Landmark City-Anchor Collaboration to Bring $2.5 Billion Into Chicago Neighborhoods

Written by Amanda Maher

In many of the largest inner cities in the U.S., an anchor institution, such as a hospital or a university, is the largest employer. As ICIC research shows, anchors also carry major purchasing power, have large real estate holdings and have a long-term investment in their neighborhoods’ economic health. ICIC’s recent work in Newark and in Minneapolis-St. Paul showed how, through local procurement, anchors can have major economic impact.

Now, in what is perhaps the largest city-anchor collaborative effort of its kind, eight universities have entered into separate agreements with the City of Chicago to collectively spend more than $2.5 billion on economic and community investments over the next three years.

“One of Chicago’s greatest strengths is our world-class universities,” Chicago Mayor Rahm Emanuel explained in a release. “They provide pathways to great careers for their students and with the help of these agreements will become even stronger engines of opportunity for our neighborhoods.”

Each university’s Memorandum of Understanding (MOU) with the city details the university’s anticipated investments. For instance, Rush University will spend $500 million to expand its Near West Side medical center and will enhance its medical training programs offered in conjunction with Malcolm X Community College and local high schools. Northwestern pledged $455 million toward a new biomedical research center – a project that is estimated to have a $4 billion impact on Chicago’s economy in its first decade. A full list of commitments can be found here.

For its part, the City has committed to support these projects through a timely review and approval process; it will also make public infrastructure improvements as necessary for these projects to move forward.

This isn’t the municipality’s first foray into city-anchor collaboration. In 2011, the City signed an MOU with the University of Chicago in which the university pledged $1.7 billion in capital construction projects; $2.5 million toward Metra station improvements; $750,000 in neighborhood improvement grants; $500,000 on workforce development programming to help local residents find work at the University; and $750,000 on employer-assisted housing in surrounding neighborhoods.

It appears the MOU served to benefit the City and the University of Chicago. Now, five years later, they’ve signed onto a new MOU that projects $750 million in additional university investment.

“Through a broad range of initiatives, the University will continue to work with the City, local elected officials, and community leaders to promote innovation and increase opportunities in education, employment, and leadership development for local residents and organizations,” said University of Chicago President Robert J. Zimmer.

These MOUs are a step forward in Chicago’s efforts to promote anchor engagement. Moving forward, the extent to which Chicago’s universities’ collaborate with each other will prove equally important.

“Yes, there is a need for partnership between cities and anchors, but what you really need is partnership amongst institutions,” noted Hank Webber, Executive Vice Chancellor at Washington University, in a report from the National Resource Network. That’s because each institution has its own strengths and capabilities, and these should be recognized as efforts are undertaken. Research universities, for instance, are better equipped to support high-tech business formation, whereas community colleges are often stronger providers of workforce training.

Aligning stakeholders’ interests and sustaining these efforts over the long-term certainly won’t be easy, but any progress to that end stands to have a strong impact on Chicago’s inner city communities.