Narrative
Full Description
Project narrative
On September 27, 2017, financial close was reached on a deal in which a syndicate of six banks — including the Industrial and Commercial Bank of China (ICBC) — entered into a $800.00 million USD syndicated revolving credit facility (RCF) agreement with Regional Airports Improvement Corporation (RAIC) — a California-incorporated non-profit public benefit entity for financing airport works for for the purpose of assisting the City of Los Angeles that acts as a quasi-governmental special purpose entity — as conduit borrower (on-lender) for Delta Air Lines, Inc. — a Delaware-incorporated major American airline headquartered in Atlanta, Georgia and listed on the New York Stock Exchange — the Los Angeles International Airport Terminal 2 and 3 Modernization Project. This RCF carried a maturity period of four years and a final maturity date of September 27, 2021. Southwest Airlines Co. issued a guarantee for the RCF. The RCF would be repaid with the proceeds of payments from the Los Angeles World Airports (LAWA), the airport authority for the City Government of Los Angeles, to purchase the completed project. ICBC contributed $105.00 million USD to the loan syndicate. In addition to ICBC, the following lenders contributed to the loan syndicate: CaixaBank ($135.00 million USD), Commonwealth Bank of Australia (CBA) ($75.00 million USD), JPMorgan Chase Bank, N.A. ($170.00 million USD), Sumitomo Mitsui Banking Corporation (SMBC) ($145.00 million USD), and Wells Fargo Bank N.A. ($170.00 million USD). In 2020, the lending syndicate of the RCF entered into an amendment agreement with the borrower for the RCF. As of December 31, 2020, $293 million USD was drawn under the RCF. As of December 31, 2021, $450 million USD was drawn under the RCF. In January 2022, the lending syndicate of the RCF entered into an amendment agreement with the borrower; in the amendment, the RCF was up-sized by $300 million USD to $1.1 billion USD. It is unclear whether all the existing lenders, including ICBC, or any new lenders contributed to this RCF. In 2023, the lending syndicate of the RCF entered into an amendment agreement with the borrower to reduce the value to $626 million USD. The proceeds were used to finance the renovation and modernization of Terminals 2 and 3 via the upgrade the concourse of Terminal 2, the demolition and reconstruction of the Terminal 3 concourse building, the demolition of the southern appendages of the Terminal 3 satellite (oval shaped structure at the north end of Terminal 3), and the demolition and reconstruction of the passenger and baggage processing facilities (ticketing buildings) of Terminal 2 and 3 at the Los Angeles International Airport (LAX) in Westchester, Los Angeles, California. The renovation would add approximately 830,000 square feet of new building space to the two terminals with space for a new centralized ticketing and arrival hall, passenger and baggage check-in, a new security checkpoint, core infrastructure to support the Automated People Mover (APM) Terminal Vertical Core, ramp improvements, a post-security moving walkway connector to the north side of the Tom Bradley International Terminal, and a new Bus Gate independent structure at Terminal 2. Terminal 3 would have 1.2 million-square feet and 27 gates and a 30,000-square foot Sky Club. The renovation would reduce congestion and improve connectivity between Terminal 2 and 3 both within the ticket and check-in section and the post-security screening section. It was expected that the increased flexibility and efficiency gains could lead to Delta relocating to Terminals 2 and 3 from their contemporary location at Terminal 5 and 6. The project included airside and landside sustainability features including low-water water fixtures, low-emitting materials for interior spaces, the recycling of over 75% construction waste, and a "cool roof" to reduce the heat-island effect and maximize air-conditioning energy use. In 2016, Delta Air Lines entered into a lease agreement with the City of Los Angeles and announced plans to modernize, upgrade and provide post-security connection to Terminals 2 and 3. The project was expected to cost approximately $2.4 billion USD, with the City of Los Angeles to pay $1.8 billion USD for the completed project. Over 2,000 workers, 30% of the project team, came from local communities. Genseler served as architect and provided wayfinding services. Hensel Phelps served as general contractor and construction manager. Arup served as structural, civil, electrical, and mechanical and plumbing engineer and provided services for information technology, communications and security, group code compliance, fire protection, lighting design, and acoustics. Burns & McDonnell served for fueling. Shannon & Wilson served as geotechnical engineer. CAGE Inc. provided baggage handling services. VDA Inc. provided vertical transportation as Gensler's subcontract. Aero Systems Engineering was responsible for boarding bridges and JBT Corporation was the installer of those. Simpson Gumpertz & Heger (SGH) Inc. provided waterproofing services as Genseler's subcontractor. Lynn Capouya provided landscape services for the 3B Tom Bradley International Terminal Plaza. Westfield Airports, LLC was responsible for some architecture and engineering services and DLR Group was subcontracted as executive architect for it. Clark-McCarthy Joint Venture was the contractor for the northside expansion. Corgan Associates Architects, PC, Gensler, Inc., and SmithGroup were the architects for the northside expansion. Buehler Engineering Inc. was also involved in planning and phasing studies and supported enabling projects for the northside expansion. The project began implementation in 2017. Construction was to be completed by 2024. As a result of the reductions in passenger volumes due to the COVID-19 pandemic, Delta changed the scope to make Terminal 3 "more customer-friendly" and include a Delta One lounge and Delta Sky Club, and baggage system upgrades to increase efficiency. Nine additional gates and associated concessions and spacing seating areas opened in October 2012. Terminal 3's West Headhouse opened in May 2023. The project was completed in August 2023.