Commissioners from Grand Traverse and Leelanau counties approved the initial step for a nearly $60 million bond sale to help fund a major terminal expansion at Cherry Capital Airport.
The Northwest Regional Airport Authority board hosted a joint meeting Monday afternoon with Grand Traverse and Leelanau county commissioners to outline the estimated $112.8 million expansion project, which is scheduled to begin in 2026 and be completed by 2028.
The meeting included a tour of the development site for the new project, and a financial overview of the proposed financing from Sean Wahl of PFM Financial Advisors which is assisting the airport with the project, along with bond counsel Patrick McGaw of the Michiganbased Miller Canfield law firm. All three boards voted in favor of proceeding with financing for the project.
“This is a milestone for us,” Authority Board Chairman Steve Plamondon of Lake Leelanau said. “This is something we’ve been working on for a long time.”
Plans call for an 80,000-square foot terminal expansion — the existing 20-yearold terminal is 121,000 square feet — which would include five additional jet bridges in addition to the five existing bridges, along with construction of a second concourse and a connector building between the existing and new structures.
The project will be paid for with funds from the Michigan Department of Transportation and the Federal Aviation Administration, along with bond funds repaid with a $4.50-per-passenger facility charge levied on airport travelers. The airport’s long-range capital plans include another 80,000-square-foot terminal addition and a total of 15 jet bridges by 2038.
Airport CEO Kevin Klein presented officials with a brief history of the airport, which dates to the 1930s from its original location off Veteran’s Drive in Garfield Township. It moved to its present location in 1936 and was used for training by the U.S. Navy during World War II. Traverse City took over the airport’s operation after the war, and four new runways were added in 1960. The airport’s first jet service arrived in 1963 with a flight between Traverse City and Detroit through North Central Airlines.
Cherry Capital cracked the 100,000 annual passenger counts in the mid-1970s, a number that has steadily surged to more than 700,000 passengers recorded last year through six airlines that serve the airport to 20 non-stop seasonal and year-round destinations around the country. It’s currently the third-busiest airport in Michigan.
The existing terminal opened in 2004, but was designed to handle 250,000 to 300,000 customers per year, Klein said, which is less than half of the facility’s current travel load. The airport’s current capacity limit is about 1,125 patrons, so the facility “is knocking on the door” of its fire code limits, he said.
“We’re building this for the capacity that we currently have,” Klein said.
But most of the meeting centered on financial projections for the proposed expansion, which generated most of the questions from county officials. Wahl’s estimates included a project cost of just over $112.8 million for the expanded terminal. Almost $51.8 million is expected to come from grant funds from the Federal Aviation Administration, leaving a necessary bond amount of just over $59.7 million in fixed rate bonds for up to 30 years, a figure that would increase to about $70 million in total bonding costs for expenses associated with the sale and interest costs until the funds are used.
Officials said the bonds would be repaid through various airport operational funds and that no local tax dollars are needed to finance the project. But the airport wants Grand Traverse County to pledge its full faith and credit to back the bonds to save on financing costs, which officials estimate will save the airport more than $17 million in financing for the project.
The Airport Authority’s bylaws also require Leelanau County to support the bond sale, although only Grand Traverse County’s full faith and credit is required under state law because the airport is located with the county’s boundaries.
Ty Wessell, chairman of the Leelanau County board of commissioners, described this as a “win-win” for the people of the little peninsula, as Grand Traverse County is set to be the sole guarantor of the $59.7 million bond. Leelanau County will not have to put their money at stake.
“We’re going to get the airport expansion with no risk involved,” Wessell explained. “Grand Traverse County commissioners had some questions about it that were addressed at the Monday meeting. And they will have to guarantee the loan, or at least put their name on it.”
Leelanau County Commissioner Kama Ross, who also attended the meeting, said a presentation by airport staff helped convince her of the necessity of the terminal expansion. According to Ross, statistics show most Cherry Capital Airport users are not tourists coming to visit northern Michigan on vacation, but people who live in Grand Traverse and Leelanau counties flying in and out.
Ross also mentioned that on at least one occasion, some of her family members had to wait on the runway for their flight because the Traverse City airport terminal was overcrowded. The airport has just four boarding bridges, according to the airport website, with five new bridges to be added in the expansion.
Leelanau County appoints three representatives to serve on the nine-member Northwest Regional Airport Authority. They are Plamondon, County Commissioner Jim O’Rourke, and a former commissioner and current candidate for reelection, Will Bunek.
