Mayor’s plan to privatize port still afloat
BY FRAN SPIELMAN City Hall Reporter October 1, 2013 3:13PM
Mayor Rahm Emanuel September 17, 2013. | Chandler West/For Sun-Times Media
Updated: November 3, 2013 6:25AM
Mayor Rahm Emanuel’s plan to privatize, improve and market one of Chicago’s greatest untapped assets — the nation’s largest inland general cargo port — is still afloat, a top mayoral aide said Tuesday.
One day after the Colorado-based Broe Group “amicably suspended” exclusive negotiations on a 62-year master lease, Port Authority Board Chairman Michael Forde vowed to forge ahead with negotiations with Broe’s competitors.
The Broe Group, which had pledged to invest $500 million in port facilities over the next decade, could not be reached for comment.
“We had several very compelling proposals. Those bidders remain interested. We’re going to continue to negotiate with everybody who made good proposals in response to the RFP. That may include the Broe Group. Their press release left that possibility open. All that stopped was exclusivity,” Forde said, refusing to identify the snag.
“We remain very optimistic that we’ll be able to get a very good deal that maximizes economic development on the Southeast Side. If we can’t, we’re not going to do a deal. No deal is better than a bad deal.”
Last month, Emanuel grounded plans to privatize Midway Airport after one of only two remaining bidders dropped out.
On Tuesday, Forde stressed the difference between the port and airport deals.
“This transaction we hope to achieve is not about monetizing the asset. What we are most concerned with is maximizing job creation at the Port District and attracting capital investment,” he said.
What happens if negotiations bog down again? Forde said there is no Plan B.
“I remain optimistic that we’ll get Plan A. People in the industry have said what a unique asset this is [because of] its access by rail, road and maritime and its proximity to downtown Chicago,” he said.
When the mayor announced his privatization plan in late July, he told reporters that it would create up to 1,000 permanent jobs and 3,000 construction jobs.
The Port District, which has roughly $30 million in outstanding debt, would have received $1 million in annual revenues, along with ten percent of new revenue that came into the port.
Downtown Ald. Brendan Reilly (42nd), vice-chairman of the City Council’s Budget Committee, said he views the breakdown in negotiations with Broe as a sign the mayor is driving a hard bargain.
“The Emanuel administration did the right thing when they pulled the plug on the Midway deal because they didn’t feel they were getting good value for taxpayers. If it turns out the Port Authority negotiations bear no fruit, the administration should consider walking away again,” the alderman said.
Reilly said he is “not eager to privatize city assets” after the parking meter debacle. But, he acknowledged that the Port of Chicago desperately needs “hundreds of millions of dollars” in improvements.
“It’s an asset that’s been allowed to go to seed. It has incredible potential for Chicago. No matter what, the status quo has to change. Whether that comes through a good privatization deal or through the city finding alternate ways to invest, we need to maximize the potential of this vastly underutilized asset,” he said.
Over the years, the Port District has been accused of operating in the shadows without standards and focusing on patronage and recreation at the expense of commerce.
That has changed under Forde, who was rewarded with a $20,000-a-year appointment to chair the nine-member board after helping Emanuel beat back a residency challenge that nearly derailed his candidacy for mayor.
Forde started by returning the port authority to its core mission by choosing Kemper Sports to operate the Harborside International Golf Center, from which the Port District derives more than half its annual revenue.
The board also hired the Bank of Montreal to do a “strategic and capital needs study” of the Port of Chicago. And at Forde’s request, the General Assembly directed the state’s auditor general to conduct a management and financial audit of the Port District that was predictably and sharply critical of operations under the previous regime.