Greising: New $10M Fund for Rebuilding Chicago Businesses Is Just a Start
BGA President David Greising writes a regular column for Crain's Chicago Business.
In an impassioned speech in a pivotal moment of her mayoralty, Mayor Lori Lightfoot on June 2 sought to mend the city and set a hopeful path forward.
Her words carried a heavy burden. Even before COVID-19 created an economic crater, well before the rioting in the aftermath of George Floyd's death in Minneapolis, Lightfoot's Chicago already faced serious challenges.
In the speech, her call for police reform was automatic. And her 90-day deadline for a first wave of new initiatives spoke to the urgent need for reform. But Lightfoot knows the root cause of the riots goes to the very heart of Chicago's urban illness—a legacy of inequity and bias that has plagued the city for generations. A new $10 million fund for rebuilding businesses from the riots and looting will be just a start.
"There is no shortcut to get to our better place. It is not one thing, it is not one program. It is not one event, it is not one person. It is everything. And it will require all of us," the mayor said.
It took a citywide record of unequal investment to get here. The Urban Institute last year studied all public and private investment in Chicago neighborhoods from 2011 to 2017. The findings: Majority-white neighborhoods received triple the rate of investment that went to majority-black neighborhoods. Low-poverty neighborhoods attracted investment at 2.6 times the rate for high-poverty neighborhoods.
Data like that speaks to the larger inequities Lightfoot has set out to address, in just about every aspect of our civic life: investment, crime, health, education, environment and more. It's no wonder the new $10 million business rebuilding fund will be allocated, she says, "with an equity weighting that focuses on the South and West sides."
The city investment will barely make a dent in the broader need. And the scale of the challenge has Lightfoot relying heavily on the private sector to redouble and reinforce the expenditure of city funds.
Last fall, she redirected $750 million in city funds toward an economic development program called Invest South/West. She has persuaded banks to plunk down tens of millions more, and as COVID-19 took root, philanthropic foundations stepped up in ambitious new ways, too.
To get a sense of how much work remains to be done, consider one of the larger investment projects of recent years: the $40 million devoted by JPMorgan Chase in 2017 to economic development in the South and West sides.
The money has made some progress. According to the bank, the investment has helped create or retain 2,300 jobs, provided capital or technology assistance to 3,300 businesses and led to the construction of 48 new housing units.
Progress needs to start somewhere. The new jobs and homes are welcome. But the numbers from Chase speak to the scale of Chicago's problem of underinvestment. In a city of 2.7 million people—and roughly half a million living in poverty—2,300 new jobs and 48 new homes leaves a long way to go.
City and private investment are fighting a tide of inequity that has built up over generations. Lightfoot didn't need the Urban Institute study to tell her this. And that's why she has assigned her deputy mayor for neighborhood and economic development, Samir Mayekar, to squeeze all he can from any new resources that come in.
"The real challenge is how do you deploy investment in a way that creates a multiplier effect," Mayekar told me.
A coalition of 100 companies has committed to go beyond philanthropy and seek profit-making investments. The city is targeting 10 areas and seeking to coordinate public and private investments there. A lot of this happens within the framework established by Invest South/West, and more needs to be done.
"We will clean up our broken windows, but we can't stop there," Lightfoot said in her speech. "We must also clean up and repair our broken systems."
Lightfoot is seeking systemic approaches to address the violence and poverty that plague the city. It's the right way to frame the problem. It also reveals the difficulty of the task she faces: Systemic change will be difficult, and cost a lot.
Whether Lightfoot can develop the resources and strategy needed to succeed remains to be seen. At the very least, she is putting the challenge front and center as no mayor has done before.