HOUSTON – In “Pop-off politics” This week, we’re highlighting the latest issue facing Houston City Council members. A bond of nearly $2 billion to improve Terminal B at Bush Intercontinental Airport. This isn’t a typical airport upgrade, so let’s break it down.

The agenda item

The city council is considering agenda item No. 18, which is full of legal terms and financial jargon. Simply put, this section authorizes the city to issue and sell what are called special facility revenue bonds in the airport system. These obligations are specifically related to United Airlines’ operations at Terminal B.

What is the purpose of these obligations?

Unlike general airport renovations, these bonds are reserved for specific projects within Terminal B. They will finance improvements such as:

• Expansion of the central processing facility.

• Installation of a new baggage handling system.

• Modernization and replacement of doors in the north and south halls.

• Added 18 doors with new jet bridges.

The key here is that the bonds are not covered by the city’s general funds or taxes. Instead, revenue generated from United Airlines’ operations at Terminal B will be used to repay bondholders. Essentially, the improvements will help boost airline operations, which, in turn, pays down bond debt.

The approach

This isn’t the city’s first rodeo with these kinds of connections. Houston has issued similar revenue bonds for special facilities five times previously, dating back to 1998. This history indicates a history of using bonds to improve airport facilities through dedicated revenue streams.

The price to pay at $1.95 billion

This new bond issue aims to raise $1.95 billion, making it a significant financial commitment to the future of the airport and its main airline partner, United Airlines.

In this week’s “Pop-Off Politics,” we highlight the latest issue facing members of the City of Houston City Council. A bond of nearly $2 billion to improve Terminal B at Bush Intercontinental Airport. This isn’t a typical airport upgrade, so let’s break it down.

Why does it raise eyebrows?

KPRC 2 investigates Mario Diaz raised questions about the involvement of Loop Capital, a company frequently linked to these bond deals. If Loop Capital looks familiar, it’s because they have a history of municipal bond projects in Houston, leading some to question whether selecting the company is in the best interest of taxpayers.

Takeaways

This guarantee does not only concern the modernization of airports; it is a major financial strategy that ties improvements to a specific revenue stream involving United Airlines, Loop Capital and the City of Houston.

KPRC 2 Investigates examines the bond and its connection to Comptroller Chris Hollins’ investor summit Wednesday night at 6 p.m.

Do you have ideas for city agenda items, this story or other city projects? Leave your comments or email Mario at [email protected].