CUED
Center
for Urban Economic Development
University of Illinois at Chicago
The
Displacement of Storefront Businesses in
Downtown Chicago 1976 - 1981
Project Number: 174
Report Date: August 1982
Author(s): Robert I. Wolf
Over the past five years, the construction of numerous high-rise office buildings has transformed the character of Chicago's Loop by significantly diminishing street-level retail activity. More than half (52 percent) of the retail stores in buildings torn down to make way for the current building boom have not relocated and have gone out of business. In addition, those that have relocated were pushed from the prime retail area to more peripheral locations. The proportion of businesses located in non-prime areas has risen from 20 to 45 percent of the total. Nevertheless, two-thirds of those that have relocated have been very successful at their new locations.
These are the central findings of a survey conducted during 1981 by the Center for Urban Economic Development (CUED) of the University of Illinois at Chicago. CUED staff collected information on all storefront businesses displaced by redevelopment projects in Chicago's Loop since 1976, 83 in all.
Most likely to relocate were the well-established single-unit businesses, with 73 percent of them opening up in a new location. These businesses could afford to move and had to, because they were the owner's main source of income. None of the 13 marginal owner-operated firms, those which were undercapitalized and less competitive, has relocated. Of the 30 businesses which were part of multi-unit chains, 63 percent have not relocated. Although they would seem able to bear the costs of relocation, their owners could also fall back on the earnings of the remaining outlets.
The shift to more peripheral areas of the Loop has had a negative effect on the success of the relocated firms. Whereas three-quarters of the firms that relocated in prime areas have been very successful, this is true of only half those relocating in non-prime areas, All four unsuccessful businesses relocated in non-prime areas.
A beneficial side-effect of displacement, temporary locations, was produced when vacant storefronts were rented in buildings soon to be demolished. The low-rent, short-commitment nature of these storefronts provided incubator space for seven new ventures, temporary homes for two displaced firms, and lucrative business opportunities for the outlets of five established firms.
The building boom and displacement it causes is chancing the character of Chicago's downtown. Very few new buildings contain storefront space, while nearly all the demolished buildings had street frontage almost entirely devoted to shops. Only five new storefronts have been constructed to replace the 73 demolished (an additional ten storefronts in the Marquette Building have been gutted and renovated). This process has reduced the amount of street-level retail space downtown to the point where some of the most heavily traveled streets have been left devoid of shops.
The attention of city government and the downtown business community needs to be directed toward possible remedies to the problem of the disappearing storefront market. The city can use its powers of zoning to encourage new storefront construction. Plans for special redevelopment zones such as the North Loop should include requirements for storefront construction.
Storefronts are the prime retail space: they afford maximum visibility to the business and maximum convenience to the pedestrian, and they add the greatest amount of variety and liveliness to city streets. The future of storefront businesses must be assured if downtown is to remain a lively and vital place to live and work.
College of Urban Planning and Public Affairs
400 South Peoria Street, Suite 2100, Chicago, Illinois, 60607-7035
Phone: (312) 996-6336 Fax: (312) 996-5766
This website is maintained by Cedric
Williams, Manager System Services,
UIC-Center for Urban Economic Development
at Chicago
