Gary airport proposals fall short of city's hopes
GARY, Ind. — Proposals from two companies that have bid on a request to run operations and development at Gary/Chicago International Airport have fallen short of the city's hopes, but officials say there's still room for negotiation.
The city had hoped to see an offer of an upfront payment and asked bidders to show a plan for investing or attracting $100 million in projects over a number of years.
But the proposals from finalists GCIA Group and Aviation Facilities Company Inc., also known as AFCO, are more modest.
Neither company has offered an upfront payment, which doesn't surprise Robert Poole, a national privatization expert who noted that upfront payments typically are offered when the facility being leased has a strong revenue flow. The Gary airport operates at a deficit and could remain taxpayer-subsidized for years.
“I would have been pretty astonished if anyone would take the risk of offering a significant upfront payment,” Poole told The Times in Munster. “The city was being optimistic about that.”
AFCO's proposal says the company would aim to attract at least $2.5 million in development in the first three years of its contract. Overall, it wants to attract at least $5 million in development at the airport and its vicinity during the first 10 years and $100 million over 30 years.
The GCIA Group's proposal relies mainly on the airport's current capital projects revenue until 2016, when it hopes to have bonds issued for new projects.
Bo Kemp, an aide to Mayor Karen Freeman-Wilson, said negotiations for a final deal are ongoing and that the upfront payment is still on the table.
“What an ultimate deal may look like is not what you have in front of you right now,” Kemp said.
Neither finalist has offered to pay the up to $800,000 owed to advisers on the privatization deal. The joint city/airport committee says it wants the winning bidder to pay that bill.
The AFCO proposal leaves the topic to further negotiations, while the GCIA Group proposal doesn't mention the payment.