Houston airport terminal funding clears city council

Initial funding for a $2.55 billion bond-financed terminal project at Houston’s George Bush Intercontinental Airport is moving forward after months of delays.

The city council on Wednesday appropriated $150 million, which marks the first portion of the city’s share of the project that will be financed with up to $624 million of general airport revenue bonds (GARBs).

Attempts to vote on the appropriation starting last November were thwarted by then-Houston Controller Chris Brown, who raised several concerns about the financing plan, including the lack of a completed feasibility study for the bonds. Chris Hollins, who succeeded Brown in January, blocked the measure earlier this month.

In a statement, Hollins said he approved the funding following a full review.

“Our focus was on efficiency, fiscal sustainability, and ensuring that Houstonians were best served under the terms of the agreement,” the statement said.  “In addition, financial aspects of the agreement had to pass a series of tests to allow the controller to sign off and to ensure that the Texas Attorney General would approve the deal.”

Brown, who was term-limited from running again for controller, is now the city’s senior advisor for financial integrity.

Houston Finance Director Melissa Dubowski said the feasibility study would be completed before the GARBs, backed by the airport’s net revenue, are sold.

“Going through that rates and charges model, going through that detailed financial analysis, it took some time to get there, but we have gone through all those numbers and we feel comfortable at this point,” she told the city council.

The GARBs would be issued in several tranches starting this year through 2026, with an initial bond ordinance brought to the city council in late spring, according to Dubowski. The issuance of up to $1.95 billion of special facility revenue bonds, backed by lease payments from United Airlines, will begin with an inducement ordinance on next week’s council agenda. Pricings will take place this and next summer, she said.

Both sets of bonds were included in a memorandum of understanding approved Nov. 15 by the city council.

In late November, then-Mayor Sylvester Turner and United officials launched the project to expand and update 50-year-old Terminal B with new gate concourses, baggage handling system, ticketing area, and a 14-lane security checkpoint among other improvements.