Mayor Rahm Emanuel said Wednesday he’s prepared to sink his plan to privatize, improve and market the Port of Chicago, one of the city’s greatest untapped assets, after the exclusive bidder tried to pull a fast one.
Two days after the Colorado-based Broe Group “amicably suspended” exclusive negotiations on a 62-year master lease, Emanuel said he was prepared to walk away from the deal, just as he pulled the plug on privatizing Midway Airport.
The Broe Group, which had pledged to invest $500 million in port facilities over the next decade, could not be reached for comment.
“Sometimes the best answer on a negotiation is `no.’ And if they were trying to change the fundamental terms as it relates to economic investment and job creation that they committed to in the first place, `no’ was going to be the answer and `no’ is sometimes the right answer,” the mayor said.
Earlier this week, the mayor’s handpicked Port Authority board chairman portrayed the deal as still afloat. Attorney Michael Forde said the board got “several very compelling proposals,” that those bidders remain interested, and that negotiations would commence with all of them to get the best deal for Chicago taxpayers.
Emanuel sounded a different tune.
“They wanted a 60-day exclusive based on the goals they were going to hit. You can’t change the goals and expect us to say yes. My view is no is the right answer. This is a different day in the city of Chicago. We learn when there’s a mistake like the parking meters. We’re not going to repeat it here,” the mayor 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, has 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.