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Concerns growing over O’Hare expansion costs

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Illinois

* I told subscribers about how United was signaling a threat to move its headquarters out of state a few weeks ago. Here’s the Sun-Times…

O’Hare Airport’s two largest carriers want to slow down, dramatically scale back or indefinitely ground the airport’s massive expansion project, including a global terminal and two satellite concourses now $1.5 billion over budget.

Ald. Matt O’Shea (19th), chairman of the City Council’s Aviation Committee, said high-stakes negotiations with hometown United and Dallas-based American Airlines have gone on for months. Those rival carriers — at loggerheads when the original agreement was signed in 2018 — are now joining forces.

“The two major carriers, United and American, want to see this project to be scaled back, to slow down,” O’Shea told the Sun-Times. Another meeting between the mayor’s office and both airlines was held Monday. […]

O’Shea said it is particularly “concerning” that United has revived a 2018 threat to move its corporate headquarters at Willis Tower out of Chicago. […]

Johnson’s chief operating officer, John Roberson, who served as aviation commissioner under Mayor Richard M. Daley, told the Sun-Times he “can’t say anything just yet” about the sensitive talks.

United’s CEO is from Texas. He does not have strong ties to Illinois.

Needless to say, losing that company’s headquarters would be one of the biggest reputational blows imaginable to Chicago and to the state. The governor’s office has been working to smooth things over, but the city really needs to get this project on track.

Mayor Johnson may have inherited the problem from his predecessor, but he needs to solve it. No excuses.

posted by Rich Miller
Wednesday, Nov 29, 23 @ 1:24 pm

Comments

Yes, the 5th floor needs to do whatever it takes to keep United here. Absolutely critical.

Comment by low level Wednesday, Nov 29, 23 @ 1:40 pm
IIRC all the airlines are troubled by City Hall’s new Paid Leave ordinance as well and has sued other jurisdictions over similar laws that they argue are preempted by Federal laws.

https://www.denverpost.com/2023/01/20/united-airlines-lawsuit-colorado-sick-leave-law/

Going to be interesting to see if City Hall amends their baby to address those concerns in the interest of building some goodwill.

Comment by ChicagoBars Wednesday, Nov 29, 23 @ 1:53 pm
Are requested slow-downs political?

Comment by Mama Wednesday, Nov 29, 23 @ 1:53 pm
===are troubled by City Hall’s new Paid Leave ordinance as well===

That was seen as potentially the last straw when a bill was introduced in Spfld to include them.

Comment by Rich Miller Wednesday, Nov 29, 23 @ 1:56 pm
Waukegan Airport expansion is the #1 issue chattered about up here in Lake among democrats. Abbott, who my dad works for, is supposedly saying they will leave if it doesn’t happen. I suggest building a metra stop in green oaks right by their HQ.

Comment by Lake Villa township Dem Pc Wednesday, Nov 29, 23 @ 2:00 pm
Based on these 2 statements, “United’s CEO is from Texas. He does not have strong ties to Illinois.” Plus “United has revived a 2018 threat to move its corporate headquarters at Willis Tower out of Chicago.” it doesn’t sound like United will stay even if the airport project is slowed down.

Hope the governor can figure out how to keep United Airlines in Chicago.

Comment by Mama Wednesday, Nov 29, 23 @ 2:02 pm
Mayor Johnson needs to hold United and American to the contracts that they signed.

Comment by Chicagonk Wednesday, Nov 29, 23 @ 2:06 pm
Well when Reinsdorf loses money from the naming rights to the United Center maybe he will move the club to Texas

Comment by DuPage Saint Wednesday, Nov 29, 23 @ 2:09 pm
What is driving the 1.5$ Billion over budget number….?

Comment by It's always Sunny in Illinois Wednesday, Nov 29, 23 @ 2:21 pm
I’m guessing that the 2 largest airlines in the country with thousands of employees including many more lawyers than the city, have contracts that are written with exit options if issues arise with the project.

Why is it that here comes the Governor again to bail out the 5th floor? Seems CTU wasn’t ready to run the whole city.

Comment by Frida's boss Wednesday, Nov 29, 23 @ 2:24 pm
Would be helpful if there was a dedicated senior staff member dedicated to things like business/ corporate development. The Administration decided corporate wasn’t in their interest and routed the position currently held by Deputy Mayor Kenya Merritt to work exclusively in the “neighborhoods”…one might say a United departure is major consequences of this terrible decision.

Comment by LastModDemStanding Wednesday, Nov 29, 23 @ 2:30 pm
Maybe that dedicated senior staffer could promise to only wear their ‘eat the rich” t shirt on the weekends

Comment by Lucky Pierre Wednesday, Nov 29, 23 @ 2:36 pm
There’s lots that is not right with the operation at O’Hare. the COO of the Mayor used to run the operation. are his people still there? he should be able to figure it out and fix things. cause I hear there are lots of problems.

Comment by Amalia Wednesday, Nov 29, 23 @ 2:39 pm
Maybe there’s a proposed site for another airport in the region but outside the city limits, which could gain some political support from this situation.

Comment by TheInvisibleMan Wednesday, Nov 29, 23 @ 2:49 pm
It is interesting that Ambassador Emanuel would comment on this topic. He has refused to say next to anything on Chicago issues before.

Comment by Three Dimensional Checkers Wednesday, Nov 29, 23 @ 3:03 pm
== routed the position currently held by Deputy Mayor Kenya Merritt==.

Yes. Yet another bad placement by the Johnson Admin. These people are utterly clueless.

== Seems CTU wasn’t ready to run the whole city.==

Yep. They were good at running campaigns. Running the city? Not so much.

Comment by low level Wednesday, Nov 29, 23 @ 3:08 pm
Maybe if United offered to sponsor the tent city, we could make this a win-win for everyone.

Comment by Michelle Flaherty Wednesday, Nov 29, 23 @ 3:11 pm
I wonder if the Mayor’s team sees this as a critical issue? From the social media feeds of the people in his orbit, this is a fist-raised, bullhorn ready, call-each-other-comrade bunch. Seeing that his council allies aren’t concerned about the small businesses closing throughout the city, the thought of a major corporation leaving might seem like a joke to them.

“What is driving the 1.5$ Billion over budget number….?”

This is the big question. Is this CDA or Studio ORD? Or both?

Comment by NIU Grad Wednesday, Nov 29, 23 @ 3:14 pm
Both the City and the State enact laws and ordinances effecting employers as if there were not 49 other States and many Cities all aggressively courting Companies- No way for JB to spin this so he needs to start acting as does the Mayor as if employers matter
Someone really needs to let Johnson comprehend that running the City for his progressive constituencies is going to result in Chicago losing its status as a world class city
.

Comment by Sue Wednesday, Nov 29, 23 @ 3:16 pm
Rahm is correct they signed a contract and that project is critical to the city. I sure hope the gov takes over the negotiation. Its amateur hour on 5 floor.

Comment by Regular democrat Wednesday, Nov 29, 23 @ 3:16 pm
== What is driving the 1.5$ Billion over budget number….? ==

Good question. US-based capital projects are always much more expensive than their European/developed nation counterparts, even when accounting for labor costs etc. I think it’s been studied, but State government should look at it seriously. I think part of it is lack of state capacity and reliance on consultant knowledge.

Comment by Incandenza Wednesday, Nov 29, 23 @ 3:20 pm
How many times does united have to cry wolf about this? This is all about them trying to stifle competition even tho they signed the contract to support expansion at the airport. I’m so over them. This project is a huge boost for the economy and the long term competitiveness of our airport. United needs to grow up.

Comment by Shytown Wednesday, Nov 29, 23 @ 3:40 pm
Shutdown- you have things backwards. As one of the largest local employers and contributors to the Chicago area’s financial welfare- it’s Chicago and Illinois which need to address United’s concerns provided they are reasonable

Comment by Sue Wednesday, Nov 29, 23 @ 3:52 pm
Remember United’s “Speech” tv commercial. If only we had a businessman in the government.

Comment by Jerry Wednesday, Nov 29, 23 @ 3:52 pm
If the city is responsible for the cost overruns, then I’m totally sympathetic toward the airlines. But if the added costs are the result of pandemic-related economic changes to the airline industry (including inflation,) then I am not so sympathetic. Billions in federal dollars were shoveled to the airlines during the pandemic — that should cover those costs.

I guess all that is separate from United leveraging a threat to move — they can just keep playing that card. It probably doesn’t mean as much as it used to economically, with remote working. I bet their Sears Tower offices are more than half empty, like everyone else’s. But the prestige damage to the city would hurt a lot.

Comment by TNR Wednesday, Nov 29, 23 @ 3:56 pm
Aren’t United employees receiving vacation and sick time which would make tge Paid Leave act not matter?

Comment by James the Intolerant Wednesday, Nov 29, 23 @ 4:43 pm
“United’s third quarter profits climbed 21% to $ 1.15 billion.” Oh now, we should roll over and give them whatever they want, the poor airlines are broke.

Comment by Chicago Blue Wednesday, Nov 29, 23 @ 5:17 pm
===Oh now, we should roll over and give them whatever they want, the poor airlines are broke. ===

Keep it up, dummy. The contract has been exceeded.

Comment by Rich Miller Wednesday, Nov 29, 23 @ 7:35 pm
===Paid Leave act not matter? ===

They’re specifically exempted under current Illinois law, which I’ve read. I haven’t yet read the Chicago ordinance.

Comment by Rich Miller Wednesday, Nov 29, 23 @ 8:01 pm