The red and white sign perched in the freshly graded lot at the intersection of Waterman Avenue and Baseline carries a message of hope and concern: job opportunities versus a continuing cycle of economic segregation.

At the hemline of San Bernardino's crime busting effort, Operation Phoenix a 20-block area northeast of downtown sets a confluence of  tattered strip malls, vacant lots, liquor stores, donut shops and check cashing operations - all snapshots in the daily screenplay of  petty criminal activity, drugs dealing, gang banging, homelessness, pan handling and prostitution.

These mean streets have experienced decades of economic decline caused by the exodus of established businesses and middle income families.

National drugstore chain Walgreens sees poverty and promise America’s inner cities. The chain broke ground for a new store this week in the shadow of SB’s drug, homeless and gang infested Operation Phoenix corridor.

But where most retailers see the impact of crime, red ink and hope deprived Walgreens sees opportunity. "We see in this community both poverty and great promise," said chairman David Bernauer.

Retailing experts say Walgreens aggressive inner city expansion strategy could hiccup in areas like this one where African-Americans live in concentrated poverty. Less than a month ago the federal government sued the company, alleging widespread racial bias against thousands of Black workers throughout its chain. 

The lawsuit alleges that Walgreens assigns Black managers, management trainees and pharmacists to low performing stores and stores in Black communities, and denies them promotions, based on race.

Walgreens released a statement saying it is committed to "fairness, diversity and opportunity" and was saddened and disappointed by the suit.

Mining for diamonds among ashes is nothing new for the nation's leading drug retailer. In its more than 100-year history, Walgreens has maintained drugstores in low income neighborhoods. Since the early 1990s Walgreens has opened more than 3,000 stores throughout the U.S. and of those, 15 to 20 percent were opened in inner city, economically depressed areas.

Michael E. Porter, a professor of business strategy at Harvard Business School and chair of the Initiative for a Competitive Inner City says inner cities are the next retailing frontier.

In a major research effort Porter estimates that households in America's inner cities possess more than $85 billion in annual retail spending power (excluding income from unrecorded activities, which could add another $15 billion). That amounts to nearly 7% of total U.S. retail spending, far more than Mexico's entire formal retail market.

"Despite lower household incomes, inner city areas concentrate more buying power into a square mile than many affluent suburbs do. But they are badly underserved."

Often lacking the types of stores that inundate suburban areas - supermarkets, department stores, apparel retailers, drugstores and so forth, Porter says many inner city residents must travel outside of their neighborhoods for the kind of world class shopping suburbanites take for granted.

At the same time many of the historic impediments to doing business in low income communities are falling. Crimes rates are dropping and cities like San Bernardino are working to reduce regulatory obstacles, improve infrastructure, code enforcement and spur retail development.

"For retailers, the message should be clear: America's inner cities are the next retailing frontier, and they are growing in our own backyards."

After decades of decline, despair and neglect residents and business owners along Baseline and Waterman are cautiously optimistic.

"It's not as simple as putting up a new store, planting grass and shooing the homeless, petty criminals and drug dealers from the corner. They've got to bring job opportunities and hope to people who have been ignored," said Raj who owns a neighborhood dry cleaners.  

Donald Barnes a physician's assistant (PA) who works at a nursing home near the planned drugstore agrees. "If African-Americans and other ‘legal' residents are offered job opportunities as Walgreens promises, the phoenix will spread its wings and take flight. On the other hand if they come hoping to make a windfall by handing those jobs to low wage immigrants like the rest of these businesses - the truth," he said, "will rise and the phoenix will wither and die."