Duluth Int'l Overcomes Funding Challenges to Build $77.5 Million New Terminal

Rebecca Kanable
Published in: 

Just as giant freighters traversing Lake Superior often battle brutal storms to reach Duluth, MN, the port city’s airport weathered its share of financial storms before building a new $77.5 million passenger terminal. But despite the national recession, lingering economic uncertainty and budget-related shutdowns of both its state government and the FAA, Duluth International Airport (DLH) found multiple waves of grant funding to move the project forward.


Project: Replacement Terminal

Duluth (MN) Int’l Airport

Cost:  $77.5 million

Size: 110,000 sq. ft.

Duluth Airport Authority

Owner: City of Duluth

Avg. Annual Passengers: 300,000

Prime Consultant, Engineer & Architect of Record: RS&H

Construction Manager:
Kraus-Anderson Construction Co.

Interiors/Resident Project Rep: TKDA (formerly SJA Architects)

Structural Engineers:
MBJ Consulting Eng.

Plumbing/Fire Protection:
Cosentini Assoc.

Baggage Handling System Consultant: BNP Assoc.

Baggage Handling
System Contractor:

Diversified Conveyors

Public Address Consultants: Shen, Milsom & Wilke
Concrete & Earthwork: Kelleher Construction

VALE Grant Consultant: LeighFisher

Geothermal System Contract: Sam’s Well Drilling

Construction of
Geothermal System:

Lipe Brothers Construction

Gate Seating: Arconas
Public, Office & Concessions

Furniture: Fluid Interiors

Passenger Boarding Bridges: ThyssenKrupp Airport  Systems

Achievements: Reduced airfield emissions; increased operational efficiencies; reduced energy consumption; upgraded passenger experience; Part 77 compliance

Challenges Overcome: Recession; state government shutdown; FAA shutdown; coordinating 12 funding sources

With serious inefficiencies both airside and within the terminal building, DLH sorely needs new facilities, explains Brian Ryks, who served as executive director of the Duluth Airport Authority when the project began. The boarding area of the nearly 40-year-old terminal is not only crowded, it doesn’t have restrooms or concessions beyond the security checkpoint, Ryks relates.

Holdrooms are sometimes standing-room-only, because they were retrofitted into the terminal after post-9/11 security requirements changed the airport’s layout. Each can hold only 100 to 120 of the passengers waiting to board 150- or 166-seat aircraft. Ryks often refers to the small, glass-walled areas as “fish bowls” — and not in an endearing way. Prior to 9/11, passengers were not as crowded, because some waited in the second level restaurant and lounge area.

Space in the lower level ticketing area is also constrained. The small, narrow baggage area behind the check-in counters makes it difficult for multiple airlines to operate simultaneously, Ryks relates.

Outside on the ramp, aircraft tails often impinge on restricted airspace due to the location of boarding bridges. “When the building was originally built, that wasn’t an issue,” Ryks explains. But FAA airspace protections have become more stringent.

Since its current terminal opened in 1974, DLH has experienced a 75% increase in passenger traffic. Even amid the recession, airport officials successfully convinced United Airlines to begin service in 2009. DLH now serves an average of 300,000 passengers per year.

“We did a lot of due diligence trying to figure out if the building could be remodeled,” Ryks recalls. But with remodeling costs alone estimated at $40 million, the airport authority decided a new building on a new site (the former short-term parking area) was a better option. Delta Airlines, the most active carrier on the airport at the time, also recognized the need for a new terminal and supported the project.

To better meet the current and future needs of airlines and passengers, DLH broke ground for its new 110,000-square-foot terminal in September 2009. The first phase of construction focused on infrastructure, new roadways and parking areas. Phase 2 included constructing the building shell, installing all systems and completing some interior finishes.

Amid construction in July, Ryks left Duluth to become the executive director at Gerald R. Ford International Airport in Grand Rapids, MI, and operations director Tom Werner stepped in as the airport authority’s interim executive director.

In October, contractors were completing the remainder of the interior and expanding the aircraft parking apron. During the final phase of the project, crews will demolish the current terminal, finish the additional apron area and construct a 366-space parking structure. After the current building is demolished, the ramp will be extended and the airport will be back to its four-bridge capacity.

With work progressing as planned, Werner reports that the terminal is on schedule for a mid-January opening.

Grant Green-Lights Geothermal System

Making the new terminal as eco-friendly as possible was a primary goal, and an FAA Voluntary Airport Low Emission Program (VALE) grant helped the airport achieve it, notes Ryks. Although a 30- to 40-year return on investment initially ruled out a geothermal system, the tide soon turned.

“It was hard to justify until we found out about the VALE program, and we felt we could realize our return much quicker,” he explains.

The new terminal was designed and already underway when Ryks contacted LeighFisher to assist the airport with a VALE application for the project. Director Darcy Zarubiak and his team documented that a geothermal system could prevent the emission of about 3.8 tons of nitrous oxide and 3.2 tons of carbon monoxide. And the FAA subsequently awarded the airport authority a $2.5 million VALE grant to help build it. In addition, $1.4 million in state bonding money was used to fund the system that is expected to save the airport $30,000 in annual utility costs.

“I think it’s a very cost-efficient approach,” Zarubiak says. “Duluth wanted to do the right thing environmentally, but it had to make financial sense.”

Because geothermal systems are easier to justify when heating rather than cooling is the dominant load, DLH was a compatible location. In July, the average high temperature in Duluth is 77°F; in January, low temperatures average -2°F.

“Duluth sits essentially on a big rock,” Zarubiak explains, adding that it’s about 55°F year round 8 to 10 feet below the surface. To access that heat, crews drilled 80 wells just east of the new terminal building — each more than 500 feet deep. On the coldest days, a boiler system will also be needed to heat the new terminal.

Cosentitni Associates designed the geothermal system, working as a subcontractor to RS&H.

Goodbye GPUs

The second VALE grant DLH received was a $1.4 million award for gate electrification and pre-conditioned air units for each of the airport’s four jet bridges. LeighFisher also helped prepare that application.

The new equipment will be used in lieu of pilots running aircraft auxiliary power units or ground handlers plugging aircraft into ground power units, heaters and cooling units on the ramp. When aircraft pull into a gate at DLH during cold weather, pilots typically run their auxiliary power units to keep the cabin warm. To do so, they idle their engines but continue to burn fuel.

Aircraft parking overnight also need warming to prevent toilets from freezing and other mechanical complications. According to Zarubiak, an auxiliary power unit on a narrow body aircraft burns about 52 gallons of fuel per hour, and an exterior ground power unit burns 8 gallons per hour.

“When you’re doing that, you’re emitting a lot of pollutants,” he says, noting that the same is true when aircraft need to be cooled.

With pre-conditioned air units and gate electrification in place, LeighFisher estimates that 42.6 less tons of nitrous oxide and 42.3 tons of carbon monoxide will be emitted at DLH over the life of the project.

“That’s a lot,” Zarubiak comments, noting that such reductions can really improve air quality in places like Duluth that are designated as carbon monoxide maintenance areas.

Zarubiak considers both of the airport’s VALE grant projects win-win situations. “The airlines save by not burning jet fuel or being charged for diesel fuel to run ground power or auxiliary power, and the airport saves on heating and cooling. The community wins because the environment is cleaner, with reduced emissions. FAA wins because they secure air credits that are good for future expansions,” he explains.

An Even Dozen

DLH tapped a dozen different sources to help fund its new terminal. With construction beginning in 2009 and the country’s 18-month recession officially beginning in December 2007, it was a difficult time to ask anyone for money, Ryks recalls. 

Although the airport lives on a very limited budget, he notes, it’s self-supporting. And he and the airport authority wanted to keep it that way.

“We knew it would be a tall order,” he acknowledges. So officials looked for funding anywhere they thought they might find it. They started with the FAA, where Ryks received support, because some of the proposed work will bring the airport into compliance with Part 77 regulations.

The Minnesota Office of Aeronautics then provided about $5 million, and Ryks lobbied the Minnesota legislature for even more, stressing that the FAA was willing to commit $20 to $25 million of discretionary funds to the project.

“Leveraging federal funds was one of our keys to success, in addition to knocking on a lot of doors,” he reports.

The airport also secured $16.6 million in state bonding money — marking the first time Minnesota put money into a terminal project, Ryks highlights.

Other funding sources include TSA, passenger facility charges, local airport authority funds and a new customer service charge levied through the rental car agencies.

The various FAA contributions include discretionary funding, entitlement funding and stimulus dollars. When Ryks heard that stimulus money might be available for airports, he put project engineers on notice.

“We had to kind of fast-track things,” he says, noting that prime consultant RS&H did a very good job accelerating the initial design phase. Site work and the airport entrance roadway — which were funded almost entirely by stimulus money — and parking areas were all pushed ahead sooner than originally planned.

Funding Frustrations

According to Ryks, the lack of a long-term aviation bill was one of the biggest challenges of the entire project.

“We didn’t know as we were moving through the project when the next grant would be coming, and FAA didn’t know either,” he recalls. “They never knew how much discretionary money they would be able to allocate or send out at any given time.”

Before a grant could be issued, bids had to be received; so DLH issued bids on as large of pieces as it could, Ryks explains.

Kraus-Anderson Construction Co. worked to manage the contractors while airport officials tried to manage the grant cycles. “Their task was not an easy one,” he says.

Mike Dosan, senior project manager for Kraus-Anderson, helped issue different bid packages. When contractors submitted their bids, airport officials had to wait for Congress to give the FAA the go-ahead to authorize funding.

“We would issue bids, and then we would not know if we would have money to award those bids,” Ryks recalls. “With discretionary funding being so key, you can’t start the work without it. That was frustrating.”

As a coping measure, the airport extended its notice to award periods as long as possible beyond the typical 60 to 90 days. “If you extend it too far, your prices go up,” qualifies Ryks. “Contractors want the assurance that they’re going to have the work and it’s going to be in a certain timeframe.”

Sometimes, the construction manager had to ask contractors to hold their bids longer, and many did.
Because FAA payment reimbursements are issued through the state, DLH suffered when the Minnesota state government shut down in July 2011. “We could not get reimbursed for work our contractors had accomplished,” Ryks reports.

The airport authority responded by opening a $4 million line of credit with the City of Duluth to ensure it could issue payments during the state shutdown. Shortly after the state came back to work, however, the FAA partially shut down. “There were a lot of issues like that that we just had to work through,” Ryks recalls.

Duluth Design

Engineer and architect of record RS&H positioned the airport’s new terminal to the south, which allowed planners to expand the aircraft apron and resolve DLH’s Part 77 issues.

Although the current and new facilities are about the same size, the design of the replacement terminal  provides a much more efficient use of space, notes John Hippchen, senior aviation engineer with RS&H. “And the new, modern terminal is really going to improve the whole traveling experience for the customer.”

The previous post-security fishbowls were replaced with one 400-passenger holdroom that will serve all four gates — complete with restrooms and concessions, Hippchen stresses. 

The new terminal will also include two baggage belts rather than the current single belt. A moveable partition wall will replace the separate Customs and Border Protection section. When an international flight arrives, the area can be closed off. The vast majority of the time, however, the wall will remain open, making the area available for domestic passengers.

Several environmental features beyond the geothermal system were included, as RS&H designed the new terminal with silver level certification from the Leadership in Environmental and Energy Design (LEED) program in mind. 

Instead of forcing warm air down from ceiling vents, passenger areas are heated using radiant air floors. Warm air flows through the floor, then up the sides to keep the warm air at “people level” — 0 to 6 feet.

“It’s a much more efficient heating system for the northern climate,” Hippchen says. Much of the flooring on top of the radiant heat system is terrazzo; carpeting was specified in the holdroom.

With large aircraft coming and going from various directions, the terminal building itself is like the port of Duluth, where freighters from all over dock, notes Hippchen. The building’s curved roof represents the waves of Lake Superior.

The terminal also includes glass curtain walls on both the front and back of the building. “To be able to take advantage of the warm sun and natural lighting with the wide open curtain wall in the front lobby and ticketing area creates an open, pleasant feel when you walk into the terminal,” Hippchen explains, noting that the nearly 40-foot-high ceiling adds to the effect.

“The new terminal emphasizes, through its design, efficiency of flow for both passengers and baggage,” Werner says. “There’s a very open and airy feel and a great upgrade in amenities. In our current facility, we didn’t have the ability to have restrooms or concessions inside the secured area. All that has been attended to in the new terminal design. That is really going to make the passenger experience incredibly positive here. Compared to the facility we have now, we’re going to be able to offer a first-class customer experience that really has not been seen here.”

Long-Term Gains

Given how far the project has come, and all it took to get it there, Ryks says it was difficult to leave DLH. He does, however, look forward to coming back to see the completed terminal.

“It’s going to suit the entire region very well for many years to come,” he says, “and it’s going to be an excellent front door.”

Because the new terminal will be such a significant upgrade, Werner expects it to be the premier gateway for northern Minnesota and the Duluth area. “We’re really proud of the design effort that’s gone into this facility,” he says. “Passengers are going to notice from the moment they enter the terminal: It’s not going to be congested; there’s going to be efficiency of flow; and the amenities are going to be where customers expect them. We’re really excited.”


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