Urban centers and national demographic trends are meeting to produce significant opportunities and challenges for commercial development. A panel convened this week in Chicago to face these head-on in a session that illustrated practical commercial development outcomes across Chicago, and showed how the future of cities – and real estate profit – is tied to inclusion.
Sponsored by MasterCard, The Next America: Connecting All Neighborhoods To Opportunity put together a panel led by Chicago Mayor Rahm Emanuel to discuss commercial aspects of the demographic changes gripping the country: by 2043, the United States is, according to US Census projections, expected to become majority non-white, a trend led by urban centers. It means that to be connected to opportunity, a more broad list of neighborhoods urgently needs to participate in and benefit from commercial development.
Chicago is emblematic of these trends as it’s one of the most diverse cities in the US and serves as a kind of test laboratory for initiatives in neighborhood revitalization, skills training and big data. It was heads of these initiatives who took the stage on Wednesday.
Where exactly are the opportunities? Finding them is about including the communities.
Community Meetings , Community Benefits
Many projects were discussed, but probably most characteristic of the event was developer and President of Chicago Neighborhood Initiatives David Doig, who told of his group’s purchase of the Ryerson Steel site in the Pullman neighborhood on the far South Side. After buying, Doig’s team hosted “70 community meetings over a year” to find out what the neighborhood needed before building anything. The top discovery was the area’s status as a retail desert. “You had to go outside of the community to buy a pair of socks,” said Doig.
The project also found a lack of indoor recreational space — rare for a city with such a robust Park District — along with a lack of affordable housing. Doig said the project’s retail anchor – a Wal-Mart – attracted other retailers including a Planet Fitness and Ross. Key to the Wal-Mart’s arrival was a commitment on the part of the retailer to hire from the community, such commitment obtained by Doig’s group in the form of written Community Benefits Agreements. “80% of Wal-Mart’s staff were hired locally,” claimed Doig.
The entire two hour session is available on video here. It’s a fascinating perspective and a reminder of the circular nature of commercial development: the performance and profits of commercial real estate projects more than ever have to be tied to the unique needs of the local communities in which such projects are proposed.