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Minneapolis-St. Paul Airport to get $1B upgrade next year, impressively without taxpayer money
At a cost similar to U.S. Bank Stadium — and free of political debate — MSP is able to pay for itself and grow according to market demands.
September 30, 2023 at 1:02PM
If you need to regain some confidence in Twin Cities public officials, take a look at the Metropolitan Airports Commission. It is having no trouble making decisions nor affording them.
At the MAC's recent State of the Airport luncheon, leaders explained the Minneapolis-St. Paul International Airport will undergo about $6 billion of construction and expansion between now and 2040.
The first $1 billion of it will be spent next year, in a frenzy of activity that will transform the Delta concourses in Terminal 1. That spending also covers an addition to Terminal 2, which means two new gates for Sun Country and the expansion of two others that the local airline uses.
"There will be a lot of construction work starting next year," Brian Ryks, chief executive of the MAC, told me after the luncheon.
Next year's capital spending at MSP is about the amount it took to build U.S. Bank Stadium from 2014 to 2016.
And unlike the stadium, no taxpayer money is involved. The airport commission was created by the Legislature 80 years ago but gets no funding from it.
"The idea of having your airport run by a public corporation basically combines the best of a public entity with the best of a private entity," said Rick King, in his second term as chairman of the MAC board of commissioners, in an interview last week.
"Our spending basically goes along our revenue, which sounds more business-oriented. Our focus on the customer is business-oriented. Yet, we have government-based retirement plans, government-based appointments for commissioners and procurement policies and things like that," King said.
About one-third of the MAC's $447 million in revenue this year will come from fees imposed on airlines. They pay $4.19 for every 1,000 pounds that an aircraft weighs when it hits the runway at MSP. For example, an airline pays about $385 to land an empty 737, which weighs 92,000 pounds.
That fee — eventually passed on to customers and thus a factor in the relatively expensive tickets at MSP — is about the middle of what big hub airports charge to airlines. Atlanta, Charlotte and DFW charge less than half that rate, while O'Hare, JFK and LAX charge considerably more.
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The MAC is entitled to impose a tax in the metro area, but it doesn't. It issues bonds when it wants to undertake capital projects, and repays them out of its future revenue.
"We don't have to wait until the Legislature meets. We don't have to go to hearings and fight against hospitals and schools and roads and bridges," said King, who retired last year as chief technology officer at Thomson Reuters in Eagan.
With financing under its control, the commission can plan far into the future. By 2040, according to its current long-range plan, Terminal 2 will have grown to 35 gates from 16 today and Terminal 1 will be larger, but with fewer gates, 95 instead of 102 today.
Four concourses in Terminal 1 — A, B, E and F — will be torn down and rebuilt by 2040. The E concourse, used by American, United and Spirit, may be the first to get the big overhaul, Ryks said.
Governance and financing are important. However, the airport wouldn't be where it is today without the right people working hard behind the scenes on tasks that are important but thankless.
For instance, King and Ryks at the luncheon noted that the commission was recently awarded its first patent — for a process that takes the data from MSP's noise monitoring system and turns it into an image.
Noise pollution and abatement is always a hot button for airports, particularly ones like MSP that are close to a city. Over the last decade, the MAC spent tens of millions of dollars to install thicker-pane windows and air conditioners for people who live near the airport.
Since 2001, it has recorded the sounds of arriving planes through a network of microphones that surround the airport for 20 miles. The agency is able to verify noise complaints with the system, and it occasionally identifies aircraft engine problems for airlines.
The imaging identifies other sources of noise, like railroads and trucks, and removes them.
"We can pick out any outliers," said Dana Nelson, the MAC director who oversees noise compliance. "We create a map of a sound event, what the frequency is, what the decibel level is."
The MAC can do more than see the future. It can hear what's happening now.
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