Bid team seeking long-term partnership, which includes ex-basketball star EARVIN “MAGIC” JOHNSON JR. as investor, speaks to committee.
A committee’s vote Wednesday to advance a proposal that would green-light negotiations with the preferred bid team for Denver International Airport’s terminal renovation came after members asked questions about the arrangement.
And after they were charmed, at least a little bit, by Earvin “Magic” Johnson Jr.
“I’ve been coming to Denver for over 30 years,” Johnson said at the start of his remarks. “You know, in those little hot pants that we used to wear and the purple uniform for the Lakers. But now, with a suit and tie, and I’m doing business in this great city.”
The retired 6-foot-9 NBA star, who posed for photos with some City Council members after the meeting, was there because his Magic Johnson Enterprises is an equity partner in the project consortium led by Madrid, Spain-based Ferrovial Airports.
The team also is led by Centennial-based Saunders Construction, which was among the managers of the airport’s hotel and transit center project. The bid team was selected by DIA officials over two others in June.
It’s seeking a long-term public-private partnership — potentially worth hundreds of millions of dollars — to renovate much of the 1.5 million-square-foot terminal. It would then oversee commercial operations in that part of the airport. Several council members cited 24 years as the potential term.
The arrangement would include the sharing of future revenues with the airport, from concessions and other sources. So far, DIA hasn’t released the conceptual financial details of Ferrovial’s bid or any of the three teams’ final proposals.
But a losing bidder, Westfield Airports, revealed in a recent filing that its team had proposed a $385 million project.
For now, DIA is asking the council to approve a “pre-development” agreement that sets in motion six months of formal negotiations for a partnership agreement, which the council would consider next spring. That initial contract is worth $9 million, but only if the airport decides not to move forward with Ferrovial.
The council also is reviewing a $600,000 contract with Los Angeles-based law firm Nossaman LLP to serve as DIA’s special counsel in negotiations.
The Business, Arts, Workforce and Aeronautical Services Committee advanced both contracts unanimously, except for the abstention of its chair, Stacie Gilmore. She recused herself from participating in discussions and voting because her brother-in-law’s company, Gilmore Construction, is on Ferrovial’s bid.
The full council could approve the contracts later this month.
In the presentation Wednesday, DIA CEO Kim Day said the major components of the project include moving the main security checkpoints from the open areas on the terminal’s main floor to the north end of Level 6, where some ticket counters are now, to effectively modernize screening for the post-9/11 era.
That would free up much of the lower level for an entry plaza from the new hotel and new Colorado-centric attractions. Among potential options: ziplines or a climbing wall.
The renovation, of course, also would create more space for shops, restaurants and other income-generating concessions. And it would mean changes to the baggage system, including some geared toward increasing capacity.
“We have a transformational project to undertake here,” said Chris Butler, whom Ferrovial has tapped as the executive director to oversee the project. Later, he referred to the iconic, striking tented roof structure of the terminal and said the goal was “to make sure that the interior of that building is reflective of the quality of the exterior.”
“We’re absolutely determined to do that,” Butler said.
The partnership would be the first at a U.S. airport for Ferrovial. It operates four airports in the United Kingdom, among other ventures.
Ferrovial’s company history has come under scrutiny from Unite Here, a union that is concerned about job retention for the DIA concession workers it represents. The union has pointed a bribery scandal in Spain, the involvement of a subsidiary in U.S. toll road projects whose operators filed for bankruptcy and problems on its projects.
The security of concession workers’ jobs, the long duration of the prospective partnership deal and the use of privatization for the project all came up in committee members’ questions Wednesday.
Several, including Kendra Black and Chris Herndon, said the public-private partnership model made sense for the terminal project. But Jolon Clark said he wasn’t sold on it and would scrutinize the arrangement more if a final agreement gets sent to the council next year.
Still others probed the team about the expected extent of meaningful contract participation by minority- and women-owned firms.
During his introduction, Johnson preemptively said he would play a role in ensuring the team meets such goals.
“I’m going to be a special adviser to the project,” Johnson said. “And what we want to do is really work with a lot of the minority firms. We want to make sure they participate here locally in this project, as well as women-owned businesses. We want to not only make sure that they have a piece of this project but also want to make sure that we mentor some of these great organizations as well and help them grow.”
Johnson said he has been involved in opening five Starbucks franchises in the Denver area. He’s also part of a concessions partnership at Los Angeles International Airport, among other ventures.
