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$8.5B O'Hare Project Faces Pandemic Worries

Wednesday, July 15, 2020

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The $8.5 billion Chicago O’Hare International Airport expansion work is the latest to come under the microscope amid the COVID-19 pandemic.

While the city’s Aviation Department insists that plans for the massive expansion remain unchanged, worries about airline funding have emerged and a part of the project—the Airport Transit System—is about a year overdue.

Some Background

The expansion was approved by the city council back in April 2018, with the biggest piece of the puzzle being that the 55-year-old Terminal 2 would be torn down to make room for a new global terminal with wider concourses and gates that could accommodate larger aircraft intended for international flights. Terminals 1, 3 and 5 are set to be renovated, with two new satellite concourses to be built and connected to the new global terminal via an underground pedestrian tunnel.

More than 3.1 million square feet of terminal space is being added, a 72% increase over the current 4.3 million square feet.

City of Chicago

The $8.5 billion Chicago O’Hare International Airport expansion work is the latest to come under the microscope amid the COVID-19 pandemic.

Once construction of the air field is completed, O’Hare will operate six east-west runways and two diagonal runways, resulting in dozens of new gates opening over the next eight years. The expansion is also slated to include a new parking and security screening facility for airline employees, a Terminal 5 parking garage and three new baggage systems.

Former Chicago Mayor Rahm Emanuel’s office said that the project “will create more than 60,000 construction jobs for the next eight years, and tens of thousands of new permanent jobs with the airport, airlines, tourism and supporting industries to support a larger, modern airport complex in the next decade.”

Emanuel launched a Request for Qualifications for the project to architects all over the world in June of that year.

The city received bids from a dozen groups. Those that did not make the shortlist included notable names such as Bjarke Ingels Group, Perkins + Will, HOK and Grimshaw Architects.

The five that made the cut for the shortlist, announced in November, included Fentress-EXP-Brook-Garza Joint Venture Partners; Foster Epstein Moreno JV Joint Venture Partners; Santiago Calatrava LLC; SOM; and Studio ORD Joint Venture Partners.

Designs from the five were revealed to the public in January 2019, and in March, Emanuel announced that the design from Studio ORD was chosen for the task and began the contract negotiations with the joint venture, which includes Corgan Associates Inc., Milhouse Engineering and Construction Inc., STL Architects Inc., Solomon Cordwell Buenz & Associates Inc. and Studio Gang Architects Ltd.

In May of last year, Mayor Lori Lightfoot inked the deal with Studio ORD, led by Chicago architects Jeanne Gang. The contract is worth about $160 million.

The city also awarded three construction manager-at-risk contracts, each for $116 million, to Austin Powers Partners, Turner Paschen Aviation Partners and AECOM Hunt Clayco Joint Venture.

And at the beginning of this year, the project announced that it inked a design contract with Skidmore Owings & Merrill for a pair of connecting concourses —dubbed S1 and S2—which combined for about 1.2 million square feet and will connect to the new Global Terminal via underground tunnels.

While the two structures will cost an estimated $1.4 billion, SOM’s contract is reportedly for $140 million.

What Now

A small piece of the renovation, upgrading the Airport Transit System or “People Mover,” is reportedly $25 million over budget and about a year behind schedule, according to Chicago’s CBS affiliate.

The People Mover shut down weekday service in May 2018 and closed altogether in January 2019. Renovations were supposed to be completed by Fall 2019 and were delayed again to “early” 2020, though the project still is incomplete.

Studio ORD

While the city’s Aviation Department insists that plans for the massive expansion remain unchanged, worries about airline funding have emerged and a part of the project—the Airport Transit System—is about a year overdue.

Chicago Aviation officials are blaming the pandemic.

“Despite COVID-19, which has limited the contractor’s ability to send experts to the site, exercising of rail vehicles has continued. In fact, total mileage on the fleet has increased 150% in the last eight weeks with multiple trains operating simultaneously for several hours on most days. On-track testing remains critical and requires on-site presence from systems experts to formally complete,” a spokesperson stated, who added that manufacturing closures also made obtaining final materials a challenge.

Officials reiterated that the project isn’t funded by taxes, but by revenue generated from various fees. It’s that same piece of information, however, that’s worrying to airline officials in terms of the project as a whole, as the city is counting on airlines to help fund the expansion.

In April, airlines reported substantial first-quarter losses, though American Airlines has reportedly said that it remains committed to the O’Hare modernization project.

“We are continuing to work closely with our partners at the City of Chicago on all airport matters, including long-term modernization,” spokesperson Gianna Urgo said in a statement.

United issued a statement as well.

“For now we are jointly focused on maintaining cost efficient operations at the airport during the COVID-19 crisis," the statement said. "We appreciate the City’s partnership and look forward to continuing our joint long-term planning work in the near future.”

In addition to financial worries, layoffs have been reported at Studio Gang and the firm reportedly “internally announced a hold on the O’Hare project.” A spokesperson declined to respond to that report, however.

   

Tagged categories: Airports; COVID-19; Finance; Maintenance + Renovation; NA; North America; Ongoing projects; Terminals

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