A winning bidder of a public-private partnership (PPP; P3) to operate and upgrade a Chicago metropolitan area airfield has been decided, according to a press announcement.
A six-person committee in charge of procuring a concession handing control of Gary/Chicago International Airport over to a private partner has named a consortium teaming ‘small hub’ operator AvPORTS and Guggenheim Partners preferred bidder.
The ad-hoc committee will enter “exclusive negotiations” with the consortium, and is expecting to make a final recommendation on the P3 to the Gary/Chicago International Airport Authority next month, the press announcement noted.
AvPORTS is a subsidiary of Aviation Facilities Company (AFCO) while Guggenheim is a financial-services shop based in New York. Investment manager Loop Capital and law firm DLA Piper are also part of the AvPORTS-Guggenheim team.
The airfield is located in Gary, a city located in the US Midwest state of Indiana and a short distance from Chicago, the largest city in neighbouring Illinois.
Billing itself the ‘third’ Chicago-area airfield behind O’Hare International Airport and Midway International Airport, Gary/Chicago is in fact a perennial underachiever.
In August, the 74-year-old airport lost its lone remaining carrier Alligiant. Meanwhile, ridership for Gary/Chicago in 2012 topped 10,500, compared with 19 million at Midway.
The apparent dubious appeal of Gary/Chicago led industry pundits to question if a legitimate bidder would emerge for the asset.
However, procurement for Gary/Chicago proved a far smoother process than for Midway, which similarly in 2012 sought to privatise, reviving a failed 2008 PPP campaign.
In February, the Authority launched procurement on a lease for Gary/Chicago. A Request for Proposals (RFP) for a PPP was published by the committee over the summer.
By September, the committee had narrowed its bidder shortlist to AvPORTS-Guggenheim and ‘GCIA Group,’ comprised of AXIS Consulting, Airport Property Ventures (APV), Lee Companies, NAI Hiffman and Williams Capital Group.
Procurement of a would-be lease for Midway, on the other hand, was terminated that month by Chicago Mayor Rahm Emanuel.
Should the deal for Gary/Chicago close, the airport will be just the second in the US to successfully opt for privatisation.
Puerto Rico in February reached financial close on a lease of its Luis Munoz Marin International Airport (LMM) to infrastructure fund manager Highstar Capital and Grupo Aeroportuario del Sureste (ASUR) for $2.5 billion.