The final design of the Manhattan Regional Airport’s new runway cut over $7 million off prior cost predictions.

Manhattan City Commissioners Tuesday unanimously voted to authorize the runway rehabilitation project to open for bids once final Federal Aviation Administration funding is awarded later this year. Olsson Associates’ Diane Hofer told commissioners the savings come as a result of an FAA-approved design alternative that had previously been rejected.

“So, not only did we save about $7 million, we cut construction time by about two to three weeks.”

The alternative involves using less material for the runway’s base course, though overall more concrete in a way that is faster and cheaper than in earlier concept designs. The existing runway surface will be turned into rubble, over which the new material will be poured to form the new runway surface.

The construction is now expected to finish by August 31st, 2023, leaving the main runway out of commission for 108 days. For about 68 days of that, the second runway will close as well – re-opening in mid-July.

“For the folks that work in the terminal, the airline’s evaluating on what they’re going to do with those employees for that time,” says Airport Director Brandon Keazer. “More than likely when something like this occurs, they usually ship them out to other closer regional airports that operate the same carrier.”

Keazer indicated the same is true for Transportation Security Administration employees working out of the airport as well. City staff, he says, will continue to have work to complete around the facility to meet federal regulations and requirements.

Manhattan has been working to reconstruct the aging runway surface for numerous years, with the 43-year old surface showing visible signs of wear. Design work began in 2020, and city officials also had to find additional funding to support the project as a result of a 2019 change in FAA rules. Current cost breakdowns indicate the city’s share of the $47 million project is $4.4 million, and the new runway is expected to have a comparable lifespan to its predecessor.

Hofer says the Bipartisan Infrastructure Law passed in Congress also provides an allocation that could potentially be committed to the project, though they are awaiting further FAA guidance on the use of the funds. Hofer says contractors will have about eight months to complete their set-up before March 21, 2023, and advises to expect them to come and go until that time.

“We have a lot of interest from contractors,” says Hofer. “A lot of large companies that have done projects in multiple states with large runways.”

Commissioner John Matta expressed optimism about the news of notable interest from contractors at this stage.

With commercial air service at Manhattan Regional Airport expected to be halted for about three and a half months in 2023 for runway reconstruction, city commissioners are questioning what impact that will have and if there are any options to mitigate it.

Commissioner Wynn Butler questioned shifting air service to Marshall Army Airfield at Fort Riley temporarily as a way to maintain market presence. Keazer indicated that idea poses a challenge to accomplish and requires federal cooperation.

“Fort Riley’s Marshall Airfield is a private airport, it’s only used for [the Department of Defense]so the public technically can’t go in there,” says Keazer. “The FAA would have to grant Marshall Airfield the option of turning to a commercial service airport — definitely some very, very significant logistical challenges to performing that.”

Commissioner Usha Reddi questioned the loss in parking revenue associated with halted air service. Parking fees are a revenue source to pay for the cost of parking lot improvements at the airport approved in 2019.

Keazer told the commission they would report back with more concrete numbers. In 2021, just over $100,000 were collected in parking fees – though those rates had doubled from their reduced rate of $2.50 per day to the initially planned $5-per-day parking fee in 2022.

Commissioner Mark Hatesohl also challenged staff with striving to fully close the $4.4 million obligation to the city and accomplish the project without city dollars.

In other business, Manhattan City Commissioners unanimously voted to issue up to $25 million in industrial revenue bonds to Meadowlark Hills.

Meadowlark is planning to use the money to help fund the construction of 24 new independent living spaces and 36 underground parking stalls, and the organization will also receive a sales tax exemption on construction materials to do so. Deputy City Manager Jason Hilgers says the IRB process is fairly routine and lays no financial liability on the city.

“In order for Meadowlark to leverage these dollars and receive, really, a sales tax exemption on the construction,” “The city is in a position, via state statute, to act as that conduit, issue this amount of IRBs and allow them to proceed with their construction.”

In the IRB process, bonds are sold to private investors to cover the costs of eligible projects. The city acts as an intermediary and issues the bonds while collecting a lease from the applicant to cover the bond payments.

“There’s a fee that they have to pay in order to access,” says Hatesohl. “There’s […] a fairly significant application, it’s not just a small deal — it’s kind of a hassle to get them, and so it has to be worth your trouble to kind of go through something like that.”

The IRB is the second held by Meadowlark, the other being an up to $45 million bond approved in 2021 refinancing outstanding bond debt held by the organization.

In executive session, commissioners discussed the purchase of land for the Manhattan Fire Department. No binding action was taken.

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