Chicago, Airlines Ink $8.5B Expansion at O’Hare

The deal marks the largest capital expansion in the airport’s history, as well as the first major terminal improvement project in 25 years.

The City of Chicago and four of the airlines serving O’Hare International Airport—United, American, Delta and Spirit—have executed an $8.5 billion, eight-year plan to modernize the airport. The deal marks both the largest capital expansion in the airport’s history and the first major terminal improvements at O’Hare in 25 years.

The plan will create 25 percent more gate capacity, new state-of-the-art security and a series of infrastructure improvements to increase airline performance. O’Hare is expected to serve nearly 100 million passengers annually by 2026, versus about 80 million today.

The just-inked Terminal Area Plan (TAP) will completely redevelop O’Hare’s existing terminals, with expanded gates and facilities at Terminal 5 (the international terminal), the redevelopment of Terminal 2 into a new O’Hare Global Terminal to serve both international and domestic passengers, and renovations and expanded concourses at Terminals 1 and 3. (There is no Terminal 4).

Upgrades will include:

  • New comprehensive security screening upgrades, meant to enhance security and reduce wait times for passengers;
  • New self-service technologies, that would allow passengers to quickly check in for their flights and drop off their bags;
  • New baggage systems, to streamline baggage connectivity.

The total terminal square footage will increase by more than 60 percent, from 5.5 million to 8.9 million square feet. Construction will start next year.

Many of the TAP changes are geared toward making O’Hare a more attractive gateway for international travel. The O’Hare Global Terminal will be a new international arrival terminal, and the extension of Terminal 5 will help millions of passengers each year avoid the hassle of long transfer times between the outlying Terminal 5 and the terminal core.

O’Hare will also be home to North America’s first Global Alliance Hub, where each of the three international airline alliances operate within a single terminal facility.

O’Hare area remains hot for industrial, hotel projects

Development outside the airport fence has not lagged by any stretch.

Over the next few years, the O’Hare airport’s hotel capacity will more than double, through the renovation of the existing O’Hare Hilton and the construction of two new hotels, one of which will have direct access to the airport via the Airport Transit System, an automated people mover.

Industrial space near O’Hare remains in high demand. Last October, for example, Westmount Realty Capital bought a portfolio totaling 2.4 million square feet of space, most of it near O’Hare or the Illinois International Port District.

And just last month, Ridge Development, the industrial development arm of Transwestern Development Co., bought a 10.5-acre parcel just southeast of the airport, on which it plans to build a 178,500-square-foot spec project with 32-foot clear heights.

Images courtesy of Chicago Department of Aviation