CHICAGO — Scott Starbuck gets his last name from the branch of the family that were whalers in Nantucket a century and a half ago. Now, his 20-year-old, high-end shoe business – City Soles – is being kicked out of its location near a subway stop by a national company that could be named for a distant relative.
That chain - Starbucks Coffee - is willing to pay about three times the rent he pays.
“Money always wins,” said Starbuck, who is moving down the road to a less-busy corner.
For this area of Chicago, known as Wicker Park, it is a time of transition to brand names, chains and higher prices. Many entrepreneurs and tenants resent it, but from the outside the transition looks a lot like success.
Chicago is accustomed to transitions, most of them successful.
INTERACTIVE GRAPHIC: Tales of 3 cities
It is the nation’s third-largest city, a global destination, a focal point for trade and transportation. Its airports handle nearly 90 million travelers a year, the third-most in the United States, while its rails, highways and port make it the premier national hub for freight and the gateway from northeast to the west.
It is, in a phrase, a global city.
Chicago's heartland location surely played a role in its prominence. But at several inflection points, the city has taken action to build its status, while many peers slipped.
Founded as a 10-square-mile enclave on the lake, it annexed the surrounding area until it was nearly twice the physical size of Atlanta, which is only now talking about annexing some land. Chicago proper accounts for 29 percent of the metro Chicago population, while the city of Atlanta represents just 8 percent of its metro area.
Partly as a result, Chicago historically has had more clout in the state legislature. For example, when the state legislature created the Chicago Transit Authority in 1945, it made the CTA exempt from sales taxes, gave it power of eminent domain and supplied funding that currently makes up 13 percent of the authority’s budget.
In contrast, MARTA gets no state funding for operations and is handcuffed by law in how it spends its money.
A planning ‘touchstone’
Most-cited among Chicago decision points is the Burnham Plan, a sketch of the future by Daniel Burnham, a nationally renowned architect who planned and oversaw building of the world’s exposition in Chicago in 1893. Like many Chicago visions, it was incompletely embraced. Yet even half-hearted affection made a difference.
It reshaped the city’s waterfront, carving out large expanses of parkland; led to construction of Chicago Union Station; and rearranged and widened downtown streets.
“The Burnham Plan is a touchstone, something that gives a sense that planning matters,” said Rachel Weber, a professor in the Urban Planning and Policy Department at the University of Illinois at Chicago..
Its legacy is seen in downtown Chicago, the business, event and tourism hub of northeast Illinois and much of Indiana as well. The area teems with executives and office workers, many of whom live downtown, as well as conventioneers, sightseers and shoppers at the “Magnificent Mile” mecca of high-end retail on Michigan Ave. Atlanta over several decades saw much of its retail and commercial center migrate out of the city.
Chicago in the 1950s faced the same post-war suburbanization that drained populations and tax bases of older cities across the country. The city pumped up planning and restructured finances – the latter helping it avoid the kind of near-financial death experience that New York suffered in the 1970s.
In the 1980s, Chicago’s economy was declining and tension rose among older ethnic groups and ascendant black communities – and the first African-American mayor. The strife eventually softened, followed by a boom, a rejuvenated central city and a new attraction in Millennium Park — first proposed by Daniel Burnham.
“(City leaders) didn’t give up on the downtown,” Weber said. “They made some wise choices that let the city capitalize on some global and national trends, like the trend toward young people moving to cities or older people moving back to the city or people wanting to live near work.”
Then came the real estate crash and the 2007-09 recession. As in Atlanta, the recovery has been slow. The city may well stand again at an inflection point, divided politically and economically and troubled by a looming fiscal crisis.
Tough politics, as usual
To some, the moment seems an echo.
A surprisingly tough campaign for mayor is emblematic. The bruising campaign forced incumbent Rahm Emmanuel, the tough-talking son of an Israel, into a runoff against coalition-building challenger Jesus ‘Chuy’ Garcia, born in Mexico.
Emmanuel, who won last week’s runoff vote, is also a former congressman and White House chief of staff and is seen as representing the Chicago of the affluent, the financial sector, the Lakefront, the north side. Garcia is the face of the Second Chicago, the south side, the struggling neighborhoods and the blue-collar unions.
“We are in the midst of another election now that has a lot in common with Chicago in 1983,” MarySue Barrett, president of the Metropolitan Planning Council said before the runoff. “We are seeing things bubble up about people’s insecurity. The difference might be that in 1983, it was about political insecurity and today, it’s economic.”
Calls for spending to help the working class and poor areas and upgrade transit come as city government faces a $300 million operating shortfall and is trying to figure out how to come up with about $550 million in police and fire pension payments.
Moody’s Investors Service in February cut the city’s debt rating, which can raise the cost of future borrowing.
Hovering in the air is the specter of a long slide, political conflict, service cuts and labor trouble, fleeing capital, a downward spiral, and … Detroit.
“We have deferred a lot of tough decisions about our fiscal challenges, about infrastructure investment,” Barrett said. “But we believe that we will make good decisions. The alternative is ugly.”
Whatever choices Chicago makes, expect neighborhoods as well as political leaders to have their say in them. Chicago – more than most cities – has a well-organized collection of local groups that live the credo that all politics is local.
“This is a critical component of the planning infrastructure,” said former Chicago resident Dan Immergluck, now professor in the Georgia Tech School of City and Regional Planning. “There are hundreds of neighborhood economic development groups (in Chicago), many of which have had serious impact on the city.”
It seems that every area and every group has its organized proponents – including businesses. There are roughly 80 different chambers of commerce, noted Erik Harmon, executive director of the chamber for Wicker Park and Bucktown. The political structure, too, is fragmented — a feature familiar to metro Atlantans.
Metro Chicago has 284 municipalities and 1,200 units of government, with no central authority. Chicago’s mayor is powerful but must work with 50 aldermen.
Yet in Chicago, fragmentation is a double-edged sword. An overarching pride prevails, said Susana Vasquez, executive director of the Local Initiatives Support Corporation of Chicago, which connects community improvement groups with funding.
“It’s constantly said that there is a real love of the city that is reflected in all its segments, in the communities, in philanthropic groups, in government. If you live here, you probably feel like you are here for the long haul. I don’t think Chicago’s a town that people are just passing through on the way to something better.”
That can make any negotiation tougher, but it also guarantees that all the parties care — and that big decisions have to align with very local interests.
‘Crucial pivot point’
In facing the city’s current financial issues, Vasquez said, “There has to be a re-imagining of how we get neighborhood development linked to overall, Chicago-wide economic development. I do think we are at a real crucial pivot point.”
Neighborhoods are not just political blocs, but also the source of economic growth in the form of immigrants. Despite often-bitter divisions among ethnic communities, the city overall has welcomed immigrants, who have become workers, entrepreneurs and taxpayers.
The area known as Little Village (long-time home to defeated mayoral challenger Garcia,) has a main street crammed with retail establishments. Some are the usual fare for lower-income areas – pawn shops and check-cashing.
But many are locally-owned service businesses. The strip on 26th Street is often described as the source of more sales taxes to the city than anywhere but Michigan Avenue.
People come to Little Village from all over to get what they need for weddings, quinceañeras – special parties for girls turning 15 – and other family events, said Mike Rodriguez, executive director of Enlace Chicago, a community organizing group. “Little Village is a success story. It is the Mexican capital of the Midwest.”
Roughly 83,000 people live in the area, the vast majority Mexican or Mexican-American.
“Cities throughout history have always relied on people moving in, while other people who’ve been there longer may be moving out,” Rodriguez said.
“The main difference between Chicago and places like Detroit or St. Louis is that we have a strong immigrant base – mostly from Latin America, but also from Asia, places like India and even China,” said Bradford Hunt, a Roosevelt College dean and author of “Planning Chicago.”
While metro Atlanta’s population also has noticeably diversified beyond black and white, the state’s recent efforts aimed at illegal immigration have been seen by many as giving the state an anti-immigrant sheen.
But all Chicago groups have not done equally well. African-Americans account for an outsized share of those leaving the city of Chicago the past several decades. Some go to nearby suburbs, some head south to places like Atlanta, Hunt said.
“There are probably more black-owned firms in Atlanta than in Chicago,” he said. “And it’s a healthier climate for black professionals.”
On a frigid, windy day near Lake Michigan, it’s easy to think of the strengths in Atlanta: A Sunbelt location as the population continues shifting west and south, the world’s busiest airport, a diverse and hardworking labor force.
Mass transit blanket
Chicago is a long way from perfect – and also very different from Atlanta. Besides the potentially massive fiscal crisis, the city has endemic poverty, gang violence. The flipside of its highly organized neighborhood groups can be a turf-oriented tribalism that distorts or even stymies decisions.
Chicago has mostly overcome its handicaps with a diverse economy, clout with state government — at least in the past — and a great location (despite cold winters).
The region also has a transit system that blankets the region.
Created in the mid-1970s, the Regional Transportation Authority saved failing private commuter rail lines, established others and took over struggling bus companies. RTA oversees a suburban system that complements the CTA’s 146 train stations and 11,000-plus bus stops.
“This was one of the times that that Chicago did something that was regional and that, by and large, has worked,” said Jon B. DeVries, another Roosevelt faculty member and co-author of “Planning Chicago.”
With a slew of universities and a sizeable tech sector, Chicago continues to draw and keep educated, ambitious young people — something metro Atlanta has had trouble with of late, according to one recent study.
Justus Harris, 24, arrived from North Carolina in 2009. One recent cold morning, he was among dozens of young people sipping lattes and eyeing screens in the Filter Cafe Lounge on Milwaukee Avenue. He is a performance artist. His partner is a filmmaker.
“I have been in Berlin, New York, Houston – and Chicago has a very strong arts scene,” he said. “It’s less dense than New York. And it’s cheaper.”
ABOUT ATLANTA FORWARD 2015
Today’s special report is the second piece of the AJC’s year-long examination of the economic state of metro Atlanta.
The key question we seek to answer: as our region recovers, do we have what it takes to attract the companies, jobs and talent we need to regain our pre-recession prosperity?
The first installment, published in February, found metro Atlanta trailing two perennial economic competitors, Dallas-Fort Worth and Charlotte, in a host of economic indicators since the recession ended. You can read the first installment on myajc.com.
We’ll follow the Atlanta Forward theme all year, deeply reporting the region’s challenges in transportation, education, leadership and more that could stunt our progress. We’ll also examine potential solutions.
We did a similar investigation in 2011. The result was our first Atlanta Forward special report, an eight-day series that illuminated many of the region’s obstacles. Four years later, the region is grappling with the same problems. So we decided to take a fresh look.
- Charles Gay, Senior Editor for Economy/Business
Email: cgay@ajc.com
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