Mayor Richard Daley blasted the city’s airline partners Thursday, saying they are jeopardizing the expansion of O’Hare International Airport by opposing $1.1 billion in new borrowing.
In a rare public venting over the discord surrounding how to pay for new runways, Daley also vigorously defended a multibillion-dollar bonding strategy that independent financial experts earlier this week warned could make O’Hare among the costliest and most debt-laden of any U.S. airport.
Daley defended the upcoming bond issue, which was downgraded as the city prepares to go to market in early February to seek emergency funding to keep the project going. And Daley charged that United and American Airlines are backing away from commitments they made in 2000 to help modernize the airfield for the 21st century.
Daley made it clear the public would be the big losers if the project stalled.
“We are not building the runways for the airlines today,” Daley said. “We are building the runways for passengers so there’s no delays in bad weather.’’
Civic leaders expressed hope the two sides will reach an agreement to complete O’Hare expansion. But they’re openly sympathetic to airline concerns about runaway financial burdens.
“It is not an unfair position on their part,’’ said Lester Crown, former chairman of the Commercial Club of Chicago's Civic Committee.
If the city did not borrow more money to continue the expansion program and related capital improvements totaling $15 billion, its runway permits could expire, Daley said.
“If you don’t keep those permits, they’re denied,” Daley said. “Then you start all over with the federal and state process. It takes you another 20 years.”
But Federal Aviation Administration officials said they were baffled by Daley’s reference to runway permits.
“The word ‘permit’ is not used by the FAA in runway construction. We are not sure what this statement means,’’ FAA spokeswoman Elizabeth Isham Cory said.
O’Hare spokeswoman Eve Rodriguez later said the mayor was talking about the FAA approval granted for O’Hare expansion in 2005. But FAA officials said there is nothing in the approval documents describing any deadline to complete construction.
The airlines are particularly opposed to a city plan to delay repayment on some of the new O’Hare bonds for at least seven years, which is a more costly way to borrow, experts said.
The airlines cite their lease agreements at O’Hare that require the city to receive approval from the carriers before issuing bonds, which are backed by airline revenues and airline passenger ticket taxes.
City officials say they have the authority to issue bonds on their own. The airlines responded with a threat to sue Chicago.
“It’s clear to me the airlines have the right under the present agreement to sue the city. I know they don’t want to do that, but they are very adamant, with good reason,’’ Crown said. “The airlines just don’t want the additional cost burden put on them.’’
Airline officials declined to respond to the mayor’s comments.
Julie Johnsson contributed.Copyright © 2015, CT Now