Chicago’s O’Hare International Airport Monday won final federal approval to launch construction on a global terminal project that is a centerpiece of the airport’s 10-year, $12.1 billion capital plan.
O’Hare is “an absolute powerhouse that in turn makes Chicago and Chicagoland a powerhouse for the American economy,” Transportation Secretary Pete Buttigieg said Monday when he joined Chicago Mayor Lori Lightfoot and others at the airport to announce the federal approval.
The Federal Aviation Administration’s environmental review/record of decision found “no significant impact” of the Terminal Area Plan, also known as the TAP.
The decision marks the end of nearly five years of federal review, as required under the National Environmental Policy Act.
“This approval was essential for us to move forward on our next big phase of modernizing this airport,” Lightfoot said at the press conference. “This is about making sure that we remain competitive on a global stage.”
With the approval in hand, O’Hare hopes to break ground soon on the Terminal Area Plan, also known as TAP. The plan carries a $7.1 billion price tag, or just under 60% of O’Hare’s overall capital plan, which goes through 2032.
The capital plan has grown to $12.1 billion, up from $8.5 billion in 2018, with the bulk of it financed by debt.
The TAP calls for construction of a new Global Terminal to serve international and domestic passengers — enabling travelers to transfer from international flights without having to go through security — and a global concourse, satellite concourses and a connecting tunnel. The estimated completion date is 2032.
The announcement comes a few months after O’Hare won upgrades from Fitch Ratings and S&P Global Ratings and enjoyed strong investor interest in its August sale of $1.3 billion of bonds.
S&P and Fitch both lifted O’Hare’s general airport bond rating to A-plus from A and assigned stable outlooks, and S&P also raised the city’s passenger facility charge rating to A-plus from A. Kroll Bond Rating Agency affirmed its A-plus rating and stable outlook. The airport’s last upgrades came in 2016.
O’Hare is only one of two airports that has received an upgrade after the pandemic, said airport commissioner Jamie Rhee Monday. “So, we came out of COVID better than we went in, our financials,” Rhee said.
Buttigieg said the Infrastructure Investment and Jobs Act is sending more federal money to airports than ever before, and that O’Hare is well-positioned to apply for additional federal money. The IIJA provides $25 billion through 2026 for airport and air traffic control projects, including $15 billion in airport development grants, $5 billion in competitive grants for airport terminals and $5 billion for FAA air traffic control towers and facilities.
”I would not be surprised to see several applications for our programs come in from O’Hare, and I would not be surprised to see strong applications come in,” Buttigieg said.
The airport is expected to take on $9 billion in debt through 2029 to fund its capital improvement program. The city is using a combination of general airport revenue bonds, passenger facility charges revenue and federal grants to fund the airport capital program.