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Chicago and Its Skyway

Lessons from an Urban Megaproject

Louise Nelson Dyble

May 2013, English

In this paper, Louise Nelson Dyble examines the history of political leadership throughout the Chicago Skyway’s development as a public project and assesses the lessons from its eventual privatization. In the early 1950’s impetus for the Skyway’s placement and rushed development came from a failure of coordination between Indiana and Illinois officials as various state agencies took the initiative to develop highways. When Indiana announced plans to terminate the Indiana Toll Road in such a manner that its traffic would enter Chicago in the Calumet region, a heavily industrialized and congested bi-state area of south-east Chicago, Chicago’s leaders were shocked. As a result Chicago’s leadership was forced into a design for the Skyway which ultimately led to fragmentation of Calumet and increased traffic congestion in the area while use of the highway failed to meet expectations. Over the next three decades toll revenue from the Skyway experienced shortfalls with the result that the deficit associated with it eventually peaked at $72 million in 1988.

Then in the 1990s, changing economic and political circumstances transformed perceptions of the Skyway and created opportunity for its redemption as a city asset. In 1989 the toll bridge generated enough revenue to bring bond interest payments up to date for the first time since 1969. By 1994 Skyway revenue was sufficient to retire the original construction debt and to float an additional $110 million in revenue bonds, some of which went toward repaying city appropriations for debt payment and operating expenses dating back to the 1960s.Two years later, Skyway tolls supported another bond issue, paying for the structure’s rehabilitation as well as a popular city “neighborhood infrastructure plan.” By tradition the Skyway’s tolls had been dedicated to construction and maintenance, and motorists did not view the Skyway as a legitimate source of city revenue. Faced with this criticism Mayor Daly’s administration took the opportunity to secure a large, immediate financial return for the city. In 2004 the mayor called for bids from private operators to lease and operate Skyway with the result that a stunning offer of $1.83 billion was received and a 99 year lease was executed.

By 2008 in the midst of a global financial crisis the value of big-ticket infrastructure leases was coming into question. As a result there is justification to predict that the Skyway may return to its original status: a disappointing city liability with little value to surrounding neighborhoods or to the city as a whole. In conclusion, Because of its physical detachment from its surroundings and its failure to attract or induce new traffic, the Skyway had a relatively small impact on the development of Chicago and a mostly disruptive effect on the Calumet district. Its history also underscores the importance of considering the effects of megaprojects on urban places and communities, in addition to their financial costs and benefits for city governments.

This paper was presented at the Lincoln Institute’s annual Land Policy Conference in 2012 and is Chapter 7 of the book Infrastructure and Land Policies.