The fortune cookies were crisp and lemony and all contained the same piece of advice: ”There is a future for your business in Uptown, Chicago!”
Not that the real estate brokers, retailers and developers who broke them open had to be convinced. All had come to the city`s second annual Neighborhood Retail Fair at the Chicago Hilton & Towers to scout deals among the city`s neighborhood shopping districts.
Once these city shopping strips were on the skids, with their mom-and-pop proprietors retiring and their larger chains fleeing with not much taking their place. Today, the strips are hot targets for fast-growing national chains like Payless Shoe Source and Pier I Inc. as well as local retailers like Saxon Paint and Home Care Centers and Stuart`s apparel.
The Uptown Chamber of Commerce`s fortune cookies were a salute to the North Side neighborhood`s Asian population. Thirty-one other neighborhoods competed with balloons, T-shirts, campaign buttons and candy at the Retail Fair, sponsored by the Chicago Association of Neighborhood Development Organizations.
The hoopla drove home one point: The city has become the new frontier for retailers, offering a population density–and buying power–unmatched in any of the suburbs.
”If you`re not looking at the city, if you`re not looking at new ways of doing business, then I think you`re a little late,” said Alan Saks, president of Saxon Paint, which operates 14 stores in the city. ”You`re missing the boat.”
Saks told retailers at the association`s breakfast meeting that his grandfather taught him how to pick locations: Put your stores where you see a lot of people standing at bus stops.
”The first day (at Saxon`s store at Archer and Ashland Avenues) I saw three customers standing at the bus stop with five gallons of paint (cans),” Saks said. ”You show me that in Woodfield Mall–ask Sears, Roebuck how many five gallons of paint they sell. Here, they`re getting on the bus with it.”
What Saks, who also has 15 stores in the suburbs, and other retailers and developers know is numbers. A majority of Chicago`s neighborhoods have at least 600,000 people living within a 5-mile radius. In the suburbs, that figure is more like 75,000.
”There`s no place left to go in the suburbs; they`ve been milked dry,”
said Rich Barbour, real estate manager for Volume Shoe Corp., which operates 125 Payless Shoe Source stores in the city.
”In Chicago, you`re sitting on 3 1/2 million people–that`s 18,000 to 25,000 people per square mile, for God`s sake–and there are only three
(major) malls (Ford City, Brickyard, and Water Tower Place).”
That density pays off for retailers like Payless, whose store at Madison Street and Pulaski Road on the city`s West Side has the highest sales volume of all the chain`s 2,300 stores nationwide, Barbour said. Some 538,000 people live in a 3-mile radius of the West Garfield Park store, which opened four years ago in part of an old Goldblatt`s store.
”That`s where the opportunities are, in the neighborhoods, especially on the South Side,” Barbour said.
On the North Side, a 7,000-square-foot Pier I store opened last May in East Edgewater, reportedly after misgivings about demand for its moderate-priced yuppie merchandise in the mini-United Nations neighborhood. Today, the store`s sales rank in the top 5 of Pier I`s 14 North Side units, said manager Cindy Lehner-Smith.
”A lot of our customers moved here from Lincoln Park and New Town to buy their first homes, and our merchandise is very reasonable,” Lehner-Smith said. ”I`ve never seen a neighborhood so excited about getting cleaned up and together–people even clean the sidewalks. I`ve never seen that anywhere.”
For the city, whose Department of Economic Development works closely with the Chicago Association of Neighborhood Development Organizations, neighborhood retailing means not only increased tax revenues, but jobs. In 1986, 166 new retail stores brought 1,044 jobs to 23 city neighborhoods, according to association estimates based on four employees per store.
In Albany Park alone, the commercial shopping district along Lawrence Avenue accounts for 5,000 to 6,000 full- and part-time jobs, says Joel D. Bookman, executive director of the Lawrence Avenue Development Corp.
”This has more impact than bringing in a Fortune 500 manufacturer,” he said. ”We see ourselves as major employment centers.”
”The city is where the people are–this is Middle America,” said Bernard F. Brennan, president of Montgomery Ward & Co., which recently opened a full-line store at Addison Street and Sacramento Avenue.
The back-to-the-city movement involves not only megaretailers like Montgomery Ward and national chains like Payless Shoe, Perry Drugs and Pier I but local retailers like Jewel Foods, Dominick`s, Stuart`s and Saxon Paints. Whether they locate in neighborhoods like West Garfield Park, where the median income is $17,225 a year, or in Lakeview East, where it`s $32,704, all have discovered one thing–people prefer shopping near where they live.
”We offer people the same merchandise they can get in the regional malls (like Woodfield), but it`s just good business to service people where they live,” said Jean Roberts, vice president of Stuart`s apparel shops, which has 30 store in the city.
It also makes dollars and sense to expansion-minded retailers like Payless, Walgreen`s and Perry Drugs.
”When you`re trying to grow a chain, you merchandise to the broadest group of people you can,” said Payless` Barbour. ”There are more people with incomes of $35,000 and under than there are of $35,000 and above–and that gives us more opportunities to sell products in the city. It doesn`t take a rocket scientist to figure that out.”
Several neighborhoods have taken the hint and geared up to attract more retailers to their commercial strips with government-sponsored facade rebate and streetscape programs, tax breaks and special loan packages.
— In Marquette Park, the Greater Southwest Development Corp. credits a $3 million remodeling and expansion by the Sears store at 62d Street and Western Avenue with spurring a redevelopment in the area. Fast-food restaurants like Taco Bell, Wendy`s and McDonald`s rub shoulders with retailers like Jewel, Erol`s Video and Radio Shack–and sales at the Sears store reportedly top those of its four other in-city stores.
— In Albany Park, the Lawrence Avenue Development Corp. has generated more than $20 million in private investments for construction and
rehabilitation since its founding in 1976. Its shopping district includes more than 200 retailers, including Florsheim Shoes, Trak Auto Parts, Jewel, Walgreens and Hallmark Cards.
— In Englewood, a unique coalition of six city departments is working with the Greater Englewood Local Development Corp. to undo a disastrous 1960s makeover that turned its once-thriving commercial strip at 63d and Halsted Streets into an imitation suburban mall.
”When the mall didn`t work, we lost our anchors,” said James Soens, who heads the development corporation. ”Now we`re de-malling, if that`s a word.” The group, which hopes to attract a mass retailer like a Zayre or a K mart once Halsted is opened to traffic, is soliciting proposals for development, filling in its potholes and replacing streetlights, Soens said. Some 238,000 people, with average incomes of $18,575 a year, live within 2 miles of the center.
In the last year, a 16 Plus large-size clothing store and a Three Sisters apparel store have opened, with the 16 Plus making its first year`s sales projections in four months, he said.
But as the malling of Englewood shows, there are problems with in-city retailing, including the difficulty of finding large sites and what many call ”excessive” time lags for building permits. It`s also sometimes tough to re-educate mall-oriented retailers and then to bring them in without stamping out existing businesses, say developers and real estate brokers.
But coming into the city is a learning experience, says Adrian Brown, vice president and director of comunity center development at Melvin Simon and Associates, Inc.
”We`re shopping center people–we haven`t built anything on much less than 20 acres, but we`ve been looking all over the city,” said Brown, walking through the retail fair. ”We want to expand our horizons. We`re convinced there`s a market in the neighborhoods.”
