SPRINGFIELD — When federal immigration officers flooded Chicago neighborhoods last fall, walk-ins at Erick Camargo’s hair salon in Chicago plunged from about 40 customers per day to as few as five.

At the height of Operation Midway Blitz, Camargo locked the doors during business hours to keep agents from entering. Some barbers worked out of their homes instead. Customers who still came to Epic Studio Barbers & Stylist in the Belmont Cragin neighborhood on Diversey Avenue no longer arrived in large family groups but alone, sprinting from their cars for fear of being stopped by immigration officers.

Two neighborhood regulars — a boy who sold chocolate to support his blind parents and a woman who sold tamales on the corner — were detained and haven’t been heard from since, Camargo said.

“I used to tell them I understand,” Camargo said of customers who stayed away. “I could tell them do this or do that about it, but something bad happens, and it’s on my conscience.”

Six months later, businesses across many largely immigrant Chicago neighborhoods are still reeling from the fallout of the raids. The impact of lost customers and cratered revenues has prompted Illinois lawmakers to debate whether and how to help businesses like Camargo’s recover.

Two proposals have emerged. One would create a $50 million grant program run by the Illinois Department of Commerce and Economic Opportunity. Another, which passed out of the House last month, would establish a loan program for small businesses whenever the governor declares an “economic shock” — defined as instances of reduced foot traffic, declining sales, workforce disruptions and business closures. Following the model of programs created by other states in the wake of COVID-19, DCEO could issue loans of up to $50,000 at a fixed 2% interest rate over five years, with no repayment required for the first six months.

Under both measures, only small businesses would qualify. The grant program would cap eligibility at 25 employees; the loan program at 50 employees and annual revenue below $3 million.

Camargo’s salon would likely benefit from both bills. While his business survived thanks to his savings, and he notes that some customers have started to return, Camargo said walk-ins remain well below pre-Operation Midway Blitz levels.

“The bills don’t wait for us. Everything is more expensive,” he said.

Chicago Democratic Sen. Mike Simmons, who is sponsoring the grant program, said he prefers it over the loan proposal because some businesses lack the capital to take on debt.

“I think this program would really send a strong message that the trauma from the ICE (Immigration and Customs Enforcement) raids was not a one-and-done,” Simmons said. “We know that this is something communities are still struggling with, the aftermath. And we need to make it possible for those business communities to continue to be the hallmark of our neighborhoods.”

But both proposals face an uncertain path.

Gov. JB Pritzker’s February budget proposal did not call for major new spending, and with just over a week left in the scheduled legislative session, lawmakers are navigating competing budget demands and a looming deficit. DCEO spokesperson Eliza Glezer said the department supports efforts to help small businesses but stopped short of a commitment.

“A program such as this would require additional funding be added to the FY27 budget,” Glezer said in a statement, which also promised state agencies under the governor would continue to engage lawmakers in the closing days of the spring session “about the fiscal impact of bills.”

The effort to help businesses hurt by federal immigration sweeps is not unique to Illinois.

A Los Angeles County government study found that 44% of surveyed businesses reported losing more than half of their revenue following local immigration raids. The city of Minneapolis reported that small businesses lost $81 million in January as a result of a similar federal operation, dubbed Operation Metro Surge. Democratic state lawmakers in the Minnesota Senate passed a $100 million loan program to support affected businesses, but the House — split evenly along party lines — never voted on the legislation.

‘A really tough situation’

The two-month operation in Chicago, which federal officials said targeted criminal immigrants, resulted in around 2,500 deportations and 3,800 detainments of people, a majority of whom had no criminal record. A Chicago Tribune analysis found that only 1.5% of those detained had been convicted of a violent felony or sexual crime. Leading into the operation, President Donald Trump had repeatedly described Chicago as a “hellhole” and “war zone,” accusing Pritzker and local sanctuary policies of endangering residents.

Beyond the deportations and detentions, the economic toll throughout Chicagoland was immediate.

Marcos Carbajal, who helps run Carnitas Uruapan, a Mexican restaurant his father founded in 1975 in the Pilsen neighborhood, said the operation quickly turned into a “nightmare.” Weekly sales at his Pilsen and Gage Park locations fell 25% to 30%. At his newest location, in Little Village — a neighborhood known as the “Mexico of the Midwest” — sales dropped 40% after federal agents swarmed the area, arresting several people, including street vendors and U.S. citizens.

“We’re talking 12, 14 car convoys of armed men with long guns and, you know, two helicopters keeping an eye on them,” Carbajal said. “I don’t know that anyone, regardless of status or race, would be running towards that area to go do anything if they see that that’s going on in the streets.”

Carbajal locked his doors, screened customers and monitored ICE alerts during commuting hours. He cut hours, reduced costs and drew on reserve funds to stay afloat. His business went into the red. Sales remain 10% to 15% below earlier levels, he said.

Carbajal isn’t the only business owner who says fear of immigration agents kept customers home.

The owner of a large plant distributor and nursery company, who asked not to be identified for fear that ICE would target the business, said Operation Midway Blitz led to fewer landscaping jobs and declining store traffic. The owner hired security at all locations, delineated property lines and had employees update their emergency contact information.

“I think there are a lot of people who’ve left our industry who, if they felt safe and comfortable, might have stayed in the industry,” the owner said. “It was a traumatic time and a surreal time and experience, and that will have a lasting impact for sure.”

While the exact financial impact of Operation Midway Blitz in Illinois isn’t yet known, Hilda Alvarez Rodriguez, special projects manager at the Illinois Hispanic Chamber of Commerce, said the vast majority of Chicago businesses did not emerge unscathed. She also noted that the operation’s end in early November only complicated the recovery, as it coincided with winter and a time of worsening inflation nationwide.

“What we essentially saw with a lot of these businesses is that they had to change their hours. They were making less income, so they had to cut a lot of staff,” Alvarez Rodriguez said. “A lot of the restaurants, a lot of these retail shops were just ghost towns during the duration of Midway Blitz.”

Andres Solarte, government affairs director with the Illinois Hispanic Chamber of Commerce, said that once Illinois and Cook County gain access to all business tax filings later in the year, there will be a clearer picture of the revenue loss associated with the operation.

Solarte said the loan program will allow Illinois to support Chicagoland businesses that have yet to see customers return to prepandemic levels, while also preparing the state for future economic uncertainty. He added that a little support from the state government could be crucial to many businesses recovering after the blitz.

“They don’t need a handout,” Solarte said. “They just need to be able to weather the storm.”

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