Skyway Transaction Basic Considerations

Why Privatize The Skyway?

1. Not a core city competency – somebody else could do it better

2.Eliminate the risks of Skyway ownership – past history of problems and default

3. Ability to shift city capital – no longer needed in Skyway, better used elsewhere

Could Privatization Be Done Legally?

1. Basic Authority A.City as “home rule” unit had power to sell or lease Skyway B.City Council still had to approve – timing: get authority upfront or wait until the end?

2. State Law Issues A.No significant liability impact of shift to private operator B.Real estate taxes triggered by sale or lease – required amendment of Illinois statute

3. Federal Law Issues A.No federal funding for Skyway B.1961 FHWA Agreement resulting from “connector” funding – required revised agreement with FHWA

4. Contractual Issues A.Construction and other Skyway contracts all assignable B.All Skyway bonds had to be redeemed or defeased – tax requirement even if ok under indentures