Asset sale could net Chicago Skyway investors $1 billion

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The Canadian pension plans that control the Chicago Skyway are reportedly looking to sell their shares for a handsome profit, thanks to drivers driving tolls that have been rising since the city let private operators lease it in 2005.

The Canada Pension Plan Investment Board and OMERS Infrastructure, which invests for the Ontario Municipal Employees Retirement System, are seeking buyers for their stakes in Skyway, Bloomberg News reported Wednesday. The account, citing “people with knowledge of the matter,” said the companies were hoping for a deal valuing Skyway’s 99-year lease at $4 billion.

The companies and the Ontario Teachers’ Pension Plan bought the lease in 2015 for $2.8 billion, securing roughly a third of Skyway’s shares. The teachers’ pension plan reportedly intends to keep its participation.

If the deal goes through, it would be another example of private investors profiting from the sale of a public good. The original investment group that acquired Skyway’s lease paid the city $1.83 billion, only to sell it a decade later for a $1 billion gain while retaining Skyway’s ongoing profits. road.

Former Mayor Richard M. Daley led the initial sale of the 99-year lease in what became known around City Hall as the Great Chicago Sale. The Skyway deal allowed operators to steadily increase tolls. The fare for cars on the 7.8-mile shortcut from Chicago to Indiana is now $5.90, while fares are much higher for vehicles with more than two axles. Cars paid $2 in 2004.

The Canada Pension Plan Investment Board declined to comment and the other companies did not respond to questions about the possible sale. The investors operate as Skyway Concession Co., whose CEO Kristi Lafleur did not respond to a message.

The Skyway generated $114.3 million in toll revenue in 2021, compared to $84.9 million in 2020 at the height of the pandemic, according to the latest audit conducted for the city by accounting giant Deloitte & Touche. . Skyway investors distributed $36.3 million last year.

The results of the latest audits were provided to the Chicago Sun-Times by attorney Clint Krislov. As director of the Center for Open Government legal clinic at IIT Chicago-Kent, Krislov has reviewed dozens of transactions to date and provides an annual analysis of each year’s results.

To maintain his longstanding opposition to property tax increases, Daley followed the Skyway deal by unloading Chicago parking meters and downtown garages.

Although the parking meter lease is the deal aldermen and their constituents love to hate, Krislov argued that it “pales in comparison” to the Skyway deal.

If investors offload him now for anywhere near the $4 billion they hope to get, that would only throw salt in the wounds of Chicago taxpayers, Krislov said Wednesday.

“Just when you think it couldn’t get any worse, it gets even worse. It’s really remarkable when you think about it. That’s another billion-dollar profit the city didn’t get,” Krislov told the Sun-Times.

“It’s much worse [than the other asset sales]. It’s a deal that’s survived COVID pretty well. The whole business of crossing from here to Indiana has remained a very profitable toll bridge. Whether attributable to COVID or many people moving to Indiana and coming to Chicago or going to the casino, this road has remained a very active and profitable toll road and will remain so unless we stop use cars and trucks to transport people and things.”

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