Chicago Skyway Concession and Lease Agreement: Key Elements Joseph Seliga Mayer, Brown, Rowe & Maw LLP

The Result of an Interactive Process Between the City and Qualified Bidders Draft Agreement Provided to Qualified Bidders for Comments Process for Obtaining and Responding to Comments Single Document Produced and Provided to All Bidders for Final Bids

Concessionaire Pays Upfront Rent to City for Right to Collect Tolls on Skyway for 99 Years Upfront Rent oSingle Payment oMaximizes Upfront Benefit to City Right to Collect Tolls oConcessionaire Retains All Toll Revenue oSubject to Certain Toll Limits oConcessionaire also has Right to Restaurant Revenues but All Other Revenue Rights Remain with City 99-Year Term oTax Ownership Issue oEffect on Value

Compliance with City Laws and Policies City Requirements Incorporated into Agreement oMBE/WBE oCity Residency Requirements oLiving Wage oPrevailing Wage Expansive View on Applicability Non-negotiable

Electronic Tolling No Electronic Tolling Currently on Skyway Different Ways of Providing Electronic Tolling Concessionaire has Right to Implement City to Cooperate

Capital Improvement Requirements City to Complete Its Capital Improvement Program Specific Capital Improvements Mandated in Agreement General Ongoing Capital Improvements Required Under Operating Standards

Operating Standards Compliance Required but Flexibility Provided Concessionaire Can Propose Alternatives City Can Modify Operating Standards

Employee Issues Labor Contracts Not Assigned Concessionaire Required to Interview Any Skyway Employees Who Apply for Employment, but No Obligation to Offer Employment

Skyway Contracts Skyway-Specific Contracts Assigned (e.g., Toll Collection System, McDonald’s Lease, Warranties for Capital Improvement Program) City-Wide Contracts Not Assigned

Liability and Insurance City Retains Liability for Pre-Closing Conditions of Land Concessionaire Assumes All Other Ongoing Liabilities Concessionaire Required to Comply with Specific Insurance Requirements

Inspection and Reporting Requirements City Retains Right to Inspect City Retains Right to Repair in Event of Default or to Address Emergency, Danger and Actions Impairing Continuous Operation Concessionaire Required to Provide Various Reports: Financial, Traffic, Accident, Environmental, etc. Concessionaire Reimbursement of City Monitoring Costs

Representations and Warranties, Closing Conditions, Mortgage Financing Minimal Representations and Warranties and Closing Conditions Mortgage Financing Provisions Recognize Rights and Remedies of Lenders Intended to be a “Done Deal” at Signing Smooth Closing

Defaults and Remedies Concessionaire Default Could Lead to City Termination In Certain Circumstances oFailure to Comply with Material Obligation oExtensive Cure Periods oMediation, Arbitration, Technical Arbitration Adverse Governmental Actions Could Lead to Concessionaire Compensation or Termination

A Careful Balance Between the Interests of the City and the Concessionaire Value Comes into Play on Both Sides City Driven by Policy Objectives Intended to Protect the Interests of its Citizens Concessionaire Focused on an Agreement that is Fair and that it Can Take to Market An Agreement for a Long-Term Working Relationship