Kent May Issue Airport Bonds
GRAND RAPIDS — Kent County commissioners will decide this week whether to begin the process to finance the massive and expensive parking structure planned for the Gerald R. Ford International Airport.
Commissioners will vote on Thursday whether or not to publish a “notice of intent to issue bonds” worth up to $130 million — about $40 million more than the building authorities for the city and county issued for the construction of DeVos Place a few years ago.
“That could scare some people, but the county has the means,” said Richard Vander Molen, a county commissioner and a member of the aeronautics board.
The proposed airport ramp would have 4,800 parking spaces — roughly the number the city has in its entire downtown system — and would cost an estimated $79 million to build. Other planned improvements for the airport, such as a pedestrian sky bridge, would bring the total spending plan to $120 million.
“This is being paid by user fees. We’re not building the ramp on the backs of people who pay property taxes,” said county Vice Chairman Dan Koorndyk, who also sits on the board of aeronautics and chairs the county’s Finance Committee.
Revenue generated by the parking ramp is expected to pay for some of the debt service the county will be facing.
Known as “ground transportation operating revenue” for accounting purposes, that income grew by 13.5 percent in 2005 from 2004 to $8.3 million, and accounted for 32 percent of the $26 million the airport collected in total operating revenue last year. Ground transportation revenue topped expenses by $5.3 million last year.
“Parking is a real science, and you try to balance those levels,” said James Koslosky, aeronautics director, of the various services the airport offers including valet parking. “We want to be competitive in our pricing.”
In contrast, airport operating revenue went up by just 1.1 percent last year from 2004 to $17.7 million. But that income still outpaced airport expenses by $6.3 million in 2005.
As for other GFIA revenue, passenger fees fell by 4 percent in 2005 to $2.76 million, down from $2.88 million in 2004.
Kent County, and not the aeronautics department, will back the bonds, which should lead to a lower interest payment due to the county’s high bond rating. And if the revenue pledged for the bonds isn’t enough to pay the principal and interest, the county will advance money from its general operating fund to make the payments.
Commissioners will be asked to approve a bond resolution from 30 to 60 days before the securities will be issued. That resolution will contain all the details on the bonds, such as the maturity schedule, size and range of acceptable interest rates.
County Administrator and Controller Daryl Delabbio thought the bonds would be issued early next year, and construction contracts would be awarded at about the same time.