CHICAGO (STNG) -- Midway Airport and all of its revenues will spend the next century in the hands of a private operator in exchange for a $2.5 billion up-front payment, under a historic agreement advanced today by the City Council.
WBBM Political Editor Craig Dellimore Reports.
Buoyed by the $2.4 billion windfall generated by privatizing the Chicago Skyway and downtown parking garages, aldermen agreed, 49-0, to sell off the biggest city asset to date: the Southwest Side airport-in-a-neighborhood that came back from the dead after Midway Airlines folded.
It's not that aldermen were gung-ho about the deal.
They were concerned passengers may be forced to pay more to park and shop at Midway. They also raised questions about the absence of minority investors in the deal, the city's decision to assume the $10 million-a-year cost of police and fire protection and about how the $1 billion in profits would be spent.
But the lure of a pot of money to spend on job-and-contract generating infrastructure projects during an economic downturn was enticing enough to put those concerns aside.
In exchange for the massive up-front fee, Midway Investment and Development Company LLC will pocket airport revenues that topped $130 million in 2006, including parking, concessions, and passenger facility charges.
An estimated $1.15 billion of the proceeds will be used to pay off Midway Airport debt. The deal also includes: $225 million for police and fire protection; $126 million for soundproofing and Midway captial projects already underway; and $19 million for transaction fees and legal expenses.
State law requires 90 percent of the $1 billion profit to be used to bankroll city infrastructure projects and shore up under-funded city employee pension funds.
That leaves $100 million to be spent at Mayor Daley's discretion. But Chief Financial Officer Paul Volpe has said the money would be parceled out to balance the next four city budgets--not just the 2009 spending plan that the mayor is schedule to unveil next week.
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