The Journal reports today that the Chicago airport privatization, announced late last year, may falter.

The deal, under which Citigroup (yes, that Citigroup) and John Hancock are supposed to pay more than $2.5 billion upfront to lease Chicago’s Midway Airport for 99 years, is in trouble because the private partners might not be able to raise the debt necessary to pay the city on deadline next week.

“The global credit crisis and the deal’s rich valuation have made it difficult to get financing for the deal,” the paper notes.” Chicago could extend the deadline six months, though.

The paper also notes that Midway’s revenue after operating expenses in 2005 (the year the bankers used to pitch the deal, for some reason) was less than $50 million.

But five percent financing (ha!) on $2.5 billion would be $125 million annually, which, the last time we checked, is more than $50 million.

As loyal FW readers know, “private public partnerships” have proven to be dangerously procyclical, on both the upside and the downside.

You may also like

Despite Lingering Shortages, New York’s Health-Care Workforce Is Bigger Than Ever

The state's health-care workforce is recovering unevenly from the pandemic, with persistently lower employment levels in some areas and robust growth in others. This mixed pattern c Read More

High Taxes Aren’t a Problem, Supporters of High Taxes Say

A declaring "no statistically significant evidence of tax migration in New York" and finding "high earners’ migration rates returned to pre-Covid levels" during 2022 has a glaring problem: It relies heavily on an almost microscopic sample size of self- Read More

The Wacky Math of New York’s Essential Plan

Thanks to an absurdly wasteful federal law, New York's Essential Plan is expected to continue running billion-dollar surpluses even as state officials more than double its spending over the next several years. Read More

NY 2nd in the Nation for Homeschooling Growth

A Washington Post analysis of homeschooling trends revealed that families in New York have flocked to home education at rates Read More

Don’t Tell The Grownups: NY Still Hiding State Test Scores

State education officials are refusing to release the results of federally required assessments in grades 3 through 8, deliberately keeping parents and taxpayers in the dark—not only about how New York’s public schools performed, but also about how that performance was measured. Read More

In a Tight Budget Year, New York’s Hospital Lobby Shoots for the Moon

As Governor Hochul calls for spending restraint next year, influential hospital lobbyists are pushing what could be the costliest budget request ever floated in Albany. In a , the G Read More

What You Should Know: NY’s changing graduation requirements

Months after lowering the scores to pass state assessment exams, New York education officials are considering eliminating the Regents diploma. Read More

Putting the Mission in Hochul’s Health Commission

Last week Governor Hochul answered one big question about her Commission on the Future of Health Care – the names of its members – but left a fundamental mystery unresolved:  W Read More

Empire Center Logo Enjoying our work? Sign up for email alerts on our latest news and research.
Together, we can make New York a better place to live and work!