Chicago Skyway Lease Agreement

The Chicago Skyway Lease Agreement: What You Need to Know

The Chicago Skyway is a 7.8-mile toll road that connects the Dan Ryan Expressway in Chicago to the Indiana Toll Road in Hammond, Indiana. It was built in 1958 and is operated by Skyway Concession Company, LLC. In 2005, the city of Chicago leased the Skyway to a private consortium for 99 years in exchange for $1.83 billion.

The lease agreement is a complicated document that outlines the terms and conditions of the lease. Here are the key things you need to know:

Length of the Lease

As mentioned, the lease is for 99 years. This means that the private consortium will operate the Skyway until 2104. The length of the lease is important because it affects the amount of money the consortium is willing to pay for the lease. For example, a shorter lease would result in a lower bid price because the consortium would have less time to recoup its investment.

Annual Payments

The lease agreement requires the consortium to make annual payments to the city of Chicago. The payments are based on a percentage of the consortium`s gross revenues from tolls and concessions. In the first year of the lease, the payment was $60 million. The payments increase each year based on inflation.

Maintenance and Repair

The consortium is responsible for maintaining and repairing the Skyway. This includes things like repaving, bridge repair, lighting, and snow removal. The consortium must also follow all applicable laws and regulations related to the operation of the Skyway. If the consortium fails to meet its maintenance and repair obligations, it may be subject to penalties or fines.

Improvements

The lease agreement allows the consortium to make improvements to the Skyway, such as adding new toll booths or electronic toll collection. However, any improvements must be approved by the city of Chicago. The consortium is also required to maintain the Skyway in a “state of good repair” throughout the lease term.

Sale or Transfer of Lease

The consortium is not allowed to sell or transfer the lease without the approval of the city of Chicago. If the consortium does sell or transfer the lease, it must pay a percentage of the sales price to the city.

Conclusion

The Chicago Skyway lease agreement is a complex document that outlines the terms and conditions of the lease. From the length of the lease to the annual payments, it is important to understand the key provisions of the agreement. As a driver who uses the Skyway, you can be assured that the private consortium is responsible for maintaining and repairing the road, and that any improvements must be approved by the city of Chicago.