Chicago May Seize Homes, Businesses for Airport

Published December 1, 2005

Local police officers and a cemetery more than 100 years old may be the only things stopping Chicago from carrying out the largest public works project in our nation’s history.

Police in Bensenville and Elk Grove Village have been guarding their village borders from surveyors hired by Chicago to map out hundreds of homes and businesses the city hopes to seize from the two towns for an expansion of O’Hare International Airport. The $15 billion estimated cost of the expansion is up from $6.3 billion in 2001 and does not include billions of dollars of roadwork around the airport.

Meanwhile, lawyers have been arguing over the legality of the city’s plan to move the 1,300-grave St. Johannes Cemetery, which lies at the west edge of the airport in unincorporated DuPage County and in the path of a proposed runway.

On November 3, U.S. District Judge David Coar issued a temporary restraining order preventing the city from razing homes and businesses and relocating graves. Another court hearing will consider arguments on a motion by Bensenville, Elk Grove Village, and the cemetery owners to stop the project. Preliminary work on a new runway that was begun in October may continue until that ruling.

Mayor Defends Grave Relocations

The status of St. Johannes Cemetery is central to the fight, said Joseph Karaganis, a Chicago attorney who represents the two villages and the cemetery owners.

“The city needs to demonstrate good title before it can go forward,” Karaganis said. “Sitting in the middle of a [proposed] runway is a cemetery to which the city does not have good title. And the law says before government can interfere with religious activities, it must show a compelling need and that there is no alternative.”

Chicago Mayor Richard Daley has defended the city’s actions, telling Chicago Tribune transportation reporter Jon Hilkevitch in an October 2 article, “In St. Louis, they moved 14,000 graves. When we built Congress Street, they moved graves. We’ve moved cemeteries in Lincoln Park.”

Project Starts, Stops, Restarts

The Federal Aviation Administration (FAA) approved the O’Hare expansion on September 30, and construction crews working for Chicago immediately began knocking down city-owned buildings at the airport to clear the way for new runways. A few hours later, though, the U.S. Court of Appeals in Washington, DC stopped the work to consider objectors’ arguments to block the project.

The restraining order was rescinded in late October, leading to the November 1 filing by plaintiffs.

“If you go by the full build-out with terminals, runways, and roadways, we could lose up to 1,000 businesses and 30,000 jobs,” said Elk Grove Village Mayor Craig Johnson. “And people wonder why we’re fighting it?”

Elk Grove Village has 35,000 residents and more than 100,000 weekday jobs, more than any other Chicago suburban community.

About 2,600 Bensenville residents would lose their homes to Chicago under the plan.

Chicago Gets Big Help

Chicago has received unprecedented assistance from the Illinois General Assembly and the FAA in its bid to expand the airport.

The General Assembly two years ago passed legislation removing protections for religious cemeteries and forest preserves, but wrote the measure so that only the St. Johannes Cemetery and forest preserves near the airport would be affected, Johnson said. The General Assembly also passed legislation allowing Chicago to seize property from other municipalities.

“In the history of our state, no municipality has ever had the power to take another municipality for its economic benefit. Our General Assembly two years ago gave Chicago the power to take any land at any time in Elk Grove Village and Bensenville,” Johnson said. “They couldn’t beat us on the merits or on existing law, so they changed laws to fit Chicago’s desires over our municipalities. It’s scary to think that Mayor Daley has that kind of power.”

The FAA also has gone to unusual lengths to accommodate Chicago. One of the points the two villages made in asking the U.S. appeals court for a stay was that the city had not shown it could finish the project. They also pointed out the FAA had not committed any of its own money to the project, as required. A few days later the FAA filed court papers announcing it is committed to giving Chicago $300 million for phase 1 of the project.

Phase 1 consists of about $3 billion of work to build a new runway and extend two others by 2007.

Money Pledged Before Analysis

The FAA’s pledge of $300 million was made before the agency finished studying a cost-benefit analysis of the project, according to an October 8 article in the Chicago Tribune, which also noted, “even the inspector general of the U.S. Department of Transportation doubted publicly that the FAA would award the full amount, especially since other major airports are competing for the same limited pool of money.”

According to the FAA, it is committed to $917 million in such grants over the next 11 years, to be distributed among 30 projects.

The city plans to sell bonds to pay for most of the runway expansion. Taxes on airline tickets, borrowing, and grants would fund the bulk of phase 2 work, but that financing is still not lined up.

Airports ‘Basically Self-Funding’

Bob Poole, director of transportation at Reason Foundation, said “these types of large projects tend to run late and go over budget, due to the incentives involved in typical public-sector procurements, such as [the tendency to] bid low and then negotiate lots of change orders once you are under contract. The good news is that most passenger airports in this country, certainly major ones like O’Hare, are basically self-funding.”

Poole also said the federal Airport Improvement Program (AIP) grants that Chicago is seeking are funded by aviation excise taxes, such as the 7.5 percent ticket tax, that can be spent only on aviation.

“Generally speaking, major airports generate far more of these tax monies than they get back,” Poole said. “Besides AIP, which will end up paying only a small portion of the total, the main sources will be airport revenues: landing fees, airline gate and other space rentals, passenger facility charges, concession fees paid by stores, restaurants, and rental car companies, parking charges, etc.”

Steve Stanek ([email protected]) is managing editor of Budget & Tax News.