The Evolving Business Airport

In June, the two towns that own Palwaukee Municipal Airport just north of Chicago O’Hare –— Wheeling and Prospect Heights, IL — passed a piece of legislation that will forever alter the 2004 Illinois Reliever Airport of the Year’s role in the...


In June, the two towns that own Palwaukee Municipal Airport just north of Chicago O’Hare –— Wheeling and Prospect Heights, IL — passed a piece of legislation that will forever alter the 2004 Illinois Reliever Airport of the Year’s role in the National Airspace System. The towns agreed to inaugurate a new Intergovernmental Agreement at the airport. Here, a former air traffic controller and corporate pilot at Palwaukee offers a retrospective on how the change in management structure at this storied airport could be a benefit both locally and nationally.

Operationally, the need for change had been apparent to many for years. The airport’s ability to keep up with industry changes and customer demands was often slowed by the 20-year old system of governance. To some, however, the move toward a more independent form of governance represented losing control of a valuable asset. The stage seemed set for a transformation. Major shifts in operational control are not new to Palwaukee however.

In the Beginning

Like most airports in 1933, Palwaukee started life as a small grass strip. When George J. Priester, the elder statesman at Palwaukee, purchased the airport in the early 1950s he envisioned a thriving general aviation airport close enough to draw customers from both Chicago and the nearby North Shore. By the 1960s, Priester Aviation was the local Learjet dealership in Chicago, and the airport was one of the busiest private fields in the nation. However, as a private airport, KPWK was unable to compete for AIP funding.

Priester Aviation owned the only fixed base operation and maintenance facility on the field. Despite what some saw as a lack of competition at Palwaukee, traffic operations neared the quarter of a million mark by 1967, the year FAA agreed to staff a new control tower built by the Priesters. It was not unusual to see four or five training airplanes in the traffic pattern for each of Palwaukee’s parallel runways, while business jets whisked out on the intersecting long jet runway between the little airplanes. Some 600 airplanes were based at Palwaukee then. Yet, some residents of neighboring Prospect Heights and Wheeling remained unconvinced of the airport’s value

As regional property taxes continued to rise in the 1980s, it became clear to George Priester and son Charlie that, in the face of rising costs and local pressure to turn the land into single-family homes, there was simply not a strong enough revenue base at Palwaukee to maintain control of the airport. Potential buyers however, were few in number.

By 1985, it was unclear whether the airport would be sold for development or taken over by the State of Illinois because of its strategic importance in drawing business traffic away from ORD. In the end, the City of Prospect Heights and the Village of Wheeling decided operational control of a local airport could not work effectively unless both neighbors took part. The transfer of control from the Priester family to the two municipalities was completed in 1986 and Palwaukee Airport became Palwaukee Municipal Airport.

The First IGA

The initial Intergovernmental Agreement (IGA) was written by two towns that had never owned or operated an airport before. In an attempt to delineate responsibility, an imaginary line was drawn east to west across the airport, something that would prove challenging in the future. Despite the doubts, Palwaukee prospered. During the sale, the Priesters kept the FBO, the maintenance facility, and the charter operation. A few years later the FBO was sold to Signature Flight Support. SFS is currently building a modern new operation at the base of the control tower.

In the mid-90s North American Jet became the second FBO on the field, bringing competition in maintenance and fueling services. (A third company, Service Aviation, also opened in the ‘90s but faltered, closing its doors in 2003.)

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