Gary airport charts course for coming years

2013-07-22T13:30:00Z 2014-01-23T09:45:12Z Gary airport charts course for coming yearsBy Keith Benman, (219) 933-3326

The Gary/Chicago International Airport Authority on Monday took actions that could have momentous impact on the airport for years to come.

By a 3-0 vote with one abstention, the Airport Authority approved asking investors for detailed proposals for privatizing the airport's management and development.

On a separate 4-0 vote, it authorized borrowing up to $35 million to fund the airport's runway expansion and other projects.

The airport has set a deadline of Aug. 26 for responses to its request for proposals for managing and developing the airport.

“I believe this is an aggressive timetable, but a fair timetable,” said Rich Hill, the airport's legal adviser on the privatization project and bond counsel for the borrowing.

The request for proposals was to be issued immediately after the meeting.

The joint city/airport committee spearheading the search for private investors wants to attract a minimum of $100 million in investment. Firms responding are also expected to outline how they would split airport revenues with the Airport Authority and/or city, according to the request for proposals.

The joint city/airport committee has emphasized the airport is not for sale. In that way, they say it is not a privatization of airport assets but a public-private partnership they are undertaking.

The request for proposals outlines two main sets of duties for bidders. One set of duties would consist of serving as the master developer for airport and non-airport property for a term of 20 years to 40 years. The master developer must show it can provide, or get others to provide, a minimum of $100 million in investment.

The second set of duties would be performed by a new airport manager. That firm would be responsible for all duties related to running the airport including managing ramp areas, overseeing airport staff, and marketing the airport. That contract would be for five years to 10 years.

Monday's action to borrow up to $35 million was critical to the plan to privatize airport management and development. That's because nailing down funding for the expansion project should enhance the value of the airport.

The Airport Authority also began to get an idea of what's ahead as it tries to clean up the environmental mess that is holding up completion of its $166 million expansion project.

The Authority cautiously approved a $4.9 million contract for hauling away contaminated soils after peppering project manager Scott Wheeler and interim airport director Steve Landry with questions.

Wheeler told the authority it can expect to spend about another $2.7 million on disposing of the soil.

The total of $7.6 million is above original estimates of $3.8 million for cleaning up that part of the environmental mess at the northwest end of airport property.

Wheeler told the authority the hauling and disposal work still can be done within the project's overall $166 million budget.

The airport has to carry out further investigation of possible environmental contamination beneath a berm it will remove to make way for the runway expansion. That could result in the identification of more dirt to haul away.

And the airport still has to negotiate the extent of other cleanup measures with environmental regulators. The building of an underground dike to contain oil seeping through the northwest end of airport property is one of the proposals on the table.

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