Los Angeles World Airports executives Beatrice Hsu and Terri Mestas have a gargantuan task: guiding the $30 billion modernization program at Los Angeles International Airport, the largest overhaul of an existing airport in the nation’s history and the largest set of public works projects in the history of Los Angeles.
Hsu became interim chief executive at Los Angeles World Airports last month after Justin Erbacci stepped down to take a similar post in Saudi Arabia. But she’s no stranger to LAX and the massive modernization effort. Former Los Angeles Mayor Eric Garcetti appointed her to the Board of Airport Commissioners in 2013; she was board president from 2021 until this year. She was instrumental in getting the first $15 billion phase of the modernization off the ground. Until taking the helm at LAWA, Hsu’s day jobs included executive posts at Brookfield Properties’ Commercial Development Group and Related Cos. of California.
Mestas has served as LAWA’s chief development officer for a little over a year, tasked with overseeing all of the modernization projects at LAX. Prior to coming on board at LAWA, Mestas was senior director for capital projects, modernization, planning, design and construction at the California Institute of Technology. Before that, she held executive posts at engineering and infrastructure giant AECOM and was program manager for the multibillion dollar bond program at the Los Angeles Community College District.
The Business Journal sat down with Hsu and Mestas to discuss the state and scope of the modernization projects at LAX.
What are the primary goals of all of these modernization projects?
Mestas: The goal of the modernization program is really to transform LAX, to provide world-class facilities that will support our guests and create an airport that’s really representative of this great region and its strong economy. Besides improving access, many of the terminals were in need of upgrades. The program also will be supporting the Olympics, the (FIFA) World Cup and all these really significant events that are on the horizon.
How have you kept the airport running while these mornization projects have moved forward?
Hsu: It’s something we think about all the time and it really has taken a heroic collaboration. The airport is an incredibly complex operation just on a normal day; even without construction we have over 200,000 passengers traveling through the airport and roughly 1,400 daily flights by 67 carriers. Layer on top of this the coordination among contractors and subcontractors to carry out the actual construction. Then we’ve had to communicate with external partners, including the airlines, the service providers to the airlines, all the concessionaires doing business on the airport and the ground-transport operators. In all, there are some 50,000 people working and coordinating operations at LAX. Every move we make takes months of planning and coordination.
The pandemic enabled fast-tracking of Terminal 3 renovations. Were any other projects also fast-tracked?
Mestas: On that Terminal 3 closure, that saved about 18 months on the overall Delta Skyway project. As for other fast-tracking, because we didn’t have a lot of traffic going through the central terminal area, we could shut down the roads and have early and extended closures in order to build those big columns that support the guideway that you see when you drive around the airport right now. That project was accelerated significantly.
Any negative impacts?
Mestas: We certainly experienced the same Covid impacts that we saw around the country. On the West Gates project (behind the Tom Bradley International Terminal), that was happening right during the core time of Covid. We saw things like productivity and time impacts as personnel were affected with illness. Then we had rising materials costs and labor shortages. The permitting and plan check also had delays: Even drawings that were submitted had to be quarantined before they were reviewed.
Back to the rising materials costs for a moment. Has that impacted the overall capital improvements budget?
Mestas: Absolutely, we saw a rise on costs across the board. They are at a point now that that they stabilized a bit, but at a higher level that exceeded projections. We expect prices will continue to increase. As for supply chain issues, like many project developers, we’ve had to resequence some of the work and be much more nimble in that planning.
In previous decades, there was significant opposition to modernizing the airport, particularly from neighboring cities that filed lawsuits to stop those projects. Former Mayors Richard Riordan and James Hahn had to shelve their plans. The Villaraigosa administration’s attempt to build a new north runway was also shelved. But for the most part, the opposition has been minimal for the billions of dollars of work going on now. How did you manage that?
Hsu: That runway issue was a hot campaign issue just before I came onto the Board (of Airport Commissioners) in 2013. Coming after all those plans you mentioned, there was a lot of mistrust between the community and LAWA and there were no constructive lines of communication. It took us a lot of intentionality to start turning that around. First, we just took the north runway issue off the table. Then we tried to establish some healthier communication around what exactly the scope of the airport modernization was and wasn’t and what were the appropriate mitigation measures that could address some of the neighborhood concerns?
We spent several years doing that and coming to some agreement about the scope of the modernization projects. By 2016, we had that agreement, which paved the way for our capital program to move forward today. Everything that we’re talking about in this program is within the envelope of what was discussed back in 2015 and 2016.
On the landside access part of the modernization, the automated people mover is the linchpin. Please describe how you see the people mover transforming the way people use LAX.
Hsu: The big idea is that passengers should have time-guaranteed access to the central terminal area and also have a free and dependable way to get to LAX. The people mover removes the factor of how long it’s going to take to navigate the central terminal area: trains will run every two minutes during peak hours and it’s at most a 10-minute ride to your terminal. Oh, and this will also reduce emissions from all those vehicles that would have been circling around that central terminal loop.
Any other impacts on the way people approach LAX?
Hsu: It will give locals more options. Right now, a lot of local people won’t go near LAX to pick up or drop off friends or relatives – it’s just too unpredictable and scary. But when the landside access program is complete, people will have options: If the central terminal area isn’t too congested, they can go right to the gate. But they will also be able to avoid the central terminal area entirely by picking up and dropping off folks at an intermodal facility (at what’s now the Economy Parking Lot) right next to a people mover station.
And what about the consolidated car rental facility?
Hsu: We will be eliminating a critical mass of trips altogether just by connecting the people mover to the consolidated rental car facility.
Right now, we have this unique and very suboptimal situation with so many rental cars dispersed around, and each have their own shuttle. With the consolidated facility accessible from the people mover, we’re going to be removing 3,200 daily rental car shuttle trips from the roads.
Why does the airport need to increase the number of terminals and gates?
Mestas: Concourse 0 and Terminal 9 are needed to address all of the future anticipated travel that we see on the horizon. Also, it improves our ability to address international travel and having the gates necessary to accommodate that.