Midway Dreams Still Alive

Chicago told the Federal Aviation Administration in a quarterly report that it continues to hopes it can resurrect a proposed privatization of Midway Airport.

The city reported that it is continuing deliberations. It did not say, as it did in its last report, that it would seek a lease at the earliest possible date. The city must file quarterly reports in order to retain its hub privatization slot under the FAA’s pilot program. Chicago was poised last spring to enter into a groundbreaking $2.52 billion agreement to lease Midway to a private consortium under the program.

The program permits the privatization of up to five airports, but the effort was canceled one year ago due to the lessor group’s inability to raise financing for the 99-year lease. The city kept $126 million in “earnest money” posted by the group.

Chicago is sticking with a floating-rate mode on a refunding deal and reoffering some Midway bonds to preserve flexibility should the leasing plan be resurrected.

Under Illinois legislation paving the way for the lease, the city was required to use most of the proceeds to finance infrastructure work and fund its pensions. Chicago also would have paid off $703 million of first-lien Midway revenue bonds and $419 million of second-lien bonds.

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Transportation industry
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