Second City’s Airport Will No Longer Be Second-Rate

Chicago’s O’Hare will soar once again through $8.5 billion upgrade

O’Hare’s $8.5 billion modernization plan

Start date: Heavy construction starts late 2019

Completion target: By 2026, the Terminal Area Plan (TAP) will completely redevelop O’Hare’s existing terminals, with expanded gates and facilities at Terminal 5, the redevelopment of Terminal 2 into a new fully integrated O’Hare Global Terminal to serve international and domestic passengers, and renovations and expanded concourses to Terminals 1 and 3.

Goal: To expand O’Hare’s facilities and create 25 percent more gate capacity

Traffic boost: O’Hare is expected to serve nearly 100 million passengers by 2026, up from nearly 80 million served today.

More jobs: In addition to creating many construction jobs, O’Hare’s redevelopment is expected to spur the creation of new permanent jobs for Cook County once the TAP is complete. The projected 60,000 additional annual jobs include 35,000 permanent tourism-related jobs, and 25,000 new jobs for the airport, airlines, and supporting industries.

Boost to the region’s economy: With O’Hare 21 and TAP, the airport will contribute an additional $16 billion per year to the county economy, compared to today’s $39 billion, with new economic activity associated with jobs and resources needed to operate and supply a significantly larger terminal complex.

The signs of O’Hare’s decline were apparent, says Mary Scott Nabers, president and CEO of Strategic Partnerships, a consulting firm.

“Once one of the nation’s busiest airports, O’Hare  has recently dropped to number three in airport rankings. While O’Hare is still the third largest U.S. airport with approximately 78 million passengers a year, it is no longer considered one of the best.”

Mary Scott Nabers, president and CEO of Strategic Partnerships,

Mary Scott Nabers, president and CEO of Strategic Partnerships

Nabers says the decline is in large part due to O’Hare’s physical condition. “It is long overdue for upgrades and modernization. While other airports have undertaken huge modernization projects, O’Hare, for some reason, allowed itself to become shabby and outdated.”

O’Hare International Airport’s slump is about to end, thanks to a recently announced $8.5 billion modernization plan. The renovation and investment initiative is called O’Hare 21. The plan gives the airport a new face, including 3 new concourses, a new international terminal, new hotel and new parking structure.

Travelers may wind up spending less on-air fares.

When a few discount airlines in 2014 were allowed to operate at the airport, ticket prices declined 7.4%,” Nabers tells Icons of Infrastructure.

More flights + cheaper tix +more traffic =increased economic activity—and local taxpayer dollars won’t be footing the bill for the expansion. “Studies show that a 10% increase in the number of passengers in a metro area generates about a one percent increase in regional employment. Businesses considering relocation check the capacity of nearby airports as part of the decision-making process,” says Nabers.

“The expansion will bring in new airlines — a huge bonus. Currently, 89% of all gates at O’Hare are controlled by just two airlines and that gives them a quasi-monopoly over capital improvements and ticket prices.”

Yes, the airport upgrade will help boost commerce in the area, says Matt Wilson of the University of Illinois at Chicago’s Great Cities Institute (GCI).

“The O’Hare expansion will be financed by infrastructure bonds that will be repaid through passenger fees on tickets. The expansion is meant to increase the capacity to handle more flights, which will lead to increased passenger numbers and increased revenues.”

Wilson, an economic development planner, tells Icons of Infrastructure: “The import/export function of airports as a means of transporting goods in and out of the region is a key potential value of the O’Hare airport expansion.”

The O’Hare renovation could lead to spin-off projects, adds Teresa Córdova, Ph.D., the GCI’s director. “Beyond airport expansions, access to airports is another front in which cities can increase their efficiency to attract firms. In that context, it’s understandable why Chicago has started a bid process to create express transit from the Loop to O’Hare.” The GCI is a research hub for scholars, policymakers, and stakeholders.

O’Hare’s shop-worn state has diminished the Windy City’s appeal, Nabers says.

“Chicago’s $8.5 billion modernization effort is impressive but also overdue considering the fact that Los Angeles International Airport (LAX) is in the process of a $14 billion modernization effort. LaGuardia has allocated $4 billion and Atlanta’s Hartsfield-Jackson airport got approval for a $4 billion upgrade.”

The name of the game is paychecks.

“The LAX revitalization created 600,000 new jobs and O’Hare’s modernization is projected to create at least half a million new jobs. Chicago’s job creation will be impressive and the entire region will benefit greatly,” is Nabers’ conclusion.

In a survey of Chicagoland Chamber of Commerce members, 63% said the proximity of Chicago’s airports was one of the top three features of the Chicago region that contribute to the success of their businesses.

ohare expansion“This modernization solidifies a crucial economic asset and our global reputation as a modern nexus of transportation. It will help attract more corporate relocations. It will create jobs. All without taxpayer money,” says Jack Lavin, the chamber’s president and CEO. His belief: “This is an investment that secures Chicago’s future as an economic powerhouse and a world-class place to live and work.”

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