Growing Chicago’s Communities: How Economic Development is Transforming Chicago’s South & West Sides

ULI Chicago members and guests gathered virtually for our panel discussion, “Growing Chicago’s Communities: How Economic Development is Transforming Chicago’s South & West Sides”, with moderator Zeb McLaurin, CEO  & Founder, McLaurin Development Partners, and guest speakers Rhonda McFarland, Executive Director, Quad Communities Development Corporation (QDCC) and Carlos Nelson, Chief Executive Officer, Greater Auburn Gresham Development Corporation (GAGDC).

Zeb kicked off the conversation by asking how we can create community development opportunities despite who occupies City Hall or other parts of the city government. Rhonda has a firm belief that economic development is driven by a community’s own plans and vision, working in partnership with the private sector in spite of changes in City Hall. There isn’t necessarily a different formula that needs to be applied in the communities, but that there needs to be recognition of the development assets, such as Rhonda & Carlos and the various CBO and CDC’s that already exist in the communities. There needs to be a table set, an opportunity to develop relationships with those in the area; engagement that will foster the ability to build wonderfully transformative, catalytic projects that are sustainable in marginalized communities like the south and west sides. Fortunately, a platform like ULI exists to assist real estate professionals in staying engaged and to aggregate the energy necessary for economic movement.

GAGDC was recently awarded the Chicago Prize Pritzker Traubert Foundation, a very competitive city-wide initiative. Beyond the financial benefit, this award allows for a focus on local community wealth building and community ownership. For example, GAGDC is an equity investor in a project for an anaerobic digester anchoring an urban farming campus which is a $36,000,000,000 project. That means that disbursements/distributions will be made quarterly from this for-profit venture. And the byproduct of the anaerobic digester is that it makes food waste into renewable energy and compost material to continue to fuel the urban agriculture movement sweeping urban America. To the community, to the organization, GAGDC is reinvesting in the community with a focus on building wealth amongst the residents and stakeholders in our own community. This is a true sustainability model that should be replicated not just in Chicago but throughout the country.

A current theme of economic development today is “Diversity of Usages” which allows for the ability to diversify risk. This thought process on the front end will benefit the long-term sustainability of the project. But, Bronzeville has a different type of diversity of usage. There is a lot of economic development that has occurred in the Bronzeville area, but there is an aspect of “what about me” that still exists amongst community members. How do we sustain our livelihoods in the future? How do you balance that in QCDC?

The language around wealth building has become cliche instead of talking about real wealth building. For example, there is plenty of vacant land owned by municipalities where they are creating opportunity, but there should be an easier path for community-based ownership versus the private market; developing and supporting small businesses that are already in the community. Invest South/West is driving some larger catalytic projects as the primary goal at this point in the initiative. But what’s important is how we attack smaller scale projects that are more accessible to smaller businesses that are local, employ local, and drive dollars into the tax base. We need to think about dividing up the pie and creating more local ownership, as part of our sustainability. This includes local service providers as well as manufacturers and helping them grow.

The challenge then becomes balancing the policy of bringing in those with larger balance sheets versus organically growing local based businesses. As an agency and as leaders in our communities, our responsibility is to speak this language at every table and with every member of our network – architects, attorneys, large corporate restaurateurs, developers, etc.  We need to advocate for what doesn’t come out of a market study. Using traditional methods doesn’t always work to tell the story and describe the assets we have to build off of. At QCDC, we get the business owner through our program “Retail Tenant Engagement” and into the fold not just to connect for a lease in a space, but at every level of support from the day they walk in until they sign the lease. This includes reviewing financials before the landlord/developer sees it, thought through financials and operational plans. We get business owners ready and tell them when they are not. Large nationals, regionals and small businesses are all necessary for our ecosystem. What we want, is for our professional partners to understand that the traditional methods they’ve used to evaluate communities don’t necessarily work in underserved communities.

It is in everyone’s interest to ignite development in all of our communities. Economic expansion and opportunity are critical elements for Chicago to remain globally relevant. It’s not going to be born just by the CBD, River North or the West Loop, it’s all of Chicago that has to share how we lift the tide. But how do we connect our CBD and other vibrant areas to intellectual resources and creative problem solvers elsewhere in our city to the opportunities on the south and west sides?

First, by recognizing the intellectual property already in the community. Start with a mutual level of respect and a desire to be curious for everyone. Drive the entire city of 77 neighborhoods and pick-up tips in every community. The ULI Chicago/LISC Yield program is a great opportunity to start the discussion. It comes from a base of respect where everyone brings their own equity to the table, and sometimes it’s not cash. You have to agree upon the equity position as equal so you can move forward. In philanthropy, we are beginning to see a small shift that community-based organizations are the experts in our community. We implore private investors that we are the experts, come to us, partner with us and dialog with us to transform the community so that we can all make money.

In this panel discussion, we have recurring themes of community ownership, resources, recognition, consistency, local ownership and local wealth creation – all of which come from the Invest South/West RFP’s. For GAGDC, they have taken the movement embedded and described in their work on the community ownership and wealth growth model. The Auburn Gresham RFP takes all of that and is incorporated into the Invest South/West RFP. The Bronzeville RFP has not come out yet, but they are planning for release later this month for the first development. The Mayor has been consistent around wealth building and equal opportunity for south/west communities and DPD is trying to do something outside of their normal structure as part of the RFP process. One concern is in building a big catalytic project, it doesn’t necessarily affect change across the street. How do we design for a $20,000,000 project on “Corner A”, but still have a homeless problem on “Corner B”. We are still working with Invest South/West for a comprehensive opportunity as it moves forward.

The concept of margin sparked some questions about sustainability: If you are confined by the margin/cash rich balance sheet companies, how do you exit yourself from that component, so you are independent of them?

It takes some vision and some pain, and we have to make serious decisions about what we will and won’t do with a goal of growth. It may mean doing without a certain thing if we see an opportunity for growth going forward. It’s not any different than a for profit business owner. Getting off the “train” means building social enterprises that are spin offs of the organizations like GAGDC, where real estate development and ownership is an option. But real estate development is a long-term play, not short term. So, it’s not really the way to grow from a cash flow standpoint to be able to move into other opportunities.

The other option is looking at how we structure projects so we can slowly grow our own balance sheet so we can do other things. QCDC is happy to be an awardee for the Chicago Community Trust Flexible Fund general operating grant that has the ability to be renewable so we can plan for growth. Their platform and agency success shows they will meet the metrics and be able to renew the grant next year. CTC understands the organization has to shore up and have a foundation to be a strong player. It takes those with perseverance and determination for economic growth in our communities. It starts with building the people and workforce development – access to education, equitable access to health & wellness. This is all fostered in love, desire and passion for building our people, our community, our city and region so all of us can grow.

Zeb concluded by noting that tremendous opportunities do not require any special formulas, it’s what we do on a daily basis  – engagement with local communities,  partnership with stakeholders that have already performed feasibility and identifying pathways to profitability and sustainable impact.

Summary written by Ginna Ryan, Principal, Mauge, Inc.