Evanston’s Downtown Plan Committee this morning heard claims from the head of a Chicago neighborhood business group that local businesses generate more economic benefit to a community than chains.
Ellen Shepard, an Evanston resident who is executive director of the Andersonville Chamber of Commerce in Chicago, said the chamber-sponsored study showed that more money spent in locally-owned stores continues to circulate through the local economy.
The study, conducted by a Civic Economics, a research group that advocates for local businesses, compared the financial performance of ten Andersonville businesses that volunteered to take part in the study with publicly available aggregate data from ten national chains.
Because the local businesses were self-selected, it’s impossible to know whether they are representative of the local community, and because the chain data is based on average nationwide performance, it’s unclear whether it reflects how the chain stores perform in a particular local community. The study also excluded chains headquartered in Chicago.
The study concludes that 10 chain outlets will generate twice as much revenue as 10 locally-owned stores but that a dollar spent in a local store generates 68-cents of direct and indirect impact on the local economy compared to only 43-cents for a dollar spent at a chain store.
The study says local stores spend more on local labor, acquire more goods and services locally and distribute more of their profits locally.
Downtown Plan Committee member Diane Williams said determining what businesses qualify as local is “a sticky wicket.”
Ms. Williams, the executive director of EvMark, cited as an example the Clean Plate Club Restaurant Group. It is headquartered in Evanston, but only one of its three owners lives here. In addition to three restaurants in Evanston, it also has outlets in Wheeling and Schaumburg.
Plan Commission Chairman James Woods said he believes there are considerable differences between downtown Evanston and Andersonville.
“Part of what Evanston’s downtown is about is counteracting the draw of malls outside of Evanston, so there is a desire to attract certain chains into town so we don’t have to go spend our money in Skokie,” he said, “And we’re a big enough community to do that.”
Committee Chair Larry Widmayer said Andersonville, with a mile-long commercial strip from roughly 5000 to 5800 on North Clark Street and mostly one- to three-story storefronts occupied almost exclusively by locally-owned businesses, is more like Evanston’s Central Street shopping district than downtown Evanston.
Ms. Williams added that sometimes communities have to make value judgments about what chains they want. A Design Within Reach or a Whole Foods chain store is considered a lot better than a Walmart or a CVS, she said.
Ms. Shepard, who has publicly criticized the 49-story tower proposed for the Fountain Square block, said she loves the Uncle Dan’s store on the site and said it’s part of the character of downtown.
Uncle Dan’s is a small chain with two Chicago stores and one in Highland Park, in addition to its Evanston store.
At the meeting tower co-developer James Klutznick said Evanston is more of a regional draw than Andersonville. “People in Andersonville come to Evanston to do some of their shopping,” he said.
He said Evanston’s policy of creating subsidized public parking and its location on mass transit lines has served to draw people from neighborhoods on Chicago’s north side and even from Old Orchard.
Tim Anderson, the other developer of the tower project, said a study in Oak Park showed that national chains account for just 10 percent of the downtown retail square footage but generate 65 percent of the sales tax revenue.
Evanston Chamber of Commerce Executive Director Jonathan Perman said in a phone interview that he’s sympathetic to the problems the Andersonville neighborhood has faced and impressed with its success.
He said Chicago’s tax increment financing policies sometimes have been used in ways that have harmed existing smaller businesses, with huge subsidies to big projects that don’t really need the public help.
And he said many of the steps that Andersonville has taken to help small businesses, such as facade improvement programs, are also being used in Evanston.
But he said Ms. Shepard appears to oppose in Evanston the same high residential densities that have supported the success of Andersonville’s business district.
He also noted that chain stores can draw customers to a neighborhood, customers who then may also patronize locally-owned businesses.