Chicago’s $2.5 billion lease of Midway Airport is no longer on track to win federal approval before the change in presidential administrations, as Federal Aviation Administration officials await additional financial information from the private operators that won the lease.
FAA officials last fall said the plan could win approval by the end of 2008. City officials hoped for approval before the Obama administration took office due to concerns that the change could delay approval. Chicago finance officials had cited the change in leadership as a key reason for seeking a quick vote in the City Council in October shortly after the deal 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. The first $1.2 billion 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. About $100 million is unrestricted and will help shore up the city’s budgets over the next four years.
The FAA said this week it is still awaiting some final financial agreements from the consortium, which will delay final approval, officials said. The consortium is known as Midway Investment and Development Co. MidCo is led by YVR Airport Services Ltd. of Vancouver, Citi Infrastructure Investors of New York, and John Hancock Life Insurance Co. of Boston. The group was among five pre-qualified by the city to bid on the transaction.