Airport advisors could ring up $2 million tab

2014-01-13T14:48:00Z 2014-02-26T15:56:19Z Airport advisors could ring up $2 million tabBy Keith Benman, (219) 933-3326

It was revealed Monday the bill for airport advisers on the Gary/Chicago International Airport privatization could hit $2 million once legal fees for a prominent law firm are added in.

The bill from law firm Faegre Baker Daniels could reach $1 million, which adds to tabs for three other advisers that have the potential to reach nearly $1 million, said airport authority member James Cooper.

The three other advisers on the privatization deal are JClark Aviation, of Atlanta, a firm head by former Indianapolis CEO John Clark; A.C. Advisory Inc., of Chicago, headed by Adele Cepeda; and Hawthorne Strategy Group, of Chicago.

JClark Aviation stands to win the biggest single paycheck. If the privatization deal is valued at $100 million the firm would reap a $500,000 payday. At the least, JClark Aviation will be paid $200,000 if a deal is concluded.

A.C. Advisory Inc. is due to get $250,000 if a deal is successful and Hawthorne Strategy Group $67,500. The three advisers combined also have a running tab for $60,000 in expenses.

The joint city/airport committee negotiating the deal had long maintained the tab for those three advisers would be picked up by the winning bidder. But on Monday, committee member Bo Kemp confirmed Aviation Facilities Co. Inc. (AFCO), the winning bidder, was still balking at paying those costs.

"Those are still in limbo," Kemp told the airport authority at its regular meeting at the airport administration building on Monday.

The contracts for JClark Aviation, A.C. Advisory, and Hawthorne call for them only getting paid if a deal is successfully concluded. As such, they are often referred to as "at-risk" contracts.

Kemp said there is the potential the advisers with success-based contracts won't get paid if the AFCO deal goes through. He said it would be up to the airport authority to make the decision on whether or not to pay them at that point.

He also pointed to the possibility of talking further with AFCO about the payments once a deal is sealed. That mirrors what was said by Faegre Baker Daniels attorney Rich Hill three weeks ago when he told the authority there was talk of getting the money from future capital raised by AFCO or getting it from future borrowing by the airport authority.

Before he left Monday's meeting, Hill confirmed the Faegre Baker Daniels bill will be payable whether or not a deal is concluded since it is not success-based. He said a contingency fee based on a deal being signed would be a violation of the firm's ethical standards.

The firm Faegre Baker Daniels was formed from the merger of Indianapolis-based Baker & Daniels and Minneapolis-based Faegre & Benson two years ago.

One of the success-based advisers, Tim Touhy, of Hawthorne Strategies, listened carefully to Monday's discussion. His comment when asked about the money that could be due his firm was brief.

"They are going to have to work that out," he said.

Copyright 2014 All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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