The Problem of Industrial Succession Space

The Chicago economy is continually launching new companies.  Some spin off from older firms; others are start-ups nurtured by business incubators.  One notable incubator is the Industrial Council of Nearwest Chicago (ICNC), which has incubated thousands of new companies. Founded in 1967 ICNC is home to over 110 small companies at a time which are supported to grow, and then outgrow their ICNC space.  ICNC is also launching The Hatchery, an incubator focused on food start-ups.  The Hatchery will provide space and support for 75-100 food industry entrepreneurs for 12 to 18 months, at which point they will graduate and find larger space elsewhere.

From an economic development perspective, it is essential that these new and expanding companies continue to find appropriate space to continue to grow in Chicago, rather than in the suburbs, in order to build the local economy. 

But there’s a problem.

More and more industrial buildings are being converted to non-manufacturing use.  Their high ceilings and open space lend themselves to modern offices or attractive residential lofts.  These developments respond to market demand, but at a social price.  The inventory of potential spaces for emerging companies – much less established firms – is decreasing.  The threat is that companies will graduate from local incubators and, finding no Chicago options, move to Bedford Park or Elk Grove Village which welcome new companies.  And Chicago will lose the jobs.

Manufacturing companies don’t move easily.  It’s not just the equipment; it’s the supply chain and the network of support services that make manufacturing work.  For 30 years, Chicago has addressed this challenge through Planned Manufacturing Districts (PMDs), areas of the city that are permanently zoned for industrial use.  PMDs give companies the assurance that they will not be priced out, nor find themselves with new neighbors who see manufacturing as an “incompatible use”.  

Yet the Emanuel Administration has removed PMD status from the old Finkl Steel site and others on the North Side to encourage new, high-value mixed-use development. This policy may maximize land value, but it places manufacturing and the working class jobs that it represents in serious jeopardy.  Once the link between a firm and its location is broken, it may never be reestablished.

From a sustainability perspective, “industrial manufacturing” can spur outdated and misguided images of large, dirty smoke stacks. Today, holding on to industrial zones in urban areas can provide major sustainability benefits and expanded economic opportunity.  Many of these businesses are clean tech or light manufacturing like the Hatchery, which are quieter and release less pollution. Contemporary manufacturing sites are also smaller, allowing them to fit into existing buildings and city blocks in a mixed-use neighborhood format.  Urban manufacturing helps create well-paying jobs and transportation clusters.  It provides easy job access for workers, often by transit, while reducing vehicle miles traveled and transportation costs. Manufacturing zones also concentrate businesses resulting in amenities for workers and strong business to business networks.  It can reduce overall shipping costs and shipping energy inputs, leveraging urban freight networks to favor greener rail shipping as opposed to truck transport.  And it often permits the efficient reuse of existing industrial buildings.   

CNT is committed to retaining manufacturing and manufacturing jobs in Chicago. Our 2017 Urban Sustainability Tech Challenge, for example, has developed a new information tool that shows that there are attractive industrial sites throughout the city, including communities that often are not considered.

The prototype of the new tool will be showcased at CNT’s Sustain-a-City Celebration on September 28th. Come join us.  

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