Specifics of the deal to transfer operations of Gary/Chicago International Airport to a private partner include a 40-year lease as well as investments in the Chicago-area airfield totalling $100 million.
A press announcement posted on the Gary/Chicago website cited the “proposed agreements” for the public-private partnership (PPP: P3) with a consortium numbering AvPORTS, Guggenheim Partners and Loop Capital. The details are under final review, but should be approved in “the coming weeks,” according to the announcement.
In October, a six-person committee tasked with privatizing the airfield named ‘small bub’ operator and Aviation Facilities Company (AFCO) holding AvPORTS, financial-services firm Guggenheim and investment boutique Loop preferred bidder. Procurement began in July.
The consortium would be required to spend $25 million in the first three years of the P3, the announcement noted, adding the contract would contain provisions to put $300,000 to bolstering businesses and jobs locally.
Terms of the PPP also include profit-sharing. Ownership of Gary/Chicago would remain public. The deal is expected to officially close in 2014.
Law firm DLA Piper is also a member of the AvPORTS-Guggenheim team, as is Michael Mullen, the former chief executive of CenterPoint Properties Trust.
Located in Gary, a city in US state Indiana, Gary/Chicago is billed the ‘third airport’ in metropolitan Chicago behind O’Hare International Airport and Chicago Midway International Airport.
Despite its proximity to nearby Chicago, the airport has poor ridership, boasting just 10,500 passengers last year. Gary/Chicago also lost its lone carrier, Allegiant, in August, and is stigmatized by its association with Gary, a US Midwest city plagued by violent crime.
Three months ago, Chicago halted procurement for a would-be lease of Midway Airport on the grounds that the bidding process had been rendered non-competitive.