Congressional inaction, GOP tax plan threaten terminal project at Missoula airport

As airport officials began planning to replace Missoula's aging and increasingly crowded passenger terminal, they knew timing would be key to the project's success.

So just last month, the airport unveiled its carefully crafted timeline, one broken down to specific months and days and timed to coincide with the allocation of certain funds.

But less than 30 days later, the U.S Congress has tossed a wrench into the proverbial gears by adding several new challenges to an otherwise fluid process.

“We have some complexity in our funding scenario that's beyond our control,” airport director Cris Jensen said Tuesday. “It's one of those variables we can't control.”

The new tax bill passed by Republicans in the U.S. House – including Montana Rep. Greg Gianforte – added one potential problem.

Jensen said the House's version of the tax reform bill would eliminate Private Activity Bonds for airport construction projects, including Missoula's terminal replacement.

That would drive the interest rate up on taxes investors pay when they buy the bonds. It could also take millions of dollars away from Missoula's already tightly budgeted terminal project.

“Our tax exempt status would go away and it would result in an increase in the cost and an increase in the interest rates, which means less money available for funding our project,” Jensen said. “It would have a dire impact on the cost of debt to fund new projects and, as a result, it would stifle construction activity.”

Jensen said airports are lobbying hard to see the provision removed. The Senate version of the tax reform bill does not eliminate the airport's tax exempt status, Jensen said.

But a second hurdle has also emerged in that Congress has not fully authorized and appropriated funding for the FAA. As it stands, Jensen said, Congress has authorized the FAA through Dec. 9, and it has appropriated the agency through March 15.

“That means our grants are going to be incomplete for what would be the start of our terminal project,” Jensen said. “We think we still need to move forward with the start of our project, which would be relocating the checkpoint from its current location in the terminal to the lobby area, simply because we need to be able to add a third checkpoint.”

The airport is on pace for another record-setting year in passenger growth, and with flights on tap for next year, officials expect to see additional growth in 2018. The current checkpoint, Jensen said, has reached its capacity.

Jensen said the airport will likely change one of its task orders that would see the airport pause the larger terminal project after relocating the checkpoint to the lobby area before starting with demolition and construction.

“The ultimate effect of that would be a delay in the completion of the project by one year, not the start of the project,” Jensen said. “We'd start the project, take a time out, and continue on down the road. We think we have a good plan to build the project with stopping points along the way.”

The Missoula County Airport Authority has spent the past two years planning a new terminal. Current plans call for a larger passenger holding area and eight jet bridges, along with an expanded security checkpoint.

The project is set to begin late next year and take several years to complete. The project, which currently ranges from $100 million to $111 million, will be paid for using airport revenue and federal allocations.