Chicago Begins a Privatization Debate

Just a potential windfall, or a sign of things to come? - You have to give 'Da Mayor' of Chicago credit for looking outside the box on this one. While some - as in this space -- have questioned his O'Hare Modernization Plan and steadfast refusal to embrace the proposed new airport in nearby Peotone, his consideration of the privatization of Midway Airport may have merit. The concept of leasing airports to private entities is well accepted in international circles, but is an idea that has been rejected by most U.S. airport interests to date. There are exceptions: Stewart International Airport north of New York City is under a 99-year lease with British-owned National Express Group and JFK's Terminal 4 was built and is operated by a private consortium. The Midway proposal comes on the heels of last year's leasing by the city of the Chicago Skyway toll road to Australian-based Macquarie, which also has interests in international airports. In that deal, Chicago received $1.83 billion, which injected much-needed cash into the city's coffers. Central to the Midway move is maintaining its property tax-exempt status, which the Illinois Senate this week approved. At a time when the Bush Administration is proposing cutting more than $700 million from the Airport Improvement Program and FAA is calling for new funding mechanisms to finance the aviation system in this country, Mayor Daley's proposal could turn out to be leading edge. The Chicago Tribune this week quoted the mayor as saying, in light of state and federal budget proposed cuts, "you sit there ... or you look for revenue." He may be right on this one. Thanks for reading.