SFO unveils billion-dollar plans for new hotel, rebuilt terminals 

click to enlarge The successful renovation of SFO’s Terminal 2 inspired new overhauls. - ASSOCIATED PRESS
  • Associated Press
  • The successful renovation of SFO’s Terminal 2 inspired new overhauls.

Among projects detailed in San Francisco International Airport’s capital plan for the next decade is a four-star hotel.

The $4.1 billion plan also calls for rebuilt terminals and boarding areas and a rehabilitated air traffic control tower.
The hotel, designed to hold 400 guests, is slated to be built near the U.S. Highway 101 entrance to the airport and will be accessible by SFO’s AirTrain system, according to airport Director John Martin. The hub will own and finance the $130 million hotel but will contract with a private management franchise such as Hilton or Hyatt, Martin said. It is expected to open in three to four years.

The capital plan unveiled Monday also contains major upgrades for Boarding Area E of Terminal 3. Construction has already started on that $114 million project, which is expected to be finished by 2014. The east wing of Terminal 3 also will benefit from $125 million in upgrades scheduled to be completed by 2015.

The Federal Aviation Administration will also spend $82 million to renovate SFO’s air traffic control tower.

The big-ticket item in the 10-year plan is a complete overhaul of Terminal 1, which houses airlines such as Delta and Southwest. That project will cost $1.7 billion and is scheduled to begin in June 2014, with a completion date still pending.

SFO plans to cover the $4.1 billion price tag through revenue bonds issued by the airport. Martin acknowledged that the total is a hefty amount to borrow, but he said SFO can easily repay the debt over a 30-year period through revenue collected from concessions, rental car proceeds and parking fees.

Last year, SFO collected $100 million in revenue from both rental car companies and parking garages, and the average passenger spent $14.50 at the recently renovated Terminal 2 — the highest such rate in the nation.

“Our financial economic engine is very strong,” Martin said. “And that’s what allows us to continue to undertake these improvements.”

Even though SFO completed a $383 million renovation of Terminal 2 less than two years ago, Martin said more improvements are necessary because of that project’s success.

“Terminal 2 is the standard for us, and perhaps the industry,” Martin said. “But if a passenger walks into Terminal 3, it’s not quite at that level, and Terminal 1 is seemingly from another century.”

Mayor Ed Lee, who attended the unveiling Monday, noted that the 10-year plan will provide 36,000 jobs and play a crucial role in the region’s bid to host the Super Bowl L in 2016 at the 49ers’ new stadium in Santa Clara.

“This airport is for everyone,” said Lee. “When this work is done, it will be modern, safe, and with the highest levels of technology and security.”


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