How to Revive a Historic Retail District: An Interview with the Associate Vice President of Commercial Real Estate at the world-class University of Chicago in Hyde Park.
In the May/June 2015 issue of Urban Land, my article “Crafting Authenticity for Retail Destinations” looked at the elements that give shopping streets and centers the handcrafted, eclectic, uniquely local feeling that many consumers prefer over typical suburban malls. As part of the article, I talked to Jim Hennessy, associate vice president for commercial real estate operations at the University of Chicago, about the university’s partnership with the city to revive the historic 53rd Street retail district near Hyde Park. Below is a fuller version of my interview with Jim, in which he talks about the university’s involvement and describes ways to catalyze development by involving local restaurants and retailers and by incubating fledgling local businesses.
Sean Slater: Can you talk about the importance of 53rd Street to Hyde Park and the University of Chicago neighborhood?
Jim Hennessy: Historically, 53rd Street was a center of vibrant commercial activity in the neighborhood. In the early 1900s, the street was home to hotels, residences, live theaters, fine dining, local retailers, and a strong office population. Over time, that vibrancy dwindled, and by the early 2000s, the city of Chicago and the local community had asked the University of Chicago for its help in revitalizing the corridor. For the university, this was an opportunity both to support economic development and growth in our local community and to bring in new amenities that would enhance the Hyde Park neighborhood as a place where top scholars, researchers, and students would want to live, work, and study.
Slater: What guided the university’s decisions?
Hennessy: The university’s decision to redevelop 53rd Street has been guided by a partnership with the local community and the city of Chicago. In 2002, at the request of the city, the university purchased two buildings that make up the Harper Theater complex, which had a strong architectural heritage as well as historical significance as a gathering place. We spent many years looking for the right opportunity for redevelopment, and the property was vacant for more than a decade before we began redeveloping it in 2011. It reopened as a neighborhood movie theater in January 2013, and its movies now play to sell-out crowds. Another major part of the broader redevelopment effort was a shopping center called Harper Court, which was an important part of the community but was aging and lacking the kinds of retail that many community members wanted to see.
Through a series of community workshops that began in 2007, Hyde Park residents and business owners identified the need for more retail options and amenities along 53rd Street. The University of Chicago and the city of Chicago combined resources to redevelop Harper Court, a mixed-use project led by Vermillion Development that became the anchor for revitalization of the entire corridor. This project comprises 150,000 square feet of office space for university employees with approximately 75,000 square feet of retail, including LA Fitness, Chipotle, Ulta Beauty, and Starbucks, along with several local retailers like Ja’ Grill (Jamaican food from Lincoln Park), Porkchop (barbecue from Randolph St), and Nancy Krause Floral Design & Garden Antiques.
Development decisions have also been led by the desire to create more retail options so residents do not have to drive to Roosevelt Road all the time for basic retail needs. There have been 30 new retailers added to 53rd Street in the past three years, and two-thirds of these new retailers are local Chicago-based companies. The next major project slated (called Vue53) is the redevelopment of a vacant Mobil gas station site on the west end of 53rd Street. This underutilized property, extending for most of the block, creates a significant gap in the urban fabric. Vue53, a midrise mixed-use apartment building, will not only create jobs for the community but also bring affordable housing units within the 228-unit project. There will also be roughly 28,000 square feet of ground-floor retail with adequate parking. We think this project will continue to reinvigorate this western stretch of the commercial corridor.
Slater: As an institutional developer, how do you define your “return on investment”?
Hennessy: While costs and revenues are part of this perspective, we put a greater emphasis on the qualitative return on investment. For example, our redevelopment efforts have added more than 1,400 office and retail employees to 53rd Street over the last three years. These employees are getting coffee, eating lunch, and shopping on 53rd Street, and they often stay for drinks or dinner and a movie after work. The value of this contribution is measured in the increasing success of local retailers, the added “feet-on-the-street” vibrancy, and the overall level of buzz on 53rd Street. Our redevelopment model is relatively simple: we want to create a catalyst that stimulates private development. In developments like Hyatt Place, City Hyde Park, and Vue53, we’ve seen the private market take notice and recognize there is demand for sustained development.
Slater: Restaurants seem to be a catalyst for the 53rd Street redevelopment. How did you attract all those Michelin stars, and how has it helped leasing?
Hennessy: We’ve been fortunate to attract some excellent restaurants to 53rd Street due to a variety of factors. Our partner, McCaffery Interests, has strong relationships with local restaurants such as the Promontory, A10, and Porkchop. Some of our restaurateurs, like Matthias Merges, owner of A10 and Yusho Hyde Park, had local family connections, as well as the vision to see Hyde Park five or ten years from now.
Restaurants are able to complement the office population and strengthen the street character with outdoor seating, ambient lighting, late night dining, etc. We’ve found that working with the restaurant design teams early on to help guide the program and coordinate development work helps to customize the venue for specific operators. For example, close coordination with the Promontory allowed us to integrate this important anchor restaurant and music venue with a yoga studio and women’s apparel retailer, all within a previously shuttered Borders bookstore. Recognizing the value of these anchor tenants as district catalysts justifies our willingness to help subsidize the initial build-out and operating costs, either through tenant allowances or rent abatement.
Slater: How have you been supporting new local businesses?
Hennessy: We’ve been using the multitenant building at 1500 East 53rd Street as our “retail incubator.” Some of the retailers have included local fashion designers; children’s apparel, books, and toys; men’s and women’s apparel; and housewares and gifts. This program gives innovative retailers the opportunity to “test-drive” their product in Hyde Park, while introducing the community to new businesses they might not have experienced. The goal is to nurture local, boutique retailers and balance the neighborhood with recognizable national brands. Retailers typically stay for six months, with the option to stay long-term if the neighborhood proves to be a good fit. We have converted several of these businesses to permanent status in available spaces in the area.
Slater: Have there been any side effects to the revitalization, such as higher property values, or neighborhood complaints?
Hennessy: An important goal for the university is to catalyze private development, so we welcome increasing interest from outside developers. Hyde Park has a strong culture of community involvement, and residents and business owners will voice their opinions about individual projects and the impact of overall redevelopment. Through partnership with 4th Ward Alderman William Burns and open discussions and meetings with the community, our neighbors have become our partners in the revitalization of the district, and also see the benefits. For example, restaurants with a long-time presence on 53rd Street, such as Pizza Capri and Chant, are seeing more traffic as new restaurants like A10 and the Promontory come to the area and create more dining options for everyone.
Slater: What’s next?
Hennessy: We see 53rd Street as an evolving environment. Our goal is to create connectivity and strengthen the entire street east to west, ideally attracting other investments to develop a vibrant overall district. This community connection is already occurring with City Hyde Park (anchored by Whole Foods) to the north and the successful Hyde Park Shopping Center to the south. We’ll know we’re successful when Hyde Park is widely seen as a great destination for dining, shopping, and entertainment for University of Chicago students, Hyde Park residents, Chicagoans from other neighborhoods, and other visitors.
The post A Conversation With Jim Hennessy: An Authenticity Reboot on Chicago’s South Side appeared first on ELS Architecture and Urban Design.