City gives second round of local business funding


Amelia Detwiler

City gives second round of local business funding

By Blaise Mesa

Although Chicago provides assistance to South Side businesses, it may not be addressing the real problems, according to local business experts.

The Neighborhood Opportunity Fund is a city initiative launched in May 2016 that aims to assist local business on the South, Southwest and West sides with a grant system. Changes to city zoning laws in 2016 allow any downtown construction project to exceed zoning for their specfic site by donating money to the city’s fund, which is then distributed in various neighborhoods, with 80 percent given to local businesses. 

To decide how much money will be given, the city takes the median cost of buildable land per square foot and multiplies that number by 80 percent. For example, a 10,000 square-foot project with a median $43 land cost of would cost a business $344,000 in donations.

Local experts recommend other methods to drive business growth.

“[Business growth is] more than just giving money,” said Mona Pearl, adjunct professor in the Department of Management & Entrepreneurship at DePaul University. “In most cases, [businesses fail] because [owners] have no idea how to grow a business.” 

The city works with communities before awarding funding to ensure the businesses being funded are needed in the area, according to a May 2016 mayoral press release. During the funding process, these local businesses have also been introduced to mentors inside the city government to ensure longevity, according to Jeffrey Levrant, owner of Homan Grown, a wholesale perennial and tree nursery in North Lawndale. 

According to U.S. Bureau of Labor Statistics records, 21.2 percent of businesses will fail in the first year and 51.2 percent of businesses will not survive five years. Records also show that 82 percent of small businesses fail because of cash flow mismanagement rather than fiscal shortfalls. 

Some businesses may only need financial assistance, but most need guidance on business basics, Pearl said. Twenty-three percent of business failures are a result of them not having the right team, according to the U.S. Bureau of Labor Statistics. 

Businesses will receive the grant money after construction is finished, according to Levrant. Homan Grown was chosen to receive grants to help acquire capital. The startup business will have four employees when it opens, but Levrant said he is confident he can keep his business afloat. 

“[The grant money is] providing access to enough startup capital to get [Homan Grown] going,” Levrant said. 

Mikkey’s Retro Grill, a hamburger restaurant in Hyde Park, is planning to open another store location because it received city grant money.

“We definitely need the funding,” said Freeland Payne, general manager of Mikkey’s Grill, 5319 S. Hyde Park Blvd. “We would have been trying to open up [the new store] maybe in 2018, closer to 2019, but with the help of [the fund] we should be open before early 2018.” 

Homan Grown and Mikkey’s Grill each are slated to receive about $80,000 in city funding. With help from the Neighborhood Opportunity Fund, they are much closer to funding and completing both their projects.

“[Getting funding is] a difficult process, but if you’re selected, it’s worth it. The risk is definitely worth the reward,” Payne said.