United Airlines would pay $686 million to expand and renovate Bush Intercontinental Airport’s Terminal B and gain control over its operations — including concessions — under a deal on Wednesday’s City Council agenda.
The city’s share of the project will be $288 million, raised through a $3-per-passenger fee the Houston Airport System has been collecting since November 2009.
The city has the cash to pay the $55 million for the project’s first phase, but may have to issue bonds to pay for subsequent phases, HAS Director Mario Diaz said. Those bonds would be paid off with continuing proceeds from the fee.
As part of the handover of maintenance and janitorial functions at Terminal B to United, 18 city employees would have to reapply for their current jobs when a United contractors begins doing the work. Diaz said the city will reassign any workers who are not hired by the contractors to other locations in the airport system.
Nonetheless, representatives of the Service Employees International Union, which represents neither United nor airport workers, raised doubts about protections for workers who transition from unionized city jobs to non-union positions for private companies. SEIU leaders also asked that council delay a vote on the contract until the public has had more time to scrutinize it.
The deal is on Council’s agenda for today, and you can be sure it will be tagged. And it needs to be delayed for at least a week, because there are still many issues that have not been fully aired out. The Chron story mentions “a 118-page agreement” that isn’t anywhere to be found on the city’s webpage, meaning that hardly anyone knows what’s in this beast. I do now have a copy of the original presentation about this proposal that was given in June. If you go to page 11, you’ll see that United has a decision point in 2017, whether or not to proceed with Phases 2 and 3 of this project. The page says “If United does not proceed with Phases 2 or 3, these areas remain with [the Houston Airport System]“. That reference has been removed in the updated doc, on which the Monday public meeting was based. What else has changed? Some more time to study this, and at least one more public hearing, would help.
Another point to note, as you can see in the fact sheet that SEIU sent me is that United will wind up with the lowest gate fees of any airline, much lower than what airlines like Southwest pay at Hobby. They’re also going to get 90% of the concessions – the city is letting United handle those details rather than handle the bidding itself. That’s probably wise given the kerfuffle that was caused the last time, but that doesn’t make this the best solution. Again, some time to talk all this through would be a good idea. The impression one gets from this story is that United is hot to get things started. That’s great, but let’s not get too hasty. We’re all going to live with this deal for a long time. Let’s get it right beforehand if we can.