Gary, Indiana, airport terminates P3

BY SourceMedia | MUNICIPAL | 06/15/22 01:29 PM EDT By Caitlin Devitt

The Gary/Chicago International Airport Authority has ended its public-private partnership eight years into what was to be a 40-year agreement.

The airport board announced the decision on June 8, saying that it would re-assume management, operations and development of the facility as part of a ?previously planned restructuring.?

The move comes a few months after new leaders took the helm at the board and the airport.

?All of us agreed that it makes sense to take full control back in house,? Dan Vicari, the airport?s executive director, was quoted in local reports as saying at the June 8 board meeting.

There were no termination payments, in part because the P3 agreement featured natural termination points for the airport, which decided to take advantage of them, said a source familiar with the deal.

The airport, located 30 miles from downtown Chicago, focuses primarily on corporate jets and cargo traffic rather than commercial flights.
Under former Gary Mayor Karen Freeman-Wilson, the authority signed the P3 agreement in January 2014 with private partners Avports/AFCO LLC. AFCO Aviation Facilities Inc. is an investor in airport infrastructure and Avports offers management and operations services with its own staff.

The P3 was unique in part because it included the development of off-airport land.

In November 2014, a few months after inking the P3, the authority hit the bond market for the first ? and only ? time, selling $30 million of tax increment-backed airport development zone revenue bonds to help finance the costs of a $174 million runway expansion. The transaction won the Bond Buyer?s 2015 Midwest Deal of the Year award.

The split with the private partners was amicable, according to a press release from the airport.

?We are pleased to be able to exit these agreements with much more robust aviation-centric infrastructure, operations and facilities in place,? GCIA Board Authority Chairman Pete Visclosky said in the statement. ?Years of sustained growth and investment by public and private entities alike have created strong momentum allowing the airport to move towards its long-standing objective of a locally sustainable airport.?

Visclosky, who represented Indiana?s 1st Congressional district for more than 30 years, took over as board chair in January under appointment by Gov. Eric Holcomb.

Also in January, the airport announced the return of Dan Vicari as executive director. Vicari had previously served as GCIA director from 2015-2018. Vicari said in a statement at the time that it?s an ?exciting time? for the airport, which is poised for growth.

The seven-member airport board has seen five new members since last fall.

In 2018, the airport completed a new U.S. customs facility and in 2020 United Parcel Service (UPS) started cargo service operations at the airport.

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