Branson Airport sues runway contractors

Branson Airport LLC alleges faulty design and construction work conducted by the builders of its physical foundation and runway system leaves the private, fledgling commercial airport open to future damages, according to an Aug. 1 lawsuit filed in Taney County Circuit Court.

The four-year-old airport filed a suit Aug. 1 against four contractors for an amount to be determined by a civil jury for damages related to subsurface failures, including a partial collapse of its runway and taxiway in 2011.

The runway collapse, according to the court filing, damaged more than 80 of the airport’s 20-by-19-foot concrete panels near the intersection of the runway and tarmac.

The airport states in the filing it has spent more than $750,000 for temporary repairs to the foundation and additional repairs “will require millions of dollars to complete.”

Springfield-based Anderson Engineering Inc. is listed among the defendants in the case for its work as geotechnical engineer. Other defendants are Kansas City-based Burns & McDonnell Engineering Co. Inc., which performed airport design work; Des Moines, Iowa-based general contractor McAninch Corp.; and Lee’s Summit-based engineers E.T. Archer Corp.

The contractors were paid roughly $70 million of the $155 million price tag for their construction efforts, the suit said.

“There’s no immediate safety issues, and the (Federal Aviation Administration) has inspected the airport per its strict guidelines and we exceed or meet all safety standards,” Branson Airport Executive Director Jeff Bourk said. “But that said, why is there a lawsuit? It’s because the lifespan of certain assets has been shortened and maintenance costs have increased. We’re seeking to recover those potential future damages.”

According to the court filing, the airport foundation rests on 422 acres consisting of a man-made plateau of more than 9 million cubic yards of rock and soil below the 7,140-foot long and 150-foot wide concrete runway, connecting taxiways and the airport terminal.

The suit claims the contractors failed to comply with contractual obligations in the preconstruction investigation, design, engineering, construction and testing of the airport’s foundation, resulting in repeated instances of subsidence failures.

Under its contract as geotechnical engineer, the lawsuit said Anderson Engineering was responsible for ensuring appropriate subsurface conditions for construction of the airport and verifying other contractors properly performed excavation and construction. Anderson CEO Steve Brady was unavailable for comment, and President Neil Brady did not return calls by press time.

The foundation work involved transforming the rocky terrain into a platform for the airport’s terminal and runway system. The karst topography under the airport is a result of bedrock that dissolves easily when water seeps into cracks and faults creating caves and sinkholes. Because organic materials such as trees decompose over time causing voids in the subsurface soil, they were prohibited from being used as fill for the foundation’s construction, the suit said.

Because of construction timelines and penalties, however, Branson airport officials claim the contractors deposited large amounts of organic materials into the base of the airport’s footprint. Specifically, McAninch Corp. faced penalties of $15,000 per day for the first 30 days the project was late, based on the agreed upon timeline for substantial completion, and $40,000 every day after. According to the filing, the general contractor ran 23-hour shifts, six days a week for at least 13 months to avoid delay penalties associated with the foundation’s construction.

Branson Airport’s legal representative, Stephen Torline of Overland Park, Kan., law firm Kuckelman Torline Kirkland & Lewis, declined to be interviewed.

Branson Airport opened in May 2009 after nearly $115 million in revenue bonds were issued in 2007 and CEO Steve Peet invested some $40 million in the project, according to Springfield Business Journal archives. From early on, the airport failed to meet its financial projections and, in 2011, trustees of the revenue bonds entered into a funding and forbearance agreement following a default event tied to a debt-service payment. UMB Bank, the trustee for bondholders, reported in January that Branson Airport failed to make a $250,000 loan payment by Dec. 31, 2012, in accordance with its 2011 agreement. As a result of the airport’s continuing default status and history of financial losses, UMB withheld its semiannual interest payment of $3.4 million, according to a Jan. 4 filing with the Municipal Securities Rulemaking Board.

Since opening in 2009, the airport had posted $19 million in operational losses, not including depreciation and interests expenses, by the time it asked investors in late 2012 to pony up $23 million to support the cash-strapped operations by offering lenders priority over bondholders with regard to first right of foreclosure.

On multiple occasions, Bourk has declined to discuss the airport’s finances with SBJ.

According to the airport’s quarterly performance reports disclosed by the securities board, while the airport suffered an additional $6.89 million operational loss, not including depreciation and interests expenses, in the fourth quarter of 2012, the company is above water in 2013. Through June this year, Branson Airport reported operating income of $670,500.

Officials had pinned turnaround hopes on the March arrival of Southwest Airlines (NYSE: LUV). Since the Dallas-based low-fare carrier began flying to Branson, second-quarter enplanements grew by 15 percent to 36,670 boarding passengers from 31,953 a year ago, according to information reported to the securities board.

As of Aug. 14, no trial date had been set for the case and no hearings were scheduled with the Taney County Circuit Court.

Web Editor Geoff Pickle contributed to this story.[[In-content Ad]]