All summer long, the Tweed New Haven Airport Authority has said an upgrade to its existing terminal would cost in the range of $5 million. Now, that price tag has more than doubled.
The airport authority’s board of directors voted last week to increase the construction budget for the project to $11 million, citing unforeseen circumstances that drove up project costs.
The reasons behind the increase remain unclear. The vote followed a private video conference call among the board members, and came with little public discussion.
Executive Director Sean Scanlon approved the price hike. Responding by email to questions from CT Public, Scanlon wrote that the airport conducted a “complete analysis” of the project after it was approved in May and discovered it would cost more. He did not respond to a request for further detail.
“The revised (agreement) reflects our full understanding of all needs and requirements, our plans for bringing an old property up to current code, a buffer for unforeseen renovation challenges, and our commitment to an improved passenger experience at HVN,” Scanlon wrote.
Connecticut Public requested copies of the new construction agreement last week, but the airport authority hasn’t released it yet.
One director who did see that material questioned the higher costs. Anthony Verderame abstained from last week’s vote to hike the construction budget, saying it seemed high, and he wasn’t satisfied with the breakdown of costs.
Verderame, who represents East Haven on the board, said he also wants to pause a much bigger project now in the works.
Avports, the private company that manages the airport, proposes investing as much as $70 million to build a new terminal and extend the existing runway. In exchange, the company is seeking a 43-year lease deal with the airport authority, which would give it more latitude to run the publicly-owned facility.
Backers say the project would bring more commercial flights to Tweed, create thousands of construction and service jobs and eliminate the need for taxpayers to backstop the airport with public money.
But a vocal contingent of residents in New Haven and East Haven has raised objections, arguing the project would also bring more noise and pollution, and strip away meaningful public oversight.
Verderame said he wants to see additional information about how the project would impact East Haven, and receive a firm commitment that more cargo vehicles won’t be traveling on town roads to reach the airport.
“We want to look out for the best interests of the residents of East Haven, and the quality of life of East Haven as well,” he said.
Before that project begins, Tweed is upgrading its existing West Terminal and an administrative building to serve Avelo Airlines, a new low-cost carrier that will make New Haven its East Coast hub.
Avelo plans to launch flights to five destinations in Florida, beginning in November with service to Fort Lauderdale, Fort Myers, Orlando and Tampa, and adding a fifth route in December to Palm Beach.
Avelo will contribute $1.2 million toward the renovations. The airport previously agreed to borrow $4 million more from Avports -- the same company angling for a major airport expansion.
The contribution from Avports will now rise to around $10 million. The money will come in the form of a forgivable loan; the authority won't need to repay it if it signs the expansion deal proposed by Avports. Payments are also suspended if the airport isn’t generating operating revenue.
Nevertheless, the arrangement presents some financial risk for Tweed, and raises the stakes surrounding its broader negotiations with Avports for the expansion project.
Under an agreement signed in May, the loan is due to be repaid monthly, with a 6% interest rate and 5% management fee for Avports. The authority is due to repay the full amount and all interest by June 30, 2024.
The agreement also effectively freezes any revenue generated from the existing terminal. The authority must hold the money in a segregated bank account, and can't touch it unless the lease with Avports is executed.
A representative for Avports did not respond to a request for comment regarding the rising cost of terminal renovations, nor did the chairperson of the airport authority's board.
A spokesperson for Avelo didn’t directly address the price tag, but said the airport “has continuously sought our input so that we can best serve our customers by delivering the convenience, choice and everyday low fares they want.”
Alders in New Haven could vote to approve a long-term lease deal with the airport authority as early as Thursday night. The agreement would in turn pave the way for the airport authority to negotiate a facility lease with Avports.
