FAA says it will OK key funds for O'Hare
$300 million is crucial to city's finance plan
By Patricia Callahan
Tribune staff reporter
Published October 8, 2005
Federal Aviation Administration officials have told Congress the agency intends to give Chicago the full $300 million grant the city requested to help pay for the first phase of its O'Hare International Airport expansion project, according to documents made public Friday.
Although the amount may seem like a small piece of the overall $15 billion expansion plan, the grant--$30 million annually for 10 years--is a linchpin of the city's financing for the project. Even the inspector general of the U.S. Department of Transportation doubted publicly that the FAA would award the full amount, especially since other major airports are competing for the same limited pool of money.
The pledge comes before an FAA ruling on whether the benefits of the project outweigh the costs. Local FAA spokesman Tony Molinaro said the agency will make a final determination on that issue before any money is handed out.
O'Hare expansion opponents were outraged. "This is an attempt to play a shell game with the law," said Joe Karaganis, an attorney representing Elk Grove Village, Bensenville and a religious cemetery that borders the airport.
FAA officials included the disclosure in a filing late Friday with the federal Court of Appeals in Washington, D.C. In the filing, the FAA asked the court to lift an order granted at the request of airport opponents that temporarily halted construction on the project.
The news of the grant took Chicago airport officials by surprise. Although Rosemarie Andolino, Chicago's airport expansion chief, expected the FAA to come through with the money, a spokesman said, she didn't know of the FAA's intent until called by the Tribune.
The FAA must notify Congress 30 days before the grant decision can become final, and the agency did so Thursday, according to the court filing.
It's not clear exactly what will happen on Capitol Hill in the next month. Congress could call for hearings or take no action, allowing the grant to go forward.
"What Congress does is Congress' business," said Laura Brown, an FAA spokeswoman in Washington.
The city plans to sell bonds to pay for much of the runway expansion project, and a key part of the bond plan hinges on the grant. Chicago officials had to strike a deal with the major O'Hare airlines to sell those bonds because the debt will be repaid with airport revenue, including higher landing fees and gate rentals. The major airlines agreed to go along with the bond plan for the first phase of the project only if the city received the full $300 million.
In a report earlier this year, U.S. Department of Transportation Inspector General Kenneth Mead called the $300 million "an unusually large request." As of last year, the FAA was committed to $917 million in such grants during the next 11 years, and that figure was distributed among 30 projects.
The airlines have not yet signed on to a finance plan for the second phase of the airfield expansion, for which the city plans to seek an additional $228 million in FAA grants. In all, the city is seeking $2 billion in grants and ticket taxes for the project.
Last week, the FAA approved the city's airfield expansion plan. But hours later, at opponents' request, the federal appeals court in Washington temporarily tabled FAA approval of the project, forcing construction to stop until the court had time to consider the merits of the challenge.
The filing that contained the grant disclosure asked the court to restore that approval and allow construction to move forward.
Attorneys for the opponents argued last week that federal approval of the project, particularly the relocation of graves at St. Johannes Cemetery, is illegal on religious grounds. They also contended that the city should not be allowed to acquire and destroy property without first proving it can finance the project.
In its filing Friday, the FAA countered that it vetted the city's financing plans adequately.
The agency also argued that its approval did not violate a religious-freedom law and that the opponents were demanding a "veto system in which religious claims simply trump all other considerations."
At least 177 homeowners and businesses in Bensenville voluntarily offered to sell the city their properties, the FAA filing states.
"Delay in construction of even a short duration will cause profound harm to the project--increasing its costs and postponing its benefits," the filing states.
It isn't clear when the appeals court will rule. Expansion opponents are expected to counter the FAA's arguments in court filings next week.
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pcallahan@tribune.com