Gov. James Thompson`s administration is offering nearly $100 million in state-financed improvements and grants to entice United Airlines to locate a potential half-billion-dollar aircraft maintenance center at Chanute Air Force Base near Rantoul.
Documents obtained by the Tribune, detailing the proposed aid package to United if it locates the maintenance center at the air base slated for closure by the federal government, show the state willing to provide up to $80 million in improvements to the base and another $14 million in job-training grants.
The direct financial aid does not include local and state tax breaks that United is seeking that could be provided by expanding Rantoul`s enterprise zone to cover the Air Force base.
The state`s offer, following incentives granted to move Sears, Roebuck and Co.`s Merchandising Group to Hoffman Estates and a package that lured Diamond Star Motors Corp. to the Bloomington-Normal area, could resurrect the politically touchy issue of the state`s use of tax dollars for business development in a year in which all statewide offices, all of the House and two-thirds of the Senate, are up for election.
Chanute is among about 20 sites that United is studying, from an original list of 84 locations in 25 states, for a 5,000- to 7,000-employee maintenance center to cope with an expanding fleet. United operates 431 aircraft, has ordered 264 planes and has options for another 206.
With existing chief maintenance operations in the San Francisco area, United is ideally looking for a site in a moderate location east of the Rocky Mountains, preferably at an airport already served by the airline, to accommodate hangars, engine and component repair shops, spare parts storage, ground equipment and technical support and administrative functions.
Although United has not discussed sites making its final list, other finalists are reportedly airports in Indianapolis, Memphis and West Virginia. The airline wants to make a selection by the end of the year.
State officials have attempted to pitch Chanute as an ideal site for Chicago-based United, with the airline playing the role of prime tenant in the state`s plan to convert the air base into a national aviation maintenance and technology center.
Illinois transportation officials say they believe that by landing United, it would, in turn, lure related aviation component manufacturers and training providers to the Chanute site.
”We`re very hopeful that United will see it for what it is-an extraordinary opprtunity to be part of a world-class aircraft maintenance and training campus,” Thompson said last week, while refusing to discuss the state`s offer.
But administration documents show the state has offered to rehabilitate and extend Chanute`s existing runway to accommodate longer-range Boeing 747-400 type jumbo jets with an all-weather landing and takeoff capacity and a full parallel taxiway at a cost of $35 million.
It also has offered to provide precision instrument landing approach systems, new lighting and new and rehabilitated runway aprons for $30 million; an engine-noise containment building for $6 million; related highway improvements to the facility for $2 million to $6 million; and a $2 million Federal Aviation Administration-certifie d control tower.
In addition, training grants of up to $2,000 per employee, at a cost of up to $14 million, could be provided to the airline.
”It is obviously a multimillion-dollar commitment stretching over several years because it has capital components. But in terms of the ratio of dollars compared to the number of high-paying jobs that would be brought to the area, it is probably one of the best deals the state of Illinois has ever put forward for economic development,” Thompson said last week.
If selected by United, state officials hope to recoup much of the investment from the Department of Defense by channeling money slated for closure of the air base to base improvements and from federal airport discretionary funds and other dollars from the FAA.
But despite lobbying last week by state Transportation Secretary Michael Lane before Illinois` congressional delegation and the connections U.S. Transportation Secretary Samuel Skinner has to Thompson, some believe that few dollars will be available from the Pentagon and they question the availability of airport discretionary money for a non-commercial maintenance facility.
Without any recoupment of federal dollars, and with state airport bond revenue already committed to improvements elsewhere, it is possible another airport bond issue could be used to finance the Chanute project.
But the state`s use of taxpayer-financed incentives for business development has come under increased criticism in this election year, as Democratic candidates primarily have attacked the Republican governor`s administration for its policy of doling out dollars for economic development. The Thompson administration has already come to United`s aid, backing the airline`s efforts to be a government designated air carrier on the lucrative Chicago-to-Tokyo route and the governor last week said a new runway at O`Hare, United`s operations` base, should be considered to relieve air traffic delays at the nation`s busiest airport-a concept supported by the airline. Thompson last week, however, denied any connection existed between his support of United for the Tokyo route and his pitch for Chanute.
Although questions over the future ownership of UAL Corp., the parent of United, the nation`s second-largest airline, remain as employees try to structure financing for a $4.38 billion buyout approved last week, airline officials said the need for a new maintenance center remains.
Minneapolis-based Northwest Airlines also is seeking a site for a similar, but smaller, aircraft maintenance facility for its increasing fleet of European-made Airbus jets. The state also has pitched Chanute to Northwest officials, but offered incentives with a substantially lower price tag.
Chanute, which has operated as a weapons training support center since World War II, is to be closed in 1993 under recommendations for Defense Department cost-savings affecting a number of military installations across the nation.
Illinois officials have attempted to fight the closing of Chanute, but Defense Secretary Dick Cheney last week said he would not change his mind, and Thompson said efforts to keep the base open, either through lawsuit or congressional pressure, are ”dead.”
”As much as we regret the loss of the Air Force at Chanute, if we do this right we have the opportunity to replace (them) with something infinitely better and infinitely more durable for the people of that area,” Thompson said.
