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St. Louis Airport Commission approves Boeing expansion

St. Louis Airport Commission
Boeing's expansion project will include St. Louis Lambert International Airport's Brownleigh and parts of Northern Tract sites. The first phase will use about 158 acres.

The St. Louis Airport Commission has taken the first step needed for Boeing’s expansion project on St. Louis Lambert International Airport land.

On Wednesday, the commission approved an agreement allowing Boeing to lease about 158 acres. The aircraft company would initially pay the airport about $2.6 million a year during the first phase of the project, with a potential increase after the seventh year of the lease based on consumer price indexing. The first phase would utilize the airport’s Brownleigh property, a portion of its northern tract that is the former site of McDonnell Douglas buildings.

The agreement will generate revenue for the airport, St. Louis Lambert International Airport Director Rhonda Hamm-Niebruegge said.

“For the St. Louis region I think it is really exciting and for the airport because it is a critical partnership,” Hamm-Niebruegge said. “As we move to our future, looking for those revenue streams, looking for the partnerships, that's what's going to make us successful. So we look at this as not only great for the airport, but really great for the region and the state.”

Airport and Boeing leaders expect the agreement to create about 500 jobs.

The deal also allows Boeing to begin a second phase of the project, using 28 acres of another portion of the airport’s northern tract site. If pursued, Boeing would pay an initial $369,000 a year. Boeing could pay up to $41.3 million to build a new facility for a tenant that is still stationed in that portion of the land.

The lease could last up to 47 years if Boeing exercises the six options included in the agreement.

“You're looking at close to a $3 million annual revenue stream for the airport, plus those [consumer price indexes] for decades to come,” Hamm-Niebruegge said. “We don't like to sell our property, we would rather turn it into long-term leases because it brings an annual revenue stream to help offset expenses here.”

The deal includes a provision under which Boeing would be responsible for environmental clean up efforts on the sites if the organization discovers a third party was responsible for any contamination. The city will reimburse Boeing up to $2.5 million.

Although the airport is in St. Louis County, St. Louis leaders would still need to approve the expansion since Lambert is city property. The St. Louis Board of Aldermen and the board of estimate and apportionment will have to green light the effort. Hamm-Niebruegge hopes the city will OK the measure by the end of September.

But Boeing is also seeking tax breaks from the St. Louis County Council. Boeing, airport and economic leaders met with county council members during a committee meeting Tuesday to discuss the potential measure. If approved by the council, Boeing could receive a 50% tax break.

“This is key to significantly growing our advanced manufacturing capabilities at the site,” Randell Gelzer, Boeing's senior director of state and local government operations said during the committee meeting. “This will allow us to compete for those next franchise programs in St. Louis.”

Chad is a general assignment reporter at St. Louis Public Radio.