The Enterprise Zone
Edna’s Restaurant on West Madison Street is one of the few black-owned businesses in East Garfield Park.

Edna and her late father, Samuel Mitchell, started the restaurant in 1966 with $700. For the last 41 years, the restaurant has been a staple in the neighborhood and a regular brunch destination for the after-church crowd.

On a recent Sunday, that crowd shuffled into Edna’s Restaurant. Women in long skirts and pea coats filed into a booth near a large window that looks out to a vacant lot and a house with boarded windows. As a juke-box plays contemporary and traditional R&B music, four Chicago police officers sat at a table and perused Edna’s menu, deciding whether they’d have grits, pancakes, bacon or Edna’s famous “best biscuits on earth.”

Next to McDonald’s, Edna’s is the only large, sit-down restaurant in the area. It is one of the few businesses that survived the 1968 riots after Martin Luther King’s assassination.

“Forty years ago, Madison Street was booming,” said Edna Stewart, the 69-year-old owner. “There wasn’t a vacant spot nowhere. We had big stores – jewelry stores, doctors’ offices, grocery stores. You name it, we had it.”

“It changed when we had the riot,” Stewart recalled. “Everything just burned down. I was the only one, with the exception of a lounge, that survived on this block. On Kedzie [Street] all of the businesses burned. There wasn’t a business left on that block at all.”

Almost 40 years later, those vacancies still exist. Nearly 15 percent of the community’s housing units are vacant, according to the 2000 Census. Banks denying loans because the neighborhood was deemed too risky was one reason development declined after the riots.

East Garfield Park once topped almost 900 retail stores and restaurants in the 1960s. Today, only 89 businesses currently serve the neighborhood’s 21,000 residents.

West Madison Street in East Garfield Park is just three miles west of Chicago’s booming business district.

Though the Loop is a place where 71 percent of residents earn more than $79,000 a year, West Madison is a business hub of predominantly poor, minority communities.

According to the Census, Cook County has the highest number of black-owned businesses of any county in the United States. Yet, very few businesses in East Garfield Park are black-owned, area business owners admit, despite the fact that 98 percent of the community is black.

Though there are more businesses in the industrial corridor of Garfield Park, Ernestine King, executive director of the Greater Garfield Park Chamber of Commerce, said lack of access to capital has contributed to an overall decline in businesses.

“There’s a problem with getting access to capital,” she said. “What I hear from people is that it’s just difficult across the board.”

King said the chamber has been working with home-based businesses in the neighborhood to increase funding resources.

“It’s difficult to get loans from banks, and when there are [government] grants, you always have to qualify for whatever it is that you’re trying to get,” she said. “It’s always difficult for blacks to qualify.”

Tony Brooks, a member of the Garfield Park Chamber and owner of Brooks Brothers, a furniture retailer in West Garfield Park, said he used his own money to fund his business.

“The nature of my business began in the service industry. I didn’t need a lot of capital to operate in the service industry business,” said Brooks, who started his business in 1983. “As the business became more and more successful, I was able to utilize my own dollars.”

According to an April 2007 report released by the U.S. Small Business Administration Office of Advocacy, most black business owners use personal or family savings, as well as government guaranteed loans rather than bank loans, to start a business.

Mark Ferguson, a spokesman for the Illinois office of the SBA, said many small business owners have difficulty getting bank loans.

“If there’s a problem it’s [because] one of the C’s of the 5 C’s of credit – capital, capacity, collateral, economic conditions and credit character – is out of whack,” he said.

Ferguson said the SBA helps people in low- to moderate-income communities who are otherwise traditionally overlooked by banks. It guarantees loans against default so banks will give loans to start-ups in these communities.

“Our guarantees go anywhere from 75 to 85 percent in the event of a default,” Ferguson said. “What we try to do is make sure the banks don’t use us as a lender of last resort.”

Pilsen – A village economy

Black business leaders in Garfield, Austin and the Greater West Side have used the example set by the Latino community is sustaining businesses.

While some black business owners rely on personal funds rather than bank loans, Sherry Rontos, president of the Pilsen Together Chamber of Commerce, said community efforts their have helped several Hispanic-owned businesses in Pilsen. Compared to Garfield Park, there are almost 700 businesses in Pilsen, where 90 percent of the community is Latino.

“Pilsen is very fortunate in the sense that we have several non-profit organizations and churches that are very strong,” Rontos said.

These organizations, she noted, work with banks to do “riskier loans” than might be mainstream, and are working with banks to make sure they’re reaching the community.

Mexican immigrants began settling in Pilsen during the 1950s. As the University of Illinois at Chicago has expanded its campus further into Pilsen, the area has experienced some growth and gentrification.

In addition to West 18th Street, Cermak Road and Blue Island Avenue are also popular business hubs. According to the Chicago Department of Planning and Development, more than 34,000 vehicles travel through the area every day. The Lower West Side community area where Pilsen is located has an estimated $143 million in buying power.

There are some vacant buildings in the neighborhood, but wall-to-wall Hispanic-owned businesses line almost every block. Tacquerias that serve half-chicken smothered in mole sauce, Mexican bakeries that sell desserts like gusaros and empanadas, and corner stands that sell fruit and corn out of a cart are a part of the business culture in Pilsen.

“You can eat three meals a day for under $10 in Pilsen,” Rontos said.

Store signs are also more likely to be in Spanish than in English, but the language barrier has not hurt small business development. In the Lower West Side, 85 percent of the area’s 44,000 residents speak Spanish, according to 2005 estimates by the Metro Chicago Information Center.

Juana Cortes, executive director of the Pilsen Together Chamber of Commerce, said the chamber has helped business hopefuls who do not speak any English. Recently, she helped a Spanish-speaking couple start their first business.

“They didn’t know how to start and they didn’t speak any English,” Cortes said. “We did all the city and state paperwork. We called the gas company, light company. We found the bookkeeper and accountant. Basically, we started the business for them.”

Ethnicity affects business identity

Leveraging ethnicity and culture has helped many immigrants succeed in Pilsen.

In a neighborhood where English is the second language, catering to the specific needs of the community has been key for small businesses.

“It’s important to maintain an identity, whether it be African-American or Latino,” said Carlos Chavarria, owner of Kristoffer’s Cafe on South Halsted Street. “Folks from all walks of life are always looking for something unique, something different. Take advantage of it because it’s a strength.”

Gus Rickette, owner of Uncle Remus take-out restaurant in West Garfield Park, said a culture of consumerism rather than a legacy of ownership is one factor that has led to decline in the area.

Uncle Remus, which Rickette’s parents opened in 1964, has five restaurants in the Chicago area, including Austin. One restaurant is located on the 4100 block of West Madison Street, part of West Garfield Park. Though there is more commerce on Rickette’s end of West Madison, that area is also experiencing a decline in black business ownership. Even stores that sell hip-hop clothing to black youth are not owned by blacks.

Unlike Pilsen, many people who own businesses in Garfield Park don’t live in the neighborhood, Rickette said.

“Other people are coming and buying the black people out,” he said. “It’s so easy to take a buyout versus trying to deal with the drugs and decline in sales because of the crime.”

Rickette said if this doesn’t change, black-owned businesses in neighborhoods like East Garfield Park will become even scarcer.

“We’re an endangered species in our own community.”