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At Carm`s on West Polk Street, in the neighborhood sometimes called Little Italy, a group of administrators who have strolled over from the University of Illinois at Chicago sit outdoors and enjoy both the day and some of Carm`s 26 variations on the theme of the submarine sandwich.

Throughout this area of burgeoning restaurants, lots of people are eating lunch, students and faculty and administrators but also people from all over the city, many of whom have turned their cars over to valets. Most

neighborhood streets are designated for permit parking only now, and the influx of visitors is far greater than lot space.

Near the far western reaches of the community, in the 2200 block of West Polk, a real estate agent is showing a newly built townhouse to a couple who work at the University of Illinois Health Science Center. This particular four-bedroom unit is priced at $259,000. Houses over $300,000 are not uncommon.

Nearly three decades ago, however, there was little peace, popularity or prosperity here; and, until recently, there was little interaction between the school and the community in which it sat.

Since before the turn of the century, the neighborhood had been a port of entry into American life for Irish immigrants. By the early 1960s, however, there were only a handful of Irish families left. Although the Notre Dame church remained, the French, too, had moved on. Thirty years ago, this neighborhood was, from the Dan Ryan Expressway on the east to Ashland Avenue on the west, from the Eisenhower Expressway on the north to 15th Street on the south, a place of Italians, Greeks, Mexicans, blacks and Jews. These people, especially the Italians, put down roots by buying property and thus changed the transient character of this part of the 1st Ward.

Halsted Street became the commercial street. You bought clothing and appliances there. Taylor Street was, and remains, a street of European mold-a small butcher shop here, a bakery or green grocers there. The owners lived upstairs.

”There was no air conditioning then,” Florence Scala recalled, ”and people sat out on their front steps in the summers or they walked their dogs, and we got to know each other. If you wanted to have coffee and (an old-time Chicago expression meaning coffee and ice cream or coffee and pasteries), you`d walk over to Harrison and Halsted to the Trimotto, a Greek-run place that the owner said he named for the fact that he governed his life by three mottos. I don`t remember what they were.

”There were empty lots with trees on them throughout the neighborhood,” Scala said. ”Kids played there. We never had enough parks, and that was one of the reasons we wanted urban renewal-much to our bad news later.”

Urban renewal 1960s-style meant huge sweeping projects, and it soon became apparent that the renewal planned for this community was not to be creating a few parks and upgrading some housing. Instead it would be the construction of a more-than-100-acre campus for a long-desired permanent Chicago branch of the University of Illinois. Some 800 houses and 200 businesses would be bulldozed and more than 5,000 people would be displaced. Many in the neighborhood decided to fight.

They pointed out that the Near West Side already showed the footprints of giants-Cook County Hospital, Rush Presbytarian St. Luke`s Medical Center, the expressways, the Jane Addams public housing project right in the middle of Taylor Street`s route through the neighborhood, some high-rise public housing along Roosevelt Road, the University of Illinois Medical Center.

Scala, a lifelong resident of the area, headed a protest group, the Harrison Halsted Community Group Inc., that tried to stop the university-first through sit-ins at the office of Mayor Richard J. Daley and, later, through the courts. Scala herself became a symbol of the common citizen standing up to the juggernaut of big government.

The battles were bitter. Each side attacked the other`s motives with emotion-charged rhetoric. Scala`s house on Taylor Street, the front room of which was an Irish bar and then became her father`s tailor shop, the house she lived in nearly all her life and lives in still, was bombed-twice.

In the end, the juggernaut won, although the idea of urban renewal became tainted in the process, came to be derided as ”urban removal.” Projects of the scope of those of the 1960s will not likely be seen again soon in urban America.

The university rose on the West Side site and opened its doors in 1965. It first was called the the University of Illinois at Chicago Circle, after the circle expressway interchange nearby. Later, in 1982, the Circle Campus would combine with the Medical Center Campus and be called the University of Illinois at Chicago, or UIC.

The very look of the new campus seemed to be a reaction to the bitterness that had surrounded its birth. Designed by architect Walter Netsch, it seemed to face inward, to turn a cold shoulder to the neighborhood, to be a Teutonic castle plunked down in a Mediterranean village. Tucked awkwardly into one flank of the campus were two buildings of the 12 that had made up Jane Addams` Hull House settlement.

The then mayor, Richard J. Daley, said of the project, ”I am convinced that after the school is in operation, everyone will say that this is a great addition to the city.”

And, indeed, as the decades passed, everyone seemed to agree that the school was great for the city. What it did for the neighborhood, however, was less certain.

Ten years ago, Scala was asked what effect the university had had on her community. She said, ”I`ve given it a lot of thought, and while I don`t feel the neighborhood is really any worse for the campus, it`s not any better either.”

A decade after those remarks, the neighborhood seems greatly changed. It`s a ”hot” neighborhood now, with renovation of the older housing stock, new townhouse developments by Hemphill and Shaw, Victor Cacciatore, Jack McNeil and others, prices spiraling up and up.

”The last 12 townhouse units I sold went for $310,000 for 3,100 square feet,” Ted Mazola said. ”Compared to Lincoln Park, they were a bargain.”

Mazola is an owner of the Century 21 real estate company that does a lot of business in the neighborhood. He also is the recently elected alderman of the ward and a founder of the University Village Associates, UVA, a community group that has supported development.

Mazola recently has been accused in the press of allowing the public and business sides of his life to mingle improperly. He has denied the charges, saying that his motives have been to improve the community, not his finances. Some observers say he has improved both. Certainly he is a force encouraging new people to come to live in the 1st Ward, both in the loft developments of the neighborhood north of the Eisenhower Expressway and in the old Taylor Street community and the townhouse developments that have grown in and around it.

”Who is moving into those townhouses?” Mazola repeated the question he was asked. ”In the units I`ve sold, there have been empty nesters moving into the city from the suburbs. There`re young people of every walk of life. The most recent sales I made were to lawyers, an interior decorator, two doctors, a couple of businessmen. Ages also range all over the place. In Garibaldi Square (condos and townhomes), a 150-unit project at Harrison and Ashland, the majority of houses are occupied by people 30 to 45, but there also are some empty nesters there.

”It`s been said that the Near West Side wouldn`t be what it is without the university,” Mazola said. ”I don`t know. I think that because of the housing stock that is here and was here and the area`s proximity to the Loop- my door to Marshall Field`s is 2.5 miles; I`ve walked it-I think it would have happened anyway.”

Scala, who generally does not agree with Mazola, concurs that the neighborhood would have survived without the university.

”Because of its location,” she said, ”it would have attracted the same kinds of people it is attracting now, though the possibility of affordable housing would have been better. The Medical (Sciences) Center was already established, and the new people might have come from there. Hull House was always an attraction for artists and writers. Richard Wright (”Native Son”) and Willard Motley (”Knock on Any Door”) lived there. There`s nothing like that here now, not even a bookstore.”

Certainly, the university has helped create the environment in which certain kinds of businesses-restaurants-and real estate developments-townhouse complexes-could flourish. For Scala, however, the result has been ”a community with a glitzy, fake quality.”

She said, ”The UVA has an annual fundraiser called a Touch of Italy. We

(old-time residents) all laugh at it. It`s really a junior Taste of Chicago, another play on the Italian culture that once was here and that there`s just enough left around to give that sort of thing some validity.”

Scala points out that the new townhouses tend to be fenced and gated, to look inward to interior courts. Cars pull through the gates into garages.

”There`s no way I`m going to run across any of those people and get to know them. They might be the nicest people on Earth, but there`s no place where we`re likely to meet.

”A lot of what makes a neighborhood isn`t here anymore,” she said.

”There are no yards, too few parks, no shopping area. (The only supermarket in the area, a Jewel, is in a failed shopping complex that is being taken over by the university. Jewel has a lease until 2004 should they want to stay.)

”Take a look at the `Tuscany Club Villas,` ” Scala said, referring to a townhouse development. ”Any villa in Italy looked like that, they`d tear it down.”

As the old Taylor Street community has changed in three decades, so too has the university.

The number of undergraduates at UIC has declined as much as 4 percent in the last decade and is expected to drop another 2 or 3 percent in the `90s. Overall, however, enrollment has remained about the same at 25,000. The void in undergrads has been filled by graduate students and students heading for professional degrees. This demographic shift goes hand in hand with the increasing role of research at UIC, an area that has grown there 60 percent since the 1982 consolidation and is projected to double between now and 2000. These changes will translate to more resident students who, in turn, will create a need for more housing and recreational facilities on campus. There also will be a need for more science buildings.

UIC`s master plan notes that expansion to the east is precluded by the expressway and by the fact that that area already is developed. The same situation exists to the north. The plan recognizes that expansion westward would be politically unwise and states the university`s intention to ”respect established community edges.”

With these restrictions in mind, the plan now calls for development southward, south of Roosevelt Road between Morgan and Halsted Streets to the South Water Market.

L. Vaughn Blankenship, associate chancellor for resources planning and evaluation, said, ”The plan is to move our playing fields south and build more science buildings on that land. We`d put some warehouse and other facilities in that southern parcel as well. The Maxwell Street market would be relocated east of where it is. It would become an area of about three blocks and be more organized than the sprawl you see now. There`d be stalls, a market master. It might end up on university land, but we`d rather the city, not us, run it. Construction in this area could begin in the next five years.”

Other changes will be more in the nature of softening the edges of, especially, the east campus, to reduce the aggregate walls and walkways and increase the green spaces. The effect will be to better blend the campus with the community.

”Already,” Blankenship said, ”the city has closed off Morgan Street where it passes through the campus, and we`ll be landscaping it to fit in better with the neighborhood. Overall, we want to make things less

forbidding.”

The Chicago Housing Authority and the university have talked about the possibility of the Jane Addams public housing buildings becoming mixed-use facilities. Some apartments would be available for purchase by current residents. Other apartments would become student housing.

Also being talked about for sometime in the next 10 to 15 years, Blankenship said, is a ”performance center where the community can assemble for concerts or whatever. There`d be gallery space for exhibits, too. It would draw neighborhood people to the university, and they could see each other here and meet each other here.”

Ultimately, the blending of school and community may best be accomplished by the neighborhood`s viewing the university not just as buildings, even as buildings with inviting greenspaces, but as a resource. The other side of that coin is the university turning outward, sharing its most valuable property, knowledge.

One example of that is the new Galileo magnet school housed in the old Jackson School building on South Carpenter Street. The university`s College of Education is providing programs, educational resources and personnel. A neighborhood activist, Oscar D`Angelo, has said that the key to the success of the scholastic academy is ”university involvment.”

Ald. Mazola commented that ”to tap into their expertise like that is to make UIC a true urban university. I tell them, `You want to be good neighbors; you want to be an urban campus? Then don`t send your teaching assistants to La Grange. Keep them in the neighborhood.` ”