Earlier this afternoon, the Chicago City Council Committee on Aviation did not vote on a major lease the Daley administration has negotiated with the firm Westfield Concessions Management to redevelop O'Hare Airport's Terminal 5 and expand the number of retail outlets there from 15 to 26. Aviation committee head Ald. Patrick Levar (45th Ward) gaveled the meeting to a close today after more than two hours of testimony about the transaction left several members of the committee -- the overwhelmingly negative public response to the 75-year parking meter privatization still fresh in their mind -- wanting more information. Ald. Freddrenna Lyle (6th Ward) told a Daley administration staffer not long after the meeting began that City Council members have to go before the public and be heralded for their economic development strategies or be "lambasted day after day after day like we were with the parking meter deal. So you might get an idea why people are gun shy."
All international flights arrive to O'Hare's Terminal 5. Since 1993, a firm called Chicago Aviation Partners (CAP) has operated the concessions there. Two years ago, the city asked for bids for redeveloping the area, and Westfield, CAP, and Delaware North Companies responded. Last summer the city picked Westfield and negotiated the proposed lease. Under the deal's terms, Westfield would pay the city a minimum annual guaranteed fee of $3 per "enplaned" passenger at Terminal 5. But that fee would kick in only once at least 1.7 million passengers pass through the area; if less than 1.7 million flyers enplaned there, the city will get 16 percent of gross reciepts of the concession sales. Last year 1.57 million passengers enplaned at Terminal 5, according to research carried out by UNITE HERE Local 1, which represents some concessions workers at the city's airports. The firm will also spend more than $26 million to rehabilitate the area.
Aldermen and representatives from CAP took issue with these and various other aspects of the lease. Ald. William Cochran (20th Ward) pointed out there was nothing in the lease to adjust the $3 per passenger for inflation. Ald. Ray Suarez (31st Ward) stated that the current workforce at Terminal 5 is only guaranteed an interview during a concessionaire switch-over -- not a job -- and said he preferred a shorter lease. Ald. Mike Zalewski (23rd Ward) worried at one point about approving a major deal and sending it to City Council with less than 24 hours before the council's next meeting. Mark Pullman, the executive director of CAP, was withering in his criticism, calling the deal the "parking meter deal of airports." His firm, he said, wasn't specifically told why its bid was rejected; his attorney said their bid guaranteed the city more than $11 million in revenues annually. (Presently the city gets a minimum of $2.8 million from CAP, a Department of Aviation attorney said early in the hearing, a number that Pullman acknowledged was a sub-market rate "in the extreme.")
In all, the Local 1 analysis estimates the Westfield deal could cost the city between $82 million and $145 million and shift risk onto the city. Levar, chair of the aviation committee, said he wouldn't call another hearing on the matter for at least 30 days.
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