O'Hare runways part of Mayor Emanuel's $7 billion plan

Mayor Rahm Emanuel's announcement Thursday of a $7 billion program to overhaul Chicago's infrastructure included $1.4 billion to get two new runways built at O'Hare International Airport by 2015.

The mayor said the city will invest $1.4 billion in O'Hare over the next three years, creating 5,900 jobs and opening the two runways by 2015. 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.

“We must ensure that our airports remain launching pads for our exports and keep us linked to the world. Thanks to the vision and determination of both Mayor Daleys and the O'Hare Modernization Project, Chicago is very well-positioned,” Emanuel said. “We are doubling down on our strength and on O'Hare's modernization, because there is no way to imagine a modern Chicago without a modern airport system.

“We are well on our way to achieving this goal, building two new runways that will be ready by 2015. Both runways are built to handle the newest generation of aircraft that specialize in long-haul flights — so that Chicago can stay connected with markets in Asia, Latin America and Europe, and the rest of America.

“Our goal is to reduce delays at O'Hare by 80 percent and raise the airport's capacity by 300,000 passengers per year by 2015,” Emanuel said. “To help us accomplish this goal, I call on the airlines to begin planning with us today, so we can add a fourth and final runway.”

About a year ago, more input on future O'Hare construction, less immediate construction and an extra $155 million in federal funds helped persuade major airlines to put aside their objections to building a new southern runway. Leaders from United and American airlines pulled their federal lawsuit aimed at keeping Chicago from moving forward with its $3.4 billion O'Hare modernization plan.

As part of the deal, the city could move forward with $1.2 billion of the projects, while it wouldn't move forward with another $2.2 billion in plans until both sides meet again to discuss the need for further modernization. Projects that hadn't been agreed to yet included a new north runway and extension of an existing north runway as well as other taxiway improvements and construction.

After court battles that went all the way up to the Illinois Supreme Court, the city won the right to exhume and relocate the remains of about 1,200 people buried in a cemetery near Bensenville to make way for a new runway.

Also absent from the pact last year was a western terminal, estimated to cost about $2 billion. United and American opposed the terminal, expected to be used by smaller rival airlines.

The city and airlines agreed to meet again on the future of the remaining projects before a March 1, 2013, deadline.

Emanuel's overall plan for Chicago 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 $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.