The City of Pensacola is expected to begin construction this fall of a new airport terminal, though with a higher price tag than once expected.
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City officials put the project around $70 million last year; on Wednesday, Mayor D.C. Reeves said it is now expected to cost between $107 million and $112 million. Meanwhile, the City Council will consider authorizing up to $150 million in bonds to finance the work and related improvements at Pensacola International Airport.
“The initial request was $100 million," Reeves said. "It will now be $150 million, but that is not because the project’s gone to $150 million. It’s just to provide us a little extra capacity with some rising costs and administrative costs … That doesn’t mean that that’s the commitment to spend.”
City leaders say the expansion is needed to ease crowding driven by years of growth. The airport reported more than 3 million passengers in fiscal 2024, and traffic has roughly doubled over the past decade. On Wednesday, Reeves said Labor Day weekend traffic was up 9.2% from last year and parking lots were at least 95% full.
To address that growth, the plan calls for major additions and upgrades: a five-gate concourse; an expanded security checkpoint with two more lanes for a total of seven; an elevated pedestrian walkway; new restrooms; passenger boarding bridges; a central utility plant; and baggage system upgrades.
The council will take up the airport items at an agenda conference on Sept. 8 and its regular meeting on Sept. 11. On the agenda are three key steps: approving the airport revenue bonds, holding a federally required public hearing on the bond plan, and signing off on a new operating agreement with the airlines that use the airport.
That agreement sets the financial rules between the city and the airlines. Under the new terms, the airport’s share of non‑airline revenues such as parking and concessions will rise from 17.5% to 20%. The minimum landing fee paid by airlines will increase from 25 cents to 30 cents per 1,000 pounds. The deal also raises the threshold for capital projects the airport can approve without airline sign‑off and requires airline approval of the airport’s eight‑year capital improvement plan, which includes the terminal expansion. City officials say these changes strengthen the airport’s finances and are essential to backing the new bond issue.
If the council approves the bond authorization and the new airline agreement, city officials say the financing structure would clear the way for phased construction while design work continues.
“It’s a multi‑phase project," Reeves said, "… and so the first physical work will be starting with this in October.”
