Cherry Capital Airport Prepares to Move Forward on $120M Expansion

Cherry Capital Airport is preparing to move forward on an estimated $120 million terminal expansion – a project targeted to break ground in 2026 to add five new gates, a relocated and expanded security checkpoint area, expanded outbound baggage area, more restrooms and amenities, and new concession areas. A notice appears on the Grand Traverse County commission agenda today (Wednesday) of the Northwest Regional Airport Authority’s request to convene Grand Traverse and Leelanau counties next month for a joint meeting to discuss the project and seek commission support to bond approximately $60 million of the cost.

In a memo to county officials, Cherry Capital Airport CEO Kevin Klein noted that airport traffic at TVC has “nearly doubled in the last decade.” Over time, he wrote, “the addition of new airlines and flights have created a crowded airport experience for travelers, especially in the busy summer months. Key functional spaces critical to the movement of passengers and baggage are now undersized for the sheer number of travelers today. As a result, passengers are experiencing delays, increased wait times, and overcrowded spaces.”

Klein tells The Ticker the airport was built to accommodate in the range of 350,000 passengers per year. In 2023, TVC experienced a record year for passenger traffic, hitting 700,699 total passenger movements. In new numbers just in, Cherry Capital Airport is now almost 55,000 passengers ahead of last year’s count at this time, Klein says. “This August will come in at over 118,000 passengers, which will be a record,” he says. 

Klein says adding a new concourse will help alleviate demand and “allow us to better serve our constituents through competitive travel options and increased economic activity.” The expansion of both the terminal and its supporting apron is slated to take place north and east of the current concourse. The five new gates will have boarding bridges and departure lounges, with the TSA checkpoint relocated and expanded. In addition to more restrooms, an expanded baggage area, and new concessions areas, additional amenities like a mother’s room, adult changing room, and service animal relief area will be added. Construction is targeted to start in 2026 and take two years to complete.

The expansion, which has been discussed for years, is estimated to cost $120 million. Half of that is expected to be covered by grants and federal funding, including Airport Improvement Program (AIP) Entitlement Grants, AIP Discretionary Grants, Bipartisan Infrastructure Law Airport Infrastructure Grants (BlL – AIG), Bipartisan Infrastructure Law – Airport Terminals Program (BIL – ATP) Grants, State of Michigan Grants, and Northwest Regional Airport Authority (NRAA) funds, according to Klein’s memo.

“I feel very confident (about securing funding),” Klein tells The Ticker. “Over the years, we’ve used our entitlement and grant funding very well. We’ve not asked for discretionary funding at the airport really since 2006, so it’s been about 18 years. We’ve built a lot of infrastructure without needing discretionary funding. So we’re now going to look for that as part of this opportunity.”

The NRAA, which operates Cherry Capital Airport, intends to bond the other $60 million. When the NRAA was established in 2020 – after Grand Traverse and Leelanau county commissioners agreed to allow TVC to become an independent airport authority – the counties “maintained consent to approve the issuance of debt by the NRAA where the full faith and credit of a county will be pledged,” Klein’s memo states.

Klein is requesting a joint meeting on October 14 with both county commissions to present the expansion plans in detail and seek approval for the NRAA to issue bonds. While both counties would vote to bond, according to Grand Traverse County Administrator Nate Alger, only Grand Traverse County could additionally vote to pledge its full faith and credit to back the debt issuance. That’s because Michigan’s Revenue Bond Act references airport bonds being “used exclusively within the territorial limits of the county” pledging its full faith and credit. Two different legal opinions concluded that only Grand Traverse County could back the debt since Cherry Capital Airport is fully within its boundaries, Alger says.

While a $60 million project is significant to bond, it represents only a small portion of Grand Traverse County’s legal debt capacity of up to $1.1 billion, according to Alger. There’s theoretically risk anytime the county pledges its full faith and credit, Alger acknowledges, but he points to the airport’s stability and growth as reassuring factors, as well as the NRAA’s plans to repay the bond through revenues. “There’s a risk anytime we do this, but commissioners look at the risk versus the reward....(NRAA) has done their analysis and believe they can afford it,” he says. Pledging the county’s full faith and credit will give the airport more favorable debt terms, Alger says, resulting in significant cost savings.

NRAA has issued requests-for-proposals (RFPS) to hire bond counsel and a municipal advisor in conjunction with the project, with bids due today. Other steps include engineering and design: NRAA has already hired firm Mead & Hunt for just under $1.9 million to complete the first 30 percent of the design.

The expansion has touched on questions raised over the years over whether Cherry Capital Airport’s location is its best permanent home. In the Grand Traverse Democrats newsletter this week, writer Harold Lassers argued the location is “not right for future growth,” citing a hazard zone map around the airport showing where housing should be restricted and noting that the risk “increases with number of flights and occupancy density.” Lassers said it was “time to start finding a location for a new airport.”

Klein says that prior to his tenure, it was studied in the 1990s whether to move the airport – and that location discussions hung over even the airport’s initial construction in 1935. But the loss of service to Traverse City by moving TVC to an outlying area – combined with the impact that airport construction would have on that new area and the relocation costs – are all prohibitive, he says.

“Whenever we take on a major project like this, we look at it and have said, ‘If we built what we had today in another location, what would it take?’” Klein explains. “Those numbers are around $5 billion to do that. It’s not something that would happen. Plus you look at the impacts on all the tenants here, from the Coast Guard to the college. The impact is so large. You don’t really gain anything at the end of the day by moving.” Klein says Cherry Capital Airport also has the room it needs for further growth on the property, with a third concourse and terminal expansion planned in the future.