The lease, which takes effect in January, is for three years, with a 25-year extension. If within the first three-year term, $110 million in revenue bonds can be sold, the lease continues for the next 25 years. Revenue bonds will be sold to finance capital improvements to the aging, large jet maintenance base. They would be repaid through TWA's lease payments and be backed solely by the company.
In August, voters approved a bond issue package backing the long-term TWA lease. Prior to that a six-month extension had been granted on TWA's lease while city and company officials negotiated the new lease. Approximately $50 million of the bonds will go toward infrastructure improvements, such as roof replacements, electrical system upgrades, asbestos removal and waste water treatment modernization. The remaining monies will be spent to improve productivity and efficiency, including equipment upgrades.
A TWA vice president said that the capital improvments would help the company be more competitive in bidding for maintenance work from other airlines. TWA has lost money in recent quarters, but would have shown a profit had fuel prices not risen this year, he said. TWA is based in Saint Louis and employs about 2,500 people at the Kansas City maintenance facility, which was built in 1954.
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