CHICAGO - The Illinois International Port District should be dissolved and its operations handed over to Chicago because it has failed to promote maritime commerce and shipping activities and instead is focused on operating a golf course, the Civic Federation of Chicago urged in a report this week.
The critical report from the local business-funded government watchdog group delivered a stinging assessment of the port district's activities and management with no significant construction project undertaken since Iroquois Landing, a freight terminal at the mouth of the Calumet River opened in 1981.
The district, governed by a board appointed by the Chicago mayor and the Illinois governor, has also done little to market itself or to promote economic investment with marketing, advertising, and promotion accounting for only about 2%, or $160,878, of the district's fiscal 2006 budget, the report said.
The 36-hole Harborside International Golf Center, which opened in 1995 on the site of a landfill generated $3.7 million, about half of the district's $7.3 million of revenues in 2006. But the federation's analysis found no proof that the district actually invests those revenues in the betterment of its facilities or to promote development of its lands along the Calumet that provides access to Lake Michigan.
The federation said operating a golf course as its primary business doesn't justify the district's exemption from property taxes or its control of a wide swath of public land and waterway assets.
"The Illinois Port District has failed to adapt to or harness the changes in the economy of northeastern Illinois," Laurence Msall, president of the Civic Federation, said in a statement. "Instead, the district has allowed the port's facilities to stagnate while it pursues a business wholly unrelated to shipping or the economic development of the Chicago Southland."
As part of its review, the federation reviewed the finances and activities of five comparable ports along the Great Lakes and St. Lawrence Seaway in Detroit, Milwaukee, Burns Harbor, Ind., Cleveland and Erie, Pa., and found that none are focused predominantly on recreational activities or entertainment facilities. Most port authorities in other cities collect most of their revenues from traditional port activities such as leases, rentals, contracts, and grants.
The review also charged that the district lacks transparency and openness to public scrutiny because information on its finances, board members and activities are not easily accessible or available on its Web site.
The district was first established in 1951 by state legislation to promote maritime commerce at the Port of Chicago which is located at Lake Calumet Harbor. The district in 2003 issued $15 million of variable rate revenue refunding bonds to refinance other loans that financed a clubhouse at the golf course. The bonds mature in 2033. In 2001, the district issued $8.5 million of Port Revenue Bonds so that a private-sector entity could acquire and construct a bulk storage facility on land leased by the district.
Given the district's failure at promoting its maritime mission, the federation report urges the General Assembly and Gov. Rod Blagojevich to dissolve it and hand control of its operations over to Chicago. The district's assets should also be transferred to local government agencies more "suited to operate them" such as the Chicago Park District, which manages public harbors along the Lake Michigan shoreline, and the Cook County Forest Preserve District, which manages open lands.
"The city has a clear stake in turning the Port of Chicago into a more vibrant center of maritime commerce and regional economic and industrial development. By reassuming the control of port lands it gave up over fifty years ago, the city of Chicago could provide access to greater financial resources and professional staff that would benefit the port and its mission," the report read.
The district did not return a call for comment but in an editorial that ran in a local newspaper yesterday, the district's executive director, Anthony Ianello, countered the federation's assessment, saying the organization had a "fundamental misunderstanding" of the district's business and to suggest the golf course is its primary business is "off-base."
Ianello called it absurd to suggest more money be spent on marketing as a way to boost shipping activity and he countered that the district's shipping-related revenues were up 9% over the last five years and more of its warehouse space is leased. He said the district generates more than $40 million in tax revenues for the city and state.
