Mayor Daley is asking the City Council to authorize a $1 billion O'Hare Airport bond issue -- the second-largest in Chicago history -- to finance construction of a new runway, refinance existing O'Hare debt and bankroll $100 million in airport improvements.
The massive borrowing, quietly introduced at Wednesday's City Council meeting, would be paid off with revenues generated by a $4.50 fee tacked on to airline tickets, known as a passenger facility charge (PFC).
The city won't issue the bonds unless the Federal Aviation Administration approves its request to use $1 billion in ticket-tax money to pay for the first phase of the mayor's massive runway expansion project.
That request, made last fall, is separate from the city's more recent application for $270 million in PFCs to help finance $400 million in overruns tied to land acquisition and litigation for the multibillion-dollar project.
1 RUNWAY TO OPEN BY '08
Unlike the $270 million, the city's request for $1 billion in ticket taxes to back the bond issue "reflects completely the financial plan we put forth in 2003," O'Hare modernization chief Rosemarie Andolino said.
An estimated $500 million of the bond proceeds would be earmarked for runway construction, the first in decades at O'Hare.
Runway 9L/27R on the northernmost portion of O'Hare near Touhy and Mannheim is scheduled to open by November 2008. All of the property has been acquired and cleared.
The site is now being graded in preparation for pouring concrete, said Roderick Drew, a spokesman for the O'Hare Modernization Project.
Roughly $400 million would be used to refinance existing airport debt at reduced interest rates. Another $100 million would bankroll O'Hare projects unrelated to Daley's runway expansion project.
Two years ago, a $1.5 billion bond issue needed to jump-start O'Hare expansion was nearly grounded because of accusations that an underwriter had not come clean about its past ties to slavery.
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