Gary airport authority OKs 40-year privatization deal

2014-01-27T16:00:00Z 2014-02-12T15:45:17Z Gary airport authority OKs 40-year privatization dealBy Keith Benman keith.benman@nwi.com, (219) 933-3326 nwitimes.com

GARY | The Gary/Chicago International Airport Authority voted Monday to approve a historic 40-year privatization deal for development and airfield operations at the lightly-used airport.

The 4-0 vote was met by applause from a crowd of more than 60 that crammed into a room at the airport administration building.

"This is a partnership to maximize a Gary asset, for the benefit of Gary and all of Northwest Indiana," Gary Mayor Karen Freeman-Wilson said just before the vote by the four authority members present.

Top executives from Aviation Facilities Co. Inc., the Dulles, Va.-based company that won the exclusive right to develop and manage the airport, pledged success at Gary.

"We will deliver," said Ozzie Moore, CEO and president of AFCO subsidiary AvPorts. "We will do everything we have to to make this succeed, because this is bigger than Gary."

AvPorts provides management-related services at nine airports around the nation. AFCO is active at 25 airports.

AFCO officials acknowledged the Gary arrangement is unique in its comprehensive nature and because it includes off-airport property development as part of the deal.

After Monday's meeting, AFCO Executive Vice President Steve Forrer said the company has several leads for development. He said his company is focused on the goal of attaining $10 million in investment in the next 18 months as called for in the agreement.

He also affirmed the airport's $166 million runway expansion will remain a priority. He said all contractual relationships with the expansion will be vetted in the next three months.

The authority members voting on the privatization represented a bare quorum. The authority was lacking its Indiana governor's appointee and its Porter County appointee due to their recent resignations. A third member, Michael Doyne, was absent.

Under the deal approved Monday, AFCO has the exclusive right to develop real estate on and around the airport within the Airport Development Zone for the next 40 years. AvPorts has a 10-year contract with up to 30 years of extensions to run the airport.

The deal requires AFCO to find investors willing to put $25 million into the airport during the next three years or the Airport Authority can cut the length of the deal in half. If the $25 million does not arrive within five years, the Airport Authority can terminate the deal.

Within a year, AFCO must provide the Airport Authority with a plan for attracting $75 million more in investment by the year 2054.

AvPorts will be paid $120,000 per year for operating the airport using the Airport Authority's current budget, including its taxpayer subsidy. AvPorts also will share in profits if the airport turns one.

The Airport Authority retains ownership of the airport and oversight of development decisions under the agreements inked Monday.

A public hearing took place before Monday's vote, with speakers about evenly divided.

Pastor James Pope, of Greater St. Stephen's Missionary Baptist Church, in Gary, praised the deal for its workforce training and provisions for hiring Gary and minority residents.

"It's time to start putting things into action," Pope told the members of the authority.

Gary resident Natalie Ammons said she was skeptical of those same provisions and wanted to know more about AFCO's record at other airports.

"We need to look at what actually will be placed in this footprint and what jobs will be placed here," Ammons said. "I just think there are too many unanswered questions."

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