CHICAGO — With no near-term plans to resurrect his predecessor’s proposed lease of Midway Airport to private operators, Chicago Mayor Rahm Emanuel wants to leave the door open to it by asking the Federal Aviation Administration to preserve its approved slot under a pilot program.
Former Mayor Richard Daley, who did not seek re-election earlier this year, had reached an agreement with a private consortium in 2008 to lease the airport for $2.5 billion.
The deal fell through in 2009 when the group, known as the Midway Investment and Development Co., could not raise the necessary financing amid an international credit crunch.
The city received $126 million in collateral posted by the group and the Daley administration continued to file semiannual requests seeking an extension to hold on to one of five slots under the federal pilot program that allows for the private operation of airports. Midway had won the one large hub slot.
Other airports and municipal managers across the country had been closely watching the Midway deal, as it was expected to serve as a model that could lead to an expansion of the program.
The city had planned to use proceeds of the transaction to fund infrastructure projects and to improve the funded ratios of its pension funds as required under Illinois legislation that paved the way for the deal. About $100 million from the agreement was to be unrestricted.
Public opinion on asset leases in Chicago soured after the city’s 2009 $1.15 billion lease of its parking meter system resulted in problems with the new meters, skyrocketing prices, and the city’s exhaustion of much of the revenue generated by the deal to cover budget deficits.
Emanuel has repeatedly said he has no plans to try again — at least in the near term — to pursue a Midway lease even though the city is carrying $15 billion in unfunded pension liabilities.
While Emanuel wants a strict policy on future leases in place before considering any future leases, the city went ahead and submitted the required application to preserve the spot by the July 31 deadline.
“The mayor believes that any monetization of the city’s assets must meet an extremely high threshold to ensure it benefits the taxpayers. His view on this has not changed,” a spokeswoman said last week. “The mayor has no plans to resurrect [the Midway lease] in the short term until we establish an open process and can ensure all revenue generated from the deal is protected for long-term investment.”