July 30, 2013
On July 21, 2013, the City of Chicago, State of Illinois, and Illinois International Port District announced the selection of a private concessionaire to operate the Port of Chicago for a 62-year lease. Over the next ten years, the deal is expected to bring in $500 million in private investment to improve the port's infrastructure and create up to 1,000 new jobs. According to an article in Crain's Chicago Business, the deal includes a minimum annual payment of $1 million from the concessionaire to the Illinois International Port District, plus 10 percent of any revenue above $4.5 million. Additionally, the deal will provide internship, job training, and other opportunities in conjunction with Olive-Harvey College. As described in a previous Policy Update, Olive-Harvey has a unique partnership with private-sector transportation and logistics firms to incorporate job training into its curriculum.
A Civic Federation report found that, despite being one of the busiest Great Lakes ports, the Port of Chicago operated at a loss throughout much of the 2000s and had not made a major capital improvement in three decades. In June 2012, the Illinois International Port District announced the completion of a study by BMO Capital Markets that outlined alternative structures for the port authority. That report recommended a long-term lease to a private firm as the best strategy to make capital improvements and better capitalize on the port's rail and highway connections.
The Port of Chicago is owned by the Illinois International Port District, a city-state agency that is self-funded, relying on rents from its tenants and fee payments. The District also owns the Harborside International Golf Center, which it leased to a private operator at the beginning of this year. The Port of Chicago has long been viewed as an underperforming component of the region's transportation system, and CMAP's freight cluster drilldown report suggests that targeted development of the port could expand the region's freight capacity.