Experts and policymakers give advice and share experiences on connecting housing and commercial development in areas being redeveloped as mixed-income communities.
The Metropolitan Planning Council’s March 10, 2006,
“Building Successful Mixed-Income Communities” forum, co-sponsored by the John
D. and Catherine T. MacArthur Foundation and in collaboration with the Chicago
Housing Authority (CHA), brought together local policymakers, a national expert,
and an audience of more than 200 to revisit the issue of economic development,
which had been explored for the first time during a 2004
forum
of this series.
According to Bill Little, CHA’s managing director of
development, the main concern of the Authority at the beginning of the Plan for
Transformation was getting homes built as soon as possible. However, now, seven
years into the Plan, the focus is expanding to encompass economic development
strategies. The Plan itself is a major engine for economic development,
leveragingapproximately $5 billion in housing-related investments since 1999.
CHA, in collaboration with the Chicago Dept. of Planning and Development (DPD),
has been instrumental in acquiring land around its developments in order to
start assembling sites to attract retailers.. This includes the eastern side of
39
th
and State streets, lots adjacent to the Roosevelt Square site
(formerly ABLA), and the Madison Street/Western Avenue intersection near West
End (the former Rockwell Gardens ).
Judy
Minor-Jackson, deputy commissioner of DPD, highlighted two initiatives aiming to
promote economic development in two areas in the vicinity of transformation
sites: the 39
th
and State intersection and the Cottage Grove
corridor.
Plans to revitalize Cottage Grove include amending the
TIF district to encompass the west side of the street and thus entice
developers. DPD is also encouraging a mix of uses; promoting infill development,
and recommending the area remain pedestrianfriendly and high density; all of
which is necessary to attract the critical mass of residents and visitors needed
to sustain a viable commercial district.
The vision for Cottage Grove is one of relatively dense mixed-use
development, with retail on the ground levels and residences on top, as well as
carefully designed streetscaping and signage. The local organization Quad
Communities Development Corporation (QCDC) has worked with DPD in producing the
plan. The 39
th
/State intersection, where the City owns 10 acres, is
part of a TIF district and an Empowerment Zone. The goal for this area is to
attract a major grocer, which would spur additional retail on this site.
Calculations by DPD show that, once redeveloped, this intersection could produce
$500,000 per year in sales taxes and generate an Estimated Assessed Value (EAV)
of $12 million.
Marilyn Melkonian, president and founder of the
Washington, D.C.-based Telesis Corporation
, began her presentation by
acknowledging the tremendous effort that has been put into transform Chicago’s
entire public housing stock, an initiative that she knows first-hand from her
involvement in the master plan to redevelop the ABLA site into the Roosevelt
Square mixed-income community. Melkonian highlighted the importance of strong
partnerships among the private, public and civic sectors, and cited two examples
of Telesis Corporation’s work as it relates to revitalizing housing and bringing
the economy back to disinvested communities:
-
The Ellen Wilson, Capper and Carrollsburg
neighborhoods in Washington, D.C., where 802 public housing units were
redeveloped -- using the first round of funding from the HOPE VI program -- as
a mixed-income community.
-
Bradenton Village, in Bradenton, Fla., where a public
housing community suffering decades of physical decay and persistent flooding
was redeveloped as a high-quality mixed-income
neighborhood.
At Ellen Wislon, Telesis Corporation connected local residents to
construction jobs and apprenticeships
To explain how New Markets Tax Credits can be used to spur economic
development, Melkonian presented a third case study: Court Square Center in
Memphis, Tenn. There, Telesis is transforming three vacant downtown-buildings
into a mix of apartments and commercial space, using both New Markets and
Historic Rehabilitation tax credits.
She
pointed out that the complexity of this type of transactions does add some risk,
due to:
–
the
mixture of five
sources of private and public funds;
–
the different recapture rules for each
tax credit program;
–
the fact that New Markets Tax Credit projects are, by definition,
in census tracts with at least 20 percent poverty; and
– the requirement that mixed-use
proposals must generate at least 20% of gross rental income
from the non-residential (usually commercial) component
Click here to learn more about Court
Square Center.
Nevertheless,
Melkonian concluded, the New Markets Tax Credit program is worth exploring in
Chicago to promote commercial development in and around the
mixed-income sites.
Locally, LISC/Chicago’s New Communities Program is bringing economic development to
neighborhoods across the city, including two areas experiencing intense public
housing transformation: the Westhaven community (formerly the Henry Horner
Homes) and the Quad Communities (including Oakland, Kenwood, Grand Boulevard and
Douglas), where seven major CHA sites are being redeveloped as mixed-income
communities.
Joel
Bookman, New Communities director, highlighted the importance of working with
the community-based organizations selected as “lead agencies” in these two
areas, Near West Side CDC and Quad Communities Development Corporation (QCDC).
Near West Side CDC has been guiding the transformation process at WestHaven
since well before the inception of the CHA Plan for Transformation, working with
community residents, developers and investors. Currently, a bank branch, a
brand-new Walgreen’s, and a dental office are up and running on Madison St., the
first commercial development in the neighborhood in more than four decades.
QCDC, assisted by a market analysis by MetroEdge and a plan developed by
Skidmore, Owings and Merrill for the Chicago Dept. of Planning and Development,
is working to put its community area back into the economic
mainstream.
According to Bookman, a number of elements are necessary
to re-create a market in a previously disinvested area and attract investment,
including:
-
an advocate or champion who is aggressive, sophisticated and
willing to push through the entire process, from the inception of the economic
development plan to the marketing to retailers and beyond;
-
an adjacent or nearby area where development is spreading quickly,
such as the West Loop near Westhaven Park, or the South Loop in the vicinity of
the Quad Communities;
-
an effort to remove negative images and perceptions: the
demolition of dilapidated high-rise public housing played a key role as the
symbol of the sunset of an old era and the beginning of a new one;
-
emerging new housing opportunities, such as the ones created by
the Plan for Transformation via mixed-income communities, or by the Dept. of
Housing through the New Homes for Chicago program;
-
research and market studies showing promising trends;
and
-
strong partnerships with community-based organizations and
institutions that can help market the area to investors.
Before becoming a successful entrepreneur as the
president of Chicago Community Ventures
(CCV), Stephen Maduli spent his
childhood and early youth in Chicago’s Englewood neighborhood, an area with high
rates of unemployment and large pockets of poverty. Maduli founded CCV in 2000,
with the goal of helping small businesses located in low and moderate-income
neighborhoods around the city. Part of CCV’s work focuses on stimulating
economic development in the vicinity of mixed-income communities located on the
Near West Side and in Mid-South, through a 30-month program that delivers
monthly business workshops, 140 hours of consulting services, and access to
peer-to-peer networks for business owners. Currently, 11 businesses participate
in this program; four from the Mid-South and seven from the Near West Side. The
companies are in diversified industries such as service, manufacturing, retail,
and nonprofit social ventures. Revenues of participating businesses range from
under $100,000 to more than $2 million, while company size varies from one to 42
employees.
In addition to assisting businesses, CCV has developed
Chicago Prospector, a free online commercial real estate listing service and
research tool that uses Geographic Information Systems (GIS) technology to
provide valuable data about available property in low-income areas. The Web site
is a resource for investors, developers andplanners interested in exploring
economic opportunities in the city. Available data includes current neighborhood
demographics, information on existing businesses by industry, and tax incentive
information. Click here to access Chicago Prospector
.
The following are a small sampling of the exchanges
during the Q & A session
with the
audience
that
followed the panelists’ presentations
- How do you gauge progress when working in
disinvested communities?
-
Stephen Maduli: It is necessary to be realistic, manage
expectations properly, and acknowledge that you can’t expect the same speed and
results from a firm run by a public housing resident who is starting his or her
first business in a developing neighborhood as you’d see with a business located
in a developed area and run by a well-trained and experienced manager..
- How do you work with the unions?
-
Marilyn Melkonian: We work very closely to connect our own
construction-related apprentice program to those sponsored by the local unions.
When our residents were done with our training, they were able to transfer to
one of the programs provided by the unions.
- How do you convince land owners to sell a lot that
you need immediately for commercial development when they are unwilling to do it
and prefer to wait until the market price is substantially higher?
-
Joel Bookman: There are different ways to do this without having
to resort to eminent domain. For instance, finding community spokespersons and
residents willing to communicate to the owner the importance of being
cooperative can sometimes work. Land swaps are also a
possibility.