Chicago Illinois is on the southwestern shores of Lake Michigan. The Chicago Portage connects the Mississippi River and Great Lakes Watersheds. The city’s history and economy are closely tied to its proximity to Lake Michigan. While the Chicago River historically handled much of the region’s waterborne cargo, today’s lake carriers use Lake Calumet Harbor on the South Side. When founded in 1837, most of the early buildings were around the mouth of the Chicago River and the original 58 blocks.