First store opens at Englewood Square, soon home to Whole Foods

When the city approached DL3 Realty and Chicago Neighborhood Initiatives about redeveloping 13 acres of vacant land in Englewood on the South Side, DL3’s Leon Walker thought about what the area looked like when he was growing up.

His mother was raised there and attended Englewood High School. His parents, both educators, had operated early education schools across the South Side, and as a child, he often visited with them the Englewood Mall at 63rd and Halsted.

“Whenever you have a large tract of land in the middle of the city, everybody always says, ‘Let’s do a big box, an out lot on the corner and a parking lot in between, and we’re done,’ ” said Walker, owner and landlord of the 5.5-acre Englewood Square at 63rd and Halsted, where a Whole Foods store will open in September.

“The problem is you never had the demographics to support a 125,000-square-foot big box like Wal-Mart they kept going to,” he said.

“I said, ‘Let’s approach it differently, split it into four parcels,’ ” he said. “We’ll take the first, to sort of create this chain reaction. Let development happen organically.”

The $20 million project — watched nationally since Mayor Rahm Emanuel announced in fall 2013 that he had lured an upscale grocer to a community known more for intractable gang crime and poverty — is part of Emanuel’s overall revitalization plan for Englewood.

But Whole Foods isn’t its only unique aspect.

Englewood Square relied on $15 million in New Markets Tax Credit Program subsidies, bringing home to Englewood the national economic stimulus program President Bill Clinton launched in 1999 — at the corner of 63rd and Halsted.

Then, $500,000 came via crowdfunding, the first time that’s been used to finance new commercial construction in Chicago. And both developer and general contractor Ujamaa Construction are African American-owned; as is Power Construction, a contractor doing the Whole Foods build-out.

“It’s awesome to see Englewood rising like a Phoenix,” said Ald. Toni Foulkes (16th). “I had to put my foot down and hold a tight rein for African-Americans to have their share of it. Our babies need to walk down the street and see people building up their community that look like them.”

Whole Foods is on target to open on Sept. 28. Its neighbors include Starbucks and Chipotle. Fully leased this month, the first of 10 stores, Villa, a footwear and apparel retailer, opens Friday.

“This is a significant project for a lot of reasons,” said David Doig, president of the nonprofit Community Neighborhood Initiatives, which handled site prep. “That corner is kind of the epicenter of Englewood, so it’s great to see retail returning, jobs created. Our hope is this will seed other development at that corner, then radiate west on 63rd, north on Halsted.”

The development, following the city’s $250 million investment in nearby Kennedy-King College, provided 150 construction jobs, with 200 permanent jobs. And 25 local businesses became Whole Foods suppliers.

Tenants include PNC Bank, Metro PCS, Wing Stop, Dress Code, Oak Street Health Center, and the requisite nail shop. That diversity wasn’t easy, particularly with brands that typically choose sites only in upscale neighborhoods.

“To attract Starbucks and Chipotle, I put together in-depth maps with census tract-level data — not just average household income, because that’s a cursory look at the market. If you just look at that, you’ll say, ‘How will I make any money?’ ” Walker said. “I went census tract by census tract, putting together a table showing 2,000 households within a mile of 63rd and Halsted who make over $75,000 a year. Those people can buy a cup of coffee every day. They may be swamped by 20,000 households who live in poverty, but they’re there.”

Walker is in rarefied air as an African-American developer who could finance such a project.

“I’d say there are very few. As for taking the lead in a project like this, I don’t know of another in the state of Illinois,” said James Matanky, president of Matanky Realty Group, DL3’s leasing agent. Matanky is also midwest operations chair of the International Council of Shopping Centers.

Walker was the first developer in Chicago to use New Markets Tax Credits for new construction in building the Roseland Medical Center in 2007. He hopes others will duplicate his innovative funding model.

“It’s important the Englewood Square story be told, because Whole Foods undoubtedly took a risk. The city undoubtedly took a risk. And for 10 retailers coming to this location, this is a nontraditional market,” he said.

“Everybody at first was like, ‘That’s Whole Foods’ experiment. We’re not coming to Englewood.’ But I knew the potential here,” Walker said. “I had to language that, with zest and zeal and facts and figures, convince people to say, ‘Yes, we’ll take this leap of faith with you.’ “