Infidels at the Water's Edge
Develop Chicago's lakefront?
It didn't take long for me to tire of preservationists' pieties about the public lakefront in Chicago. Chicago has more public lakefront than it can afford, with the result that in 1990 it was falling apart. In a contrary mood, I proposed a cure in this piece, which was not well-received.
From New York to Seattle and from Baltimore to San Diego, waterfronts once crowded with ships' masts today bristle with construction cranes. Hotels, marinas, shopping arcades, and condos are going up even on the formerly barren shores of Jersey City and Cleveland.
Developers have learned how to turn water into gold. In development pacts negotiated with local government agencies, they are building new parks, promenades, and other recreation facilities. These partnerships in effect provide for the profitable—if carefully controlled—exploitation of spaces and vistas traditionally considered public property.
But Chicago's lakefront remains quiet—except for the shuffling of papers as engineers prepare yet another plan to redevelop Navy Pier. Those who treasure it—and fight off any commercial encroachment—regard Chicago's lakefront as an already fully developed public recreation space. "Other places are spending millions to achieve what we've got in Chicago," says William Brah, president of the Center for the Great Lakes.
Even big-time local developers who wanted to get their feet wet had to go to places like New York City to build waterfront projects like a hotel-apartment-marina-retail complex by Cesar Pelli that Jerrold Wexler and Edward Ross proposed there (unsuccessfully). In Chicago, you don't back no losers—and you leave the lakefront alone.
Perhaps it's been left too alone. "Chicago has neglected its lakefront more than any other city," says Scott Hodes, the attorney who headed Mayor Eugene Sawyer's short-lived Navy Pier Development Authority.
On a postcard, Chicago's waterfront may look like Rio's, but a closer glance reveals the effects of age and neglect. Revetments and breakwaters are crumbling. Sections of the lake-front are inaccessible. Indeed, tourists are often surprised that getting to the lake from the Loop is like trying to find an out-of-the-way Greek restaurant. Much of Burnham Park south of 31st Street is a landscaped highway with parking lots.
With mandated limits on its taxing power—compounded by a drastically shrunken tax base—Chicago today may have more public lakefront than it can afford. Mayor Harold Washington's Shoreline Protection Commission in 1988 prescribed such urgently needed erosion protection measures as seawalls, harbors and landfills with a price tag of $800 to 900 million over 10 years. A later, far more modest, plan by the Chicago Park District still is expected to cost an estimated $189 million. And don't hold your breath waiting for the Feds to pick up any substantial portion of the tab.
Lakefront protectionists, such as Friends of the Parks, charge that the park district is mismanaged rather than poor, and that the state's $150 million grant last year to renovate Navy Pier sets an auspicious precedent. But it's unlikely that the General Assembly will continue to cough up such amounts again in the near future or that the park district will undertake enough economies to fund the mammoth task at hand.
Rather, it is the private sector that is making no small waterfront plans across the country these days. Whether as tourists, condo-buyers or conventioneers, it seems that people are willing to pay a hefty premium to be near the water. In cities where once-industrial waterfront properties remained in private hands, redevelopment has triggered bargaining to build and maintain public access and amenities, in exchange for permission to undertake certain commercial developments.
Some municipalities, for example, have traded public land for revenue that is used to maintain or develop other public facilities. For Loyola University's controversial landfill off its Rogers Park campus, for example, the state traded its deed to lake-bottom land for a small public plaza, promenade, and overlooks on the new project. The Chicago Park District called the deal an "ideal model of public-private partnership."
An arguably even better deal was the $4.2 million restoration of Cafe Brauer in Lincoln Park. Most of the money for the project came from the Lincoln Park Zoological Society, which will operate the facility—and pump any profits back into general maintenance of the park district's zoo next door.
What is likely to make Cafe Brauer a success is not the cuisine but the ambiance created by its proximity to the water. Racine, Wis., is cashing in on its lakefront ambiance thanks to a partnership between private developers and city and county governments which floated $12 million in bonds, cash and a grant for harbor improvements and a new marina. The new marina tapped pent-up demand for mooring spaces on Lake Michigan and sparked more than $112 million in private investment in retail, restaurant, townhouse, and condo development and office space. That development will generate an estimated $10 million in license fees over the next 20 years plus $300,000 a year in new property taxes that will pay off a new park and festival center, waterfront walkways, and public boating facilities.
Chicagoans horrified by the phrase "cashing in on the lakefront" should remember that it's nothing new. Condos facing Lake Michigan are said to fetch an estimated 30 percent higher price than landlocked sites, which presumably adds to their property-tax bill. (In fact, property values in tonier neighborhoods escalate in relation to their proximity to Lake Michigan.) And the park district this year expects to receive $27.5 million from such things as boat moorings and rental of Soldier Field. The problem is that those earnings vanish into the park district's general fund, rather than being specifically earmarked for the lakefront. Rather than maintaining a precious asset, we instead may be bleeding it.
Historically, taxpayers generally are quite content to take their "cut" from a publicly owned waterfront in the form of a day's fishing, a swim, or a romantic stroll. But the latest generation of waterfront developments use far more sophisticated bookkeeping.
When local governments allow development of property, they in effect "sell" a package of associated public goods—everything from location, sunlight, vistas, and aesthetic satisfaction. Such horse trading is implicit in traditional zoning laws, although sometimes all the public gets in exchange for allowing another 60-story building is a barren concrete "plaza" unfit even for big-city pigeons.
Even Frederick Law Olmsted seemed to accept controlled commercialization of public space as a way to get funds that public agencies were unwilling or unable to provide. He once proposed to convert several blocks of Central Park frontage along New York's Fifth Avenue into a shopping arcade so that the land might be "a source of revenue, in rent, to the park fund, instead of a burden to it."
Linked development redux. The idea may not be new, but the potential is. Look at Battery Park City in New York. Built on 92 acres of public landfill near the World Trade Center in lower Manhattan, Battery Park City is mammoth—eight million square feet of new office space, 8,000 market-rate apartments and condos, plus street extensions, marinas, and public spaces. Profits earned by the tax-exempt public authority that is developing the property take the form of land leases, development fees, and payments made by buyers in lieu of taxes; that revenue—expected to total $10 billion over 25 years—is being used to pay off the bonds used to install the necessary infrastructure and to build public parks and promenades.
The public's return on its investment is generous. Fifty acres of new parks costing $100 million (including a 1.2 mile harbor-front esplanade) have been lauded as among the best public spaces built in the city in a generation. Master planning for the project was done by Alexander Cooper, whose firm also designed Chicago's Cityfront Center.
The developer also has committed to contribute to a $3.2 billion city fund for the purchase and rehabilitation of a quarter-million low-cost housing units in other parts of the city with donations that will eventually reach $1 billion.
More important, municipalities' participation in such private projects as investment partners provides them with more bargaining power than ever. In addition to a claim to a cut of the profits and the leverage to influence hiring policies, they can extract other concessions for construction and maintenance of unrelated public facilities elsewhere. Cities, in effect, are doing business rather than attempting to regulate it.
In Illinois, quasi-independent public authorities have been embraced as solutions to political stalemate and debt. By selling the state an interest in Navy Pier for $150 million in Build Illinois funds, for instance, Mayor Richard M. Daley rapped new revenue sources and spread the political risk for the outcome of the project. Other states also have turned to such authorities in search of competence or economy. The appeal of public authorities in short is that they have learned to act like private enterprises.
Once, one could tell planners apart from developers by the quality of their suits. Now they not only dress but sound alike. "We try to act in a more entrepreneurial fashion," explains Lee A. Silberstein, vice president of New York City's Public Development Corporation, which is building projects along the city's waterfront. "In the early '80s we looked at the potential of economic development as a partner with business, on the giving side as well as the receiving side."
Traditionally, public or "natural" amenities spurred private development, but some of these new projects have turned that formula on its head. In effect, private investment, in the form of long-term leases and other commitments, back the bonds needed to pay for infrastructure improvements. After completion of the project, the cash flow pays for parks and other amenities.
There are pitfalls. As MIT scholars Bernard Frieden and Lynne Sagalyn ask in their 1989 study, Downtown, Inc., "If the city acts like a developer, who will look after the public interest?" And in Chicago, that question could be rephrased: "If the city acts like the city, who will look after the public interest?"
Much public lakefront development in Chicago, such as McCormick Place, Meigs Field, and other projects, has been marked by endless politicking, confusion, and corruption. Or paralysis, as in the case of Navy Pier.
But it may be tricky to duplicate the Battery Park success story. Mayor Washington's shoreline commission mumbled about "partial sponsorship and involvements" by the private sector to foot the bill for fixing the lakefront, although not one of these ideas has gotten far enough that someone could figure actual costs and paybacks to the city.
Private developers are becoming more alert to public amenities than many a city planner. Not out of public spiritedness perhaps, but because it is essential to the ambiance on which the marketing of certain kinds of shopping, housing, and recreation projects depend for their success. In Racine, for example, Gaslight Pointe offers of upscale "marina living" would be nullified if the developers vandalized the waterfront.
Elitist privatization of the waterfront is one of the reasons why Friends of the Parks ferociously oppose what the group's Executive Director Erma Tranter calls "private encroachments." The lake belongs to everyone, the reasoning goes, not just those who can afford it.
But public access and private development are not necessarily incompatible. In Racine, walkways, boat slips, overlooks, and fishing piers have satisfied the state's waterfront public trust doctrines. A complicated series of negotiations have resulted in what one planner calls a "very commingled" public-private project.
Even Friends of the Parks accept some commercial development to generate badly needed revenue. The group is supporting a park district plan for a new marina at the turning basin at the mouth of the Chicago River. As many as 500 new slips could be built there, enough to generate fees sufficient to retire an estimated $11–12 million in bonds needed to build anew landfill (to provide vehicle access from the city), fix up a small beach, install fishing piers and a promenade, and convert the unused Coast Guard station into a year-round restaurant located at what park district planners describe as "the most exciting location in Chicago."
Mayor Washington's shoreline commission foresaw construction of several such marinas accommodating 3,400 new boat slips. Frank Kdrna, a marina consultant and commission member, estimated that in 1988 revenue from slip fees and related concessions could cover as much as 40 percent of the cost of building not only the marinas but of shoring up the rest of the lakeshore as well.
The commission bowed to local pressure, however, by rejecting Rouse-like retail extravaganzas as violations of the public access principles in the 1973 Lakefront Protection Ordinance. It reserved the lakefront east of Lake Shore Drive for strictly recreational purposes. But does renting the upper floor of the born-again Cafe Brauer for private functions differ in principle from renting a similar room at a lakefront restaurant or hotel?
"Recreational" is a flexible term. Arguably the most use recreational facility on the lakefront is Lake Shore Drive. Redefining "recreation" to include vistas and ambiance as well as ball fields and fishing docks opens up problematic commercial possibilities. Consider, for example, Burnham Park near McCormick Place. As a park, it's a mess—a badlands of parking lots and highway interchanges.
As a development site, it's a peach. Across from it sits Northerly Island, the only one of Daniel Burnham's proposed chain of offshore "islands" to be built. Since 1947, the peninsula has been the site of Meigs Field, run by the city under a lease that generates exactly $1 a year for the park district.
The Meigs lease expires in 1996. Sentiment has long existed to close down Meigs ("It was a mistake," says Erma Tranter, executive director of Friends of the Parks) although the city has expressed an interest in buying the site to keep it open as a convenience to business flyers.
Were that land situated in any other big-city harbor, developers would be landing on it in waves like the Marines at Guadalcanal, trying to establish beachheads. The site offers spectacular views of both the city and the lake and potentially convenient access to the nation's largest exposition complex. (When Northerly Island was used as the site of the 1933–34 Century of Progress Exposition, it was connected to Burnham Park by a bridge.)
A site much less imposing was chosen for New York's Hudson River Center, a hotel-marina complex planned by the city's Public Development Corporation for a four-acre offshore platform across from the Javits Convention Center. Privately financed, the complex will cater to convention visitors while returning to the public a new harbor walk plus lease payments and a percentage of the developer's profits and taxes.
Northerly Island's 92 acres make it big enough to build another North Michigan Avenue on it, even another Battery Park City. It could never be the money-machine the latter is; Lake Shore Drive is not Wall Street. Even so, converting Northerly Island into something like Vancouver's Pacific Place or Battery Park City might create the source of money for the road extensions and re-routings and landfill additions so badly needed along that stretch of shore.
Nothing but a daydream, in the opinion of James R. Reilly, CEO of the Metropolitan Pier and Exposition Authority (MPEA), who says that any such commercial development is about as inappropriate as it is unlikely. "We should be moving toward a rational, attractive plan for the adjacent museum campus," he says, as part of plans to redevelop much of that part of the lakefront as parkland.
But how? Chicago's lakefront may be out of bounds to private developers, but remains open to public developers. Reilly sounded conspicuously unlike a bureaucrat when he lamented to a WBEZ interviewer about the advantages rival convention cities like Atlanta enjoy. "To compete," he said, "we need a better product."
Reilly has hinted that making McCormick Place a better product will include making it "more lovely." That could include linking it, visually and physically, with the cultural campus to the north via a more accessible and comely lakefront park.
MPEA has become Chicago's de facto lakefront development authority. The recently announced proposals to build a massive McCormick Place III with a domed stadium should mobilize enormous capital—and clout. Planners are said to be already at work compiling cost estimates for a re-routing of Lake Shore Drive as a possible component of such plans. Politically, such public benefits might be an essential reward to factions backing the new taxes that almost certainly will be part of the overall financing package—in effect, payments made in lieu of taxes.
Some of the financial experts have suggested "private sector contributions," including corporate sponsorships, as funding possibilities for the McCormick Place expansion. Might we someday swim at First National Park or sail from the Quaker Oats Marina? It's too soon to predict. But the notion of commercially developing parts of the lakefront in order to save it may soon be a question of how, not whether. ●
Debate over Navy Pier's future goes on—and on
Navy Pier was built to be a cargo dock and carnival site, a combination that perfectly expressed Chicago's pre-Depression personality. Its present condition—a physical wreck whose repair has been stymied by political factionalism and lack of money—sadly reflects the Chicago of the 1990s just as accurately.
What to do with Navy Pier so far has produced seven studies under four mayors—or was it four studies under seven mayors? It's hard to remember them all, much less which one proposed an amusement park, new marinas, submarine berths and museums or designer-cookie boutiques. Most of the pinched-purse development scenarios advanced since the late 1970s have assumed that commercial activity—retailing usually, although someone mentioned a hotel and condos once—would be required to generate the funds needed to cover the cost of repairing the 73-year-old structure.
How much commerce the pier can or should support is a philosophical question as well as an engineering one. In a radio interview, John Schmidt, chairman of the Metropolitan Pier and Exposition Authority, said that "to the extent that commercial activities add to the public's enjoyment [of Navy Pier], they make sense." But others have disputed the argument that commerce should be a marginal activity at the renovated facility. The Chicago Tribune editorialized in support of a commercial festival marketplace like the Rouse Co.'s Harborplace in Baltimore; "[these] projects perhaps come closest to resolving such disputes, since their design proceeds from the premise that buying things is Americans' favorite recreation."
Alas, development can't proceed without infrastructure improvements, and infrastructure improvements have been stalled without development. Mayor Daley tied the pier's fate to that of McCormick Place the way a shipwrecked sailor might latch on to a floating spar, by agreeing that both should be controlled by the new Metropolitan Pier and Exposition Authority. The "McPier" authority initiated studies to determine the structural viability and market prospects of a rebuilt pier developed to serve a variety of potential uses that will guide the investment of $150 million in stale capital funds. Those recommendations are expected to be made public around May 1.
That planning project is proceeding within the context of a long-range marketing plan for McCormick Place. Those familiar with the project expect that it will eventually be converted at least in part into exhibition space that would function as a kind of McCormick Place annex, leaving the main hall free to concentrate on its real business of trade shows and conventions. At least one former member of one of Navy Pier's task forces calls that possibility a "travesty," since it adds nothing to the lake-front that is not already there.
Pier planning also is being coordinated with several already-existing plans for the rivermouth area. The Chicago Park District already has announced preliminary plans for a new marina, in the turning basin, to be linked to a system of shoreline walkways. The two big private developments in the area, Illinois Center and Cityfront Center, also have promised to build park space on their own.
It will be tricky: For example, the headlands immediately west of the pier now include parking lots that Mayor Eugene Sawyer set aside for a retail complex but which the park district wants to turn into parks. Similarly, pane district planners have suggested that the [tier's north slip might be a sensible site for a multilevel garage with a landscaped roof that would provide both park and parking. The cost, however, would be to lose the north slip as a marina site. "Thai's just one idea floated by one of the interest groups," explains Nick Trkla of Trkla, Pettigrew, Allen & Payne, the firm heading McPier's planning project. "Part of the job is to weigh the tradeoffs." ●