In greater Chatham, 17 building owners and businesses assisted by the nonprofit Greater Chatham Initiative, were recently selected for $2.4 million worth of reimbursable grants from the city of Chicago’s Small Business Improvement Fund.
They include Iman’s Hair Braiding Salon, tavern Blaq’s Lounge and the owners of the building where Larry’s Barber College is located.
Nearly all the recipients are building owners who have retail shops or other businesses in their buildings. They were notified about the approval for SBIF grants in January and February, said GCI, a community development organization.
The SBIF grants provide reimbursement to tenants and owners of industrial and commercial properties for permanent building improvements and repairs.
Participants can receive grants to cover 30% to 90% of remodeling costs, with a maximum of $150,000 for commercial properties and $250,000 for industrial properties.
Founded in 2016, GCI works in the South Side neighborhoods of Chatham, Greater Grand Crossing, Avalon Park and Auburn Gresham.
The Department of Planning and Development starts accepting new SBIF applications on the first of every month for designated neighborhoods in a two-year cycle.
The grants are funded by tax increment financing. TIF “is funded by property owners’ real estate taxes, so this is a way for them to benefit from — and in a sense recoup — their ever-increasing property taxes,” said Jeremy Jacobson, GCI’s corridor revitalization manager.
‘A long and arduous process’
Since 1999, the SBIF has supported more than 1,570 small businesses with nearly $118 million in grants, according to the city’s website.
The grants are a promising source of funding but completing complicated SBIF applications can be “a long and arduous process,” Nedra Fears, GCI executive director, said in a statement.
“Imagine having an opportunity to apply for a grant that can substantially help a business owner or enhance the community, but at the same time, not knowing what to do, how to complete the application, how to approach a lender, or in some cases, perform the most mundane tasks,” Fears said.
The SBIF’s reimbursable grants are more complicated than direct ones because the recipient must finance the project up front. The fund will pay for 90% of the construction costs, with the grantee responsible for the other 10%. Once the project is complete and the city signs off, the recipient will get reimbursed.
The SBIF “requires applicants to finance the project and get paid back once it is completed. This is difficult for many applicants with limited resources, who can be hesitant about or unable to access the financing they need to get the project off the ground,” said Jacobson.
“It is common to be awarded funding but never use it. We are actively working to avoid this situation and help guide awardees through the process so they can find a funding source that works for them,” Jacobson said.
This year’s 17 SBIF grantees assisted by GCI marks the most recipients since the nonprofit started helping applicants in Greater Chatham in 2018. By comparison, in 2022 the SBIF selected eight GCI-assisted applicants for grants.
Last year, GCI’s team went door to door and talked with business owners in greater Chatham to raise awareness and offer support. It held in-person and virtual information sessions and recruited prior grantees to participate in Q&A sessions. The nonprofit distributed print and digital flyers in the community.
GCI then worked with interested parties to complete the SBIF application, including a construction budget and contractor bids.
For applicants that need financing, GCI identifies suitable banks and funders and helps develop proposals. It also provides guidance and support for awardees throughout renovations.
Revitalizing Greater Chatham
Greater Chatham and the surrounding area has a rich history and was home to African American icons such as singer Mahalia Jackson, musician Nat King Cole, poet Gwendolyn Brooks and Carol Moseley Braun, the first African American woman elected to the U.S. Senate.
But the area has faced socioeconomic challenges. By 2010, Greater Chatham’s population had declined. There was higher unemployment, more homicides and more foreclosures than the city of Chicago, according to a 2024 report from GCI.
However, there are signs of recent progress. From 2016 to 2021, greater Chatham’s property values rose and its overall population has increased, GCI said.
“Securing funding for the improvement of businesses in our community is critical,” Fears said.
In recent years, GCI has helped other local businesses obtain the SBIF grants to upgrade and grow.
The SBIF helped Soul Veg City renovate its 40-year-old location and expand to a second site called Vegan Now 2Go. It assisted Brown Sugar Bakery with the acquisition of Cupid Candies.
Harold’s Chicken #24 is building an 80-seat restaurant, while Haire’s Gulf Shrimp is buying a new building to expand. Let’s Eat to Live restaurant expanded to a second location. And Nafsi, an upscale soul food restaurant, opened last year in the South Shore Cultural Center.