Starbucks closings seen hitting urban economic developments efforts hard

By Bonnie Miller Rubin
Chicago Tribune
(July 16, 2008) Russell Morgan wants the corporate honchos at Starbucks to know that when it comes to closing store locations, they don't know beans.
 
He may be a retired railroad worker, but get him going on the Seattle coffee giant and he speaks with the authority of a Wall Street analyst. He rattles off a multitude of reasons for the company's financial woes, but nothing, he says, is as boneheaded as the announcement this week that it will shutter the Country Club Hills store at the end of the month.
 
"They just pulled the plug too soon," Morgan said as he satisfied his twice-a-day caffeine habit. "They didn't give it enough time."
 
To people who live in more fashionable ZIP codes, the loss of a Starbucks might not be viewed as a wound to civic pride. But in Country Club Hills, the opening of the ubiquitous chain in May 2007 signified a certain cachet.
 
But now this store at 167th and Crawford is going the way of yesterday's coffee grounds, part of a corporate restructuring that will close 600 of its more than 7,000 outlets nationwide. The first 50 of those 600 were announced Monday.
 
Some 12,000 jobs will be shed, but an employee of the Country Club Hills store, who declined to give her name, said all her co-workers had been reassigned to other locations.
 
Kelly Mattran, the company's Chicago-based regional marketing manager, confirmed the closing by the end of July but declined to give a specific date or discuss why the store was chosen.
 
"Throughout the history of Starbucks, we have always aspired to put people first," she said in a written statement. "This makes our decision to close stores more difficult. . . ."
 
The only other Illinois address on the hit list so far is in Elmhurst, where latte lovers need only travel mere blocks for a fix.
 
Market saturation is an oft-cited reason for the company's turmoil. "The Onion" once lampooned the proliferation with the headline, "New Starbucks Opens in Rest Room of Existing Starbucks."
 
However, that's not the case in Country Club Hills, where the nearest Starbucks purveyor is four miles away, in Homewood. Of course, overexpansion of premium brands has never been a problem in the south suburbs, where residents commiserate about being the forgotten stepchild of the region. Rand McNally once left the entire region off the map of the metropolitan area.
 
It's a familiar story, said Country Club Hills Mayor Dwight Welch. The community, which has a population of 16,000 -- 80 percent African-American -- has to work twice as hard as other communities to kick-start economic development, even though its median household income is almost $57,800, or similar to Mt. Prospect's, according to the 2000 census.
 
"Starbucks has had a good following, but no one makes money in the first year," he said. "They have a national problem . . . but they only looked at the current numbers instead of looking at the growth potential. They'll be back in 24 months . . . and then they'll have some explaining to do."
 
The city's Economic Development Commission will write a letter to corporate headquarters, officials said.
 
As for Morgan, he hopes to rally residents with an Internet campaign. He attributes the store's failure to, among other factors, poor signage that could have directed traffic from nearby Interstate Highway 57.
 
There's no question that commerce is, well, percolating along the 167th Street corridor, which just a few years ago featured little more than vacant lots.
 
Wal-Mart anchors the development, along with a Loews multiplex, which is one of the theater chain's top moneymakers, according to city officials.
 
In the next few months, a Sonic Drive-In will open adjacent to the Starbucks site and is expected to draw "a huge amount of traffic," explained Wanda Comein, spokeswoman for the city. A 140-store outlet mall is poised to break ground and is slated for 2010, city officials said.
 
"I'm so tired of having to drive for everything I need," sighed Darnell Nolin, 29, sipping a chai tea when told of the Country Club Hills store's demise.
 
The business consultant regularly uses the locale for meetings. He has to travel to 127th and Cicero—some 40 blocks north—"to get a Potbelly's," he lamented. "Now, that's just not right."

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