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San Diego airport awarded $110M in grant money for Terminal 1 project

San Diego International Airport is the beneficiary of substantial federal funding meant to assist the airport as it works to improve operations with the $3.4 billion redo of Terminal 1.

Wednesday, the San Diego County Regional Airport Authority, which owns and operates the airport, announced that it will receive $110 million in grant money over a 10-year period from the Federal Aviation Administration for airfield improvements included in the project.

“The FAA’s investment helps SAN and our passengers by allowing for more efficient operations from the minute they arrive to the minute they depart,” Kimberly Becker, who heads the Airport Authority, said in a statement. “The Airport Authority team was able to demonstrate to the FAA that the airfield improvements project will provide significant enhancements and allow us to continue serving the region’s air service needs. We appreciate the support of the FAA.”

Planned airfield improvements include redesigned taxiways and extra aircraft parking spots meant to reduce taxiing times.

Under construction since November, San Diego’s new Terminal 1 will eventually deliver 30 gates in an all-new facility promising room for larger planes, superior food and shopping options, and a baggage handling system capable of processing up to 2,000 bags per hour during peak periods. The new terminal’s first 19 gates are anticipated to open in late 2025, with the remaining 11 gates scheduled to be completed by late 2027.

Financed with bonds, the project will rely on fees paid by airlines to rent terminal space, parking revenue and passenger facility charges to repay the debt.

The FAA funding falls under the federal agency’s Letter of Intent Program, a reimbursement program that awards money for development projects that preserve or enhance airport capacity. San Diego applied for federal assistance on March 1, 2021, and was notified of approval on June 9 of this year, according to letters reviewed by the Union-Tribune.

“We look forward to continuing our working relationship toward the successful completion of this major system capacity enhancement project,” FAA executive Manson Wong, who runs the agency’s Los Angeles office, wrote in a letter to Becker, the airport CEO.

The money will be distributed annually, from fiscal 2022 to fiscal 2029, through $10 million in airport improvement project discretionary grants. The award amount increases to $15 million in fiscal years 2030 and 2031.

Although the Terminal 1 project will not boost the airport’s maximum capacity, which is limited by its single runway, the project is designed to better accommodate the growing number of passengers expected to be coming through the airport in the coming decades.

The just-announced money is distinct from two $24 million grants the San Diego airport was awarded for its new Terminal 1 efforts from the FAA as part of the Bipartisan Infrastructure Law.

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