Crain's Chicago Business, February 12, 2024 by crainschicago

CHICAGOBUSINESS.COM I FEBRUARY 12, 2024

Will a Shields sale boost Walgreens health care plan? Former CEO Roz Brewer said the specialty pharmacy firm would drive long-term growth. The new boss seems to have other ideas. By Katherine Davis

In 2001, Chicagoans cheered when Boeing picked the Windy City over Dallas and Denver for its new headquarters. | AP IMAGES

Did relocating to Chicago help Boeing or hurt it? The move was based on the professed need to buffer top execs from the distraction of the production plants | By Steven R. Strahler

oeing's declaration in the spring of 2001 that it would move its headquarters four months later to Chicago was an unmitigated triumph for a city that had suffered through the loss of prestige companies during the 1990s. But was it good for Boeing? The ensuing decades have seen the once-lauded aerospace firm humbled by a string of disasters, the latest a blowout of a cabin panel in midflight. The Alaska Airlines 737 Max 9 landed safely, and no lives were lost — in contrast to the 346 who died in two 737 See BOEING on Page 23

C-suite people “lost the ability to freely interact with the floor, the engineers and the IAM, the machinists.” — Scott Hamilton, industry analyst

Walgreens Boots Alliance in recent years has spent billions of dollars on various assets it said would prop up a new health care business intended to support the pharmacy chain’s long-term prospects. Shields Health Solutions, a specialty pharmacy firm, was among the companies Deerfieldbased Walgreens added to its portfolio. Walgreens paid more than $2.34 billion over two separate investments into Shields, an asset that was supposed to be key to Walgreens’ transition into a full-fledged health care company. At the time of Walgreens’ second investment into Shields, former CEO Roz Brewer said the deal would “drive sustainable long-term growth.” But new CEO Tim Wentworth seems to have other ideas about the best path forward for Walgreens’ multibillion-dollar health care strategy. Bloomberg News reported Jan. 23 that Walgreens is looking to sell Shields for more than $4 billion, citing people familiar with the matter. A potential deal could help Walgreens refine its growing and ever-important health care segment, as well as shore up Walgreens’ balance sheet — key for a

Tim Wentworth

company that just cut its dividend. And as it's a relatively small part of the business, Walgreens is unlikely to miss it much. “They're now, as a lot of firms are, in a more profit-oriented, macroeconomy,” says Nathan Ray, a partner at Chicago consulting firm West Monroe. “They're just taking a slightly narrower ambition and probably really focusing on the things that they must win, which is (being) the main street corner for retail health consumers." “Walgreens is clearly in possession of assets that define what it should become,” Ray adds. “Shields just doesn't seem to be one of them.” See WALGREENS on Page 20

In health care, tech, architecture, nonprofits and more, these leaders are charting the way. | PAGE 13

GREG HINZ The CTA asked Springfield for money to avoid a fiscal cliff, but the agency needs to help itself, too. PAGE 2

ILLINOIS’ FILM TAX CREDIT A BOON The state has caught the eye of Hollywood studios and producers. PAGE 3

WI OR The lak can lan

GREG HINZ ON POLITICS

The CTA asked for help — but it needs to help itself, too

aving a billion-dollar tin cup of sorts, leaders from the Chicago Transit Authority and other transit agencies were in Springfield last week in search of funds to avoid a now rapidly nearing fiscal cliff. They’d better be prepared for a fight. With lawmakers soon to face tax-averse voters in the upcoming elections, the word from Springfield is that transit is going to have to wait awhile and then submit to some legislativeGreg Hinz mandated reform. Particularly under the gun is the Chicago Transit Authority, whose recovery from COVID has been tentative, partial and agonizingly slow. “No revenue without reform,” summarizes Illinois House Assistant Majority Leader Rep. Kam Buckner, a Democrat whose South Side and South Loop district is as dependent as any on a reliable and smoothly functioning public

transit system. “Leadership of the CTA has to restore it into a system that really works.” The CTA’s problem is twofold. As someone who regularly rides the system and had a knife pulled on me at a downtown el station just a few weeks ago, I can attest that those problems are real. The first is strictly political. Under the blueprint developed by the Chicago Metropolitan Agency for Planning, transit systems that collectively face a $730 million hole when federal COVID relief funds expire in 2026 and a $1.2 billion deficit by 2031 are going to have to give to get help. Specifically, the CTA, Metra and Pace quite possibly need to be effectively merged, surviving only as operating units under a bulked up Regional Transit Authority. The CTA and Chicago City Hall are balking, however. We’ll see if they can hold out. The other problem is operational. A combination of labor and security concerns, plus changing commuting patterns that are keeping many workers at home,

has driven patronage way down. Ergo, while CTA ridership rose 14% last year to 279 million, it’s still only a tidge over 60% of pre-COVID levels. Something has to change. The CTA has made progress on “every one” of its key metrics, says spokesman Brian Steele, with the number of trains and buses in operation now approaching 90% of pre-COVID levels, station cleanliness significantly better and even 6,300 citations for smoking on CTA vehicles in 2023 rising to nearly the 2019 level of 6,494. But security remains a huge problem, a factor that may be slowing the comeback of the Loop business sector as scared workers stay home rather than trust the CTA. According to the CTA’s own passenger surveys, just 49% of train passengers feel safe when they are on the el. Forty-nine percent. That’s up 7 percentage points from a year ago, but well below the 61% figure of 2019. Security guards are around. They, and eventually police, responded minutes after a fare-box jumper that I yelled at flashed a

knife in my direction. But the number of officers assigned to the Chicago Police Department's public-transit unit has caromed wildly in recent years, moving from a high of 194 down to 98 before settling this winter to around 135, according to data compiled by Chicago Inspector General Deborah Witzburg.

reports that he rarely used his free-transit pass in recent years? Steele replied that the agency has used its social media accounts to run pics of Carter on the el, only to be accused of engaging in a publicity stunt. Says Rep. Buckner: “The president of the CTA should ride the CTA," he says. It sends "a terrible message when the chef doesn’t eat his own cooking.” It might help, too, if Mayor Brandon Johnson occasionally commuted on the Green Line from his West Side home to downtown, with a few TV cameras in tow. Support for transit is progressive politics. If fewer than half your customers feel safe on the train, you’ve got a problem. In any event, it looks like the General Assembly will only listen this spring, perhaps taking up the financial rescue plan this fall or next spring. In the end, passage prospects may depend on the CTA doing more to help itself.

The Chicago Transit Authority and other transit agencies were in Springfield last week in search of funds to avoid a now rapidly nearing fiscal cliff. CTA spokesman Steele suggests the crime numbers, while still too high, are reasonable given that the CTA every days carries a number of commuters equal to “the population of Denver.” But if public perception is worse than the reality, why hasn’t CTA President Dorval Carter been more visible in riding the train and buses after

Rivian appoints Apple and car industry vet for key product role By Mark Gurman and Ed Ludlow, Bloomberg

An Apple veteran who led work on home devices and helped start efforts to develop an electric vehicle is leaving for Rivian Automotive Inc., marking yet another senior departure for the iPhone maker. DJ Novotney, a vice president of hardware engineering, informed colleagues Jan. 26 of his exit, according to people with knowledge of the matter. He will become senior vice president of vehicle programs at Rivian, the maker of electric SUVs and pickup trucks, and report to Chief Executive Officer RJ Scaringe, said the people, who asked not to be named discussing unannounced matters. Novotney, who worked at Apple for nearly 25 years, was known as a senior lieutenant to many of the company’s top hardware engineering executives. He was instrumental in the development of several generations of the iPod and iPhone, and was tapped by former hardware chief Dan Riccio to help lead development of the iPad, the people said. “Great products are what we do best and I have been so very lucky along the way to be part of so many amazing teams that developed everything from iPod, iPhone, iPad, Watch and so many more,” Novotney wrote in a memo to colleagues that was seen by Bloomberg. “Apple has been my life, but now is the time for me to move on and help bring to life a new set of products.” Novotney also helped bring the Apple Watch to market, having been brought on to the project by Apple Chief Operating Officer Jeff Wil-

liams and former head designer Jony Ive. About a decade ago, Novotney was one of a few executives tapped to kick start Apple’s efforts to develop an electric vehicle — a project codenamed Titan. Amid a re-organization of the car project following continued setbacks a few years ago, Novotney moved on to become a senior executive in charge of developing future home devices, including some in the robotics and artificial intelligence spaces. Apple has explored a HomePod with a display that can swivel via a robotic arm, Bloomberg News has reported. Rivian sees the hire as a major coup. Novotney, who started at the company on Jan. 29, will be one of about a dozen senior vice presidents. In his new role, he’ll lead product management for products and engineering, making him one of the company’s most critical executives. Rivian’s Scaringe took the head of product role after the previous executive in charge of development, Nick Kalayjian stepped back, Bloomberg News reported in November. Kalayjian is leaving the carmaker this year and Novotney will take on many of his responsibilities. Spokespeople for Apple and Rivian declined to comment. Novotney didn’t respond to a request for comment. For Cupertino-based Apple, the move marks yet another exit in the senior ranks. Tang Tan, Apple’s vice president of product design for the iPhone and Apple Watch, is leaving the company next month for LoveFrom, Ive’s design firm, while hardware technologies leader Steve Hotelling exited late last

year. Across 2022 and 2023, it lost a slew of other executives in hardware, operations and services. Irvine, California-based Rivian has been seen as a leading contender among a handful of EV startups chasing market leader Tesla Inc. It makes two consumer models — battery-electric pickups and sport utility vehicles called R1T and R1S. The company also makes a battery-electric delivery van for Amazon.com Inc. and recently announced it had been freed from exclusivity to sell the last-mile product to others.

BLOOMBERG

DJ Novotney was known as a senior lieutenant to the tech company’s hardware engineering execs

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Laura Ricketts’ mansion subject of competing lawsuits Eight years after moving into her new lakefront home, a legal battle between her builders and their insurance company is playing out in court By Dennis Rodkin

“The Bear” | CHUCK HODES/FX

Illinois’ film tax credit a boon, study shows The state averaged $404 million in direct production expenditure by Hollywood studios from 2012 to 2022 | By Brandon Dupré rom popular, award-winning television shows like “Fargo” and “These “The Bear” to Wolf Entertainment's One Chicago series, Illinois has caught the eye of Hollywood studios and producers. productions And that attention has been earned thanks to the state’s live and die by competitive film tax credit, which ranks near the top in the country, according to a new study that evaluates the economic impact of Illithe incentives, nois’ film credit, which offers productions a headline rate of up to 30% back on eligible expenses. and they’ll go The top-line numbers are eye-popping: The state averaged $404 million in direct production expenditure by Hollywood studios from elsewhere if 2012 to 2022, billions in additional economic benefits over that time the incentive is and a $6.81 return on investment for every dollar the state spends on the tax incentive. not there.” “It’s clear that we have an established economic driver here that

continues to grow,” said Christine Dudley, who heads the Illinois Production Alliance, which commissioned the survey. “Instead of one-off See TAX CREDIT on Page 22

— Brad Tietz, vice president

of government relations for the Chicagoland Chamber of Commerce

Eight years after Laura Ricketts moved into her new lakefront mansion in Wilmette and found flaws in it, a legal battle between her builders and their insurance company is playing out in court. At stake is an estimated $7 million that Ricketts’ attorneys say was added to her $12.8 million mansion plan by a builder’s mistakes, overruns and changes. Ricketts, a co-owner of the Chicago Cubs, co-owner of the Chicago Sky and owner of the Chicago Red Stars, prepared a list of alleged problems with the house that runs to about 1,200 items, everything from a leaky roof to poorly installed bathroom tile and skylights. The latest skirmish in the legal battle that broke out in 2022 is a pair of lawsuits crossing one another, both filed last month in federal court in Chicago. The builder of Ricketts’ Sheridan Road mansion, LG Construction Group, is suing its insurance company, Westfield, to cover its costs if it is found liable in the case Ricketts filed last year. Meanwhile, Westfield filed a suit requesting that a judge declare that the insurance company isn’t required to cover LG because a construction insurance policy expired before Ricketts’ complaints came out. The policy, Westfield’s attorneys say in its suit, expired Jan. 24, 2018, but LG did not notify Westfield of Ricketts’ complaints until Aug. 8, 2019. LG’s attorneys argue that because the complaints are about the work that LG and subcontractors performed while the policy was in

place, Westfield is required to help defend LG against Ricketts’ complaints. LG and Westfield were scheduled to enter arbitration Jan. 23, said David Goodman, principal at Chicago law firm Goodman Law Group. Goodman is representing LG against Westfield but not against Ricketts.

Ricketts, a co-owner of the Chicago Cubs, co-owner of the Chicago Sky and owner of the Chicago Red Stars, prepared a list of alleged problems with the house that runs to about 1,200 items. Ricketts initially was also suing the house’s architects, Evanston firm Morgante Wilson, but she settled with them in recent months, according to Goodman. No terms of the settlement have been released. Richard Valentino, a partner at Chicago law firm Amundsen Davis who is representing Westfield, declined to comment. Dennis Culloton, a media contact for Laura Ricketts, did not provide Crain’s a response from her.

Initial plans Ricketts began planning a mansion on a 1.2-acre parcel on Sheridan Road in 2010, when she See RICKETTS on Page 22

Chicago-area commercial property sales down 44% in 2023 High borrowing costs and diminished property values led to less dealmaking last year By Rachel Herzog

Constricted borrowing and diminished property values brought on by high interest rates put commercial property sales on a foreseeable downhill slope in 2023, though the lows weren’t as low as in past years. Investors last year traded just under $11.9 billion of local commercial properties, a 44% decrease from 2022, according to data from research firm MSCI

Real Assets. That figure is up slightly from 2020, when the onset of the COVID-19 pandemic emptied out urban centers and pushed transaction volume to a 10-year low of less than $11.5 billion. Dealmaking in the Chicago area didn’t take quite as much of a hit as the nation overall, where sales dropped by 51% to about $347 billion as mismatched pricing expectations between buyers and sellers slowed activity, especially in the office sector. Nation-

ally, there was a 32% drop in office sales volume in the fourth quarter of 2023 from the same time frame the previous year. Downtown Chicago’s office market went most of 2023 with sales effectively at a halt, and properties that broke a nearly 14-month drought in the fall traded at deep discounts. An Oregon real estate investor bought 230 W. Monroe St. at a 63% discount in September, and an office building across from Willis Tower traded at the end of December for 89% less than it was See SALES on Page 22

230 W. Monroe St. | COSTAR GROUP

FEBRUARY 12, 2024 | CRAIN’S CHICAGO BUSINESS | 3

Local investor buys prominent office tower on Michigan Avenue at a big discount Chicago’s R2 bought the 41-story building at 150 N. Michigan Ave. for about 50% of what it sold for in 2017 By Danny Ecker

Chicago real estate firm R2 has purchased a Michigan Avenue office tower for about half the price it sold for just more than six years ago, the latest in a series of recent sales showing how badly remote work and higher interest rates have hurt downtown office property values. A venture led by R2 closed last week on its acquisition of the 41-story office building at 150 N. Michigan Ave., an R2 spokesman confirmed. The exact sale price was not immediately clear, but sources said it was close to $60 million, down from the roughly $70 million deal R2 was negotiating to pay for the 654,508-squarefoot building last summer. Both prices are dramatically lower than the $121 million that a venture of New York-based CBRE Investment Management paid for the tower in 2017, as well as the $87 million mortgage that CBRE IM took out to finance that purchase. The steep discount from the building's pre-pandemic value reflects the record-high vacancy rate, office space-shedding trend and higher borrowing costs that have kept many real estate investors away from the downtown office market over the past few years and fueled a historic wave of distress. Prospective buyers can only justify paying a fraction of what a building was worth before because of the challenges and costs associated with leasing up available workspace in such a sluggish office environment. The 150 N. Michigan deal adds to a list of big discount transac-

a statement. “This is not a 'buy it cheap and do nothing' deal. We are capitalized to make major improvements and put this building back on the map.” The 40-year-old tower, known for its diamond-shaped rooftop, was 68% leased when it went up for sale last year, according to marketing materials, slightly below the average for downtown office buildings.

Some leasing wins

150 N. Michigan Ave. (center). | COSTAR GROUP

tions that includes an office building at 230 W. Monroe St., which traded in September for 63% less than its 2014 sale price, or the 20-story office building at 300 W. Adams St., which was sold earlier this month for about 89% less than it was worth just more than a decade ago. One big obstacle facing investors that want to buy such properties is that banks aren't eager to back them. People familiar with the 150 N. Michigan transaction said R2 got financing for its Michigan Avenue purchase from a fund managed by Whippany, N.J.-based MetLife Investment Management, which provided the $87 million mortgage that CBRE IM borrowed in 2017. The

structure is commonly known as "stapled financing," in which a building's current lender provides a new loan for a buyer to overcome the tight lending environment.

Hoping to defy trend R2 is betting it can defy the ongoing trend of companies cutting back on workspace, and MetLife is hoping that effort will boost the building's market value enough to avoid having to accept a painful financial haircut. MetLife's loan matured in September 2022, according to real estate information company CoStar Group. A MetLife spokesman did not respond to a request for comment, and a spokesman for CBRE

IM declined to comment. R2 will look to leverage some big investments that CBRE IM made in the building during its ownership tenure. A marketing flyer for the property last year from real estate services firm Eastdil Secured said the building "is the beneficiary of almost $35 million in capital used to reimagine the lobby, renovate the tenant lounge and amenities, improve vacant space to attract tenants and maintain building and backof-house systems." "We are looking to expand on that with our brand of baseball and make the design more hospitality-driven and the amenities consistent with the new world," R2 Principal Max Meyers said in

CBRE IM's investments in the building helped it notch some leasing wins, including a 2021 expansion by Lake Forest-based business service and technology provider Impact Networking to add more than 50,000 square feet on a lease that runs through 2031. But the building also suffered a big loss in 2022 when its largest tenant, Crain Communications — the Detroit-based parent company of Crain's Chicago Business — vacated its roughly 54,000-square-foot office in the building. R2 is best known locally for owning properties on Goose Island, but it has tied itself to other downtown projects since the COVID-19 pandemic began. The firm was hired last year by the lender that seized the Chicago Board of Trade Building in the Loop to oversee a renovation of the property, and is partnering with a foreign investor on a plan to turn the upper floors of the office building at 79 W. Monroe St. into apartments. Eastdil's Bryan Rosenberg and David Caprile marketed 150 N. Michigan for sale.

State Street office and retail building sold to firm in Schaumburg for under half its previous sale price By Rachel Herzog

A five-story office and retail property on downtown Chicago’s State Street sold for a nearly 60% discount, another distress signal from the once-storied shopping corridor. North American Real Estate, based in Schaumburg, paid $15 million for the property at 100-112 S. State St. on Dec. 22, according to Cook County property records. That’s down from the $35 million the seller, a joint venture of New York-based Tishman Realty and French financial services firm AXA Group, paid for it in 2015. As high interest rates escalated borrowing costs in 2023, commercial property sales slowed, dropping by 44% year over year in the 4 | CRAIN’S CHICAGO BUSINESS | FEBRUARY 12, 2024

Chicago area, according to data from research firm MSCI Real Assets. Properties that did trade often sold at lackluster prices, especially as office and retail landlords contended with high vacancy rates. At 100-112 S. State St., the first two floors are fully occupied with retail tenants that include Champs Sports and Capital One Cafe. A fully occupied retail space is an anomaly for State Street, which has been hit hard by a decline in downtown foot traffic and high-profile store departures including Old Navy, Urban Outfitters and DSW. The street’s storefront vacancy was almost 28% in 2022, far higher than the 15.3% pre-pandemic rate, according to data from Stone Real Estate. The property’s upper three

floors are office space, and just one is occupied, partially by an Expansive co-working space. Downtown Chicago’s overall office vacancy hit a record high of almost 24% in the third quarter of 2023 amid continuing remotework trends, according to data from brokerage CBRE. Savas Er, principal at North American Real Estate, declined to comment on the sale price but previously told Crain’s that the firm already owns the adjacent property, a six-story building at 114 S. State St., and said buying the other property was “an opportunity for us to have more footprint and control the corner.” Tishman Realty and AXA Group did not respond to requests for comment.

100-112 S. State St. | COSTAR GROUP

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A CHICAGOAN TO KNOW

Connie Mixon of Elmhurst University Mixon, 57, is an Elmhurst University political science professor who frequently provides political analysis and commentary for media outlets including NBC, PBS, NPR and WGN. Recently, she was an expert witness for the prosecution in former Chicago Ald. Ed Burke’s trial. Burke was convicted in late December on federal charges including racketeering and extortion. Mixon and her husband live in Beverly. What was your role in the trial? To provide the jury with a broad, basic overview of how Chicago’s City Council works. I called it the “Schoolhouse Rock” civics lesson. Most of the jurors didn’t live in Chicago, and even Chicagoans don’t always understand the structures and processes of city government. What piqued your interest in politics? My grandfather and uncle were 47th Ward precinct captains in Chicago from the ’60s to ’80s. To keep their city jobs, they had to turn out the vote for the (Democratic) machine in their precincts. But my mother was fiercely independent, so I heard frequent and passionate debates at the family dinner table. First job? Just after high school, I also graduated from McDonald’s Hamburger University and became a “fry girl” — a genderspecific job then. It was the busiest station and pretty uncomfortable. The polyester brown uniform was hot, and I got splattered with hot oil. Luckily, during my first shift, the manager noticed me helping the girls make change at the registers, which didn’t calculate change back then, and he jumped me up a bunch of levels to handling the drivethru, a coveted job. What would surprise people about you? I’m frequently called the “beer professor.”

Nominate a leader who leads sustainability initiatives at an organization and makes an environmental impact.

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6 | CRAIN’S CHICAGO BUSINESS | FEBRUARY 12, 2024

Why? I collaborated on a research project with an Elmhurst University student who wanted to examine gentrification in a new way. During the initial phase, we talked about breweries popping up in Chicago and decided to examine whether there is a connection between them and gentrification. There is. How so? Breweries need a lot of space for equipment, so they find affordable property, usually on the periphery of emerging, hot neighborhoods. Their presence spurs more investment and attracts affluent residents. One speaking engagement on this connection led to another, and I started giving talks that I call “A Shot of Politics With a Beer Chaser.”

A cringe-worthy academic experience? You’ve heard the old student excuse that the dog ate my homework? Well, one year at Elmhurst University, my dog ate 30 of my students’ end-of-term papers. I had just spent hours grading and writing comments on them, and stacked them on my desk at home. I left the room for 15 minutes, and when I returned, I saw that my new puppy had jumped onto the desk and shredded every paper. I spent more hours taping them back together, minus the pieces he ate. From then on, my dog was never unattended.

Here’s why Helmut Jahn’s last Chicago building looks like that A hard-hat tour of the nearly complete 1000M shows how the 73-story tower’s slight twist and pronounced cantilever play out in the apartments inside | By Dennis Rodkin ith the last building that the innovative architect Helmut Jahn designed for his adopted hometown of Chicago nearing completion at 1000 S. Michigan Ave., leasing of its apartments has started and Crain’s got a first look inside. The handsome interior finishes by Kara Mann Design are in various stages of completion. But the real payoff of walking through the building called 1000M is finding out how Jahn’s manipulation of the tower — it cantilevers 12 feet over a historical building next door and twists slightly as it rises — plays out in the apartments people will live in. For one thing, the cantilever and the twist together make the 73-story tower’s highest floors bigger than its lowest by an estimated 750 square feet. “It’s every developer’s dream, more area on the upper floors than on the bottom,” says Phil Castillo, executive vice president and managing director at Jahn, the successor to the firm Helmut Jahn headed before he died in an accident in 2021. Originally pitched for 86 stories of condos, the building ultimately wound up as 74 stories of apartments. The first 19 floors are up for rent now, with move-ins scheduled for May 1 and the last of the 738 apartments expected to be complete by the end of 2024. Rents start at $2,075 for a studio, $3,115 for a one-bedroom, $5,865 for a two-bedroom, $8,770 for a three-bedroom, and $14,470 for a four-bedroom penthouse. Their designs include kitchens Mann fitted out with contemporary cabinetry and countertops, double vanities in the primary baths and primary closets with high-end clothing storage built in. The manipulated tower, Jahn told Crain’s in 2017 before construction began, “is not an aesthetic trick. It had to do with maximizing views.” On a hard-hat walk-through, a Crain’s reporter saw how the twist, seen in the exterior photo below as a change in the glass color, works inside. Apartments on the southwest corner of the building have clear views east of Grant Park and the Museum Campus. Nevertheless, we’re showing few photos of the views because, as an active construction site, the building now has dirty windows that would give the wrong impression. The twist creates a diagonal line, or what Castillo calls a crease, that runs up the north and south sides of the tower. The crease manifests inside many of the apartments as a tilted column in a large window, like the one

Timeline: Helmut Jahn’s 1000M As Helmut Jahn’s last building begins leasing its apartments, here’s a look back at the path to getting it built.

2015 ◗ In August, Crain’s reported that architect Helmut Jahn was designing a tower to go on a vacant lot at 1000 S. Michigan Ave., one of few gaps in the Michigan Avenue cliff wall. It wasn’t yet clear what development firm was behind the project, but a joint venture of two New York firms had recently bought the eight-story building next door. ◗ In September, that joint venture, made up of JK Equities and Time Equities, announced plans to build an 86-story condo tower that would stand on the vacant lot, with upper floors stepping outward into the airspace above the building next door. ◗ The announcement came a few weeks after Miami-based developer Crescent Heights announced a 76-story apartment tower a few blocks from the 1000M site.

2016 ◗ The height of the Jahn design is

reduced to 73 stories, shorter than the Crescent Heights project. Jahn’s building will no longer be the South Loop’s tallest.

2017 ◗ In March, just ahead of starting its

sales effort for the tower’s 323 units, the developers unveil some images of the exterior. ◗ In October comes word that the building’s amenities will have a wellness concentration, including a Himalayan salt room.

2019 ◗ In April, Nema, the apartment tower

that was announced around the same time in 2015 as 1000M, opens for renters. ◗ In October, 1000M’s developers

PHOTOS BY DENNIS RODKIN

about how many units are under contract. Ground-breaking time is generally when that information gets trumpeted.

2020 ◗ In June, Crain’s reports that construc-

tion has stopped at the 1000M site. A representative of the developer says it’s about protecting construction workers from COVID, but other developers have kept going, with precautions. Construction was deemed a necessary business under Gov. J.B. Pritzker’s shutdown orders. A few months later, the Chicago Tribune reports that Goldman Sachs has put a 90-day hold on its financing of the project.

2021 ◗ In May, Jahn, at 81 years old, died

after being hit by cars while riding his bike. ◗ In December, construction resumes after an 18-month pause, but the building will now be apartments instead of condos. Goldman Sachs has re-upped, and with Deutsche Bank Wealth Management, has lent $304.5 million.

January 2024 ◗ The 73-story tower 1000M, Jahn’s

prepare to have a ceremonial groundbreaking. Crain’s notes that the developers have released no information

last design, begins leasing its 738 units.

below. The angled column is seen to the left of Willis Tower. It’s a departure from the strict rectilinear frame of most highrise windows and a chance for the residents to experience the architecture in their own living space, just as residents of 875 N. Michigan, formerly the John Hancock Center, experience its X-braces from their living rooms. Similarly, the angle of the cantilever shows up in apartments in the section of the building that reaches out 12 feet over the historical building next door. The windows tilt out as they go up. It makes them seem larger, but it also makes the look of the space more distinctive and fun than a standard vertical plane. “When you can see these things from the inside, it’s pretty cool,” Castillo says. He began working

with Jahn in 1979 and has been a leader of the design of 1000M since a joint venture of Time Equities and JK Equities obtained the site in 2019. Jahn and Castillo previously worked for New Yorkbased Time Equities on a Manhattan project, the 64-story 50 West Street. When Time started auditioning architects for the Michigan Avenue site, “we pursued it relentlessly,” Castillo says now. The site has its rewards, including a chance to add a tower to the city skyline, where none of Jahn’s previous works show up, and long views in nearly all directions because of its south Grant Park location. There was also the chance to take advantage of the unusual situation where the owners were keeping the low-rise historical building next door, in part

for its air rights. Castillo points out that while the metal and glass tower has a far more modern look than its historical neighbors, the design makes a dedicated effort to fit in. The aluminum and glass of the lower floors has big frames around the windows, like the vintage buildings on the block, and that section’s rippled aluminum finish suggests the neighbors’ textured brick. Where it nestles between older buildings, 1000M is right-angled like them, Castillo says, but above that the facade and some corners are rounded. The developers, he says, “feel that residential buildings should be soft, with round corners.” At 832 feet high, 1000M is Jahn’s tallest in Chicago, but not his tallest worldwide. That distinction

goes to the 993-foot Leatop Plaza, completed in 2012 in Guangzhou, China. Neither is 1000M the last the prolific architect designed. Castillo says its design was concurrent with the Pritzker Military Archives Center, completed last summer in Somers, Wis. But as the last completed project in Chicago, a city the flashy German-born architect embraced from the time he arrived here as an Illinois Institute of Technology student in 1966 and where he designed eye-catching dorms, office buildings, an airport terminal and a state government building, among numerous others, it’s more than simply another new downtown apartment tower. “I think Helmut would be happy with how this turned out,” says Castillo. FEBRUARY 12, 2024 | CRAIN’S CHICAGO BUSINESS | 7

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M EDITORIAL

A welcome sign that City Hall is listening

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eal estate developers have long complained that the hurdles they must clear to launch a project within Chicago city limits create costly bottlenecks that stall developments for months — even if there’s little doubt they’ll eventually be approved. It’s a problem that predates the current administration. But, perhaps to the surprise of some in the business community, Mayor Brandon Johnson appears to be poised to do something about it, having signed an executive order in December giving city departments 90 days to craft recommendations that would expedite housing and commercial development. As that 90-day period winds down, Crain’s Justin Laurence reports there are several important process changes on the table, many of which could bring welcome relief to real estate developers and investors frustrated by a choppy and overly bureaucratic development approval process. Ideas in the works, according to a document obtained by Crain’s, include combining two mayoral-appointed development review commissions into one, hiring more staff in key positions, investing in technology that will speed the process along, and naming a point person within the mayor’s office whose job will be to streamline all of these functions. Kenya Merritt, deputy mayor for neighborhood and economic development, has led the push to compile this list of reforms, including setting up working groups with real estate professionals and interviewing longtime city staffers for their insights.

Many of the recommendations are in-theweeds policy proposals that are little understood by anyone outside City Hall, but developers argue they’re needed because the current regulations stack up to cause significant delays in the approval process. Among the current problems: sequencing various permit approvals rather than allowing them to happen simultaneously, and not having enough staff in positions who are allowed to review and advance applications forward. The list Merritt is compiling also tackles issues developers have more publicly griped about, including limiting the city’s designreview committee, but not doing away with it entirely, by reducing the number of

committee meetings from three to one, establishing objective design criteria, and standardizing “commentary coming out of design review meetings.” The proposals currently under consideration also include consolidating the Chicago Plan Commission and the Community Development Commission into a single body. Currently the Plan Commission reviews site plans, designs and land uses for major projects. The Community Development Commission approves creation of new taxincrement financing districts and projects that receive funding from the program. Combining these functions under one banner makes sense, and hopefully will result in

time and cost savings for all concerned. The document also outlines potential changes to the city’s zoning rules that would require sign-off from the City Council, including allowing granny flats citywide, revising the private boundaries of the city’s lakefront protection ordinance — which requires projects to get Plan Commission approval — and allowing more density in buildings that offer additional affordable units. The next step in Johnson’s war on red tape involves forming a task force to review the results of Merritt’s fact-finding mission and make recommendations on which changes should be implemented first. Johnson is inviting outside professionals “with working knowledge of local development and entitlement processes” to apply to join a task force that would meet for one year to come up with a “multi-year strategic plan” that would, among other things, develop metrics to measure the program’s success, and serve as ambassadors to “promote the program’s mission and equity-related goals to different audiences,” including the City Council and business leaders. The invitation to the task force acknowledges that the city has developed processes “with the intent to advancing resident interests” that nonetheless “can hinder the speed, cost, and location of the development and unnecessarily increase project costs and risks.” For a business community too often left wondering if this mayor shares or even hears its concerns, the effort to slash red tape and spark more development and investment here is an encouraging sign.

PERSONAL VIEW

We need community-based jobs to address systemic inequity, and corporate Chicago can lead the way

lmost half of Chicago’s 77 community areas, all on the South and West sides, have unemployment rates double the Chicago metro average, and unemployment rates for Chicago’s Black and Latinx populations are multiples of Chicago’s white population. It is a common refrain that “every system is perfectly designed to get the results it gets.” Our current systems and approaches produce these results, and we need true systems change. No amount of effort to increase diversity hiring for jobs in the Loop, the suburbs or in remote environments will close these gaps, much less the follow-on disparities in income, wealth, health, safety and more. The unprecedented corporate focus on diversity hiring over the last three years has been a step in the right direction, but it’s simply not enough. For over three years we had front-row seats to one of Chicago’s most notable corporate place-based investments: Discover Financial’s Chatham Customer Care Center, a project that brought hundreds of quality jobs to the South Side, with more

Juatise Gathings (left), and Matt Johanson are co-founders of Just Act Partners, a consultancy serving efforts to advance equity in Chicago. Gathings, a native of the Roseland community and a member of Crain’s 40 Under 40 Class of 2021, was previously director of operations and community outreach for Discover’s Chatham Customer Care Center. Johanson was previously Discover’s chief ESG officer and senior vice president of social impact. than 80% of employees residing within a short, local commute of their jobs. We came away from that project convinced that the single most powerful way to pur-

sue inclusive economic growth is to create more quality jobs within Chicago’s South and West Side communities. The most underappreciated benefit of community-based jobs is the opportunity to build and nurture a culture that is made by community members for community members. When employees can easily see how they fit in and can thrive as their true selves, it is far easier for them to reach their full potential. In Chatham we saw that employees are more engaged, are retained longer and produce better results for customers. Brickand-mortar operations also have the opportunity to be active in and additive to a community, including direct support for surrounding small businesses. This is community impact and bottom-line business value together. Creating community-based jobs is a prime opportunity for Chicago’s corporate community to fulfill its unique and critical role in addressing generational inequities. In coordination with public, nonprofit, philanthropic and community efforts, the

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. 8 | CRAIN’S CHICAGO BUSINESS | FEBRUARY 12, 2024

private sector has the scale, resources and ingenuity to lean into this new model and find paths to strong business results that also make a material impact. Chicago boasts the second-most Fortune 500 companies of any U.S. city, with 8,000 companies that have 150 or more employees, according to World Business Chicago. Chicago’s rich workforce development ecosystem is focused on creating pipelines of job-ready candidates, but only corporate partners can bring enough quality jobs that provide economic stability and economic mobility to strengthen families, communities and the city’s economy. Luckily, this is not go-it-alone work. Despite numerous reasons for distrust, Chicago’s communities remain ready to embrace and support these efforts. Community members and leaders are ready to be co-creators of inclusive community investment efforts. Companies need to act with intentionality, openness and curiosity to challenge their business-as-usual policies See INEQUITY on Page 9

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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PERSONAL VIEW

Mag Mile has a bright future, and it will take some re-imagining to get there

s there truth in numbers? It depends on your experience, instincts and beliefs about the future. At the end of 2023, the vacancy rate for premises with a direct entrance on North Michigan Avenue was 32%, not including department stores. If we add premises that are under lease but available for re-tenanting, the vacancy rate rises to 47.5%. Seventeen properties encompass approximately 400,000 of vacancies, ranging from 1,075 to 125,000 square feet. Do these numbers suggest North Michigan Avenue is in freefall, headed for a crash landing? Our 32 years of experience on North Michigan Avenue leads us in a direction the numbers would otherwise suggest. We see a very positive future. North Michigan Avenue has been and will always be one of the 10 great shopping avenues of the world. Like everything in life, it is going through a cycle and will need to evolve. This is no different than fashion trends, a nation’s political views, urban vs. suburban lifestyles, industry priorities for investment and the weather. The difference being, North Michigan Avenue is a physical form, owned by many different entities. Retail is always evolving and going through cycles. In its simplest form, urban brick-and-mortar retail has not changed in hundreds of years. Picture a western town in the 1800s. One parked their horse, wagon or buggy. You could arrive by stagecoach or railroad (public transportation). Each town had a

in the United States that saloon (hospitality/food enjoys the immediate and beverage), a mergeographic concentracantile store (fashion), a tion of retail, residential, hardware store, bank, livhospitality, museums, ery (goods and services), offices, medical and a doctor (medical) and a education institutions, jail (law enforcement). physical beauty, natural The physical nature of an urban downtown has Stanley Nitzberg waterways and public evolved, but not the un- is principal and transportation. There is too much at derlying concept. executive vice stake for the avenue to Therein lies the long- president of fail. The stakeholders of term foundation for the Mid-America North Michigan Avenue continued success of Real Estate. — namely, the property North Michigan Avenue. There is no other shopping district owners together with interested

parties including city of Chicago leadership; Alds. Brendan Reilly, 42nd, and Brian Hopkins, 2nd; tenants; Magnificent Mile Association leadership; and neighborhood residents — will find common ground to re-imagine the avenue. It will take initiatives that will include but not be limited to addressing a physical punch list, re-imagining, creating open space and achieving new legislation to enable Business Improvement Districts. There are many current success stories on the avenue, as retailers

ranging from the finest luxury goods retailers to discount category merchants are achieving record sales levels. Pedestrian traffic counts exceed pre-pandemic levels, according to data provider Springboard. Merchants that include Aritzia, H&M, Alo Yoga, Swarovski, A. Lange & Söhne and Paul Stuart have recognized the potential. Chicago is a city that has always grown stronger following difficult times. We invite you to join us as we reimagine a brighter future for North Michigan Avenue.

INEQUITY From Page 8

and practices, learn how to operate successfully in a new community and catalyze change. Companies that approach this work with a commitment to develop cultural competency and fully leverage the community’s lived experiences will find great business and even greater impact. Our learning journey has also raised our optimism that the corporate community is poised to embrace the role that it alone can play, led by collaborative bodies such as the Corporate Coalition and the Civic Committee of the Commercial Club. Surely, there is no shortage of distractions for the corporate community today, but efforts to include all Chicagoans in our economy cannot wait for calm seas and the perfect political and economic climates. As our friend, World Business Chicago CEO and President Michael Fassnacht, recently said in a post, “Our city’s bright future is not predestined. . . .It demands a consistent collective effort from all of us.” For the Chicago corporate community, we hope that effort has an increasing focus on creating community-based jobs. For our part, we will keep sticking our feet in doors until it does. FEBRUARY 12, 2024 | CRAIN’S CHICAGO BUSINESS | 9

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

ACCOUNTING / CONSULTING

CONSTRUCTION

BRAND ENGAGEMENT

John Kasperek Co., Inc., Calumet City / Mokena

Skender, Chicago

ePromos, St. Cloud

Skender, one of the nation’s top building contractors, congratulates Tom Behringer on his promotion to Senior Superintendent, Team Leader. Tom joined Skender in 2011 and has mentored and coached numerous people across the company. His ability to remain levelheaded while leading the charge on technically complex projects is admirable and impressive. People look up to Tom as he is approachable, inspirational, reliable, and an incredible teammate.

ePromos is proud to welcome Adam Rosenbaum as President. His proven expertise in market expansion, operational efficiency and sustainability, and client success aligns seamlessly with ePromos’ goals for growth and innovation. He brings 25 years of financial, operational, and strategic leadership experience in the marketing services industry. Adam worked at BAMKO, where he served as Chief Strategy Officer. Prior to being acquired by BAMKO, he served as COO/CFO and principal at Tangerine.

CONSTRUCTION

CONSUMER PRODUCTS

ARTS / ENTERTAINMENT

Skender, Chicago

Jelmar, LLC, Skokie

Driehaus Museum, Chicago

Skender, one of the nation’s top building contractors, congratulates Eric Fiket on his promotion to Senior Project Manager, Team Leader. Since joining Skender in 2022, Eric has consistently been a calm, meticulous and extremely technical team member. He is incredibly deft at risk management, making him a trustworthy asset to clients. Eric is intentional about building solid relationships, always up for a teaching moment, and has a great disposition while coaching others through complex concepts.

Jelmar, LLC, manufacturer of household and industrial cleaning product lines CLR BrandsTM, CLR PRO® and Tarn-X®, announces Jeffrey Pozen as president and chief operating officer. In his seven years at Jelmar, he’s served as chief of staff, chief financial officer and chief strategy officer. He is leading Jelmar’s innovation, operating, finance, growth and strategy functions. Prior, he was a partner with RSM US LLP, an audit, tax and accounting firm.

JKC is pleased to introduce Robert Little as a full-time Associate. Robert recently earned his Bachelor of Science Degree in Accountancy from Northern Illinois University and completed an internship with the firm last fall. Robert gained significant experience through audit and tax roles for multiple public accounting firms as an NIU student. He now joins JKC’s consulting team. Robert, a Calumet City native, looks forward to serving JKC clients in a greater capacity through his new role.

The Driehaus Museum is pleased to announce the appointment of Nina Yung as its Director of Development and Strategy. In her 15 years in the nonprofit and museum space, she has actively supported various arts and culture organizations in the community and served in leadership roles at the MCA Chicago, the Art Institute of Chicago, and most recently HPS Chicago. In her new role, Nina will oversee the museum’s comprehensive fundraising strategy and support the implementation of the strategic plan.

AUTOMOTIVE RB Global, Westchester RB Global, a trusted global marketplace for commercial assets and vehicles, welcomes Eric J. Guerin as Chief Financial Officer. Mr. Guerin brings extensive senior executive financial leadership experience, including serving on the Skyworks, Inc. board of directors, and most recently serving as the Chief Financial Officer of Veritiv Corporation, until its acquisition in November 2023. Prior to Veritiv, Mr. Guerin served as Executive Vice President and Chief Financial Officer of CDK Global, Inc.

FINANCIAL SERVICES

TranSystems, Schaumburg

Hilco Global, Northbrook

Brian Fairwood is named Executive Vice President of Operations of TranSystems Corp., a consulting firm that provides engineering, architecture, planning, and construction solutions to the transportation marketplace. Fairwood most recently served as Central Region Senior Vice President overseeing both sales and operations for the Central Region of the company, which is made up of 14 offices in five states and is the largest region. He will now oversee business operations across the firm.

Hilco Global announces Eric Kaup and Ben Nortman are appointed to the newly created position of Co-Chief Commercial Officer. Mr. Kaup and Mr. Nortman Kaup will provide vital strategic and business development leadership, driving a more integrated and focused approach to the marketplace. Both will be empowered to capitalize on synergies and adjacencies across all client-centered Nortman capabilities and expertise. Their focus includes unlocking new deals earlier in the business lifecycle and taking a holistic approach to the suite of solutions that the Hilco Global platform offers. Mr. Kaup will focus on deals in the Commercial Industrial sector, while Mr. Nortman will focus on Consumer/Retail and maintain his role as CEO of Hilco Merchant Resources.

EXECUTIVE SEARCH Slayton Search Partners, Chicago Slayton Search Partners is proud to announce the promotion of Ashley Saunders to Vice President & Principal. Ashley joined the firm in 2022 and quickly demonstrated her exceptional execution skills and ability to drive significant results. She will be responsible for developing and managing client relationships within the retail and consumer industries. Ashley has a bachelor’s degree from Olivet Nazarene University and a master’s degree from Columbia College Chicago.

EXECUTIVE SEARCH Slayton Search Partners, Chicago

CONSTRUCTION

EDUCATION

Skender, Chicago

Teach for America, Chicago

Skender, one of the nation’s top building contractors, congratulates Dave Ruzich on his promotion to Senior Superintendent, Team Leader. Since joining Skender in 2016, Dave has prioritized sharing his copious knowledge and skills to the next generation. He has proven himself a valuable resource to all, consistently building his teammates up while maintaining high standards on his projects. Dave is thorough, resourceful, resolute and wellrespected by those he works with.

Teach For America Greater Chicago– Northwest Indiana has appointed a new board member, Nisaini Rexach, to its regional advisory board. Rexach is a Teach For America alumna and the Community Engagement Manager at Microsoft where she oversees the Chicago market around philanthropic investments and initiatives. Before her role at Microsoft, she worked for Chicago Public Schools and as Chief of Staff for the Scratch Foundation.

Slayton Search Partners is proud to announce the promotion of Kelsey Wright to Digital Marketing and Brand Strategist. She will be the primary resource for ensuring brand continuity, serving as a key driver of marketing-related activities. Her success is fueled by her exceptional creativity, attention to detail, and deep understanding of Slayton’s brand values. Kelsey has a Bachelor of Fine Arts degree from Columbia College and a master’s degree from the University of Hawaii at Manoa.

FINANCIAL SERVICES Baird Capital, Chicago ENGINEERING

BANKING

CONSTRUCTION

Old National Bank, Chicago

Skender, Chicago

Hanson Professional Services Inc, Chicago

Old National is excited to welcome John C. Thurston to its Commercial Banking team in Chicago as Corporate Banking Executive. He will lead Corporate Banking teams focused on providing middle market and mid-corporate businesses with a full range of robust banking services including credit, liquidity, and treasury management. John has more than 30 years of relationship-based commercial banking experience, including the past 12 years at Bank of the West / BMO as Area Manager and Managing Director.

Skender, one of the nation’s top building contractors, congratulates Brian Skender on his promotion to Senior Project Manager, Team Leader. Since joining Skender in 2004, Brian has relentlessly and wholeheartedly worked to ensure Skender is a great place to be. His team looks up to him as he generates and embodies loyalty, commitment and support. Brian’s ability to build people up, coupled with his aptitude for fostering meaningful connections, makes him a fan favorite internally and externally.

Todd Merrihew, P.E., has rejoined Hanson Professional Services Inc. as a senior vice president and the principal of the firm’s aviation market. Working from the Chicago regional office, he will oversee the operations and coordinate the business development efforts of Hanson’s aviation team. Merrihew, who worked for Hanson as a project manager and designer from 1995 to 2005, has almost 30 years of experience in the aviation industry and is a licensed professional engineer in Illinois and Ohio.

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ENGINEERING / CONSTRUCTION

Baird Capital recently announced significant leadership updates as longtime COO Scott Skie retires: Katie Schoen assumes the title of Global Head of Investor Relations & Operations Schoen after serving as Director of Investor Relations with Baird Capital. She earned a BS in finance and international business from Marquette University. Erin Jelenchick has been named Baird Capital’s Global Head of Finance. Jelenchick She most recently served as Principal Investments Finance Director at Baird. Jelenchick earned a BA and MPA in accountancy from the University of Wisconsin – Whitewater. The duo has over 35 years of combined industry experience. The co-leadership approach positions the firm well for its next stage of growth.

FINANCIAL SERVICES Mesirow, Chicago Reid Kilberg has joined Mesirow as a Managing Director in Global Investment Management, bringing more than 30 years of experience in institutional business development roles to the firm. This senior hire is the fourth strategic appointment for the Global Investment Management distribution team in the last six months. This comes as part of Mesirow’s commitment to drive growth, enhance investor experiences and build strategic global partnerships.

INVESTMENT BANKING SC&H Capital, Chicago SC&H Capital, a leading investment bank specializing in M&A and other advisory services for middle-market companies, announced Mike Fixler has joined as Managing Director. Fixler brings more than 25 years of experience strategically advising middle-market companies and their stakeholders to the firm’s Special Situations team. His expertise is focused on distressed mergers and acquisitions, capital raising, and various restructuring processes, including in bankruptcy cases.

LAW FIRM Bradford and Gordon, Chicago Jessica L. Nelson has joined the firm as Partner. She has represented clients in all aspects of divorce litigation including high-asset divorce, postdecree modifications, and pre- and post-nuptial agreements. Jessica has previously worked in corporate law and has a particular focus on the intersection of finance and family law. She is a member of the Illinois State and Chicago Bar Associations and serves as member/president emeritus of the Young Professional Board of Deborah’s Place in Chicago.

2/6/24 4:05 PM

LAW FIRM

LEGAL

MANAGEMENT CONSULTING

TECHNOLOGY

Holland & Knight LLP, Chicago

Riley Safer Holmes & Cancila LLP, Chicago

Levenfeld Pearlstein, Chicago

RHR International, Chicago

EC-United, Chicago

LP welcomes Kathryn (Katie) Nadro as a partner in their Corporate Group, advising clients on cybersecurity and data privacy matters. A Certified Information Privacy Professional (CIPP/US), Katie helps clients navigate data security and privacy issues. She assists with policy drafting, program management, data collection, and incident response. She also advises clients on best practices for compliance with evolving state, federal, and international data protection laws.

RHR, a leadership consulting firm, has named Jessica Bigazzi Foster, PhD, as Chief Executive Officer. Foster recently served as President and, since joining RHR, she has become a trusted advisor to influential CEOs, C-suite executives, and boards of directors. Foster is respected as a global thought leader on talent management, leadership in complex environments, and the future of work. She has a bachelor’s in psychology, as well as a master’s & PhD in industrial and organizational psychology.

EC-United, a nationally certified MBE technology consulting firm specializing in delivering innovative professional services, hardware, software and workforce labor solutions, is pleased to welcome Cecelia Bolden as Executive Vice President and Chief Operating Officer to our team. With more than 30 years of experience, Cecelia will lead the operational execution of EC-United’s three towers of service, along with business development, project oversight, and call center operations.

Rachel Agius and Anthony Amorini have been elected to partnership at Holland & Knight. Ms. Agius is a member of the firm’s Litigation Section in Agius Chicago. Her practice focuses on commercial litigation, class action defense, energy litigation and data privacy matters across a variety of industry sectors. Mr. Amorini is a member of the firm’s Business Section in Chicago. Amorini He primarily represents borrowers and lenders in senior secured credit facilities, second-lien credit facilities, real estate finance matters and syndicated credit facilities.

LEGAL

LAW FIRM

Benesch, Chicago

Marshall, Gerstein & Borun LLP, Chicago

Geoffrey J. Rahie has joined Benesch as a Partner in the firm’s Corporate & Securities Practice Group and Co-Chair of the Private Equity Practice Group. Geoff is recognized as a top dealmaker who provides strategic advice to clients as they navigate their investment decisions. He spends most of his time counseling private equity clients with respect to acquisitions, divestitures, recapitalizations and other material corporate transactions.

Isaku M. Begert recently joined Marshall Gerstein as an Associate. Using his foundation in mathematics and physics and a keen understanding of complex legal matters, he handles all aspects of IP litigation from beginning to end, and is adept at providing creative solutions for his clients. Isaku earned his J.D. (with honors) and an L.L.M. in Intellectual Property law from DePaul University and a B.A. in Mathematics, with a minor in Physics from Cornell University. LAW FIRM Marshall, Gerstein & Borun LLP, Chicago Marshall Gerstein is proud to welcome Associate Enisha Smith to the firm’s Electrical & Computer Technologies group. There, she focuses on patent prosecution in the electrical, computer software, mechanical, and electromechanical technologies. Enisha earned her J.D., cum laude from North Carolina Central University School of Law and a B.S. in both Electrical Engineering and Criminal Justice from North Carolina A&T State University.

RSHC is thrilled to announce that Christopher Hickey has been promoted to partner. Chris focuses his work on complex product liability and commercial litigation matters with a particular concentration on serving aviation-industry clients. An accomplished trial and appellate lawyer with years of military service, and an experienced private pilot, Chris is the first RSHC partner who is also a military reservist. He is based in the firm’s Los Angeles/Irvine office but practices internationally.

LEGAL Hughes Socol Piers Resnick Dym Ltd., Chicago HSPRD is excited to announce Emily Brown’s promotion to Partner. Since joining the firm in 2019, she has excelled in legal strategy and client advocacy, leading highvalue cases to successful outcomes. Her extensive background in public interest law and complex litigation aligns with the firm’s mission and values. Emily’s achievements, which include securing favorable settlements and judgments, highlight her commitment to providing our clients with outstanding representation.

LEGAL Hughes Socol Piers Resnick Dym Ltd., Chicago

LAW FIRM Phillips Lytle LLP, Chicago Frank G. Dylewski has joined Phillips Lytle LLP, a preeminent law firm that is recognized nationally for its legal expertise, as special counsel. An experienced litigator, Mr. Dylewski will continue to accelerate the growth of the firm’s national litigation practice as well as its rapidly expanding Chicago office. He will collaborate with the firm’s talented roster of attorneys to assist clients in navigating intricate legal challenges and delivering legal solutions that achieve business goals.

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HSPRD elevates Lori Deem and Charlie Wysong to firm shareholders, enriching our capabilities. Lori excels in counseling and representing executives in employment matters that Deem involve compensation, equity, job transitions, harassment, and discrimination. Charlie represents litigants in substantial and complex employment, fraud, qui tam, and discrimination lawsuits. He obtains multi- Wysong million-dollar outcomes for whistleblowers, employees, and other plaintiffs, and anchors our appellate litigation practice with notable victories in the Illinois Supreme Court. Their promotions strengthen our lasting position as a legal leader and ensure that HSPRD provides exceptional tailored legal solutions for each client.

NON-PROFITS

LEGAL Levin Ginsburg, Chicago Levin Ginsburg is pleased to announce that Adam M. Heiman has joined the firm as a Partner. Adam will be heavily involved in the firm’s Estate Planning and Real Estate practice groups. Adam is a graduate of Chicago-Kent College of Law (J.D., 2001) and Indiana University (B.S. Accounting, 1998). He is also a registered Certified Public Accountant. Adam has extensive experience serving as a trusted advisor on estate and wealth planning matters, including preparing gift and estate tax returns and handling trust and estate administration. His real estate experience includes advising clients on sale transactions, leases and financing of various commercial properties, including multi-family apartments, industrial and office buildings.

LEGAL Levin Schreder & Carey, Chicago Levin Schreder & Carey congratulates Peter B. Allport on his admission to equity partnership. Pete concentrates his practice on representing clients in trust, estate, and family and other closely Allport held business disputes, as well as other types of fiduciary litigation. Maria M.L. Schwartz has been admitted as a partner. Maria focuses her practice on tax and succession planning for high net worth families. Schwartz She has significant experience advising family offices and family businesses on ownership, structure and governance best practices. Maria also counsels trustees and executors on trust and estate administration, including management of family trust companies.

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

The Chicago High School for the Arts (ChiArts), ChiArts Foundation, Chicago ChiArts, Chicago’s first public arts high school, has promoted Tina Boyer Brown from Artistic Director to Executive Director. Under the guidance of Boyer Brown Brown and newly appointed Artistic Director Greer Reed, ChiArts’ faculty provides tuition-free, pre-professional arts training to students from all 50 wards. Also, Johnny Merrifield was promoted to Executive Director of Merrifield ChiArts Foundation, the philanthropic partner of ChiArts, from his prior position as Director of Development and Marketing. With this leadership transition and since its origin, ChiArts Foundation continues to fulfill its mission that novice talent should have access to the opportunity and training to thrive, no matter their previous exposure to arts education or income.

PROFESSIONAL SERVICES NORC at the University of Chicago, Chicago NORC at the University of Chicago has promoted Angela DeBello to its first chief of staff. DeBello, previously senior vice president of Business Development, will serve as an advisor, thought partner, and liaison in the Office of the President and work across NORC to help advance its goals. She will drive initiatives that foster institutional priorities and continue to oversee the Office of Business Development. She is a 25-year veteran of NORC.

SOFTWARE Salesforce, Chicago World Business Chicago announces the appointment of Christina Meitus, EVP and Head of Professional Services Americas, Salesforce to its distinguished board of directors. World Business Chicago is committed to fostering inclusive and equitable economic development through business growth and expansion, workforce development, and community impact. World Business Chicago also promotes the Chicagoland region as a premier global hub for business and innovation.

TECHNOLOGY SERVICES Xamin, Inc., a subsidiary of Mowery & Schoenfeld, LLC, Lincolnshire Xamin, a subsidiary of Mowery & Schoenfeld, recently announced strategic leadership changes: Jeff Brandt has succeeded Jonathan Smith as CEO, and Suraj Prakash has been hired Brandt as the company’s CTO. Jeff will lead Xamin to a new phase. With 30+ years of experience, most recently as the President of William Frick & Company, he has successfully spearheaded growth Prakash strategies, operational enhancements, and client satisfaction initiatives. Suraj will oversee the company’s core products while developing and delivering technologies to maximize the value Xamin’s clients get from their technology investment. He brings a 10+ year career in product development and management, driving strategy and revenue growth for Chicagoland businesses.

WEALTH MANAGEMENT Altair Advisers LLC, Chicago Altair Advisers promoted Allison L. DiLiberto to Managing Director, Head of Finance and Operations and Anna E. Nichols to Managing Director, Head of DiLiberto Client Education. Allison joined Altair as Director of Finance and Administration in 2021. Her financial and managerial leadership, passion for fostering a superb workplace culture and ability to navigate complex Nichols financial landscapes has made her a true asset to the firm. Anna came to Altair in 2012. Her background in research, program development and facilitation led to the development of the firm’s client education services. Her commitment to excellent service coupled with her strategic insights and leadership have been instrumental to Altair.

2/6/24 4:06 PM

How Alinea wound up on so many global travelers’ bucket lists In the elite realm of haute cuisine where Alinea resides, the influence and name recognition and drawing power of the restaurant extends well beyond Chicago to the dining capitals of the world | By H. Lee Murphy

hen Choose Chicago, the local tourism agency, was polling visitors a decade ago or so on what attractions brought them to the city, many of the responses were predictable — the museums and the lakefront and Navy Pier and local sports teams all got mentioned. But for several years running, one attraction noted in the top five by Choose Chicago was a surprise: the Alinea restaurant in Lincoln Park, which boasts all of 70 seats and a sold-out dining room every night. On a nice summer day, more than 70 people churn through the entryway at Navy Pier every few minutes. But in the elite corridors of haute cuisine where Alinea resides, the influence and name recognition and drawing power of the restaurant extends well beyond the city to the dining capitals of the world. The accolades have kept piling on since the place opened in 2005: named best restaurant in the world by Elite Traveler, best restaurant in North America by World’s Best 50 Restaurants, and best restaurant in the U.S. by Gourmet magazine and Business Insider. It’s one of just 13 restaurants in the nation to own the coveted Michelin three-star rating. Foodies the world over know Alinea and put it on their travel itinerary. The head chef and co-owner at Alinea since the start has been Grant Achatz, 49, a cancer survivor who still spends most nights in his kitchen doing the cooking. But the business’s growth — it’s now part of a group of five restaurants and lounges — has been orchestrated in large part by its other co-owner, Nick Kokonas, a former bond trader who doesn’t cook but co-founded the restaurant two decades ago and ever since has taken a lead role in managing its balance sheet. It is Kokonas who keeps a sharp eye on the firm’s marketing and promotional reach. Kokonas, 56, chatted with Crain’s Chicago about Alinea’s success and wide-ranging influence. Excerpts follow. Crain’s: With a restaurant in Evanston, Chef Grant already had a reputation among local foodies when you two were first planning Alinea 20 years ago. But did you at that time ever think it would turn into a global phenomenon? Kokonas: Actually, we always aimed for a national and international audience. When we opened, the restaurants with international reputations in and around Chicago were Charlie Trotter’s and Le Francais, but both had been around a long 12 | CRAIN’S CHICAGO BUSINESS | FEBRUARY 12, 2024

while and we had confidence from the start that we could do things different and better. More than a year after we opened, Gourmet magazine named us the best restaurant in America, and after that the excitement kept building. James Beard and Yelp and Tripadvisor were all calling us the best restaurant and Grant the best chef, and the positive reviews kept coming, though we never became complacent. All the while, unlike some other restaurants, we never paid for all this attention — every reviewer paid for his or her own meal — nor did any advertising. People who are serious about food read all the articles, and we became known by practically everybody. On a global scale, most people would consider Michelin the ultimate in restaurant guides. When I was a young food lover myself, I admit that I traveled through Europe in the ’80s with that familiar red Michelin guide under my arm and visited as many three-stars as I could afford. So many tourists did the same then, and as a three-star in Chicago, I assume you attract the same kind of Michelin followers. In fact, there are only a few thousand print copies of the Chicago edition of the Michelin Guide printed every year. But its influence is so legendary that every year when a new guide is released, all the media — newspapers (including Crain’s) and magazines and TV stations — cover it like a major news event. And so that three-star award is publicized far beyond the actual guidebook’s reach itself. European travelers are very dependent on Michelin still. Having said all that, it’s clear that things are changing. People under the age of 45 who grew up on the internet aren’t likely to know Michelin and its restaurant history. There are no one or two restaurant arbiters anymore. Young people now get more news from Instagram than anywhere else. The single most important media for us has been the Netflix show “Chef’s Table.” We were featured on that at the start of its second season six years ago, and that single episode has been viewed millions of times since around the world — in 120 countries in all. To this day we keep encountering people who saw that show and then put Alinea on their must-visit bucket list.

Inside Alinea | MATTHEW GILSON/ALINEA GROUP

I’ve always argued that one city — even a big city like Chicago — can’t support a three-star Michelin restaurant by itself. It needs tourists. Where are people coming from at your restaurants? We started recognizing where people were from by the area codes for their phones listed on their reservations. For travelers from overseas, we started giving them souvenir menus printed in their native languages as they departed. I once went into our Aviary lounge pre-COVID and noticed that nearly all the customers were speaking Mandarin that night. For some reason our restaurants are on the radar for Chinese tourists. So we started printing menus in Mandarin. At Alinea itself, in summer months we estimate that 70% of our guests are from outside of Illinois and 30% are from outside the U.S. The thing about restaurants

today is that even if diners visit you once, you can’t count on them to come back. I studied credit card data from one American city to another and found that for visitors to any single restaurant, only 6% of them return within a year. The vast majority of people come and then you won’t see them again for at least several years. That tells you it’s a big world out there. One reason they don’t come back to you is they can’t — you’re sold out every night. My sources tell me you did $5 million in revenues your first year and you did well over $25 million last year. That’s huge for a place with just 20 tables. It’s true that we have a wait list for a seat at Alinea each week of more than 1,000 names. Our menu prices ran $85 to $145 per person when we opened in 2005, and the average check per customer today is around $650,

alcohol and service included. When the great French Laundry restaurant opened in remote Yountville, Calif., in the mid-1990s, I well remember that it had no sign out front. It was way too cool for a sign. (Achatz worked at the French Laundry for a time in the '90s.) In almost 20 years you’ve never had a sign either, which might be an annoyance for some visitors. When we were getting ready to open I asked a guy to design a sign for us and it came to an estimated cost of $150,000. Our entire budget to open the place was just $2 million. So we couldn’t afford the sign. Fortunately every Uber driver knows how to find us. This story appears in the ChicagoGlobal newsletter, a joint project of Crain’s Chicago Business and the Chicago Council on Global Affairs.

If there’s one thing the COVID-19 pandemic taught us, it’s the value of adapting and mapping the path ahead. In health care, tech, architecture, nonprofits and more, these leaders are charting the way. Some are looking forward to transitions in 2024, laying the foundation for continued success. Others are making the investments needed to confront the challenges faced by our city and region. The through line for all: The status quo is not an option.

ELLEN ALBERDING

DEBRA CAFARO

FRANCESCA CORNELLI

CEO, Joyce Foundation

Chairman and CEO, Ventas

Dean, Northwestern University’s Kellogg School of Management

espite her plan to step down this year from leading the Joyce Foundation, Ellen Alberding has big plans for the final months of her 22-year tenure. Alberding, 65, says the foundation will focus on its core missions of racial equity and economic mobility for people who live in the Great Lakes states. That, she says, will tee up her successor to dive into these topics in the coming years. “Economic mobility is related to everything that we work on here, and we will be really leaning into that for the next year,” Alberding says.

“I’m proud of our ambitions, because we can make big-impact changes over time.” — Ellen Alberding Under her leadership, the Joyce Foundation — one of the largest foundations in Chicago, according to Crain’s data — has been at the forefront of tackling some of society’s biggest issues, which also include gun violence and environmental concerns. And there are no plans to slow down. Alberding has laid the foundation for Joyce’s new leader to hit the ground running and succeed, including growing its assets to $1.3 billion. In 2021, following the murder of George Floyd, the foundation pledged $250 million over five years to redouble its racial equity and economic mobility emphasis. And as COVID took a toll on Chicago’s education system, the foundation responded with millions in grants. After moving swiftly to answer the biggest issues facing the city and region, Alberding says Joyce will continue to strive for change. “I’m proud of our ambitions, because we can make big-impact changes over time,” she says. — Brandon Dupré

hen Debra Cafaro was named CEO of Ventas in 1999, she was experienced in real estate, law and finance, but she was new to the world of health care. Cafaro, now 66, took the role as an opportunity to learn about a sector that touches everything. And the industry is about to become even more prevalent 25 years later. The firm, one of the nation’s largest health care real estate investment trusts and the secondlargest owner of senior housing in the U.S., is poised for expansion as aging baby boomers create a wave of demand for affordable housing and services. Ventas is seeing a record number of new residents at its senior housing properties, with moveins rising to 120% of 2019 levels, according to the REIT’s third-quarter report. That’s a trend Cafaro expects to continue, as the world’s population of people over age 80 is projected to balloon to 426 million by 2050, triple what it was in 2020, according to the World Health Organization. The demographic trend comes as the high cost of labor, materials and borrowing has tightened supply — factors that have created challenges for much of the commercial real estate sector but give Ventas an advantage due to demand in the senior housing and health care niches. “Ventas is in a much better spot because we have so much demand that is growing the business in a way that’s outpacing some of the interest rate increases,” Cafaro says. It also helped that the company raised about $3 billion early in 2023, putting it in a strong financial position before interest rates skyrocketed. Still, Ventas is navigating a long recovery from the COVID-19 pandemic and working to get back to pre-pandemic levels of occupancy and earnings in the coming years. This year, the REIT plans to ramp up its property acquisitions, a part of the business that was dampened due to COVID. “We want to add to that kind of unprecedented organic growth opportunity,” says Cafaro. — Rachel Herzog

rancesca Cornelli’s career in business and academia has taken her around the globe. A native of Milan, she’s taught at the Wharton School at the University of Pennsylvania, the London School of Economics, the Indian School of Business in Hyderabad, India, and the New Economic School in Moscow. But a few months after she became dean of Northwestern University’s Kellogg School of Management, the COVID-19 pandemic hit and Cornelli had to figure out how to lead a business school while the world locked down. “It was like a baptism of fire,” she says. “But I was obliged to really focus on crisis management.” Luckily for Cornelli, Kellogg’s own crisis management courses helped the newly minted dean navigate an unprecedented emergency. Faculty with that specialty became her cabinet during the early days of the pandemic and their advice proved critical, she says. “They helped me figure it through, not to overreact and not to panic and to focus on the calm, on the communication and always keep in my North Star.” Cornelli, 61, isn’t surprised that the crisis management course is compulsory at Kellogg. The business school is focused on teaching students how to lead during turbulent times, be it weathering a pandemic or a corporate PR dilemma. That’s the pitch she is hoping will attract students to Kellogg, as applications continue to decline at MBA programs across the country. The number of Kellogg applicants dropped from 5,813 in 2020 to 3,910 in 2022. Last year marked a slight rise to 4,032. Cornelli notes that applications shot up in September, indicating prospective students may have been pessimistic about the state of the economy. “When there’s a boom, people don’t leave their jobs,” she says, “and when there’s a recession, that’s when they leave their jobs to apply.” — Leigh Giangreco FEBRUARY 12, 2024 | CRAIN’S CHICAGO BUSINESS | 13

T BRIDGET COUGHLIN President and CEO, Shedd Aquarium

he Shedd Aquarium’s ambitions aren’t bound by its location on the Museum Campus, says President and CEO Bridget Coughlin. “We have this idea that we not only are here in Chicago, but truly everywhere,” she says. “This idea is just going to scale incredibly in 2024.” Coughlin envisions a global footprint for the Shedd, and she’s already delivered on that promise. The aquarium works with a shark sanctuary in Indonesia, has studied coral reefs off of the Florida coast and embarked on an ambitious project to track fish activity in the Chicago River, to name a few

S SUSAN CROWN Chairman and CEO, Owl Creek Partners; founder, Susan Crown Exchange

usan Crown sees plenty of parallels in the worlds of business and philanthropy in which she operates. When considering investments at private-equity firm Owl Creek Partners, she described her style as opportunistic, with many of her investments targeting women-led companies. She often finds deals through connections with leaders she has met via her service on corporate and nonprofit boards. “I only invest in things where I really understand the issues and the markets and I have a strong belief in the people running the organization,” says Crown. She points to a 2019 investment in Coursera, which partners with uni-

D DR. NGOZI EZIKE President and CEO, Sinai Chicago

r. Ngozi Ezike leads one of the largest health systems in the area, but unlike some of her peers, she has the unique challenge of serving Chicago’s sickest and poorest patients. As Illinois’ largest safety-net health system, with nearly $610 million in 2022 revenue, Sinai Chicago predominantly serves patients with Medicaid and Medicare, government-sponsored health insurance plans that typically reimburse at lower rates than commercial ones. Many other Sinai patients don’t have insurance at all. Sinai provided $52 million in uncompensated charity care in 2022, according to its annual report. That means Ezike, 51, needs to maintain four hospitals, 14 clinics and a research institute on slim margins,

B XUAN FU Managing partner, Skidmore Owings & Merrill

eijing native Xuan Fu joined Skidmore Owings & Merrill in 1994 as a technical architect, a role that had her collaborating with experts from around the world while she was still learning English. She started her career by working on a major landmark project, the Jin Mao Tower in Shanghai, and now leads SOM’s practice in China. She’s currently overseeing the creation of a master plan to transform Guangzhou South Station, one of China’s biggest transit hubs, and the design of more than 20 square miles of waterfront communities in Nansha, which will be built to safeguard against storms and flooding. “Our vision extends beyond infra-

initiatives — and this is only the beginning. “Our vision is a world thriving with aquatic life,” she says, “and that is not only a local effort, but also a global one for the Shedd.” There are also big plans for the Shedd’s physical location. This year, the aquarium will get underway on what it’s calling the largest “physical transformation” in recent memory: a $250 million plan to reimagine its historic galleries along with modern upgrades that will offer a more immersive feel. As museums and other nonprofits have struggled coming out of the COVID pandemic, the Shedd has seen a resurgence under the leadership of

Coughlin, 52, who was named CEO in 2016. Post-COVID crowds have returned in numbers that surpass the aquarium’s own projections. In 2023, the Shedd posted its best year since 2013, with 1.99 million visitors. Since reopening in 2021 after pandemic closures, the Shedd has continually beat yearly attendance expectations as it expands its reputation and brand name globally — and there are no plans of slowing down this year. “People are voting with their feet, and our mission is really resonating,” says Coughlin. — Brandon Dupré

versities and companies to provide online learning, as an example. Coursera’s CEO was a former president of Yale University whom Crown met when she was a fellow on the Yale Corp. That relationship paid dividends, as interest in Coursera surged with the onset of the COVID-19 pandemic. At the youth-focused philanthropy Susan Crown Exchange, she also defers to experts in the subject matter before determining how to spend her time and capital. “We are doing things that most other places are not doing, which is listening to kids’ voices,” she says. “We find out what they are facing, what their challenges are. It really comes from what we learn from kids.”

Crown, 65, who worked within other organizations for decades, said that both Owl Creek and the Susan Crown Exchange allow her to work independently and make moves quickly. “I have a higher risk threshold than I think I would have before I started these.” She currently sits on the board at organizations such as Illinois Tool Works, Rush University Medical Center, Northern Trust and the Brookings Institution, allowing her to stay connected to leaders who might provide her with the genesis of her next youth enterprise or investment. “I really feel just lucky to have an inside track at all these exceptional places,” she says. — Mark Weinraub

providing essential health care to some of the city’s most vulnerable patients. “We are in a very special niche in terms of the very steep incline we face in trying to deliver the highest quality of care with very limited resources,” says Ezike, who holds a bachelor’s in chemistry from Harvard University and specialized in internal medicine and pediatrics at the University of California, San Diego’s School of Medicine. Ezike came to Sinai in June 2022 after serving in another and uniquely demanding role: director of the Illinois Department of Public Health during the onset of the COVID pandemic. During her three-year tenure, Ezike, the department’s first Black female leader, became the face of Illinois’ pandemic response. That experience has informed Ezike’s

approach to not just offering traditional health care at Sinai, but also investing in addressing food and housing insecurity and providing job opportunities to the surrounding communities. “We don’t stay in a lane,” Ezike says. “We take over the whole road . . . because all of that is intimately tied to health.” She advocates for legislative policies to better support safety-nets like Sinai and fundraises from private donors. “More people are thinking about not just the care that they get, but the care of people who might not be as advantaged or privileged, and realizing despite your ZIP code, despite your place of origin, despite how much money you have in your bank account, we all need health care,” Ezike says. — Katherine Davis

structure, aiming to cultivate sustainable, thriving communities in the face of environmental challenges,” says Fu. SOM, the architectural firm that handled the design of the Willis Tower, the former John Hancock Center and several of the tallest buildings in the world, has long had a focus on sustainable design. As climate change and extreme weather have come to the forefront in the last few years, Fu describes the firm’s approach as an ongoing commitment to evolve the firm’s projects, practices and operations. “In the face of climate change, our challenge is to be introspective and visionary in our approach,” she says. “We share our journey openly, inviting

others to join us on this transformative path toward a more sustainable and inspiring future.” Over three decades at SOM, Fu, 59, has transitioned into business development and worked her way up to project manager and eventually partner. Elevating women to leadership roles in the historically male-dominated field has been a priority for her, and she was elected to the firm’s now all-female executive committee in 2019. “I aspire to pass on the wisdom and guidance bestowed to me by my mentors and to continue mentoring and supporting the next generation of architects,” she says. — Rachel Herzog

14 | CRAIN’S CHICAGO BUSINESS | FEBRUARY 12, 2024

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VALERIE JARRETT

DORRI MCWHORTER

PENNY PRITZKER

CEO, Obama Foundation

President and CEO, YMCA of Metropolitan Chicago

Chairman, PSP Partners

fter a tumultuous presidential election in 2016, Valerie Jarrett needed time to recover. The former senior adviser to President Barack Obama spent time with her grandson, wrote a book and went on the speaking circuit. Then she got a call from her former boss. “President Obama called me and he said, ‘I think it’s time for you to come home,’ “ says Jarrett. So began her next chapter in 2020 as CEO of the Obama Foundation and the Obama Presidential Center, the living monument to the 44th president rising in Jackson Park. It’s a fitting position for Jarrett, 67, who has long worked as keeper of the legacy for Barack and Michelle Obama. And she maintains that while the political climate in America has become more divisive since Obama left the White House, his legacy will endure. “The fact that our country elected a Black man president is a sign of progress,” Jarrett says, noting lasting Obama wins including the repeal of “Don’t Ask, Don’t Tell” and passage of the Affordable Care Act. “It’s also going to be up to the next generation of leaders to build on that legacy and to follow his example, but chart their own path. That’s what our foundation is designed to do.” Under Jarrett’s leadership, the foundation has lined up a slate of scholarships. In 2022, a $100 million donation from Airbnb CEO Brian Chesky launched the foundation’s Voyager Scholarship, which awards financial aid and travel stipends to college juniors and seniors. The foundation also supports My Brother’s Keeper, a national program Obama began as president that addresses opportunity gaps for boys and young men of color. Demonstrating success stories from those programs has made it easier to fundraise, Jarrett says. Keeping that momentum going will remain a key challenge. The center intends to build an endowment that will help pay for the cost of operating the campus, she adds. “(We’ve got) two more years of construction, which takes a lot of time and energy to stay on track and on budget. So that’s a daily challenge. But every time I go out to the site and I see what we are creating and how it’s going to benefit the community, it makes it all worthwhile.” While Jarrett sees signs of progress since her days at City Hall — first working for former Mayor Harold Washington and later for former Mayor Richard M. Daley — she laments the low voter turnout in local elections; just 33% of registered voters cast ballots in the April 2022 mayoral runoff. To help counter that, Jarrett chairs the board of Civic Nation, a nonpartisan nonprofit that includes a voter registration initiative created by Michelle Obama called When We All Vote. “An engaged and involved electorate is one of those very important, essential characteristics of a healthy democracy,” says Jarrett. — Leigh Giangreco

16 | CRAIN’S CHICAGO BUSINESS | FEBRUARY 12, 2024

estoration and expansion are on the agenda this year for the YMCA of Metropolitan Chicago. President and CEO Dorri McWhorter has already overseen the reopening of the nonprofit’s Little Village location, which closed during the COVID pandemic. And its previously closed Rogers Park location was turned into a shelter for asylum-seekers who have arrived in Chicago in the past year; plans call for reinvesting in the Far North Side location and reopening to the public, she says. Named to the top post in 2021, McWhorter, 50 — the first Black woman to helm the YMCA of Metropolitan Chicago — is keenly aware of the toll the pandemic took on the city and how it upended and changed people’s lives.

“If the Y can make movement more accessible for folks, then we can actually help change some health outcomes for a lot of people.” — Dorri McWhorter In 2024, the Y is mobilizing to meet those needs. An ambitious new project will focus on a strategy to get Chicago moving and active again after the pandemic forced people indoors and into more sedentary lifestyles. The goal is to help reduce health care and insurance burdens by improving health through play. “If the Y can make movement more accessible for folks, then we can actually help change some health outcomes for a lot of people,” she says. And to better serve a modern city, the Y — one of Chicago’s oldest social service agencies, founded in 1858 — plans to begin a 24/7 child care service geared to parents who work night shifts. If you want your Amazon package to arrive at 7:00 in the morning, someone has to process and deliver it, she says. “Meeting folks where they are at and serving new community needs is what we plan to do,” says McWhorter. — Brandon Dupré

enny Pritzker has always viewed herself as a builder, no matter what her title says. “This is the common thread throughout my career,” she says. “I firmly believe that building businesses, driving innovation and fostering entrepreneurship can be a truly noble endeavor and a powerful force for good.” Pritzker, 64, has had plenty of opportunities to build, whether in past positions as secretary of the U.S. Department of Commerce in the Obama administration, or in her current role as head of private investment firm PSP Partners and through the Pritzker Traubert Foundation, a philanthropy she started with her husband, Bryan Traubert, that works to increase economic opportunities for families in Chicago. She sits on the board of directors at software firms Icertis and Microsoft and leads Harvard University’s governing body, a position that’s drawn extra scrutiny in recent weeks. Most recently, Pritzker was named the special representative for Ukraine’s economic recovery by President Joe Biden, a position she felt a special connection to, as her family fled Kyiv more than 140 years ago to escape Jewish persecution. “Economic assistance is just as essential to Ukraine’s survival as security assistance,” says Pritzker. “We are working with allies and partners to help Ukraine become a sustainable, digital, clean, competitive and European country integrated into global markets.” Closer to home, the Pritzker Traubert Foundation is focused on community and workforce development in neighborhoods on Chicago’s South and West sides, where high rates of poverty and unemployment follow decades of disinvestment. The foundation has contributed $30 million to community-led real estate projects through its Chicago Prize project. “We firmly believe that talent is universal across Chicago, but opportunity is not,” Pritzker says. PSP Partners has made investments in companies such as E.B. Bradley, digital agency Dept, Benchmark Analytics, Ellevest and Arboretum Partners. No matter the industry, every company must have one thing before PSP will invest. “First, it starts with culture,” Pritzker says. “We are a culture- and values-based organization and believe that our core values are the foundation of our great culture.” PSP is well positioned to take advantage of the forecast for an improving economic picture in 2024, with Pritzker pointing to infrastructure and industrial services, technology and real estate as expected highlights. “We will be doubling down on the growth initiatives at our existing companies and believe the environment will be favorable for new partnerships and investments in leading companies with world-class teams,” she says. — Mark Weinraub

LAURA RICKETTS

JENNIFER WELCH

BETSY ZIEGLER

Co-owner and director, Chicago Cubs Baseball Club; minority investor, Chicago Sky; co-owner, Chicago Red Stars

President and CEO, Planned Parenthood of Illinois

CEO, 1871

oming out of the University of Michigan Law School in the late 1990s, Laura Ricketts didn’t pursue a career in professional sports team ownership. Now she’s a key investor in three of them. Most Chicago sports fans know her family for its control of the Cubs. But the 56-year-old dove into women’s professional sports in a big way in 2023, becoming a minority stakeholder in the Chicago Sky WNBA franchise and leading a group of women from the Chicago business and civic scene to buy the Chicago Red Stars of the National Women’s Soccer League for $35.5 million. Ricketts says the opportunities to buy into the women’s pro sports franchises were “serendipitous,” and that social and economic inequalities magnified by the COVID-19 pandemic fueled a “personal reckoning” that steered her deeper into sports as a platform to effect change. But both investments are on brand for a high-profile Chicago figure who focuses much of her work on empowering and promoting women and the LGBTQ+ community. “By showing that these endeavors and clubs can be commercially successful, it furthers women’s equity and equality and empowerment,” Ricketts says. Her coalition of investors that bought the Red Stars in August said it would commit an additional $25 million in new investment into the club’s soccer and business operations. Ricketts in the meantime is focusing on Beyond Barriers, a venture she co-founded in 2021 that companies hire to provide womenfocused professional development training. Like other members of her family, she also has one foot in politics: Ricketts was the biggest individual donor to former Mayor Lori Lightfoot’s re-election campaign last year and is on the committee in charge of financing the upcoming Democratic National Convention at the United Center this August. “I don’t like politics,” Ricketts says. “But (women) have to play on the field, or we forfeit. And what we forfeit is decisions the government makes that affect our lives.” — Danny Ecker

ver since the U.S. Supreme Court overturned Roe v. Wade in June 2022, Jennifer Welch has been on the front lines of abortion access and care for Americans here and elsewhere, as abortions have been tightly restricted or outright banned in many states. Illinois is now sometimes the closest destination for abortions for millions of women. While most of PPIL’s out-of-state patients come from nearby Wisconsin, Indiana, Kentucky and Missouri, the group’s 18 clinics have seen patients from about 40 states since the Dobbs ruling. The organization’s number of abortion patients has more than doubled and about 35% of its patients come from another state, she says.

“I’m afraid that this is the new normal and it is likely to be even more challenging for patients to get the care that they need.” — Jennifer Welch “I’m afraid that this is the new normal and it is likely to be even more challenging for patients to get the care that they need,” says Welch, 55, who has headed PPIL for about seven years. To meet the demand, she has hired dozens of employees and opened new clinics, including one in southern Illinois that’s designed to be accessible to patients coming from Alabama, Mississippi and other Southern states. “We have expanded just in time to meet the moment,” Welch says. “But the fact that we can do it doesn’t mean it’s easy for us.” PPIL has provided more than $2 million in subsidies and financial assistance to patients since the Supreme Court’s decision. “It’s amazingly expensive,” she says. The influx of patients hasn’t gone unnoticed by abortion opponents. PPIL’s Peoria clinic was the site of arson last year; it closed and is expected to reopen later this year. “What we are seeing is an emboldened opposition,” Welch says. “Our opposition is getting more vocal and more violent.” As a nonprofit, PPIL heavily depends on philanthropic contributions. As she prepared for Roe v. Wade to be overturned, Welch launched a fundraising campaign, ultimately raising $40 million, which she says is covering the costs of PPIL’s expansion so far. But more funding will be needed. “We’re going to need consistent, ongoing support to maintain this care,” Welch says. — Katherine Davis

ew organizations were more upended by the COVID pandemic than 1871. Like any good startup CEO, Betsy Ziegler pivoted. The tech co-working space at the Merchandise Mart was founded in 2012 on the idea that startups needed affordable office space that could grow with them, as well as a community of mentors and collaborators. Remote work changed that equation. A little less than half of its co-working space at the Mart is now occupied, compared with 90% pre-pandemic. “For a year-plus, we’ve been using that as an excuse for why we can’t do things,” Ziegler says. “We have to decide: What are the things we can do, and what are the things we can be trying to set ourselves up to succeed under these conditions? So there’s been a mindset shift.” Ziegler doubled down on the community part and rethought the physical space. 1871 has increased its membership to 480 from about 410 prior to the pandemic. It also added 200 growth-stage or more mature members when its parent, the Chicagoland Entrepreneurial Center, acquired the Illinois Technology Association. And it absorbed startup incubators Catapult and Hub88. Ziegler and her team developed a slate of industry-focused innovation labs, including for cannabis, Web3, artificial intelligence, insurance technology, supply chain, food technology and fintech. And 1871 is building on partnerships with 60 companies, as well as 45 other organizations, from neighborhoods to international groups. Some will have their own space and rely on 1871 for virtual community. “We’re not walking away from the space, but it’s been a journey to figure out what is the value proposition,” says Ziegler, 52, who was named CEO of 1871 in 2018. “Space is still important to us. We think proximity matters a lot in innovation.” The organization is exploring how to make space available to members on a less-frequent basis for in-person gatherings and summits, rather than just day-to-day desk and office space. It’s looking at adding what Ziegler calls “more of an Airbnb model.” “We experimented with it and never went full force,” she says. “Now, we are.” Startups were a critical spark for Chicago’s economy in the years between the Great Recession and the COVID-19 pandemic, and 1871 played a role in that. The hard reset that followed in tech in 2022 persists, and funding is harder than ever for founders to come by. “Investors are being much more cautious, and I think that’s going to continue for a long time,” says Ziegler. “Companies that will win are those that figure out how to bootstrap for longer and get to profitability faster.” — John Pletz FEBRUARY 12, 2024 | CRAIN’S CHICAGO BUSINESS | 17

Apartments near Bally’s casino site sold for $42 million The sale represents a 26% loss for the seller, but comes as the area has drawn interest from investors By Rachel Herzog

A 141-unit apartment building a few blocks west of the planned Bally’s casino on the Chicago River traded at a 26% loss for the seller late last year, another data point showing the difficulty of selling large commercial properties in 2023. Illinois investment firm Exposition Capital paid just over $42 million for Mondial River West, a 15-story building at 910 W. Huron St., on Dec. 28, according to Cook County property records, down from the $57.5 million that global investment manager Barings paid for it a decade ago. Mondial was one of more than a dozen multifamily buildings in and near downtown Chicago that hit the market last year. But high interest rates have made it difficult to put together a deal,

and many of those properties didn’t trade. Those that did felt the impact of the cooling investment climate on values: North Water Apartments in Streeterville sold at a 28% loss in June, and the developers of Lake & Wells in River North took about a 20% hit in that building’s sale in April.

Location, location, location Still, Mondial boasts proximity to Bally’s $1.7 billion casino project, the largest entertainment development underway in Chicago. The neighborhood around the proposed project has attracted interest from investors and developers staking their bets on the casino’s ripple effect on the area. Chicago-based Shapack Partners has proposed 1,400 apartments and a hotel near the planned casino, and Canadian developer

910 W. Huron St. | COSTAR GROUP

Onni Group plans to build 2,700 apartments on Goose Island. Cornerstone Real Estate Advisors, which is now a part of Barings, bought Mondial from Chicago-based Waterton in 2013. Waterton had transitioned the

former condo building to apartments after acquiring the property in 2011. Barings did not respond to a request for comment. Exposition Capital could not be reached for comment, and the building’s

property manager, Exposition Residential, did not respond to a request for comment. Pete Evans, senior managing director in real estate firm Berkadia’s Chicago office, represented Barings in the sale.

CA Ventures sells River North apartments for $61 million

Mortgage rates climb most since October

By Rachel Herzog

By Prashant Gopal, Bloomberg

Local real estate firm CA Ventures sold a 102-unit luxury highrise in River North for almost $61 million in December, the latest asset the firm has unloaded in its recent string of sell-offs. The buyer of the 26-story apartment building at 8 E. Huron St., an affiliate of Bethesda, Md.-based investor Dreyfuss Management, assumed CA Ventures’ debt on the property, a $41 million mortgage from lender New York Life Insurance, according to Cook County property records. The deal follows the sale of CA 8 E. Huron St. | COSTAR Ventures’ national senior housing portfolio, according to informa- since they provide financing at a tion from research firm MSCI lower rate than what the buyer Real Assets, and comes as the would likely get with a new loan. company faces litigation from in- The mortgage on 8 E. Huron St. was issued in 2016, and the outvestors and former executives. The sale appears to be Dreyfuss standing balance as of Dec. 29 Management’s entry into the Chi- was about $39.5 million, accordcago market. The firm owns a doz- ing to property records. CA Ventures paid about $6.1 en other properties in Maryland, Virginia, Pennsylvania and Wash- million for the development site ington, D.C. While high interest at the corner of East Huron and rates slowed commercial proper- North State streets in 2012, propty sales in all sectors last year, erty records show. Construction investors have expressed confi- was completed in 2017. The firm started developing in dence in Chicago’s multifamily market thanks to strong demand and around downtown Chicago about a decade ago after estabfor downtown apartments. Deals that allow the buyer to lishing itself as a student housing take on an existing mortgage on developer in college towns the property are also appealing in around the country. In recent today’s interest rate environment, months, CA Ventures has been hit 18 | CRAIN’S CHICAGO BUSINESS | FEBRUARY 12, 2024

with lawsuits including from investors who allege the firm defaulted on almost $10 million worth of loans and from former executives saying the firm owes them money, according to reporting from industry publication The Real Deal Chicago. The firm’s student housing partner, QuadReal, which recently took control of CA Ventures’ student housing portfolio, is also suing the owner of CA Ventures’ LaSalle Street headquarters and accusing CEO Tom Scott of self-dealing, the outlet reported. CA Ventures and Dreyfuss Management did not return requests for comment on the Huron Street deal. The Real Deal Chicago first reported the sale.

Mortgage rates in the US rose the most since October as potential buyers face affordability challenges in the housing market. The average for a 30-year, fixed loan was 6.69%, up from 6.6% the week of Jan. 14, Freddie Mac said in a statement on Jan. 25. It was the biggest weekly jump since late October, putting the average rate back near the highest since the middle of December. House hunters have been squeezed by high mortgage rates and prices that have held up given a persistent shortage of homes listed for sale. But rates are hovering more than one percentage point below a high in October, which bodes well for the market ahead of its typically busiest season, according to Sam Khater, Freddie Mac’s chief economist. “Despite persistent inventory challenges, we anticipate a busier spring homebuying season than 2023, with home prices continuing to increase at a steady pace,” Khater said in the statement. Investors are weighing the Federal Reserve’s next steps. The market was readying for the possibility of rate cuts early in 2024

given policymakers’ forecasts, but an acceleration of inflation in December and strong retail sales have raised concerns about how soon the central bank may start.

Homebuilders have been using incentives such as mortgage rate buy-downs as a way to attract buyers. Those recent data points “have caused a decline in market confidence regarding the Fed’s readiness to implement interest rate cuts,” said Jiayi Xu, a Realtor.com economist. “In fact, the Federal Reserve is now facing a new challenge: determining the optimal timing for a shift to rate cuts.” Homebuilders have been using incentives such as mortgage rate buy-downs as a way to attract buyers. D.R. Horton Inc. said it expects to continue to use those offers as buyers are stretched with rates and prices. Mortgage rates dropping in December also helped boost sales of new homes across the US, which rose 8% that month.

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Chicago-based Intelligent Medicine Exchange aims to take financial uncertainty out of an industry notorious for it By Jon Asplund

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The Chicago-based Intelligent Medicine Exchange (IMX) has been designated a contract market by the Commodity Futures Trading Commission (CFTC), making it the first health care futures and options exchange. Trading is expected to begin in the first half of 2024, with IMX launching its first health care indexes. IMX has partnered with Minneapolis Grain Exchange for clearing services. A designated contract market (DCM) is a board of trade, or exchange, that operates under the regulatory oversight of the CFTC. DCMs may list for trading futures or option contracts based on any underlying commodity, index or instrument, CFTC said in a statement. Just like a wheat farmer can lock in revenue for his commodity and a cereal company can lock in its cost in the commodities markets, health care companies can hedge on their revenues and costs with the exchange, said James Plante, IMX's co-founder and CEO. Health care represents close to 20% of national GDP, some $4.5 trillion in spending, but it hasn't had a futures exchange, Plante said. The business model has been based on financial uncertainty, creating risks that in turn create overcharging, he said. “How do health care companies try to hedge against their risks?”

WALGREENS From Page 1

A Walgreens spokesman declined to comment on the Bloomberg report or the company's strategy with Shields. Walgreens stock was up 1% on the news of a potential Shields sale, but it quickly dropped back down. The company has struggled to excite investors in recent years. Instead, Walgreens has watched its stock steadily drop. Over the last 12 months, Walgreens shares are down 38%, closing at $23.25 on Feb. 1. Meanwhile, CVS Health stock is down just 14% over the same time period and closed at $73.92 on Feb. 1. Walgreens' slumping stock reflects poor revenue and earnings reports over several quarters, issues that, in part, led to Walgreens replacing Brewer and kick-starting an aggressive cost-cutting program. Wentworth told investors in January that “everything" was "on the table to deliver greater shareholder value." Besides cutting the dividend nearly in half, Walgreens has insti20 | CRAIN’S CHICAGO BUSINESS | FEBRUARY 12, 2024

Plante said. “Pharmaceutical companies will raise their prices, service providers overbill by five times what they expect to be paid and insurance companies set up barriers to care.”

Price transparency He calls current health care pricing mechanisms “unsavory” and says a contract market like IMX can allow participants — including investors, payers and providers — to hedge their bets and provide price transparency and price discovery to boot. The exchange would be less about contracts for vials of a drug and more contracts based on health care cost indexes, he said. IMX would publish cost indexes, from a general health index encompassing 90% of the spending in health care today to specific, granular indexes about procedures and diseases, such as diabetes or kidney disease. Plante says he expects IMX could someday have hundreds of indexes. While health care pricing may seem unique and nuanced in its pricing, Plante says the data is readily available to create indexes, for example among de-identified electronic health record data from some 200 million patients and billions of transactions. IMX has built an artificial intelligence model, dubbed IMX GPT, to generate indexes using health records and more than one hundred thousand provider billing codes. tuted three rounds of corporate layoffs, closed stores and lowered capital expenditures. Executives told investors in January that Walgreens is on track to save $1 billion by the end of the second quarter of 2024. “Tim has been definitely vocal about wanting to right-size Walgreens’ overall operations,” says Keonhee Kim, an industry analyst at Chicago-based Morningstar, adding that any sale proceeds would likely be used to pay down debt.

Revived talks on Boots sale In December, Bloomberg also reported Walgreens was reviving discussions to offload U.K. drugstore chain Boots, another sign of cost-cutting. Walgreens had abandoned a plan to sell the unit in 2022 after failing to secure the desired valuation. If Walgreens were to sell Shields, it's unlikely to have a large impact on Walgreens’ health care segment or the business overall. While Shields grew 27% to $133 million in the three months ended Nov. 30, it only made up 7% of the health care segment’s $6.6 billion in 2023 sales, according to U.S. Se-

“Then we put a futures contract on top of that,” he said. In that way, IMX can help find where prices are and where they might be going. “In health care, our indexes will reflect what is happening today, in almost real time. That sets up the discussion for what prices will be. The futures market doesn't set prices, it facilitates price discovery,” Plante said. “The index says what's happening now, and investors look at where they're willing to bet it will go.” “With IMX, the entire health care industry will finally have access to the capital markets tools available to other major sectors of the economy,” said James Plante. “IMX will provide opportunities for market participants through competition for services and cushioning price shocks in the marketplace, potentially leading to lower prices and premiums.” The ability to hedge against uncertainty with a futures market could have had a profound effect on many providers at the time of the COVID-19 pandemic arriving, he said. For example, COVID-19 shutdowns meant a huge drop in orthopedic procedures. “Costs didn't change, volumes did, so revenues did. Payers were happy not to be paying out for as many medical procedures, but it would have been an ideal time for hospitals to have had a hedge on,” he said. “Then, later, there was a surge in utilization, in which payers could have had the hedges.”

BLOOMBERG

AUCTION

First futures exchange for health care is created

curities & Exchange Commission filings. “I don't think it's going to be a meaningful piece of the business they're going to be losing,” Kim says. The rest of the health care segment houses primary care provider VillageMD, which accounted for 70% of 2023 sales, and postacute and home care firm CareCentrix, which pulled in 23% of total health care revenue. Possible Shield buyers include other specialty pharmaceutical companies, health systems or private-equity firms, analysts say. “There's going to be buyers that want to compete. There will also be buyers that maybe want to consolidate,” Ray says. “This is definitely, I think, a good time to at least test interest.”

Bringing this 1920s-era Evanston house up to date was one couple’s COVID-era project

aving recently moved from New York, Renee Smith and Chris Pine (not the actor) and their kids were renting in Wicker Park when COVID dawned, and they knew they wanted more space, both indoors and out. On a drive through Evanston, they spotted a house near the lakefront for sale, “fell in love and within 24 hours made an offer,” says Smith. They bought it despite knowing the house had long-outdated utilities, a kitchen cobbled together awkwardly from several little rooms, no separate bathroom for the primary bedroom and other deficits. Ten months of renovations later, “we had updated everything that needed it but kept the charm intact,” Smith says. Pine retired last fall from a career in commercial real estate, so the family is moving to the Washington, D.C., area to be closer to Smith’s work handling government affairs for a pharmaceutical company. They put the house, a fourbedroom, 4,050-square-footer on Judson Avenue less than a block from Evanston’s lakefront park, on the market Feb. 8. The price is $2.15 million, and the listing agent is Sally Mabadi of Berkshire Hathaway HomeServices Chicago. Many of the original features from 1924 were intact, including the handsome vestibule wrapped in wood with a tile floor.

Area full of historic homes Architect A.G. Brown designed the house in an eastern stretch of Evanston that today is replete with nice historical houses. Its original owners was Charles M. Moderwell, a coal industry executive and, before moving to Evanston, president of the Chicago Board of Education. Crain’s couldn’t find the name of Moderwell’s wife. Also intact were the living room’s built-in bookcases, wood floors, big carved stone fireplace mantel and crown moldings. The can lighting is new, part of the infrastructure overhaul that Smith and Pine put the house through. They had initially thought they might revamp only the kitchen and baths’ infrastructure, but took the wiser, building-code-sanctioned path of redoing electrical and other infrastructure throughout the house. One outcome of that approach is that walls and ceilings all have a smooth new finish, instead of the bumps and patches that are seemingly inevitable with old walls. In the dining room, reworking the ceilings required some extra finesse to preserve the original

starfish-shaped plaster medallion on the ceiling. Just as the kitchen is the center of any home, renovating this kitchen was the centerpiece of the project. It was key to making the house work for a modern lifestyle. “We collapsed four little rooms and a mudroom together into one large eat-in space where we can entertain,” Smith says. Because there was little historical detail other than antiquated metal cabinets, the redo could “make everything modern,” she says. Even so, they were careful to blend old with new as the job progressed. Part of the kitchen was to get new wood flooring, so they held off on refinishing the original floors in main rooms until the kitchen was ready, in order to keep the floors all looking the same. The breakfast room is in one of several of the house’s spaces that may have originally been more like porches in the days before air conditioning, their rows of windows opening to capture cool breezes off Lake Michigan, two blocks away. Slate flooring now helps keep the sunny space feeling cool in summer. The largest of the old porches faces the street and has a view up the block to Evanston’s lovely lakefront park and Lake Michigan. That’s why such a nice space, just off the living room and overlooking the street, became the home’s workout space. “My husband likes looking at the lake when he runs” on the treadmill, Smith says. As in the breakfast room, the floor is slate. This is yet another space with ample daylight that may once have been a sleeping porch, on the second floor with entrances from two bedrooms. The primary bedroom was just fine when the couple bought the house, with all original trim in place. But rather than have its own bath as is modern custom, it shared a bath with the bedroom next door in a jack-and-jill configuration. Creating a primary bath entailed losing what had been the home’s fifth bedroom. Because the house is a Tudor, a style with roots in England, “I wanted (the yard) to feel like an English garden,” Smith says. They planted hydrangeas, peonies, roses, lilacs and other flowering perennials. Smith says leaving the house behind just a couple of years after all the work was done is bittersweet. They had transplanted themselves to new locations a few times during Pine’s career, but when they got to Evanston, “we really loved it,” she says.

LARRY MALVIN PHOTOGRAPHY

When the pair bought it in 2020, the house was 96 years old and in serious need of updating | By Dennis Rodkin

FEBRUARY 12, 2024 | CRAIN’S CHICAGO BUSINESS | 21

TAX CREDIT From Page 3

films that everybody gets excited about, the public and policymakers are now recognizing that this is an industry for the future.” And without that credit, there wouldn't be a film industry in Illinois as we know it. The study, which was conducted by London-based consultancy Olsberg SPI, found that only an estimated 6.4% of the current production expenditures in the state would exist if it weren’t for the credit, meaning the remaining 93.6% would've taken business to another state. “These productions live and die by the incentives, and they'll go elsewhere if the incentive is not there,” said Brad Tietz, vice president of government relations for the Chicagoland Chamber of Commerce. Tietz, who worked closely on crafting the current film credit legislation, which was introduced in 2008, and has also been involved in other state tax incentive programs, said it's “the most efficient tax credit in Illinois’ credit portfolio” for its simplicity and immediate effects. Illinois 30% tax credit, along

SALES From Page 3

worth just over 10 years ago. In addition to not trading, just under $7 billion worth of local properties faced financial troubles such as loan defaults or transfers to a special servicer, bankruptcy, tenant distress and 22 | CRAIN’S CHICAGO BUSINESS | FEBRUARY 12, 2024

‘Construction defects’ LG worked on the house until June 2016, more than a year after Ricketts moved in. Even then, her attorneys wrote, the house was “riddled with significant construction defects.” Three years later, in August 2019, Ricketts filed a request for legal arbitration with LG over the plethora of defects she found in the house and her costs to remediate them. When LG informed Westfield, according to the insurer’s suit,

BLOOMBERG

bought the site for $6.5 million. Two years later she filed plans with the village to build a house that Chicago magazine reported at the time would take advantage of the site’s lakeward slope, making it two stories on the street side and three stories facing the water. In 2014, Crain's reported that construction would cost $6.3 million, bringing total investment in the property to $12.8 million. Designed by Morgante Wilson, the six-bedroom house would have a long wing stretching nearly to the beach, with a sandy area built to connect the two. That is seen at the far right in the aerial image of the house. According to the lawsuits, Ricketts originally planned to move into the house in March 2014, but because of construction delays, that was pushed back to August 2015, and the house was still incomplete when she moved in. LG’s suit says that “upon moving into the project, Ricketts continuously sent emails to LG and the project architect, notifying them of construction defects she identified.” Among the defects Ricketts allegedly spotted were “inade-

Laura Ricketts

GOOGLE

From Page 3

quate paint throughout the home, corners not being square, bumps in wallpaper, doors not properly sanded, leaks throughout the home and windows not properly closing,” LG’s suit says. A roofing consultant hired by the architects found “improperly installed ice and water shield, gutters not pitched properly, inadequate flashing, downspout leaks, downspouts not connected to a sewer, improper materials used contrary to architectural drawings, ice damming and soffit leaks.” One of the places leaks were found was in the room built close to the edge of the sand, known in the lawsuits as the Lake Room. Repairs to the roof alone cost $1 million, Ricketts’ original suit claims, according to Westfield’s suit.

An aerial view of the mansion Laura Ricketts built next to Lake Michigan in Wilmette

the builder said it “had no notice or knowledge of claim for damages (by Ricketts) until receipt” of her attorney’s Aug. 1, 2019, letter. LG’s attorney later told Westfield’s attorney that LG was “surprised” by Ricketts taking action, and disputed her claims. Westfield’s attorney, according to the suit, “sent a letter to LG, advising of Westfield’s position that it owed no coverage to LG for Ricketts’ claim.” At the outset of the Ricketts project, LG took out an insurance policy from Westfield that

provided up to $10 million in coverage. The terms of the policy, according to LG’s suit, say Westfield would pay any sums that the insured “becomes legally obligated to pay,” and that Westfield “will have the right and duty to defend (LG) against any suit seeking those damages.”

A ‘standstill’ The two parties agreed to a “standstill,” which precluded either from suing the other during the Ricketts case, according to

Westfield’s suit, but last month, LG told Westfield it was terminating the “standstill.” LG alleges in its suit that it has incurred legal fees and other costs from the litigation against Ricketts for which Westfield should be liable. The builder’s attorneys wrote in the suit that LG “will continue to incur further damages as a consequence of Westfield’s breach of its obligation to provide LG with a defense in the Ricketts arbitration.” LG is asking for a jury trial and that it be awarded damages. Westfield, in its suit, is asking a judge to decide that the insurer “has no duty to defend or indemnify LG” and that Ricketts has no claim to any funds from Westfield. Illinois still has room to grow.

with an additional 15% diversity credit, the first of its kind in the country, on wages paid to individuals who live in economically disadvantaged areas, places it among the most competitive rates in the country.

Salary cap limitations

Midtier market According to the study, Illinois is considered a mid-tier market, along with states like New Jersey and North Carolina, in terms of incentives, locations and crew depth. That's just below New York, California and Georgia, which are considered the leading states for film production. Illinois’ growth in production has also been good news for Illinois workers. In 2014, IATSE Local 476 — which represents industry workers who supply the sets, lighting and makeup for the state’s film and television productions — had 1,065 members, including 209 members under age 34, the study shows. That number nearly doubled by 2022, with some 2,032 members, including 603 members under age 35. “The tax credit has been everything for us,” said Anthony Barracca, secretary treasurer of the IATSE Local 476. “It has elevated our work and given Illinois work-

ers pensions, benefits and a sustained quality of life.” Barracca said outside studios no longer need to bring their own crews because Illinois has workers to fit every need in the industry. As the industry has grown, so too has studio demand. The state now boasts 77 total stages and

some 900,000 square feet of stage space, according to the study. The Field Studios, a $250 million project set to open in the spring on a 21-acre campus at Diversey Avenue and Pulaski Road, will add additional space for production companies in Chicago. While the study mostly lauded the state’s tax credit, it noted that

liquidation, according to MSCI. That was down from $7.3 billion at the end of the third quarter. But there could be more on the horizon: MSCI identified an additional $9.6 billion of properties in potential distress, with financial troubles such as delinquent loan payments, high vacancies or maturing debt. Office properties have been at

the forefront of that distress, as rising interest rates made it even harder for owners of those properties to contend with remotework trends decimating demand for office space. The owners of Loop office towers at 161 N. Clark St. and 111 W. Jackson Blvd. were hit with foreclosure suits in the fall, and a number of other landlords handed over

their keys to their lenders. Nationally, offices accounted for 41% of the value of troubled and bank-owned real estate, according to MSCI.

IATSE LOCAL 476

RICKETTS

IATSE Local 476, which represents industry workers who supply the sets, lighting and makeup for the state’s film and television productions, nearly doubled its membership between 2014 and 2022.

Retail sector woes But financial strain also spilled over into the retail sector in Chicago, with the owner of the retail portion of 1 N. State St. facing a

Though the state benefits from landing top television productions, it has trouble attracting blockbuster films, the study found, mostly because of the limitations in the tax incentive’s salary caps. The state’s previous salary cap for the eligible tax credit went up to the first $100,000 of Illinois resident salaries. Big-budget movies that feature actors and crews with the highest industry salaries will always look to states like Georgia, where there is no salary cap, instead. But beginning in 2022, a legislative change to the incentive allows a credit for the first $500,000 of qualified individual resident and nonresident compensation under qualified expenditures. While the 2022 data was not available to be used in the study, Peter Hawley, director of the Illinois Film Office, believes that change will make the state more competitive for larger movies in the future. “That change in the policy will move the needle and start attracting those bigger projects,” said Hawley. “We just don’t have the data on that yet.” $50 million foreclosure lawsuit and the lender seizing the retail space at the Palmer House Hilton. More distress could be coming from the retail sector in the future. Retail properties added the most value — about $3.5 billion — to MSCI’s total of potentially distressed real estate in the fourth quarter of 2023.

BOEING

Boeing’s generous returns policy Dividends/buybacks percentage of operating cash flow

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Max crashes in 2018 and 2019. Since then, Boeing has struggled with head-spinning public relations problems, red ink and added costs, settlements and penalties exceeding $20 billion. Its stock, off about 20% since the Jan. 5 Alaska Airlines fiasco, trades at less than half of what it did before the last 737 crash. Chastised Boeing executives are publicly apologizing: In a public mea culpa offered during the company’s Jan. 31 earnings call, Boeing CEO Dave Calhoun said “we caused the problem” behind the Alaska Air blowout. He said a probe into the root cause is underway but noted the ultimate responsibility for the incident rested with Boeing. “While we often use this time of year to share or update our financial and operational objectives, now is not the time for that,” Calhoun told employees in a memo, according to Bloomberg News. “We will simply focus on every next airplane while doing everything possible to support our customers, follow the lead of our regulator and ensure the highest standard of safety and quality in all that we do.”

The Chicago game plan Boeing's relocation to Chicago was predicated on the professed need to buffer top management from the influence and distractions of its production plants, whose numbers were growing as the company diversified and absorbed a 1997 merger with defense contractor McDonnell Douglas. A separate headquarters location, the reasoning went, would operate as an honest broker among the various units, no more than a day trip from any of them. But as Boeing stumbled, the narrative took hold that an insulated headquarters was a deaf one. “The biggest criticism at the time and even to this day: It took the C-suite people away from their core business,” said Scott Hamilton, an industry analyst in Bainbridge, Wash., near Boeing's roots in Seattle. “They lost the ability to freely interact with the floor, the engineers and the IAM, the machinists.” The headquarters move, according to this scenario, also was a manifestation of changes in corporate culture following the merger with St. Louis-based McDonnell Douglas. Bean counters, aiming for a perch closer to Wall Street, had triumphed over the engineers closer to the factories. “It was symptomatic of the disconnect between top management and the company's heritage and core business,” said Richard Aboulafia of aviation industry consulting firm AeroDynamic Advisory. “They were sending a signal to investors that capital would be provided on the basis of returns, rather than loyalty and legacies. Going down that path produced nothing good at all.” Boeing declined to comment.

‘Manufacturing challenges’ A former company insider takes

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issue with the gloomy portrayal, pointing out that Boeing has a history of overcoming production delays, cost overruns and unhappy customers in a notoriously complex and capital-intensive business. Long before the Chicago move, it stumbled initially on two of its most successful models: the 747-400, the highest-selling version of the pioneering jumbo airplane, and the 777, the largest twin-engine jet. Despite the black eye Boeing took related to production setbacks on its 787 Dreamliner, the company has never confronted the opprobrium generated since the 737 Max crashes that halted Max production and the latest accident that triggered regulators to cap it. “I’m disappointed that the manufacturing challenges do keep happening at Boeing. This isn’t new,” United Airlines CEO Scott Kirby told CNBC last month. “My own assessment is that this goes all the way back to the McDonnell Douglas merger, and it started a change in culture.” American Airlines CEO Robert Isom was blunt with Wall Street analysts: “Boeing needs to get their act together.” In that conference call with analysts after Boeing reported another quarterly loss, Boeing's Calhoun blamed his own company for the Alaska Airlines neardisaster and on CNBC apologized to Kirby, who like other Boeing customers has called into question future orders. Though Boeing's fourth-quarter results, which included the first operating profit in five years for commercial airplanes, exceeded expectations, Calhoun declined to offer the customary guidance for the year ahead.

C-suite culture shift Whether by coincidence or not, once Boeing settled into the Morton Salt building along on the west bank of the Chicago River exactly a week before 9/11, the news out of the executive suite seemed more suitable for the tabloids than aerospace journals. Philip Condit, the CEO who decided Boeing would move to Chicago instead of to other finalists Fort Worth or Denver, resigned barely two years after the move, after a government procurement scandal involving the company's

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CFO. In 2004, Boeing paid $70 million to settle a class-action lawsuit alleging sexual discrimination. Boeing brought Harry Stonecipher, a former McDonnell Douglas CEO with a home in Chicago, out of retirement to succeed Condit. But in 2005, Stonecipher was ousted after revelations of a romantic relationship with a Boeing executive he later married after divorcing his wife. Stonecipher's exile led to a Boeing decision that wasn't tabloid fodder but had far-reaching ramifications. Boeing tapped a new chief, James McNerney, a North Shore native and CEO of 3M who had lost a famous horse race to succeed Jack Welch as General Electric's CEO. Alan Mulally, a Boeing culture-carrier and engineer who headed commercial airplanes, was passed over and left to become CEO of Ford Motor. Hamilton said the connection to Boeing's Seattle roots withered more when during the 2010s it lacked directors with ties to the commercial airplanes division in Seattle, the company's biggest unit, which before the 737 crashes accounted for twice the revenue of the defense-contracting side. “To me, it's so telling of the benign neglect that headquarters had for commercial aviation that they had nobody from the Seattle area or with commercial aviation supply-chain or production experience,” said Hamilton, managing editor of industry newsletter Leeham News and Analysis. McNerney retired in 2015 and was succeeded by Boeing insider Dennis Muilenburg. But after the 737 Max disasters, Boeing once again turned to someone in McNerney's mold: Calhoun, a Boeing director who had, like McNerney, headed GE's jet-engine division.

‘A moral erosion’ Aboulafia, the industry analyst, cites as a warning flag the surge in the volume of Boeing's stock buybacks and dividends, which soared from $1.3 billion in 2012 to more than $12 billion five years later. They went from 19% of operating cash flow to 99% in just three years. “Giving that much of their cash flow back to shareholders leaves very little left over for investing in the company’s future,” Aboulafia said. “What really made it bad was

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the arrival of the Jack Welch/GE philosophy, where workers and suppliers are merely an input.” Asked about the buyback trend, Boeing pointed to a 2020 release that said the firm would suspend its dividend and extend a suspension of its stock buyback program initiated the previous year after the second Max crash. Paul O'Connor — who saw Boeing up close as a newspaperman and gubernatorial press secretary in Washington state from the mid1970s to mid-1980s and later helped recruit it as executive director of World Business Chicago — said Boeing was a prize catch that never sought any relocation subsidies. “Part of the pitch was really geared toward their value set, but I do think a moral erosion took place at the highest levels following the McDonnell Douglas merger,” he said, adding, “Coming to Chicago, they said later, made them a true global company. They realized they had been looking through aerospace eyes.”

A global profile In 2006, the Seattle Times interviewed the late James Warner, who as chief administrative officer had conducted the headquarters search that took just a few months. “The primary reason back then was to make sure the corporate headquarters of Boeing would concentrate on the totality of the company and represent itself to the world — and that includes Wall Street and governments around the world — that we are a multifaceted aerospace company,” he said. “We needed to deal with perception issues that we were, simply, only a Seattle-based commercial-airplane company. And we felt that the role of corporate headquarters would be better fulfilled if we were not in the same area as any of our primary businesses, whether that be military, space or commercial.” At the same time, he was careful to stress the importance of those other locations: “They are just as Boeing as Alan Mulally is Boeing.” But soon after the interview, Mulally was gone from Boeing. And in 2022, Boeing announced another headquarters move — to Arlington, Va., even farther from Seattle.

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