Economy Kills Chicago Midway Airport Lease Deal

The soured US and global economy has killed a deal for a USD$2.52 billion long-term lease of Chicago's Midway Airport, the city's chief financial officer said on Monday.

Chicago CFO Gene Saffold said the Midway Investment and Development Company, the group that successfully bid on the 99-year airport lease in September, was unable to secure financing, leading to the deal's collapse.

"The global economic recession continues to have substantial impact on the availability of financing, which has created serious challenges for many businesses and financial institutions, including those involved in this transaction," Saffold said.

The Midway Investment and Development Company is made up of Citigroup unit Citi Infrastructure Investors, YVR Airport Services and John Hancock Life Insurance.

The city will retain USD$126 million in earnest money from the deal, Saffold said, adding that USD$80 million of the funds will be set aside to help balance the city's budget this year and next. Another approximately USD$6 million will cover the city's transactions costs, he said.

In addition to the money, Chicago retains the right to lease the airport in another competitive offering in the future when financial market conditions improve, according to Saffold.