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When Jeff Hallenbeck, a 27-year-old baker in Pilsen, began selling homemade croissants at the local farmers’ market two years ago he was concerned he wouldn’t get enough customers. He needn’t have worried: an overwhelmingly positive response from friendly locals, who lingered to discuss bread-baking tips, prompted him and his partner to start planning a bricks-and-mortar space. In April, Beurrage bakery made its official debut on 18th Street, Pilsen’s gritty-but-charming main drag. It is one of many new shops cropping up all over the neighbourhood, a phenomenon many attribute to a strong sense of community involvement. “The rule of business in Pilsen is to favour small-business co-operation over competition,” says Aaron Lippelt, book director at Open Books, a repurposed warehouse selling used tomes. “It’s a great place to nurture new ideas without fear.”

New businesses are only one aspect of Pilsen’s allure: its location (3km from the University of Illinois) and easy access to public transport make it ideal for graduate students and young professionals who commute into the city proper. Artists seeking live-work studios with cheap rent thrive in the many warehouses and industrial spaces that are peppered throughout the lower west side’s residential areas.

Pilsen has a palpable artistic legacy. A Latino population that showed up in the 1970s (after an initial wave of Czech and German immigrants in the late 1800s) began a tradition of brightly coloured mural paintings, which liven up the façades of the area’s buildings and metro stations. Over on Halsted Street, creative types from all over Chicago flock to a monthly art walk, where artists display their works inside 30 live-work gallery spaces. These modified shopfront apartments epitomise the harmony between Pilsen’s creative present and industrial past.

Of Pilsen’s many potential fixer-uppers, none has enjoyed as dazzling a transformation as Thalia Hall, a monolith built on 18th Street in 1892 that was modelled after an opera house in Prague. After being taken over by veteran Chicago restaurateur Bruce Finkelman in 2013, the landmark property now contains old-timey tavern Dusek’s Board & Beer.

While amenities such as this do soften Pilsen’s industrial edge, some wonder whether new big-buzz initiatives – including Chicago’s first commercial heliport, set to launch this autumn – could lead to a mass exodus of core residents: a mix of working class Mexican families, artists and a young creative class.

“We’ve been in the neighbourhood for eight years now and more students are moving in – bars, independent coffee shops and non-Mexican restaurants keep opening and it looks like we are on the verge of bourgeois,” says a smiling Amanda Joy Calobrisi, a painter who occupies a shopfront apartment.

One thing about Pilsen that won’t change any time soon is the willingness of locals to embrace their unique heritage. During the first week of Thalia Hall’s grand opening, owner Bruce Finkelstein was repeatedly approached by long-time residents who remembered buying penny candy in the building’s lobby or working as ushers in the old theatre.

“The neighbours have wanted to see something happen to this property for a while so they’re excited to have us down here,” says Finkelstein. “It’s been a beacon of the community and that’s exactly what we want to turn it back into.”

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