The city and Continental Airlines today announced a $1.2 billion overhaul of Terminal B at Houston's George Bush Intercontinental Airport, expected to take seven to 10 years.

The Houston Airport System and Continental Airlines will jointly pay to expand Terminal B from 360,000 square feet to 1.7 million square feet.

Continental will put up more than half the financing for Terminal B improvements through bonds, with the city doing the rest. A new $3 passenger facility fee, like one that is in place at Hobby Airport, also will help fund the makeover. No such fee is in place now at Intercontinental.

Continental is the terminal's sole tenant. Houston-based Continental Express, the airline's regional carrier largely operated by ExpressJet, occupies the facility.

The massive overhaul, which anticipates continued growth at Houston's largest airport, will include additional gates and a second Federal Inspection Services facility for U.S. Customs, indicating plans for international flights from the terminal.

The plans call for the number of gates to grow from some 40 to between 60 and 65.

"Houston's airport system is among the world's strongest and fastest-growing and this will help us keep it that way," Mayor Bill White said. "And as we prepare for the future, the city is happy to continue its strong partnership with Continental Airlines."

Intercontinental is the largest of the four hubs for Continental, which also concentrates operations in Cleveland, Newark, N.J., and Guam.

Continental operates 740 flights out of Houston to 179 nonstop destinations throughout the United States and internationally, and the airport is considered especially valuable as a gateway to Latin America.

Similar to Terminal C

In 2004, Continental opened the $300 million Terminal E and a new federal inspection facility came after that. The revamped Terminal B is expected to be similar in its look and feel to Terminal C, which recently was improved.

"Dramatic growth is fueling this airport and the Terminal B project represents part of our strategic planning and building effort aimed at making Intercontinental a more compelling and attractive destination," said Richard Vacar, director of the Houston Airport System, which ranks as the fourth-largest in the U.S.

Last year, Houston's airports transported a record 52 million passengers and more than 400,000 metric tons of cargo.

Terminal B will see its north and south ramps and the parking garage replaced, and the existing roadway, signage, utility and fuel storage systems will be improved. Plus, the motorized walkway will be expanded to connect to Terminal A

Other plans include a replacement of the north and south concourses. The new north concourse will connect to the northwest concourse of Terminal C.

The central part of the terminal also will be either refurbished or rebuilt. Work will be done in phases so parts can be used continually.

Continental took over all the gates at Terminal B last year after Northwest Airlines, which had two gates, relocated to Terminal A.

bill.hensel@chron.com