The winds of change sweeping the blocks south of the Loop are beginning to look like a hurricane of upscale development. It’s as if the residual benefits of the rejected world’s fair are coming anyway, with castles for the rich, lofts for the lawyers, esplanades for the joggers, and dramatic new walkways to the old temples of culture along the lake. One can tour Chicago’s oldest mansions, and even buy one for $650,000 in a spiffed-up historic district. Tourists seeking a bit of the old rat-a-tat can find a gangster-theme restaurant.

Throughout the once forlorn patch of weedy prairies and lonely warehouses between Congress Street and McCormick Place, cranes, bulldozers, and construction crews are raising dust. Emerging from this dust is a hodgepodge of new housing and transformed factories and warehouses. Often impenetrable mazes of torn-up streets, bridges, and sewers represent hundreds of millions of dollars in public investment in new infrastructure.

Cutesy frame houses–selling at $250,000 and up, faster than they can be built–are transforming seedy South State Street into gingerbread. Just west and south of those balloon-frame caricatures is that inaccessible island of town houses, homes, and condos called Dearborn Park, whose sequel, “Dearborn Park II,” now sprawls south toward 18th Street.

Southeast on Wabash Street, the last of the crumbling limestone walls of the Coliseum, castlelike home of political conventions and heavyweight championships, have been carted away to make room for a multi-million-dollar temple and religious headquarters.

Further east, a gray, desolate warehouse-lined stretch of Indiana Avenue has been transformed into an empty grass-lined parkway. Where it ends, between 16th and 18th just across the tracks from Soldier Field, stands an Oz of row houses and town houses called Central Station. Here lives Mayor Daley.

Sitting in the eye of this hurricane is a dumpy 70-year-old single-room-occupancy hotel, the St. James. Though everyone else, including its 150 low-income residents, wants the St. James restored, the building is up for sale and deteriorating because the city wants to tear it down.

The St. James, 1234 S. Wabash, is an unlikely symbol of the drama engulfing the South Loop. It’s the focus of a new battle in a depressingly familiar war–the one pitting the city and its favored developers who want to lure winners to a new area against those who want to save room for the losers.

It’s a turf war/class war that has raged elsewhere–in Lincoln Park, Hyde Park, and River North, and over Presidential Towers. Will Chicago always be a tale of two cities–one prosperous and subsidized and the other impoverished and displaced–or will it learn to create a mixed-income community? Despite lip service to the contrary, this touted mix of rich, middle-income, and low- income residents is impossible to find–either in plans and proposals that find their way to City Hall or on the streets of the actual city.

The St. James is a fitting symbol of this phenomenon. The St. James could be keeping pace by undergoing a $4 million makeover. A plan to accomplish this was supported not only by social progressives, religious leaders, and advocates for the homeless and for more low-income housing–but by area bankers, hospital chiefs, and industrialists as well.

But last year City Hall nixed the proposal. It seemed the St. James was in a “strategic block which has been targeted for large-scale development.” Those who wanted to fix up SROs were told to look elsewhere.

The city claims to want a “mixed income community” in the South Loop, but it doesn’t want to be held to any numbers or percentages. It says it will consider proposals to develop as much SRO-type housing–about 900 units–as the area now holds. But the decision to reject the St. James makes campaign participants skeptical.

Renovation of the yellow-brick hotel, not quite a flophouse but no place for conventioneers, was to have been the first project of a coalition of 11 venerable downtown churches, including Fourth Presbyterian, Holy Name Cathedral, Saint James Episcopal, and the Chicago Sinai Congregation.

These religious institutions formed Central City Housing Ventures, a low-income housing consortium. And together with the Chicago Christian Industrial League, which runs a successful SRO west of the Loop, they devised a plan for a state-of-the-art SRO–the kind favored by even moderate mayors and conservative developers.

Their architects had enlisted the services of Michael Mosteller, a New York specialist in designing humane, affordable SROs–ones that help nurture and even transform their residents, not just shelter them. Under the plan some 175 or so lucky students, Streetwise sellers, pensioners, and other low-income and even homeless Chicagoans would have a decent place to live and socialize.

A contract negotiated with the owner of the St. James by Central City Housing Ventures hinged on the city’s providing some $4 million to finance the rehabilitation. This seemed probable, given the city’s informal encouragement, as well as the support being expressed by South Loop and south-side planning and neighborhood groups. One of those, the powerful Near South Planning Board, represents not only residents but also major banks, hospitals, cultural institutions, and industries in the area.

When the city ultimately rejected the deal, Central City Housing Ventures and the Chicago Christian Industrial League hit the roof. A press release headlined “Urban Renewal or Urban Removal?” protested: “The St. James is a 186-unit SRO built in the 1920s with 52 code violations on file with the Building Department (even before additional life-safety codes are imposed). If it is not renovated soon it will have to close, further reducing the dwindling supply of SROs.”

Despite these protestations and considerable editorial support, the city has not altered its position. Discussions between the city and potential developers of SROs are continuing over alternative sites for low- income housing in the South Loop. But as with the St. James project, which they never went beyond encouraging, city officials have made no commitments.

“And no alternative site or project is as affordable or developable as the St. James project,” says Jackie Miranda, executive director of Central City. “We would do it in a minute if the city ever changes its mind.”

Taking up the cause of low-income housing in the South Loop, the Chicago Coalition for the Homeless has targeted the city’s creation of an expanded Tax-Increment Financing Plan (TIF) for the area. Under the TIF, any higher property tax revenues brought in by the redevelopment would go to pay off $105 million in city-guaranteed bonds for area improvements, and not to other taxing bodies like the Park District, Cook County, or the deficit-plagued Board of Education.

“Unless guarantees are built in to provide low-income housing and job creation and training for low-income Chicagoans, minorities, and women, this TIF will do little more than decorate the playground of the wealthy residents of Mayor Daley’s new neighborhood while it unfairly erodes the tax base for the Board of Education and other local taxing bodies,” says Les Brown, policy coordinator of the Chicago Coalition for the Homeless.

“If the city is going to erode the tax base with a TIF, it ought to do some social good. A city is supposed to use TIFs when development wouldn’t happen otherwise. Anyone could see, long before the TIF was proposed earlier this year, that the South Loop area was undergoing a building and real estate boom with or without it. Though it didn’t need a TIF to redevelop the area, the least the city can do now that it has it is try to ensure that this new neighborhood doesn’t repeat mistakes of the past–as in the North and West Loop areas–and use its power to guarantee the creation of a truly mixed-income neighborhood.”

Racial and economic segregation and isolation benefit no one, Brown says. The Homeless Coalition wants the city to make developers set aside 20 percent of all new housing in the South Loop for low-income residents and “50 percent of all jobs created by South Loop development” for the homeless, minorities, and women. Otherwise, the coalition argues, the city’s worst problems–homelessness, joblessness–will be shifted to other, poorer neighborhoods, while valuable infrastructure subsidies benefit upper-income development.

Though it supported the St. James renovation, the Near South Planning Board, a nonprofit group representing most of the major businesses and institutions in the area, supports the TIF and opposes the Homeless Coalition’s demands for housing and set-asides.

“The TIF is for infrastructure improvements, crumbling streets, sidewalks, and sewers,” says Barbara Lynne, executive director of the Planning Board. “Why should a developer come in and rehabilitate a building if the streets and sidewalks are crumbling and look like hell?”

Lynne says the area has had a surplus of low-income housing and needs more middle- to upper-income housing to balance it off.

“We accept the idea of preserving existing SRO units,” she says, “but we want them upgraded, and we don’t want more than we now have. That’s why we supported the St. James proposal; it would have turned bad SRO housing into better housing.”

Lynne says the Planning Board–which met recently with Brown and the Homeless Coalition–“resents being portrayed as the bad guy in this matter. We are not happy with their approach. They are turning people off with this negative approach to people who have the potential to help them. Most people who are here are aware of and sensitive to problems of low income and homeless. We are irritated because the Coalition for the Homeless makes no recognition of what we have done and what we are already doing.”

Brown says that although he realizes the coalition’s stridency may put off some potential supporters among the New South Planning Board, something dramatic must be done. The displacement of low-income residents from the South Loop is imminent, he says, if low-income housing guarantees aren’t built into city development plans.

“We have already seen portions of the South Loop that have been gentrified displace large numbers of low-income residents. In 1980 Burnham Park, a northern sector of the South Loop, had 5,354 residents and of those 40.3 percent were white, and the median income $8,696. In 1987, there were 10,095 residents, 68 percent of whom were white, and the median income was $42,000. These kinds of changes can take place kind of quickly.”

Though the Homeless Coalition lost its battle to add low-income housing guarantees to the TIF, it will not give up the struggle. Brown says, “We’re going to be persistent. A similar battle to include low-income units at Presidential Towers went on for years. We’re not going to go away. There will be more direct action taken on this issue. We’ll have to turn up the heat, to let the rest of the city see what it’s subsidizing in the South Loop. We will be targeting not only the mayor but specific upscale developers in the area, seeking their cooperation to set aside units for low-income residents.

“We also plan to create our own written and visual plan for the South Loop so we can show how it might be done and can be done to truly create a mixed-income community in Chicago. There’s also the possibility of litigation. A class action suit was filed against the Village of Addison recently because of a TIF there that could result in displacement of Hispanics in the area. Perhaps something similar could be done here.”

Art accompanying story in printed newspaper (not available in this archive): photo/Charles Eshelman.