Lambert's billion-dollar expansion hangs on a wing and a prayer: The numbers no longer add up

With more than $85 million in debt service due during each of the next two fiscal years, bond analysts are less optimistic than Bachmann or Griggs about the short-term prognosis.

"I think St. Louis is going to have a difficult period here for the next couple of years as they adjust to the changes that have taken place at American," FitchRatings's Stettler says. "We put out a negative watch on the rating [in July] because there are things that have happened and it does look like it might end up in a downgrade. They've got their challenges in getting other carriers back. Over time, I see a good case that St. Louis could bounce back from what's happened here over the next five, six, seven years. In the short term, we may yet decide that the credit quality has deteriorated to the point where we do have to take some action right now."

Mary Ellen Wriedt, associate director at Standard & Poor's, says her agency thought that Unison-Maximus' worst-case scenario was "certainly possible," which is why the agency issued a negative outlook when the bonds were issued in May. The negative outlook is a signal to investors that the grade could change for the worse, and that's exactly what happened when American announced its cutbacks. Wriedt says Standard & Poor's takes forecasts by airport consultants with a grain of salt.

Kelly Brother
Lambert's new runway, part of a $1.1 billion expansion, is now slated to open in late 2006 (visit www.lambertexpansion.com to view the map in its entirety)
Lambert's new runway, part of a $1.1 billion expansion, is now slated to open in late 2006 (visit www.lambertexpansion.com to view the map in its entirety)

"We have our own opinions on where we think things might go," she says. "When American made those service-level decisions -- or announcements -- in July, they were greater than 20 percent. We just really felt that that kind of change in costs and cost structure at the airport was more consistent with a BBB+ rating in our rating universe. We were clear on which direction the costs were going, and the magnitude."

Even with empty concourses, Boyd thinks the new runway is a good idea.

Lambert's two main runways are too close together to be used simultaneously in bad weather, which leads to delays that can affect other airports forced to wait for planes to arrive from St. Louis. "Honestly, I've never seen a runway I don't like," Boyd says. "With or without a connecting hub, it will make the airport more efficient. I think it's an investment for the long-term future."

For Bachmann, the stakes couldn't be higher. He sees Lambert as the single most important ingredient in the region's economic health.

"Attracting business is not the most important thing," Bachmann says. "The most important thing is keeping the business you have. If it becomes inconvenient to travel from here, then you run the risk of seeing businesses putting more of their people in locations other than St. Louis."

The city comptroller also flies high on wings of hope.

"The airport's and the city's finances remain stable, but certainly, in light of American's cuts, we are planning accordingly to ensure financial stability continues," Darlene Green said in a statement. "Lambert Airport has a bright future, and I am optimistic that Lambert will continue to be the economic engine that drives the economy of the St. Louis region."

But Krekeler remains a show-me-the-money airport commissioner.

"The changes that have gone on in the past two years and what's going to happen in November are beyond anyone's imagination," he says. "If I was king, it never would have gotten this far. I'd stop what we were doing. It could still be an awful nice park or a golf course or something like that.

"You could plant grass and stop the bleeding right now."

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