(Bloomberg) — Chicago Mayor Brandon Johnson is seeking approval this week to issue several billion dollars in bonds to upgrade O’Hare International Airport and convert two office buildings into affordable apartments.
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The City Council’s Finance Committee voted Monday on a series of proposals from the Johnson administration. The proposals could amount to more than $4 billion in debt. The projects must still be approved by the full city council, which will meet on June 12.
The fortunes of the nation’s third-largest city have risen alongside those of the state of Illinois in recent years. Chicago bonds recovered, despite a sharp increase in municipal issuance, particularly in the airport sector. An index of BBB-rated municipal bonds, of which Chicago is the third-largest issuer, has gained about 0.6% this year compared with losses in the broader market.
Airport debt constitutes the bulk of the proposals. The committee approved a plan to issue up to $3 billion in senior general airport revenue bonds and passenger facility revenue bonds for O’Hare capital improvements. The bonds would be a mix of new money and refinancings in three different transactions from July through November, according to the city’s presentation at Monday’s meeting.
The panel also held a hearing Monday in reauthorization of up to $1 billion in short-term line of credit or commercial paper to allow continued tax-exempt spending for O’Hare .
The committee also approved a bond sale worth up to $400 million in junior debt to refinance the city’s water system. The deal is scheduled for August, according to the city’s presentation. The city’s improving ratings offer potential for savings through refinancing, according to the presentation.
Johnson also wants to sell more than $150 million in multifamily housing revenue bonds to increase the availability of affordable housing in the central business district. Office buildings in Chicago’s Loop have seen vacancies increase while a shortage of affordable housing also plagues the city. Johnson decided earlier this year to move forward with his predecessor Lori Lightfoot’s plan to rehabilitate a handful of office buildings into apartments intended to revitalize downtown.
The city intends to issue housing bonds and loan all or part of the proceeds to developers to help finance the cost of the project. The finance committee approved proposals of up to $70.5 million for the conversion of 208 S. LaSalle Street and up to $88 million for 111 W. Monroe Street.
(Updated with Finance Committee votes throughout and details on short-term loans and notes in fifth paragraph.)
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