Chicago neighborhoods didn’t flourish the way downtown did

on May11
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2019-05-10 18:00:09

“No world-class global city has a failing central business district. It is not in our interest as a city to pit one side of the city against another. Our challenge is to make that central business district work for all parts of . . . Chicago.”

Mayor Rahm Emanuel uttered those words last August before announcing he wouldn’t run for a third term. Perhaps unwittingly he was drafting his closing argument for history.

During the mayor’s eight years, he benefited from a steady march of employers into downtown Chicago, many from the suburbs. Hardly a week passed without the mayor, who loves the role of salesman-in-chief, speaking at a new office or cutting a ribbon on something that promised jobs.

It might have been luck as much as skill. But with a background in investment banking, Emanuel, a fundraiser with few peers, understands business cycles and what it takes to get before a corporate honcho and not leave without a “yes.”

Yet the city’s neighborhoods didn’t flourish during his tenure the way downtown did. For Chicago, the Emanuel years saw population loss, ceaseless violence and a poisoned relationship between the police and the people. All overshadowed good news in economic development.

For his critics, the Rahm Emanuel who closed schools and mental health clinics did far more harm than good. But to most who follow development and job growth in the city, the “Mayor 1 Percent” tag hung on Emanuel is unfair.

“If nothing else, he deserves credit for recognizing the neighborhood disinvestment that has taken place over many years,” said Craig Chico, president and chief executive officer of the Back of the Yards Neighborhood Council.

City Hall’s plan for neighborhoods has included a share-the-wealth fund that uses fees from downtown projects to support small businesses in disadvantaged areas. It has tapped tax-increment financing, or TIF, to support local retail and has an affordable-housing ordinance to force builders of market-rate housing to support cheaper new units off-site.

The program for small business, called the Neighborhood Opportunity Bonus, has generated $47 million for about 200 businesses and community organizations since 2016, with $169 million more in the pipeline. Critics have said it falls short because it helps only those enterprises that can get credit elsewhere.

But Chico praised Emanuel for insisting on standards. “You’d be doing these entrepreneurs a disservice if you fund them upfront,” he said.

Emanuel’s neighborhood successes have included manufacturing and distribution projects in Pullman, grocery stores planted in former “food deserts” and housing renovation such as the long-sought reopening of the historic Rosenwald Courts Apartments at 4642 S. Michigan Ave.

“They have come up with very creative and novel ways of doing development,” says Leon Walker, managing partner of DL3 Realty, which was behind the Whole Foods-anchored Englewood Square mall at 63rd & Halsted. | Provided photo

“Whether it is the mayor or his staff, I know that their heart is in doing the right thing,” said Leon Walker, managing partner of DL3 Realty, which was behind a Whole Foods-anchored plaza in Englewood that opened in 2016 and a Jewel-Osco that opened this year in Woodlawn. “They have come up with very creative and novel ways of doing development.”

One of Emanuel’s foremost allies in the Chicago City Council, Ald. Anthony Beale (9th), said he bonded with the mayor early over successful efforts to land a Walmart in Pullman.

“He saw very quickly the opportunities that are here. Nobody else has the kind of land and access to the expressway that we have,“ Beale said. “He saw it. We had a legitimate partnership. If I needed for him to make a phone call, he made it.”

anthony beale alderman 2019 mayoral election candidate rich hein

Ald. Anthony A. Beale: “He saw very quickly the opportunities that are here. Nobody else has the kind of land and access to the expressway that we have.“ | Rich Hein / Sun-Times

Beale said communities that lack development need to take an inventory of their assets — including land, labor force and transit — and adopt a “squeaky wheel” approach with whoever occupies the mayor’s office.

The disadvantage in Emanuel’s approach to development is that it’s strictly deals-oriented, said Dan Cooper, director of research for the independent, not-for-profit Metropolitan Planning Council.

“Some of that has been very successful,” Cooper said. “But, for me, it’s been at the expense of a real thoughtful comprehensive plan for the neighborhoods.”

Cooper said some of Emanuel’s initiatives have been tone-deaf, such as the $95 million police academy in West Garfield Park, advanced despite outrage over police brutality.

The Metropolitan Planning Council’s Dan Cooper on Mayor Rahm Emanuel’s deals-oriented development approach: “Some of that has been very successful. But, for me, it’s been at the expense of a real thoughtful comprehensive plan for the neighborhoods.”

Others say planning is best done during the slow times, not amid a long economic boom and that Emanuel can’t be faulted for seizing opportunities where he can.

He’s done it while reducing reliance on TIFs, which have been controversial because they siphon property taxes from local government and can subsidize private development. Under Emanuel, the city has diverted TIF spending to public works, and it also has returned surpluses to local taxing bodies. The mayor also has improved reporting for how TIF money is spent.

David Reifman, Emanuel’s outgoing commissioner of planning and development, said the administration has created tools for economic growth during years when the federal and state governments were little help. “We have been able to leverage our market strength to create opportunities in the neighborhoods,” he said.

Reifman said the neighborhood focus isn’t limited to isolated deals and that it brings in policy initiatives such as transit improvements and work on parks and libraries. “These are community assets that are foundational to our neighborhoods,” he said.

An example is the city’s transfer to Englewood of its North Side fleet-management facility. It added daytime population to support the Whole Foods and other recent retailers. The city also relocated City Colleges of Chicago employees to Kennedy-King College at 63rd and Halsted streets.

Aarti Kotak, the mayor’s deputy chief of staff for neighborhood economic development, said the public investments can “create an artificial momentum” that helps bring private investment to a community. The initiatives often involve fulfilling neighborhood plans written years ago, according to Kotak.

“You can call them deals,” she said. “I call them pulling plans into life.”

It can take time before construction equipment shows up. “Downtown capital flows easily in a strong market,” Reifman said. “It’s harder to get equity and debt into areas with a declining population.”

Downtown, the inflow of business has been spectacular. Emanuel leaves successor Lori Lightfoot with two mega-projects and their $1.6 billion in TIF-related headaches. The Chicago City Council approved TIF subsidies last month for the Lincoln Yards project in the old North Branch Industrial Corridor and a project known as The 78 on  62 acres at Roosevelt Road and Clark Street.

A signature Emanuel program would apply at Lincoln Yards. It takes development fees the city gets from manufacturing zones that are moving to other uses and spends the money to improve other industrial areas. It’s another case of the mayor using central-area success to subsidize work somewhere else. “This will support head-of-household, working family jobs,” Reifman said,

A tally from the real-estate firm CBRE Group has 56 companies moving from the suburbs to central Chicago since Emanuel became mayor. Helping that has been zoning that’s pushed the central business district into the Near West Side and Fulton Market corridor.

Ed Kus, an attorney who as a city employee wrote the last comprehensive revision of city zoning rules, said Emanuel has used money from downtown deals judiciously to help neighborhoods. Kus said there’s no point in waiting for long-term plans in a city that’s established and, in many areas, has little vacant space.

“Growing downtown is the only way the city is going to get out of the financial mess it’s in,” says John O’Donnell, chief executive officer of Riverside Investment & Development, which built the 150 N. Riverside Plaza office tower (above) and is backing two other big projects.

“Growing downtown is the only way the city is going to get out of the financial mess it’s in,” says John O’Donnell, chief executive officer of Riverside Investment & Development, which built the 150 N. Riverside Plaza office tower (above) and is backing two other big projects. | Paul Saltzman / Sun-Times

With mega-developments in the works, there’s evidence the downtown core will keep growing. John O’Donnell, chief executive officer of Riverside Investment & Development, which built an office tower at 150 N. Riverside Plaza and is backing two other projects, said downtown merits the attention because it’s the city’s tax generator.

“Growing downtown is the only way the city is going to get out of the financial mess it’s in,” O’Donnell said.

While the mayor has supported the big projects, O’Donnell said there’s a growing backlash to tapping downtown projects for affordable housing. He said the cost of that is beginning to make some developers rethink deals.

“That will reduce the supply of housing, and that’s not the way to make things more affordable,” he said.

It’s inevitable that an outgoing Chicago mayor would have unfinished business. For Emanuel, a notorious control freak, it might be galling that he can’t write the epilogue for his own administration.

He might have to settle for something like this from Collete English Dixon, executive director of Roosevelt University’s Marshall Bennett Institute of Real Estate and a veteran of development finance.

“Mayors can be catalysts. They can be hurdles,” English Dixon said. ”The city of Chicago has a downtown area with a value to the business community that has manifested itself. And that’s to the mayor’s credit.”

Collete English Dixon, executive director of Roosevelt University’s Marshall Bennett Institute of Real Estate, credits Mayor Rahm Emanuel's efforts.

Collete English Dixon, executive director of Roosevelt University’s Marshall Bennett Institute of Real Estate, credits Mayor Rahm Emanuel’s efforts. | Roosevelt University

3 key development wins, 3 whiffs

WINS

• O’Hare Airport: The $8.7 billion modernization should secure Chicago’s global connections. Getting the airlines and other interests together on this enormous investment was no easy feat.

• Riverwalk completion: What many Chicagoans will remember Rahm Emanuel for. Now, they must eat hearty and drink up when they use it because the city needs Riverwalk revenue to pay off a $98.7 million federal loan on the project.

• Historic preservation: Emanuel did what former Mayor Richard M. Daley couldn’t here: He patched together a venture to restore the landmark Uptown Theater, anchor of a possible entertainment district. He also backed refurbishment of the Logan and Congress theaters.

WIN: the Riverwalk. | Colin Boyle / Sun-Times

WHIFFS

• U.S. Steel South Works site: 500-plus acres of lakefront property got city road help, but the huge site is still vacant after all these years. Time to bring back the Dave Matthews Band?

• Amazon HQ2: Why wave rich incentives for a politically fraught project that Chicago realistically had no chance to get? All of the losing cities were just leverage for what Amazon founder Jeff Bezos wanted.

• Tesla-in-a-tunnel: Elon Musk’s plan to whisk travelers between O’Hare Airport and downtown was a pipe dream. Fast transit to and from O’Hare needs to rely on surface rail and find reliable private-sector partners.

Former site of U.S. Steel South Works

WHIFF: Redeveloping the former site of U.S. Steel’s South Works. | Sun-Times files

 

 

 



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