CHICAGO (AP) -- Mayor Rahm Emanuel has decided not to move forward with plans to lease Chicago's Midway International Airport, ending a bid to make it the first major U.S. hub to be brought under the management of private investors.
The remaining potential bidders failed to meet criteria the city set down to ensure taxpayers got a good deal, Emanuel spokeswoman Sarah Hamilton said.
"That's really the bottom line. We set a high bar, and the companies who were interested, they fell short of what the taxpayers deserved," Hamilton said.
Midway would have been the first large U.S. airport to go private under a pilot program overseen by the Federal Aviation Administration.
Emanuel announced in December that he was exploring a lease of Midway for up to 40 years in a deal that would generate enough revenue to pay off the airport's roughly $1.4 billion debt and help fund other public works projects around the city. But many in Chicago are wary of letting private firms take control of major public assets after past deals, including a lease of city parking meters, turned out poorly.
In the Midway deal, the city would have retained ownership and profits would have been shared. The arrangement would have allowed the city to redirect its share of the Midway profits to other infrastructure projects instead of having to put them back into the airport.
The only other airport selected for the FAA pilot project was Puerto Rico's Luis Munoz Marin International Airport, which went under private operation in February in a 40-year contract worth an estimated $2.6 billion.
Midway, wedged among densely populated southwest side neighborhoods, is the city's second-largest airport after O'Hare International. The 85-year-old airport handled almost 20 million passengers last year on its five runways, and the city had touted it as a worthy investment opportunity for the private sector.
In March, the city released a list of six qualified bidders, including a partnership between Industry Funds Management and Manchester Airport Group, which has interests in airports in the U.K. and Australia. Also on the list was Great Lakes Airport Alliance, which paired Macquarie Infrastructure and Real Assets with Ferrovial of Spain, which manages London's Heathrow Airport.
The list was whittled down to two companies, and one pulled out this week, about a month before bids were due.
With only one company left, the process was no longer competitive, Hamilton said, declining to identify the two firms.
"The mayor always said if this wasn't going to be the best possible arrangement for taxpayers he wouldn't do it," she said.
Many Chicago residents turned sour on privatization efforts after former Mayor Richard Daley got the City Council to approve a 75-year lease of city parking meters to a private company in 2008. The city got a $1.1 billion payment, but meter fees went up and the company went after the city for revenue lost when streets were closed.
A previous attempt to privatize Midway under Daley fell apart in 2009 when private investors could not raise the necessary money amid the global economic downturn.