Posted on April 05, 2012 10:03 AM
City of Chicago Announces $7.2 Billion Infrastructure Initiative
On Thursday, March 29, 2012, the City of Chicago announced a $7.2 billion infrastructure initiative to improve transportation facilities, sewers, schools, and parks. It would provide $1.4 billion for O’Hare International Airport’s expansion program; $1 billion for the Chicago Transit Authority (CTA) to renovate 100 train stations and eliminate slow zones; $1.4 billion for replacing or relining 900 miles of pipe and 750 miles of sewer lines; and $300 million for purchasing new parkland and construction of recreational facilities. The plan would create an estimated 30,000 jobs over the next three years.
In his speech announcing the effort, Mayor Rahm Emanuel stated that funding had been identified and would not come from raising taxes. Rather, the investment program would be funded through a variety of sources, including “reforms, some through efficiencies, some through cuts in our central offices, some through direct user fees, and some from our Infrastructure Trust.”
The City of Chicago proposed the Chicago Infrastructure Trust on March 1, 2012. The trust would operate as a nonprofit corporation, pooling private and institutional investment funds with grants and bond proceeds. Using these resources, the trust would provide tailored financing packages to support public infrastructure projects. For its inaugural project, the City plans to work with private investors to finance $200 to 225 million to improve the energy efficiency of City-owned buildings. The ordinance establishing the Chicago Infrastructure Trust has not yet been approved by the City Council.
Other projects in the City’s infrastructure initiative had been previously announced with identified funding. For example, the $1 billion Red Line modernization project was announced in December 2011 and will be financed with a combination of federal, state, and local funds. Also in December, the CTA was awarded a $20 million federal Transportation Investment Generating Economic Recovery (TIGER) grant for Blue Line improvements between Damen Avenue and Belmont Avenue and the City Bike Share program. Additionally, a 25-percent water-sewer rate hike and accelerated investment program was announced in October 2011.
GO TO 2040 calls on the region to reinvest in existing communities, and to prioritize the maintenance and operations of the region’s ageing infrastructure. The City’s capital initiative makes strides in that direction and also promotes key infrastructure expansion projects that will support broad economic development across the region. While the full details on the plan’s financing are not yet available, it appears to rely on user fees and innovative private partnerships, both of which are consistent with the policies of GO TO 2040. CMAP looks forward to learning more details about the financing of the infrastructure package.