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Service & Impact
summer 2021

Re-Writing The Inner-City Story

Commercial Real Estate Developer Leon Walker Is Bringing Hope and Opportunity to Historically Disinvested Communities
Written by: Andy Butcher

When parts of Chicago went up in flames in the wake of protests over George Floyd’s death, in May 2020, developer Leon Walker drove out to check on his projects. Passing through parts of the city where people were looting, he arrived at Englewood Square on the South Side, only to find local residents guarding the retail center he had helped bring there.

“They said, ‘Not here,’ and they stood there, before the police arrived,” Walker recalls. “Tears welled up in my eyes.” That community response, along with the fact that he did not have to file insurance claims for any of the other projects he has been involved in across the city, is a testimony to the positive impact of the “venture development” investment philosophy he has been pioneering in the city over the past couple of decades.

Through strategic partnerships with private investors, local authorities, and community organizations, Walker’s DL3 Realty development firm has been able to breathe new life into long-declining parts of the city.

People lined up outside for four hours to get into the new Whole Foods when it opened its doors in Englewood in 2016, the anchor store in a $20 million development that also included Chipotle and Starbucks—all three the kind of brands local residents never expected to see in their neighborhood.

But the initiative has been hugely successful— not only in anecdotal terms such as Walker’s engagement with the community during the 2020 civil unrest. The results are not just to be found in residents’ warm feelings but in cold hard facts. In the year following the opening of the Englewood Square development, crime in the immediate area dropped by 50%. Housing prices went up for the first time in decades.

Some 40 local vendors got on to the shelves of Whole Foods. Not all of them did well, Walker acknowledges, but at least they had an opportunity, and about half of them are now in 15 or 20 other stores and a handful are growing national businesses. Then there are the local businesses engaged in the management of the center, from security to landscaping.

Walker sees it all as part of rewriting what has for too long been a doom-and-gloom story. He notes that when work on the Englewood Square project was underway, director Spike Lee was shooting a movie just down the street. But the filmmaker’s Chi-Raq had a very different tone, focusing on the gang violence in the area.

“We want to create a new narrative around what it means to be engaged in communities of color and how we execute uplifting investments that provide both financial rewards as well as a positive social impact,” says Walker.

Bringing light

Development alone can’t solve all the problems in historically disinvested neighborhoods, Walker acknowledges, but it can help fashion an environment in which people find the will and the capacity to take them on. “Disinvestment and segregation engulf communities in a poverty trap, which reinforces a lack of hope and faith in the future,” he says, “and that influences the behavior of the individuals that are caught in that trap.

“Our projects bring light, opportunity, and hope, which inspires people to take different steps and make positive choices. I mean, if you have hope and faith, you make more positive choices, and you avoid desperate acts that can have negative impacts on your family and the community.

“If you have hope and faith in the future, then you will do things that are more positive, pursue opportunities to better yourself, and your community, because you believe in a brighter future.”

Walker began work on his venture development framework, which he calls more of an evolution than a revolution, when he made a major career switch some 20 years ago. The University of Chicago Law School and Booth School of Business, and University of Michigan, graduate left a well-heeled position in Los Angeles with a global real estate firm to return to Chicago.

Honing his strategy, Walker has learned how to balance the differing interests of what he calls the three Ps needed for effective venture development— private equity capital, public investment and philanthropic support—and to speak their different languages.

“When you look to make an investment in an emerging market like South America, the first thing you do is get a translator,” he says. “An authentic one, someone that really understands the mission that you’re trying to achieve, but also has some relationships in that community.”

Part of the success of the Englewood Square development involved presenting the opportunities in a different way. He knew that pitching a typical potential trade map, outlining the demographics of the surrounding area, would not be persuasive. But showing that there were 1,000 people within a mile of the location who made more than $50,000 a year, each of whom “can afford a cup of coffee every day,” was way more appealing than focusing on averages.

“Now they’re swamped by 8,000 people… that are mired in poverty,” Walker notes. “So when you look at the averages, you’re not able to see those nuggets in there. You have to show corporate tenants that a real opportunity exits; you just have to tease it out in a different way.

“You have to take your time to create metrics that communicate a more positive story about the neighborhood than what can be gleaned from the more traditional sort of measures that are used in real estate and by corporations as they make their investments decisions.”

Building trust

It has also been critical to win the trust and support of the local community, people often wary of outsiders looking to come in and make a quick profit.

“You can’t do this as a helicopter type of investment,” Walker says: some trust needs to be built up, so they don’t look at you as just a taker. With that in mind, he is careful to explain that revitalization is not gentrification. “Revitalization engages local residents and business in the efforts of renewal so that you don’t displace them,” he explains. “That’s very different.”

It’s also important not to promise the moon. Ten years ago, everyone wanted to have a Gap or an Old Navy in their community, he says, but the current situation may not make that possible. “But maybe I can bring a new retailer that will allow us to demonstrate success, which will then build on itself and allow us to attract more aspirational investments.”

Over the past few years, Walker’s efforts have sown over $100 million into some of Chicago’s neediest neighborhoods and created over 3,000 jobs. Other projects have included taking vacant big-box stores and repurposing them as corporate back offices and call centers. Looking ahead, he has a goal of creating 10,000 more jobs in 10 million square feet of new commercial space in the next decade.

He speaks enthusiastically of what is under way in Woodlawn, a once-vibrant community of some 80,000 people now numbering about a third of that. DL3 Realty and Terraco partnered on a 3P investment that brought Jewel-Osco, the first new full-service grocery store to the Woodlawn community in over 40 years, outside of which stands a 17-foot tall sculpture, designed by local artist Bernard Williams, called the “Wonder of Woodlawn.”

With a circular design inspired by the world’s first Ferris wheel unveiled at the 1893 Columbian World’s Fair, hosted nearby at the Midway Plaisance, the piece of art celebrates the area’s heritage and Black history makers. Among past residents featured are Gwendolyn Brooks, Dinah Washington, Sun Ra, Joe Louis, Cassius Clay, Emmett Till, Cab Calloway and Jesse Owens.

“Our hope is that 10 or 15 years from now, a child or a student standing on the corner at the bus stop will look up and see Sun Ra and think, ‘Who the heck is that?’ They’ll Google it or speak it into Siri and get back some information that will engage and inspire them to learn more about the history of this neighborhood, even as it begins to be revitalized.”

Community transformation has been part of Walker’s DNA. His parents were both public school teachers, who took out an SBA loan in 1969, when interest rates were running over 18%, to build the first state-of-the-art preschool education center on the South Side.

“I got my first hard hat on that job with my dad,” he recalls. “It sparked in me a desire to be in commercial real estate and to make high-impact, socially conscious investments in the neighborhoods I grew up in as a kid.”

By the time the family sold the last of their Children’s Developmental Institute education centers in 2019, tens of thousands of kids had graduated from CDI kindergarten programs.

Being strategic

Walker saw what a little hope could do for a community as a teenager working in the City of Chicago’s Jumping Jack community service program. He was employed on one of the crews that transported and set up the large inflatable playgrounds when, under newly elected Mayor Harold Washington, they first began to visit Black and brown neighborhoods long excluded from the program.

“Everywhere we went, people went absolutely bananas because they had never seen a jumping jack,” Walker remembers. “The kids loved it. They would beg us to stay a little longer, just 15 more minutes.” That experience left an indelible mark in his consciousness about how deep the disparities run in our society, he says.

In a 2020 TEDx Talk outlining his venture development philosophy he puts some numbers to that kind of gap. Such as that those born on the South and West Sides of Chicago have a life expectancy 10-15 years shorter than that of wealthier Chicagoans clustered along the lakefront: “Research now confirms that your ZIP code means more than your genetic code—where you grow up, largely determines how long you live, how much you will make and the quality of the life you will have.”

Then there is the income lost to the growing “red zone” of poverty gripping the south and west sides of Chicago where large corporations have left and small businesses have closed—around $4 billion a year, according to a recent study by Chicago’s Metropolitan Planning Council.

Even as a teen, Walker was aware of the fading fortunes of parts of the city as businesses closed and people moved away. In his TEDx Talk he recalls having to “start worrying about whether my baseball hat was tilted to the right, which meant I was claiming one gang, or leaning to the left, meaning I was claiming another.” “We’re just trying to make sure that these communities get the health care, the grocery stores, the jobs and the business opportunities they deserve.”

Walker gets teary momentarily when he thinks about the impact he has been able to make since returning to Chicago. “We’re just trying to make sure that these communities get the health care, the grocery stores, the jobs, and the business opportunities they deserve,” he says. “Because kids just like me live there.” “It’s not just throwing money at problems. It’s being strategic— intercepting communities at the right point in the growth curve… in a way that can be transformative.”

However, he underscores that venture development isn’t just about following your heart, it also means using your head. “It’s not just throwing money at problems,” he says. “It’s being strategic— intercepting communities at the right point in the growth curve… in a way that can be transformative and create a ripple effect…”

With the approach now finetuned and well-proven, he is keen to see it picked up and run with by others across the country; there’s more than enough to keep him busy in Chicago and, besides, local knowledge and presence is a vital factor in venture development’s success. To help spread the word, he has released a free white paper in addition to his TEDx Talk introduction.

In it he doesn’t mince his words, calling the poverty trap so many are caught in “no longer an isolated problem but a crisis in human capital development.”

Walker’s innovative strategy—he was the first developer in Chicago to use new market tax credits in a new construction project, and the first to introduce crowdfunding into the capital stack during the development of Englewood Square— is drawing attention. He fields calls from developers and mayors across the country.

His innovation also earned him the 2020 inaugural Change Maker Award from Roosevelt University’s Marshall Bennett Institute of Real Estate, which cited his work as “an inspiration for the next generation of real estate developers from and for the city’s neighborhoods.”

Andy Butcher is editorial director of WayMaker Journal.