Frequently Asked Questions
Learn more about our project with the answers to some of our most frequently asked questions.
Frequently Asked Questions
Will the airports be privatized?
No, the airports will not be privatized. VIPA has entered into a partnership with a private partner (VIPorts, now known as SkyCity), to modernize and improve both airports.
VIPA will have oversight over SkyCity.
VIPA will be partnering with SkyCity and they will provide funding to modernize and improve the airports in exchange for a long-term lease of the terminals and operating and management agreements.
Is the P3 model the best overall way forward to redevelop the terminals at HERA and CEKA?
A public-private partnership will mean that both airports receive needed infrastructure upgrades without placing a capital debt burden on VIPA or the Government of the Virgin Islands.
The competitive P3 process will ensure that the USVI gets a best-in-class airport developer and operator while remaining in compliance with FAA regulations and safety requirements.
How has VIPA addressed issues regarding accountability, transparency, and openness in the procurement and selection processes?
VIPA is committed to creating an informational and transparent process and will provide information throughout the process utilizing various means, to include:
· A stand-alone VIPA Airports P3 website.
· Regular updates via radio, newspapers, and social media.
· Community meetings and forums.
Will VIPA still be the owner of the airports?
All improvements made during the P3 lease term will revert to VIPA at the end of the leasehold at no additional cost to VIPA or the Government of the Virgin Islands.
Will the redeveloped terminals include jet bridges?
The redeveloped terminals will include an optimal mix of jet-bridge and stair access to accommodate all types of aircraft utilizing the airport facilities.
What type of risk will be transferred to SkyCity from VIPA?
SkyCity will be responsible for the financing, design, permitting, and construction. Once the project is completed, they will assume all operational risk, including all operations and maintenance expenses.
How is this P3 different than the P3 at the Luis Munoz Marin International Airport in Puerto Rico?
Puerto Rico’s P3 utilized the FAA’s Airport Investment Partnership Program, which allowed the government to receive a substantial up-front payment in exchange for a long-term lease.
Puerto Rico’s P3 required the transfer of the Airport’s Part 139 operating certificate to the private partner.
Puerto Rico’s P3 was subject to an extensive FAA notice, hearing, and comment process.
Will you be hiring local people to work on these projects, and if so, what percentage of your workforce will be local residents?
Yes, SkyCity partners have demonstrated that commitment in past projects globally. For construction, SkyCity has partnered with St. Croix-based J. Benton Construction who will deliver important local knowledge and skilled tradespersons. Through this partnership, SkyCity will utilize a majority local workforce. Local businesses will continue to have the opportunity to be concessionaires at the airports as we create jobs and entrepreneurial opportunities.
Have other U.S. airports utilized a P3 structure to redevelop their terminals?
- LaGuardia Airport and John F Kennedy International Airport in New York
- Newark Liberty International Airport in New Jersey
- Multiple terminals at the Los Angeles International Airport in California
- Gulfport Airport in Alabama
- Luis Munoz Marin International Airport in Puerto Rico
- Dallas-Love Field Airport in Texas
- Kansas City International Airport in Missouri
How will VIPA make sure SkyCity fulfills its promises and obligations?
There will be Key Performance Indicators that will be included in the Lease and Operating & Management Agreement.
There will be annual reviews of the performance of the private partner by VIPA.
The FAA will continue to perform regulatory and safety inspections.
What is the expected duration of the project?
Upon successful completion of the transition phase, financial close is expected in 2025. Further information about the construction timeline will be available following financial close.
Will airport employees be displaced because of the P3?
VIPA will work with SkyCity to ensure a smooth transition of employees. Some employees will be able to remain with VIPA based on their work assignments, while other employees whose work assignments are airport specific will be offered the opportunity to transition to the private partner.
What is the process that was used to select the private partner in the P3?
The selection process began with the issuance of the Request for Qualifications (RFQ). The RFQ was used as a screening process to establish a pool of vendors that were qualified, and thus eligible to submit responses to the Request for Proposal (RFP). Vendors who were pre-qualified in the RFQ process were eligible to receive the RFP. This was an open and competitive process. VIPorts was chosen as the private partner, and they have since changed their name to SkyCity.
Why redevelop the airports now?
- The terminals have not been upgraded since 1989 (CEKA) and 2000 (HERA) with the exception of the CEKA baggage claim area, which was renovated in 2014, and the HERA domestic lounge was remodeled in 2021.
- The CEKA terminal was designed to accommodate 300,000 passengers; however, more than 1.65 million passengers used the terminal in 2022.
- The terminal expansion will help alleviate congestion and long wait times at the airport.
- Provide for future tourism growth.
- Remain competitive with other Caribbean airports.
What is the typical financing structure for a P3 Project?
SkyCity, the selected partner, will finance the entire project with a combination of debt and equity.
What will happen if SkyCity cannot complete the P3 Project?
VIPA will assume ownership of any improvements, take over operations, and select a new private partner to complete the project.
Does VIPA receive any financial benefit under this arrangement?
VIPA will receive annual rent payments and will share in airport revenues.
Short and long-term maintenance at both airports will be paid for by SkyCity during the lease term.
SkyCity is responsible for capital improvements at both airports during the lease term.
Why would SkyCity want to participate in this P3 Project
SkyCity will collect airport fees and rents as revenue.
They will be responsible for all operation and maintenance expenses and will also pay a ground lease and percentage rent on facility leases to VIPA.
They will enter into a lease agreement with VIPA.
What is the current phase of the project and what’s next?
The project is currently in a transition phase that involves substantial work between SkyCity and VIPA including design, construction planning and permitting, employee transition, airline engagement, financial and commercial business activities, operations and maintenance, legal and project documentation, regulatory matters, and stakeholder communications and outreach. This process will facilitate the development of design plans that best reflect the unique needs of both airports.
Will local businesses have the opportunity to operate out of these airport concessions?
Yes, SkyCity is integrating local businesses and products into the airport experience, and it extends beyond just airport concessions. Local businesses will continue to have the opportunity to be concessionaires at the airports as we create jobs and entrepreneurial opportunities.
What is SkyCity’s commitment to the communities of St. Croix and St. Thomas, and the USVI district overall?
SkyCity is committed to becoming contributing members of the community through involvement in local events, school and youth initiatives, training programs, engagement with community groups and agencies, and other community benefits. SkyCity is already in the process of engaging with community groups and organizations and those efforts will only accelerate as we move forward. SkyCity also has a track record of community contributions when working on these kinds of programs around the world. It’s an important element of what SkyCity does.