Chicago City Council Committee Approves Midway Deal

Mayor Daley’s plan to lease Midway Airport to an investor-operator team for $2.5 billion has just passed out of committee and is now teed up for full Council approval tomorrow. From the Chicago Sun-Times:

Mayor Daley’s $2.5 billion plan to privatize Midway Airport was cleared for take-off by a City Council committee today as City Hall races to complete the historic transaction before the change of administrations in Washington. The City Council’s Finance Committee signed off on the deal, despite concerns about parking and concession prices, the city’s decision to assume the $10 million-a-year cost of police and fire protection and questions about how the $1 billion in profits would be spent.

There was this puzzling bit of silliness:

At one point, Ald. Leslie Hairston (5th) threatened to hold up the deal to protest the absence of minority investors. “Chicago is not an all-white city. In a city as racially and culturally diverse as Chicago, before we go selling off the city’s assets, we want to know that the purchasers are sensitive to that diversity. And we are not seeing that,” Hairston said. But, in the end, the deal went through and appears to be headed for full Council approval on Wednesday.

So let me get this straight—the bidders are offering Chicago a $2.5 billion check, and that’s not good enough for the “diversity” crowd? The fact that the city will have more money to shore up its finances and pension obligations and improve infrastructure for Chicago citizens of all shapes, sizes, and colors doesn’t matter? Instead, they talk about focusing on “minority investors” and want to make sure “purchasers are sensitive to that diversity”. What???!!! Do these people have to frame everything in terms of race? Multi-billion dollar deals are color blind, and if minority investors want to invest in the companies that are doing this, they certainly can. But this whole issue shows an appalling lack of understanding with the way the real world works. The bidders are tapping into the global capital markets to structure the best deal possible. These markets don’t care what color you are, just how they can get the best financing structure for the best rates. It’s inappropriate to bring diversity and race into a discussion like this. Chicago and it’s diversity of citizens have all benefited well from the Skyway lease, the parking garages lease, etc., and the “diversity” and racial mix of investors was not an issue in those discussions. In fact, it’s silly political opportunism like this that, if actually put into practice, would have more potential to tank a deal or complicate the financing so completely that it’s unworkable. Can we please get real here? Luckily, it sounds like the rest of the committee didn’t take the bait.

Leonard Gilroy is Senior Managing Director of the Pension Integrity Project at Reason Foundation, a nonprofit think tank advancing free minds and free markets. The Pension Integrity Project assists policymakers and other stakeholders in designing, analyzing and implementing public sector pension reforms.

The project aims to promote solvent, sustainable retirement systems that provide retirement security for government workers while reducing taxpayer and pension system exposure to financial risk and reducing long-term costs for employers/taxpayers and employees. The project team provides education, reform policy options, and actuarial analysis for policymakers and stakeholders to help them design reform proposals that are practical and viable.

In 2016 and 2017, Reason's Pension Integrity Project helped design, negotiate and draft pension reforms for the state of Arizona's Public Safety Personnel Retirement System and Corrections Officer Retirement Plan, which both passed with overwhelming bipartisan support in the state legislature and were signed into law by Gov. Doug Ducey.

Gilroy is also the Director of Government Reform at Reason Foundation, researching privatization, public-private partnerships, infrastructure and urban policy issues.

Gilroy has a diversified background in policy research and implementation, with particular emphases on competition, government efficiency, transparency, accountability, and government performance. Gilroy has worked closely with legislators and elected officials in Texas, Arizona, Louisiana, New Jersey, Utah, Virginia, California and several other states and local governments in efforts to design and implement market-based policy approaches, improve government performance, enhance accountability in government programs, and reduce government spending.

In 2010 and 2011, Gilroy served as a gubernatorial appointee to the Arizona Commission on Privatization and Efficiency, and in 2010 he served as an advisor to the New Jersey Privatization Task Force, created by Gov. Chris Christie.

Gilroy is the editor of the widely-read Annual Privatization Report, which examines trends and chronicles the experiences of local, state, and federal governments in bringing competition to public services. Gilroy also edits Reason's Innovators in Action interview series, which profiles public sector innovators in their own words, including former U.S. Transportation Secretary Mary Peters, former Florida Gov. Jeb Bush, former Indiana Gov. Mitch Daniels, former New York City Mayor Rudy Guiliani and more.

Gilroy's articles have been featured in such leading publications as The Wall Street Journal, Los Angeles Times, New York Post, The Weekly Standard, Washington Times, Houston Chronicle, Atlanta Journal-Constitution, Arizona Republic, San Francisco Examiner, San Diego Union-Tribune, Philadelphia Inquirer, Sacramento Bee and The Salt Lake Tribune. He has also appeared on CNN, Fox News Channel, Fox Business, CNBC, National Public Radio and other media outlets.

Prior to joining Reason, Gilroy was a senior planner at a Louisiana-based urban planning consulting firm. He also worked as a research assistant at the Virginia Center for Coal and Energy Research at Virginia Tech. Gilroy earned a B.A. and M.A. in Urban and Regional Planning from Virginia Tech.