Chicago’s proposed $2.5 billion lease of Midway Airport to private operators is on a glide path to win Federal Aviation Administration approval possibly before the end of the year following a required public hearing on the deal last weekend.
FAA officials have said they could approve the plan before the end of the year. City and federal authorities hope to win approval before the new administration takes over the White House in mid-January over concerns the change could delay the deal.
The meeting drew few members of the public and lasted just a half hour. The hearing was held by a panel represented by the U.S. Department of Transportation, the FAA, and the Transportation Security Administration to accept public comments on the city’s application to privatize the airport under a federal pilot program.
The City Council approved the deal last month shortly after it was announced by Mayor Richard Daley. Under the transaction, a consortium would pay Chicago $2.5 billion to operate Midway for 99 years. The city first announced four years ago that it would explore the privatization of Midway under the federal program, which permits up to five airports to be converted from public to private hands.
The city would use $900 million from the deal for infrastructure and pension funding. Under Illinois legislation that had paved the way for the lease, Chicago agreed to restrict about 90 % of the net proceeds. All of the 90% can go for infrastructure, or up to half can be put aside to help address the city’s $9 billion unfunded pension liability.
The first $1.2 billion of the deal will go to defease existing Midway airport revenue bonds, with another $225 million earmarked for an escrow to help the city pay for police and fire services at the airport, which it retains control over. The financial and legal team that put the deal together will receive $19 million in fees. About $100 million is unrestricted.