Construction on the long-awaited expansion of Terminal 1 at the San Diego airport could start as early as next month, following a vote Thursday on two key contracts for what will eventually be a $3.4 billion project — the largest in the airport’s history.
In a unanimous vote, the San Diego County Regional Airport Authority board agreed to pay a maximum of $2.6 billion for the replacement of the 19-gate Terminal 1 with a 30-gate, state-of-the-art facility — plus major new roadways that will ease access to the future 1.2 million-square-foot terminal. A second contract for a new taxiway and related airfield improvements was also awarded in the amount of nearly $252 million.
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Nearly a decade in the making, the ambitious project will deliver 11 additional gates, much-improved food and retail concessions, a baggage handling system that will be able to process up to 2,000 bags per hour during peak periods, and an outdoor deck off the future food hall that will offer panoramic views of the harbor and downtown skyline. A 5,200-parking garage also will be built, as well as an elevated departure roadway similar to the one serving Terminal 2, and a new three-lane airport access road from Laurel Street and North Harbor Drive that airport planners say would remove 45,000 vehicle trips per day from Harbor Drive.
“For anyone who’s been through Terminal 1, it has not been the customer experience that we want our visitors and residents to have,” said Airport Authority CEO Kimberly Becker. “We’re often the first and last impression visitors get of the region, and we certainly need to provide a better impression for them so this terminal will really represent the image we want to share in San Diego.
The plan for the Terminal 1 overhaul also makes room for a future high-speed transit connection via a people mover traveling between the airport and a still undeveloped Grand Central Station that would likely be located on the Navy’s 70-acre Old Town Complex, commonly known as NAVWAR.
The Navy and SANDAG have been jointly working on the project for some time, but it is not yet a done deal. The airport, though, has reserved space for a transit station, to be generally located on the west side of the Terminal 1 parking structure. In the meantime, the airport will begin providing next month free shuttle service between the Old Town Transit Center and Lindbergh Field.
The one remaining hurdle before construction can get underway is approval by the Federal Aviation Administration of a federal environmental impact analysis. Airport officials said that will come this month, which would clear the way shovels in the ground sometime next month.
The overhaul of Terminal 1 comes eight years after the $1 billion redevelopment of Terminal 2, at the time the largest project in airport history. Dennis Probst, vice president of development for the airport, expects that once completed, the new Terminal 1 could surpass the improvements made to Terminal 2.
“This is such a huge deal for the airport and such an exciting day for us,” Probst said. “We’ll literally be completing the transformation of this airport to be the equivalent of or better than Terminal 2. It will be a while before we see the steel coming out of the ground but work will start in 30 days, and you’ll see utility relocation, demolition of buildings. When the new facility is complete it will be remarkable.”
The first 19 gates in the new terminal are expected to open in 2025, and demolition of the old terminal would follow. The additional 11 gates should be ready by late 2027. Turner and Flatiron construction companies, which were also involved in the airport’s Terminal 2 redevelopment, will be leading the reconstruction of Terminal 1.
Griffith Company was awarded the contract for airside improvements, including relocation of the existing taxiway and construction of a second taxiway to allow for easier movement of arriving and departing aircraft.
The project has been long sought by the airlines who have complained that the 1960s-era facility is ill-suited to meet the needs of today’s passengers and the air carriers.
“The existing Terminal 1 is past its useful life and can no longer provide the kind of experience passengers expect in San Diego,” said Southwest Airlines executive Steve Hubbell in a letter to the Airport Authority conveying the airlines’ support for the project. “It’s also a facility that is is inadequate from an airline operational standpoint … We want to grow in San Diego and provide additional service to more cities to better serve the surrounding community. To do this we need cost-effective, world-class facilities to support our operations and to provide a quality passenger experience. The new Terminal 1 will allow us to accomplish these objectives.”
The budget for the entire airport redevelopment project, which has grown from $3 billion to $3.4 billion, also covers the construction of a new administration building, plus Airport Authority costs for designing and managing the project and a reserve of more than $227 million in case of unforeseen conditions that arise during the construction period.
Probst said he is confident that the final cost will be less than $3.4 billion, as once rapidly escalating prices for commodities like steel and lumber continue to drop. The Airport Authority will issue revenue bonds over a 35-year period to finance the project, with some annual debt payments expected to be as high as $345 million. The airlines and the fees they pay for renting terminal space, plus revenues from parking, concessions and passenger facility charges, will be used to cover the yearly payments.
A number of representatives of organized labor spoke in favor of the project, praising the Airport Authority for requiring that a project labor agreement be used during construction. Such pacts are basically collective bargaining agreements in which hiring is typically done through the unions, with contractors paying into union health benefit and pension systems.
“I’m super excited San Diego has an opportunity to fix Terminal 1 and bring it up to current standards,” said Tom Lemmon, business manager of the San Diego Building and Construction Trades Council. “And I appreciate the board and their commitment to San Diego’s workforce, including the future workforce through the consideration of a project labor agreement as well as apprenticeship programs that will be utilized, giving opportunities to tomorrow’s workforce.”
Terminal 1 will remain open throughout construction but there will be disruptions. The Terminal 1 lot is scheduled to partially close in the first quarter of 2022, and then fully close by July 2022. At that time, Terminal 1 passengers will have the option of parking in the Terminal 2 Parking Plaza, where there will be a shuttle taking passengers to Terminal 1.