Why is Gary off the radar?

Two months ago, Infrastructure Investor reported that the Illinois Department of Transportation (IDOT) had issued a Request for Information (RFI) seeking input from airport developers, investors and operators, as well as passenger and freight air carriers, for the development of South Suburban Airport (SSA), a project it is considering procuring as a public-private partnership (PPP; P3).

A statement released by Governor Pat Quinn’s office a few days later referred to the project as “a third major Chicago regional area airport”. Suddenly, there was a sense of déjà-vu: Gary/Chicago International Airport, in neighbouring Indiana, had already laid claim to that title.

“Gary/Chicago is a part of the Gary-Chicago Compact and so it is listed in the Chicago Department of Aviation as Chicago’s third regional airport,” Gary Mayor Karen Freeman-Wilson tells Infrastructure Investor.

Overlap

The concern – in our view – is not just the overlap in rank or title, but the possible overlap in the two facilities’ roles and geographies.

Gary/Chicago is an existing airfield located in Gary, Indiana, 25 miles south of downtown Chicago; SSA, which would be located in Peotone, would be 40 miles south of Chicago. The two airports would be just 40 miles apart from each other. This prompts a couple of questions: does the city really need four airports, and what would SSA add to the mix?

One could perhaps argue that Gary/Chicago could be a freight/cargo airport since currently no commercial airlines fly out of the facility, while South Suburban Airport could be developed as a general aviation and commercial hub.

But Gary/Chicago, which is in the process of being further developed with the extension of its primary runway and a 40-year concession awarded to a consortium teaming AvPorts and Guggenheim Partners last year, is still working out its strategic plan and deciding what type of facility it will be.

Already in operation, Gary/Chicago’s clients include the National Guard, Gary Jet Centre, B Coleman Aviation and White Lodging. One of its largest clients is Boeing.

“There is an agreement that calls for any entity that moves its headquarters to Chicago like Boeing did a while ago, to have a hangar or keep its fleet in Gary, which is what Boeing does,” Freeman-Wilson says.

A third airport in the region has been considered for decades. In 1986, Illinois, Indiana and Wisconsin sponsored the Chicago Airport Capacity Study, with input from the city of Chicago and the Federal Aviation Administration (FAA). Two years later, the study concluded that O’Hare and Midway airports could not be expanded to meet the long-term needs in the region, but that a new airport would be needed.

According to the South Suburban Airport website, four sites were recommended for study, including Gary and Peotone.

Since Gary/Chicago already exists – and is in the process of being expanded – it is difficult to understand the rationale behind Illinois’ decision to pursue a new facility in Peotone. Neither the Illinois Department of Transportation, Governor Quinn’s office nor the project development team of SSA responded to requests for comment, leaving us to ponder how a fourth airport would not be redundant.

While the SSA project is at an exploratory stage, Illinois has already spent some $85 million to acquire 3,857 acres of the 5,800 acres needed for the project. Governor Quinn, who according to a statement has made the development of a new airport in Chicago’s south suburbs “one of his key priorities”, signed a law in July 2013 authorising IDOT to move forward with the construction of SSA.

Time will tell whether the Illinois project is a wise one in terms of capital allocation, but what is obvious now is that better coordination between the states involved certainly couldn’t hurt.