Parties Call The $100 Million Program 'Game Changing' For The Airport

Development and management agreements presented Monday to the Gary/Chicago International Airport Authority by the airport's public-private partnership (P3) committee propose a $100 million total investment in Gary/Chicago International Airport and the City of Gary over 40 years by private interests. Terms include an investment of $25 million in the first three years and a minimum 30 percent goal for local workforce participation as well as performance incentives for revenue growth including profit sharing with the airport and the City of Gary.

The proposed terms were negotiated by the Ad Hoc committee with Aviation Facilities Company Inc./AvPORTS (AFCO), Guggenheim Securities and Loop Capital.

"Public ownership and private investment are the cornerstones of these proposed agreements," said Carrie J. Hightman, chair of the P3 Ad Hoc Committee and executive vice president and chief legal officer of NiSource Inc. "The airport is a catalyst to uniquely unlock the value of the City of Gary and Northwest Indiana. These proposed agreements bring together world class management, creative development and strong capital partners to accelerate investment for job creation and long-term sustainable growth."

The airport authority has the final review and approval over terms presented by the P3 committee. Final action by the board is expected in the coming weeks. Should the airport authority approve the terms, final contracts could be effective in early 2014 following a public hearing of ordinances.

The proposed management and development agreements each carry a term of up to 40-years and include a 30% goal for local participation, 20% for disadvantaged and minority owned businesses (DBE, MBE) as well as 5% for women and veteran owned businesses (WBE, VBE). 

The master development plan is to be presented within in the first 12 months of the effective date. The plan includes a 10-year proposed investment and action plan intended to achieve a $100 million investment over 40 years. The manager will provide daily operation and management services at the airport. The initial term of the management agreement will be 10 years, with up to six 5-year extensions.

On October 25, the Ad Hoc committee announced exclusive negotiations with AFCO and the other financial firms. The airport authority created the Ad Hoc committee in February 2013 to solicit and evaluate public-private-partnership opportunities that retain public ownership of the airport and benefits from private sector innovation and access to capital.

FMI: www.garychicagoairport.com