However City Hall tries to spin it, the collapse of the $2.52-billion deal to privatize operation of Midway Airport is a blow to the way Mayor Richard M. Daley has financed his government in recent years.This has been big news as of late!
City Chief Financial Officer Eugene Saffold on Monday blamed the meltdown on "unprecedented" turbulence in the financial markets, turbulence that made it impossible for a consortium headed by a unit of CitiGroup to obtain financing by an early-April deadline.
Mr. Saffold termed that "a temporary setback" and "a little speed bump," strongly suggesting that the city would rebid the deal when more normal times return. In the meantime, the city will keep $126 million in earnest money that Citi put up, using much of the funds to fill holes in the 2008 and 2009 operational budget.
Much of that's true, particularly the part about financial turbulence. But the bigger truth is, the city is out more than $2 billion, money that would have gone to retire debt, replenish way-underfunded employee pension funds, pay for capital projects for the 2016 Olympics, and other needs.
It's gone. Adios. Au revoir. The $1 billion or so the city would have netted after retiring existing debt on Midway ain't here no more.
Dispatches from Chicago's south side.
Tuesday, April 21, 2009
Midway meltdown bad news for Daley
Greg Hinz:
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