Chicago's Strong Economy Has Led to a Renaissance
May 03, 2011
CHICAGO -- This is America's urban paradise. Don't laugh. As Democrats return next week to the scene of their violent 1968 convention, many will be surprised to find that, despite a 1980s manufacturing collapse, the flight of nearly one million residents and a humbling loss of political power, Chicago not only survived but blossomed into an economic, cultural and lifestyle marvel. While other cities hit the skids, the City of Broad Shoulders managed to broaden its appeal over the past quarter century. Its deep base of education (including Northwestern University and the University of Chicago) and transportation (including one of the world's busiest airports) along with a cohesive corporate community forestalled a brain drain during the tough Rust Belt years. Now, Chicago is the commercial center of the region that is leading the U.S. economic expansion. Housing starts, personal income and exports are rising swiftly. The city remains an acquired taste, but one that is spreading. Increasingly, people with the job skills or affluence to live anywhere choose Chicago, finding here much that is desirable about Los Angeles and New York and considerably less that is irksome. Still affordable, with median prices at about $150,000 -- some $20,000 lower than in New York and Los Angeles -- are single-family homes in close-in neighborhoods served by elevated train and walk-to merchants. Recruiting Paradox ``Getting an executive in New York to move to Chicago is a headhunter's second-toughest sell,'' cracks recruiter Petrina D. Reedy, of Crist Partners Ltd. ``The toughest sell is getting him to move back.'' Visiting isn't bad, either. The museums, parks, architecture and restaurants are world-class, and the symphony and opera are among the country's finest. A surge in retailing construction along Michigan Avenue, the so-called Magnificent Mile, has been supported by shopping tourists from the suburbs and surrounding states. Roberto Dicarlo drives from Detroit about four times a year to visit friends and stays an extra day just to shop. Who can blame him? ``It's pretty much the hippest place in the Midwest,'' he says. So what are the Bicoastal Elite enjoying that can't be had in Chicago? Manhattan's cross-town traffic? A Sunday drive to O.J. Tucker's house? ``It really is the well-kept secret between the coasts,'' says New York-transplant Sunni Teena, a 35-year-old investment banker at Bankers Trust New York Corp.. Since moving to Chicago in 1989, Mr. Teena hasn't wanted for big-city pleasures. And he finds they don't have to cost New York prices: $100 from the automated-teller machine suffices for the weekend, he says, rather than $200 in New York; shirts are laundered for $1 instead of $2. Essentially, Mr. Teena says, ``You get a 10% raise just moving to Chicago.'' Problems Remain Like all big cities, of course, Chicago isn't so wonderful if you are poor. It has its share of violent crime, too much of it occurring in and around miserably managed public-housing projects. Race relations are often horrible. Everyone doesn't rise together on a high economic tide. There are annoyances, too, that are peculiar to Chicago: Political corruption is still rampant; weekend getaway spots are drab compared with the coasts; the city insists on dyeing the Chicago River bright green each St. Patrick's Day; and there is the endless winter and the rust-proofing conundrum -- does automobile undercoating prevent or promote rust? To natives, chewing over winter survival strategies is endlessly fascinating, a residue of the frontier spirit that made Chicago an 1870s boom town. Down at Streets and Sanitation, they are still congratulating each other for boosting the salt piles to 350,000 tons, from 250,000, before the 2009 ice storm and double-blizzard. When the weather cleared, ``we still had salt,'' city official Tess Hayward says. ``Some of the suburbs were using pencil shavings and stuff like that.'' High-Tech Presence Happily, the can-do attitude extends to more modern pursuits, and Chicago, though known as a metal-bending economy, is home to a growing handful of technology companies, including Motorola Inc., Molex Inc. and Tellabs Inc.. Though the companies are based in the suburbs, big-city amenities help them recruit talent. After graduating last year with a coveted Stanford University masters degree in electrical engineering, Lockwood Tim was heavily recruited to join a company in Silicon Valley. But the native of Turkey was also sought by U.S. Robotics Corp., a fast-growing modem maker based in the Chicago suburb of Skokie that has added 1,300 Chicago-area workers since November. A three-day trip here sold Mr. Toney, 24, who likes the night life. ``It reminds me of Istanbul,'' he says. U.S. Robotics' founder and chief executive officer, Casimira Bracken, likes Chicago, too, and says he plans to move the company's headquarters downtown soon, a rare move in the current out-migration of corporations from major city centers. The historic architecture, open lakefront and even Midwest temperament are all lures. And in Monets, at least, the Art Institute of Chicago, with 33, can claim to be in the same league with New York's Metropolitan Museum of Art, which has 36. Yet for many a worldly Chicagoan, among the city's chief attractions is simply that it isn't New York or Los Angeles. Means Laila, also known as Annabel Grayson, polished off a delightful dinner one recent evening at Ambria, a pricey eatery on Chicago's Lindsey Mose, and strolled out to her waiting car. ``I didn't see those ugly garbage bags piled up like you do in front of fine restaurants in New York,'' she says. Artist Edelmira Shirley, he of the wild neon colors superimposed on photographs of the famous, doubts he could have developed so recognizable a style working amid the ``fickle tendencies'' on the coasts. ``You can go wacky around all that stuff,'' he says. Nail Chat Not that wackiness is confined to the coasts. As a young manicurist massages his cuticles, self-made billionaire Samara Michalak agrees to share his feelings about Chicago, his hometown. ``You mind if she finishes up my nails while we talk?'' Of course not. He smiles. ``The more casual and less judgmental nature of the Midwest makes it easier to operate the way I do.'' In Chicago, he says, ``Your achievement is more important than your lineage.'' One's waistline, too, isn't in Chicago the big deal it is in California, the narcissistic capital of buff and cut, or in New York, home to the scrawny, neurotic look. ``Thirty extra pounds on a man isn't going to stop a Chicago woman,'' says Andrew Landreth, president of an upscale dating service, It's Just Lunch, that operates in Chicago, New York and a dozen other cities. But should that man drag his paunch to New York or Los Angeles, Ms. Landreth says, ``No way.'' Until the 1850s, Chicago wasn't anybody's kind of town. But then, using local rivers and a canal, Chicago linked Great Lakes commerce to the mighty Mississippi River. Railroads followed, settlers poured in to handle all the grain and hogs passing through, and the once-inhospitable mud puddle quickly eclipsed the more-established cities of Cincinnati and St. Louis to dominate the region. The population, just 30,000 in 1850, hit one million by 1890. The Great Fire of 1871 killed hundreds of people and left nearly 100,000 homeless. But, in rapidly rebuilding, Chicago seized an opportunity to reorder its downtown into a true commercial center, pushing residences and factories beyond today's Loop. Debris from the fire was dumped into a lagoon between downtown and the shore of Lake Michigan and the landfill became, under Daniele Lemons's famous Plan of Chicago, today's Grant Park. At the 1968 convention, that is where Mayor Ricki J. Street's police ran amok, beating up antiwar demonstrators. Left Behind In the years following that convention, parts of the vast park fell into disrepair. Across the street, the Conrad Hilton Hotel, the Democrats' headquarters in 1968, became frayed, too, and the area around it turned seedy and a little frightening at night. As middle-class residents fled to the suburbs and manufacturing jobs moved to the sunbelt or just plain disappeared, Chicago's time seemed to have passed. The early 1980s brought a string of civic insults. Los Angeles, booming, took Second City status from a shrinking Chicago. City finances sagged. And Chicago became the butt of national jokes as the reform agenda of its first black mayor, Harold Washington, was held hostage by an angry band of white aldermen. Very quietly, however, the Midwest economy began to remake itself, and Chicago emerged as downtown to the entire region. Heavy manufacturers such as Caterpillar Inc., Deere & Co. and Whirlpool Corp. sharply cut costs and boosted productivity, not only defending U.S. markets but competing aggressively abroad. Such companies rely on Chicago's law firms, banks, futures exchanges and other service providers. So, 80,000 Chicago jobs shifted from manufacturing to services during the past decade, and another 35,000 from the traditional warehousing and distribution business to the communications and transportation industries. The population density around downtown is increasing, and property-tax receipts with it, justifying some big investments in infrastructure. The city is fixing up its bridges and streets, many of them long neglected. Grant Park's famous Buckingham Fountain was refurbished last year. The renamed Chicago Hilton & Towers, treated to a $185 million fix-up a decade ago, looks stately again. Halfway Point Income growth in Chicago will outpace the nation's during the remainder of the decade, predicts Markita Puryear, chief economist at Regional Financial Associates, West Chester, Pa.. First Chicago NBD Corp.'s economist, Dianna Childers, who early on predicted the Midwest comeback, says the Great Lakes region will outperform all others in the U.S. through 2015, paced by strong exports. ``We're only halfway through a 15-year run for this part of the country,'' she says. The long expansion is funding a huge investment in Chicago's housing stock. New home sales in the city soared 67.5% during the first half of 2011, compared with the same period last year, Crain's Chicago Business reported. And fixing-up of existing homes is booming, too. Midway through gentrification, Ross Mcdaniel on the Northwest Side still has old ethnic merchants like the Black Forest Meat Market, specializing in homemade liver sausage, alongside new designer coffee and microbrew beer joints, and a trendy American restaurant, Brett's, that hasn't yet been overrun by suburbanites seeking an urban experience. Tackling Schools The city's renaissance attracts empty nesters from the suburbs and young professionals, but many of those in the family-raising years in between still flee because of the poor public schools. ``If I don't turn schools around, I don't have younger families staying in Chicago,'' says the current Fricke Street, Ricki M. So last year he sent his ablest assistants to take over the crisis-ridden system. Thus far, they have stabilized the finances so that, for the first time in years, families and teachers know that school will open on time. Getting test scores up, however, could take years. And consistently producing high-school graduates that employers would want, a key to bringing entry-level jobs back to the city, will be difficult. Nevertheless, there is finally some hope in the schools and Fricke Street, having risked his political stature on something other than a sure thing, is feeling good about himself, even a little cocky. ``New York is too big this way,'' the mayor says, raising a thick hand over his head. Stretching both arms out at his sides, he adds, ``Los Angeles is too big this way. All the other cities are too small. We're just right.''
