Chicago closes on $99 million federal loan to complete downtown riverwalk

Mayor Rahm Emanuel’s plan to transform a six-block stretch of the downtown Chicago Riverfront into an enticing public space that will someday rival Millenium Park inched closer to reality Thursday.

It happened after City Hall closed on a $99 million federal loan that will finally allow the mayor to get moving on the long-awaited riverwalk build-out between Michigan and Lake.

“The city of Chicago’s downtown is the fastest growing downtown—both commercially and residentially—in the country. And that riverwalk will become the new park for downtown, which has grown by residential capacity [by] 38,000 people just in the last ten years,” the mayor said Thursday at a Chicago conference held by the Clinton Global Initiatives.

Outgoing U.S. Transportation secretary Ray LaHood, a former Illinois congressman, announced the loan as a “done deal” at a news conference in Chicago on March 28.

But, just like home buyers don’t get the keys to their new digs until the closing, the money isn’t released until the closing.

The $99 million loan is being made available to the city under the so-called “Transportation Finance Innovation ACT” (TIFIA) created to bankroll infrastructure projects “of regional or national significance” that might otherwise be delayed.

Chicago’s downtown riverwalk certainly falls into that category. It’s been on the drawing board for more than 20 years—ever since planning started to rebuild Wacker Drive—only to go through a series of fits and starts.

In a press release Thursday to announce the closing, Emanuel made no mention of how he intends to repay the 35-year loan, which has no payment schedule until construction scheduled to start next near is completed in 2016.

In a follow-up e-mail to the Chicago Sun-Times, mayoral spokesman Bill McCaffrey said a “significant portion” of the loan would be repaid with “docking fees” paid by tour boats using “two city-owned docks where Michigan Ave. meets the river.” The tour boat contracts were re-bid last year to boost city revenues.

The rest of the money will come from revenues generated by retail leasing, advertising and sponsorships, McCaffrey said.

“We are building thousands of square feet of indoor and outdoor retail space, and the rent from these and existing riverwalk tenants from State Street to Lake Shore Drive will be dedicated to repaying the loan,” he wrote.

“The city will install informational kiosks along the riverwalk that will also provide space for outdoor advertising. In addition, we will solicit private donations for sponsorships – similar to what has been done at Millennium Park.”

Three months ago, Transportation Commissioner Gabe Klein portrayed the city’s loan repayment plan as “extremely conservative.” Klein said he was certain revenues generated by tour boat fees, retail leasing, advertising and sponsorships would be enough to repay the federal loan.

Asked then whether the Chicago River was likely to see a lot more advertising and boat traffic to repay the loan, Klein said, “No. Any additional advertising would be very tasteful and very limited….[And] right now, it’s just using the existing two [boat] slips.”

The federal loan will help Chicago flesh out “conceptual ideas” and catchy names for each of the six downtown blocks that run along Wacker Drive and the Chicago River.

State to Dearborn would be known as “The Marina, with restaurants and public seating that allows people to while away their time watching commercial and recreational boat traffic along the river.

Dearborn to Clark would be turned into “The Cove,” featuring kayak rentals and a dock for “human-powered watercraft.”

Clark to LaSalle would be turned into a heavily-landscaped “River Theater” with a wide staircase to Upper Wacker Drive.

Kids who love to splash around in chlorinated and “zero-depth” public fountains would be able to do just that in the one-block stretch from LaSalle to Wells, to be known as, “The Swimming Hole.”

Wells to Franklin would be turned into “The Jetty,” described as a place to learn about the “ecology of the Chicago River” complete with floating gardens and piers for fishing.

And Franklin to Lake would be known as “The Boardwalk,” described as the site of an “iconic bridge” that would bring people from Upper Wacker down to the riverwalk level while surrounding by “floating gardens and landscaping.”

Former Mayor Richard M. Daley’s plan to build a San Antonio-style riverwalk initially called for the city to spend up to $50 million in federal funds to build a river-level boardwalk from Michigan to Lake that would have included 35,500 square feet of retail and restaurant space, along with docks for tour boats and water taxis.

When the work was done, the city would have turned the riverwalk over to a private management company.

But when Daley tried to tackle the project in one fell swoop, only one company responded to the request for proposals. City Hall decided to toss out the lone bid and restart the competition in smaller bites.

After filling in the “missing links” in the Wacker Drive riverwalk, the city agreed in 2009 to design the rest — even though Chicago taxpayers still didn’t have the money to build it.

The Daley administration issued a “request for proposals” from firms interested in designing the final phase of the riverwalk — the six-block stretch between State and Lake streets. It was those concepts that the city plans to follow.