Lockport, Ill. — The waters are quiet now. The locks are in disrepair. The mule-drawn barges have long since disappeared. Once a symbol of the Midwest's economic might, the Illinois and Michigan (I&M) Canal has languished over the decades. Now, however, there are signs of renewal.
Old canal towns are taking a second look at the waterway in their backyards. Federal legislation signed recently has sparked hopes of an economic revivals.
''Finally, it's going to happen,'' says Gerald Adelmann, standing outside the boarded-up Gaylord Building, which is slated for renovation next year. Originally a depot and mule barn during the construction of the I&M, the building is the first here in Lockport, Ill., to be renovated as a direct result of the federal legislation - legislation that Mr. Adelmann helped lobby for as executive director of the Upper Illinois Valley Association.
On Aug. 24 President Reagan signed into law a bill designating the I&M Canal and the land surrounding it as ''a national heritage corridor.'' The federal designation is a first, encompassing 120 miles of waterway, 18 Chicago neighborhoods, and 43 other northern Illinois communities.
The legislation brings together a number of interests and varying priorities. In some areas, the focus of development will be recreational, with bordering parks and perhaps boating facilities. In others, the canal is seen as a historical landmark. In still others, communities hope recreational and historical interest in the canal will bring in new businesses.
So far, there has been a remarkable degree of cooperation, despite the different priorities.
''The important thing is the recreational potential,'' says David Carr, guiding his white pickup truck along the gravel road next to the I&M. As the state's superintendent of the canal, he is in charge of clearing the I&M of trees and building new hiking and bicycling trails. A new state tax will boost his budget some $3.5 million over the next four years to rehabilitate the western, rural half of the canal and adjacent state parks.
''You have 40 years of neglect to catch up on,'' he says. An economic upswing will depend on tourists coming to the canal for its recreation and history.
Several miles east of Mr. Carr, the canal winds past the large US Steel mill in Joliet. In 1980 the company closed down half the mill, leaving Louis Walsh, Midwest project manager of the company's realty development division, to lease or sell off 87 acres adjacent to the I&M.
''This is a whole new sense of developing properties from a historical point of view,'' Walsh says. ''We felt since we have a historic site, we gain very little by razing it.'' He is looking for manufacturing or other companies willing to locate in some of the 1.1 million square feet of buildings.
Meanwhile, the Joliet Area Historical Society has opened a mini-museum, celebrating the area's rich industrial and transportation heritage. Many communities like Joliet grew up because of the increased traffic on the canal, which, in its 19th-century heyday, linked the Great Lakes with the Illinois River and eventually the Mississippi. In the 16 years after the canal opened in 1848, Chicago's population nearly quadrupled, to 75,000.
The town that canal officials chose as their headquarters, Lockport, is trying to recapture some of its heritage in order to bring new business to town. It has plans to upgrade its public landing, which in canal days served as an open area for commercial and public traffic, and renovate the historic Gaylord and Norton buildings that lie on either side of the landing. The area, along with Lockport's downtown, has been designated a historic district.
''That is our biggest resource for commercial development,'' says Ann Hintze, economic development coordinator of the Lockport Area Development Commission. Several new businesses have moved in, partly making up for the loss of more than 600 jobs when the city's largest employer, a Texaco refinery, closed in 1981.
Although it may spur more interest in the area, the designation of the canal corridor is a relatively modest federal effort, says Tim Turner, regional director of the Midwest office of the National Trust for Historic Preservation. Under the new law, a federal commission will receive $250,000 a year to support and coordinate mostly recreational and cultural aspects of the canal corridor. Economic development will mainly be left to individual communities.
''The value of the legislation is to create an umbrella under which other things can happen,'' Mr. Turner says. Actually, many local projects predate the federal legislation. Three years ago, for example, when a classy French restaurant opened in downtown Lockport, many locals were skeptical. ''The line was (that) we would never make it,'' recalls Robert Burcenski, partner and head chef of the Tallgrass Restaurant. Now, on some days, ''we turn away two to three times as many people as we get in.''
Blue Island, Ill., which is not along the I&M but another part of the designated corridor known as the Cal-Sag Channel, passed a local ordinance a few years ago designating a historic district. Using federal community-development block grants, the city remodeled store-fronts, installed period street lighting, and landscaped the two-block district. Since then, three new businesses have opened up, says Janet Muchnik, the city's acting director of planning and community development.
The Metropolitan Sanitary District of Greater Chicago hopes to develop the properties it owns along the Cal-Sag. This would be the first phase in developing parks and sites along the waterways of the metropolitan district. It is offering 19 parcels of land for lease to developers willing to provide a public pathway along the channel. The goal is to work with local communities, says the district's general superintendent, Raymond Rimkus.
These types of projects are what Adelmann calls balanced economic development , which is sensitive to the recreational and cultural factors involved. His nonprofit group aims to serve as a catalyst for such model projects and link the public and private sector, he adds.
Observers say it is too early to tell whether or not these efforts will spark an economic turnaround.
''We won't know the relative impact of this for five or six years,'' Turner says. ''If they (the communities and groups) can maintain that sort of consensus on how to proceed, then I think it will be successful.''
The historic aspects of the canal are important, too, he adds. ''Fifty years from now, kids are going to be able to go through (the canal) and have a better idea of how this country developed after the Industrial Revolution.''