Midway Deal Still Mired In Trouble

By Kevin Robinson in News on Apr 8, 2009 3:40PM

Mayor Daley's scheme to lease Midway Airport to a private partnership continues to stall amid the global credit crisis. The April 6 deadline to close the deal passed on Monday, although the city has granted a two week extension on the deal, in hopes of negotiating a six month extension while a consortium of investors tries to line up the remaining cash needed to seal the 99-year lease.

"As everyone knows, we've seen unprecedented developments in the national and world economy-specifically in the financial sector-since last September when Midway bids were submitted. And the global economic recession is obviously having a substantial impact on the availability of financing-this has created serious challenges for many businesses and financial institutions," a spokesman for the city said. The city declined to comment on the terms of the proposed six month extension. "It's to ensure a six-month extension is in the city's best interests," Chicago's chief financial officer Gene Saffold told Crain's Chicago Business. "We have to work through some issues. It's not something I can comment on."

The consortium of investors, which is made up of John Hancock Life Insurance, Vancouver Airport Services Ltd. and a division of taxpayer-owned Citibank, must come up with nearly $2.5 billion in financing, or risk forfeiting the $126 million deposit they put down on the airport.