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Durbin wants any Midway privatization deal to compensate feds for funds spent to rebuild airport

Midway Airport  |  Sun-Times Library

Midway Airport | Sun-Times Library

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Updated: March 2, 2013 7:33AM

The federal government should be repaid — in some fashion — the $378 million in federal funds used to rebuild Midway Airport as part of any privatization deal, U.S. Sen. Dick Durbin (D-Ill.) urged Tuesday.

In a letter to outgoing U.S. Transportation Secretary Ray LaHood, Durbin said that “hard questions” need to be asked about plans under exploration by Mayor Rahm Emanuel and the Federal Aviation Administration to privatize Midway — or any other public transportation investment.

His cautionary letter comes as Emanuel is seeking bidders on a possible lease of Midway under terms dramatically different than those that collapsed for lack of funding under former Mayor Richard M. Daley.

Emanuel also is determined to avoid the political backlash that followed the widely unpopular privatization of Chicago parking meters.

The mayor has insisted that any deal involve a 40-year lease — rather than the 75-year one for parking meters — as well as profit-sharing for Chicago taxpayers and safeguards against consumer price gouging.

However, Durbin’s letter Tuesday urged that additional considerations be thrown into the mix, consistent with 2011 legislation Durbin introduced, but could not get passed, on the sale and lease of federal transportation assets. Durbin plans to reintroduce the bill again this year.

The senator noted that Midway received $378 million in federal funds to rebuild runways and taxiways and to replace a terminal. That investment helped the Southwest Side airport generate “$7 billion in economic activity each year,’’ Durbin wrote.

“The federal government has borrowed heavily to make investments at Midway and other airports across the country,’’ according to Durbin’s letter. “I encourage you to look closely at the federal funds these airports have received and make sure these funds are repaid prior to the sale or lease of an airport.’’

Durbin’s 2011 legislation would have required the Department of Transportation to create a formula to determine the “depreciated value’’ of any federal investment before any privatization plan was sealed, said Durbin press secretary Christina Mulka.

The private company could then include that depreciated payback to the federal government in their purchase price, Mulka said.

However, Durbin noted in his letter that he is open to other forms of reimbursement, and wrote that “I have spoken to Mayor Emanuel about these possibilities as well.’’

Mulka said Durbin talked to Emanuel on Tuesday and if the mayor brings “ideas to the table on how the federal investment can be brought back, he is open to ideas.’’

Durbin’s office issued a news release about Durbin’s Tuesday letter to the LaHood only hours after releasing a statement on LaHood’s announced resignation. However, Mulka said, Durbin’s office had the privatization letter “ready to go’’ for Tuesday release before realizing LaHood was announcing his decision to leave the Cabinet that same day.

Mayoral spokesman Tom Alexander Tuesday pointedly refused to comment on Durbin’s request that federal funds used to overhaul Midway be paid back as part of any privatization deal. Nor would Alexander comment when asked whether the senator’s demand would be an impediment to a Midway deal.

“We respect Senator Durbin’s opinion and concerns, and the Mayor is committed to carefully evaluating the potential for a deal and will not support anything unless it meets the specific criteria he previously set forth to protect airport users, ensure a fair and transparent process, and provide a strong benefit for Chicago’s taxpayers,’’ Alexander said.

Ald. Michael Zalewski (23rd), a member of the mayor’s commission to evaluate the Midway deal, responded with caution Tuesday.

“I respect Sen. Durbin’s input,’’ said Zalewski, whose Southwest Side ward includes Midway. “His position on Washington is just another factor we must consider as we explore the future of Midway. We will look at every aspect before making a final decision.’’

Durbin noted a federal payback would create more money for other airport investments, including improvements at Chicago’s O’Hare Airport.

His letter also urged scrutiny of any tax and financing benefits to ensure “no hidden tax subsidies are involved,’’ as well as a disclosure of any planned changes in fees or workforce that could reduce wages and worker benefits.

Steve Schlickman, executive director of the University of Illinois at Chicago’s Urban Transportation Center, said he did not see Durbin’s letter as “an effort to kill the deal’’ but rather as a reaffirmation of Durbin’s past positions.

“I don’t believe his letter has any official standing in the process for approving the airport but it is an important statement from an important public official who represents the state of Illinois and thinks it’s incumbent on people arranging the deal to [make sure] this is a good deal for his constituency,’’ Schlickman said.

Midway has won a rare slot in the Federal Aviation Administration’s Airport Privatization Pilot Program. Stewart International in Newburgh, N.Y. was the first airport to join the program. In 2000, it was purchased by a British company that sold the airport back to the Port Authority of New York in 2007 after it couldn’t turn a profit.

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