Airport asks panel to increase hotel bond authorization to cover construction cost escalation
Summary
San Francisco International Airport asked the Budget & Finance Committee to authorize an additional $35 million in bond capacity and reappropriate $25 million of prior issuance costs to preserve the originally proposed 351‑room hotel amid an 18% rise in Bay Area construction costs. The committee forwarded the items to the full Board with a positive recommendation.
Cathy Weidner of San Francisco International Airport told the Budget and Finance Committee the airport seeks to increase hotel financing authorization by $35 million and reappropriate roughly $25 million in issuance and financing costs to align the funding structure with higher construction bids.
"Bay Area construction costs have increased by 18 percent," Weidner said. The proposed layered financing structure would sell general airport facility bonds to buy hotel special facility revenue bonds and increase authorizations so the originally envisioned 351‑room hotel can be built to the intended brand standards and amenities. Airport staff projected annual gross revenues of about $60 million for the hotel when complete and said construction was anticipated to finish in summer 2019.
The Budget Analyst and controller presented debt‑service projections for a 40‑year term and recommended approval. Following public notice, committee members moved to send both items to the full Board with a positive recommendation.
The vote to move the items does not itself authorize bond issuance but clears legislative pieces necessary for the airport to proceed with financing consistent with the airport commission—s previously approved plans.
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