Two bidders to make Gary airport privatization pitch

2013-09-06T13:30:00Z 2013-09-07T13:01:11Z Two bidders to make Gary airport privatization pitchKeith Benman, (219) 933-3326
September 06, 2013 1:30 pm  • 

GARY | A joint city/airport committee has recommended two bidders out of an original field of 10 for further negotiations to privatize the management and real estate development at Gary/Chicago International Airport.

The committee has selected the GCIA Group LLC and another group headed by Aviation Facilities Co. Inc. as its two preferred bidders. The Gary/Chicago International Airport Authority could be asked to ratify that recommendation as soon as its next meeting Tuesday.

The GCIA Group is made up of Lee Cos., of Gary; Axis Consulting, of Chicago; The Williams Capital Group, of New York; Airport Property Ventures, of Manhattan Beach, Calif.; and NAI Hiffman, of Chicago.

The AFCO team includes AvPorts Management, of Dulles, Va.; Guggenheim Partners, of New York; Loop Capital, of Chicago; and law firm DLA Piper.

"These are all big names in their field, which makes us all the more excited," said committee chairwoman Carrie Hightman at a brief meeting to announce the picks at the airport Friday morning. "It also explains why they rose to the top."

The action in Gary comes one day after Chicago Mayor Rahm Emanuel pulled the plug on final negotiations for the privatization of Midway airport, shocking many observers after a similar effort there failed four years ago.

Hightman said choosing the AFCO and GCIA groups for further negotiations does not rule out working with some of the other bidders in the future.

The committee hopes to have the Airport Authority seal a deal with a winning bid group by the end of October.

Committee members interviewed after the meeting would not reveal any details of the GCIA or AFCO proposals. However, they confirmed both are comprehensive proposals that include managing the airport, development at the airfield and real estate development in areas surrounding the airport.

Interviewed earlier this week, Steve Forrer, AFCO/AvPorts executive vice president, said the comprehensive nature of his group's proposal will be pivotal to its success.

"Our proposal is a comprehensive proposal that includes development both at the airport and off the airport," Forrer said. "We think it is important to integrate the two and our proposal does that."

The GCIA group is spearheaded locally by Patrick Lee, a Miller Beach resident who is president of Lee Construction Management. His company was the lead local developer and project manager for two new hangars for the Gary Jet Center. In an earlier response to the committee, the GCIA Group touted those projects as a successful $10 million public-private partnership for the airport.

The committee wants to see a plan from bidders for attracting $100 million more in investment to the airport during the next 20 to 40 years, according to its request for proposals issued July 22.

Members of the joint city/airport committee were at pains Friday to say the deal they contemplate for Gary is nothing like the one proposed for Midway. Member Bo Kemp said the Midway deal would have represented a privatization of the entire airport, while the Gary deal will be a public-private partnership with the Airport Authority maintaining control.

Chicago Aviation Department Chief Financial Officer Michael Zonsius was at Friday's meeting of the joint city/airport committee. The Gary Airport Authority is part of a bistate agreement that is overseen by a single authority for Gary, Midway, and O'Hare International Airport.

Informally discussing the deal with committee members before their meeting, Zonsius was overheard to say he was "shocked" by the sudden derailment of the Midway negotiations and noted he was "down in the trenches" when due diligence was being performed for the deal.

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