Los Angeles Int'l Uses Public-Private Partnerships to Build Automated People Mover & Consolidated Rental Car Facility

Author: 
Jodi Richards
Published in: 
May-June
2017

Los Angeles International Airport (LAX) is no stranger to construction projects. Since 2009, Los Angeles World Airports (LAWA) has been hard at work on a $14 billion capital improvement program at LAX and garnering the distinction as the largest public works program in the city's history.

While tackling this ambitious program, the nation's third busiest airport is also taking on the challenge of learning and employing a new delivery method. Two major elements of the Landside Access Management Plan-an automated people mover and a consolidated rental car facility-will use the design-build-finance-operate-and-maintain method under separate public-private partnerships (P3s). 

Roger Johnson, LAWA's deputy executive director, says in his experience managing close to $7 billion worth of work for LAWA, this is the first delivery method he has seen that "truly aligns the design builder/developer's interests with that of the airport's interests."

facts&figures
Projects: Automated People Mover System; Consolidated Rental Car Facility
Location: Los Angeles Int'l Airport
Airport Operator: Los Angeles World Airports 
Part of: $5.5 billion Landside Area Modernization Program (LAMP) 
Delivery Method: Design-build-finance-operate-and-maintain under separate public-private partnerships (P3s) 
P3 Legal Consultant: Nossaman LLP
P3 Consultant: Ernst & Young Infrastructure Advisors, LLC
LAMP Consultant: Joint Venture of Parsons Brinckerhoff & STV
Umbrella Effort: $14 billion modernization program

New Delivery Route
With $14 billion in capital improvement needs at LAX, Johnson says a public-private partnership is one way the airport can achieve its development objectives while maintaining a reasonable cost per enplanement for its airlines. 

Under the P3/design-build-finance-operate-and-maintain delivery method, private sector developers will assume some of the upfront costs and risks associated with the project, but will also operate and maintain the facilities once complete. For the airport, this ensures schedule and cost certainty-benefits for the private developer as well. "The model inherently incentivizes the winning proposer to give us a quality product, on time and at a very competitive price," Johnson explains. "The sooner they get the system built, the sooner they start generating revenue for themselves." 

Another benefit of P3s is that the total cost of ownership is considered upfront, he adds. When a developer submits its proposal, it not only includes the cost for design and construction, but also the cost for 25 years of operation and maintenance. 

LAWA was particularly interested in using a P3 for its automated people mover system because it had no intention of operating the train system after it was built, Johnson explains. As the airport looked at the design-build-operate-maintain delivery method, it was a "fairly easy transition" to go to the design-build-finance-operate-maintain method, he notes.  

The automated people mover system and consolidated rental car facility will be delivered under separate P3 contracts. LAWA is hoping to award the people mover contract by December of this year, and the rental car center project later in 2018. Officials expect the new people mover system to be operational in late 2023 or early 2024.

The winning developers will design the final projects, but will need to follow LAWA design guidelines, which include adhering to the airport's mid-century modern architectural motif. The airport also established an architectural review committee to ensure any proposed designs are consistent with LAWA standards. 

Learning Curve
While a P3 may sound like an easy endeavor from the airport's perspective, Johnson reports that the amount of work associated with the contracting and developer selection process is significant. Because these projects will be LAWA's first foray into public-private partnerships, the airport has brought on a team of "very skilled and experienced advisors," he notes. 

Nossaman LLP and Ernst & Young Infrastructure Advisors, LLC are specifically serving as P3 consultants, and the firm hired to lead the overall Landside Access Management Plan program-a joint venture of Parsons Brinckerhoff and STV-also has strong P3 experience. 

LAWA requested industry feedback by sending out questions "to just about anybody we could think of that would be interested in this program," Johnson recalls. "We requested feedback on some of our thoughts." Following that, the airport held a series of meetings about the people mover system and rental car facility, and 15 different teams attended to learn more about the projects. "It's been pretty phenomenal, actually," Johnson says of the interest. 

Industry outreach has been integral to the entire program. Toward that end, LAWA created a LAMP Business Opportunities website to provide information and encourage participation. Because the programs are large, expensive procurements to pursue, it was important that interested private sector teams fully understood the projects, the client and the client's commitment to the projects before they started investing, Johnson explains.  

He reports that both of the P3 Landside Access Management Plan projects have garnered "tremendous response and interest." The team has received five statements of qualifications for the people mover system and six for the rental car center project. 

Getting Around LAX
Roadway congestion around LAX has been an ongoing issue. While discussions about improvements have been occurring for more than a decade, "earnest planning" began around 2013, notes Johnson.  

As passenger numbers returned to pre-9/11 levels, ground transportation traffic took much longer to return, he adds. "People obviously figured out different and better ways to get here than private vehicles, but we are back to that point where basically every day is like Thanksgiving Day with the traffic congestion."

On an average day, LAX has about 95,000 vehicles in the Central Terminal Area. "To put that into perspective, it's like a Rose Bowl worth of traffic every day," Johnson says. Naturally, holidays are even more challenging, with some 120,000 vehicles per day last Thanksgiving. 

The airport's current roadway network was designed to accommodate about 40 million annual passengers; and last year, LAX served close to 81 million passengers. "We're currently double what the roadway capacity is," he relates. At peak times, it's typical for passengers to spend more than 40 minutes driving through the airport-and that's after they get to the airport, he emphasizes. 

According to LAWA data, slightly more than half of the vehicles in the Central Terminal Area are private; the rest are taxis, buses, shuttles and vans from rental car companies, hotels and shared-ride companies that are also competing for the space. 

$14 Billion Effort
When LAX's Modernization Program is complete, $8.5 billion will have been invested in improving the airport terminals and airfield, including the New Tom Bradley International Terminal, Midfield Satellite Concourse, renovations of existing terminals and runway safety projects. The remaining $5.5 billion is focused on three major landside objectives:
• improving the passenger experience and relieving traffic congestion in the Central Terminal Area and surrounding street network;
• creating new convenient locations for passenger pick-up, drop-off and parking outside the Central Terminal Area; and
• improving air quality through the reduction of vehicle emissions. 

To do so, planners divided the Landside Access Management Plan into four primary components for completion in two phases. Phase I is scheduled to begin at the end of this year and become operational by 2024. Its main elements include the automated people mover, consolidated rental car facility, intermodal transportation facilities and a portion of the roadway improvements. Phase II, primarily consisting of remaining roadway improvements, is slated to begin in 2024 and wrap up by 2035. 

The automated people mover will be a 2.25-mile aboveground system that transports LAX passengers to and from airline terminals, the new consolidated rental car facility, remote pick-up and drop-off locations for airport parking facilities and Metro's regional transit system. The people mover will provide free 24-hour access to the airport's Central Terminal Area, with six stations and a capacity of more than 10,000 passengers per hour.

The new rental car facility will consolidate the large collection of agencies that are currently located in 23 different properties around LAX, causing confusion and traffic congestion. The consolidated facility will accommodate all the rental car agencies in one centralized location and include 8,000 ready/return spaces, 10,000 overflow spaces, 1,200 rental car employee spaces and 2,200 airport employee or public parking spaces. Colocating the rental cars is expected to eliminate more than 3,200 daily trips on city streets and in the Central Terminal Area by rental car shuttles. It is also designed to free up 20% of commercial curb zone on the lower level. 

Plans for intermodal transportation facilities are also in the works to provide new offsite locations for passenger pick-up and drop-off, including new parking facilities served by the automated people mover. 

Traffic and roadway improvements are being designed to alleviate vehicle congestion in and around airport facilities, including improved access in and out of the Central Terminal Area and the regional freeway system. Plans include additional traffic lanes and improved freeway ramps, as well as bicycle and pedestrian improvements. 

Dynamic Schedule
Phasing and scheduling of projects for the Landside Access Management Plan is a "very dynamic process"-especially in light of the other projects LAWA is or will be engaged in throughout the Modernization Program. LAWA's Construction Logistics Management group (euphemistically called CALM for short) will be analyzing the impact that construction projects have on airport operations.

At the height of Phase I in summer 2011, crews were putting $4.5 million to $5.5 million worth of construction work in place every day. Current projections suggest that the pace will climb to $9 million per day as the Landside Access Management Plan reaches its pinnacle.

"We're going to be doing about 75% more a day than we were during our last major development peak," Johnson states. "It's a very significant issue that we meet on a weekly basis for."

Subcategory: 
Landside Development

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