Airlines Sign 6.6 Billion O''Hare Expansion Deal Last May, ORD Hides Deal from Public


Aug 20, 2002
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Chicago, Airlines Agree On O''Hare Expansion Pact - Report

CHICAGO (AP)--City officials and more than a dozen airlines have signed a $3.9 billion agreement for financing the first new runways at O''Hare International Airport, according to a published report.
The Chicago Tribune reported in Monday''s editions that the city and the airlines, including American Airlines and United Airlines, signed the pact in May, but haven''t disclosed it publicly.
Minneapolis-based Northwest Airlines was the only carrier to reject the agreement, the Tribune reported.
Citing four city and industry officials who would discuss the agreement only under the condition of anonymity, the newspaper said the initial funding burden for the runway work would fall on the city, but the airlines would increase their commitment in the later years of the project.
The agreement was reportedly reached after nine months of intensive negotiation, which coincided with a deep economic slump in the airline industry. The breakthrough only occurred after the city made concessions permitting the cash-strapped airlines to defer some interest payments and refinance their existing debts to the airport. They would reportedly be able to postpone their payments to the city until at least 2006.
The agreement would pay for two new runways at O''Hare and the extension of a third pending approval of the full $6.6 billion O''Hare expansion project by the Federal Aviation Administration.
ChicagoMayor Richard M. Daley and city aviation officials have said they expect to receive formal approval from the FAA in about a year. Their plans, however are being challenged by the Suburban O''Hare Commission, which represents a number of communities in the O''Hare area who are opposed to expansion of the airport.
Joseph Karaganis, an attorney for the Suburban O''Hare Commission, said the failure of the city to disclose the May agreement is a sign that it was made on a shaky economic foundation.
The financing agreement documents, which the city continues to keep secret, are further evidence of Daley''s unwillingness to expose the O''Hare documents to public scrutiny, Karaganis said. He knows the $6.6 billion price tag is lowball and that the true cost is three times that amount.