Gary airport hires advisers in bid to lure investors

2013-04-22T17:00:00Z 2013-04-23T07:59:03Z Gary airport hires advisers in bid to lure investorsKeith Benman keith.benman@nwi.com, (219) 933-3326 nwitimes.com

Former Indianapolis International Airport CEO John Clark has landed a contract at Gary/Chicago International Airport that could net him a $500,000 payday within months.

The airport authority on Monday, by a 6-1 vote, approved a "success-based" fee for Clark's consulting firm of the greater of $200,000 or 0.5 percent of any public-private partnership deal struck at the airport.

The airport authority wants JClark Aviation Group, a consultancy founded by Clark last year, to be its overall adviser in securing a private investor willing to plunge at least $100 million into the airport just east of Chicago.

It is the 0.5 percent provision that could land Clark the biggest payday. If the airport attains its minimum goal of $100 million in investment, he would be paid $500,000. If the investment is larger, Clark's paycheck grows.

The contract is an "at-risk" one, meaning Clark will get paid only if a pact with private investors is actually concluded, with August now the target date for getting that done. And under the terms of the contract, it is the successful bidder that would pay Clark, not the airport authority.

The contract approved by the airport authority Monday is in addition to the one Clark already has to work on business development at the airport. That contract will remain in effect, said David Bochnowski, chairman of the joint city/airport committee that recommended Clark.

That contract stipulated the airport authority will pay JClark Aviation $245 per hour up to a sum of $10,000 per month for doing business development work. However, billing records obtained by The Times through an Access to Public Records request show Clark actually was paid more than that in the first four months of that contract.

For October he was paid $12,375; for November $14,173; for December $12,127; and for January $12,789, according to airport purchase orders. He also was reimbursed for $1,517 in expenses for December.

Clark will be reimbursed for up to $25,000 in expenses under the separate contract approved Monday.

The airport authority on Monday also approved on a 6-1 vote a similar "at-risk" contract for A.C. Advisory Inc., of Chicago. The firm, headed by Adele Cepeda, will be paid $250,000 to be the airport's advocate and overall financial adviser in negotiations with private investors.

Similar to Clark's contract, the firm only gets paid if a deal is reached. It is the winning bidder that must pay the tab.

A.C. Advisory also will be reimbursed for up to $25,000 in expenses.

Authority member Nikki Thorn was the only board member to vote against the JClark Aviation and A.C. Advisory contracts. Thorn said she is not against seeking to form a public-private partnership, but she objected to the search and hiring process.

A formal request for proposals should have been issued so that companies would have had a fair chance to compete for the jobs based on both price and qualifications, Thorn said.

A.C. Advisory and one other firm were interviewed for the job of financial adviser at Thursday's meeting of the joint city/airport committee. Bochnowski confirmed those were the only two firms interviewed and no formal request for proposals was issued.

As for John Clark, Bochnowski said the airport authority has been working with Clark for a while now and is comfortable with the work he has done.

"He is nationally recognized," Bochnowski said. "Everyone we talked to, whether law firms or financial advisers, everyone was familiar with John and had a great deal of respect for him."

Clark had been acting as informal adviser to the joint city/airport committee and pointed out to them how difficult it was to find firms willing to work "at risk."

Clark's firm is made up of himself and managing partner Al Stanley. It currently has one other client, San Diego International Airport, Stanley said.

The airport authority also authorized, by a 7-0 vote, to have airport staff negotiate a contract with the law firm of Faegre Baker Daniels LLP to act as bond counsel for the airport's runway expansion project as well as legal adviser on any possible public-private partnership.

Four law firms were interviewed for those jobs, Bochnowski said.

The airport authority also authorized a contract that will pay a $30,000 fee to ADK Executive Search, of Atlantic Beach, Fla., to perform a search for an airport executive director.

The authority also approved insurance renewals that will hike the airport's total annual insurance bill to $100,321 from the current year's total of $95,974. Most of the increase came in the commercial property policy. Local insurance and employee benefits firm Haywood and Fleming Associates negotiated the new rates.

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

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