The Interview Issue

Rahm Emanuel on Upgrading Chicago's Infrastructure


"We're not sitting next to Google, so this is pure, hard work"

Photograph by Thomas Prior for Bloomberg Businessweek

"We're not sitting next to Google, so this is pure, hard work"

Emanuel often takes the train to work, chatting with constituents. Devin Leonard goes along for the ride and talks with the mayor about his planned upgrade of the city’s infrastructure.

How often do you take the train ?
I probably do it twice a week. That’s the average, but there are weeks like this week, because of my schedule, it was once. It would have been on Monday, but Amy and the kids were leaving, so I wanted to stay and see them off.

Why do you do it?
First of all, when I worked downtown that’s how I always used to travel. In fact I was on the El when 9/11 occurred. It’s very convenient. Then there’s the political benefit—that’s the primary reason. A lot of people come up and talk to you, and it’s a great way to have people feel like they can access their mayor.

What do people talk to you about the most when you’re on the El?
How do I get a subscription to Businessweek? I mean, they’ll talk to you about something in their neighborhood. They’ll talk to you about something at work or just any topic they want to talk about. Sometimes it’s national, mainly—almost 99.9 percent—local. [Some passersby wave.] Excuse me, sir. Hey, how are you, ma’am?

I mean, you should look at our schedule for Sunday. I do what I call Target town halls. I walk to Target (TGT) on 85th and Cottage Grove. I did that at Lowe’s (LOW) down in Chatham, Wal-Mart Express (WMT) in Chatham. Then I did the Salvation Army at Englewood. Then I went to church in Woodlawn, but I just basically walk and talk to people.

Are people happy with the mass transit system?
Look, this is a big—how are you, ma’am?—this is a big strategic advantage for the city. Almost every company I’ve recruited to move to the city talks about the convenience of going from home to work compared to where they lived.

And one of the reasons companies want to move here—No. 1, incredibly skilled workforce. But an additional on-the-margin but strategic advantage is our mass transit system. That’s why I’m making a major investment in it. Here is one fact, OK? More people take the Chicago public transit system in a single month than people who take all of Amtrak all year.

Why hasn’t there been more investment in the Chicago Transit Authority over the years?
It’s not like my predecessor [Richard Daley] did not invest in the CTA, so that’s not accurate. One of the first things I worked on when I became a congressman was, he and I worked on the expansion of the Brown Line. The stations used to have platforms for only six cars. It was one of the older lines.

I got the money to renovate all the stations—as you can see, the stations are new—and extend the platforms to eight cars. We have dramatically increased our investment. We have a business plan. We wrote it up. One of the pieces of the plan is a major investment in infrastructure to move goods and services and people more efficiently. Given that I think outside of New York we have the highest ridership on a mass transit system, it’s in our economic self-interest to make investments. You know, in the last two days this week we announced a jobs fair for 200-plus bus drivers and 500 jobs for fixing the facilities that will actually upgrade the buses and the rail cars. Two-thirds of the rail cars will be totally replaced with new Bombardiers. And then the entire bus system, or three-quarters of the bus system, will actually be replaced with new buses, also with all the security and amenities.

I see it as a component of our economic strategy. I had lunch yesterday with the head of my water department. The city is embarking this year on the largest investment in water management. We’re replacing 900 miles of water line—everything that is 100 years or older—750 miles of sewer, and 160,000 catch basins.

We have the two largest water filtration plants in the world, and they’re going to be rehabbed. Some of our old pumping stations actually still work on steam. By going electric we’ll save $7 million. We’re going to finance the whole system with the savings.

We’re fixing up the roads and everything like that—2,000 miles of road, I believe it was, out of 4,000 in the city. So half the city’s roads will be repaved in the next decade. I mean, nobody is doing anything close to this. And we’re going to put 30,000 people to work.

I don’t know if you saw the report yesterday, but Chicago had the fastest employment gains and the largest decline in unemployment. The only city beating us is San Jose. I mean, we’re not sitting next to Intel (INTC). We’re not sitting next to Google (GOOG), so this is, you know, pure, hard work with a strategy and implementing.

Is that report a vindication of your job-creation strategy?
Not a vindication, but it means we’re on the right course. If it was a vindication I’d be spiking the ball. I’m not. Would you have gotten employment growth [anyway]? Probably. Did we accelerate and accentuate it? Yes. And policy does matter.

But 9.8 percent unemployment is still pretty high, isn’t it?
Yeah. I mean, sorry, but I’ve only been here a year. But yes. We’re going in a better—I think the right direction. There’s no doubt about it, and I’m not going to rest until we have it down. I mean, that’s also in the face of an economy that wasn’t exactly doing well. As I always say, I can’t keep the world away.

Talk about your public-private infrastructure trust and why you decided to finance a lot of this stuff this way.

OK, let me say this. All the water investments [used a] traditional methodology, method of financing. Airport, federal funds, local financing. All the roads, traditional. Community colleges, we cut the central office and we saved $120 million, and we’re plowing it into one new campus and we got state funding for another new campus. Then we’re doing a lot of what I would call maintenance/upgrades at all the others.

That is, of the $7.3 billion in capital in the next three years, $7.2 billion of it is traditional, meaning cuts, redirected. The trust is going to be used for what I call transformative [projects]. It hasn’t even done anything yet, and the first one will be for retrofitting older city buildings.

That will put about 1,000 people to work, save us citywide about a million, million and a half a month in energy-loss costs. [The public-private trust is] not going to finance the CTA’s bus facility. That’s not what it’s for. It’s for looking at transformative investments that really change the economic opportunity for the city. Remember, Washington finally passed, after 10 years, an infrastructure highway bill, but it’s only for 18 months. Nobody can make a plan in 18 months. The water guys literally gave me a tree trunk they pulled up that used to be a water pipe. That’s what’s in the city. We are replacing everything that’s 100 years or older.

Oh, the pipe is the tree trunk?
Yes, in parts of the city. We’re not alone. That’s true everywhere, but we’re going to replace it all. And when we’re done, the amount of water we save that we usually lose through leakage, we’ll save two years’ worth of residential use. And 18,000 people in the next decade will be doing all the sewer, all the catch basins, all the piping, and all the water filtration work.

On the trust, the local press really went after you, and continues to, over the transparency issue. What’s your response to that?
It will fully comply with all the laws that are on the books. It’ll be totally transparent. Every reform, every change, every amendment I adopted, all dealt with governance. I understand people’s concerns based on past actions that they all participated in. [Chicago gave up billions of dollars in revenue in 2008 under then-Mayor Daley when it leased its parking meters to a partnership led by Morgan Stanley (MS).] And the states of California, Washington, and Oregon are now looking at doing exactly what we’re doing. You would agree we’re the most capitalist system—economy—in the world?

Yes.
We’re the only economy that still does its infrastructure on a socialist model, state-owned. I mean, the Canadians came in here—do you know there are 147 different projects that are all public-private in Canada, just north of us? It’s a tool. It’s not an end.

And there’s a way to bring in private investors without repeating the debacle of the parking meters?
Absolutely. I mean, it is the exact opposite. Here we’re trying to finance it and own it. It is at every level—policy, politics, and product—fundamentally an answer to what was wrong with the parking meters, an absolute rejection of that model.

You’re kind of at an impasse with the teachers union. Is there a way to extend the school day without giving the teachers a 25 percent raise?
Sure. Look, we will get there. School is going to start on time. The kids are going to have a full day when they start on time, and teachers will be properly compensated. But as you know, for 10 years [Chicago] kids had the shortest day and the shortest year. That’s just not sustainable, and we’re going to change it.

Another question is about the gang situation. You’ve also been criticized for—
There’s nothing I’m not criticized for.

—for doing away with the specialized police units that dealt with it. Any plans to put them back in place?
Do you know what the overall drop in crime is in the city? Ten percent, one of the largest in the country. We had a breakup of the gangs. We are putting more police and resources into fighting crime and implementing new community policing strategies on a level that has never been done before. We are going to turn the corner on the shootings, no doubt about it.

So you support [Police Superintendent] Garry McCarthy?
Yes, sure. Garry’s a very good police officer, good leadership. Look, we took 600 officers who were walking around the building. How do you think we got [a drop in crime of] 10 percent? You went out and you made it happen. Thefts are down, armed robbery is down, burglaries are down, and we’re going to get shootings down. We’re going to get them down.

So is this still the best job in the world?
Absolutely. Is this the best interview you ever had?

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Leonard is a staff writer for Bloomberg Businessweek in New York.

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