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Open for business in Woodlawn: Black communities are often stereotyped as consumer wastelands, but immigrants and first-time entrepreneurs have tapped the unmet needs in the neighborhoods.

Becker Muzeau didn't know much about the South Side when he moved to Chicago from Miami in 2001.

His colleagues in a training program for new store managers gossiped about how he would fare at the helm of a tax preparation store by Stateway Gardens, a former public housing complex in Bronzeville. They portrayed the area as too violent for the then-29-year-old Haitian immigrant.

"They said, 'He's not going to make it,'" Muzeau said.

On his first day, Muzeau said he was nervous as he walked from his car to the store, weaving through dozens of people hanging out near the business. No one hassled him, and some people introduced themselves when they found out he worked at the store.

Four years later, encouraged by his experience near Stateway Gardens, he opened his own business in Woodlawn, another predominantly African-American community where disinvestment has left its mark. Muzeau spotted a need for financial and technology services. So he opened Techmark Multi-Services at 6459 S. Cottage Grove Ave., located along a major commercial corridor that cuts through the neighborhood.

Woodlawn, which could be the home of the Obama presidential library, struggles to attract financial institutions and big-name retailers and restaurants, though it shares a boundary with the prestigious and powerful University of Chicago. Yet some businesses do come and thrive, confounding notions that there is no money to be made and no opportunities to be had in communities, including Woodlawn, that lenders and upscale businesses have forsaken.

The stretch of Cottage Grove between 62nd and 67th Streets could be a corridor from any black neighborhood in the country where higher-than-average rates of poverty, unemployment and crime coexist with pockets of middle-class residences.

The consumer base could support more retailers. Since 2006, however, the city has issued four permits to demolish commercial buildings and two for new construction of the buildings on the five-block stretch of Cottage Grove, according to city data. Twenty-two percent of the nearly 90 properties are vacant lots and empty buildings. The city hasn't issued a permit to do business at some of the buildings in more than a decade.

Cottage Grove is in a tax increment finance, or TIF, district, a tool for investment in so-called blighted communities. Under TIF, a portion of the property tax dollars generated in the district is used to help attract businesses and other services to the neighborhood. But the area has rarely benefitted.

In Woodlawn and in black commercial corridors across the country, immigrants like Muzeau and first-time entrepreneurs often operate the only businesses.

Adam Troy, an Ohio-based developer who helped bring a Wal-Mart to Bronzeville, said the business community has a tendency to "couch the race factor within safety considerations or worries about risk."

Black consumers and neighborhoods get branded as too poor and too dangerous to do business with, he said. But businesses have gone into black markets and prospered.

"So," he said, "somebody's making money here."

Opportunity in neglect

Muzeau said he saw opportunity where others only see risk.

"It doesn't matter whether a person is poor or rich," said Muzeau, whose customers come to him to file their taxes, remove viruses from their computers and get advice about averting home foreclosure. "Once people see good service, they continue to come to you. It's all about trust."

Muzeau's business is among about 40 with active business licenses between 62nd and 67th Streets on Cottage Grove, city data show. Storefronts are dominated by tax-preparation services, fast-food restaurants, convenience stores, daycares and haircare-related businesses. About 1 in 4 of the businesses either styles or sells hair.

Opening a business where few others want to go comes with advantages, including cheap rent and less competition. These advantages make it easier for first-time entrepreneurs, women, minorities and immigrants who typically have less wealth and access to capital to invest in a business than native-born white men.

Muzeau, who lives in south suburban Tinley Park, rents his office space for $500 a month. He said he makes $180,000 to $200,000 in annual profits. At least 60 percent of his customers have minimum wage jobs, and the majority are working women, he said.

Troy said Wal-Mart founder Sam Walton built his discount mega-chain by first focusing on underserved markets. The approach hinged on building stores in affordable spaces and providing customers with one-stop shopping at a discount. Beauty supply superstores such as Cosmo at 6250 S. Cottage Grove Ave. and other mixed merchandise retailers follow a similar strategy in underserved communities like Woodlawn, Troy said.

Mostly black women and girls peruse the aisles at Cosmo, a bustling shop more than half the size of a football field. Hair extensions hang from hooks. Straight Korean hair. Brazilian curls. Kinky Senegalese twists. Mannequins sport black, blue, yellow and red wigs, some styled after "Pulp Fiction" belle Mia Wallace's classic bob. Black men and women with coiffed heads flash pearly smiles on perm and texturizer kit boxes. Orange tin cans of Murray's hair pomade also decorate the shelves of the store.

Cosmo, which opened in 2002, also stocks snacks, clothes, pajamas and lingerie, household items and appliances. It also buys and sells jewelry.

T.J. Johnson, a Cosmo employee for seven years, said neighborhood people buy toilet tissue, T-shirts, socks, deodorant, laundry detergent and other items they might buy at a big-box retailer like Target, which doesn't exist in Woodlawn, or a Walgreens or CVS. Johnson said only a Family Dollar store a few blocks south has as much merchandise as Cosmo.

On a June day, Woodlawn resident Jasmine Hall was shopping at Cosmo for lipstick and "basic lady stuff," she said. She estimates she spends about $100 a month on beauty supplies and basic household items.

"This store also has something for everyone," she said, "I don't think they're going out of business any time soon.

The retail 'snowball effect'

Woodlawn's Cottage Grove commercial corridor is not unusual. Most of the empty storefronts on Cottage Grove between 62nd and 67th streets used to house fast-food restaurants, hair salons, day cares or tax preparation services, the same businesses that dominate today. There is an Aldi's grocery store and a Family Dollar store along the stretch.

The corridor features a prevalence of businesses known to cluster in black communities across the country, said Kim Zeuli, senior vice president of the Initiative for a Competitive Inner City, a Boston-based think tank. She described the corridor as "a very local economy" where small-business owners fill a vacuum left by a lack of corporate interest in commercial spaces.

Urban development researcher and consultant Mari Gallagher said "the snowball effect of retail" helps explain why a particular mix of businesses persist in areas like Woodlawn.

Businesses in urban markets typically open where businesses already exist, near establishments their owners consider similar in type or quality, Gallagher said.

A business owner considering opening a high-quality grocery store or a cafe might see parts of Woodlawn that lack similar offerings and assume it's not a good market for them. On the other hand, an abundance of certain businesses might indicate that local consumers can support them.

For example, Troy said businesses such as beauty supply stores and hair salons tend to locate near each other. It doesn't take a market study, he added, to see that people who get their hair done at a salon are likely to shop at a nearby beauty supply store.

The businesses "don't have to do any marketing or advertising," Troy said. "All they have to do is come and compete."

Gallagher emphasized that businesses in the financial services and food sector have been known to sometimes charge higher prices than what consumers with more options would pay at mainstream establishments. Some critics have blasted this as predatory.

But, "I don't see it that way," Muzeau said.

The most he charges to remove viruses and spyware from a computer is $75, he said, about half of what the same service costs at Office Depot and Best Buy.

Most of his business, however, centers on tax preparation.

"I think all people need some kind of services, and we help them with something they wouldn't have," he said of area businesses.

A history of decline

Woodlawn residents have high hopes that the Obama library and other efforts in the area can revitalize the neighborhood.

"Any progress for future business is all going to be good," said 64-year-old Harrison Davis, a Woodlawn resident. "I'm just hoping when these places open up, the people in the neighborhood can get some jobs."

When the city annexed the area now known as Woodlawn in 1889, it was occupied mostly by Dutch farmers who settled there about 40 years prior and sustained themselves by selling produce to merchants in the city. Their numbers had hovered between 500 and 1,000, but the World's Columbian Exposition in 1893 brought the area 20,000 new residents, including entrepreneurs, according to the Chicago Historical Society.

The University of Chicago had supported restrictive covenants to keep blacks out of Woodlawn and Hyde Park, but in 1948 the U.S. Supreme Court ruled that they were unenforceable. That's why the neighborhood remained predominantly white and middle class until the 1950s. By i960, the population had ballooned to more than 81,000 and the area was overwhelmingly black, boosted by an influx of Southern migrants in the latter years of the Great Migration.

In the '60s, 63rd Street, which intersects with Cottage Grove, was celebrated for its jazz clubs. But as population outpaced new construction, landlords illegally subdivided buildings into smaller dwellings, cramming people into housing that often ended up neglected. Compounded by other issues, including a lack of public- and private-sector investment, Woodlawn became associated with blight and crime.

White businesses fled the neighborhood after the assassination of Martin Luther King Jr. in 1968, fearing protests and riots similar to those that had engulfed other black communities. A rash of arsons in the 1970s set by property owners left scores of empty lots and abandoned buildings.

Woodlawn's population decreased from 81,279 in 1960 to 27,086 in 2000, according to the Chicago Historical Society.

Today, walking south on Cottage Grove from 55th Street in Hyde Park, the landscape morphs dramatically around 60th street, near the boundary of Woodlawn. Sparkling university buildings and lush park space surrender to affordable housing, vacant lots and deteriorated commercial strips.

Ald. Willie Cochran (D-20th), whose ward includes most of Woodlawn, said market studies have shown that the community can support a higher retail density.

"Even in a racist system that disinvests in certain communities, there are those who come into communities and invest no matter what race they are," Cochran said. "If they offer the right product, they are successful, but they have to get around the philosophy that black neighborhoods or minority neighborhoods that are deprived are not worthy to be invested in."

Making public dollars count

Davis has lived in Woodlawn since 1972, raising children and grandchildren on the fresh produce he grows in his backyard.

He owned Harrison's Barber shop at 6437 S. Cottage Grove Ave. for 15 years before he closed it this year after the new owner announced plans to rehab the property.

Davis said he and other residents would especially appreciate a tailor, a shoe repair store, a furniture store and more quality restaurants included in any new retail. There's opportunity, he said, for business owners to capitalize on the spending power of area consumers who have to leave the neighborhood to find more shopping options.

"The neighborhood is really crying for something, anything, as long as it's helpful," Davis said.

Tax increment financing is supposed to help address such concerns.

Last year, the City Council approved a $2 million subsidy to rehabilitate the Strand Hotel, an abandoned historic hotel at 6315 S. Cottage Grove Ave., and convert it into apartments and retail space. The project is in Woodlawn's oldest TIF district. The plan to transform the hotel marked the district's first direct investment in a commercial project since it was establishment in 1999.

Beyond the project, there are still questions about whether the city has used district TIF money to its full potential. A Chicago Reporter analysis found that most of the money generated in the district, which includes a swath of 63rd Street and Cottage Grove Avenue, has not been invested there. Of the $30.8 million in revenue generated by the district from 1999 to 2014, according to city data, nearly three-fourths of the money was either unspent or transferred out of the district to repay the city bond debt from the construction of a high school in South Shore, another struggling South Side community.

The city can use property taxes from a TIF district to pay project costs in adjacent districts. Former Mayor Richard M. Daley siphoned millions of dollars from Woodlawn and some other TIFs in high-poverty communities on the South Side to pay for the high school. This was part of Daley's citywide plan to renovate and construct dozens of new schools, something that is typically funded by school bonds. The money added up to $10.4 million, or about one-third of the revenue generated in the Woodlawn TIF from 1999 to 2014.

Critics say Chicago's program has too often used public subsidies in communities like the Near North Side and the Loop that already appeal to developers. By comparison, TIF investments have lagged in communities like Woodlawn where the need for economic development is most dire.

Cochran declined to discuss issues related to the Woodlawn tax district. But he said in a separate interview that the renovation of the Strand Hotel will bring retail and 63 new apartments to the area. Several mixed-use buildings with residential and retail space were bought earlier this year near 64th and Cottage Grove and will be restored, Cochran said, adding that he's working on bringing a bank to the area.

Gallagher said what Woodlawn needs is balance between mainstream businesses and the "fringe" businesses that are there now. The neighborhood could also strive for "a higher tone" of retail.

"It would take a visionary champion to come in and set a new tone, which can help revitalize the market," Gallagher said.

Zeuli, however, is wary of focusing on what Woodlawn and similar neighborhoods don't have. "Look at all the opportunities in these areas," she said. "Look at the advantages rather than thinking, What's wrong with it?'"

A snapshot of Cottage Grove

There are about 40 businesses with active licenses in a five-block stretch of South Cottage Grove Avenue in Woodlawn. Yet the percentage of vacant land and buildings along the corridor reflects the ongoing disinvestment in the area.

Property types, 6200-6700 S. Cottage Grove Ave.

Commercial only                      25%
Vacant land or buildings             22%
Mixed retail and residential         19%
Parking lots                         18%
  Planned development              2.35%
  Church or church facility        2.35%
  Nonprofit apartments             2.35%
  Social Security Administration   9.41%

Source: Cook County Assessor's Office

Note: Table made from bar graph.

Taking care of business

As in many African-American communities, certain types of businesses tend to cluster in Woodlawn.

Where the money's going

The Woodlawn TIF district has generated $30.8 million in
revenue since 1999. But most of it has not been invested in
the Woodlawn community.

25%  Spent

5%   Transferred to the
     West Woodlawn TIF

34%  Transferred to a
     South Shore TIF district

37%  Unspent

Source: City of Chicago, 1999-2014

Note: Table made from pie chart.
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Article Details
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Title Annotation:Who's Doing Business in the Neighborhood?
Author:Emmanuel, Adeshina
Publication:The Chicago Reporter
Article Type:Cover story
Date:Jun 22, 2015
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