Construction Equipment Guide
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Sat February 10, 2001 - West Edition
WorldPort, a 70-acre air-cargo park, is the first private development under construction at Denver International Airport (DIA). The facility, when totally built out in three years, will be poised to take advantage of the dramatic shift toward the timely delivery of goods, from products purchased online to just-in-time inventory and critical parts.
“The incredible impact of e-commerce is changing the nature of air cargo on a global basis. Airport development must be flexible enough to accommodate it,” said Joseph A. Piscitell, president and CEO of DAMG Worldwide, a leading financier and owner of aviation assets.
Construction on the $200-million public/private air-cargo development and commercial complex began in October 2000, with the first six months allotted for site preparation to establish the building path, according to John Lasell, vice president of Bovis Lend Lease, general contractor for the project. “It’s a huge job,” said Lasell, adding that scrapers and dump trucks, and backhoes, will move close to 1 million sq. yds. (836,127 cu m) of dirt within the site.
“The issue of fugitive dust will be of concern,” said Lasell, who noted that the Federal Aviation Administration is requiring the subcontractor to ensure air controllers have unblocked visibility in all directions at all times during construction. “Dust could potentially impact visibility from the tower,” added Lasell. But with extensive dust control measures in place, including relentless watering, that shouldn’t become an issue.”
The other challenge in the project will be working in Colorado’s winter climate, which can alternate between warm and sunny days and frigid and snowy.
The eight air-cargo buildings, 500,000 sq. ft. (46,452 sq m) in all, will be tilt-up concrete, typically 30-ft. (9.1 m) high. “It’s fairly typical construction for the Colorado area,” said Lasell. The air-cargo tax apron will require 80,000 sq. yds. (64,000 sq m) of concrete poured 17 in. (43.18 cm) thick. Roadways will take 70,000 sq. yds. (56,000 sq m) of bituminous paving.
All utilities going into the project are sized for the future — to full build-out of the project, according to Lasell. Water lines will be cement-lined steel. “It’s the highest quality installation and this is the DIA standard,” said Lasell.
Up to 20 subcontractors will be used on the project, with much of the work still out to bid. Bovis Lend Lease is a worldwide construction company with 28 offices in the United States. The Denver office, opened five years, has 35 employees and does $50 million in construction annually. The company has experience with airport projects, including the United wing at O’Hare Airport in Chicago and the United Airlines facility in Indianapolis, as well as airport projects in New York City and San Francisco.
DAMG Worldwide is financing the project, along with financial partner Lehman Brothers and its local development partners Fulenwider, Prather & Thompson LLC.
WorldPort reflects a major departure from most third-party developments in that it offers a tiered pricing structure to accommodate different user needs. WorldPort will have an expansive cargo apron, facilities for carriers, and buildings specifically designed to accommodate the brokers and forwarders who need to interact with customs on a regular basis. The development will also provide space for shippers specializing in e-commerce and critical parts warehousing.
“We believe it’s vital that airport cargo facilities include not only the carriers, but the key industry players that support them,” said Piscitell. “Customs brokers, freight forwarders, consolidators and truckers will have the opportunity to lease, at reasonable rates, modern on-airport facilities that allow them to be productive and reduce operating costs.”
Leasing is under way and the first tenants are expected to be in their new facilities before the 2001 holiday shipping crunch. WorldPort’s initial freight-handling capacity should accommodate DIA’s cargo needs for the next five to 10 years, according to Pisctell.
The project is funded through a combination of WorldPort private equity and approximately $55 million in tax-exempt bonds issued by the city and county of Denver on behalf of WorldPort, guaranteed by a letter of credit provided by Morgan Guaranty Trust Company of New York. The city’s obligation to pay debt service on the bonds is limited to payments received by the city from WorldPort — no taxpayer funds or general airport revenues will be used.
The financing structure was developed by DAMG Worldwide and its financial advisors, Merrill Lynch, Lehman Brothers and J.P. Morgan. WorldPort is the first third party cargo development to secure financing based on a detailed financial analysis of the underlying economics of the air-cargo industry. A financial feasibility report highlighted the strong demand for air cargo facilities in the Denver area. By projecting future demand for air cargo facilities at the airport, WorldPort demonstrated to investors that the project produced sufficient revenues to repay the original investment cost.
DAMG Worldwide, through its Infrastructure Group, is the financier of the $1-billion San Diego Air Commerce Center at Brown Field, a commerce center and one of the largest air-cargo privatization project in North America. DAMG also is the financier of a $500-million joint-venture multi-modal transport park in Monterrey, Mexico.