You may have noticed some … disruption to business as normal inside Denver’s airport. Because it’s a tangled web of contracts, disagreements and timelines, we’ve written this as a reasonably up-to-date guide to what’s going on at Denver International Airport.
Denver International Airport CEO Kim Day told a city council committee she hopes to have a new construction team in place by this fall, with work beginning again in the terminal by "early next year."
"We have a commitment that we are going to deliver this project ourselves," Day said. "But we are going to deliver it on our budget of $770 million, which includes our contingency, and we think we are going to be able to deliver it quicker than the Great Hall Partners said that they could."
Great Hall Partners, the consortium lead by Spanish construction giant Ferrovial, was kicked off the project last month, following disputes over cost and timeline.
Day said they are looking into whether it makes sense to bring in a contractor that can do some work this year, before they find a permanent team.
Day said they can fit the project under the original budget, in part by limiting the scope of the project.
"We are likely going to reduce the number of concessions that were in the Great Hall, because we think Ferrovial and the Great Hall Partners had a little overly ambitious view of what would work in terms of retail in the Great Hall," said Day.
The big picture: The construction is meant to move security lines to a less exposed location.
And they want to open up the Great Hall — the space under the famous white tents — which was originally designed to be “a traveler oasis,” said Kim Day, CEO of Denver International Airport.
“This was a place that was comfortable, it had trees and water. And it was a place you could relax and de-stress,” Day said at a ceremony last year, marking the beginning of construction. “It used to be [travelers] were satisfied with a hot dog that was rolling on a spindle. Today? Doesn’t work that way.”
The airport’s grand plan is to open up the hall, and add higher-end retail and restaurants where travelers would spend more money. Kind of like these simulated people are doing:
Here’s where we are right now.
Construction inside one of the busiest places in the world, Denver International Airport’s main terminal, came to a stunning halt after the city fired its contractor.
Late in the evening on Aug. 12, Denver Mayor Michael Hancock gave the OK to terminate the $1.8 billion dollar contract amid accusations of sloppy construction, safety lapses, and disagreements over delays and cost overruns. Hancock said he took the extraordinary step to prevent “irreparable damage” to the airport.
The project, meant to move security lines off the fifth floor and open the hall to high-end retail and restaurants, now sits in limbo with unfinished work left behind white walls that snake through the terminal. Now, questions swirl about who will pick up the project, when it will be done and how much it will cost.
DIA said it plans to hire a new contractor and will go through the standard procurement process to find one. The termination of the current contract with Great Hall Partners — a partnership between Ferrovial Airports, Saunders Construction and JLC Infrastructure — is effective Nov. 12.
Here’s what’s next.
Ferrovial and its subcontractors have until that mid-November date to vacate the job site. The company has agreed to do so in an orderly and professional way. The airport will owe the company about $200 million to get rid of them, and it’s unclear how much is for work already completed, how much is for the financing Ferrovial secured, and how much is any penalties associated with terminating the contract.
The airport says it will identify a contractor by this fall, then it will have to go through the standard city procurement process. The airport will have to change the scope of the project to make it fit within some kind of budget.
It’s still unclear just how long it will take to finish the work at the airport, and how many more years travelers will be inconvenienced.
How did we get here?
In early 2015, Denver announced the renovation project, noting that moving the security lines, which ballooned after 9/11, to a less exposed location was the airport’s highest priority. The airport narrowed the list of potential contractors down to three — Ferrovial (a Spanish infrastructure giant), Westfield Airports and Den Transformation Team. By June of 2016, Ferrovial was picked for the job.
At the time, Ferrovial and its partners, including Colorado-based Saunders Construction, were, in the airport’s estimation, the best contractor for the job. An independent panel and four committees were set up to evaluate and score the proposals. Ferrovial outscored the other two developers, with the airport saying at the time that their plan, “best achieved a visionary look for the terminal while staying true to the needs of an operating airport.”
When announcing the termination of the contract recently, DIA CEO Kim Day said the airport did not make a mistake hiring the developer.
“We had an intense procurement process, we had outside people from the community and experts who helped us to pick the developer that we thought was the right one to go forward,” she told CPR News.
Still, some on Denver City Council had concerns. In announcing her “No” vote on the contract, councilwoman Debbie Ortega cited “the extremely limited time (one week) to review” the contract, which “including financials … written behind closed doors and never fully provided to City Council.”
The only other “No” vote was from then-Councilman Rafael Espinoza, a former architect.
“What they’re doing is a ‘yes.’ How they’re doing it is a question mark,” Espinoza said after the vote.
He questioned what he called a luxury contract, with a $100 million-plus contingency fund. And he took issue with the public-private nature of the deal. Ferrovial agreed to finance a portion of the construction in return for management rights and a slice of the retail proceeds for three decades.
In the end, the contract was easily approved as a super majority of the council agreed with the airport that the project was necessary for the airport’s future success.
Ferrovial broke ground on the project in the summer of 2018.
The relationship between DIA and the contractor got rocky quickly.
Even before the groundbreaking ceremony, featuring NBA Hall of Famer Magic Johnson (his investment company helped finance the project), the contractor was already sending warning signs that something was wrong. In a May 2018 correspondence to the airport, Ferrovial said delays were mounting, blaming “the multitude of Owner Changes being issued on the project.”
A year later in May 2019, CBS4 broke the story that the construction could be delayed by four years and cost an additional $310 million, because of, according to Ferrovial, airport-led changes to the design and weak concrete in the original construction of the building in the ‘90s. The city contracted a third party who reported that the concrete needed additional testing but was fine to build on. Ferrovial maintains the concrete problems were a legitimate issue and reason for delay.
In July, the war of words between the two sides escalated as DIA accused the contractor of breaching its contract and threatened to end things. The airport had issues with the contractor over the project’s timeline, costs, diversity and safety.
About two weeks later, DIA announced it would terminate the contract.
Do you have specific questions or observations about DIA? Email Ben.Markus@cpr.org