Rethinking Airport Infrastructure: How P3s are Developing Landside Solutions

Airport executives across the country face a common challenge: ambitious capital programs constrained by limited funding and competing priorities. While federal grants and other funding sources, such as Passenger Facility Charges (PFCs), are often directed to critical airside infrastructure, they may not always
align with the timing or scope of complex airport development projects. At the same time, airports must fund landside facilities such as consolidated rental car centers, parking structures, ground transportation hubs and energy systems, using the same limited bonding capacity and revenue sources that support the broader airport enterprise.

This funding gap has already prompted a number of airports  to explore alternative delivery models, including Reno-Tahoe International (RNO). Public-private partnerships, or P3s, have emerged as an innovative tool for advancing landside projects that might otherwise be deferred or strain already-stretched budgets. The model is gaining traction not as a replacement for traditional procurement, but as a way to bring private capital,
specialized expertise and long-term operational accountability to projects where these elements create measurable value.

Understanding the P3 Framework
A P3 is a contractual collaboration between a public entity and private partners. Structuring a P3 transaction can take many forms, including models where the public sector retains ownership while the private sector
contributes investment, technical expertise, innovative design and delivery methods and long-term operational
capacity. In the airport context, this means the airport can maintain control through long-term ground leases
and performance standards while private partners assume responsibility for design, construction, financing,
operations and lifecycle maintenance.

The structure differs from traditional delivery. In some cases, rather than the airport managing separate contracts for design, construction and operations, a P3 consolidates these functions under a single entity accountable for the facility's performance over decades, not just years. This integrated approach aligns incentives and encourages innovation: when the private partner's financial performance depends on the facility’s long-term success and user satisfaction, they are motivated to pursue new designs, technologies and operational strategies that enhance performance and reliability.

For airports, the benefits can extend beyond accessing private capital. Depending on how a transaction is structured, a P3 may offer advantages such as accelerated project delivery, transfer of some or all schedule and budget risk, upfront funding for lifecycle maintenance and reduced demand on internal staff compared to a traditional delivery model. This model also brings specialized expertise to asset types that airports develop infrequently, including consolidated rental car facilities, ground transportation centers  and energy infrastructure projects, drawing on lessons learned from diverse projects at other airports and in related industries.

Why Landside Projects Present Opportunities
The case for P3s is strongest for landside facilities with dedicated revenue streams and operational complexity.  Unlike airside infrastructure, where federal funding structures and regulatory requirements favor traditional delivery, landside projects often lack sufficient grant funding and require specialized operational and financial expertise that often extends beyond any airport’s capabilities.

Consider the evolution of ground transportation at airports. Modern consolidated rental car facilities are not simply glorified parking structures; they are complex operations integrating other ground transportation operations, rental car counters, fueling stations, electric vehicle charging infrastructure, fleet
security control mechanisms and car wash facilities. They require specialized design knowledge, sophisticated revenue management and long-term maintenance strategies that differ significantly from terminal or airfield work.

Private partners who specialize in these facility types bring experience from projects across different markets, climates and operational contexts. They have encountered challenges that have not yet emerged at a given airport and developed solutions proven elsewhere. This expertise, combined with their accountability for long-term performance, can produce better outcomes than traditional delivery models.

RNO: A Case Study in Balanced Partnership
Reno-Tahoe International’s ground transportation center and consolidated rental car facility demonstrates how
P3s work in practice. The $299 million, 440,220-square-foot project, part of the airport's $1+ billion MoreRNO Infrastructure Program, will consolidate all rental car operations and ground transportation providers into a single on-airport location connected to baggage claim via a covered walkway.

The project structure balances airport control with private sector accountability. The Reno-Tahoe Airport Authority (RTAA) retained ownership through a 30-year ground lease and maintained decision-making authority throughout design and construction. The airport teamed up with Conrac Solutions, a Meridiam-owned company, and facilitated rental car operators’ participation in shaping facility requirements — ensuring those who would operate in the building would also help design it.

The private consortium, Conrac Solutions and Meridiam, assumed significant risk: committing to delivering on budget and schedule, maintaining the facility to industry standards for three decades and absorbing revenue shortfalls if customer facility charges (CFC) do not meet projections. The risk transfer allowed the RTAA to focus on other significant capital program priorities while ensuring predictable project delivery. This long term structure also encourages the private partner to introduce innovation through energy-efficient design, advanced digital
monitoring systems and adaptive maintenance strategies that extend asset life and improve performance over time.

Financially, the structure created stability through a fixed CFC  schedule and kept the majority of project debt off the airport's balance sheet, with the RTAA making a $16 million financial investment and transfer of pre-collected CFCs. This helped preserve bonding capacity for other MoreRNO initiatives — a critical consideration for airports managing comprehensive capital  programs. The facility is scheduled to open in 2027-2028.

The northern Nevada project illustrates how airports can strategically blend delivery methods. While using P3 delivery for the ground transportation center and consolidated rental car facility, the airport continued alternative delivery methods for other capital projects, maximizing federal funding and bonding capacity where appropriate and deploying private capital where it created the most value.

Strategic Considerations for Airport Leadership
P3s are not appropriate for every project or every airport. Success requires an honest assessment of whether the model fits specific project characteristics and institutional capacity.

The strongest candidates share several attributes: dedicated revenue streams that can support private financing, operational complexity that benefits from specialized expertise, scale that justifies the transaction costs of structuring a P3 and projects that airports develop infrequently enough that building internal expertise isn't cost-effective. Additionally, stakeholders should recognize that P3 delivery involves more extensive legal and
financial review, and transaction costs included in the overall project budget.

Just as important is institutional readiness. Successful P3s require all parties to invest time at the outset to clearly
understand goals and objectives, policy parameters, procurement requirements and legal and financial terms. Establishing robust oversight mechanisms and ensuring stakeholder alignment is critical. Airports must be prepared to manage long-term relationships with private partners, enforce performance standards and navigate complex agreements that span decades.

Risk and cost allocation also deserve careful attention. While P3s can transfer construction and operational risks to private partners, airports must identify potential challenges early, define mitigation strategies and incorporate appropriate safeguards.

Not all risks should be transferred. Airports should retain those they can manage more efficiently while allocating others to parties best positioned to control them. Stakeholder engagement matters. Although it is important
for rental car operators, ground transportation providers and other stakeholders to have meaningful input into facility design and operations, the level of engagement needed for a successful project is often not achieved in practice. The most successful P3s embed collaboration early and consistently, producing facilities that purposefully address diverse operational needs and customer expectations.

The Path Forward for Airport Infrastructure
American airports face substantial infrastructure needs. In 2023, FAA estimates airports will require over $100 billion in capital investment over the next five years. Traditional funding sources, including Airport Improvement Program grants, Passenger and Customer Facility Charges and general airport revenue bonds, cannot close this gap on their own.

P3s offer another tool, but they are not a cure-all. They work best when strategically aligned with projects as part of a broader capital program that continues to leverage federal funding, bonds  and traditional procurement when those approaches make sense.

For landside facilities specifically — those with dedicated revenue streams, specialized operational requirements and limited federal funding – P3s have demonstrated their value at airports nationwide. They can accelerate delivery, transfer risk, ensure lifecycle maintenance and bring expertise that strengthens project outcomes. P3 agreements are inherently complex and require careful, project-specific structuring to reflect each airport’s unique circumstances. Airports are best served by specifying policy parameters and basic financial terms
in advance of the P3 partnership.

The question for airport leadership is not whether to adopt P3s wholesale, but how to evaluate them thoughtfully for projects where they create genuine value. That requires understanding the model's strengths and limitations, assessing institutional capacity and staying focused on the ultimate goal: delivering infrastructure that serves passengers, supports airport operations and provides  lasting value to the communities airports serve.

As airports navigate complex capital programs with constrained resources, P3s represent another tool in the
infrastructure delivery toolkit.