DOWNTOWN — As Downtown shows signs of post-pandemic recovery, Michigan Avenue is positioning itself to receive some curb improvements and financially jumpstart new small business storefronts this year.
Announced at the start of 2024, The Magnificent Mile Association was one of 15 neighborhood groups to get a city grant through the Small Business Storefront Activation Program. The group will use $300,000 to negotiate leases with landlords for one or two small business pop-up shops along Michigan Avenue.
The Mag Mile, defined by the area of Michigan Avenue between the Chicago River and Oak Street, has had several iterations of a storefront program throughout the years to boost foot traffic and economic viability of the area.
The most recent example was through World Business Chicago, which used pandemic relief funds to open pop-ups in vacant stores along the Magnificent Mile. The organization covered the cost for the build-out, rent and utilities while offering a prime location to a selected retailer through a “request for proposal” process.
The program, which saw at least four retail pop-ups, ended in December with The Rendez-Vou, a cultural French market at 875 N. Michigan Ave.
Separately, the Magnificent Mile Association received two storefront grants from the city to activate two vacant stores. One was used in 2022 to bring in a four-month exhibition by Kavi Gupta Gallery at a vacant retail spot at 535 N. Michigan Ave.
The other was used in 2021 to open Colores Mexicanos, an artisan Mexican gift shop, for a one-month stint at an empty store at 605 N. Michigan Ave, along Chicago’s high-end shopping corridor.
What happened exceeded the Magnificent Mile Association’s expectations. The store became so successful it was able to renew its lease independently. More than two years later, Colores Mexicanos remains at its same spot on Michigan Avenue.
Now that the organization has more grant money available, it’s hoping to duplicate the success Colores Mexicanos has had at other vacant stores. Currently, the Mag Mile is experiencing a 27 percent vacancy rate, which is slightly lower than 30 percent from two years ago.
Numbers have improved since Alo Yoga opened along the popular stretch in addition to the impending openings of Aritzia at 555 N. Michigan Ave. and H&M at the former Apple store at Michigan and Huron. The luxury indoor mall at 900 N. Michigan Ave. also remains at 100 percent leased.
But that still leaves numerous storefronts sitting vacant along the Mag Mile that can be potentially filled using the association’s $300,000 grant.
Kimberly Bares, CEO of the Magnificent Mile Association, told Block Club the association hopes to support up to two local businesses along Michigan Avenue with the hopes they could be long-term tenants like Colores Mexicanos.
“A cloning machine. That’s what I need,” Bares said jokingly. “Apart from science fiction, they demonstrate exactly the qualities of a successful business on Michigan Avenue. They’ve got a phenomenal product that is unique. They are fantastically talented when it comes to merchandising and displaying that product. They’ve expanded and adapted.”
Colores Mexicanos co-owners Gabriel Neely-Streit and sisters Erika and Leticia Espinosa practically happened on the grant opportunity after years of looking for a retail spot in Chicago.
The small business started from humble beginnings, selling artisan Mexican items from local vendors in Mexico at street festivals. The trio also hosted yard sales at Leticia Espinosa’s home.
After being part of the Community Marketplace on the Chicago Riverwalk in 2021, the three almost signed a lease in another area of the city when they got a call for the pop-up opportunity on Michigan Avenue.
“In our brains the space was amazing. [Gabriel] saw the space and it was like love at first sight. The difference between the amounts for rent … there was a difference but we said let’s do it,” Erika Espinosa said.
“Kimberly was able to basically help us make the connection … help us negotiate. I mean, we didn’t even know what range of numbers we would be talking. It was a new world for us. … She and her team were an incredible asset and helped us get acclimated to this area,” Neely-Streit said.
The store adds life to the heavily commercialized strip with two floors filled with colorful, artisanal Mexican art, ceramics, clothing, coffee, candy and more. The store has become a destination Downtown as it hosts various workshops, an annual Day of the Dead event and more.
“They understand what it means to run a business. They have a good grasp of their finances, profitability, inventory and they are engaged in the community,” Bares said.
Erika Espinosa said she’s proud to have a stake along Michigan Avenue and hopes other local businesses will join her and bring diversity to the retail district along the Mag Mile.
“We need more of our communities to be represented. … [We] need more spaces to be represented in downtown Chicago,” Erika Espinosa said.
Those who are interested in the program must fill out a form through the city’s Business and Consumer Protection department to gauge eligibility. The program is meant for existing businesses that would embark in opening their first store or are opening an additional location.
Businesses must have fewer than 500 employees and be based in Chicago, be incorporated or active in a Qualified Census Tract or “have proof of pandemic-related losses or increased costs proportional to the program benefit.”
Other Mag Mile Priorities in 2024
Beyond the storefront grant program, Bares said the organization is also hoping to establish a new taxing district that would replace its current Special Service Area, which is set to expire in 2024.
The new initiative making its way through Springfield would establish a Business Improvement District across the state while also keeping Special Service Areas in action. A Business Improvement District could shore up millions in additional annual revenue that the association could use for infrastructure, security and streetscape improvements, according to Crain’s.
Illinois is one of five states nationwide that don’t have Business Improvement Districts, although its structure is better suited for an organization like the Magnificent Mile Association, Bares said.
The two types of taxing districts both impose a tax on property owners within a defined area and those funds are then invested back into the corridor. Bares argues a business district allows for more flexibility with how those taxes are assessed.
“For our district where we have some significant variance in the values of properties, it allows us to be more flexible and more equitable in assessing that assessment. … With SSAs, it’s a one size fits all,” Bares said.
Business Improvement Districts would also be managed by an elected board, while SSAs are managed by a mayoral-appointed board with budgets approved annually through the City Council.
But for now, as this legislation continues through the state house, Bares said the association is looking ahead. It hopes to secure some curb improvements in time for the 2024 Democratic National Convention this August in Chicago.
“At a minimum” the association wants to install “wayfinding” signage and improve its sidewalks and curb cuts to make the Mag Mile more accessible.
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