Discover's South Side Deal Touted As Corporate Investment Done Right

When Target Corp. in 2019 closed two of its South Side outlets, including a large-format store in Chatham, many residents feared it was part of corporate pullback from historically disadvantaged Black neighborhoods. But officials from Discover Financial Services said Thursday they are ready to take over the abandoned Target in Chatham and eventually bring in about 1,000 call center jobs.

The company sees the move as a chance to boost a disinvested neighborhood. 

“The traditional corporate site selection process perpetuates bias,” Discover CEO Roger Hochschild told Bisnow.

It also means companies lose out on opportunities, and he said he hopes other businesses follow Discover’s lead into historically disadvantaged areas.

“I think they’ll find great talent. This is not only the right thing to do, it’s a great business decision.”

The announcement was made at 86th Street and Cottage Grove Avenue in Chatham alongside Mayor Lori Lightfoot, DL3 Realty Managing Partner Leon Walker and many other city, state and federal officials. The loss of the neighborhood Target had stung, they said.

“It left a gaping hole in the community, and people were sad because they didn’t know where they were going to shop and spend their money,” U.S. Rep. Bobby Rush said during the press conference.

Losing the Target stores also meant lost jobs. But Lightfoot said Discover’s move will help reverse some of the damage done by the closings, the coronavirus pandemic and the civil unrest that engulfed many South Side neighborhoods in 2020.

“Don’t get me wrong, the downtown is the heart of who we are, but we can’t be a great city if our neighborhoods are starving,” she said.

Hochschild said he agrees. He told Bisnow selecting Chicago’s South Side for the company's first new call center in 20 years was in some ways a response to the civil unrest.

“For us, it’s really a decision driven by the impact of the social justice movement,” he said.

Too often, corporations establish operations in areas that are already economically vibrant, Hochschild said. That squelches employment opportunities for people in regions like Chicago’s South Side and its south suburbs and entrenches inequality.

The COVID-19 crisis further dimmed employment prospects. Last summer, the overall unemployment rate in the Chicago metro area hit 15.6%, according to a report in the New York Times, but the rate in some predominantly Black neighborhoods on the city’s South Side was more than double that.    

Discover did not receive any funds from the city to establish itself in Chatham, according to Hochschild, but he still credited Lightfoot’s INVEST South/West initiative for helping complete the deal. The mayor has made the initiative a highlight of her term in office, touting its $70M of investments into projects in low-to-moderate-income neighborhoods on the South and West Sides.

“We only looked at communities that have been targeted for investment by the mayor’s initiative,” Hochschild said. 

Economic development experts said they agree Discover’s move gives the South Side a much-needed boost.

“We have a lot of vacant buildings in our neighborhoods, and they’re eyesores, so any time you can repurpose a vacant building into a jobs engine, it’s phenomenal,” Chicago Neighborhood Initiatives Vice President of Real Estate and Inclusion Ciere Boatright told Bisnow. “I hope it sends a message to other Fortune 500 companies. What do you do with a vacant big box? This is what you do.”  

Since forming in 2010, CNI has coordinated $500M of investment into Chicago’s low- and moderate-income areas, especially the Far South Side Pullman neighborhood.

“We’re excited to see it happen in another neighborhood that deserves job creation,” Boatright said.

Discover plans to hire around 150 people this year and more than 1,000 by 2025, Regional Operations Director Juatise Gathings told Bisnow. The 30-year-old grew up in Roseland on the city’s Far South Side and will lead the new center.

The Riverwoods, Illinois-based company will pay new hires more than $17 per hour, and all full-time employees will receive benefits, including health insurance and four weeks of paid vacation, she said. The company also plans to promote from within and offer tuition reimbursement to those who attend college. 

“One of the things I know from growing up on the South Side is that there is a lot of talent in Chatham and the South Side communities,” she said.

DL3 Realty will renovate the shuttered big-box retail space into a 100K SF call center, which will include a 5K SF community gathering space for local community groups. Walker praised Target during the press conference for helping complete the deal. DL3 Realty purchased the site from Target in 2019 for $250K, according to Cook County property records.

Walker has already completed several high-profile projects in South Side neighborhoods, including Whole Foods’ new grocery in Englewood, after these areas suffered decades of disinvestment. He recalled that the Chatham neighborhood had been a mecca for Black-owned businesses in the 1970s and said Thursday's announcement by Discover will help bring back some of that luster.  

“There is a business case for investing in our neighborhoods,” he said. “This investment will inspire a new wave of corporate investment.”