To: altair19 who wrote (182051 ) 12/7/2009 4:02:34 PM From: stockman_scott Respond to of 361967 Midway Airport Only Asset Chicago ‘Actively’ Looking to Lease By John McCormick and Darrell Preston Dec. 7 (Bloomberg) -- Chicago, the third-largest U.S. city by population, is open to leasing additional assets to private companies to bolster its budget, Chief Financial Officer Gene Saffold said in an interview at Bloomberg’s Chicago Bureau. “‘Nothing is off the table’ means that we would consider other alternatives that are out there,” he said. Besides leasing Midway Airport once market conditions improve, the city isn’t working on other transactions, Saffold said. “We’re not pursuing them as a means to address budgetary issues, but we look at privatizations as a means of being better able to provide critical services,” he said on Dec. 4. Saffold said the city hasn’t hired consultants to help it review additional leases, though Mayor Richard M. Daley is “open” to considering it. Other cities including Atlanta are reviewing asset leases. Kasim Reed, the former Georgia state senator who led the initial count in the city’s Dec. 1 mayoral election, said last week that he’s considering leasing roads and parking garages to private companies to raise revenue. The Chicago City Council, voting 38-12, passed Daley’s $6.1 billion spending plan for 2010 on Dec. 2. The opposition was larger than in past years and followed criticism that he tapped too deeply into reserves to close the budget gap. Daley anticipates using $370 million in such funds generated from a 75-year lease on parking meters. Saffold said the city plans to repay the reserves. Revenue has been hurt by declines in real estate tax collections, income taxes and the loss of convention business to warmer, less expensive cities such as Orlando, Florida, and Las Vegas. To save money, Daley has fired city workers and pressured unions to accept unpaid furlough days this year. JPMorgan Experience Saffold, 54, appointed to his job in March, previously was managing director for national accounts at New York-based JPMorgan Chase & Co. Daley, 67, leased thousands of parking meters, a toll highway and city-owned garages during the past five years, raising $3.45 billion. The meter deal angered residents who faced malfunctioning machines and quadrupled parking rates in many neighborhoods. Chicago Parking Meters LLC, majority-owned by Morgan Stanley infrastructure investment funds, paid $1.15 billion to run the 36,000 parking meters in a deal that closed in February. Daley later apologized for how the parking-meter changeover was handled. The mayor is serving his sixth term and next faces re-election in 2011. Debt Tripled Chicago’s debt burden tripled during Daley’s two-decade tenure. The city has an AA credit rating, the third-highest, from Fitch Ratings, which revised its outlook to negative from stable on Oct. 2. That same day, Chicago learned it lost to Rio de Janeiro in its bid to host the 2016 Summer Olympics. The mayor was counting on the Olympics to help bolster Chicago’s development. He anticipated receiving federal money for infrastructure projects for an event that organizers estimated would draw as much as $22.5 billion in tourism, construction and related spending to Illinois. Chicago’s efforts at privatization hit another rough patch in April when a $2.5 billion deal to lease Midway Airport for 99 years fell through during the credit crisis. The mayor wanted to use the proceeds to repay $1.15 billion of the airport’s debt, finance future infrastructure projects, contribute to underfunded pensions and plug a budget hole. The Daley administration’s problems with the parking deal and Midway Airport followed a successful leasing of the Chicago Skyway, a 7.8-mile (13-kilometer) toll road that became the first in the U.S. to be privatized when Macquarie Infrastructure Group and Cintra Concesiones de Infraestructuras de Transporte SA paid $1.8 billion in 2005 for a 99-year lease. The city will look to a Midway deal when “the market improves,” Saffold said. To contact the reporters on this story: Darrell Preston in Chicago at dpreston@bloomberg.net; John McCormick in Chicago at jmccormick16@bloomberg.net. Last Updated: December 7, 2009 00:01 EST