GARY | A joint city/airport committee on Thursday recommended hiring a slate of advisers for forming a public/private partnership at Gary/Chicago International Airport.
A.C. Advisory Inc., of Chicago, was recommended for hire by the airport authority at a success-based fee of $250,000 to be the airport's advocate in negotiations with private investors.
JClark Aviation, run by former Indianapolis International Airport CEO John Clark, was recommended for hire at a success-based fee of the greater of $200,000 or one-half basis point of the total value of any deal struck with private investors. If the airport attains its goal of attracting at least $100 million in investment that could result in a payday of $500,000 for Clark.
JClark Aviation will be the airport's coordinator and overall adviser for reaching a public-private partnership deal.
JClark Aviation already has done work on the public-private partnership project and a host of others under a $10,000 per month contract it has with the airport authority. That contract, which runs until October, will stay in force.
The committee also recommended hiring Indianapolis law firm Faegre Baker Daniels LLP as both bond counsel for the runway expansion project and legal adviser on any possible public-private partnership.
The Faegre Bakers Daniels fee as bond counsel most likely would be paid for out of a more than $30 million loan the airport plans, which will be paid back with tax income from the Airport Development Zone tax increment financing district on Gary's West Side. The law firm's public-private partnership work would be billed separately, but the same loan may be used to pay it, said airport lawyer Patrick Lyp.
All of those hires were recommendations only, and will have to be approved by the Gary/Chicago International Airport Authority. Its next meeting is Monday.
"It's a solid team," said committee chairman David Bochnowski after the meeting at the Gary airport administration building. "It's a stand-up team. And it's a team that investors will take notice of."
The fees to A.C. Advisory and JClark Aviation will only be paid if the city and airport are able to land a private investment group to develop the airport. That means those potential investors will have to pay what basically will be a large upfront fee to the airport advisers.
The deals are being struck because the financially strapped airport authority does not have the money to pay them.
However, it will have to come up with up to $25,000 for expenses for A.C. Advisory and up to $25,000 in expenses for JClark Aviation under Thursday's recommendation. A successful bidder could also be required to cover those capped fees once a deal is in place, Bochnowski said.
The joint city/airport committee recently submitted a report to the city of Gary and Gary airport authority recommending they try to secure a private investor by August willing to put at least $100 million into the airport.
In exchange, that investor would get exclusive development rights for parcels of airport land and/or some facilities.
The joint city/airport committee also agreed to continue meeting and working on finding private investors, perhaps until a deal is actually struck.
Originally, its mission was to expire with delivery of a report on forming an airport public-private partnership, which it submitted to the city and airport authority last week.