On December 21, 2017, the City and County of Denver and Denver Great Hall LLC reached financial close on the $1.8 billion Jeppesen Terminal redevelopment project (Great Hall Project) at Denver International Airport.
Following on the heels of Denver City Council’s approval of the Development Agreement and commercial close in August 2017, this represents a critical milestone in Denver International Airport’s plans to upgrade its signature terminal for the post-9/11 era by, among other things, relocating and modernizing its security screening areas and improving the passenger experience through the development and management of a new concessions program.
The project will leverage the expertise of Denver Great Hall LLC, a consortium led by Madrid-based Ferrovial Airports that includes equity members Magic Johnson Enterprises/Loop Capital and Saunders Concessions, and a design-build team of Ferrovial Agroman West and local contractor, Saunders Construction. The team was selected following a competitive procurement process and entered into a pre-development agreement with the Airport in September 2016.
The term of the Development Agreement is 34 years, comprised of an anticipated four-year construction period and a 30-year operating period. The maximum contract value of $1.8 billion includes $650 million in capital costs, a contingency for potential Owner-initiated changes, and annual supplemental payments following substantial completion. Revenues from the revamped concessions program will be shared 80%/20% between the Airport and Developer.
Developer’s financing consists of $189 million in short- and long-term private activity bonds, issued in eight tranches with maturities ranging from 2022 to 2049, and $73 million in equity. Citigroup served as the lead underwriter of the bonds. The bonds were rated BBB by Fitch and BBB- by Standard & Poor’s.
The Airport opened the “Great Hall” two decades ago, when it was designed to accommodate 50 million passengers each year. With the Great Hall now nearly 20 percent over capacity, and significantly higher passenger traffic projected in the coming years, the Great Hall Project “will greatly enhance security, improve passenger flow and return the terminal to a passenger oasis.” (https://www.flydenver.com/greathall).