March 11, 2004

The Chicago Transit Board today authorized the CTA to execute a term sheet with Mills Corporation for the financing and development of a subway station at Block 37. The final negotiated agreement must also be presented to the Board for its approval. Project advancement is contingent upon the City of Chicago reaching a formal agreement with Mills for the overall redevelopment of the site.

Ultimately, the new CTA station would serve as the main terminal for a new, premium express rail service to both O'Hare and Midway Airports. Construction of the terminal and an underground track connecting the CTA's Blue and Red Lines would constitute the first phase of the development of the express train service, but CTA would begin operating local rail service to O'Hare and Midway upon opening of the retail portion of the development.

"Although the vast majority of CTA's capital investment is focused on neighborhood stations, rail lines and fleet improvements, it is also important to invest in projects that can position the CTA for significant operating benefits in the future," said Board Chairman Carole Brown. "This project will help CTA enhance service throughout our entire system, and premium express service will create jobs and economic growth. Improving our airport connections will help maintain Chicago's place as the world's preeminent business and convention location."

?The city's redevelopment of Block 37 presents a window of opportunity to construct a transit facility with benefits that will extend throughout the CTA's service area," said CTA President Frank Kruesi. ?In addition to faster service to the airports for commuters, business people and tourists, track and signal improvements will benefit the 20 percent of CTA rail customers who ride the Orange Line and the O'Hare branch of the Blue Line. By creating a new link between the Orange, Blue and Red Lines, this facility will increase the CTA's flexibility and result in more service options for all rail routes that serve the Loop."

The cost of the transit center is estimated at $213.3 million of which Mills Corporation would pay $40.9 million. The remaining $172.4 million is expected to be funded by the CTA and the City of Chicago. The CTA expects to use capital funds for up to $130 million and is working with the City to finalize an agreement for the remaining $42.4 million. The CTA's share represents 4.4 percent of funds in the CTA's five-year capital plan. Over the life of the current capital plan, CTA's total neighborhood-specific investment will be 6.5 times greater than downtown-specific investments.

As a public/private project, the transit terminal is eligible for low-cost, long term financing through the U.S. Department of Transportation's Transportation Infrastructure Finance and Innovation Act (TIFIA). The CTA will work with Mills to apply for this financing.

Kruesi added that because it is the only vacant parcel between CTA's Dearborn and State subways, the Block 37 site makes possible a track connection project that would otherwise be prohibitively expensive. By comparison, the recently completed temporary World Trade Center subway station for Port Authority Trans-Hudson (PATH) trains in New York City cost $300 million, but the estimated cost for the planned permanent center is $2 billion, and Lower Manhattan's underground Fulton Street Transit Center project is projected to cost $800 million.

Construction of the Block 37 station would constitute the first phase of the overall development process for the express train service. Subsequent phases will proceed as funding becomes available. Conceptual plans envision a premium amenity, premium fare airport express service that, in cooperation with airlines, could accommodate a future full service air terminal with ticketing, passenger check-in and baggage checking.

The next step is for Mills Corporation to also approve the term sheet. Once that occurs, the CTA and Mills will develop final transaction documents, which will have to be approved by both Mills and the Chicago Transit Board.

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