Aviation Economic Experts Charge Chicago Falsified Grant Application for O'Hare Expansion

They admittedly have an agenda. Hired by two cities bordering O'Hare International Airport, an aviation economics consultant says Chicago Mayor Richard Daley's grandiose plan for a massive $20-plus billion dollar expansion of O'Hare has been dealt a major blow -- because Daley, in essence, lied.

Campbell Hill Aviation Group says the mayor's big plan hit a major roadblock last Friday when the nationally known economic consulting firm, filed a massive critique of Chicago's application for hundreds of millions of dollars in special federal grants. The Campbell-Hill filing with the FAA charges that Chicago has made false claims of economic benefits to persuade FAA to issue the federal funds. It also demands that FAA reject Chicago's application because the economic costs of Chicago's O'Hare expansion project are far greater than the economic benefits.

"This important study filed with the FAA once again shows that the City continues to 'cook the books' by low-balling the costs and inflating the benefits of the flawed O'Hare Modernization Plan," says John Geils, President of Bensenville.

Chicago is seeking an FAA grant of $300 million to fund the first phase of the City's $20-plus billion plan to entirely rebuild O'Hare Airport. Federal law requires that airports submit a Benefit-Cost Analysis ("BCA") demonstrating that the benefits of the project outweigh the costs.

Chicago has submitted a BCA Study to the FAA which claims that both "Phase I" of the proposed O'Hare expansion and the entire OMP meet the required benefit-cost tests.

Campbell-Hill refuted the City's claims in a scathing report. Among the City's BCA false claims identified by Campbell-Hill:

• Vastly overstated delay savings by capping flight operations at the current level even after OMP is built for the entire 20-year evaluation period.
• Overstated delay reductions -- in reality, Phase 1 and the full-build OMP would drastically increase delays.
• Failure to consider and evaluate alternatives to the OMP. Alternatives have already been suggested by aviation leaders that would reduce delays and congestion and meet projected regional demand without the destruction and costs that the OMP would require.  Additional alternative measures include runway configurations which were proposed by the Chicago air traffic controllers, as well as use of congestion management techniques and reliance on other airports, including the new south suburban Chicago Abraham Lincoln National Airport.
• Outdated traffic data was used.
• Failure to offer alternative to loss of major hub airline's participation.

The City is aggressively pursuing huge FAA grants -- $300 million for Phase 1 and $800 million for full OMP -- because without substantial AIP grants, the OMP cannot be built. Additionally, the City's financial plan currently calls for O'Hare's two hub airlines (United and American) to agree to pay for over $8 billion in bond debt, a debt burden to which neither airline has yet agreed. Without the $800 million in federal grants, the crushing airline debt burden will be even greater.

By law, Campbell Hill contends, the FAA cannot grant the City's request for federal funding because the City does not meet the required federal BCA tests. "The City requires massive amounts of federal funds to finance the OMP and as a result, the failure to meet legally required Benefit-Cost tests could cause the entire financial "house of cards" that Daley has constructed to support his massive O'Hare plan to collapse," said Dr. Brian Campbell Chairman of Campbell-Hill.

Campbell Hill's analysis was funded by Bensenville and Elk Grove Village, two neighboring communities which believe that the region's airport problems can be solved at a lower cost with better results and less environmental damage using the other suggested alternatives.

"We ask the FAA and Committees of Congressional Oversight to follow its own due process and regulations by rejecting the City's unworkable, badly-planned and cost-burdensome proposal," said Craig Johnson, Mayor of Elk Grove Village.

FMI: www.air-econ.com