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No entry, gentry: new rules for the Clybourn corridor

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At the Chicago Plan Commission meeting last month, a surprising thing happened. Every seat in the City Hall meeting room was taken, in most cases by a well-suited lawyer or developer. What's more, the people there seemed to be listening.

And for good reason. The issue before the commission--a seven-person advisory board--had to do with Lincoln Park, one of the city's few prospering neighborhoods and therefore a neighborhood that is near and dear to the hearts of developers. The commission was deciding whether it was in the city's best interest to protect 115 acres of industrial property along North Clybourn Avenue from the steady advance of residential and commercial development.

Alderman Edwin Eisendrath (43rd Ward), backed by planners, industrial real estate brokers, and union leaders, led the charge in favor of industry, asking the commission to control commercial and residential development in the area. He noted that some 1,700 jobs, currently paying about $35 million a year in salaries, were at stake.

"The people who work in the Clybourn corridor live in every ward of the city," says Eisendrath. "If conflicts with other land uses put these industries out of business, then we will not only cost the city one of its best sources of wealth, but it will have a disproportionately high impact on minority communities. Because these workers take their paychecks home with them, it would amount to a disinvestment in neighborhoods throughout the city. The reality is, not everybody here is going to get a job downtown in finance, insurance, and real estate."

On the other side were a handful of industrial-property owners from the area and their battery of lawyers, who argued that Eisendrath was offering them protection they do not want. Someday they may want to move, they say, because their buildings are too small, old, or obsolete. And they want the right to sell to whomever they choose--builders of shopping malls, condos, town houses, it doesn't matter--at the highest dollar the market will bear.

"I like doing business in Chicago," says David Schopp, chairman of U.S. Sample Company, the second-largest manufacturing employer in the area. "But I don't want to be restricted. I don't think it's government's role to say who I can and cannot sell to."

The commission's members listened rather impassively and then voted seven to zero in Eisendrath's favor. They recommended that the City Council establish the land between Clybourn and the Chicago River, bounded on the south by North Avenue and on the north by Webster, as a Planned Manufacturing District (PMD). It's a new zoning designation, proposed by Eisendrath and approved last April by the full City Council, that prohibits commercial or residential development in order to preserve manufacturing, and in all likelihood the city will adopt the commission's recommendation in this case.

"This is not protection," Eisendrath says. "This is government planning at its best. Did everybody get exactly what they wanted? No, compromises were made. But it was in the best interest of the city. That's why the commission voted for it."

Well, without diminishing the alderman's accomplishment, what else could the plan commission do? Like the Department of Economic Development and the Planning Department (which also endorsed Eisendrath's plan), they had no choice. The alternative was to do nothing--or as fiscal conservatives like to say, let the market run its course--and lose even more industries to the cheaper land and lower taxes of suburbia.

"There are industries that want to move here," says Eisendrath. "And Clybourn is very attractive for a lot of reasons. But if we let things go as they are, we'll lose them."

The surprise is that it took planners so long to realize Clybourn's significance, not to mention the threat it faced. A decade or so ago, it was just an aging industrial strip of steel mills, scrap yards, and warehouses that ran along the eastern edge of the Chicago River. That was before a few farsighted developers got the idea that it could be commercially and residentially developed.

Ridiculous, many observers scoffed; no yuppie in his or her right mind would want to live or shop along a smelly industrial corridor just a few blocks from Cabrini-Green.

Ah, but you overestimate the common sense of our market, developers argued--a fatal mistake for anyone looking to make millions in this business. The first visionaries were developers Tem Horwitz and Robert Matthews, who converted an abandoned piano factory at 1872 N. Clybourn into the Clybourn Lofts.

"I remember the debate over the Clybourn Lofts very well," says Martin Oberman, at that time 43rd Ward alderman. "They needed a zoning change from manufacturing to residential. A lot of the [industrial] neighbors opposed it, but the developer did a pretty good sales job, saying that there was no alternative use for the property, that no industry would move there. The residents went along, so I agreed to give them the zoning change, though there were some industrial owners who felt that once we let one residential in, the whole climate would change."

They were right. Within a year, the Clybourn Lofts had almost sold out. Suddenly the real estate pages of the daily newspapers gushed about the advantages of urban life in what locals call "upper Cabrini." In a matter of years, Oberman's office received at least seven requests for zoning changes (away from industrial) on sizable chunks of land. The strip along Clybourn became home to upscale stores, restaurants, small malls, movie theaters, even an outdoor beer garden that overlooks a scrap yard.

Some industrialists panicked. Residential and commercial properties are worth more per square foot than industrial property, they noted. Thus, as homes and stores replaced factories, property taxes rose, escalating industries' operating expenses.

Other conflicts emerged. Clybourn's early pioneers were not of sturdy stock. The sounds and smells of industry--coming from trucks, metal crushers, bulldozers--bothered them. They bombarded the alderman's office with complaints.

Worse yet, commercial and residential development meant a different set of environmental regulations, which greatly restricted industrial operations. "The noise standards for operating a factory next to a grocery store are more restrictive than for running one next to a scrap yard," says Eisendrath. "That only makes sense. But suddenly companies that had been in business for years, and had planned to stay in business for years, found that they would be in violation of the law."

The two camps were at each other's throats. You shouldn't have moved here if you can't stand a little dirt, some industry owners sneered. The hell with industry, developers and new residents countered, let's build houses right up to the river.

"We didn't have a policy to rationally deal with those early conflicts," says Oberman. Another participant in many of these early debates was Donna Ducharme, executive director of the Local Economic and Employment Development Council, a nearby not-for-profit group whose goal is to encourage industrial development.

"Developers said that commercial or residential was the only alternative because there was no [real estate] market for manufacturing," Oberman recalls. "One fellow wanted a zoning change that would allow him to convert a light manufacturing operation to residential. I called Donna Ducharme, and she said, 'Oh no, I have people looking for light manufacturing all the time.'

"So I said, 'I tell you what, Mister Applicant, I won't pass your zoning unless you give Donna 60 days to find some manufacturing people who will buy your building.'" Within a couple of weeks, the developer had changed his mind about converting to residential anyway. Oberman concluded that many of the developers' claims were unsubstantiated. "That's when I knew that we needed some policy."

By the time Eisendrath took office in 1987, things had flip-flopped. Residents, concerned by the increasing congestion caused by commercial development, began to think they might prefer industrial neighbors. (Thus Eisendrath's interest in establishing a PMD goes along with what many of his constituents want.) At the same time, hostility toward commercial development was waning in many industrialists. The money that developers offered them was too tempting; the costs and hassles of doing industrial business in a changing industrial corridor were too high. Many felt the lure to move, and if they did, they wanted top dollar for their properties. They no longer wanted protection from residential and commercial development; they'd become advocates of laissez-faire.

"I can understand their concern," says Eisendrath. "The area is changing. You may have sunk a lot of money in your facility, only to find out that a grocery store is coming next door. Without a plan, it's very uncertain."

As an example of the way in which matters can be worked out, however, he points to A. Finkl & Sons, a steel producer, the largest employer in the area, and a major proponent of the PMD. A year or so ago, Finkl's operation was jeopardized when a factory across the street closed.

"The owner was selling to a developer who wanted to put in a shopping center," says Eisendrath. "That would have put Finkl in violation of environmental regulations against noise pollution. I sat down with lawyers for Finkl and the developer and worked things out. Finkl will buy half of the property and use it for light industry; the other half will be all shopping." The light industry, which is by definition quiet, would separate Finkl's from the shopping area and act as a buffer, reducing the noise level. "It was a great compromise. It allows us to create new manufacturing jobs for the area. The developer was creative and cooperative, and became a supporter of the PMD."

Such compromises are not always possible, critics of the PMD contend. One property owner, Louis H.T. Dehmlow, told the plan commission that he wants to move his chemical-production company to the suburbs in order to be closer to his customers. Dehmlow said he could not finance the move unless he sold his property at the highest possible rate. Other property owners have similar complaints.

"My business is doing well," says Schopp. "Current projections are that we will outgrow our facilities by 1991. Then what? If I have to move, I'm going to be severely limited as far as to whom I can sell my property. The difference between the going price for commercial and industrial property is big. I want top dollar for my property. Otherwise, I'm being penalized, and that's not fair."

Oberman (a private attorney these days, who, by the way, represents Finkl) argues that the law makes no guarantee that a seller receive the highest price for his property.

"People are acting as though we took away a right or privilege, and that's not true," says Oberman. "We have zoning laws that limit what people can do with their property. That's how we protect neighborhoods from improper uses. Think of it this way. What would you do if your next-door neighbor decided to sell his house to Mobil Oil so they can stick a gas station there? You'd fight like hell. But to use this argument, your next-door neighbor would say, 'Of course they can turn this into a gas station. Otherwise, you're depriving me of my right to make money.'"

Eisendrath says the PMD ordinance he drafted in April takes these conflicts into consideration. The ordinance requires that the Zoning Board of Appeals (which might hear land-use variance requests even on property that's part of a PMD) "consider the probable effects of any proposed use on (a) existing manufacturing activities, including the potential for land use conflicts and nuisance complaints; (b) the number and types of jobs in the district; real estate values and taxes; traffic flow and parking; efforts to market the property for industrial use."

Once the City Council unanimously approved the ordinance last spring, Eisendrath proposed boundaries for the Clybourn PMD. Within the boundaries mentioned, "we have a core area and a buffer zone," Eisendrath explains. The dividing line is Kingsbury Drive, an industrial artery that runs parallel to Clybourn, between it and the river. In properties west of Kingsbury--the "core" of the district--residential, commercial, and retail development would be prohibited. The buffer zone runs, roughly, east of Kingsbury, a 74-acre strip in which commercial establishments (but not residential) would be permitted with ZBA approval.

Most observers figure that the Clybourn strip may be one of only a very few PMDs established. After all, a PMD's purpose is to protect industry from other kinds of development. And unfortunately for the city, there are few areas like Lincoln Park where developers are interested in building anything, whether industrial, residential, or commercial.

"Land-use planning for one neighborhood like this is only a first step," says Eisendrath. "Chicago has to learn to support its industry with programs and infrastructure. We have to help industry market their goods; we have to supply a safe climate for their workers."

Art accompanying story in printed newspaper (not available in this archive): photo/Jon Randolph.

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