In the face of increased interest in the community from chain establishments that could displace locally owned businesses, and with data from a new study showing that the locals are substantially better for Chicago's economy, the Andersonville neighborhood is calling for city and state policies to protect locally-owned businesses. The area is centered around Clark Street and Foster Avenue.
'Locally owned businesses have been the key to Andersonville's success from its beginning as a small Swedish enclave,' said Jill Metz, president of the non-profit Andersonville Development Corporation. 'The study provides hard economic data to support our feeling that these businesses are a vital resource and must be protected.'
'Andersonville Study of Retail Economics' was a study created by Civic Economics, an economics consulting firm. The study compares the local economic impact of 10 locally owned Andersonville businesses versus 10 chain stores in the same industries.
The results show that for every $100 in consumer spending at the local businesses, $73 stays in Chicago's economy, vs. only $43 for the chains. This represents a 70% 'Local Premium' to the city when consumers shop at the locals. Further, the locals keep 70% more dollars in the city's economy for every square foot they occupy than do the chains. The study also demonstrates that the locally owned businesses and the chains bring in roughly the same revenue per square foot, dispelling the notion that chain stores increase sales tax revenues for the city.
The results raise important public policy questions for elected officials.
'Locally owned businesses provide substantial economic benefits to the city, benefits that are in danger of being measurably diluted by increasing chain competition,' said study authors Matt Cunningham and Dan Houston of Civic Economics. 'Public policy should seek to protect and promote local business.'
According to Metz, possible policies could include: 1) Formula Retail Ordinance. Cities across the nation—most recently San Francisco—have enacted ordinances to help regulate the flow of chain stores into their communities. In San Francisco, neighborhoods can 'opt in' to this ordinance or not. 2) TIF (tax increment financing) funds for local business start-ups. 3) Property tax reform. Multiple local businesses in Andersonville were lost during recent tax assessments because their rents were raised significantly to cover their landlords' tax bills. Small commercial properties should have property tax protection as well. 4) Funding for a 'Local First' campaign to educate consumers.
See www.andersonvillestudy.com .