Crain's Chicago Business, April 1, 2024

Inside McDonald’s subculture marketing

From anime to streetwear, the fast-food giant has focused on bringing bubbling trends to the masses | By Erika Wheless, Ad Age

For anime fans, the name “WcDonald’s” isn’t new. e ctional version of McDonald’s has shown up in anime since the 1980s as a way for shows to reference the fast feeder without being sued. It is the kind of legal runaround that might have corporate lawyers ready to pounce. But for its newest campaign, McDonald’s embraced the trademark trickery.

e chain put the WcDonald’s moniker at the heart of an e ort that includes a new sauce, mangainspired packaging and four short anime episodes that McDonald’s will distribute on a special website.

“I’m sure that would have been a hard conversation to have a few years ago with the legal team,”

Need a CFO? This rm lets you rent one.

Third Road Management based in Glen Ellyn is offering part-time chief nancial of cers to midsize businesses looking to boost growth

managing my team.”

After burning through four employees in the chief nancial ocer position in four years, Todd Eichholz, owner and CEO of A&A Paving in Roselle, decided to go smaller to ll that big position.

“I have made some bad hires in the past because I didn’t truly know the best questions to ask,” Eichholz said. “I did not know how to spot-check and to be able to manage and coach that person. I always had an anxiety. I know I need someone in that position. I am scared to hire that position because I know that is my one kind of weakness as far as

Eichholz turned to ird Road Management, a Glen Ellyn-based company that provides midsize businesses with part-time CFOs to help boost growth.

“ ese businesses are literally everywhere you look,” said John Frank, founder and CEO at ird Road. “ ey need somebody in the room that thinks like an analyst, that asks probing questions that could tie together the numbers with the experiences on the ground.”

e company, whose CFOs typically spend between one and

said Tass Tsitsopoulos, group strategy director at Wieden+Kennedy New York, McDonald’s lead U.S. creative agency that was involved in the campaign. Now, “We want to take this copyright problem and use it to connect with fans.”

e campaign, which debuted last month, is an example of how the world’s largest fast food chain has loosened the reins on its once heavily scripted marketing approach as it taps into rising trends in a move to drive loyalty in communities such as anime enthusiasts, streetwear savants and more.

McDonald’s has moved away from a marketing

SPORTS

Personal seat licenses could fuel the Bears’ ambitions for a new stadium. PAGE 3

With the cost of insuring a home rising fast, homeowners are taking policies with a bigger deductible that cuts their monthly payment but boosts their outof-pocket costs in the event of a claim, a new study shows.

“It’s a trade-o that (people) are making with insurance premiums going up so much,” said Je Wingate, executive vice president of Chicago-based Guaran-

REAL ESTATE

teed Rate Insurance, which released the analysis of about 50,000 U.S. homeowners insurance policies March 13.

“ e customer is then shouldering more of the burden” if they wind up having to make an insurance claim, Wingate said.

In the years 2019 to 2023, as average annual homeowners insurance rose by about $615, to $1,723, large numbers of policyholders

Wrigley rooftop owners are proposing a 29-unit apartment building across from ballpark. PAGE 4

The Travis Scott meal saw a lot of success when it was launched in 2020. | MCDONALD’S

Mark Weinraub

Can DePaul rise from its self-imposed irrelevance?

The cheerleaders gyrated and the pep band burst into the school ght song on a chilly Monday at Wintrust Arena. e moderator steered attention to the locker-room tunnel, where the man of the hour and his family soon would emerge.

Dan McGrath

Many seconds passed. e music and dancing continued, but no guest of honor. e thought occurred: Had Chris Holtmann changed his mind? Had he come to his senses about taking over as coach of a DePaul team that was 3-29 overall, 0-20 in the Big East Conference and by any reckoning a disjointed mess this season?

A DePaul team that has nished last in 12 of its 19 seasons of Big East membership and hasn’t been to the NCAA Tournament in 20 years?

Finally Holtmann appeared, accompanied by wife Lori and

daughter Nora. A boyish-looking 52, he had dressed for the part with a Blue Demons lapel pin a xed to his DePaul-blue blazer. Before a cozy gathering that could have passed for the crowd at recent DePaul games, University President Rob Manuel and Athletic Director DeWayne Peevy were e usively cheerful in welcoming the Holtmanns to the Blue Demon “family.”  is was intended as a celebration. DePaul, long a victim of self-imposed irrelevance in Chicago sports, was announcing that it’s back in the game, casting its fate with a proven coach who’d nonetheless seen an enviable run at Ohio State gradually unravel.

“I wasn’t looking at that as a deterrent,” Peevy insisted.  After ve straight NCAA Tournament appearances, the Buckeyes went 16-19 last season and were treading water with a 14-11 record and six losses in seven games when Holtmann was dismissed on Feb. 14.

“One thing I learned is that we’ve got to be a little older than we were,” Holtmann said.

e 50-day, headhunterinvolved process that led to Holtmann was “an unconventional search,” Peevy said.

“We had to improve the pro le of the vacancy: facilities, operational resources, salaries for coaches, NIL money. Without those, who’d be interested?”

Holtmann was, with his Coach of the Year credentials from Butler (Big East) and Ohio State (Big Ten) suggesting he might be a departure from DePaul’s previous whi s. He was considering sitting out a year and living o Ohio State’s dime, “but I love to teach, love to coach, and despite the gray hair, I’m still relatively young.”

In a sense Holtmann knows what he’s in for, having produced three NCAA Tournament teams as Butler’s coach while DePaul was going 11-43 in the Big East and nishing seventh, ninth and last under Oliver Purnell and a Dave Leitao redux.

ings got worse (9-51) under Tony Stubble eld and interim replacement Matt Brady, who bemoaned the transfer-built team’s

disdain for cohesion in radio remarks after a home- nale loss to Xavier. “ ey’re not playing what we’re coaching,” Brady said. at won’t do under Holtmann, who tempered his optimism with realism in assessing where things stand.

“Coming into a situation where there’s some repair, some rebuild necessary, I’ve been through it,” he said. “ e game has changed, but the basics of a successful program have not: hard work, playing for something larger than yourself, nding the right group that wants to be here and will lock arms to build this thing.”

Holtmann was 7 when DePaul made its last Final Four appearance, but he cited tradition and history as one of the job’s attractions, even mentioning the late George Mikan, a Joliet giant who was national Player of the Year for the Blue Demons 79 years ago.

ere has been a strong local presence to DePaul’s best teams ever since — Joe Ponsetto/Dave Corzine, Mark Aguirre/Terry Cummings, Quentin Richardson/

Bobby Simmons. e nostalgic among us might swear by its importance, but local talent is no longer what it used to be.

I watch a lot of high school basketball in connection with my day job, and in 14 years I haven’t seen enough legit prospects to stock one Big East roster. Why that’s so is a story for another time, but an all-Chicago-area squad would get hammered in the Big East.

“Roster construction is vastly di erent from how it was ve, six years ago,” Holtmann said. “You used to be able to plan on a roster that would basically look the same from year to year. You can’t do that anymore — you have to look at everything.

“But as fertile as Illinois and the Chicago area have been, we have to tap into that. We have to build a roster that can compete at the highest level. I see challenges as opportunities. is city can’t wait for this program to be special again.”

Crain’s contributor Dan McGrath is president of Leo High School in Chicago and a former Chicago Tribune sports editor.

Union League Club plans, again, to sell its Monet painting

Steven R. Strahler

e Union League Club of Chicago is making another run at selling its painting by Claude Monet to o set nancial challenges.

In a March 13 letter to members, club President Cynthia Doloughty said the board has approved the sale of “Pommiers en Fleurs,” or Apple Trees in Blossom, painted by the French impressionist in 1872, to pay for renovation of its facilities.

e club, under pandemicrelated pressures, attempted to sell the Monet in 2020 and was later sued by an Australian art dealer who alleged the club backed out of an agreement to part with it for $7.2 million. A Cook County Circuit Court judge dismissed the suit, a decision upheld on appeal.

is time, the painting could go up for auction. In her letter, Doloughty said the club had hired the Winston Art Group to represent it. A club member said it might fetch $15 million or more. e club acquired the 23-inch-by-29-inch painting from one of its members for $500 in 1895.

e board also approved sale of another painting it owns, Walter

Ufer’s “Land of Manana” from 1916.

Reconsideration of selling the Monet was forced by a lender’s demand to pay down principal on a bank loan, according to the member. Doloughty wrote that proceeds will be used to upgrade dining and event spaces “that have become tired with age and use” and overnight rooms that haven’t been redone since 2007.

She said proceeds also “will repay a portion of our debt to shore up our nancial footing.” A portion of the proceeds, she added, also could be used to augment the club’s noteworthy art collection, of which the Monet is considered the jewel.

Like other downtown private clubs, the Union League Club struggled against demographic and social trends long before the pandemic emptied out the Loop.

e Union League member said the club makes money on events, dues and room rentals but not on food and beverage sales or its athletic facilities.

Frank DeVincentis, a director who chairs the task force overseeing the reinvestment initiatives, said the club hopes the pending sale will allow it to put $10 million into facili-

ties and its capital accounts, with additional funds available for art purchases more in tune with its American artist-oriented collection.

He clari ed the member’s comment about paying down bank debt, saying, “We are in close talks with a bank. We’re not at that place of urgency, but we do need to make some nancial improvements.” He wouldn’t disclose the name of the lender or the amount at issue. “ e debt service is considerable, and it warrants some signi cant payments.”

DeVincentis, a nancial adviser, said membership has climbed above 2,000 from its pandemic nadir while remaining below its peak.  He said improving the facilities enabled by the sale of the paintings is crucial to sustaining membership recruitment and retention.

“We think we’re at a crossroads. To a certain extent, we’re putting our money where our mouth is,” he said.

e Monet was the rst by the French artist to be acquired by a Chicago institution. It had been on

loan to the Art Institute of Chicago when the Union League Club made the rst attempt to sell it.

e club did sell lesser artwork and a building annex to raise cash but managed, with layo s, other retrenchments and extra dues, to circumvent losing the Monet.

e Art Institute was the rst U.S. museum, in 1903, to purchase a Monet. It led to a collection of 33 paintings and 13 drawings by Monet, the largest by the artist outside Paris and highlighted by the seasonal “stacks of wheat” paintings.

The club tried to sell the painting in 2020 and was later sued by an Australian art dealer who alleged the club backed out of an agreement to part with it for $7.2 million.

WIKIMEDIA COMMONS

‘No California, no Chicago’ on this restaurateur’s menu

Seeking to conquer the world via red sauce, Miami’s Carbone is shaping a global dining empire. Just don’t look for one of its restaurants here | By

Michael Smith, Bloomberg

It’s 7 p.m. in Miami — 6 p.m. in Dallas, 4 p.m. in Las Vegas, 2 a.m. in Riyadh, 7 a.m. in Hong Kong — and the scene at Carbone, the red-sauce Italian joint turned Kardashian-esque brand, is as spicy as the rigatoni vodka.

Waiters weave through the crowd. Guests squeeze into green leather banquettes. e throng spills out the door, into a pop-up cigar bar. e man choreographing it all moves through the place, dressed head-to-foot in casual-chic black.

See CARBONE on Page 16

Carbone has locations in New York, Miami, Dallas, Las Vegas, Hong Kong, Doha and Riyadh.

Personal seat licenses could help pay for new Bears stadium

As the team makes its pitch, here’s a look at what rivals have been able to charge fans for the hefty perk at newer venues in other cities

Danny Ecker

As the Chicago Bears shift their stadium-building focus from Arlington Heights to the lakefront, it’s almost certain the team will ask fans to pony up to help pay for it. And it could be a lot, based on the financing for the past few NFL palaces.

Setting the debate over taxpayer support aside, a large chunk of those funds would most likely come through the sale of personal seat licenses, the hefty one-time purchases that give their owners the right to buy season tickets each year. New venues that debuted in the Los Angeles, Las Vegas, Atlanta, Bay Area and Minneapolis markets over the past decade leaned heavily on proceeds from such PSL sales to finance their construction.

The Bears are now focusing their new-stadium pitch on the Museum Campus, where sources say the team would demolish Soldier Field — while retaining war memorials and making infrastructure improvements to the area — and construct a domed stadium. Marc Ganis, a Chicago-based stadium consultant, told Crain’s he believes a domed stadium alone — not including the proposed infrastructure work — would cost upward of $2.5 billion to $3 billion to build within city limits.

The Bears have publicly

pledged to contribute $2 billion in private money to the effort. A significant portion of that investment would likely come from PSL sales.

The Bears are now focusing their new-stadium pitch on the Museum Campus, where sources say the team would demolish Soldier Field.

PSLs are a familiar concept for the Bears, which sold such licenses ranging from $765 to $8,500 that collectively raised more than $50 million toward the $690 million renovation of Soldier Field in 2002 — licenses whose value would evaporate should the team ditch its current home at Soldier Field.

But ticket market experts say those costs would pale in comparison to the PSL rates the team could charge to back a new venue. That stands to test Bears supporters’ financial willingness to help foot the stadium bill for a team that has seemingly inelastic demand for its product, despite years of

See BEARS on Page 18

Law rms are of ce landlords’ new best friends

They soak up middle- and lower- oor space instead of paying top-dollar rents or seeking penthouses

In good times or hard times, lawyers always win.

Revenues at the top 100 rms rose to $131 billion in 2022, the most recent year available, from $7 billion in 1986, a 19-fold increase, according to American Lawyer. Pro t margins never fell below 35% in even the worst years and hit a record 45% in 2021. For comparison’s sake, Apple’s operating margin last year was 34%.

Now lawyers are winning the o ce-space game, too: Law rms

are historically reliable but not exactly sexy as o ce tenants, especially compared to the ashier and pricy deals in recent years signed by tech and nance companies. But several of the biggest deals over the last year involve law rms, and with Manhattan o ce landlords scrambling for tenants, members of the bar are enjoying their unlikely new status as belles of the ball.

“It’s nice that the Knicks are good again because brokers are inviting me to all the games,” said one partner in charge of his rm’s real estate needs.

Yards, a 51-story tower, the top three oors are leased by hedge fund ird Point at $137 a square foot, according to KBRA data. Below that comes private equity rm Silver Lake, paying $111 per square foot under a lease inked in 2017. Next comes the law rm Milbank Tweed, which signed a lease in 2016 and pays $90 a square foot for 360-degree views from the 30th through 39th oors.

“I’m in an interior o ce, but you can enjoy the views from wherever you are,” said a Milbank spokeswoman.

A return-to-o ce survey by the Partnership for New York City showed law rms had average

See

Law rms typically don’t pay top-dollar rents, or seek out penthouse space, but they soak up space in the middle or lower oors of buildings, helping landlords balance their books. At 55 Hudson

Aaron Elstein, Crain’s New York Business

Westchester-based Dorf Nelson & Zauderer opened an 11,000-square-foot New York of ce in Midtown last December. BUCK ENNIS

BLOOMBERG

Wrigley rooftop owners propose a 29-unit apartment building across from the ballpark

A venture that controls three buildings along Shef eld Avenue wants to redevelop the properties with a ve-story rental project

As the Chicago Cubs seek to put new advertising signs on the rooftops of buildings they control across the street from Wrigley Field, the owners of three other properties that overlook the stadium are proposing to redevelop them with a 29-unit apartment building.

A venture that controls three buildings at 3627-3633 N. Shefeld Ave. is proposing to demolish them and build the ve-story rental building, according to a presentation posted on the website of Ald. Bennett Lawson, 44th. e trio of properties includes one with a long-standing billboard on its roof that for decades displayed an advertisement for Torco oil, as well as the property famous for its “Eamus Catuli” sign — translated from Latin as “Let’s go Cubs” — along its roofline.

e group behind the plan, which is led by longtime rooftop property investor Marc Anguiano, presented it in February to the East Lakeview Neighbors community group, according to the alder’s o ce. e proposal would require City Council approval to move forward.

If approved, the plan would reshape a stretch of She eld well known to generations of Cubs fans. e buildings’ owners for years sold tickets to fans to sit on rooftop bleachers and watch Cubs games, but those seats have

sat mostly empty since the team erected a massive video board in right eld in 2015 that blocked their view.

A group led by another co-owner of the buildings — investor Edward McCarthy — sued the Cubs in 2014 to block the video boards from going up, alleging they would violate revenue-sharing agreements with the club that date back to 2004. But a judge dismissed the complaint in late 2015.

e redevelopment proposal comes as the Ricketts family, which owns the Cubs as well as a dozen properties along She eld and Waveland avenues across the street from the stadium, eyes its own plan to alter a pair of those buildings. e team is seeking to add large LED corporate logo signs atop the buildings at 3623 N. She eld — next door to one of McCarthy’s properties — as well as 1040 W. Waveland Ave.

Maintain vintage look

Members of the East Lakeview Neighbors community group generally didn’t have any concerns with the proposal, said Lawson, who worked for years with retired Ald. Tom Tunney and was elected last year to replace him. Many, including the Cubs, were comfortable with a project that was strictly residential and didn’t bring new commercial uses to the block.

Lawson admits there is a “charm” to the facades of the

buildings, which were shown on national television during Cubs games for decades. But the design of the proposed apartment building is meant to harken to the vintage look.

Anguiano, an Avondale native who grew up going to Cubs games, said he and his partners wanted to redevelop the buildings in a way that aligned with their history.

“Instead of trying to propose a development that might be found somewhere else in the city, we really wanted this to still look like the neighborhood, but be updated so that it was useful,” Anguiano said, noting that the three buildings combined have only about a half-dozen operating apartment units today.

Well-known parts of the building, including the Eamus Catuli

sign, will likely be incorporated into the new project in some way, Anguiano said. “We’ve got a lot of history and a lot of memorabilia in those places.” He declined to comment on the estimated cost of the project.

McCarthy, who co-leads a venture that bought the middle of the three buildings last year for $3.4 million, according to Cook County property records, couldn’t be reached. Industry publication CoStar News rst reported about the planned redevelopment.

e proposed building would include 11 o -street parking spaces accessed from an alley behind it, according to Lawson’s website. Designs for the building in the presentation to the community group show a rooftop amenity area that includes two

pickleball courts.

A McCarthy venture paid $4.8 million in 2012 for the 3633 N. She eld building, known as the Lakeview Baseball Club, buying the property out of foreclosure after its previous owners defaulted on a mortgage tied to the building. e property’s rooftop viewing business was launched in 1988, and the building became known for both the Eamus Catuli sign as well as another sign with the letters “AC” for “Anno Catuli,” Latin for “year of the little bear.”

e AC was followed by a series of numbers representing how many years it had been since the Cubs won a division title, a National League championship and a World Series. e numbers were all reset to zero after the Cubs won the 2016 World Series.

South Loop residential tower sells for $144M

A Los Angeles investor sold the 47-story complex, making it the biggest a partment building trade in the city so far this year

Rachel Herzog

Los Angeles investor CIM Group con rmed on March 12 that it had sold the 47-story Paragon Chicago at 1326 S. Michigan Ave., which it completed in early 2019 with development partner Chicago-based Murphy Real Estate Services.

An a liate of San Franciscobased investor FPA Multifamily paid $144 million, or $288,000 per unit, for the property, CoStar

News reported. CIM Group did not comment further, and executives at Murphy Real Estate Services and FPA Multifamily did not respond to requests for comment from Crain’s. at sale price marks the fourth-highest amount that a Chicago apartment building has sold for in the last year, behind the $232 million sale of 727 W. Madison St. in the West Loop in August, the $173 million sale of the North Water Apartments in Streeterville in June and the $161 million sale of the Lake Meadows apartments in Bronzeville in May.

ose deals are a sign that real estate investors have a healthy

appetite for downtown apartment buildings, even in a slow market for commercial property

transactions, but some sale prices likely haven’t quite been what sellers hoped for due to high in-

terest rates and economic uncertainty.

e deal for the apartments at 1326 S. Michigan Ave. was likely a loss for the seller. e development cost $171 million to construct, according to Murphy Real Estate Services’ website. CIM Group re nanced the property with a $148 million mortgage from Deutsche Bank in 2019, according to Cook County property records.

FPA Multifamily has made major investments in Chicago apartment properties in recent years, most recently scooping up the Seneca, a 286-unit vintage building in Streeterville for $55 million in June and the 304-unit West77 in River North for $89 million in October 2022.

e South Michigan Avenue building is now dubbed Arrive Michigan Avenue, according to its website.

Danny Ecker

An aerial view of the buildings highlighted at 3627-3633 N. Shef eld Ave. across the street from Wrigley Field | ALD.

1326 S. Michigan Ave. COSTAR GROUP

This $12 million condo used to be a boiler room

Developer Arthur Slaven, who converted the former Montgomery Ward of ce tower on Superior Street, is selling his penthouse

Dennis Rodkin

When he was converting the former Montgomery Ward o ce tower in River North to condos in the early 2000s, developer Arthur Slaven reserved for himself space at the very top, including the former boiler room and part of the executive helicopter pad.

e condo Slaven created there — more than 10,000 square feet with a 30-foot wall of glass facing the city skyline, wenge wood and Venetian plaster nishes, a glass catwalk, a staircase that twists like a ribbon and a rooftop deck where the helicopters used to land — went on the market March 20.

Slaven and his wife, Jane, are asking $12 million for the Superior Street condo, a three-bedroom that they and noted interior designer Darcy Bonner created out of former mechanical space. It’s represented by Carrie McCormick of @properties Christie’s International Real Estate.

“It’s hard for me to let go of what we made here,” Slaven said of the space. Now living primarily in Florida, the Slavens don’t need so much space when they’re in Chicago. “Every time I wake up and walk down those stairs, I get a lift,” he said.

e tall wall of glass is a singular reminder of the change Slaven’s rm, Centrum Realty & Development, made in the tower where Montgomery Ward had its headquarters before it went

bankrupt in 1997.

Designed in 1970 by architect Minoru Yamasaki, it was a modernist classic, with travertine marble pillars at the corners and acres of black glass in between. Centrum bought the tower in 2001, and later the rest of the late retailer’s 23-acre River North campus. One key to making the tower work as a residential building was replacing Yamasaki’s forbidding black glass with a clear version.

Bonner’s design for the condo interior played o that change with interior walls and a staircase and catwalk of glass, and complemented the exterior travertine with a wall of the same material 30 feet high in the living room.

e 30-foot height of the living room comes from its origin as a space two stories high that housed the tower’s heating and air conditioning equipment on the 27th oor. In the conversion, Centrum inserted a 28th oor. Some condos are on the 27th oor and some are on the 28th, but only the Slavens’ unit is on both.

Could set a new record

In fact, it’s on three levels, including the 29th — the roof — where the condo has a family room that opens onto the outdoor terrace. It’s one of four units with terraces on the former helicopter pad, Slaven said.

If it sells at or near the $12 mil-

lion asking price, the condo would set a new record for downtown condos that are outside the traditional upper-priced zones for condos: the Gold Coast, Michigan Avenue and Streeterville. But it wouldn’t be an isolated big-ticket sale for the River North neighborhood, which Centrum and others created out of former parking lots and low-rise former Ward buildings in the early years of the 21st century.

Members of Michigan’s DeVos family built a house nearby for over $12.7 million. Another house in the neighborhood, with 10,300 square feet and both indoor and outdoor pools, sold for almost $6.78 million in 2021.

Residents of homes sold for $4 million or more have included Michael Jordan’s ex-wife, Juanita Vanoy; Chicago Bulls star DeMar DeRozan, who bought Vanoy’s former home; ex-Bull Jimmy Butler and former radio jockey Jonathon Brandmeier.

ere’s a noteworthy coincidence in the Slavens tapping @ properties Christie’s agent McCormick to sell their condo. She also represented the penthouse in a di erent former Montgomery Ward headquarters, the Michigan Avenue tower the company built in 1899.

at condo, about two miles from the Slavens’ home on Superior Street, sold March 15 for $3.55 million, or about 96% of the sellers’ asking price.

A re-imagined Tavern on Rush is set to open this summer

Restaurateur Phil Stefani is resurrecting one of the Gold Coast’s favorite see-and-be-seen spots just across the street from its old digs

Jack Grieve

Crain’s reported in July that Stefani signed a lease at the base of the Thompson Chicago hotel, but the decorated restaurateur had yet to decide whether he’d resurrect the Tavern on Rush name or when the restaurant would open.

The re-imagined restaurant will take over the bottom two floors of the building, which were previously occupied by Nico Osteria at the corner of Rush Street and Bellevue Place. The new Tavern space will span 16,000 square feet and include an outdoor patio — a feature

Stefani sees as a key to success in that area.

e new space will o er a

“modernized and re ned look while staying true to the approachable and comfortable ambiance” of the former location, according to the Stefani Restaurant Group.

In addition to serving breakfast, lunch and dinner daily and brunch on the weekends, Tavern on Rush will provide room service for the hotel, which was acquired by Oxford Capital Group in 2021, as well as catering for banquets at its event space.

Stefani plans to bring back many of the former staff members from the original location.

The patch of the Gold Coast where State and Rush streets intersect has long been home to a handful of old-school steakhouses and Italian joints, the

old Tavern on Rush being one of them. The restaurants encircle Mariano Park, and over the years their patios — particularly Tavern on Rush’s — have become see-and-be-seen spots for patrons.

Tavern on Rush closed in 2022 after its longtime lease ended.

Landlords Fred Barbara and Jim Banks, who have owned the building at 1031 N. Rush St. since 2005, thought it was time to breathe some new life into the neighborhood and gutted the building. ey opened a new restaurant called e Bellevue in May 2023.

New era for the area

Tavern’s closure knocked over the first domino, ushering in a new era for an area once nicknamed the “Viagra Triangle.” Next door, for example,

Carmine’s closed in 2023 so its landlords could knock down and rebuild at 1043 N. Rush St. Stefani’s restaurant group also operates Stefani Prime steakhouse in Lincolnwood; Bar Cargo, a Roman-style pizza bar, in River North; Broken English Taco Pub locations in the

Loop and Old Town; Tuscany Taylor, Stefani’s oldest restaurant still in operation, in Little Italy; and the newly opened Stefani’s Bottega Italiana, which includes a pasta lab, on the Far Northwest Side.

Crain’s reporter Ally Marotti contributed.

VHT

A rendering of the new Tavern on Rush restaurant TAVERN ON RUSH

With an adversary of Fritz Kaegi still on the Board of Review, the commercial real estate sector scored a win in its push-and-pull with the county assessor

Commercial property owners notched a win in the push-andpull over assessments with Larry Rogers’ re-election to the Cook County’s tax appeals board on March 19.

Rogers, who secured his sixth term on the Board of Review, has clashed with Cook County Assessor Fritz Kaegi since Kaegi’s election in 2018 over what Rogers says are the assessor’s inflated valuations of properties, among other issues. With Rogers fending off an opponent who was endorsed and backed by Kaegi, the board keeps a member who will provide a check on the assessor as the city of Chicago is up for reassessment this year amid a challenged commercial real estate market, real estate professionals say.

“I think that retaining him on the Board of Review will create a balance that is very necessary,

so I’m very happy to see that he won. I think Kaegi kind of is going overboard and doesn’t realize the e ects he’s having on the operation of buildings,” said David Goss, co-founder of Chicago-based apartment building brokerage Interra Realty.

‘Evens out the playing eld’

Kaegi has been at odds in recent months with commercial landlords, who say the assessor’s overestimation of their properties’ value unnecessarily forces them into a costly appeals process to bring values down. The city’s upcoming assessment cycle comes at a time when the pandemic, high interest rates and economic uncertainty have decimated commercial property values.

Kaegi was the largest contributor to Rogers’ opponent, south suburban tax appeals aide Larecia Tucker, and loaned a total of $680,000 to an independent expenditure committee

that had spent nearly $600,000 on advertising, mailers and texts either opposing Rogers or promoting Tucker as of March 20, according to public records. Some saw Rogers’ win as voters rejecting a power play from Kaegi to install an ally on the board, though Tucker maintained during the campaign that she would be independent and base her decisions on the market.

“I think it evens out the playing field. I mean, it’s a fact he wanted to pack the board, he wanted to have control, it seems to be, completely over everything in the assessment system. I think the board provides sort of a counterbalance,” Chicago apartment landlord Stuart Handler said.

In a March 19 social media post, Kaegi said he was proud to support Tucker.

“Since day one as assessor, I’ve made my mission clear: to bring equity, transparency and

fairness to a broken property tax system that was stacked against middle-class residents. I’m committed to continuing that work,” he wrote on X, formerly known as Twitter.

While Rogers’ re-election elicited a “sigh of relief” from landlords facing the upcoming assessment cycle with apprehension, Neighborhood Building Owners Alliance President

Mike Glasser said he hopes Kaegi and Rogers can work to address broader issues with the county’s tax assessment process in light of the industry’s challenges.

“We want to see an assessment process that results in fairness and fosters a climate that encourages quality investment throughout the city and county,” he said.

Rachel Herzog

Fritz Kaegi (left) and Larry Rogers Jr. | CRAIN’S FILE AND ROGERS CAMPAIGN

Futuristic 1933 House of Tomorrow is slated to get a $4 million rescue

The pioneering glass structure, which was designed for the Century of Progress International Exposition in Chicago and later moved to Indiana, will get the rehab it’s needed for decades |

By Dennis Rodkin

The long-stalled rescue of a futuristic house designed in the 1930s for Chicago’s Century of Progress world's fair and later moved to the Indiana shoreline will get a sorely needed rehab with $4 million in federal funding.

Vacant and decaying since at least the early 2000s on a duneside site in Beverly Shores, the House of Tomorrow is a pioneering glass structure designed by George Fred Keck for the Century of Progress world's fair. He was more than a decade ahead of Chicagoan Ludwig Mies van der Rohe and New Yorker Philip Johnson, who designed glass houses that are far more famous.

Although it’s in terrible shape now, the building “is too important to lose,” said Todd Ravesloot, chief of facilities at Indiana Dunes National Park, which encompasses the site where the House of Tomorrow and four other former houses from the world's fair stand. “It’s one of our most unique attractions in the park and a symbol of innovation and development in architecture.”

Keck designed the 12-sided house for the fair’s showcase of future home designs that modern architectural styles and emerging technologies would make possible. The house had a new-fangled dishwasher, electronic eyes to open the doors to the garage and kitchen, and a place to park a personal aircraft.

e national park announced March 12 that it’s getting $22 million in federal funds for historic restorations. Of that, $4 million will go to restore the exterior of the House of Tomorrow, Ravesloot said.

e work will include rebuilding the original glass and alumi-

DEDUCTIBLES

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shifted to bigger deductibles.

In that four-year period, the number of policyholders with deductibles of $5,000 to $10,000 grew by 49%. Agreeing to a bigger deductible unlocks discounts on the premium.

Customers presumably determine that they’d rather save roughly $50 a month on their insurance bill and hope they’re not hit with a costly home repair where they’ll have to pony up thousands of dollars before insurance kicks in.

Wingate said customers holding onto their own money is a good idea if they’re banking it

num exterior and some structural repairs, he said. “We’re going to restore it to its original appearance which has almost disappeared over time.”

e work is all exterior, Ravesloot said, with the goal of “making it a nished shell that’s more palatable and a ordable for someone to redo the interior.”

As with the other Century of Progress homes, the park service owns the building and leases it to Indiana Landmarks, which has the authority to offer the house rent-free to someone who will pay the cost of restoration.

Another world’s fair house in the cluster, the ashier, amingo-pink Florida Tropical House, was extensively restored via the lease-for-rehab arrangement.

e family that did the work beginning in the early 2000s is now o ering to sell the 52-year lease for $2.5 million, which must be paid all in cash.

against future losses. “Hopefully you’re putting that money away in the event there is a catastrophic loss later,” he said.

How many policyholders are prudently banking the savings in case of expensive property damage?

“Probably not many,” Wingate said.

It’s still true that the majority of policyholders have a deductible between $1,000 and $2,500, the report said, but the share of people with deductibles that size dropped by 17% in the four-year period of the study.

Struggle for rst-time buyers

“It’s really about affordability,” Wingate said. A first-time

Ravesloot said he has no estimate of what the interior work at the House of Tomorrow will cost, but that the combined total for interior and exterior restoration has been “too much for anyone” to take on in return for a rent-free lease. In 2019, Indiana Landmarks launched a $2.5 million fundraising campaign to get the house restored, but more than five years later, the House of Tomorrow is still shrouded in construction wrap,

homebuyer who’s facing today’s high interest rates and rising home prices “is looking for a strategy to afford that monthly payment.” In 2019, the average homeowners insurance premium was $1,108, Guaranteed Rate found, and in 2023 it was 55% higher at $1,723. In 2023 alone, premiums rose by nearly 19%.

In Illinois, premiums rose even more last year. The increase was 25.8%. Guaranteed Rate’s report does not provide dollar figures on the state level.

The 2019 increase in Illinois was sixth-highest among the 50 U.S. states. The two biggest increases were in Louisiana (up 34.3%) and Alabama (32.4%).

The increase was 12.3% in Florida, which enacted cost-controlling legislation in 2021 and 2022 after eye-popping increases in homeowners insurance rates.

Most lenient states

Illinois doesn’t get whacked by hurricanes and other problems that have spurred big rate increases in some states. One reason rate increases are big here, Crain’s reported in September, is that insurers don’t need state approval to raise rates in Illinois, which is among the most lenient states on regulating insurance rates. Wingate declined to comment on the question of Illinois

as it was at the time.

e Indiana Dunes National Park’s $22 million in restoration funding is coming from the Great American Outdoors Act, passed by Congress in 2020 to provide $9.5 billion over ve years to help national parks catch up on a huge backlog of maintenance and repair projects, such as the House of Tomorrow.

Of the $22 million the Indiana Dunes National Park is getting, Ravesloot said, $13 million will go to restoration of the Good Fellow Lodge, a handsome 1940s building that was the centerpiece of US Steel’s Good Fellow Youth Camp. Another $5 million will go toward restoring the Bailly Homestead, a site associated with a fur trader who set up a trading post in 1822 on the road from Detroit to Chicago.

e trio of restorations, all long overdue, are projects “we’ve never been able to do because we couldn’t put our hands on these kinds of resources in one shot,” Ravesloot said. e $22 million, he said, “is probably the largest investment ever made into the park’s historic structures.”

After restoration, the Good Fellow building will be used for meetings and education and may be o ered for rent as an event venue, Ravesloot said. In 2023, the park began soliciting proposals from businesses or other groups for putting the Bailly Homestead to use after its restoration.

Together, the three restorations “will let us show o the cultural resources” in a park that is “best known for our beaches,” Ravesloot said.

e national park, 40 miles from the Loop, had over 2.8 million visitors in 2022, the latest year for which gures have been released.

being lenient. But he pointed to two other factors in the big increases here.

One is the increasing incidence of damaging storms like the one on Feb. 27, when the National Weather Service said at least 11 tornadoes touched down in the Chicago area.

“Seventy percent of homeowners losses this year have been due to storms,” Wingate said.

The other factor is the age of Illinois homes compared to those in later-to-develop parts of the country, Wingate said. “An older house with an older or poorly maintained roof is more likely to suffer damage” in a powerful storm, he said.

An undated image of the house as it originally looked | WISCONSIN HISTORICAL SOCIETY

The House of Tomorrow as it looks now | JAN PARR

Ruling will keep River Forest condo site empty for longer

The parcel at Lake Street and Lathrop Avenue, where a stalled development rst proposed in 2018 has descended into a legal battle, cannot be sold until the case is resolved, a Cook County judge ruled

e site of a long-stalled condominium project in the heart of River Forest will stay that way for an unforeseeable length of time, following a judge’s ruling.

us the property, which River Forest o cials eight years ago envisioned as part of a revitalization in a core section of town, will remain idle.

e court-appointed receiver for the site at Lake Street and Lathrop Avenue cannot try to sell the property while the former developer and its lender are battling each other in a foreclosure case, Cook County Circuit Court Judge Catherine Schneider ruled March 18.

e ruling delays inde nitely any possibility of another builder taking over the site, which village o cials targeted for redevelopment in 2016. Two years later, developer Marty Paris' Sedgwick Properties got village approval to build a 30-unit condo on the site, which previously held some single-story commercial buildings and surface parking.

At the time, Paris told Crain’s that what he had in store was “a statement building for Lake Street and River Forest,” with ground- oor commercial space along Lake and four stories of covered balconies lined with balustrades. e condos would be priced from about $600,000 to $1.4 million.

Building permit revoked

But by September 2023, he had not completed the project, which had been reduced to 21 condos, and River Forest revoked his building permit. e site has stood empty, except for the small parts of construction that Paris’ rm completed, since then.

Oak Park’s Wednesday Journal newspaper reported March 13 that the court-appointed receiver, Ascend Real Estate Group in Chicago, was entertaining a $3.75 million bid for the property from Michigan Avenue RE, the best of three bidders. Schneider’s ruling e ectively shut down that deal.

Cal Denison, Ascend’s asset manager, declined to comment,

and Crain’s could not reach Michigan Avenue RE.

Ascend began marketing the property through Jones Lang LaSalle in November, but the attorneys for Sedgwick's development entity for the site, Lake Lathrop LLC, argued in court lings that the sales e ort is illegal. at's because the foreclosure case that Beverly Bank & Trust launched in May has not yet completed. Unless the foreclosure case is completed with a decision that takes the property’s title away from the developer, Lake Lathrop’s attorneys argued, Illinois foreclosure laws do not give the receiver power to sell it. Schneider’s ruling concurs.

Beverly Bank & Trust was the second lender on the condo project, after a previous source ofnancing left. In 2022, Beverly, an a liate of Wintrust, approved a $20 million line of credit, which it canceled the next year. e Bank sued Paris for return of the $4.2 million he used.

A Wintrust spokesperson, Samantha Zidek-Zvonar, said the bank would not comment.

Crain’s could not reach Paris, who is enmeshed in a divorce case that centers on his nances and recently declared bankruptcy.

With all these parts moving at once, Schneider ruled that Ascend was premature in trying to sell the dormant site. Paris’ attorneys have argued in court that they may prevail in the foreclosure, which would keep the site in its present owners’ hands.

While waiting to see if that happens, “the power to advertise and market (the property) for sale is not one that is appropriate for the receiver at this time,” Schneider wrote. “ e receiver

no longer possesses this power e ective immediately.”

Eight years after village ocials saw the site as a redevelopment opportunity, development has stalled and there's no telling when it can restart.

Matt Walsh, village administrator in River Forest, was not available for comment. In September, when o cials yanked Paris’ building permit, Jessica Spencer, assistant village administrator, said that “we are quite disappointed that this has gotten to this point, that the project has gone on this long and not much has been shown for it.”

Dennis Rodkin

The site as it looked in September. Little has changed since then. | CASSANDRA WEST

A less-than-pretty picture at the Art Institute

Sometimes there's what's legal, and then there's what's right. ey aren't always the same thing.

e latest case in point comes as the Art Institute of Chicago, one of the city's cultural gems, digs in its heels in a dispute over ownership of a drawing by Egon Schiele, an Austrian Expressionist who died during the u epidemic of 1918 at age 28 — but not before making his mark on early 20th-century art with his intense and provocative portraiture.

After conducting an investigation, the Manhattan District Attorney's O ce has successfully pressed cultural institutions and collectors to return 10 of 11 Schiele works to the heirs of Fritz Grünbaum, who was murdered in a concentration camp during World War II and whose art collection was looted by the Nazis. Ten out of 11 of the works have been returned to Grünbaum's surviving family as a result of Manhattan authorities' intervention.

e lone holdout: the Art Institute of Chicago.

e drawing in question is entitled "Russian War Prisoner," a watercolor on paper that art historians say was created along with similar works while Schiele served as a World War I prison camp guard. According to the Art Institute's records, the museum purchased the piece in 1966. Art collectors reckon this piece, like the 10 other disputed works, could be valued at $1 million to $1.5 million.

As Crain's Brandon Dupré reports, the Art Institute recently claimed victory in another, separate legal battle over the provenance of "Russian War Prisoner," this one with the heirs of the Grünbaum family. In that civil suit, the judge found that the heirs had exceeded the statute of

limitations in pursuing their claim — a ruling the Grünbaum heirs are appealing.

In that dispute as well as the one with the Manhattan district attorney, the Art Institute argues it obtained "Russian War Prisoner" legally and that more information regarding its ownership and provenance of the artwork will be in its legal response to the Manhattan District Attorney's O ce, expected in coming weeks. In a written statement to Crain's, the museum said it had done "extensive research" on the work's origins and chain of custody and is "condent" in its "lawful ownership," noting that, "If we had this work unlawfully, we would return it, but that is not the case here."

Manhattan authorities tell a di erent story, presenting in a 160-page motion various

instances where they allege the museum failed to properly vet the artwork's history.

As Patty Gerstenblith, a DePaul University law professor who specializes in cultural heritage law, put it to Crain's: e ruling in the Grünbaum case "relied on technical grounds over the passage of time and didn't answer the substantive question of who owns the painting and whether it's stolen."

By relying on technical legal arguments to back up its claims, the Art Institute is swimming upstream against a tide of change in the eld, as peer institutions review their collections and reckon with thorny issues of provenance, cultural appropriation and even outright criminality that could underlie their possession of some spectacularly valuable and signi cant works.

e Schiele stando is not the rst time the Art Institute has faced disputes over provenance. A recent investigation by Crain’s and ProPublica found that at least four pieces from the museum’s Alsdorf collection may have been looted from Nepal and exported illegally, including an inscribed gilt-copper necklace that the Nepali government wants returned.

e Alsdorf collection also contains incomplete provenance by modern standards, the report found. “While some museums have taken a more expansive approach to weeding out looted artifacts,” Crain’s and ProPublica wrote, “the Art Institute lags behind.”

As Elizabeth Campbell, director of the Center for Art Collection Ethics at the University of Denver, put it to Crain's, Art Institute o cials may sense they're teetering at the apex of a very slippery slope. “AIC’s legal proceedings seem like actions that a museum takes when it's feeling threatened and may be an e ort to protect itself from future claims for di erent pieces it possesses," she said.

By ghting to fend o claims like those from the Nepali government and the Grünbaum family, however, the Art Institute's leaders stand to lose more than a few disputed artworks. ey risk tarnishing this treasured museum's reputation as one of the foremost repositories of the world's collective expression of beauty, truth and humanity.

Chicagoans have always taken intense pride in the Art Institute; since the day it was founded in 1879, its existence has been one of the city's main claims to world-class status. Doing what's right would go a long way to ensuring Chicagoans can remain proud of one of our most vital civic assets.

New downtown stadium would o er the mayor a rare and transformative economic opportunity

Mayor Brandon Johnson and all parties interested in the Loop, including the Bears and the White Sox, should pause and look for a collaborative solution on a stadium proposal that will be mutually bene cial and good for all of Chicago.

And while the horse may be out of the barn on the casino, if at all possible, I would throw that into the mix, too.

While Chicago is not ailing in the same way as other Rust Belt cities such as Cleveland and Detroit, we can take a page from their books with respect to urban planning.

spective cities. is resulted in spin-o entertainment venues such as restaurants, nightclubs and related retail.

Business and real estate organizations in Chicago are concerned about the slow postpandemic recovery of the Loop. Only 56% of the people are returning to the o ce in Chicago post-pandemic, lagging some peer cities. e impact on commercial, retail and dining sectors is apparent, with vacant storefronts and foreclosed o ce buildings.

on a long-term basis.

What is needed is sustainability, and this can only happen with attractions that stand the test of time. It is fair to say that sports teams and stadiums that can double as entertainment venues can do this, as re ected in the success at venues such as the United Center and Wrigley Field.

While goods provided by retailers are a key component of the Loop’s economy, the internet has clearly accelerated a decline in this sector. If people did not shop online before COVID, they certainly are now.

such as entertainment, health clubs and hair salons. Today the trend has ipped with the preponderance of spending on services — one of the reasons Illinois needs to modernize its regressive tax system.

A revitalized Loop will increase the city’s sales tax take. Even better, a good share of the sales tax will be paid by suburbanites attending games and concerts.

Both cities, facing dying central business districts a couple of decades ago, worked with their professional sports teams to locate new stadiums in the heart of their re-

While well intended, the mayor’s recent infusion of more than $1.5 million in grants from the Small Business Improvement Fund to businesses in the LaSalle Street corridor is not the answer to revitalizing the Loop

Couple this with the fact that the economy has shifted from purchasing goods to personal services over the last couple of decades. Numerous economic data sources, such the Federal Reserve and the U.S. Department of Labor, have reported that in the 1970s and early ‘80s, 60% to 70% of consumer spending was concentrated in goods versus 30% to 40% for personal services,

e mayor ran on creating a more equitable balance in job creation for people who have been left out of the economy. All of these proposals can help to remedy that through the creation of jobs in construction and the entertainment sectors. If the teams think outside of the box, there will be opportunities for bringing young underemployed or unemployed people into the sports business.

Another idea being oated is converting

ANN DWYER

Michael

STADIUM

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empty o ce buildings to a ordable housing, typically de ned as serving individuals who earn 80% to 120% of the area median-family income. When I served as the mayor of Highland Park, where we created a ordable housing, this equated to $60,000 for an individual and $90,000 for a family of ve.

e conversion of o ce buildings in the Loop to housing started under former Mayor Richard M. Daley. Mayor Johnson can continue that trend with projects that may provide housing to people working in the new entertainment district — in e ect, workforce housing. Perhaps this can be part of any negotiation for public bene ts with the teams — that is, requiring the teams to build, contribute to or own a ordable workforce housing.

An analogy is an Olympic Village with housing for athletes. However, when Olympic villages shut down after the games, the facilities and housing become white elephants.

A ordable housing will have a reason to exist, given that stadiums are, to some extent, contractually obligated to remain in place for long time periods. is stems from the substantial investment made by the teams. It is hard to walk away from an investment in the hundreds of millions. Further, any public support negotiations will often require the team to be in place for a circumscribed time period, particularly if the Illinois Sports Facility Authority issues debt for the stadiums.

ere are also environmental bene ts. Chicago already has a transit system that serves the Loop. is would reduce the need for large stadium parking structures. Train service to the Ravinia Festival is a testament to how mass transit dovetails with entertainment.

People working and living in the new a ordable housing can walk to work. Businesses entertaining clients will be able to walk to games and concerts. All this cuts down on carbon emissions and reduces wear and tear on the infrastructure.

Crime prevention is also a potential bene t. Extending the activity of the Loop into the evening brings crowds. While some criminals are brazen, many are opportunistic. e latter are unlikely to commit a crime when many people — that is, witnesses — are present.

Chicago has great institutions that can assist existing city departments in creating scenarios and measuring positive or negative impacts of any proposal. For example, the Civic Federation and the Metropolitan Planning Council are independent and have no agenda other than helping Chicago prosper. Both groups date back to Progressive Era that gave rise to many positive reforms in local government. I would suggest our progressive mayor take advantage of these groups as well.

It may turn out, after study and analysis, that the aforementioned ideas are not practicable.

However, not stepping back and looking holistically at the need for a

revitalized Loop and a new stadium or stadiums may be passing up a once-in-a-lifetime opportunity for our great city.

In Highland Park, we invested in our downtown to make it inviting and walkable often after recessions. My favorite saying was, “Downtown is everybody’s neighborhood.” is holds true for the Loop, speaking not only to a sense of place, but also to its importance as an economic engine that enables the funding of critical services.

A prosperous Loop can generate resources needed to deal with many of problems near and dear to the mayor’s heart, such as homelessness, equitable service

delivery and crime.

So go for it, Mayor Johnson. is very well could be your de ning moment. Invite the parties of interest into a big tent. Along with your sta , include the teams, Loop property owners, the Illinois Sports Facility Authority, the Chicagoland Chamber of Commerce, the Commercial Club of Chicago, a ordable housing advocates and current Loop residents, to name a few stakeholders. Have your sta use the resources of the Metropolitan Planning Council and the Civic Federation. is is a great opportunity for you to lead and transform the city in a way that will bene t current and future Chicagoans.

Distressed Downers Grove of ce building up for sale

The offering will test at what price investors are willing to bet on a post-pandemic comeback for demand in the suburbs

Danny Ecker

e lender that took control of a mostly empty o ce building in Downers Grove last summer has put it up for sale, testing at what price investors are willing to bet on a comeback for severely weakened o ce demand in the suburbs.

An a liate of New York-based JPMorgan Chase has hired brokerage Cushman & Wake eld to seek a buyer for the Highland Landmark V o ce building at 3005 Highland Parkway in the western suburb, according to a marketing yer. e listing comes roughly eight months after the bank venture seized the sevenstory building from an entity controlled by Vancouver, British Columbia-based Adventus Realty Trust, DuPage County property records show.

e 251,229-square-foot building is part of a urry of distressed o ce properties in a market upended by the remote work movement and spiking interest rates hammering o ce building values over the past couple of years. Many landlords with maturing debt are underwater — meaning their properties are worth less than the debt they’re carrying — and would have to plow large amounts of new equity into their buildings to pay o their mortgages. Facing long odds of leasing up their buildings, a number have instead surrendered them to their lenders rather than chip in more capital or face a lengthy foreclosure process.

Adventus had taken out a $35.7 million mortgage on Highland Landmark V from JPMorgan Chase in 2020 and was staring down a

deadline to pay o its $28.9 million balance by November, according to an Adventus regulatory ling.

But the building is likely worth far less than that today. For-pro t college owner Adtalem Global Education, which was known as DeVry in 2009 when it leased more than 170,000 square feet in the building for its headquarters, moved its main o ce to a smaller space downtown in 2017 and is vacating the building, according to the Cushman yer. at leaves Highland Landmark V at just about 32% leased moving forward, the yer said.

With the building’s value dramatically reduced, the Adventus venture opted last year to transfer its stake in the property to its lender in lieu of foreclosure, according to DuPage County property records. at completed a dramatic loss of equity for Adventus, which bought the building in 2015 for $71.6 million, property records show.

e Cushman yer does not include an asking price for the property, and a spokeswoman for JPMorgan Chase did not respond to a request for comment.

Recent lease extension

e brokerage is highlighting why investors might consider buying the property o the discount rack. e yer plays up a recent lease expansion and extension from industrial manufacturing company Dover, which now occupies 79,801 square feet in the building on a deal that runs through the end of 2030.

e building is also among the newest o ce properties across the suburbs — having been com-

pleted in 2008 — which should give it a leasing advantage over its competition. Newer o ce properties and those that have seen major upgrades to amenities are outperforming the rest of the market as companies seek out workspace that will compel employees to gather.

A couple of miles west of Highland Landmark V, the owner of the building at 3500 Lacey Drive in Downers Grove proved the resiliency of newer buildings in 2022 when it got Health Care Service Corp. to back ll more than 133,000 square feet in the property vacated by supply chain management company Havi Group.

Cushman also points to what’s possible when a buyer can pick up a building on the cheap.

While selling at a severe discount would mean a big nancial haircut for JPMorgan Chase, it would allow the next owner to invest heavily in leasing e orts and signal to the market that it is looking to make deals at a time when many landlords are hand-

cu ed by big mortgages.

e yer cites the example of Gallagher Insurance’s former home at 2 Pierce Place in Itasca, which was sold in 2022 for a fraction of its pre-pandemic value. “ e reset basis and the market’s perception of a new ownership group that was not over-leveraged allowed for tremendous leasing activity,” Cushman said in the yer, noting 187,000 square feet of deals done at the tower over the past couple of years.

Still, it’s a di cult time to be hunting for buyers. With banks wary of lending for o ce acquisitions and the sector’s outlook murky, sales of suburban o ce properties nationwide last year fell by 55% to $38.6 billion, according to research rm MSCI Real Assets. Locally, the November sale of the Oakbrook Terrace Tower o ce building gave the market its biggest suburban o ce sale in 18 months, but the price was well below what the building was worth nearly a decade earlier.

Suburban o ce demand has

also been sluggish, pushing vacancy to a record-high 30% at the end of 2023, according to data from brokerage Jones Lang LaSalle.

Adventus has been hit hard over the past few years by that malaise, fallout from having purchased more than half a dozen suburban Chicago o ce buildings between 2013 and 2015.

Among its local pain: e company was hit with a foreclosure lawsuit in 2022 over its $24 million loan tied to the four-building Oak Brook O ce Center, and last year was hit with another foreclosure lawsuit alleging it defaulted on its nearly $115 million mortgage tied to the Riverway o ce complex in Rosemont, one of the largest examples of o ce distress ever in the Chicago suburbs.

An Adventus spokesman did not respond to a request for comment.

Cushman capital markets brokers Dan Deuter, Tom Sitz and Cody Hundertmark are marketing Highland Landmark V on behalf of JPMorgan Chase.

Motorola Solutions’ CEO riding a wave to bigger paydays

Greg Brown’s winning strategy has paid off as the company’s fortunes have improved

Motorola Solutions CEO Greg Brown could soon become the highest-paid leader of a Chicago public company, thanks to an increase in long-term incentive pay that was approved last year by the company’s board of directors.

Motorola’s stock has been soaring, reaching a new high of $347.08 on March 18 before closing at $340.03. Last year the company’s board increased the potential value of Brown’s longterm stock awards by 28%, from a target of $15.5 million to $19.8 million. He exceeded that amount

because of better-than-expected performance. Because such awards are based on the company’s future nancial and stock performance and paid out over a three-year period, the exact value of the payouts are just an educated guess at this point. But in its proxy statement, the company estimated the total

value of his cash and stock pay last year at $28.2 million, up from $21.0 million in 2022, when Brown ranked No. 5 on Crain’s list of highest-paid CEOs.

With total compensation estimated at $28.2 million — and the retirement of Exelon CEO Chris Crane, who led the most recent list — Brown could top this year’s ranking. AbbVie’s Richard Gonzalez, who was the second-highest paid CEO in 2022 behind Crane, made $25.6 million last year.

Brown, 63, has led Motorola for 16 years, through the turbulent 2011 breakup of a sprawling conglomerate that once included cellphones, wireless-networking equipment and cable boxes.

He runs the surviving Chicago-based company that’s best known for emergency radios and equipment for publicsafety dispatch centers. It has since added video-security

products and more software, increasing the company’s annual revenue 36% over the past five years to about $10 billion. Its stock price has soared 279% during the same time, outpacing a 78% gain for the S&P 500 index.

“As the (compensation) committee and the board looked ahead, they believed it to be in the best interests of our shareholders and critical to the company’s path forward to retain Mr. Brown as CEO,” the company said in its proxy statement. “In a highly competitive industry in which the need for proven leadership is critical, the committee supports Mr. Brown’s (long-term incentive) and total pay opportunities.”

Motorola acknowledged Brown’s “position is above market median” but suggested shareholder returns justify the pay package.

Motorola shareholders are asked annually to weigh in on the CEO’s pay, although the

vote is non-binding. at said, they overwhelmingly approved Brown’s pay package last year, 130.3 million to 7.3 million.

Brown’s salary stayed the same last year at $1.35 million, but his short-term cash bonus was $4.6 million, well above the target payout $3.0 million and his 2022 award of $3.3 million, according to a securities ling.

e real bump comes from stock and option grants that are tied to the company’s performance over the next three years.

Stock awards granted last year were valued at $15.3 million, up from $11.0 million in 2022. His options to purchase stock issued last year were valued $6.6 million, up from $5.2 million in 2022.

Betting on Motorola’s stock has been a winning strategy for Brown, who has made hundreds of millions over the years from long-term equity awards as the company’s fortunes have improved.

John Pletz

3005 Highland Parkway in Downers Grove | COSTAR GROUP

Greg Brown

PEOPLE ON THE

ARCHITECTURE

Project Management Advisors, Inc., Chicago

BANKING / FINANCE

American Community Bank & Trust, Oak Brook

CONSTRUCTION

Pepper Construction, Chicago

INFORMATION / DATA TECH

Wavicle Data Solutions, Oak Brook

NON-PROFIT

Leadership Greater Chicago, Chicago

Project Management Advisors, Inc. has promoted Tiffanie Schmidt to Vice President, located in Chicago. Tiffanie brings 12 years of experience and a diverse architecture background in large-scale commercial, tech of ce, healthcare, education, community and recreation projects in the U.S. Prior to joining PMA, Tiffanie managed complex and crossfunctional projects at JLL.

ARCHITECTURE / DESIGN

Wright Heerema Architects, Chicago

Wright Heerema

Architects welcomes

John Kolb, IIDA, LEED AP, Interior Design Director, and Robyn Waldman, Director of Finance & Operations, as new team members.

Both bring 30+ years of experience to WHA.

Kolb Waldman

John has a background in high-quality interior design solutions and has successfully led projects across various sectors, including commercial and multifamily. His diverse perspective will play a key role in strengthening our clients’ business performance through innovative design.

Robyn has worked domestically and internationally, responsible for onboarding newly acquired companies, assessing corporate needs, and building out structure and process. Her problem-solving and analytical skills will ensure the highest level of success at WHA.

BANKING / FINANCE

Amalgamated Bank of Chicago, Chicago

Amalgamated Bank of Chicago is proud to announce the appointment of Nick Weaver as President and Chief Operating Of cer. Nick rejoined ABOC as EVP and COO in September 2023. Previously, Nick served as ABOC’s EVP and Director of Operations as part of a 23-year track record of strong leadership in banking. Nick will be instrumental in accelerating ABOC’s growth, both internally by fostering a culture of collaboration and externally by strengthening relationships with the Bank’s valued customers.

CONSTRUCTION

Clayco, Chicago

Clayco welcomes Heath Cowan as Senior Project Director, working out of Clayco’s corporate headquarters in Chicago. Heath brings 17 years of experience with a proven construction management track record, known for driving results through creative problem-solving and versatile leadership. In his new role, Heath will oversee project teams across a variety of verticals.

Strejc Kern

American Community Bank & Trust welcomes Joe Strejc, SVP Commercial Banking, and Brian Kern, SVP Commercial Banking, to the Oak Brook commercial team. Both veteran bankers join with over 20 years of building trusted client relationships and customized nancing solutions in the Chicago area. Taking an innovative and entrepreneurial approach, Joe Strejc will work with a wide range of business/industry groups offering a client- rst attitude. Brian Kern will focus on providing comprehensive commercial banking solutions to manufacturers in a wide variety of industries, distributors and select service businesses. Serving small to midsize private companies, both Joe and Brian will contribute to the bank’s mission of creating client advocates.

CONSTRUCTION

BIG Construction, Chicago

BIG Construction is proud to announce Chris Farrington has joined our team as President and chief integrator. Chris has spent the last 20 years in Chicago’s commercial construction industry, leading some of the largest of ce, complex healthcare, and distinguished ground up projects, totaling over ve million SF. In his new role, Chris will ensure every move BIG makes is driving us towards our vision and monumental growth targets - $350M in annual revenue by the end of the decade.

CONSTRUCTION

Krusinski Construction Company, Oak Brook

Krusinski Construction Company has promoted Steve Moeller to Vice President, Preconstruction. For almost 20 years, Steve has been an integral part of our company and has elevated our business, people and reputation in an impactful way. In his new role, Steve will lead the Krusinski Preconstruction Team with his extensive operational and preconstruction planning experience while continuing to foster the strong relationships he has built as a Project Manager and Senior Project Manager.

Melesio at

Pepper Construction Group has appointed Tom Lapidus as Senior Vice President of Information Technology, overseeing all aspects of the rm’s information technology strategy, including security compliance, modernization, service management, technology innovation (including Arti cial Intelligence) and data analytics. Lapidus brings to the role more than 23 years of experience in information technology, with a focus on leveraging technology to drive ef ciency and align with business strategy.

HEALTH CARE

Erie Family Health Centers, Chicago

Nicole Kazee has been promoted to Chief Strategy and Transformation Of cer of Erie Family Health Centers. Since joining Erie in 2017, she has helped ensure the sustainability of Erie’s mission by leading the development of strategic goals, and providing oversight for managed care, marketing and communications, community engagement, and government relations. In this new role, Nicole will also lead Erie’s efforts to develop a multi-year transformation plan.

HEALTH CARE

Erie Family Health Centers, Chicago

Kellie Medious has been named Vice President of Operations after serving as Erie Family Health Centers’ Associate Vice President of Patient Access Operations and other roles since joining Erie in 2016. She is responsible for the strategic vision and direction for Erie’s business operations and supports initiatives which improve staff engagement, program development and compliance management. Kellie also drives strategy as Erie’s Diversity, Equity, Inclusion and Belonging Of cer.

HEALTH CARE

Erie Family Health Centers, Chicago

Robin Varnado has been named Chief Operating Of cer at Erie Family Health Centers. Robin brings nearly 30 years of healthcare operations leadership experience, including nearly 11 years at Erie, most recently as Associate Vice President of Operations. She will lead all major operations functions at Erie, plan and execute strategic goals, and lead all growth initiatives, including the launch of Erie’s planned new health center site at the Sankofa Village Wellness Center in West Gar eld Park.

Jim Barker has joined Wavicle Data Solutions as Director of Data Governance. In this role, he will guide the company’s data governance services to help leading organizations improve data capabilities and build well-rounded data cultures. Barker will leverage his 30+ years of data management and strategy expertise to drive value for Wavicle’s customers. Most recently, Barker led professional services in data strategy for Alation, serving as the company’s primary data governance thought leader.

INFORMATION / DATA TECH

Wavicle Data Solutions, Oak Brook

Debbie Sweet has joined Wavicle Data Solutions as Director of Data Strategy to lead data strategy services and help major organizations align people, process, and technology to meet their objectives. Bringing 25+ years of data and analytics consulting experience, Sweet is passionate about helping companies drive data literacy and build strong data and analytics programs. Previously, Sweet served as a data strategy and applied intelligence leader at Accenture, Clarity Insights, and Himformatics.

LAW FIRM

Taft Law, Chicago

Jane Hahn has joined Taft as a partner in its Mergers & Acquisitions practice. With a wealth of experience, she counsels public and private clients through complex domestic and cross-border mergers, acquisitions, and divestitures spanning diverse industries. Her experience extends beyond M&A to encompass comprehensive counsel on general corporate and nancing issues. She is recognized as a rising star, emerging lawyer, and leader in her eld for her innovative approach to meeting client goals.

LEGAL

Benesch, Chicago

Leadership Greater Chicago (LGC), the region’s premier civic leadership development organization, welcomes Daniel Cervantes, MBA as the new vice president of programs and civic engagement. In this critical role, Cervantes will create tangible experiences for LGC Fellows using the city as a classroom to inspire action for a better, more equitable Chicago Region. He will lead the creation and design of programming for both the LGC Signature Fellows Program and The Daniel Burnham Fellowship.

WEALTH MANAGEMENT

Duchossois Capital Management, Chicago

Duchossois Capital Management announced Ashley Duchossois Joyce will assume the responsibilities of Chairman effective April 1st. Ashley is Chairman of The Duchossois Family Foundation, focusing on wellness and economic opportunity for the veteran population. Additionally, she is a trustee of the University of Chicago and University of Chicago Medical Center. Ashley is a board member of the Smithsonian National Board and Chair Emeritus for Metropolitan Family Services.

WEALTH MANAGEMENT

Duchossois Capital Management, Chicago

Rich Naski has been named CEO of Duchossois Capital Management, effective April 1. Rich joined the Duchossois organization in 2016, and previously led the family of ce, which is now being combined with DCM. Before Duchossois, Rich was a partner at the law rms of Winston & Strawn LLP (Chicago, IL) and Bodman PLC (Detroit, MI). He received both his undergraduate and law degrees from the University of Michigan.  Rich succeeds Mike Flannery, who will remain a senior advisor to DCM in retirement.

WEALTH MANAGEMENT

Duchossois Capital Management, Chicago

Samuel Stucker has joined Benesch as a Partner in the rm’s Corporate & Securities Practice Group. Sam represents and advises private equity sponsors and their portfolio companies and privately held and public companies on complex transactions ranging from $10 million to $10 billion, including mergers and acquisitions, divestitures, leveraged buyouts, carve-outs, de-SPAC transactions, recapitalizations, and other investment transactions.

David Jallits, CIO of Duchossois Capital Management, has assumed responsibility for all of DCM’s investment activities, including public, private and direct investments. Previously, David led the rm’s fund allocations across public and private equities, credit and real estate. Prior to DCM, David was the CIO of a multi-family of ce and, before that, MD and Head of Global Investment Research for Cambridge Associates. David has also managed capital directly for over 25 years.

Among big U.S. cities, Chicago has maintained its housing affordability the best over the years

Since 1970, it’s gotten harder to buy a home here — but it’s also become much more dif cult in other places, new data show

Dennis Rodkin

In the half-century since Lucy Hilt started selling homes in Chicago and the south suburbs, she’s seen transformative changes in the real estate market, including interest rates that soared into the double digits in the 1980s, women entering the workforce and adding to their households’ buying power, and the shift from stacks of listings printed on paper to widespread use of the internet.

One thing that’s little changed in all that time is the a ordability of Chicago-area homes.

Of the 10 largest U.S. cities, Chicago has held onto its housing a ordability best over the past 50-plus years, according to data from RealtyHop. After publishing a state-by state look at how a ordability has changed since 1970, RealtyHop pulled city-by-city data exclusively for Crain’s.

RealtyHop found that while it’s harder to a ord homes all over the country, the a ordability factor in 2022 in Chicago was the least changed from 1970.

“It’s interesting to nd that the third-largest metro seems to have held onto a ordability when others have changed so much,” said Shane Lee, a RealtyHop data scientist.

RealtyHop measures a ord-

ability as the multiple of median household income needed to pay for the median-priced house. In Chicago, the multiple was 2.05 in 1970 and grew to 2.72 in 2022.

To be sure, it’s gotten harder to a ord a home in the Chicago area in the past ve decades — about 33% harder. But compare that to Los Angeles, where it’s gotten 245% harder in the same period. In Philadelphia, Miami and Boston, a ording a home in 2022 was more than twice as hard as in 1970.

Not for the happiest reasons

“We’re still that place where you can get more house for your money,” said Hilt, an agent with Berkshire Hathaway HomeServices agent in Downers Grove, where she works with both her daughter and her granddaughter.

“We can be happy about our a ordability when people want to buy a house,” she said. In all the big cities whose a ordability was better than Chicago’s in 1970 — Dallas, Houston, Philadelphia and Atlanta — it’s now worse than Chicago’s.

As Crain's reported in February, Chicago’s longtime housing a ordability could be used well in a rebranding of the city as it tries to recapture its appeal to employ-

ers and other economic drivers.

Even so, it’s not for the happiest reasons that our a ordability has stayed strong. Lee pinpointed two causes in particular.

One is the slackening of population growth. A rapidly growing population means fast-rising demand for homes, which can push prices up and make them less a ordable, but “in Chicago, the population boom was all before 1970,” Lee said.

In the two decades prior to 1970, the Chicago area gained 2 million people, but ve decades later, it still hasn’t added another 2 million.

In the Los Angeles metro area, 1950-1970 growth was repeated in the next three decades, a little slower than before, but far faster than in Chicago.

In Los Angeles in 1970, it took 2.22 times the median household income to a ord the median-priced house, RealtyHop reports. By 2022, it had grown to 7.64, making Los Angeles by far the least a ordable of the big cities.

Among the 10 big cities, no other has a multiple over 5. Even in the 20 largest cities there are only two others, San Francisco (6.97) and San Diego (6.49). In San Jose, a smaller metro area but big with the tech industry,

the multiple is 7.44.

ese cities are not only on the pretty, temperate West Coast but “they’ve attracted the tech industry and other jobs” over the past half-century, Lee said.

e second factor Lee pointed to is the Chicago area’s notoriously high property taxes. “People in other parts of the country don’t feel the e ect of property taxes as much as people in Chicago,” Lee said. She has no axe to grind here; she lives in New York and has only visited Chicago.

An August report by the Lincoln Institute of Land Policy showed that of the 10 big cities, only Houston has a higher e ective residential property tax rate

than Chicago, and it’s slight. In Houston, the rate was 1.56% in 2022, and in Chicago, 1.52%.

In super-expensive Los Angeles, the e ective tax rate was 1.16%, or about three-quarters the gure for Chicago.

If property taxes were lower in the Chicago area, reducing the long-term cost of ownership, Lee said, “sellers could push harder on prices and buyers would pay them.”

RealtyHop’s data for the 50 largest cities, not seen in the chart, showed that only ve U.S. cities have held onto their affordability better than Chicago since 1970. ey are Cincinnati, New Orleans, Pittsburgh, Hartford and Cleveland.

Developer proposes 500-unit apartment building in Old Town

Fern Hill is moving forward with a plan to construct a taller, slimmer tower that would be adorned with colored panels

A Chicago developer is moving ahead with its plan for a colorful, 500-unit apartment building in Old Town after slimming the tower's design and tacking on eight stories.

Fern Hill was to submit its plan to the City Council last month for a 44-story residential building along the north side of North Avenue between Wells Street and LaSalle Drive, according to a zoning application for the project. e formal proposal comes about two-and-ahalf years after Fern Hill began gathering neighborhood feedback to shape its vision for properties it owns along the eastern edge of Old Town.

Under the plan, Fern Hill would demolish a single-story Walgreens on the block and incorporate a new location for the drugstore chain into the highrise, which would be connected to a low-pro le parking garage with ground- oor retail. After rst sharing its plan publicly in

September, Fern Hill recon gured it to increase the tower's setback from Wells Street, reduce its width by 15% and make it 85 feet taller, according to a statement from the rm.

Dubbed "Old Town Canvas" as a nod to the neighborhood's artistic history, the apartment building would be adorned with a mix of colored panels meant to form a mosaic on the building's exterior with hues that change throughout the day based on sunlight.

If the City Council signs o on the project — and if Fern Hill can land construction nancing for a development it estimates would cost between $200 million and $300 million — it would tee up a prominent new residential building in one of the most a uent pockets of the city. It would also validate Fern Hill's approach to hone its project based on community feedback, a reversal from developers' typical process of proposing a building rst before gauging public response.

" roughout this multi-year

process, we have remained deeply committed to collaboration and community engagement," Fern Hill founder and President Nick Anderson said in the statement. "Our priority from the start has been to have an authentic dialogue with the community and get feedback from residents, business owners, and other stakeholders, and we’re proud to present a revised design that reects those insights."

Fern Hill launched the project concept in 2021, conveying it to area residents as a blank slate to be shaped by community input. e developer formed a partner-

ship with the Moody Church across the street and other nearby property owners to acquire so-called air rights for a highrise, a common practice that would allow Fern Hill to build a taller, more dense building on its block than what is allowed under the city's zoning code. at maneuver also would curb development around it. When property owners sell unused air rights — which allows them to capitalize on their property value while still controlling it — the size of what can be developed on the seller's property is permanently capped. Some of the development

rights would be transferred from properties Fern Hill owns next to the project site, including a former Treasure Island grocery store along Wells Street that closed in 2018 and two gas stations next to the Moody property.

Old Town Canvas would include 100 a ordable units to comply with Chicago's a ordable housing ordinance, according to the zoning application, bringing a relatively large batch of lower-cost apartments to a neighborhood with few of them.

“By increasing setbacks, reducing width, and maintaining a focus on a ordability, we're not just building structures; we're helping this great neighborhood continue to thrive inclusively and equitably," Anderson said in the statement.

Anderson, who worked at developer Related Midwest before launching Fern Hill in 2018, is betting that rampant demand for apartments in the heart of the city will continue. While downtown rents have only ticked up over the past year, a pandemic-induced slowdown of new apartment construction is on track to choke the new supply being delivered next year, which could translate into rent spikes.

Danny Ecker

This house on Newport Avenue in Portage Park sold for $300,000 in February.

| COLDWELL BANKER REAL ESTATE GROUP

An architect’s rendering of Old Town Canvas | FERN HILL

Developer John Buck’s Gold Coast co-op sells after more than $7M in price cuts

In 2019, the 23-room home on East Lake Shore Drive that overlooks Oak Street Beach was put on the market with an asking price of $11.5 million. It sold on March 15 for $4.1 million |

By Dennis Rodkin

John Buck, a prominent Chicago real estate developer, sold his East Lake Shore Drive home for about $7 million less than he originally wanted for it.

Buck and his wife, Kathleen, first put the 23-room co-op on the market in September 2019, with an asking price of $11.5 million. After bouncing on and off the market a few times and taking multiple price cuts in subsequent years, the unit went off the market in October, when the asking price was a little under $4.9 million.

On March 15, the Bucks sold the co-op for $4.1 million, or $7.4 million off their original asking price.

Michael Rosenblum, the Berkshire Hathaway HomeServices Chicago agent who represented the sellers and the buyers in the sale, said neither he nor those parties would comment.

The unit, five bedrooms and 9,600 square feet, is on the 10th and 11th floors of 199 E. Lake Shore Drive, designed by Benjamin Marshall in 1913.

Listing photos show the unit has bay windows that frame views of Oak Street Beach, some original ornamental plaster ceilings, a hanging staircase between the two levels, and terraces facing both north toward the beach and south into the Streeterville skyline. There is also a rooftop space of more than 2,000 square feet

that is unfinished.

In 1996, John Buck’s firm converted the 11-story building from apartments into a co-op building. The Bucks then personally bought this unit from the conversion firm, although Cook County records do not show what they paid.

Thus, it’s not possible to say whether their $4.1 million sale was profitable.

The Bucks’ big come-down in price is not unusual in the upper-end downtown market these days, as crime and the slow return from COVID keep a lid on demand. A Gold Coast condo that sold in January for $9.3 million started out with an asking price of $13.9 million. In June, a green-built mansion on the Gold Coast sold for $7 million, a little more than half its original asking price of $13.5 million.

John Buck is chairman and CEO of the development firm that bears his name, which he founded in 1981. The firm has built many projects in the city, including nine square blocks on and near North Michigan Avenue known as North Bridge, and in recent years, the River North apartment tower called 3Eleven, which Buck built in 2018 and sold in December. Also, in 2023, the firm paid $53 million for a West Loop surface parking lot where it plans a pair of towers with a combined 1.5 million square feet of space.

BERKSHIRE HATHAWAY HOMESERVICES CHICAGO PHOTOS

From

“ is is Miami,” Je Zalaznick says. “Right here.”

Zalaznick, scion of a prominent New York real estate family, has big plans for oh-so-hot Miami, and for all those other cities and more. He wants to build a LVMH Moet Hennessy Louis Vuitton SE of hospitality.

He’s talking a globe-spanning conglomerate of celebrity- lled restaurants, clubs, VIP events, hotels and condos akin to the Ti any-to-Dior luxury empire of French multibillionaire Bernard Arnault.

You have to wonder: Has all the money sloshing around Miami gone to this guy’s head? Restaurants are a notoriously brutal business. Even celebrity chefs like Jamie Oliver have stumbled. (Oliver’s global Jamie’s Italian chain went bust in 2019.)

“It’s a highly di cult thing to replicate ne dining,” said Aaron Allen, founder of restaurant consultancy Aaron Allen & Associates. “When you start to get multinational, as they have, there are a lot of moving pieces.”

And yet, since opening the rst Carbone in New York in 2013, Zalaznick and his partners, chefs Mario Carbone and Rich Torrisi, seem to have de ed the odds, Allen said. ey’ve transformed their pricey take on mid-century Italian-American cuisine into a global operation. e numbers are startling. Eleven cities. Forty-plus restaurants.

ere’s a Carbone in New York, Miami, Dallas, Vegas, Hong Kong, Doha and Riyadh. Each serves more or less the same menu. ey cater to A-listers (or wannabes) willing to pay up for southern Italian comfort food, like veal parmesan ($91) or the signature rigatoni ($34).   e trio’s company, Major Food Group, today is a $500 million-ayear-plus business, people familiar with the company’s nances say. (Zalaznick declined to comment on MFG’s revenue.) It’s cut deals with names like billionaire Michael Dell; Miami Dolphins owner Stephen Ross; and Miami mover Craig Robins, a local partner with none other than Arnault.

he says.

Zalaznick got this far via JPMorgan Chase & Co., where he worked a two-year stint in investment banking. He disliked the job but says it taught him some business basics. Later, he took a job at the front desk at the Mandarin Oriental in New York.

Zalaznick seems to be after the business of buzz. He wants customers to feel they’re among the privileged few who are rich enough, famous enough or simply lucky enough to step into this world. It’s a place where old-school meatballs meet new-school money.

Zalaznick calls this dance e Moves. At Carbone, the host knows your name. e head waiter plonks down at the table to review the oversized menu. e Caesar alla ZZ salad ($29) is served with bad jokes.

To Zalaznick, regulars — even billionaires — are his “boys.”

A big question, of course, is how to replicate e Moves — over and over — without reducing the whole thing to a glori ed Olive Garden. Both Carbone and Marea were stripped of their Michelin stars in 2022.

MFG’s bets haven’t always worked out. Plans to develop a luxury condo/hotel with four MFG restaurants and kitchens designed by Mario Carbone collapsed. Zalaznick says MFG still plans to develop hotels and is looking at several potential deals.

some of the deepest pockets on the planet: Saudi Arabia.

His Excellency Yasir AlRumayyan, gatekeeper for Saudi Arabia’s about $900 billion sovereign fund, has invited hundreds of people from a conference he’s hosting nearby. Guests dig into stsized meatballs in red sauce. Oysters are piled atop mountains of ice.

It’s no coincidence that AlRumayyan has picked Carbone. Zalaznick has known him since MFG opened a pop-up Carbone in Riyadh pre-pandemic. Last fall, MFG opened a full-blown Carbone, Sadelle’s and L’Ami Dave inside the Mansard Riyadh hotel.

Zalaznick is cultivating other deep pockets too. He’s helping Miami developer David Martin design a luxury condo on Biscayne Bay. Dell tapped MFG to run four restaurants at his Boca Raton Resort & Club.

Last May, with the blessing of Dolphins owner Ross, MFG built and ran the members-only Palm Club at the Miami Formula 1 Grand Prix, above the 50-yard-line-seats at Hard Rock Stadium.

Entry price: as much as $30,000.

For that, people could watch the race and watch Tom Cruise dote over Shakira and her kids and Vin Diesel chat with Queen Latifah.

“How did we do it?” Zalaznick said of the turnout. “We invited them.”

Ross also brought Zalaznick into his Hudson Yards development in Manhattan. eir project: a megabranch of ZZ’s Club, MFG’s private supper club in Miami, complete with an invitation-only club-within-the-club with a $50,000 initiation fee.

Next up: pulling a Carbone with one its Italian rivals in New York, Marea. In January, MFG announced a deal to replicate Marea beyond Manhattan.

What Zalaznick is really selling is a glimpse behind the velvet rope. Carbone’s lobster ravioli ($52) is good. Eating it next to Rihanna is better. And being so exclusive that Justin and Hailey Bieber reportedly couldn’t score a table at the original Carbone in Greenwich Village really helps.

Zalaznick, 40, moved to Miami in 2020, at the onset of the pandemic, and he can still come across as a bit of a New York snob. When he arrived, he says, there was nowhere to eat (Miami has about a dozen Michelin-starred restaurants). He says the same about other places MFG is targeting: cities light on taxes and regulation like Houston and Scottsdale and ush foreign ones like Dubai and Abu Dhabi.  “No California, no Chicago,”

Celebrity chef Wolfgang Puck says expanding so rapidly can be very risky because you can easily spread yourself too thin, imperiling the quality of the food and service that keeps customers coming back. Puck started building his empire in Los Angeles, opening Spago, which quickly became a celebrity magnet. After four decades, he’s got about 20 ne-dining restaurants from Beverly Hills to Budapest and Singapore and regularly turns downs o ers to open more.

“Opening is easy, but staying open is really hard,” Puck said in an interview. “It’s kind of like being married.”

MFG tends to nd investors to stake new spots — a normal nancing path for restaurants. But, now MFG is looking into raising capital in a big way. Zalaznick doesn’t rule out a public stock o ering.

“We are thinking about everything and looking at everything,” he said.

On this late February evening, money is seemingly no object. Carbone Miami has been rented out by

ZZ’s in Miami started out with Zalaznick’s longtime friend Robins, who co-owns the Miami Design District, a swath of ultra-luxurious shops backed by Arnault. Zalaznick had bought a $15 million mansion a few doors down from Robins and approached his neighbor about some vacant restaurant space.

“I will say that I was skeptical,” said Robins. So, the lease had a clause that Robins could evict Zalaznick if he didn’t get a minimum 100 members.

Today, ZZ’s, with its $15,000 initiation fee, has 2,000. And it just expanded to Brickell, Miami’snancial district.

“ ese are my boys,” Zalaznick said earlier, as the F1 racers roared by. “ is is where it all happens.”

— With assistance from Kate Krader and Felipe Marques.

CFO

From Page 1

three days a week with a client, is riding a wave of alternative staing solutions that has risen since the COVID-19 pandemic disrupted traditional work arrangements.

ird Road recruits workers who have held the CFO position in previous jobs. Before pairing a CFO with a client, Frank and his team work to make sure it will be a t, both in terms of expertise and culture.

“ ey have experience literally rolling up their sleeves and working with businesses that look like the ones that we work with,” Frank said. “I don’t think we would go as far as trying to put a square peg in a round hole.”

Adding a CFO can help give new companies credibility faster, said Barry Hollingsworth, adjunct

LAW FIRMS

From Page 3

daily attendance of 65%, the same as nance and the most of any profession except real estate, at 75%.

Even so, law rms don’t need as much space as they used to, said Tom Fulcher, a vice chairman at commercial broker Savills. ey typically lease 600 square feet per lawyer, or 40% less than before, a decline that predates the pandemic. Less room is needed because o ce-cluttering le cabinets and libraries lled with weighty tomes have gone the way of the scrivener. Still, there are an awful lot of law rms, and they’ve supplanted tech rms as brokers’ favorite clients.

“ ere was a time when Google was taking 1 million square feet of space. Last year it was nancial tenants looking for space,” said Ken Rapp, a vice chairman at CBRE. “Next in line is law.”

Manhattan law rms leased 3 million square feet of space last year, said Rapp, who reckoned that was the most or second-most

BEARS

From Page 3

mostly middling performance on the field and gripes that many fans are priced out of attending games.

Even so, the Bears still would have very strong demand for PSL sales, said Scot Tobias, founder of Worldwide Tickets, a New Jersey-based company that advises PSL owners on the value of their licenses. For the best seats in a new stadium, the Bears could get takers for PSLs at $100,000 apiece, he previously estimated.

Financing tales from the last five new NFL stadiums illustrate the potential gains and pitfalls of PSLs that could shape how the Bears approach such licenses, which require buyers to purchase the underlying seasonticket package each season to remain valid.

In Las Vegas, the Raiders sold PSLs for 85% of the 65,000 seats at Allegiant Stadium, which

professor of accounting andnance at DePaul University’s Kellstadt Graduate School of Business and a full-time CFO at Lifted Made, which makes hemp products.

“I think it is becoming more common because the whole landscape of smaller businesses getting money from the investment community is becoming accelerated,” Hollingsworth said. “Companies are saying, ‘How can we attract the attention of private eq-

in the last 20 years. Paul Weiss Rifkind Wharton & Garrison last year took 765,000 square feet at 1345 Sixth Ave., and also last year Davis Polk & Wardwell signed a renewal and extension for 700,000 square feet at 450 Lexington Ave.

Law rm leasing activity is robust in other cities, too. In downtown Chicago, the third-largest deal signed by any employer was the 204,000-square-foot renewal by law rm Katten Muchin Rosenman, according to Savills.

Law rm leasing volume probably will fall to about 1.5 million square feet this year in New York, Rapp said, because fewer leases are expiring. But several big rms whose leases end in three years are hunting for space because it takes about 18 months to design and build out an o ce after nding the right location.

ose on the prowl include Willkie Farr & Gallagher, whose lease for 300,000 square feet at 787 Seventh Ave. expires in 2027. So is Ropes & Gray, whose lease for 330,000 square feet at 1211 Sixth Ave, expires in 2027. Also looking for space are Goodwin Procter and

opened in 2020 as the team relocated from Oakland, Calif. Prices ranged from $500 apiece to $75,000 for the right to buy the best seats in the building, and the team reportedly pulled in $549 million toward the $1.9 billion cost to build the venue — more than double what they projected the PSLs would generate.

The Los Angeles Rams, which share SoFi Stadium in Inglewood, Calif., with the Los Angeles Chargers, had similar success generating hundreds of millions of dollars in seat license funds to help shoulder the project's $5.5 billion price tag. Buyers of its PSLs paid as much as $100,000 for the right to buy a season's worth of the priciest tickets in the venue.

It's conceivable that the Bears could charge similar prices to those two examples at a new stadium, said Patrick Ryan, co-founder of Houston-based ticket pricing strategy rm Eventellect, which has worked with many major U.S. pro sports franchises.

uity or venture capitalists if we don’t even have a CFO at this point?’

”

The part-time arrangement works best when CFOs have a specific project to focus on such as an acquisition, sale or joint venture, he added. Hollingsworth, who has held the position at four companies over the past 20 years, warned that a CFO with multiple clients might have a hard time remaining focused on each company.

The idea of a part-time CFO came to Third Road’s Frank about 10 years ago, after he helped a company cut the amount of debt it was using to finance operations after the chief financial officer had resigned. Frank formally incorporated Third Road in 2015 and began devoting himself to it full time in 2017. The company now has 16 employees, with about half of

Covington & Burling, both located in the New York Times Building on Eighth Avenue, across from the Port Authority bus terminal.

Willkie Farr said it is reviewing its options. Ropes, Goodwin, and Covington didn’t reply to a request for comment.

Attention is also being paid to Rockefeller Center. e nearly 100-year-old complex is 93% occupied, according to owner Tishman Speyer, a strong gure considering older buildings tend to be out of favor these days with prime commercial tenants and higher than 2019’s 92% occupancy rate, according to Moody’s. Law rm Baker Hostetler’s lease expires in three years and is contemplating new space, according to people familiar with the matter. Baker wouldn’t comment.

Rockefeller Center’s $1.7 billion mortgage, at a 5.6% interest rate, matures next year and lenders will want a robust occupancy rate in order to re nance the loan. KBRA Credit Pro le said in a recent report the 12-building, 6.7 million square-foot complex is “conservatively leveraged,” though net cash

e numbers could be so much higher today, in part, because the team may have drastically underpriced its initial PSLs in 2002, based on the way the market value has jumped. ose who purchased the original Soldier Field PSLs saw the market value of the licenses more than double over their rst decade, according to a 2012 Forbes report.

Pricing is key

The challenge for the Bears with a new stadium will be pricing PSLs in line with what the market will bear to avoid a rash of ticket brokers snapping them up and trying to flip them for a profit, Ryan said, but to also ensure that average fans who actually want to attend games can afford to buy them.

“The goal should be for the Bears to have a great relationship with their fans for years to come which means getting the PSLs in the hands of buyers who are actually going to attend the games and not just try to flip the indi -

them staffed out as CFOs.

Eichholz said he felt con dent in the ird Road-provided CFO, who works in A&A’s o ce one day a week, after hearing from other clients that used the company.

“I can manage, coach and call B.S. on every other single position in my company because I know it, I have done it,” Eichholz said. “ ere is nothing that can really get past me except on that CFOtype position.”

Outsourcing the CFO saved A&A about 30% when compared to hiring a full-time employee in the role and provided immediate relief to the stress Eichholz felt over that position, he said.

ird Road, which also provides accounting services, has clients in seven states. Most are familyowned businesses that have revenue between $5 million and $50 million, although the company can work with rms with revenue

ow fell by 2% on an annualized basis last year, to $165 million. Asked if he expects to re nance the mortgage at an attractive rate, Tishman Speyer CEO Rob Speyer said, “Yes. For sure.”

Others, however, are watching closely for signs of weakness.

“Rockefeller Center is the biggest re nancing in the city,” said a major law rm partner who specializes in commercial real estate deals. “Next is Worldwide Plaza.”

At the corner of Eighth Avenue at West 50th Street, Worldwide Plaza is shaping into the cautionary tale of what can happen when a building loses a big law rm. Anchor tenant Cravath Swaine & Moore is leaving in August for 2 Manhattan West, near Hudson Yards, and so far no one has leased the rm’s 600,000 square feet of space. Fitch Ratings says the Worldwide Plaza’s $1.2 billion mortgage, at a 4% interest rate, comes due in 2027 and re nancing could be di cult without a big new tenant.

One reason older buildings like Worldwide Plaza, developed in 1989, struggle to land tenants

vidual tickets for profit,” Ryan said. “This may mean leaving some money on the table, but this venue will be very profitable outside of just the Bears business as it will be a great spot to host concerts, Final Fours, and the Super Bowl.”

Other issues can arise from tying PSL pricing to a team's recent performance, as demonstrated by recently built stadiums for the San Francisco 49ers and Atlanta Falcons.

San Francisco sold out of seat licenses priced from $2,000 to $80,000 before the 2014 debut of $1.3 billion Levi's Stadium in Santa Clara, Calif., a run that occurred amid three consecutive years of making the playoffs, including a Super Bowl appearance.

But the team went the next five seasons without a winning record, and PSLs started trading on the secondary market for hundreds or even thousands of dollars less than their original prices, dealing a financial blow to

of up to $100 million.

‘Industry-agnostic’

e company is “industry-agnostic” when it comes to the businesses it supports, but has noticed concentrations in professional services, nonpro ts, manufacturing and distribution, construction, real estate, family o ce and private equity, ird Road President Ryan Kunkel said.

And ird Road-provided CFOs can always call for help if they get stuck on a problem at one of their clients.

“What is really unique is that we have an army of CFOs,” Kunkel said. “You kind of get the repower of a whole team in addition to that one individual that is supporting your organization.”

Don’t miss an opportunity network with and learn from fellow CFOs as Crain’s hosts its annual CFO Breakfast on April 17.

is their windows are smaller and columns tend to clutter hallways. That environment was all right when partner offices measured at 350 square feet. But now that they’ve shrunk to about 150 today, Fulcher said, the challenge for law firms is to provide employees a more appealing atmosphere than they can get at home. That’s why law firms want space in newer, column-free buildings with lots of windows, even if they lease less space than before.

“If you sign up for space people actually use, that’s a smart decision,” Fulcher said.

Jon Dorf, managing partner at Dorf Nelson & Zauderer, said his Westchester County-based firm looked at about two dozen possible office locations and visited six before moving into 11,000 square feet of space at 475 Fifth Ave. in December. The only trouble was he couldn’t find any takers for the law-book shelves bought when he was starting out 30 years ago.

“I literally couldn’t give them away,” Dorf said.

sellers who helped fund stadium construction.

In Atlanta, around 7,000 PSL owners simply stopped paying installments toward their purchases between 2016 and 2020, according to records from the Georgia agency that owns the $1.6 billion Mercedes-Benz Stadium. Those defaults totaled nearly $43 million owed to the Falcons, which could either go after non-payers legally or take back the PSLs and simply sell them to others — assuming they can find buyers. Original PSL prices for the stadium ranged from $500 to $45,000.

"That puts teams in a really tough spot," said Nels Popp, an associate professor in the sports administration program at the University of North Carolina, whose research focuses on ticket sales. "You need the money and, contractually, these buyers have to pay you. But do you want to be the team that sues your seasonticket holders? That's a really bad look."

John Frank (left) and Ryan Kunkel.

MCDONALD’S

calendar driven by limited-time seasonal o ers to focus on “fan truths” — a moment, memory, ritual, or behavior related to McDonald’s — and where such moments intersect with subcultures involving celebrities, music, fashion, TV and movies, childhood nostalgia and, now, anime. e goal is to use data and social listening to have fans tell McDonald’s what is interesting to them, and see where the brand may already have a connection to those interests as a way to keep up with culture and remain authentic to fans.

Tariq Hassan, McDonald’s chief marketing o cer, likened nding those intersections of trends to watching many small pots on a stove — some may be warm, simmering, or boiling. “We are looking for when they are just starting to simmer,” Hassan said in a recent interview. “Because if they have boiled over, it’s too late.”

In the past, McDonald’s was “really transaction-focused,” Hassan said, suggesting the strategy risks brands trying to “discount your way to success — and bluntly, that was not working anymore.”

Staying at the leading edge of culture is not easy for a corporate behemoth such as McDonald’s, which must satisfy varying constituencies at once, including franchisees in every corner of the country. But the 70-year-old company has no choice but to nd new ways to drive loyalty if it wants to continue to grow, suggested one expert.

“McDonald’s has an interesting challenge,” said Marina Cooley, associate professor of marketing at Emory’s Goizueta Business School.

“At one point, nine out of 10 Americans had eaten at McDonald’s at least once a year. It’s not necessarily an issue of nding new customers, it’s having them come back again and again.”

‘Camp res and reworks’

To do this, McDonald’s has started talking to subcultures with individual campaigns, rather than trying to entice the majority of consumers at once.

is marketing shift began with Travis Scott in 2020, when the brand teamed up with the rapper to promote his go-to order — a Quarter Pounder with cheese, bacon and lettuce, and fries, with BBQ sauce and a Sprite. It was rooted in the fan truth that everyone, even famous people, has a McDonald’s order. It was a huge hit — Quarter Pounder sales doubled in the rst week — and was followed by other “famous orders” e orts starring a range of celebs, including Saweetie, J Balvin and BTS. While the chain has since ended “famous orders,” the larger strategy lives on.

“Travis Scott’s meal was the moment we learned how to shift from having a conversation brand-to-fan, to having a conversation fan-to-fan,” Hassan said. “Not to give away the secret sauce, but that is the simplicity of how we approach these ideas. How do we approach these conversations as if we were sitting down at a restaurant, across from

our friends as a fan of the brand?”

Since then, McDonald’s has used fan truths as a core starting point for campaigns. Hassan credits W+K for identifying these truths.

For instance, the idea for 2022’s Cactus Plant adult Happy Meal campaign came from a big consumer reaction to a short tweet the brand made about consumers not realizing they had eaten their last Happy Meal as a kid.

e Cactus Plant Flea Market streetwear brand was founded by Cynthia Lu, whose memories of McDonald’s were tied to spending time with her friends. at association sparked the adult Happy Meal toys, which included McDonaldland characters shown with the four-eyed style used by Cactus Plant.

Last year, McDonald’s found more pop culture gold with the Grimace Birthday Meal, which includes a berry- avored purple milkshake and stemmed from the nostalgia of childhood birthdays spent at a McDonald’s Playplace.

e e ort sparked a TikTok trend of people posting videos of pretending to pass out after drinking the shake, including some suggesting the shake has the same e ects as lean or “purple drank,” a recreational drug drink. It was risky marketing territory, but McDonald’s leaned into it, however subtly, in yet another example of how the chain has taken risks that are paying o .

As for the anime campaign, “It’s too early to share any true sales metrics, but WcDonald’s is performing above the forecasting standard that we set,” Hassan said.

Tsitsopoulos called McDonald’s historical connection to anime “a gift.” Once considered a niche interest, anime has become a broad and beloved genre, with celebrities such as Megan ee Stallion, John Cena and Megan Fox sharing their love for certain shows.

Finding fan truths

As it keeps its eye out for the next bubbling trend to jump on, McDonald’s is getting advice from the outside. For instance, in May 2023, Hassan brought in Marcus Collins, the former head of strategy at W+K New York, to be McDonald’s “professor in residence” to help the chain get comfortable internally with engaging in culture, and understanding how to connect with fans through cultural artifacts, language and behaviors. Collins is an

assistant professor of marketing at the University of Michigan’s Stephen M. Ross School of Business, and the author of “For the Culture,” a book about how powerful cultural norms are when it comes to human behaviors.

“If you think about customers on a bell curve, most marketers are focusing on the middle — the largest population,” Collins said. “ ose people are less likely to try new things. But folks to the left or right of that, those subcultures are more receptive. And if you authentically show up there, those mega-fans go preach the gospel to others, and there is more credence from those people than any brand could ever have.

“It’s like camp res and reworks,” he continued. “ e reworks are for everyone to see. A campaign that speaks to a certain set of fans, that’s a camp re where we can bring them together.”

Finding these smaller fan bases is why McDonald’s partnered with Cactus Plant Flea Market over larger streetwear brands such as Supreme, and Travis Scott over Jay-Z, he said.

“People would see that and say that Jay-Z just got a fat check,” Collins said. “But Travis Scott had receipts of him already being a McDonald’s fan.”

W+K and McDonald’s are constantly on the lookout for where fan truths overlap with a subculture, but nding the next subculture is a mix of art and science. McDonald’s has access to plenty of consumer data — 150 million global consumers are signed up for its loyalty program and it also gets third-party delivery data and leans heavily on social listening. But when it comes to deciding which subculture to lean into next, W+K and McDonald’s say they don’t have a speci c benchmark. But there is one important guiding principle: Tsitsopoulos says that data has to show that a trend must be relevant in 12 to 18 months, which is how long the campaign planning process can take.

“It has to survive that long lead time,” Tsitsopoulos said. “We want to make sure it will still be on the rise and not just a fad.”

He points to NFTs as a subculture idea that did not have the needed staying power. McDonald’s, like dozens of other brands, dabbled in the digital collectibles, releasing a McRib NFT. But there were too many unknowns with NFTs, nor did they seem tied to a fan truth.

“ ey were not so embedded in culture that we thought they would be there 18 months out,” he said. Indeed, the NFT hype faded almost as fast as it began.

For other brands looking to take a page out of McDonald’s playbook, Collins encourages them to nd their own fan truths. He points to KFC’s Jack Harlow partnership, or White Castle’s Fat Joe sliders as similar executions to McDonald’s Travis Scott meal, but not the same strategy.

“Find out what is true about you. How do your customers see the world?” Collins said. “And where do you intersect with those beliefs or artifacts?”

e goal is to authentically

connect with fan groups, and hopefully bring in new customers. But Emory’s Cooley noted that being “cool” is also a way to make McDonald’s more approachable and combat the negative connotations consumers can have of a giant, global corporation.

“McDonald’s is a goliath,” Cooley said. “They have to make that work for them.” She pointed to the chain’s “As Featured In” campaign, which ran last year and played off of the many TV shows, movies and songs that have also referenced McDonald’s, including “Seinfeld” and “Space Jam.”

“ at is a goliath thing to be that big in culture, but they spin it as a positive part of culture,” Cooley said.

New sauces over sneakers

McDonald’s marketing shift was in part driven by the pandemic, Hassan said. At the height of COVID, the chain slimmed down its menu to avoid supply chain issues. Even now, McDonald’s will often give existing items new packaging or make smaller menu upgrades, rather than introducing wholesale menu changes. One example: adding sauces to liven things up.

e Travis Scott meal included BBQ sauce, as did the Saweetie meal, which also came with Sweet ‘N Sour sauce, and was renamed “Saweetie ‘N Sour” sauce in honor of the rapper. BTS’s meal featured sweet chili and cajun sauces. In 2022, McDonald’s brought back its Szechuan sauce for app users. Last year, it rolled out a Sweet and Spicy Jam sauce and a Mambo sauce inspired by the Washington, D.C., area. e WcDonald’s campaign features a savory chili sauce.

“A new sauce is an easy way to squeeze relevance out of existing menu items,” said Adam Chandler, journalist and author of the book “Drive- ru Dreams.” “Fans want to try the new sauce, but it’s an easy sell to franchisees, who don’t have to teach employees something new or buy a new piece of equipment.”

But despite its menu and marketing wins, McDonald’s is still dealing with headwinds that are a ecting other fast feeders, including higher labor and food costs. McDonald’s U.S. comparable sales were up 4.3% in the fourth quarter, down from a 10% jump in the same period in 2022. McDonald’s CEO Chris Kempczinski told analysts that McDonald’s saw fewer consumers who make under $45,000 a year because eating at home was more a ordable.

at consumer belt-tightening makes McDonald’s culture plays all the more important, Cooley suggested. “Sharing that you are trying the new McDonald’s item, you aren’t just buying the food, you’re getting some cultural capital,” she said. “While younger consumers might have lower socio-economic means, when we talk about social currency, McD onald’s is a more approachable treat than the $180 sneaker drop.” Erika Wheless writes for Crain’s sister site Ad Age.

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The McRib NFT was released in 2021.

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