HOUSTON – In ‘Pop-Off Politics’ this week, we’re highlighting the latest issue in the City of Houston facing council members. A nearly $2 billion bond to improve Terminal B at Bush Intercontinental Airport. This isn’t your typical airport upgrade, so let’s break it down.
The Agenda Item
The City Council is reviewing Agenda Item #18, which is packed with legal terms and financial jargon. In plain English, this item authorizes the city to issue and sell what is called Airport System Special Facilities Revenue Bonds. These bonds are specifically tied to United Airlines’ operations at Terminal B.
What’s the Purpose of These Bonds?
Unlike general airport renovations, these bonds are earmarked for specific projects within Terminal B. They’ll fund improvements such as:
- Expanding the Central Processing Facility.
- Installing a new baggage handling system.
- Upgrading and replacing gates in both the North and South Concourse.
- Adding 18 gates with new jet bridges.
The key here is that the bonds are not covered by general city funds or taxes. Instead, the revenue generated from United Airlines’ operations at Terminal B will be used to pay back the bondholders. Essentially, the improvements will help boost airline operations, which in turn, pays off the bond debt.
The Approach
This isn’t the city’s first rodeo with these kinds of bonds. Houston has issued similar special facilities revenue bonds five times before, dating back to 1998. This history indicates a track record of using bonds to improve airport facilities through dedicated revenue streams.
The $1.95 Billion Price Tag
This new bond issue aims to raise $1.95 billion, making it a significant financial commitment to the airport’s future and its primary airline partner, United Airlines.
In ‘Pop-Off Politics’ this week, we’re highlighting the latest issue in the City of Houston facing council members. A nearly $2 billion bond to improve Terminal B at Bush Intercontinental Airport. This isn’t your typical airport upgrade, so let’s break it down.
Why It’s Raising Eyebrows
KPRC 2 Investigates Mario Diaz raised questions about the involvement of Loop Capital, a firm frequently tied to these bond deals. If Loop Capital sounds familiar, it’s because they have a history with Houston’s municipal bond projects, leading some to scrutinize whether the firm’s selection is in the best interest of taxpayers.
The Takeaway
This bond isn’t just about airport upgrades; it’s about a major financial strategy that ties improvements to a specific revenue stream involving United Airlines, Loop Capital and the City of Houston.
KPRC 2 Investigates is looking into the bond and how it connects to the Controller Chris Hollins Investor summit on Wednesday night at 6 p.m.
Have thoughts on city agenda items, this story or other city projects? Drop your comments, or email Mario at mdiaz@kprc.com.
