CHICAGO — Chicago Mayor Rahm Emanuel Friday named members of a special advisory panel charged with protecting the public's interest in a possible lease of Midway International Airport.
The city announced plans for the panel when it announced the decision to once again explore privatizing Midway.
A $2.5 billion deal with a private investment group reached under former Mayor Richard Daley was derailed in 2009 after the group could not come up financing amid the international credit crunch. Anger over the city's privatization of its parking meters later that year soured the local appetite for more asset leases.
With investor thirst for such deals on the rise and a federal deadline looming to preserve its hub slot in a federal program, Emanuel's administration late last month submitted a revised preliminary application to the Federal Aviation Administration.
The advisory panel's members include a mix of aldermen and representatives of the civic, labor, and business interests.
They are Alderman Carrie Austin who chairs the council's Budget Committee; Frank Beal, of Metropolis Strategies; James Connolly, of the Chicago Laborers District Council; Martin Nesbitt, PRG Parking Management; former Alderman and attorney Martin Oberman; Peter Skosey, chairman of Metropolitan Planning Council; and Alderman Michael Zalewski.
The panel is charged with representing the public interest in a possible lease. An outside independent financial advisory firm is expected to assist the panel in its deliberations.
"Any potential deal must pass an extremely high threshold and this committee will ensure transparency, integrity and thorough deliberation in this process," Emanuel said in statement.
The city has said should it decide to proceed with a bidding process, the panel would be charged with reviewing the process, a winning bid's structure and impact, and whether it provides a fair value for city taxpayers. The City Council would be given at least 30 days to review the deal.
The FAA said in a statement that it received the city's application on Dec. 28. "The FAA has 30 days to review the preliminary application," the statement said.
Chicago expects to release a request for qualifications from potential bidders later this month as it gauges whether a lease makes fiscal sense.
The city has released some key terms which would impact the valuation process. Any deal would be limited to 40 years and be structured as a management and land lease with ongoing revenue sharing benefits for the city. The initial upfront payment would go to retire Midway's $1.4 billion to $1.5 billion of debt with future payments being invested in city infrastructure.
The city has also released what it calls a travelers' bill of rights as any lease deal would impact the costs of parking, concessions, and other airport services. The airport's main airlines - led by Southwest Airlines - would also need to approve any deal.
The city's announcement that it would explore a Midway lease has come with a full-court press to portray any eventual deal as a good one for taxpayers and not a repeat of the $1.15 billion parking lease. Meter rates have skyrocketed and most of the proceeds went to balance Daley's last few budgets.
The airport serves 8.7 million passengers annually and it experienced 3% growth in both 2009 and 2010 with passenger numbers up 6% for the first half of last year. The airport is located about 10 miles southwest of downtown. It has five runways and 43 gates and more than 13,000 parking spaces.
The 1996 federal pilot program allows 10 airports to enter into long-term operating leases or pursue the sale of a facility to a private firm. The program exempts the airports from laws that require that airport revenues be spent on airports. Two other slots are preserved. Hendry County Airglades Airport, a general aviation reliever airport in Clewiston, Florida, is negotiating an agreement with a private operator. The FAA said it expects to make a decision early this year on the Puerto Rico Ports Authority's final application to complete its privatization of the Luís Muñoz Marín International Airport with Aerostar Airport Holdings.