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Inner City Opportunity

Inner city locations, which have been written off by many as hopeless, offer businesses several opportunities. Not only do they provide abundant labor, but like other downtown neighborhoods, they are located in the heart of the transportation corridors. And financially speaking, 56 percent of all federal dollars going to urban business development programs are going specifically to the inner-city programs, according to Porter's ICIC (www.icic.org).

Perhaps the biggest advantage, especially for retailers and service providers, is that inner cities are one of the largest underserved markets in the country. American inner cities represent $85 billion in U.S. retail spending annually; however, approximately 25 percent of inner-city retail demand is unmet by inner-city retailers. ICIC also reports that retail demand per inner-city square mile is often two to six times greater than each metro area square mile.

Neighborhoods like South Shore in Chicago "have more buying power than even the wealthiest suburb," says one Brookings Institution paper authored by Shorebank Corp. The study shows that while South Shore's median family income is only $22,000, compared with $124,000 in the more affluent suburb of Kenilworth, South Shore packs $69,000 of retail spending power per acre -- almost twice the $38,000 per acre of Kenilworth.

Some retailers have seen the light and are abandoning their search for suburban spots to look for inner-city locations. Rite Aid, for example, announced in mid-1998 a two-year, $230 million development plan for economically depressed urban areas. Rite Aid has committed to 37 new stores, 73 relocations and 17 remodeling projects within 85 communities in 20 states and the District of Columbia.