The Record · Chapter Eight

The Exit

The bank got rescued. The workers’ checks bounced. The steel left the Calumet for good.

By Jason C. Wandel and Claude for Chicago Register · Monday, October 19, 2026

This is the stretch from 1970 to 1992, when the mills that built the Calumet went dark and the money moved its attention downtown. Last time the city cleared neighborhoods with one word, blight, and the aldermen decided where public housing could go with a nod nobody wrote down. Now the jobs that held the South Side together started to leave. Watch who left first, and who was left holding the paper.

Start with a committee.

In 1956 a group of business leaders formed the Chicago Central Area Committee to plan the Loop. In 1973 the committee’s own corporation published a plan called Chicago 21. The man leading it was the head of Continental Illinois, then one of the biggest banks in the country. Neighborhood groups protested that nobody had asked them. The plan went ahead.

The Commercial Club paid for the Burnham Plan in 1909. The Central Area Committee wrote Chicago 21 in 1973. Seventy years apart, the business table drafted the city’s plan and the city signed it.

Today that same committee’s executive members include Sterling Bay, the developer behind Lincoln Yards, and Jenner and Block, one of the city’s big law firms. Real estate, law and the plan at one table, seventy years running.

Here’s what happened to Continental Illinois. In 1984 it nearly collapsed, and federal regulators stepped in with what was then the biggest bank rescue in American history. The bank that led the plan for downtown got saved by the public. Hold that thought for the mills.

Now a law firm.

In 1972 a young state lawmaker named Michael Madigan co-founded Madigan and Getzendanner, a firm that helped property owners appeal their tax bills. Madigan would become Speaker of the Illinois House and hold that job for most of the next four decades. The men writing the tax laws in Springfield had a firm that got paid to help owners beat them. We’ll see what that cost the rest of us in the last part.

Now the mills.

On March 27, 1980, about 3,300 workers at Wisconsin Steel on the Southeast Side showed up and found out the mill was closing that day. No notice.

Here’s how it got there. In 1977 International Harvester, which owned the mill, sold it to a company called Envirodyne that had never run a steel mill. Harvester lent Envirodyne the money to buy it. A long strike at Harvester cut orders, and in 1980 the whole thing went under. In April the bank told the workers their last paychecks were no good. Their pensions and health care went with it.

Look at that sale the way the workers learned to. Harvester sold the mill to a buyer that couldn’t carry it, using Harvester’s own money, and when it failed the old owner was out of it. The workers were left with checks that bounced.

A thirty year man at the mill named Frank Lumpkin got the workers together into the Save Our Jobs Committee. They wanted the mill reopened and their back pay, pensions and benefits paid. They fought in court in Illinois and in Washington for seventeen years. In the end they won settlements of about $17 million, about a third of the roughly $40 million they were owed. By then, more than one in six of the old Wisconsin Steel workers had died.

We print that one as a win, because it was. Seventeen years of men who refused to go away got back a third of what was theirs. What held it was numbers and stubbornness and the courts. The other two thirds stayed gone.

In 1983 Chicago elected Harold Washington, its first Black mayor. The City Council split into two blocs, and for most of his first term the majority bloc blocked nearly everything he sent them. The papers called it Council Wars. He was an objector who took the biggest seat in the building and found out how much the other seats could still do.

In 1984 Washington created the city’s first tax increment financing district, in the North Loop. It’s called a TIF. Here’s how it works in plain words. The city draws a line around a neighborhood and freezes the property taxes that go to the schools, the parks and everybody else at today’s level. Every new dollar of tax that comes in above that line for the next twenty three years goes to projects inside the line instead.

That first one, later called the Central Loop TIF, ran until 2008. About $1 billion went through it. About 30 percent of everything it raised went out the door in its last twelve months.

Freeze the tax, keep the growth. More than half of all the TIF money Chicago has spent since 1984 went downtown or right next to it.

In 1989 the city ruled Block 37, one of the original 58 blocks on the 1830 map, blighted and knocked it flat before anybody had the money to build on it. It sat as a hole in the middle of the Loop for about twenty years. Once it’s a hole, the city has to keep paying to fill it.

One of us lived downtown on his own through most of the 1990s, right in the middle of that wait. Block 37 had the feel of a place to be. Shopping, somewhere you’d want to stop on your way home. It never happened. Everybody just waited and waited. He left in 1999, and Block 37 was a big part of why. The whole city felt like one string of setups like that one, and that block was all of it in miniature.

Then the biggest one.

South Works, U.S. Steel’s mill at the mouth of the Calumet River, had about 20,000 people working there at its wartime peak. By 1979 it was down to about 10,000. On January 9, 1992, U.S. Steel announced it was closing. On April 10, 1992, the mill went dark with fewer than 700 people left on the clock.

The mill that went in at the Calumet mouth in 1882, the one Morgan’s dinner folded into U.S. Steel in 1901, closed 110 years after it opened. The land sat empty by the lake. Remember it. Somebody’s building on it right now.

Now cross the state line, because the Calumet never stopped at it.

Gary, the city named after the chairman, hit 178,320 people in 1960. Gary Works had more than 30,000 people on the payroll in the early 1970s. By 1990 it was about 6,000. Gary lost almost a quarter of its people in the 1980s alone, and today it’s under 70,000. Hammond and East Chicago lost jobs, people and tax base on the same calendar.

In 1967 Gary elected Richard Hatcher, one of the first Black mayors of a big American city. He took the keys to a company town just as the company started walking out of it. Same lesson Harold Washington got sixteen years later. You can win the biggest seat in town and still not own the ground under it.

Over in East Chicago, a lead smelter had run from 1920 to 1985 on ground right next to where people lived. When it closed, the lead stayed in the dirt. Remember that one too.

Chicago kept the market. Indiana got the smoke. Then the jobs left both sides of the line, and the smoke stayed in the dirt.

So here’s what this stretch adds up to. The bank that planned downtown got rescued by the public. The mill workers got bounced checks and, after seventeen years, a third of what they were owed. The tax firm got paid by the owners it helped. The TIF took the growth downtown. And the steel left the Calumet for good.

Here’s our question. When Continental Illinois went down, the government stepped in. When Wisconsin Steel went down, the workers’ checks bounced. Who decides which ones get saved?

Next comes the last stretch, the one we’re living in. The city starts selling the things it owns.

The scoreboard

Read it yourself

Sources