"DuPage County, Ill., Airport's Debt Plan Gets New Pilot"

Tuesday, November 5, 2002

DuPage County, Ill., Airport's Debt Plan Gets New Pilot
The Chicago (IL) Tribune


A financial consultant favored by DuPage County Board Chairman Robert
Schillerstrom surfaced Monday in the middle of DuPage Airport's plans to
refinance about $24 million in long-term debt. 

And though no vote was taken in a special meeting Monday, airport board
members appear to have abandoned a controversial $31 million bond issue
proposal that would take advantage of low interest rates by refinancing
debt and adding about $7.5 million in borrowing. 

In its place is a similar refinancing plan--but without the new
borrowing--that was outlined Monday by John Glennon, president of
Chicago-based North American Capital Opportunities Inc. and a major
contributor to the campaign funds of Schillerstrom and other
Republicans. 

Schillerstrom has used Glennon as a consultant on recent county
government bond issues. 

Refinancing the airport's debt would save money and remove a legal
barrier to campaign promises made by Schillerstrom and other DuPage
politicians, who have sought for years to end the airport's reliance on
property tax revenues. 

The impediment is a 1993 borrowing that helped finance a major expansion
of the airport. It included a legal provision that prohibits the airport
authority from reducing the amount of property taxes it collects--about
$6.5 million a year--until the debt is repaid in 2011. The restriction
would be eliminated if the debt was refinanced. 

The airport authority is a government agency that operates the West
Chicago airfield. Airport board members are appointed by the County
Board chairman with the approval of the County Board. 

Airport officials had been working on a refinancing plan with
underwriter Banc One Capital Markets Inc. and the law firm Chapman and
Cutler. The version of the plan that was presented a week ago would have
paid off the existing debt in four years and used non-tax revenues to
fund new borrowing. 

Representatives from Banc One and Chapman and Cutler were expected to be
available at Monday's airport board meeting to answer questions. 

Instead, Glennon appeared before the board with representatives from
underwriter George K. Baum & Co. 

The airport had not entered into any formal agreement with Banc One or
Chapman and Cutler, and board members did not take any votes Monday to
switch to Glennon and Baum. But board members seem ready to proceed with
some sort of refinancing plan. 

Bond lawyers and underwriters usually are paid out of the proceeds of a
bond issue. 

In an e-mail response to Tribune questions, a spokesman for Chapman and
Cutler said: "As requested, Chapman and Cutler will not be acting as
bond counsel to the DuPage Airport Authority in connection with the
authority's proposed bond issue. We understand that the request was not
due to any concern relating to our firm. We believe our legal services
provided value to the authority during the process leading up to the
financing, and we look forward to working with the authority on future
matters."

Duane Gengler, airport board chairman, said Schillerstrom told him that
the airport was to use Glennon as its consultant. 

Schillerstrom denied he had ordered the airport to use Glennon or his
firm. But Schillerstrom has made it clear that he was unhappy with an
initial proposal by the airport to refinance its debt over a longer term
and include the new borrowing. 

"I told the DuPage Airport board that I wanted them off the tax
rolls,"Schillerstrom said. "I don't want to dictate to anybody. But I'm
strongly in favor of getting them off the property tax rolls."

Since 2000, Glennon and his firm have contributed at least $37,000 to
GOP organizations and politicians, including $1,250 to Schillerstrom,
according to Illinois State Board of Elections records.


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