Twenty years have passed since the first plane landed at Denver International Airport.
Since that time,
a project that was seen as a political boondoggle — even called “Federico’s Folly” for then-mayor Federico Peña — has survived the perils of an ailing airline industry, fiscal downturns, volatile fuel prices, budgetary mismanagement and political posturing to emerge as an economic powerhouse with a whopping $26.3 billion impact on the state’s economy in 2014.
DIA was never intended as a mere replacement for the tired old Stapleton International Airport that had been hemmed in by urban development.
The leaders who envisioned the big new airport on the plains had a long-term strategy in mind: the airport as an economic engine, working with industry and tourism to help catapult Denver — a so-called cowtown in a land-locked state with no water ports and limited rail access — to new heights of growth and financial success.
And, although there is more work to be done, the plan is starting to come to fruition, said airport CEO Kim Day.
“The impact in the region has far exceeded the vision — we’ve grown faster than anyone expected,” Day said. “Had they not built this airport, Denver would not be growing the way it is in terms of overall economy and great jobs here, and all the businesses that are moving to Denver.”
Where it started
When the first flight took off for Kansas City from DIA in the early morning of Feb. 28, 1995, the airport was 16 months past due, about $2 billion over budget, and had suffered an epic failure of the system that was to revolutionize baggage-handling procedures, which, according to The New York Times, was responsible for about $100 million of that overrun.
Ten years later, DIA was still $4 billion in debt, the planned hotel and rail lines were on hold, and officials were navigating the tricky waters of persistent land squabbles between Denver and Adams counties, and the fallout from United Airlines’ 2002 bankruptcy.
Despite these setbacks, the airport has continued to push forward — but not without recent hardship.
The long-awaited hotel and transit center was the focus of a scathing November 2014 report from the Denver city auditor’s office that cites a lack of change-related cost controls, poor record keeping and sloppy accounting among reasons the project is over budget.
“From the initial $500 million to the current $544 million, we cannot provide assurance that the (hotel transit center) project will not ultimately increase to $599 million,” the audit report said.
Day vigorously defended management of the project but also agreed to implement all 11 recommendations made in the report.
The hotel will open in November, and the rail line is scheduled for a 2016 debut — and, Peña said in a recent interview, there’s plenty more to come. “I think the full potential has yet to be met. That will occur over a number of decades.”
In 1983, when Peña became mayor, Stapleton had major issues, including noise-violation lawsuits and frequent flight delays that affected the entire country.
“It was seen really as the Achilles’ heel of aviation,” said Denver Mayor Michael Hancock. “The old saying is that ‘If Stapleton coughed, the rest of the nation got a cold.’ “
Stapleton was hindered by space and its proximity to residential areas.
“The only place it could (expand to) was the Rocky Mountain Arsenal, and that wasn’t going to solve your noise issues with Park Hill,” said Jeff Price, professor of aviation and aerospace science at Metropolitan State University of Denver. “There were a lot of problems that the arsenal was not going to solve that building a new airport solved. It created the ability to expand the places it needs to without worrying about a lot of residential encroachment.”
The Denver Regional Council of Governments voted in July 1983 to allow Stapleton to expand onto the arsenal. However, many weren’t happy, among them the Adams County commissioners and the mayors of Commerce City and Brighton.
Peña heard them out over dinner one night.
“I said ‘tell me exactly what your problem is with the airport being expanded on the arsenal.’ And that’s what started the conversation and the ultimate decision to move the airport away from the two cities,” he said. “So that’s how the compromise started to move the airport and get the permission to annex the land and the rest, as they say, is history.”
When Peña looked northeast instead, with a proposal to build a new airport 24 miles outside Denver — “out in Kansas,” as many characterized it — many thought he was off his rocker.
“It is probably fair to say that the idea of a new airport was not universally supported.” said then-U.S. Sen. Tim Wirth. “Many did not fully understand the economic impact of a new airport, what it would mean for Denver, and that it would certainly pay for itself.”
It took a lot of work to both persuade voters to approve the project and secure necessary funding.
Wirth worked with Sen. Frank Lautenberg — a New Jersey Democrat and Vail homeowner who at the time chaired the Senate transportation appropriations subcommittee — to land about $500 million in federal funding, making the airport the largest single federally funded project between Chicago and the West Coast, Wirth said.
“A concerted effort by some in the Denver business community, landowners with a potential stake and the aggressive mayor’s office finally won the day,” Wirth said.
Most of the airport’s initial construction, which employed more than 11,000 construction workers, took place after Wellington Webb became mayor in 1991.
The city closed deals with multiple airlines and revamped the airport’s concessions program to give minority and women business owners more opportunity on Webb’s watch. This was all part of a greater vision of what the airport could do for Denver, Webb said.
“In 1996, 42 percent of the concessions at the airport were local minority- and women-owned businesses. That’s as high as Atlanta,” Webb said. “We imagined a great city, and what we did was to follow up with building a great city.”
Minority- and women-owned enterprise participation is calculated differently today. An airport spokesman said in 2014, minority- and women-owned businesses accounted for 39.4 percent of total concessions revenue of $330.3 million.
Big land, big ideas
Denver International Airport sits on 53 square miles. To put that into perspective, the cities of Boston or San Francisco could easily fit on DIA’s property.
The airport’s main Jeppesen Terminal, the Airport Westin Hotel, six runways and three gate areas take up only a small portion of that land, leaving thousands of acres open for opportunity.
The initial DIA land acquisition in the 1980s included 71 oil and gas wells. The airport now has 76 fully owned wells and 54.9 acres dedicated to solar arrays that can generate 10 megawatts, or enough electricity to annually power about 2,600 homes. There are also 16,000 acres of land available for farming, with roughly 8,327 acres currently leased among three farms.
“The only caveat is they cannot grow anything that would attract birds,” Day said, “because birds are bad for an airfield.”
Since 2008, DIA has made about $1.65 million from farming and $31 million from oil and gas — money that feeds into the airport’s non-airline revenue stream.
Non-airline revenue, which also includes food, concessions and car rental fees, accounts for 46 percent of DIA’s 2014 estimated operating revenue of $700 million.
There also are 9,000 acres of land within the airport boundaries available for commercial development. There is also adjacent land in Aurora, Commerce City and Adams County open for development.
But there is still controversy, the most significant rooted in an original 1988 annexation agreement with Adams County that gave Denver County the land upon which to build the airport.
In that agreement, Denver agreed to restrictions on development in order to give other communities an advantage in landing new business near the airport. And now, there’s squabbling over tax revenue sharing that would help Denver meet the spirit of the agreement as businesses are lured to DIA. Officials have been in mediation talks for more than 14 months.
“The intergovernmental agreement has some limitations on what those commercial activities are, but as long as they’re related to the airport, they’re certainly acceptable,” Day said.
Hancock remains optimistic that the decades-long dispute between Denver and Adams County will soon be resolved. But until it is, Price said, the issue is holding the airport back from the explosive growth its planners envisioned.
“Denver got a little ahead of itself in some areas,” he said. “Stepping back a bit, doing some good master planning for the area around the airport, and getting those governmental agreements in place with Adams County are going to be critical for that airport to be what they eventually hoped it would become.”
Recent developments include the Paradise 4 Paws pet hotel, and the North American headquarters of Panasonic Enterprise Solutions. The new rail line — with three major stations, each with business development plans — will help make this area more accessible and more attractive.
It’s all part of the carefully choreographed dance of planning for the future.
“We are always dealing with the unknown, so that’s why we have to be real planners,” Day said. “In everything we decide, we like to look at what’s going to be the impact on the future.”
That future isn’t completely in the airport’s control, said Price, explaining that the city’s economic development can have a direct affect.
“If you grow Denver’s aerospace industry and our high-tech and IT industries — the more that grows, the more you’ll attract that international traffic,” he said.
On the operations side of things, DIA has ample room for expansion of the terminal and the capacity to double the number of runways to 12.
Plans to build the airport’s seventh runway were put on hold in 2013, in part because of cost overruns with the hotel and transit project.
The runway also is not immediately necessary, the airport says, for several reasons — among them, technological advancements like the FAA’s NextGen system, which allows for more efficient traffic management. And then there’s simple modern airline math: As more passengers are crammed onto each plane, fewer flights are necessary and less runway space is needed.
Better routing, along with replacement of older, louder planes with newer, quieter models, has also helped reduce DIA’s noise complaints from a high of 84,467 in 1995 to 4,522 in 2014.
The airlines, of course, are a huge part of operations, generating revenue for DIA through the payment of landing fees and taxes.
Some carriers, such as Frontier Airlines, have complained that DIA’s costs are too high, blaming them for recent flight and job cuts.
Cost-per-enplaned passenger, or CPE, is the common industry metric for comparing airport costs. It isn’t a perfect science — each airport has its own model for cost-share with the airline.
According to 2013 FAA and airport data, DIA had a CPE of $11.81, compared with Washington Dulles at the top at $27.29 and the cheapest, Charlotte Douglas in North Carolina, at $1.13.
This places DIA in the middle of the pack for large hub airports, right where DIA CEO Day wants it to be.
“We have to balance keeping this a beautiful pristine facility that works with keeping the cost to our carriers low. We don’t want to be so cheap that you’re in a crumbling facility that eventually becomes LaGuardia,” Day said. “Everything we do … we look at what’s going to be the impact on our carriers. And we make every decision with that cost-per-enplaned passenger in mind.”
Airport of the future
Today’s technology was primarily relegated to science fiction back when DIA opened. The Internet wasn’t readily available, mobile phones were not commonplace and people kept up on current events by reading print newspapers. In airports, electrical outlets were placed about one per every 2-3 gates — a fact that causes many modern travelers dismay.
Today, it takes only a glance at the five new Southwest Airlines’ gates in DIA’s Concourse C to get an idea of the direction in which the airport is headed: Plush seats sit in the center of the concourse, interspersed with wired work tables; gate seating is equipped with USB ports and outlets; and patrons will soon be able to order food for in-person delivery from the concourse’s myriad restaurants.
These are just a few examples of how DIA is focusing more on the consumer experience, much in the way a suburban mall property does, with shopping, spas and restaurants.
“Quite honestly, airlines have given up a lot of the amenities for customers, and we want to re-engage customers and make, at least the travel in Denver, if not their entire trip, something really special,” Day said.
The airport recently announced plans to remodel the Jeppesen Terminal’s Great Hall through a public-private partnership, relocating the massive TSA screening area and re-purposing the space for concessions.
“That space was always intended for people to mix and mingle underneath what was a very iconic roof structure,” project manager Kenneth Ho said in January.
As for the next 20 years, Peña says the work may never be easy, but the outcome will be worth it as DIA continues to propel Denver and the state to greater growth and success.
“These kinds of visionary projects will always have some critics and challenges,” he said, “but if they were easy, every major city in America would do it.”
Laura Keeney: 303-954-1337, lkeeney@denverpost.com or twitter.com/LauraKeeney
