Illustration by Mell Montezuma

Moving Past the Festivals

Chicago’s SSAs struggle to support businesses unexpectedly closed

While most of the world’s decisions are made in ivory towers and government chambers, the impacts of COVID-19 are seen and felt in our everyday environments: our homes, our hospitals, our storefronts. Inadequacies in federal funding and shortages of basic protective equipment are making the fight increasingly difficult for those on the front lines. Many of the mom-and-pop shops that anchor commercial corridors are at risk of going underwater due to a lack of revenue and an inability to cover costs. Likewise, unemployment numbers are skyrocketing and dysfunction in the state’s employment security office is making it hard for individuals to stay afloat. As vulnerable populations scramble to acquire the financial aid that is available to them, Special Service Areas (SSAs) are considering ways to deploy their resources to solve both the social and economic challenges arising in their communities.

Special Service Areas are local tax districts that fund expanded services and programs along business corridors within the district. According to the city’s Department of Planning and Development, the objective of the SSA is to promote commercial and economic development initiatives.

There aren’t many limits on how they fulfill this mission. SSAs organize everything from farmers’ markets to additional snow removal on a neighborhood’s main streets, and many SSAs have controversially contracted with private security firms for an added layer of corridor surveillance. Most commonly, SSAs devote chunks of their efforts to coordinating some of Chicago’s most prized events, like the Pride Parade (SSA #8), Lollapalooza (SSA #1), and the Silver Room Block Party (SSA #61). Due to varying property values across the city, some SSAs are better funded than others, but what’s clear is that SSAs have the capacity (and autonomy) to fund both critical and trivial pursuits in the name of economic development. 

Though Mayor Lori Lightfoot and Governor J.B. Pritzker have differing opinions on the fates of these popular summer festivals, some SSAs have already taken it upon themselves to pull the plug on their large-dollar events. SSA #42 in South Shore quickly opted to cancel its highly anticipated South Shore Summer Festival in order to find better uses for the money as the community fights COVID-19, which is disproportionately affecting South Shore. The SSA has recently come under scrutiny for its financial mismanagement of last year’s event, where Robin Thicke brought out thousands of residents on a Sunday evening. With the cancellation of the Summer Festival, the SSA moved swiftly to request proposals for the use of over $120,000 in newly available funds to aid the community’s fight against the pandemic. 

In an April 8 meeting, several proposals were presented by SSA commissioners, business owners, and 5th Ward Alderman Leslie Hairston. The proposals ranged from providing meals and groceries for vulnerable populations to creating platforms for nonessential businesses to make sales and generate revenue. The chasm is between issuing funds for the sole intent of protecting nonessential businesses and their employees, or crafting a program that would provide household necessities to residents. It’s hard to make an argument for “best use” of funds when each proposal would provide direly needed aid to at least some demographics within the community, but given the SSA’s purpose of generating commercial and economic development, there is a philosophical challenge presenting itself throughout this process. In the same way that coronavirus has challenged the entire world to innovate in its daily operations—forcing professional services to work behind a webcam, universities to consider e-degrees, and the entire globe to redefine “essential”—it has also created circumstances where governing bodies are called to reimagine their roles and responsibilities. Is the SSA’s responsibility to aid its commercial partners, or the residents of the community?

To understand Special Service Areas, it’s important to understand how they’re funded and the different entities they’re tied to. In order to create an SSA, a service provider (typically a chamber of commerce or other nonprofit business association) conducts a feasibility study for the desired area and applies to the Department of Planning and Development to begin the process of establishing an SSA. After being approved to proceed, the service provider is tasked with forming an advisory committee, and the two entities work with a consultant to formulate a plan and collect data to complete the remaining application documents. This process includes organizing community meetings, creating a budget, collecting signatures from taxpayers, and seeking approval from City Council, but the details of this process reveal who SSA stakeholders are and exactly who the SSA is beholden to.

Special Service Areas are funded by a property tax levy on commercial properties within their boundaries. This means that a portion of the taxes that business owners and landlords pay are allocated to the budget of the SSA; tenants of commercially-zoned properties in the district might see higher rents as a result of this additional tax levy. This budget is typically agreed upon by stakeholders every fiscal year, and in return the businesses that pay into the SSA become subcontractors and benefit from SSA services, while providing their services for programs such as the South Shore Summer Festival. 

This funding structure, which in many ways defines the obligation of Special Service Areas, is what makes this particular moment challenging for SSA #42. While economic development is an important driver for the health of a community, direct aid to residents is not exactly within the purview of the SSA. And in a pandemic that will undoubtedly lead to shuttered businesses and emptied commercial corridors, some commissioners want to stick to their guns and support businesses, particularly the ones that have had to cease operations, while other commissioners have proposed programs that will have a greater benefit to the general public. SSA #42 is looking to do both, as the commissioners have just approved a proposal from the South Shore Chamber that would provide $3,000 grants to ten businesses in the district, and another proposal that would supply the main grocery store in the community, Local Market, with funds to build out a grocery delivery service. 

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Throughout the process, SSA #42 Chairman Jared Lewis has said the commission is placing importance on being guided by the goals of the commission and using data to make cost-effective decisions. He cites the original intent of the SSA program, saying, “the people best positioned to know how to develop their communities…is the community.” However, Lewis also said the ability of an SSA to make good policy is based on its ability to draw from “objective facts.” At every level of government right now, datasheets are being crunched and analyzed to measure the impacts of COVID-19 and subsequent policy responses. Likewise, SSA #42 and its service provider, the South Shore Chamber, are trying their best to collect data on their community partners to understand the damage being done to their corridors—but a lot of things are unknown. 

What is known is that businesses deemed nonessential have been forced to close down and cease sales, leaving them vulnerable to missed payments and permanent closures. Lewis’s proposal would have filled one known gap: he proposed creating an online platform for nonessential businesses in South Shore to sell their products, supported by a marketing campaign, also proposed. There weren’t many barriers to realizing this plan, and the expenses were minimal. The proposal also falls in line with the duty of the SSA to support businesses in the district.

This is where philosophies differ: other proposals were tailored more toward providing direct aid to as many residents as possible. Operating on similar data, these proposals are specifically geared toward residents who may have lost their jobs, elderly residents with limited mobility, or frontline workers who are short on time and peace of mind. Fifth Ward Alderman Leslie Hairston proposed a collaboration between the SSA and the community’s restaurants to provide meals for first responders and health care workers, an effort that she estimated would cost $30,000. Another proposal, which was adopted, devotes another $33,000 to develop a grocery delivery service for community residents, an effort that would entail a partnership with the new Local Market, and a potential fund-matching opportunity for banks in the community.

The latter proposals, however, while long on budget allocation, were short on logistics. For the grocery delivery service, presumably powered by Instacart, many questions remain on how to build such a program, how to raise awareness and administer it, and how to make sure it’s equitably distributed. Programs like that one are considerably more resource-intensive than that of Lewis’s or Ra’Oof Saleem’s (who proposed a social media marketing campaign for the community’s businesses and services), and their justification is derived from equivocal assumptions that ought to be investigated before being acted upon. 

All of these plans have a clear public benefit, and the debate that commissioners are engaging in is healthy nonetheless. Critical discussion like this is necessary to craft and execute effective programs, and discussion wouldn’t be possible without the cancellation of the Summer Festival. Now that it’s back to the drawing board for the use of these funds, SSA #42 is being challenged to reimagine what those funds could instead be used for in the future. 

As of late, some commissioners of the SSA have begun to question whether the Summer Festival is actually generating the economic development that the SSA is tasked with cultivating. In fact, earlier this year was the first time that the SSA has ever put out a request for proposal in order to evaluate alternatives to the festival. Former chairman and current commissioner Amena Karim has long been an advocate for rethinking the effectiveness of the festival, saying that it doesn’t generate the level of business activation that it would if it were located along the commercial corridors of the community as opposed to its current site, the South Shore Cultural Center. Commissioner Karim cited several alternatives to a one-time festival, mentioning farmers’ markets and smaller street festivals. She was also a pioneer of the 2017 Connect South Shore Arts Festival, a partnership between SSA #42 and Hyde Park’s Silver Room and Connect Gallery. Connect South Shore was a weekend-long festival with events ranging from wellness workshops to film screenings and music performances. The mix of activities and the use of multiple vendors along the 71st Street corridor served as an ideal activation of both community and commercial stakeholders. Efforts like these are what she considers more “optimal, revenue-generating” uses of SSA dollars, but one thing remains challenging in crafting programs and measuring impact—data. 

Lewis, also a second-year master’s student at the University of Chicago Harris School of Public Policy, is privy to the importance of evidence-based policymaking. Not fully for or against large events like the Summer Festival, he does believe that there needs to be a more intelligent and robust infrastructure upon which the SSA operates in order to measure the impact of initiatives. As a taxpayer-funded entity tasked with generating commercial and economic development, no SSA has the same make-up. SSA #42 is quite different from SSA #1 in the Loop, and it’s not too similar to SSA #61 in neighboring Hyde Park. With thirty-one percent of its residents living below the poverty line and largely vacant commercial corridors, it’s important for SSA #42’s dollars to go a long way, and the best investments are made based on data. Lewis suggests that a collaborative effort between the SSA and the Department of Planning and Development to collect neighborhood-specific data beyond the census would be useful for an entity like the SSA. As SSA #42 rethinks its uses during this crisis, acquiring these resources will be top of mind when the pandemic is over.  

In a funding landscape as disconnected as the one we’re seeing implemented on federal, state, and local levels, it’s fortunate that entities like Special Service Areas exist. Issues that commonly arise with large departments allocating funds to smaller jurisdictions are dollars occasionally not reaching the most vulnerable, not meeting every need if they do reach the most vulnerable, or not reaching anyone at all. But Special Service Areas have the context to ensure that less-visible variables within the community can be solved for. While Special Service Areas are susceptible to politics, and sometimes misrepresentative of the community, one would hope that in a time of crisis, these symptoms are not a deterrent from doing what’s best for their communities as a whole. In the case of SSA #42, $120,000 that would’ve previously gone toward the South Shore Summer Festival is now a part of a checkbook with the intended purpose of fortifying one of the last majority-minority neighborhoods on the lakefront. What they’ll do with it is up to them; there are judicious ways they can go about it, and more imprudent ways. But what’s surely on the minds of the commissioners of SSA #42 is how these dollars can be spent in the future, and the resources they’ll need in order to make a real impact. 

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Malik Jackson is a recent graduate of the University of Illinois at Urbana-Champaign, where he majored in Urban Studies and Planning.

1 Comment

  1. Thank God and the SSA#42 for feeding my family at the Parkways. I was running low on funds then the Local Market Foods trucks started showing up every week with bags of chicken, greens, milk, potatoes, chili and so much more. Thank you.Thank you.

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