Long-neglected Port of Chicago hopes to spur economic growth

For 15 years, Chicago has tried and failed to win a federal grant to rebuild the principal dock at its main Lake Michigan port.

During this time, the 113-year-old dock has never stopped crumbling.

Dark vertical cracks appear at several points along its 3,000-foot facade. They get wider and deeper as they reach down into the Calumet River, likely releasing toxins from blast furnaces and coke ovens that operated on the site for decades.

Sinkholes have also opened along the concrete deck of the dock, according to the Illinois International Port District, the dock’s owner. One is big enough for a minivan.

If the Calumet dock falls apart completely, it could cause a breach in an adjacent U.S. Army Corps of Engineers landfill and send 40 years’ worth of toxins dredged up from the river gushing into Lake Michigan, according to a 2023 grant proposal by the port district. A spokesman described this as a worst-case scenario.

But in 2023, the Port of Chicago is not just a scar on the city’s shoreline and a threat to the environment. It’s a drag on economic growth.

Sitting at the far southeastern edge of the city, just east of the Chicago Skyway Bridge and only 1,500 feet from the Indiana state line, the dock can’t bear enough weight to do what Duluth and Cleveland can do: export containers on ships bound for overseas. It can’t do what Burns Harbor and Milwaukee can do: import wind turbine blades from Europe or Asia.

“We may explore handling containers in the future,” said Erik Varela, executive director of the port district. “But we can’t do that type of thing when our dock is littered with sinkholes, when our warehouses need new roads, when their roofs are leaking and when they may not have enough lighting to operate safely.”

[ Chicago’s international port looks for funds to improve its facilities and attract more shipping business ]

Repairs could allow the port to handle more shipping, Varela said, and give him a chance to boost port tonnage by more than 50%.

“Right now, we’re just trying to do some basic maintenance,” he said.

Since its inception, the port has been hobbled by shifting U.S. trade patterns, the collapse of the city’s steel industry and penny-pinching by both public and private operators.

The story of how it sank into such neglect is pure Chicago.

In 1871, the city’s one-of-a-kind water link between the Great Lakes and the Mississippi River helped make it the country’s busiest port, one that lured more ships than New York, San Francisco, Philadelphia, Baltimore, Charleston and Mobile combined, according to the Encyclopedia of Chicago.

But today’s Chicago port has been enfeebled since the day the Illinois legislature defined its legal powers.

When lawmakers set up port districts statewide in 1951, anti-Chicago downstaters helped bar the Illinois International Port District alone from levying taxes. This forced the Chicago port to make money only by charging private carriers to dock or by leasing them land and buildings, just like O’Hare International Airport.

But O’Hare revenue grew much faster than the port as air travel surged. America was also falling in love with highways and trucks at that moment, and trans-Pacific trade with China eventually came to dwarf traffic on the St. Lawrence Seaway.

To make matters worse, the federal government then lumped all its transportation grants together, said Steve Fisher, executive director of the American Great Lakes Ports Association. This forced airports, highways, railroads and transit agencies to compete for the same infrastructure dollars as ports, he said.

The Chicago port never had a chance, even for federal money being spent a few blocks away.

The state also refused to provide construction funds for much of the Chicago port. In contrast, Indiana built its Burns Harbor port to lure a steel mill.

When companies began moving into the Chicago port, some had to build their own warehouses, and construct or repair their docks, Varela said. In return, the port gave them long-term leases with rates that sometimes didn’t cover the cost of inflation.

The potential economic loss was huge since a dollar from 1958 is worth less than a dime in today’s dollars.

Starting in 1980, the sudden collapse of the Calumet-area steel mills sliced the port’s revenue and political clout even more.

And at this moment of great peril, the port was in the hands of a labor boss with reputed ties to organized crime.

John Serpico ran the port from 1979 to 1999. A top official in the Laborers’ International Union of North America, Serpico was a prolific fundraiser for the Republican governors and Democratic mayors who appointed him.

The port district is governed by a board made up of five members appointed by the mayor and four by the governor.

Serpico was convicted in 2001 of improperly using his influence over union funds to obtain millions of dollars in personal loans from banks.

[ Ex-labor boss guilty in fraud case ]

Illegal dumping in and around the port reached its peak during Serpico’s tenure, said Ders Anderson, the greenways director for Openlands, an environmental group.

Harold Washington came into office hoping to rescue the Calumet steel industry, said Scott Bernstein, founder of the Center for Neighborhood Technology, an environmental group. He wound up focusing more on tourism and leisure.

One of Washington’s advisory committees mulled using port district land for a World’s Fair that never happened. The mayor went along when the Sanitary District of Chicago pressed to build a 36-hole golf course on a landfill at the port, Bernstein said.

Richard M. Daley wanted to build Chicago’s third airport on port property. But when Springfield Republicans blocked the plan, then-Gov. Jim Edgar threw his support to Peotone, in Will County.

Rahm Emanuel never stopped trying to privatize the port. Lori Lightfoot decided to keep it, but this required more detailed cost assessments so it could compete for state and federal infrastructure grants, Varela said.

[ City’s Port of Chicago privatization contract isn’t fully formed ]

In addition, the port district published its first-ever strategic plan last year.

And Lightfoot’s efforts have slowly borne fruit.

Since 2019, the port has received $32.4 million in state, county and city funds to repair its transit sheds, roads and rail spurs.

Just four years ago, the U.S. Department of Transportation started offering port-specific grants, and the port district is now seeking a $34.5 million federal grant to rebuild the Calumet River dock. In support of this effort, the state has agreed to contribute another $13 million, and North American Stevedoring Inc., one of the port’s biggest tenants, has promised $5 million.

Brandon Johnson, Chicago’s new mayor, hasn’t yet met with Varela but said in a statement he’s looking forward to doing so. The mayor views the port as a critical economic asset for Chicago and supports its effort to attract and retain commercial shipping, the statement said.

The new 10th Ward alderman, Peter Chico, said he had one private meeting with Johnson but the port didn’t come up. He’s had one introductory meeting with Varela.

For now, Chico said his main goal is to increase public awareness of the port by opening up more recreational opportunities. This got harder when razor wire and guard shacks appeared at all U.S. ports after the 9-11 terrorist attacks.

To open up the port, Chico said he welcomed a successful effort by U.S. Rep. Robin Kelly to secure $844,800 in federal funds to plan a bike path near Lake Calumet.

“Here in the 10th Ward, most people don’t understand the port. There’s not much interaction,” Chico said. “So having more public places for people to come and enjoy it is really, really key.”

Juanita Irizarry, executive director of the environmental group Friends of the Parks, pointed to a deeper set of problems.

“The Southeast Side is out of sight and out of mind for a lot of people, and we’ve gotten used to the idea that certain communities will be our sacrifice zones,” she said.

[ Fiercely proud of their home, residents of the Southeast Side — long a toxic dumping ground — are rising up against polluters ]

In neighborhoods close to the port, the median household income is $40,876 per year, according to U.S. census data cited by the port district. That’s 30% less than the rest of Chicago.

According to U.S. census data, 98% of the residents are Black or Hispanic and their median age is 34.

With five interstate highways nearby and all six big North American railroads converging on Chicago, the air they breathe ranks in the 96th percentile of all U.S. census tracts for the most diesel soot.

In March, Irizarry’s organization filed a federal lawsuit to stop the Army Corps from storing more toxic sludge at the mouth of the Calumet River. The Alliance of the Southeast, another activist group, joined the lawsuit.

[ Community groups sue to stop toxic waste dumping on Southeast Side lakefront land designated for park ]

“We have a hard time imagining that they’d put a toxic dump right next to Lincoln Park,” Irizarry said.

The 200-acre Calumet Park, one of the city’s largest, is on the lake just 1,400 feet south of the landfill.

The crumbling port district dock at the mouth of the river threatens to inflame this legal battle because it butts up against the Army Corps landfill. If the dock falls apart completely, according to the port district, it could damage the landfill and cause “a collapse of dredged sediment contaminants” into the lake.

The Army Corps has been storing and filtering sediments dredged up from the river in the mostly submerged, 45-acre landfill since 1984, according to the lawsuit.

When the landfill opened, the Army Corps promised the Illinois legislature it would keep adding sediments to it for no more than 10 years, according to the lawsuit. After that, the site was to be turned over to the Chicago Park District.

Neighborhood groups have since blocked the additional landfill sites the Army Corps wanted along the river. So now the Army Corps wants to keep using its so-called Confined Disposal Facility for another 20 years, and to build it higher.

“Siting a 25-foot tower of industrial waste at the Lake Michigan shoreline during a time of rising water levels, more intense storms, and heavy wind and wave action exacerbated by climate change is not a good plan,” said Howard Learner, executive director of the Environmental Law & Policy Center, which is handling the lawsuit.

Learner said the Army Corps had planned to start preliminary work on the expansion this summer. The Army Corps backed off, he said, after the Illinois Environmental Protection Agency said it needed more time and a public hearing before issuing permits.

Matthew Nies, a Department of Justice spokesman, declined to comment on the lawsuit.

Spokesman Jacob Zdrojewski said the stone the Army Corps uses to encase the landfill is helping support the port district’s dock. In any case, Zdrojewski said, “the failure of an IIPD dock wall segment will not pose any risk to the structural stability” of the landfill.

Any further delays mean the Army Corps will have to stop dredging, since it has no place else to put the river’s toxic sediments, Zdrojewski said. This could disrupt commercial shipping, he said, since sediments will continue to build up in the river.

Some ships already touch the river’s bottom with their keels as they approach the dock, Varela said.

Anderson of Openlands hopes the lawsuit will force the Army Corps and the city of Chicago to consider other options.

For example, Anderson said the city should think about dewatering the sediments and shipping them along with the rest of its toxic garbage to the sprawling landfills it uses now in rural Illinois. The Army Corps has already used this approach in East Chicago, he said

The city should also consider an ordinance requiring the companies operating along the Calumet to cap their docks with cement or asphalt instead of gravel and to clean them regularly, he said. This would prevent chemical residues from their operations — toxins such as chromium, copper and zinc — from winding up in the river in the first place.

Most of the docks, including at the port district, are built on 10 feet of landfill composed mostly of slag and other iron-making remnants, he said.

Anderson acknowledges the pain associated with these choices.

“The Calumet region had a huge employment base up until the 1970s and then it started getting hammered,” he said. “Plenty of companies dissolved and walked away.

“For city leaders to start hitting the remaining industries hard in terms of water pollution is not an easy thing,” Anderson said.

“But if they don’t, they’re just passing the buck to the next generation,” he said. “Eventually, all this pollution will have to be cleaned up.”

Varela sees plenty of opportunity for the port to be a linchpin of Chicago’s green future.

[ Lawmaker pushes for Chicago to join the race for 1st offshore wind farm on the Great Lakes: ‘This is not pie-in-the-sky.’ ]

When the Illinois House endorsed plans for a Lake Michigan offshore wind farm in April, lawmakers specified that the Chicago port would be the logical place to unload turbine blades from overseas.

Varela said he hopes the wind farm would deliver its electricity to the port too. He could then direct it to the city’s power grid or use it to make the port into a giant refueling stop for electric cars, trucks, trains and vessels.

He could also use it to produce hydrogen for these vehicles or for nearby steel mills looking to cut their carbon dioxide emissions.

For now, the Calumet remains a place of stunning visual contrasts.

Some of the busiest railroad tracks in the country cross the river on a Norfolk Southern Corp. lift bridge designed during the same era and with the same all-black, erector-set technology as the Eiffel Tower.

[ Truck and rail backups clogged roads, creating more pollution and raising health risks for Chicagoans near freight corridors ]

Beneath the bridge, gray-speckled cormorants disappear for a minute or more as they prowl below the surface for their supper. All around, white mountains of salt, yellow piles of sulfur and abandoned factories from the dawn of the industrial age still stand along the river.

One of the strangest sights, familiar to anyone who drives the Bishop Ford freeway, is a Great Lakes freighter called C.T.C. No. 1.

With its name scraped off, its main front windows shuttered, and its light-blue hull stained with rust, the ship has been parked between two grain elevators at the port since 1982. No water is in sight, though, because vegetation along the freeway blocks the view.

The owner has considered scrapping the ship but in the meantime must pay $75,000 in annual storage fees, Varela said.

The northernmost grain elevator is entirely vacant. Varela said he’d tear it down if he had an extra $17 million. The southern elevator is packed with lime silica, a component of cement, that a company called Mt. Carmel Stabilization brings in by barge.

Mt. Carmel is part of a diverse group of companies that operate inside the port.

Tootsie Roll Industries imports sugar by barge, refines it on a dock next to Lake Calumet, and then ships it by truck to manufacturing plants in Cicero and Kenosha.

The Canadian National Railway imports wood from Canada mostly by rail and then sorts it for reshipment all across the Midwest.

Only a few long-term leases remain that cut the port’s potential income, Varela said. But two belong to the biggest tenants, North American Stevedoring and Kinder Morgan.

North American Stevedoring occupies 190 acres at the port’s crumbling Calumet dock. The company has been there since 2006 and has 50 more years to run on its lease, according to the port district.

Spokeswoman Anne Hurtubise said the company’s investments in the Calumet facility have revived it from a near-total loss to a thriving terminal.

North American Stevedoring has refaced portions of the crumbling dock with steel sheet piles and cast concrete at its own expense and plans to do more, Hurtubise said. The two sides have always acknowledged they may need to alter the terms of their agreement in response to changing economic conditions, including inflation, she said.

Kinder Morgan, one of the largest U.S. pipeline companies, has operated a tank farm for ethanol, biodiesel fuel, airplane de-icer and other chemicals at the port since 2001. That’s when Kinder Morgan purchased one of the port’s original tenants and inherited its 66-year lease, which still has three years left to run. The lease covers 177 acres, of which Kinder Morgan uses 70 and subleases the rest.

Spokeswoman Amy Baek didn’t comment about the lease rate but said Kinder Morgan has invested $57 million in the tank farm and looks forward to signing a new agreement. Unlike some other port tenants, Kinder Morgan has always been responsible for maintaining the infrastructure on its site and has made long-term investments to do so, she said.

Varela cited an Illinois Department of Transportation study to show that maritime terminals on the Chicago and Calumet rivers directly employed over 9,000 people in 2021.

According to the Army Corps, 9 millions tons of maritime cargo moved through the Calumet harbor and river in 2021. Many additional tons moved through the area on trucks and trains only.

Counting maritime traffic only, Duluth ranked first among Great Lakes ports in 2021 with 32.5 million tons.

The Duluth port still gets almost 90% of its volume from iron ore, coal and limestone. Chicago’s most frequent maritime shipments, in a postindustrial contrast, involve sand and gravel, concrete and cement, lumber, salt, and sugar, according to the port district.

These low-profit commodities can’t travel fast. They’re heavy and need to be delivered close to where they’re used.

Varela says he’s also in talks with his counterpart in Burns Harbor to see if they can coordinate the delivery of partial loads between their ports. This could boost barge traffic and thereby reduce congestion and truck pollution on the highways.

To promote this approach, the chief executive of the Ports of Indiana, Jody Peacock, hands out plastic rulers showing that 15 barges tied together can haul as much cargo as 239 rail cars or 1,050 trucks.

Varela faces plenty of mundane chores as he reaches for these lofty heights.

He’s in talks with Kinder Morgan on a new lease after the current contract expires in 2026.

“It’s safe to say that the rate they pay now cannot be maintained,” he said. Kinder Morgan didn’t comment on the talks.

Sometime next year, Varela hopes to generate new revenue by leasing out 100 acres of now-vacant land on the west side of Lake Calumet.

He also hopes to persuade the city to spend more of its revenue from the Lake Calumet tax increment financing district on the port.

Currently, the city uses some of this money for projects in other neighborhoods, including new stores and resurfaced streets in Pullman.

[ Lincoln Yards and The 78 are developments that are years off, but nearly $140 million in TIF funds are flowing ]

Most of all, Varela’s got to fix his crumbling dock.

It’s not just a port district issue, he says, because in a worst-case scenario it could threaten the adjacent Army Corps landfill.

But cost-cutters in the U.S. House are already dialing back on the port-specific grant program that Varela said he hopes to tap.

Varela is contemplating grim choices about what this could mean.

“If we’re unsuccessful in getting the federal grant, I do have the $13 million from the state,” he said. “So I’ll start fixing the dock and literally go foot by foot until I spend down the $13 million.

“Then I’ll have to stop, right?”