Port of Chicago Privatization Plan Draws Critics


Nearly seven years after the privatization of city parking meters, many Chicagoans are still fuming over the deal. Since then, a proposal to privatize operations at Midway Airport fell through, as did a similar plan at the Port of Chicago. But the port is trying once again.

The Southeast Side maritime and industrial site has put out a request for proposal to manage and oversee the port. But officials say they have learned their lessons from the parking meter deal and any agreement will be much different.

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TRANSCRIPT

Eddie Arruza: As far as maritime ports go, the Illinois International Port District, as it's officially called, is not visibly teeming with activity. If a visitor expects to see a constant flow of ships sailing in and out, that's not happening. The port's declining infrastructure makes it look almost abandoned. But its new executive director says the port should not be judged by its appearances.

Clayton Harris III, Illinois International Port District Executive Director: Does this port actually look like what I believe most people think a port looks like? Absolutely not. But this port, how it operates right now with everything that's going on, is the number one port in the Great Lakes.

Arruza: Indeed, the port is a major point of transit between the St. Lawrence Seaway and the Mississippi River.

Located near 95th Street and the lakefront, it was officially launched in 1958. And many of its original features remain, from the grain silos that need more than a little maintenance to railways that have long been out of service. It clearly needs a major infusion of funding, but the port is its own municipal corporation, separate from the city, and that, says the chairman of its board, limits its revenue.

Michael Forde, Illinois International Port District Chairman: The Port District is an entirely self-funding entity. We do not get any money from the city, we do not get any money from the state, we get no taxpayer money. We depend solely on our tenants and users of the port for our revenue. That level of funding is not enough to really execute on the potential that the experts see for the port.

Arruza: Last year, the Port District issued a request for proposals seeking "a private sector partner to acquire tenants, support the growth of existing tenants, and/or bring about facility improvements that enable commercial growth."

Forde: We are not looking to privatize the port, I know others have suggested that. We are not looking to sell the port. We are legally prohibited from selling the port. We are not looking to hand over control of the port.

Michael FordeMichael Forde

Arruza: But it's not the first time the port has tried to lease out its management and operations. In 2013, a tentative agreement with Denver-based Broe Group fell through at the last minute when port officials said the company made "critical changes in terms."

Forde: We are cognizant, I think of the lessons learned from some of these other P3 deals that are so unpopular and that have turned out not to be such great deals for the taxpayers.

Arruza: Among those pushing back on the port's latest privatization effort is the alderman whose ward includes the port.

Ald. Susan Sadlowski Garza, 10th Ward: The disinvestment in the port is on purpose because then they can come in and say, “Oh, the port hasn't been run correctly, we need to get a private contractor, a master leasee to run it so that it can be run correctly.” There's not been any investment put into it. They’ve never really given this port a chance to thrive and grow.

Arruza: Also blasting the port's move is the International Longshoremen's Association, the union that represens many of the port's workers. A union official recently told the port's board that "a for-profit based service provider or company focuses its energy, human and capital resources on maximizing the bottom-line returns with little or no loyalty toward its host community, little commitment to the creation of quality jobs ... or maintaining and upgrading the public's asset."

But the port's executive director who's been on the job only since May, says viability is the keyword for the port's future.

Clayton Harris IIIClayton Harris III

Harris III: The charge is to find viability and to keep it and maintain viability for the port. Now if that turns out to be privatization and is voted on or agreed to by the board, that's the direction we go.

Arruza: The port says it currently has nearly 30 tenants that use facilities to store everything from sugar to steel coils and lumber. The port adds that part of what's hamstrung revenue growth are long term leases–some dating back to the early 1960s–that long ago capped rents at levels far below present day rates.

But Alderman Sadlowski Garza says creative solutions, not privatization, should be pursued.

Sadlowski Garza: This could be a world-class port. When this port was born, my great-grandfather actually christened the first ship ever to come through this port so I have a vested interest. This is my legacy. I don't believe that privatization is the key to making this place successful. If we tap into the resources and the people that we need to tap into, this place can flourish.

Arruza: The Port District says it is currently in talks with several firms, but none has yet been chosen. The port's chairman says an original plan to have a signed agreement by mid-October is very likely going to be pushed back.

More on the story

Read the request for proposal issued by the Port District. The district's next board meeting is Sept. 16 where the public can comment on the privatization plans.


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