DALLAS--Mayor Federico Pena says the longstanding question of whether United Airlines will sign a lease to use the new Denver International Airport may soon be answered.

Colorado lawmakers late Sunday approved incentives that would use up to $115 million of certificates of participation in an effort to win a maintenance facility, reservation center, and pledge to sue the new airport.

The tax-exempt obligations would be issued by the Colorado Housing and Finance Authority and secured by a pledge of the state-levied aviation fuel taxes as the cornerstone of a $150 million package approved over the weekend.

Last night, the Denver City Council was expected to approve a separate plan offering up to $175 million in incentives if United commits to the new airport and locates a maintenance facility and reservations center in the area.

"We are hopeful that the city council will approve that," Mayor Pena said yesterday after a hearing on the proposal. "There is no discussion of the city increasing the bid. We already have a lot on the table."

But even as Denver and the state have proposed incentives valued at $325 million, it is not yet clear if Chicago-based United believes the incentives are enough. In fact, the state had originally discussed tax breaks and givebacks exceeding $600 million.

"At this point, we have not heard," mayoral aide Tom Gleason said. "I don't think anybody knows yet." A United spokesman declined to comment.

But the mayor insisted yesterday that even if Denver loses its bid for the 5,000-job, $1 billion maintenance facility and the new reservations center, United will still commit to the $2.4 billion airport.

"Regardless of what happens with the two facilities, they will be here, said Mr. Pena, who said a lease could be signed before he leaves office this month. "Let's assume that United rejects the state bill. United will still come to the new airport. We have always known that. The only question was of the magnitude of their presence."

Under the city's proposal, United would commit to operate 45 gates at the new airport for 30 years in exchange for tax breaks, shared revenues, and other economic incentives, the mayor said.

United officials have been reluctant to commit to the new airport because of concerns that operating costs would double or triple when Stapleton International Airport is closed for the new airport opening in 1994.

Their skittishness was cited by Standard & Poor's Corp. when the agency downgraded the project bonds to BBB-minus, the lowest rating ever for a major airport credit.

The bonds are rated conditional Baal by Moody's Investors Service, while Fitch Investors Service has assigned the $1.4 billion of outstanding debt a BBB.

Denver plans to issue another $100 million of variable-rate debt the week of June 17 and another $200 million of fixed-rate debt in October.

But do city officials believe an agreement with United could lead to an upgraded?

"Maybe the deductive logic is that it should be," said the mayor, adding, "but I haven't had those conversations with the rating agencies."

Since last month, rumors that an agreement might be near have boosted trading prices of the Denver airport bonds. However, some investment bankers have privately questioned whether the city deal with United would affect the ability to make debt service.

The mayor and Gennifer Sussman, the new airport finance director, both said in interviews that the city's incentives would not affect the airport's ability to meet debt service, maintain its coverage, or fund pay-as-you-go features of the new airport.

Meanwhile, state officials are still combing the bill passed late Sunday at the end of a six-day special session called to develop a package of incentives.

A component of the state plan would give United up to $33 million in tax breaks available to any company locating in an enterprise zone. But the largest incentive involves state-backed obligations.

"There are many, many unanswered questions at this time," said David Martinez, spokesman for the Colorado Housing and Finance Authority. "There are some legal issues that have to be resolved."

While state Attorney General Gale Norton last week questioned whether a package of incentives might violate Colorado's constitution, Gov. Romer and others have said the proposal is legal.

The governor has 30 days to act on the legislation.

But it was questions about whether the state could provide major tax breaks and guarantee givebacks to United that pushed lawmakers last week to consider a plan using debt to entice the airline.

Proceeds from the sale would be used to build a facility, though not the maintenance center. Denver has promised to use its revenue bond-issuing powers to finance that complex.

Under an intergovernmental agreement, Denver would lease the land for the facility to CHFA and United would lease the building from the agency.

Mike Cheroutes, senior bond lawyer at Davis, Graham & Stubbs in Denver, said the proposal would authorize CHFA to issue up to $115 million of certificates of participation to be secured by a portion of the state's aviation fuel tax and ot er sources.

The revenue stream, which has averaged uo t $9 million a year since it was implemented in 1988, would be used to pay obligations with a 20-to-30 year maturity, he said.

However, Mr. Martinez said the pledge of the aviation fuel tax alone would only support an issue of $90 million to $105 million of certificates of participation.

"It looks like there may be a shortfall there," he said.

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