CHICAGO

O'Hare Expansion Seeks More Money And Land, As Airlines Balk

09/08/2010 11:23 am ET | Updated May 25, 2011

UPDATE:

The city council approved the $1 billion bond measure for the O'Hare expansion project, but demurred on annexing 271 acres of neighboring Bensenville for the expansion.

Aldermen expressed concerns that the project was not hiring at least 50 percent of its workers from Chicago, as mandated by city ordinance. Ald. Ed Burke imagined his constituents' reactions to the project: "Today they read a story on the front page about a billion dollars that is going to be spent. And you know what they say? ‘I ain’t getting a job up there. My neighbor isn’t getting a job up there,’" the Tribune quotes Burke as saying.

According to the Sun-Times, the powerful Finance Committee ultimately did approve the bond measure, despite these objections. But the Aviation Committee postponed a vote on the annexation for at least a day.

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The mammoth project of expanding O'Hare Airport is seeking an additional $1 billion in bonds, even as the airlines who would help finance construction are voicing their opposition.

If the airlines don't sign on, taxpayers could be stuck with a bill of an estimated $3.3 billion.

A new terminal at the airport's west edge is the centerpiece of the expansion project, which will also include additional runways and a new air traffic control tower. Mayor Daley, a proponent of the project has long said that the project won't require taxpayer dollars -- new fees on airlines and passengers, as well as money from the Federal Aviation Administration, would cover costs.

But according to the Chicago Tribune, the two principal carriers at O'Hare aren't thrilled about the prospect of financing the expansion with new fees and rent costs:

United and American have hired the law firm DLA Piper to represent their interests in the proposed funding, design and construction of the remaining O'Hare project. The airlines contend that a 2005 contract bars the city from funding construction with bonds paid by airline landing fees and terminal rents, without first gaining the consent of carriers accounting for a majority of O'Hare operations.

In an Oct. 14, 2009, letter to Andolino obtained by the Tribune, DLA Piper warned that United and American "will protect their contractually bargained-for rights."

The issue is particularly tricky because the new terminal would largely benefit other airlines, though United and American would be footing most of the bill.

Andolino and the airlines are working on negotiating a compromise around the terminal, which might include delaying its construction until a certain level of demand is reached at the airport. The terminal could also be shelved indefinitely.

Meanwhile, the $1 billion that the city is currently looking for would go toward runway work, and is less likely to face objections from the carriers. ABC Chicago reports that the measure was being considered by the City Council's Aviation Committee Tuesday, and is likely to see a vote before the full council on Wednesday.

While the airlines fight to check the airport's expansion, other opponents are having less success. WBEZ reports that the village of Bensenville, which lies adjacent to the airport, can no longer afford to fight the city of Chicago on a proposal to annex some of the village land for the airport.

The city will be removing hundreds of homes and businesses from Bensenville for the expansion. But exactly what that expansion will look like is very much an open question.

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