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Denver council members seek answers on $1.8 billion DIA pact

Author: Adam McCoy - August 2, 2017 - Updated: August 2, 2017

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Denver International Airport’s main terminal. (flydenver.com)

In a letter Tuesday, two City Council members asked that a vote on a $1.8 billion, 34-year private-public partnership with Denver International Airport be postponed for 120 days to give officials, airlines and city voters more time to review the proposed pact.

Council members Deborah Ortega and Rafael Espinoza wrote the letter on Tuesday arguing there are components of the complex, 15,000-page agreement that require a more thoughtful review.

“Mayor (Michael) Hancock and DIA should pursue a 120-day extension to provide Council time to fully review a contract it took three years to develop,” Ortega and Espinoza wrote.

The deal known as the DIA Great Hall project includes an overhaul of DIA’s terminal and details oversight of airport concessions over the course of three decades. DIA’s need for more space and improved security were cited as the impetus for the deal, the Denver Business Journal reports.

In their bid for a postponement, Ortega and Espinoza argue they haven’t been afforded enough time to fully study important components of the agreement.

Important elements of this lengthy and very complex contract, including financial modeling, were not made available until a few days prior to the hearing. A third-party evaluation of the financials was made available only one day prior to the hearing.  Both could only be reviewed in the presence of DIA staff; committee members could not retain copies for thoughtful review.

Additionally, the two council members said in the interest of protecting the city, there are a lot of questions that have gone unanswered.

To protect the interests of the City, a clear understanding of the major risks in the event of a failure of execution by the developer and how the contract protects the City from these risks is necessary. Questions posed in three letters to DIA staff were not answered. Nor have answers been received to questions about how the standards of performance required of the developer are organized and executed over the term of the contract including the city’s recourse if the developer does not meet the standards. It appears the City is relying on surety bonds in lieu of guarantees. Questions concerning how they arrived at the value of the bonds, which appear low, are unanswered.

Ortega and Espinoza also expressed concern about the project design remaining at 30 percent complete and the City Council relinquishing its authority to consider concession contracts to a private entity for the next 34 years.

“I share the goal of assuring a secure, quality experience for the traveling public. One of the biggest benefits to government (and the citizens of the City) of a public private partnership — risk transfer — is absent or certainly minimized. Instead we have high transaction costs and loss of operational control with unexplained oversight or remedies.”

The City Council will hold a public hearing on the DIA Great Hall project at 5:30 p.m. on Aug. 14.

Read Ortega and Espinoza’s full letter here.

Adam McCoy

Adam McCoy

Adam McCoy covers Denver-area politics for Colorado Politics.


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