Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=100065
Story Retrieval Date: 5/22/2013 1:59:45 AM CST
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Travelers won't notice as they rush for their flights, but Midway Airport could move into private hands on Wednesday.
The City Council Finance and Aviation committees at a joint meeting Tuesday unanimously approved a leasing agreement to privatize Midway Airport. The City Council is expected to vote on the proposal Wednesday.
The agreement between the city and investors allows a 99 year lease of the airport for which the city will receive $2.52 billion dollars. State law stipulated that 90 percent of that money must be used for infrastructure improvements in Chicago. The remaining 10 percent can be used at the discretion of the city.
But even if Midway goes private, several aldermen want a push for more minority investors and a continued preference for Chicago vendors.
The issues raised the main topics of contention during the joint meeting, but the measure moved forward despite the objections.
Ald. Toni Preckwinkle (4th) raised concerns about the absence of any minority investors in the Midway Investment and Development Company, LLC. The company is a consortium of investors that includes Vancouver-based airport operator YVR Airport Services Ltd.
“I would feel better about this proposal if there were more minority involvement,” Preckwinkle said.
The city’s chief financial officer Paul Volpe said no direct minority investors are involved at this time. Volpe added that there is a chance additional investors will become involved in the deal and offered to keep the council updated.
“At this time we have had one minority investor come to us with interest and that has been in the last 24 hours,” Volpe said.
Council members also expressed the preference to keep mostly Chicago vendors at Midway. Ald. Thomas Tunney (44th), a small business owner, noted that the current leasing plan lacks any guarantees to keep Chicago vendors at the airport as individual leases run out.
“I just hope that the Chicago brand is cultivated with the quality management and driven with concession sales advice,” Tunney said.
George Casey, president and CEO of YVR Airport Services, responded to Tunney’s questions by describing his firm's commitment to local businesses and a hometown look.
“Our airports are distinct to the local market and we think that provides a vibrant atmosphere,” Casey said.
The plans to privatize Midway have been in the works for several years. In September of 2006 the city submitted its preliminary application to the Federal Aviation Administration, according to an FAA statement.
The city received FAA approval in 2006 and began its search for interested investors this February.
The privatization move is made possible by 1996 federal legislation that allowed up to five public airports to be sold or leased to private companies, but only one of those airports could be a major hub such as Midway. Chicago was first city to apply for privatization for any airport and remains the only city to do so.