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Should we build an airport at Peotone, find another solution, or pursue a combination- and why and how?
service of the Hyde Park-Kenwood Community Conference Transit and Parking
Committee and the HPKCC website, www.hydepark.org
Here is the project description, followed by three takes. on it. None of the latter deals with how increased airport capacity at any facility would be accessed by or be of benefit to Hyde Park-Kenwood or the greater Mid-South, nor do they deal in detail with drawbacks including environmental at the various present or future airports including Gary. Rep. Jesse Jackson, Jr. told the October 5th Ward meeting that the step needed to establish the Authority is certification by Governor Blageovich, who says he likes the plan. 37 south suburban municipalities are on board. Jackson said the drop dead consideration (among many) for SSA over Gary Airport is that Gary is in O'Hare's airspace while SSA is not. The developers believe they can bring a self-supporting, self-expanding airport in under the critical $10 per passenger charge.
World-renowned airport developers LCOR and SNC-Lavalin, serving as consultants, have used innovative design, modular expansion and efficient financing to yield a South Suburban Airport plan that
This important breakthrough demonstrates that the Airport is viable by initially serving a natural local passenger and cargo market. It dose not depend upon airlines signing up years in advance of its opening. The results and the opportunity they present support the immediate creation of a local public authority and its issuance of a Request for Proposal for the development, financing and operation of the airport.
1.Why a Public-Partnership:?
2. The Developer-Consultants
3. A Local, Market-based Demand Analysis
LCOR and SNc conducted a "bottom-up" market analysis using census tract and travel data that focused on the natural demand in the south suburbs, rather than simply assuming that a certain portion of Chicago area traffic would use the airport; that is, its favorable location and pricing would stimulate new demand stealing traffic from O'Hare or Midway. This type of analysis is similar to what airlines do before entering a new market or a new airport.
The focus on local demand meant that LCOR and SNC's forecast were even more conservative than the State's, and it gave them confidence that demand existed at the right per-passenger price. They concluded that it will attract carriers, even if (as is typical of airlines) they do not commit years in advance to use the airport.
4. Airport Layout Geared to Efficient Growth and Economic Development
SNC reviewed the TAMS data and conducted its own planning and design, which yielded a low-cost, high-quality layout that allows for quick and easy expansion in sync with demand. SNC's design incorporates just-in-time expansion of parking, terminal and internal road needs with little demolition; nothing is wasted as the airport grows. It even anticipates air cargo growth and industrial use areas and reserves a right-of-way for Metra into the terminal.
The initial phase does not rely upon large, immediate highway improvements, relying instead on modest upgrades to West Offner Road until traffic justifies a dedicated western access and, eventually, and eastern access road. On opening day, the airport will have about 1,300 parking spaces and 300 peak hour enplanements. This level does not require the State to build a dedicated road to the airport. As traffic grow, however, larger improvements will be appropriate, and they can be paid for in part by rent paid by the private developer to the airport authority.
Phase I is similarly sized to the TAMS "Inaugural" airport layout, with a small, attractive terminal, surface parking, air cargo area and single runway, but costing hundreds of millions of dollar less than the original TAMS design, which yielded unacceptably high airline costs. SNC verified that the TAMS siting of the one-runway Phase I is approximately the best location within the 2,400 acres already budgeted for sate land acquisition, but the SNC design places special emphasis on the economic development aspects of the airport. SNC also feels that Sange Field can remain open during the initial phases of the airport's growth.
5. The Terminal: Modular Expansion and High Customer Service
The terminal design emphasizes customer service and a modular, just-in-time approach to expansion. Its European-style"common use" approach to gate allocation--in which the airport, not individual airlines, controls the gates--increases the effective capacity of a given terminal size by more than 30 percent compared to the traditional approach, and save the airlines at least as much money. Under the traditional approach , gate are allowed to sit empty most of the day. This means that the "opening day" target of 5 gates provides what 8 gates might otherwise provide. Moreover, because of the initial concourse configuration, the airport can be expanded to 13 gates almost immediately with little additional cost. The drawings below show how the landside of the airport expands over time.
Opening Day, 2008 has 5 aircraft positions that are easily expanded to the right to 13 gates if demand evolves more quickly. By 2018, forecasts indicate the terminal should have expanded in three modules to accommodate roughly 32 aircraft. By 2028, the addition of cost-effective "chevrons" to the ends of the terminal, plus new customer service areas, have added 24 more gates and plenty of capacity to accommodate the growing number of passengers. Beyond Year 24, the terminal can offer 60 gates. If the region's capacity eventually requires it, more identical "X" terminals added via underground access.
6. Up to Year 25 and Beyond
SNC's initial planning horizon fo the airport was to Year 25, at which time the second runway will have been in lace for several years and the terminal fully expanded. However, after O'hare and Midway reach their expanded capacity, the South Suburban Airport will still be ready to take on the region's additional demand. SNC's concept, like the TAMS design, allows the airport to have up to three identical terminals and four to five runways, a level not envisioned by anyone until near the turn of the century. At that point in the future, high-speed rail may supplement aviation as a common American intercity travel mode, and SSA is sure to be part of the system.
7. A gateway at Home in Northeastern Illinois
In every region of America, there are design elements and colors that arise from the local history, traditions, and economy. from the prairie style of Frank Lloyd Wright to the natural woods and vibrant hues of the countryside, SNC's concept for the terminal would make travelers feel welcome, relaxed and at home in airport. It would also be an attractive economic gateway that welcomes the world to pull up a chair with Northeastern Illinois.
8. The Airport's Local Economic Impact
A smooth-Running Engine: The modular approach for the terminal's expansion allows the number of gates and car parking spaces to grow six-fold and the terminal size four-fold in the first decade; faster or slower depending upon demand. Just as importantly, the expansion occurs with little disruption to passengers and air service and at a cost well below the increase in revenues.
Jobs: Based on formulae developed by the Airports Council International, Phase I alone is expected to generate 15,000 new, permanent jobs in the local economy, a number which will increase as the airport grows. The airport's initial construction will immediately provide over a thousand unionized construction and trades jobs, a benefit that will continue each time the airport expands.
Expected Local Tax Base: Local governments will benefit from the expanded local tx base from the new businesses (and growth in existing businesses), new industries and higher employment. Because they will attract and serve customers from outside of the region, airports tend to expand the local tax base much faster than population.
A Market-Oriented Finance Plan: The finance plan began not with how much money was needed, but rather with the more market-oriented approach that asks how much natural travel demand will exist, and what airlines would be willing to pay to use and airport to serve them. Accordingly, LCOR and SNC discussed with some of their own tenants, including low-cost carriers that might want to enter the Chicago market in the future, what price level would be attractive for them for a new airport, especially if that price could be guaranteed for several years. LCOR and SNC recommend doing just that, meaning that the developers, not the airlines or the authority, would take the financial risk.
Money for Land and Local Infrastructure: This price range became the benchmark for calculating the airport's future revenue. Fortunately, the revenues are projected to be enough to finance the Phase I airport, expand it as demand grows, and have enough left over to pay rent to the airport authority totaling in the hundreds of millions of dollars over time. This means the airport will always remain an attractive low-cost option for carriers (and lower than O'Hare and Midway will charge by 2008), and will allow the developer-operator to pay enough rent to the authority such that the authority can repay the state for its land, support local infrastructure improvements and add job-attracting amenities to the airport's industrial and cargo areas.
Financial Structure: The airport will be financed with a combination of private equity by the developer, plus non-recourse tax-exempt airport revenue bonds issued by the authority on behalf of the airport. This means no financial risk to the governments participating in the authority. This efficient structure takes advantage of the uniquely American means of financing public-use infrastructure. privately-developed terminals at JFK international and Orlando Sanford Airport use a similar approach, as do many new air cargo facilities. The developer's equity provides extra protection for bond buyers. Moreover, the bonds would be insured, reducing interest costs and allowing them to be "AAA" rated.
10. The Partnership to Opening Day
The developer is the private partner in the public-private partnership, and the authority is the public partner. The private partner would be responsible for
The public sector, primarily the authority, would be responsible for
11. The Public-Private Partnership Structure
Under the parters hp structure, the State transfers the land to a south suburban intergovernmental authority crated by the Intergovernmental Agreement (IGA). The Authority then leases the land to the developer for the sole purpose of building and operating a public-use airport. The airport is financed with the combination of private equity and non-recourse tax-exempt bonds backed only by airport revenues. The developer expands the airport on schedule as traffic grows and pays rent (a share of airport revenues) to the IGA. The public controls the airport via the authority, it continuing oversight and approval processes, and the approximately 50-year lease and development agreement.
12. The IGA and the Authority
..... The authority will be composed of numerous south suburban governments in addition to the four founding communities that initiate the IGA.
Hyde Park Herald, August 25, 2004
In my eight years in the Illinois Senate, and in many years of community involvement before that, I have often found that opposing viewpoints could be reconciled through respectful negotiation and principled compromise. Usually, those on either side of an issue had legitimate interests at heart. What was necessary was finding a solution that satisfied both.
One of the seemingly intractable challenges currently facing illinois policymakers is how to address the need for greater airport capacity in our state's northeastern region. Some advocate the expansion of O'Hare International Airport, the world's busiest, which is currently suffering from delays that threaten its future as the economic engine of our region. Others advocate the construction of a new airport near south suburban Peotone, which would reduce pressure on O'Hare while spreading the economic bounty more equitably across the region.
This challenge is often portrayed as an "either-or" proposition; we either expand O'Hare to build Peotone . I believe we should do both.
There is no denying the continuing importance of O'Hare to our regional economy. It is responsible for 450,000 jobs and $38 billion in economic activity. Those huge benefits are threatened by increasing delays and possible flight-caps, which could drive air traffic to other airports in other locations. A modernized O'Hare would mean the creation of 195,000 more jobs and another $18 billion in annual economic activity. It would be a grave mistake for policymakers to fail to make the needed investments and allow O'Hare's central role in our regional economy to be diminished.
At the same time, there is a strong case for a third regional airport in the South Suburbs--a region that has struggled economically while other suburban areas have prospered. Employment and income in the South suburbs lags the rest of the Chicago area. The construction and operation of a new airport near Peotone would bring 1,000 construction jobs in the next two years and 15,000 permanent jobs by the first full year of the airport's operations, as well as billions of dollars in new economic activities, to residents and communities that sorely need it.
While the airlines and federal government would pay most of the cost of O'Hare expansion, a major objection to building Peotone has been the potential burden on state taxpayers. But Congressman Jesse Jackson, Jr., a key leader in the Peotone effort, has assembled a group of private investors who are willing to risk their capital on the new airport's prospects. State government's role in the project would be limited to providing the kind of infrastructure improvements, such as roads, transit and sewers, which it routinely provides to other development projects around the state. The state also can continue to acquire the necessary land for the project, making sure to adequately compensate local landowners who live within the airport's footprint.
Congressman Jackson's proposal is a strong one in a time of expanding government deficits. And, by providing an alternative to federal funds being used in the airport's development, it would complement--rather than compete--with Midway and O'Hare. I am hopeful that the South Suburban Airport Commission and Will County officials can come together to work toward balanced economic growth and agree on a unified approach that will provide for economic benefits throughout the South Suburbs.
The benefits of a South Suburban airport would not be limited to the Chicago region. Many Downstate communities are hampered by their lack of air access to Chicago, since gates for such flights are extremely limited at O'Hare and Midway. An airport near Peotone would provide Downtown communities with enhanced air access to Chicago, as well as accommodating general aviation traffic that formerly utilized Meigs Field. In addition, as the world's first and only airport custom designed, built and priced to attract low-cost carriers, it will attract air service to the Chicago area by start-up and discount airlines currently not operating out of Chicago's existing airports.
The bottom line is that expanded air capacity in the Chicago region will benefit all Illinoisans through more jobs, economic growth and more flights to and from Downstate. Achieving these goals need not be an either-or proposition. Through a willingness to compromise and work together in pursuit of our common interests, we can accommodate both an expanded O'Hare and a new third airport. The pressing need for good jobs and economic growth demands that we accept nothing less.
Hyde Park Herald, September 8, 2004. Letter by Tom McDougal
Barak [sic] Obama extols the benefits of a new airport at Peotone while arguing that it can coexist with an expansion of O'Hare. He may be correct, but he encourages a disappointingly parochial "Illinois first" view that ignores that Gary, Ind. would be a much better location for a third regional airport.
What? What good does an airport in Gary do the people of Illinois? Consider first why we might not want an airport in Peotone. An airport in Peotone will spawn a whole new network of highways. It will create urban sprawl from here to Kankakee. The airport, the highways and the sprawl will destroy fertile farmland we might desperately need someday. Peotone is far from power plants, requiring more high-tension lines. There is no public transportation to the other airports.
There is another serious problem that no one talks about. A new airport and the ensuing development around it will require enormous amounts of fresh water and will generate an equal amount of waste. No one talks about where that fresh water will come from and where the waste will go. If water is drawn from underground aquifer, as it likely will be, farmers all around the area will eventually find their wells running dry.
For each of these problems with Peotone, the existing airport at Gary has a solution. It lies within an industrial area, so no precious farmland will be lost. It is easy to reach from Chicago; in particular, the South Shore rail line connects it to downtown Chicago, with connections from there to O'Hare and Midway. It is close to sources of electricity, and the power lines are already up. It can draw water from the lake, and Gary has a sewage treatment plant. Finally, it already has two runways and a control tower with a radar feed, which means it can get up and running almost immediately.
But what about jobs? What about tax dollars? Illinois residents living in the south suburbs will have equally good job opportunities at Gary as at Peotone. In fact, the presence of mass transportation will make jobs in Gary more accessible to those people without a car. A busy airport at Gary will generate new development all around it, and yes, some of that development will be here in Illinois, bringing jobs and tx revenues.
Of course, it is probably true that Illinois would get more in taxes from a Peotone airport than from a revitalized Gary airport. It's important, however to balance that potential revenue against the considerable burden on the state for new infrastructure: roads, highways, water mains, sewage treatment, police and fire protection, etc.
But these arguments about jobs and tax revenues assume that the people of Illinois are somehow more deserving of our support than the people of Gary. Why should that be? Let us recognize that the people of Gary are just as much our brothers and sisters as the people of Dalton, Kankakee, or Winnetka.
Gary is in terrible shape, physically and economically. The people of Gary need our help. Given this opportunity to help them while also improving our own situation, it would be unconscionable to leave them to suffer alone.
Once you get beyond thinking "Illinois first," once you look at the question from a regional, national, or global perspective, it becomes clear that an expanded airport in Gary will provide greater benefit at less cost than a new airport in Peotone.
Hyde Park Herald, September 8, 2004. by Cal Audrain
This is in response to the article in the Herald on Aug. 24 by Barack Obama on expanding O'Hare and still building, with private funds, at Peotone. It is a thoughtful argument for a balance of concerns on airport capacity and economic concerns. However, it does not address the larger picture, the real long-range issues of the region. It only looks at airports and jobs and it only looks at Illinois.
For relief on air flight needs in the near future, a more economical response would be to include Gary, Rockford and Milwaukee airports in the planning. This alternative does not address the economic needs of the south suburbs, but airports are not the only way to create jobs and it does give economic assistance to other areas in need, even if they are not all in illinois.
A long-range plan would consider that eventually high speed rail can replace flights to nearby cities and reduce some air traffic. It can also speed access to existing airports. Expanding the Gary airport is the least costly means to increase overall capacity. There are already rail connections from Chicago to Milwaukee and Gary and those legs could be the first to be targeted for upgrade.
However, there is a much larger issue. This issue is about sprawl and the conservation of resources, about looking beyond our narrow interests to what we are doing to the land and air. In time we will realize we need to shift from airplanes, cars and trucks back to rail because it is a more energy efficient mode of transportation. We will stop spreading urban development further and further into rural land; we will stop converting fields of corn into large parking lots for stores and offices and airports and make better use of what we already have. Maybe someday we will find a way for our government to allocate resources and craft legislation that will benefit people for generations, not just until the next election.
From Letter to the Hyde Park Herald, November 17, 2004 from Jack Saporito
[Saporito reference's Mayor Daley's favorable impression of the new Osaka, Japan airport and that it was built in less time than it typically takes to build one runway in this country. Saporito says this can happen under the current plan for the 3rd airport at Peotone and that "intermodal is, in fact, the future." Saporito says that even without 9/11 etc. "jet aviation is not sustainable with current business models, oil shortages and the climate change--caused in part by jet engines. Already, he says a large percent of O'Hare's flight ar in the under 70 mile range that should be using other modes. In short, the O'Hare "boondoggle" will not serve its goals but burden the future while Peotone is a viable part of regional transportation restructuring.]