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Obscure Chicago port agency to state auditor: Audit us

6-19-2009 The Tee Box Par 3 Fifteenth hole Port Course Harborside International Golf Course called 'Anchor' Harborside's signature hole. A

6-19-2009 The Tee Box on the Par 3 Fifteenth hole on the Port Course at Harborside International Golf Course called "Anchor" Harborside's signature hole. A 192 yrd par 3 from the Blue markers. Photo of Bob Kooney River Forest. Photo by Dom Najolia, Chicago Sun-Times

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Updated: July 26, 2012 6:08AM

Four years after being accused of allowing the nation’s largest inland general cargo port to “stagnate” and focusing on recreation at the expense of commerce, the Illinois International Port District is privatizing its golf course and asking the state’s auditor general to examine its operations.

It’s not often that a government agency that has operated in the shadows for decades shines the light on itself. But, that’s precisely what the Port District is doing under the direction of its new chairman, attorney Michael Forde.

Forde was rewarded with a $20,000-a-year appointment to the nine-member Port District board — and designated as its chairman — after helping Mayor Rahm Emanuel beat back a residency challenge that nearly derailed his candidacy.

Now Forde is trying to return the port authority to its core mission by choosing Kemper Sports to operate the Far Southeast Side’s Harborside International Golf Center, from which the Port District derives more than half its annual revenue. The board also has 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 has directed Auditor General William Holland to conduct a management and financial audit of the Port District.

Civic Federation President Laurence Msall said he doubts Holland will find anything different than the federation found four years ago, when it proposed that the Port District be abolished so its formidable powers could be transferred to City Hall.

“They are ignoring their economic development and shipping mandate and focusing on a golf course. And even those resources don’t go to promote port activities,” Msall said. “This is a wasted asset. It’s not being maintained or promoted. We’re not competing to bring in shipping activity. The majority of its funds go to operate a golf course. . . . And large amounts of land are fenced off from any sort of public access, while they hide behind a shield of homeland security. This is a government agency operating in complete secrecy with very little evidence that it’s benefitting taxpayers who authorize its tax-exempt operations.”

Forde said it was the Civic Federation’s 2008 report that prompted the Port District to blow the whistle on itself.

At the time, the Civic Federation noted that the Port District had “undertaken no substantial construction or renovation projects to improve or expand port facilities” since it built Iroquois Landing at the mouth of the Calumet River in 1981. Harborside International, just outside the Pullman neighborhood, was the “only major construction project” since then.

After analyzing district finances and comparing its operations to five comparable ports along the Great Lakes and St. Lawrence Seaway, the Civic Federation concluded that the Port District stood alone in being “focused on golf, rather than shipping” and port operations.

“This is not about whether we stave off elimination of the Port District. But the reputational aspect is important. When you have an organization like the Civic Federation criticize an agency’s lack of transparency, you take it seriously,” Forde said. “The place has a reputation of being secretive and opaque. This is about getting a third party to come in and scrutinize us, take a look at what we’re doing and tell us how we can do it better.”

The Port District has had a checkered past.

Under four Illinois governors, its chairman was John Serpico, a powerful Chicago labor leader who hobnobbed with mobsters and was subsequently convicted of masterminding a kickback scheme and using union funds to induce crooked bankers to provide himself and an associate with $5 million in personal and business loans.

Gilbert Cataldo, a Serpico associate and former executive director of the Port District, also was convicted of taking kickbacks to arrange a business loan.

Despite that sordid history, Forde said, “I don’t suspect anything specifically is going on. This is about making sure we’re doing everything as well as we can and, to the extent we’re not, to fix it.”

The Port District has an annual budget of $7 million and roughly 30 tenants that lease port facilities to bring in sugar, steel and other commodities.

The District owns roughly 1,500 acres of land around Lake Calumet as well as 190 acres at 95th Street where the Calumet River flows into Lake Michigan.

Harborside International Golf Center is actually a pair of 18-hole golf courses owned and operated by the Port District at 11001 S. Doty.

The courses are open to the public for $82 Monday through Thursday and $95 on Sunday’s and holidays. Audited statements for 2008 and 2009 show that $3.5 million — 45 percent of the Port District’s total revenues — was generated by Harborside.

In 2009, the Port District spent $3.6 million to repair and improve the golf center; $1.1 million on insurance, and $1.3 million on employees.The bulk of that money was spent at Harborside, which has more than 150 employees.

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