Anyone who's ever wanted to buy the Brooklyn Bridge can take heart: Chicago just auctioned off its Skyway toll bridge to the highest bidder. The 99-year, $1.83 billion lease went to the Cintra-Macquarie Consortium. The sale marks the first privatization of an existing tollway in the United States.
Talks started two years ago as Chicago looked for ways to cut costs and raise revenue. Officials determined that running a toll bridge was not a "core competency" of the city and hired the investment firm Goldman, Sachs & Co. to find buyers. Five groups qualified to bid. The winner, Cintra-Macquarie, operates more than 30 toll roads in Canada, Australia and Europe. The lump sum will be transferred into a city bank account in late January.
The lease agreement stipulates that the private operator meet high standards of safety, maintenance and engineering, and that there be a limit on toll hikes. The Chicago police department will still patrol the Skyway, a major connector between Chicago and northwest Indiana.
Mayor Richard M. Daley announced plans to use the money to pay off existing city debt and Skyway bondholders. He is also pushing for a long-term reserve fund with the potential to generate additional cash flow. Officials are so pleased with the deal, says Chicago's chief financial officer, Dana Levenson, that it has "made us think about other assets that could be sold."
Those options are limited. As an independent, profit-generating enterprise, "the Skyway is an unusual asset for any city to own," Levenson notes. And as one Chicago alderman points out, the amount of the nearly century-long lease wouldn't cover city operating costs for a single year.
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