In Chicago’s Woodlawn Neighborhood, Untapped Economic Opportunity

Written by Adeshina Emmanuel. This article originally appeared in The Chicago Reporter.

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 recalls.

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., along a major commercial corridor that cuts through the neighborhood.

Areas like Woodlawn, which could be home to the Obama Presidential Library, struggle 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 isn’t money to be made and opportunities to be had in communities 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 co-exist with pockets of middle-class residences.

The consumer base could support more retail and other options. 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.

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 hair-care related businesses. About one in four of the businesses either styles or sells hair.

Opening a business where no one else wants to go comes with advantages, including cheap rents 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 is working women, Muzeau 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, 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 is among one in four businesses on a stretch of South Cottage Grove Avenue that sells or styles hair.

Cosmo, open since 2002, also stocks snacks, clothes, pajamas and lingerie, household items and appliances. It also includes a jewelry dealer.

T.J. Johnson, an 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 had 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 street 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.

“[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 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 help revitalize the neighborhood.

“Any progress for future business is all going to be good,” said 64-year-old Harrison Davis. “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 sending produce to merchants in the city. Their numbers had hovered between 500 and 1,000, but the World’s Fair in 1893 brought the area 20,000 new residents, including entrepreneurs, according to the Chicago Historical Society.

The neighborhood remained predominantly white and middle class until the 1950s. By 1960, the population had ballooned to more than 81,000 and the area was overwhelming black, boosted by an influx of Southern migrants in the latter years of the Great Migration. 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.

Back then, 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 (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.”

Looking forward

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 businesses owners in capitalizing 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.

Cottage Grove is in a tax increment finance district, known as a TIF. Chicago uses property tax dollars in the district to help subsidize economic development. But Cottage Grove in Woodlawn has rarely benefitted. Last year, the City Council approved a $2 million subsidy for a redevelopment project at 6315 S. Cottage Grove Ave. That marked the district’s first direct investment in a commercial project since its establishment in 1999.

Cochran, who mentioned he’s in talks to bring a Mariano’s grocery store to Woodlawn, called the Cottage Grove corridor “a land of opportunity.” He said the ongoing renovation of the historic Strand Hotel near the intersection of 63rd and Cottage Grove will bring ground floor retail to complement 63 new apartments. 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 to bring the area a bank. Currently, Woodlawn only has one bank.

Gallagher said what Woodlawn needs is balance between mainstream businesses and the “fringe” businesses there now. While many businesses have survived, the neighborhood could still use more variety among businesses and 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?’”