DOWNTOWN — A program that would give grants to small businesses looking to revitalize the LaSalle Street corridor passed a critical hurdle last week.
The program would direct $5 million in tax-increment finance dollars to jumpstart a Small Business Improvement Fund for storefronts along the LaSalle Street corridor in the Loop.
Grants of up to $250,000 would be available for building owners or tenants to make permanent renovations on ground-level retail space. An extra $50,000 would be available for applicants expanding to the corridor from low- and medium-income neighborhoods. A maximum is set for $1 million per property.
A total of $5 million would be up for grabs, according to city documents.
The expansion was approved by the City Council’s finance committee Thursday and awaits a vote from all 50 alderpeople.
The proposal is being marketed as a great opportunity for local businesses, but leaders of one South Side chamber of commerce worry the increased financial benefits could lure stores away from commercial strips in lower income areas.
The addition of the Small Business Improvement Fund to Downtown is part of Mayor Lori Lightfoot’s initiative to turn LaSalle street into a vibrant strip. Part of that includes incentives for developers to convert underutilized office buildings into apartments and condos.
If approved, it would be the first Small Business Improvement Fund created for Downtown, according to Cindy Roubik, deputy commissioner of the city’s Department of Planning and Development.
“We have this tool that’s worked very successfully in commercial corridors in other neighborhoods. And we felt it was important to bring that same tool to this corridor in Downtown to see if it can spur investment for…neighborhood amenities like restaurants, dining, grocery stores, retail stores,” Roubik said.
The LaSalle Street improvement fund is slightly different than other Small Business Improvement Funds across the city.
The maximum grant for the LaSalle Street improvement fund is higher than in other programs and would reimburse 90 percent of all expenses. Grants in other neighborhoods are capped at $150,000 per applicant and reimbursements vary between 30-90 percent.
There also would be no revenue limits for the small businesses or building owners applying for grants through the LaSalle Street program. The original Small Business Improvement Fund states businesses must make less than $9 million in gross revenue in order to apply.
Although the revenue limit would be removed for the LaSalle Street program, franchises, chain businesses, bars and taverns still would not be eligible.
Lettuce Entertain You, a hospitality group that owns many Chicago restaurants, would not be eligible for the improvement fund, officials from the Department of Planning and Development said. But Ann Sather, a Swedish-style breakfast spot owned by retiring Ald. Tom Tunney (44th), would be, officials said, hypothetically.
Building owners would also need to have a tenant lined up for the retail space they are trying revamp, according to city documents.
While many small businesses and restaurants have closed permanently because of the pandemic, low staffing and sales, Roubik is hoping the grants will give small businesses the jump start they need to be successful Downtown.
“We do know that there are small businesses that are struggling citywide and nationwide and they’re still trying to recover from the impacts of the pandemic,” Roubik said. “But I do hope that this incentive helps … I think that it will come down to timing.”
When grants are awarded sometime next year, business owners should already know which residential conversions are moving forward, bringing hundreds of new residents and potential customers Downtown.
The proposal has received a mixed reception from business leaders in other neighborhoods.
Leaders from the South Shore Chamber of Commerce feel the program would be a great opportunity for brand expansion, while officials from Greater Englewood Chamber of Commerce worry the opportunity could lure vital small businesses away from their communities.
Businesses from South Shore and Englewood that want to open Downtown would be eligible for the additional $50,000 to do so.
Tonya Trice, executive director of the South Shore Chamber believes $300,000 would greatly interest local businesses looking to expand, since the benefit is twice as what the local Small Business Improvement Fund offers.
“We have a lot of great businesses on the South Side of Chicago that may not have the brand recognition that they deserve, because they are unable to expand into those markets. So, I definitely think that businesses would be interested,” Trice said. “The storefronts and the properties are in much better condition than those on the South Side. So I think businesses would have an opportunity to see the money go farther.”
Felicia Slaton-Young, executive director of Englewood’s chamber, said she supports expansion and growth for local businesses, but wonders why extra incentives would be offered Downtown.
“I have mixed feelings about it. Why can’t this program allow small businesses to be able to get access to this funding to create the space that they need, in the community in which they’re already doing business?” Slaton-Young said.
Slaton-Young also worries about the sustainability of the businesses that would move Downtown.
“At the end of the day, most of this funding will go towards retrofitting or rehabbing an existing space. This is not ownership. This is getting a space ready for business. And so what are those rent rolls going to look like? How much is the lease per square foot? We need to be really clear about what the overall fiscal and financial impact will be,” Slaton Young said.
If approved by City Council, the Department of Planning and Development plans to work with neighborhood business leaders to identify potential applicants.
Roubik expects to have multiple rounds of applications with the first round opening this year.
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