The Chicago Skyway Has Been Bought By Canadian Pension Funds For $2.8 Billion
By Mae Rice in News on Nov 14, 2015 8:00PM
The Chicago Skyway has a buyer: a group of major Canadian pension funds, who plan to take over the 89-year lease on the toll road for $2.8 billion. The transaction, for $1 billion more than the sellers paid for their 99-year lease, still awaits approvals from the City of Chicago.
The Skyway specifically connects downtown Chicago to the south-eastern suburbs, and brought in $80.7 million in revenue in 2014, according to the Sun-Times. This constitutes a slight uptick from 2013.
According to the Tribune, the lease fits a larger strategy for the three Canadian buyers (Canada Pension Plan Investment Board, Ontario Municipal Employees Retirement System, and Ontario Teachers’ Pension Plan). With $374 billion to their names, they invest increasingly in infrastructure assets known for their stable long-term returns, like toll roads and ports.
Back in 2005, when the Skyway was first leased to Madrid-based Ferrovial and Australia’s Macquarie, it was an innovative deal. According to Toll Road News (which covers, you guessed it, news about toll roads), Dana R. Levenson, then-City of Chicago Chief Financial Officer, said of the deal:
"This transaction, which is the first of its kind in the nation, fulfills Mayor Daley's continued commitment to pursue innovative financing techniques, and has provided Chicago taxpayers with an unprecedented single, up-front payment of $1.83 billion that we will use to invest in our people and protect Chicago's taxpayers both today and in the future."
Today, international infrastructure leasing deals aren’t quite so groundbreaking. The Tribune reports that Ferrovial, one of the sellers in this deal, manages a total 1,300 miles of highway across Canada, the U.S., Europe, Australia and Colombia.
In other words, it’s not new or unusual for Chicago to have a toll road whose proprietors never drive on it. According to WGN, drivers likely won’t to notice any differences.