Crain's Chicago Business, January 8, 2024 by crainschicago

CHICAGOBUSINESS.COM I JANUARY 8, 2024

Airlines anxious over cost of O’Hare rebuild United and American are raising the stakes at a crucial point in the city’s biggest economic development project I By John Pletz

could threaten Chicago’s status as one of the nation’s busiest airports. The airlines say the cost of a rebuild of Terminal 2 and the addition of two satellite concourses, as well as some related projects, now is pushing $7.6 billion, up from an estimated $7.1 billion in 2022. United and American have been warning airport officials for months that the cost of See O’HARE on Page 18 GETTY

ith a key part of the O’Hare International Airport terminal upgrade poised to move forward next year, the airport’s two biggest carriers are growing more worried about the rising cost of the project. United Airlines and American Airlines are raising the stakes at a crucial point in the city’s biggest economic development effort. It’s a game of chicken that ultimately

Tesla’s Cybertruck isn’t a Rivian killer yet It will take time for Elon Musk’s team to ramp up production of the long-awaited vehicle By John Pletz

Tesla finally launched its long-awaited Cybertruck on Nov. 30, but it’s going to take at least another year to ramp up production. Tesla is the juggernaut of the electric-vehicle industry. But CEO Elon Musk has hit plenty of potholes on his journey into the truck market, which may give upstart Rivian a little more breathing room to build up its own capabilities before facing the full onslaught of its formidable rival. Tesla is expected to produce

about 75,000 trucks this year, Baird Equity Research estimates. Rivian is expected to increase production at its plant in Normal to 75,000 to 80,000 vehicles, up from about 50,000 in 2023. “The delays for the Cybertruck have been a birthday gift for (CEO) RJ (Scaringe) and Rivian,” says Dan Ives, an analyst at Wedbush Securities. It also helps that they’re not necessarily chasing the same customers. The Cybertruck looks like something from an old Schwarzenegger movie. Prices will range from

$60,990 to $99,990, before incentives, although the lowest-priced model won’t arrive until 2025. Rivian’s R1T looks more traditional and is priced at $73,000 to $93,000. Rivian appears to have gotten through the hardest part of de-risking its product and manufacturing process — hardly a given for a startup in the auto industry. Now it has to scale things up. “Rivian is doing well and doing what they need to do,” says Stephanie Brinley, an analyst with S&P Global. She adds that Tesla’s an-

ticipated ramp-up in production in 2025 could coincide with Rivian bringing on more capacity at a new plant in Georgia. Tesla aims to make 250,000 trucks a year by 2025. It still faces challenges in ramping up production of its new truck, which is made of stainless steel and has a new type of voltage architecture. “They can scale quicker than anybody,” Ives says, but he notes that Rivian isn’t Musk’s only target. “Tesla is clearly going after Rivian, Ford and a host of others in the industry.”

A Tesla Cybertruck at a Tesla store in San Jose, Calif. I BLOOMBERG

DAN MCGRATH Joey Meyer’s firing was a self-inflicted wound that still hasn’t healed at DePaul. PAGE 2

THE TAKEAWAY Vacations By Rail co-founder Todd Powell talks about traveling more than 200,000 miles by train. PAGE 6

DAN MCGRATH ON THE BUSINESS OF SPORTS

Joey Meyer’s firing still hasn’t healed at DePaul

oey Meyer died Dec. 29 at 74, and the turnout for his wake at St. Vincent DePaul Church on Wednesday would have made for a nice crowd at a DePaul University basketball game these days. The analogy speaks to the high regard those within the DePaul community still have for the Dan Meyer family, and McGrath to the languishing state of DePaul men’s basketball more than 25 years after Joey’s crude dismissal as coach brought an unceremonious end to the storied Meyer Era. Ray Meyer coached DePaul basketball for 42 years, highlighted by a Final Four run in 1979 that turned the “little school under the el tracks” into a national story. After playing for his dad, Joey Meyer was at his side for 16 of those years as his top assistant and frequently

bemused attache. DePaul had known some lean times in previous years, and while Ray reveled in the attention, it didn’t change him. “We had the national media on campus leading up to the Final Four, and of course Coach let them in to watch practice,” Joey once recalled. “But we couldn’t get started until Coach and Louie the janitor finished their half-court shooting contest.” A year earlier they had a home visit scheduled with Mark Aguirre, a freshman standout on the Final Four team, future All-American and one of the top recruits in the U.S. “It was a Sunday afternoon. I picked up Coach and said, ‘Let’s go, we don’t want to be late.’” “He said, ‘Can’t we wait till the end of the Bears game?’” Joey’s immersion in the family business was bad news to his mother Marge. “She wanted me to go to law school,” he said, but it was a glorious time, and Joey’s role in it can’t be overstated — he was responsible for most of the recruit-

ing and much of the coaching. He took over following Ray’s retirement in 1984 and sustained DePaul’s success for a solid decade. But the Michael Jordan Bulls’ emergence as Chicago’s winter team and a convergence of other forces beyond his control led to a gradual unraveling: a “boycott” by high school coaches over grievances more imagined than real; a dyspeptic newspaper columnist who’d find fault with a Pacific Coast sunset, and an outsider athletic director who decided the Meyer Era was too mom-and-pop for his lofty ambitions. Five successors have come and gone without restoring the glory, and the sixth hasn’t shown much promise. Perhaps Joey’s greatest failing as a coach was that he wasn’t his dad; he didn’t have that endearing “America’s Grandfather” persona to charm and disarm his critics. But he was a good coach and a truly good man — bright, witty, thoughtful, considerate, still a revered figure

among his former players. “I’ve known him since I was 15 years old,” said Tom Kleinschmidt, who is now 50 and was the last high-profile recruit Joey landed. The transition from top recruit to top player wasn’t seamless, and his frustration led to occasional pouting and threats to leave. “Joey finally sat me down and said, ‘Where do you want to go? I’ll help you pack.’ I needed that tough love at the time.” Kleinschmidt is now a coach himself, having led DePaul College Prep to a state title last season. The experience has strengthened his appreciation for his former coach. Kleinschmidt’s eyes glistened as he recounted one exchange. “My first year, I called Joey and I said, ‘Man, I have to apologize to you. I was such a pain in the ass.’ Joey just laughed. He was never one to hold a grudge.” Joey was through with DePaul but not with basketball after his dismissal. He made three coaching stops and won three titles at what

was then known as the NBA’s D-League. It was a primitive operation in its early days; Joey once bought bread and cold cuts at a convenience store for a postgame meal when his Fort Wayne Mad Ants couldn’t find an open restaurant after a road game. On another occasion, the team bus couldn’t navigate the drive-thru window of a 24-hour fast-food joint because of a low-hanging canopy; Joey persuaded the manager to allow the players walk-up service at the drive-thru. The glamour and glitz of the Final Four must have seemed like a distant memory as the Mad Ants dined on fast-food burgers by the side of the road on a cold Massachusetts evening. “Why?” I asked him once on a visit to Fort Wayne. “I have the gene,” Joey said. “I still love the game. I love being around it, love teaching it.” Crain’s contributor Dan McGrath is president of Leo High School in Chicago and a former Chicago Tribune sports editor.

ORPHE DIVOUNGUY ON THE ECONOMY

The charlatans of doom were wrong again in 2023

t’s that time of the year again, the period when most CEOs, market analysts, bankers, economists and other experts and non-experts alike make their predictions for the new year. Many incorrectly predicted a global and U.S. economic recession in 2023, based on concerns about elevated inflation and rapid tightening of monetary policy. Orphe Fast forward a year, and most Divounguy forecasters have learned their lesson. American households and businesses are savvy and resilient. Even the social media prophets of doom have mostly fallen silent, replaced by renewed optimism that the Federal Reserve might be able to stick the landing. However, this positive outcome is far from guaranteed, given the potential crosswinds of political polarization, dysfunction in the nation’s capital and the uncertainty associated with an election year. Since the Fed initiated its campaign to combat inflation, the doom and gloom forecasts have been somewhat of a consensus, which led some observers to label a 2023 recession one of the “most anticipated recessions’’ of all time. Job losses were expected to drive up the unemployment rate, cause significant drops in U.S. house prices and global stock markets were expected to see big losses. Perhaps the forecast that carried the most weight was the Fed’s Summary of Economic Projections. The median forecast predicted the unemployment rate would rise to 2 | CRAIN’S CHICAGO BUSINESS | JANUARY 8, 2024

4.6% in 2023 while core inflation, as measured by the Personal Consumption Expenditures Price Index, would moderate to 3.1%. As it turns out, that forecast missed the mark as well. Members of the Federal Open Market Committee have since revised their projections, raising their forecasts for real GDP and lowering their unemployment rate predictions. Despite some economic slowdown, the U.S. economy has demonstrated resilience, with the unemployment rate remaining at a low 3.7%. Declining energy prices and easing supply-side challenges have contributed to a reduction in headline inflation. The combination of a resilient labor market and lower inflation has pushed real wages higher and supported household budgets. After declining in 2022, financial wealth also saw an increase in 2023. The average expert forecast now points to no recession. But while the news has generally been positive, renewed optimism doesn’t guarantee a favorable outcome. The labor market has already shown signs of normalization. In November, financial conditions eased, yet monthly job growth, which included the roughly 40,000 to 50,000 workers returning from strike actions, continued to slow toward its pre-pandemic pace of roughly 194,000 jobs per month. Although nominal wage growth remains somewhat higher than usual, it is moderating and unlikely to re-accelerate. The housing market has also already normalized. According to Zillow data, home values are only up 2.7% compared to a year ago, and annual rent growth — the largest and stickiest component of core inflation — has cooled to just

3.3%. The typical rent grew roughly 4% annually before the pandemic. In November, the annual increase in the Consumer Price Index, which still overestimates rent prices, fell to 3.1%, its lowest level since March 2021. Along with the deceleration in price increases, expected inflation declined. Year-ahead inflation expectations plunged to 3.1% from 4.5% the previous month, causing more restrictive monetary policy. There’s also the matter of large non-financial companies lacking

the cash to deal with maturing debt in 2024. Refinancing at current rates would mean billions of dollars in additional interest costs, clearly a major headwind for the soft-landing scenario. Policy uncertainty due to increased political polarization in the nation’s capital will be another crosswind. The possibility of a highly contested election could further dampen economic growth in the second half of 2024. Further declines in inflation

and expected inflation should prompt the Fed to consider a loosening of monetary policy. Failure to do so could inflict more economic pain than necessary to bring inflation down. In 2024, the Fed will have stay nimble and shift its focus to keeping Americans employed. Orphe Divounguy, a senior economist at Zillow Group and executive adviser at Quantitative Research Group, writes a monthly column for Crain’s.

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What AbbVie gets with pricey ImmunoGen buy The North Chicago drugmaker is scrambling to reignite growth as Humira sales tank

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Why Illinois isn’t helping to ease U.S. housing crisis The Land of Lincoln is tied with two other states for last place in homebuilding I By Dennis Rodkin

s the nation’s housing market struggles with an extreme lack of inventory of for-sale homes, one of the most often mentioned solutions is to build more homes. Because the U.S. is short about 6.5 million homes, according to a Realtor.com study, it’s imperative that new supply get built. Illinois isn’t helping. New data shows that among the 50 states, Illinois is tied with two others for building the fewest new homes. See HOMEBUILDING on Page 18

A relatively flat population has meant there’s little incentive for homebuilders to add to the housing pool in large numbers.

AbbVie’s agreement to pay a rich premium for a cancer drugmaker shows how badly it needs to kickstart growth as sales of its leading product plummet. AbbVie announced on Nov. 30 its intent to buy ImmunoGen for $10.1 billion, or $31.26 per share, nearly double ImmunoGen’s share price of $16.06 at market close the day before the deal. The 95% premium exceeds even the high markups in other recent pharma deals of similar size. It’s far more than the 20% premium Deerfield’s Horizon Pharmaceuticals fetched in its sale to Amgen a year ago. More recently, Merck & Co. paid a 75% premium to acquire Prometheus Biosciences for $10.8 billion, and Biogen paid a 59% premium in its $7.3 billion purchase of Reata Pharmaceuticals. Massachusetts-based ImmunoGen makes Elahere, a treatment for certain kinds of ovarian cancer that received accelerated approval from the U.S. Food & Drug Administration in November 2022. In the first nine months of 2023, the drug brought in more than $212 million in revenue, according to ImmunoGen records, and sales are expected to grow significantly in years to come. “The acquisition of ImmunoGen demonstrates our commitment to deliver on our long-term

growth strategy and enables AbbVie to further diversify our oncology pipeline across solid tumors and hematologic malignancies,” AbbVie CEO Richard Gonzalez said in a press release announcing the buyout.

ImmunoGen makes Elahere, a treatment for certain kinds of ovarian cancer that received accelerated approval from the U.S. Food & Drug Administration in November 2022. The deal is Gonzalez’s latest move to fill the enormous gap created by declining sales of Humira, a multipurpose drug that peaked at $21 billion in annual sales in 2022, representing 36% of AbbVie’s total revenue. The long-delayed arrival of generic competition in the U.S. earlier last year sent Humira sales into a tailspin, and AbbVie is scrambling to find new drugs to offset the revenue losses. Elahere would help, but it’s only part of the solution. Morningstar’s Damien Conover and See ABBVIE on Page 17

What Hyundai selling on Amazon means for the industry Cars Commerce CEO Alex Vetter insists that his company’s ability to sell cars trumps the scope of the Hyundai-Amazon pilot project By Mark Hollmer, Automotive News

Hyundai created a commotion Nov. 16 with the announcement it would start selling a full portfolio of its vehicles on Amazon’s shopping platform, with an initial 18 dealers taking part in the pilot in January. Cars Commerce CEO Alex Vetter took notice. Soon after the news broke, Vetter posted a cheeky tweet on X (formerly Twitter) promising that his company facilitates the sale of vehicles far better than Amazon — a global vendor of everyday goods — ever could. He wrote, in part: “@Hyundai — please dm me, we can enable ALL of your retailers vs 18 and do

it with people actually buying cars, not dog food.” If successful, the AmazonHyundai partnership would compete with companies such as Cars Commerce, which includes the Cars.com marketplace along with digital experience, trade and appraisal, and media operations. Vetter, 53, had plenty more to say about the announcement. He spoke with Staff Reporter Mark Hollmer of Crain’s sister publication Automotive News. Here are edited excerpts. Q: Is this pilot a big deal? A: Anytime you pilot any new technology or experience with a subset of your dealer network, I applaud it because I’m advocat-

ing for this industry to do far more digitally. Could Amazon’s size and reach pose a competitive risk to existing listings companies? Anytime any of the big horizontal tech giants want to enter an industry, you have to pay attention. I also remind you, though, that buying a car is a multichannel experience, meaning consumers are never one and done. They are seeking out trusted, credible, independent objective advice and we see this reliably in our 25 years of data. Close to 30 million people every month are coming to Cars.com to seek out our expert opinions, reviews

“During the quarter, we made strong strategic moves that advanced our platform strategy and unlocked future growth,” Cars Commerce CEO Alex Vetter said in a statement. I CARS.COM PHOTO

and comparison shopping. Can Amazon handle vehicle sales? People use Amazon to shop for

everyday goods. [But a car] is a big-ticket item, so consumers are going to do heavy amounts of See AMAZON on Page 17

JANUARY 8, 2024 | CRAIN’S CHICAGO BUSINESS | 3

Two new houses in East Garfield Park sold for prices upward of $950,000 each At close to $1 million, the Monroe Street pair set a new benchmark in the West Side neighborhood By Dennis Rodkin

A pair of newly built houses in East Garfield Park sold in December for more than $950,000 each, a new benchmark for the West Side neighborhood. The houses, on Monroe Street three blocks west of the United Center, are one side of builder Melvin Bailey’s strategy for what he calls “building our community, the community my family grew up in.” The other side is a pair of houses going up on Walnut Street that will be priced for more moderate-income buyers, around $290,000 with subsidies provided by the city, Bailey said. “Change is coming” to East Garfield Park, the next step west from the booming West Loop, said Bailey, whose firm, MKB Business Strategies, partnered with Joudeh Investments on the Monroe houses. But by building for both ends of the housing market, “we can add to the neighborhood’s beauty and safety and stability. It’s about time we did.” The founder of Community Male Empowerment Project, Bailey trains and hires ex-felons and others who need help entering the job market, which is “another part of what we do that reduces crime,” he said. Bailey also built an eight-unit condo building a few blocks away on Adams Street, one of two recent buildings facing each other on the 2300 block where condos

The Monroe Street houses are nearly identical contemporary-styled houses. I PHOTO BY DENNIS RODKIN

sold in the $400,000s. The Monroe Street houses are nearly identical contemporarystyled houses, seen above in a photograph that was taken on a rainy day and thus gives the false impression that the metal portion of the exterior is discolored. They have five-bedroom layouts with sleek kitchens, fireplaces and baths. The higher-priced sale was the corner lot. It sold Nov. 28 for

$975,000. The interior house sold Dec. 1 for $955,000.

More development coming With the Chicago Blackhawks’ $65 million development plan a few blocks east, “we know there’s more development coming to this area,” said Mario Encinas. A personal injury attorney, Encinas bought the corner house with his wife and fellow attorney, Rosa Encinas.

Ashley and Thomas Cole, who bought the other house, said they house hunted everywhere from Bronzeville to Wicker Park and settled on this one in part for the ease of commuting into the Loop and in part for the space. “We like the modern look and feel,” Ashley Cole said, “and in terms of growing our family, having the space.” The previous high in the neighborhood was $699,000, which buyers paid in April 2022 for a nicely

restored 19th-century greystone. Bailey rejects the notion that he’s gentrifying the neighborhood. “I would say things are looking much better in the neighborhood where my parents went to high school,” he said. “Thirty years ago, when the Henry Horner Homes were here, nobody cared about the neighborhood.” The Chicago Housing Authority’s Henry Horner project, which filled 10 square blocks with seven- and 16-story buildings, was demolished in 2006. The Monroe houses are on lots that were not part of the CHA footprint but were vacant for an unknown number of years before the city deeded them over to Bailey’s firm and Joudeh Investments in September 2022. The new houses fill in a blank spot on a block that, like many around it, is mostly handsome old 19th century row houses that have survived decades of disinvestment. Danielle Dowell and Arianna Esper of Berkshire Hathaway HomeServices Chicago were the listing agents for the pair of houses. The attention from buyers for the houses, which went on the market in mid-September and were both under contract to buyers by early November, told Dowell that “it’s a great spot,” she said. Sharon Aguilera of Anaya Realty represented the $975,000 buyers, and Melinda Jordan of Jameson Sotheby’s International Realty represented the $955,000 buyers.

How remote work will bite some startup backers At least 25 Illinois investors are on the hook to repay the state nearly $1 million in ‘angel’ tax credits By John Pletz

A tax break designed to coax wealthy individuals to put their money into startups is coming back to bite some of those investors in the wallet. The state of Illinois is poised to claw back tax breaks from investors who backed fledgling companies that now are failing to meet in-state hiring requirements, largely because of a surge in remote work that resulted from the COVID-19 pandemic. Some companies that opted to hire the best talent wherever they could find it now are running afoul of a little-noticed provision of a program that has been touted as a success in encouraging more startup investment. The Illinois Department of Revenue says that so far 25 investors will have to pay back nearly $1 million in tax credits because several startups no longer comply with the law’s requirement that 51% of a company’s jobs and 75% of the 4 | CRAIN’S CHICAGO BUSINESS | JANUARY 8, 2024

new positions created during the three years following an investment be located in Illinois.

Fine print The situation highlights the often-unintended consequences of the fine print that gets written after laws are passed, as well as the many ways in which post-pandemic realities of business are still unfolding. “The current rules do not reflect the massive changes in hiring practices following COVID and are forcing companies to make the impossible decision of choosing between hiring the best people across the world or penalizing their earliest financial supporters,” says Stephen Ross, a principal with Hyde Park Angels, a Chicago angel-investor group. HPA has been notified by four companies in its portfolio that they are no longer in compliance with the state’s rules. Among them is Chicago-based Rheaply, which operates an on-

line platform that helps companies reuse and sell used laboratory and office equipment. About 60% of its roughly 60 employees are in Illinois. The company meets the 51% threshold specified in the statute but not the 75% requirement for new jobs, which was created in 2018 by the Legislature’s 12-member Joint Commission on Administrative Rules. “We try to prioritize local candidates in the interview process, but there are situations that cause us to hire outside of Chicago in an effort to maintain the health of our business, especially as it relates to servicing customers outside of Chicago,” says Rheaply CEO Garry Cooper. The company says its business in New York and other markets increased, along with office vacancies that resulted from hybrid work in the wake of the pandemic. The Illinois angel tax-credit program was launched in 2011 as

a way to encourage early-stage investment in startups, which often comes from wealthy individuals who are referred to as “angel” investors, rather than larger, formal investment firms, such as venture-capital funds. Investors can receive a tax credit of 25% of their investment up to $2 million. The pool of credits available annually is $10 million. Since the program started, 473 companies have received investments that qualified for $98 million in tax credits.

Helpful tool Victor Gutwein, managing director of early-stage fund M25, has taken advantage of the credit but also says it’s a helpful tool in enticing individual investors to fill out a seed investment round. One of M25’s portfolio companies received a letter in July that it was out of compliance, and Gutwein says about two dozen local angel investors have been comparing notes on

the issue for several months. Investors are calling on the state to change the program’s rules. “This made total sense in a preCOVID world, but it makes no sense in a post-COVID world where the entire planet has gone virtual,” says Christopher Deutsch, an angel investor who heads Lofty Ventures. Deutsch estimates he’s received more than $100,000 in tax credits related to a dozen investments. “This is not a complicated thing. They need to fix it.” Indiana, Kentucky and Wisconsin have similar investment-credit programs, which require that 50% to 51% of a startup’s jobs be instate. The Illinois Department of Commerce & Economic Opportunity, which administers the angel tax-credit program, says it’s “examining the implications of the current policy and evaluating potential program improvements.”

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THE TAKEAWAY

A Chicagoan to know: Todd Powell of Vacations By Rail

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Powell, 54, is co-founder of Vacations By Rail, the largest provider of train trips in the country. The Chicago firm was acquired by U.K.-Based Great Rail Journeys in 2019. Powell has traveled more than 200,000 miles through more than 30 countries on monorails, funiculars, cogwheels, steam, heritage and highspeed trains, among others. Powell and his wife live in Western Springs with their two children, 16 and 13. I By Laura Bianchi Where did you get your adventurous spirit? My mom made a big impact. She would take my siblings and me to what she called “the treasure forest” in Downers Grove, where we would use our imaginations to create adventures. Your early years? My parents divorced when I was 12 and my mom worked hard to shield all of us from the financial challenges. My brother, sister and I spent a lot of time with our grandparents and worked odd jobs for spending money while our mom went to law school. Eventually she became a prosecutor and public defender. When did you fall in love with train travel? My first train trip was a solo venture during college in Rome, when I went snowboarding in Switzerland. After several hours I fell asleep, and when I woke up, we were emerging from a tunnel into a truly magical scene: the Swiss Alps, covered in more snow than I had ever seen, with charming Swiss chalets dotting the valley. I was hooked. A harrowing tale? Several days before flying from O’Hare to college in Rome, I had all of my wisdom teeth pulled. Novice mistake on my first international flight. As soon as we took off, the sockets started bleeding nonstop. What a nightmare.

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What happened? Eight hours later, some medics at Rome’s Fiumicino International Airport threw me in an ambulance and rushed me to a hospital. I had no money. I didn’t speak Italian. Finally, I found some college paperwork in my bag and the hospital contacted someone at school to pick me up. I slept for 36 hours after that.

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A travel tip? Adopt the “slow travel” philosophy.

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6 | CRAIN’S CHICAGO BUSINESS | JANUARY 8, 2024

For instance? Instead of rushing from place to place, hang out in a café or bar and see what develops. In my 20s, I was in Berlin by myself at a bar that some local Lucky Strike cigarette girls recommended to me. After a couple of hours sipping a beer,

a local guy invited me to join his group. They took me from bar to bar and we had a great time. What do you envision for rail travel in the future? In the United States, we may not see high-speed train networks anytime soon. However, we are headed toward faster, more reliable trains. President Biden’s announcement in November of $16.4 billion for Amtrak’s Northeast Corridor was a good sign.

Northwestern explores possible breakthrough in gene, cell therapies By Jon Asplund

Northwestern University synthetic biologists say they’ve found a way to deliver cell and gene therapies into the body that breaks through a major barrier in bringing treatments to market. The biologists have developed a flexible new platform that mimics natural processes used by viruses, binding to target cells and effectively transferring drugs inside, Northwestern said in a press release. They’ve built extracellular vesicles (EVs) — “tiny, virus-sized nanoparticles that all cells already naturally produce” that can direct cells to self-assemble custom EVs designed to have useful surface features and produce and load the EVs with biological drugs. “In proof-of-concept experiments, the particles successfully delivered biological drugs — in this case CRISPR gene-editing agents that knocked out a receptor used by HIV — to T-cells, which are notoriously difficult to

target,” the release said. The research, published Nov. 27 in the journal Nature Biomedical Engineering, marks the first study to successfully use EVs to deliver cargo into T-cells, the release said. “The genomics revolution has transformed our understanding of the molecular bases of many diseases, but these insights have not resulted in new medicines for one fundamental reason: We lack the technology needed to deliver targeted medicines to specific sites in the body where they are needed,” Northwestern’s Joshua N. Leonard, who led the study, said in the release. “These shared delivery challenges are holding us back. By making broadly enabling delivery platforms available, we can remove a huge amount of risk and cost from bringing new drugs to clinical trials or to market. Instead of designing a new delivery system every time a company makes a new drug, we hope that they can instead use modular, reconfigurable platforms like ours, thus accelerating the rate at which gene

and cell therapies are developed and evaluated.” Leonard is a professor of chemical and biological engineering at Northwestern’s McCormick School of Engineering and a key member of the Center for Synthetic Biology. He also launched Syenex in 2022, one of 12 startups housed at Northwestern’s Querrey InQbation Lab. Leonar’s multidisciplinary team also includes Julius Lucks, a professor of chemical and biological engineering at McCormick and CSB member, and Judd Hultquist, an assistant professor of medicine (infectious diseases) and microbiology-immunology at Northwestern University Feinberg School of Medicine, the release said.

Promising outlook Gene and cell therapies hold promise for treating a wide range of diseases, if challenges surrounding the delivery vehicle are surmounted, the release said. With a delivery vehicle, gene therapies enter the body to transfer genetic material into specific

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Biologists have developed a flexible new platform that mimics natural processes used by viruses, binding to target cells and effectively transferring drugs inside

cells to treat or prevent disease, it said. Similarly, cell therapies transfer full cells, which are typically modified outside the body before being administered, the release said. “Viruses have a natural ability to enter cells and deliver cargo,” Leonard said in the release. “Borrowing viral parts is an effective strategy for achieving delivery, but then you are somewhat limited to the types of delivery that the virus evolved to do. It takes substantial engineering work to tweak those systems to alter their functions for each application. In this story, we instead attempted

to mimic the strategy that viruses have evolved, but we used new biological ‘parts’ to overcome some limitations of viral vectors and ultimately make new functionalities possible.” The newly developed platform, GEMINI (Genetically Encoded Multifunctional Integrated Nanovesicles), can provide a suite of technologies for genetically engineering cells to produce EVs, the release said. Through Syenex, GEMINI and other synthetic biology technologies could rapidly generate delivery vehicles for developers “from academic spinouts to mature biotechnology companies,” the release said.

JANUARY 8, 2024 | CRAIN’S CHICAGO BUSINESS | 7

Here’s why electric vehicles have become a political football The EV discussion encapsulates a host of issues dominating the nation’s political conversation: the cost of living, reliance on Chinese manufacturing and cultural factors such as the feasibility of the cross-country road trip By Molly Boigon, Automotive News

fairs at SBD Automotive. Georgia, for example, is investing in EV and battery manufacturing.

There’s a new topic for heated political debates around the dinner table this holiday season: electric vehicles. Likely the largest factor driving this uptick in EV chatter is the 2024 election, where Republican presidential candidates including Donald Trump and Vivek Ramaswamy have lumped the pro-electric vehicle crowd with coastal elites, socialists and other rhetorical targets of the political right. Ramaswamy said EV incentives championed by President Joe Biden are “using our taxpayer money to subsidize some other guy to feel cool about himself because he doesn’t have selfesteem, so he wants to own an electric vehicle.” At the other end of the table are EV proponents who see the technology as an existential issue and argue that the U.S. needs to dramatically slash carbon emissions to slow global warming. Trading fossil fuel vehicles for their electric counterparts is one of the fastest ways to slash greenhouse gas emissions and achieve that goal, they say. The discussion also encapsulates a host of issues dominating the nation’s political conversation: the cost of living, reliance on Chinese manufacturing and cultural factors such as the feasibility of the cross-country road trips that remain an element of American identity. “There’s certainly been a large uptick in the amount of polarization around EVs,” said Robert Fisher, domain principal of electrification at SBD Automotive, a research and consulting firm. That polarization “is a very credible, serious threat” to wider adoption.

Competing on cost

Early opposition As far back as the fuel-efficient Toyota Prius hybrid, which was introduced to the U.S. in 2000, clean cars have been scorned by the political right. “They are doing this as a status thing to make it look like they care and that they are saving the environment,” Rush Limbaugh said on a 2007 episode of his radio program. It “is a bunch of liberals doing it.” Despite EV pioneer and Tesla founder Elon Musk’s growing affiliation with conservative U.S. politicians, the association between electric vehicles and lefty politics never quite went away. In October, University of California Berkeley’s Energy Institute 8 | CRAIN’S CHICAGO BUSINESS | JANUARY 8, 2024

President Joe Biden views the electric Ford E-Transit Van with Ford Executive Chair Bill Ford (left) and former UAW President Ray Curry (right). | PROVIDED PHOTO

at Haas released a study that found EV ownership correlated with political ideology, even controlling for household income and population density. About half of EVs registered from 2012 to 2022 were in the 10 percent of counties with the highest share of Democratic votes. “This correlation is still there even if we account for other factors that we think might play a role in EV adoption,” said one of the study’s authors, Katalin Springel, assistant professor at the business school HEC Montreal.

‘Easy target’ As the nation approaches another election year, both sides of the political aisle are vying for the coveted white middle-class voter, said William O’Reilly, partner at political consulting firm The November Team. Republican voters are concerned about “fundamental American” economic freedom and choice, he said. So the Biden administration’s actions on EVs — both incentives and regulations — can be pitched to those voters as mandates and government overreach. “For anyone trying to reach working-class and middle-class voters, it’s just an easy target,” O’Reilly said. At the national level, a group of senators has introduced a bill that would block the EPA’s draft rules on vehicle emissions, a regulation analysts say would encourage EV adoption. The agency

is proposing changes that would set new emissions standards for the 2027 through 2032 model years, requiring about two-thirds of 2032 new light-vehicle sales to be zero emission. A report from Harvard’s Environmental and Energy Law Program found the proposed standards are “ambitious” but “largely consistent with what the industry is projecting for itself.” Consulting firm GlobalData projects less than 40 percent EV share of the U.S. market in 2030. But according to the Choice in Automobile Retail Sales Act sponsors in the Senate — 32 Republicans and one Democrat — the regulations are part of the “EPA’s radical agenda, which is driving up costs for people and handing the keys of America’s auto industry to China.” That framing may resonate in large swaths of the country. Republican leaders are taking efforts to slow the transition with state and federal legislation. Sen. Deb Fischer, R-Neb., for example, introduced the “Stop EV Freeloading Act,” which would charge manufacturers a one-time fee of $1,000 per electric vehicle to pay into the Highway Trust Fund. That reserve helps states pay for federal highways and comes from the federal gasoline tax. “If the federal government intends to continue pushing EV manufacturing and adoption, then it must also devise a strategy to ensure EVs pay their fair share

for road maintenance,” said Fischer’s one-pager on the legislation.

State rules In Texas, EV drivers have to pay $400 to register their vehicles and $200 to maintain their registration each year. That money also goes into a highway fund. Other states, including Kentucky and Oklahoma, have approved taxes for EV charging stations. At the other end of the spectrum, blue-state California offers up to a $9,500 incentive — depending on the buyer’s trade-in, income bracket and residence — for EV purchases. The state is requiring that all new vehicles sold after 2034 be zero-emission cars, such as those powered by batteries, plug-in hybrid systems or hydrogen fuel cells. In red states, the disincentives make it harder to purchase EVs, said SBD’s Fisher. That creates a cycle: Political opposition reduces financial assistance and maintains EVs’ high cost, which creates more political opposition. “It’s a bit of a self-fulfilling prophecy,” he said. “If you say, ‘No, we don’t think electrification is the future, it’s a waste of government money,’ well then you’re also going to make it more difficult for your people to achieve that future, even if they wanted it.” Some Republican-led states do buck the trend, said Riley Keehn, an automotive technology specialist focused on regulatory af-

Republican animus toward EVs could be a problem for U.S. automakers investing billions in the new powertrain technology. China and Europe are far ahead of the U.S. in EV adoption. “Automakers need to be prepared to participate in global markets,” said Stephanie Brinley, a principal automotive analyst at S&P Global Mobility. “Europe and China are going this way, and they’re not going to change, even if there is a little bit of a delay.” Automakers and their EV infrastructure partners have given their opponents plenty of ammunition in the short term. High prices dissuade buyers, according to a report issued last month by S&P Global Mobility. The average transaction price for a new EV in the U.S. was $53,469 in July, compared with $48,334 for new gasoline-powered vehicles, according to Cox Automotive. That price gap is more than twothirds of the maximum federal tax credit on EV purchases or leases. Charging infrastructure is neither universally available nor reliable. At least 1 in 5 charging attempts by EV drivers failed last year, according to J.D. Power’s Electric Vehicle Experience Public Charging Study released in February. Automakers are delaying the rollout of new electric models, and the rate of EV sales growth is slowing. Analysts and political consultants agree that addressing pressing concerns such as infrastructure reliability and cost would go a long way toward getting more conservatives on board with EVs. Automakers and the federal government are investing in the nation’s vehicle charging network. And EVs are expected to become more efficient and less expensive. Tackling issues such as fires and educating consumers about the technology and its benefits — such as smarter, more integrated software, faster acceleration, and savings on fuel and maintenance — will also be key. “We have interwoven EVs so intrinsically with climate targets,” Keehn said. “It really clouds our view of the technological and product benefits that we can get out of” EVs “just from an innovation standpoint.” Molly Boigon writes for Crain’s sister publication Automotive News.

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LET

EDITORIAL

When it comes to cops in schools, local councils should make the call

GETTY

e closed the last year with news that Chicago Public Schools leaders want to move away from the district’s system of school choice, just one aspect of Mayor Brandon Johnson’s vision for the educational system in which he once worked. And now we’re opening the new year with word that CPS brass is angling to make good on another element of Johnson’s education framework: removing police officers stationed in school buildings by next fall. As first reported by Nadig Newspapers, a longtime community media group on the Northwest Side, the Chicago Board of Education is exploring the removal of what are known as school resource officers at high schools, abandoning the current policy of allowing local school councils to decide whether to have up to two police officers assigned to their campus. As WBEZ noted in a report following up on Nadig’s scoop, Johnson campaigned for his current job declaring that “armed officers have no place in schools in communities already struggling with over-incarceration criminalization, profiling and mistrust.” As mayor, however, Johnson has backed off that position somewhat, stating he’s fine with the idea of letting local school councils decide what’s best for their own buildings — though as a candidate, he certainly made his feelings on police presence in schools clear enough. The Chicago Teachers Union has con-

sistently criticized the placement of police officers in schools, arguing their presence — particularly in schools with predominantly Black and Latino student bodies — perpetuates the school-to-prison pipeline and criminalizes situations that would otherwise call for other forms of discipline. So it should be no surprise that Johnson and a Board of Education freshly stocked with his progressive-leaning picks would be aligned with the union on this issue — or any other, for that matter. But some principals will tell you it is bet-

ter to have police in the schools who know the students — often by name — and have been trained to respond to the sorts of emergencies that arise in school settings than to call in unknown officers on an emergency basis. Seasoned resource officers develop relationships with students and staff, contributing to the sense of safety and stability. “You first have to have safety. People need to know we are a safe school,” Taft High School’s principal, Mark Grishaber, told Nadig Newspapers, adding that in the past 15 years the Northwest Side school’s

enrollment has grown from 3,000 to more than 4,000 in large part because the community believes Taft is a safe school. “And now you’re messing with that formula.” There’s also the matter of ensuring the school and its surroundings are safe from outside threats. News out of rural Iowa just days ago confirms what anyone paying attention to the national news already knows: Gun violence can happen anywhere, even in the most seemingly placid locations, and schools have sadly become a flashpoint for this kind of mayhem. With 37 school shootings resulting in injuries or deaths nationwide in 2023, it’s difficult to see how the potential for this kind of violence is any less real in Chicago than it would be in, say, Greensburg, La., or Nashville, Tenn. How does removing trained officers from the city’s high schools make students and staff safer from outside threats? The Board of Education votes this summer on whether to renew an existing $10.3 million contract with the Chicago Police Department to provide the resource officers who help make school buildings more secure. Between now and then, parents with kids in the system have to hope board members come to realize the importance of school resource officers — or at least to recognize what a lousy idea it is to strip local school councils of the power to retain them if they determine that’s what’s best for the students in their care.

PERSONAL VIEW

Economic growth is the single most important job of running a city. Full stop.

nomic growth comes in the form he latest painful news of of organic innovation through a sudden leadership deparvibrant startup ecosystem. tures at World Business Chicago was not even viewed Chicago should be an utterly soas a viable “tech hub” in the 2000s, bering wake-up call for the city’s and while we can never rival Silileadership. con Valley for best in the world, I used to work at World Business becoming a definitive “tier 2” tech Chicago — the city’s publichub (along with New York City, private partnership organization tasked with business attraction John Busch is a Boston, Los Angeles and Seattle) and growth — and I was im- Chicago-based would create vibrancy, prosperity, and hope in direct and indirect pressed with the dedication, tal- tech entrepreways for decades. If successful. ent and results demonstrated by neur and Without economic growth, this small group of leaders. former fellow without a powerful startup flyWhile much of World Business at World wheel and without a rising tide, Chicago was originally designed Business there are fewer jobs to go around, to prioritize business relocation Chicago. lower tax revenues and choppy and attraction, the organization’s leadership began to look inward toward the waters for all ships. While we’re not the country’s finance, end of Mayor Richard M. Daley’s tenure. They knew that while attracting new corpo- entertainment or tech capital, we are derate logos makes for splashy headlines and batably the most affordable major Ameribig office leases, the surest form of eco- can city with a lot of the right ingredients

in terms of human capital, major companies, universities, cultural institutions and a global airport. But there is still so much work to do in Chicago’s journey to becoming a tier 2 tech city. I would argue we’ve actually taken a concerning step back in recent years and hours. These latest leadership departures from World Business Chicago are a further indictment of frustration among the business community. Michael Fassnacht, Mellody Hobson and Mark Tebbe are all die-hard Chicagoans with immense talent and devotion. They don’t need to commit their time to helping this city; they are servant leaders. There is no other way to view this than as a loss. The city’s economy and business community continues to feel pain with ballooning debt, company departures, talent departures, real estate vacancies, deteriorating public services, increased crime and — worst of all — an increased adop-

Write us: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited. Send letters to Crain’s Chicago Business, 130 E. Randolph St., Suite 3200, Chicago, IL 60601, or email us at letters@chicagobusiness.com. Please include your full name, the city from which you’re writing and a phone number for fact-checking purposes. 10 | CRAIN’S CHICAGO BUSINESS | JANUARY 8, 2024

tion of zero-sum thinking. Have we hit rock bottom? Or will we continue to stumble? Many future pages could and should be devoted to solutions now. I won’t pretend I have all the answers or that any are easy. But before we can expect to reverse our actual and perceived setbacks, we must first admit that we have a problem and come to terms with three foundational truths. First, we must realize as a business and civic community that we are involved in competition. The biggest winners of this trend are not stakeholder groups in Chicago, but the other cities vying for our momentum in Indianapolis, Columbus, Nashville, Austin and Miami. Second, all the city’s stakeholder groups exist within the same ecosystem. Our boats rise and fall in the same water and we are on the same team. Lastly, we will not talk or signal our way out of stagnation. Growth is our only way out.

Sound off: Send a column for the Opinion page to editor@chicagobusiness.com. Please include a phone number for verification purposes, and limit submissions to 425 words or fewer.

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LETTERS TO THE EDITOR

In Illinois, the term ‘nonprofit hospital’ is an oxymoron

e: “Northwestern, UChicago tax breaks under scrutiny in new report” (Aug. 14): Nonprofit hospitals deserve more scrutiny than they tend to receive. As nonprofits, these hospitals are exempt from paying most taxes, but in exchange for this exemption, they are expected to provide community benefits and charity care to patients in need. Unfortunately, however, many nonprofit hospitals are failing to keep their end of the bargain. These hospitals operate less like charitable organizations and more like big businesses hungry for profit. This is a growing problem nationwide, including here in Illinois. The Lown Institute found that Illinois’ nonprofit hospitals had a “fair share deficit” of $1.244 billion. That is, Illinois nonprofit hospitals received, in aggregate, $1.244 billion more in tax breaks than what they spent on charity care for low-income patients. Researchers also found that most Illinois nonprofit hospitals are hiding their prices. Earlier this year, PatientsRightsAdvocate.org surveyed 2,000 hospitals nationwide, trying to determine how many were complying with federal price transparency rules. In Illinois, they found that 12 out of 38 hospitals reviewed — just 32% — were in full compliance. The rest were, to varying degrees, less than straightforward with their patients about the cost of care. For patients, these practices have serious consequences, including big unexpected medical bills, which become debt. That’s why Consumers for Quality Care gave Illinois a failing grade in our recently released nonprofit hospital scorecard for the state. Nonprofit hospitals should put their patients first, before their bottom lines, and be held accountable whenever they fail to do so. Dr. Donna M. Christensen is a founding board member of Consumers for Quality Care.

Illinois hospitals are meeting rigorous charity care standards I write in response to “Letter to the Editor: In Illinois, the term ‘nonprofit hospital’ is an oxymoron” (Dec. 5), which assails the integrity of our community hospitals by suggesting there is a willful and pervasive attempt by Illinois’ nonprofit hospitals to sacrifice patient care for financial gain. The charges levied by Dr. Donna M. Christensen represent a narrative that is incendiary and irresponsible and serves to undermine Illinois’ world-class health care system. The author claims Illinois’ nonprofit hospitals are failing to provide the level of charity care and community benefits necessary to justify their nonprofit status. In fact, Illinois hospitals are meeting the clear and rigorous standards laid out in Illinois state law that ensure communities receive value and benefit beyond any property tax exemptions granted. There should be no disagreement about whether Illinois hospitals provide substantial benefit to their

communities, with recent data showing that hospitals provided $6.9 billion in benefits within communities across Illinois. This investment in patient care and local health includes the unreimbursed cost of medical research and education; subsidies and staffing assistance for federally qualified health centers; mobile health services in low-income communities; transportation to appointments; and resources that promote good health, such as healthy, fresh food. Hospitals treat every patient who enters their hospital with im-

mediate medical need, regardless of ability to pay. The most recent data available indicates Illinois hospitals provided almost $900 million in charity care in 2021 to patients who lacked the ability to pay. Programs such as the Chicago HEAL Initiative involve hospitals and are designed to make a measurable difference in the wellbeing of Chicago residents generally, and specifically in 18 neighborhoods with the highest rates of violence, poverty and inequality. Contrary to the author’s claim that hospitals are actively working

to hide the cost of care, IHA and the hospital community strongly support providing patients with meaningful and relevant information about their health coverage so they can make informed decisions about their care. At the state level, IHA supported legislation requiring hospitals to proactively assist uninsured residents in obtaining health insurance coverage and determining eligibility for financial assistance. Federally, the hospital community supported recent actions from the Centers for Medicare & Medicaid Services to enhance price transpar-

ency, and hospitals are working diligently to come into full compliance with the extensive new rules. CMS has acknowledged the significant progress being made by hospitals in meeting these new requirements. Illinois’ nonprofit hospitals and health care professionals work around the clock, every single day of the year, to fulfill their mission to provide quality, accessible and equitable care to Illinois patients and communities across the state. A.J. Wilhelmi is president and CEO of the Illinois Health & Hospital Association.

Corporate Partners of the Art Institute of Chicago impact every corner of the museum, enabling us to share our singular collections with our city and the world. The Art Institute of Chicago acknowledges its premier Corporate Partners, who generously support the museum at the $25,000 level or above. Abbott AbelsonTaylor Group AIG Alex. Brown | Raymond James Allstate Altair Advisers Anonymous Bank of America Baxter Bloomberg Philanthropies BMO

Christie’s CIBC Citadel CNA ComEd The Edgewater Funds Future Wanxiang Foundation GCM Grosvenor Health Care Service Corporation ITW Jenner & Block

JPMorgan Chase & Co. Leo Burnett Madison Dearborn Partners Make It Better Foundation MUFG Bank Northern Trust Sotheby’s Spark Foundry United Walgreens

Our mission is to collect, care for, and interpret works of art across time, cultures, geographies, and identities, centering the vision of artists and makers. We recognize that all art is made in a particular context, demanding continual, dynamic reconsideration in the present. We are a place of gathering; we foster the exchange of ideas and inspire an expansive, inclusive understanding of human creativity.

Visit artic.edu/corporate-sponsorship to learn more about Corporate Partners of the Art Institute of Chicago.

JANUARY 8, 2024 | CRAIN’S CHICAGO BUSINESS | 11

Developers propose office-to-apartment conversion near Old Orchard mall It’s a bold plan that could serve as a blueprint for others amid a flailing office market and strong demand for apartments The rooftop deck of the 740-space parking garage is slated to include a walking track, putting green and gaming area with activities like a putting green and bocce ball, plans show. GW Properties has been busy with retail projects in the northern suburbs over the past couple years. Among other work, the firm redeveloped a shuttered gas station in Northbrook into a retail property that includes a Starbucks and is developing a Shake Shack restaurant in Deerfield. GW also purchased a large property in Bannockburn that was previously home to landscape design company Beeson’s Nursery, where the developer is planning another retail project.

By Danny Ecker

Chicago developer Mitch Goltz has unveiled a $90 million plan to turn a vacancy-plagued office complex near Old Orchard mall into 245 apartments, a bold office-to-residential conversion that could serve as a blueprint for others amid a flailing office market and strong demand for apartments. A joint venture of Goltz’s GW Properties and Glenview-based developer Drake Group won unanimous approval Dec. 7 from the village of Skokie Plan Commission to transform the Old Orchard Towers office property at 5202 and 5250 Old Orchard Road in the northern suburb into a mixed-use residential complex. Under the proposal, which still needs approval from the village’s board of trustees, GW and Drake would convert the majority of the property’s two seven-story buildings into apartments and build out a large outdoor amenity deck on the roof of a 65,000-squarefoot parking garage that stands between the buildings. Plans show that about 32,000 square feet of ground-floor space at the 355,195-square-foot complex would be maintained as office space meant to accommodate existing tenants at the property. “It’s an exciting project and a great location,” said Goltz, whose development firm is better known locally for retail projects but is also developing residential properties in the area. “Skokie is a vibrant market, and there are a lot of opportunities with the growth of Old Orchard.” If the plan comes to fruition, it would be a rare example of an office building being turned into apartments — the type of conversion that developers are mulling and cities are seeking as the remote work movement has fueled a staggering amount of office distress. Many outdated suburban office buildings have little chance of being revived for their traditional office use, prompting investors to pursue them as candidates to be redeveloped with warehouses, homes or multifamily residential uses. In the case of Old Orchard Towers, GW and Drake Group would acquire the property from a venture of Chicago-based real estate firm Zeller, which bought the complex for $64 million in 2007. The Zeller venture in 2018 refinanced the property with a $59.6 million mortgage that matured over the summer, with the complex about 65% leased and likely worth far less than the balance of the loan. The mortgage was packaged with other loans and sold off to commercial mortgage-backed securities in12 | CRAIN’S CHICAGO BUSINESS | JANUARY 8, 2024

Residential projects

Renderings (above and below) show views of the proposed apartment complex conversion of Old Orchard Towers. I GW PROPERTIES

vestors, making much of its financial performance data publicly available. Zeller hired brokerage Cushman & Wakefield in May to market the property for sale as a redevelopment opportunity. Pending village approval of the redevelopment project, GW and Drake would acquire the complex for close to $11 million, according to people familiar with the deal. A sale at about $30 per square foot would complete a massive loss of equity for both Zeller and bondholders in the CMBS loan. Spokesmen for Zeller and New York-based Ares Commercial Real Estate, a special servicer overseeing the loan on behalf of bondholders, did not respond to requests for comment. Goltz said the estimated total

cost of the project would be about $90 million, including the acquisition price.

Rise in rents The developers have good reason to wager on the suburban apartment market. Higher interest rates over the past year have kept many renters from buying homes, a big reason that rents at apartments across the suburbs have jumped this year. But GW and Drake aren’t the only ones looking to add new residential units near Old Orchard. The mall’s owner, Unibail-Rodamco-Westfield, plans to build a 300-plus unit apartment complex on the mall’s campus to bring in new foot traffic after the closure of its Bloomingdale’s and Lord & Taylor anchor department stores.

Just west of Old Orchard Towers, a joint venture of local developers Tucker Development and Wingspan Development Group recently landed financing for a 300-unit apartment project at 5400 Old Orchard Road. Goltz told Skokie Plan Commission members that he anticipates rents at the redeveloped Old Orchard Towers will be slightly cheaper than those offered at new construction projects, estimating a range of $2.60 to $3 per square foot. “We don’t have to command the highest rents in the market, and we’ll be able to offer a product that will be on par with a lot of new construction,” Goltz said during the meeting. The proposal includes 115 two-bedroom units, 84 one-bedroom units, 24 studios and 22 three-bedroom units.

On the residential front, GW is part of a joint venture developing a 21-story, 248-unit apartment building at 218 E. Grand Ave. in Streeterville. GW is also in a joint venture proposing a mixed-use development with 354 apartments at 3955 N. Kilpatrick Ave. near the Six Corners intersection in Portage Park. Led by real estate veteran Tom Drake, the Drake Group is best known in the northern suburbs as a custom homebuilder. Old Orchard Towers was completed in 1981 as the headquarters of drugmaker G.D. Searle, which at the time was led by CEO Donald Rumsfeld after his first tour as U.S. secretary of defense. Pfizer, which acquired Searle in 2003, sold the office complex the following year for $16 million to real estate investors that poured money into renovations and leasing efforts and eventually sold it to Zeller when the property was 75% leased. But the complex suffered some large tenant losses during the COVID-19 pandemic. The most notable was National Louis University, previously the largest tenant in the complex until its lease for nearly 88,000 square feet expired in July 2021, according to a May 2022 DBRS Morningstar report on the CMBS loan. Health care consultancy SG2 leases nearly as much space through the end of 2024, the report said, but the company recently moved out as part of a consolidation of offices by its parent company at the Old Post Office downtown. The property was on track to generate $2.6 million in net operating income in 2022, according to the report, which would have covered only 63% of Zeller’s annual debt service. Cushman & Wakefield brokers Dan Deuter, Cody Hundertmark, Tom Sitz and Dirk Riekse marketed Old Orchard Towers for sale on behalf of Zeller.

PEOPLE ON THE MOVE

Advertising Section To place your listing, visit www.chicagobusiness.com/peoplemoves or, for more information, contact Debora Stein at 917.226.5470 / dstein@crain.com

BANKING / FINANCE

EDUCATION

FINANCIAL CONSULTING

HEALTH CARE

LEGAL

Busey Bank, Chicago

School of the Art Institute of Chicago, Chicago

Peregrine Economics, Chicago

Loyola Medicine, Maywood

Benesch, Chicago

Peregrine Economics announces Chad Coffman as Co-Founder and President. He directs matters involving securities, corporate finance, valuation disputes and regulatory investigations. He analyzes equity, fixed income, and option damages, materiality, market efficiency, and loss causation in securities fraud class actions and opt-out claims. He has provided expert testimony and has been invited by regulators and bar associations to speak on issues related to economic analysis in securities cases.

Loyola Medicine has announced the appointment of Katherine Johnson, MD, as chair of the department of psychiatry and behavioral Johnson neurosciences at Loyola University Medical Center (LUMC) and Stritch School of Medicine, Loyola University Chicago. She is the first woman to chair the department and has been with Loyola since 2016. Rosenblum Loyola Medicine has also announced the appointment of Jordan Rosenblum, MD, as chair of the department of radiology at Loyola University Medical Center (LUMC) and Stritch School of Medicine, Loyola University Chicago. Dr. Rosenblum has been with Loyola since 2009 and is also a professor of neurology and radiology at Stritch School of Medicine and director of neuroradiology at Loyola Medicine.

Denis Yavorskiy has joined Benesch as an Associate in the firm’s Litigation Practice Group. Denis has represented clients in high-stakes litigation across the country involving breach of contract, products liability, environmental regulations, False Claims Act, antitrust, lien foreclosure, and defamation. He has advised clients on litigation matters from a variety of industries, including telecommunications, chemicals and automotive manufacturing, education, and software.

Busey Bank welcomes Kim Becker as Senior Vice President and Treasury Management Executive. Throughout her extensive career, she has been a trusted advisor who takes a consultative and educational approach with clients. Combined with her commitment to building strong relationships, Kim provides treasury solutions and strategies that support the unique needs of Busey’s clients, including their daily cash flow, investments, information reporting and fraud mitigation.

David J. Vitale was appointed as the new chair of the Board of Governors at the School of the Art Institute of Chicago. A recognized leader throughout the city, with a deep history with both the School and museum, Vitale has been involved with the Board of Governors since 2003 and the Board of Trustees since 1993.

EDUCATION School of the Art Institute of Chicago, Chicago

CONSTRUCTION Gilbane Building Company, Chicago Gilbane Building Company welcomes Michael C. Brown back home to Chicago as regional president, overseeing Gilbane’s Midwest and Texas regions. With nearly 30 years of experience, Brown previously spent close to two decades with Gilbane. He brings a unique combination of strong local ties in Chicago and significant national relationships. Brown is a distinguished business leader who exemplifies Gilbane’s core values and is eager to lead our teams to achieve outstanding results for our clients.

Sekile M. Nzinga has joined the School of the Art Institute of Chicago as the School’s first-ever vice president of diversity, equity, and inclusion. In this role, Nzinga will advance the School’s commitment to anti-racism, fairness, and belonging by providing strategic visioning, coordination, and implementation of new and existing DEI initiatives.

FINANCIAL CONSULTING Peregrine Economics, Chicago Peregrine Economics announces Peter Hickey as Co-Founder and Managing Director. He focuses his expert practice in the areas of financial markets litigation and regulatory matters, valuation disputes, and complex commercial litigation damages. He has been retained by the SEC, other regulators, and private investment funds to offer his opinion on complex valuation topics. He testifies in federal and state cases and supports a network of academic and industry experts across the country.

FINANCIAL CONSULTING FINANCIAL SERVICES DESIGN

Lakeshore Financial Group, Chicago

Hitchcock Design Group, Naperville

Welcoming Michael Nicholas, CFA, LSFG’s new Financial Representative, bringing 7 years of valuable experience from his previous role at Northern Trust Bank such as asset allocation, tax-efficient analysis, and the management of ultra-high-networth portfolios. Aligned with LSFG’s approach, Michael is committed to making a difference in clients’ lives. Eager to join a caring team, he aims to contribute personalized strategies for every client. Michael is insurance licensed in Illinois. TC138100(1223)1

Congratulations, Lacey Lawrence, on your promotion to Principal! Lacey has become a recognized leader within our Recreation Team and a valuable contributor to our company. She has been a primary senior level project manager, design lead, and client manager for our team for years, growing a client base, and being a key contributor to the growth of our market sector. Lacey has a unique environmental design skillset and is highly regarded as a mentor and resource for others throughout the company!

Peregrine Economics, Chicago Peregrine Economics announces Candice Rosevear as Co-Founder and Managing Director. She leads a national practice focused on labor and employment, valuation, and complex commercial damages. She provides expert analysis and testimony in state and federal courts on class certification, equal pay, discrimination, wage-andhour violations, market manipulation, and complex valuation. Rosevear also conducts independent research on diversity for a prominent philanthropic foundation.

FINANCIAL CONSULTING

EDUCATION Gradient Learning, Chicago Gradient Learning announced that Monica Milligan has been appointed as its new Executive Director. Monica has served as Gradient Learning’s Chief Program Officer since joining the organization in 2021, after a long track record of excellence across different sectors, roles, and strategies. With more than 15 years of nonprofit, teaching, and education experience combined, she has spent much of her career creating solutions to help reimagine education in our nation’s schools.

P014_CCB_20240108_v1.indd 1

FINANCIAL SERVICES Mesirow, Chicago Rebecca Solomon has joined Mesirow Wealth Management as an Estate Planning Specialist. In her new role, Rebecca will serve as a centralized, specialized estate planning resource for Mesirow’s Wealth Advisor teams, enhancing the firm’s ability to deliver customized, comprehensive wealth plans to its clients. Rebecca brings more than 25 years of experience in advanced estate planning and business succession advice to the team.

Peregrine Economics, Chicago Peregrine Economics announces Scott Walster as Co-Founder and Managing Director. He served as Assistant Director and Financial Economist in the SEC’s Division of Economic Risk Analysis where he directed regulatory investigations on market manipulations, corporate disclosure, securities lending, investment adviser frauds, and broker-dealer violations. He focuses on assisting clients with criminal and civil securities matters and helps them understand the impacts of governmental agency proposals.

LAW FIRM Corboy & Demetrio, Chicago Attorney Conrad C. Nowak has joined Corboy & Demetrio, bringing with him more than 18 years of defense experience in the areas of personal injury, product liability, toxic tort, construction, aviation, and commercial litigation. Conrad, a former partner at Hinshaw & Culbertson, received a J.D. from Loyola University Chicago School of Law in 2002 and a B.A. from DePaul University in 1998. Conrad is a proud U.S. Army veteran, and Crain’s selected him to “Notable Veteran Executives” in 2020.

LAW FIRM Hahn Loeser & Parks, Chicago The Firm welcomed Con Riordan and Andrés Gallegos to its Litigation and Construction Practices. Riordan has decades of experience representing Riordan contractors, sureties and lenders in litigation and transactional construction and surety law. He’s been recognized by both Best Lawyers and Illinois Super Lawyers in 15 straight years. He earned a J.D. from the University Gallegos of Illinois, an M.S. from DePaul, and a B.A. from Notre Dame. Gallegos has experience in commercial litigation, construction, business transactions, privacy law and healthcare law. He’s guided entrepreneurs and small businesses through development, minimizing risks and offering solutions. He earned a J.D. from the University of Illinois Chicago and a B.S. from Southern Illinois.

NONPROFITS The Chicago Lighthouse, Chicago Rosa Carrillo has joined The Chicago Lighthouse as its new Chief Financial Officer. In this position, she will oversee all financial compliance, internal controls, and Information Technology across more than 30 programs via The Chicago Lighthouse’s social services and social business enterprise affiliates. Ms. Carrillo was most recently Associate Vice President and Controller at The Chicago Community Trust. REAL ESTATE ML Realty Partners, Itasca ML Realty Partners is pleased to announce that Rebecca Diipla and Doug Wood were promoted at the firm. Diipla was promoted to Marketing Manager Diipla for her continued implementation and ownership of ML Realty Partners’ marketing campaigns, thoughtfulness of the company brand, and passion about her work since joining ML Realty Partners in 2013. Wood Wood was promoted to Senior Development Manager for his high-quality construction and development work for ML Realty Partners on ground up developments and tenant buildouts since joining the firm in 2021. ML Realty Partners is a long-term investor and developer of industrial real estate in the Central United States.

To order frames or plaques of profiles contact Lauren Melesio at lmelesio@crain.com or 212-210-0707

12/21/23 9:20 AM

A temporary installation draws eyes to an isolated parcel near the Chicago River that’s supposed to honor Jean Baptiste Point DuSable By Dennis Rodkin

Thirty-six years after Mayor Harold Washington dedicated a park named for Jean Baptiste Point DuSable near the mouth of the Chicago River, the first structure has finally been built there. It’s temporary, built of metal pipes and colored canvas. Even so, it resonates back to the late 1700s in a specific way. The structure is 40 feet by 22 feet, the same dimensions as the house where Haitian-born DuSable and his Potawatomi wife, Kitihawa, lived with their two children, earning distinction as the earliest named residents of Chicago. For a park site that has sat barren and remote for an embarrassingly long time, the structure is “way overdue, way, way overdue,” said Nicolas Paul, president of the DuSable Heritage Association, which has been advocating for development of the park for the past two decades, “but it’s something.” Set on an isolated mound east of DuSable Lake Shore Drive and south of Lake Point Tower, the structure is a puzzler for people who see it from the Navy Pier Flyover, the Drive or the sidewalks near the pier — if they see it at all. Printed on the two long sides are questions: “Who found Chicago?” and “Who was Du Sable?” “It’s a mystery when you look at it. That’s intentional,” says Carol Ross Barney, the veteran Chicago architect whose firm, Ross Barney Architects, along with architect Ryan Gann and the DuSable Park Design Alliance, put the structure there for the Chicago Architecture Biennial. QR codes posted where pedestrians and bicyclists might spot them link to a website that describes the history and mission of the long-undeveloped DuSable Park. Ross Barney, best known in Chicago for her design of the Riverwalk, sees the Biennial installa14 | CRAIN’S CHICAGO BUSINESS | JANUARY 8, 2024

tion as both a way to put people’s minds on DuSable and Kitihawa now and to preview what’s to come on the site. Tapped by the Chicago Park District in March 2022 to design DuSable Park in partnership with Brook Architecture, Ross Barney expects to see construction of the park begin in the next few years. That’s because developer Related Midwest announced in October that it’s starting construction of a 72-story apartment tower, the first of two planned for a tight site on the opposite side of the Drive. The fates of the two sites bracketing the highway have long been connected, by agreement with the city. While building the towers, the developer gets to use the park site for equipment staging and in return will build the park, including extending eastward the north-bank esplanade that now ends just shy of the bridge. The extension will make the now inaccessible park site reachable by foot and bike, as will a planned spur from the Navy Pier Flyover. “We will not see this park before probably 2025 or 2026,” Paul said. For now, Ross Barney says the temporary structure and strips of snow fence nearby that represent the outbuildings that were on the 18th-century DuSable homesite “start to tell the story of this entrepreneur’s home that was sort of perched on the edge of this mighty lake.”

Site is a simulation The water’s-edge site is a simulation. The DuSable family’s home actually stood about a mile west, near what’s now Michigan Avenue, when most of the land between there and Lake Michigan, including the park site, was marsh or underwater. The trader and his family lived there from about 1775 until they sold the property and livestock in May 1800. In 2010, city officials renamed the bridge at Michigan Avenue for DuSable, placing the honor close

to the site he owned. At that point, the park site had sat undeveloped for more than 20 years. First designated as a park site in 1985 when the formerly industrial southern section of Streeterville was set to become residential, the 3.44-acres of land isolated east of the Drive was named for DuSable in 1987. The timeline since then is a series of false starts and stops, including cleanup of radioactive leftovers from the industrial era and a developer’s failure to build a 150-story tower called the Chicago Spire on the site Related Midwest now owns. The past 36 years are littered with articles and letters expressing hope that the long-stalled park will finally get built. Among them are an optimistic 2003 letter from Friends of the Parks and a 2018 article in the Chicago Crusader expressing bewilderment that it’s taking so long compared to other projects in the city’s front yard like Millennium Park and Maggie Daley Park. “It should not be this hard,” Paul said. “Something always comes along to push it back. This really shouldn’t be accepted.” Ross Barney, too, bemoans the protracted development time for the park. She said that’s one reason she chose to build the structure, “a kind of lantern to bring you to look over at this spot” that sits otherwise empty. While indigenous people lived in what’s now Chicago for centuries before the DuSable family, honoring DuSable and Kitihawa is a way of marking the beginning of the permanent settlement that became a city. “It’s not about who founded Chicago,” she says. “We know who founded Chicago” in 1837. The DuSables “found their way to Chicago,” Ross Barney said. “All of us found our way here in some way,” whether as immigrants, workers coming to town for a job or students drawn by a university.

KENDALL MCCAUGHERTY, HALL+MERRICK+MCCAUGHERTY

36 years after Mayor Harold Washington dedicated a park, its first structure is built

Minority- and women-owned businesses’ revenue lags counterparts: study Chicago-based Next Street links the disparity to challenges in raising money for operations By Mark Weinraub

Revenue at midsize businesses in the United States run by minority and women owners is lagging similar-sized companies headed by non-minority male owners, a new study found. Next Street, a Chicago-based firm focused on growing small businesses that conducted the survey, links the disparity to challenges minority-run companies face raising money for their operations, limiting sales potential. “More capital helps you put in the investments to actually generate sales but also (helps with) surrounding yourself and the business with good advisory services that could help also grow revenue,” said Charisse Conanan Johnson, co-CEO of Next Street. Companies with owners who are Black, Latino, Asian and other ethnic minorities, along with women and veterans, account for 30% of the 300,000 U.S. businesses with annual revenue between $11 million and $500 million. But those 90,000 businesses account for just 20% of the $13 trillion in revenue generated annually by midsize companies, according to the study, which was funded by JPMorgan Chase. These midsize companies could generate an additional $1.3 trillion in combined annual revenue if their sales grew to match their footprint, the study found. “This is a huge opportunity for our economy and our communities, and we want everybody to understand this because this is not something that one institution and one organization is going to take care of,” said Terry Hill, co-head of emerging middle market at JPMorgan Chase Commercial Banking. “It is an opportunity and challenge for all of us.”

Harder time raising capital Minority-owned businesses reported having a harder time raising capital, with 16% saying the company could not access financing when it needed it, compared with 6% of other businesses, according to a survey of 302 companies conducted as part of the study. High credit costs, difficulty with the application process and doubts about whether an application would be approved were the reasons listed for the inability to raise the capital the company needed. The funding shortfall prevented businesses from hiring advisers and talent who could help boost sales. Minority-owned businesses reported struggles with fundraising despite recording faster growth than their counterparts of similar size. According to the survey, minority-owned companies grew at a rate of 32% compared with a

growth rate of 19% for other companies in their last fiscal year. In addition to the faster growth, the study, which also relied on U.S. Census Bureau data, statistics scraped from websites and artificial intelligence, noted that minority owners of midsize companies are an average of 10 years younger than their counterparts. That finding should allow bankers looking to invest in the sector to develop financial tools and advisory services specifically for newer businesses. “The younger piece of that I think was really like an ‘A-ha!’ ” Conanan Johnson said. “We have the opportunity to wrap our arms around diverse businesses.”

In line with national trend The number of minorityowned middle-market companies in Chicago is in line with the national trends, accounting for 28% of the city’s 10,436 businesses of that size. Revenue also lags at a similar rate, with minorityowned business in Chicago generating just 18% of the total. Overall, midsize businesses in Chicago make up about 3.6% of the U.S. total, generating a combined $464 billion in revenue every year.

Minority-owned businesses reported struggles with fundraising despite recording faster growth than their counterparts of similar size. The city has a recent history of community organizations and businesses assisting smaller counterparts and can use that experience to help boost the middle market, Conanan Johnson said. “Chicago is a very collaborative market,” she said. “I think that kind of collaboration extends to middle-market businesses.” Private-equity firms focused on that type of company have been sitting on their two highest amounts of unused capital at the end of the past two years, the study says. Expectations for a decrease in interest rates in 2024 provide an opportunity for that money to be deployed. The revenue gap for the minority-owned midsize businesses in Chicago is $45 billion a year, according to the study. “I never had the math,” Hill said. “The scale of the opportunity is immense.”

IN DIVERSITY, EQUITY AND INCLUSION

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Wrigleyville’s oldest dive bar to Malört: Quit stealing our mixology ideas Nisei Lounge finds itself at odds with CH Distillery, which took over production of the bitter liquor in 2018, over holiday-inspired infusions By Jack Grieve

It’s hard to imagine someone liking Jeppson’s Malört more than Nisei Lounge bartender Val Capone. The bitter wormwood alcohol that makes most people pucker has been her drink of choice for more than 20 years. She’s been referred to as the “Maven of Malört,” and every year she looks forward to celebrating Malörtsgiving and Malörtsmas. This holiday season, however, Capone and her bar were at odds with the makers of their favorite liquor — and it all comes back to a Christmassy candy cane concoction. Capone, who prefers to go by her wrestling nickname even in professional settings, has the official job title of Director of Malört Infusions for Nisei Labs at Nisei Lounge, the self-proclaimed oldest dive in Wrigleyville. She’s the brains behind the bar’s St. Patrick’s Day special, a Vienna Sport Pepper-infused Malört shot called “Sporty Malörty.” When Lady Gaga headlined Wrigley Field, Capone added edible glitter to the bar’s bottles. Recently, her mixes were Hanukkah-themed. Nisei’s Malört infusions date back to 2016 when a few employees stumbled upon an old box of candy canes behind the bar and decided it best not to let them go to waste. As any bartender would do, they dropped the peppermints into their favorite bottles of liquor — and so candy cane Malört was born. “It became a bar sensation for us,” Capone said. Capone and the folks at Nisei are not the only Chicagoans who have experimented with Malört-inspired infusions. Three Aces in Little Italy is reported to have served Malört mixed with bacon at Chicago’s annual Baconfest in 2013. That same year, Karyn’s on Green took a more upscale approach with vanilla-infused

Malört cocktails. (Both spots have since closed.) More recently, the Malört brand itself has gotten in on the infusion action. To much fanfare, CH Distillery — which assumed production of Malört when it bought Carl Jeppson Co. in 2018 — launched a seasonal pumpkin spice mixture this October. The company sold shots for $8 and bottles for $150 at its restaurant in the West Loop, with proceeds promised to go to charity. But CH entering the infusion business raised eyebrows at Nisei. Not only had Malört mixes become part of the bar’s identity, the dive rolled out its own pumpkin spice Malört blend in 2022. To them, CH’s decision to start with the same mix seemed at the very least curious. Then the distillery announced another charity special in November. Its name: “Malörtsgiving.”

Getting personal For Capone, that’s when things started to feel personal. Nisei has long made a point of staying open on Thanksgiving with its own “Malörtsgiving” celebration, and working that shift has become something of a tradition for her. “I leave my partner, I leave my dad, I leave my family to ensure that people have a safe space to go so that they don’t feel alone on the holidays,” Capone said. The distillery using the same name made her feel snubbed. “That hurt my heart so much.” So, by the time CH announced its December special, Capone and the Nisei team were primed to perceive malice. And when they learned the distillery had rolled out a candy cane Malört mix — the very same blend that kickstarted their infusions — they decided enough was enough. “Look @JeppsonsMalort we’ve sat quietly while you built your brand this fall copying our infu-

sions,” the bar tweeted recently. “But THIS IS FUCKING BULLSHIT. Quit stealing our mixology ideas without attribution.” Capone had a more measured response but also insisted that Nisei deserves credit from the distillery. “We get that everybody does infusions now and we’re not saying it’s so crazy and outlandish, but the fact that there’s been no accreditation, no tribute, no nothing, that’s where the problem is.” CH did not respond to multiple requests for comment, but a recent post on Jeppson’s Malört Twitter account read: “Our sincere apologies to all the bartenders, bars and other good folks who are OG originators of infused Malört. In our rush to do good we missed acknowledging those who came before us in the quest to make Malört worse. Our seasonal flavored Malört series has been a charitable fundraiser since day one, with every penny of profit earmarked for charitable donations. Since starting on Oct. 1, more than $45,000 has been raised, with more to come. Thank you to all the Malört fans who make this possible and sorry again for failing to acknowledge anyone who has infused Malört before we ever did.” Despite the rising tensions, Nisei does not intend to slow down on its Malört consumption anytime soon, and neither does Capone. “That’s not how we roll,” she said. “Just because we like the bitter stuff doesn’t mean we like to be bitter.” In fact, the bar has launched a Malört-inspired charity campaign itself. For every shot of Malört it sold last month, Nisei was to donate $1 to the Greater Chicago Food Depository. As Capone puts it: “Instead of being bitter like our favorite elixir, we’re going to turn this really gnarly, gross, rude negative into a very cool positive.”

State’s pension liability finally reaches a plateau

Richard Gonzalez

The good news is limited in a new report from the General Assembly’s fiscal agency BLOOMBERG

By Greg Hinz

ABBVIE From Page 3

other industry analysts project Elahere’s annual sales will reach nearly $2 billion over the next eight to 10 years. “This specific drug is a big drug but not the next Humira, not even the next Rinvoq or Skyrizi,” Conover says, referring to two other fast-growing AbbVie drugs. Instead, “it’s reflective of AbbVie’s intention to be a little bit more of a growth-oriented company,” Conover says. “What they have right now is probably enough to offset the Humira biosimilars but not have a company that’s rapidly growing.” He calls the premium AbbVie is paying for ImmunoGen a “fair price,” primarily because of Elahere’s demonstrated effectiveness in clinical trials and its sales prospects. ImmunoGen is also conducting ongoing clinical development programs to expand the drug into earlier lines of therapy and to more subsets of ovarian cancer patients. Additionally, ImmunoGen has several other drugs in its development pipeline. “This is a pretty big opportunity,” Conover says.

Smooth acquisition expected AbbVie executives, as well as industry analysts, don’t expect the ImmunoGen deal to face much scrutiny from federal antitrust regulators. While AbbVie sells other cancer drugs, it doesn’t have an

AMAZON From Page 3

research at the dealership, on the dealer’s website, on trusted third-party marketplaces like Cars or on the OEM site. It’s not a single source, so it’s not a single-channel category. It’s the same reason why Hyundai is a partner of ours. We’re listing all Hyundai’s inventory on Cars. com. We’re powering Hyundai websites. We’re helping Hyundai do certified pre-owned. My point is, the more this industry realizes that digital channels are where people shop, I think it’s a good thing for the industry. What are the benefits of the Amazon-Hyundai pilot? The benefits for Hyundai are that they’ve created a lot of PR buzz and noise around the

ovarian cancer medication in its portfolio right now. “Given the complementary fit, we see limited risk of regulatory scrutiny,” Leerink Partners Research analysts wrote in a report Thursday. AbbVie and ImmunoGen expect the transaction to close in the middle of 2024. Investors were encouraged by the ImmunoGen deal, sending AbbVie’s stock up 3% when the agreement was announced yesterday. That’s a welcome bump for a stock that has dropped 11% this year, as generic rivals started poaching Humira’s U.S. sales. AbbVie’s third-quarter revenue fell 6% to $13.9 billion as Humira sales dropped 36% from the same period a year prior. Growth among AbbVie’s other immunology drugs Skyrizi and Rinvoq has helped offset Humira losses, but the company has said acquisitions will be necessary to stem the full impact and jumpstart growth. “AbbVie has needed another growth story,” says Chris Raymond, a senior biotech analyst at Piper Sandler. On the company’s last earnings call, in October, Gonzalez told investors AbbVie is focused on acquiring other companies that can help it grow. “We’re looking to add assets that could give us incremental pipeline and revenue growth toward the end of this decade and into the ‘30s,” he said. “That’s what . . . the bulk of our focus is on.” As AbbVie bets big on Elahere’s

upside, it’s also gambling on Gonzalez’s dealmaking acumen, which has yielded mixed results since the company was spun off from North Chicago-based Abbott Laboratories a decade ago.

brand, and from a branding standpoint, that’s certainly going to help them. It’ll be interesting to see how much Amazon promotes them to their everyday shoppers because, you know, people are going there for everyday goods and so I guess that’s a good thing for Hyundai’s brand awareness.

As the auto industry and car companies all realize they’ve got to find a more efficient way to sell and to generate sales for their cars, digital platforms are far more efficient to generate vehicle sales to the very people who are actively in the market trying to decide what and where to buy now — and that’s our DNA.

Could the Amazon initiative backfire? I don’t think Hyundai will need to spend as much on Super Bowl ads. We think the industry needs to evolve, and so perhaps some of the large television networks aren’t going to get as much brand money as they used to. Let’s remember this: Only 5 to 7 percent of the population is in the market to buy a car at any given time. That means mass-market advertising has close to a 90 percent waste factor.

Prior success AbbVie’s last megadeal, the $63 billion acquisition of Botox maker Allergan in 2020, has largely been seen as a successful purchase, Conover says. Other Gonzalez acquisitions haven’t performed as well. Take the $5.8 billion acquisition of Stemcentrx in 2016. AbbVie had to write off $4 billion of the purchase price after Stemcentrx’s Rova-T cancer drug, once thought to have potential revenues of nearly $5 billion, foundered on regulatory snags. “That’s largely regarded as a bad acquisition,” Conover says. Then there’s AbbVie’s $21 billion purchase of Pharmacyclics in 2015, which brought another promising cancer treatment. Imbruvica lived up to and even exceeded early sales projections, but has seen 20% declines recently as competitors entered the market. Conover sees less regulatory risk for Elahere, which already has a key approval. As for competition, Conover says Elahere has rivals, but also has a leading position in the market: “It could get more crowded but for now, the market is really Elahere’s to gain and probably hold onto unless the next generation drugs are significantly better.”

Does it make more sense for Amazon to buy a company such as yours, rather than do this themselves? I don’t know exactly how they view [subsidiary] Whole Foods or [online clothing retailer] Zappos, but if they’re looking for an auto partner, we’re certainly capable because we have trade-in solutions and financing solutions. We would love to help bring more dealers into the Amazon platform for sure.

After years of often highly divisive political struggles, Illinois appears to have reached a point of relative stability in its longunderfunded employee pension systems. A new report from the General Assembly’s fiscal agency indicates that total unfunded liability in the state’s five retirement systems was a combined $142.3 billion as of June 30, still stunningly high compared to the state’s current $50 billion annual operations budget but within $10 billion of where it was in 2018 and below the $144.2 billion in 2020. The good news is limited. Despite higher contributions in recent years and a generally healthy stock market, the state still hasn’t reached the point at which unfunded debt is decreasing. That means taxpayers at a minimum will have to continue to up their contributions, now at $11.265 billion a year, to a projected $13.5 billion by 2032 — and that figure could be low if the economy takes an unexpected dip, investment returns decline or lawmakers increase pension benefits. “Illinois is finally nearing a point in the next couple of years where the unfunded liability of the state’s pension systems is decreasing and not increasing, but we aren’t there yet,” said Maurice Scholten, the incoming president of the Taxpayers Federation of Illinois. Added Scholten, “Illinois’ pension payments are still high and it’ll take another 20 years before the pension systems are properly funded.” The report from the Commission on Government Forecasting & Accountability specifically looks at retirement systems for state white-collar workers, university staff, judges, lawmakers and grade and high school teachers downstate and in the suburbs. The latter, the Teachers’ Retirement System of the State of Illinois, is by far the largest, comprising $81.9 billion in unfunded liability all by itself.

Point of relative balance The report indicates that the ratio of assets to liabilities in the retirement systems, known as the funded ratio, also has reached a point of relative balance. It rose slightly in the past year from 44.6% to 43.8%, and now has reversed a drop into the 30s and has exceeded the 43.3% it was in 2011. The main reason more progress hasn’t been made is that the state still is contributing on a

long-term ramp adopted during the tenure of former Gov. Jim Edgar that pushed off big payments into the future. However climbing the ramp has been slower than expected, with lawmakers instead spending state resources on education, law enforcement and other needs. As a result, the last year contributed $4.8 billion less than it should have under strict actuarial analysis, COGFA said.

Immense progress Gov. J.B. Pritzker has pointed to slowly improving numbers — and to the fact that workers hired since 2011 have been promised lesser benefits — as a sign that the state does not need to make radical changes. But Pritzker has been able to put in extra money in recent years, something his office in a statement said has helped the state improve its previously near-junk credit rating. “Payments are up and liabilities are down. That’s immense progress for the state of Illinois and the governor will continue to work with the General Assembly to build on the fiscal responsibility he’s championed,” it said. A somewhat less upbeat statement came from Illinois House GOP Leader Tony McCombie: “The state has seen an enormous revenue windfall as a result of the pandemic and stimulus packages, and this report shows that we still aren’t making much progress in paying down the state’s unfunded pension liability,” she said. “The majority party has instead made budgetary promises through expanded state programs that I am afraid we won’t be able to keep. It is vital we continue to work toward our state’s fiscal stability, which means putting any excess funds that become available toward existing pension debts, the state’s rainy day fund, or toward substantial property tax relief.” McCombie also noted that the latest figures do not include the cost of potentially increasing benefits for people hired since 2011, benefits some believe are too small and endanger the state pension funds’ exemption from Social Security taxes. One major business group here, the Civic Committee of the Commercial Club, has urged lawmakers to consider imposing a temporary income-tax surcharge to pay off the debt earlier, something that would save money long-term and make Illinois’ finances more closely resemble those of other states. But the plan so far has gained little traction in Springfield. JANUARY 8, 2024 | CRAIN’S CHICAGO BUSINESS | 17

O’HARE

of other capital projects, rather than approving each one as it came, as it had under the previous lease. So long as the terminal projects stay within a budget that has a built-in inflation cost escalator, the city can proceed with the terminal and other capital improvements. However, if it blows through the budget, the city has to get the airlines to sign off again. Aviation Commissioner Jamie Rhee is keenly aware of those constraints, telling Crain’s in August: “I’ve heard (the airlines) loud and clear. They have said, ‘You’re not getting any more money than what we gave you in 2018.’ ” It’s not clear how far she and the city are willing to go in flexing their new power. The carriers have been meeting regularly with the Department of Aviation for months. “Chicago is an important hub for American, and we are grateful for our long-term partnership with the City of Chicago and the Chicago Department of Aviation,” American said in a statement. “We remain committed to working with the Johnson administration to deliver a capital plan that will enhance the customer experience in a prudent and cost-effective manner to keep O’Hare well-positioned for the future and cost competitive for the airline and our customers.” United added, “As Chicago’s hometown airline, United is committed to building a bigger, stronger, more efficient and modernized O’Hare Airport, just as we’ve done at many of our other hub markets across the country. We continue to work with the City of Chicago and our fellow airlines to advance the terminal redevelopment program in a manner that not only ensures O’Hare’s future financial stability

and competitiveness but also limits costs for the millions of passengers who fly through Chicago’s airport each year.” Whether Mayor Brandon Johnson is willing to get involved directly, as his predecessors have, remains to be seen. The mayor’s office declined to comment. “The project is so ambitious it would be tough without support, however grudging, from the airlines,” says DePaul University professor Joe Schwieterman, who studies aviation. “This is the latest chapter in a long story that will take more twists and turns before it’s over. The city wants to play ball with the airlines and has struck compromises many times in the past. There no doubt are many ways to assuage their concerns.” The airlines have their own motivations to reach a deal. The heart of the project involves demolishing Terminal 2 to build a new “global terminal” to handle international flights for United and American that will connect to the main terminals used by those carriers for domestic flights, rather than busing arriving passengers to and from Terminal 5 across the airfield. The project is arguably more important than ever, because airlines are betting more heavily on international travel coming out of the pandemic, which favors hubs such as O’Hare. United and American insist they aren’t trying to get out of the terms of their new lease with the city, but they have been sounding the alarm for months about rising costs. The airlines say they are in full support of a terminal-redevelopment program, but it must be

done in a cooperative manner that not only ensures O’Hare’s financial stability and competitiveness but also limits costs for the passengers who fly through the airport each year. They are worried that O’Hare’s costs per enplanement to the airlines that use the airport will nearly double by the time the project is finished in 2032, making it more expensive than peer airports at a time when there is a wave of multibillion-dollar expansion and renovation projects underway across the country. Los Angeles International Airport and O’Hare are the largest at about $12 billion, according to Fitch Ratings. (O’Hare has several other capital projects in the works in addition to the terminals.) United and American have recently announced terminal projects at other hubs, and all those costs figure into the bottom line for each airline. United on Nov. 30 announced a $2.6 billion terminal expansion at Bush Intercontinental Airport in Houston. United will get new gates at Denver International Airport, where it is investing nearly $1 billion. The airline now operates almost as many daily flights in Denver as Chicago. It recently bought 133 acres of land in Denver, sparking speculation that it might move its headquarters out of Chicago. United downplayed the notion, but whispers persist whenever controversy arises involving the carrier. Meanwhile, American signed a new lease in May at its home airport in Dallas-Fort Worth that includes $4.8 billion in capital projects, including a new terminal and the renovation of another. At the announcement in Houston, the former hometown of Continental Airlines, which merged with United 13 years ago, CEO Scott Kirby highlighted the issue of government partnerships. “It really demonstrates what a city, a community, can do if they work in partnerships with businesses,” he said. “And I know this is actually not just about the airport. It’s not just about United Airlines. “Today is about us and what we’re doing here, but it’s also the reasons it’s happening everywhere in the city. It’s the reason that this is one of the fastest-growing cities in the country, creating good jobs and careers for people. It’s because you have that kind of political will in communities to do work like this.”

relate to growth. Illinois’ population grew about 2% in the past decade, compared to Utah’s 24% growth in the past 13 years.

said Lucy Mierop, a broker at Re/Max Market in Willow Springs who represents the houses of several small homebuilding firms. “They don’t want to take the risk that they can’t sell the house when it’s finished,” Mierop said, so most “won’t build until they have the buyer.” The bigger homebuilders in the Chicago market are all national firms based in other cities. “They can afford to take a risk,” Mierop said, and when they do, in the present short-inventory climate, “they sell out.” Tracy Cross’ latest report, for the third quarter of 2023, showed the reward of taking the risk. Builders pulled business from the existing

home market, where the pickings have been epochally slim, Tracy Cross CEO Erik Doersching told Crain’s in early November. Even so, builders can’t ramp up production quickly in response to the shortage in the existing-home market. “It’s not like baking more loaves of bread to get on the shelves,” Doersching said in November. Getting new homes onto the market “is a process that can take two years, with land acquisition, permitting and construction.” In that, Illinois isn’t alone. Even at more than 10 times the pace of Illinois, Utah can’t build new homes fast enough either, according to the Salt Lake Tribune.

the expansion is at risk of running over a budget that’s already risen by $1 billion from its original $6.1 billion price tag. “The projected $1.5 billion in excessive costs are all being estimated before construction has begun — we have concerns that without input from the airlines, those costs will escalate further after the work begins,” American and United told Crain’s. “We want to avoid an over-budget (Terminal Area Plan) program that will make it more expensive and less convenient for all passengers, regardless of the airline, to visit Chicago.” United and American account for nearly 80% of the traffic at O’Hare, which means they pay the bulk of the airport’s operating costs through landing fees and terminal rent. The carriers note that O’Hare is a connecting airport, and more than 50% of their passengers here are coming from other cities. They warn that if their costs get too high at O’Hare, the connecting traffic will be rerouted to other, cheaper connecting airports, which would cause traffic at O’Hare to plummet. They’ve urged the city to slow down until they can agree the numbers are realistic, and whether to look for ways to rein in costs before designs and schedules get too far along. The airlines say they’ve proposed multiple alternatives that would not only address some of the cost concerns, although they didn’t specify the suggestions they’ve made. The Chicago Department of Aviation also declined to discuss specific details of the negotiations but said in a statement: “Enabling work for the next phase of this vital infrastructure project began in March, and the CDA remains engaged in consultation with airline, agency and business partners on the complex phasing and implementation associated with a development of this magnitude.” Both airlines stress that they want the O’Hare expansion, which will increase the amount of space for arrival and departure gates by 25%, to continue. The issue is the cost. The airlines say the city cannot deliver the project for the agreed-upon contractual price, and they have been requesting that the Department of Aviation allow the airlines to re-

HOMEBUILDING From Page 3

From July 2021 to July 2022, a time when the housing boom was raging, Illinois grew its housing stock by 0.2%. New Jersey and Rhode Island did the same. That’s according to a map released Dec. 4 by ResiClub, a real estate analytics site launched recently by Lance Lambert, former real estate editor at Fortune magazine. The three are all states with high taxes, though Rhode Island comes in just behind the 10 top-taxing states. Compare the small proportion 18 | CRAIN’S CHICAGO BUSINESS | JANUARY 8, 2024

BLOOMBERG

From Page 1

view the project and collaborate on the path forward. The airlines say they want to ensure two things: that the rising costs don’t continue to balloon so much that it makes O’Hare economically uncompetitive, or that the scope of the project doesn’t shrink to the extent it will harm the operations or passenger experience.

Turbulent relationship The project, which was approved five years ago, has been delayed by a pandemic and a longer-thanexpected environmental review — and it’s still in the design phase. Negotiations between the airlines and the city have heated up as the airport gets ready to move ahead with the first of two satellite concourses. The satellites are expected to be 60% designed by the end of the first quarter, with construction to start in the second half of the year. The centerpiece of the project, a replacement for Terminal 2, will be built later. But the pieces are interconnected, and airlines want to nail down the costs and scope of the overall project before it goes much further. Costs have always been a sticking point between the airlines and the city, which operates O’Hare. During the massive $6 billion runway reconfiguration project, which dragged out over 16 years, American and United went to court at one point to slow down construction before the federal government stepped in with funding to keep the project going. What’s different now is that under a new lease agreement signed in 2018, the airlines authorized the city to build the new terminal and satellite concourses, as well as a list of new homes in these states to Utah, which topped all states by growing its housing stock by 3.3% in the same period. Next was Idaho at 2.8% and Texas at 2.3%. Three other states — Florida, Colorado and South Carolina — all built 2% or more, which means in six states, the pace of new construction is 10 times what’s happening in Illinois. The difference might seem obvious to people who believe the narrative that Illinois is losing population fast, but keep in mind that in May 2022, the U.S. Census Bureau revised past reports, resulting in showing a small gain in the prior decade rather than a loss. Nevertheless, the answer does

Flat population to blame A relatively flat population has meant there’s little incentive for homebuilders to add to the housing pool in large numbers. After building as many as 25,000 new homes a year in the early 2000s, according to ongoing tracking by Schaumburg-based Tracy Cross & Associates, the business dropped so far that 2021’s sales volume was the first to go over 5,000 since 2008. In 2022, sales dropped below 5,000 again. Illinois builders are reluctant,

Support the project, but . . .

Here’s what $6.2 million buys in Winnetka

ChicagoBusiness.com President and CEO KC Crain Group publisher Jim Kirk, (312) 397-5503 or jkirk@crain.com Editor Ann Dwyer Managing editor Aly Brumback Creative director Thomas J. Linden Director of audience and engagement Elizabeth Couch

A Hill Road mansion built in the 1930s and extensively rehabbed in the past decade sold on Dec. 1 I By Dennis Rodkin cago Board of Trade that sparked a drop in the stock market. An investigation approved by the U.S. Secretary of Agriculture “led to the 38th floor of the Chicago Board of Trade Building and the small office of Edwin Taylor Maynard, 62, a trader ensconced behind four telephones and a ticker,” Time magazine reported at the time. Maynard denied having inside information. He said he just watched the market closely and noticed that it “looked like a groggy boxer. It needed just a little push to knock it down.” In 1978, Don Perkins, CEO of grocery store chain Jewel, and his wife, Phyllis, bought the property. Don Perkins died in 2015, two years after selling the house for a little under $2.7 million. That 2013 buyer is the 2023 seller. Without comment from the homeowners or the agent, Crain’s couldn’t determine what the condition of the house was in 2013, but it might have been poor, given that in 2022, Winnetka’s Landmarks Preservation Commission honored the owners of this house and others for “choosing rehab over teardown,” according to the Record North Shore. Radnay’s listing says the rehab, “a full house renovation and addition,” was the work of Chicago firm J. Lawton Thies Architects. According to the listing, the house has natural-finish oak floors, restored plaster moldings, a French-inspired blue and white kitchen with extreme upper-end appliances, a conservatory that includes a mural done in a botanical theme, a new three-car garage expressly designed to showcase the owners’ cars, and other opulent details. The cabana by the pool has a wood-burning fireplace, a kitchen and a great room. The renovation was “executed to outshine all modern-day needs,” Radnay wrote in the listing.

Assistant managing editor/special projects Ann R. Weiler Assistant managing editor/news features Cassandra West Deputy digital editor Robert Garcia VHT PHOTOS

Winnetka mansion built in the 1930s and extensively rehabbed in the past decade sold for $6.2 million. The house on Hill Road, a six-bedroom, 11,000-square-footer on 1.3 acres with formal gardens, a swimming pool and a cabana, came on the market in May at just under $7 million. It went under contract in early October, and the sale closed Dec. 1 at about 89% of the asking price. At $6.2 million, the sale price ranks as the third-highest paid for a Winnetka property so far in 2023, behind two Sheridan Road properties that each went for more than $12 million. For the Chicago metro area, the Hill Road sale was the 13th-highest of 2023. The sellers owned the house through a trust that concealed their names from public records. Numerous online records identify Steven and Anita Livaditis as the most recent residents. The couple — he’s a principal at global real estate investment bank Eastdil Securities — could not be reached. Listed phone numbers for them do not answer. Jena Radnay, the @properties Christies International Real Estate agent who represented both the sellers and the buyers, did not respond to a request for comment. The buyers are not yet identified in public records. Built in 1938, the house was one of several in Winnetka designed by architect S.S. Beman, the son of Solon Spencer Beman, also an architect and best known for designing the Pullman company town on Chicago’s far South Side. The Winnetka house has been the home of at least two noteworthy business figures. In the 1940s and 1950s, Edwin and Betty Maynard lived there. Edwin Maynard, a trader, grabbed national attention in 1948 when his short selling of wheat led to a big drop at the Chi-

Assistant managing editor/enterprise Joe Cahill

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Crain’s Chicago Business is published by Crain Communications Inc. Chairman Keith E. Crain Vice chairman Mary Kay Crain President and CEO KC Crain Senior executive VP Chris Crain Chief Financial Officer Robert Recchia G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Editorial & Business Offices 130 E. Randolph St., Suite 3200, Chicago, IL 60601 (312) 649-5200 Vol. 47, No. 1 Crain’s Chicago Business (ISSN 0149-6956) is published weekly, except for the first week of July and the last week of December, at 130 E. Randolph St., Suite 3200, Chicago, IL 60601-6201. Periodicals postage paid at Chicago, Ill. Printed in the U.S. © Entire contents copyright 2024 by Crain Communications Inc. All rights reserved. Reproduction or use of editorial content in any manner without permission is prohibited. Subscribe: $169 a year • Premium Print + Digital Subscription • Print delivery of Crain’s Chicago Business • Unlimited basic digital article access across all devices • Access to archived articles • Editorially curated newsletters For subscription information and delivery concerns please email customerservice@chicagobusiness.com or call 877-812-1590 (in the U.S. and Canada) or 313-446-0450 (all other locations). Postmaster: Send address changes to Crain’s Chicago Business, 1155 Gratiot Ave., Detroit, MI 48207-2732. Four weeks’ notice required for change of address.

JANUARY 8, 2024 | CRAIN’S CHICAGO BUSINESS | 19

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