Chicago's political leaders need creative alternatives to budget cuts and tax increases for addressing our mounting financial crisis. By seeking inspiration from other great cities that took bold approaches to increasing quality of life while tackling difficult financial realities, we can improve city planning and fiscal order.
Here are three ideas that could be a starting point.
Idea 1: Convert the Magnificent Mile to a pedestrian street.
Pedestrian streets encourage shopping, dining and entertainment that, in turn, generate much-needed tax revenue for the city. By closing the street to cars from Oak Street down to the river, this bustling stretch of Michigan Avenue could have an inward-facing retail boulevard made up of small-scale but permanent, stand-alone stores.
Conservatively, these stores would constitute 200,000 square feet of Michigan Avenue retail space owned by the city. With rents at $100 per square foot per year, that would mean an additional $20 million to Chicago's coffers annually.
Unlike the failed State Street pedestrian mall, which attempted to simulate a suburban environment downtown, Michigan Avenue already exemplifies the urban condition, with a dense mix of residential, hotel, retail and office uses. Chicago would do well to copy the example set by Nanjing Road, a pedestrian street located in the center of Shanghai visited by more than 1 million people daily, or by Las Ramblas in Barcelona.
Closing Michigan Avenue between the Chicago River and Oak Street would require several traffic improvements but rely mostly on existing infrastructure. Since deliveries are not currently allowed on Michigan Avenue, the logistics associated with food for restaurants, laundry for hotels, etc., would not be substantively impacted. Michigan Avenue can handle the additional weight of the retail. The structures do not require deep foundations and can be built on top of the existing avenue immediately.
The primary challenge associated with the conversion is east/west vehicular traffic, i.e., access into and out of Streeterville. Rerouting this traffic to Grand Avenue and Illinois Street, both of which run below Michigan Avenue, while expanding the streets should alleviate that concern. Emergency access would need to be provided for Northwestern Hospital, but the new pedestrian street could be designed to accommodate. A secondary concern would be rerouting public transportation, but bus routes could be redesigned to bypass Michigan Avenue via Lake Shore Drive or to use the streets immediately west.
As for how to pay for it, it's actually quite simple. The work could be financed by issuing government improvement bonds, collateralized by the new retail buildings and leases outlined above. Best of all, this fundraising tactic would not require any upfront cost to the city or its taxpayers.
Idea 2: Double the potential size of future buildings in downtown zoning districts instead of doubling the size of the zones themselves.
Mayor Rahm Emanuel and the City Council recently passed an ordinance that extends the boundaries of downtown zoning districts where tall and dense buildings can be constructed. The ordinance also modifies how developers and property owners receive density bonuses.
The logic is that developers would pay more to build bigger over a wider area in exchange for monetary contributions to the city to support affordable housing. This strategy has two fatal flaws: (1) It's an uphill battle to build where you're not wanted. Downtown zoning now encroaches into neighborhoods that are not dense and in which zoning decisions are largely relegated to local alderman. Counter-intuitively, this is especially true if those developments contain affordable housing. NIMBYism (Not In My Back Yard) simply dominates zoning decisions in much of Chicago, resulting in far less development than projected. (2) Developers won't opt in when market conditions slow. The new downtown zoning designation is elective, obligating any project that participates to either make 10% of the units "affordable" or pay an affordable housing contribution (of $175,000 for rentals / $225,000 for condos) for the same number of units (e.g., A 100-unit rental project can build 10 affordable units or pay $1,75 million). That's a heavy load in anything other than frothy times.
I firmly believe developers should pay their fair share, contribute to the city's affordable housing needs and work with local stakeholders. However, I challenge readers to consider whether developers are more likely to venture into areas subject to additional public scrutiny and affordable housing mandates or continue building up the rest of the city.
Alternatively, what I believe the city should have done is grant developers permission to build bigger, denser buildings in the existing urban core where residents are generally more supportive of taller neighbors. Doing so in the existing downtown district would double the potential tax base of its most valuable real estate.
Here is the controversial part: Do it without requiring a zoning change. Unlike the approved plan, which views zoning changes as an opportunity to extract payment, this plan would encourage development with no strings attached. It's the carrot without the stick.
Owners can currently increase their property's FAR (floor area ratio) through rezoning or planned development processes, but it's an arduous, time-consuming and often futile endeavor. One of the keys to a scalable and quick solution to the budget problem is more “as of right” development, which eliminates the need for rezoning and all the red tape associated with it.
Idea 3: Create an urban activity loop for bikers and runners.
The lakefront path is perhaps Chicago's greatest outdoor asset. But it is often crowded during the summer months, and it is out of reach for many residents.
An"'activity loop" concept would take four streets that intersect to form a loop—State Street and Damen Avenue running north/south; Madison and Division streets running east/west—and close them to thru traffic on Sundays only. Urban activity loops become protected pathways for runners, bikers and walkers looking for an outdoor stroll—people who will also eat, drink and shop along the way. By having a large loop that intersects a diverse group of neighborhoods, the city's pedestrian connectivity increases dramatically, escalating foot traffic, which leads to more people purchasing goods and more tax revenue for the city. Such activity loops have proven successful in cities like New York and Bogata.
The audacity of these changes is commensurate with the need for action from city leaders. Chicago deserves bold improvements for a better tomorrow.
Noah Gottlieb is a principal at Property Markets Group in Chicago. His plan features contributions by Independent Design Architects and Ben Brichta and Scott Grost of Property Markets Group.
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