John Selden took the helm of the Atlanta airport last year. 

NEW DETAILS: Hartsfield-Jackson project costs soar $640 million higher

Construction projects to modernize and expand Hartsfield-Jackson International will cost $640 million more than anticipated, and airport officials are seeking Atlanta City Council approval to apply for additional federal funding.

The cost of renovations to the domestic terminal facade, construction of pedestrian bridges from the parking decks and relocation of flight information displays will go up by $275 million.

That’s mostly due to an extra $240.4 million for financing and interest because of the additional costs incurred from switching to bond funding. The rest of the extra cost is because bids for the project “came in higher than originally estimated,” according to airport documents.

Airport officials plan to leverage the funding from the federal $4.50 passenger facility charge (PFC) that travelers pay for each leg they fly and use it to secure bond funding.

Doing it that way is more expensive, said Hartsfield-Jackson chief financial officer Greg Richardson. Like a mortgage or other type of loan, it will cost the airport more over time for financing and interest.

That’s the reason, he said, that airports are lobbying to increase the maximum PFC allowed from $4.50 to $8.50.

But, if that happens, passenger would end up paying more. Airlines have resisted airports’ efforts to increase the PFC.

Another project, to add five additional gates to one end of Concourse T, will cost an extra $341 million, more than doubling the project’s original budget.

The increased budget for the gate expansion project includes an extra $197.8 million in financing and interest costs for more bond funding. The project will also cost more because bids were higher than estimated. On top of that, there’s an increase in “soft costs” for planning, design, testing, and project and construction management, according to airport documents.

A smaller project to reconstruct a taxi lane and ramp area will cost $23.4 million more than originally expected due to more pavement needed and higher pavement costs.

Hartsfield-Jackson is also seeking to use a greater share of PFC funds for a $318 million project to lengthen the Plane Train people-mover track.

Given the size of the airport’s $6 billion ATL Next expansion and modernization, airport officials “knew at some point” they would need to turn to bonds to finance projects, “just given the magnitude of the program,” Richardson said.

“Everyone goes through this,” he said. “At some point, you’re going to have to bond fund certain projects,” so there’s still federal funding available for other projects in the future.

For the four projects, the airport will apply for an additional $732 million in PFC funding from the Federal Aviation Administration.

On Wednesday, the Atlanta city council transportation committee voted in favor of the measure, which now goes to the full council for a vote.

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