Gary Airport’s private partnership readies for takeoff

December 9, 2013

(WBEZ/Michael Puente)
Gary Chicago International Airport officials are contemplating a $100 million public-private partnership with a Virginia based company. The money aims to better utilize the airport off the shores of Lake Michigan in Gary, Indiana.

It’s been nearly a year since the Gary Chicago Airport Authority announced it was seeking private dollars to give a boost to its struggling airport.

On Monday, the airport appeared to be one step closer to making that plan a reality.

At the authority’s regular meeting, it said Aviation Facilities Company, Inc. was seeking to invest $100 million over the next 40 years in a public-private partnership with the airport.

“Public ownership and private investment are the cornerstones of these proposed agreements,” said Carrie Hightman, chair of the P3 Ad Hoc Committee, which was put together by the airport authority to seek proposal from private firms.

Based in Northern Virginia, Aviation Facilities Company, also known as AFCO, is an industry leading airport management firm with more than 80 years of experience. Investment partners in the deal include Guggenheim Securities and Loop Capital, both with operations in Chicago.

The proposal calls for a 30 percent goal of local participation, 20 percent for disadvantaged and minority-owned businesses, as well as 5 percent for women and veteran-owned businesses. One other key provision requires $25 million to be spent within the first 36 months of the agreement or the deal can be dissolved.

Hightman, who once served as president of SBC Illinois (now AT&T), is currently executive vice president and chief legal officer for Merrillville, Indiana-based energy company NiSource Inc.

Hightman says AFCO understood Gary’s needs, which is why it won its recommendation.

“They understood the things that were important to us and Northwest Indiana such as local jobs, such as minority participation, such as increasing the tax base, such as creating a plan that would make this airport sustainable and profitable,” Hightman said.

Although it aspires to be the Chicago metro area’s third major airport, the Gary airport has struggled of late. It currently has no commercial passenger service. Its last carrier, Allegiant Air, flew its last flight to Orlando, Florida from Gary in September after a one-year run. The airport is home to charter and private jet services, as well as the corporate fleet for Boeing Corp., and the Indiana National Guard.

Gary airport authority board chair Thomas Collins gave no indication as to when the board will make a final decision.

“I think the information that was presented will be considered by the board and thoroughly reviewed. The entire board just hasn’t had enough time to study and digest this. We would like a little time to review this and get back to everybody with the results,” Collins said. “I don’t have a time frame.”

The airport is still undergoing a $166 million expansion of its primary runway. Although the Federal Aviation Administration originally said it wanted the project done in December of this year, Gary received an extension to deal with issues related to pollution cleanup near the site. The airport is also in negotiation with the Canadian National Railway company to move tracks that travel right in the path of the new runway.