Will the $8.5 billion O’Hare expansion be delayed?

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Will the $8.5 billion O’Hare expansion be delayed?

Conceptual site plan for Global Terminal and satellite concourses (Courtesy Chicago Department of Aviation)

Airline traffic is still uniformly down across the board thanks to the ongoing coronavirus pandemic as travelers wary of infection steer clear of flying, leading to major airport expansions across the U.S. being delayed as revenue dries up. Is the $8.5 billion O’Hare 21 expansion, headlined by the $2.2 billion O’Hare Global Terminal and Global Concourse, facing similar problems?

The City of Chicago unequivocally says that the project is on track, but as first reported by Crain’s Chicago Business on September 18, documents filed to refinance the airport’s existing debt indicated that the current O’Hare reconstruction and expansions could be delayed.

According to the analysis from Ricondo & Associates in the filing, passenger traffic is expected to drop 62.1 percent this year because of COVID and will only rise to two-thirds of pre-pandemic levels in 2021. Obviously that’s quite a departure from the revenue forecast when the O’Hare expansion was originally approved by former Mayor Rahm Emanuel, and the documents suggest that the target 2028 completion date for the renovations could be pushed back.

What’s at stake? The first phase of the Terminal Area Plan (TAP) centers around Studio ORD Joint Venture Partners’ (Studio Gang, Corgan Associates, Solomon Cordwell Buenz, and STL Architects) $2.2 timber terminal, which will replace the existing Terminal 2, was slated to break ground in 2023. SOM is also slated to break ground on a pair of satellite concourses totaling $1.4 billion in 2022 that will connect from the west of the airport to the new Terminal 2 via underground tunnels. A host of upgrades across O’Hare, including the ongoing $1.2 billion upgrade of Terminal 5, which will bring 10 new gates to the terminal by 2021, have been either scheduled or are already underway.

A triangular airport
Rendering of the Studio ORD team’s winning proposal for the new O’Hare Global Terminal and Global Concourse building. (Courtesy Studio ORD)

In a statement, Chicago Department of Aviation (CDA) spokesman Matt McGrath said that there would be no delay to any of the planned projects at O’Hare, and that the CDA was already looking into cost-saving measures that wouldn’t affect the 2028 timetable.

“O’Hare 21 is moving forward, period, full stop,” said McGrath. “Any doubt about the City’s commitment to continuing to invest in O’Hare’s modernization and competitive position should be put to rest by the fact that we’re currently progressing with construction on three runways (9 Center, 9 Right extension, and 4 R overlay) and a $1-billion expansion of Terminal 5.

“To trim our sails on O’Hare 21 right now would be both rash and short-sighted, not to mention largely inconsequential to current airport costs. In fact, during the COVID-19 disruption, our hub carriers have been using every gate available to them multiple times per day to maximize connectivity in their schedules, which indicates the importance of scale in how the airlines generate revenues in the hub-and-spoke business model.”

The Terminal 5 expansion will need to finish before the new Global Terminal can break ground.