Crain's Chicago Business, March 4, 2024

ON TAYLOR STREET, TIME IS RUNNING OUT

‘Little Italy is no longer a thing,’ says one restaurant operator. ‘It has come and gone.’ |

Chicago-based prayer app claims No. 1 spot

Hallow got some bang for its buck with a regional 30-second Super Bowl commercial

By Corli Jay

If you ask Alex Jones, cofounder and CEO of the prayer and meditation app Hallow, how he feels about the success of the app, he'd give all glory to God.

Hallow, a Chicago-based startup, can be spotted in Apple's app store in the No. 1 spot for free apps following its Super Bowl commercial, which featured actor Mark Wahlberg asking viewers to join him in prayer this Lent and to “stay prayed up.”

“Jesus is now on top of the app store charts, who would've thought,” said Jones when asked about the success of the Super Bowl ad. e 30-second commercial ran in 14 markets in a regional spot and cost just a fraction of the $7 million a national ad demanded, said Jones. Hallow beat out discount e-commerce app Temu, which sits at No. 2 on the list of free apps after dropping billions into marketing recently — a particular point of pride for Jones.

“We're a small team, so it was certainly a big swing for us. It was a big bet. We really never would have considered it, if not for the fact that the Super Bowl, once every 10 to 15 years, happens to

For major airlines, the DEI wars are just beginning Carriers nd

themselves at the center of an escalating political debate over diversity policies

By John Pletz

e three big airlines that employ tens of thousands of workers in Chicago — United, American and Southwest — are being dragged into the culture wars.

America First Legal, a group started by former Trump adviser Stephen Miller, has taken aim at the airlines in its broader ght

GREG HINZ

A voter’s guide to two of the trickier issues on the March 19 primary ballot.

PAGE 2

against diversity, equity and inclusion.

It started last fall with a complaint led with the Equal Employment Opportunity Commission, claiming the airlines’ diversity policies are discriminatory. e group followed up in January with a letter to the

See DEI on Page 16

FINANCIAL SERVICES

Discover-Capital One deal leaves a highly touted Chatham call center’s fate uncertain. PAGE 3

ALLY

See APP on Page 16

A voter’s guide to two of the trickier issues on the March 19 ballot

As in life, good intentions will take you only so far in politics. Eventually, wise voters gure out that declaring an intention to do good is not the same as actually doing so. Ergo, two contests on the March 19 primary ballot in which voters would be well advised to look beyond the ashy exterior and check under the hood.

e rst is the Bring Chicago Home referendum being pushed hard by Mayor Brandon Johnson and his progressive allies. A judge has ruled that the proposal’s wording is defective and ordered that no votes be counted. But advocates are vowing to overturn the ruling on appeal and are still working hard for a “yes” vote.

If the appeal succeeds and the measure passes, it would yield what advocates say is $100 million a year for a ordable housing and related social services by jacking up as much as 300% the city’s real estate transfer tax on property sold for at least $1 million. e rate would drop just a tad, from 0.75% to 0.6% on property below $1 million.

Now, it’s obvious that Chicago needs more a ordable housing. No one with a heart wants people sleeping under viaducts in the cold. It’s equally obvious that many folks are thrilled by the prospect of dinging “rich” people who own million-dollar-plus homes. Mailers sent to voters by referendum advocates say the intent is to “fund a ordable housing and homelessness services by asking the wealthy to pay their fair share.”

e truth under this hood: is no longer is the “mansion tax” that once was pitched. In fact, it’s a tax on any property, especially business property. Like the corner grocery store. Or the six- at apartment building whose owner relies on rents to pay her bills in retirement. Or a downtown o ce tower that’s struggling to stay a oat post-COVID amid a recordhigh 26% vacancy rate. All of them easily could sell for more than $1 million.

Advocates say such taxes have worked well in other cities and charge that foes are exaggerating by, for instance, dubbing the proposal a property tax. ey’re right about that. It’s a tax on property sales, not a regular property tax.

at said, advocates e ectively assume that any business with property worth $1 million must be owned by someone who’s “rich.”

e University of Chicago’s Harris School of Public Policy projects that a whopping 75% of proceeds from the tax hike would come

from business property, not, say, Lake Shore Drive condo owners. If you think owners of that corner grocery store, small apartment building or vacant o ce tower ought to be squeezed until their pinkie rings y o , great. But admit what you’re doing.

e other problem with this proposal is that the speci c usage of the money won’t be determined in law until the City Council considers rules — after results of the primary are in. In other words, trust Johnson and the City Council members to do the right thing to serve homeless people — once they have the money, that is. After all, they’re well intentioned. Look at the ne job they’ve done housing homeless refugees this winter.

Given the fact that Johnson recently announced plans to raise another $350 million for homeless people by letting tax-increment nancing districts expire, might we perhaps wait and see how that works out? From my experience, even well-intentioned blank checks tend to bounce at City Hall.

e other ballot item that I think needs more scrutiny is the race for a seat on something called the Cook County Board of Review, a little-known but powerful agency that e ectively decides how high your property taxes will be by hearing appeals of property valuations proposed by county Assessor Fritz Kaegi.

e board has a terrible reputation for operating in the shadows, with its members doing themselves no favors by routinely accepting campaign contributions from property tax appeals lawyers, appraisers and other types who appear before them. One of those commissioners is Larry Rogers. He insists he’s done no wrong. Beyond that, it’s worth noting that, unlike the independently wealthy Kaegi, Rogers can’t just write himself a check at election.

Kaegi this March has endorsed and is backing — with more than $100,000 of his own money — a woman running against Rogers, Larecia Tucker, in the Democratic primary. Tucker, who now works as an appeals aide in suburban Rich Township, says she decided to run on her own, is independent and will take orders from no one. Rogers charges Kaegi is trying to take control of the three-member board by sticking an ally into a swing seat.

Assessments can be complicated stu . Kaegi and the existing Rogers-allied board have di erent philosophies over how to tax big commercial property. But even if Rogers, et al., are too inclined to do favors for businesses that hire contribution-making property tax appeals lawyers, is the solution for Kaegi to e ectively pick the members of the board that reviews his work?

Voters will decide.

Crain Communications celebrates opening of Grand Rapids Business

Crain Communications celebrated the opening of its newest City Brand, Crain’s Grand Rapids Business, at an open house for business and civic leaders held Feb. 26.

KC Crain, president and CEO of Crain Communications, hosted the leaders at an open house in the new o ce of Crain’s Grand Rapids Business in the Waters Center in downtown Grand Rapids.

Crain Communications entered the West Michigan market in late summer 2022 when it acquired the Grand Rapids Business Journal. Four months

later, Crain purchased another Grand Rapids-based business publication, MiBiz.

After merging the two operations, Crain’s Grand Rapids Business was launched in April 2023. e newly combined newsroom and sales sta moved into their new downtown o ce in November.

Grand Rapids joins Crain’s Chicago, Cleveland, Detroit and New York in the stable of Crain City Brands.

“A great business market deserves an equally strong news organization to keep it informed,” Crain said. “ e o cial opening of our doors in Grand Rapids marks a signi cant milestone in the Crain’s Business expansion.”

Greg Hinz

Crain’s Staff

KC Crain, president and CEO of Crain Communications (bottom left) and Jim Kirk (bottom right), group publisher and executive editor, speak to business and civic leaders during an open house at Crain’s Grand Rapids Business’ of ces. | PHOTOS BY SETH THOMPSON

Discover-Capital One deal leaves call center’s future uncertain

For three years, it has provided hundreds of jobs on the South Side — a ‘great lifeline for the community’ and ‘huge economic thrust,’ Cha tham of cials say |

By

Mark

Weinraub

Capital One’s plan to buy Discover Financial Services raises questions about whether Discover's highly touted call center in Chatham will remain a key job provider for the largely Black South Side neighborhood or face closure as part of cost-cutting measures related to the $35 billion deal.

“ is has been a great lifeline for the community,” said Nedra Sims Fears, executive director at e Greater Chatham Initiative, a neighborhood organization. “ ey have really put their back into it and we have appreciated it.”

Fears relayed an anecdote: At a Christmas party, a principal of a neighborhood elementary school said it was easy to identify the school’s Discover families, as the kids were not stressed and the parents were more involved at school activities.

See CHATHAM on Page 18

The effort that Discover put into highlighting its work in Chatham over the past three years may help save the facility from the chopping block.

Lurie cyberattack demonstrates how bad it can get

The threat that took down the hospital’s system is the latest in an escalating series of attacks putting lives and entire health systems at risk

Jon Asplund

e continuing network outage at Ann & Robert H. Lurie Children's Hospital due to a cyberattack is the latest in an increasing number of hospital and health system cybersecurity crises nationwide.

It's a problem that is putting lives in danger, and not just causing costly disruption to health care businesses, the American Hospital Association's chief cybercrimes o cial says.

“Not only is the organization a victim in these crimes, but obviously the patient inside the hospital or health systems is a victim, their care delivery is disrupted and delayed, and any delay, urgent or not, can harm patients' health,” said John Riggi, the AHA's national adviser for cybersecurity and risk.

e state of care in these situations can be especially harrowing. A report from the Associated Press described a heart surgery performed at Lurie on a 7month-old without the use of some high-tech devices.

“Also the entire community that depends on the hospital is placed at risk,” Riggi said. “ at's why the FBI and Department of Justice consider cybercrime against health care a 'threat to life' crime.”

On Jan. 31, Lurie announced it had taken down its entire computer and communications network due to a cybersecurity incident. Phones, email, computers, connected medical devices, electronic health records and the provider-patient portal MyChart were all unavailable.

ough patient services continued to be provided, patients and their families were directed to communicate via a special call center.

After two weeks, phone and email communications were restored, Lurie said on Feb. 14. Electronic records and MyChart remain unavailable. WBEZ later reported independent pediatricians working within Lurie's network and unable to bill patients through proper channels would be able

“Not only is the organization a victim in these crimes, but obviously the patient inside the hospital or health systems is a victim.”

John Riggi, the AHA’s national adviser for cybersecurity and risk

to apply for emergency loans. e phenomenon has been on the rise for years but was exacerbated by the COVID-19 pandemic, because “in an e ort to improve patient care and e ciency, health care has become increasingly networked, tied to thirdparty vendors and reliant on electronic health records,” said Riggi.

Lurie isn't the only Chicago children's hospital to deal with a cyberattack in recent months.

St. Anthony Hospital revealed

See

In Florida, insurance rates are driving away would-be buyers

Homeowners

from

Sarasota

south to Naples — long a draw for Chicagoans — are having a tougher time selling their

Michael Sasso, Bloomberg

Florida’s southwestern coast — long one of America’s fastestgrowing regions — is losing some of its boomtown swagger as a home-insurance crisis and other soaring costs make homes unaffordable.

Homeowners from Sarasota south to Naples, known for its eight- gure waterfront mansions, are having a tougher time selling their properties, and the buildup in inventory has caused home prices to fall at some of the

fastest rates in the nation. Realtors point to rising insurance costs that were exacerbated by Hurricane Ian in 2022, prompting some homeowners to list their homes for sale and wouldbe buyers to walk.

“You’ve got people that went through the storm and just want to move on, and don’t really think the a ordability is here anymore because of insurance,” said Marlissa Gervasoni, president of the Royal Palm Coast Realtor Association. “From what I’m seeing, I believe they are

looking for areas that might be less costly.”

Southwest Florida has been one of America’s fastest-growing regions for decades, historically luring retirees from the Midwest drawn to its warm winters, prevalence of golf courses and relatively a ordable housing. In recent years, agents have said they’re seeing more newcomers from the Northeast and other regions, and the area’s rise in home prices has outpaced the nation overall.

A rendering of Discover’s call center at 8560 S. Cottage Grove Ave.

Wall Street was surprised but not shocked by Capital One’s planned Discover purchase

The timing of the $35 billion deal may have been unexpected, but the outcome wasn’t. Here’s why.

Mark Weinraub

Capital One Financial Corp.’s $35 billion deal to buy Discover Financial Services brings an end to the saga of the credit card company that had long been a takeover target but — at least for a time — seemed determined to go it alone as it built out a national network of merchants over four decades.

In the end, it was that very network — combined with the consumer lender’s relatively digestible market cap — that made Discover too attractive for outside investors to resist.

Indeed, Capital One is swooping in despite the arrival last month of a new CEO at Riverwoods-based Discover whom many on Wall Street had expected to focus on cleaning up lingering regulatory issues at the Riverwoods-based company before potentially seeking a buyer.

“To me it was a pretty big surprise, the timing of it more so than anything else,” said David Schi , head of consumer and retail banking at Chicago consulting rm West Monroe. “During the CEO cutover, that’s when a lot of times, the board may look for opportunities to really have a suitor, so the fact that the new CEO had just started made the timing a little bit surprising.”

Discover had named banking industry veteran Michael Rhodes president and CEO of the compa-

ny in December, roles he o cially assumed on Feb. 1.

“At the end of the day, we don’t really control the timing when opportunities present themselves,” Rhodes said on a conference call Feb. 20 to discuss the deal with Capital One.

He added that he will remain in an advisory position at the combined company for a year after the closing, expected for the end of 2024 or early 2025.

Rhodes stepped into roles vacated by long-term Discover head Roger Hochschild, who was

forced out last summer following the disclosure of regulatory issues related to the misclassi cation of credit cards and a proposed consent order with the Federal Deposit Insurance Corp. tied to other consumer matters.

During his brief remarks on the conference call, Rhodes said the deal will not change Discover’s priority of cleaning up the regulatory issues. Discover also will continue to look for a buyer for its student loan business, which has a portfolio of about $10.4 billion in outstanding loans.

Discover’s brand will live on as it is absorbed into Capital One, which Capital One chairman and CEO Rich Fairbank likened to a baseball team with strong players at similar positions.

“ eir customers love them,” Fairbank said on the conference call. “ ey have strikingly low attrition rates. ey have very high loyalty. We have admired the brand that they have built along the way. We turned our admiration ultimately into a bid when planets aligned.”

Fairbank added that the com-

pany will maintain a “signi cant presence” in the Chicago area after the deal closes. Discover, which employs about 6,000 people in two locations in the area, declined to elaborate on Fairbank’s comments.

e $35 billion in stock that Capital One is paying — valuing each Discover share at a 26.6% premium to its Feb. 16 closing price of $110.49 — also was a surprise. e company’s valuation had fallen sharply following the disclosure of the regulatory issues last summer, with share prices falling to a three-year low of $79.04 by late October before rebounding over the past several months.

Despite that rebound, Discover remained a relatively puny acquisition target, with a market capitalization of $27.6 billion prior to the deal announcement. Capital One’s market value, by contrast, is in the neighborhood of $52.2 billion. Others’ market values are American Express at $154 billion, Mastercard at $424 billion and Visa at $553 billion.

Against that backdrop, the upside for both companies was too great to pass up even if the timing was not perfect, West Monroe’s Schi said.

“When you listen to why Capital One is justifying the conversation and pushing the deal, it makes a lot of sense,” Schiff said. “It is surprising but not shocking.”

Chicago economic rebound will accelerate in 2024 after lagging U.S., Huntington of cial predicts

The bank’s chief investment of cer sees gains ahead in two key sectors

e Chicago-area economy has recovered slower from the COVID-19 pandemic than the rest of the country but will begin to catch up in 2024 as activity picks up in the industrial and transportation sectors, according to John Augustine, chief investment ocer at Huntington Private Bank.

“It is unusual for us to come out of an economic slowdown slower than the rest of the country,” Augustine said in a presentation to clients. “Usually, we lead.”

e unemployment rate in the Chicago area stood at 4.1% and average hourly earnings were $33.63, according to the latest government data. at compares with the overall U.S. averages of 3.7% and $34.55, respectively.

e area economy has lagged in part because the consumer

spending that helped power the economy over the past year, a time when many expected the country to tip into recession, did little to help Chicago-area businesses. at activity led to more growth in the services sector, rather than goods, a trend that Augustine said he expects to level out as borrowing costs for manufacturers steady with an expected dip in interest rates.

“We will get it back,” Augustine said. “It is just taking us longer this time.”

e uncertainty that persisted throughout 2023 kept many local companies on the sidelines despite a string of economic indicators that pointed to a steadily improving economy; it’s also slowed investments early in 2024.

“Even though we are all waiting for something bad to happen, it is just not happening,” Augustine

said. “It is hard to make pre-pandemic comparisons. Our world now, whether we like it or not, is pre- and post-pandemic. We are still writing the manual post-pandemic.”

Huntington, which exploded into the Chicago market with its $22 billion purchase of the par-

ent of TCF Bank, remains bullish on the area, said Chris Sweetland, president of the bank’s Illinois-Wisconsin region. rough that deal, Huntington boosted its area branches to nearly 140, making it the fth-biggest bank in the area by that metric.

“We are investing right here in

Chicago,” Sweetland said. “ at investment will come in the form of people. It will come in the form of locations and facilities. We are going to spend some big dollars here in Chicago.”

On the commercial side, the company plans to double the size of its regional banking segment that supports local businesses with annual revenues between $2 million and $50 million, Sweetland said. It also will invest in its middle-market segment for companies with up to $2 billion in revenue and double the size of its Chicago private bank, which offers services for wealthy clients.

Despite the growth expectations for the region, the housing sector will continue to drag on the local economy. Housing prices remain elevated despite the surge in mortgage rates in the past few years due.

“Everyone is sitting in their houses with their 3% mortgages and no one will move,” Augustine said.

Discover’s brand will live on as it is absorbed into Capital One, which Capital One Chairman and CEO Rich Fairbank likened to a baseball team with strong players at similar positions. BLOOMBERG

Mark Weinraub

The unemployment rate in the Chicago area stood at 4.1% and average hourly earnings were $33.63, according to the latest government data. URBAN LAND INSTITUTE

Allstate looks to unload Wacker Drive of ce building

The insurance giant is poised to take a big loss on the West Loop building it bought two years ago with an eye on moving there

Danny Ecker

Two years after buying a Wacker Drive o ce building and mulling a plan to move its headquarters there, Allstate has put the property up for sale.

e Northbrook-based insurance giant has hired real estate services rm Colliers to sell the 10-story o ce building at 29 N. Wacker Drive, according to marketing materials. ere is no asking price listed for the 133,580-square-foot building, which an Allstate venture bought in January 2022 for $29.7 million, according to Cook County property records.

But it’s likely the building is worth substantially less than that today, given drastic interest rate hikes over the past two years and a remote work movement that is scaring many real estate investors away from o ce buildings. People familiar with the o ering said they expect bids to come in at just more than $10 million, based on recent sales of other downtown o ce properties, a price that would saddle Allstate with a painful loss.

e listing is a surprising pivot by a company that signaled its con dence in downtown’s post-

COVID future with the purchase, which came at an ugly time for ofce landlords in the heart of the city. With downtown o ce vacancy surging to a record high from companies slashing their footprints, Allstate’s acquisition of the building demonstrated its commitment to workspace in Chicago’s urban core. e company said at the time it might move its headquarters to the Wacker Drive building after selling its longtime north suburban campus to an industrial developer.

But Allstate has not occupied the Wacker Drive property, which is leased today to a mix of small tenants that collectively occupy about 57% of the building, according to a marketing yer. It’s unclear what prompted the company to seek a buyer for the building, and an Allstate spokeswoman did not respond to a request for comment.

Embraced remote work

Allstate embraced the rise of remote work during the COVID-19 pandemic, striking a deal to sell its massive Northbrook campus and moving its headquarters to a portion of a nearby building at 3100 Sanders Road in the northern suburb. In

an annual report released last month, Allstate touted that it has attracted “more quali ed candidates with remote work options” and that the company has seen an “increase in applicants since we announced our permanent exible work environment, including an increase in diverse candidates.”

Aside from its Northbrook main o ce, Allstate also has space it leases downtown, at 444 W. Lake St. and in the Merchandise Mart.

Colliers is playing up the Wacker Drive property as an opportunity for another company that wants to own and occupy a high-pro le downtown o ce building, much like Allstate intended. e building today has three full oors of available space totaling about 43,000 square feet that could house a corporate buyer’s workspace.

e brokerage is also projecting that a buyer could boost the property’s value by adding a rooftop deck amenity space. Such an addition, which would be allowed under the property’s existing zoning, could help attract new tenants as companies seek space in the newest and most updated o ce buildings to

help encourage employees to gather.

e Wacker Drive property was built in 1961 as the headquarters for Millers National Insurance and was known as the Masonite Building, according to the Colliers yer.

Prior to Allstate’s 2022 purchase, the building was previously sold to an investor for $13.4 million in April 2010, according to Cook County property records, after its vacancy spiked following the Great Recession.

Amid high borrowing costs and the sector’s murky future, Allstate is hitting the market at a

tough time for Chicago-area ofce building sales, which plummeted 60% last year to $1.4 billion, according to research rm MSCI Real Assets.

Downtown o ce buildings that have changed hands in recent months have also shown the decimation of property values.

Buildings at 230 W. Monroe St., 300 W. Adams St. and 150 N. Michigan Ave. have traded since September at fractions of what they were worth well before the pandemic.

Colliers’ Alissa Adler and John Homsher are marketing 29 N. Wacker on behalf of Allstate.

Magni cent Mile retail space sold to rms known for amassing distressed malls

in distressed shopping centers have made their entry into retail on the Magni cent Mile, picking up the mostly vacant property at the base of the Warwick Allerton Hotel Chicago at 701 N. Michigan Ave.

A joint venture of Namdar Realty Group and Mason Asset Management bought the 22,900-square-foot retail space from its longtime owner, London-based Grosvenor, in a deal that closed Feb. 8, according to an announcement from real estate brokerage Jones Lang LaSalle. e buyer paid about $23.1 million for the property, or just more than $1,000 per square foot, according to Cook County property records.

“Chicago is a growing market for us, and 701 N. Michigan Ave. represents an exciting opportunity to expand our portfolio in high-end urban retail,” Mason Asset Management President El-

liot Nassim said in a statement. e deal was likely an opportunistic play for the rms, which have turned pro ts from distressed shopping malls, to acquire a high-street retail property at a lower basis as Chicago’s North Michigan Avenue shopping corridor recovers from the COVID-19 pandemic’s blow to downtown foot tra c.

“ is was a heavily sought-after o ering, given the opportunistic nature of the deal at a key corner along an internationally renowned high street,” JLL Managing Director Keely Polczynski said in a statement.

e property’s sole tenant is Rolex, which occupies a 2,240-square-foot ground- oor retail space and 2,040 square feet of basement storage space. e property’s former longtime tenants, luxury fashion brands Brooks Brothers and Stuart Weitzman, occupied the entire space and vacated after the onset of the pandemic.

Grosvenor bought the retail space for about $17.3 million in 2002, or about $755 per square foot, according to previous reporting from Crain’s and data from research rm MSCI Real Assets. e rm most recently renanced the property with a $21.6 million mortgage from IberiaBank in March 2020, according to MSCI data. e rm declined to comment on the sale.

Transaction volume

e deal could be a sign of transaction volume starting to pick up after a months-long slowdown of commercial property sales amid high borrowing costs and decimated property values. Transaction volume for retail properties ticked up nationally in January, rising 116% from the same month in 2023, though prices were down 3.6% year over year, according to a report from MSCI.

Great Neck, N.Y.-based Namdar owns several Chicago-area

malls, some in partnership with Mason Asset Management, including the Stratford Square Mall in Bloomingdale and the River Oaks Center in Calumet City, MSCI data shows. Most recently, Namdar acquired the Louis Joliet

Mall in Joliet in June 2023 for about $31.4 million.

JLL’s Polczynski, along with Senior Director Michael Nieder, Associate John Dettla and Analyst Caity Tirakian, represented Grosvenor in the sale.

29

Rachel Herzog

701 N. Michigan Ave. JONES LANG LASALLE

Former West Loop toy design studio is on the market

After 20 years as the home of Big Monster Toys,

a thriving restaurant

A former toy design studio in the West Loop is poised for reinvention.

A unit of Big Monster Toys has hired real estate brokerage Jones Lang LaSalle to market the company’s facility at 21 S. Racine Ave., a few months after the toy creator laid o its sta and ended operations.

Recognizable for its cartoonish, oversize yellow front door, the one-story, 18,626-square-foot building is being o ered either for sale or for lease, with JLL pitching its potential to be repositioned as an o ce for an architecture or design rm, an events or entertainment space, a vehicle showroom or a brewery.

“ e only thing that limits you as an occupier is your imagination,” JLL Vice President Michael Conway said.

JLL Managing Director Dan Reynolds, who has the listing along with Conway and JLL Managing Director Dominic Carbonari, said the building’s unique features, which include a curved roof with a skylight and exposed wooden beams on the inside, as

well as its proximity to the West Loop’s thriving restaurant and entertainment scene, should inspire potential investors and occupiers.

“We’re hoping to nd someone that’s going to kind of bring that building into another unique use for the next 20 years. We don’t know exactly what that is,” Reyn-

olds said. “ e space is whimsical in the way that it inspired the people that worked there to be creative, and we think it’s going to inspire someone else to utilize the building in a unique way as well.”

e listing doesn’t include a sale price. An entity managed by the three partners in Big Monster Toys

buildings in the West Loop have been razed to make way for highrise apartment buildings and ofce towers, Reynolds said a repositioning is more likely than a full redevelopment because of what the building already has to o er.

— Sam Unsicker, Robert Annis and Brian Kujawski — bought the building for almost $1.2 million in 2002. Reynolds said the owners invested about twice that amount into improving and maintaining the property, which was built in 1940. While many low-rise industrial

“It’s very rare that you come across an asset that’s in the condition that this particular building is,” Reynolds said. “Ultimately, the market’s going to decide what happens here. We just tend to think that the existing improvements are so unique and so well maintained that someone’s going to gravitate, ultimately, toward wanting to reuse those.”

Rachel Herzog

21 S. Racine Ave. | JONES LANG LASALLE

Inside the former Big Monster Toys design studio at 21 S. Racine Ave. | JONES LANG LASALLE

UIC, Harvard team up on drug to ght superbugs

UIC’s Yury Polikanov is overseeing experiments to develop an antibiotic that can effectively defeat the defenses of drug-resistant bacteria

Researchers at the University of Illinois Chicago and Harvard are developing an antibiotic that could overcome the problem of drug resistance in socalled superbugs.

It is called cresomycin, and it can suppress bacteria that have become resistant to commonly prescribed antimicrobial drugs, UIC said in a statement.

Research on the drug focused on ribosomes, common cellular targets, and how antibiotics work on them. In drug-resistant bacteria, the microbes have modified their ribosomes to defend against drugs, the statement said.

The development was published in the journal Science.

Partnering with Harvard

UIC Associate Professor of Biological Sciences Yury Polikanov and his team have been partnering with colleagues at Harvard on ribosome research for years. Polikanov’s team provides critical insights into cellular mechanisms and structure using X-ray technology to look at ribosomes at an atomic level.

The imaging is guiding Har-

vard researchers, led by Andrew Myers, Amory Houghton Professor of Chemistry and Chemical Biology, to design and synthesize the new drugs, Polikanov said.

Polikanov’s laboratory uses X-ray crystallography to visualize drug-resistant ribosomes and the action of cresomycin with nearly atomic precision. “This by itself allows us to both understand how it binds with the ribosome and specifically how it interferes with the ribosome.”

What his lab was able to do, he said, was see how the drug cresomycin, synthesized by Harvard, was able to be shaped for binding to the ribosome when it was made.

More than half of all antibiotics inhibit the growth of pathogenic bacteria by interfering with the creation of proteins by the ribosome, Polikanov said. Those antibiotics bind to bacterial ribosomes and disrupt this protein-manufacturing process, effectively killing the bacteria.

Resistance can occur when the bacteria creates a simple defense of a methyl group that physically blocks antibiotics

from binding to the bacteria, he said.

Polikanov said that in observing how cresomycin worked against this kind of bacterial defense, they found that the antibiotic was able to physically move the methyl group out of the way. He said that that mechanism isn’t something that would be expected in simply modeling the antibiotic’s likely impact.

It had to be seen through the X-ray crystallography to be believed, he said.

“By determining the actual structure of antibiotics interacting with two types of drug-resistant ribosomes, we saw what could not have been predicted by the available structural data or by computer modeling,” Polikanov said. “It’s always better

to see it once than hear about it 1,000 times, and our structures were important for designing this promising new antibiotic and understanding how it manages to escape the most common types of resistance.”

Success with mouse models

So far, the drug has cured infections in mouse models at Harvard, said Polikanov, with the next steps being to assess cresomycin’s effectiveness and safety in humans.

The Harvard labs of Myers have recently received a $1.2 million grant from Combating Antibiotic-Resistant Bacteria Biopharmaceutical Accelerator.

The grant will allow them to move the research forward and scale up the amount of cresomycin for larger trials, Po -

likanov said.

Polikanov points out that grants and subsidies are important to developing new antibiotics that can be used on multidrug-resistant strains of diseases because such lastchance antibiotics are designed to be used sparingly.

“Making these kinds of antibiotics doesn’t follow the common rules of marketplace supply and demand,” he said. “Once you develop an antibiotic and begin to use it, the clock is ticking towards resistance.”

Drugs that will work on the most resistant of bacteria can’t be widely marketed to the world, but instead will be used as a last resort to save the lives of patients for whom other treatments won’t work because of that resistance.

UChicago to ght inequity in cancer care with new center

CinEQUITY will work to pioneer

research that addresses factors adversely affecting excluded or marginalized people in the Chicago area

UChicago Medicine is launching a new effort to tackle inequities in cancer, the South Side academic health system announced Feb. 16.

CinEQUITY — the Center to Eliminate Cancer Inequity is part of UChicago’s Comprehensive Cancer Center. CinEQUITY is pronounced like “see inequity,” a Feb. 16 press release states.

It will work to pioneer transformative research that addresses biological, social and structural factors adversely affecting excluded or marginalized people in the Chicago area.

The goal is to ultimately create solutions for eliminating disparities that can be implemented by communities, health care systems and policymakers.

Health inequities in cancer are expected to increase in the next 25 years as cancer rates

climb, UChicago Medicine said in the press release.

“Unacceptable disparities in cancer prevention and care delivery impede even current best practices from reaching the underserved,” Dr. Kunle Odunsi, director of the Comprehensive Cancer Center, dean for oncology and biological sciences division and The AbbVie Foundation Distinguished Service Professor of Obstetrics & Gynecology, said in the release.

On Chicago’s South Side, cancer incidence is expected to climb 12% in the next decade, the release states. The U.S. Centers for Disease Control & Prevention predicts cancer rates will increase by 49% from 2015 to 2050, it said.

Hub for research

CinEQUITY is meant to serve as a hub for research aimed at eliminating cancer inequities,

partnering with community leaders in planning the cancer center’s research priorities and evaluating progress, the release said.

The system’s $815 million freestanding comprehensive cancer center broke ground five months ago and is expected to open in 2027. It has been touted as a center dedicated to reducing health disparities and advancing scientific discoveries.

Jasmin Tiro, professor of public health sciences, is the director of the new center.

“We recognize the urgency to address systemic inequities faced by marginalized groups in the Chicagoland area,” Tiro said. “We are resolute in our dedication to foster an environment where every voice is valued, where diversity is not just celebrated but embraced, and where inclusive action is the cornerstone of our work.”

The effort to combat inequity will also support collaboration with community-based organizations on efforts like training for conducting community-engaged research, building inclusive research teams and disseminating research findings to influence policy and practice,

the press release said.

“CinEQUITY will unite researchers, community leaders, advocates, survivors, policymakers and partners from various sectors to forge innovative pathways toward eliminating barriers to health equity,” Odunsi said in the release.

Researchers Elena Aleksandrova (left), Yury Polikanov and Egor Syroegin | JENNY FONTAINE/UNIVERSITY OF ILLINOIS CHICAGO

Jon Asplund

The U.S. Centers for Disease Control & Prevention predicts cancer rates will increase by 49% from 2015 to 2050. | NATIONAL CANCER INSTITUTE

Jon Asplund

AbbVie inks $64 million deal with San Diego rm

AbbVie, which sold $15 billion in bonds to nance two major acquisitions, is entering into a multiyear pact with Tentarix Biotherapeutics

As AbbVie continues to look outward for help developing new promising drugs, the pharmaceutical giant is entering into a multiyear deal with a San Diego-based biotech company developing oncology and immunology drugs.

AbbVie will pay Tentarix Biotherapeutics $64 million in upfront option payments for two biologic programs, and AbbVie will receive an exclusive option to fully acquire the programs later for an undisclosed price, according to a Feb. 22 statement from AbbVie.

The collaboration with Tentarix will integrate AbbVie’s drugmaking expertise with Tentarix’s proprietary Tentacles platform, which develops biologic drugs designed to activate immune cells that modulate disease pathways.

“Oncology and immunology are two of our key strategic growth areas where we are pur-

suing novel technologies that aim to deliver transformative therapies, which address unmet patient needs,” Jonathon Sedgwick, senior vice president and global head of discovery research at AbbVie, said in a statement. “This strategic partnership complements our ongoing efforts in developing novel biologics, potentially to expand our oncology and immunology portfolios with conditionally-active multi-specific molecules.”

M&A has been a priority Mergers and acquisitions have been high on the list of AbbVie’s priorities recently as it looks to find new therapies that can sustain growth amid revenue erosion stemming from its once best-selling drug Humira that’s now facing biosimilar competition.

In just the last three months, AbbVie announced two critically important acquisitions: the $10.1 billion purchase of Im -

munoGen and a separate $8.7 billion deal to acquire Cerevel Therapeutics, bulking up AbbVie’s long-term drug portfolio. To pay for the deals, AbbVie

sold $15 billion of corporate bonds, Bloomberg reported Feb. 22.

The Tentarix deal was announced just two days after

AbbVie said its first-ever and longtime CEO Richard Gonzalez will step down in July to be replaced by longtime executive Robert Michael.

Katherine Davis

The collaboration with Tentarix will integrate AbbVie’s drugmaking expertise with Tentarix’s proprietary Tentacles platform, which develops biologic drugs designed to activate immune cells that modulate disease pathways. | BLOOMBERG

Chase Tower rehab is a much-needed win for the Loop

You could almost hear the sighs of relief echoing across the Loop when JPMorgan Chase execs announced Feb. 26 that after scoping out other neighborhoods for their Chicago headquarters, they planned instead to rehab the bank's iconic tower at 10 S. Dearborn.

As Crain's Mark Weinraub reported, developers eyeing plans for new o ce towers at the edges of the Loop and elsewhere have tried to lure JPMorgan out of Chase Tower for years, some even oating the idea of buying the building from the bank as part of a larger deal to anchor a new skyscraper elsewhere.

But instead, JPMorgan announced it will spend an undisclosed amount to give its Chicago agship a head-to-toe makeover, one that will help preserve one of the most elegant and well-loved edi ces in the city's skyline. e improvements in the works include a face-lift for the plaza outside the building, updates to the lobby, mezzanine and food hall, as well as the addition of a tness center and new conference center.

Joining the years-long corporate parade to Wacker Drive, the West Loop or the Fulton Market District would have dealt an enormous blow to the central Loop by adding to the massive blocks of empty workspace that plague the very heart of downtown today. But JPMorgan's decision to refurbish its 55-year-old home is commendable, in part because the commitment has the potential to help reverse the narrative about the viability of Chicago's central business district. By keeping its corporate ag rmly planted in the heart of the Loop, JPMorgan is underscoring many of the features that once made the Loop

In "What does Chicago need next? A rebranding" (Crain's Forum, Feb. 26), Crain's laments the decline of Chicago's national standing. It is maligned as a city that has lost its way, Crain's reports, a place with much crime and little care. To counter this toxic narrative, Crain's sounds a call for Chicago to focus on its strategic advantages. Such advantages include an educated labor force, low cost of real estate and a cadre of corporate investors, a number of whom are quoted. is story rings true; there is little doubt that Chicago's default narrative is one of struggle, or that it has been forced into a defensive posture. Yet it is also fundamentally awed. By focusing on external reputation management and by relying on tourism as a panacea for the city's ills, Crain's is discounting the most valuable asset: Chicago's communities.

The Loop needs corporate presences like Chase and Google in order to build back the energy it has lost in the post-COVID world.

such an attractive draw to begin with — features that should still be attractive now.

Proximity to transportation is chief among those attributes, with el lines, buses and highways connecting the heart of the Loop to even the farthest- ung neighborhoods and suburbs of Chicago. ose connections create access to downtown employment for residents living in neighborhoods as wide-ranging as South Shore

to Rogers Park, Portage Park to Washington Heights. Even with recent improvements to public transit just west of the Loop, getting from, say, Hyde Park or Gar eld Ridge to a job at Mondelez or McDonald's headquarters west of the Loop can be an arduous journey.

Indeed, JPMorgan execs con rmed that proximity to train and bus lines was critical in the decision, as roughly 7,200

employees commute to the building.

JPMorgan's choice to stay put represents an important victory for the Loop, which is in desperate need of reclaiming daily foot tra c and vibrancy as the e ects of the pandemic fade. Combined with Google's pending transformation of the James R. ompson Center two blocks north, the Chase Tower project stands to help cast the vacancy-ridden Loop in a better light for other prospective o ce tenants and investors and rea rm the area's status as the gravitational center of Chicago business.

At a time when business leaders are increasingly concerned about the future direction of the city, Google and Chase are showing by their actions that business leaders can do more than complain: ey can work in partnership with local economic development o cials to send a strong message that Chicago is still a great place to work and invest.

Even if the days of Monday-through-Friday o ce work are permanently behind us, the Loop needs corporate presences like Chase and Google in order to build back the energy it has lost in the post-COVID world. Many downtown buildings may still be headed toward total reinvention as the conversation about the Loop and its reason for being moves forward. More o ce towers may be converted to residential use. Sports stadiums and entertainment districts may rise to create entirely new neighborhoods on the fringes of downtown.

But the presence of corporate colossi like Chase and Google will reinforce what has always been true about this town: e business of Chicago is business, and the business center of Chicago is the Loop.

As a partner in an urban planning

and placemaking consultancy, I work with cities likewise facing overlapping challenges, from housing affordability to public safety, from arts funding to migrant integration. In downtown Boston, for example, where ground-floor retail suffers from vacancy rates comparable to those in Chicago, my team is guiding a policy effort to incentivize BIPOC entrepreneurs to become long-term tenants. In northwest Arkansas, a region grappling with displacement and soaring rents, we are launching a program that supports local culture-makers and small businesses in remaining in place. In St. Louis, which has experienced population loss and emptying out of office space, I participated in an Urban Land Institute advisory panel that proposed a model for downtown revitalization that equips artists, emerging restaurateurs and neighborhood devel -

opers with public-sector resources.

e common thread among these economic development strategies is that they invest in community-scaled assets. Rather than joining in Richard Florida's veneration of big-ticket stadia and casinos, sustainable redevelopment recognizes the hard hustle and extraordinary talent embedded in communities — and constructs a sca old of policy, nance and real estate support. is, and not windowless casinos or walled ballpark complexes, is what city brands are made of: generational wealthbuilding, a share in the city's prosperity, a tangible belonging. Or else, as William Howell warns, branding e orts are no more than "light-hearted PR campaigns that don't deliver."

Crain's is so worried about a void in leadership at World Business Chicago, Choose Chicago and other elite corporate organizations that it entirely misses those leaders who are busy shaping Chicago's narrative for the next generation. Conspicuously absent in this story are Chicago's indigenous cultural exports, such as

house music or slam poetry; a global destination honoring the rst Black U.S. president goes unmentioned. Unheard are the voices of BIPOC leaders — easter Gates, Eric Williams, Edra Soto and far too many others to list — who emerged from Chicago's storefronts and galleries to become its brand ambassadors. An inventory that does not include these reputational assets produces a portrait of Chicago as cartoonishly distorted as that of Trump's favorite punching bag.

Of course, large corporations, government agencies, tourism promoters and other holders of power must be part of Chicago's narrative change, as well as the deeper work that undergirds it.

But a Democratic National Convention — or a convention of any stripe — won't varnish the city's image. Business insiders by the roomfuls, whether lled with smoke or merely hot air, won't lift the city's fortunes. Real change has to be nurtured, funded, prioritized in policies and cared for. It has to come from within, out of the ne grain of Chicago's neighborhoods.

COSTAR GROUP

F. Philip Barash is a former Chicagoan who worked for the Chicago Architecture Center and the Chicago Loop Alliance.

Rebranding Chicago starts with solving our crime problem

The article “What does Chicago need next? A rebranding” (Crain's Forum, Feb. 26) gets ahead of itself. It needed to be preceded with an article titled: “What does Chicago need now? Law enforcement.”

You can do all the rebranding you want, but if you have an inferior product, rebranding is pointless.

At the moment, perception of the quality of Chicago's product may actually be lower than what it should be, but until the roots of that perception are dealt with honestly and actually fixed, people will be smart enough to want to go elsewhere and will rightly keep pushing back against the idea of Chicago as an event venue or place to live.

As for involvement from the business community, yes! It's been a long time. But take off the rose-colored glasses and start a political movement that has a chance of electing competent and responsible officials. We'll never get anywhere with the clueless people currently in charge.

STEVE ROESS Chicago

We should be scaling up — not cutting — DEI opportunities for diverse talent

The article "DEI o cers are overloaded and on the outs" (Feb. 22) noted, "DEI teams are often given massive mandates from their employers to make structural changes without the necessary resources or support to e ectively make that happen." I nd this disheartening.

Any time diversity is under attack, it is time for solidarity and increased support for our colleagues — not for faltering on our commitments to inclusion. Diversity, equity and inclusion efforts of companies and organizations are not only morally right, but also beneficial for business.

According to a recent study by McKinsey, companies with more diverse management teams foster greater innovation, which leads to 19% higher revenues. Efforts to place legal pressure on DEI initiatives tells our colleagues they don't belong, and rather than providing diminished resources for corporate DEI efforts, organizations today should be doubling down.

For innovation to thrive in an organization, diversity of thought within teams is a prerequisite, and this requires leaders to stand in the face of challenges and let their employees know they are valued.

Through Chicago Innovation's mentoring and inclusion programs, I have seen many instances where racially diverse leaders lift up other racially di -

verse rising stars and help them along their career journeys. Case in point: Carlos Cardenas, senior group manager of Wintrust, is a mentor in The Ladder, our program to support Black and Latino professionals. He helped his mentee, Emilio Balderas, engagement lead at Serafin & Associates, join the auxiliary board of the National Museum of Mexican Art, providing Emilio with board experience and access to more powerful networks that can help catapult his career forward.

Organizations should be scaling up these types of opportunities for diverse talent, and not reducing funds or attention toward corporate DEI efforts — regardless of potential backlash. By investing in DEI programs, business leaders will see their employees unlock professional growth opportunities that will provide an ROI back to their organization's bottom line, and we should all support this.

LUKE TANEN President and CEO Chicago Innovation

With in ux of funds, Illinois looks to add enough chargers to support 1 million EVs

The state’s EV coordinator says 30,000 more charging ports are needed to reach energy goals

Illinois’ electric vehicle charging infrastructure is on pace to double this year, buoyed by an in ux of state and federal dollars.

e investments are aimed at supporting both federal and state environmental goals. e Biden Administration set the goal of EVs making up half of all U.S. vehicle sales by 2030. Under the Climate and Equitable Jobs Act — Gov. J.B. Pritzker’s marquee climate law that passed in 2021 — Illinois aims to have one million EVs on the road by 2030.

ese targets have spawned major infrastructure programs, which after years of planning and funding are seeing tangible results in Illinois.

State funding allocated in 2023 put Illinois on course to double the number of direct current, or DC, fast charging ports on state roads within a year, from 993 to 1,914. e increase brings the number of fast charging ports to over 25 percent of the 7,000 DC ports estimated to be needed to support the state’s EV goals.

In Illinois, several agencies are part of the e ort to ensure EV charging infrastructure gets where it is needed, but the drive is coordinated by Megha Lakhchaura, the state electric vehicle coordinator at the Illinois Environmental Protection Agency.

“We expect that we will need 36,000 public charging ports to support one million EVs. Most of these will be level two chargers, but we will need close to 7,000 fast charging ports by 2030,” Lakhchaura said in an email statement. “We expect to have over 2,000 fast charging ports by the end of 2024 if the chargers are installed on time.”

Illinois has almost 2,300 level two charging ports, which fully charge a vehicle in ve to six hours. e number of DC fast charging ports, which can charge a vehicle in under an hour, increased in the month ended in mid-February from 993 to 1,010.

e development of EV infrastructure will build on expansions completed last year. e number of electric vehicles in Illinois rose 60 percent last year — by more than 30,000 EVs — compared to the national average increase of 50 percent. As of January, the Illinois secretary of state reported there were 93,821 EVs licensed for state roads.

“We spent money last year to double the number of ports within a year. So, by the end when all of this comes into fruition when the installation happens, you’ll have just seen a doubling of the number of ports

by just the state programs,” Lakhchaura said. “And we’re not done yet. We still have more money to go on this year.”

EV funding sources

There are three main sources of EV infrastructure funding: the federal Charging and Fueling Infrastructure, or CFI, grant program; the National Electric Vehicle Infrastructure, or NEVI program; and state funding from the Illinois Department of Transportation and the IEPA.

“We have three baskets of investment to create this charging network in the state,” Lakhchaura said. “The idea is that everything complements each other, and we’re avoiding duplication or building at the same sites.”

Lakhchaura said building out EV charging infrastructure and educating the public on the advancements in EV technology is an important step toward moving Illinois toward its climate goals.

“We’re just right at the start of the learning curve on how to use these vehicles,” Lakhchaura said. “We can get over this. It’s really about understanding this product and adapting to it and making these little changes like you do for anything you get in life.”

Federal charging and fueling infrastructure

e Illinois Finance Authority, in their role as the Illinois Climate Bank, received almost $15

million from the federal CFI grant to develop community-based charging stations. e grant will fund the construction of 881 charging stations. Only 36 of the 881 chargers will be DC fast chargers. While DC chargers are faster, they are more expensive.  e focus of this track of the CFI program is developing community infrastructure to support local travel.

“In these cases, people are more likely to be topping up a battery or leaving a car parked long enough to get a full charge on a level two charger,” Illinois Department of Transportation spokesperson Paul Wappel said. “Level two chargers are signicantly more cost-e ective for these types of uses, which means we can install more chargers for the same amount of money.”

National electric vehicle infrastructure

The state will continue to receive funds through NEVI to build DC fast chargers along alternative fuel corridors, networks of highways with infrastructure to support electric and hydrogen powered vehicles.

The program requires public charging stations be available at least every 50 miles along a corridor. Chargers must be publicly accessible 24/7 and be set up with combined charging system connectors and contactless payment options.

Illinois will receive $148 mil -

mum funds being allotted.  Illinois school districts and bus companies purchased 180 electric school buses last year through the federal Clean School Bus Program. Lakhchaura said additional EV buses were purchased with funds from the Volkswagen settlement with a focus on communities that did not receive federal funds, such as Chicago.

The settlement was the conclusion of lawsuits filed against Volkswagen for violating Clean Air Act emissions standards by installing “defeat devices” in certain diesel models between 2009 and 2015. The established trust provided Illinois with over $1 million in funds for diesel emission reduction projects.

Time is another crucial factor in the expansion of EV charging, especially as the number of EVs on state roads must increase 10-fold for the state to meet its stated goal. Lakhchaura said she expects to see significant progress this year.

lion between 2022 and 2027 to build a network of EV chargers along highways, starting with the interstate system.

The state’s deployment plan was approved in September 2022. Wappel said final standards for the charging stations were set in February 2023. Phase one of Illinois’ plan will use approximately $50 million to build chargers at 46 locations within eligible corridors.

State programs

Meanwhile, Illinois is implementing its own programs to meet the goals set under CEJA.

The IEPA will award $27 million dollars in grants to build DC fast charging stations at public locations including hotels, shopping centers and gas stations. The grants were to be announced last month.

“We haven’t issued the awards yet,” Lakhchaura said last month. “But what we’ve seen from the applications that we got is that they were spread all over the state.”

As part of CEJA, Illinois established a rebate program to incentivize the purchase of EVs. The program allows Illinois residents to collect a rebate for the purchase of an all-electric passenger vehicle from a recognized dealer. The current rebate rate is $4,000 per vehicle. In fiscal year 2023, 7,669 rebate applications were filled with 4,872 rebates awarded. The funding cycle for this year ended on Jan. 30 with over 5,500 applications being received and the maxi -

“In 2024, you can see more authorizations and more money going out towards it. I can say that construction and installation take a while,” Lakhchaura said. “So, towards the end of the year, you’ll see dramatically more charging stations than what you can see today.”

More funding and resources will be needed to meet the goal of building 30,000 more chargers. Illinois will still have almost $100 million from NEVI for future use after phase one is completed. Lakhchaura said the state will continue to apply for competitive funds like CFI. While Illinois plans to continue to invest in EV infrastructure, Lakhchaura said the state won’t fund every charger.

“In the near term, Illinois will focus on installing a significant number of public chargers in the next two years to create a basic public infrastructure for the state,” Lakhchaura said in an email statement. “Future rapid growth of vehicles will lead to private companies investing in public charging without the need for grants and rebates. However, charging will require more funding and support for at least the initial years to support EV growth.”

Capitol News Illinois is a nonpro t, nonpartisan news service covering state government. It is distributed to hundreds of newspapers, radio and TV stations statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation, along with major contributions from the Illinois Broadcasters Foundation and Southern Illinois Editorial Association.

Cole Longcor, Capitol News Illinois

Illinois will receive $148 million between 2022 and 2027 to build a network of EV chargers along highways, starting with the interstate system. | CAPITOL NEWS ILLINOIS

IRS targets sports teams, large partnerships and high-income taxpayers in new enforcement push

The In ation Reduction Act (IRA) gave the IRS much-needed funds to modernize its outdated systems, improve taxpayer service and operations and increase enforcement.

e $80 billion the IRS was initially slated to receive has been reduced to $60 billion over 10 years, with $25 billion earmarked for enforcement. Shortly a er enactment of the IRA in August of 2022, the IRS developed a Strategic Operating Plan, which outlines how the IRS aims to both transform the taxpayer experience and increase enforcement. Key objectives in that plan include expanding enforcement for large partnerships, high-income and high-wealth individuals and promoting fairness in enforcement activities. New audit campaigns announced by the IRS’s Large Business and International Division are designed to close the tax gap and address the perceived inequity in IRS enforcement towards low-income taxpayers.

Promoting fairness in enforcement activities to shift audit focus

e IRS is routinely criticized for focusing enforcement on low-income taxpayers who claim tax credits unavailable to high-income taxpayers, such as the Earned Income Tax Credit. is low-hanging fruit is easy for IRS computers to identify and requires very little IRS resources or sta time. Armed with the new IRA funding, the IRS is expanding audit campaigns that will target taxpayers with a total income above $1 million or over $250,000 in assessed tax debt. Taxpayers earning $1 million or more in 2019 were audited at a rate of less than 1%; in 2011, the audit rate was over 7%. To increase this audit rate, the IRS plans to use data analytics and specially trained new agents, appeals o cers and attorneys.

Large partnership exams

e number of partnerships ling IRS

Form 1065 increased from 3.2 million in 2010 to 4.3 million in 2020. According to the IRS, partnerships with assets above $5 million grew by more than 75% during the same period. Yet the audit rate for partnerships in 2019 was just 0.05%. Auditing partnerships

requires specialized expertise and signi cant resources. e Strategic Plan includes hiring and onboarding agents in 2023 and rolling new audits out in 2024 and 2025.

Sports industry losses

As part of the large partnership exam initiative, the IRS announced a new enforcement campaign in January against sports industry partnership losses. While the campaign announcement was sparse in detail, it comes on the heels of a scathing ProPublica report titled “ e Billionaire Playbook: How Sports Owners Use eir Teams to Avoid Millions in Taxes.” e IRS previously has launched enforcement campaigns as a result of ProPublica’s criticism of an industry practice.

Bottom line: Surviving an IRS exam

Chicago businesses, especially larger partnerships and sports teams, can expect to start receiving audit notices soon. But there is a lot taxpayers can do now to get ready for an IRS exam.

While much will depend on the nature of the taxpayer’s income or business, some items are sure to come up and can be identi ed and re ned prior to a visit from the IRS.

One of the most common high-income audit disputes involves passive vs. active losses. Section 469 of the Internal Revenue Code limits the amount of losses a taxpayer can take from a “passive” activity. Taxpayers who have multiple businesses can nd themselves unable to deduct losses if they do not actively participate within the meaning of the IRS rules in each business or properly elect to group them together. Successful entrepreneurs o en nd themselves having to prove “active” participation in growing businesses.

If the IRS does come knocking, a representative with intimate knowledge of IRS rules is key to success.

GUINEVERE

Oreo maker Mondelez is strong as ever in Russia as war with Ukraine drags on

Despite an initial pledge to scale back operations in the wake of Putin’s Ukraine invasion, documents and market data show the Chicago-based company’s presence is actually growing by some measures

On a wintry day in late 2023, an expat YouTuber offers a tour of a supermarket in a snow-cov ered Moscow suburb. In addi tion to the normal supermarket staples, there’s a healthy selec tion of western brands, from Lay’s potato chips to BelVita cookies and Alpen Gold and Milka chocolate.

“This is my favorite,” says the video narrator, pointing to a display of eight varieties of Al pen Gold — made by Chica go-based Mondelez Interna tional Inc., which has pledged to halt its investment and ad vertising in the country because of its invasion of Ukraine.

Despite an initial pledge to scale back operations, company documents and market data seen by Bloomberg show that Mondelez’s presence is actually growing by some measures.

“I used to be a big fan of Mil ka but the price of Milka has gone up a little bit in the last year,” says the narrator, who op erates the “Travelling With Rus sell” channel.

A pan of the camera shows multiple varieties of Milka, right next to Toblerone chocolate, also made by Mondelez. A more recent online tour of a local cor ner store by the same YouTube channel shows a similar selec tion of products.

Mondelez’s operations in Russia accounted for a lower percentage of revenue in 2023 — 2.9% of consolidated net revenue, down from 4% the previous year — but the business is highly profitable.

Between January and July of last year, Mondelez’s Russian business imported about 20 million kilograms (44 million pounds) of chocolate, biscuits and candies — a 2% increase from a year earlier, according to the most recent data from USbased trade data aggregator ImportGenius, which provides trade intelligence using data gathered from electronic bills of lading.

U.S. and European companies face no good choices in Russia: Pull out and potentially hand over a profitable business to a government that’s looking to fund its war efforts, or stay and face condemnation.

“If we suspended our full operations, we would risk turning over our full operations to another party who could use the

cluding sugar-laden treats, aren’t under any international sanctions, and other US companies have continued to operate in Russia since it invaded Ukraine. The war has caused the deaths of at least 10,000 civilians, according to the United Nations; unofficial estimates put the death toll far higher.

Research efforts

Mondelez has also recently conducted market research in Russia, according to internal company documents viewed by Bloomberg. The maker of Halls cough drops and Ritz crackers tested a change to its Milka products in October with market researcher Ipsos. In December, Mondelez presented the results of a Nielsen report on how post-pandemic behaviors

notes a rise in impulse buying after the pandemic. “Mondelez needs to exploit the momentum to win in this channel,” according to the presentation, dated December 2023.

It’s a departure from March 2022, when Chief Executive Officer Dirk Van de Put said Mondelez was “scaling back all nonessential activities in Russia.”

Then, in June of that year, the company said it had “scaled down our activities, discontinuing new capital investments, new product launches and our advertising media spending in Russia.” Overall volume and import volume had declined, Mondelez said.

Mondelez’s operations in Russia accounted for a lower percentage of revenue in 2023 — 2.9% of consolidated net revenue, down from 4% the previous year — but the business is highly profitable. “Despite the decrease in revenues, the profitability of our Russian business in 2023 remained above historical levels,” the company reported in February.

More autonomy

In its response to Bloomberg,

stead, she said, the company pays taxes to the Russian government and is “normalizing life in a country that is waging one of the most horrible wars in the history of humankind.”

Last month, Reuters reported that Mondelez had put new management in place in Russia, citing internal memos.

The market-research firms that Mondelez has worked with have also said they would wind down business operations in Russia. Nielsen said it was suspending consulting services in March 2022, and in response to an inquiry from Bloomberg, it said it complies with all sanctions but doesn’t share its customer list and “cannot comment on specific work carried

Kantar said in January 2023 that it had left the country and told Bloomberg that it hasn’t commissioned any new work there. “We do not recognize this as a Kantar piece of work,” a spokesperson said in response to a description of the research report. Paris-listed Ipsos didn’t respond to requests for com -

“Products sold in Russia are now produced and distributed locally, with no imports of finished goods from Europe into Russia or exports from Russia into Europe.”

It reiterated its condemnation of “the brutal aggression against Ukraine” and said that “last year’s profitability can be attributed to our stoppage of investment, combined with ruble strength and other factors.” Mondelez added it has invested to repair and rebuild manufacturing facilities in Ukraine.

Still, the moral imperative for companies to leave is clear, according to Nataliya Popovych, the founder of We Are Ukraine and a member of the steering committee of B4Ukraine, which aims to block any financial gains that could be used by Russia for the war. She said B4Ukraine has reached out to Mondelez multiple times about its concerns.

“The excuses they use to stay in the Russian market, we find them not viable, not substantiated,” Popovych said, noting that the company sells chocolates and cookies, which are food — but hardly essential. In -

Companies such as PepsiCo Inc., Unilever Plc and Nestlé SA have stayed in Russia, too, running factories and selling “essential” products including ice cream and chocolate bars. PepsiCo CEO Ramon Laguarta said in 2022 the company was suspending the sale of some international brands, such as 7Up and Pepsi. It continues to sell soft drinks with other names, as well as Lay’s chips, baby food and dairy products. It also sells local products, including the fermented beverage kvass. PepsiCo, Unilever and Nestlé declined to comment.

Dif cult process

Companies that seek to leave Russia face a difficult process that often incurs large financial penalties that diminish what’s often already a deflated price for the sale of local operations. And those that announce an intent to depart risk having their assets taken over, which is what happened to yogurt maker Danone and brewer Carlsberg A/S last year.

The Russian economy has been resilient despite sanctions and is expected to continue to grow. The country has increased social benefits, lifting the incomes of the poorest decile of the population by more than twice the rate of inflation, according to Bloomberg Economics. That is seen driving demand for branded snacks and sweets.

Deena Shanker and Dasha Afanasieva, Bloomberg

U.S. and European companies face no good choices in Russia: pull out and potentially hand over a pro table business to a government that’s looking to fund its war efforts, or stay and face condemnation. | BLOOMBERG

PEOPLE ON THE MOVE

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Amanda Jurmu, SEGD has joined Kahler Slater’s Environmental Branding team as Associate and Technical Leader focused on the design and delivery of integrated brand environments. She brings over 15 years of experience creating innovative design solutions and crafting captivating brand narratives for a variety of clients. She will enhance the rm’s continued growth in Chicago, and across the country, by integrating environmental branding, interior design, and storytelling into physical spaces.

ARCHITECTURE / ENGINEERING

Klein & Hoffman, Chicago

Klein & Hoffman announces the promotion of Thomas Flynn, R.A., to Associate Principal. Tom has over 25 years of experience involved in the planning, design, construction, and management of the built environment. His expertise includes the design of new, and restoration of various buildings. Tom uses his expertise to oversee complex projects as a Project Manager for K&H involving various façade related components and coordination of construction trades and/ or professional consulting services.

ARCHITECTURE / ENGINEERING

Klein & Hoffman, Chicago

Klein & Hoffman announces the promotion of Alesha Shaw to Director of Marketing.

Joining the rm in 2015, Alesha’s contributions in branding and creative strategy have signi cantly shaped the rm’s marketing direction. She led major rebranding efforts in 2016, revitalizing the rm’s identity and market presence. With 16 years in the AEC industry, Alesha is recognized for her innovative and results-oriented approach and will oversee branding and marketing campaigns, driving continued growth with forwardthinking strategies.

ARCHITECTURE / ENGINEERING

Klein & Hoffman, Chicago

Klein & Hoffman is pleased to announce the promotion of David Weirick, AIA, to Senior Associate I. David leads all phases of restoration projects in Milwaukee and Chicago and has been instrumental in the opening and growth of K&H’s Milwaukee of ce. David has broad expertise in the assessment and restoration of building exteriors and has led successful restoration efforts at wellknown historic landmark buildings, including the Milwaukee County Courthouse and The Rookery Building in Chicago.

First Bank Chicago, one of the ve largest privately held banks in Chicago, proudly announces the promotion of Kim Imroth to VP/Treasury Management. Kim is responsible for working closely with our relationship managers to support & execute a ve-star experience for commercial clients. With over 32 years in the nancial industry, her expertise is essential with product development, technology enhancements, client training, operations, compliance, and marketing. Kim joined First Bank in 2016.

CONSTRUCTION

Northern Builders, Inc., Schiller Park

Northern Builders, Inc. is pleased to announce the promotion of Kenneth L. Nyenhuis to Senior Vice President - Preconstruction and Development. Over the last 8 years, Ken has transformed Northern’s estimating department into a sophisticated preconstruction team. He also leads Northern’s Cold Storage Division. Ken’s talent and deep personal regard for his work greatly contribute to Northern’s team approach and overall success.

EDUCATION

Daystar Academy, Chicago

Tosha Jackson has been appointed Head of School at Daystar Academy, an International Baccalaureate World School in Chicago’s South Loop. With more than 20 years’ experience in Chicago Public Schools, Jackson is well equipped to lead the private, faith-based school, one of only 40 IB Continuum Schools in the United States. Jackson most recently served as Chief of Schools for the AUSL network at CPS. Daystar serves students from preschool to grade 12. Learn more at DaystarAcademy.org.

FINANCIAL SERVICES

Hilco Global, Northbrook

Hilco Global announces the appointment of Richard “Rick” Maletsky as its new Executive Vice President and General Counsel. In his role, Mr. Maletsky will play a pivotal role as the company’s chief legal expert and advisor as well as serving as a key member of Hilco Global’s executive management team. He will lead the company’s legal department, overseeing all legal functions across various disciplines, including corporate, commercial, transactional, litigation, product, and regulatory matters.

Lauren Kuczek has joined J.P. Morgan Private Bank in Chicago as an Executive Director and Wealth Strategist working closely with highly af uent clients in the area. Taking a conversational approach, she leverages her industry experience to help her clients accomplish their goals. Lauren joins the rm from Northern Trust.

HEALTH CARE

Cigna Healthcare, Chicago

Cigna Healthcare has named Lisa Buckley as general manager for its group employer business in the Midwest. Buckley is responsible for driving market growth for client employers with under 3,000 employees, creating customer value and ensuring the local market strategy, product and network offerings meet evolving customer and client needs. She also works with the markets’ network leaders, medical executives and others to advance health access and equity in the communities Cigna Healthcare serves.

LAW

Holland & Knight LLP, Chicago Elin Park joined Holland & Knight as a partner in Chicago. She represents companies and individuals in high-stakes commercial litigation and class actions across a range of disputes, including false advertising, privacy, duciary duties, asset management practices, and state and federal consumer protection statutes. She also handles disputes involving vendors, suppliers and contactors, as well as regulatory proceedings and investigations. Ms. Park joins the rm from Jenner & Block LLP.

LAW FIRM

Taft Law, Chicago

Adam Hollander has joined Taft as a partner in the Litigation practice focusing on insurance coverage disputes. For more than 30 years, Adam has guided policyholders through disputes involving virtually every type of policy, including but not limited to rst-party property, business interruption, general liability, professional liability, D&O and entity liability, EPLI, employer liability, rep and warranty, product recall, and crime and delity coverage.

von Briesen is pleased to welcome Shareholder, Jeff Van Winkle, to its Chicago of ce. Jeff joins von Briesen’s Business Practice Group with more than three decades of experience representing businesses, investors and entrepreneurs in all phases of their businesses with extensive experience in mergers and acquisitions, international transactions, nancing and securities. Jeff serves on the Board of Advisors for the Small Business Advocacy Council.

NON-PROFIT

AgeOptions, Oak Park

AgeOptions appointed

Gayle E. Kricke, MSW, PhD, Director of System Operations, Primary Care at Northwestern Medicine, as vice chair of its Board of Directors. In addition to clinical operations, Gayle has experience in healthcare quality, patient safety, geriatric social work, and healthcare policy.

Established in 1974 as the Area Agency for Aging in Suburban Cook County, AgeOptions mission is improving systems and services, strengthening communities, and helping people thrive as they age.

PHILANTHROPY

Jewish United Fund, Chicago

Keith Shapiro, renowned for his leadership and commitment to Chicago’s Jewish community and Israel, has been named Chair of the 2024 JUF Annual Campaign. Shapiro, a longtime JUF board member who has chaired and served on many JUF committees, will spearhead JUF’s Annual Campaign, which fuels life-transforming services for 500,000 Chicagoans of all faiths and millions of Jews worldwide. In his professional life, he serves as Chairman and CEO of Karlov Street Capital, LLC.

PROFESSIONAL SERVICES

West Monroe, Chicago

Tim Valin has been promoted to Senior Partner, Energy & Utilities. Tim partners with the largest utilities across North America to modernize their infrastructure with a focus on communication networks. He combines expertise in strategy for utility clients with a pro ciency centered around infrastructure modernization to develop strategic plans and governance structures to guide the successful implementation of infrastructure and technology solutions. He joined West Monroe in 2009.

Kate Festle has been promoted to Managing Director, Mergers & Acquisitions. She partners with private equity and strategic buyers in pre-acquisition due diligence, post-merger integration, and value creation to succeed in the healthcare marketplace. She is passionate about behavioral health, having led more than 50 buy-side, sell-side, and technology transformation initiatives in that space. Kate was named an Emerging Leader by M&A Advisor in 2022. She joined West Monroe in 2018.

PROFESSIONAL SERVICES

West Monroe, Chicago

Nick Kennedy has been promoted to Managing Director, Operations Excellence. He helps organizations realize anticipated bene ts and manage change for their most important strategic transformations. With 15 years of experience, he continues to bring passion to every client engagement by aligning executives and their teams to desired outcomes and sustainment of organizational goals. He joined West Monroe in 2010.

PROFESSIONAL SERVICES

West Monroe, Chicago

Jonathan Ross has been promoted to Managing Director, Mergers & Acquisitions. He collaborates with PE rms and strategic buyers to execute highly complex transactions. He has advised CIOs on dozens of multiyear separation and integrations projects with Fortune 500 companies and divested business units over $3 billion in revenue. He has also led over 50 diligence focusing on increasing enterprise value through digital value creation and data. He joined West Monroe in 2016.

PROFESSIONAL SERVICES

West Monroe, Chicago

Jonathan Williams joins West Monroe as a Managing Director in the Product Experience & Engineering Lab. He will continue partnering with leading organizations to solve mission-critical challenges at the intersection of digital innovation and process transformation. His specialty is product creation with his work contributing to hundreds of millions of dollars in new revenue. He joined from Dialexa, a digital product development company where he was a partner and Chicago market leader.

DEI

From Page 1

U.S. Department of Labor’s O ce of Federal Contract Compliance Programs, asserting that the airlines, which receive federal contracts, are violating discrimination provisions.

e airlines, particularly United, nd themselves at the center of an intensifying social media backlash and political debate over DEI policies that’s only likely to get louder as the presidential election campaign heats up. A key issue will be whether a rmative action programs that were struck down in academia last year by the U.S. Supreme Court will be outlawed in the workplace as well.

Setting goals

For United, the challenges started about two years ago during the depths of the COVID-19 pandemic, after it bought a ight school as part of its e ort to deal with an industrywide pilot shortage. e airline set a goal that 50% of the ight school candidates would be women or people of color.  at goal sparked a brush re on social media, with critiques often lobbed by people who mistook the goal as 50% of its new-pilot hires would have to be women or people of color.

Accepting pilots to ight school and hiring them are two di erent things, however. All commercial airline pilots must meet minimum requirements set by the Federal Aviation Administration. Instead, what United has aimed to do is broaden the pool of candidates coming into the program for training.

“United is proud to maintain the highest standards in our pilot hiring, training, and safety practices. Every aviator who joins our ranks must meet them. No exceptions,” the company said in a written statement to Crain's.

American Airlines highlighted a similar recruiting and training program for new pilots called Cadet Academy, noting that 51% of its participants were women or people of color.

Diversity e orts extend beyond the cockpit, with United, American and Southwest setting goals to di-

From Page 1

ChicagoBusiness.com fall on the Sunday immediately preceding Ash Wednesday,” said Jones. Since the airing of the ad, Jones says the app has been downloaded 16.5 million times with “400 million prayers prayed” to date, with its biggest spike since running the Super Bowl commercial.

Jones declined to o er the current valuation of Hallow or how much the company spent to produce the commercial.

He said that as Lent, a 40-day season of prayer and fasting, was coming up, using the nation's biggest stage was a perfect way to introduce people to the app and promote its “community prayer challenge.”

“We're a startup; we're still losing money, and it's all a bet on

versify management ranks as well.

ALAMY

In 2020, Southwest set a goal of “doubling the percentage of racial diversity and increasing gender diversity” of its senior executive committee by 2025, America First’s complaint said. American said in 2022 it “increased Black representation at the director and above level by 50%” from 2020. United said in 2022, “almost half of all promotions at the senior professional and senior leader level were of those belonging to underrepresented racial and ethnic groups.”

‘Attractive target’

e airlines were trumpeting their achievements just as the Supreme Court decided Students for Fair Admissions v. Harvard, ruling that race could not be considered a factor in college admissions.

e rst EEOC complaint against the airlines came in November. To sue a company for discrimination, a plainti must request an investigation by the EEOC. e agency can either le its own lawsuit or allow the plainti to sue.

“ e timing is not happenstance: It’s coming after Students for Fair Admissions v. Harvard,” notes William Corbett, a law professor at Louisiana State University who teaches and writes primarily in the area of labor and employment law. “A big question on many people’s minds is they’d like to see Students for Fair Admissions extended to employment and say you can’t do a rmative action in employment just as in education.”

(whether we) can build something big to try to have a sustainable economic model, but most importantly, to achieve our mission . . . to help people pray at scale and especially reach out to people who have fallen away,” Jones said.

Wahlberg partnership

Wahlberg made his way into the mix with the release of his 2022 lm “Father Stu,” which follows an amateur boxer on a journey to becoming a Catholic priest. Jones said they reached out and formed a partnership from there.

“He's an incredible example of faith and an incredible content creator, and greater at, especially, reaching out to folks who have fallen away from their faith and inviting them into and inspiring them to explore building a relationship with God,” said Jones.

He adds: “Airlines are highpro le, and they’ve come out with some concrete statements about what they want to do, and I think it makes them an attractive target.”

Dallas-based Southwest says it's not backing down. “Southwest prides itself on having an open and inclusive work environment that consistently ranks among the world’s best places to work,” the company said in a written statement. “For 52 years, we have put people rst, and we will not waver from this path. Our goal is to identify, hire and retain the best talent for Southwest, while fostering a workplace where individual perspectives and ideas are valued, and all feel a sense of equity and belonging.”

A political mine eld

America First Legal, which Trump adviser Miller bills as “the long-awaited answer” to the American Civil Liberties Union, led an EEOC complaint Feb. 6 involving the NFL. e group contends the league’s “Rooney Rule,” which requires that minority coaches be considered for head coaching and other top jobs, is discriminatory.

Miller's group also led an EEOC complaint regarding Sano , a French pharmaceutical company.

DEI is proving to be a political mine eld.

“Two years ago, we wrote about the pressure from the left (to do more on DEI), and corporates were having to respond to employees and customers or risk getting canceled,” says Cli Kupchan, chairman of Eurasia Group, a political consultancy that ranked the culture wars in the top 10 of its annual report on geopolitical risks. “A lot of boardrooms were responsive. So what we’re writing about this year is whiplash. ere’s a real sense that this is a maze that’s very di cult to get out of.”

e DEI conversation will only intensify as the presidential election draws closer.

“ e megaphone that Donald Trump already has is going to be 10 times louder and further embolden those who are seeking to challenge DEI policies,” Kupchan says. “My guess is we haven’t seen anything yet.”

Founded in 2018, Jones said the position the company nds itself in now is a stark di erence from the beginning days when he and two other co-founders of the app went into debt to fund the app. e trio, who graduated from the University of Notre Dame, took on Silicon Valley as they sought investors for their idea.

The company raised $50 million in funding led by Californiabased fund Goodwater Capital last year and has raised $105 million to date. Columbus, Ohiobased venture-capital firm Drive Capital led a $40 million investment into Hallow in 2021, which also included tech investor Peter Thiel.

“I never could have imagined that we'd be here. Every year I always say there's no way that we (can) beat it, but somehow God does,” said Jones.

LURIE

on Jan. 29 that it was the victim of a ransomware attack in December.

In the case of the smaller South Side children's hospital, there were no patient care disruptions and no known outside access to electronic medical or nancial records, St. Anthony's said.

However, an investigation conrmed that some patient information les were copied on Dec. 18, according to a Jan. 29 statement.

e hospital statement indicates that authorities were noti ed and Saint Anthony consulted “leading cybersecurity specialists.”

“As a vital safety net hospital to the people in the communities we serve, we are dedicated to using our resources to care for our community’s most vulnerable and not to rewarding the illegal actions of bad actors,” St. Anthony Chief Information O cer Je Eilers said in the statement. “Fortunately, our prompt action and response to this event allowed us to continue providing patient care without disruption.”

Cybersecurity news outlet e

CHATHAM

From Page 3

She also recalled a Discover employee telling her he was able to see his toddler grow up because the call center was close to home, saving him from the 90-minute commute each way that his previous job required.

“Place matters. Having a quality work environment where you live is really important,” Fears said. “It is our hope that Capital One sees the value of its call center and keeps it intact.”

Discover declined to comment on its plans for the call center, pointing to a statement announcing the deal that said, “Capital One appreciates the importance of Chicagoland and remains committed to maintaining a strong

INSURANCE

From Page 3

However, several factors are converging and hitting the region’s normally hot real estate industry all at once, said Amir Neto, director of the Regional Economic Research Institute at Florida Gulf Coast University. Developers are bringing a wave of multifamily residential projects online just as a pandemic-fueled surge of migration slows and high mortgage rates weigh on housing demand, Neto said.

Add to the mix an insurance crisis, and a seller’s market is becoming a buyer’s one, he said.

Homeowners policies across Florida started soaring in 2020 because of what insurers and state regulators attributed to rampant lawsuits and fraud. Rates in the state climbed as much as 33% annually, then shot up another 42% last year in the aftermath of Hurricane Ian, according to the

Record reported that known ransomware gang LockBit claimed credit for the attack, saying it sought a nearly $900,000 ransom.

St. Anthony did not state whether it paid any sort of ransom.

e AHA's Riggi said cybercriminals will hold an organization's network hostage by in ltrating it, extracting data and then threatening to make that data public. He said, however, that he's seeing fewer organizations paying anything to such cybercriminals.

Riggi said that a few years ago, as many as half of all organizations that found their data held hostage would end up paying, but those numbers have fallen “to maybe one-third or less.”

Nevertheless, the costs involved in disrupted care, disrupted dayto-day business operations, restoring secure networks and dealing with the aftermath can be monumental.

Chicago-based CommonSpirit Health, a nationwide Catholic health system, reported more than $150 million in costs due to a 2022 cyberattack that took down much of its network for more than a month.

e breach a ected more than

presence in that market, as well as maintaining service excellence across the U.S.”

“Trying does not necessarily guarantee success, but the hope that I have is that they will stay true to their commitment to community jobs and workforce development,” said Ald. William Hall, who's 6th Ward is where the call center is located.

Corporate jobs at Riverwoodsbased Discover may also be in the balance. While Discover CEO Rich Fairbank said after the deal was announced that the company will maintain a “signi cant presence” in the Chicago area after the deal closes, the nal call on employment numbers may not be Discover’s to make. ose decisions may ultimately come from Capital One. Discover, which employs about 6,000 people in two

industry-funded Insurance Information Institute.

Ian, a Category 5 storm that was the third-costliest in US history, led some insurers to pull out of the state or limit new policies. Floridians paid $6,000 on average for insurance last year, about triple what they paid in 2019. By comparison, the average US homeowner paid about $1,700 in 2023, the III said.

In Fort Myers, where hundreds of homes and business were destroyed by Ian, “we’re seeing anywhere from a 50-to-100% increase in spending depending on the age of the home,” said Gervasoni, head of that area’s Realtors board.

New laws

Florida legislators have passed laws recently to bring insurers back into the state and lower rates, but they remain high.

Today, Cindy Blackburn and her husband feel stuck in what was once their Cape Coral dream home, unable to sell and move closer to family up north.

600,000 patients from more than 100 facilities across at least 13 states. In addition to hospitals and outpatient centers, the system said that about 50 home care services locations were also included in the breach.

Although CommonSpirit is headquartered in Chicago, it doesn’t have any hospitals in Illinois. It operates about 140 hospitals and 1,000 sites of care across more than 20 states.

And for SMP Health, a smaller Catholic system in central Illinois, a ransomware attack closed down its Spring Valley hospital,

o ces in the area, declined to elaborate on Fairbank’s comments.

Discover announced in March 2021 it would be opening the call center at the site of a vacant Target store at 8560 S. Cottage Grove Ave., holding a news conference with the company's CEO and then-Mayor Lori Lightfoot on the site. Target’s 2018 closure of the Cottage Grove store, as well as one in Morgan Park, was met with a raft of criticism and accusations that the retailer was turning its back on Black customers even as it planned openings on the Northwest Side with nancial help from the city.

Minority-owned suppliers

Discover launched operations from temporary space at the site a few months later. At a grand

Hurricane Ian blew ashore not far away on a barrier island called Cayo Costa, damaging the Blackburns’ roof and everything underneath. For a time, they lived in an RV while contractors rebuilt their house, all the while battling with an insurance company that put up obstacles to getting reimbursed, Blackburn said. Ultimately, they self-funded most of the $250,000 in repairs.

By last summer, the Blackburns were ready to sell their home and move to Tennessee or North Carolina. ey listed it in August 2023, but it languished until January and they took it o the market. eir broker at the time never disclosed they couldn’t sell the property while they still had an insurance claim pending, Blackburn said. ey’ve since found a new agent, Gervasoni, and are hoping a lawyer can resolve their insurance claim.

“ is was to be our retirement house, and having gone through what we’ve gone through, we’ve

CommonSpirit faced a proposed class-action lawsuit led in January 2023 accusing the system of having inadequate data security measures to protect and secure patient information.

Riggi, who spent nearly 30 years with the FBI before joining the AHA, said the process of restoring multiple systems at a complex organization is both costly and time-consuming.

St. Margaret's. NBC News news rst reported in June 2023 that the hospital was closing its doors “in part because of a devastating cyberattack, which experts say makes it the rst hospital to publicly link criminal hackers to its closure.”

Hospitals generally must notify the U.S. Department of Health & Human Services, mail noti cation letters to those potentially impacted, and will provide free credit monitoring and identity protection services.   en, almost inevitably, come the lawsuits.

opening in August 2022, Discover trumpeted that it awarded 47% of its business to minority-owned suppliers and 28% to womenowned suppliers as the center was built out, with a quarter of construction costs totaling nearly $4 million going to Black-owned contractors.

e company said that it expected to employ more than 1,000 people at the center by 2024, with the majority living within 5 miles of the site.

“It has been a huge economic thrust,” Hall said. “ ese are quality-of-life jobs, no ifs, ands or buts about it. ese opportunities being taken away would mean the possibility of neighborhood growth stalling, the possibility of people moving.”

In April 2023, Discover’s thenCEO, Roger Hochschild, penned

realized this is not where we belong,” said Blackburn, 59.

Likewise, homes for sale are piling up in some cities.

Active listings of single-family homes in the Cape Coral-Fort Myers area were up 62% in January compared with a year earlier, while those in Punta Gorda — which is 100 miles south of Tampa — were up 139% in December from a year ago, according to local Realtors boards. Supply is up in Naples, too, but not by as much.

Some of the spike is a uke. After Hurricane Ian ravaged the region in September 2022, thousands of people, like the Blackburns, su ered damage to their homes and led insurance claims. Now that most of those claims have been resolved, people can put their homes up for sale.

Prices have taken a hit. Of the 12 metropolitan areas with the sharpest drops in median sales prices in the past year, four are in Southwest Florida, according to the National Association of Realtors.

“In any ransomware attack, one of the critical issues is nding out whether your backups are secure and not corrupted,” he said. “Even if your backups are secure, you cannot restart the system until you nd and close the hole where they got in.”

“ en you search every nook and cranny of your network to ensure an attacker isn't still inside, hiding. Only then, if you feel you've identi ed the issue, closed the gap and they are no longer in the network, can you start to restore services,” he added. “Once that's done, you methodically bring up the system. Every program has to be restored, and you have to ensure that restarting one system, like phones or individual medical devices, doesn't crash the rest of the system.”

an opinion piece that ran in the Chicago Sun-Times further extolling the virtues of the call center, both for Discover and the surrounding community.

e e ort that Discover put into highlighting its work in Chatham over the past three years may help save the facility from the chopping block, as its value goes beyond the dollars that Capital One could save by shuttering the call center.

“ ere is no question that companies want positive stories,” said Tim Calkins, associate chair of the marketing department at Northwestern University’s Kellogg School of Management. “ at is an enticement for Capital One to keep this open. Capital One is a national brand, which means that its image is shaped by what happens in cities all around the country.”

Prices in the Naples-ImmokaleeMarco Island area fell 5.9% in the fourth quarter of 2023 from a year earlier, the third-steepest drop in the group, NAR data show.

“It needed to happen, or else we were going to price everyone out of the market,” said Tony Barrett, president of the Realtor Association of Sarasota and Manatee. He calls the slowdown a “reset” rather than a down market.

e rise in listings — which is also happening in the broader state of Florida, but to a lesser degree — stands in contrast to the national trend, as high mortgage rates have discouraged homeowners from moving. To be sure, some of the state’s increase in supply represents a normalization from extremely low levels, but it’s also due to higher insurance costs and the rise in home prices in recent years, said Brad O’Connor, chief economist at the statewide Florida Realtors.

“A ordability has eroded in a big way,” O’Connor said.

Ann & Robert H. Lurie Children’s Hospital | LURIE

On Taylor Street, once Chicago’s epicenter of Italian cuisine, time is running out

Some owners say Little Italy’s golden age is behind them |

By Ally Marotti

There’s a fence on Taylor Street in the Little Italy neighborhood painted the colors of the Italian ag. “Welcome to Little Italy,” it says. “Time to mangía.”

For decades, it's been time to eat on a street whose identity was bound tight to a cadre of Italian restaurants, many that trace their roots to immigrants who came to the U.S. from Italy a century and more ago. eir founders lived and worked in the West Side neighborhood. In some cases, the restaurants were passed down to their children and grandchildren.

Now, owners of Taylor Street eateries say they're struggling. Customers have not returned with the same force as pre-pandemic. Decades-old mainstays have permanently closed. ough restaurants have opened since the pandemic along the strip of Taylor that stretches between University of Illinois Chicago’s campus and the Illinois Medical District, many of the new spots cater to the lunch crowd or to students. Tastes have changed.

Some owners say Little Italy's golden age is behind them.

“Little Italy is no longer a thing, unfortunately,” says Nick Lombardo, chief operating o cer at Rosebud Restaurant Group, whose restaurant at the corner of Taylor and La in streets had daily service from 1976 until last year. “It has come and gone.”

Pre-pandemic, e Rosebud would serve no fewer than 150 people a night on weekdays and 300 on weekends, Lombardo says. at dropped down to 20 or 30 people a night. e Rosebud served its last dinner on New Year’s Eve and will now be used only as an event venue.

It's one of several big hits to the street in recent years. Francesca’s on Taylor and Davanti Enoteca permanently closed in 2020, after 24 and 10 years, respectively. RoSal’s Italian Cucina, which had been open for almost 30 years, closed before the pandemic. Such closures create a compounding e ect for those that survive, says Lombardo.

“All these places just went away, so there was no reason to head to Taylor Street,” he says.

Ask Little Italy restaurant owners when the neighborhood was in its heyday and they’ll say the late 1980s or early '90s, when the Chicago Bulls were doing well and Michael Jordan was pulling in the spectators. In those days, e Rosebud drew celebrities like Frank Sinatra and Robert De Niro. e United Center is close enough to draw a pregame crowd to Taylor Street restaurants.

“When Michael Jordan retired, he killed everybody,” says Ralph Davino, the third-generation owner of Pompei, a restaurant down the block. “You couldn’t t into Rosebud when Michael Jordan

was playing.”

Other factors have a ected Taylor Street’s dining scene beyond the rise and fall of Chicago sports teams, of course. e restaurant hub in the West Loop, centered in Randolph Street, has been drawing diners for a decade or more, and the nearby Fulton Market District continues to grow in popularity. Little Italy restaurant owners also say suburban customers hesitate to drive into the city and are worried about crime, a complaint echoed by restaurants — and other business owners — throughout the city.

Davino estimates Pompei’s revenue is down 15% to 18% compared to before the pandemic.

at is telling: Over the past few years, in ation has driven up menu prices at most restaurants and, in turn, revenue.

Davino’s grandfather, who immigrated to the U.S. from Italy, started Pompei as a bakery in the early 1900s. Davino’s family lived in apartments above the bakery when he was a child, back when Pompei was located on Loomis Street. He took over the business from his uncles in 1984, expanded the o erings and moved into its current location at 1531 W. Taylor St. in 2000. He owns the building, which helps with survival. e restaurant seats about 200, but Davino says it’s too much space now.

After COVID, “it never returned back to what it was,” he says. “I used to have lines go outside, lines of people out the door.”

A few blocks o Taylor Street, revenue is holding steady at Tufano's Vernon Park Tap, says third|generation owner Joey DiBuono. But he's seen a shift toward lunch, and the 94-year-old restaurant now closes around 8:30 p.m. Prepandemic, it stayed open until 9:30

or 10 p.m.

“By 8:30, it gets pretty quiet,” he says. “I have people that come for lunch and the students, and . . . we make it work.”

Even as some Italian restaurant owners lament their changing fortunes, Taylor Street itself is not su ering from a real estate perspective, says Will Winter, vice president of Stone Real Estate. Winter is leasing the retail space in the Neighborhood Hotel, which replaced the National Italian American Sports Hall of Fame at 1431 W. Taylor St.   e street is well leased and new restaurants are debuting, Winter says. Taylor’s Tacos opened last year at 1512 W. Taylor St., for example. Other spots cater to the college students, like Korean-style corn dog joint Kong Dog and Insomnia Cookies.

‘Changing consumer tastes’

“It just speaks to changing consumer tastes,” Winter says. “ ere’s still culinary demand. It just might not be all Italian.”

Still, even the new blood says it’s a hard street to thrive on. Taylor Mason, the founder of Taylor’s Tacos, says she had to change her hours to target the lunch crowd after quickly discovering the dinner rush was nonexistent. Nine months in, Taylor’s Tacos' catering operation still carries the business. Mason says she’s considering whether having a storefront is even worth it.

A block away, Peanut Park Trattoria is also feeling the pinch from a lack of foot tra c on the street. Owner Dave Bonomi, who lives in the neighborhood, teamed up with his business partner to open the Italian restaurant at 1359 W. Taylor St. in 2021 to breathe some life into the neighborhood. He was warned it wouldn’t be easy. ree

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years in, the bills are getting paid, but he says he could use more customers.

“I had the right partners. I loved the location. I’m like, ‘You know what, I can beat the house,’ “ he says. “It’s not been easy. It’s a tough street.”

e late 19th and early 20th centuries brought thousands of Italian immigrants to Chicago. U.S. census counts suggest more than 15,000 Italians moved to the city between 1870 and 1900. Many landed around Taylor and Halsted streets near Hull House, the settlement agency that served recent arrivals.

Like many neighborhoods that were once home to a single major ethnic group, the makeup of Little Italy has been changing for decades. e building of expressways left its mark; the Eisenhower and the Dan Ryan circumscribe the neighborhood on the north and east. But it was the construction of the University of Illinois Chicago in the 1960s that caused the most profound changes. More than 800 houses and 200 businesses were demolished to make room for the campus, despite the e orts of lifelong resident Florence Scala, who fought City Hall and thenMayor Richard J. Daley and lost. In 1980, Scala and her brother opened a restaurant called Florence in the building where they grew up, according to her Chicago Tribune obituary. Before it closed in 1990, one frequent customer was Mayor Richard M. Daley.

Davino, the 77-year-old owner of Pompei who grew up above his grandfather’s bakery, pointed to Scala’s loss to the rst Mayor Daley as a turning point for the Little Italy of his childhood.

“It all changed,” he says. “It used to be Little Italy at one time. Now I would call it University Village.”

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“Little Italy is no longer a thing, unfortunately,” says Nick Lombardo, chief operating of cer at Rosebud Restaurant Group, whose restaurant at the corner of Taylor and La in streets had daily service from 1976 until last year. “It has come and gone.” | JOHN R. BOEHM

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