Build It And Hope They'll Come

When Bill Clinton appointed Federico Pena transportation secretary, he described the former Denver mayor as a "doer" who could do for his country what he did for his city. Pena's biggest legacy is the new Denver International Airport, one of the most ambitious-and controversial-public projects in decades. It rises, pyramidlike, on windswept prairie 23 miles northeast of the city. Pena describes it as an airport for the 21st century, a high-tech hub that will draw business from around the world and help keep Denver prosperous. "This is a visionary project," he says, adding that cities with "efficient international airports" will be clear winners in the global marketplace.

Visionary it may be. But some people in Denver consider the new airport a pipe dream. They call it "Federico's Folly," a white elephant that is neither needed nor wanted. Why the fuss? For one thing, they claim, the cost of building the airport has risen substantially, to nearly $4 billion. And though city fathers bragged that Deliver International would be the nation's largest airport, it will by some measures be smaller than Stapleton International, which it will soon replace. There's even a chance it might lose millions, some analysts say, saddling taxpayers and bondholders with an enormous bill. Pilots have dubbed it "Denver Idiotic." Locals call it "a field of dreams."

Nothing if not confident, Pena brushes off such "perennial critics." Mayor Benjamin Stapleton was similarly lampooned when he built Denver's current airport 50 years ago. "It was called Stapleton's Folly," Pena says, adding that today's detractors miss a simple fact: "We need more airport capacity," and the new facility will give it for decades.

Critics think differently. Denver International, they suggest, is a case of civic boosterism ran wild. The idea for a new airport took hold in the early 1980s, at the peak of an oil and real-estate boom. Businessmen and tourists came flocking. The airline business exploded; Stapleton became notorious for delays. Then the good times went bust, and politicians and business interests seized upon the new airport as a sort of grand public-works project to create jobs and revive the economy. "Imagine a great city," Pena exhorted voters during his 1987 re-election campaign. Along with other city fathers, he sketched out a bright future. A new "world class" airport would bring in business. Daily nonstop flights would shuttle to Europe and the Pacific. Denver would become a global hub and regain its standing as the undisputed First City of the Plains.

Excited by such prospects, voters approved the project in 1989 by a 2-to-1 margin. But now reality has set in. When selling the project to voters, planners at one point forecast up to 36 weekly flights to Europe by 1993; today, there are four. The number of passengers departing from Denver was to rise from 16 million in 1985 to some 26 million by 1995. Last year's figure: about the same as in 1985, half what Stapleton can handle. The falloff in traffic was due less to Denver's economic slump than to a sharp and unanticipated shakeout in the airline industry, says consultant Michael Boyd: "It is an airport for the 1980s, not the '90s" or beyond.

Finances have also been unpredictable. Voters approved an airport that would cost around $2 billion, with six runways (and space for six more) and some 120 gates, according to Ted Hackworth, head of the city council's finance committee. Now it's $3.7 billion, he says, citing the latest bond prospectus. (Pena argues that DIA, to be built in phases, was always "a $3 billion airport.") For that, Denver gets an airport with five runways and 88 gates, 20 fewer than Stapleton. Airport authorities say the higher costs (as well as the reduced scale) reflect planning changes. Land prices soared. Continental Airlines decided it needed fewer gates; United wanted more. An international terminal was added, along with a pricey, automated baggage-delivery system. Even at the higher price, Denver International "is the best airport buy in history," says aviation director James DeLong. If you think Denver is expensive, he adds, consider that a new airport in Chicago could cost $10 billion.

'Tougher to be competitive':A good point, but perhaps not one Denverites will immediately appreciate. Stapleton is a 15-minute ride from downtown; the new airport takes nearly an hour and a $45 cab fare. The two airlines with hubs at the new facility, Continental and United, worry that it could be competitively damaging. Their operating costs at Stapleton work out to about $7 per passenger, slightly below the national average; at Denver International they will run around $14, and possibly more than $20. "That makes it tougher to be competitive" for both airlines, says David Messing of Continental, which lost $299 million last year and has just emerged from bankruptcy. (Neither airline believes it can pass on the higher costs to consumers right now, mainly because the industry has grown so price-competitive.)

The final irony, after all the cost and inconvenience, is that the new airport may lose money. Stapleton last year produced revenues of some $164 million; Denver International will need at least $350 million to break even. But it's not certain to get it. That's why Standard & Poor's rates the $3.1 billion worth of revenue bonds issued to finance the project at BBB two steps above junk. Denver is not legally obliged to bail out DIA, should it falter. But a number of analysts think the new airport might need financial help. That possibility doesn't bother city officials. "Our projections suggest that's not a worry," says spokesman Briggs Gamblin-nor airport authorities. "Caveat emptor," shrugs one: let bondholders beware.

As if sensing trouble, onetime boosters appear to be distancing themselves. Mayor Wellington Webb, though insisting that the airport is a needed investment in Denver's future, carefully assigns responsibility to the "prior administration" of Federico Pena. Even stalwart Pena draws fine distinctions: "When I left office, we were on budget and on schedule." The bigger point is that, gripes aside, Denver has a new airport. It opens on Dec. 19, amid the Christmas rush. Not the best time to work the bugs out of a major facility, but perhaps that's an omen. With time, as traffic and the city grow, Denver International may well become all that Pena and its boosters hope. But for now, expect a rough ride.