Crain's Chicago Business

THE

Higher interest rates, fewer groundbreakings

After a strong 2022, Chicago’s construction industry is losing momentum as rising rates chill new projects

BY ALBY GALLUN

Amid higher interest rates and a slowing economy, electricians, ironworkers, carpenters and crane operators could have a little more time on their hands this year.

e local construction industry is losing momentum after a strong 2022 as developers hold o on big projects. But contractors aren’t bracing for a major downturn: After rising 12% to $13.4 billion in 2022, construction starts in the Chicago area will dip slightly this year, to $13.3 billion, according to a forecast from Dodge Data & Analytics, a Hamilton, N.J.-based research rm.

at may be just what the Federal Reserve wants to hear as it tries to hike short-term interest rates enough to tame in ation, but not so much that it pushes the economy into a painful recession. Rising rates have cooled o the real estate market, making it harder for developers to nance new apartment towers, warehouses and other buildings. e impact has started to trickle down to the rms that pour concrete, install wiring, hang drywall and do all the other jobs required to construct a new building. With borrowing costs up and

So much for Rivian’s first-mover advantage

The EV truckmaker races to unscramble production amid growing competition, union pressure and shrinking cash

BY JUDITH CROWN

Crain’s is spotlighting women in the business and nonpro t worlds who are making decisions of real consequence.

Our inaugural list of 13 outstanding women begins on PAGE 13

BANKING

Rivian is struggling to accelerate production of electric pickup trucks and SUVs as new rivals pile into a market it hoped to dominate and union organizers take aim at the company’s downstate factory. Recent setbacks pummeled Rivian shares to a 52-week low of $15.28 last month. Price cuts by rivals Tesla and Ford weigh on the shares, which peaked at more than $170 following Rivian’s November 2021 IPO. Amid shrinking cash reserves and recession fears, the

company announced it was laying o 6% of its workforce, although sparing its primary production facility in Normal. at follows a similar-sized layo last summer. e challenge for Rivian is to x its supply chain and production snafus so it can boost output before more competitors swoop in. “ e market is looking for them to put out goals and meet them,” says Michael Shlisky, senior research analyst at D.A. Davidson, who expects the stock to

Msall’s

JOHN R. BOEHM

An ideological battle plays out in the 46th Ward

One candidate says the real cure to crime is to invest in social welfare programs — and backs a bevy of new taxes and a ordable-housing mandates to achieve that.

A second says the choice is simple: “You can go to the City Council with the intention of making headlines, or to be someone who gets things done.”

e third asserts she’s the in-between moderate the ward needs, neither someone enamored of the Socialist left nor a product of establishment politics.

Welcome to the Fightin’ 46th Ward, a staggeringly diverse chunk of North Side real estate that runs from leafy Edgewater, through plucky Uptown, to upper-middle-class Lake View, with a few high-end lakefront condo towers thrown in for good measure.

For a half-century now, this ward and particularly its aldermanic races have been the focus of a class war of sorts that has morphed somewhat through the years but fundamentally remained the same. is year, that contest has gone citywide with the City Council’s Socialist bloc hoping to at least double the ve members it now has, the equally progressive United Working Families party endorsing in 18 wards, and a biz-backed group named Get Stu Done PAC making moves in nine wards with a few other possibilities on the horizon. I have no idea who’s going to win in the 46th Ward. But the ght for control of the City Council in some ways is just as important as the battle to become mayor. And it’s receiving far less media coverage.

e rst candidate is Angela Clay, 31, a fourth-generation Uptown resident who works as an organizer for a progressive group. Soft-spoken but rm in her views, her core convictions are best summarized by a statement on her website: “ e best way to make our communities safe is to make all of our community members safe with the housing, mental-health care, job training and violence intervention they need.”

Clay opposed a high-end apartment tower rising on a former hospital parking lot for only including eight a ordable units. All new residential structures should be at least 30% a ordable to keep rising prices

CORRECTION

Civic and business leader Andrew McKenna dies

from forcing lower-income people out, in her view. Clay has endorsed Cook County Commissioner Brandon Johnson for mayor and says she agrees with his proposals for new levies on suburban commuters, trading on Chicago commodities exchanges and residential sales of over $1 million—and she would back restoration of the jobs head tax.

e second candidate is Kim Walz, 37, who works in government a airs for Walgreens and has endorsements from lots of big-name pols, including Sen. Dick Durbin, D-Ill., Gov. J.B. Pritzker and U.S. Rep. Mike Quigley, for whom she once worked.

Walz says she wants to “preserve” the ward’s low-income housing and would set a 20% standard for new buildings, though some of the a ordable units could be located elsewhere in the ward. She backed the hospital project because the developer agreed to donate a large sum to a shelter for abused women. She says the Chicago Police Department is about the right size but needs to operate more e ciently, in part by using more civilians for desk jobs. She terms it “unconscionable” that the city has spent so little on violence prevention and wants mental-health professionals to handle many calls that now go to police. Walz is not publicly backing anyone for mayor. e third candidate — three other contenders are on the ballot, but have not campaigned much — is Marianne Lalonde, 36, an environmental research scientist who fell just 25 votes of unseating nowretiring 46th Ward Ald. James Cappleman four years ago.

“We need an alderman who will represent all of the ward,” says Lalonde. If she wins, she adds, she’ll join the City Council’s progressive caucus but not its Socialist caucus. Lalonde says she’ll push for larger new units, rather than more studios and one-bedrooms. She opposed the hospital project because the land was needed for medical purposes, and she says she favors a “multi-faceted” approach to crime that includes everything from more detectives to more money for violence prevention. She likes Jesus “Chuy” Garcia for mayor. Who do the voters like? We’ll nd out soon.

In the Feb. 6 “50 Priciest Home Sales of 2022” feature, the buyer of the No. 5 property on the list was misidenti ed. A Chicago Title land trust purchased the property on May ower Road in Lake Forest.

BY STEVEN R. STRAHLER

Andrew J. McKenna, a consum mate networker and inexhaustible dynamo who was among Chicago’s most consequential business lead ers of his day despite never being a major company CEO, died Feb. 7 at his North Shore home. He was 93 and had fallen ill last month.

From boardroom positions at McDonald’s, Tribune and other hallmark rms, McKenna’s clout extended through corporate Chi cago and into the city’s cultural and charitable institutions and its sports teams. He was chairman of the Cubs and the White Sox almost simultaneously, and he owned a piece of the Bears.

A 1992 Crain’s pro le, which said he attended nearly 100 board meetings a year, described him as “perpetually antsy, with a nervous stammer,” a “ xer with a cause” and “the Zelig of Chicago business,” a reference to the everywhere character in the 1983 Woody Allen lm.

McKenna was in his mid-70s when he became McDonald’s nonexecutive chairman and navigated back-to-back deaths of two CEOs and, later, the forced resignation of another during rocky periods for the fast-food company. He stepped down as a director in 2016 after investors criticized his long (25-year) tenure and questioned the board’s independence.

If McKenna had an equal among Chicago moguls in the decades bordering the turn of the millennium, it was Lester Crown, who headed

family-owned Henry Crown & Co. Crown was out front, engaging the business community in public policy battles like expansion of O’Hare International Airport. McKenna was more of a Mr. Inside.

PAPER BUSINESS

McKenna’s base of operations was a privately held paper company eventually known as Schwarz Supply Source; he had joined the Morton Grove rm in 1955, discovering his métier in sales after getting a law degree from DePaul University. e eldest of six sons of a South Shore coal executive had initially wanted to be a journalist, working as a Leo High School student for Jerome Holtzman, then a Chicago Times sportswriter.

Despite its plain-vanilla products, which included french-fry bags and

tray liners for McDonald’s, Schwarz provided a springboard to bluechip boardrooms for McKenna after he led a buyout in 1967 and became CEO. Two years later he was elected director of an insurance broker that evolved into Aon and, in 1971, of Skyline, a mobile home manufacturer in Elkhart, Ind.

He had been living in Michigan City, Ind., moonlighting as general manager of a minor league baseball team and co-founding a private school in La Porte, La Lumiere, which U.S. Chief Justice John Roberts and the late comedian Chris Farley attended. rough baseball, McKenna got to know former White Sox owner Bill Veeck, a relationship that paid dividends. In 1975, when the team was on the verge of being sold and moved to Seattle, McKenna alerted Veeck, who put together a successful white-knight bid.

McKenna was tapped as Sox chairman, and he and other investors doubled their money when the team was sold again, to Jerry Reinsdorf and others in 1981 for $20 million. Later that year McKenna took the same role with the Cubs when Tribune bought the team for $21.5 million.

In 1985 Reinsdorf and a Sox colleague sought to buy a 3.23% stake in the Bears owned by Jim Finks, a former Bears general manager and Cubs president. e majority-owner McCaskey family matched Reinsdorf’s o er and put McKenna on the

The Mr. Everything of Chicago business was chairman of McDonald’s and various civic endeavors. He also was chair of the Cubs and White Sox and owned a piece of the Bears. In his spare time, he ran a paper company.

Andrew McKenna

See MCKENNA on Page 8

the founder: New CEO says Wintrust won’t seek buyer

As he succeeds Ed Wehmer, Tim Crane sees more room to grow for Chicago’s last major locally based business lender I

BY STEVE DANIELS

Few thought Wintrust Financial would sell to a larger bank so long as founder Edward Wehmer was in charge. Now that he’s ceding the CEO role to President Tim Crane, the bank’s future as a locally based commercial banking force is less settled.

Five years ago, Wehmer likened acquiring Rosemont-based Wintrust— with its unusual array of separately chartered banks and an unorthodox big bank and community-banking model that its customers nd attractive—to “swallowing a porcupine. It hurts going down, and it just might kill you.”

To be sure, he always acknowledged the hard truth that any publicly held company must seriously consider a genuine o er. In banking,

See WINTRUST on Page 18

A staggering addition to the downtown sublease market

Media conglomerate Publicis Groupe looks to shed more than half its space at the Leo Burnett Building in the city’s largest sublease o ering

BY DANNY ECKER

Publicis Groupe has put 350,000 square feet of its Wacker Drive o ces up for sublease, a staggering addition to the ood of available workspace in the city as the remote work trend bludgeons landlords.

e media conglomerate formally hit the market this week with its 14- oor listing at 35 W. Wacker Drive, according to a marketing yer from brokerage Cushman & Wake eld.

JOE CAHILL ON BUSINESS

Pritzker should listen to the Civic Committee this time

Gov. J.B. Pritzker turned a deaf ear the last time Chicago’s top business leaders o ered a plan to repair Illinois’ broken nances.

Four years later, the Civic Committee of the Commercial Club of Chicago is trying again. As my colleague Greg Hinz reported, the group released another scal reform blueprint on Wednesday.

Hopefully the governor is more inclined to listen this time. Back in 2019, Pritzker had just taken o ce with a scal game plan centered on a graduated income tax that would raise rates on higher earners. But Illinois voters rejected the constitutional amendment needed to allow such a tax.

Since then, state nances have been buoyed by an in ux of federal COVID-19 relief funds and an unexpectedly strong rebound in tax revenue coming out of the pandemic. To his credit, Pritzker took advantage of the windfall to pay down some state debt, pay o overdue bills and kick some extra dough into state pensions, among other steps that have helped win upgrades from credit rating agencies.

All that good news may lull Pritzker into scal complacency as his second term begins. He should ght that feeling.

As the Civic Committee points out, the improvement in state nances is transitory and incomplete. Illinois remains a budgetary laggard; the recent upgrades still leave it with the lowest credit rating of all 50 states. Persistent scal woes overshadow Illinois’ many economic strengths, contributing to slower-than-average growth and discouraging investment in the state.

ose realities will become all too obvious in the months and years to come. e feds won’t be sending any more COVID relief checks, and the one-time revenue surge will peter out. Structural budget de cits will return, and pensions will devour an ever-larger share of state funds.

IDEAS

e o ering becomes the city’s largest block of available o ce space on the secondary market, shattering the mark previously held by Groupon’s nearly 291,000-square-foot sublease listing at 600 W. Chicago Ave. Publicis’ push to shed more than half of its 685,000-squarefoot o ce in the 50-story tower is another gut punch to downtown o ce landlords that are already grappling with record-high vacancy as they compete for tenants. It’s the most jarring move

to date in a broader surge of companies embracing remote work and trying to o oad space on the sublease market, a trend that has fueled a dramatic oversupply of available workspace and pushed building owners to shell out unprecedented perks to land deals. Including the Publicis listing, there’s now almost 7.3 million square feet of o ce space available for sublease downtown,

See PUBLICIS on Page 22

e Civic Committee calls on Pritzker and state legislators to develop a comprehensive plan to address these challenges. It o ers a range of ideas on both the revenue and spending sides of the ledger.

Most important are proposals on pension funding, the greatest long-term threat to Illinois’ nancial stability. Illinois bears costly pension obligations agreed to by lawmakers who failed to set aside enough funds to meet those obligations. e funding shortfall had grown to a staggering $139 billion gap by the end of

the state’s last scal year. Illinois Supreme Court justices have ruled that the state constitution bars any reduction in pension payments, and Pritzker has been unwilling to seek an amendment to that prohibition. So Illinois has to pay the full amount owed to state retirees. e state has been chipping away at the shortfall with annual payments that actuaries deem insu cient to fully cover the obligations. e goal is to reach a 90% funding level over a 50-year period.

RISING SHARE

Despite their inadequacy, pension contributions now account for one- fth of the state budget. at share will rise as required contributions increase, crowding out other state needs. Every dollar spent on pensions is a dollar that can’t be spent on public safety, education or health care.

As the Civic Committee points out, the ultimate cost of the current funding schedule could vary signi cantly based on unpredictable factors such as investment returns and demographics. erefore, the group says, “we do not believe the status quo funding plan is sustainable.”

I agree, and I like the Civic Committee’s proposed alternative: a rapid acceleration of pension contributions, starting with an additional $2.3 billion in scal 2024. e group estimates accelerated payments would save taxpayers $37 billion in contributions over 22 years and fully fund pensions. Accelerating contributions also accelerates the growth of the pension funds through investment returns, closing the funding gap faster and reducing future contributions.

Where would Illinois get the money for additional pension contributions? e Civic Committee proposes a temporary income tax surcharge dedicated to pension funding. Individual taxpayers would pay an extra 0.5%, and corporations an extra 0.7%, generating about $2.9 billion annually. e surcharge would expire after 10 years, by which time the pension plans would be well on their way to full funding.

New taxes are never welcome, especially in a relatively high-tax state like Illinois. But a time-limited tax that eliminates a scal albatross and ultimately saves tens of billions makes sense, with two provisos: Legislation enacting the pension surtax must include ironclad prohibitions on extending the expiration date or using the funds for other purposes.

TIM FISHER WINTRUST FINANCIAL CORPORATION

Following

Tim Crane

“CHICAGO NEEDS A (LOCALLY BASED) BANK. I DON’T SEE ANY REASON IT SHOULDN’T BE US.”

Tim Crane, CEO of Wintrust Financial

Former council member: Voters have to decide what they want from city government

AMEYA PAWAR SERVED TWO TERMS AS ALDERMAN of Chicago’s 47th Ward from 2011 to 2019. While on the City Council, he spearheaded the creation of the City Council Office of Financial Analysis, which provides aldermen with forecasts, analysis and recommendations related to Chicago’s budget. He is now senior fellow at the Economic Security Project and co-founder and principal of Okay Cannabis. This transcript has been edited for length and clarity.

BY STEVE HENDERSHOT

CRAIN’S: How do aldermen balance ward services and their legislative responsibilities?

PAWAR: When I rst ran for alderman, I talked to constituents about the idea that aldermen have to also be legislators—that the City Council should be a deliberative legislative body that works on citywide policy, in addition to taking care of things at home. Prior to that era (2011), aldermen were primarily feudal lords and occasionally legislators. Chicagoans sometimes decry the idea that their alderman is a feudal lord, because they want a legislator with big-picture thinking. But when it comes to an issue on their block, or on their street, or in their neighborhood, they want the feudal lord.

e council today is more focused on citywide issues, and a lot of that change is rooted in the class that came in in 2011, which was really a changing of the guard—it was the beginning of the end of the machine.

So is the council set up for success now, from a legislative perspective?

Wanting to focus on legislation isn’t the same as having time to do it. Ward o ces are dramatically understa ed, and our commitment to legislation required us to work double time. If I had been completely immersed in service-based issues with my sta , I couldn’t have done the citywide stu .

Another aspect there is that I had the

An ongoing collaboration between Crain’s Chicago Business and the University of Chicago’s Center for E ective Government.

ChicagoBusiness.com/OneCity50Wards

privilege of working on citywide policy because we didn’t have the kind of issues in the 47th Ward that some parts of the city deal with. We had some alders who were dealing with a shooting every night and dealing with the trauma that comes with that. Ironically, I had the privilege of being a champion for social and economic justice because I represented a ward that was well-o .

The culture of hyperlocal, hyper-responsive ward o ces is unique to Chicago. Aside from the demands on sta time, what are the pros and cons of that system?

In that rst election, I ran on grid garbage, saying, “It makes no sense to pick up garbage based on ward boundaries. It should just be done based on what’s most e cient, not on a political boundary.” And Chicago implemented grid garbage.

But there was a cultural shift, and some people were up in arms at rst because it took a while to realize that under this new system, I couldn’t do anything if there was a garbage can full on Lincoln Avenue.

e centralized system removed me from

the equation, where before, I was able to provide hyperlocal service delivery with a customer-service touch. Grid garbage probably has resulted in signi cant cost saving—people said they wanted this— but then they were upset when they didn’t get exactly what they were used to. at’s the tension that we’re always going to have in the city.

Do you think the City Council is due for a structural shake-up? What changes would you make?

I used to think that perhaps we should reduce the size of the council and double or triple the sta , to end up with a body that’s more deliberative on citywide issues. Or you could keep the same struc-

ture, double the sta , and still end up with an interesting structure.

But what I come back to is that Chicagoans need to think about what they want from their government: Do we want an inbound neighborhood call center or a legislative o ce? ere are good things about the current system and the way it provides a mechanism for community members to voice concerns, compared to what it’s like calling a massive bureaucracy at any other level of government where it’s impossible to get someone on the phone. But there are lots of other things that would be better if they were handled centrally, including a ordable housing decisions. So I think we should have this conversation as a city, and to think together about what we want.

A rarity in the Outcome Health trial: A juror Zooms in

The federal judge tested videoconferencing for a sick juror to avoid delaying the case. But he decided it’s not ready for prime time.

BY JOHN PLETZ

With the clock ticking on what’s expected to be an extraordinarily long trial, a Chicago judge tried an unusual experiment last week.

When a juror on the Outcome Health fraud trial called in sick Feb. 6, the juror was allowed to watch and hear testimony via video conference, which allowed U.S. District Judge omas Durkin to avoid delaying the trial or excusing the juror.

Court watchers say it’s the rst time that videoconferencing has been used to accommodate an individual juror in Chicago federal courts, although at least one trial was conducted via video conference during the pandemic.

It might also be the last. Durkin concluded by the end of court that day, “I don’t expect we’ll follow this procedure again in the future. Going forward, absent something extraordinary, I will likely either recess the trial to allow a juror to come in the follow-

ing day if they are ill or discharge the juror and proceed with the remaining jurors.”

e judge is overseeing the fraud trial of three former executives of Outcome Health: co-founders Rishi Shah and Shradha Agarwal, along with former Chief Operating O cer Brad Purdy. Durkin had the approval of attorneys and their clients. He also noted that a California appellate court had upheld the conviction of someone who sought a new trial because a juror participated via Zoom for the rst two days of trial.

REACTIONS

ere wasn’t a particular glitch that swayed Durkin. “One thing you didn’t get to do is watch that juror, his reaction to evidence, whether he was attentive— which I’m sure he was,” he told the attorneys in the case, which is scheduled to last another 12 weeks.

e experiment at the Dirk-

sen Federal Building last week is just one of the myriad ways that videoconferencing and other COVID-19 adaptations have crept into daily life. e question now is the degree to which those changes will outlive the pandemic.

Tom Breen, a veteran defense attorney who isn’t involved in the Outcome Health case, agreed with Durkin that it’s critical for jurors to be seen as well as to see.

“Sometimes the reaction from a juror or jurors can give you a real insight into what they’re thinking,” he said. “I’ve seen jurors shaking their heads in response to testimony, or jurors who’ve been taking notes and throw their pens down and stop.”

But he’s a staunch advocate of using Zoom for routine status hearings, as many courts are doing. “It’s wonderful. It saves everyone time and money,” Breen says.

King County, Wash., which includes Seattle, was a leader in

conducting virtual trials during the pandemic, and it still allows remote jury selection.

“Washington state found higher minority participation,” says Ted Donner, a Wheaton attorney who teaches jury selection at Loyola University School of Law and is part of the nonpro t Online Court Project. “Everybody’s

got a smartphone; not everyone has a car. People are showing up more readily.”

He says videoconferencing technology was making its way into the courtroom before COVID-19 arrived. “I expected we would have seen it eventually. e pandemic accelerated that process pretty dramatically.”

Ameya Pawar

minority-owned business applicants for Small Business Administration (SBA) 504, SBA Express and 7(a) loans, who are purchasing owner-occupied commercial real estate within an opportunity zone. Qualified recipients must certify that business entities (including sole proprietorships) are at least 51% owned by women, Black or African American, Hispanic or Latino, Native American or Alaska Native, Asian, Native Hawaiian or other Pacific Islander. Program funds can be applied toward down payment only. Borrowers cannot receive program funds as cash back in excess of earnest money deposits. The Down Payment Grant program is only available with the SBA 7(a), SBA Express and SBA 504 products. Down Payment Grant program may be considered taxable income and a 1099-MISC will be issued; consult with your tax advisor. The commercial real estate loan must fund with Bank of America. Down Payment Grant may only be applied once to a qualifying owner-occupied commercial real estate, regardless of the number of applicants. Bank of America may change or discontinue the Bank of America Down Payment Grant Program or any portion of it without notice. Not available with all loan products, please ask for details. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms, and conditions are subject to change without notice. May be combined with other offers. If you do not qualify for the Down Payment Grant, you may still apply for SBA loan products, as well as for other non-SBA loan products of Bank of America. Owner-occupied commercial real estate will be determined in underwriting and requires occupancy by the borrower/guarantor. Please note SBA guidelines require at least 51% occupancy to be considered Owner Occupied. SBA financing is subject to approval through the SBA 504, SBA Express and SBA 7(a) programs. Loan terms, collateral and documentation requirements apply. Bank of America credit standards and documentation requirements apply. SBA eligibility and restrictions apply.

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CRAIN’S PARTNER

Novack, 40, is president of Deer eld-based Curion, a nearly 50-yearold consumer products testing company for the likes of Estee Lauder, Kraft Heinz and Constellation Brands. She and her husband live in Highland Park with their 7-year-old twins and a 2-year-old. I

By Laura Bianchi

Testing food and makeup sounds like a great job!

It keeps me coming to work every day. You can’t really understand a client’s objectives and solve problems without tasting or using a product.

An embarrassing moment?

As a newbie at Curion, I participated in an ice cream tasting for a client. All eight of us at the table had a cup for expectorating the ice cream—like a wine tasting—but I didn’t realize what it was for, so I lled my cup with water. I was so embarrassed that I ate all 15 samples and paid the price with a queasy stomach.

Where did you grow up?

I was born in England. My family moved to the U.S. when I was 7, and then at 15, we moved to Hong Kong. I threw an epic teenaged t, but those experiences taught me that opportunity can come with change.

How so?

I attended a top high school, Hong Kong International School, and experienced travel opportunities one can only imagine. Our school trips included kayaking down the Seti River in Nepal and camping on shore, scuba diving in the Philippines and working for Habitat for Humanity in southern India.

Your favorite responsibility?

I love browsing grocery and makeup aisles to stay in touch with these fastpaced industries. There is always something new to try.

A notable success?

After Wendy’s created its new hot and crispy fries, they wanted evidence that consumers preferred them over their largest competitor’s fries. A claim like that is highly scrutinized by legal and marketing teams, so we had hundreds of consumers come in for a tasting using a very speci c protocol. The results allowed Wendy’s to make a huge marketing splash.

A life-changing moment?

My family and I were sitting along the parade route, next to the Dairy Queen, just feet from where the rst bullet hit during the mass shooting at the Highland Park Fourth of July parade last year. I had my younger daughter on my lap and my twins were in the street, ready to grab candy. I thought I heard reworks, but then I saw a look of terror in one woman’s eyes, and my friend screamed to get down and run. The gun re was incessant.

What did you do?

I grabbed my daughters and took o with the crowd, but got separated from my husband and son in the rush. It was the de nition of terrifying. Thankfully, we reached safety unharmed. But I will never be able to unhear that sound or forget the terror we all felt.

How the shift toward technology in jobs is playing out here

BY JOHN PLETZ

Computer technology continues extending deeper into more types of work, from o ces to the manufacturing oor, transforming the economy and increasing the need for workers at every level to have digital skills.

New data from the Brookings Institution shows how the shift is playing out across industries.

Two decades ago, fewer than 10% of jobs were highly digitalized, requiring a high knowledge of computers and electronics, the Washington-based think tank says. By last year, it was more than 25%.

At the opposite end of spectrum, roughly half of all jobs had low digital content in 2002, Brookings says. By 2022, it was just under one-quarter of all jobs.

Coming out of a pandemic that has severed the link between work and traditional workplaces for many employees, digitalization of jobs has even greater implications for the economies of individual states and cities. Fewer than 1% of low-digital jobs can be done from home. About threefourths of highly digital jobs can be done remotely.

Chicago mirrors the national trend, according to an index score developed by the Brookings Metropolitan Policy Program that measures the digitalization of more than 750 jobs. Chicago and New York have scores of 48, the same as the U.S. average. Los Angeles is close behind at 47.2.

e scores—and rankings—reect the overall degree of digitalization of jobs in a particular economy on a scale of 0 to 100.

HIGH-TECH HUBS

e metropolitan area with the highest digital-work score, not surprisingly, is San Jose, Calif., the heart of Silicon Valley, at 52.3. It’s followed closely by Washington, D.C., which also has the nation’s third-largest collection of technology workers, at 51.8. Austin, Texas; Boston; and Seattle round out the top ve.

“Digitalization brings a winnertake-most or superstar dynamic,” says Mark Muro, a Brookings senior fellow. “You see places like Boston or Seattle pulling away.

“ e presence of digital work goes along with supporting and providing middle-class opportunity. e bene ts don’t necessary require what we think of as high-

TH E LOSS OF A HOSPITALI TY IC ON

Near ly 40 year s ago, Br uce White cr eate d White Lo dg in g with a si ng le hote l, grow in g it to one of the most re sp ec ted hospital it y compan ies in the countr y.

To da y, we cele brate his li fe, le ga cy, and th e im pa ct he had on each one of us .

Th ank you for cr eating a compan y gu ided by your va lu es. Each of your 6,10 0 associ ates promise to ma ke you pr oud.

We wi ll miss you, Br uce.

tech, software development-type skills.”

Administrative and clerical jobs require familiarity with computers, and everything from sales orders to manufacturing production quotas are recorded in sophisticated software systems.

e federal bureaucracy is emblematic of the rapid transformation to digital technology, especially the Department of Defense and its many contractors. Washington has the highest education rate in the country. Like Boston, the nation’s capital and the surrounding area also is home to a large concentration of universities.

at may explain why Bloomington-Normal and Spring eld have the highest scores among Illinois metro areas: 50.9 and 50.1, respectively. (Normal is also home to Rivian Automotive’s factory, which began turning out electric vehicles in late 2021.)

Manufacturing towns such as Peoria, Rockford and Decatur also made substantial gains in digital jobs. Kankakee showed the biggest increase, jumping from 28.9 to 46.3, just shy of the state average of 47.8, according to Brookings data.

“Manufacturing is one of the most quickly digitalizing jobs,”

Muro says.

Illinois ranks the highest among neighboring states, just edging out Michigan, Ohio and Missouri. Indiana ranked last, just behind Kentucky and Iowa.

HIGHER PAY

e more digital skills a job requires, the more it pays. Brookings data shows the average for high-digital-skill jobs is about $79,000, compared with $35,000 for jobs with low digital skills and

$54,000 for occupations that require medium digital skills.

Private companies and public institutions, from City Colleges of Chicago to the University of Illinois, are focusing on “upskilling” and “reskilling,” providing technology training to everyone from middle-school students to adults already in the workforce.

“People with more digital skills see greater mobility and pay,” Muro says. “ e overall digital skill level of people, rms and place is strongly associated with increased productivity and pay.”

New Brookings Institution data shows how the tech transformation is evolving across industries when it comes to job digitalization

BLOOMBERG

Six clues that home prices have found their happy place

If you were expecting home prices to drop into the bargain basement, there are several reasons you shouldn’t

BY DENNIS RODKIN

When the real estate market hit the brakes because of rising interest rates around Labor Day, Katrina Ladyga got calls from a few people who gured it was time to pounce on the bargain prices that would result.

Taking it in stride, Ladyga, an @properties Christie’s International Real Estate agent in the near western suburbs, asked each wannabe vulture what price range they were shopping in. “ en I’d show them,” she says. “’Well, you have three properties to choose from,’ so I don’t think it’s time yet” to count on sellers capitulating on price.

Sti competition for homes even as the boom subsided was the rst clue that prices wouldn’t plunge, even if they had stopped soaring upward.

Ladyga turned out to be right.

While Chicago metro-area home prices ended the year at compared with 2021, the towns Ladyga covers outperformed the region. Home prices were up more than 6% in La Grange, La Grange Park, Western Springs and Hinsdale, all parts of her turf.

For those real estate bears who were counting on prices collapsing, the second clue that it’s not coming is in a weekly report published Feb. 6 by Midwest Real Estate Data. e median price of homes sold in the Chicago area in the week prior was $272,500, down 0.9% from the median price a year earlier, $275,000. It’s the 13th week out of the past 14 when prices have been at compared with a year earlier.

Early in 2022, the last stage of the housing boom, the weekly

price reports were running as much as 7% above the yearearlier period. e 2022 price increases were coming on top of big price increases in 2021—running in the 10% range.

Over the next several months, rising interest rates, the Federal Reserve’s tool for sti ing housing ination, slimmed down the increases. While prices didn’t drop below the previous year, they gradually tapered down to about even with 2021. In the rst week of November, the mostly uninterrupted string of at price reports had begun.

Here are four more clues that home prices have settled into place for at least the foreseeable future.

No. 3: Goldman Sachs says so. Goldman Sachs is also saying prices appear unlikely to drop much in the Chicago area. Fortune magazine reported Feb. 6 that in revising its nationwide 2023 forecast from a 6.1% drop in home prices to a moderate 2.6%, Goldman listed Chicago as one of the metro areas least likely to be impacted. at’s based largely on the fact that affordability didn’t shrink as much here as in boomy markets like Austin, San Francisco and San Diego.

No. 4: Interest rate shock is fading.

“Buyers have emotionally adjusted to the increases in mortgage rates,” says Jamie Roth, an Engel & Volkers Chicago North Shore agent based in Highland Park.

Startling as it was to see mortgage interest rates rise above 5% for the rst time since 2009, eventually “everybody realized it’s still e ectively cheap money” compared to rates of 8% and 9% in the 1990s and above 10% in the

1980s, Roth says.

Interest rates have come down nearly a full percentage point since their late-October peak at 6.94%. And the Federal Reserve this month slowed its rate hikes, increasing its benchmark rate by less than the ve prior increases.

No. 5: Some buyers are still going over the asking price to get what they want.

Stephanie Walker and Pam Weinert, mother-daughter Compass agents in the Barringtons and other far northwest suburbs, represented a Lake Barrington Shores condo in November.

“ ere were a lot of people who really wanted it, but they didn’t think they had to go over the list price,” Walker says. “ ey were very surprised that it went to the one bidder who went over the asking price.”

Ladyga also told of over-theask-bidders. e property in the photo at the top of this story is a house on Lawn Avenue in La Grange that she represented. In August it was priced at $950,000. Multiple o ers took it up to $961,000, the price at which it closed in September.

On Feb. 6, Roth was preparing to put a client’s Highland Park house on the market at $1.4 million. “It has no competition,” he says, although he stops short of predicting it will sell for more than the asking price.

No. 6: Chicago condo sellers are waking up and smelling the co ee

e weak spot in the metro area’s prices is the Chicago condo market. e median price of condos sold in the city in December

was $300,000, down 12.6% from a year earlier, according to data published in mid-January by the Chicago Association of Realtors. Prices were also down in the three months prior.

Condos are about two-thirds of all home sales in the city and about 13% of all sales in the metro area, so that drop impacts everyone. ere are several intractable issues contributing, including the city’s crime problem and the slower-than-expected return to downtown jobs, culture and shopping. All have suppressed demand for condos. But on top of those, there’s an optimistic but self-defeating mindset among sellers that they should hold rm to their asking price.

A result is that unrealistically priced properties “sit out there for sale for a long time,” said Kirste Gaudet, an @properties Christie’s International Realty agent specializing in downtown condos.

e longer a property goes stale

on the market, the more likely it is to go at a cut-rate price.

Gaudet represented buyers who paid $800,000 recently for a two-bedroom condo in the Ritz-Carlton Residences on Michigan Avenue. e sellers, who bought the condo for slightly over $1 million in 2016, rst put it on the market in April 2022 at $900,000, a tacit acknowledgment that they couldn’t get back what they paid for it, given how much North Michigan Avenue has declined since 2016. e sellers eventually cut their asking price to $850,000 and sold for $800,000, 20% below their purchase price. Agents are pointedly talking to their clients now, Gaudet says, “about setting realistic prices.” She says she’s already seen the effect, with buyers “paying closer to the asking price” than they might have a few months ago. at may help put a oor on condo prices and stop the drop. Realistically, it could take some time.

team’s ve-person board. “I had to spend 12 seconds thinking about it, but I’m not shocked,” Reinsdorf told the Tribune.

ere was speculation that Tribune was angling to buy the football franchise, but it was McKenna himself who became an owner. With Aon CEO Pat Ryan, a longtime friend, he bought 20% of the team in 1990.

McKenna emerged as a civic presence, chairing the Economic Club of Chicago, the Civic Committee of the Commercial Club of Chicago, the Executives’ Club of Chicago and the board of trustees at the University of Notre Dame, his alma mater. He took a turn at leading the United Way of Metropolitan Chicago’s annual fundraising campaign and was on the Museum of Science & Industry board.

Describing his boardroom presence, United Way CEO Sean Garrett said in 2019: “He’s quiet. en he’ll say a couple of things that change the conversation.”

McKenna was a member of May-

or Richard M. Daley’s kitchen cabinet and practiced shuttle diplomacy between City Hall and Halas Hall when the Bears initially looked for new playing quarters, before winning a publicly funded Soldier Field overhaul. McKenna also was involved in the failed attempt to lure the 2016 Summer Olympics to Chicago.

“Rail-thin, with a shock of white hair and owlish glasses (and, lately, a bit of a stoop), Mr. McKenna stands out in a crowd,” Crain’s said in 2012. “He works a room with a polished ease many politicians could learn from. But colleagues say he doesn’t rely on charm to get results. Instead, he nudges a group toward consensus by framing issues and drawing out the views of each member on critical points.”

In 2001 a Tribune sports columnist selected McKenna over Michael Jordan as the city’s most-connected (if substantially less recognizable) sports gure.

With reporters, McKenna was typically opaque, as indicated by this exchange in the Tribune in 1999:

Tribune: In your role as a director, have you ever opposed management on an important issue?

McKenna: I don’t think it’s a matter of opposing management. ere are many instances where management will come to the board with alternatives and lay each of them out and entertain a discussion about that.

Tribune: But how aggressive a director are you? Does it ever come to butting heads with a CEO?

McKenna: It probably would manifest itself in a di erent way. I’m fortunate the companies on which boards I serve always come to the board with a very wellthought-out position. It’s never just throw something on the table and see where it goes.

McKenna took charge when twin succession crises struck McDonald’s in 2004. James Cantalupo, the CEO who had returned to Oak Brook after sales faltered and McDonald’s had reported its rst quarterly loss in the late 1990s, died at a company convention in Orlando. McKenna was elevated to non-

executive chairman, and McDonald’s had a CEO successor, Charlie Bell, in place within hours.

“It was a board operating at its nest,” Je rey Sonnenfeld, founder of the Chief Executive Leadership School at Yale University, told the Economist magazine.

Only a few months later, the McKenna-led board confronted another sober test when Bell stepped down with what proved to be a fatal colon cancer diagnosis. Under Bell’s successor, Jim Skinner, McDonald’s stock tripled but faltered again when the company reacted slowly to changing consumer tastes.

CEO Don ompson was eased out in 2015. at year, McDonald’s directors, mostly long-tenured Chicagoans like McKenna, came under re for their “insularity and regional bias” from a pension fund adviser, which also agged a potential con ict: McDonald’s had done business—$71 million over 22 years, by the company’s accounting—with Schwarz and another rm once partly owned by McKenna.

McKenna told the Wall Street Journal the sum was tiny compared with Schwarz’s revenue over the period; the relationship, he said, “doesn’t even come close to even matter in terms of a challenge to independence.” (Schwarz had about $400 million in annual revenue when it was sold to a British rm in 2012.)

Nevertheless, McKenna’s days as a McDonald’s director, which has earned him at least $1 million annually for years, were numbered. But like Zelig, he stayed in the picture. In mid-2016 he was given the title chairman emeritus and continued to advise the Golden Arches.

“I called him St. Andrew, because he was a saint. He measured up to that standard,” said longtime friend Newton Minow, a Chicago lawyer and former chairman of the Federal Communications Commission. “He was an inspiring, selfmade leader. He gave everything he had to make this a safer, kinder community.”

This house on Lawn Avenue in La Grange sold for about 1% more than its asking price in September.

Dan McGrath contributed.

MCKENNA from Page 2

McKenna ‘gave everything he had to make this a safer, kinder community’

FINALISTS NAMED FOR 2023 CHICAGO ORBIE® AWARDS

e Chicago ORBIE® Awards honors chief information o cers and, for the rst time ever, chief information secur ity o cers who have demonstrated excellence in leadership. With support f rom Crain’s Chicago Business, ChicagoCIO will honor the CIO and CISOs who are driving innovation and transforming Chicagoland’s leading organizations. e ORBIE Awards will take place on April 20th at Chicago Marriott Downtown Magni cent Mile.

To learn more about the event visit chicagocio.org/awards/details. e nalists are below:

GLOBAL | Over $5 billion annual revenue & multi-national operations

LARGE ENTERPRISE | Over $2.5 billion annual revenue

ENTERPRISE | Over $1.5 billion annual revenue

LARGE CORPORATE | Over $500 million annual revenue

CORPORATE | Up to $500 million annual revenue

CISO | Chief Information Security O cer

Mike Adams Brunswick Manuel Dietz Bosch

Talvis L ove Baxter International

Whitney McGinnis McDonald’s Corporation

Atul Verma Bank of Montreal

John Armbre cht e True Value Company Murali Balakumar Oak Street Health Rahul Ghai AAR CORP

Laura Kohl Morningstar, Inc.

Rick Cook Portillo’s

Michelle Kasson e AZEK Company

Greg Michelini Athletico Physical erapy

John Mohr John D. & Catherine T. MacArthur Foundation

Justin Stahl Chicago Bears

Dr. Mark Campbell Chicago White Sox

Francisco Diazluna Producers National Corp Scrip Companies

Kader Sakkaria Ru alo Noel Levitz

Raj Sampoornam Byline Bank

Jason Schweitzer ECOS

Dustin Esselman

Mark Brow ning Exelon Maryann Byrdak Feeding America Kemper Insurance

Mike Powell SEKO Logistics

Samir Shah Fortune Brands Innovations

Swati Shah TransUnion

Dr. Alok Mehta

Lisa Toma Suncoke Energy

Kris Rao HNI Corporation

Robert Allen Gallagher Bruce Co ng City of Chicago United Airlines

John Sander Wesco

Sara Schmidt US Foods

William Shields TransUnion

Deneen DeFiore

is civic conversation is long overdue

How many mayors does one city need?

You might think Chicago has only one but, thanks to this city’s unusual structure, we have one plus 50: an array of mini-mayors representing, on average, just under 54,000 residents per ward — a much smaller ratio than other major metros — and these mini-mayors, the local aldermen, have say-so on matters ranging from small-business signage to the number of parking spaces allotted to a given street.

By contrast, New York, with nearly 8.5 million residents, has 51 council members, each representing just over 166,000 people. Los Angeles has 3.9 million residents, and 15 council members representing nearly 257,000 people each.

But a fractured City Council built of 50 separate efdoms is not the only structural feature that sets Chicago apart from other major metros. Chicago has taken a pass on many of the municipal government reform ideas that swept across the country during the 20th century.

Unlike 23 of the 25 largest cities in the United States, Chicago has no charter — the thing that would allow external accountability when the city government operates in violation of its own code. (Indianapolis, like the Windy City, is also charter-free.) Why is this important? When a city government violates its charter, entities ranging from the state to private citizens can sue to enforce compliance.

ere are more structural peculiarities that set Chicago apart from other major metros, which may help to answer the question that perpetually nags so many civic observers here: Why doesn’t e City at Works actually work?

e answers begin to come to light in a remarkable new series that Crain’s

Chicago Business has embarked upon in partnership with the University of Chicago’s Center for E ective Government. e biggest takeaway from the series — “One City, 50 Wards” — is that the structure of government is not an arcane issue that should only matter to academics. Chicago’s mayor-council system, its plethora of wards and its lack of a charter all a ect how the city makes decisions, and thus how it operates. e system determines whose voices are heard and whose are stied. e system also incentivizes aldermen to focus on ward-level constituent services, as opposed to citywide policy.

As Ann Bowman, an expert on city politics and administration, put it in the Feb.

6 debut of the series: “Structure matters in a big way. . . .Of course it matters who you elect, but structure can make a di erence

in how these councils function.”

e opening piece in the series points out that the case for structural change is complicated. ere’s no expert consensus or empirical evidence that there’s a single, best way to govern a big city. But as Chicagoans prepare to vote in mayoral and City Council elections, now is the right time to have a conversation about the city’s system of government and to ask some tough questions about whether City Hall, in its current form, can deliver fair and e ective services and representation to all Chicagoans.

e “One City, 50 Wards” project sets the table for that conversation.

is year marks the 100th anniversary of Chicago’s last City Council shake-up, when the city adopted its current model of 50 aldermen representing 50 wards; before 1923, the city had 70 aldermen represent-

ing 35 wards. Over the last century, Chicago tinkered around the margins but mostly remained a last bastion of the style of wardbased governance that was popular in the fast-growing American cities of the Industrial Revolution.

So our mayor-council system — not to mention our 50-aldermen pileup — is not a structure dictated by a burning bush. Chicagoans have the power to look to other cities, other models, and start asking tough questions about what sorts of foundational changes are necessary to put this city on a path to prosperity. e second installment of the series — a Q&A with former 47th Ward Ald. Ameya Pawar (Page 4) — shines more light on the inner workings of the council and moves the conversation forward.

at conversation continues this week with two webinars hosted by the Center for E ective Government. On Feb. 13, from 12:30 p.m. to 1:45 p.m., an expert panel will discuss “Representation, Corruption, and the Inner Workers of the 50 Mini-Mayor System.” On Feb. 15, the subject will be “Power and E cacy of the City Council Within and Beyond Chicago,” also from 12:30 p.m. to 1:45 p.m. Crain’s political reporters Greg Hinz and Justin Laurence will be adding their voices to those presentations. May they be the beginning of a citywide e ort to nd the answer to the question: “What sort of government does Chicago need now?”

A loss for supporters of good government

Even in death, it seemed, the wisdom of Laurence Msall could not be avoided.

ere in the Chicago Tribune was word of the stunning death Feb. 4 of Msall, 61, and longtime head of the Civic Federation, a nonpartisan research organization whose expertise is how city and state governments in Illinois function, or don’t function.

Having dined with him a few days earlier, I was especially taken aback. ere was a sudden surgery, complications, and he was gone. But, in a sense, he wasn’t.

Not far away in the same paper was a piece on the state of city of Chicago nances: “Pension debt, property taxes, budget holes: Chicago’s next mayor faces huge nancial problems” was the headline on a story about the upcoming election.

e rst expert quoted? ere was no

surprise.

“Civic Federation President Laurence Msall, who passed away suddenly on Saturday after having complications from a surgery, said earlier that critical issues like crime that have dominated this election cycle can’t be addressed without a healthy budget.”

“ ‘ ere are not easy answers for the city’s longer-termnancial challenges,’ Msall said earlier.”

As the article then noted, “Indeed, none of the mayoral candidates want to focus on the city’s economic woes, and most have been reluctant to propose speci c plans or potentially unpopular solutions.”

So spineless, so true. It’s why Msall was a treasure. Whether you were a reporter or an organization looking for insight about the woeful state of nances in Illinois, it was

best to have Msall on your speed dial. He was a 24/7 vehicle of non-ideological accounts of the facts, and possible solutions.

He did so as a member of that declining, even maligned, species: a trustworthy, authoritative “good government” expert. Our trust in people who are smart is heading south.

When smart government folks urged us to wear masks, millions declined. When NewsGuard does non-ideological fact-checking, we can be derided as leftwing, or right-wing, by those who buy into notions of “alternative facts.”

Msall came to his authority by working rst in the administration of Republican Gov. Jim ompson, where he was immersed in economic development issues. He earned a law degree at night and later worked for Republican Gov. George Ryan. By the time he headed the Civic Federation, he knew politics, bureaucracies and balance sheets, cold.

Over the years, he became the go-to person on state and city nancial matters. You

name the outlet, he was there. He wrote regularly for Crain’s Chicago Business, most recently about the city’s unsettling crime statistics, and their link to declining business vitality. Crain’s reporters like Greg Hinz quoted him on matters such as the nancial repercussions of the legislature sweetening Chicago cop and re ghter pensions.

A genial manner, and an ability to turn the nancially obscure into the totally accessible, made Msall a source of almost biblical certitude.

In a 2020 Chicago Sun-Times podcast, he argued that “beleaguered Chicago taxpayers and business owners ravaged by the pandemic can’t take any more punishment. Instead, he’s urging the mayor to wield the budget ax.” at never really happened, but maybe the next mayor will listen.

But here’s why Msall’s passing is ultimately such a huge loss.

As conservative commentator Peggy Noonan put it a few years ago, “We are losing it. We are less versed in the facts of

BLOOMBERG

Jim Warren, former managing editor of the Chicago Tribune, is executive editor of NewsGuard.

An ongoing collaboration between Crain’s Chicago Business and the University of Chicago’s Center for E ective Government. ChicagoBusiness.com/OneCity50Wards

history, not only of other countries but of our own. It is a crisis, and much has been written on it over the years.”

e late historian David McCullough argued, “We are raising a generation of young Americans who are by and large historically illiterate.” He could have added our raising a generation that is by and large media illiterate, which is why the work of a group such as NewsGuard, which o ers non-ideological assessments of news sites’ credibility, is so important. When we dined, Msall referenced actions by Chicago mayors Lori Lightfoot, Rahm Emanuel and Richard M. Daley to put our current travails in context. He connected dots. It was the same that evening with his mentions at the table of various

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governors and the state’s budget mess.

e decline of traditional media exacerbates the problem of institutional knowledge and competence. Mike Flannery, the great political reporter for Fox 32 Chicago, on Feb. 5 noted the dramatic decline in coverage of the state Legislature. By my account, where there were once about 34 full-time reporters covering the Legislature, now there are just several. When the cat’s away, the mice will play.

It’s the same with the state’s congressional delegation. How much do you really know about what your congressman has done this past year? All too often, the dwindling number of journalists with media outlets nationwide have to report on the politicians’ terms, namely show-

ing at local appearances, or perhaps via their video press releases.

I texted a friend, himself a veteran of state government, about Msall’s sudden passing. “We just never know when our lottery ball will be picked,” he responded. So true. But it also inadvertently reminded me about subjects like the actual state Lottery, and Lightfoot’s claims of the nancial glories of what will be Chicago’s rst casino. ey are both complexity- lled topics that scare away many reporters and, as important, most citizens.

At the dinner, Msall asked a mutual friend whether she thought he should retire. If he had asked me, the answer would have been quick: Hell no. e tragedy is that it is now moot.

MY BENESCH

Featured team (left to right)

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Laurence Msall

PETER BAILLEY

PEOPLE ON THE MOVE

ACCOUNTING

The Illinois CPA Society, Chicago

The Illinois CPA Society (ICPAS) welcomes Geoffrey Brown, CAE as its new president and CEO, succeeding Todd Shapiro, who retired after a 24-year career with ICPAS. Brown has more than 20 years of experience as an association professional and joins ICPAS after serving nine years as CEO of the National Association of Personal Financial Advisors. Brown will lead ICPAS in its next chapter of growth and evolution as one of the nation’s largest associations serving certi ed public accountants.

ARCHITECTURE / ENGINEERING

Klein & Hoffman, Chicago

Klein & Hoffman (K&H)

announces the promotion of Jason Wilen, AIA, CDT, RRO, to Associate Principal. With 30 years of experience, Jason provides leadership for the rm’s roof system and waterproo ng rehabilitation projects and participates in the rm’s expert witness and building envelope commissioning efforts. Jason is a licensed architect in Illinois and an active member of International Institute of Building Enclosures (IIBEC). In 2022, Jason was awarded IIBEC’s Richard M. Horowtiz Award.

BANKING / FINANCE

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

CONSTRUCTION SERVICES

Redmond Construction, Chicago

World Business Chicago, a leading public-private economic development agency, has named Jamie Redmond, Partner & Chief Operating Of cer, Redmond Construction, to its board of directors. World Business Chicago’s mission is to drive business growth, talent and workforce development, community impact, and equity while supporting the business community and promoting the Chicagoland region as a top global hub for business.

ACCOUNTING

Legacy Professionals LLP, Westchester

Legacy Professionals LLP is pleased to announce that Christine Haber Ernst, CPA, CFE was named Partner at Legacy Professionals LLP and Crystal J. Nesson, CPA was named Principal, both effective January 1, 2023. An Audit Partner, Ernst leads the Firm’s Non-Pro t Practice Group. She is a graduate of Nova Southeastern University and Florida Atlantic University. Nesson specializes in federal and state taxation and is a graduate of Northern Illinois University. Legacy Professionals LLP is a Westchester-based regional CPA rm providing audit, accounting, tax, payroll compliance audits, and client accounting and advisory services (CAAS) to employee bene t plans, labor organizations, nonpro ts, and other businesses. www.legacycpas.com

Prairie Capital Advisors, Oakbrook Terrace

Prairie Capital Advisors, Inc., a leading corporate advisory and investment banking rm, is pleased to announce the promotion of Harsh Patel as Vice President. Harsh is involved in executing sell-side ESOP engagements and capital structuring projects by delivering overall project management, corporate valuations and transaction analyses.

FINANCIAL SERVICES

Lakeshore Financial Group, Chicago

Levin Ginsburg, Chicago

Levin Ginsburg is pleased to announce that Roenan Patt has been promoted to partner in the rm’s Litigation Practice Group. Mr. Patt is a graduate of The University of Illinois Chicago School of Law cum laude, (J.D., 2012) and Roosevelt University, (B.S. Biology, 2009). Roenan is a litigation and trial lawyer who represents individuals and businesses in commercial disputes. Roenan represents clients in both State and Federal Court.

LAW FIRM

Riley Safer Holmes & Cancila LLP, Chicago

NON-PROFIT

ACCOUNTING / CONSULTING

Weiss & Company LLP, Glenview Weiss & Company LLP

has elevated veteran CPAs Katherine Chung and Jeremy Morgan to partner. Katherine is a member of our tax department who works with clients in diverse industries, providing expertise on federal, state, and international tax planning and compliance for closely held, mid-market companies.

Jeremy works in our assurance department providing audit and review services for closely held businesses and tax-exempt organizations as well as accounting consulting and corporate, partnership, and individual tax services to clients in a broad range of industries. Both personify the deep professional talent that has made Weiss one of the area’s most consistently successful accounting rms for over 50 years.

BANKING / FINANCE

Ernst Nesson Wintrust Commercial Banking, Naperville

Wintrust is proud to welcome Senior Vice President Grant Cowen to the Wintrust Commercial Banking team. Grant brings 30 years of banking industry experience most recently with West Suburban Bank/Old Second National Bank as a Managing Director Commercial Loans. In his new role, Grant will focus on bringing his diverse background and experience in commercial lending to privately owned businesses of all types and revenue levels to help them with their banking needs.

LSFG welcomes Jack Klobucar as a Financial Representative. He’s dedicated to helping blue-collar businesses and young professionals with their nancial objectives. Jack is eager to begin his new role where he will support clients and contribute to the team’s success. Jack is a Registered Representative of, and securities are offered solely by Equity Services, Inc. (ESI), Member FINRA/ SIPC, 1 N Franklin Street. LSFG is independent of ESI. TC130984(0123)1

LAW

Hahn Loeser & Parks, Chicago

The Firm announced the addition of Daniel Kim as an Of Counsel member to its growing Intellectual Property Practice. Kim focuses on complex IP litigation, prosecution, licensing, and counseling involving patents, trademarks, copyrights, and trade secrets. He has worked with clients from different countries and industries in mechanical, biomedical, and electrical engineering, material science, software, design, and pharmaceuticals. Kim earned his J.D. from the University of Chicago Law School.

Riley Safer Holmes & Cancila LLP (RSHC) welcomes LaVon M. Johns as a partner and leader of the rm’s business transactions practice. Johns advises clients in complex commercial real estate and nance transactions, including acquisitions, dispositions, nancings, leasing, and public/private partnership transactions. Best known for serving as lead real estate counsel to the City of Chicago in the privatization of major assets, LaVon is adept at handling highly visible and large scale projects.

CONSTRUCTION

DSI, DSI South, Tampa Development Solutions Inc., and DSI South, is pleased to welcome Jeff Schneider, as Senior Vice President of their new South division, headquartered in Tampa, FL. In this role he will oversee all operations and construction projects throughout the Southeast U.S., overseeing all aspects of the highly specialized industrial design-build practice. Jeff brings over 20+ years of diversi ed experience, most recently working for one of the largest publicly traded REIT’s in the United States.

LAW

McDonald Hopkins, Chicago

McDonald Hopkins is proud to welcome James Inendino as a Member in the rm’s Business Department in Chicago. James adds over 30 years of experience to McDonald Hopkins’ national nance and real estate teams. His practice focuses on providing insight and guidance to clients on corporate nance, real estate nance, workouts, restructurings, and commercial real estate transactions. James also represents nancial institutions and borrowers in secured and unsecured lending transactions.

Thompson Coburn LLP, Chicago

Genevieve LeFevour has joined Thompson Coburn as a partner in our Chicago of ce. Genevieve assists employers in a range of industries with employment litigation and the successful handling of local, state, and federal lings. Genevieve has signi cant experience helping employers successfully navigate labor matters. She has also tried both bench and jury trials in Cook County and Lake County. Genevieve is the rst female graduate of Chicago’s Loyola Academy to serve on its Board of Directors.

PUBLIC AFFAIRS

Choose DuPage, Downers Grove

World Business Chicago, a leading public-private economic development agency, has named Greg Bedalov, President & CEO of Choose DuPage, to its board of directors. This appointment is in conjunction with the Greater Chicagoland Economic Partnership. World Business Chicago’s mission is to drive business growth, talent and workforce development, community impact, and equity while supporting the business community and promoting the Chicagoland region as a top global hub for business.

Illinois Humanities, Chicago Illinois Humanities is pleased to announce two new additions to our Board of Directors: Dr. Antoinette Burton and Julio Paz. Dr. Antoinette Burton, Chair of the History Department at University of Illinois at Champaign Urbana, directs the Humanities Research Institute. “I am so honored. I look forward to supporting the amazing public humanities work being done there and bringing ideas and energy from east central Illinois to the table.” Julio Paz, MBA, is Chief External Affairs Of cer at Chicago Commons. He is passionate about community development, philanthropy, and partnerships as tools to achieve social justice. “I am honored to join the Illinois Humanities Board and look forward to supporting its vital programs throughout Illinois.”

REAL ESTATE

Burton Paz

@properties Commercial, Chicago

Mike Rourke has been elevated to managing broker of @properties Commercial, a division of @properties Christie’s International Real Estate. Rourke’s commercial real estate career spans more than 35 years, with experience in sales, leasing, property management, asset management and development. He has spent the past 12 years at @properties Commercial, where he has consistently been one of the rm’s top-producing brokers, while also managing a variety of development and investment projects.

REAL ESTATE

ML Realty Partners, Itasca

ML Realty Partners has promoted Ken Lavand to Senior Financial Analyst. Since joining the rm in 2017, Lavand has applied his nancial and business expertise to strengthen the company’s valuation and acquisition efforts. Lavand’s analytical and forecasting strengths have supported ML Realty Partners in expanding the rm’s portfolio of properties while he has continued delivering high levels of care and determination in his work.

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

Chung Morgan

LAW FIRM

LAW FIRM

Crain’s is spotlighting women in the business and nonpro t worlds who are mapping out bold moves, taking big risks and making decisions of real consequence for their organizations and for the region at large. We also take a look at their big mission and challenges. Here's our inaugural list of 13 outstanding women.

Roz

CEO, Walgreens Boots Alliance

Walgreens CEO Rosalind “Roz”

Brewer is leading the longtime pharmacy and retail chain as it embarks on its largest transformation yet—becoming a health care provider. Since joining Walgreens in March 2021 after a stint as chief operating officer at Starbucks, Brewer, 60, has executed multibil

lion-dollar acquisitions to position the drugstore giant to provide health care

Mary Dillon

Brewer CEO, Foot Locker

e former CEO of Bolingbrook-based Ulta Beauty is back at it again, this time at the helm of Foot Locker. Mary Dillon, 61, is tasked with a turnaround at the New Yorkbased shoe store chain and must move it beyond its mall-based, Nike-focused past. Nike—which accounted for 68% of Foot Locker’s 2021 sales—announced last year that it would cut inventory at the chain, temporarily sending Foot Locker’s stock downward. e stock price has risen about 24% since Dillon took over.

Experts have said Dillon, who remains based in the Chicago area, is up for the job and well equipped to lead a transformation. She delivered a stellar performance during her roughly eight years as CEO at Ulta, setting Wall Street’s expectations high for Dillon out of the gate at Foot Locker.

At Ulta, Dillon shed the retailer’s discount image, expanded its online operation and made it a launching pad for invogue products. ose chops will come in handy in the coming year at Foot Locker.

Ally Marotti

services, including primary care.

While Brewer doesn’t have much experience operating health care companies, the Spelman graduate is no stranger to running a large corporation. Prior to Starbucks, Brewer was CEO of warehouse retailer Sam’s Club, a division of Walmart.

At Walgreens, where Brewer is the rst woman and the rst Black person to hold

the CEO job, she’s tackling ambitious plans to open primary care o ces in partnership with Walgreens subsidiary VillageMD at 1,000 stores by 2027 amid challenges such as recruiting in-demand physicians. Brewer also needs to ensure Walgreens makes good on its promise to provide quality care at a cheaper price.

Katherine Davis

Founding principal, Studio Gang

Since she wowed Chicago with her rst skyscraper, Aqua, more than a dozen years ago, architect Jeanne Gang, 58, has been busy designing all manner of buildings. Museums, re stations, parks, dorms, an airport and an embassy.

Gang and her Chicago-based architecture rm, Studio Gang, have made bold statements all over the world and continue to gain momentum with big, prestigious commissions. Like the

new Terminal 2 at O’Hare International Airport, an assignment Studio Gang won in 2019. Or a $431 million addition to the American Museum of Natural History in New York, set to open Feb. 17.

She followed up Aqua, an 82-story high-rise in the Lakeshore East development, with the 101-story St. Regis Tower, completed in 2020 just a couple of blocks away. It’s the world’s tallest

building designed by a female architect. Gang and other female architects— Zaha Hadid, among them—have broken barriers, reaching the upper echelon of an industry long dominated by men. But her proli c output in her city and beyond could place her among Helmut Jahn, Ludwig Mies van der Rohe and other Chicago postwar icons.

Alby Gallun

Jeanne Gang

Mellody Hobson

President and co-CEO, Ariel Investments

Mellody Hobson is as high-pro le a business gure as they come in Chicago, male or female. She chairs the board of Seattle-based Starbucks, sits on the bluechip board of JPMorgan Chase in New York and last year joined the ownership group of the Denver Broncos.

But her day job will keep her busy in 2023. Chicago’s Ariel Investments, where Hobson, 53, began her career as an intern in the early 1990s, is in the midst of a turnaround. e asset management rm,

Beverly Kim

Co-owner, Parachute and Wherewithall

Since Beverly Kim, 43, reopened Wherewithall and Michelin-starred Parachute after pandemic closures, she has been using her Avondale restaurants to help reset the industry. at’s a tall order for two small restaurants, but she knew just the place to start: eliminating tipping. Servers get $25 an hour instead of the pre-pandemic tipped minimum wage of $6.40. Cooks and other kitchen workers got a raise, too.

e restaurants also added sick days and four weeks of parental leave—in keeping with Kim’s long-standing mission of making the industry hospitable for working mothers. Kim adds a 20% service charge to checks to o set those raises, accompanied by a lengthy explanation for the customer. at part is key, Kim said.

When New York restaurateur Danny Meyer went tipless in 2015, he did so by upping menu prices. at experiment failed. Kim thinks a service charge is close enough to a tip in the mind of a customer that they might get on board with the change. She’s optimistic it will work, though it will be hard, particularly amid in ation. e industry “needs to be sustainable for all of us,” she says.

Ally Marotti

founded by Hobson’s mentor John Rogers Jr., has seen performance in its agship funds lag peers and appropriate indexes. Assets under management sit at about $16 billion.

Hobson is in charge of Ariel’s business strategies and direction, while Rogers focuses on nding beaten-down stocks whose value he believes isn’t appreciated yet. One of her jobs will be to continue to diversify Ariel’s business, branching out from mutual funds to other investment

vehicles like exchange-traded funds and investment styles like long-short strategies.

Not that her other gigs don’t present challenges. Overseeing the board at Starbucks can’t be completely comfortable as Howard Schultz, who built the company into a global franchise and has returned as interim CEO, combats e orts to unionize the co ee chain’s outlets around the U.S.

Steve Daniels

Peggy Kirk

CEO, Shirley Ryan AbilityLab

Peggy Kirk is relatively new in her position as CEO of Shirley Ryan AbilityLab, a top-ranked rehabilitation hospital in Streeterville, but she knows the organization perhaps better than anyone.

Kirk, 65, is an AbilityLab lifer. While in nursing school at Northwestern University, she completed rotations at the organization before landing a full-time nursing job in 1981. Over the years, she worked her way up to vice president of clinical operations and chief operating o cer before becoming CEO in 2021.

Now she oversees a sta of 2,500 at the AbilityLab, which has been ranked the No. 1 adult specialty hospital in the country by U.S. News & World Report for the last 32 years.

While the AbilityLab has managed to avoid extreme sta ng shortages and drops in revenue that many other health care institutions experienced during the COVID-19 pandemic, Kirk says the organization has felt the recent in ation wave.

Networks are the secret sauce of their success

Among the biggest lessons for one networker: There is power in a group of masterminds if done correctly

BY DANIELLE BRAFF

To grow the AbilityLab, Kirk is expanding its reach, mainly through partnerships with other health care providers across the globe.

“It is one way to spread our mission and our knowledge to the eld,” Kirk says. “But growth is important for the organization from a nancial perspective as well.”

Katherine Davis

Jenny McColloch

Chief sustainability of cer, McDonald’s

Jenny McColloch oversees sustainability e orts at the fast-food giant, from reducing plastic in Happy Meal toys to working with beef farmers on sequestering carbon. McColloch, 40, has been at McDonald’s for a decade, coming up through a position that focused speci cally on sustainability within the supply chain.

is year, she’s concentrating on working toward achieving McDonald’s lofty carbon emissions goals. It’s a daunting task for one of the largest buyers of beef in the world. McDonald’s has more than 40,000 locations in 118 countries and works with thousands of franchisees, suppliers and employees.

Systemwide sales in 2021 were $112.5 billion, a number that surpasses the gross domestic product of many countries. Making progress involves working with franchisees on getting renewable energy into their stores, rethinking McDonald’s packaging

and working with farmers to protect ecosystems and reduce their own carbon footprint. Meanwhile, companies of all shapes and sizes are watching her.

Ally Marotti

Marianne Markowitz

CEO, First Women’s Bank

Marianne Markowitz, a former Small Business Administration o cial in the Obama administration, launched the rst and so far only new Chicago-area bank since the Great Recession. After opening its doors last year, 2023 is the year of execution for First Women’s Bank.

Raising more than $30 million in equity from investors last year, First Women’s since has brought in high-pro le corporate “mission partners” like Microsoft, United Airlines, Aon, Comcast, Airbnb, Wendy’s and William Blair & Co. Among other things, those companies have deposited substantial sums in the edgling bank, which had $71 million in deposits as of Dec. 31, up from $47 million as of June 30, according to lings.

With low-cost funding in hand, First Women’s Bank will put that cash to work this year. e bank’s mission is to lend to women- and minority-owned businesses,

with the bulk of those loans being SBAbacked—Markowitz’s expertise.

Markowitz, 56, sees a potential economic downturn as an opportunity for her bank. When other banks pull back, First Women’s will be ready. “We don’t have any loan losses,” she says.

Steve Daniels

Money, ideas and a fantastic team are key for a company to succeed.

But female Chicago entrepreneurs say their networks are their secret sauce.

Paula Jenkins, owner of LFS Consulting, a nancial coaching company in Grayslake, belongs to 24 networking groups, and she met hundreds of entrepreneurs over the past ve years. Some of the groups are based on location, others are focused on her industry and a handful are women-only. All have helped Jenkins handle challenges she faced throughout her career.

“When you focus on an item you need help with, and those around you strategize with you— it’s quite powerful,” Jenkins says.

Nearly 80% of professionals believe networking is important for career success, according to a LinkedIn global survey, but 38% say it’s di cult to keep in touch. A study by Northwestern’s Kellogg School of Management and Stony Brook University’s College of Business nds that professionals with a higher status have larger social networks and continue to increase those networks, believing they have more to o er while networking.

But in reality, anyone who networks bene ts, says Kate Alpert, co-founder of Women Belong, an Evanston organization aimed at supporting female business leaders.

Alpert, who met her business partner Dorothy Rosen via networking, was a new mother with a highneeds baby, and she had no role models for working full time while caring for a di cult child.

“ is idea of balancing caregiving and work, and showing up vulnerably and honestly without all the answers—I connected with Dorothy right away over that,” Alpert says.

After their networking meeting, the two realized the need for other networking groups aimed at women with similar struggles, and they launched Women Belong.

Candice Warltier, CEO and founding partner of CS-E ect, a Chicago-based strategic commu-

nications agency, is a member of Chicago Moms in Business, a mostly online group. She says it’s her go-to for everything from asking for recommendations for a great event venue to nding the hottest restaurant to entertain a client.

“I found my accountant and even connected a friend to a divorce attorney through this group of women business owners,” Warltier says. “Although I have only met a handful of members in person, I feel extremely connected with this group and would feel comfortable asking almost everything.”

Warltier is also a member of Chicago Innovation’s Women Mentoring Co-op, a diverse group of women from various industries and companies. Chicago Innovations connects a mentor with a mentee who work together on a speci c issue over a six-month period. ere are networking sessions for all participants.

Since networking takes time, it’s important to be intentional and strategic about the groups you join, says Jenkins, who is reviewing her list of groups in an e ort to pare them down.

“You can’t be in so many and get the full bene t of all of them when you are stretched so thin,” she says.

e biggest lesson she’s learned: ere is power in a group

of masterminds if done correctly. And, she says, a room full of female entrepreneurs is critical, as they have unique challenges that can be helped by open and vulnerable discussions. (She credits the I’m Possible Women’s Empowerment Collaborative, Women Belong and Crystal Lake Chamber of Commerce Women Empowering Women for these salient networking discussions.)

“Entrepreneurship is a beast of its own, and only entrepreneurs truly understand the day-to-day struggles, highs and lows,” Jenkins says.

“ENTREPRENEURSHIP IS A BEAST OF ITS OWN, AND ONLY ENTREPRENEURS TRULY UNDERSTAND THE DAY-TO-DAY STRUGGLES, HIGHS AND LOWS.”

Paula Jenkins, owner of LFS Consulting

ERIN STEFANIK

Marie Lynn Miranda

Chancellor, University of Illinois Chicago

Ever since Marie Lynn Miranda was announced as the 10th chancellor of the University of Illinois Chicago, the city’s largest and only public research university, she hasn’t stopped smiling. “I am so incredibly excited about the opportunity to join a university with such deep commitment to questions of social justice and such deep engagement with its home community of Chicago,” she said.

Miranda, 59, doesn’t begin until July, but that hasn’t stopped her from visiting the school for a week every month to speak with faculty, students and university leaders. Before UIC, she served as provost at the University of Notre Dame and remains a member of the faculty in its department of applied and computational mathematics and statistics.

As provost, she led the university’s academic response to the COVID-19 pandemic and championed e orts to increase faculty and student diversity, missions she cares deeply about. At UIC, she plans to “deepen and extend programs” that make impacts on equity and access and that focus on serving the city’s diverse population.

Female entrepreneurs face obstacles getting funding

Women-led businesses are 63% less likely to receive venture-capital funding than those led by men. Here’s what to do.

BY DANIELLE BRAFF

Soup was always at the center of the table for Alison Velazquez, who grew up in Mexico City and moved to Chicago when she was 4.

So she thought it would be a no-brainer to get funding for Siempre Soups, her line of plant-based, preservative-free, readyto-eat soups she founded in 2014. Today, six years after going through the Good Food Accelerator and nine years after launching—she’s still trying to raise money for her small startup.

“It’s a nightmare,” Velazquez says. “ e numbers speak for themselves.”

In 2021, only 2.4% of the total capital invested in venture-backed startups in the United States was for female-founded businesses, according to PitchBook. Researchers from Columbia Business School and London Business School found that

women-led businesses are 63% less likely to receive venture-capital funding than those led by men.

“ e reality is the majority of consumers who are doing the shopping are women,” Velazquez says. “I’m selling a brand that women purchase, but I’m asking for men to fund a business that they don’t really understand or connect with.”

Gentry Lane, CEO and founder of Anova Intelligence, a computational security company based in Washington, D.C., had a similar experience.

“People invest in people they like, rst and foremost,” she says. “And we all gravitate to people who remind us of ourselves. Male venture capitalists look at women entrepreneurs and see nothing but di erences.”

So what’s a female business owner to do?

Ari Krzyzek, CEO and head of strategy of Chykalophia, a Chicago company

designed to accelerate women-led businesses, says companies have options. Requirements for getting funded through a business line of credit or a loan looks different than getting a grant or funding from venture capitalists, Kryzek says.

Owners need to identify their business needs and foundation, which includes understanding the company’s target audience, explaining how it serves as a solution to an issue, outlining plans for customer acquisition and retention, and determining the funds needed to achieve these goals.

Idea Group, a Chicago company o ering management, marketing and consulting services for nonpro ts and associations. ere are microloans, lines of credit, commercial loans and other special funding programs, in addition to grants, angel investors and more. But before contacting

Alison Velazquez, founder of Siempre Soups

“Without such clarity, banks, grants, organizations and investors are not able to picture what impact the funds will have in your business,” Kryzek says.

Knowing your numbers is key, says Melissa Lagowski, CEO and founder of Big Buzz

any of these, entrepreneurs need to know which is best for them.

“Organizations like the National Association of Women Business Owners Chicago chapter can help point you in the right

Brandon Dupré

“I’M ASKING FOR MEN TO FUND A BUSINESS THAT THEY DON’T REALLY UNDERSTAND OR CONNECT WITH.”

Lynn Osmond

CEO, Choose Chicago

Chicago’s hopes to improve its crimeand pandemic-sullied national reputation are pinned in an outsize way on Lynn Osmond.

She took over last spring as CEO of Choose Chicago after 25 years running the Chicago Architecture Center, becoming the tourism agency’s rst female top executive. Osmond has been rebuilding Choose’s executive team to try to revive the city’s COVID-battered hospitality sector and restore convention and trade show business that is coming back at a slower pace than that of other major cities. Her ambitious goal: draw close to 54 million visitors to the city this year, nearly 90% of 2019’s record-high gure and up from 30.7 million in 2021.

She’ll try to pull it o with a smaller budget and less political certainty than her predecessors had, though she’s far better connected with local civic and business leaders.

Before marketing the Chicago’s First Lady architecture boat tours, Osmond, 65, spent years early in her career as a symphony executive in Canada, New York and California.

Osmond says she’s leaning on her fundraising skills to bolster Choose, having grown the Chicago Architecture Center’s annual budget from $2.5 million to $25 million during her tenure. She got a boost on that front in January from a $5.5 million American Rescue Plan Act grant to help promote tourism in Chicago’s neighborhoods.

Danny Ecker

Andrea Sáenz

CEO, Chicago Community Trust

Andrea Sáenz, 50, has big plans as she begins her rst year as president and CEO of the Chicago Community Trust, one of Chicago’s largest and richest foundations. As the foundation’s eighth president and rst Latina leader, Sáenz aims to really “dig into economic development in communities that have been disinvested for decades.”

Her focus will be continuing to develop and expand programs like We Rise Together and Connecting Capital & Community, or 3C, that aim to bring equity, resources and homeownership to the city’s South and West sides.

After stints as chief of sta for former Chicago Public Schools CEO Jean-Claude Brizard and rst deputy commissioner and chief strategy o cer at the Chicago Public

Library, Sáenz served as chief operating ofcer of the trust, helping oversee its some $4.7 billion in assets and grant commitments totaling $1.4 billion in 2021. Now, as head of the trust, Sáenz will decide where to channel grant funding and help set the agenda on what philanthropy in Chicago wants to accomplish.

Brandon Dupré

Karen Sauder

President of global client and agency solutions, Google

When Karen Sauder became head of Google’s Chicago o ce nearly ve years ago, she said the giant tech company had “made a big commitment to stay here for the long haul.”

Google proceeded to double its headcount to about 1,800.

During the depths of the pandemic, Sauder, 54, stepped up to the microphone at the ompson Center and made an even bigger commitment: Google would overhaul and buy the aging downtown icon, giving the Loop a massive pick-me-up when the city needed it most.

e company hasn’t disclosed the specifics of its plans for the ompson Center. But construction is expected to begin this year, with an expected 2026 move-in date.

Google, like other tech companies, faces unexpected headwinds. It recent-

ly announced layo s as growth in its core search-advertising business decelerated last year after a COVID-induced surge. (Google has not said how many employees in Chicago will be a ected.) Sauder, who joined Google a dozen years ago from DraftFCB, has her work cut out for her, overseeing the company’s relationship with advertising agencies and big clients.

John Pletz

Liz Thompson

Female and male founders: 17.6% 2008200920102011201220132014201520162017201820192020202120222023

direction by helping you connect with the right resources,” says Lagowski, who recommends that every woman in business join and network via NAWBO.

When she founded her company in 2004, she used credit cards with high interest rates, and was 10 points shy of approval for a business loan.

“I didn’t know that di erent banks and nancial institutions have di erent parameters and di erent ideal loan clients,” she says. “If I had known, I would have shopped around more.”

Luckily, Lagowski had gone through the Goldman Sachs 10,000 Small Busi-

Female founders only: 2.5%

President, Cleveland Avenue Foundation for Education

ness program, where she learned about SBA loans. She went to SomerCor, where she secured a loan and hired a high-level employee.

During the pandemic, Lagowski lost 50% of her business, but through NAWBO Chicago, she stayed abreast of various business programs available. at funding helped her stay a oat, and she took an economic injury disaster loan to invest in the future growth of her team.

Today, her revenue has surpassed pre-pandemic numbers, and she’s preparing for a record-breaking year.

Liz ompson, 59, president of the Cleveland Avenue Foundation for Education, or e CAFE, puts money into her passion: education. e CAFE’s 1954 Project, a nod to the landmark school desegregation ruling, has awarded $10 million to young leaders doing innovative work in education and will soon announce its newest recipients.  ompson’s own education, a degree in electrical engineering from Purdue University, led to a decadelong stint in telecom and working with young people as a volunteer for Junior Achievement. She entered the nonpro t world when she became founding executive director of City Year Chicago.

When she and her husband, Don ompson, a former McDonald’s CEO and co-founder of e CAFE, moved to Denver, she led a multimillion-dollar expansion

of an Early Head Start Montessori school there as its executive director.

Back in Chicago, her hometown, she’s “on a mission to elevate leaders of color in education and provide them with the resources to be successful.” Because leaders of color in social innovation only receive 4% of the philanthropic dollars that go toward that kind of work, she says, “we invest in people who need the investment.”

Cassandra West

TODD WINTERS

POOJA SHAH/TEMBO TONES PHOTOGRAPHY

New Wintrust Financial CEO Tim Crane aims for growth, but not a sale

WINTRUST from Page 3

though, the adage is that banks are sold, not bought. If the top dog isn’t ready to sell, few—if any— suitors will bother.

For Chicago, an independent Wintrust is what remains of the city’s signi cance as a business banking hub. Once home to numerous large commercial lenders, Chicago has seen all but Wintrust sell to out-of-state banks craving a piece of the nation’s third-largest market. If Wintrust is swallowed up, Chicago becomes akin to Milwaukee and other far smaller cities served mainly by out-of-town banks.

Crane in 2008 joined smaller Wintrust from Harris Bank, where he was president and ran retail banking, a move that surprised local bankers. When he becomes Wintrust CEO in May, Crane, 61, will oversee a bank with $52 billion in assets, the fourth-largest local franchise by deposits and among the top three lenders to the region’s midsize companies. Wehmer, 68, will continue to wield in uence for at least the next three years in his new role— rst as executive chairman for a year, then as senior adviser and founder.

Crane says any changes will be stylistic. Where Wehmer is a big personality with a colorful way with words unusual for a banker, Crane is more low-key and comes across as un appable—someone who thinks hard before he acts.

“We like our position in Chica-

go,” Crane says. “As others have disappeared around us, it’s improved our position. Chicago needs a (locally based) bank. I don’t see any reason it shouldn’t be us.”

Still, larger banks looking to go big in Chicago might interpret the ascension of a new CEO in his early 60s as a sign Wintrust would welcome an o er.

Crane dismisses such a notion: “With the caveat that we are a public company and, of course, would appropriately address any acquisition overture, we aren’t for sale.”

But stock valuation is the bottom line in mergers and acquisitions. A lower value on Wall Street compared with rivals makes it easier for a suitor to make an o er you can’t refuse.

Wintrust stock trades at around 1.5 times the bank’s tangible book value, a common valuation metric in banking. Two out-of-state banks in Chicago that have shown a desire to grow here—Columbus, Ohio-based Huntington Bank and Minneapolis-based U.S. Bank— trade at 2.2 times and 2.6 times their book values, respectively, says Terry McEvoy, an analyst with Stephens in Portland, Maine.

Huntington CEO Stephen Steinour has said he’d be open to future deals in Chicago. U.S. Bank considered bidding for Chicago’s MB Financial in 2018, before stepping aside as Cincinnati-based Fifth ird acquired MB. Spokespeople for both banks declined to comment on their in-

terest in Wintrust.

Ordinarily, the big valuation gap would make Wintrust vulnerable. But the market for large-scale bank mergers essentially is shut down now because the Biden administration believes that banks as big as U.S. Bank, the country’s fth largest, can be too hard to manage.

A change in administration, though, could reopen the oodgates.

“It’s a consolidating industry,” McEvoy says. “Wintrust, for years, has been on the buying end of that.”

While big bank deals are on pause, a key job for Crane will be to improve earnings at Wintrust, drive up the stock price and truly make it so that “no one’s going to be able to a ord us,” as Wehmer recently put it.

ACQUISITIONS

Wintrust wants to eat rather than be eaten. “When acquisition opportunities present themselves, we are disciplined in our approach and are good at integrating the acquired businesses,” Crane says.

As examples, he points to Wintrust’s acquisition of Allstate’s portfolio of loans to agents around the country in late 2021 and a more recent deal for Rothschild’s $8 billion U.S. asset-management business.

Crane also will look at geographic expansion for a bank that remains heavily tied to the Chicago market, albeit with a growing

LAST MAN

SELECTED

2017 2019 2022

Seller Chicago-based Chicago-based Chicago-based PrivateBancorp MB Financial First Midwest Buyer Toronto-based Cincinnati-based Evansville, Ind.-based

As Chicago’s once-plentiful group of midsize business banks sold to out-of-town buyers over the past six years, Rosemont-based Wintrust Financial just kept growing. Source:

presence in southern Wisconsin. Wehmer was frustrated at the lack of buyout targets in northwest Indiana. e bank will open a loan production o ce in Crown Point later this year, adding to the one retail branch it has in Indiana.

Wintrust has staked out solid market positions in areas it couldn’t buy its way into, such as suburban Evanston and Oak Park. But the going can be slow and expensive.

Helping Crane, too, is that Wehmer’s most reliable lieutenants are staying on. Chief Operating Ocer Dave Dykstra, who’s been with Wehmer since 1995, will continue in that role. And Richard Murphy, chief lending o cer and a 30-year veteran of Wintrust, isn’t going anywhere, either.

What will distinguish Crane from Wehmer will be how he responds to unforeseen challenges

and opportunities. Wehmer did lots of small bank acquisitions and shied away from larger ones, believing they were risky. Wehmer also recruited experienced bankers like Crane who grew disenchanted with their roles at competing banks, many times in the wake of disruptive mergers.

“I don’t think we have to be $100 billion (in assets),” Crane says. “But the model is to continue to grow.”

Whatever happens on the deal-making front, Wintrust’s board needs to start the process of identifying their 61-year-old incoming CEO’s eventual successor almost immediately.

Crane sees no issue there. “We’ve got a great bunch in their 40s and 50s,” he says. “ ere will be lots of great opportunities over the next ve to 10 years for younger people at the bank.”

Rivian struggling with production, competition and labor organizing efforts

RIVIAN from Page 1

underperform.

While 2022’s down market battered the entire EV sector, Rivian’s stumbles drew particular criticism. CEO R.J. Scaringe announced last month that the company fell short of its 25,000-vehicle goal by 700. at doesn’t sound so bad, but Scaringe had slashed the goal by about half early in 2022. More worrisome, Shlisky says, is that Rivian only sold about 8,000 of the 10,000 vehicles it produced in the fourth quarter.

e setbacks have delayed the launch of Rivian’s platform for less-expensive vehicles by a year, to 2026. And in December it shelved a deal with Mercedes to build electric vans for European businesses.

For the rst nine months of 2022, the company lost $5 billion on revenue of $995 million, as cash reserves fell to $13.8 billion from $18.5 billion at the start of the year.

Scaringe says Rivian has enough to fund operations through 2025. But if cash keeps dwindling at the current average pace of $1.5 billion per quarter, the company will need a fresh infusion by next year to keep reserves from running too low, warns Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions in Chester Springs, Pa. “Building a new $5 billion plant (in Georgia) and adding new models will not slow the out ow of money,” he says.

Investors might balk at putting more money into a cash-burning manufacturer beset by operational woes, potentially forcing Rivian to seek a buyer for the entire company. Rivian’s shrunken stock price makes it a relatively a ordable entry into the EV business for a potential suitor. A Rivian spokeswoman declined to comment on the possibility of a sale.

A sale at current prices would be a big loss from Rivian’s IPO price of $78. Yet Rivian’s market cap of around $18 billion would still be a big bite for any potential acquirer.

Analysts discount the U.S. automakers that are forging their own paths in electric trucks. Ford, which early on invested in Rivian, backed away to focus on its electric F-150 Lightning.

But there could be interest from Asian or European automakers, or an industry outsider like Amazon, analysts say. e e-commerce giant owns an 18% stake in Rivian, which is supplying delivery vans. Last year, Sony formed a joint venture with Honda to produce electric cars.

“A buyer would get several years’ head start (in EV manufacturing) rather than go on its own,” says Tyson Jominy, vice president at J.D. Power.

Another challenge comes from the United Auto Workers union, which aims to return to the plant that was organized under previous owner Mitsubishi Motors.

WORKER COMPLAINTS

e UAW helped coordinate a handful of employee safety complaints with the U.S. Occupational Safety & Health Administration in the fall. And the UAW led a complaint with the National Labor Relations Board in the fall alleging Rivian engaged in unfair labor practices by threatening employees with the loss of jobs and bene ts if they unionize, and discriminating and retaliating against employees for their union support and activities, according to NLRB records.

A Rivian spokeswoman declined to comment on the complaints because the cases are pending. No doubt Rivian opposes the entrance of a union. “As we are building direct to consumer business model, we believe that our employees bene t from having direct relationship with their management team,” the spokeswoman said in an email. She declined to comment on the company’s production challenges because Rivian reports earnings later this month.

e UAW was unsuccessful in organizing EV plants until December, when it won an election at a battery plant in Ohio, a joint venture of General Motors and LG Energy Solution of South Korea. e UAW won in a lopsided 710-16 vote.  “ at was an astounding win,” says Victor Devinatz, a professor of management at Illinois State University. “What does that bode for organizing Rivian?”

RIVIAN’S TUMBLING DAILY STOCK PRICE

e UAW has good reason to press on. Wages and bene ts are generally lower at EV plants than unionized facilities. And fewer workers are needed to assemble electric cars, Devinatz says, adding, “ e UAW is trying to protect jobs through the transition.” A UAW spokeswoman declined to comment.

Analysts point out that pay raises would increase Rivian’s costs at a delicate juncture, delaying company pro tability, discouraging outside investors and further depressing the stock.

Some of Rivian’s ills are due to forces bu eting all EV startups: the shortage of semiconductors, the rise in interest rates and the drying up of venture capital. But many of its problems are self-in icted, primarily in manufacturing.

Rivian has some breathing room—it’s one of only four companies with EV trucks on the road. Its most direct competitor,

Ford’s F-150 Lightning, debuted last year with four models ranging from $55,000 to nearly $97,000 base price. Ford enjoys a competitive advantage as an experienced manufacturer, analysts say. GMC’s Hummer is out with a pricey base of $110,000. And the Lordstown Motors Endurance, beset by its own nancial troubles, is targeting eet buyers with its truck at $65,000. Rivian’s truck starts at $73,000, and its SUV begins at $78,000.

But more competitors are coming. Chevy’s new Silverado EV arrives later this year, and the GMC Sierra is expected early next year, along with the Ram truck from Stellantis. And the market is eager to see Tesla’s Cybertruck, although its debut has been delayed several times.

“Rivian is in a race against time because everyone is coming,” Jominy says. “ e company has to get its manufacturing issues sorted out as quickly as possible.”

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Local construction industry losing momentum

CONSTRUCTION from Page 1

lenders growing more cautious, many developers have completed all their planning and predevelopment work but have yet to secure the funds they need to break ground.

“We have a lot in the pipeline,” says Michael Meagher, president of Chicago-based McHugh Construction. “The question is: Is it getting out of the pipeline?”

That’s an important question for big general contractors like McHugh and the numerous people who make a living in the construction trades. The industry employs about 134,000 in the Chicago area, up about 14% from its pandemic low in spring 2020 and roughly equal to its pre-pandemic employment levels, according to the Federal Reserve Bank of St. Louis. But the sector used to employ a lot more people here—155,000-plus before the Great Recession.

A few big, high-profile projects will continue to keep many workers busy, including the Obama Presidential Center on the South Side and the modernization and expansion of O’Hare International Airport. And the proposed $1.7 billion Bally’s casino along the Chicago River could create 3,000 construction jobs.

Infrastructure also offers major opportunities for construction firms as some of the $1 trillion in spending in the 2021 federal infrastructure bill flows to projects in the area.

“There will be a mad scramble for that money, and it’s crucial that we get our share now,” says Bob Clark, executive chairman and founder of Clayco, a Chicago- bas ed general contractor.

Though the market is slowing, Clayco, one of the firms working on the O’Hare project, is still on track for a good year, Clark says. Clayco’s total revenue nationwide should rise to $5.6 billion in 2023, up from $5.2 billion last year and $4.9 billion in 2021, according to Clark.

“I expect ’23 to be a little bit flat, but, by the fourth quarter, we’ll see a bunch of stuff rolling in,” he says.

Dodge Data projects a mostly flat year for the Chicago construction industry overall, but activity will vary by sector. On the commercial side, office building construction starts here will drop to $1.4 billion, down 29% from 2022, and warehouse starts will fall 22%, to $1.2 billion, according to the Dodge forecast. Local single-family construction starts will slip 2%, to $2.7 billion, while apartment starts will drop 18%, to $2.6 billion. Health care will offset some of those declines, with volume jumping 82%, to $934 million.

LAGGING EFFECT

Warehouses and apartments have been bright spots for several years, even through the pandemic, generating lots of work for construction firms and their

CONSTRUCTION STARTS FOR THE CHICAGO AREA

Rising interest rates will cool the local construction industry this year, but won’t push it into a downturn, according to a forecast from Dodge Data & Analytics.

subcontractors. In the Chicago area last year, industrial developers broke ground on a record 31.8 million square feet of warehouse space on a speculative basis, or without leasing the space to a tenant first, according to Colliers International.

Apartment developers, meanwhile, have been keeping construction firms busy with projects in the suburbs and the city, especially in the Fulton Market District. Developers are on track to complete 2,900 apartments in downtown Chicago this year and as many as 5,600 in 2024, which would be an annual record, according to Integra Realty Resources, an appraisal and consulting firm.

But the construction cycle takes time, with many months going into planning, approval and financing, and the construction itself often taking two years or more for high-rise projects. As a result, rising interest rates have a lagging effect: Right now, many construction firms are busy with developments that started before the market changed, but the volume of new projects getting underway is shrinking.

“Our business is usually the last one to see a slowdown, and the last one to come out of it,” says Damian Eallonardo, executive vice president at Chicago-based W.E. O’Neil Construction.

O’Neil, for instance, began construction last year on a 28-story hotel, the RIU Plaza, just off North Michigan Avenue, that won’t open until 2024. Construction of many of those downtown apartments, expected to be completed next year, also began in 2022.

Developers are still working to get their projects shovel-ready, so they can break ground when the financing climate improves, Eallonardo says. But many are playing the waiting game right now.

“Our estimating department is pretty busy, but last I checked, we don’t make a lot of money

estimating jobs,” he says. e pandemic disrupted the construction industry, as supplychain bottlenecks caused delays and pushed up prices for all kinds of building materials. A strike by Illinois quarry workers last year also delayed some projects by reducing supplies of aggregates that go into ready-mix concrete, says Eric Lindquist, president of Adjustable Concrete Construction, a Lombard-based concrete contractor.

DIVERSIFICATION

Prices of lumber, steel and other key materials are coming down, and delivery times have become more predictable. But finding workers in certain trades has become increasingly difficult amid a tight labor market. Lindquist says there aren’t enough people entering construction apprenticeship programs to replace retiring workers.

“It’s been very tough,” he says.

For many firms, diversification is critical as they try to smooth out the ups and downs of economic cycles. Chicago-based Pepper Construction is active in educational and health-care sectors, and has found opportunities with museums. The firm is wrapping up construction on the Pritzker Archives & Memorial Park Center just over the border in Wisconsin.

Pepper also is exploring opportunities with hotels that plan major renovations and in the energy markets, says Pepper President Scot Pepper. Last year, the firm formed a new company, Pepper Energy, that focuses on renewable energy projects.

Though business “is slowing down a little bit,” Pepper doesn’t see major trouble on the horizon.

“We’re pretty stable right now. We have some jobs that pushed off because of interest rates,” he said. “I’m not feeling like it’s going to be a really long or deep recession at all from what we’re seeing.”

Publicis Groupe’s office sublease listing in Leo Burnett Building is city’s largest

towering over the roughly 3.3 million square feet in the market when the COVID-19 pandemic began, according to recent data from brokerage CBRE.

Paris-based Publicis—whose brands include Leo Burnett Worldwide, Digitas and several other advertising, marketing and market research rms located at 35 W. Wacker—said in a statement that the sublease listing “is a normal course of business aligned with our future of work planning, rooted in purposeful time together in the o ce, with exible models that bene t both talent and our business.”

e publicly traded company reported last week that its net revenue rose by 20% year over year in 2022, its second consecutive year of double-digit growth. Publicis occupies 32 oors in the tower, long known as the Leo Burnett Building, and is o ering a mix of di erent oors for sublease, according to the Cushman yer. e company’s lease runs through the end of 2030.

TYSON’S MOVE

e o ering comes just a couple of weeks after Tyson Foods put its entire 233,000-square-foot West Loop o ce building up for

sublease. e companies now account for two of the three largest sublease listings in the city. Such move-in ready spaces have been getting the attention of prospective tenants because they are typically o ered at bar-

gain rates and allow takers to avoid the high construction costs associated with building out a new o ce from scratch. Logistics company TransLoop, public relations services provider Cision and Twin Brook Capital Partners

are among the companies that have recently signed on to sublease o ce space downtown.

e Publicis sublease listing is also a troubling move for Opal Holdings, the New York-based real estate investment rm that

paid $415 million in late 2021 for the tower at 35 W. Wacker. While Publicis still has almost eight years left on its lease, its move to cut back on space signals how much smaller its footprint may be in the future. e o ering also comes as the building’s second-largest tenant, law rm Winston & Strawn, is likely to leave the building when its lease expires and is eyeing a new o ce at 300 N. LaSalle St. Publicis and Winston currently lease more than three-quarters of the 1.1 million-square-foot Wacker Drive tower.

An Opal Holdings spokesman did not respond to a request for comment.

FLOOR PLANS

e Cushman yer plays up a variety of 25,000-square-foot oor plans in Publicis’ space and notes that plans are in the works for a new lobby and tenant lounge in the building. Some of the oors were updated as recently as 2018, when Publicis relocated some of its brands into the building from the Merchandise Mart.

Cushman & Wake eld Vice Chairman Steve Schneider is marketing the 35 W. Wacker space on behalf of Publicis Groupe.

The Leo Burnett Building at 35 W. Wacker Drive.

COSTAR GROUP

A knockoff of Frank Lloyd Wright’s Robie House quickly grabs buyers’ attention in Edgebrook

BY DENNIS RODKIN

Acopy of Frank Lloyd Wright’s celebrated Robie House in Hyde Park, built 17 miles away and 82 years later, quickly attracted potential buyers after hitting the market Jan. 31.

“It’s been crazy,” said Nicole Flores, the Dream Town Realty agent representing the house on Navajo Avenue in Chicago’s Edgebrook neighborhood. Six potential buyers made appointments to walk through the fourbedroom, 3,600-square-foot house on Feb. 1, its rst full day on the market at $924,900. e listing was marked contingent just a few days later, on Feb. 6.

Long, slender and built of brick with broad roof overhangs, the exterior “is pretty darn close” to the look of its inspiration, Robie House, Flores said.

In 1910, Wright completed a house at 5757 S. Woodlawn Ave. for clients Frederick and Lora Robie. A national historic landmark, the house is “a masterpiece, dazzling,” now-retired Chicago Tribune architecture critic Blair Kamin wrote in 2019, when owner the University of Chicago and operator the Frank Lloyd Wright Trust unveiled an $11 million restoration.

Kamin wrote that the Robie House is “one of Chicago’s, and the world’s, architectural treasures (and) culminated the architectural revolution of Wright’s Prairie Style.”

e Navajo Avenue copy was built in 1992, during a high wave of interest in the architect, but there’s not much more known about its origin. e present sellers are the fourth owners and, according to Flores, have no information about its early days. Crain’s tried to reach the early-1990s seller but was unsuccessful.

It’s not an identical twin of the Robie House. Its exterior closely resembles the original but with some notable changes, including a limestone arch framing the front door.

Inside are Wrightian touches, including a big stone replace dividing two rooms, windows separated by brick piers, and extensive use of brick and wood. It does not duplicate Robie’s wood-banded ceiling, art glass windows or rows of globe lights.

John Ei er, a Chicago architect who has done several restorations of Wright buildings and lives in a Wright house in Glencoe, looked at listing photos of the Navajo house and said the exterior has “a really strong, obvious connection to Robie House” and a few elements of another Wright design, the Darwin Martin house in Bu alo, N.Y.

On the inside, Ei er was impressed by the extensive use of brick for walls and chimneys. “ at’s a lot of masonry, like Wright would have,” he said. He also complimented the technique of brushing back the grout above and below bricks to emphasize the horizontal look, a Wright specialty.

Asked to rate the house’s Wright-inspired exterior for its verisimilitude, Ei er gave it an 8 out of 10.

Has he seen 9s and 10s?

“No,” Ei er said.

e echo of Wright is largely in the formal rooms and doesn’t extend into the kitchen, baths and bedrooms.

e sellers, Eava Harrison and Christopher Gentry, bought the house in 2015 for $817,000, according to the Cook County clerk. ey were traveling and not available for comment, Flores said.

The home, built in 1992 with an exterior closely resembling the Prairie-style masterpiece in Chicago’s Hyde Park neighborhood, attracted six potential buyers in its rst day on the market. “It’s been crazy,” the listing agent said. I

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