CUED

South Suburban Economic Development Project

Credit Needs Analysis
A major component of the UICUED contribution to the TAPP project is to conduct an analysis of the credit needs of small businesses in the area. Students assisted in the beginning stages of this analysis. To date, a sample of small businesses in the five communities has been selected and several interviews have been conducted. A barrier to this analysis has been the unwillingness of business owners to discuss their financial situations. There are two preliminary findings. Preliminary evidence suggests that local banks do not make the very small loans that many of many these small businesses need. The reason is that the banks cannot justify the administrative costs that these loans entail. Small businesses need technical assistance in identifying sources of funding and in completing loan applications.

Economic Development Linkages Associated with the Robbins Incinerator
There are two components to this analysis. The first examines the economic impact of the construction of the incinerator. The second examines the feasibility of establishing new businesses that use recycled products as inputs. Recycled inputs could become readily available once the Reading Energy Incinerator is constructed in Robbins. Students examined various processes and technologies for converting newspaper into insulation products, plastic into home construction products and glass into tile. The potential market for such products also was assessed. The incinerator could not operate without a state subsidy in the amount of $300 million over twenty years. The incinerator will create between 65 and 80 permanent jobs and 400 temporary construction jobs. More than half of the positions will require employees with college educations. Paper and plastics recycled at the facility will be too contaminated to be sold for recycling. Further impediments to plastic recycling include fluctuating market prices and lack of proximity to potential users. There is little potential for developing new industries that used recycled materials in the south suburbs. There is already a dominant company making products from recycled plastics in Chicago. Aluminum is used exclusively for cans, and the recycled steel market is dominated by large steel producers or minimalist. Siting of a materials recovery facility (MRF) in Robbins is not likely due to poor transportation access and lack of a sufficient input stream due to the incinerator's use of recyclable products.

Construction Trades Training Program Development
As part of the TAPP project, CUED is examining the feasibility of initiating a construction training program for residents of the south suburbs. The options being considered are starting a new program or building from an existing program. As part of this research UPP 553 students assisted in conducting two surveys --- one of potential trainees and one of contractors. The first survey was distributed to about 20 organizations (unemployment offices, community or organizations, village halls, job training organizations). The contractor survey was conducted in conjunction with the Chicago Urban League. It was administered to minority business owners in the south suburbs and local construction companies. The base of companies was obtained from the yellow pages and lists of contractors licensed in the five villages. This survey will help establish the demand for the graduates of the proposed program. The students assisted in estimating demand for trainees based on responses (need, gross revenue). Students also contacted minority-targeted construction training programs throughout the country to identify models for implementing a new program (or to expand an existing program). The topics discussed in these interviews included outreach, assessment, curriculum and job placement. Although all of the local interviews have not been returned and examined, the efforts to date suggest several conclusions. African Americans and Latinos historically have been denied access to the construction trades. There have been approximately 20 community-based programs developed to increase access to these groups, but few remain due to union resistance. It is more feasible to build from the already existing construction trades training program at South Suburban College than to attempt to develop a completely new program. Youthbuild USA, a pre-apprenticeship program that has received national attention, combines training with the goal of rehabilitation to provide affordable housing. This proven program with an established curriculum can serve as a model for a program in the south suburbs. Since Youthbuild USA will be developing a program in the Chicago area, representatives from the five communities should remain in contact with the organization to lobby that residents of their communities are included. Survey respondents prefer a full-time program. Respondents state a willingness to complete remedial academic work in order to qualify on pre-program testing.

Site Suitability Analysis for the Proposed Construction Trades Training Program and Recycling Businesses
As part of the feasibility analysis for the construction trades training program and recycling businesses, an inventory of vacant property available for redevelopment in Harvey was conducted. The physical space requirements for a facility that could house the training program and serve as an incubator for new businesses was established, and sites were evaluated according to the criteria established. The criteria included minimum of 50,000 square feet of dividable space, public transportation and truck accessibility, appropriate zoning and cost-related features. Students conducted a field study to obtain information on potential sites. Seven sites were identified that possessed the required characteristics. Further study eliminated all but two of the seven sites. Color maps of these sites are included in the report.

Housing Development in Harvey
A housing market assessment was completed to establish the feasibility of Community Economic Redevelopment Corporation's (CERC) proposal to build a low-to-moderate income multi-family housing development. The development would have approximately 120 to 200 units of non-continuous construction. This project is viewed by CERC as a stimulus to local economic development. Students conducted a housing market study of the area. The study included 26 municipalities in the south suburbs in order to determine whether there is a market for affordable multi-family housing, the size of that market. The study examined whether there are comparable units in the area. A radial study (in 1,2,3, and 5-mile increments) was conducted to determine population demographic information (income, racial composition, occupancy and retail market information, units of multi-family housing, poverty rates, etc.). A related task of this analysis was to examine whether construction could be linked to the construction trades training program and the development of industries using recycled products. The housing market assessment demonstrated a need for higher quality and larger rental housing units in the TAPP project area. Public-sector financing is unavailable for the development. There is little opportunity to link the construction of the development to the proposed construction trades training program, since construction would be completed by the time a program could be developed, funded and implemented. It is unlikely that plastic lumber produced from a new company started for this purpose in the south suburbs could be used in construction of the housing development. There are approximately 40 producers of plastic lumber in the United States, with one of the most competitive, Eaglebrook Plastics, being in Chicago. The economics of this industry do not suggest that a new facility in the south suburbs would be viable. There is some opportunity for linked economic development from the housing development. Linked developments are likely to include a convenience store and a branch bank. It is unlikely that the development could create larger spinoffs or attract new industrial activity to the area.

Inventory of Community Development Organizations
An inventory of community and church-based organizations operating in the five communities was completed as part of the study. Interviews were conducted with representatives from known organizations to obtain information on their organizations and their activities. There is a relatively small base of community development organizations with which planners and village staff can work in implementing development projects. There are several community service and church organizations that provide services such as food pantries, home energy assistance, emergency assistance and scholarships. The primary community development organization is New Cities Development Corporation. New Cities focuses on housing improvement and development and operates a home maintenance training program.

This website is maintained by Cedric Williams, Manager System Services,
UIC-Center for Urban Economic Development