Metro Edge making inroads for the city
August 27, 2002
BY TAMMY WILLIAMSON BUSINESS REPORTER

While searching for a site for its first home in Chicago, home furnishings retailer Ikea encountered far more questions than answers: Who will shop at the store when it opens, how much will those potential shoppers earn and how much will they spend at a Swedish home-furnishings store? Ikea has shopped city sites for months, including Damen Avenue along the Stevenson Expy. and along Elston Avenue, which it abandoned after residents of the area squawked over the increased traffic an Ikea store would cause. Ikea is using the usual cast of economic-development specialists, including city planning officials and major marketing research firms. But it's also receiving market intelligence from a little Chicago upstart: Metro Edge, part of Shorebank Corp., the South Shore neighborhood bank known for financing projects that revive city neighborhoods across the country.

Metro Edge, an offshoot of Shorebank Advisory Services, is funded through a combination of grants and fees from clients who buy its research. Metro Edge aims to be self-sufficient in two years, more than double its staff of seven and grow into something more than just an economic development program. It wants to be a business. The goal is to get retailers and financial service companies into urban neighborhoods they might overlook if they confined their survey to median household income, for instance. "It's not just about fairness and equity, it's a business," said Bob Nash, vice chairman of Shorebank Corp., which has $1.3 billion of assets. "We try to peel back the onion to find those customers and businesses" that will appeal to an incoming company.

Shorebank's Metro Edge is a tiny operation compared with giants in the market research business, like Claritas Inc. It doesn't seek to compete directly with those companies, said Shelly Herman, senior managing director of Shorebank Advisory and president of Metro Edge. Rather, it wants to work with bigger market research firms and get a piece of that business. Metro Edge would tear apart economic data on a given neighborhood, and sell that research to a company that might already be working with a company like Claritas, or offer market research in conjunction with a research firm. "We're the on-the-ground people," said Fran Grossman, executive vice president of Shorebank Advisory. "We can tell you what apartments go for, how long a house sits on the market--and we can make something" of all that data for prospective clients.

For example, it took several years of negotiations and planning before Home Depot opened a store near 87th Street and the Dan Ryan Expy., Herman said. Companies like Home Depot want to know things like the median income of the area and percentage of home ownership, which were reportedly lower than the company liked. What won over Atlanta-based Home Depot was when company officials learned about the intense level of renovation of homes and apartment buildings in the area. "We helped them understand the picture," Nash said. Many people in the area "are small contractors working on renovations of three-flats and six-flats." And Shorebank, through its contacts in the neighborhood, finances those renovations.

For the Ikea project, Shorebank was hired by the city of Chicago. Metro Edge researched the proposed location off of the Stevenson for Ikea, which is seeking another location in addition to its popular store in Schaumburg. "I was actually quite impressed with the report Shorebank handed us," said Brad Prevost, Ikea's director of real estate for the Midwest. "I would imagine it's probably very effective." Ikea also conducted its own research, because it wanted a firm to work directly for it, and Shorebank was hired by the city to do the study. Ikea hasn't ruled out the Damen site, which Prevost believes is being scouted by other retailers. But Ikea is looking at other sites, evaluating surrounding neighborhoods, availability of land, access to freeways and other factors. Prevost said Ikea is "hopeful we can open a couple more stores" in Chicago. Shorebank's Metro Edge has its sights on some pretty hefty players: Home Depot, the Gap, Target and, of course, Ikea. It's calling on those and other companies, pitching its local knowledge along with its research expertise. "We can find gold for businesses in urban neighborhoods," Herman said.