CHICAGO - The Chicago City Council yesterday approved issuance of $185 million of debt for infrastructure improvements, marking the city's first bonding for that purpose since 1987.
The program will include the issuance of $150 million of general obligation bonds and $35 million of bond anticipation notes for fees and capitalized interest associated with the bonds, according to Walter Knorr, the city's comptroller.
The bonds and notes are expected to be issued by the last week in July, Mr. Knorr said.
Hamilton Investments Inc. has been chosen as lead underwriter and bookrunning manager for the deal, Mr. Knorr said. PaineWebber Inc. was selected as co-senior manager, he added.
Co-managers for the deal are LaSalle National Bank, Northern Trust Bank, M.R. Beal & Co., Carmona, Motley & Co., and KM Independence Group.
Mayor Richard M. Daley announced the bond program in May, saying it would generate or save a total of 1, 500 jobs in the city.
Proceeds from the bond issue will finance, among other things, public facility renovations, commercial and industrial renovations, street repairs, and recycling facilities.
Mayor Daley has said that the city would be able to issue the new debt without a property increase because of savings from the refinancing and retiring of old GO bonds.
The bond proceeds would go to a wide variety of projects, according to Noelle Gaffney, a spokeswoman for the mayor. She said only $3.5 million would be used for tunnel and structural improvements related to the flooding that plagued the city in April.
On April 13, at least 250 million gallons of water flooded an underground tunnel system and some basements in the city's downtown business district when a retaining wall in the Chicago River ruptured.
Meanwhile, Mayor Daley yesterday reaffirmed his stance that a new airport for Chicago is "dead" because the Illinois General Assembly failed to approve legislation that would have set up an authority to oversee the airport.
The mayor added that he will not lobby for the project in November when the legislature reconvenes.
Ms. Gaffney said the mayor is now considering alternative plans, including the proposed construction of a high-speed rail line to boost capacity at Chicago's O'Hare International and Midway Airports. She added that the rail proposal has not been worked out in detail.
Ms. Gaffney said that Mayor Daley is looking at other plans in an effort to use $90 million in proceeds from a passenger facilities fee charged at both airports.
The airport legislation faltered last week in the Illinois Senate. The airport authority would have been made up of officials from Chicago, Illinois, and Indiana, and would have had the ability to issue $8.5 billion of revenue bonds to help finance the $10.8 billion airport.