$7 Billion Public-Private Plan in Chicago Aims to Fix Transit, Schools and Parks
By JOHN SCHWARTZ
Chicago is embarking on a $7 billion plan to transform the city's infrastructure from the skies above to the pipes underground.
Mayor Rahm Emanuel is planning to announce the initiative Thursday. It includes projects to expand the city's largest airport and improve its streets, water system, schools, community colleges, parks and commuter rail network. The city estimates that these initiatives will create 30,000 jobs over the next three years.
At a time when the nation is only beginning to pull itself painfully and delicately out of a deep recession, and when cities and states are cutting essential services and wondering how to keep the courthouses open and the lights on, an infrastructure proposal for a single city with an estimated cost in the billions — with a "b" — is audacious. Mr. Emanuel, in an interview, suggested that nothing less than this "integrated, comprehensive approach" will do for what he calls "building a new Chicago."
With the plan, Chicago is taking a leading role among cities and states struggling to keep their infrastructure from crumbling further but frustrated with legislative gridlock in Washington, said Robert Puentes, director of the metropolitan infrastructure initiative at the Brookings Institution.
"There is tremendous interest in doing something different — people aren't waiting for the federal government to raise the gasoline tax or pass the carbon tax and have money raining down," he said. He cited successful campaigns in "can-do states" that include Colorado, Washington, Arizona and Virginia to finance economic development projects with public-private partnerships, and Los Angeles' vote in support of a major transportation referendum in 2008.
Mr. Emanuel, who served in the White House in two administrations and as a member of Congress, said "I will not tie this city's future to the dysfunction in Washington and Springfield."
In the speech, to be delivered at the Chicagoland Laborers' Training and Apprentice Center, Mr. Emanuel will describe the financing for the sprawling plan. Some of it will come from the newly created Chicago Infrastructure Trust, an initiative announced this month by Mayor Emanuel and former President Bill Clinton, who has long had an interest in infrastructure and energy efficiency. The fund, a nonprofit corporation, pools outside investment and applies it to a wide range of possible projects.
Other funds will come from cost cutting, some from the savings in energy and water use from retrofitting buildings, and some from user fees, but "none of these funds will come from an increase in property or sales taxes," according to the speech. A copy was provided to The New York Times through the mayor's office. Depending on the project, some of the investment would be paid back through interest on loans, others through profit sharing.
Still, economic development efforts in the past have tended to disappoint, Mr. Puentes noted, because they tended to pay businesses to relocate or threw money into projects like stadiums. Some public-private partnership projects have been criticized as giveaways to the private businesses that take them over — including two prominent cases in Chicago itself, the privatized Chicago Skyway and the city's parking meter system, which obligate the city to leases that span generations. Mr. Emanuel says that the city has learned an important lesson, and that "I am not leasing anything," or selling off the city's assets, he said in an interview. "I'm using private capital to improve a public entity that stays public."
The investments, by any measure, are enormous, and they are intended to tackle enormous problems for this aging city. "You can't have a 21st-century economy on a 20th-century foundation without holding yourself back," Mr. Emanuel said. The projects include $1 billion for the Chicago Transit Authority to renovate more than 100 stations and eliminate "slow zones" that cost riders an estimated 11,000 hours of delays every day. O'Hare International Airport will receive $1.4 billion over the next three years to expand capacity.
Underground, the city will take on the challenge of fixing its water system, which suffered 3,800 leaks last year. That means replacing 900 miles of pipe that is more than 100 years old and replacing or relining 750 miles of sewer lines, among other projects estimated at $1.4 billion. Projects would be coordinated so that a street dug up to repair pipes could get broadband cables and other work done at the same time so that the streets would not be resurfaced only to be dug up again soon after.
Mr. Emanuel is also planning to spend nearly $300 million to buy 180 acres of new parkland and to build playgrounds, basketball courts and sports fields, as well as nature trails and bike and running paths.
Jorge Ramirez, the president of the Chicago Federation of Labor, said he applauds the plan as an official concerned with jobs, but also as an investor in the trust through union pension funds. Instead of investing pension funds outside the city, "you bring it back here," creating jobs locally and getting a good rate of return. "Smart," he said.
Some suggest that the initiative will have to prove itself to overcome the skepticism that comes naturally to longtime observers of the Chicago political scene. "It's totally within reason for Chicagoans to be skeptical," said Celeste Meiffren, field director for Illinois PIRG, an advocacy organization. "That being said, it does seem that a lot of these projects are pretty worthwhile. If the mayor provides a lot of information to us as residents and taxpayers, gives us an opportunity to weigh in on these projects and involves our aldermen too — and makes sure we receive a fair value — it'll address a lot of the concerns we have here."
In his speech, Mr. Emanuel evokes the Great Fire of 1871, which left 100,000 people homeless, and which led to what he calls the city's "second birth": $50 million in new buildings completed a year after the fire and a building boom that put the city back on the map and saw it host a Republican National Convention just nine years later.
"Chicago's identity was not forged by the Great Fire," he said, "but by the great fortitude of its people in its aftermath." Rebuilding now, he suggested in an interview, is just as important: "The decisions we make in the next two or three years determine what Chicago will look like in the next 20 or 30 years."
And not just Chicago, said Mr. Puentes of Brookings. If the program is successful, it will be imitated, he said; "This is not just a Chicago story."
