The new chairman of Mayor Rahm Emanuel’s revamped, $1.7 billion Infrastructure Trust said Monday the Trust could be a vehicle to bankroll high-speed rail to O’Hare Airport.
“We’ve talked for, how many decades now about high-speed service to O’Hare? Those things can happen because there’s revenue that gets created from that enhancement,” City Treasurer Kurt Summers said.
“It doesn’t happen because all the sudden we have more access to municipal bonds than we had before. That’s clearly not gonna happen. It doesn’t happen because it’s some new idea under the sun. It’s not. It happens because we create a new source of financing that can be reliant on those things . . . The more premium the service, the faster it is, the nicer it is, the more you can charge, which means the more you can finance,” said Summers, the new chairman.
Former Mayor Richard M. Daley once hoped to persuade Chinese investors to build a high-speed rail system to O’Hare that would originate from a super-station the CTA spent more than $200 million to build.
It never happened, leaving the underground station looking like little more than an unfinished basement.
More recently, Emanuel characterized high-speed rail to O’Hare as a “game-changer to the economics” of Chicago. His new Aviation commissioner, Ginger Evans, called it an “essential piece of infrastructure” for an international city and suggested premium fares as “one option” to help pay for it.
On Monday, Summers pointed to the O’Hare express as one of 18 projects the revamped Trust plans to examine.
Other possibilities include: reviving a stalled plan to build new Olympic-sized pools at Chicago Public Schools and Park District fieldhouses; revamping Chicago’s 400,000 street lights; redeveloping the Uptown Theater and possibly delivering on Emanuel’s 2011 campaign promise to extend the CTA’s Red Line from 95th Street to 130th.
If the Trust decided to bankroll the Red Line extension, Summers was asked whether CTA riders who travel to the new end of the line could be asked to pay higher fares to guarantee a return for investors.
“It depends. You could also have a whole new set of concessions that are there and a whole new set of revenue sources. It doesn’t have to be transit or rider fees. It could be user- or service-based opportunities that are there, only enabled because you’ve made that enhancement,” he said.
In 2012, Emanuel persuaded a reluctant City Council to approve an Infrastructure Trust billed as a revolutionary change that would allow private investors to pump $1.7 billion into “transformative” infrastructure projects the city could not afford to build on its own.
Instead, the Trust has been more like a bust.
It finally got off the ground with a program known as “Retrofit One” to reduce energy consumption at city assets and by helping to bring 4G mobile data service to the CTA’s subway system later this year.
But that’s about it. And neither of those projects can be classified as “transformative.”
Now, Emanuel is hitting the reset button in hopes of delivering on his lofty promise. The overhaul comes at a time when the city’s crushing debt and junk bond rating has driven up the cost of city borrowing, making the Trust all the more important as a vehicle to fund infrastructure projects.
First Deputy Corporation Counsel Leslie Darling, who normally testifies before the City Council’s Finance Committee on multimillion dollars settlements stemming from alleged police abuse, is the new executive director of the Trust, replacing Stephen Beitler.
Emanuel is also expanding a five-member board into seven members and replacing all but one existing appointee: Chicago Federation of Labor President Jorge Ramirez.
Along with Summers, who will serve as chairman, are Debra A. Cafaro, CEO of Ventas; Miguel Zarate, managing partner of Marquette Associates; Carl G. Lingenfelter, chief administrative officer of Northern Trust Hedge Fund Services; Kym M. Hubbard, global head of investments for Ernst & Young; and Ald. Matt O’Shea (19th).
Among those being replaced is former Chicago Inspector General David Hoffman.
During debate about the shake-up at Monday’s meeting of the City Council’s Finance Committee, Chief Financial Officer Carole Brown acknowledged that the Trust has been so slow to get out of the gate.
“The goal of the Trust is to be self-sufficient over time, so that the projects fund themselves and provide a return to investors for themselves. That has been challenging,” Brown said.
“One of the challenges for the Trust is coming up with viable projects and identifying viable financing sources for those projects.”
O’Shea told his colleagues that Chicago neighborhoods “from Hegewisch to Sauganash and Mount Greenwood to Rogers Park” have “crumbling infrastructure” that desperately needs to be rebuilt.
“We’re gonna get things done,” O’Shea said.
Summers agreed that the “right leadership team” is now in place to start delivering on a vision so bold, former President Bill Clinton joined Emanuel in making the announcement.
“Some of the challenge has been, there’s been such a big mandate and such a big vision, it can be overwhelming,” Summers said.
“What we now need to do is refocus on what matters and begin delivering results that people can see, touch and feel and see how it impacts their lives. And the more of that we do — quarter-by-quarter, year by year — the bigger the impact and the bigger the opportunities and the larger the projects are that we can take on. We have to build credibility.”