1. John McCormick in the Trib reports that the CTA will locate smart-card recharge boxes (which are about shoebox sized) “at [roughly] area currency exchanges and convenience stores” for a mere 1.8% commission. This will greatly help to decrease the social cost of raising cash fares while further spreading the benefits of Chicago Card.

Now, how about allowing daily or weekly passes on Chicago Card? I wonder if the software is smart enough to do an “auto day pass”: once you’ve taken $5 ($6?) of travel within a day, every additional trip could be free or refunded after the fact. (I understand that London’s Oyster smartcard has a “daily price cap” that ensures riders never pay more than a day-pass price for one day’s travel; any additional trips are free. This mechanism requires just a software routine to total each day’s usage and credit back the “overpayment.” For instance, say a trip is $2 and the day pass is $6; the fourth trip of the day could either be free, or the $2 would be refunded to the account at the end of the day.) Again, day passes are good for the system since they encourage more-profitable off-peak travel and reward the system’s best customers — and smart cards are good for the system since they are easier on equipment, do away with cash handling, and speed boarding.

These days, if I want to make a side trip (go to Chinatown for lunch, stop by a movie after work and then go home — all of which involve off-peak travel), I need to remember to grab one of the “1-Day Fun Passes” I have at home before leaving for the day — and forego the benefits of Chicago Card all day. I also need to remember to buy new passes, which seem to only be available at the visitor info centers and the airports. More likely, I’ll bike to work instead and thus avoid the marginal travel cost for the side trips. A “daily price cap” would solve this dilemma and make me (and many others) more likely to choose transit for these off-peak, non-work trips. A daily price cap would solve this.

2. Greg Hinz reports in “Crain’s”:http://www.chicagobusiness.com/cgi-bin/news.pl?id=18087 that Lori Healey, presently a partner at Perkins & Will, will be DPD’s new commissioner. Healey was co-chair of MPC’s Urban Development Committee during my stint there, and consistently struck me as a dedicated, tough-nosed, and knowledgeable advocate: a good negotiator and facilitator. That’s pretty much what the city needs at DPD.

Found a report at the World Bank site written by Prointec Inocsa Stereocarto for the Madrid transit agency comparing operations integration and funding sources for several major transit agencies. I was mostly looking for just how lavishly France funds the Paris Metro, and found ample evidence: the French government kicked in $800M to run the Parisian transit system in 1997, and that local employers paid nearly $1.7 billion in payroll taxes (and discounted passes) to finance system operations. The riders paid just 25.7% of the RATP’s total cost, with taxpayers picking up the rest: 31% from the 2% payroll tax, 17% from the feds, and the rest from payments and traffic fines from the local governments.

Compare that to 53% farebox recovery for CTA, with just $700M in regional subsidy (plus a 25% match and reduced fare reimbursements from the state, totaling <$250M) for all of RTA, for instance — to serve a metro area of similar scope, although half as densely populated, and therefore much more expensive to serve with transit.

Update 17 July 2006, from a Fiscal Policy Institute (Word file) document:
MTA (NYC) finances roughly break down to 70% system generated (about 55% fares, 15% advertising and tolls), 25% dedicated taxes, and 10% transfers from other governments (including $250M from NYC). The six dedicated taxes include corporate income, petroleum importation, vehicle registration fees, 0.25% on real estate transfers and mortgage recordings, and 0.25% on retail sales. The taxes were introduced in the early 1980s, with a nexus focusing taxation on “two groups who derive significant benefit from an effective mass transit system: (1) the business community and property owners,” who benefit from better access, higher density, higher property values, and better business productivity from a broader labor pool, and (2) drivers, “since an efficient mass transit system relieves congestion and enhances their mobility.” Transit also improves the environment, facilitates economic activity and expands the tax base, and supports jobs elsewhere in the state: “public spending on mass transit has by far the highest economic multiplier among all industries in New York State”; $1 billion spent yields $3.4B in total economic output, 37,500 jobs and $1.8B in payroll. (Sadly, this is unsourced.)

Crain’s Greg Hinz reports that the CTA’s 2006 budget includes a mild cash fare increase, furthering the two-tiered fare system (and apparently adding more tiers) separating smart cards, transit cards, and cash:

Those who pay in cash would have to fork over $2 a ride, up from $1.75 now. But only 20% of CTA users now pay in cash, with the others using the pre-paid Chicago Card or daily, weekly or monthly passes.

Removing the paper transfer cards would undoubtedly save cash. The differential pricing for bus and rail for those using Transit Cards will undoubtedly cause additional confusion. But overall, the net effect will be to speed operations: discouraging payment with nickels and dimes saves everyone time and money, and it’s time the prices reflect that.

CTA can both improve ridership and address the equity concern raised here by vastly increasing the availability of daily and weekly passes, and prepaid Transit Cards. Sell them at every corner store, every train station, and every bus driver. (Wouldn’t take much: just have them dispense $5 day passes as they now dispense transfers.) NYC added day passes to all MetroCard vending machines, with a “positive impact”:http://www.schallerconsult.com/pub/metrocrd.htm on the bottom line:

Evidently, passes attracted not just those already making enough trips to save money with a pass, but also attracted customers just below the break-even threshold (13 trips for the 7-day pass and 11 trips for the 30-day pass). These customers have taken advantage of passes to boost their ridership past the break-even point-making transit cheaper for them while increasing NYC Transit revenues. Some transit riders also report that pass usage cut into their taxi ridership, an unsurprising development since pass users’ incremental transit trips are free.

“A pass will allow much greater mobility for transit riders and that’s great news for our economy. It also means less traffic congestion, a saner city and cleaner air,” said [Straphangers Campaign’s Gene] Russianoff in “1997”:http://groups.google.com/group/bit.listserv.railroad/browse_thread/thread/256de9efe5008e53/d50515e5c1f643f0%23d50515e5c1f643f0?sa=X&oi=groupsr&start=0&num=3

The weekly passes were (reportedly) especially popular among low-income workers who can’t front the cost of a monthly pass; at $20/week or $75/month, it’s almost a wash, anyways. “Surveys in NYC”:http://www.straphangers.org/discount.pdf (p. 17) indicate that over a fourth of lower-income riders there used 7-day passes, vs. less than 10% of high-income riders, and that 60% of low-income riders cited cost as a deterrent to buying a 30-day pass. Low-income riders are also more likely to be “unbanked,” thus creating a deterrent to using the credit-card-linked Chicago Card Plus.

I’m not sure what stands in the way of stores other than Jewel/Osco and currency exchanges offering the cards for sale. If CTA doesn’t want to deal with the complications of running a wholesale business, then outsource it (maybe to the folks who put Lotto machines on every corner in poor parts of town). If it’s an exclusivity agreement, then that’s stupid: any upfront premium would be more than offset by higher sales.

(Thanks to Adam Kerman for the idea about passes.)

It’s official: Federated will kill the ancient, revered Marshall Field’s nameplate and replace it with the hated Macy’s. Of course I cut up my Field’s credit card and sent a shard of it to Federated headquarters out of sheer pique (and my own rather extreme sentimentality about place), but in the short and long term today’s announcements don’t even make great business sense.

What I posted to Chicagoist‘s comments:

Sure, a stronger brand identity nationwide is generally good for business. What’s curious about this is that Marshall Field’s probably has higher name recognition in the USA than, say, Lord & Taylor — which was spared because it doesn’t quite fit into Federated’s business strategy. L&T isn’t even that special to Manhattanites, unlike Bloomie’s, Saks, and Bergdorf, but somehow it survives?

Whoever buys Lord & Taylor (“exploring strategic options” means “on the block”) would be smart to negotiate the Field’s name as part of their deal. It’s not like Federated has any more use for it, unless they want to keep a department at State Street trafficking in Field’s memorabilia.

[Federated CEO Terry] Lundgren has specifically mentioned State Street as a showpiece in several interviews I’ve seen this year. He admits that Field’s trades at a higher level than Macy’s East, but said something about how Macy’s West in SF and Seattle is similar. (I’ll look up the cites at home.) Apparently, he thinks that he can have the best of both worlds: a national brand name that means different things to different cities. But to realize $500M in “cost synergies,” which the shareholders want, he’ll have to cut back on those less-profitable lines (like, oh, those special things carried only at flagships) and on service. I agree that Macy’s stands for nothing but dark stores and middlebrow selection, dominated by those high-margin but cheesy private labels that investors love.

The marketing push at Field’s in recent years has centered around highlighting State Street as a distinctly Chicago institution and as something special, restoring its faded allure. Federated’s own research indicates that people’s fond memories of Marshall Field’s are all about the State Street grand dame — one of retailing’s greatest momuments — and not their local branch stores. Yet Lundgren won’t promise that the recent (and fantastic) improvements at State Street will stay, only that the bottom line still rules above all else; as he told the Tribune, “Of the coming changes to the historic State Street flagship, Lundgren said, ‘I just know it needs to do better.’ ” This directly contradicts recent (2003-2005) statements by Field’s executives that sales at the chain overall, and State Street in particular, had upticked after many years of stagnation.

That polish behind State Street plays into a broader trend by cosmopolitan consumers to seek local alternatives, or at least local spins, on global trends. Dumbing down the entire chain to a nationwide, thousand-store Macy’s name not only reduces the chain to a commodity level that it will share with Wal*Mart, but also squanders the considerable goodwill that Field’s has engendered over the years: the splendor of State Street, true to Marshall Field’s plans, created a true genius loci. The architecture wasn’t value engineered and yet was magnanimously opened to all. It offered a modern temple of cosmopolitanism and grandeur to the emerging middle classes of the world’s preeminent Modern city. Arguably, in a pluralist city of many denominations, the one religion everyone could agree on was consumerism; Field’s played a key role in changing millions from mere workers to consumers, and the building provided an appropriate place of worship. The resulting emotional connection to shoppers built a powerful brand.

From the Tribune:

“Chicagoans and folks in the central United States tend to be more brand loyal,” said Burt Flickinger, managing director for Strategic Resource Group in New York. “While Field’s was a broken business, it was not unfixable. Federated has taken a broken business and made it a much more broken business.”

Another retail consultant said Field’s could be fashioned into an upscale brand.

“Retailing has been skewed to the low end and the high end. Marshall Field’s would be a powerful high-end brand. Why would you bring it down to the mushy middle?” asked Al Ries, author of the “The 22 Immutable Laws of Branding.”

“This is particularly bad,” he said. “I’d rather have a name that no one has heard of with potential rather than a name like Macy’s that everyone has heard of but has no potential. People know about it, but it will never be perceived as a high-end brand.”

Indeed, the “lost years” at Field’s aside, the brand has significant national cachet since it served its upmarket clientele well for decades. Macy’s has always catered to the mid market.

David Greising has a useful perspective, also in the Trib:

If this all sounds a bit emotional, well, it is. And emotion is what Lundgren and the legions of MBAs that argued for this deal missed when they decided that the Field’s name must go. They relied, instead, on logic and experience.

Trouble is, it’s hard to view Field’s recent history and not get a bit emotional or, as some might indelicately put it, get mad. People get mad because Field’s demise was not an act of nature, it was a result of neglect.

But the hurt is more than just some parochial paroxysm. “Chicago properly should resist this national homogenization to the extent it can,” O’Connor said. “But this is beyond our control, really.”

Field’s is a name that mattered, so Field’s hurts more than the rest.

In the end, a retailer is nothing but a pile of inventory, some lease papers, some employment contracts, and a brand — its “goodwill,” its “emotional bond with consumers”:http://keepitfields.org/testimonials.htm. Emotion _does_ matter in the world of retailing, and Federated doesn’t seem to understand that. Their surveys only asked the up-or-down questions, comparing two incomparable commodities: the long-neglected Field’s and the better-tended, much larger Macy’s. No attempt was made to truly understand the brand’s intrinsic value.

Meanwhile, some (like the mayor) are shrugging and saying, “well, they’re not cutting jobs.” Of course no jobs will be cut locally; there’s no Federated-May overlap here, except for Lord & Taylor. Jobs will be cut everywhere else because there’s substantial overlap. Either way, no jobs would have been cut here, so that simply should not factor into the equation.

Long after I stopped using Randolph Street Station, the long-promised (20 years?) renovation actually happened. Now, Paul Beitler — one of those rare businessmen who really does care about how the public experiences his buildings, recently investing millions into the Pittsfield and 360 N. Michigan with no obviously huge payoff — has been hired to manage the station. Sure, no one wants an odorous chicken shack (hah) in their train station, but Beitler would be remiss to forget that this station serves South Siders–and could provide convenient competition for overpriced Millennium Park concessionaires.

In other Metra news, the selection of Arlene Mulder for a Cook County board seat bodes fairly well for the region. A stronger voice from suburban Cook County on the board might counteract Jeff Ladd’s stridently anti-Cook stance (odd, considering most of Metra’s budget comes from Cook), and Mulder brings great experience in the value of transit oriented development to an agency which typically prefers its stations surrounded by parking.

Well, not quite. While admiring the 2005 bike map, I decided to see how many Chicago community areas I have neither walked nor cycled in and found five: Avalon Park, Burnside, Calumet Heights, Dunning, and Mt. Greenwood. The first three are in a triangle south of the Skyway and southeast of Chatham — not too difficult, and near some interesting street patterns I want to check out. The latter two are at the city’s edges. Dunning is due west-northwest, but literally has nothing to see but miles of bungalows (including Schorsch Village) and an asylum. Mt. Greenwood has the Agricultural High School, Cook County’s last working farm.

A curious thing: the 2005 Chicago bike maps were paid for by Chase/Bank One as part of its Bike One marketing scheme. (Personally, I suspect it’s because LaSalle has had pretty good success “owning” many of the local running events, notably the Marathon.) This year’s map notes the many recently opened branches around town. Curiously, a good many are within one block of CTA stations — most obviously following the Blue Line out along Milwaukee, where before there were no branches between the West Loop and Avondale, now four branches have sprouted within a block of the Blue Line between Division and Logan Square, plus two further from the train. This is in addition to the ATMs placed inside many stations. Of course, this makes eminently good sense — many stations have existing retail clusters around them, and people want convenient banking that fits into their daily schedules, and many of said schedules include the train — but it’s still interesting to have this longitudinal comparison.

CTA stations that Bank One has opened branches within two blocks of in the past year:
Red Line: Cermak, Harrison, Chicago, Sheridan, Lawrence, Bryn Mawr, Thorndale/Granville
Brown Line: Armitage, Irving Park, Western, Kedzie
Blue Line: Logan Square, California, Damen, Division
Orange Line: Roosevelt, Pulaski
Purple Line: South Blvd.

A Chinese fast-food franchise at an airport is managed by a company owned by a Black Muslim named Jabir, except that it’s really run by a white guy named Tony. [from Chicago Journal]

Today’s random find: in 1901, residents of East Garfield Park were riled up over the noise problem in the 13th Ward. Most disconcertingly, they wanted a proposed roller coaster (“centrifugal railroad,” for how centrifugal force would keep it on the tracks in a loop) stopped, as “they dreaded the yelling this novelty would produce.”

It’s hard to even imagine a time when (a) roller coasters were so close to houses that they could be heard from there, as amusement parks now have to locate out in the exurbs to get the needed quantities of parking; and (b) yelling was a primary concern of voters.

An interesting map in Sunday’s NYT shows that, by the standards of the Wildlife Conservation Society, Illinois is perhaps the nation’s least “wild” state — almost all of its terrain has seen substantial human disturbance. Unlike other states, no inhospitable slopes or deserts stubbornly resisted settlement; the settlers planted their stakes across the Prairie State with ease, showing perhaps that this state was uniquely suited for human settlement.

Sandra Jones in Crain’s points out, and Sandra Guy in the Sun-Times insinuates, that Federated’s decision not to terminate Lord & Taylor’s 54 stores puts the writing on the wall for Marshall Field’s 60 stores. Simply put, Federated’s goal above all else is to make Macy’s the national department store, a feat never before accomplished in a marketplace where local names once held tremendous sway. Field’s three principal markets–Chicago, Detroit, and the Twin Cities — are too important to that strategy, and if L&T stands in those markets, then Macy’s only entr�e will be to replace Field’s. Both are boutique operations compared with what will soon be 730 Macy’s, and Federated clearly thinks that Macy’s can trade at the same upper-middle level as Field’s.

And thus, within the span of a few years, Federated will have killed off maybe 1,600 years of American retailing history, wiping out the pride and joy of the gentries of a score of cities. All replaced, of course, by a trio of names from the self-proclaimed Capital of the World.

The list of store closings will open up a few choice mall opportunities (UTC in San Diego, King of Prussia, Burlington and Natick near Boston, and a bunch of those dual Robinsons-Mays in Southern California) but oddly doesn’t affect any of the half-dozen downtowns (e.g., Boston or Los Angeles or St. Louis, where Famous-Barr does almost no trade) which might have feared store closings.

Surprising find in the list of Illinois earmarks inserted into the House version of SAFETEA: $4 million for the Eisenhower cap in Oak Park. Also interesting: Cermak BRT, not Ogden Transitway, was singled out for cash — maybe Lipinski, Jr. has different priorities?

Not so surprising: the Hastert Highway. Sigh.

Not at all surprising: only 12.6% of the $215.5M in earmarks will be spent in a city with 23% of the state’s population. (Granted, the city might do better in getting allocations from awarded, non-pork funds.)