Global Aviation: Airport Privatization Round-Up
Aviation infrastructure is undergoing a global shift from government ownership and operation to private control. This shift has resulted in countless opportunities in private investment at airports;
President Donald J. Trump's Address - State of the Union January 30, 2018
President Donald J. Trump addressed the State of the Union and discussed his Administration’s infrastructure plan calling on Congress to "produce a bill that generates at least $1.5 trillion for the new infrastructure investment." He also reiterated his intention to streamline federal regulations and shift the financial burden to state and local authorities, and private stakeholders saying that "every federal dollar should be leveraged by partnering with state and local governments and, where appropriate, tapping into private sector investment."
St. Louis Lambert International Airport Privatization January 29 and 31, 2018
The City of St. Louis has selected Moelis & Company, Sinquefield-affiliated Grow Missouri Inc. and McKenna & Associates LLC as City's the advisory team on the privatization efforts of the St. Louis Lambert International Airport. Moelis & Company will be the lead financial advisor and will seek and evaluate bids and analyze the financial terms. Grow Missouri will support and underwrite the evaluation process. McKenna and Associates will assist in identifying contractors and subcontractors. The City's aldermen have already called for the rejection of the advisory team citing "inherent flaws in the process" and a conflict of interest in hiring a non-profit organization funded by Rex Sinquefield, a campaign donor in Missouri.
LAX Automated People Mover (APM) P3 January 24, 2018
The LINXS consortium, comprised of Grupo ACS, HOCHTIEF, Fluor, Bombardier, and Balfour Beatty, is said to be the preferred proponent on the LAX APM P3 project. On January 5, 2018, Los Angeles World Airports (LAWA) had extended the deadline for financial proposals to January 16, 2018 to allow bidders to consider the implications of the federal government's tax bill passed on December 22, 2017. LAWA is expected to issue its official decision in February 2018. The city council will then have to approve the project to reach financial close, which should occur in March 2018.
Westchester County Airport P3 January 18, 2018
The Westchester County Airport's 40-year lease has been put on hold after a new executive administration of the county started on January 1, 2018. The new administration is re-evaluating the long-term lease, which could lead to the modification of certain terms. When the Macquarie Infrastructure Corporation team was voted to be the preferred proponent in November 2017, it had to finalize the lease with county's executive staff and send it to its Board of Legislators for review. Twelve members of the Board of Legislators had to vote in favor of the lease before the transaction could proceed, but this process is now on hold.
San Diego Airport Cargo Facilities P3 January 17, 2018
A selection panel has recommended Aviation Facilities Company (AFCO) as the preferred bidder for the San Diego Airport Cargo Facilities P3 project. The San Diego Airport staff is negotiating with AFCO to decide whether they will take that recommendation to the airport board. No deadline has been set to conclude the negotiations.
O'Hare Express System (OES) P3 January 5 and 12, 2018
On January 5, the Chicago Infrastructure Trust (CIT) and the City of Chicago have extended the deadline to the RFQ response for the design, construction, finance, operation and maintenance of the proposed OES to February 5, 2018. The original deadline to submit responses was January 24, 2018. CIT has not modified the initial procurement schedule. On January 12, the Canadian National Railway Company (CN) has advised interested parties that it has issued a request for clarification to the CIT informing that no agreements with CN exists for right-of-way use or acquisition and the OES P3 project will be unable to operate on CN tracks or be constructed in CN's freight corridor. As a result, potential bidders may decide not to respond to the RFQ.
Kansas City International Airport (Terminal A) P3 December 21, 2017
Earlier in December 2017, Kansas City Councilman Lee Barnes, Jr. introduced a resolution to terminate negotiations with the Edgemoor Infrastructure & Real Estate Team (Edgemoor consortium) and to begin negotiations with the KCI Partnership. The resolution was adopted, but on December 21, the Kansas City Council approved to resume negotiations with the Edgemoor consortium on a new Memorandum of Understanding (MoU) with a January 30, 2018 deadline for the City Council to review a final revised MoU.
Denver Airport Great Hall (Jeppesen Terminal) P3 December 15 and 21, 2017
The revenue bonds to finance the Denver Airport Great Hall project have priced with a total issuance size of $190.53 million ranging from 2022 to 2049. The project reached financial close on December 21, 2017.
Baker McKenzie has deep experience in major projects counseling, covering the development, financing and secondary market transfer of P3s in aviation, power generation, energy transmission, water, wastewater, and other infrastructure industries. We understand the issues that typically arise with governmental authorities, equity sponsors, and other stakeholders. We are also sensitive to interface and subcontractor issues and we understand the appropriate allocation of risk for design-build-finance consortia.