Gary taking a new tack to expand, land business for its airport

Study for public-private partnership is in the works

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The long-struggling Gary/Chicago International Airport is completing a runway extension and pinning hopes for future expansion on a possible public-private partnership deal. (Zbigniew Bzdak, Chicago Tribune)

For many years, Gary/Chicago International Airport has offered its services as a reliever airport to help ease flight-delay pressures at Chicago's two airports.

Yet there have been few takers among airlines or passengers, despite competition in the form of low airfares to sunny destinations and Gary/Chicago's quick link to Chicago via the Chicago Skyway, I-80/94, the Indiana Toll Road and South Shore Line commuter trains.

Only a handful of third-tier air carriers accepted Gary/Chicago's offer, and all except one of them are no longer in business. Remember Hooters Air or the restructured Pan Am Airways?

Today, Gary/Chicago has only one passenger carrier, Allegiant Airlines, which operates two flights a week to Sanford, Fla., near Orlando. Most of the flights at the airport are general aviation, military-related and some cargo.

But Gary has a new mayor, elected in 2011, and a runway extension is set to open later this year — allowing Gary/Chicago to handle large wide-body airliners that cannot be accommodated on Midway Airport's relatively short runways. So the northwest Indiana airport that bills itself as "Chicago's real third airport" is making a new run.

Like the city of Chicago's strategy at Midway, Gary/Chicago officials have begun to explore the possibility of leasing or privatizing the airport under a public-private partnership.

The Gary/Chicago International Airport Authority Board has hired advisers for a venture aimed at developing the airport, including upgrading and expanding the passenger terminal, as well as developing the surrounding area. Part of the bid also would include stronger efforts to market the airport to airlines, officials said.

A "request for ideas" will be issued soon, according to a public-private partnership committee recently created by the board.

City and airport officials said they are eager to hear whatever ideas the marketplace has to offer.

"We are fully open to ideas, and we don't have any preconceived notion as to what a deal might look like," said Gary Mayor Karen Freeman-Wilson, a Harvard University-educated lawyer who is a former Indiana attorney general.

Financial experts, project managers and legal advisers were brought on board because "I have enough sense to know I don't know anything about this area," Freeman-Wilson said. Her strategy to create jobs and rescue Gary's economy by creating incentives to attract businesses includes developing the airport and the city's transit system.

"The true measure of a person who wants to lead well is to arm themselves with the best information to make a good decision," she said. "For us, local control is very important. But if the answer is we don't think it is right to pursue a public-private partnership at the airport, then that will be the answer."

A $167 million runway extension project is on schedule for completion by the end of the year, airport officials said. The project required relocating railroad tracks. The 1,900-foot extension of the 7,000-foot main runway will allow Gary/Chicago to handle any Boeing or Airbus aircraft.

The team hired to explore a public-private partnership and develop a request for proposals includes A.C. Advisory Inc., JClark Aviation and Faegre Baker Daniels LLP. The city and airport authority do not have the funds to pay the advisers, so they would be compensated via fees resulting from the initial financing of the anticipated deal for a public-private partnership, officials said.

The airport authority is hoping to garner about $100 million in capital investment.

Can it fly?

Robert Poole, a transportation expert and public-private partnership proponent with the Reason Foundation, called it "a tall order, given that Gary/Chicago has managed to attract only one small airline with very limited service."

"It's not clear what market niche the airport could most realistically fulfill that is not already being met by O'Hare or Midway," Poole wrote this month in his Airport Policy News newsletter. "A possible model would be Orlando/Sanford, which has carved out a niche for itself serving trans-Atlantic charter flights and some degree of budget-airline domestic service."

Gary/Chicago officials said they plan to issue a request for proposals this summer.

A report by the Northwest Indiana Regional Development Authority concluded that a revitalized airport could create 2,400 jobs and $526 million annually from airport-related activity.

"This airport is an asset that belongs not only to Gary, but to the tri-state region," said David Bochnowski, who chairs the airport's public-private partnership committee. He also is chairman and chief executive officer of NorthWest Indiana Bancorp.

The planned south suburban airport near Peotone, which officials in Will County support and the Illinois Department of Transportation is acquiring land for, is too far away from Chicago, Bochnowski said.

Contact Getting Around at jhilkevitch@tribune.com or c/o the Chicago Tribune, 435 N. Michigan Ave., Chicago, IL 60611; on Twitter @jhilkevitch; and at facebook.com/jhilkevitch. Read recent columns at chicagotribune.com/gettingaround.

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