Tag Archives: Chicago region

The Chicago Fire and Bridgeview: another case when building a sports stadium is not a good investment

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Residents of the southwest Chicago suburb of Bridgeview are not happy about reports that Toyota Park, built to be the home of the Chicago Fire, has created a lot of debt for the community:

The exchange came Wednesday night at Bridgeview’s first Village Board meeting since the Tribune published a report detailing the small southwest suburb’s financial woes tied to its biggest bet, the 20,000-seat Toyota Park.

The taxpayer-owned home of the Chicago Fire has come up millions of dollars short of making its debt payments since opening in 2006. Meanwhile, the town has nearly tripled property taxes in less than a decade, even as the town offset some of the financial sting by taking out more loans to help make payments.

In all, the blue-collar suburb is now more than $200 million in debt.

In comparing towns’ debt to property values, the Tribune found Bridgeview had the highest debt rate in the Chicago area. Much of the debt is tied to a stadium deal in which the newspaper found insiders landed contracts and town officials enriched their political funds with stadium vendor donations.

The stadium might have helped put Bridgeview on the map (leading to higher status/prestige) as it is the only suburban facility in the Chicago area that is home to a major sports team (despite arguments in the past from the Bears and White Sox that they might move to the suburbs). But this level of debt seems insurmountable for a village of 16,500 people who have a median household income of $42,073, below the national average.

This should be a reminder for many communities, small suburbs or big cities: sports stadiums are not the deals they may be made out to be. Yes, it could bring or keep a major sports team. But, the public debt may take decades to repay, can lead to higher tax burdens for residents who are likely not all attending the games, doesn’t necessarily mean that a host of entertainment businesses will open up nearby to serve stadium patrons, and the primary people who benefit are the sports teams (who get new stadiums for which they don’t have to pay the whole bill) and a small number of local leaders and businesses. It may be nice to mentioned on TV every once in a while (if you can find the more minor channels the Fire tend to be relegated to) and be the politician who helped bring the major team to town but it often isn’t a great deal for the whole community.

Chicago region home prices back to April 2000 levels

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Data from the S&P/Case-Shiller suggest that Chicago area home prices have returned to levels from early 2000:

Home prices in the Chicago area hit a new post-housing crisis low in March, falling to levels not seen locally since April 2000, according to the widely watched S&P/Case-Shiller home price index, released Tuesday.

With the most recent decline, average  home prices in the Chicago area have fallen 39 percent since they peaked in September 2006, according to the index…

Much of the pricing pressure was on homes that sold for less than $139,182, as the average selling prices for those properties in March fell 3.4 percent from February and were down 9 percent from a year ago and reflects the impact of distressed homes on the market. That puts the pricing environment for lower-priced homes akin to where it was in April 1995…

“We’re beginning to see more stability in the overall numbers,” Blitzer said. “The housing situation in the United States, while certainly not booming, is seeing some stability and possibly some gains going forward. Prices will be the last thing to go up.”

As the article notes, economist Robert Shiller has expressed skepticism that housing prices will rise anytime soon.

While there may be a lot of worry about foreclosures (and Illinois ranks poorly here as well), the issue of depressed housing prices might linger even longer. The wealth that people expected to incur through their house has, on average, been reduced to 2000 levels. Another way to interpret the data above is that on average, people who have bought a home since April 2000 can’t expect to make any money on selling their home now. This could limit people’s abilities to move and purchase homes as well as change how they think about homebuying.

 Zillow just put together a new map of the United States based on what % of homeowners are underwater. The map has more people in the red than one might hope:

The real estate information website Zillow has compiled its data from the first quarter of 2012 to build this map, showing just how much negative equity there is among the homes in many counties. Deep red along the west coast, throughout Florida and in the Great Lakes region serve as a harsh reminder of the chronic troubles these areas are still struggling to control…

In the worst hit counties, more than half of the homes are underwater. Clark County, Nevada – home to Las Vegas – is among those in the unfortunate top 1 percent, with 71 percent of homes underwater. For the vast majority of homes here, the amount owed is more than 200 percent of the value. Clayton County, Georgia, part of metro Atlanta, has an astounding 85 percent of its homes underwater.

This article from 24/7 Wall St. breaks Zillow data down even further to name the ten cities with the highest rates of homes with negative equity. Las Vegas, Reno, and Bakersfield are the worst performing cities in the country, with rates above 60 percent.

While the situation is certainly bad in many, many parts of the country, four-fifths of all counties in America have fewer than 35 percent of their homes underwater, according to the map. But it’s still a widespread problem – and one that seems to be growing. More than 31 percent of all homes in the country are underwater, according to these first quarter 2012 numbers from Zillow, a jump from the 28 percent the company noted a year earlier and the 22 percent the year before that.

It could take a long time to reverse these trends.

New economic plan for Chicago region from Emanuel, World Business Chicago

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Chicago Mayor Rahm Emanuel announced a new economic plan for the Chicago region earlier today:

What’s clear from the 60-page report is that the city is aiming to shake up the status quo. Too many agencies have been making uncoordinated efforts to boost economic development, the report finds, and greater collaboration is needed. Job training programs have not been well-aligned with employers’ needs and should be tailored to specific job demand. And new funding models are needed for infrastructure and transportation projects, given the economic times.

“A global city like Chicago needs a clear set of goals, a clear framework for analysis and clear strategies for economic growth and the creation of jobs,” Mayor Rahm Emanuel said in a statement…

It is one of two major regional planning endeavors that has been under way for months. Next week, the Chicagoland Chamber of Commerce will unveil the results of a study conducted by the Paris-based Organization for Economic Cooperation and Development (OECD), of how the region can better compete in the global economy.

Read the executive summary of the plan here.

A few quick thoughts on the plan:

1. I’m not particularly surprised by any of the 10 primary suggestions. What seems most pertinent here is that the plan is regional and wants to leverage the assets of the whole region for this one plan.

2. It seems to me that the trick will be uniting all of the local governments and taxing bodies in order to work on this plan. Some of the recent battles in Chicagoland indicate that this will not be easy: the battle over the expansion of O’Hare Airport and the battle over the purchase of the Elgin, Joliet, & Eastern railroad tracks by Canadian National. Perhaps this most recent economic crisis presents an opportunity – after all, Emanuel is well-known for saying, “You never want a serious crisis to go to waste” – where even the wealthier suburbs will want to tackle these issues together. Balancing all of these interests will be difficult as will having the right kinds of structures to enact change across communities.

3. This reminds me that while Mayor Emanuel may be considered liberal by some, he is pro-business in a similar way to President Clinton and other more moderate Democrats. This plan comes out of the World Business Chicago group that Emanuel has tapped to help lead Chicago forward. Emanuel’s vision may have more governmental involvement than some would like but matters like infrastructure are already government’s concerns and if managed well (which includes preparing for the future rather than simply trying to keep up today), can help everyone else succeed. If this plan is a success and the Chicago region continues to be or even builds upon its standing as a world-class city, Emanuel will be remembered fondly by many on both sides of the political aisle.

4. I would be curious to know how many plans like this have been developed in the past, how many were successfully followed, and how many were successes.

5. There are a number of groups who do regional planning in the Chicago area, such as the Chicago Metropolitan Agency for Planning which has its own Go to 2040 Plan, and I wonder how they will respond to this plan.

Building intermodal facilities to relieve traffic congestion

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After examining a new report that Chicago has some of the worst traffic bottlenecks in the country, the suggestion is made not to add lanes to the highways but rather to build more intermodal facilities:

“This is a roadway that has 1950s technology that we are using for 2011 traffic,” said Don Schaefer, executive vice president of the Mid-West Truckers Association. “Aside from a few locations on the Illinois Tollway, there are very few roadways in the Chicago area that are engineered to handle 2011 traffic volumes.”

Adding highway lanes is unlikely to produce the capacity necessary to ease congestion, experts said. A partial solution involves building more intermodal facilities where truck trailers are loaded onto flatbed train cars and transported long distance by rail, then transferred to trucks for the last segment of trips.

One such facility is the sprawling CenterPoint Intermodal Center near Joliet, on the site of the former Joliet Arsenal. But even there, truck traffic is a problem on Arsenal Road leading to Interstate Highway 55.

“The state is building a new interchange to relieve traffic, but today truck traffic trying to get off I-55 southbound is backed up on to the highway,” Schaefer said.

While adding lanes may seem like “common sense,” studies consistently show that this simply encourages more traffic. Think about places have kept adding lanes like downtown Atlanta (I-75 corridor in particular) or the Los Angeles region. Traffic is still an issue during peak times and those roads are already at six or more lanes in each direction.

Intermodal facilities are an intriguing solution. A few thoughts about these:

1. Do most Americans even know what they are? If not, they should as many of their consumer items are routed through these facilities.

2. Part of the reason this article caught my attention is that just last week I drove right by the Centerpoint Intermodal Center which is just east of I-55 and just south of the Des Plaines River. The area was an interesting one: the large facility itself is surrounded by a number of warehouses and distribution centers, including Wal-Mart. When driving a car through such places, I tend to feel out of place as everything is a little bigger: the buildings, the space, the trucks. And yes, the ramp to get on I-55 northbound at Arsenal Road had a long backup of trucks.

Here is some more information on the CenterPoint Facility that just opened in 2010:

The facility will be a central spot where train containers from California, Texas and the Pacific Rim will be delivered for pick-up by trucks moving goods to warehouses and distribution centers throughout the Midwest.

CenterPoint already has an international intermodal facility in nearby Elwood. Combined, the sites will be the country’s largest inland port. In an era of high fuel costs and declining numbers of cross-country truck drivers, the facility is expected to be a more efficient, environmentally-friendly mode of hauling.

A third CenterPoint facility also is planned for Crete.

The $2 billion Joliet development – located on 3,800 acres south of Laraway Road between Brandon and Patterson roads – is the largest construction project in Will County.  It has created about 1,000 construction jobs.

3. What would it take to build more of these? One obvious question is where to put them. This one near Joliet is just outside the Chicago region and there is not much around it: an oil refinery and the Abraham Lincoln National Cemetery. Most importantly, there are not a lot of houses nearby. If you tried to build these closer to cities, I’m sure there would be NIMBY issues. Imagine if someone wanted to build a new one near the Circle Interchange in Chicago – residents would complain and the price of land would likely be prohibitive. There are some older facilities embedded in the Chicago region; for example, there is one in Chicago just south of Midway Airport between 65th and 73rd Streets. You can see Union Pacific’s Chicago region facilities here.

But these facilities are needed, particularly in the Chicago region with its radial railroad system and many at-grade crossings. In recent years, the goal has been to relieve some of the rail traffic closer to the city which was behind the fight over whether Canadian National should be allowed to purchase the Elgin, Joliet & Eastern beltline railroad that runs around the city and on which CN wanted to run more freight trains.

Naperville, Aurora mayors among those who voted for Illinois toll increase

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Amidst news that Illinois tollway directors voted today to raise tolls for a $12 billion capital project (see my earlier thoughts here), I noticed that Naperville Mayor George Pradel is involved:

But a majority of Illinois State Toll Highway Authority leaders said the move is crucial to repair existing roads and build some new ambitious projects such as the long-delayed Elgin-O’Hare Expressway extension into O’Hare International Airport and a western bypass road around the airport. The capital plan will create about 120,000 permanent jobs and ease congestion, officials said.

“My heart goes out to those going through tough times and that have lost jobs. One side effect of this is that it will enhance the economy in northern Illinois over 15 years,” said Naperville Mayor and tollway director George Pradel, who voted for the toll increase.

The decision didn’t come quietly — one board director called the move too hasty and proposed a scaled-back version.

Director Bill Morris of Grayslake, the only dissenter in today’s vote, thinks the toll authority could carry out a 10-year capital plan with a 15-cent increase at a 40-cent toll plaza now with more hikes expected later.

You can see the profiles of the Illinois Tollway Board of Directors here. Having never looked at these profiles, I was intrigued: Pradel is joined by the current mayor of Aurora as well as well a number of businessmen and two female public servants (one from education, one from Cook County government). On the whole, it seems like the directors bought into the economic development argument: good tollways, whether that means improved roadways or new roadways, will help northeastern Illinois prosper.

But looking at the backgrounds of this group, I wonder how many also were influenced by how better roadways might help their community or business interests. While this is not necessarily bad – indeed, northeastern Illinois needs businesses and jobs – it is a different perspective than the common driver might have. (And since this is Illinois, I assume there is some political process behind this board. Still, no “citizen” members?) Take Mayor Pradel: was his vote solely for northeastern Illinois and/or is this quite beneficial for Naperville? The regional argument is interesting (and I’m sure the job and economic estimates could be debated) but I would be interested in hearing about how local interests affected this vote.

Jump in usage of food stamps in the Chicago suburbs

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The effects of the American economic crisis are also being felt in the suburbs. In the Chicago area, usage of food stamps has increased dramatically since 2006:

Since 2006, the state’s Supplemental Nutrition Assistance Program, commonly called food stamps and administered via Link cards, has seen a rise in the number of people in the program in an average month by 46 percent in Cook County, 133 percent in DuPage County, 84 percent in Lake County, 96 percent in Kane County, 168 percent in McHenry County and 74 percent in Will County.

“It’s easy to assume hunger is an urban problem,” said Lake, whose food bank serves 13 counties. “But the fact of the matter is, hunger is everywhere.”

In the suburbs, the increase in food stamps use could be the result of previously middle-income families getting caught by a tough break, said Jennifer Yonan, a vice president of the United Way of Lake County…

To qualify for food stamps, a household has to meet certain income requirements. A family of four, for example, must have a gross monthly income of less than $2,389 to qualify.

The suburbs were once considered the bastion of the wealthy but this is changing as more suburbs encounter issues that were once thought to be big city problems.

The 133% rise in DuPage County is particularly interesting. In recent decades, DuPage County was transformed from more of a bedroom county, meaning that workers lived in DuPage but commuted elsewhere for work, to a job center. In figures from the early 2000s, DuPage County had more jobs than eligible workers, meaning that the county needed outside workers to fill all of its jobs. If you look at the unemployment rate for DuPage County (not seasonally adjusted), the rate was as low as 2.7% in October 2006, as high as 9.4% in January 2010, and is now at 8.6%.

It would be interesting to see more exact data to figure who exactly has started using food stamps since 2006.

This rise in food stamp usage is a similar phenomenon to reports about the black middle class or the increase in foreclosures: when an economic crisis hits, people living on or near the economic edge will have more difficulty.

Further details on proposed Illinois toll hike; Illinois tolls rather low

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The Chicago Tribune reports today that the Illinois State Toll Highway Authority wants to raise toll rates in order to raise money for several new projects, including a reconstruction of I-90 (the Jane Addams), adding an interchange between I-294 and I-57 (one of the few places in the US where two interstates do not have an interchange), extending the Elgin-O’Hare, and undertaking several studies for possible new roads (extending Route 53, the Illiana Expressway).

But there is more to this story. While the Authority wants money to undertake these projects, there is another defense for raising rates: Illinois toll rates are lower than other states.

The council urged that tolls on the existing tollway system be raised to levels “consistent with national averages” to generate revenue for the EOWB [Elgin-O’Hare West Bypass]. Currently, Illinois Tollway users pay the equivalent of 3 cents per mile, while the national average is 7 cents per mile, officials say. Using that model could result in a systemwide doubling of the current rate, to 80 cents from 40 cents for passenger vehicles using I-PASS, and to $1.60 from 80 cents for cash customers…

The report also said tolls on the EOWB itself should be “consistent with the level of other new toll projects nationwide,” or about 20 cents a mile. This suggests that tolls on the new highway could be as much as seven times the current rate, or $2.80 for passenger vehicles using I-PASS and $5.60 for cash customers…

In addition, the council’s report recommends that future toll increases be indexed to inflation. The last time the tollway hiked car tolls was 2005, but that was the cash rate. Cars with I-PASS pay the same rate as they did in 1983, the tollway says…
The report also urges consideration of so-called congestion pricing strategies, in which vehicles pay higher tolls during peak hours or for express lanes; extending the tollway’s bond maturity term up to 40 years; and giving further study to tolling adjacent freeways. That could mean imposing tolls on I-290.

I’m guessing Chicago area residents will not like this as it makes driving more expensive (particularly with the price of gas) and there will general grumbling about how the tolls were supposed to disappear at some point. But, roads have to be paid for somehow and whether motorists pay through tolls or gas taxes, they will pay for the privilege of using roads. If anything, perhaps Chicago area residents should be surprised that tolls have stayed so low when other states have raised them. Since we can probably assume that the cost of road building has gone up like everything else, it sounds like tolls should increase.

If there is a larger issue to be concerned about, we could ask about the planning undertaken by the state. A road like the Illiana Expressway has been discussed for decades and waiting this long to undergo a major study and then go through with the construction will cost more now than it would have years ago. The Elgin-O’Hare has been a running joke for a while. Additionally, it would be interesting to see how close or far planners were in estimating the number of vehicles that would use the highways each day. The early expressways in the area, I-294 and I-290 are two examples, have seen much more traffic than was initially anticipated, driving up costs. Overall, more foresight could have saved money.

Class I railroads converge in Chicago region

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Chicago continues to be a critical transportation hub in the United States. A recent short interview in Chicago said 70% of American rail traffic moves through the Chicago area and 6 of the Class I railroads in the United States run through the region. Here is a description of Class I railroads from the Department of the Interior:

There were 554 common carrier freight railroads operating in the United States in 2002, classified into five groups.

Class I railroads are those with operating revenue of at least $272 million in 2002. Class I carriers comprise only 1 percent of the number of U.S. freight railroads, but they account for 70 percent of the industry’s mileage operated, 89 percent of its employees, and 92 percent of its freight revenue. Class I carriers typically operate in many different states and concentrate largely (though not exclusively) on long-haul, high-density intercity traffic lanes. There are seven Class I railroads ranging in size from just over 3,000 to more than 33,000 miles operated and from 2,600 to more than 46,000 employees.

Here are the seven Class I carriers: “The Burlington Northern and Santa Fe (BNSD); CSX Transportation (CSX); Grand Trunk Corporation, which consists of the U.S. operations of Canadian National (CN), including the former Grand Trunk Western (GTW), Illinois Central (IC), and Wisconsin Central; Kansas City Southern (KCS); Norfolk Southern (NS); The former Soo Line (800) owned by Canadian Pacific (CP); Union Pacific (UP).”

Of course, this can lead to a number of issues:

1. The Chicago region has a large number of at-grade crossings and long freight trains are a nuisance for many drivers, particularly in denser areas.

2. This requires a lot of space to transfer cargo. In recent years, the newer intermodal facilities have moved further out from the city of Chicago with new facilities in Rochelle (west of DeKalk, south of Rockford) and the Joliet Arsenal.

3. Freight tracks closer to the city can be congested, delaying passenger trains.

The trick for the railroads (and others?) is to remind residents of the Chicago how important railroads are for transporting goods. In recent years, there has some more advertising about this, particularly touting the greener use of fuel compared to trucking. But more could be done within the region to provide evidence that Chicago continues to be important partly because of this traffic.

Illinois redistricting also about capturing suburban voters

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Much of the press about redistricting in Illinois has highlighted how Democrats plan to increase their seats. But the Daily Herald offers an additional insight by suggesting that the redistricting is really about capturing suburban voters:

But even as political analysts poring over the new boundaries provide slightly different takes, one thing is certain: the suburbs, which saw booming growth over the last decade, were the prime meat in the proverbial fattened calf — filleted to produce congressional districts that would help assure a Democratic majority in the state’s delegation over the next 10 years…

“There’s been a shift in power,” Northern Illinois University professor Richard Greene said. “Because of the population shift, the Democratic core and the inner manufacturing suburbs are losing strength, as the outer-edge suburban communities are gaining substantially in strength.”

Democrats, political consultant Kitty Kurth said, want to continue to capitalize on their base — the largely Democratic voting bloc of Chicago, some of which has moved to the suburbs in recent years.

The new map appears to do just that, in some cases through odd-shaped districts that often start in solidly Democratic Chicago and extend into the suburbs through long, gnarled fingers. That essentially extends Democratic Chicago districts into traditionally Republican suburban ones, but not by so much as to put any Democratic majority at risk.

Traditionally, some of the suburban areas, particularly DuPage County, have been solidly Republican strongholds. While these figures are already changing somewhat, this redistricting might help push  these state offices further away from Republicans.

The article also goes on to note how the second Hispanic district in the state could be located in the southwest suburbs “centered around Aurora and Joliet.”

Such a move to control suburban votes would go along with commentary that suggests suburban voters are critical for national political outcomes.

Seeing the Chicago area’s “pre-European settlement vegetation”

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Here is a website that offers a look at the vegetation in the Chicago area before settlers really transformed the land. According to this article, the maps were created by looking at surveyor’s notes:

Nearly 200 years ago, long before global positioning systems, the land was surveyed with little more than a compass, a 66-foot-long metal chain and an ax to mark trees, said McBride. Luckily, surveyors also brought notebooks.

Surveyors’ notes slowly outlined gorgeous, ecologically diverse landscapes now largely lost. “As they divided each township into 36-square-mile sections, surveyors marked up to four ‘bearing’ trees near each section corner. They jotted down the trees’ species and other notes describing the landscape,” said McBride.

From these records, McBride painstakingly reconstructed the landscape: 65 percent prairie, 30 percent wooded, and at least 2.8 percent wetland. Trees flourished in northern townships; prairie dominated southern ones.

Things I think of when looking at this map:

1. Some of the first settlers in the Naperville area settled around the “Big Woods” area which I would guess is the big forested section on the map between Batavia and Aurora and east of the Fox River.

2. In the days before trains (with the first train line running out of Chicago through what is now Wheaton and West Chicago in 1849), the prairie land between southwestern DuPage County and Chicago could turn quite soggy. Hence, there was quite a network of plank roads in the Chicago region so that people could traverse the prairie.

3. There was quite a bit of prairie. How long did it take for most of that prairie land to disappear and be converted into farm land?

4. There was a lot of trees north of Chicago along Lake Michigan. I don’t know how much of that timber was cut down and ended up in Chicago but there were a number of timber/logging communities around Lake Michigan including in western Michigan and in Wisconsin. Perhaps the most famous of these communities is Peshtigo, Wisconsin, which suffered a tragic fire on the same day as the Great Chicago Fire in 1871.

5. In the area I am most familiar with, western DuPage County, it seems like the DuPage County Forest Preserve has grabbed some of the original timber areas. I wonder if these areas were harvested and then grew again.

6. It would be an added bonus if there was an overlay to this map of current development and vegetation. This would provide insights into how much has changed.