McCarthy Building Cos. has broken ground on a major new expansion project at Phoenix Sky Harbor International Airport, launching construction on a $326 million concourse that will increase gate capacity and help ease congestion at Terminal 3. The company announced the milestone on April 7.

The St. Louis-headquartered contractor is building a 173,000-square-foot, multi-level concourse that will add six new passenger gates, bringing the total at Terminal 3 to 26. The terminal currently handles roughly 25% of Sky Harbor’s annual passenger traffic—a number expected to grow as Phoenix continues to attract new residents and visitors.

Designed with both function and future expansion in mind, the concourse will feature several distinct levels. The main passenger level will include gate hold areas, restrooms, and shell space that can accommodate future retail or tenant build-outs.

Above that, the upper mezzanine will provide room for a passenger lounge, support areas, and an outdoor terrace with views of the airfield. At the apron level, crews will construct essential back-of-house areas and aircraft service spaces.

“This expansion is not just about accommodating more passengers—it’s about creating a seamless and comfortable travel experience, while future-proofing the terminal for long-term growth,” McCarthy said in the release.

A key element of the project is an elevated connector bridge that will link the new North 2 Concourse directly to the existing Terminal 3 processor. According to McCarthy, the design also includes infrastructure to allow for a future tunnel connection to Terminal 4’s North Concourse, creating greater flexibility and flow between the terminals.

Preliminary demolition and enabling work is expected to begin this month, including the removal of the existing Annex Building.

Phoenix Sky Harbor has seen a surge in passenger volume over the past several years, prompting airport officials to pursue phased expansions and modernization projects across the facility. The Terminal 3 North Concourse project represents a major step in increasing gate capacity and improving operational efficiency, especially during peak travel periods.

The project is part of a broader capital improvement strategy at Sky Harbor, which has included upgrades to Terminal 4, improvements to the Sky Train system, and enhancements to airport roadways. Once complete, the new concourse is expected to support airline growth and enhance the overall passenger experience with more spacious gate areas, new amenities, and improved circulation.

Originally reported by Matthew Thibault in Construction Dive.