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Development deal could send O'Hare cargo to Rockford

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<p align="justify">A deal reached Thursday could put Chicago/Rockford International Airport closer to grabbing cargo and distribution business away from O'Hare International Airport.

<p align="justify">A Chicagoland developer wants to build up to 450,000 square feet in cargo-related buildings at the Rockford airport. The airport has about 620,000 square feet of cargo facilities, most of that used by UPS.

<p align="justify">The Greater Rockford Airport Authority signed a deal Thursday afternoon with Tandem Development Group and Leopardo Construction to develop up to 33 acres of prime land near the UPS hub and one of the airport's runways.

<p align="justify">The companies have ties to businesses at O'Hare, and Rockford officials want to use O'Hare's increased congestion as a marketing chip for its own land.

<p align="justify">"This is economic development. This is jobs. This is huge," Mike Dunn, chairman of the Greater Rockford Airport Authority, said at a meeting Tuesday with the Register Star's Editorial Board. "This is acknowledgment that RFD exists 60 miles up the road."

<p align="justify">The project could happen without the airport spending significant funds: The developer has committed to pay for most of the expansion, while the Federal Aviation Administration may fund most of the rest.

<p align="justify">If federal funds aren't available, the airport might have to sell bonds to pay for up to $15 million in ramps for runway access.

<p align="justify">The whole development could take up to five to 10 years to build, airport Executive Director Bob O'Brien said.

<p align="justify">The development will start as early as this fall with a 70,000-square-foot building and $10 million in improvements. The developers haven't announced who it would be for, but airport officials hope it's an O'Hare cargo carrier, such as Polar Air Cargo, Atlas Air or Cathay Pacific Airways.

<p align="justify">Rockford airport officials have been wooing Polar Air, one of O'Hare's largest cargo carriers, for a while, telling the company that its planes could be unloaded and reloaded in half the time here.

<p align="justify">The new facility would bring one or two flights a weeknight, in addition to the airport's 30 cargo flights.

<p align="justify">Developers downplayed the competition with O'Hare and played up the attraction of Rockford.

<p align="justify">"I wouldn't want to suggest that the whole strategy is 'O'Hare is going through a reorganization and an expansion and that's the sole reason to go to Rockford,' but I think it's going to be an ongoing search to look for the best way to move cargo," Rick Mattioda, president of Leopardo Companies Inc., said Wednesday. "It starts with the infrastructure that's in place at the airport that's been there for some time but is underutilized."

<p align="justify">Mattioda said cargo companies and those that need to make fast shipments could locate there. For example, retailers who use UPS might want to put a distribution center there. The airport authority would have final say over who could locate there.

<p align="justify">Airport officials have made such development a priority, particularly in the past year. The airport board agreed last year that, if needed, it would build a $5 million to $10 million "spec building" to attract a new business. But in recent months, airport officials had regular contact with private developers to do the building.

<p align="justify">Dunn and O'Brien said more announcements could be on the way. The airport has almost 300 more acres with access to runways.

<p align="justify">According to preliminary FAA data released this week, the airport rose to at least the 21st-busiest cargo airport in the country last year. It had 1.39 billion pounds of landed weight in 2006 and is on pace for more than 1.4 billion pounds this year.

<p align="justify">UPS is the major cargo operator at Rockford, with a 500,000-square-foot sorting facility and 70,000-square-foot air cargo building. BAX Global and DHL have buildings that are about 25,000 square feet each.

<p align="justify">Meanwhile, O'Hare was the eighth-busiest cargo airport in 2005, the most recent year available, with 4.82 billion pounds of landed weight.

<p align="justify">It's in the midst of a $15 billion expansion, which includes the first new runway in more than 30 years and a mix of new, extended and reconfigured runways. The project could last until as late as 2016, officials have said.

<p align="justify">O'Hare officials did not return a call seeking comment.

<p align="justify">FAA spokeswoman Elizabeth Isham Cory declined to comment about Rockford's attempts to take business from O'Hare.

<p align="justify">"We like to see a variety of operations at all airports, as this activity is healthy for the local economies as well as the nation as a whole," she said Wednesday. "It is up to the individual carriers to determine their market strategies and the particular airports they choose to target."

<p align="justify">Tandem Development Group, based in Hoffman Estates, is run by Paul Ahern, a former executive with major industrial developer CenterPoint properties. The company specializes in office, industrial, retail, health care and mixed-use projects.

<p align="justify">Leonardo Construction, also based in Hoffman Estates, is one of the nation's largest 220 contractors, according to Engineering News-Record magazine. The company has done work at O'Hare and at airports in Milwaukee, Indianapolis and Boston.

Staff writer Thomas V. Bona may be contacted at 815-987-1343 or tbona@rrstar.com.</font>