Gary airport authority clinches deal for $30 million

2012-12-19T19:00:00Z 2012-12-20T08:35:03Z Gary airport authority clinches deal for $30 millionKeith Benman keith.benman@nwi.com, (219) 933-3326 nwitimes.com
December 19, 2012 7:00 pm  • 

The Gary/Chicago International Airport Authority approved an agreement Wednesday that should open the spigot on a $30 million grant that is badly needed for its $166 million runway expansion project.

By a vote of four in favor with one abstention, the authority's board approved a grant agreement with the Northwest Indiana Regional Development Authority, which has been on hold while the RDA reviewed the project's finances.

"You expect $30 million from the RDA, and you will get $30 million from the RDA," airport attorney Patrick Lyp said as he explained the agreement to board members.

The expansion project will extend the airport's main runway to 8,900 feet from its current 7,000 feet, which will allow it to comply with federal safety regulations as well as handle larger commercial aircraft. Construction activity and costs hit a new peak this autumn, with railroad relocations and runway preparations going on simultaneously.

As soon as the RDA agreement is signed by the state attorney general's office, the airport will begin drawing on the grant to pay bills already incurred, according to Airport Finance Manager Carolyn Keith. By the end of the month, up to $20 million of the grant already could be spent, Pruitt said.*

That action will also allow the airport authority to repay a $12 million debt to the Airport Development Zone, according to Lyp. That money is slated to be used later on the project, either as a direct contribution or to ease a large borrowing.

For much of the past two years, the airport authority has been struggling to come up with funds to pay for the expansion, which ballooned in cost to $166 million from original estimates of about $90 million. This week, both the authority and RDA have expressed confidence funding for the project is now in place.

The RDA board approved the $30 million grant more than 1 1/2 years ago, but it was held up while the agency did its financial review and a joint RDA/airport task force hammered out the reimbursement agreement.

Despite the pressing need to get the money, airport authority members still had questions and concerns about the agreement Wednesday.

"There are some stipulations in this agreement I have a problem with," said authority member Silas Wilkerson at the beginning of the discussion. "But because the 11th hour is here, I'm going to have to vote in the affirmative."

Concerns raised by authority members included a provision of the agreement that essentially "locks up" all Airport Development Zone money for the expansion project. At one time, the authority had wanted to use zone funds for subsequent expansion projects.

Lyp explained that stipulation basically only applies until the RDA money is used up, probably sometime in the summer.

By the time the vote came, Wilkerson had expressed a number of concerns and he abstained from the vote.

The airport authority only has five members after the resignation of Robert Poparad three weeks ago and the recent resignation of Roosevelt Allen. Both have resigned to focus their time on their elected positions in Porter County and Lake County respectively.

The board of commissioners in each county is expected to name replacements for each early in the new year.

*Information on how soon a Northwest Indiana Regional Development Authority grant will be spent by Gary/Chicago International Airport was incorrectly attributed in a story in Thursday's Times. Airport Finance Manager Carolyn Keith said up to $20 million could be spent by the end of this month.

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