At its monthly meeting Wednesday, the Gary/Chicago International Airport Authority board approved multiple rate changes and a new lease agreement with a major parcel company.

The airport authority board also approved an agreement with Citgo Petroleum Corporation.

The board’s seven members unanimously approved all four motions.

Dan Vicari, the airport’s executive director, called the agreement with Citgo “a big deal.”

The airport received $9.8 million to create a pipeline for fuel rather than having trucks bring fuel from Citgo’s farm.

In the agreement, Citgo proposes to hire a designer who looks at defining and constructing fuel pipelines and comes up with a cost estimate that will help educate the board on moving forward.

“It fits with the financing that we have available for the project,” Vicari said.

Scott McKinley, Citgo representative, said at Wednesday’s meeting that the company’s East Chicago location has a substantial amount of jet fuel flowing into the four Chicago-area airports.

“We’re pleased to work with the Gary/Chicago International Airport on this project,” McKinley said. “We think that connection would benefit the airport in terms of lowering its clients’ and customers’ overall fuel acquisition costs.”

The Gary/Chicago International Airport updates its rates annually, and they are effective each Jan. 1. Airport personnel look at the consumer price index to determine rates, Vicari said, which was a little greater than 4% from September 2023 to September 2024.

Vicari asked the board on Wednesday to approve the rate advertisement.

“We’ll notify not only our tenants here, but we’ll put it on our website and make sure that the flying community in general knows that the airport’s adjusting its rates and charges,” Vicari said. “People are free to comment, and then we provide the feedback to the board, and they can consider those during final approval or denial.”

People can provide feedback for the next 30 days. The airport authority board will vote on the rates at its Dec. 11 meeting.

The airport authority board also approved amended hangar rental rates for the Griffith-Merrillville Airport. The Gary/Chicago International Airport authority acquired the airport in December 2023, with the acquisition valued at about $1.8 million.

Hangar rental rates at the Griffith-Merrillville Airport had not been adjusted since 2013, Vicari said.

“This is our first stab at making sure that not only they’re updated and current, but also that they’re equitable,” he added. “This is our first opportunity to create equity, which we have to do as a public use airport and also marketable with current market rates.”

The Gary/Chicago International Airport authority intends to update the rental rates each year.

The new hangar rental rate for the Griffith-Merrillville Airport is $3 per square foot per year, Vicari told the board on Wednesday. Airport personnel plan to notify tenants of the new rate and that leases will expire Dec. 31.

Each new lease will be one year, Vicari said before the board unanimously approved the rental rates.

The board also unanimously approved renewing the airport’s lease agreement with United Parcel Service Inc. UPS currently has a five-year lease with the Gary/Chicago International Airport, which Vicari said will start again Dec. 1.

UPS will pay about $270,000 total, including about $169,000 per year to rent the airport space.

“We love having them here,” Vicari said about UPS. “We’re very happy to have their commitment to the airport for another five years.”

UPS is in the fourth year of their current five-year lease, Vicari said Wednesday.

The Gary/Chicago International Airport relocated UPS from the passenger terminal facility and put the service in modular offices adjacent to the passenger terminal. The airport plans to move UPS to a newly constructed cargo facility “as early as late next year,” Vicari said.

Relocating UPS will help the airport eventually open passenger services again, Vicari added. Vicari doesn’t know when the airport will open passenger services after they stopped in 2013.

“We have had a lot of different changes and requirements by the TSA running it, from the equipment to just the overall spacing and layout of the areas of the terminal,” Vicari said. “We’re updating it to comply with their standards, as well as the look and feel.”

mwilkins@chicagotribune.com