CHICAGO -- Building an airport on Chicago's southeast side would cost $17.4 billion -- at least $8.4 billion more than four other possible sites, according to a preliminary financial feasibility analysis presented to an Illinois-Indiana site selection committee Wednesday.
Mayor Richard Daley of Chicago is pushing for the so-called Lake Calumet site over the other four sites being considered by the bi-state Policy Committee for the Site Selection of a Supplemental Airport in the Chicago Area. The committee is made up of Chicago, Indiana, and Illinois officials.
Those sites and their estimated costs include the existing Gary, Ind., Regional Airport, at $9 billion. There are also three Illinois sites outside of Chicago: in Kankakee, at an estimated cost of $3.8 billion; Peotone, at $3.7 billion; and on the Illinois-Indiana border east of Beecher, at $4 billion.
Opponents of the city's site said the higher price tag, along with other studies that show the Chicago site would displace more people and incur more flight delays, should take Lake Calumet out of the running.
But Robert Repel, the Daley administration's point man on the supplemental airport, took issue with the estimated cost of the Lake Calumet site. He said after the committee meeting that the city was updating its own 1990 financial analysis of the site that pegged the cost at about $5 billion.
"We're confident we will be able to demonstrate the Lake Calumet site will cost nowhere near the number they say" in the preliminary analysis, he said. "I think [the cost] might be a bit more expensive, but not four times greater as we heard here."
Mr. Repel added that the updated city study, which he said should be completed by the end of November, would also include a detailed financing plan for the site "that has not been seen before."
The city's 1990 analysis outlined a 28-year, $5 billion financing plan that incorporated the use of nearly $600 million of revenue bonds, $1.5 billion of state and federal grants, $50 millionof excess revenues from Chicago's O'Hare International Airport, $407 million of airline and other user revenues, $513 million in interest income and $1.9 billion in passenger facility charges.
In addition, city officials have talked about leveraging the approximately $84 million a year it will collect from a $3 passenger facility charge at O'Hare for additional bonding.
Indiana officials also had their own consultant's report, which showed the cost of the Gary site at just over $6 billion -- $3 billion less than the feasibility analysis.
How each of the possible airport sites could be financed was not explained in any detail in the preliminary analysis done by PRice Waterhouse. One member of the policy committee said the lack of financing information was due to bond firms that declined to offer their opinions to the accounting firm because "they were afriad of disqualifying themselves from consideration" to participate in whatever bond deals result from a new airport.
Don Corinna, program manager for the bistate committee, said the analysis was never intended to contain specific financing plans, a step he said would be pursued once a site is selected. He said several investment bankiers were approached by Price Waterhouse to review its methodology, but those firms declined to participate, citing "a purported conflict of interest" due to working relationships with Chicago, Indiana, or Illinois.
Supporters of Chicago's plan have said the ability to collect passenger facility charges at O'Hare Airport and to attract more passengers to the Lake Calumet site due to its proximity to downtown Chicago, combined with its long history of operating and financing O'Hare, gives the site an edge over its competitors.
Mike Robinson, a spokesman for the Third Airport Alliance, a group that supports the rural Illinois sites, contended yesterday that the news concerning the high cost of the Lake Calumet site, which would include the expense of moving about 40,000 residences, an auto plant and other businesses, wetlands, landfills, and cleaning the area of toxic wastes was bad for Mayor Daley's plan.
On the other hand, he said financing any of the rural sites was still doable, with the costs cited in the feasibility analysis. The group has said a mixture of federal grants revenue bonds, and privatizing some of the airport facilities could be used to finance an airport in their area.
The possibility of Chicago annexing one of the rural sites was raised by another study concerning the possible ownership of the airport. Mr. Repel said while there is precedent for Chicago to do that, given its decades-ago annexation of the land that was to become O'Hare Airport, the annexation of a rural site "was not an issue Chicago has considered as an option."
The Price Waterhouse financial analysis in one of dozens of studies that the policy committee will weigh before it gets a final report from its primary consultant, TAMS Consultants Inc., at the end of October.
The site selection process, which has been going on for two years, will end on Jan. 5 when the committee is expected to chose one of the five sites or a "no build" option. If a site is selected, another 12 months would be spent on putting together a master plan.
The 11-member policy committee is made up of four members appointed by Gov. Evan Bayh of Indiana, who favors the Gary site, three members appointed by Mayor Daley, and four members appointed by Gov. Jim Edgar of Illinois.
Illinois's secretary of transportaion, Kirk Brown, said his state has not taken a position on any of the five sites and that it "has no ax to grind except to get the facts out."