Chicago embarks on $7 billion infrastructure plan

By Jason Keyser

Associated Press

Published: Thursday, March 29 2012 4:55 p.m. MDT

Chicago Mayor Rahm Emanuel laughs with journeyman laborer Tabatha Miles, a 2004 graduate of the apprentice program at Chicagoland Laborers Training and Apprentice Center in Chicago, Thursday, March 29, 2012, after she introduced the mayor for a news conference. Emanuel announced a $7 billion program to overhaul Chicago's infrastructure. The three-year plan calls for improvements to rail stations, airports and parks and would create more than 30,000 jobs.

Chicago Sun-Times, Rich Hein) CHICAGO LOCALS OUT, MAGS OUT, Associated Press

CHICAGO — Chicago is setting off on an ambitious $7 billion program to overhaul the metropolis' aging infrastructure, from replacing crumbling commuter rail stations and century-old water pipes to building new airport runways and parks, its mayor announced Thursday.

Fed up with what he called dysfunction in Washington, Mayor Rahm Emanuel said his envisioned transformation of the United States' third largest city would go ahead without waiting for federal assistance or raising taxes.

Instead, Emanuel is turning to public-private partnerships and in particular a newly created nonprofit fund called the Chicago Infrastructure Trust, which will pool the expertise and resources of private-sector investors for a staggering array of projects. The three-year plan could create 30,000 jobs, the mayor said, while touching virtually every part of the city's infrastructure.

At a time when city and state governments around the nation are making painful budget cuts and struggling just to maintain their rail lines, highways, bridges and other essential public infrastructure, Chicago's plans stood out as especially ambitious in their scope. They were equally unique for a financing model not yet applied to a project of this size at the city level in the United States, according to urban planners.

"What we do in the next two to three years will determine what Chicago will look like in the next 20 to 30 years — the type of city our children will inherit," Emanuel said in announcing his plans at the Chicagoland Laborers' Training and Apprenticeship Center.

Among its projects, the city plans to renovate more than 100 transit stations, spend $290 million on expanding parklands and transform the Chicago River — which once flowed with sewage and industrial waste — into a haven for kayakers.

It will also spend $1.4 billion on two new runways at O'Hare International Airport by 2015 and $660 million on public schools. The city will replace 900 miles of water pipes that are more than a century old and 750 miles of sewer line. The roads above them will also be repaved. Highlighting the need, Emanuel said more than 3,800 water pipes burst last year.

Some urban planners and policy experts were skeptical that remaking a city on such a grand scale could be pulled off without either raising taxes or privatizing major pieces of infrastructure, as Chicago's former Mayor Richard M. Daley did with the Chicago Skyway and the city's parking meter system.

"I'm still a little mystified," said Joseph Schwieterman, a transportation specialist at DePaul University. "I do applaud the mayor for setting the bar high and telling the public to brace themselves for change. But we haven't heard much about the pain that it may entail — user fee increases. That's how the Skyway worked. We got lots of money but they raised the fees."

Schwieterman said Emanuel's talk of public-private partnerships left him room to veer toward some privatization or at least outsourcing the management of assets while maintaining public ownership.

The mayor, in his speech, insisted that was not the case. Without naming them, he said there were five leaders in infrastructure finance interested in investing in Chicago's publicly owned properties, adding that they would "stay Chicago's publicly owned properties."

Some of the money would come through user fees and savings from a program to retrofit city buildings and reduce their energy consumption by 25 percent, Emanuel said.

"I think he inspired us today, but we need better answers on how we'll pay for it," said Danny Solis, a Chicago alderman. "Efficiencies are a good start, but we'll need more."

The mayor announced the creation of the Chicago Infrastructure Trust earlier this month with former President Bill Clinton, describing it as a way to get around government dysfunction in Washington and state capitals that stall economic growth.

Some urban planners applauded that as an innovative departure from the finance methods local governments in the U.S. have used for many decades, such as municipal bonds and taxes, to deliver infrastructure.

"At some point you reach some practical limits in how far that (bonds and taxes) can go and especially when you overlay the ongoing impacts of the slow economic recovery on top of that," said Leonard Gilroy, a senior fellow at the Illinois Policy Institute and analyst at the Reason Foundation.

"Governments all over the country are looking for new solutions to deliver infrastructure," he said. "Every year, new states are passing laws enabling public-private partnerships to help modernize their transportation infrastructure and even go beyond that to other types of infrastructure."

He said he's never seen it done on such a large scale at the city level in the U.S., though similar public-private partnerships are more common overseas.

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