BY MAUREEN N. MARATITA
The board of Guam’s airport had a long agenda for its June 2 meeting, but made significant progress.
Among its discussions were construction delays of the third-floor arrivals corridor, which was awarded to Black Construction Corp.
A final opening date was not received, according to the project’s construction manager, Kent Hsieh, president and principal of KHLG & Associates Inc.
As to when construction would be complete, he said, “The final completion date will fall between April 26, 2021 and December 21, 2021.”
Black had not been responsive, he said.
“We have requested Black Construction to submit a recovery schedule — due last week,” he told the board. While Hsieh recognized there were a lot of reasons for the delay, he said Black Construction said they would need a couple of weeks to reply.
Hsieh described Black’s progress monitoring as a potential breach of contract. “They’re supposed to track activities and they’re not doing it. … If you look at all the activity and the schedule, they don’t match. Without a schedule, we are following blindly … ,” he said.
According to Black, the project was 50% complete, he said. “We have told them we will hold their project payment until their schedule is submitted.” Hsieh asked the board whether to pay or not and allow Black to submit a schedule. “Right now, we’re holding 10% of the contract, plus all the remaining balance of the project payments,” he said. He recommended meeting with Black.
Board Chairman Brian Bamba, who is also senior vice president of IP&E — said a committee of the board should meet with Black.
The board did approve payment of a change order for work completed under that order.
Delays to the airport project were already anticipated in July 2018, according to Journal files. By early 2019, when the completion date was then September 2019 the cost was estimated at just under $118 million. Bids were issued for the corridor in 2016, and the award was for $97 million.
Additionally, the board approved $3 million in rent relief for its MAG tenants — those that operate under a Monthly Annual Guarantee and who therefore make payments regardless of revenue.
John Rios, controller at the airport, ran the board through the current fiscal situation for the current fiscal year.
The airport had budgeted about $53.3 million in expenditures for fiscal 2020 but expected that to be $49.5 million. “Total airport revenue …. is $72.6 million,” he said. That included the CARES Act $20.7 million grant. “It’s still below our approved budget of $77 million.” With $49.5 million in expenses, that left the airport with a net revenue of $23.1 million for the current fiscal year. The airport would still be able to meet its debt service.
The rent relief would include six car rental companies, one food vendor, the airport parking lot vendor and Lotte Duty Free — which has the merchandizing concession at the airport. IT&E had also applied for rent relief.
Thomas C. Ada, the executive manager at the airport told the board the rent relief would be for three months — April, May and June.
“We still end up with a surplus of $5.7 million,” he said. If it remained at the end of the year, he said, “It’s definitely going to be needed to be carried forward to fiscal 2021.”
What the airport wants to do, he said is “alternatively to charge the tenants on the basis of the space they are occupying. Utilities still have to be paid and there’s some fixed costs.” It would be applied across the board.
Tenants would be given the option to have relief spread out in three months, or in lower payments for two months, with a balloon for the third month.
He said for Lotte, “The reduction or discount translates to about 70%. For your car rental companies the discount is approximately in the order of 80% to 85%.”
“The food concessionaires … are on a percentage of sales basis. … The relief that is being provided to them is that they are allowed to maintain their equipment in place … .”
The board also approved two awards to Hawaiian Rock for runway work. mbj