Gary-Chicago Airport Delays Runway Expansion

 - September 3, 2013, 2:20 AM

Plans to expand the main runway at Chicago’s third commercial airport have hit another delay. The latest estimate now places completion in September next year.

The $167 million plan to lengthen Runway 12/30 and adjacent taxiway to 8,900 feet from 7,000 feet at Gary-Chicago International Airport (KGYY) in Gary, Ind., is stumbling in the wake of more extensive environmental remediation than initially anticipated; intransigence from railroads whose tracks must be relocated; the exodus last month of the airport’s lone airline, Allegiant; the possible exit of the airport’s most prestigious corporate tenant, Boeing; and the failure of the airport to attract up to $100 million more in private-sector financing for ancillary facilities.

The majority of funding for the revamped runway and associated construction is being provided by the FAA ($60.6 million), the Northwest Indiana Regional Development Authority ($50 million), the Chicago Department of Aviation ($9.5 million) and the Federal Highway Administration ($6 million). Additionally, the Gary-Chicago Airport Authority has borrowed $35 million to support the expansion and may increase that borrowing to more than $65 million.

Significant Remediation Needed

The airport is located in the industrial swamp south of Chicago that was once the heart of the nation’s steelmaking industry and a major refinery center. The area adjacent to Runway 12/30 was tagged by the Environmental Protection Agency (EPA) as early as 1987 for extensive acid, cyanide, PCB and solvent contamination that must be remediated before the runway can be lengthened. That contamination is now far worse than originally anticipated and is driving most of the delays, according to Gary mayor Karen Freeman-Wilson. The delays, in part, have boosted legal fees associated with the project nearly 20-fold from original estimates and they could top $1 million by year-end.

Lengthening the runway requires the remediation as well as the relocation of navaids on the field, railroad tracks, portions of a major road and a fuel farm; construction of higher-capacity airport lighting, road overpasses and railroad bridges; acquiring adjacent property; and burying high-voltage power cables. More than $40 million has already been spent on relocation of the rail lines alone.

In July, the airport authority voted to bring in former Indianapolis international airport CEO John Clark to take charge of the project and put it back on track. Clark’s consulting firm was already involved in trying to bring private capital into the effort. While the Northwest Indiana Regional Development Authority maintains that a modernized Gary-Chicago could create 2,400 new jobs and generate $526 million in economic activity annually, the airport has historically struggled to recruit and retain even low-budget airlines, and its location in a gritty urban neighborhood has dissuaded many potential corporate tenants. These factors are seen as impediments to future private-sector investment on the airport or even privatization of the entire airport, one of the strategies the airport authority is examining. The potential exodus of Boeing, which bases several corporate jets at KGYY in support of its Chicago headquarters, could deal another blow to these efforts. Boeing and the authority have so far been unable to come to terms on a new lease for the company’s airport hangar.

Allegiant Airlines operated its last flight out of the airport on August 10.