Philip M. Klutznick did not invent the atomic bomb, public housing, the modern suburb, the shopping center or the State of Israel.
But Klutznick, who turns 80 Thursday, did play an important role in the evolution of all those things.
Statesman, millionaire, adviser to five Democratic presidents, and now dean of real estate developers in a city known for big-name developers, Phil Klutznick has been a Chicagoan for all seasons.
And he still is, as many were reminded earlier this year when Mayor Harold Washington asked him to cochair a panel that will examine the problems of the Chicago Housing Authority.
At the time, the semiretired Klutznick told a reporter that the CHA job was the toughest he had ever undertaken.
He was too modest.
This is the man who during the Depression helped put together the federal government`s first efforts at slum clearance and public housing; who during World War II supervised construction of entire residential cities around defense plants; who, with his business partners after the war, built the suburb of Park Forest and later the region`s first, and arguably best, suburban shopping malls; and who during the `70s led a ”back-to-the-city”
movement by helping develop the Dearborn Park townhouses south of the Loop and his best-known achievement, Water Tower Place.
Klutznick is still very proud of Water Tower Place. In a way, the 74-story, mall-hotel-condominium complex is the most impressive decoration on his office wall. It`s all a visitor sees looking north out the window behind his desk on the 9th floor of Olympia Centre, 737 N. Michigan Ave.
The walls there also are lined with photographs of Presidents Franklin Roosevelt, Harry Truman, John Kennedy, Lyndon Johnson and Jimmy Carter. Klutznick worked for them all, most recently as commerce secretary under Carter from 1979 to 1981.
The largest photograph, though, is of Adlai Stevenson II–the late governor and two-time Democratic presidential nominee. When Stevenson was named ambassador to the United Nations, he brought his friend Klutznick with him to serve as emissary to the UN`s Economic and Social Council. Klutznick worked on development strategies for Third World countries. But his biggest coup may have been keeping the UN from going broke. In 1962, he used his business and government connections to push through the sale of $200 million in bailout bonds.
All the while, Klutznick has led what amounts to a parallel career as a sponsor of the State of Israel and of Jewish causes of all kinds.
Klutznick has developed real estate in Israel, and he is still president emeritus of the World Jewish Congress and honorary international president of B`nai B`rith. A highly regarded expert on Middle Eastern affairs, Klutznick once filed a bylined series of articles from Israel that were published in The Tribune.
Nowhere on Klutznick`s resume, though, is there mention of the personal ingredients that made it all possible. Yet there are two traits that keep popping up, and that seem to set him apart from most other wealthy businessmen or public officials.
First, he has been quick to spot trends in the way Americans want to live and to develop products that satisfy those desires, no matter how radically they differ from existing patterns.
Second, he is a believer in government and government`s ability to improve the well-being of its citizens–not a popular idea among Klutznick`s economic peers, who tend to venerate Ronald Reagan and the gospel of free enterprise.
It`s easy to see how Klutznick came by his positive view of government.
In the `30s he was part of a New Deal administration that mobilized the federal bureaucracy to an extent not witnessed before or since.
”This was revolution,” Klutznick said. ”We were feeling our way. There were no rules, no guidelines. The thing about Roosevelt was that if something didn`t work, he`d try something else.”
Klutznick`s first taste of government was not in Washington, but in Omaha. After earning a law degree there at Creighton University, he was recruited in 1933 by a favorite law professor who had recently been named city attorney. The young Klutznick was put in charge of housing and urban renewal, with specific orders to find out how Omaha could benefit from the menu of New Deal programs.
”We got Dodge Street widened through the WPA (Works Progress Administration),” Klutznick said. ”That was the first thing I ever got built.”
It wouldn`t be the last. The young Klutznick organized a mayor`s housing committee and fired off applications for housing under a new federal slum clearance program. Only 60 projects were approved nationwide. Omaha got two for a total of 600 apartments.
Omaha`s coup annoyed officials in bigger cities that got no housing, but it also impressed higher-ups in FDR`s Cabinet who saw in Klutznick a genius for getting things done. In 1938, he was recruited as special assistant to the U.S. attorney general for public lands.
”I was paid $5,000 a year for handling all the problems associated with slum clearance throughout the country,” Klutznick said. ”Then Pearl Harbor happened, and I never got back to Omaha.”
Klutznick was put in charge of building temporary housing for defense workers and their families in the eastern half of the U.S.
Thousands of apartments were built alongside the shipyards of Hampton Roads, the armored vehicle factories of Detroit, and even the Hawkeye ammunition plant in Iowa.
Part of Klutznick`s temporary empire was the top-secret compound at Oak Ridge, Tenn., where a small army of scientists and technicians developed the first nuclear bomb.
”I don`t know if the atomic bomb could have been built if it weren`t for the expandable trailer,” Klutznick said, only half in jest.
All the while Klutznick was learning the techniques of housing production, and coming up with a few wrinkles of his own.
After the war he served briefly as commissioner of the Federal Public Housing Authority before moving to Chicago–one of his frequent stops during the war–to set up a branch of a law firm he had worked for in Omaha.
But Klutznick`s legal career never got off the ground, as he became absorbed in what was supposed to be a side project: building Park Forest. It was the first of the preplanned ”new towns”–3,000 homes and a shopping center plunked down in the corn fields west of Chicago Heights.
”We were able to take a veteran, with wife and child, who couldn`t find a place to live, and set him up in a three-bedroom house for $75 a month,”
Klutznick said.
In 1956, Park Forest gained national prominence as the setting for William H. Whyte`s best-selling study of America`s new corporate, conformist lifestyle, ”The Organization Man.”
But Klutznick recalls that Park Forest almost never was. Several times his development company, American Community Builders, teetered on insolvency. The first tenants railed against rent increases and the slow pace of promised improvements. There was even a hint of scandal when in 1954 Senate conservatives staged a highly publicized investigation into how Klutznick and his partner, Nathan Manilow, secured $58 million in government-guaranteed mortgages.
But the loans got repaid, and Klutznick, who lived there himself in the early days, now boasts that: ”When it was all over, we had made a town of it.”
By the early `60s the rush to the suburbs was on, spurred by the new expressway system and cheap gasoline.
Sensing the shift, Klutznick hooked up with Marshall Field & Co. to develop three of the region`s early shopping malls: Old Orchard, Oakbrook and River Oaks.
”The automobile had changed everything,” Klutznick said. ”But, no, I don`t feel guilty about it. We didn`t facilitate the move to the suburbs. The city was not keeping up with the needs of the people. You could build a house for less, and give more value to the buyer, in the country.”
By the early `70s, Klutznick`s new firm, Urban Investment and Development Co., had joined with Aetna Life and Casualty Co. The emphasis was still in the suburbs, with refined and upscaled versions of Park Forest like New Century Town in Lake County.
But in 1971 Klutznick sensed another shift in the demographic winds. Young professionals had begun moving back to the city, particularly to the north lakefront, where they could live nearer their jobs in what was fast becoming the city`s new basic industry: The service and financial sector.
”People along the lake were driving out to Old Orchard to shop,”
Klutznick said. ”We knew we had a market downtown.”
The mortgage lenders had no such premonition, and Klutznick recalled that they required a great deal of convincing that North Michigan Avenue was ready for a new kind of mega-development called Water Tower Place.
But it was, and Klutznick and his wife, Ethel, still live in one of its luxury apartments, or as he puts it, ”over the store.”
As for the future of the city, the Klutznick is at once bullish and bothered about Chicago.
Last month he told a meeting of the Urban Land Institute that Chicago had undergone a ”sea change” that will mean continued growth of its service and finance sectors, and hence of its downtown.
But ”not everyone can be a lawyer or a doctor or an advertising man,”
Klutznick said. A campaign should be mounted, he said, to restore Chicago`s place as the nation`s manufacturing center. But this time, he added, the emphasis should be placed on high-tech manufacturing.
”Chicago has got every asset a big city should have,” Klutznick said.
”Beauty. People willing to work. Technology.
”But we also have a tendency to make big plans and then do nothing about them. What`s needed is elbow grease to make things happen. Government has to get involved. But first we have to quit thinking that government is the enemy.”
