LOCAL ECONOMIC DEVELOPMENT IN CHICAGO 1983-1987: THE REFORM EFFORTS OF MAYOR HAROLD WASHINGTON A Dissertation Presented to the Faculty of the Graduate School of Cornell University in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy by Kenneth M . Reardon May 1990 Kenneth M. Reardon 1990 ALL RIGHTS RESERVED LOCAL ECONOMIC DEVELOPMENT IN CHICAGO 1983-1987: THE REFORM EFFORTS OF MAYOR HAROLD WASHINGTON Kenneth M. Reardon, Ph.D. Cornell University, 1990 This research focuses upon the economic development policy-making and planning activities of Chicago's Mayor Harold Washington during his first term in office (1983-1987). This thesis documents the major economic development policy initiatives of this administration as well as its record of achievement. In addition, this research describes how the mayor and his senior planners sought to re-orient economic development policies in order to provide greater benefits to Chicago's poor. Finally, the research evaluates the degree to which Mayor Washington succeeded in institutionalizing a progressive approach to local economic development planning in Chicago. Qualitative research methods were used to collect data for this study. The primary source of data was a series of fifty-one personal interviews which were conducted by the investigator with community activists, public officials and business leaders from Chicago. Additional data came from an investigation of existing documentary evidence, particularly municipal reports, studies and plans. These data were supplemented by materials taken from Chicago’s major daily newspaper, business press and community development journals. The major foci of attention in this study are the major economic development policy initiatives and planning decisions of the Washington administration. Among the major policy initiatives examined by this study are: the Buy Chicago, Minority Purchasing, First Source Hiring, General Obligation Bonding, Downtown/Neighborhood Linkage and Citizen Participation Programs. Among the major economic development decisions reviewed by this research are: the Playskool Plant Closing, the Redevelopment of Navy Pier and the 1992 Chicago World's Fair. This study concludes that the Washington administration was quite successful in transforming the nature of local economic development planning within Chicago during its first term in office. Policy changes made by the administration produced a pattern of benefits which provided much more assistance to poor and working class neighborhoods within the city and encouraged formerly excluded groups to participate in the local economic development planning process. Unfortunately, these changes were not fully institutionalized and did not continue beyond Mayor Washington's time in office. Biographical Sketch Kenneth M . Reardon Kenneth M. Reardon was born in New York City on September 15, 1953. He received a Bachelor of Arts degree from the University of Massachusetts at Amherst with a major in Sociology in 1975. He received a Master of Urban Planning degree from Hunter College of the City University of New York in 1982. At Cornell University, his major area of doctoral concentration was Planning Theory; minor areas of concentration were Urban and Regional Theory and Organizational Behavior. Kenneth M. Reardon was a Staff Organizer and State Director of the New Jersey Federation of Senior Citizens from 1975 to 1978. He served as the Director of Organizing for the Connecticut Citizen Action Group from 1978 to 1980 and Consultant for the New York Public Interest Research Group's Citizens' Alliance from 1980 to 1982. He is currently a Lecturer in the New York State College of Human Ecology at Cornell University where he serves as Director of its New York City Field Study Program. iii c \ In Memory of Donald G. Sullivan iv Acknowledgements In the Fall of 1983 Mr. Robert Mier, the then Commissioner of Economic Development for the City of Chicago, came to Cornell to address a graduate seminar in the Department of City and Regional Planning. Mr. Mier, who is an alumnus of the department, spoke about the challenges facing the administration of Mayor Harold Washington. During his presentation Mr. Mier focused upon the problem of involving the staff of a machine-dominated public bureaucracy in promoting redistributive development policies and participatory planning processes. At the end of his presentation Mr. Mier invited those interested in municipal reform to come to Chicago to examine what they were doing. The questions which Mr. Mier's presentation raised were very similar to those I had been exploring since participating in a seminar on democratic planning with Professor Bertram Gross at Hunter College and in a series of classes on planning theory and organizational administration with Professor Pierre Clavel at Cornell. With Professor Clavel1s encouragement I travelled to Chicago in the Summer of 1985 to meet with Mr. Mier to discuss the possibility of doing my thesis on the reform efforts of the v Washington administration in the economic development area. Mr. Mier was very supportive of my proposal and offered to assist me in any way that he could. Over the course of the next two years, Mr. Mier and his staff provided me with complete access to the records of his department, assisted in arranging interviews with key administration officials, provided introductions to leading civic leaders, reviewed preliminary outlines of the research design and consistently offered feedback upon my work. Robert Giloth, former Deputy Commissioner for Research and Policy Development, was particularly helpful in sharing his knowledge, contacts and thoughtful analysis of events and developments within both the administration and the city with me. Without their assistance, this project would have been impossible to complete. I also want to thank the chairman and members of my Ph.D. Committee for assisting me in the completion of this thesis. Throughout the research design, data collection, data analysis and writing phases of this study Professors Pierre Clavel, Barclay G. Jones and Robert N. Stern have provided me with excellent feedback and direction. I am particularly grateful to vi Professor Clavel, the chairman of my committee, for having encouraged me to pursue this topic, for the insights his book The Progressive City provided, for the critical commentary he offered on the thesis and for devoting a considerable portion of three Summers to working with me on this project. Without his assistance, and that of Professors Jones and Stern, this research would not have been as well executed and presented. I would also like to thank Dean Jerome Ziegler, former dean of the New York State College of Human Ecology at Cornell University, for providing financial support for my thesis research. I also wish to thank my colleagues on the faculty of the Field and International Study Program for the encouragement they offered during my work on this project. Finally, I would like to express my deepest appreciation and gratitude to my wife, Kathleen, for all her encouragement and support. Without her enormous patience and generosity this work would have been impossible to complete. vii Table of Contents Chapters Page I. Introduction ........................ 1 A. Urban Policies for Economic Development ............ 1 B. The Chicago C a s e ................ 6 C. Presentation of the Central Research Question .... 12 D. Identifying Cases of Progressive Reform .............. 33 E. S u m m a r y ........................ 39 II. The Byrne Administration 1979-1983 . 42 A. The Byrne Victory in the 1979 Mayoral Election .......... 42 B. Early Actions and Decisions of the Byrne Administration . 47 C. Economic Development Policy­ making and Planning in the Byrne Administration . 54 D . The Growth of Mayor Byrne’s Opposition........... 62 III. The Washington Campaign and Transition Process .................. 76 A. Economic Conditions Prior to the Washington Election .... 76 B. The 1983 Chicago Mayoral Election . ....................... 85 C. The Washington Administration Assumes Office.......... .. 93 IV. Mayor Washington1s Development Agenda and Early Decisions...... 102 A. The "Chicago Works Together": 1984 Development P l a n .......... 102 B. Major Development Decisions . 117 viii Chapters Page V. Major Economic Development Initiatives........................ 144 A. Post Election Political C l i m a t e ........................ 144 B. New Programs Established........ 148 VI. New Policy Initiatives Debated .... 176 A. General Obligation Bonding and the Neighborhood Investment P r o g r a m ...................... 176 B. Linking Neighborhood Needs to Downtown Resources .............. 193 C. Citizen Participation in Development Planning . ......... 228 VII. Conclusions........................ 245 A. The Successful Initiation of the Populist Model ............ 245 B. Progress Made By the Washington Administration .... 249 C. Failure to Institutionalize . 272 D. Reflections on the Process of Institutionalization ............ 277 E. Implications for Future Research..................... 285 ix Appendices Appendix Page A Research Design and Methodology . 288 B Letter of Introduction ........... 314 C List of Chicago Interviewees . 316 D Interview Schedule ............... 321 x List of Tables Table Page 3.1 Chicago Job Performance Compared to the Nation, 1960-1982 ............ 78 3.2 Chicago's Job Creation Performance Compared to Other Metropolitan Areas, 1960-1982 .................... 80 3.3 Racial Composition