News & Politics » Miscellany

Industrial Displacement: Here Come the Gentry . . . There Goes the Neighborhood

Well-heeled residents are streaming into the Lakewood corridor. Property values are soaring. Manufacturers like Jim Blacklidge no longer feel safe walking the streets at night.



Visitors to the Lakeshore Athletic Club, at 1320 W. Fullerton, tend not to reflect on the prominently posted signs indicating that the club's parking lot is the property of the Milwaukee Road. Nor do they probably think much about the fact that the club itself was originally a large lumber and paper warehouse, reclaimed for recreational use. They are simply aware that, on days when the club posts a sign saying "Train Today / Do not park on tracks," their imported sedans may be towed.

Perhaps Lakeshore members are reflecting more on the definition of their pecs and abs than on their neighborhood's interrelated commercial, industrial, and residential functions. Aside from the possibility of cars being towed, their major concern is that, on days when a train comes through, they may have to park further away from the building, thereby wasting valuable time that could be spent on the Lifecycle or in a Hips, Buns, and Thighs class. They don't see those tracks--or the genealogy of the club building--for what they are: a constant reminder of what this area once was, and what transformations it continues to undergo.

Inconvenience to the sweat set occurs, at most, one or two days a week, whenever the Peerless Candy Company receives a shipment of sugar syrup. Peerless, on Lakewood between Schubert and Diversey, is the only paying customer remaining along this spur line of the Milwaukee Road, which more or less follows Lakewood Avenue from Clybourn to Belmont, at which point it turns northeast, culminating in what is now the VIP parking lot at Wrigley Field.

A little history might be in order here. At the turn of the century, the rail line extended well beyond the ballpark, carrying freight to Evanston and points north. But as the elevated railway system began to take shape (about 1907), the Chicago & Milwaukee Railroad sold the right-of-way north of Addison to an entity that was predecessor to what we now know as the Chicago Transit Authority. After the right-of-way changed hands, the line ceased to haul through traffic, but continued to operate as a local freight spur, serving the businesses that had grown up in the blocks adjacent to the railroad tracks.

Early on, many coal yards, which required rail service, populated the strip. But as coal declined as a fuel source, the coal yards were replaced by other businesses, mostly light industry--food processing, brewing, tool and die--not true "smokestack" manufacturing.

By the 1980s, hard times had befallen the railroads. In the 70s the Milwaukee Road filed for bankruptcy; by 1982 it had vacated the line north of Belmont, and by 1985, north of Diversey. The Minneapolis-based Soo Line, which acquired the Milwaukee Road's assets in its reorganization, has on several occasions attempted to abandon the money-losing operation still servicing the area south of Diversey. Jurisdiction over such matters lies with the Interstate Commerce Commission, but the ICC has repeatedly rejected Soo Line's petition, citing Peerless Candy's dependence on the rail line for its survival. Perhaps not incidental to the ICC's position is the backing of Chicago's Department of Economic Development, which in 1984 floated a $2.75 million industrial revenue bond issue that enabled Peerless to expand substantially.

According to "Where Workers Work," a publication of the Illinois Bureau of Employment Security, manufacturing businesses in the 60657 zip code provided some 5,038 jobs in 1969. By 1977, that figure had declined to 4,128, and by 1984, the last year IBES provided such numbers, to 3,145. (Although these figures encompass the entire 60657 area, the vast majority of these jobs were provided by businesses in the Lakewood corridor, between Diversey and Addison; there are few, if any, other manufacturing businesses located within the zip code.) Currently, the corridor provides an estimated 2,000 jobs.

It's not difficult to see how certain interrelated forces have caused the loss of jobs in the area. Residential development has proceeded apace in the Lincoln Park, East Lakeview, and DePaul neighborhoods for the last two decades, as the postwar suburban migration has partially reversed itself, and similar development in the contiguous Central Lakeview area is just a logical step in the neighborhood "reclamation" process commonly known as gentrification. The abandonment of the Lakewood spur north of Diversey removed one obstacle to successful residential development--having a freight train periodically run past one's front or back door.

The motivation on the part of manufacturing businesses to vacate is similarly easy to grasp: dollars and cents. An industrial property owner in the Lakewood corridor who purchased a site in 1970 for 25 cents a square foot may well be able to sell that same parcel for 100 times that much; property in the corridor is currently quoted at prices between $22 and $25 a foot.

What it boils down to is that manufacturing has moved out of the neighborhood and been replaced by residential developments. Since 1984, the City Council has permitted eight parcels of property in the Lakewood corridor to be rezoned from manufacturing to residential use, resulting in almost 250 new residential units scattered among the remaining businesses.

The industrial displacement phenomenon is currently favored as an issue for alarm among city-planning types nationwide; in Chicago, their attention has focused first on River North, and more recently on Goose Island and the Clybourn Avenue corridor, two areas of the north side that are more heavily and substantially industrial than the Lakewood strip has ever been.

But some observers see recycling unsightly industrial buildings into loft residences or replacing them with spanking new townhouses as wholly positive developments for the neighborhood, and for the city. They feel that heavy industrial land use should be shifted away from central locations, leaving these areas free for residences. Those holding this point of view tend to be residential developers, urban dwellers seeking higher-quality urban dwellings, and those living next door to converted factories who note their properties becoming much more valuable.

Others see the situation a little differently. Planning professionals point out that residential development encourages land speculation and drives up property values, rendering it difficult, if not impossible, for businesses to expand. The businesses that need to grow are obliged to sell, and many of those displaced find themselves forced not only out of the neighborhood but out of the city entirely, translating into lost jobs and general erosion of the tax base.

Still others argue that determining whether industrial displacement is "good" or "bad" is practically irrelevant; it is, they say, simply a natural evolution of the urban environment dictated by free-market forces. And free-market forces can be pretty tough to overcome without some rigid governmental regulation.

Compounding the plight of businesses that see residential development encroaching upon them is the attitude of their new residential neighbors. One might think that those who move into a converted industrial property do so with the knowledge that other industries will remain nearby, perhaps even as close as next door. The inference one might draw is that these new residents would respect the rights of use--within zoning and other regulations--of adjacent property owners. But according to observers like Donna Ducharme, one would be extremely naive to make that inference.

Donna Ducharme is executive director of LEED Council, a neighborhood economic-development organization affiliated with the New City YMCA. Although Ducharme's service area covers only a small part of the Lakewood corridor, it does include Clybourn Avenue and Goose Island, and so she is intimately familiar with the mechanics of industrial displacement.

She explains that the process has something of a domino effect: once one industrial parcel converts to residential, it becomes easier to push out the rest of the businesses in an area. New residents routinely complain about noise, truck traffic, odors, and other indicators of commercial activity. They care little that industry has occupied the area for decades before they arrived, because, she says, they "have a vision of change for the neighborhood that they hope will continue." Ultimately, businesses lose patience with having to field their neighbors' complaints and succumb to the pressure to sell out.

The Lakewood corridor, however, has deviated a bit from this model, possibly because the corridor doesn't resemble a typical manufacturing district. First, the abandonment of the spur line was a sudden development. But at the same time, this narrow industrial strip has been surrounded by residences for years, since the turn of the century. And for all of those years, businesses and residents have coexisted more or less peacefully. Until now, that is. With the loss of the railroad and the sudden advent of extensive residential development, changing patterns of use may also change what is appropriate for the neighborhood--in terms of its history, architecture, infrastructure, and the needs of the people who now live and work there.

Jim Blacklidge is president of Craftsman Plating and Tinning, which abuts the abandoned spur between Melrose and School streets; his family has operated Craftsman in the neighborhood for over 40 years. He says his business has operated compatibly with Lakewood area residents, but that he's begun to see his relationship with the neighborhood change dramatically. As more businesses leave, he says, those that remain are more vulnerable to a combination of forces that includes conflicting real estate interests, congestion, and neighborhood complaints. In short, Jim Blacklidge feels threatened.

Doug and Melinda Funkhouser are double neighbors of Craftsman Plating: they live on Lakewood, just west of the factory, and their scenic design business (making painted backdrops for photo shoots) is located in the building just east of it on School Street. They are expecting their first child in March (two other women on their block are also pregnant) and are therefore particularly sensitive to the quality of their living environment. On his way to and from work this summer, Doug noticed clouds of foul-smelling white smoke billowing out of Craftsman's open garage doors on a number of occasions. He says he called Blacklidge to inquire about this but that his phone calls were unanswered, so he reported the incident to the city's Department of Environmental Controls.

Jim Blacklidge says he has never received any calls from the Funkhousers, and that the first he heard of their complaint was when he received a citation from the city for possible violation of air pollution control regulations. He says that another complaint was filed anonymously with the federal Occupational Safety and Health Administration questioning whether Craftsman was providing a safe work environment for its employees. (Doug Funkhouser admits to having filed the complaint with OSHA, but counters that it was only after he brought up the issue with the authorities and an EPA inspector visited Craftsman that he noticed the factory running its air filtration system full-time.)

Blacklidge calls this harassment. He says his ventilation and air filtration systems comply with EPA standards and that he has violated no city air pollution ordinances. He thinks it rather perverse that he has been called up on air pollution charges in light of his service as a liaison between the plating industry and the EPA on various pollution control issues. He points to several framed certificates, from both the state and federal EPAs, on the wall of his office that attest to his leadership. An area realtor, Blacklidge reports, has been canvassing his neighbors, telling them that their property values would skyrocket if they were able to put the plating company out of business. "That's immoral," he says.

Blacklidge knows he could turn a substantial profit on his real estate if he were to sell, but he has no intention of doing so. He cites not only his own substantial capital investment in the property but his role as an employer. "Seventy-five people work here, and at least half of them live in walking distance from the factory. We've already made concessions to the neighbors, like discontinuing our night shift because people complained about the noise and the trucks unloading at night."

Even if he wanted to sell, he says he faces the dilemma of many small businesses in similar circumstances: there are few options for them to consider in moving. Not only can relocation be expensive , there is a paucity of industrial property, especially for small businesses, on the north and northwest sides. Although substantially more space is available on the south and west sides, those are not reasonable alternatives for businesses like Craftsman that have a strong local north-side base. "We intend to stay for at least ten years," he says.

Another business that has incurred the wrath of neighbors is Small Assemblies, a metal foundry on West Henderson. Dorothy McMahan lives next door to Small Assemblies. She also is president of the North Central Lakeview Neighbors Association. Although she has lived in the neighborhood for almost all of her 67 years, she feels the conflicts between residents and industry are growing worse as time goes by, and she is not one to keep quiet about such conflicts.

Mrs. McMahan has complained in the past about operations at Small Assemblies--open vats of molten aluminum and extrusion machinery that employs vibrating hydraulic presses. She blames officials of the Daley administration for allowing this allegedly nonconforming use to happen, and says it's gone on so long that attempts to intervene now are meaningless.

Her biggest complaint, however, was recently dealt with to her satisfaction: Small Assemblies had obstructed the alley (created by the abandoned spur) that provided access from her block of Henderson to Racine. The barriers the company had put up effectively made that block of Henderson a dead-end street; residents were understandably concerned about how that fact would affect emergency vehicles attempting to access their street. Although Small Assemblies removed the barriers after some heated sessions with city officials, Mrs. McMahan is still unhappy with the company, and wonders how the residents in the townhouses proposed for the former Racine Fuel site (directly to the east of Small Assemblies) will deal with the business and its owner, Vince Blakely, when they move in.

Mrs. McMahan is nothing if not excitable about the issue. "How dare these crybaby industries accuse the residents of chasing the businesses out?" she practically screams. "They left because the railroad left. There's nothing vicious or malicious going on," she says. "It's progress." Vince Blakely did not return phone calls, but Jim Blacklidge reported that, to his knowledge, Small Assemblies has no intention of relocating.

Some don't share Mrs. McMahan's views on what constitutes "progress" and are trying to do whatever is possible to help industry remain. One method is to legislate. While in office, 43rd Ward Alderman Marty Oberman initiated legislation that would allow the City Council to create protected manufacturing districts (PMDs) where zoning changes from industrial to residential uses would be prohibited or strictly controlled. Oberman's successor, Edwin Eisendrath, continues to sponsor the legislation; currently it is in committee, but insiders give it a good chance of passing. If it does, it may well be able to protect Goose Island and the Clybourn corridor, but time may have run out for Lakewood as it did long ago for River North.

David Mosena, deputy commissioner at the Department of Planning, explains why. "PMDs are effective where reinforcing the existing industrial zoning makes sense," he says. A number of factors determine what "makes sense." First, he points out, is the scale of the district. Second, there should be an infrastructure adequate to support industry. And third, the existing industry should be worthy of protection: it is more reasonable to assist "sunrise" industries--those thriving and growing--than "sunset"--those on the decline.

Regrettably for thriving industries like Craftsman and Small Assemblies, the Lakewood corridor lacks at least one of those characteristics: one would be hard-pressed to define the one-block-wide strip as a "district." And the fact that so much housing is already present also creates problems. For one thing, as the remaining businesses are increasingly interspersed with housing, they become less unified in purpose and less able to withstand neighbors' complaints. Extensive residential development also increases the amount of automobile traffic in the area, making truck access and efficient deliveries more difficult. Furthermore, attracting new "sunrise" businesses to the area when others have moved out is almost unthinkable. Not only are land prices too high for industry, but industries are generally about as happy having residential neighbors as residents are to have a factory next door.

Short of a PMD, there's not much left for public officials to do. The Jane Addams Resource Corporation (JARC), another neighborhood economic-development organization that services the Lakewood corridor, is attempting to help businesses stay afloat and in place. Susan Matteucci, who coordinates Lakewood corridor activities for JARC, points out that those who look at the issue purely in terms of free-market forces are regrettably indifferent to long-range impacts. Although businesses may reap enormous profits by selling, they are still faced with the relocation dilemma if they intend to stay in business.

Matteucci says that her organization is looking for options to assist these industries but is not very specific about what those options might be. They may include helping businesses to relocate elsewhere within the city limits, perhaps in newly established urban industrial parks, and instituting programs, like some in other cities, that compensate businesses for relocation expenses when they are forced out by residential development. JARC (as well as LEED Council) is also participating in a progam investigating ways to preserve older industrial buildings, underwritten by the National Trust for Historic Preservation and administered by the Chicago Association of Neighborhood Development Organizations. The program is somewhat limited, however, as it primarily stresses architectural rather than industrial preservation.

Matteucci also makes the point that residents who look forward to their property values increasing as businesses vacate often do not consider how higher property values may play havoc with their property taxes. In a rather ironic twist, residents might face relocation dilemmas similar to those the displaced industries encounter. But 44th Ward Alderman Bernie Hansen discounts such concerns, citing a high degree of home ownership in the blocks adjacent to the strip. He says, "You wouldn't believe how many calls I get from homeowners [in the corridor] asking for help in getting home improvement loans. These people aren't about to cash in."

JARC, the city's Department of Economic Development, and Bernie Hansen's office are all committed to helping retain whatever industries want to stay in the city, particularly if they are compatible with other land uses in the neighborhood. Hansen has assisted the Kimberly Rose Company (now KR Industries) in finding a new location at Lake and Artesian. He notes that because it relocated within the city, KR was able to take advantage of a federal economic development program that offers displaced business owners subsidies (50 cents per square foot) on purchases of other urban industrial properties.

Hansen has also appropriated a substantial portion of his ward's discretionary general-obligation bond funds for the resurfacing and improvement of Lakewood Avenue in a manner compatible with both business and residential use. And Broucka Sarnoff of the city's Department of Planning is quick to emphasize that when the residents and the alderman raised the issue of improving the street, the design by the Department of Public Works was sure to accommodate both automobile and truck traffic.

If Hansen doesn't appear to be overly aggressive in supporting industry in the Lakewood corridor, it shouldn't come as a complete shock. Aldermen are responsible to their constituents; they're the ones who keep them in office. And Bernie Hansen's constituents do not, in general, have industrial protection high on their list of political priorities. Ron Sable, Hansen's unsuccessful challenger in November, was a vocal critic of Hansen's mostly laissez-faire attitude on industry; it is no coincidence that Sable's power base was centered far away from the Lakewood corridor precincts.

Those who favor the free-market analysis will ultimately argue that what happens in the corridor will be, and should be, dictated by pure economics, or what Dorothy McMahan calls "progress."

Certainly the fate of the neighborhood hasn't been much ruled by aesthetics. Projects like the recycled Brewery apartments at Fletcher and Lakewood do preserve the existing physical appearance of the neighborhood; unfortunately, not every old industrial building is as well suited for conversion into peachy lofts. But in an area where one of the major questions is appropriateness, the new housing produced is sorely insensitive to context. Hawthorne Court, on Racine between School and Melrose, is an example of the clapboard-sided, gabled, San Francisco-ish town houses that have been popping up with alarming frequency throughout the DePaul and Lakeview areas. They fail to make any connection with the adjacent housing stock--masonry cottages, two- and three-flats, and apartment blocks. (Fitzgerald Associates, which has been designing most of these, might take a look at Pappageorge & Haymes's elegant Greenview Passage development for a clue to what could have made more design sense.) The only encouraging note about Atlantis/Kenard, which developed Hawthorne Court and the similar Park Lane project at Southport and Schubert, has been its practice of commissioning murals by artist Tom Melvin to decorate its sales pavillions. It is unfortunate that these are only temporary structures, because they are a more lively addition to the streetscape than the permanent buildings under construction beside them.

But that, as they say, is another story entirely. If the market fancies Victorian charm, the developers are going to supply Victorian charm. The final question seems to be: who controls the neighborhood in a "city of neighborhoods"? In Lakeview, the control seems to lie with the people who live there and the real estate developers providing them with places to live, not with those whose concern is wider, with the greater good of the city.

The Lakewood corridor may be an anomaly because of its peculiar configuration and the misfortunes of the Milwaukee Road. But there are dozens of businesses in industrial areas throughout the city that feel threatened in the way Craftsman Plating does. And although Central Lakeview residents seem confident that their neighborhood--and their lives--will be enriched by the new residential development, if repeated elsewhere, that phenomenon could make the city a poorer place overall. But perhaps the Lakewood corridor can teach us some good, hard lessons that will help save places like Clybourn Avenue and Goose Island from the onslaught of "progress."

Art accompanying story in printed newspaper (not available in this archive): photo/Kathy Richland; illustration/Carl Kock.

Add a comment