Revitalization in a distressed residential-industrial neighborhood: Pullman, Chicago, Illinois

I came across an interesting case study by the Chicago Business School, The Pullman Historic District: A partnership in place-based community investment, about the revitalization of the distressed neighborhood of Pullman, in Chicago.  

The effort was sparked by Park Bank, a locally focused community bank ("It shouldn't be a surprise that big banks are more comfortable dealing with large businesses | Community banking"), and its community development corporation which was doing a lot of housing rehabilitation.  It was also very much committed to community organization and involvement.

In planning, most cities use a 4 to 7 step ladder to summarize the economic health of a neighborhood: distressed, emerging, transitioning, and healthy.  Pullman is distressed.  The closure of various industrial businesses over the past decades decimated its economy.

With the Great Financial Crisis in 2008, the community bank was acquired by US Bank, which decided to continue to commit financial and technical assistance resources to the revitalization program in Pullman.

Main Administration Building of the Pullmans Palace Car Company, 1893. From a publicity brochure published by the Pullman Company. Pullman Company Archives of the Newberry Library, Chicago, Illinois.

Pullman was an industrial community, known for being the home of the Pullman railcar operation, which finally went kaput in 1955, although it manufactured cars elsewhere into the 1980s, and was later absorbed by Bombardier.

The community bank developed a plan to redevelop an old industrial site, which was complicated because of its size, community needs, and contamination.  

Historic Pullman homes come in a variety of different styles and sizes throughout the neighborhood. NPS Photo/Stephanie Schneider.

The original intent was to build retail and housing on the brownfield site, but wrt housing they realized they didn't need to build more, but instead should be focused on rehabilitation and re-occupancy of existing housing.

Just before the acquisition, the community bank received $50 million in New Markets Tax Credits, which passed to USB.  To meet self-dealing strictures, they spun off the CDC and gave the NMTC to it, which provided vitally needed capital.

At the time, Walmart was the only retailer interested. which was controversial, but people got a store and entry level jobs.  A community benefits agreement provided other inducements, as did the creation of a community center (eventually taken over by the parks department), and two light industrial facilities, for a total of about 1,200 jobs.

Like in DC at the time, when Walmart was expanding to cities. I ended up writing many entries on the issue:

-- "Walmart: in the city, vs. of the city," 2011
-- "Lessons from Walmart's foray into DC," 2011
-- "Wal-mart plays hardball with DC," 2013
-- "What community benefits are supposed to be versus what people think they are about," 2013
-- "More Walmart in DC," 2013
-- "6Ps, Walmart in DC and "I hate to say I told you so"," 2014
-- "Lessons from Walmart's foray into Washington, DC," 2011
-- "Piling on City Council for Walmart," 2013
-- "I hope for Aspen Hills' sake that Montgomery County is smart enough to learn from DC's planning errors with regard to Walmart's entry," 2012

-- op-ed piece, Washington Business Journal, "Temper Walmart glee with planning") 

While the case study lauds the Walmart as using an architectural style sympathetic to the local historic architecture, it looks a lot like the one on Georgia Avenue in DC.  At least the DC one has underground parking exclusively, rather than a big parking lot in front.  Vague historic aesthetic, nothing particularly specific.

To put into scale the jobs issue, the peak employment of the Pullman manufacturing plant was 10,000.  And there were many other businesses in the area, like International Harvester. So today, they have recaptured fewer than 20% of the jobs when the community was successful.  This is the reality of urban deindustrialization, either:

• closure of businesses
• consolidation of businesses with employment reduction
• replacement of workers with capital
• businesses moving out of cities 
• layoffs and tiered wages ("How the American South Drives the Low-Wage Economy," American Prospect)
• businesses moving overseas.

This is why I get angry when Republicans say "Democrats destroyed cities."  Elected officials didn't make those decisions.  And why spending upwards of $200 million on community improvement doesn't seem to have immediate effect.  From the study:

Place-based investing seeks to create positive economic and social returns in a given geography—say, a neighborhood: Pullman—through a coordinated influx of capital and development. The idea is layered: financial investors will see financial returns; “social” investors will see financial returns and community impact; and the community will benefit from economic development in the form of jobs, access to goods, services, housing, and quality of life. 

According to CNI10, the investments it spearheaded in Pullman between 2010 and 2019 brought $350 million dollars into the community, leading to the development of more than a million feet of commercial, industrial, and recreational space; creating 1,500 permanent jobs, a 43 percent increase for the area; and leading to a 136% percent rise in residential property values. Jennifer Bransfield—now the organization’s chief operations officer and general counsel— indicates that a majority of this investment occurred within a single census tract.

National Monument.  In 2015, the Pullman manufacturing site was designated as a national monument, the Pullman National Historic Park.  Planning document.

Evaluation.  The case study discusses the difficulty of evaluating the success of the funding.  Time, causality, and replicability are issues.

My point would be that as a distressed community, revitalization will take decades, especially given the nature of the types of vacant land, which cost extranormal amounts to come back online.

It presented Census data, which finds the area is still losing population and wage growth is stagnant.

Lessons.  "Don't drip money." Invest large amounts.  New Markets tax credits can be a good capital source.  The area has a logistics hub opportunity, brownfield site attracted other funding sources.

Future.  Chicago Neighborhood Initiatives, the re-branded CDC, is now working beyond the Pullman neighborhood, is developing a microenterprise funding initiative, and developing its capacity to invest and help other areas grow.

Planning relevance.  I think this project is a good example of my "best practice revitalization planning" approach, including the elements:

• a robust plan
• an implementation organization
• funding
• serendipity -- jumping on opportunities, like the National Monument
• recognition of the length of time required to execute the program