Full steam ahead | Bleader

Tuesday, October 7, 2008

Full steam ahead

Posted By on 10.07.08 at 04:48 PM

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On more than one occasion during Tuesday’s hearings on the plan to lease Midway, an alderman walked out of City Council chambers shaking his head. “Somewhere in this deal we’re getting screwed,” one of them muttered. “I just can’t figure out where yet.”

The sentiment appeared to be shared by quite a few of his colleagues, who pelted city officials with questions about the deal, expressing annoyance that its terms were so complicated and the explanations offered so incomplete. Privately many were distressed that they were going to have to choose between supporting a cash windfall—and the mayor—or holding out for answers that obviously weren't coming.

Under federal law all revenue currently generated at Midway goes back into the airport, but by turning over its operations to a private manager for 99 years the city would collect $2.5 billion. Much of those funds would go toward debt payments, leaving the city with about $900 million to spend on pension obligations and infrastructure needs and another $100 million to use at its own discretion.

As they had on day one of the hearing, aldermen had lots of questions—about the wisdom of leasing public assets (it’s amazingly prudent in this case, they were told), minority contracting (well, the lessors are—um, how should we put it?—white), the cost of police and fire coverage (essentially, it would come out of the $2.5 billion), and the pay rate for the lawyers who negotiated the lease ($295 per hour over the last two years of negotiations, climbing to $540 an hour if the deal goes through).

When aldermen Manny Flores, who’d said he wanted to support the deal, and Tom Allen, who’d admitted skepticism, asked for guarantees that the infrastructure and discretionary funds would be distributed around the city, chief financial officer Paul Volpe tried to dodge by promising that the administration would consult aldermen about those decisions later.

“You know, here’s what we’re worried about," Allen said. "We’re worried about $225 million being plucked out here, and another $100 million being put in another corner, and we get the crumbs. We’re voting on this and we’re giving away our leverage, whatever leverage we had, when we vote on this, in terms of our ability to increase capital projects in our wards. . . . Why can’t we codify this and put it into the ordinance right now?”

“I don’t see how you’re giving up your leverage,” Volpe said. “We realize that those discussions need to occur, and through this legislation we are giving you that authority to pass a separate, more thoughtful ordinance [at a later date] on how we spend those proceeds.”

“I think those discussions should happen contemporaneously,” Allen said.

But they didn’t. Without adding any language specifying how the funds will be used, the finance and aviation committees went on to approve the deal unanimously. It will almost certainly pass the full council at Wednesday’s meeting, less than a week after terms of the deal were provided to aldermen.

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