The Clash on Clybourn Avenue : Along Chicago’s ‘Gaza Strip,’ manufacturers are trying to face down developers and yuppies who want to gentrify the city’s industrial sector. The question: Can steel mills and gourmet groceries coexist?

Mary Sue and John Crawford live in a luxury loft condominium near a steel mill, a cosmetics factory and a scrap metal yard. Their own home was once an automotive parts warehouse.

Not far from the Crawfords, in a factory that takes up seven city blocks, workers pour red-hot liquid steel into molds. Near that, a bar caters to young professionals in coats and ties.

In the same neighborhood, a smelly tire recapping center does business within three blocks of a sparkling new shopping mall with a gourmet grocery store and a six-screen theater.

This is Clybourn Avenue, two miles northwest of downtown Chicago, long a monument to the Windy City’s industrial heritage. Home to gritty, century-old manufacturing plants and soot-stained brick buildings, it is now home as well to a controversy over the future of industries that once were the economic base of big industrial cities in the Midwest and Northeast.

Key Vote Due

Developers want to recycle more of these old buildings, transforming them into offices and apartments, bars and boutiques, and driving up real estate values and property taxes in the so-called Clybourn Corridor.

Many manufacturers want the area to remain as it has always been; they propose preserving the area as a historical industrial district in the same way that blocks of historic homes are preserved in many cities and buildings are saved as landmarks of the past.

They believe that having the city designate the area as a Planned Manufacturing District would keep real estate values and property taxes down, and, the manufacturers say, would save jobs.

Perhaps as early as this month, in a vote that could set a pattern in Chicago and serve as a model to other cities, the City Council will decide whether gentrification will go forward or whether the Clybourn Corridor will be preserved as a Planned Manufacturing District.

“Driving down the Gaza Strip of Clybourn you see yuppification and you see industry,” said Louis Masotti, a Northwestern University professor of management and urban development who has studied Chicago’s business climate. “It is a clash of economic cultures--the attractive retail jobs versus the blue-collar, noisy, grimy high-paying jobs. It is a clash between those who make it and those who buy it.”

Masotti, a consultant to a firm fighting to create the industrial preservation district, said he believes that “the yuppies should stay east and the industries should stay unfettered on the West Side.”

Experts see the clash between white-collar homes and blue-collar workplaces as an outgrowth of wrenching economic changes that have rocked many urban centers as heavy manufacturing has given way to high-technology and finance-related industries.

Michael Beyard, director of commercial development research for the Urban Land Institute in Washington, said factories that once were a mainstay of city economic life are now finding land cheaper, services better and transportation faster in suburban industrial parks. Meanwhile, the office and high-rise boom in the cities has pushed up land values so far that those plants that remain find the costs prohibitive when they try to expand or modernize, he said.

“It may make more sense for a neighborhood to change to maintain the tax base and jobs in the city than to maintain industrial uses in an area that has changed economically,” Beyard said.

Seeking Designation

Not everybody agrees with that assessment, however, as urban industrialists like those in the Clybourn Corridor still think that they would be better off to fight than switch.

In Chicago’s Planned Manufacturing Districts, restrictions would be placed on commercial and residential development, helping to maintain a diversified economy and to protect dwindling blue-collar jobs. Since the early 1960s, Chicago has lost 250,000 manufacturing jobs while gaining about 200,000 lower-paying service industry jobs.

Chicago’s Clybourn Corridor, part of the larger Chicago River industrial sector, is the first area to seek the city’s new planned manufacturing designation.

Masotti said the new legislation is needed because the Chicago that poet Carl Sandburg called the “stormy, husky, brawling city of big shoulders,” is hunching over to become the city of “soft shoulders” with its increase in financial, real estate, insurance and retail businesses.

Chicago lost its sprawling stockyards and meat-packing industry in 1971 and is trying to save the remaining industrial jobs, which since 1983 have been vanishing at the rate of 5,000 a year.

Predominantly industrial since the turn of the century, the Clybourn Avenue area employs 1,700 workers in 31 manufacturing firms, including steel processing, chemical manufacturing, industrial refrigeration and custom-made picture framing.

“The strongest sector of the economy is the industrial sector. The Clybourn Corridor is a relatively safe area for an industrial market, with public transportation . . . a good supply of industrial buildings and a good labor force,” said Greg Longhini, Chicago’s industrial land use planner.

“If the city wanted to develop a manufacturing district, 10 years ago would have been a great time to do it. It is too late in the game to establish at this point,” responded David Schopp, a factory owner who says that creation of the industrial district would prevent him from selling his property for a profit.

Value Doubles

But if city officials and industry owners want to lock in the existing industry, real estate developers such as Tem Horwitz may have already stolen the key.

Horwitz calls the Clybourn Corridor an industrial wasteland. By creating the first and only residential building there in 1984, he became a pioneer, bringing residents from upscale neighborhoods on the lake front two miles west into the industrial desert.

The value of apartments in Horwitz’s Clybourn Lofts, which once warehoused pianos and auto parts, has doubled, up to $300,000 each. The 57 lofts have high ceilings, big windows, sun decks and an address tantalizingly close to trendy Lincoln Park.

Similar conversions of industrial property to residential use is taking place in New York.

“The lofts in Manhattan are very fashionable with a lot of charm and space,” said Beyard of the Urban Land Institute. “Now there are artists, yuppies and the rich living there, so there is displacement of those in the manufacturing industry. You can’t compete with more expensive uses like residential and specialty offices for architects and designers.”

As relatively wealthy people take up city living, the economy creates low-paying retail and restaurant jobs. And there is fear that more manufacturing jobs, paying an average hourly wage of $9.67 nationally, will be lost.

“The loss of the city’s manufacturing jobs is affecting economic stability,” said Mary Howe, the owner of an industrial refrigeration company. “You can’t replace $30,000-a-year jobs with $3.35 an hour. The city can’t survive on McDonald’s.”

Advocates of the planned manufacturing district stress that industry was in the area before condominiums, offices and stores arrived. But newcomers complain of noise and other pollution. Jerry Lasky, owner of a bar and office space, said his office building shakes from vibrations caused by the movement of heavy equipment at a metal compacting company in the neighborhood.

Noise Complaints

If the manufacturing district is created, further residential conversions would be forbidden. Otherwise, more and more residents are likely to arrive to wake up to the sound of metal being crushed, the smell of old steel or the roar of nearby truck rigs.

Masotti says that for those who want a quiet suburban life, the Clybourn Corridor is not the place to settle down. “They choose to live there,” he said. “It isn’t easy to move an airport or steel factory. It’s a traditional battle. It’s incompatible uses to have a loft filled with yuppies and ingot manufacturing in the same area.”

“The day after people moved into the lofts they called the alderman to complain of odors and noise. They figured industry was going to move out when they moved in,” said Sandi Smith, who lives just outside the Clybourn Corridor.

The changing neighborhood leaves A. Finkl & Sons Co., the last steel mill on the city’s North Side, questioning its future.

“A steel mill cannot live next to a commercial or residential area. We would be making noise, vibrations, heat and flare, which would fall in violation of city codes,” said Chairman Charles Finkl.

When the Sheffield Foundry adjacent to the Finkl & Sons mill went out of business and sold the land to a developer for a shopping center, Finkl & Sons invested $2 million to buy land and put up a warehouse and service center--a light manufacturing site that creates a buffer between the heavy industry and the new commercial development. Only an alley now separates the new shopping center on the site from the light manufacturing facilities.

The Finkl & Sons mill is three blocks from the loft condominiums and a few doors away from the Hunt Club Bar & Grill, owned by Lasky and former Chicago Bears player Gary Fencik. Factory doors are closed at night in an effort to keep trespassers away from the dangerous steel forging process.

Can’t Sell

If industrial displacement continues, moving a 6,000-ton press and putting up a building at $80 a square foot would be financially out of the question for Finkl & Sons. To survive on Clybourn, the company needs to be buffered by light manufacturing.

Schopp, president of U.S. Sample, a wallpaper sample book maker, said the planned manufacturing proposal would make it difficult for him to sell his property, which is about 30 feet away from the condominium lofts.

“You can’t sell it for heavy industry use this close to a condominium. During night shifts, there are complaints of noise from workers who get into their cars and blast their radios,” he said.

Not all incursions into manufacturing areas are made by those looking for a place to live. Boston and San Jose are trying to keep their city’s research and development firms from taking over manufacturing areas.

Marilyn Swartz Lloyd, Boston’s economic development director, hopes to create an industrial designation that would halt the conversion of low-cost manufacturing space into offices stressing high technology.

Zoning wars have also broken out between commercial and industrial developers in Philadelphia. New York is trying to impose zoning restrictions in its garment district to ensure equal space for industry beside new conversions to office space.

Studies show that manufacturing jobs can have a multiplying effect on the economy by creating other employment opportunities through consumer spending. In Portland, Ore., blue-collar employment has increased 30% in the past decade under an industrial sanctuary policy.

According to Masotti, industry in Chicago is an endangered species.

“We have a history of manufacturing in this town,” he said. “You can’t forget the nitty, gritty, grimy manufacturing.”