Retailers discover Northwest Indiana

Cabela's is looking to open here in the coming years, a Lexus dealership in the coming days. Ashley Furniture recently opened in Schererville, Home Depot is building in Hammond, Target is adding stores and Walter E. Smithe is building a bigger showroom in Merrillville.

The rush is on in Northwest Indiana, as these retailers are following a trend that has seen the number of area retailers spike by 10 percent the past four years. Since August 2001, the number of Lake and Porter county stores engaged in retail trade has jumped from 9,900 to 10,800.

"It's a significant increase," said Don Coffin, associate professor of economics at Indiana University Northwest and source of the above numbers.

Grant Monahan, spokesman for the Indianapolis-based Indiana Retail Council, said retailers follow "housing rooftops."

During the four-year period from 2001 through 2004, the population of the two counties rose 2 percent and its medium household income climbed by 6 percent.

Perhaps more significantly, 3,300 single-family housing permits were issued for the area in 2004 alone.

St. John Township's population grew by 4,858 from 2000 to 2004, and Winfield's climbed 64 percent, or 1,302, during the period. In Porter County, the population jumped 5.6 percent to 154,961, and by 2020 forecasters say the county is likely to be home to 200,000 residents.

Monahan argues that Northwest Indiana, home to nearly two-thirds of a million residents, has been "understored."

"That's not a knock on the area," he said. "Its proximity to Chicago could have played a part."

Coffin agrees Northwest Indiana's proximity to Chicago may have stymied regional retailing.

"We're right next to Chicago, and for a lot of shopping purposes, people would go to Chicago," he said.

IKEA, the modestly priced yet trendy home furnishing retailer, is an example of the dilemma large retailers find in the Chicago market. The company, though recently approached to open a store in Hammond, has no plan to open in Northwest Indiana because, it says, the region already is being served by IKEA locations in Bolingbrook and Schaumburg.

"Most of Northwest Indiana technically is within the Chicago media market," spokesman Joseph Roth said last week when asked if IKEA will locate in Northwest Indiana in the future. In general, Roth said, IKEA needs a population of 2 million to support one store while the population of greater Chicago is more than 6 million.

"The potential exists much further down the road," he said.

But if its proximity to Chicago has played a part in keeping some retailers at bay, Northwest Indiana's location on the edge of the giant metropolis also is spurring its population growth and the development that follows. Anecdotal information from Realtors indicates the majority of residents moving into many new south Lake County and Porter County developments are relocating from across the Illinois line.

Dennis Highby, chief executive officer of the Nebraska-based sporting goods giant Cabela's, said Hammond is the "perfect location" for the chain's new store and the company liked Northwest Indiana's location at the base of Lake Michigan and its proximity to Chicago.

"Chicago is a tremendous market for Cabela's, and a store would do great in the southern part of Chicago," he said in April. "Or south of Chicago, I guess, would be a better terminology."

Purdue University professor Richard Feinberg, who is the institution's Director for the Center for Customer Driven Quality, said Northwest Indiana "was probably underserved."

"People moved out of the Chicago area in past 10 years and into the area," he said. "Now the retailing is just catching up. It's the natural order of things. It takes awhile for the market system to work its magic."

Being "underserved" is part of why Target has increased its Northwest Indiana presence.

Target opened a store in the Valparaiso Marketplace and another in Highland in the spring of 2001. Nationally, the retailer has added 247 stores in the last three years and now has 1,189 stores.

Last year, it opened a store on Calumet Avenue in Munster.

"When we held up a map of the area and looked at all the existing stores there ... we saw a void right in that area," said Forrest Russell, the Target senior site development manager overseeing the Munster project. "So for us, that was an opportunity."

Next in the region for Target is its store in St. John, scheduled to open next month.

"It's still location, location, location" said Russell. "Where the people are and the access is, that's where we want to be."

Times Business Writer Keith Benman contributed to this report.

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