The $166 million Gary/Chicago International Airport expansion project faces a $30 million funding gap, with its deadline for completion just 17 months away, according to airport officials.
The airport authority is now exploring a number of strategies for coming up with the money needed to complete the 1,000-foot extension of its main runway, according to Airport Director Steve Landry.
"This project will get done, because the balance of our tax increment financing could be used if necessary and there are other funding mechanisms such as bonding that could be used," Landry said.
When the project was first announced six years ago, airport officials put a price tag of about $90 million on the expansion. A program update provided at the beginning of last year put the total price at about $128 million.
In early March, Landry told a meeting of the airport authority the cost of the project had increased to $166 million. He attributed the most recent increase to additional land purchases needed for the railroad move as well as the need to build a longer vehicle overpass on Airport Road.
The funding shortfall comes despite a $30 million cash infusion from the Northwest Indiana Regional Development Authority, which the airport authority approved by a 6-0 vote at Monday's meeting at the Airport Administration Building.
That money will be used to pay for the vehicle overpass now being constructed on Airport Road. The bridge will carry motorists over the CSX tracks there as well as the Canadian National tracks that will be moved there.
The airport recently borrowed about $12 million from funds accumulated in its own airport development zone fund for that project. Landry said for now the airport plans to pay that money back.
But in the future, the development zone fund could be used to pay some of the increased project costs. It has accumulated about $20 million in funds from payments made in lieu of taxes in a tax increment financing zone encompassing much of the city's east side.
The FAA has set a deadline of Dec. 31, 2013, for completion of the runway project. If that deadline is not met, the FAA has told the airport authority it could pull the $57.8 million it has pledged to the project.
Consultant Al Stanley, of JClark Aviation Group, reported to the airport authority Monday that he recently met with FAA officials. He said there is a possibility the FAA could add to the $57.8 million in funding it pledged in a letter of intent six years ago. But the airport would have to demonstrate the money is needed for additional projects.
An analysis of airport documents provided to the Northwest Indiana Regional Development Authority show much of the cost increase for the airport expansion project is due to relocating tracks for three railroads.
In a grant application submitted last year to the RDA, the airport pegged its railroad relocation costs at $75.6 million. In the early years of the project airport officials estimated the railroad move would cost from $30 million to $50 million.
The airport authority on Monday also approved hiring Dyer Construction for grading and drainage work for the runway extension. Dyer Construction was the low bidder on the project at $2,706,622 when bids were opened July 17.