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Chicago Midway Airport Goes to Private-Run

In The New York Times report, Chicago Mayor Richard M. Daley announced that an investment group bid $2.52 billion to win rights to a long-term lease of the Midway Airport, which will become the first large privately run airport in the country.

Midway Investment and Development Company requires final approval from the Federal Aviation Administration and the Chicago City Council. The Council is going to vote over this proposal on Oct. 8.

“As the first privatization of a major American airport, this transaction will provide unprecedented benefits for the traveling public, the airlines and the taxpayers of Chicago,? Daley said.

Midway Investment and Development consisted of John Hancock Life Insurance Company and Citi Infrastructure Investors, and one Canadian company, YVR Airport Services Ltd. of Vancouver.

Midway Investment and Development said that they believed the 99-year-long-term lease will be successful and build reputation of the airport.

The deal will have a 25-year use agreement with airlines already at Midway, which will raise rates and charges at the outset and freezing them for six years.

Experts thought this issue is important because it is unprecedented. The deal will bring certain risks and potential rewards for the public.

“I don’t see where the investor can benefit without raising the costs I’m going to have to pay,? said Aaron J. Gellman, a professor at Northwestern University’s Transportation Center and the Kellogg School of Management. It sets the valuation on airports, he said.

The article from BizTimes Daily, Milwaukee County Executive Scott Walker thought that the General Mitchell International Airport could undergo the same operation as the Midway Airport.

"Milwaukee can benefit from their example and generate necessary revenue on a smaller scale," Walker said.

Walker thought the plan would give the government a steady, long-term revenue stream for the county. He said that the revenue could be used to support and improve transit, as an alternative to raise property or sales taxes.