Luring Retailers

Leslie Hairston was brimming with ideas after winning the election to head Chicago’s 5th Ward in 1999. She surveyed constituents to find that they wanted shops like Starbucks, Old Navy, and Bed, Bath and Beyond. Starbucks was a popular symbol of city life and social status, but none of the company’s stores was located in a predominantly black area, like Hairston’s 5th Ward.

She contacted the city’s planning department and was rebuffed. “I was looking for their assistance in making the connection,” she said. “They didn’t say no. They said it was far-reaching.”

Around the same time, retired NBA star Magic Johnson was launching a line of Starbucks in underserved parts of Los Angeles and New York City. Hairston phoned a longtime friend, who worked for Johnson, and arranged a call with him that day. Five years later, in July 2004, they were able to get a Starbucks at 71st Street and Stony Island Avenue—the first to arrive in any of the city’s black neighborhoods. “There were a couple of times that we were told we were going to lose them,” Hairston said. “It is pretty comical that, in an African American neighborhood, it takes five years to get a Starbucks. And, on the North Side, they’d operate out of a shoebox if you’d let them.”

In 2006, Starbucks will open two more of its stores in black neighborhoods, but the company is one of many whose locations are clustered on the North Side. A Chicago Reporter analysis shows that several major retailers are disproportionately located in mostly white neighborhoods on the North Side. The retailers were least often found in black areas on the South and West sides.

Some say commercial projects will come to black neighborhoods, but they won’t arrive as quickly as they have in the city’s white communities. Retail experts say big-box developments are likely to make more appearances in black areas, like the Target in Chatham and the Wal-Mart opening in 2006 in Austin.

With their success, other smaller stores are likely to follow, said John C. Melaniphy III, formerly of Melaniphy and Associates, a retail consulting firm. “Look how long it took for retailers to go on Roosevelt Road, to serve the South Loop after all of the housing was developed,” he said of the area that has sprouted a Jewel and a Target in the last five years. Much of the area’s upscale housing has been there for years.

Mary Pattillo, author and associate professor of sociology and African American Studies at Northwestern University, believes that shopping choices for blacks should improve. “I think there is starting to be more attention paid to that and I think that would bode well for the future,” said Patillo, who attributes some of the spark to the realization among retailers of an “incredibly” untapped market.

“Of course this is happening at a time when many neighborhoods on the South Side are gentrifying, many of the closer mid-South neighborhoods,” said Patillo, who has studied Chicago’s black middle class and is finishing a book on North Kenwood and Oakland.

The partnership between Starbucks and Johnson, known as Urban Coffee Opportunities, has led to more than 90 Starbucks stores across the country, including the Stony Island Starbucks and five others in Chicago. Another two stores will open in 2006—one in Chatham at 87th Street and Lafayette Avenue, and the other in North Lawndale at Roosevelt Road and Homan Avenue.

“We formed Urban Coffee Opportunities in February 1998 to enhance the development of Starbucks retail stores in ethnically diverse –¦ neighborhoods across the United States,” said Kelly Mattran, marketing manager for Starbucks’ Midwest region.

Still, just eight of the city’s 133 Starbucks are on the South Side. Starbucks officials would not elaborate on the factors used in the decision-making process to locate stores. “Starbucks is always looking for locations in communities where people appreciate great coffee. We spend a lot of time listening to our customers, and customer requests played a significant role in our decision to open up –¦ at 71st and Stony Island,” said Mattran.

Hairston is now trying to lure Best Buy and Bed, Bath and Beyond, though she knows it won’t be easy. Some black aldermen say they’re frustrated with the pace of development on the South Side and feel it’s up to them to get the deals done because the city’s primary focus is getting business to the Loop.

A spokeswoman with the city’s Department of Planning and Development said city planners represent several sectors of the city and are not focused solely on downtown. “We don’t put a priority [on] one over another,” said Constance Buscemi. “We market the South and West sides as actively as we market the North Side.”

The city provides retailers with a demographic profile of each community, including data about the population, income, potential buying power, household size and race. The department also helps identify locations where businesses might want to locate, Buscemi said.

Still, some black aldermen say much of their energy is devoted to attracting businesses to their wards. They find themselves trailing city staff to the annual International Conference of Shopping Centers convention in Las Vegas each spring to establish contacts with major retailers, some of which are arranged through Retail Chicago, a city program designed to assist developers with retail market opportunities.

“It was like a job fair. Very few were very serious,” said 6th Ward Alderman Freddrenna Lyle, who made the trip in 2000. “They were like lemmings. They were saying, –˜If Target comes, we’ll come.’ Somebody will have to take the first step.”

It wasn’t until the Chatham Target opened in 2002 that she felt her ward stood a greater chance for more development. Some consider the store a jewel of the South Side and a catalyst for the Chatham Village Square shopping center, located at 87th Street and Cottage Grove. “Retailers are seeing that they can do business here and do well. And that’s what I think we need to see more examples of,” Melaniphy said.

The Target project has proven to be a success with the store’s sales exceeding expectations. However, the project was the brainchild of a South Sider intimately familiar with the area and its potential, one who had delivered groceries to Chatham residents in his youth.

Musa P. Tadros was 10 years old when his family moved from Jordan to an apartment at 45th Street and Union Avenue in the 1970s. The family opened its first grocery store, where Tadros would ring up sales, mostly Tombstone pizzas, for his grade school classmates during lunch. After school, he’d return and work until 9 p.m. “I felt I was stuck in the grocery store business,” said Tadros, who went on to partner with his brother to open more grocery stores. But the grocery industry got competitive. “Walgreens started selling bacon and bread,” he said. “They were taking business from us.”

Tadros altered his business plan, got a realtor license and began developing property. The Target project started forming in August 1993 when he paid $3 million for the 17-acre site at a bankruptcy sale. The project has been his largest to date.

Initially, he was snubbed by Target. “We’re working on our A-list right now and, when we work on our B-list, I’ll give you a call,” Tadros said he was told. “Some felt they didn’t want to be in a rough community. –˜That’s a risk. We don’t want to take that chance.'”

But Tadros didn’t buy it. He had operated Horizon Foods there for years without major problems. “It was a safe community,” he said. “I think corporate America didn’t figure they could make money in the black community until six or seven years ago.”

But there are several smaller establishments flourishing in black neighborhoods that keep away better tenants, some said. “The dollar stores are replacing [shuttered stores] like rabbits,” said Lyle. “You’re not going to get a Gap to come in and open next to the dollar store.”

Angelica Herrera, Frank Life, Sean Redmond, Amy Shebeck and John Wicencyjusz helped research this article.

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