The nation's best-known development bank Monday launched a new incarnation of a development subsidiary to focus on business and job growth.
Shorebank Corp.'s new subsidiary, Chicago Neighborhood Institute, is a nonprofit group targeting job creation and placement for residents of the city's south and west sides.
Simultaneously working to create jobs at area manufacturers and fill them with local residents is "unique in the country," said Mary Houghton, president of Shorebank, which owns development organizations in several states and consults nationally about development banking. The company's main subsidiary is South Shore Bank in Chicago.
"If we succeed, we would hope to make the point that a banking institution can develop unusual partnerships both with employers and with residents," she said.
In fact, other bank and community development groups likely will keep a close eye on the subsidiary's progress, she said.
"Many banks do have community development corporations and they could do this," particularly if they work with a nonprofit entity, Ms. Houghton said.
"Like many of the strategies at Shorebank, the principles apply in almost any neighborhood," added Cliff Kellogg, the subsidiary's vice president. "The particular approach has got to be sensitive to what's already happening in the neighborhood."
Shorebank will contribute about $500,000 to the new entity's $3 million operating budget over the next year. The rest of the budget will come from grants, government contracts, and income from various projects.
The institute's efforts will include a loan fund for local manufacturers to expand and create new jobs. And companies that hire local residents can get up to a 3% rebate on loans, said Craig J. Lewis, the institute's chief executive officer.
Management said it hopes to double the number of residents in the Austin neighborhood who work in local jobs over the next decade, and help create 10 new black-owned businesses a year.
Of the 800-some small manufacturers there now, just four are black-owned and only about 10% of the work force is local, Mr. Kellogg said.