Suddenly, some of Chicago’s deadest commercial streets are rising from the grave.
It’s no news any more that big-time development is coming to downtown Chicago in the form of entertainment places, restaurants, hotels and high-rise condos.
What may be obscured by the blockbuster projects announced recently is that new shopping centers meeting basic needs with drugstores, grocery stores and movie theaters are going up in long-blighted areas of the city that major retailers have shunned for years.
In some cases the centers are projects that have been talked about for many years by neighborhood groups that have tried to fill economic gaps where private investment was lacking.
The talk seemed to go on and on with nothing ever getting accomplished, but now, as if shaken by a geologic shift, the earth is moving, bringing ripples of commerce, jobs and community pride.
The tremors in fact come from a fortuitous alignment of circumstances: a golden economy, retailers searching for new markets, a climbing real estate cycle, newly resurgent neighborhoods, lenders looking for community investments, timely city help, Chicago’s improving image, a critical mass of savvy local groups and leaders and a more positive outlook on development by inner city residents.
“It has to do with a lot of forces,” said Martin Berg, director of neighborhood development for the Chicago Association of Neighborhood Development Organizations (CANDO). “The timing for these things is really very good.”
Two representative projects, which this summer held groundbreakings and have signed on major supermarkets, are:
– Lake Park Pointe, a 78,000-square-foot center at Lake Park Avenue on East 47th Street, a desolate South Side artery that has divided prosperous Hyde Park and South Kenwood from ghetto poverty for almost half a century. A Hyde Park Co-op grocery store and Walgreen drugstore will anchor the strip.
– Gateway Plaza, a bold and ambitious complex with almost 300,000 square feet of space sprawling over 31 acres along Howard Street between Clark Street and the Howard “L” station at the north end of Rogers Park almost at the city’s boundary with Evanston. Set to be included are a Dominick’s supermarket and a 14-screen Cineplex Odeon.
While Howard Street never fell to the level of 47th Street and some other devastated commercial strips, it has long been settled in a trough of seedy decay and plans to revitalize both the street and the CTA station have been stalled for more than 10 years.
Another project could become an example of an even more remarkable rebound: Lawndale Plaza, an 80,000-square-foot, supermarket-anchored center planned for a two-square-block site on Roosevelt Road between Kedzie and Homan Avenues that will also contain a 10-screen Cineplex Odeon movie theater. The theater is under construction.
The project is in the middle of North Lawndale, one of the most devastated areas of the city, which never recovered from the riots of the 1960s and became a byword for hopelessness, losing about half its homes and population from 1960 to 1990.
The shopping center is still in the final planning stages, and the site’s long history of failed dreams don’t encourage confident predictions of success. On the other hand, the walls are up for the movie complex, which is being developed by a separate company and a successful Walgreen drugstore was put up across the street in 1995.
These three projects stand out because the areas they are in have been so sorely neglected by retailers, but they are in fact part of a quiet retail renaissance that has been going on in many parts of the city over the last couple of years–and in other cities around the country as well.
Locally, City Hall has quietly been conducting a program called Retail Chicago since 1994 to sell neighborhood commercial districts to retailers, and recently announced a $3.5 million pilot program to strengthen several such areas through special technical services, redevelopment assistance and physical improvements.
“There’s a whole new sense of the value of the city,” said Andrew Mooney, program developer for the Chicago office of the Local Initiatives Support Corp. (LISC), a funding and support group for community organizations. “Retailers who have saturated the suburbs are looking for new markets.”
The inner city got a boost from academia in an influential 1995 Harvard Business Review article, “The Competitive Advantage of the Inner City,” by Michael Porter, a Harvard Business School professor.
Porter argued, among other things, that buying power in the inner city is as great as in the suburbs because greater population density offsets lower incomes.
And U.S. cities on the whole are getting better press, although there are always exceptions. Urban crime is down on average, welfare rolls are dwindling and downtown residential and entertainment-oriented redevelopment is growing–and Chicago has taken a lead. An economic downturn could change all that, but it’s not considered likely any time soon.
Despite the appearance that the new projects in North Kenwood, North Lawndale and Rogers Park came together in a 1997 summer of retail love, each has a long, complex history that illustrates how tough it has been in the past to get such centers developed and how local as well as macroeconomic conditions have to be right for anything to happen.
The idea of a shopping center at 47th and Lake Park had already been around some years before it became part of a larger redevelopment plan that venerable real estate guru Ferd Kramer of Draper & Kramer was advocating for the North Kenwood-Oakland area back in the mid-’80s.
But the Kramer plan died amid the political and community struggle over the fate of the Chicago Housing Authority Lakefront Properties, six bleak high-rises that loomed over the area about eight blocks away. It seemed as if another good idea was wasted.
In the ensuing 10 years, however, the city and CHA leadership have changed, a plan has solidified to replace four of the CHA buildings with low-rise homes, and more than 1,200 units of new housing have been built in the area, mostly by non-profit groups. There is still substantial blight, but a new look is emerging.
People tend to overlook the fact retail development follows housing development, said Paul Grogan, national president of LISC, which has mostly helped community groups build housing over the years. “To recreate the market, you must start with housing recovery,” he said.
LISC is putting $1.5 million in the $9.1 million project through its program called The Retail Initiative. The developer is the Fund for Community Redevelopment and Revitalization, a local not-for-profit group.
The crucial function of residential development is also evident at Lawndale Plaza and the adjacent cinema complex. One neighborhood leader said there’s no way retail development could take place at the site without the Homan Square residential project, which has put up more than 150 new housing units on the site of the old Sears headquarters two blocks away and plans an eventual total of 600.
“That’s a no-brainer,” said Robert Steele, director of the Lawndale Business and Local Development Corp., a non-profit group supported by the Chicago Department of Planning to help bring business to the area. “Had it not been for the volume of housing units at Homan Square, there wouldn’t be a market.”
Other problems that often seem to block projects in blighted urban areas also played their part in delaying development there. The prestigious Urban Land Institute crafted a plan for a shopping center on the Lawndale property in 1986, when it held its convention in Chicago, but the plan foundered amid local political infighting complicated by financial issues and difficulties in assembling the site.
Now, said Steele, the community is solidly behind the development, having tired of waiting for something to happen. The developers are Pyramidwest Development Corp., a local realty and development group that has had an interest in the land since the early 1970s and Venterra Sales and Management, another realty firm.
It’s no coincidence that the 47th Street and Lawndale projects either directly or indirectly involve a Walgreen store. Walgreen Co. has been a trail-blazer in reinvesting in the inner city in Chicago and elsewhere.
“We looked at what trade areas we weren’t serving, and Lawndale was a gaping hole,” said Tom Connolly, director of real estate for Walgreen’s western division. “Even though there was no strong retail, there was an enormous pent-up customer base.”
The Lawndale store has performed well and is acting as a catalyst for further retail development in the area, Connolly added.
The Rogers Park project has a somewhat different history than the other two, being in an area that has remained vibrant over the years even though somewhat dilapidated and weighed down by proximity to a few blocks of high-density poverty.
A multi-use complex has been an on-again, off-again proposition for more than 10 years, held back partly because of its sheer size and cost, which is expected to total $60 million. Other complicating factors are the involvement of the city, which is putting up $8 million in TIF funds, and the CTA, which is expected to spend millions of dollars to remodel the “L” station.
Like the others, however, it has also been bedeviled by struggles among community groups. In the past, “everybody wanted a piece of it,” said Mari Gallagher, executive director of DevCorp North, a not-for-profit group developing the project with Combined Property Development Corp., a private real estate firm.
In part because of that, the project was also needlessly complicated, involving housing as well as retail development, said Gallagher. Plus the market was different, she pointed out. In the late 1980s, real estate was going into a slump and most retailers were still reluctant to come back to inner city neighborhoods.
But Rogers Park too has been changing since then. The city’s northernmost lakeshore community went through a period of relative decline in the late 1980s, but has stabilized and been showing signs of reinvestment with increased condominium conversion in the last couple of years.
Gallagher said the community, which was outraged when its core supermarket closed in 1993, strongly backs the center, whose anchor tenant is to be a 70,000-foot 24-hour Dominick’s.
