Like the Skyway lease that preceded it, leasing Midway will mean much needed cash for a city that's facing a huge budget shortfall. But money from the lease -- 90 percent of it -- cannot, by law, go to patch a wounded budget.
It began as a cinder airstrip in an old onion field, became Chicago Municipal Airport, and eventually, until O'Hare overtook it, Midway was the world's busiest airport. It has always been a prized city asset, but City Hall believes it's worth more to Chicago by being leased to a private operator -- a 99-year deal for $2.5 billion.
"We believe this is a very good return, especially given the current stress in the credit markets. Washington and Springfield could learn from us," said Mayor Richard Daley.
Pending government approval, the business consortium with the winning bid for operating Midway will take over early next year. Critics of privatization say it will mean higher prices for airport passengers in concessions and parking fees, though the city takes issue with that.
"Our experience shows that private operators try very hard to drive traffic through the airport. That is the greatest benefit for them and they do that by providing goods and services people want at fair prices, so that's what we believe," said Paul Volpe, budget director.
The Midway lease deal means the city receives just over $2.5 billion. About half of that goes to debt retirement. Of the remaining $1.2 billion, the city must, by law, spend 90 percent of that on infrastructure improvements and pension contributions.
The mayor dismisses the notion that the city is giving up prized assets. Without it, he says, infrastructure dies.
"How you gonna do this if everything crumbles now, in the next five or six years? You will be like many cities in America, crumbling. That is why you think outside the box," said Mayor Daley.
Apart from the 90 percent of the lease proceeds that must go to roads, bridges, sewers and other infrastructure needs, the city would have about $100 million to use at its discretion. The mayor did not offer specifics on that Tuesday, but he will have more to say in a budget message in a couple weeks. The mayor did say Tuesday afternoon that using it all as a one-time payment to balance next year's budget would be irresponsible.