Six months into the Gary/Chicago International Airport’s public-private partnership both government interests and operator AFCO AvPORTS remain positive about the arrangement and the airport’s future prospects, but one roadblock stubbornly remains — railroad tracks atop a berm that need to be relocated before resuming the runway expansion project that is expected to cost in excess of $166 million.
Last week, airport representatives told the Regional Development Authority that negotiations with CSX Corp. and Canadian National Railway are ongoing, but the runway work won’t be complete until 2015. If the project is to be completed by the August 2015 deadline required by the Federal Aviation Administration, CSX trains would have to be relocated to the Gary branch line by this fall, so the old tracks and berm can be removed.
Officials from the Gary Airport Authority, AvPORTS and other regional partners are confident that the project will be completed soon, so they can focus on planning Gary’s future as a possible reliever airport for corporate aviation and other opportunities.
Opportunity for growth
The airport had several miscues as a host for commercial airlines as regional carriers, such as Hooters Air and Allegiant Airlines, came and went in recent years. What stymied Gary, particularly when it came commercial airlines, was its relatively short — at 7,000 feet — runway. The plan to add 1,900 feet to the runway has hit several snags — including cleaning up contaminated soil — that have steadily added to the project’s cost.
Rep. Ed Soliday, R-Valparaiso, has been aware of the airport’s potential since he ran a charter business there in the 1960s, but two barriers always stood in the way of its development.
“No. 1 was bad management,” Soliday said. “And No. 2 was the physical property, with the railroads preventing expansion of the runway. If they bring in a management group and apply good techniques and long-range planning, then the sky’s the limit.”
Soliday, who worked as a pilot and executive with United Airlines for 35 years, recalled a discussion with a former airport director about serving as a possible alternate landing site when bad weather hits Chicago.
“I told him they may be impressed and be willing to talk about a fixed route, say New York to Chicago. He told me, ‘Well, we don’t really get along with the airlines,’ ” Soliday said. “That’s not the way to go about doing business.”
One of the aims of the public-private partnership, known as the P3, was to bring in aviation experts to position Gary for success and to help with financing with numerous transportation projects in and around the airport.
Interim Gary Airport Authority executive director B.R. Lane said P3 has put the airport at a significant advantage from its previous setup.
“We’ve gotten, as an authority, a group of experts in the management of aviation,” Lane said. “Previously, the authority wasn’t a group of experts in this field.
“We still have the authority made up of publicly appointed people on board, who are really are focused on managing the public’s interest. But we don’t have to focus so much on the day-to-day operations of the airport when have partners across the country providing a confluence of expertise.”
In the partnership agreement, AvPORTS committed to managing the airport and investing $25 million in the first three years of the 40-year agreement, while the city of Gary retained ownership of the airport and is responsible for at least $120,000 in management fees annually.
The deal was touted as providing $400 million in capital investment; the creation of 2,400 direct and indirect jobs; and producing an annual economic output of $526 million from airport-related activity.
Soliday said the point of investing millions of regional and state dollars that in the airport was to create a regional benefit and leverage dollars to create jobs.
“The best way to do that is through air freight or passenger flights,” he said. “I’m stunned when I hear people say it’s not a reliever airport, and I think they must have an agenda. It’s 35 minutes from downtown Chicago; Teterboro isn’t that close (to New York) and John Wayne isn’t that close (to Los Angeles).”
AvPORTS and its partners are not only expected to spark business at the airport but in the heavy industrial area around it. AvPORTS manages several airports around the country — including Newark Liberty International Airport and Teterboro Airport — but CEO Ozzie Moore said Gary represents a unique case.
“There’s nothing quite like Gary that we’ve done before, but we’ve learned best practices in the industry and applied them to Gary. Particularly as it pertains to strategic planning: what it is we are trying to make this airport become and why.”
Moore does see some comparisons to Teterboro Airport in New Jersey, which is located just outside of New York City. It is one of the busiest general aviation airports in the country.
“(Gary is) the home for Boeing’s corporate fleet,” Moore said. “Maybe others can see value locating there if we are sensitive enough. (Teterboro) is possibly what Gary can become. It’s easily secured. It has great accessibility from an aviation standpoint; planes are not waiting to take off and land. Ground transportation access would need to be addressed, but getting cheap fuel is there already.
“We’re very excited about the opportunity. We see from the (June) charette how interested the community and industry are to make Gary a success.”
While not directly involved in the railroad negotiations, Moore said AvPORTS is “totally committed” to making sure the project gets completed.
“We know how fundamental it is to our success, and so we are giving advice and support, and making our resources available to make sure it gets done as quickly as possible.”
Seeding development
The Northwest Indiana Regional Development Authority has pumped a significant amount of money into the runway project in recent years.
“As far as the RDA is concerned, our top priority is working with the airport,” said RDA executive director Bill Hanna. “Developing the surrounding properties around the Gary airport presents great opportunities and challenges.”
Soliday said bringing in businesses that will utilize the airport’s services is key to its future.
“If all the new company can get is say a Dairy Queen to locate on the perimeter, then it’s pretty much business as usual and it will gain nothing in terms of attracting aviation,” he said. “They’d be better off gaining something like an accounting firm, who would fly out of there on business. They need to stop all the barriers people have doing business in Gary.”
Some infrastructure will need to be improved in the vicinity of the airport, particularly sewers and wastewater treatment, since it’s only been zoned for heavy industrial use in the past.
Also, the airport’s access to Chicago customers is less than ideal, especially since the Cline Avenue bridge was closed due to structural instability in 2009 and eventually demolished. The FIGG Group, based in Tallahassee, Florida, is in the process of raising $250 million to build the bridge, which will charge tolls. The bridge is projected to open at the end of 2016.
All of these factors have come into play during the airport’s strategic planning process, which won’t be finished until next year.
Lane came on board only a few months before the P3 agreement was signed, so the transition has been a whirlwind.
“At the six months mark, it’s still kind of early,” Lane said. “We’ve been shifting our role at the authority into one of transition into a policy and governance role. Getting the stakeholders comfortable has been a heavy lift. The new and different isn’t always comfortable.
“For me, personally, coming here in October, it’s been really nonstop change, so I look forward to being able to exhale, which won’t happen until the runway extension is finished. We won’t see value until after the runway is done.”