Thursday, February 13th, 2014

Chicago: Is the Illiana Expressway a Boondoggle in the Making?

I haven’t had much to say about the Illiana Expressway, a proposed 50-mile road linking I-65 to I-55 across the far south suburbs of Chicago and Northwest Indiana.

The road has been controversial in Chicago because it was not one of the strategic initiatives of the regional GO TO 2040 plan, and thus in a sense makes a mockery of the years of planning and community dialog that went into that project. Many in the city, as well as various independent organizations like the Metropolitan Planning Council, have said the Illiana is a sprawl producer and poor use of precious financial resources.

Northwest Indiana has been foursquare behind it, and why wouldn’t they be? NWI is Indiana’s premier example of sprawl in its purest form. The population of Lake County has basically been flat since 1960, but during that time there has been massive abandonment of the northern county (Gary, Hammond, etc) in favor of new greenfield locations like Crown Point. The existing freeway infrastructure was designed to serve the old built up areas in the north. The Illiana would serve the new focus of the county further to the south. So naturally they want it. Even if the road is a financial loser, that’s an even bigger win for them since it means subsidies from the rest of the state.

Which is exactly the scenario that appears to be shaping up on both sides of the border. As I noted previously, this road is being billed as using a privatization scheme, but the reality is that the public is backstopping the finances. It uses a so-called “availability payments” approach in which the taxpayer guarantees the returns to the vendor and assumes all the revenue risk.

How big is that risk? Looks pretty big. Greg Hinz over at Crain’s Chicago Business has the story, noting that the Illiana Expressway will likely charge tolls that are four times as high as the rest of the tollway system:

Any company that tried to sell a product at up to four times the competition’s price likely wouldn’t stay in business very long. Customers would walk right away, and management at a minimum would find itself out of a job. But things work differently in the wonderful world of government.

The story is that, based on documents recently, and quietly, released by the Illinois Department of Transportation, it appears the road quite probably would have to levy tolls two, three and even four times those charged on other Illinois tollways.

Yes, you read that right. Four times now charged elsewhere in the metropolitan area by the Illinois Tollway. A cool $11.81 for an auto to drive the road’s entire proposed 47-mile length, and an icy $58.13 for a 16-wheeler.

With no toll at all on the nearby I-80, an existing expressway that runs about 10 miles or so north of the proposed Illiana, guess where the trucks are likely to end up?

As Hinz notes, private toll roads around the country are experiencing significant traffic shortfalls, even when offering a congestion free alternate to a choked up regular route. If that happens here and toll revenues don’t match up with forecasts even with jacked up rates, guess who loses? The taxpayers and motorists of Illinois and Indiana, that’s who.

Don’t expect any high profile bailouts. Rather, an increased share of the two state’s annual highway fund will have to be diverted to covering the shortfalls, crowding out spending elsewhere. This is one of the big fears in the rest of Chicagoland, where there’s a massive infrastructure investment deficit. (From a Northwest Indiana perspective, it’s who cares since it’s the rest of Indiana who will likely see their major projects cut).

The jury is still out on this, but the Illiana deserves serious attention as a potential boondoggle in the making.

48 Comments
Topics: Transportation

48 Responses to “Chicago: Is the Illiana Expressway a Boondoggle in the Making?”

  1. John Morris says:

    To put this in context, Illinois’s 500 warn notices (down from an average of 1000-2000 many months) this month include- Office Depot, firing hundreds as it shifts hq to Florida & Cardinal Health as it shifts to Ohio & other states.

    Other big layoffs result from JC Penney closing a suburban Chicago store.

  2. Tone says:

    And yet, Illinois has faster job growth than Ohio.

  3. Tone says:

    OH yoy job growth in 2013 0.5%
    IL yoy job growth in 2013 1.0%

  4. John Morris says:

    Also in the news:

    Texas passes Illinois in median household income is spite of a surging population.

    http://www.texaspolicy.com/center/fiscal-policy/blog/texas%E2%80%99-median-household-income-continues-climb-strong-middleclass-economy

    And now Texas passed California in exports.

    The big warn notice was about Office Depot moving its merged hq to Florida.

  5. Tone says:

    And yet OH struggles, more than most.

  6. John Morris says:

    @ Tone

    I am hardly here to hype Ohio.

    My point was also that job growth in Illinois is now almost all inside Chicago itself and that the suburbs served by this road are losing jobs or stagnant.

    My relative bullishness on Columbus is based its strong position relative to downstate Illinois & the average Chicago suburb.

  7. This post is about a highway. Can we stay on topic please?

  8. Chris Barnett says:

    I’m not generally opposed to good highway connectivity between outlying medium-sized cites, rural areas and Indy within Indiana. For example, I-69 between Evansville and Indy and upgrading US31 to someday become I-67 between Indy and South Bend.

    But building this expressway bugs me…like the east end bridges I’m helping to pay for in Louisville, Kentucky. It really doesn’t help Indiana, when we do need to spend on increased transit options in NWI and Indy.

  9. Eric says:

    John Morris is actually Joel Kotkin?

  10. Eric says:

    I think there’s a decent chance the Illiana gets cancelled. I think Quinn had to support it prior to the election. If it gets dragged out long enough, it doesn’t have much of a constituency.

    It’s absurd, really. A 50-mile highway with less traffic per day than Irving Park avenue?

  11. John Morris says:

    This post is about a highway. Can we stay on topic please?

    How is talking about the economy of the area served by the proposed road off the subject? My warn notices highlighted job cuts in Illinois & specifically losses in Chicago’s suburbs.

  12. Tone says:

    Did you see where OH is in the top 8 John?

    And Eric is correct, this highway will likely NOT be built. It is a campaign ploy by Quinn to get votes.

  13. John, if it’s specifically the economic impact of the highway, ok. But I don’t think Office Depot’s HQ relocation has anything to do with that directly, however.

  14. Tone says:

    “My point was also that job growth in Illinois is now almost all inside Chicago itself and that the suburbs served by this road are losing jobs or stagnant.”

    Seeing as the Chicago metro is 70% of the state population, only a fool would be surprised by that.

  15. John Morris says:

    Where did you get the idea I was hyping Ohio? You are evading the core relevant subject here which is low growth in Illinois and general job losses to many other states.

    The big warn notice related to the merged Office Depot/ Office Max moving to Florida.

    https://www.dailyherald.com/article/20131210/business/712109889/

  16. John Morris says:

    “If it’s specifically the economic impact of the highway, ok. But I don’t think Office Depot’s HQ relocation has anything to do with that directly, however.”

    Doesn’t all of this relate to the market for the road and support your point?

    Here is an article on rising poverty in suburban America that highlights the state of Chicago’s southern suburbs.

    http://articles.chicagotribune.com/2013-05-21/news/ct-met-poverty-report-20130521_1_elizabeth-kneebone-suburban-poverty-alan-berube

  17. M says:

    I read this blog everyday as much for Aaron’s thoughtful articles as for the usually wonderful comments section full of intelligent opinions and arguments. I rarely post but in following all the recent commentary I feel compelled to say, John you are turning into bit of a troll. Please stop its getting really tiresome.

    Now in regard to the Illiana. In reading the coverage my opinion is that it is a political maneuver by Quinn to shore of votes in the the South Suburbs–much like the Peotone airport. Hopefully neither will see the light of day.

  18. John Morris says:

    Stating relevant but unpleasant facts is now trolling?

    Chicago’s southern suburbs lead the state in foreclosures, have high office vacancy rates & rising poverty.

    http://www.chicagobusiness.com/realestate/20130114/cred02/130119916/suburban-office-vacancy-remains-high

    Sadly, since government usually throws good money after bad, the road will likely be built.

  19. Tone says:

    John, you are a troll, you have been called out now repeatedly. The only thing that’s unpleasant is your lack of knowledge.

  20. I agree with Aaron – this expressway might make sense to the Northwest Indiana residents, but I’m trying to figure out the upside for the Illinois side considering how many other infrastructure projects are needed. While I sympathize with the NWI natives that find the stretch between I-80 and I-294 to be the seventh circle of hell (IMHO, it’s the single worst traffic nightmare in the Chicagoland area, which is saying something, and I’m already dreading having to drive that way tomorrow during a weekend trip), there isn’t enough development in the area on the Illinois side of the border to justify this. The only thing that could possibly make it semi-justifiable is if an airport ever gets built in Peotone (which has been talked about for decades with no actual action). The appears-to-be-dead Prairie Parkway proposal between I-80 and I-88 in the far Western Suburbs, which wasn’t exactly 100% clear in terms of benefits, either, was at least more justifiable with the population growth and access to the I-88 corporate office corridor for employment.

  21. urbanleftbehind says:

    Frank,

    Which expressway corridor do you mean by between “I-80 and I-294″? This might just be a case where a simple add-lanes (or a truck/long length vehicle lane or lanes) on I-80 west of the I-94/and IL 394 junction might make more sense. I used to think that the IL 53 north extension was the most necessary expressway expansion project (the stretch of I-94/I-294 north of O’Hare was hell to navigate for airport trips or trips to other “hood” towns e.g. Aurora and Joliet from the Waukegan area), but that trip became much smoother after 2008 when the 4th lane was added on 94 in Lake County. I’ve worked on a preliminary phase of a managed lanes project for I-80 from west of I-55 to I-294. It doent help that the southern part of the Chicago area and NWI tend to get more wet snow/wintry mix then the dry snow you see more prevalent north of the City.

  22. John Morris says:

    “John, you are a troll, you have been called out now repeatedly. The only thing that’s unpleasant is your lack of knowledge.”

    I guess knowing that the office vacancy rate in Chicago’s southern suburbs is over 24% displays ignorance?

    @ Frank The Tank said

    “this expressway might make sense to the Northwest Indiana residents”

    Northwest Indiana also has little or no job growth.

    http://www.nwitimes.com/business/local/region-s-manufacturing-focus-accounts-for-slow-growth-jobs-deficit/article_626ca366-519c-5f97-830a-9563f1373a8b.html

  23. John Morris says:

    The weird thing here, is that stating facts that support Aaron’s anti highway case is perceived as trolling.

    Shouldn’t Chicago residents and urbanists be happy that Chicago is outperforming its suburbs in terms of jobs? Shouldn’t they be opposing this road and advocating for infrastructure that supports that growth?

    Instead, it seems like people just hope that somehow the project doesn’t get done. This is similar to the weak to non existent opposition to the new Tappan Zee bridge project in NY.

  24. @urbanleftbehind – Apologize, that was a typo. I really meant I-80 heading east of I-294 (or west toward I-294). That just always seems to be a massive traffic choke point, so I can see where the NWI residents south of I-80 would want a different options.

  25. @urbanleftbehind – Also, I agree that the I-53 extension was one of the most logical for the Chicago area, but it doesn’t seem as pressing after that I-94 lane additionl (That’s putting aside the heavy NIMBY concerns regarding that I-53 extension, of course.)

  26. Harvey says:

    Southland Chicago is Rust Belt Chicago. The sprawl down there isn’t so much development as white flight and borrowed time. I wasn’t aware of a similar dynamic across the state line, but that seems to be what Aaron’s describing in Northwest Indiana.

    I can’t see the point of the expressway for any existing industry or trade either. It’s the worst form of wishful thinking, building something and hoping they come. Scrap it and put the money into the crosstown L line everybody wants but no politician talks about.

  27. the urban politician says:

    The Illiana Expressway idea is garbage. I want it to die very badly.

    John Morris said:

    “Shouldn’t Chicago residents and urbanists be happy that Chicago is outperforming its suburbs in terms of jobs? Shouldn’t they be opposing this road and advocating for infrastructure that supports that growth?”

    ^ YES YES YES! Now I don’t have the hatred for the suburbs that many urbanists have, and I actually think healthy suburbs are part of a healthy metropolitan area. But if the city’s core is right now the economic engine of the region, then we should be investing precious infrastructure dollars on promoting that, rather than the opposite.

    Building another expressway (an expensive toll road, at that) will do nothing to help the south suburbs. This is such a stupid, stupid idea, but that’s no surprise since Illinois has such worthless leadership.

  28. the urban politician says:

    Harvey, what is needed for the south suburbs is for everyone to leave and move to Texas already. Let them Lone Star folks have more institution-dependent poor people, then we’ll see how great their numbers look…

  29. wkg in bham says:

    the last i had heard the big “development” idea for south metro chicago was to convert vast swaths of it to “urban forrests”. oddly enough, the are a lot of forrest like parks in the south metro.

  30. Lou says:

    I think the money would be better spent on upgrading the south shore rail line with extensions to south lake county. I think its odd that NW Indiana and Chicagoland in general was built on rail but Indiana thinks building a bunch of highways will lead to prosperity? It has not worked so far, just lowered density and helped kill Gary and Hammond. Since Chicago’s core is growing faster with jobs and residents it would be better for NW indiana to gain better access to it via rail and not build highways around it.

  31. John Morris says:

    “Chicagoland in general was built on rail.”

    And its relationships with surrounding cities & first suburbs were built on rail & were largely synergistic.

  32. John Morris says:

    In a nutshell this is my problem with Chicago.

    Some city built out in the 1920’s on can be excused for not having a deep embedded understanding of urbanism, transit etc.
    Folks in Chicago and in the state capital should have a clue as to what works and doesn’t but the brain dead thinking, racism or corruption that produced the United Center & Cabrini Green still remains.

  33. John Morris says:

    For the record, I feel the same way about most of the NYC region’s leaders.

    How can Chris Christie live across from Manhattan & compare Jersey City to most of New Jersey and not learn something? Ditto with almost every town mayor along a commuter line.

  34. John Morris says:

    Don’t get me started on Andrew Cuomo.

  35. @John Morris – I’ll give you Cabrini Green and the racially-driven building of housing projects, but the United Center was completely privately financed by the Bulls and Blackhawks (one of the few stadiums in America built in the past 20 years to not use public money). The teams built that building and own it 50/50. There are plenty of examples of Chicago corruption, but the United Center definitely isn’t one of them.

    Back to the topic, though, as dumb as Chicago and Illinois politicians might be at times, my feeling is that this expressway is going to fall through. Now, it might fall through for what would normally be bad reasons on other issues (i.e. an inability to work collaboratively with Indiana leaders), but a whole lot of infrastructure proposals with more advanced plans and fewer parties to deal with haven’t ever ended up going anywhere (and even the ones where there was legitimately widespread support, such as the I-355 extension that was completed a few years ago and the western access to O’Hare that is just getting started, have taken decades to get off the ground). This simply smells a lot like the Peotone airport project – there’s a hardcore constituency in the South Suburbs that want it and won’t let it go (and to be fair, as someone that grew up in that area and has seen its decline, I completely understand that the politicians there want to put up the fight on paper for procuring more investment in their areas), but the lack of motivation from the City of Chicago and the politicians from the more affluent North and West Suburbs will likely stall this into perpetuity.

  36. Rod says:

    Assuming a pretty large share of the funding comes from the feds, this seems like the kind of project that could lead the “have” regions of the country to say “no more”. In Canada, most of the transportation funding is local or regional. Maybe we need to go to that in the U.S. With air travel for business, there is much less of an argument for interstate highways. If necessary, let the rails pick up long haul.

  37. Roland S says:

    @frank the tank – The sad thing is, there are so many better ways to promote development in the Southland. How about improvements/extensions to the Rock Island or Metra Electric? Both lines are owned by Metra so there are no freight railroads to get in the way. How about upgrades to 57 and 394?

  38. the urban politician says:

    John,

    Keep in mind that most cities “built out in the 1920’s” saw widespread deindustrialization and suburbanization of their populations, racial segregation, and significant declines in mass transit usage for a good half century, in addition to a widespread growth in automobile ownership and usage as well as massive investments in highway and automobile-focused infrastructure.

    So yeah, I can understand why most leaders today (majority of who grew up watching cities decline) do not see mass transit investments as the ‘wave of the future’. I certainly thing this perception is changing (yes, even in Chicago), but such change takes time.

  39. urbanleftbehind says:

    The thinking in Indiana happens in Indianapolis. There is little chance That this already tightwad state will fund two “bads” – rail transit expansion in a step child region of the state. A south shore extension running N-s or a alteration to the proposed South east service line (using the old CWI r.o.w. down to beecher) east through Lansing and Munster then south to Lowell could be a good investment, I just have no trust in Indianapolis.

  40. Chris Barnett says:

    And by “Indianapolis” I assume you mean the superblock on Capitol Avenue that is in Indy but is controlled by a gubernator from Columbus with presidential aspirations, and America’s Worst State Legislature (67% of which is from outside the Indy metro, and half of which is decidedly small-town/rural) who think that what’s good for Podunk is good for NWI and Indy.

    Yep, those folks never met a road project in someone else’s district that they didn’t like, as long as they get theirs. Plus the campaign funding from construction and engineering companies and bond lawyers.

  41. Brent says:

    I’ll only support this highway if it’s VERY limited access and has higher than normal tolls. Otherwise, it’s just a sprawl enabler. The south suburbs of Chicago, much like Metro Detroit, Cleveland, and Buffalo, continue to grow and grow outward, despite an overall declining population.

  42. urbanleftbehind says:

    Many Will County residents view the project as a nuisance relief measure, which puts them in almost the same category of ungrateful NIMBY as some Wrigleyville residents. Many who attended public meetings leading up to ther regional board’s approval of fast-tracking the project seemed to want it only to remove the trucks from their arterials. Well, maybe if the western half of Will County (along and west of IL 53) didnt go so whole-hog in pursuit of logistics business, you woudnt need the trucks off of your local roads.

  43. John Morris says:

    @ the urban politician

    I meant that I can understand how cities built from the 1920’s on would be more car oriented & have poorer urban structure. Chicago has enough built before that period- to have knowledge of what works.

    Chicago politicians (And even more so urbanists, activists, investors) of today should also understand how badly policies like urban renewal worked out. The city’s social fabric never recovered.

    The database of available data is now too big to ignore innocently. At best one can say people are playing on public ignorance to get elected.

  44. John Morris says:

    “those folks never met a road project in someone else’s district that they didn’t like.”

    Indiana even pays hundreds of millions of dollars for road projects in Kentucky.

  45. John Morris says:

    @ Frank The Tank

    “There are plenty of examples of Chicago corruption, but the United Center definitely isn’t one of them.”

    Not sure about that, at best the United Center is an example of ignorant urban design & probably racism. If they didn’t use tax dollars directly, I doubt they paid a market price for the 50 or more acres of urban property it wastes.

    Now Chicago thugs will grab property to build casinos.

    http://ij.org/illinois-han

  46. My main concern with the Illiana is that I’ve heard a lot of complaints about working conditions in the warehouse industry which it is supposedly being built to serve–http://willcountynewsviewpoints.blogspot.com/2014/01/comments-to-cmap-on-illiana-expressway.html

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