Minority Developers' Initiative Ready To Take Leap Forward In 2022
2022 could be the year that minorities make big strides in the world of Chicago commercial real estate. There has already been at least some progress in recruiting diverse groups of workers to construct buildings, but the founders of the Chicago Emerging Minority Developer Initiative say another key step is needed to achieve true diversity.
“The way that wealth is created in the commercial real estate space is through ownership,” Capri Investment Group Senior Advisor Gwendolyn Butler said last week during Bisnow’s Construction & Development Chicago in-person event.
Butler does not discount the importance of diversifying workforces, whether in construction or the professional services that support such activity. But without ownership of development projects, minority communities will remain far behind the rest of the city.
There is a good business case for trying to foster a more diverse development community, according to Leon Walker, managing partner of DL3 Realty, which has launched several significant projects on the city’s South Side and West Side, including Englewood Square, a retail center that includes a 20K SF Whole Foods.
“This is about us all doing better and expanding the pie,” he said. “We can’t continue to be a global 50 city if we don’t expand opportunities and create neighborhoods of choice from, right now, neighborhoods of last resort.”
That is creating opportunities for the entire development community, he said. CEMDI is asking other developers to look for already high-capacity developers that can be lifted up into the ranks of ownership, but there is a long way to go before that is achieved.
“We’ve had 60 cranes in the sky, which is a great show of confidence and investment in our city, but not one of these projects was led by a Black or Brown development team,” Walker said. “So, CEMDI is about changing that snapshot, so that going forward, we have more inclusive participation, and a bigger pie for us all.”
The ground was prepared for CEMDI back in 2018, when attorney Graham Grady and others started Chicago African Americans in Commercial Real Estate, an organization that brings together hundreds of Black architects, property managers, finance professionals, attorneys and others several times a year to discuss common experiences and network to share opportunities.
“When we first got together, it was a love-in, because it was so rare to see other people of color in any meetings for commercial real estate,” he said.
In 2022, the group will launch a series of panels to highlight major firms that have made a lot of progress in the diversity, equity and inclusion space, Grady added. But to participate, the firms will have to include their minority partners, and landing such partners requires effort and commitment.
“They have to walk the walk, as well as talk the talk,” he said. “You don’t end up with a woman vice president of your company without saying, ‘We need to do something in this space,’ and you don’t end up with Latinx or with African Americans on your team unless you say, ‘This is something we want to do.’”
The overall goal is to increase minority participation not just in neighborhood projects, but also on the city’s upcoming megaprojects such as Sterling Bay’s Lincoln Yards, Related Midwest’s The 78 and Farpoint Development’s build-out of the former campus of Michael Reese Hospital on the South Side lakefront.
“We have a list of 600 members, so we can help you source people for your projects,” Graham said.
There are some signs of change. Related Midwest announced in early November that it was hiring Bowa Construction, a minority-owned firm, to construct its 300-unit, 43-story apartment tower 900 Randolph in Fulton Market. It will be the first skyscraper in Chicago constructed by a minority-owned firm, according to Related officials.
For CEMDI, 2022 is going to be its true launch year, Walker said. The group hired Bill Little to lead day-to-day operations, and over the next year, he will tackle both the lack of minority participation in major projects around the city and the lack of risk-taking in South and West neighborhoods. That will include making sure everyone in the commercial real estate community knows about all the efforts going on to promote diversity.
“We’ve found that there are a lot of good things happening in silos, good initiatives and programs, and people don’t know how to access them,” Walker said.
He envisions CEMDI helping new developers gain access to the equity needed for predevelopment activities, as well as engage with established developers, especially those looking to establish mutually beneficial joint ventures with minorities.
“I’m not asking you to do anything which is charitable,” he said.