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UW-Milwaukee - Center for Economic Development

Policy Research Report Abstract

Curbing Industrial Decline or Thwarting Redevelopment? An Evaluation of Chicago's Clybourn Corridor, Goose Island, and Elston Corridor Planned Manufacturing Districts
by Joel Rast

Executive Summary

During the late 1980s, the City of Chicago initiated an innovative policy to preserve manufacturing employment in a rapidly gentrifying area on the city's Near North Side just north of Goose Island. In 1988, a 115-acre area between Clybourn Avenue and the Chicago River (the "Clybourn Corridor") was designated as a Planned Manufacturing District (PMD). A PMD is a special zoning designation which places significant restrictions on the rezoning of industrial land for non-industrial uses. PMDs are intended to preserve manufacturing jobs by protecting industrial firms from encroachment by land uses incompatible with manufacturing. In 1990, the Goose Island and Elston Corridor PMDs were established nearby.

This study evaluates the performance of these three PMDs during the period from 1988-2004. The study's principal objective is to determine how effective these PMDs have been in retaining manufacturing businesses and jobs. While Chicago now has a total of 13 PMDs, the majority of them have been in existence for less than two years. PMDs that have been in place for 15 years or longer may provide valuable lessons that can be applied to the city's newer PMDs and to areas where the creation of PMDs is under consideration. The study's principal findings are as follows:

In terms of overall business and job creation and retention, the PMDs have performed well. From 1988-2004, the number of businesses in the PMDs increased from 255 to 356, while jobs increased from 6,588 to 7,415. More troublesome is the performance of manufacturing in the PMDs during this period. Both manufacturing jobs and businesses experienced a sharp decline. This means that all the net growth in businesses and jobs in the PMDs from 1988-2004 occurred in sectors besides manufacturing. At the same time, manufacturing in the PMDs has recovered in recent years after bottoming out during the late 1990s.

Of the three PMDs, the Clybourn Corridor has fared the worst in terms of industrial retention. Despite the establishment of the PMD in 1988, the Clybourn Corridor has transitioned from a largely industrial area to a retail area. For every new retail job created during the 1988-2004 period, roughly one manufacturing job was lost.

The Goose Island PMD has performed the strongest of the three PMDs. Jobs on Goose Island rose from 1,256 in 1988 to just over 2,000 in 2004. Manufacturing did not fare as well as other sectors, however, with employment falling from 406 workers in 1988 to 310 workers in 2004. A worker on Goose Island today is more likely to be employed in a warehouse than in an industrial firm. The decline of value-added activities on Goose Island and in the other PMDs has likely affected the earnings of workers in a negative way.

The industrial retention performance of the Elston Corridor PMD has been comparable to Goose Island, with manufacturing experiencing a decline from 1988 to 2000 but showing signs of recovery in more recent years. Confidence in the PMD among Elston Corridor stakeholders is weak in places. Vacant property in some locations has created the perception that the PMD is no longer working effectively.

The Clybourn Corridor, Goose Island, and Elston Corridor PMDs have not been problem free, but our research indicates they remain fundamentally sound. Moreover, they appear to be necessary to protect certain property owners from encroachment by incompatible land uses. City officials should continue to work with PMD stakeholders to uphold confidence in the PMDs and to better ensure that they perform their intended function of providing living wage jobs for Chicago residents.

The complete report (401k) is available in Adobe's Acrobat format. Acrobat Reader is required to view the file. Use Adobe's web site to download a free copy of Acrobat Reader.

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