Real estate pros aim to diversify the ranks of developers

In early 2019, Chicago could count about 60 construction cranes lunging for the sky. It was a factoid ex-Mayor Rahm Emanuel played up as evidence of Chicago’s muscular growth, saying the count was five times higher than in 2010. But to developer Leon Walker, the cranes reminded him of a lot that’s wrong around here.

Walker, managing partner of DL3 Realty, knew that each crane stood for hundreds of jobs and an investment probably north of $100 million, maybe closer to a billion dollars. He’s hardly opposed to that. But Walker saw the cranes clustered in maybe 25% of the city’s land area. And he looked into how many development teams behind those cranes were owned by minorities. The answer: zero.

He’s spent a career finding opportunities in parts of the city other developers ignore. Walker’s notable successes include the Whole Foods-anchored plaza at 63^rd and Halsted streets, and the Blue Cross health center and offices in Morgan Park.

The native South Sider has emphasized a business model that he calls “venture development,” the joint pursuit of profit and community enrichment. It can be a lonely quest, in contrast to the “have” neighborhoods where developers encircle available tracts like buzzards.

To Walker, having a little competition to build things on the South Side is a help, not a hindrance. “We need more complementary development, not less. There’s a ripple effect and it makes our jobs easier,” he said.

One way to get it is to encourage Black and Brown entrepreneurs, especially those who live in areas needing investment, to become developers themselves. “I want to show people that you can do this work in your neighborhood and make a living,” Walker said.

So, aligning with others in the real estate sector, Walker has co-founded the Chicago Emerging Minority Developer Initiative. It’s a nonprofit supported by a grant from The Chicago Community Trust that will try to build the networks to get more minorities into the development game. Two other African Americans co-lead CEMDI. They are Gwendolyn Hatten Butler, president of Capri Investment Group, and prominent zoning attorney Graham Grady.

The task they’ve set for themselves isn’t easy. There is no single how-to route to become a property developer, a role that can be compared to a movie producer or an orchestral conductor.

Architecture, finance, engineering, zoning, community relations — a lot of factors are at work in any real estate deal, and a developer’s role, along with risking some of his or her own money, is to marshal them toward a single goal. Some developers are real estate brokers by background, others are lawyers, construction workers, financial traders, mathematicians even.

Most started small, Walker noted, perhaps by flipping houses or renting out some storefronts. If they succeeded, he said the natural desire was to move one to something bigger.

With its grant support, CEMDI has started off by surveying real estate investors, financial institutions, and government and community leaders for ideas about making the field more inclusive and attuned to equitable development.

Walker said the group hopes to issue a preliminary report in February and finalize recommendations during the second quarter of 2021. Then it plans to get various interests together to talk about ideas liable to include mentoring and education.

The conversations are overdue, but the timing might be right for a receptive audience. The pandemic-fed recession and unrest related to police killings of Black people brought racial injustice to the forefront in 2020.

Leading banks have promised to increase lending to minority communities, and charities are committing new money to passed-over neighborhoods. Walker’s effort could combine with other well-intentioned programs, such as the Hire360 partnership to get minority-owned firms into the construction trades.

Another tie-in is higher education. Roosevelt University’s Marshall Bennett Institute of Real Estate, which has worked to diversify the field, has announced it is lowering costs for qualified students who can demonstrate work experience or professional certifications. Incoming students can get up to 12 credit hours toward its master of science in real estate.

Collete English Dixon, the school’s executive director, said the advance credit “may encourage people that have been on the fence to go ahead and get the additional credential of an MSRE degree when they realize they might already have a semester or two of earned credits under their belt. It gives them a jump-start.”

In November, the school gave Walker its inaugural “Changemaker” award for his neighborhood development.

Walker said there will be ongoing opportunities for minority developers in Mayor Lori Lightfoot’s Invest South/West initiative targeting underserved areas. City officials have solicited development ideas for eight sites along neighborhood commercial streets, with more expected in 2021.

“The city has done a remarkable job of looking at land as an asset,” Walker said.