Discover Financial Services is in advanced talks to turn a vacant former Target store in the Chatham neighborhood into a call center that could bring as many as 1,000 jobs to the city's South Side, according to sources close to the discussions.
Lining up a potential economic jolt for an area known for corporate disinvestment, the Riverwoods-based credit card giant is eyeing a lease for the 127,000-square-foot property at 8560 S. Cottage Grove Ave., sources said. The store is one of two South Side locations Target announced it would be shuttered in 2018 amid a rash of public criticism.
Sources said no deal has been finalized and discussions could still fall apart. But the lease would be a landmark move by one of the Chicago area's highest-profile companies and a victory for Mayor Lori Lightfoot's crusade to channel more corporate investment and jobs into the city's blighted South and West Side neighborhoods.
The call center would also be a win for Chicago-based developer DL3 Realty, which last year bought the former Target store in Chatham and another vacant one in Morgan Park. DL3, led by managing partner Leon Walker, struck a deal at the time with Blue Cross and Blue Shield of Illinois to turn the Morgan Park location into a community center and office building that opened in August. The Discover deal is said to be similar in nature, but could generate twice as many jobs.
Walker said he has been in talks with "a number of corporate tenants" about leasing the Chatham Target, but said he has not signed a deal with anyone. "It's a great opportunity for corporate investment," he said.
Asked about the potential Chatham deal, a Discover spokesman said in an email that the company has "no plans to share at this time," while Chicago Chief Marketing Officer Michael Fassnacht told Crain's he had been "instructed to say I can't confirm" plans to re-purpose the former Target.
The closure of both Target stores last year led to calls for the city to drop plans to help the retailer open new stores on the city’s North Side—and became an issue in aldermanic and mayoral elections in 2019.
Major retailers closing up shop is a longstanding problem for predominantly Black communities on the South and West sides. As population and jobs have dwindled in such capital-starved neighborhoods, commercial corridors are rife with vacant storefronts—symbols of disinvestment that have led even some of the most socially conscious community developers to shy away from taking on new projects. That was exacerbated this year by the COVID-19 pandemic and civil unrest marked by looting of several South Side shopping centers.
Key to reversing that trend is not only attracting but retaining companies like Blue Cross Blue Shield and Discover to effect sustained change, economic development experts say.
Walker has been among the most active real estate investors on the South Side. He developed a Whole Foods-anchored shopping center in Englewood in 2016 and co-developed a Jewel-Osco in Woodlawn, the neighborhood's first new full-service grocery store in more than 40 years.
Lightfoot, meanwhile, has prioritized making sure investments like those have a ripple effect. Her Invest South/West program is meant to channel $750 million in public resources over three years into blighted commercial corridors in 10 designated neighborhoods. While Chatham isn't one of the program's target areas, nearby Auburn Gresham, Roseland, and South Shore are. Since launching in October 2019, the city says it's invested more than $70 million in public funds into retail corridors through Invest South/West and “mobilized more than $300 million in private and philanthropic commitments.”
It's unclear how the city is involved in negotiations with Discover, but a source familiar with discussions said no city subsidies, such as tax-increment financing, are on the table.
For Discover, a deal would establish its fifth call center in the U.S. Unlike most major financial services companies, Discover has located all its call centers in its home country and has played that up in its national advertising.
The company employs about 8,000 in call centers in Salt Lake City, Utah; Phoenix; New Albany, Ohio; and Greenwood, Del.
In the wake of the police killing of George Floyd in Minneapolis in May, financial services companies of all kinds looked for opportunities to boost economic development in communities like Chatham. If this deal comes together, few will have done so as directly as Discover.
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December 11, 2020 at 09:38AM
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Discover eyes up to 1,000 jobs for South Side call center - Crain's Chicago Business
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