Daley Determined to Sell Midway Airport

By Kevin Robinson in News on Jan 6, 2010 3:00PM

Following up on Mayor Daley's successful privatization of Chicago's parking meter system, and the cost-savings realized by drivers on the Spanish-leased Chicago Skyway, the mayor is gearing up to lease Midway Airport to a consortium of private investors. Crain's is reporting that the city will meet a February 1 deadline to tell the Federal Aviation Administration what its next steps will be in the process. The FAA has five spots open for a pilot privatization program, one of which is for a major hub airport. Midway currently holds that spot. “The mayor has said he clearly wants to do it,” John Schmidt, the city's outside attorney that handles privatization matters told Crain's.

The plan to lease the airport to a consortium of investors, including the government bailed-out Citibank, fell apart last year when the consortium couldn't line up enough credit to close the deal. According to the Wall Street Journal, however, the city is considering issuing tax-free debt to fund the sale. In that scenario, the city would issue the debt, essentially fronting the money to the consortium, which would then pay the city back over time from profits generated through the airport. The plan is to substantially lower the amount of financing that the airport operator would need up front to close on the lease deal.

And while the city hasn't been directly in talks with potential investors, Southwest Airlines, which dominates Midway, is reportedly "very eager to see it happen." Schmidt told the Wall Street Journal that he's "optimistic that it will be done in 2010." It's unclear if the city will reopen bidding on the lease, or simply restart negotiations with the winning bidder, a group of investors led by Citibank, John Hancock Life Insurance and the Vancouver Airport Authority. “There is no legal requirement on how the city goes about this process,” Schmidt told Crain's.