DAN MCGRATH: Will the Sox displace the Cubs as Chicago’s baseball team? PAGE 2
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Consumer lenders scare Wall Street
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Investors worry that rising inflation means fewer people will be paying their credit card bills on time BY STEVE DANIELS
WORKPLACE MENTAL HEALTH
CRISIS POINT The pandemic put a spotlight on mental well-being. Now employers are being pushed to address an emergency before it gets worse. | PAGE 13 FIND THE COMPLETE SERIES ONLINE
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The Lincoln library and Lincoln foundation are going their separate ways after reconciliation efforts fail BY STEVE JOHNSON Springfield’s Abraham Lincoln Presidential Library & Museum and the foundation that helped get it built and supported it are now a house divided, one whose failure to stand is rooted partly in the infamous stovepipe hat that the foundation bought for the library. Renamed the Lincoln Presidential Foundation—no more “Library” in the title—the fundraising group said March 7 that it has a new mission: to support other venues related to the 16th
Abraham Lincoln’s stovepipe hat of questioned authenticity at the Abraham Lincoln Presidential Library & Museum in Springfield.
JOE CAHILL
TECH TAKEAWAY
It’s time to stop selling cookies and ketchup in Russia.
This exec has been a cop and a Miss USA contestant.
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Even Honest Abe couldn’t heal this rift
See LINCOLN on Page 36
NEWSPAPER l VOL. 45, NO. 14 l COPYRIGHT 2022 CRAIN COMMUNICATIONS INC. l ALL RIGHTS RESERVED
See DISCOVER on Page 39
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DAVID JUNKIN
When Russia invaded Ukraine in late February, a sunny outlook for consumer spending and borrowing suddenly turned cloudy. The war sent prices of gasoline and other necessities soaring, sparking concern on Wall Street over the short-term prospects of local consumer lenders including Riverwoods-based credit card issuer Discover Financial Services and Chicago-based online subprime lender Enova International.
Since Feb. 25, the day after Russia’s assault began, Discover and Enova’s stock prices have fallen 11.1% and 7.8%, respectively. Both stocks were stable before then. Investors don’t worry as much about banks that cater mainly to businesses, likely because companies are experiencing little trouble passing along their higher costs to consumers. The KBW Regional Bank Index is down 6.9% in that period. It’s down less than 3%
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2 APRIL 4, 2022 • CRAIN’S CHICAGO BUSINESS
TIFs are too important to fade away anytime soon
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TIFs are a boon, a boondoggle or something of both. The latest round is being fought in Springfield, where it’s state Sen. Ann Gillespie, D-Arlington Heights, and a couple of allies vs. the Illinois Municipal League. So far, the munis are winning, but the fight continues. Gillespie says her constituents have had it with TIF. Sounding much like the Chicago Teachers Union did when it buffaloed then-Mayor Rahm Emanuel into banning new TIF projects downtown, she says that cities which use TIF BOON, BOONDOGGLE OR SOMETHING too often operate in the dark, exploit loose wordOF BOTH? THE DEBATE CONTINUES. ing in the law, and deprive school districts and other agencies of their fair share of taxes. money usually coming from what Her constituents “think that TIFs amounts to a hidden property tax are black holes,” Gillespie declared hike on everybody else. in a phone interview. The state law Though it has and should receive authorizing TIFs “just isn’t working lots of attention—TIF districts collected $1.5 billion in Cook County in the way it was intended to.” Under current law, Chicago 2020, the last year for which figures are available, amounting 11.6% of all or another burg can declare a property tax collections—the debate neighborhood blighted under some never seems to change over whether loosely defined rules and for the oliticians come and go. Political parties rise and fall. Once-dominant ideologies fade, only to stage a revival a generation or two down the road. Yet, one thing remains constant in the world of Chicago politics and government: the TIF wars. TIF, of course, stands for tax-increment financing, a way to subsidize development and hopefully grow the tax base by throwing money into certain projects selected by City Hall, with the
next 23 years use any increase in property tax income from those areas strictly on developer subsidies, public works projects and other work in that neighborhood. Gillespie’s proposal would add some specifics to “blight,” for instance, requiring that a certain percentage of residents receive food stamps or be below the poverty line for their neighborhood to qualify as blighted. She’d also require that officials from other local governments, like schools, have to sign off on a TIF district before it could be created, with appeals going to the Illinois Department of Revenue. Illinois Municipal League Executive Director Brad Cole likens the latter to putting the fox in charge of the hen house, since the schools never want to lose money to anyone but don’t have the economic development responsibility that cities and villages do. Having beaten back a previous effort by Gillespie to shorten the life of TIF districts from 23 years to 10 years, he says most lawmakers long ago have conclud-
GREG HINZ ON POLITICS
ed it would be better to leave the situation alone. In reality, who’s right varies case by case. For instance, when Chicago created the largest TIF district in the state, the one being used to rebuild the Chicago Transit Authority’s Red Line north, every pro-CTU alderman voted in support. But rules of that district were carefully written to exclude schools and guarantee that they’d get their normal share of tax receipts. Another example: A new plan drafted by the Urban Land Institute to revive and reorient the outmoded LaSalle Street financial district says that one of the best ways to come up with money needed in a neighborhood critical to Chicago’s overall health is—guess what—TIF. It wants
to lift Emanuel’s ban on downtown TIF spending, asserting that the ban itself is outmoded. On the other hand, the problem with too many TIF districts is that their budgets operate pretty much in isolation, with little scrutiny, rather than having to compete with all the other needs at budget time. Fix that and you might fix much that’s wrong with TIF. Though Cole says the battle is over for awhile, Gillespie is hoping to graft her proposal onto some bigger package in the remaining days of the Legislature’s spring session. If that doesn’t happen, there’s always the fall veto session, she adds. C’est la guerre. TIF is too important and too controversial to fade away as a political issue in Illinois anytime soon.
Will the Sox become Chicago’s baseball team?
I
aspirants. “The Chicago Cubs: Better than 2012!” Now there’s a marketing slogan. But the sun will be shining, the beer will be cold and the stands will be pretty much filled, no matter who’s playing. (And some of those beer-drinking sun worshippers won’t know who’s playing.) Then there’s their poor cousins to the south, the White Sox. Two straight postseason appearances, although COVID-influenced 2020 was a 60-game aberration. A credible major leaguer at every position, including some dynamic young talent. The best and most exciting player in the city at shortstop. A certified baseball genius in the dugout. Yep. Simply laughable was the knee-jerk braying that greeted Tony La Russa’s hiring last year and intensified after a misinterpreted new rule stung him in an early-season game. Out of touch. Simply too old. Then, according to one THE SOUTH SIDE PRODUCT WILL BE portly savant, he “took the bat out of Danny FAR SUPERIOR THIS YEAR. Mendick’s hands” by calling for a bunt that didn’t work because the batter or stuck at Murphy’s, because couldn’t get the bunt down. they weren’t in the ballpark. Bunts, of course, are verboten As we know, Javy Baez, Kris in the age of analytics. Hardly Bryant and Kyle Schwarber anyone bunts anymore, almost would join Rizzo through the nobody can and this failure draft; Jake Arrieta, Kyle Henwas further proof that the game dricks and Aroldis Chapman had passed La Russa by. Ninearrived in trades; Dexter Fowler, ty-three wins and a division title Jon Lester and Jason Heyward later . . . signed on as free agents; and Joe “Taking the bat out of Danny Maddon was lured out of Tampa. Mendick’s hands” . . . move over, By 2016, the Cubs—the Cubs!— Pete Rose and Shoeless Joe. It’s were World Series champions. enough to get you banned. Man, that seems like a long I go back to Oakland with La time ago. And it’s going to seem Russa. I’ve never seen a man longer still after we get a few more consumed by the game, weeks of a 2022 lineup dominatmore attuned to the clubhouse ed by prospects, retreads and 4A n 2012, Year One of a scorched-earth rebuild, the Cubs finished 61-101, 36 games out of first place and fifth in the National League Central. They avoided last place only because the Houston Astros, in their final season of National League members hip, were even more committed to tanking. Alfonso Soriano was still around, joined in the outfield by Tony Campana and David DeJesus. Luis Valbuena, Starlin Castro, Darwin Barney and Bryan LaHair manned the infield and LaHair made the All-Star team as a first baseman, though Anthony Rizzo’s arrival rendered him obsolete; he batted .213 with three home runs and 12 RBIs after his one shining moment and was out of baseball by November. The attendance was announced as 2,882,756, though some of those late-season 30,000 crowds either got stuck in traffic
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vibe or more on top of things on a daily basis as a season unfolds. And he’s not some cranky, old “back in my day” codger. He adapts. The Kendall Graveman/ Joe Kelly signings are an acknowledgement that bullpen arms have become the coin of the realm in today’s game, like it or not. Age notwithstanding, La Russa is much more of an asset than a liability. Now if he could only transform Guaranteed Rate Field into Wrigley . . . No need. In its third iteration since replacing its crumbling
DAN McGRATH
ON THE BUSINESS OF SPORTS forebear, the ball mall has become a decent facility. It’s not Wrigley, but it’s a perfectly acceptable place to watch a ballgame. Besides, what happens on the field is what matters most. Discerning baseball fans know that the South Side product will be
far superior this year, and for the next few years at least. We’d be wise to pay attention. Crain’s contributing columnist Dan McGrath is president of Leo High School in Chicago and a former Chicago Tribune sports editor.
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CRAIN’S CHICAGO BUSINESS • APRIL 4, 2022 3
JOE CAHILL ON BUSINESS
No more cookies or ketchup for Russia
TODD WINTERS
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Greystar is developing a 236-unit building at 166 N. Aberdeen St. that will open next year.
Housing boom looms for city’s hottest neighborhood Developers plan 9,065 apartments in the West Loop, more than the total planned for all other downtown neighborhoods combined I BY ALBY GALLUN
A
partment developers just can’t get enough of the West Loop. They’re piling into the neighborhood, supercharging a growth spurt that began with the arrival of Google and other businesses several years ago. One number tells the story: 9,065. That’s how many apartments are currently planned for the West Loop, more than the total for all other downtown neighborhoods combined, according to Integra Realty Resources, an appraisal and consulting firm. “It’s a pretty staggering amount,” says Matt Letourneau, president of Neighbors of West Loop, a residents group. “We often ask questions about whether there are enough tenants” to fill all those apartments. Developers think so, especially in the Fulton Market District, a See APARTMENTS on Page 37
“PEOPLE ARE GOING TO BE MORE VOCAL AND NOT WANT THEIR VIEWS BLOCKED. THEY’LL FIGHT THE DENSITY AND FIGHT THE TRAFFIC AND ALL THAT OTHER STUFF.” Ron DeVries, Integra Realty Resources
Aid organizations prep for surge of Ukrainian refugees Resettlement agencies are awaiting placements, funding and other key details for thousands of Ukrainians expected to come to Illinois BY ELYSSA CHERNEY Refugee aid organizations in Chicago, still rebuilding from funding cuts during the Trump administration, are trying to staff up and raise private money as they brace for an influx of Ukrainian families relocating to the city. Advocates expect that Chicago could see thousands of Ukrainians arriving here under President Joe Biden’s recent pledge to allow up to 100,000 refugees into the U.S. Since the city and suburbs are already home to a large
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Ukrainian community, it’s likely that many will come to reunite with relatives living in the area or be placed here by the State Department. Melineh Kano, executive director of RefugeeOne, the city’s largest resettlement agency, said her organization will rely on a mix of federal funding and private donations to serve displaced Ukrainians. As of now, RefugeeOne employs 65 people and lost as many as 25% of its employees when the last administration slowed resettlements to
historically low levels, crippling budgets, Kano said. “We do have one Ukrainian staff person, but she is there to serve non-Ukrainians as well, so once the flow of Ukrainians starts, we obviously need more Ukrainian-speaking staff members,” Kano said. According to the U.N. Refugee Agency, 3.9 million Ukrainians have fled the country since Russia invaded Ukraine and began bombings in late February, with See REFUGEES on Page 39
ould you survive without Oreos? How about Heinz ketchup? I haven’t tasted either in quite a while, and I feel fine. But I’m getting the impression that Chicago-based packaged-food giants Mondelez International and Kraft Heinz consider these products essential to sustaining human life. They haven’t said so directly, much less produced any health research showing that people can’t live without snacks and condiments. Yet their response to Russia’s invasion of Ukraine suggests a belief that such items are indispensable necessities of life. Mondelez, for example, issued a statement condemning “unjust aggression” in Ukraine (without naming the aggressor) and announcing plans to scale back “all non-essential activities in Russia while helping maintain continuity of the food supply during the challenging times ahead.” Notably absent from the statement was any indication that Mondelez would stop producing and selling Oreo cookies, Milka chocolates and other treats in Russia. Apparently they’re “essential.” Kraft Heinz’s statement leaves a similar impression. The company said it’s suspending new investments in Russia, as well as imports and exports there. Again, no indication that Kraft Heinz will stop making and selling ketchup, mayonnaise, sauces and baby food in Russia. Some companies, such as Chicago-based McDonald’s, have gone further, suspending all Russian operations. Others, including several packaged-food makers, are continuing to sell some products there on humanitarian grounds. That approach is credible only if the items in question are lifesaving drugs, medical equipment or basic foodstuffs Russia can’t provide for itself. I’ll give Kraft Heinz a pass on baby food, too. But cookies and ketchup? Come on. Nobody would die if Mondelez and Kraft Heinz pulled those items from Russian grocery stores. Nor would it break either company financially. Russian sales account for less than 4% of revenue at Mondelez and less than 1% at Kraft Heinz. McDonald’s, by contrast, gave up 9% of revenue when it closed outlets in Russia and Ukraine. Yes, there’s an argument to be made that pulling out of Russia altogether would be a futile gesture, hurting the companies, their customers and employees without influencing govern-
ment policy. But when a state deliberately targets civilians in a war of aggression, fundamental morality demands disengagement. Failure to do so suggests a corporate value system that prioritizes profits over the lives of innocent Ukrainians. Continuing to do business in Russia is more than a case of moral blindness. It also helps Putin. For one thing, companies that make and sell products in Putin’s country pay taxes that support his war machine. They help keep Russia’s economy ticking, which is essential to the dictator’s ability to maintain power and make war. Perhaps more important is the message Mondelez and Kraft Heinz are sending to the Russian people. Their continued presence contributes to a sense of normalcy among the population while Putin commits crimes against humanity in a neighboring country. Don’t underestimate the symbolic power of mass-market global brands. When Russians got access to Western brands for the first time in the 1990s, they lined up for McDonald’s, Levi’s and Cokes. Their enthusiasm was about more than burgers, jeans and soda. Russians reveled in the feeling that their country was joining a broader global community where life would be better. As long as major consumer brands are still available to ordinary Russians, they have one less reason to question the lies Putin is feeding them about his murderous campaign in Ukraine. But if they start seeing empty shelf space or unfamiliar products where those brands used to be, they may start to wonder. At the very least, they’ll feel another direct effect of a war that has already triggered punishing sanctions that make daily life in Russia more difficult. As brands disappear, it will be increasingly clear to Russians that their country has been excluded from a global economic system they’ve come to rely on. And that’s as it should be. Countries that intentionally bomb apartment buildings, schools and hospitals shouldn’t enjoy the fruits of global commerce. If these moral imperatives aren’t enough to convince Mondelez and Kraft Heinz to pull out of Russia, they should consider the reputational risks of doing business with Putin. Proximity to the perpetrator of atrocities televised around the world will become increasingly toxic to their brands as the war drags on and death tolls climb. At some point, the damage could become irreparable.
4/1/22 3:44 PM
4 APRIL 4, 2022 • CRAIN’S CHICAGO BUSINESS
David Kaplan to host new show on NBC Sports Chicago After a 20-month hiatus, ‘Unfiltered with David Kaplan’ will mark a return to nightly TV for him
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avid Kaplan, a preeminent voice of sports in Chicago, is about to host a new Monday-throughFriday sports talk show on NBC Sports Chicago. Starting April 4 “Unfiltered with David Kaplan” will air at 6 p.m. weeknights. After a 20-month hiatus, it will mark a return to nightly TV for Kaplan, Robert Feder who hosted “Sports Talk Live” on the regional sports network for more than 16 years. “I am so excited to be back doing a daily TV show and having such a great opportunity to highlight all of the stories that make Chicago the best sports city in America,” Kaplan told me last week.
On the new 30-minute show, Kaplan “will bring the entertainment to sports talk with his honest take on all teams . . . (and) dive into trending sports topics, pop culture and candid conversations with players, coaches and insiders,” according to the network. The show, sponsored by PointsBet, also will feature a daily segment on sports gambling. “Kaplan not only lives, eats, sleeps and breathes sports, but he’s also wildly entertaining,” John Schippman, vice president of sports content at NBCUniversal Local Chicago, said in a statement. “This high-energy show will be for every type
of Chicago fan and we’re excited to blend sports and entertainment.” On nights when its broadcast is pre-empted by a live game or pre/post coverage, the show will continue to be available on NBC Sports Chicago’s livestream. Kaplan hosted “Sports Talk Live” for more than 16 years before it was cut in August 2020 as part of companywide reductions at NBCUniversal Owned Television Stations. He segued to host its “Football Aftershow” wrap-up program. The Skokie native and 2021 Chicagoland Sports Hall of Famer continues to co-host mornings from 7 to 10 a.m. weekdays with Jonathan Hood on Good Karma Brands ESPN sports/talk WMVP 1000-AM.
David Kaplan Robert Feder has been covering the media beat in his hometown since 1980. His column is published in Crain’s under an agreement with the Daily Herald.
Chicago investor in megadeal for Wacker Drive tower
N T R H
Tim Callahan is returning to the market with a sale that values skyscraper at more than $1B Veteran Chicago real estate investor Tim Callahan has returned to the downtown office market in a big way, partnering with a New York firm to buy the 55-story tower at 110 N. Wacker Drive in a deal that values the skyscraper at more than $1 billion. In one of the biggest transactions on record for a Chicago office building, a joint venture of Callahan Capital Partners and Oak Hill Advisors paid $210 million on March 30 to acquire the controlling equity stake in the building from Houston-based developer Howard Hughes, the seller said in a statement. It’s the second-highest valuation for a Chicago office building, behind only Willis Tower’s $1.3 billion sale in 2015. The Wall Street Journal first reported in late December that New York-based Oak Hill had a deal in the works for the property, but Callahan, who has been a prominent name in Chicago real estate for the past 25 years, had not previously been reported as part of the venture. It’s a big re-entry to the Chicago office market for the 71-year-old, whose real estate investment firm sold off its stake in a handful of downtown office buildings in 2018. Callahan, who was CEO at Sam Zell’s Equity Office Properties Trust from 1996 to 2002 and subsequently ran Trizec Properties before starting his own firm in 2007, has purchased the tallest office skyscraper built in Chicago in three decades at a precarious time for the downtown office market, with COVID-19 clouding the
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COSTAR GROUP
BY DANNY ECKER
The 1.5 million-square-foot tower at 110 N. Wacker Drive, which opened in late 2020, is more than 82% leased with long-term tenants. future of demand for workspace. “110 North Wacker is the most prestigious address in Chicago, and we are thrilled to be re-entering the office market with this purchase,” Callahan said in a statement. “The last few years have changed tenant expectations of what an office should be. Our plan is to achieve a new standard with service, amenities and exclusive offerings that you would experience at the finest hotels.”
TENANTS
Working in Callahan’s favor is that the 1.5 million-square-foot tower, which opened in late 2020, is more than 82% leased with long-term tenants. Bank of America is the anchor with more than 500,000 square feet and lends its name to the tower, and a series of law firms have leased space in the building, including Jones Day, Morgan Lewis & Bockius, Perkins Coie, King & Spaulding and Cooley. CBRE will lead leasing and management at the building, according to Callahan’s statement. Howard Hughes, which co-developed the tower with Chicago-based Riverside
Investment & Development, touted the big windfall it is generating through the sale. The company said in its statement that it owned 90% of the venture that developed the property and “realized net proceeds of approximately $169 million over the fouryear development timeline.” Howard Hughes had been looking to sell its stake in the building since late 2019, when it announced a broader plan to sell off $2 billion of “non-core” assets. The company said at the time that the tower would cost around $722 million to build, and its joint venture with Riverside increased its construction loan to $558 million. The company also projected at the time that the building’s estimated stabilized net operating income would be about $14.4 million and that it expected an 8% yield on the cost of the building. Howard Hughes, which was spun out of mall owner General Growth Properties in 2010, paid $12.3 million in 2014 for the 43,000-square-foot parcel of land beneath what was then a squat General Growth building at 110 N. Wacker. It described
plans at the time to redevelop the property, but first had to resolve a dispute with its joint venture partner in the land acquisition before teaming with Riverside to propose the current tower. Callahan has had a high-profile Chicago office tower on his hands before. One of his early moves at Trizec was to sell the firm’s stake in then-Sears Tower to MetLife in 2003, a move aimed at relieving a massive debt burden associated with the property on the way to a major turnaround of the company. His Trizec tenure ended in 2006, when the company was sold to private-equity giant Blackstone— now the owner of Willis Tower—for $8.9 billion. Callahan then set out with former Trizec executives on his own venture in 2007 and began acquiring properties, most notably a handful in Chicago in a joint venture with Canadian investor Ivanhoé Cambridge. Callahan Capital Partners sold its Chicago assets, including interests in the buildings at 10 and 120 S. Riverside Plaza, 125 S. Wacker and 515 N. State St., to Ivanhoé in 2018.
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6 APRIL 4, 2022 • CRAIN’S CHICAGO BUSINESS
TECH TAKEAWAY
Karen Bartuch
Perpetual Client Focus.
Bartuch, 45, who was a Chicago police officer for nine years, is now vice president of brand marketing for Chicago’s SpotHero, a reservation service for parking spots in garages and lots. The company has parked over 40 million cars to date, and this year is approaching $1 billion in parking sold. Bartuch lives in Edison Park with her 16-year-old daughter. I By Laura Bianchi
>
Named a Crain’s 2021 “Notable Rising Star in Law,” Simone Randolph is an indispensable adviser to institutional lenders and corporate real estate companies. She has closed over $1 billion in multifamily, industrial, retail and office real estate transactions and commercial asset financings over the last three years, and clients rely on her pragmatic and agile counsel.
How did you become a police officer? I studied psychology at Northwestern and sold pharmaceutical (products) for a few years, but it wasn’t a good fit. I saw my brothers (one a police officer and one a firefighter) helping people and loving it, so I followed them.
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We invite you to learn how our innovative approach to service delivery aligns with your business goals.
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Your assignments? The gangs and narcotics teams. Later, I became policy and communications adviser for former Chicago Police Superintendent Jody Weiss.
Scariest day on the job? My sergeant and I responded one Friday night to an active shooter behind a huge apartment complex. A man, with a Bible in one hand and pockets full of ammo, fired bullets at all the responders for an hour.
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Chicago Simone.Randolph@ ThompsonHine.com
What happened? SWAT arrived and killed him, but not before one of them took some rounds in his vest.
> Why did you return to corporate? I wanted to move up and lead people, but during my nine years, CPD never offered me a promotional exam. The city was financially strapped.
>
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Any tattoos? I have Joan of Arc in full color across my back. Her warrior spirit resonated with me. I prided myself on being the tip of the spear, taking arrows for others.
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T H I RT Y - T W O F I N E LY A P P O I N T E D H O M E S
How does that play out at SpotHero? I’m the mama bear, fighting for my team. I protect them. I like taking risks and challenging my team to do the same, too.
> Embarrassing moment? I was introducing someone at a big CPD event, and I forgot his name and my name. My sergeant walked me off the stage, and I signed up for Toastmasters.
> Your favorite book? “You Are a Badass” by Jen Sincero. It’s about positive mindset. I read it six times a year or more.
TH EO RCH AR DLI N COLN PA R K.COM ©2021 Jameson Sotheby's International Realty. All rights reserved. Sotheby’s International Realty® and the Sotheby’s International Realty Logo are service marks licensed to Sotheby’s International Realty Affiliates LLC and used with permission. Jameson Sotheby's International Realty fully supports the principles of the Fair Housing Act and the Equal Opportunity Act. Each office is independently owned and operated. Any services or products provided by independently owned and operated franchisees are not provided by, affiliated with or related to Sotheby’s International Realty Affiliates LLC nor any of its affiliated companies.
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O N LY A F E W R E S I D E N C E S R E M A I N
What would surprise people about you? I competed in beauty pageants, like the local Miss USA competition. I was terrible. Awful.
4/1/22 3:09 PM
CRAIN’S CHICAGO BUSINESS • APRIL 4, 2022 7
Late fees help drive record profit at Peoples Gas Chicago’s natural gas utility posted a record $205 million in net income last year as rates continue to climb to cover what critics call runaway infrastructure spending BY STEVE DANIELS Peoples Gas generated more than $200 million in net income last year—well over double what the Chicago utility routinely was earning as recently as six years before— thanks to a state law that opened the door to runaway capital spending on infrastructure. Another contributing factor to the banner year for Peoples: record revenue from late-payment fees, charged to Chicagoans struggling to pay soaring heating bills. The $205 million in earnings, a 10% increase from 2020, enabled Peoples to pay $180 million in dividends—another record—to its Milwaukee-based parent, WEC Energy Group, according to Peoples’ annual report, disclosed March 31. WEC Energy in January raised its shareholder dividend by more than 7% for the third straight year. Late payment fees in 2021 totaled $29 million, up more than 80% from $16 million in 2020 when Peoples (like other Illinois utilities) weren’t allowed to ding customers for late payments for much of the year. But the $29 million also was 16% higher than the $25 million Peoples collected in 2019, before the pandemic. State law permits Peoples and other large gas utilities in Illinois to impose a monthly surcharge covering cost plus profit tied to most of its infrastructure work. The surcharge has grown in recent years to account for more than 10% of the revenues the utility collects. In 2021, surcharge revenue totaled $164 million, up 19% from $138 million in 2020, according to filings with the Illinois Commerce Commission.
And why should it? Under state law, Peoples, along with other utilities, bears next to no risk from customers unable to pay their bills. The charges of past-due bills the utility writes off as uncollectible merely are passed along to ratepayers. “The rise in late payment charges since 2019 is a result of economic challenges during the pandemic and the extended Covid-19 moratorium,” Peoples Gas spokesman David Schwartz says in an email.
“While disconnection is always a last resort, communicating that as a possibility prompts customers to reach out to us and access the financial help that is available and stay connected, which in turn reduces late payment charges. . . .Our policy about them has not changed because of CEJA, or at all.” The infrastructure program— dubbed the System Modernization Project—has gone more slowly and been far more costly than Peo-
ples projected when then-Gov. Pat Quinn signed the law effectively allowing yearly rate hikes with only after-the-fact review by regulators.
UNION OPPOSITION
Efforts to address what has turned into a heating affordability crisis in Chicago have run into staunch opposition from trade unions benefiting from the work. Pritzker last year called for ending the surcharge authority, but the issue ended up unaddressed in CEJA. “What is unsustainable is the current state of the antiquated iron pipes—which date back to the
1800s—that Chicagoans rely on to stay warm in our brutal winters,” Schwartz wrote. Critics say Peoples’ program goes far beyond replacing very old pipes. The entire system is being upgraded under the guise of a safety program, they say, and the costs are correspondingly high. Added Schwartz, “The cost of natural gas, globally, has more than doubled in the past year. . . .This is the reason heating bills are elevated this year. Peoples Gas does not profit at all from the sale of natural gas. Our customers pay the exact same amount for gas that we pay for it.”
...
LOBBYING
Consumer advocates have lobbied Springfield for years to repeal the surcharge authority, arguing it gives utilities something like a blank check to spend liberally. In utility regulation, higher capital spending leads to higher profits because utilities earn a return on their accumulated investments. It also means higher utility rates—and frequently bills—for consumers. “The late payments are doubling the negative impact of the boondoggle infrastructure project,” says Abe Scarr, director of Illinois PIRG. The surcharge “is making the service unaffordable, out of which (Peoples) is collecting more profits. It’s a direct result of state policy.” Of Peoples’ 808,779 residential customers, 228,792—or 28%—were hit with late fees in February, according to an ICC filing. More than 18% of households were more than 30 days behind for a total of more than $97.5 million—an average of $664 per household. The landmark Climate & Equitable Jobs Act, or CEJA, signed into law last year by Gov. J.B. Pritzker, will bar late fees on low-income households. But that doesn’t take effect until next year. In the meantime, Peoples doesn’t appear to be holding back.
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8 APRIL 4, 2022 • CRAIN’S CHICAGO BUSINESS
Former FBI informant files for bankruptcy
In February, John Thomas said he had amassed a real estate and business empire worth $150 million, a remarkable change in fortune for a two-time felon released from prison in 2017. A month later, his petition says he’s not worth more than $50,000. In mid-February, John Thomas shared a career comeback story that sounded too good to be true: After walking out of federal prison in 2017 with $20 to his name, the two-time felon had amassed a real estate and business empire worth $150 million. In mid-March, Thomas filed for personal bankruptcy, listing assets of $0 to $50,000. The Chapter 13 petition adds to a growing list of court cases involving Thomas, best known in Chicago as an FBI informant who wore a wire on a confidant of former Gov. Rod Blagojevich. An office building a Thomas partnership owns in St. Paul is in receivership. An Indiana shopping mall owned by another Thomas venture is in bankruptcy. And a bankruptcy trustee in a different case has accused Thomas and a partner of diverting $2.8 million from a South Side shopping center in a way that constitutes larceny or embezzlement. A personal bankruptcy filing could offer Thomas a way to extinguish his business debts. But it clashes with the rags-to-riches redemption story he described in a mid-February interview with Crain’s, when he volunteered that he was worth $150 million. Thomas said he had next to nothing when he was released from federal prison camp in Duluth, Minn., in 2017. He had been serving a sentence there after pleading guilty to charges that he stole more than $370,000 in public funds from a marina development in south suburban Riverdale. It was his first trip to prison but his second conviction. After pleading guilty to a billboard leas-
ing scam in New York, Thomas received probation in 2010, his reward for helping federal prosecutors in Chicago convict Antoin “Tony” Rezko, a close associate of Blagojevich, and former Ald. Isaac “Ike” Carothers.
ACQUISITIONS
After prison in 2017, Thomas went on an acquisition spree that included an Aurora apartment building, a mall in Elkhart, Ind., and the former Sherman Hospital in Elgin. With a new wife and young son, he said he was a changed man who lenders and investors could trust. Asked about the recent lawsuits and bankruptcy cases, Thomas, principal of Chicago-based Freedom Development Group, expressed confidence he could resolve them, possibly by selling the properties involved and using the proceeds to pay off debts. “I’m not wealthy by cash basis,” Thomas said in February. “I’m wealthy by asset basis.” His bankruptcy case tells a different story. Thomas, effusive in February, wouldn’t say much about the recent filing. In brief text messages, he said the case “is being withdrawn” and has “nothing to do with finances.” He didn’t respond to a follow-up message requesting an interview. The 17-page petition is short on specifics. In addition to listing assets of $0 to $50,000, the filing estimates Thomas’ liabilities at just $500,001 to $1 million. It only lists one creditor: his ex-wife, Lori Korwek Thomas, who has a claim of $650,000 against him. “That was the impetus for the case,” says Jeffrey Harris, the local attorney representing Thomas in the bankruptcy case. Harris said he was not aware of the nature of the claim against Thomas, saying only that he
JOHN R. BOEHM
BY ALBY GALLUN
John Thomas thought it related to the split of the couple’s assets from their divorce. Korwek Thomas declined to comment, and her attorney did not return a phone call. What’s surprising is that the Chapter 13 petition reveals nothing about Thomas’ business and real estate creditors. It says his debts are primarily consumer debts, not business debts, and says no creditors have claims secured by his property. Thomas owns stakes in multiple commercial properties through limited liability companies, a standard practice in the industry. For some of the companies, Thomas has guaranteed repayment of debt in the event they default on mortgages. Of all of his recent invest-
ments, Sherman Hospital perhaps has worked out the best. A Thomas venture acquired the shuttered Elgin hospital for $1 million in 2019. In 2020, at the beginning of the coronavirus pandemic, the state decided to lease the hospital for COVID-19 patients. But it never followed through with its plans. Instead, it reached a settlement to pay the venture nearly $4 million.
LAWSUITS
Other investments haven’t worked out so well. Multiple creditors and partners have sued other Thomas ventures and Thomas himself, alleging that they defaulted on debts or reneged on agreements. In the case involving the South Side
shopping center, a bankruptcy trustee alleges that Thomas made illegal transfers from the property to other Freedom Development Group properties. In February, Thomas insisted that he knew nothing about the transfers. Individuals who file for bankruptcy protection are required to provide a complete list of their assets and liabilities. Harris, the attorney for Thomas, acknowledged that his filing includes omissions but said it doesn’t run afoul of the that requirement at this early stage in the case. “As of today, right now, they don’t necessarily have to be completed,” Harris said. “As of now, we’ve complied with the rules.”
This housing boom is the strongest of the 21st century Home prices rose by double digits for the ninth straight month, the longest string in records that stretch back to the late 1980s BY DENNIS RODKIN Chicago-area home prices hit the ninth month of their strongest run-up in at least three decades, according to a national index released March 29. The region’s single-family home values rose by 12.5% in January from a year earlier, according to the S&P CoreLogic Case-Shiller Indices. It’s the ninth consecutive month with home prices up more than 10%. In Case-Shiller data that stretches back to 1988, there has never been a run of double-digit price increases as long as this in Chicago. In late 2013 and early 2014, when the housing market
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was rising from the depths of a long crash, prices rose by double digits for seven consecutive months. During the housing boom of the early 2000s, prices were up in the 9% range for 13 months, reaching above 10% just once, in April 2005.
ROBUST GROWTH
The run of price increases has been good news for existing homeowners, whose home equity has risen fast, either making it easier to sell and move to another home or increasing their household wealth. In the past, when Chicago’s home values were rising slowly, the large number of underwater mortgages was
holding back potential sellers and suppressing growth in household wealth. There’s also good news of a sort for buyers in Chicago’s home price increases: While robust, they’re relatively weak compared to other cities, which means affordability is not galloping out of reach here. Nationwide, home prices were up 19.2% in January, according to the index, and in six cities, they were up by more than twice Chicago’s 12.5% increase. Among the nation’s 20 largest cities tracked by the index, Phoenix leads the nation in vanishing affordability. Its home prices were up 32.6% in January; Phoenix’s prices have been the nation’s fastest-rising every month
for 32 consecutive months. The other five cities where home prices rose by more than twice Chicago’s increase are Tampa at 30.8%; Miami, 28%; Dallas, 27.3%; San Diego, 27.1%; and Las Vegas, 26.2%.
RISING INTEREST RATES
Chicago’s increase was 18th on the list of 20 major cities. The two with smaller price growth in January are Minneapolis at 11.8% and Washington, D.C., at 11.2%. The January increase for Chicago was larger than the prior four months, whose increases were between 11.5% and 12.2%. That mirrors the national picture. “Last fall we observed that home prices, although continuing to rise quite
sharply, had begun to decelerate,” Craig Lazzara, managing director at S&P DJI, said in comments that accompanied the data, but “even that modest deceleration was on pause in January.” The nationwide increase in prices, 19.2%, was the fourth-largest monthly in the index’s history, he said. Although the market has been strong, Lazzara said, “the macroeconomic environment is evolving rapidly. Declining COVID cases and a resumption of general economic activity has stoked inflation, and the Federal Reserve has begun to increase interest rates in response. We may soon begin to see the impact of increasing mortgage rates on home prices.”
4/1/22 3:17 PM
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3/31/22 11:10 AM
10 APRIL 4, 2022 • CRAIN’S CHICAGO BUSINESS
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EDITORIAL
That late tax bill isn’t good news, Cook County
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go, which is particularly complex. From this vantage point, it’s hard to discern who’s really at fault in this screw-up. Is it an assessor who’s taking too long to deliver his results, as Rogers asserts, or is it a board of review that ignored a transition to a new computer system, forcing the creation of a workaround to pour data back into a 40-yearold mainframe, as Kaegi asserts? What we can see clearly, however, is that tax-funded governments that de-
CRAIN’S ILLUSTRATION
hey say nothing is certain except for death and taxes. Cook County is about to turn at least part of that maxim on its head: Property-tax bills for the second half of this year are likely to be delayed by as much as six months. Lest anyone reading this rushes to break out the bubbly and celebrate an unexpected tax holiday, let us spoil the party by mentioning a few downsides. For one thing: Cook County property owners will most definitely receive that second-half tax bill, albeit quite late— and the next bill to cover the first half of 2023 will inevitably follow, quite likely right on its heels. That could create a cash crunch for taxpayers who haven’t set aside the needed funds. But the drawback that has far more wide-ranging consequences is this: Delays in receiving roughly $16 billion in second-half tax revenues will force local government bodies around the county to either issue tax-anticipation notes to cover the cost of their operations—racking up interest charges in the process— or draw down cash reserves to meet short-term needs. Neither outcome bespeaks good government, but that’s the reality Cook County officials face as a feud heats up over who’s to blame. As Crain’s political columnist Greg Hinz reported March 30, Cook County Assessor Fritz Kaegi contends the tax
Larry Rogers Jr., left, and Fritz Kaegi bills will be late because the Board of Review, which hears appeals of Kaegi’s assessments, has failed to use a new county computer system, essentially forcing enormous amounts of data to be reloaded from one system to another. Larry Rogers Jr., the Board of Review’s chairman, contends Kaegi’s at fault, asserting the township-level data that Kaegi’s office would normally ship to the board by November still hasn’t arrived.
Kaegi’s office tells Crain’s the timing of bills going out depends on when the board completes its appeals. RogFritz Kaegi ers’ office says it normally takes 10 to 11 months to do its work after the first township is closed by the assessor, plus six weeks or so for the bills then to be prepared and mailed by the county treasurer. In this case, the first township wasn’t closed until December 2021, and the board this year is reviewing the triennial reassessment of the city of Chica-
IS IT TOO MUCH TO ASK THAT THE PEOPLE DETERMINING HOW MUCH WE OWE AND WHEN CAN GET THEIR ACT TOGETHER? liver essential services to Cook County residents are going to feel the effects of this meltdown between two sets of public officials who seem to be engaged in all-out war with one another. As Kaegi and Rogers hurl accusations, notably absent from the scene is Cook County President Toni Preckwinkle. It’s well past time for her to bring the feuding factions together, demand accountability and push for speedy solutions. No one likes to pay taxes. Is it too much to ask that the people determining how much we owe and when can get their act together? Apparently so.
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cartel conducting money laundering on ply only to some, while a privileged class a scale that has never been seen—much profits. The lack of federal banking and less endorsed—by a government entity tax reform also helps maintain and grow in this country. This is what is patently the illicit market in many states. And as ridiculous about the current system and cannabis tax revenues grow, many states are becoming reliant on a severely flawed why very little of it makes sense. Consider the magnitude of the crime: revenue source to fund essential governAccording to data analytics firm Headset, ment services. Recall that many of these cannabis sales are expected to surpass same states were operating in the red be$30 billion in 2022. As new markets come online, that number will continue to multiply, so the amount of STATE GOVERNORS ARE ESSENTIALLY annual cannabis tax revenue being LAUNDERING MONEY FROM laundered through state coffers is in the billions of dollars per year, REGULATED CANNABIS SALES. every year. Moreover, these are tax revenues generated from businesses the fore the cannabis cash cow came along. As states trumpet the tax windfalls federal government does not recognize as legal and does not allow to operate they are enjoying due to record sales of alongside their “legitimate” counter- cannabis the previous year, governors points that enjoy access to banking and should take heed. No industry can surfinancial services, as well as numerous vive under conditions that maintain ludicrous levels of inequities and inconsistax benefits. The current system is unsustainable tencies. Now more than ever, state leaders for the long haul. It also helps perpetuate the disparities of the failed War on need to stop the hypocrisy and push for Drugs, where rules and enforcement ap- safe banking reforms.
Write us: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited. Send letters to Crain’s Chicago Business, 130 E. Randolph St., Suite 3200, Chicago, IL 60601, or email us at letters@chicagobusiness.com. Please include your full name, the city from which you’re writing and a phone number for fact-checking purposes.
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Why cannabis banking laws need to change now
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YOUR VIEW
tained money is combined with nder the long-stand“clean,” legally obtained cash in ing definition of order to disguise its origins and money laundering allow it to be integrated into and current federal law that the legal economy. If there is a categorizes cannabis as an more precise definition of what illegal substance, there is happens when tax revenue from virtually no reason that Ilfederally illegal cannabis sales is linois Gov. J.B. Pritzker—as combined with state coffers, I’d well as his fellow governors love to hear it. Cannabis sales across the country—should are taxed approximately 30% in not be arrested on federal Joe Caltabiano is many regulated markets. Those charges. Consider that on CEO of Choice taxes are collected and used by an annual basis, the gov- Consolidation in states to fund an array of state ernors of any state that al- Chicago. Earlier, low regulated and taxed he co-founded Chi- services, from education to transportation to public safety. cannabis markets to break cago’s Cresco Labs more federal money laun- and was senior vice So while the cannabis industry is hamstrung due to IRS tax code dering laws than Al Capone president of mort280E and the lack of access to could ever imagine. The FBI gage banking at federal banking services, tradishould be knocking down Guaranteed Rate. tional debt vehicles or U.S. eqthe doors of the governors’ mansions in every state with a regulated uity markets, state governors are essenmarket. And if that sounds ridiculous, tially laundering money from regulated it’s because it is—but not for the reason cannabis sales. How can this be possible? When you consider the current law, you might be thinking. At its most basic, the crime of money the state governments taxing these reglaundering occurs when illegally ob- ulated markets are no different than a
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Sound off: Send a column for the Opinion page to editor@ chicagobusiness.com. Please include a phone number for verification purposes, and limit submissions to 425 words or fewer.
4/1/22 4:22 PM
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CRAIN’S CHICAGO BUSINESS • APRIL 4, 2022 11
LETTER TO THE EDITOR
Biosciences industry here is strong and growing
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he biosciences community in the Chicago area continues to experience tremendous growth, particularly during the last two years. In fact, the Illinois Biotechnology Innovation Organization’s (iBIO) most recent research report shows that Illinois is ranked in the top five states nationwide, with $2.7 billion in venture-capital investment between 2016 and 2019. The report cited data from Pitchbook, the State Biosciences Report by TEConomy and BIO. New lab developments like Fulton Labs, Lincoln Yards and the Helix 51 incubator at Rosalind Franklin University are helping fuel this growth, but they are not alone. Organizations like Portal Innovations have launched—and expanded—to provide startups space to operate and connections to
funding opportunities. BioLabs announced plans for Chicago operations. New lab space has attracted companies like Talis Biomedical and Solvd Health to move operations here. Companies such as Vanqua Bio, SimBioSys and Prenosis recently closed significant venture-capital rounds. But these VC figures are very different from those cited in a recent Crain’s article, “Here’s the big obstacle to Chicago’s biotech dreams.” According to TEConomy, a global leader in research, analysis and strategy, the significant discrepancy in numbers is primarily due to Crain’s sole focus on companies in the city of Chicago with a biotechnology therapeutic. It ignores venture deals in pharmaceutical, medical devices, technology systems and biotechnology, which are crucial subsectors of
our entire biosciences community. By this very narrow definition, Prenosis’ recent venture-capital raise, which Crain’s referenced, wouldn’t be included in the data Pitchbook provided. The scope and definition iBIO and our other community partners use is extremely important. They are used by TEConomy in every other state in the country, and provide a more holistic (and accurate) view of the community and comparisons to other states. While I don’t agree with the selective statistical parsing of Crain’s article, the overall point is important: For the continued success of our community, we need to ensure that our community has access to early-stage capital. It is critical that the Illinois Small Business Innovation Research (SBIR) matching pro-
gram is funded in Illinois’ budget, which will provide state matching funds for critical “proof of concept” federal SBIR grants. We also need to ensure our companies are using current programs, like prequalifying for the Illinois Angel Investment Tax Credit Program. Finally, we need to look ahead to cultivate more home-grown ventures in our community. I’m excited to see what happens with Portal’s operations and other initiatives. We also need to look at how we can adapt other existing programs, like the R&D Tax Credit, which needs to be permanent and adapted to provide support for our startup scompanies. JOHN CONRAD President and CEO, Illinois Biotechnology Innovation Organization
CRAIN’S CHICAGO BUSINESS
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PEOPLE ON THE MOVE
Advertising Section To place your listing, visit www.chicagobusiness.com/peoplemoves or, for more information, contact Debora Stein at 917.226.5470 / dstein@crain.com
ACCOUNTING
CONSTRUCTION
HEALTH CARE
NON-PROFIT
PRIVATE EQUITY
ORBA, Chicago
BIG Construction, Chicago BIG Construction is thrilled to welcome Dan Hartman as Senior Project Manager. Dan joins BIG after spending 18 years at an ENR top 100 construction management firm managing interior construction projects in excess of $80m. At BIG, Dan will oversee the growing portfolio of large scale corporate interior fit outs and mentor the growing operations staff. Notable projects led by Dan include William Blair, Shure, Omnicom, Goldman Sachs, Mash McLennan, Hyatt, Winston & Strawn, and Bryan Cave.
Salvation Army Metropolitan Division, Chicago
Red Arts Capital, Chicago
ORBA, one of Chicago’s largest public accounting firms, welcomes Vedha Lekshminarayanan, CPA and Wendan Zhang. Vedha Lekshminarayanan joins the firm’s Tax Group. She specializes in Lekshminarayanan income tax projections for individuals and tax preparation for S-corporations and individuals. She is also experienced in preparing financial statements, compilations and financial reviews, performing Zhang audit procedures and reconciling bank statements. Wendan Zhang joins the firm’s Accounting Services Group. She is proficient in reconciling bank statements, maintaining updated general ledgers and preparing financial statements for a variety of industry clients, including health care and real estate. She is also skilled in filing payroll and sales tax returns.
Cancer Treatment Centers of America, Chicago Ajaz Khan, MD, has joined Cancer Treatment Centers of America® (CTCA) as Enterprise Chair of Medical Oncology and Medical Oncologist at CTCA Chicago. Dr. Khan comes to CTCA with significant medical leadership experience, most recently as the Chief of Hematology and Medical Oncology at St. Peter’s Health Partners in New York. Board certified and fellowship trained in hematology and medical oncology, Dr. Khan primarily focuses on treating patients with breast and lung cancers.
Ellyn Harris, an executive leader with 29 years leading non-profits, joins The Salvation Army Metropolitan Division as Deputy Executive Director of Development. Ellyn will develop long-term strategies for revenue growth and branding to support a 150-year organization meeting human needs without discrimination. Her career has focused on serving marginalized communities on a global scale. Most recently, Harris served as National Director, Individual Giving for Habitat for Humanity International.
ARCHITECTURE Goettsch Partners, Chicago Goettsch Partners (GP) has promoted Erik Harris, AIA, and David Lillie, AIA, LEED AP BD+C, to Principal. Harris is a senior project architect who is currently working on large Harris office and mixed-use complexes in Charlotte and Denver. His recent work in Chicago includes the Bank of America Tower and 150 North Riverside office buildings, the Hyatt Regency McCormick Place Expansion and Renovation, and Lillie renovation assignments at the Wrigley Building and Chicago Union Station. Lillie is a senior project designer, focusing on supertall towers and multibuilding mixed-use complexes throughout Asia, including a 500-meter tower in Zhongshan and other projects in the cities of Guangzhou, Hangzhou, Shenzhen, Taipei, Wenzhou and Wuhan.
CONSTRUCTION Northern Builders, Inc., Schiller Park Northern Builders, Inc. is pleased to announce the promotion of Kevin J. McDonough to Project Manager. In his new role, Kevin is responsible for managing all phases of construction including design, permitting, and scheduling while ensuring each project meets Northern’s high standards of quality, timing, safety, and performance.
Global commercial partner Fishawack Health (FH) welcomes Marcia Goddard as its new chief creative officer (CCO). Goddard, who was formerly president of McCann Health in New Jersey and San Francisco, will now lead the creative teams for the U.S. Marketing group. With a unique ability to bring together creative and account teams to produce exceptional work, Goddard joins FH at a time of accelerated growth.
Cotter Consulting, Inc., Chicago Cotter is pleased to announce the promotions of Brandon Pejskar, PMP, to Group Leader, Energy Group and Borut Vujic, PE, to Group Leader, Transportation Group Pejskar at the Chicago-based and women-owned project and construction management firm. As Group Manager for Cotter’s Energy Group, Brandon will provide leadership in the delivery of Cotter’s project management and Vujic project controls services to our energy clients. Borut’s depth of experience in roadways, bridges, and railroad structure projects and his team leadership as Group Manager will support safe and effective project management for our transportation clients.
LAW
FINANCIAL SERVICES Busey Bank, Chicago John Paul “J.P.” Hills joins Busey Bank as Senior Vice President and Commercial Market President. As a Commercial banker committed to providing a best-in-class experience, he focuses on developing relationships with family offices, business owners and high net worth individuals.
NON-PROFIT Salvation Army Metropolitan Division, Chicago Jeanette Bonzani, a senior human resources leader with more than 30 years of non-profit experience, joins The Salvation Army Metropolitan Division as Divisional Director, Human Resources. In this role, she’ll provide strategic direction on culture, recruitment, and operations that support The Salvation Army’s 150year mission. Most recently, Jeanette served as Senior Vice-President, Human Resources for 15 ½ years at The Chicago Lighthouse for People Who Are Blind or Visually Impaired.
Benesch, Chicago Paul A. Del Aguila has joined Benesch as a Partner in the Litigation Practice Group. Paul is an accomplished litigator and has extensive experience litigating product liability and complex commercial matters. Over the past 20 years, Paul has protected the interests of local, regional, national, and international clients in high-stakes disputes throughout the country, and routinely provides pre-dispute counseling and risk management advice to clients.
Much, a full-service law firm based in Chicago, has welcomed Dan Rosenberg to its Chambers-ranked Construction group. Dan joins Much from a construction management and engineering company, where he was a senior executive and general counsel. His decades of experience and in-house perspective gives him a deep grasp of the construction and real estate industries, including financings and transactions, federal and state compliance matters, labor negotiations, and litigation and dispute resolution.
TECHNOLOGY AHEAD, Chicago AHEAD, a leading provider of enterprise cloud solutions, is pleased to welcome Preet Michelson as its new Chief People Officer. An HR veteran, Michelson has three decades of experience in people development, strategy, and finance expertise. In her new role, Michelson will be responsible for all aspects of AHEAD’s human resources strategy, working to continue building a culture at AHEAD that attracts, retains, and develops the best team to support the company’s aggressive growth strategy.
TECHNOLOGY Nerdery, Chicago
LAW Much, Chicago
First Bank Chicago, Northbrook
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Fishawack Health, New York / Chicago
CONSTRUCTION SERVICES
BANKING
First Bank Chicago, a Division of First Bank of Highland Park, is pleased to welcome Scott McDougall to our team as Private Banking Officer. Scott is responsible for supporting our growth and expansion strategy while focusing his efforts on building client relationships, optimizing deposits, and providing customized banking solutions. He will be assisting clients as they seek to protect, build, and grow their wealth. Scott comes to us from JPMorgan Chase Bank.
HEALTH CARE
Red Arts Capital, a leading middle-market, sector-focused private equity investment firm and preferred investment partner for family-owned supply chain-related businesses, is pleased to Henkels announce the expansion of its team with the addition of Michael Henkels as Vice President and Danielle Gerbie as the firm’s new Chief of Staff. Henkels will be responsible for deal sourcing, investment Gerbie evaluation and execution, and monitoring investments. He brings a range of private equity industry experience to Red Arts Capital having worked across multiple sectors. Gerbie comes to Red Arts Capital with operational experience in the public and private sectors. Prior to joining Red Arts, Gerbie worked directly with the CEO and Founder of Flexpoint Ford.
NON-PROFIT Woods Fund Chicago, Chicago Woods Fund Chicago is pleased to announce Wei Aniton as the new Vice President of Finance. Wei is an entrepreneurial guru who has led multidisciplinary teams, defined strategies and created scalable infrastructures for an array of early-stage and publicly-traded firms. “I aspire to align my energy with those enabling the freedom and self-determination of BIPOC Americans. I am grateful to be united with Woods Fund Chicago, promoting socio-economic equality.”
Meghan Stiling’s role with Nerdery, a premier digital product consultancy, has expanded to Chief Digital & Operating Officer (CDOO). In this expanded role, Stiling will assume responsibility for leading client-facing and delivery operations teams, while continuing to be responsible for defining and driving new technology and strategy capabilities. Her expertise in cloud engineering, security, data, and technical architecture led to significantly growing those in-demand service offerings.
To order frames or plaques of profiles contact Lauren Melesio at lmelesio@crain.com or 212-210-0707
3/29/22 4:12 PM
CRAIN’S CHICAGO BUSINESS • APRIL 4, 2022 13
BEYOND PHYSICAL: Poll reveals depth of COVID’s mental impact on city, suburban residents. PAGE 17 STRESS SERVED DAILY: Restaurant workers received more than their share of anguish. PAGE 18
DAVID JUNKIN
WORKPLACE MENTAL HEALTH
CRISIS
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The pandemic put a spotlight on mental health. Now employers are being pushed to address a crisis before it gets worse. | BY AMY KRAFT FIND THE COMPLETE SERIES ONLINE
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FUTURE OF WORKLIFE: CEOs and HR managers have a chance to strike a new balance. PAGE 20
Health care and restaurant employees, grocery store cashiers, teachers, truckers, delivery drivers—the economy’s “essential workers”—experienced some of the toughest mental health pressures during the pandemic. Actually, workers in other job categories were affected, too, by the stress, burnout, out-of-whack work and personal routines, and career disruptions of the last two years. Early in the pandemic, a Chicago woman who was juggling a full-time job while taking care of two preschool boys saw her work-life balance turned upside down. When her boss dismissed the three years of verbal abuse she had endured from a colleague, that pushed her to her wits’ end. She questioned whether the company’s culture was the right fit for her mental well-being. “They were not supporting me through difficult situations and just paid lip service to the idea of work-life balance without recognizing how draining this whole thing was,” says the woman, who asked
Crain’s not to publish her name for fear of industry backlash. For Evan Reifman, a new job at a Chicago coffee shop brought constant last-minute schedule changes, along with recurring equipment breakdowns and an unrelenting stream of impatient customers. After nine months, he quit. Antwon Steer, an electronics store salesman, praises his company for how it communicated policies and safety protocols during the pandemic. But irate and entitled customers have had a negative effect on his mental health. “I get that everyone is going through something,” he says, “but dealing with the public is getting tougher and tougher.” If the COVID-19 pandemic was a threat to physical health, it also took a massive toll on mental well-being. Though not as outwardly visible, mental health struggles in the workplace affect morale, productivity and the bottom line. See CRISIS on Page 14
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In fact, the nation’s mental health crisis led President Joe Biden to announce a strategy to address it during his State of the Union speech. “Even before the pandemic, rates of depression and anxiety were inching higher,” the White House said in a statement. “But the grief, trauma and physical isolation of the last two years have driven Americans to a breaking point.” In an October survey conducted by The Conference Board, 57% of workers said their mental health had degraded since the start of the pandemic. Workload was the driving factor. Half of respondents said work demands took a bigger toll on their mental health than COVID-19. Anxiety and depression among U.S. adults increased after August 2020 and peaked in December and the following January, the Centers for Disease Control & Prevention reported. Rates have decreased since then but still remain higher than pre-pandemic levels. Alcohol consumption increased, and overdose deaths spiked immediately after the emergence of COVID-19 in 2020. “Mental health has been more obvious, people’s routines are changing and support is lower,” says Amanda Griffith-Atkins, a licensed marriage and family therapist in Chicago’s North Center neighborhood. As the pandemic took hold, companies, C-suite leaders and human resources managers added or expanded health care benefits, ramped up employee assistance programs and committed to improving company culture, especially with employees working remotely, hybrid or in constant flux about returning to the office. Now, as Chicago companies are returning to the office or some sort of hybrid schedules, they’re figuring out how to continue with pandemic-adopted supports to ensure they are caring for employees’ mental health and to attract and retain top talent. “Whereas we used to say, ‘It’s OK to not be OK,’ we are now saying, ‘It’s not OK to not be OK,’ and employers should be doing something about it,” says Amanda Lannert, CEO of Jellyvision, a Chicago-based benefits guidance software company. Although 85% of C-suite and HR leaders believe mental health affects everyone regardless of having a diagnosed mental illness, 67% plan to return employee health and wellness benefits to what they were pre-pandemic in the next year, according to a survey by Modern Health, a global mental health benefits platform. That shortsighted thinking is a mistake, Lannert says. As CEO of a company that helps employers streamline employee health care benefits and financial needs, Lannert and her team try to stay ahead of employers’ needs. One of their surveys found that 95% of HR pro-
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fessionals anticipate that employees will continue to seek mental health care. “This is not a blip, but a new norm,” she says. Jellyvision is also about practicing what it preaches. In addition to robust employee benefits, the company offers 12 self-care days a year, when the entire office closes one Friday or Monday every month so employees can take care of themselves. “If it energizes our workers, then trading eight hours of work with people working the rest of the week with more focus, then it’s worth it,” Lannert says, adding that a company culture can contribute to burnout and to a sense of entitlement to people’s energy and time if they’re never allowed to truly unplug. “It is not enough to give people care,” Lannert says. “We have to change things that are causing undue stress for our employees, or people are going to vote with their feet.”
MENTAL HEALTH FIRST AID
Judith Allen, clinical director and chief operating officer of Communities in Schools of Chicago, or CIS, has taken steps to address the additional stresses of the pandemic facing faculty and staff at Chicago Public Schools. “Staff are burned out, tired and leaving the education space,” Allen says. Although the mission of the nonprofit is child-focused, the organization knew that the wellbeing of CPS staff, especially during the pandemic, was just as important. To that end, CIS added services for employees and school staff, such as “Compassion Fatigue” groups, where employees can vent and talk about what is exhausting them without any fear of retaliation from supervisors and managers, who are not allowed in these groups. CIS also increased one-on-one time between supervisors and staff to ensure that everyone is being heard. “I’m not a huggy-buggy person, but when we talk about the concept of wellness, there is a cost to not being mindful of your staff’s wellness,” Allen says. CIS of Chicago is also one of the few organizations in the city providing youth and adult Mental Health First Aid training, a course managed by the National Council for Mental Wellbeing that teaches people how to identify and respond to signs of mental illnesses and substance abuse disorder. “Our focus is helping the community understand that mental well-being is about being well and addressing mental health challenges and substance abuse challenges and that recovery is possible,” says Tramaine El-Amin, client experience officer at the National Council for Mental Wellbeing. “We’re taking a community conversation and putting it in the
w DIVIDED VIEWS C-level and HR leaders differ widely from employees and managers on workplace mental health benefit offerings.
Amanda Griffith Atkins, a licensed marriage and family therapist in Chicago’s North Center neighborhood
WHAT C-LEVEL AND HR LEADERS SAY Believe they offer the best possible mental health benefits to employees 87% Believe they offer enough mental health support for employees 85% Believe their company culture is sufficiently supportive of mental health 87%
WHAT EMPLOYEES AND MANAGERS SAY Have mental health benefits within the medical plan 45% Have benefits outside the health plan with access to 1:1 sessions with providers 32% Have benefits outside the health plan with access to chat or text providers only 28% Have access to a well-being app or meditation app 16%
PHOTOS BY ALEX GARCIA
CRISIS
Source: Modern Health, “A Report on the Changing Attitudes About Mental Health Care and the Workplace,” September 2021
Dr. Judith Allen, clinical director and chief operating officer of Communities in Schools of Chicago workplace context.” More than half of all Americans receive health care coverage through an employer. Although employer health care coverage comes with cost-sharing benefits, the group plan may not contain coverage for the specific health care needs of every individual, especially when it comes to mental health care. Despite the 2008 Mental Health Parity & Addiction Equity Act, which required insurance coverage for mental health conditions, including substance abuse disorder treatment, to be the same
as coverage for any other medical condition in a particular plan, health insurers have found ways to circumvent the rules, leaving individuals with inadequate care. To help combat this, Gov. J.B. Pritzker last summer signed into law House Bill 2595, which requires insurers to cover medically necessary mental health care, including the treatment of mental, emotional, nervous or substance use disorders, beginning Jan. 1, 2023. And the Chicago city budget boosted spending for mental
health from $12 million in 2019 to $86 million this year.
EMPLOYEE BENEFIT CHANGES
Employers are also looking for ways to increase their mental health benefit offerings. According to the Kaiser Family Foundation’s 2021 Employer Health Benefits survey, 39% of firms with at least 50 workers that offer health benefits made changes to their mental health and substance abuse benefits. Thirty one percent offered more ways enrollees can access mental
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services. Although these programs have been around for several decades, EAPs have been traditionally underutilized. “A lot of people don’t know that their workplace offers that,” says Richard Chaifetz, founder and CEO of Chicago-based ComPsych, the world’s largest provider of EAPs. In addition to the lack of publicity surrounding EAPs, the stigmatization of mental health has also kept them in the dark. “Mental health is still a private matter,” says Lannert. “And it’s weird to call a private hotline to talk about depression and loneliness.” The way to get more employees interested and engaged in EAPs and any other mental health offerings is to communicate often about these options, which Allen says is one of the features offered at CIS. “We have newsletters that go out once a week, and a TV monitor in our main office that is updated throughout the day with resources about mental health and self-care,” says Allen, adding that some of the schools her organization partners with have asked for those features as well. Regular conversations and pulse checks on employees can also help employers learn the best ways to manage their workforce. “Pay attention to your employees, and they will pay attention to you,” says Chaifetz. “The more managers at all levels can do that, the better the organization functions.” This, he adds, can lead to “FIRST AND FOREMOST, YOUR EMPLOYEES financial and intrinsic rewards. NEED TO BELIEVE THAT YOU HAVE THEIR Depression alone major BEST INTEREST. THERE HAS TO BE TRUST.” cause isof adisabilLouis Haynes, clinical psychologist and executive ity, absenteeism and productivity director of Arcus Behavioral Health & Wellness loss. Research from the CDC Employers should also ensure shows that depression causes that their brokered health insur- about 200 million lost workdays ance plan has adequate digital each year at a cost to employers services for employees. A United- of $17 billion to $44 billion. And Healthcare mobile app, Sanvello, the World Health Organization offers on-demand emotional reports that for every $1 spent on support modules to help people treating common mental health with stress and sleep. It’s also a concerns, there is a return of $4 in useful supplement for individuals improved health and productivity. dealing with an emotional health Therefore, it behooves employers problem that is more serious, says to reduce any job-related stressDr. Rhonda Randall, executive ors that might be contributing to vice president and chief medi- depression, like long hours, chalcal officer at UnitedHealthcare’s lenging job demands and limited or no autonomy in the workplace. commercial line of business. “This requires a whole paraLast summer, Vida Health, a virtual care company that offers digm shift,” says Louis Haynes, prevention and management clinical psychologist and execuservices for chronic and mental tive director of Arcus Behavioral health conditions, became an Health & Wellness, a nonprofit in-network provider for eligible community mental health agency Blue Cross & Blue Shield of Illi- in Chicago. “First and foremost, your employees need to believe nois members. Other benefits that employ- that you have their best interest. ees are turning to for support are There has to be trust.” employee assistance programs, or EAPs, a voluntary work-based LEADERSHIP CAN SET AN EXAMPLE service that provides short-term Dr. Wendy Dean is co-founder, counseling and confidential fi- president and CEO of Moral Injunancial, physical and emotional ry of Healthcare, a nonprofit orhealth services, such as through telemedicine, which, according to Griffith-Atkins, is one of the best changes to come out of the pandemic. “People can now access therapy during the day, especially since they are working from home,” she says. “And employers are becoming more understanding of that.” Employers have also expanded their in-network mental health and substance abuse providers and increased coverage for outof-network services, the survey showed. “Finding a therapist who accepts your insurance is difficult,” Griffith-Atkins says. “Any barrier that we can remove to get somebody in the door, it’s just more likely that they will show up.” The explosive growth of telemedicine during the pandemic means that more people can access care. Telehealth use increased from less than 1% of all outpatient visits to 13% in the early days of the pandemic. By March 2021, usage had decreased to 8%, but it is still higher than pre-pandemic levels. It remains unclear whether policymakers will permanently extend waivers put in place during the pandemic to expand access to and coverage of telehealth services. But employers can contract directly with telehealth service providers to ensure that high-quality telemedicine and digital health are available to their employees.
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Loc
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PHOTOS BY ALEX GARCIA
CRISIS
Amanda Lannert, CEO of Jellyvision, a Chicago-based benefits guidance software company
Louis Haynes, clinical psychologist and executive director of Arcus Behavioral Health & Wellness ganization that provides training and consultation to organizations focused on alleviating distress in their workforce. Distress, she says, can come in the form of something so seemingly innocuous as electronic health records, most of which are based on reimbursement needs and lack an intuitive user interface. Not only do they detract from the physician-patient relationship, but research shows that the majority of physicians believe that electronic health records contribute to physician burnout. “If it’s causing people to work extra hours, it’s not a workable solution,” Dean says. The health care industry isn’t
the only area that suffers under the weight of inefficiencies, which decrease productivity and employee morale. As companies plan to reopen their offices to workers, it would be wise to first review workplace practices and identify ways to streamline processes, such as updating office equipment, poor system integration and communication across departments. “Leadership needs to be asking their workforce, ‘What do you need to be successful today, and how can I get that for you?’ ” Dean says, adding that a leader’s presence in the workforce sends a signal to employees that they are seen and heard.
Haynes agrees that leaders need to be more present and available in the lives of their workers. “A CEO is also human,” says Haynes, who suggests that leaders can model what it looks like to take care of their personal needs. “This is an opportunity to evaluate how we approach mental health in general.” And Lannert emphasizes the importance of being mindful of the new ways that people work after two years of being remote. “Show respect for workers instead of forcing a mandate back to the office,” she says, adding that work has continued even though employees are remote. “We can’t put the cat back in the bag.”
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Co ness ache taste years pand iden phys COV beyo COV wide crisis work Se of ci bani tal he publ area (69% pand (70% as an
CRAIN’S CHICAGO BUSINESS • APRIL 4, 2022 17
Pandemic had wide mental consequences
w CHICAGO-AREA VIEWS ON COVID-19 AND MENTAL HEALTH Total
City residents
Suburban residents
66% 68% 63% 70% 68% 44% 43% 45%
Local leaders didn’t do enough, poll respondents say
PHOTOS BY ALEX GARCIA
BY WILLIAM JOHNSON
substance abuse (64%), obesity (51%) and chronic disease (48%). Cough, fever, shortAccording to the Cenness of breath, headters for Disease Conache, fatigue and loss of trol & Prevention, over taste and smell. After two 939,000 Americans have years of the COVID-19 lost their lives to this pandemic, Chicago rescoronavirus, and many idents know the illness’s others are suffering physical symptoms. But William Johnson COVID’s effects extend is CEO of The Har- long-term health effects. However, while immunibeyond the physical. ris Poll, a public zation can largely protect COVID has sparked a opinion, market wide-scale mental health research and strat- Americans from hospitalization or death (over crisis across Chicago’s egy firm based in 75% of Chicagoans have workers and families. Chicago. received at least one dose Seventy-three percent of city residents and 65% of subur- of a COVID-19 vaccine), there is no banites are concerned about men- vaccine for the mental wounds that tal health. From a list of 10 common stem from two years of prolonged public health concerns, Chicago- fear, anxiety, sadness, stress and area residents cited mental health isolation. The American Psycho(69%) behind only the COVID-19 logical Association, or APA, found pandemic (79%) and public safety that anxiety and depression rates (70%). Mental health was selected among U.S. adults were four times as an active issue more often than higher between April 2020 and
Essential workers
I think essential workers’ physical health is equally important as their mental health
Essential worker in household
50% 54%
The COVID-19 pandemic has had a negative impact on my mental health.
30% 32% 28% 34% 31% The COVID-19 pandemic has had a negative impact on my physical health.
Source: The Harris Poll
August 2021 than in 2019. COVID’s negative mental health effects were felt even more acutely among those who report being or living with an essential worker (e.g., teachers, restaurant workers, health care professionals) during the pandemic. Half of Chicagoans who report having worked as an essential worker, and 54% of Chicagoans who report having an essential worker in their household, believe that the pandemic harmed their mental health. Comparatively, 44% of all Chicago-area residents think that
COVID harmed their mental health. This exceeds the percentage of residents (30%) who think that COVID harmed their physical health. These statistics align with findings from the APA’s 2021 Work and Well-being Survey, which found heightened levels of stress and burnout across all industries, but especially among teachers and health care workers. These public-facing groups suffer from additional stress stemming from the politicization of masks and vaccines and feeling under-supported by both their employers and the government. We need to stop measuring the city’s health solely by the number of positive COVID tests, available hospital beds and COVID deaths.
16% 17% 16% 17% 16% I think local leadership has done enough to prioritize the mental health of essential workers during the pandemic.
Chicagoans’ overall well-being cannot be measured by these hard statistics alone. Two-thirds of Chicagoans (66%) believe that essential workers’ physical and mental health are equally important. A majority of respondents believe that local leadership’s efforts to protect essential workers’ mental health throughout the pandemic has left something to be desired. Only 16% of Chicagoans believe that local leadership has done enough to prioritize the mental health of essential employees. As Chicago starts to move past mask mandates and vaccine requirements, we expect workers and families will begin recovery from the mental strain of COVID-19.
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Restaurant workers reveal stress that accompanied COVID
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Employers recognize what they must do going forward as food-service employees recount the ill effects of mandates, masks and mad customers on their health always an option in an industry where employers do not reguAfter Effrin Alexander quit his larly offer health insurance. And job at Virtue last fall, it felt better workers say that just because the than that first breath of fresh air mask mandate has ended does not mean their anguish is gone, after removing a mask. He was sad to leave. The restau- or that the mental health crisis rant in Chicago’s Hyde Park affecting their industry is over. “I see people looking at me neighborhood had treated him and his co-workers well, partic- because I’ve stopped wearing a ularly after the pandemic hit. mask,” says Drew Riebhoff, a servMasks and gloves were made er at Somerset restaurant in Chiavailable, and Virtue set up a Go- cago’s Gold Coast neighborhood. FundMe page to help furloughed “I can tell they’re judging, and I’m employees early on. And now, it’s like, ‘You don’t know my story.’ ” There were times during the working to provide health insurpast two years when Riebhoff, ance, an anomaly in the industry. But the situation became un- 34, worked three jobs. He rarely easy for Alexander, 28, who once got enough hours and always felt thought he’d be in the restaurant the need to work more, to make industry for life. Working as a money and save, in case he was server at a customer-facing busi- furloughed again. He woke up angry every day, he ness during the pandemic was scary, particularly one where the says. At work, maskless custommasks always came down. On top ers complained about servers not of the anxiety around the possi- wearing masks, and people wantbility of infection, the stress of ed to sit outside because they having to enforce all the COVID were “COVID conscious” then rules—from mask mandates to flagrantly disregarded restaurant dining time limits—was crush- rules. At one riverfront restaurant ing. “You never know who’s going where he worked, serving meant to get that upset and flip a table,” standing in the cold spring rain taking orders while customers sat Alexander says. “It was very difficult to nego- under umbrellas near heaters. Riebhoff says, “2020 through tiate risking your life every day and not knowing whether or not 2022 has felt like one long year.” Though his problems aren’t someone would tip you,” he says. “I was no longer comfortable all solved, Riebhoff is starting to working in an industry where my feel more empowered. Therapy income was based on things that helped. He advocates for himself at work—he was ready to contest were out of my control.” Alexander is one of roughly if his employer made him keep 60,000 restaurant workers who wearing a mask after the mandate ended—and sees opportunity for “IT WAS VERY DIFFICULT TO NEGOTIATE an restaurant workers RISKING YOUR LIFE EVERY DAY AND NOT to push for better treatment. KNOWING WHETHER OR NOT SOMEONE That sentiment is common among WOULD TIP YOU.” employees who stayed in the indusEffrin Alexander, former restaurant worker try. Though thousands left, those have left the industry since the who stayed are no longer willing pandemic started, according to to suffer for low wages, a sporadic the Illinois Restaurant Associa- work schedule, or the mistreattion. Many lost their jobs because ment that became the norm in of restaurant closures. Others, the restaurant world. As a result, some restaurant their mental health in tatters, quit or chose not to come back to the operators are altering their protocols to better attract and retain industry when they were called. The pandemic-related job inse- employees. The upheaval is still curity, health risks, roller-coaster underway. Beverly Kim, co-owner of of regulations, customer confrontations and added responsibili- Michelin-starred Parachute and ties have had a profound impact nearby Wherewithall in Chicago’s on the mental health of those Avondale neighborhood, says alin the restaurant world. Some most the entire industry needs to turned to therapy, but that’s not be rebuilt to truly address work-
BY ALLY MAROTTI
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Effrin Alexander, a former restaurant worker at Virtue in Chicago’s Hyde Park neighborhood ers’ mental health. Taking tips out of the equation, for example, would reduce the power imbalance patrons have over workers. “By professionalizing it, we can get more people to work in it,” Kim says. “We need to inspire the next generation. Right now, it’s up in the air. The next generation is like, ‘Do I really want to go into this? I see how easy people go out of business and lose their jobs.’ There’s so much stress, there needs to be a reckoning here.” The changes must start at the top, says Chicago sommelier Alpana Singh. Restaurant operators must be healthy role models for their employees, demonstrating good self-care in an industry that often glorifies excessive drinking and a culture that leads to burnout. Raising wages isn’t enough to retain employees, let alone make an impact on their mental health. “I just don’t think that it’s about throwing money,” Singh says. “It’s about understanding all of these other influences that the servers are coming in with. The only thing you can change and be competitive with is the work environment.” Singh is preparing to open her fourth restaurant, Alpana, in the Gold Coast. It won’t be a latenight place, so employees can rest and don’t burn out. She’s working wine education into the job description, to give staffers a skill set they can build a career on.
Most of the job candidates Singh interviews for Alpana ask about the work-life balance, so she knows that is a priority. She can see in their résumés how the past two years have been. Some list four or five jobs in that time. Job insecurity in the industry during COVID has weighed heavily on workers. When talking about mental health in the restaurant world, many workers and owners start conversations by noting that it’s not just their industry that is suffering. In fact, all of America is undergoing a mental health crisis, they say, particularly those in the health care industry. But in this, they stand out. In just the first year of the pandemic, 95% of restaurant workers experienced a shift in their job status that resulted in lost wages, according to survey results from Restaurant Opportunities Centers United, which aims to improve wages and working conditions. The attrition caused by the instability and resulting mental health issues likely isn’t over. Tad Walters, a sous chef at Duck Duck Goat in Chicago’s Fulton Market District, thinks about leaving the industry. He spent his entire career working more than 50-hour weeks, and got a taste of serious rest and rejuvenation when he was furloughed. Walters, 29, cut back on drinking, worked out more and felt healthier than ever.
Last year, he landed a job at Sugargoat, a bakery, that required working 60 or 70 hours a week, and his mental health tanked. He didn’t have time to find a therapist, though he wanted to. Others in the restaurant industry started therapy for the first time and say it helped immensely. Madison Shomaker, 22, an employee at Similan Thai Sushi in Chicago’s Edgewater neighborhood, is one of them. She was in college when COVID hit, working at a coffee shop. She got several free therapy sessions through school. Now that she’s graduated and living on a server’s pay, she doesn’t go anymore, but it helped at the time. Her mental health has improved since those early, dark days of the pandemic, Shomaker says, standing behind the counter at Similan, filling to-go orders. She still worries about interactions with customers. Will someone spit on her for not wearing a mask? Get mad for a mistake in an order? People couldn’t control COVID, so they did something they could control and lashed out at service workers, she says. That continues, even with the mask mandate gone. She also wonders about COVID’s lasting impact. “Even if the memory fades, it will always be this strong, formative experience,” Shomaker says, stapling a receipt. “The anxiety is going to last.”
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RECOVERY
Relief for Illinois employers: A tax credit bill T are being borne out in the curhe Illinois Association for rent workforce shortage crisis. It Behavioral Health champialso seeks to address the longoned the Recovery & Mental standing issue of stigma faced Health Tax Credit Act, which is deby those with mental health and signed to help address the worksubstance use disorders. For force shortage crisis across the too long, those diagnosed with state of Illinois and reduce stigma mental health or substance use associated with mental health or disorders have been treated as substance use disorders. The act second-class citizens—discrimis contained in both SB 3617 and inated against based upon conSB 3882. Gerald “Jud” E. ditions that are medically docuThe bills, with the sponsorship DeLoss is CEO of of Democratic state Sens. Laura the Illinois Associa- mented and as prevalent as any Fine and Sara Feigenholtz and tion for Behavioral other disease. The Recovery & Mental Health Democratic Rep. Deb Conroy in Health. Tax Credit Act would provide a the House, recently passed the Illinois Senate and are poised to be pre- qualified employer tax credit of $1/hour worked per eligible employee, up to $2,000 sented to Gov. J.B. Pritzker. Right now, Illinois and the country are for each employee hired and retained for suffering from the continued impacts of a minimum of 500 hours during a tax year. the COVID-19 pandemic as well as a work- The total tax credit allocation for all emforce shortage crisis at a level not seen for ployers during the year is $2 million maxdecades. The legislation will address the imum. The qualified employer would be recontinued impacts of the pandemic that
quired to provide a supportive recovery environment for the employee, collaborate with mental health and substance use disorder treatment providers or facilities, and require a professional diagnosis of the condition and recovery. The eligible employee would voluntarily provide basic information to the employer (subject to confidentiality requirements). The information would then be shared with the Illinois Department of Human Services, which determines each employer’s eligibility for the tax credit. If approved, IDHS would issue an employer tax certificate, which would not contain any patient/employee identifying information. The employer would then file the certificate with its tax return to claim the tax credit with the Illinois Department of Revenue. To ensure the equitable distribution of the tax credits, the bill would create an Advisory Council on Mental Illness & Substance Use Disorder Impacts on Employ-
ment Opportunities within Minority Communities. Minority communities across Illinois have been disproportionately impacted by the opioid and suicide epidemics menacing the state. Those epidemics, coupled with the COVID pandemic, have imposed an inequitable impact upon communities of color. To address this, the advisory council would provide guidance on how, when and where the tax credits would be made available, and to further share the positive message of recovery. The advisory council, made up of 15 stakeholders, would act to ensure tax credit opportunities were made available to all communities of color. The Recovery & Mental Health Tax Credit bill will bring about positive changes for communities of color and for those with mental health and substance use disorders. At the same time, it will increase an already depleted workforce pool for Illinois employers, thus benefiting our state in many positive ways.
These important pieces will help us expand a quality, accessible mental, behavioral and substance use disorder workforce in Illinois that will be able to provide care to those seeking assistance. With this bill, Illinois residents should
see that lawmakers consider mental health just as important as physical health. The Legislature will continue to work with the behavioral health community to ensure we can meet the needs of Illinois residents no matter where they live in the state.
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Lawmakers aim to curb suffering, diversify mental health field
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turn. They either can’t find a prohen a person suffers vider with availability or one they from a physical illness, can afford. This can have serious we as a society often rerepercussions on their health and spond in a supportive manner. safety, especially because they But when that same person suffers cannot wait to get help while in a from a mental illness, the societal crisis. response may be different. In IlBy 2026, Illinois is on track to linois, we are working to change have 8,353 unfilled mental health that reaction and end the stigma care jobs, according to Mercer’s surrounding mental health. 2021 External Healthcare Labor Furthermore, the COVID-19 Laura Fine is an pandemic has exacerbated the Illinois state sena- Market Analysis. In-patient facilineed for affordable, accessible tor and chair of the ty providers will tell you they have care for some forms of mental ill- Senate Behavioral empty of beds, but they cannot fill ness, but only about half of those and Mental Health those beds because not enough providers are available to offer pasuffering receive treatment. Committee. tients the quality and experienced Anyone can be impacted by mental illness—whether it is personally, a care they deserve. The COVID-19 pandemfriend or family member—but for years, the ic has magnified these issues. Patients and stigma surrounding it has prevented people mental health care providers need help from getting the care they need. That’s why more than ever in addressing the behavioral I am so proud that the Illinois Legislature health workforce crisis. That’s why I initiated Senate Bill 3617, is focusing on behavioral health and substance use disorders to ensure everyone has known as the “Ensuring a More Qualified, the access they require for treatment and re- Competent, and Diverse Community Becovery. In Illinois, we want to be sure men- havioral Health Workforce Act.” It addresses tal health and physical health are viewed the concerns of patients and providers by the same, because you can’t have one with- growing the workforce and directing more people who are seeking mental health care out the other. Improving access to mental health care to providers who have availability. The bill for people across the state concerns me accelerates the process for out-of-state clideeply. However, people seeking mental nicians applying for licensure in Illinois and health treatment in Illinois face many bar- cuts the red tape for social workers, profesriers. A shortage of providers is one of the sional counselors and clinical psychologists biggest obstacles. Currently, the state has returning to the workforce after taking time only 14 behavioral health care profession- off for up to five years. It also includes inials for every 10,000 residents. This scarcity tiatives to support diversity in the mental leaves many people who are bravely taking health field, and it establishes tax credits the first steps to seek care with no place to for employers who hire workers in recovery.
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JOHN R. BOEHM
LEGISLATION
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20 APRIL 4, 2022 • CRAIN’S CHICAGO BUSINESS
RESPONSIBILITIES
In the workplace, well-being starts at the highest levels M
ental health conditions impact 20% of the workforce. Most businesses see value in supporting workplace mental health and in fact, they see it as integral to success because mental health and well-being impact productivity, performance and retention. For many businesses, the focus on worker mental health and well-being started pre-pandemic, but the disruption caused by COVID-19, coupled with high racial and political tension and economic uncertainty, have brought these issues to the forefront. According to the Centers for Disease Control & Prevention, people are experiencing symptoms of anxiety and depression at three to four times the rates that existed pre-pandemic. Many feel extreme stress from isolation, disruption in daily routines and the loss of loved ones and a sense of control. Multiple national surveys show rising rates of burnout, which is likely contributing to the “Great Resignation.” Burnout results from excessive stress, which increases the risk of people developing depression, anxiety and other mental health conditions. So, what should businesses do to support workplace mental health and well-being and retain high performers? Our LEAD framework, developed by the American Psychiatric Association Foundation’s Center for Workplace Mental Health, offers four factors to consider.
LEADING
Leaders must reassure workers and normalize what many are feeling when it comes to stress, uncertainty, grief and loss.
Darcy Gruttadaro is director of the Center for Workplace Mental Health at the American Psychiatric Association Foundation. Dr. Saul Levin is CEO and medical director of the American Psychiatric Association and chair of the American Psychiatric Association Foundation board. Whether it’s acknowledging that our collective mental health and well-being have been tested, that the organization cares about the workforce, or reminding people that mental health support is available when needed, leaders can make huge changes with positive, simple messages. The highest level of organizations can, and must, open the door to employees feeling safer in seeking mental health care and support.
EFFECTIVELY COMMUNICATING
Many businesses are finding new ways to check in on the mental health and wellbeing of employees. Supervisors are moving beyond discussing assignments and deadlines to ask how team members are doing and whether they need additional support, or using meetings to remind team members about available support services. Organi-
zations are using intranet posts, electronic communications and online conversations to move mental health from a taboo topic to one that is out in the open. Businesses should be part of that momentum.
ADAPTING TO CHANGE
Right now, many workers are navigating a new normal. This is likely impacting everyone’s mental health and well-being, especially for those living with a mental health condition. Now is the time to examine organizational culture and consider what more is needed to support workplace mental health. A few changes can make a big difference. Some organizations are offering mental health training so managers know
how to notice a team member who may be struggling, how to talk with someone they are concerned about and how to connect a team member with services. Others are creating employee resource groups and other peer support networks, which provide feedback loops for human resources and leadership around employee mental health needs. Many organizations are surveying their employees to better understand employee mental health and needs.
DOUBLING DOWN ON ACCESS TO CARE
Many people learn about their benefits during orientation and open enrollment, but reminding people of these benefits and how to take care of their mental
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EXPECTATIONS
Future of worklife depends on being well today
“G
ture of work, they need to act with reat Resignation.” “Great greater intentionality than ever Reshuffle.” We should to retain the best aspects we disbe taking about “A Great covered over the past two years Reimagining.” of remote work: a democratizing As companies announce their spirit of collaboration between return-to-office plans, this is a employees, enhanced productivmoment to boldly reimagine ity through asynchronous work how “getting back to business” and—most of all—prioritizing doesn’t mean returning to “busipersonal well-being. ness-as-usual.” I am the first to say that any More than 80% of workers say Nadia Rawlinson digital-first platform, like Slack, they don’t want to return to old is a corporate office norms, yet 50% of corpo- board director and is only a means to an end. Work rate leaders want their workers former chief people from home brought its own mental health challenges as the back to full-time in-person work officer at Slack. boundaries between work and in 2022. It’s no wonder that 52% of workers are personal time blurred. Almost half of workplanning to quit their current jobs in favor ers surveyed felt pressure to respond to of full-time remote or hybrid, and 53% say messages quickly, even if they were sent afthey place a higher priority on their mental ter working hours. Our emergence from COVID shouldn’t well-being now compared to before COVID. As CEOs, chief human resources officers worsen our other long-running mental and team leaders experiment with the fu- health pandemic, one that impacts our in-
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of hybrid employees say they are frustrated and confused about when and why they will be expected in office. Like millions of Americans, and 20% of Slack’s workforce, I was hired and onboarded to my previous role as chief people officer remotely, and I continued work from my home in Chicago THE ROI FOR COMPANIES THAT CHOOSE to without meeting a single colleague in TO SCALE THEIR MENTAL HEALTH person for months. Instead of feeling adrift and disconRESOURCES IS MASSIVE, A RETURN OF nected, the unique approach to work, $4 IN IMPROVED HEALTH AND culture and digital-first communicaallowed me to be even more enPRODUCTIVITY FOR EVERY $1 INVESTED. tion gaged and effective in the role in ways that were surprising and, I believe, shed a useful light into what the next generproductivity for every $1 invested. The problem is that too few middle man- ation of working life will become. For example, we instituted “Fri-yays,” agers are equipped with the skills to be the inclusive leaders they need to be, scoring with Friday being a day off for employees so nearly 2 times lower for both sense of be- they can do something they find personally longing and work-related stress compared enriching or, quite frankly, just to unplug as to senior executives. Thirty-eight percent a hedge against burnout. Crucially, this only dividual happiness as well as our collective bottom line to the tune of $1 trillion in productivity loss each year. The ROI for companies that choose to scale their mental health resources is massive, a return of $4 in improved health and
3/31/22 4:18 PM
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Include funds for mental health services, workers in state budget D
health is essential. Employers should survey employees to better understand the challenges employees face when seeking in-network mental health care. Then, they can work with health plans and third-party administrators to ensure employees can access care when necessary. If employees cannot access affordable and timely care through the health plan, it will affect productivity, performance, disability rates and, ultimately, the organization’s bottom line. The pandemic has deepened the existing mental health crisis around the world. But everyone who runs a business or organization can help if they bring workplace mental health front and center.
works if every person takes the day off, starting with the team leader—because if the boss is working, employees will not feel free to actually use the time for what it’s intended, a real break. I sought ways to be vigilant about checking in with my team members. Before meetings I’d ask every person to share two adjectives that describe how they’re feeling. “I’m feeling energized but anxious,” or “Stressed but happy.” Just a pause like this positions leaders to meet people where they are and, similarly, employees to feel validated in navigating this time period the best they can. This simple act allows leaders to create a sense of grounding for the team before getting to the work at hand. There is no one-size-fits-all solve for achieving high productivity and easing the mental stress of this new working world. We are not only engaging in asking the right questions, we are starting to learn the right answers thanks to large-scale research and bold experimentation. The future of the workforce and mental well-being of employees depends on it.
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der, Thresholds continued to do espite working in the in-person work throughout the mental health space, pandemic to care for our clients nonprofit providers like in their daily lives. Pandemic Thresholds and their dedicator not, our tremendous staff ed staff are not immune to the are out there every day giving mental and emotional rigors of people hope for a better tomorthe COVID-19 pandemic. Menrow, and we need to show them tal health has become a critical just how much they are valued. focus for everyone, including To do so, we increased investour workforce, as the number of people experiencing depression Mark Ishaug is the ment in their mental health and anxiety has surged during CEO of Thresholds, support through our employee assistance program, increased the past two years. Add on-the- one of Illinois’ salaries for certain positions job burnout, social isolation and largest communiand provided pandemic-related economic uncertainty, and you ty mental health bonuses, as well as sign-on and have a perfect storm for behav- providers. retention bonuses. ioral health issues. To ensure our staff and clients were safe While the need for mental health services has never been greater, access to care from severe COVID-19 symptoms, we reis limited because there are not enough quired that staff be vaccinated and later treatment professionals. Prior to the pan- boosted, while also allowing religious or demic, Illinois’ mental health workforce medical exemptions. (Staff also worked was enough to support just 23% of Illinois- hard to get much-need vaccinations and ans in need of care. Providers like Thresh- boosters for our clients.) Most recently, in olds and countless others across the state response to rising gas prices, we provided are forced to turn thousands of people a gas bonus for our high number of staff away every year. This mental health crisis who drive for their job to provide in-home is creating a tremendous amount of turn- and community care for our clients. Still, there are challenges. over on the front lines of care delivery, Thresholds’ main revenue source is the shrinking the workforce and reducing service delivery throughout the sector. And state’s Medicaid program, which reimburses our work at antiquated rates. We the issue only snowballs. As a provider that cares for those with do not have the same option as for-profit the most serious mental health conditions businesses to simply raise rates to cover like schizophrenia or severe bipolar disor- costs; when nonprofit providers increase
critical employee benefits, provide more time off for staff or employer health insurance costs go up (and they go up every year), nonprofit providers have no way to make up the additional costs. These important and necessary staff support measures add greater strain on slim organizational budgets. This is why it is crucial that we increase state investment by increasing the Medicaid rate, helping us and providers across the state provide care to the more than 3 million people in Illinois who have health coverage through the state’s Medicaid program. This will not only support and attract valued treatment professionals, but also increase access to care for so many who need it. We are seeing strong bipartisan support for funding proposed by Gov. J.B. Pritzker, House Majority Leader Greg Harris, D-Chicago, and Sen. Elgie Sims, D-Chicago, that would make a $170 million to $180 million investment in both mental health and substance use treatment. This additional funding would be historic and empower nonprofit providers to make the kinds of investment in our workforce that they have long deserved. We are counting on Gov. Pritzker and the General Assembly to ensure this investment is included in the final state budget to support the community mental health workforce and to improve access to care.
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22 APRIL 4, 2022 • CRAIN’S CHICAGO BUSINESS
The ex-banker running Rivian’s finances has a plan to regain Wall Street’s trust
The UChicago MBA and first-time CFO faces a multifaceted challenge: a 73% implosion in Rivian’s share price from its peak amid analysts’ downgrades, production snags, missed delivery targets and an embarrassing U-turn over pricing I BY ED LUDLOW
R
CASH NEEDS
Rivian will burn through more than $14 billion over the next two years, analysts estimate. It could take several more years for its vehicles to produce meaningful revenue to offset cash usage, likely forcing Rivian to raise more capital amid equity market turmoil. The company isn’t alone as an EV startup with heavy cash needs, but Rivian is generally seen as one of the leading contenders to Tesla’s throne, giving it an advantage over competitors with more baggage. “We’re very much in the driver’s seat in regards to the rate and speed at which we can dial up or dial back Rivian’s deployment of capital,” McDonough said. That also extends to deciding when to raise
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Since joining Rivian, McDonough has built out her team with several key hires, including bringing in Jeff Baker from Clorox as chief accounting officer. Gerard Dwyer, formerly CFO at Google’s self-driving unit Waymo, was hired in May as vice president of business finance. It’s not lost on McDonough that she’s a woman in the historically macho world of automobile manufacturing. But that’s something she has dealt with throughout her career, from restaurant kitchens to Wall Street. “My very first work experience was in a kitchen of 52 French men,” McDonough said. “Being a woman in a male-dominated industry, I learned from the very start how to navigate those waters.” Like Rivian, EV rival Lucid Group Inc. has a woman at the helm of the finance operations. The pair, however, are still in the minority: Of the 682 Fortune 500 and S&P 500 companies, only 15% had a sitting female CFO as of Dec. 31, according to the Crist|Kolder Volatility Report.
‘BRO CULTURE’
BLOOMBERG
ivian Automotive Inc.’s Claire McDonough savored the stock market’s enthusiasm when she helped raise $13.7 billion in 2021’s biggest initial public offering. Suddenly, the electric-vehicle maker was more valuable than Ford Motor Co. or General Motors Co. Now the first-time chief financial officer has to bend her own Wall Street experience to a new challenge: a 73% implosion in Rivian’s share price from its peak amid analysts’ downgrades, production snags, missed delivery targets and an embarrassing U-turn over pricing. The pressure is on McDonough, 40, a former banker at Credit Suisse Group and JPMorgan Chase & Co. She has to prove her operational acumen and win back the confidence of investors who rushed to endorse Rivian as a worthy challenger to Tesla Inc., then snubbed it just as vigorously. “If we can really prove out this ramp, if we can prove out our opportunity to bring new vehicles to market, to build additional capacity in a cost-effective way, the stock price will just take care of itself,” McDonough said in an interview. The Irvine, California-based company, founded in 2009, only recently started producing its signature plug-in pickup trucks and SUVs at its assembly plant in Normal, Illinois, as well as electric delivery vans for Amazon.com, a key investor. Rivian plans to deliver 10,000 vans to the e-commerce giant this year, McDonough confirmed, while building 25,000 vehicles overall. Getting there will require cash, and the executive concedes that her greatest challenge now is spending wisely as supply-chain constraints hamper production. Rivian had $18.4 billion of cash as of Dec. 31, and a lengthy to-do list.
Claire McDonough more money, she said. Controlling the purse strings of one of the country’s buzziest automotive startups isn’t a role McDonough had always seen for herself. While at Duke University, she started a food-delivery business from her college dormitory and interned at the Food Network in New York. A connection to chef Jacques “Mr. Chocolate” Torres opened the door to a gig in France working pastry lines, then in kitchens in Washington, D.C., for Michel Richard. McDonough got an MBA at Chicago Booth School of Business and was an intern and associate at Credit Suisse in New York. After a stint as finance director and treasurer at high-end grocery chain Fairway Market Group, she returned to banking with a job at JPMorgan, where she spent more than six years with the retail and consumer investment-banking team. Rivian, meanwhile, was looking to bolster its leadership as it sought to turn from a startup into a legitimate vehicle manufacturer. While looking for a CFO in 2020, RJ Scaringe, Rivian’s founder and chief executive officer, approached Peloton Interactive Inc.’s Jill Woodworth, according to people familiar with the discussions. Woodworth didn’t want to leave the fitness-equipment
Colin Langan. Having to “manage the visionary” will be an important role for McDonough, he said. McDonough has started to establish a more public profile, jumping in on earnings conference calls at times to offer more detail. Rivian insiders describe McDonough as a “killer”—strong on strategy, not afraid to speak up and fluent in the capital markets. But they also caution that she has little operating experience. She got a lesson in the pitfalls of operational missteps this month. Rivian raised sticker prices as much as 20% “THE BEST CFOS ARE NOT JUST A on its consumer models, including for preBOOKKEEPER. THEY ARE MAKING viously placed orders, ACTIVE AND STRATEGIC DECISIONS leading to cancellations by angry cusWITH THE CEO.” tomers. McDonough and her team were Colin Langan, analyst, Wells Fargo lead proponents of the higher prices, arguing offering was one of the half-doz- behind the scenes that they were necessary to achieve profitability en largest in U.S. history. McDonough, the mother of two in the long run, according to peosmall kids, describes herself as ple familiar with the matter. Just days later, Rivian reinstatthe “partner in crime” to Rivian’s charismatic CEO. In searching ed the original prices for existing for a CFO, the company wanted pre-order customers. It kept the someone who could complement higher prices for new orders afScaringe’s vision and, when nec- ter March 1, saying that the supessary, provide a dissenting voice. ply-chain crunch was boosting “The best CFOs are not just a input costs. Applying the price bookkeeper. They are making ac- hike to prior customers, Mctive and strategic decisions with Donough now acknowledges, the CEO,” said Wells Fargo analyst was something “we got wrong.” maker, but she recommended McDonough and made the introduction. The pair had worked together previously at JPMorgan, and Woodworth subsequently insisted that McDonough be part of the bank’s team that co-led Peloton’s 2019 IPO. With no experience as a CFO or in the auto industry, McDonough’s hiring 14 months ago didn’t cause much of a splash. It wasn’t until Rivian’s own IPO this past November that the logic began to prove out. The blockbuster
In November, a former Rivian sales executive sued the company, accusing it of having a “toxic bro culture.” McDonough was one of several senior women executives who came to the company’s defense. In comments in an internal Slack channel that were seen by Bloomberg, she said Rivian’s culture was a strategic advantage and were it not for the company’s support of diversity, she’d never have been hired, given her lack of industry experience. McDonough didn’t directly address the claims during the interview but repeated praise for Scaringe and Rivian’s culture while acknowledging the importance of diversity. “I will say that we, collectively as an industry, need to recruit more women into the fold,” McDonough said. She’ll get a chance to do just that. On the agenda for 2022 is the start of construction on a $5 billion plant in Georgia, which the company says will create more than 7,500 jobs. Rivian is also searching for a site in Europe and is building out a network of fast-charging stations in the U.S. McDonough will oversee all of that spending. Scaringe told Bloomberg that McDonough has already acquitted herself well. “Her ability to balance our short- and long-term initiatives to achieve substantial scale is incredible, which coupled with her high intellect makes her a lot of fun to work with.” Bloomberg News
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Cultural Center unveils historic renovation The Grand Army of the Republic rooms, a jewel of the Chicago Cultural Center, have undergone a $15 million rehab When Tim Samuelson, Chicago’s cultural historian emeritus, would visit the Grand Army of the Republic rooms at the city’s Cultural Center back in the 1970s, “it was kind of sad,” he says. “All of the colors had been painted over in just this bland, kind of grayish tone.” The spectacular, 40-foot-wide ceiling dome with 62,000 pieces of art glass dating to the turn of the last century wasn’t painted over, but it might as well have been. Decades of dirt and disinterest had dulled its vibrant colors, and beginning in the 1940s, it was lit from above with electric bulbs rather than the natural light its designers intended. No more. As Samuelson discussed the GAR Memorial Hall and Rotunda recently, workmen were on their hands and knees around him. They were putting the finishing touches on a yearlong, more than $15 million restoration to bring back the dome, the rooms’ elaborate ornamentation and a resonant, earth-toned paint scheme that experts describe as a lost Tiffany masterwork. It was all to get things ready for the March 26-27 grand reopening of the rooms, a hearty welcome back to city life for spaces that hadn’t exactly disappeared but were operating at just a fraction of their original power. “It gives us an opportunity to bring it back to its original splendor and then also gives us an opportunity to kind of rethink public performance here,” said Erin Harkey, who took over in November as commissioner of the Chicago Department of Cultural Affairs & Special Events, whose headquarters are part of the 1897 building’s near-labyrinthine complex of grand galleries, office warrens and dazzling tile-floored stairways.
RESTORATION DREAM
The public programming for the re-coming out party put the spotlight on two of the stars of the restoration effort: Samuelson, who long held the dream of bringing back the GAR rooms, and Gunny Harboe, the Chicago restoration architect whose firm has led much-praised renovations of Frank Lloyd Wright’s Robie House in Hyde Park and Unity Temple in Oak Park, among other projects. Not on the program, though, was perhaps the biggest star of all: the anonymous foundation that came to see Samuelson one day in 2019 talking about restoring that art-glass dome. Through the years, he said, “There were people who would come forward, and they’d look up at that dome, and it was dirty and broken. It was pretty nasty. And they’d say, ‘Oh, we’d like to fund fixing the dome.’ And I’d say, ‘Hey, great.’ And then we’d figure out how much it would cost and we’d never hear from them again.” In 2008, long after the building’s transformation from the main Chicago Public Library to the Cultural Center, the city was able to restore what’s billed as the world’s largest stained-glass Tiffany dome, a 38-foot-diameter masterpiece showcasing the company’s iridescent Favrile glass in a geometric, fish-scale pattern on the building’s south side, above Preston Bradley Hall, long the library’s main circulation room. However, its more botanical but no less eye-popping north side counterpart, built by the Chicago firm of Healy & Millet using Tiffany specifications for color and glass, had not received the same TLC. So when the foundation—as Samuelson explained it, anonymity is the group’s thing—came to talk about finally funding
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PHOTOS COURTESY OF HARBOE ARCHITECTS
BY STEVE JOHNSON
Tim Samuelson, left, and Gunny Harboe that dome work, “my heart lifts,” Samuelson said: He might live to see new life breathed into the showpiece of the rooms with the names of Civil War battles cut into the marble. Those rooms were dedicated to the Grand Army of the Republic and used for the Cultural Center’s first five decades by that politically powerful fraternal organization of Union army veterans. But Samuelson also thought about Charlie Brown and the football, and he’s the guy in the zigzag-patterned shirt. The more they talked, though, they more he realized this was a sober, serious offer. And then some. “I took them down to the dome room to talk about it,” he recalled. “And I said, ‘Oh, by the way, you know, the walls were originally decorated by Tiffany, and nobody even knows that Tiffany was involved. And it’s under all these layers of paint.’ And they said, ‘Oh, we could maybe help you with that, too.’ ” That was in the anteroom known as the rotunda. Like any homeowner with a contractor on the premises, Samuelson had a much longer wish list. By the time he had finished, as he tells it, the foundation had agreed to also restore the Tiffany paint scheme in the bigger, adjacent GAR Memorial Hall, plus refinish all the metal and plaster ornamentation on the walls, refurbish the massive oak-and-mahogany doors and a handful of giant cherrywood display cases along the walls, make new versions of the long-lost original chandeliers and redo the massive windows along the room’s perimeter to bring light back in. “They are totally enthusiastic about the whole job, and I can’t believe it,” he said. “Pinch me.” A “dream team of restoration experts” was assembled, led by Harboe, who by work’s end would call the GAR restoration “one of the best projects I’ve ever been involved with.” One huge and propitious discovery: Much of the over-paint—the drab, institutional stuff—was able to be flaked right off, leaving there before them Tiffany’s original sort of Roman red, a deep terra cotta color that needed only relatively light restoration. “In my 30 years,” Harboe said, “we’ve never done a project like this where we
were able to recapture the original paint job, literally.” His line of work is subtle, the architect notes. “The glory of a really good restoration job is people don’t always get what you did,” he said. “But if you can see the befores and then you are experiencing the afters, it’s a very clear, incredible change.” The rooms are going back, more or less,
to the role they had before, as part of the Renaissance revival building’s suite of grand chambers that can host events, exhibitions and more. But they’ll have new interpretive materials inside that tell the story of the GAR, restoring the function as a memorial, and of the renovation itself. And on all their surfaces, they’ll be gleaming like it’s 1897 all over again.
3/31/22 3:43 PM
24 APRIL 4, 2022 • CRAIN’S CHICAGO BUSINESS
DePaul receives record-breaking donation Stanford alum Eugene Jarvis is giving millions to the university over his alma mater BY ELYSSA CHERNEY Video game designer Eugene Jarvis, who revolutionized the arcade industry with his 1981 smash hit “Defender,” is about to make history again. Jarvis and his wife, Sasha Gerritson, a DePaul University trustee and alumna, are donating more than $30 million to the North Side school, the largest single contribution it’s ever received. Bolstering DePaul’s College of Computing &
Digital Media, the money will be used to create an endowed scholarship, build an interdisciplinary student center at the Loop campus and support a research partnership with the Ruff Institute of Global Homelessness. “Cool stuff at DePaul, like virtual reality and robotics labs and cinematography studios and the most dynamic faculty, don’t come cheap, so that’s where donors come in,” said Jarvis, 67, who’s served as the computing college’s
first video game designer in residence since 2008. “They need a lot of funding over a number of years. It looks like I’m going to be paying this one off for a while.” Exactly how much they’re paying remains a mystery. Jarvis and Gerritson declined to share details about the gift amount, saying they want people to focus on how it will serve students and not the dollar sign. What’s known, however, is that it eclipses the $30 million investment manager Richard
Driehaus donated in 2012, which previously held the record. In honor of his donation, the computing college will be named after Jarvis. “We don’t want what this gift is doing to be about the amount,” said Gerritson, 49, who earned a certificate in music performance from DePaul in 1999. “It’s about the people. It’s about trying to serve and give access to as many people as possible, and it feels a little self-serving to lead with the amount.” University President Gabriel Esteban called the gift “transformational” and said “it will help empower
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BERKSHIRE HATHAWAY HOME SERVICES CHICAGO
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generations of student leaders and innovators for years to come.” Enrollment in the computing college, which will soon be known as the Eugene P. Jarvis College of Computing & Digital Media, is one of the private Catholic university’s fastest growing with more than 5,400 students. It was founded 40 years ago and includes nationally recognized curriculums in computer science, cybersecurity, data science, game design, graphic design and cinematography. Jarvis, who now runs his own video and arcade game design company called Raw Thrills in Skokie, hopes his financial support helps the next wave of gamers transform their passion into a successful career. As technology evolves, the skills needed to create video games have become more complex and include animation, computer programming and mechanical engineering, Jarvis said. The new Jarvis Student Center for Innovation & Collaboration, which will be housed in the concourse level of the DePaul Center at 1 E. Jackson Blvd., will bring these areas together through an interdisciplinary approach and host game production studios. An endowed scholarship at the computing college will also provide significantly expanded financial aid to undergraduate and graduate students. Chicago is a hub for the arcade video game industry, with several pinball machine manufacturing companies in the suburbs. Stern Pinball and Jersey Jack Pinball are located in Elk Grove Village and Chicago Gaming, which produces arcade games, is in Cicero. Jarvis moved from his native California to work for Chicago-based Williams Electronics, which has since gone through several ownership changes and is now known as WMS Industries. According to ZipRecruiter, the majority of game designers earn between $76,500 and $130,000. In addition to starting his own company, which employs about 80 people, including some DePaul graduates, Jarvis developed popular games including “Robotron: 2084,” “Smash TV” and “Cruis’n.” Jarvis, a Stanford University graduate, decided his money would be better spent at DePaul instead of at his alma mater, which has the third-largest endowment of any U.S. college at $28.9 billion and a vast rolodex of wealthy supporters. “Rather than being an elitist college and not expanding enrollment for decades, they want to expand opportunity for students and that means admitting more students, but that takes a lot of money,” he said. “I’m just providing the rocket fuel for DePaul and particularly the College of Digital Media to expand opportunities for a whole new group of young people.” Jarvis and Gerritson live in Glenview with their two adolescent sons. The couple, who have been married for 16 years, previously gave money to renovate an opera hall on the Lincoln Park campus and have donated to a host of other causes across DePaul.
3/31/22 3:51 PM
CRAIN’S CHICAGO BUSINESS • APRIL 4, 2022 25
RESIDENTIAL REAL ESTATE BROKERS NOTABLE REAL ESTATE PROFESSIONALS continue to reap the benefits of pandemic-spurred innovations. In this group of Notables, many brokers, both individuals and teams, sold the highest-priced home of their careers or broke their own sales-volume records in 2021. More than a handful took over listings that had languished on the market for months, worked their marketing magic, relisted the properties and found buyers within days. Advertising with QR codes and on social media, including TikTok, continued to pay off for brokers, as did digital stagings and using Zoom to show properties to out-of-town buyers. As they doubled or tripled business and sold unique properties (one of seven homes located on Lake Shore Drive and the Walgreen estate in Lake Forest, just to name two), brokers didn’t forget the communities they serve. The brokers honored here serve on arts nonprofit boards, raise money for scholarships, support children’s charities, donate to food pantries and otherwise chip in to make the Chicago area stronger. By Lisa Bertagnoli, Kate Rockwood and Jennifer Thomas METHODOLOGY: The individuals featured did not pay to be included. Their profiles were drawn from the nomination materials submitted. This list is not comprehensive. It includes only individuals for whom nominations were submitted and accepted after a review by editors. To qualify for the list, nominees must have met certain sales criteria, have at least 10 years of experience (individuals and team leads), demonstrate an innovative approach to marketing homes, and have a leadership presence in the sector and the community.
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JENNIFER AMES
TRACY ANDERSON
CEO and private-office advisor | Engel & Völkers Chicago
Founding broker and luxury specialist | Compass
The pandemic didn’t stop Jennifer Ames from opening two new Engel & Völkers offices, one in 2020 and one in 2021. She also continued to sell at a high level in 2021, including a $6 million Highland Park lakefront home, the highest price tag in the suburb in six years. Ames, past president of the auxiliary board of the Art Institute of Chicago, uses diverse marketing channels such as Engel & Völkers’ GG Magazine and Shop TV to promote her listings.
Tracy Anderson reached her highest number of closed and pending sales in her career in 2021. She also expanded her team by adding a licensed assistant and an additional agent. One of her favorite transactions was helping a couple find “the one” after submitting 11 other offers. Anderson is active in the Hinsdale community and served on the Hinsdale Historical Society board of directors and women’s board, the Wellness House’s board of directors and was president of the Hinsdale Junior Woman’s Club.
SHEENA BAKER
RICK BELLAIRS
Principal broker | Compass
Broker | Berkshire Hathaway HomeServices Starck Real Estate
Last year, Sheena Baker sold six newconstruction homes with the same floor plan for a builder with no model home. Once the first property was sold, she had the home staged and professionally photographed and then set up an indoor drone tour. Next, she hosted an open house before the buyer’s closing to promote the remaining five homes. Baker also created a new team and added three new team members in 2021.
Rick Bellairs sold an 11.5-acre estate in Woodstock for the second time in 2021 (the first sale was in 2013) for just under $1 million. The original home was built in 1845 and remains part of the grand, and much expanded, residence. Bellairs is a familiar face in Woodstock as chairman of the Woodstock Groundhog Days Committee since 2017 and a member of the Woodstock Plan Commission. As an extra service for his clients, he also helps prepare property tax appeals.
JANET BORDEN
DAN CACICH
Realtor | Compass
Broker | Coldwell Banker Realty
Last year marked the first full year that Janet Borden worked for Compass after she and colleague Allison Silver launched the company’s Highland Park location. Among her notable transactions was selling three homes with indoor basketball courts. She also was the No. 1 individual agent for the number of homes sold in Highland Park for the third year in a row. Borden supports the Southern Poverty Law Center and does hands-on work for Habitat for Humanity and the Ronald McDonald House.
Dan Cacich reports that 2021 was the best year of his 25-year real estate career. His sales throughout the Chicago region and northwest Indiana included a Calumet City property that received 38 offers within just a few days and sold for $35,000 above list price. Cacich regularly finds investors for challenging properties. He is the past president, vice president and treasurer of Thrivent Financial, North Lake County Indiana chapter, and past chairman of the Unmet Needs Committee at Lakeshore Area Regional Recovery of Indiana.
PAIGE DOOLEY
CONNIE DORNAN
Broker | Compass
Broker | @properties
Paige Dooley sold a particularly memorable home in 2021—a more than 100-yearold property with expansive gardens, a tennis court, an indoor pool and a buyer who was a relative of a former owner of the home. In a year with tight inventory, she leveraged her large agent network to find homes for her clients. Dooley is enthusiastic about supporting educational causes and is a longtime member and past president of the Winnetka Public School Foundation and past chair of the Winnetka Children’s Fair.
The past year saw Connie Dornan sell a luxury home in Glencoe for $3.75 million and one in Northbrook for $2.55 million. She was the fourth broker hired for the Northbrook home and sold the property in a multiple-offer situation. It was the first sale of over $2 million in Northbrook School District 27. Dornan combines triedand-true networking and outreach with modern technology such as geotargeted marketing and algorithms to market her homes. She is a supporter of the Autism Self Advocacy Network and Youth Services of Glenview/Northbrook.
ANNE DUBRAY
LAURA FITZPATRICK
Agent | Coldwell Banker Realty
Senior broker | @properties
Anne DuBray closed the second-mostexpensive listing in Lake Geneva, Wis., for nearly $12.8 million. Working closely with the Coldwell Banker Realty’s public relations team, DuBray helped land multiple media write-ups about the home in the Chicago and Milwaukee areas. She also worked with Fox Business on their “Mansion Global” TV show, shooting a segment inside the Lake Geneva listing. DuBray regularly mentors new agents and every October hosts open houses to raise money for breast cancer research.
Laura Fitzpatrick more than doubled her sales volume between 2020 and 2021. Her largest transaction sold for more than $2.8 million in Kenilworth, and a home she sold in Wilmette received seven offers over list price. She is an active volunteer at St. Joseph School in Wilmette, including on their marketing and benefit committees, and is a member of the Wilmette Working Moms group.
4/1/22 3:00 PM
26 APRIL 4, 2022 • CRAIN’S CHICAGO BUSINESS
NICOLE FLORES Broker Dream Town
Nicole Flores’ work is now a family affair— her son Xavier joined her team as a full-time broker last year. Her team of six brokers is now the largest it has ever been. Flores boosted her marketing efforts last year by advertising on a bus bench and a billboard and adding her first professional video to her business page. She is on the board of Everyday Edgebrook and is a longtime supporter of the Danny Did Foundation.
LORI JOHANNESON Broker @properties
Lori Johanneson, a published MBA graduate, last year launched Living Local With Lori, a cross-marketing platform where local experts can share ideas and support one another’s efforts. The platform includes weekly video interviews and news about biannual events. Jo-
hanneson completed the IronMan Chattanooga in Tennessee last year and started her own real estate team in December 2020.
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SANDRA FRAMPTON
CARRIE GOODMAN
Managing broker @properties
Broker @properties
Sandra Frampton saw her biggest year in her 18-year career in 2021. She also did it without the help of an assistant—Frampton’s business grew so quickly that she didn’t have time to hire a replacement for her former assistant. She did, however, officially cement her role as a mentor for other agents by upgrading her license to managing broker, and she became an assistant managing broker for @properties’ new Algonquin office. Frampton is a longtime member of the Educational Foundation of District 65 and a member of the Mainstreet Professional Standards Board.
Carrie Goodman made her first $1 million-plus sale in 2021 after finding the perfect Long Grove residence for a buyer looking for a home with a basketball court. That helped her exceed her sales volume goal by $1.6 million. Goodman goes beyond typical listing sheets and brochures to provide property updates, improvements and notes on local schools to her clients. She is the secretary on @properties’ philanthropic board, @givesback, and serves on the Congregation Beth Am Sisterhood board.
GINA GUARINO
ANNE HODGE
Broker Coldwell Banker Realty
Broker @properties
In 2021, Gina Guarino expanded her business to include southwestern Florida, along with her listings in Illinois and Indiana. She also sold two properties completely virtually last year, including one where the buyer never stepped foot inside the home. Guarino combines digital and print efforts for all her listings, including postcards, social media posts and ads, video slideshows, magazine-quality printed brochures and e-blasts. She is a member of the St. John-Dyer Chamber of Commerce and the Schererville Chamber of Commerce.
In a hectic market, Anne Hodge relied on a variety of print materials, including eight-page mailers, a brochure mailer program and QR codes, to help her clients sell their homes. Hodge, whose pre-real estate career included working in the construction industry and at a Fortune 500 tech company, helps her fellow brokers build their skills by hosting workshops on technology and the sales process. Hodge is a supporter of pediatric brain tumor research charity Winning With Wyatt and is past co-president of La Grange Newcomers & Neighbors.
NANCY HOTCHKISS Sales associate Berkshire Hathaway HomeServices Chicago
Two of Nancy Hotchkiss’ most memorable recent sales included selling the highest-priced home in her market and selling the home of a Chicago celebrity. Since becoming a fulltime broker in 1983, Hotchkiss has enjoyed
helping buyers and sellers realize their dreams. She is active in her community as a member of the Beverly Area Planning Association, a nonprofit community alliance group.
JOANNE HUDSON Broker Compass
Among the notable homes that Joanne Hudson sold last year was a 1920s English home in Glencoe that was previously struck by lightning. The home was painstakingly and authentically rebuilt using salvaged blueprints. To sell the home, Hudson created a drone video that highlighted the home, the grounds and the golf course view. She also sold the neighboring home of the fictional McCallister family from “Home Alone.” Hudson likes to use social marketing videos, drone video and digital pre-marketing to market her listings.
SUSIE KANTER
AMY DUONG KIM
BRAD LIPPITZ
VITTORIA LOGLI
ANN LYON
MICHAEL MAIER
Broker Dream Town
Senior broker Compass
Broker @properties
Broker @properties
Last year saw business increase by 50% for Susie Kanter’s team, which gets more than 90% of its business from personal referrals. Kanter helped neighboring condo owners sell their units by giving advice on necessary updates and contractor suggestions. Both sold quickly and for a healthy profit and led to Kanter getting referrals from both the sellers and buyers of the units. Kanter is a volunteer and supporter of Refugee One, Common Pantry and Real Estate to the Rescue.
The past year was the strongest of Amy Duong Kim’s career. She closed multiple units in the Residences of St. Regis Chicago, a new addition to Chicago’s skyline. She also capitalized on a trend she noticed of suburban buyers purchasing new homes within 1 mile of their current home. She did a mailer campaign to neighbors in the same school district and received two of the three offers on her listing from the campaign. Duong Kim is a member of the Hinsdale Junior Woman’s Club and the Asian Real Estate Association of America.
President, Brad Lippitz Group Compass
During the frenetic real estate market of the past year, Vittoria Logli used professional staging, 3D tours, floor plans and videos to expose her listings to as many potential buyers as possible. One sale that was close to her heart was saving a new client’s home just days before it was going to be sold at auction. Logli found a qualified buyer, and the client made a nearly $100,000 profit on the home, allowing her to relocate to be closer to family. Logli is a member of the Glenview Public Library Foundation Board.
Ann Lyon joined @properties in 2021 after working for Berkshire Hathaway HomeServices. Among her notable recent transactions is managing both sides of the sale of the Schweppe Estate, a more than 5-acre lakefront estate in Lake Forest. Lyon has led the highest-selling team in the Lake Forest and Lake Bluff markets for the past two years. She is involved with the Lake Forest chapter of the Infant Welfare Society, Northwestern Lake Forest Hospital Women’s Health Auxiliary Board and the Junior Garden Club of Lake Forest.
Broker Berkshire Hathaway HomeServices Chicago
In an unpredictable year, Brad Lippitz nearly doubled his prior-year sales in 2021 by capitalizing on Chicago’s submarkets to maximize sellers’ returns and help buyers find their homes. Lippitz likes to create geofences for his
properties to reach and capture more buyers. Lippitz regularly hosts fundraisers for Human Rights & Justice and the Human Rights Campaign.
Michael Maier worked with a buyer from the Netherlands to secure the perfect Sheridan Road investment property last year. The buyer didn’t see the property in person until the day before closing. With a long career in luxury property sales and marketing, Maier regularly sends out customized e-newsletters for his listings and market data to highlight his properties. That includes several recent marketing-to-sale efforts for residential properties in Streeterville. Maier is a member of the Streeterville Organization of Active Residents.
4/1/22 3:00 PM
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CRAIN’S CHICAGO BUSINESS • APRIL 4, 2022 27
LAURA MAYCHRUK
AMANDA MCMILLAN
Broker Gullo & Associates
Broker @properties
Laura Maychruk made several memorable sales in the past year, including one during a block party and another to a U.S. Army veteran couple. She considers surviving in a pandemic and simultaneously having the best year of her real estate career a major accomplishment. Maychruk is deeply involved in her community as president of the Oak Park Arts District Business Association, a member of the Oak Park-River Forest Community Foundation and the owner of Oak Park’s Buzz Cafe. She is also a volunteer at Housing Forward and Beyond Hunger.
Amanda McMillan grew her business by over 30% in the past year and expanded her team by three members. McMillan continued to use first-person videos she narrated herself to market her properties. One of her trickiest and most satisfying deals was actually three intertwined transactions: selling a couple’s condo, selling their mother’s condo and buying a two-flat for them all to live in. A cause close to McMillan’s heart is the nonprofit War Dogs Making It Home, an organization that pairs returning veterans with service dogs.
RALPH MILITO
SUSAN MINER
GINA MUSOLINO
Broker @properties
President Premier Relocation & Real Estate Services
Broker Coldwell Banker Realty
Ralph Milito sold the most homes of his more than 30-year career in 2021. The past year also included the special moment of helping his two sons buy their first investment property together. Milito is a real estate investor himself and has owned and managed more than 30 properties. Milito, who began his career as a real estate appraiser, enjoys handling every step of the sales process from listing to closing. He is a member of the National Association of Realtors and a volunteer for Cure SMA’s annual conference.
The past year saw some major highlights for Premier Relocation’s founder and president, Susan Miner. That included selling three Winnetka lots for $24 million—the highest price for a single-family residential land purchase in Chicago real estate history. She also rented a condo at the highest recorded monthly rent of $85,000. Miner is a member of the Chicagoland Chamber of Commerce, the National Association of Women Business Owners and Celebrity Advisors, a nationwide network of top brokers.
One of Gina Musolino’s most noteworthy sales was a custom $1.25 million, 6,200-square-foot home in Valparaiso, Ind. An executive needed to sell quickly to relocate, and Musolino was able to get multiple offers on the home within a month. Additionally, she strengthened her agent networks and even helped three former clients become real estate agents. Musolino, who was born in Italy, is a member of the Italian American Women’s Club of Lake County. She is also a 25-year supporter of the local fire department and volunteers for the department’s yearly open house.
JOANNE NEMEROVSKI
MAUREEN O’GRADY-TUOHY
Broker Compass
Realtor Berkshire Hathaway HomeServices Chicago
Working without a team, Joanne Nemerovski uses handson, white-glove service to sell luxury real estate. She has sold more than $1 billion of real estate in her career. That includes the recent resale of a 6,000-square foot duplex, one of just a few in a building over-
looking Lincoln Park. Nemerovski is active with Chicago Comer Children’s Hospital and the Respiratory Health Association.
Maureen O’GradyTuohy, a second-generation Realtor, expanded her focus on technology in the past year by using more QR codes for advertising and working with digital staging to better promote her listings on social media. Her efforts paid off with a high-volume year, including selling the Walgreen estate in Lake Forest for the second time. O’Grady-Tuohy, a board member of Lake Forest’s Citadel Theatre, also collects supplies for local nursing homes and for organizations that support veterans and the homeless.
Top 10 Team in Chicago for 10 Years in a Row $111 Million Sold in 2021
Congratulates
Brad Lippitz
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BRAD LIPPITZ GROUP 773.404.1144 brad@bradlippitz.com bradlippitz.com 3323 N. Broadway, Chicago 20 W. Kinzie St., Chicago
Modern. Vintage. Architectural. Cool.
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And everything in between.
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28 APRIL 4, 2022 • CRAIN’S CHICAGO BUSINESS
ANDRA O’NEILL
LINDSEY PAULUS
Broker @properties
Broker @properties
Andra O’Neill, Lake Forest’s No. 1 individual agent for the past five years, sold some of the suburb’s top historic homes in 2021. With more than 20 years of real estate experience on the North Shore, she is well versed in the market. O’Neill is a member of the women’s board of Northwestern Lake Forest Hospital and head of its 2022 gala. She is also a member of the Gorton Community Center board of directors.
The largest transaction of Lindsey Paulus’ career, a property listed at $1.45 million, came in January 2021. It also happened while she was sick with COVID-19. Due to her strong relationships with the agents in her office and with her clients, she was able to get the deal done. Paulus likes to creatively market her properties, including hosting ice cream events where she hands out homemade “It’s My Jam” ice cream. Paulus is the president and fundraising chair of the La Grange Pet Parade board, one of La Grange’s most popular community events.
LINA SHAH
MARY SUMMERVILLE
Broker Coldwell Banker Realty
Lina Shah made several notable sales in 2021, including a Doug Garofalo geothermal home in Oak Brook. Shah, an inductee in the Coldwell Banker’s President’s Club for the top 1% of agents in the Chicago area, came to real estate with a background in law and business. That gives her added insights into contracts, negotiations and regulations. Shah is active in the Oak Brook community as a member of the village’s Commercial & Residential Revitalization Development committee, the Oak Book Community Caucus and the Oak Brook Women’s Club.
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Broker Coldwell Banker Realty
In the past year, Mary Summerville hired a new agent for her team, sold a newly rebuilt historic Glencoe home and completed the sale of Pitner Row, a 10-unit development on the site of a former landscape nursery. In March 2022, she also joined Coldwell Banker after more than six years at Dream Town Realty. Summerville is a former board member of the North Shore-Barrington Association of Realtors and an active supporter of Northlight Theatre and the YWCA Evanston/ North Shore’s Race Against Hate.
LINDSEY RICHARDSON
MILLIE ROSENBLOOM
MICHAEL ROSENBLUM
Broker Dream Town
Broker associate Baird & Warner
Not only did Lindsey Richardson beat the individual sales record she set in 2020 within the first two quarters of 2021, but she also got married after having to postpone her wedding because of the pandemic. She even closed the sale of her client’s condo on her wedding day while getting her hair and makeup done. Richardson is a volunteer with Cradles to Crayons and a former board member of Real Estate to the Rescue.
Millie Rosenbloom has been No. 1 in sales among Baird & Warner’s 2,200-plus brokers for more than 10 years. One of her most notable 2021 sales was a Gold Coast condo with a heated, 1,900-square-foot wraparound terrace. Rosenbloom has closed more than $1.1 billion in sales in her career, including properties such as a hospital and a golf course. She is past president of the Chicago Association of Realtors, a member of the Magnificent Mile Association and a supporter of the Brain Research Foundation.
Broker associate Berkshire Hathaway HomeServices Chicago
SUE TEPER
LISA TRACE
MARY WALLACE
Broker @properties
Broker @properties
Broker Coldwell Banker Realty
Sue Teper sold a home last year solely through video streaming, and the clients didn’t even see the home in person until three months after they bought the property. To get maximum exposure for her listings, Teper, who has more than 30
Lisa Trace, whose @properties team includes her daughter, Sam, sold several remarkable properties in 2021. For a listing with a six-car garage, she targeted her marketing efforts at local car dealers, believing that the home would appeal to car enthusiasts. Trace has worked in real estate for 20 years, but she also had a 20-year career as a U.S. Navy nurse. She is a board member of the College of Lake County Foundation, helping to raise money for scholarships.
One of Mary Wallace’s areas of expertise is helping people sell their loved one’s homes after a death or a move to assisted living. She helps coordinate everything from clean-outs to scheduling repairs. In the past year, Wallace closed the biggest sale of her career. The $770,000 sale was the eighth-highest home sale in Beverly in 2021. Wallace spent 12 years as a board member of the Oak Lawn Park District and was the youngest person ever elected to the board.
years’ experience in real estate, advertises in international publications and The New York Times real estate section. Teper enjoys volunteering with her two children for organizations such as the Center for Enriched Living, Keshet and the Perk Center Cafe.
Michael Rosenblum closed 20 properties at the Residences at Water Tower in 2021. He also wrote his second best-selling children’s book, “The Caterpillar and the Butterfly.” Rosenblum is an inductee of Berkshire Hathaway HomeServices’ Chairman’s Circle and regularly ranked in the top half of the 1% of the company’s broker network. He is a committee member of the Chicago Association of Realtors’ Professional Standards & Ethics Board and donates a portion of every closed listing to Doctors Without Borders.
SWATI SAXENA
DARRELL SCOTT
Broker associate Baird & Warner
Broker Compass
Swati Saxena has made great use of technology to sell real estate during the pandemic by hosting Facebook Live open houses and using Zoom for walkthroughs and inspections with out-of-town buyers. One of her favorite 2021 sales was finding a dream home for a couple whom she helped fall in love six years earlier. Saxena started her real estate career 11 years ago after spending nearly 15 years as a semiconductor engineer. She is a board member of the Oak Park Area Association of Realtors and the founder of the association’s diversity committee.
Darrell Scott, who heads up his own team, doubled his business last year. He did that partly by taking a very handson approach to selling homes. He weighs in on everything from choosing paint colors to setting up professional drone videos. Scott regularly works with Chicago’s top entertainers and athletes, including members of the Chicago Cubs, Bulls and Blackhawks. He and his wife, Jill, who is also a broker at Compass, volunteer monthly with the Off the Street Club in West Garfield Park.
HAYLEY WESTHOFF
JAMES ZILTZ
President, The Westhoff Group Compass
Hayley Westhoff grew her team last year and helped them reach their goal of $100 million in sales. Her most noteworthy transaction was selling a Lakeview condo in eight days for more than $250,000 in profit. Westhoff is a big believer in privately listing properties before bringing them to market to get feedback on pricing. She sells close to 30% of her listings pre-market. Westhoff is a volunteer and donor at Team Bright Side and Children’s Oncology Services’ Camp One Step.
Broker Berkshire Hathaway HomeServices Chicago
In 2021, James Ziltz expanded his business into the south Florida market and also grew his Chicago-area business. He made several off-market and pre-market sales and has experience in guiding homeowners through necessary minor and major home renovations. Ziltz enjoys mentoring other brokers and has managed and trained nearly 60 agents in his career. He is a supporter of several philanthropic organizations, including the Face the Future Foundation, Heartland Alliance and Sunshine Kids.
4/1/22 3:00 PM
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CRAIN’S CHICAGO BUSINESS • APRIL 4, 2022 29
Julie Bird (left), Allie Payne
Amy Diamond
Barbara O’Connor (left), Hilary O’Connor
Cheryl Bellavia (left), Dympna Fay-Hart
Ben Lalez
Bryan Bomba
ALLIE+JULIE TEAM
AMY DIAMOND, DEAL WITH DIAMOND GROUP
BARBARA O’CONNOR GROUP
BELLAHART GROUP
BEN LALEZ TEAM
Dympna Fay-Hart and Cheryl Bellavia, brokers Dream Town
Ben Lalez, team lead and real estate agent Compass
BRYAN BOMBA GROUP
In 2021, the BellaHart Group was founded, its members joined a new brokerage, Dream Town, and the organization sold $46 million in residential real estate. A personal highlight for Dympna FayHart, who began working in her parents’ real estate business on the Northwest Side of Chicago when she was a child, was selling her youngest son his first home. She holds a Senior Real Estate Specialist designation with National Association of Realtors and is active in her local chamber of commerce.
Over the past year, the Ben Lalez Team grew to 16 agents from six, while increasing sales to $100 million from $23 million. Lalez, who owns and operates a property management company as well as a small general contracting company, leverages TikTok to promote properties and develop a following of younger home buyers. He also was an industry pioneer in hiring a full-time social media manager. He is a leader with nonprofit Lyte Collective’s Agents of Change and has helped raise more than $50,000.
Allie Payne & Julie Bird, team principals Compass Real Estate
A big year saw the creation of the Allie+Julie Team, with a total of nine licensed team members, along with the opening of a brick-and-mortar office in Evanston. Key marketing methods include the use of QR codes, social media, videos and digital ads; the goal is to be as eco-friendly as possible by reducing paper waste while letting buyers download information straight to their phones. An interesting transaction was a hidden gem: A unique, 50-yearold coach house turned into a single-family home.
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Amy Diamond, real estate broker and team lead @properties
In 2021, the Amy Diamond, Deal With Diamond Group sold the same number of homes as 2020, but saw a 10% increase in volume. The group uses a three-tier approach: Work with the client to stage and declutter; next is a firm belief in print’s ability to target areas with the right buyers; then combine heavy online efforts with the group’s social media following to cast a huge net. The group’s annual charitable event supports a nonprofit that provides social services and housing in 37 towns in the north and northwest suburbs.
Barbara O’Connor, president and founder Dream Town
Business grew by 30% year over year as well as the number of brokers on the team, making the Barbara O’Connor Group No. 1 in Dream Town’s Lincoln Square office and into the top 1% of Chicago Realtors rankings. Another highlight was selling a commercial property using a unique auction approach that drew in multiple bids and wildly outperformed the market to the tune of an extra $250,000 for the client. Team member Hilary O’Connor serves on the Dream Town Diversity Council. Barbara O’Connor chairs the Chicago Association of Realtors’ education and grievance committees as well as the Realtors Political Action Committee.
Bryan Bomba, broker @properties
Hinsdale-based Bryan Bomba Group specializes in the new-construction segment, with both builder and buyer representation. Bomba, who has expertise in residential valuation on complex residential properties, recently negotiated and solved the complex issues of three clients on a single block in one neighborhood—involving eight transaction sides on three properties. He also has a background in marketing and sales with Procter & Gamble, and is a member of Real Estate Vision, the Relocation Appraisers Consortium, the Employee Relocation Council and Thrive Mastermind.
Congratulations 2022 NOTABLE RESIDENTIAL REAL ESTATE BROKERS! THERE IS A REASON WHY LUXURY MARKET HOMEBUYERS USE
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30 APRIL 4, 2022 • CRAIN’S CHICAGO BUSINESS
Julie Busby
Caroline Starr
Kelly Parker
Crystal Ly Tran Jerbich (left), Salma Torres
Dawn McKenna
Maria DelBoccio (left), Diane Marchetti
Brad A
BUSBY GROUP
C STARR TEAM
CRYSTAL TRAN TEAM
Caroline Starr, team lead @properties
DAWN MCKENNA GROUP
THE DELBOCCIO | MARCHETTI GROUP
THE
Julie Busby, founder Compass
CHICAGO HOME COLLECTIVE
For every Busby Group transaction, a donation is made to the Greater Chicago Food Depository; as a result, breaking the $100 million sales mark in 2021 meant a donation of 50,000 meals, surpassing the group’s goal by nearly 20,000 meals. Among other highlights, Busby represented a buyer who bought a $2.5 million condo in Tribune Tower sight unseen. In fact, that was just one of five listings the group (which markets its local properties nationally) managed to sell sight unseen last year. Julie Busby is a board member of the Neighborhood Parents Network.
A key to the C Starr Team’s success—in 2021, it registered a 35% increase in both volume and units—is innovative marketing. For example, the group makes heavy use of short video clips
Dawn McKenna, team lead Coldwell Banker Realty
with single-frame shots to highlight architectural and design features and gives buyers quick, visual information. In one recent transaction, the group helped a first-generation American family purchase their first home and, by spearheading donations, helped to furnish it. Caroline Starr serves on the board of Journeys | The Road Home.
Chicago Home Collective successfully navigated the pandemic, increasing sales by 43% entirely through referral or repeat clients. Notable sales include a landmark greystone in Logan Square for $1.1 million and pre-selling an entire nine-unit development in Wicker Park. Kelly Parker was featured in CS Magazine and has spoken many times about challenging the “hustle culture” of the industry, improving agent etiquette and modeling different, more-aligned ways to grow business. She serves on the fundraising committee of the Honeycomb Project, a nonprofit that mobilizes family volunteer opportunities.
Maria DelBoccio and Diane Marchetti, founding members @properties
Debra Dobbs
Danielle Dowell
Elaine Sweeney Pagels (left), Brita Pagels
Emily Sachs Wong
THE DOBBS GROUP
THE DOWELL GROUP
Debra Dobbs, lead broker @properties
Danielle Dowell, founder and real estate broker Berkshire Hathaway HomeServices Chicago
ELAINE PAGELS GROUP
THE EMILY SACHS WONG GROUP
Elaine Sweeney Pagels and Brita Pagels, sales associates Berkshire Hathaway HomeServices Chicago
Emily Sachs Wong, real estate broker @properties Christies International Real Estate
During the pandemic, Elaine Pagels Group developed a multi-layered marketing approach to generate exposure for listings: in-person and remote tours of properties; video tours of the neighborhood amenities near listings; and digital, print and phone canvassing of the neighborhoods. One of its most noteworthy 2021 transactions was the sale of the “glass house” in Downers Grove, a home with a unique architectural style, history and location. The group is in the top quarter-percent of production in the Berkshire Hathaway HomeServices network nationally.
Last year was a record-breaker for The Emily Sachs Wong Group, ranking within the top three teams in Chicagoland (on $316 million in sales) after growing by $100 million in sales from 2020. Emily Sachs Wong was named the No. 1 agent in Lincoln Park for the year as she passed a milestone of $2 billion in career sales. A noteworthy transaction came early in 2021: An 11,000-square-foot mansion on a triple lot with a full-sized yard held the title of the most expensive home sold in Chicago for the majority of the year.
In 2021, the Dobbs Group not only grew from one to four agents (representing 70 years of collective experience), but also quadrupled its volume. It also closed on the sale of a home in Lincoln Park that achieved Chicago’s highest price of the year, and the group won an award for its website. Debra Dobbs’ varied background includes opening the first gelateria in Chicago and producing a David Mamet play. She is active today in national and local politics, as well as the Realtors Political Action Committee and the Zoning Committee–Lincoln Central Association.
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The Dowell Group saw several notable transactions in 2021 as it increased its business by more than 30%, added to its new-construction developments and listings, and grew its roster of agents as well. One of the group’s strategies is to find gaps in the market and use analytics to properly market and sell homes for a premium. A Chicago real estate broker since 2007, Danielle Dowell serves on the Home Builders Association of Greater Chicago Board.
Kelly Parker, founder and principal broker Compass
Crystal Ly Tran Jerbich and Salma Torres, sales associates Berkshire Hathaway HomeServices Chicago
In 2021, the team added six new teammates and achieved a 192% increase in units and a 377% increase in sales volume. The organization uses an array of technology, including videography, virtual staging, QR codes, social media marketing and paid ads to promote listings on its website. A recent highlight was selling one of seven homes on DuSable Lake Shore Drive. Crystal Ly Tran Jerbich volunteers at Humble Design, a notfor-profit that designs and furnishes home interiors for individuals and families emerging from homelessness.
Last year was a recordbreaker for Dawn McKenna Group as it closed on $605 million in business. Crain’s dubbed a $7.675 million Hinsdale listing—the most expensive home in the village’s history—as “the first megamillion-dollar deal of 2021.” Dawn McKenna is part of Coldwell Banker’s International Luxury Alliance, and as a Global Luxury agent ambassador often speaks about best practices for social media. She is a member of the Chicago Advisory Board of the Concussion Legacy Foundation and a supporter of the Ronald McDonald House Charities.
Mike Esenberg (left), Sherri Esenberg
In DelBoccio | Marchetti’s most noteworthy transaction of 2021, the group took over a listing that had been on the market for 600 days; radically rethinking the target market shifted the focus (and a sale) to a happy family. The team also shifted into high gear with social media, adding videos of listings, stories on social accounts, still photos, reels and other techniques to offer sneak peeks into upcoming listings. Maria DelBoccio started and oversees the Battle of the Badges, a charitable foundation for first responders.
Holly Connors
THE ESENBERG TEAM
GETBURBED
Sherri, Mike and Lauren Esenberg, brokers Berkshire Hathaway HomeServices Starck Real Estate
Holly Connors, senior broker @properties
Over the past year and a half, The Esenberg Team worked with 120 families— the most business it has ever done in an 18-month span. A family business (wife, husband and daughter), the team was named to Real-
Trends’ “America’s Best” list. The Esenbergs volunteer with OMNI Youth Services, American Society for the Prevention of Cruelty to Animals, Save-a-Pet, Fortunate Pooches & Lab Rescue and Christopher House.
A year of milestones for Holly Connors saw her sell more than $100 million in real estate and pass the lifetime sales marker of $700 million as well. A former United Airlines flight attendant, Connors began selling real estate in the city, but completely changed her business by moving to the suburbs. Today, she’s heavily involved in her community, serving on the Arlington Heights Chamber of Commerce Board of Directors, the Committee for ABC/25 Foundation, the local PTA board, and as a member of the Chicago Association of Realtors as well as its national and state associations.
4/1/22 3:00 PM
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CRAIN’S CHICAGO BUSINESS • APRIL 4, 2022 31
Brad Andersen (left), Brady Andersen
Elizabeth Goodchild
Nicole Hajdu
Moin Haque
Jackie Mack
Missy Jerfita
THE GGL GROUP
THE GOODCHILD TEAM
THE HAJDU GROUP
THE HAQUE GROUP
JERFITA TEAM
Nicole Hajdu, realtor Dream Town
Moin Haque, broker Coldwell Banker Realty
JACKIE MACK & MORE
In 2021, The Hajdu Group grew with the addition of a virtual assistant and several showing agents. Nicole Hajdu aligns the group’s marketing efforts to complement each other, from drone footage and photos to staging and special events. She reached a personal goal by joining the top 1% club, and moving forward, plans to add a focus on investment partnerships. Hajdu is a board member with the Gladstone Park Chamber of Commerce. She and her team support a different charity each month.
Moin Haque reports that he doubled his business revenue from 2020 to 2021, with a notable transaction being the sale of an Oak Brook home owned by White Sox legend Frank “The Big Hurt” Thomas for $4.5 million. With an MBA in finance and a background with major financial services companies, Haque also helps clients create real estate investment portfolios. His practice focuses on Naperville, Chicago, Aurora, Oak Brook, Lisle and Plainfield. He is on the board of the Infection Prevention & Control Foundation.
Brad Andersen and Brady Andersen, founding principal brokers Compass Real Estate
Last May, The GGL Group entered a strategic partnership with Compass Real Estate that combines its century-old legacy brand with a brokerage with a leading-edge technology platform. Today, GGL is recognized as the highest-producing team in its primary market area. Brad Andersen is president of the North Shore-Barrington Association of Realtors, a former president and board member of the Lake Forest/Lake Bluff Rotary and Lions clubs, and an executive committee member and treasurer of the Lake Forest/Lake Bluff Chamber of Commerce.
Elizabeth Goodchild, broker Berkshire Hathaway HomeServices Starck Real Estate
In 2021, Elizabeth Goodchild sold more than 90 homes “singlehandedly,” bringing her career total to 1,800. She also recruited 10 new agents—“mostly Gen Zs”—to her 21-agent team and elevated it to a No. 1 ranking within Starck Real Estate. She hosts a radio show, “Good to Know with Liz Goodchild,” Saturdays on AM 1160 and recently was elected as the Greater Chicago chapter president of the Asian Real Estate Association of America. She is also chief business development officer at Zinda, creator of social media platform Journyz.
Jackie Mack, vice president of sales and broker associate Jameson Sotheby’s International Realty
For Jackie Mack & More, working in real estate is a way to maintain affordable housing options in Evanston. The group donates at the end of each transaction to a charity of the client’s choice and donates Mack’s annual “Commission Mission Award” of $10,000 to local charities. The group helped a young couple buy a building using an FHA 203(k) loan to create a not-for-profit theater. Jackie Mack serves on the advisory board of the Evanston Community Partners for Affordable Housing and is committee chair for the Evanston Lighthouse Rotary Club.
JUST LISTED
Missy Jerfita, team lead Compass
A former actress, Missy Jerfita started her real estate career 19 years ago in a challenging market and sold $10 million her first full year. Jerfita Team has made “staging to sell” one of her trademarks, noting that due to HGTV’s impact, buyers today want to see finished product, not in-progress “projects.” Jerfita has served on board of Youth Services of Glenview/Northbrook, offering counseling and crisis intervention, and she also developed the Jerfita Team Key to Success Scholarship for Glenbrook South High School seniors.
ACTIVE
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Joanne Nemerovski —
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2120 Lincoln Park W, 5-6 | $5,800,000
2040 N Mohawk | $3,750,000
4/1/22 3:00 PM
32 APRIL 4, 2022 • CRAIN’S CHICAGO BUSINESS
Sophia Klopas (left), Jason Stratton
Kari Kohler
Lance Kirshner
Matt Laricy
Karen Schwartz (left), Laura McGreal
Elizabeth Lothamer
Mario
KLOPAS STRATTON TEAM
THE KOHLER GROUP
THE LAKE GROUP
LARICY
LOTHAMER GROUP
THE
Kari Kohler, broker and team lead Coldwell Banker Realty
Lance Kirshner, real estate broker and team lead Compass
Matt Laricy, managing partner Americorp
THE LAURA MCGREAL & KAREN SCHWARTZ (LMKS) GROUP
Elizabeth Lothamer, broker and team leader @properties
Mario Berks Hom
In 2021, The Kohler Group expanded to Denver and Las Vegas, building teams on the same model as the St. Charles-based business. The team also hired a videographer to document clients’ homes, with a focus on such amenities as large at-home offices, pools, outdoor areas and in-law arrangements. A notable transaction helped put a subdivision experiencing depressed pricing back on the map with publicity surrounding the sale of a home with a full-size basketball court for top dollar. Kari Kohler is a board member of Arcsology.
In 2021, The Lake Group expanded to seven fulltime team members and business nearly doubled to $73.8 million from $47.5 million. Lance Kirshner and his group were the fourth broker/team to list a unit at 900 N. Lake Shore Drive, a building designed
In the last 18 months, Laricy closed 543 units with volume of more than $268 million. One was a $5.6 million penthouse in the West Loop and another was a large terrace unit at luxury Noir Residences building for $2.5 million. Matt Laricy relies on technology for marketing: social media advertising; promoting weekly on Instagram, Facebook and YouTube; 3D tours, drone video and custom online interactive presentations. Laricy also uses NFC (near-field communication) tags, which he believes will be the wave of the future in lieu of brochures.
After building the Lothamer Group team from one to five agents, Elizabeth Lothamer recently hired both a new operations manager and full-time marketing director to streamline business. Unusually creative marketing approaches include hosting wellness events at listings with massage and acupuncture. The team works with Humble Design, an organization that furnishes homes for people emerging from homelessness, helping to furnish rooms for teenage moms and families. The team does an annual Habitat for Humanity women’s build and fundraising event and volunteers with the Frank Lloyd Wright Trust.
The M Nota Estat has f time estab socia for a majo Insta and ers. M law f Jone & Ell intel litiga is a f mem a bo ans S
Sophia Klopas and Jason Stratton, partners Berkshire Hathaway Home Services Chicago
Sophia Klopas downsized her team to six brokers while increasing volume with a renewed dedication to excellence. During COVID, the team found new ways to spin its 4K video marketing investment, converting tours to more of a blog style, reshooting many existing videos and creating mashups, clips and teasers to entice buyers. A founding member of the KoenigRubloff Cares Foundation (now known as the Kindness Foundation), Klopas raises money for supplemental programming at local elementary schools as well as student backpacks and Christmas presents for the kids.
by Ludwig Mies van der Rohe. After managing a renovation, the team successfully sold the unit within 48 hours of relisting. Kirshner has closed over $300 million in transactions so far in his career and is also a licensed real estate appraiser.
Laura McGreal and Karen Schwartz, broker/team leads Dream Town
Over the past 18 months, the LMKS team has grown to 10 women, becoming No. 1 in transactions and No. 2 in volume at the Dream Town Lincoln Park brokerage office—its highest numbers to date. For its biggest transaction of 2021, the group’s background in new construction helped guide its client in the negotiation and purchase of a double unit in the pre-construction phase at the Peoria Green Development. Two other notable projects were Illume in the West Loop and Norweta Club.
CONGRATULATIONS LORI JOHANNESON
Crain’s 2022 Notable Residential Real Estate Brokers
#1 REALTOR®
CONGRATULATIONS
@properites Christie’s International Real Estate NAPERVILLE *
The Esenberg Team on being a Crain’s 2021 Notable Residential Real Estate Broker Team 847.370.6251 | esenbergteam.com
Lori Johanneson Real Estate Broker
(630) 283-2089 lori@ljhomesellingteam.com
www.ljhomesellingteam.com @johannesonhomes
Let our family show your family the way home!
*B re Re Ba
©2022 BHH Affiliates, LLC. An independently owned and operated franchisee of BHH Affiliates, LLC. Berkshire Hathaway HomeServices and the Berkshire Hathaway HomeServices symbol are registered service marks of Columbia Insurance Company, a Berkshire Hathaway affiliate. Equal Housing Opportunity. Broker Metrics/InfoSparks 1/1/2021 to 12/31/2021 closed sales.
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CRAIN’S CHICAGO BUSINESS • APRIL 4, 2022 33
Mario Greco
John Morrison
Danielle Moy (left) and Shelly Moy
Melanie Giglio-Vakos
Pattie Murray
Randy Brush
P
THE MG GROUP
THE MOY GROUP
Mario Greco, founder Berkshire Hathaway HomeServices Chicago
THE MVP TEAM; MELANIE GIGLIOVAKOS PARTNERS
PATTIE MURRAY TEAM
RANDY BRUSH TEAM
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MORRISON HOME TEAM
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The MG Group, a Crain’s Notable Residential Real Estate Broker since 2019, has focused significant time and resources into establishing professional social media accounts for all its agents on all the major channels: Meta, Instagram, TikTok, Twitter and LinkedIn, among others. Mario Greco practiced law for several years at Jones Day and Kirkland & Ellis in Chicago in their intellectual property litigation departments. He is a fundraising committee member for CurePSP and a board member of the Evans Scholars Foundation.
John Morrison, owner and broker @properties
From 2020 to 2021, Morrison Home Team increased its total sales volume by 77.5%. It marks the third year that John Morrison has outsold all other competing brokerages in the 60010 area and the 12th consecutive year he’s been the No. 1 agent in closed volume in Barrington. The most interesting transaction of the year was a $2.995 million home, which sold in just over 30 days for the full list price. Morrison is an active member of The Shepherd’s Circle, supporting health care in the Barrington community.
Danielle Moy and Shelly Moy, brokers @properties
With more than $78 million in sales volume in 2021, The Moy Group is the No. 1 real estate team at @properties’ Orland Park office. One of its key marketing tools is “coming soon” ads and reaching out to local realtors to promote properties before they hit the market. Danielle Moy is a member of the Asian Real Estate Association of America, which promotes sustainable homeownership opportunities in Asian American communities, and she was its “A-List #1” top sales professional by 2020 individual sales.
CONGRATULATIONS, ANNE DUBRAY! #1 COLDWELL BANKER REALTY AGENT ON THE NORTH SHORE A Luxury Property Specialist with the Coldwell Banker Global Luxury® program and an International Society of Excellence award winner, Anne achieved over $90
Melanie Giglio-Vakos, team lead Compass
The MVP team has an extensive list of unlisted new-construction properties as well as resales of condos, townhomes, and single-family homes in Chicago and the suburbs. A key marketing tool is to leverage off-market listings to create an air of exclusivity for buyers to make an offer before homes hit the general market. Melanie Giglio-Vakos, who has more than 20 years of residential real estate experience, is a board member of Imerman Angels and is on the board of the Chicago Association of Realtors’ Casino Royale event.
Randy Brush, broker Coldwell Banker Realty
Pattie Murray, broker Berkshire Hathaway HomeServices Chicago
Randy Brush considers himself a coach and mentor to new agents and to clients, especially seniors, who can require a higher degree of hand-holding services. Having worked for a moving company earlier in his career, he personally shepherds clients—he closed 115 transactions last year alone—through details. In one case, he helped a disabled veteran evicted from an “inhabitable” home get his property sold quickly so he could move off the streets. Brush has been involved with Realtors Against Homelessness for the past five years.
The network led by Pattie Murray, a lawyer admitted to practice before the U.S. Supreme Court, leans toward bankers, attorneys, doctors and other professions. A notable recent transaction saw her serving as the selling agent for the largest (in terms of dollars) residential single-family home sale in Glen Ellyn, at $2.6 million. She has served on the board of directors for Wheaton Bank & Trust since 2005, is chief fundraiser for the Young Men’s Educational Network in Chicago’s North Lawndale neighborhood and is an annual Diamond Sponsor for the Glen Ellyn Infant Welfare Society’s Housewalk.
congratulations
to Connie Dornan on being Crain’s 2022 Notable Residential Real Estate Broker
million in sales in 2021 and has more than $1 billion in
NOMINATED 5 YEARS IN A ROW!
career sales. In 2021 Anne achieved outstanding success: • #1 Coldwell Banker Realty Agent on the North Shore • #2 Coldwell Banker Realty Agent across Chicagoland • Represented More Buyers and Sellers in Glenview than Any Other Agent*
TheotokosPanagia
TheotokosPanagia
Count on Anne and her Anne Advantage Team for exceptional real estate service. Let the best guide you. 8 47. 2 0 8 .1 3 9 7 CO N N I E @ CO N N I E D O R N A N .CO M
ANNE DUBRAY
anne.dubray@cbexchange.com 847.657.3747 Licensed in Illinois and Wisconsin
TOP 1% IN THE NORTH SHORE* #2 IN ILLINOIS BY REAL TRENDS**
*By North Shore-Barrington Association of REALTORS ® **Top 1% & #2 in State of Illinois by Real Trends 2015-2021. This data is LQIRUPDWLRQDO DQG FDQQRW EH JXDUDQWHHG DFFXUDWH 'DWD PDLQWDLQHG E\ 05(' //& PD\ QRW UHáHFW DOO UHDO HVWDWH DFWLYLW\ LQ WKH PDUNHW
*Based on total number of units in Glenview in all price ranges as reported by Midwest Real Estate Data on Jan. 13, 2022 for the period of Jan. 1-Dec. 31, 2021. One unit equals one side of a transaction (buyer or seller). Source data is deemed reliable but not guaranteed. Affiliated real estate agents are independent contractor sales associates, not employees. ©2022 Coldwell Banker. All Rights Reserved. Coldwell Banker and the Coldwell Banker logos are trademarks of Coldwell Banker Real Estate LLC. The Coldwell Banker® System is comprised of company owned offices which are owned by a subsidiary of Realogy Brokerage Group LLC and franchised offices which are independently owned and operated. The Coldwell Banker System fully supports the principles of the Fair Housing Act and the Equal Opportunity Act. 22A76Z-DC_CHI_3/22
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4/1/22 3:00 PM
34 APRIL 4, 2022 • CRAIN’S CHICAGO BUSINESS
Vadie Reese (left) and Elijah Reese
Bari Levine (left), Elena Tamillo
Riz Gilani
Rosie Gonzalez
Marlene Rubenstein (left), Dena Fox
Ryan Preuett
Mike S
THE REESE GROUP
REFINE RESIDENTIAL BY THE BARI & ELENA TEAM
RG GROUP
THE ROSIE GONZALEZ GROUP
RUBENSTEIN FOX TEAM
RYAN PREUETT GROUP
THE TEA
Rosie Gonzalez, broker Coldwell Banker Realty
Marlene Rubenstein and Dena Fox, broker associates Baird & Warner
Ryan Preuett, global real estate advisor Jameson Sotheby’s International Realty
Mich brok Kelle
Vadie Reese, real estate broker Serene Realty
The Reese Group recently created a concierge program to help sellers in low-income communities renovate homes with no upfront costs or fees, enabling them to sell at top-dollar market values. To be COVID-safe, the 18-member team conducted digital tours, used QR codes to schedule appointments and even sold one listing to a buyer using FaceTime video. Vadie Reese, who is a clinical quality improvement specialist and an accredited distressed property representative, is on the women’s board at Greater Love MB Church in the Austin neighborhood.
Bari Levine and Elena Tamillo, co-founders @properties
The Bari & Elena Team had a record-breaking 2021 with more than $125 million in sales. Five agents on the team have individually sold more than $10 million in real estate. A notable recent transaction was a fall listing that got stale: The team virtually staged photos to refresh it as a “new” listing and sold it for the full asking price after three months. Bari Levine has been featured on “House Hunters,” is president of @Gives Back charity, and contributes to the Anthony Rizzo Family Foundation and Lynn Sage Breast Cancer Foundation.
Riz Gilani, broker Dream Town
RG Group had its best year yet, ranking in the top 1% of Chicago Realtors in both 2020 and 2021. With 95% of business coming from prior clients and their referrals, the team has grown to five licensed brokers. An interesting recent transaction involved a multifamily investment purchase, which fell through when the appraisal came in lower than the contract price. A week later, another client reached out. The property was appraised the second time around, and a new deal was put together promptly. Riz Gilani is a board member at One Tail at a Time.
CONGRATULATIONS
La Grange-based Rosie Gonzalez has held the top spot in her office in sales and volume for the past six years; this year, she sold six times more homes than any other agent in her hometown. A college recruiter before she ventured into real estate, Gonzalez has introduced TikTok to her social media marketing game, using it to introduce new listings and open houses. A notable transaction—and one that she considers an honor—was a referral from a well-known retired broker for his brother.
The Rubenstein Fox Team, which surpassed the $100 million mark in team sales, started a new brokerage in Florida to serve as a second market for Illinois clients. Marlene Rubenstein is a LeadingRE relocation and seniors real estate specialist. The team has expertise in public relations, retail, finance and project management. Rubenstein is active with the National Kidney Foundation of Illinois, where she co-founded the Women’s Board, as well as with a shelter in the city for battered and abused women with children.
Ryan Preuett Group achieved more than $100 million in closed and pending sales in 2021. The team also expanded the number of incoming and outgoing referrals by building on a network of brokers throughout the country. A noteworthy speedy transaction was one built entirely on trust: Preuett met the buyers on a Wednesday, spent a day with them Sunday, and closed the transaction about a week later. He is a part of the Top Agent Network Advisory Board and the Hippocratic Cancer Research Foundation Board.
Compass Congratulates Lance Kirshner
C S TA R R T E A M . C O M
CAROLINE STARR 8 47. 8 9 0 . 8 8 9 2 caroline@cstarrteam.com N OTA B L E R E S I D E N T I A L R E A L E S TAT E B R O K E R
· 2022 · CRAIN’S CHICAGO BUSINESS
Premier Real Estate Team, Exceptional Results
Providing Concierge-Level Real Estate Services
Total Volume
Units Sold
$73.8M
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CRAIN’S CHICAGO BUSINESS • APRIL 4, 2022 35
Mike Saldino
Scott Stavish (left), Andy Tsoukalis
Philip Skowron
Todd Szwajkowski (left), Amie Klujian
Nick Fallico (left), Craig Fallico
Josh Weinberg (left), Tommy Choi
THE SALADINO SELLS TEAM
SCOTT STAVISH GROUP
SKOWRON GROUP
SWAKEGROUP
TEAM FALLICO
Michael Saladino, managing broker Keller Williams OneChicago
Scott Stavish and Andy Tsoukalis, brokers @properties
Philip Skowron, founder and broker @properties
Todd Szwajkowski, president and broker Dream Town
Craig Fallico, team lead and broker Dream Town
WEINBERG CHOI RESIDENTIAL
Over the past three years, Michael Saladino has sold more than 170 units for over $60 million in volume, earning him a Top Producer award from the Chicago Association of Realtors for the seventh year in a row. A former sergeant with the Chicago Police Department, Saladino was appointed by the city as a Commissioner for the Northwest Home Equity Assurance Program. He’s also affiliated with Homes for Heroes, is a member of the Keller Williams Sports + Entertainment division and serves on the Chicago Association of Realtors’ Grievance Committee.
The Scott Stavish Group was involved in more than 150 transactions totaling $80 million-plus in sales in 2020 and 2021, including an “incredibly special” home in Evanston. The team of five agents covers a market stretching from the South Side to the northern suburbs. Prior to working in real estate, Scott Stavish was a vice president with a Chicago restaurant group. Recently, he was on an episode of “House Hunters.” Stavish and other team members are involved with dozens of charities.
Philip Skowron emphasizes team mentoring and coaching. Three individual Skowron Group agents earned membership into the @properties’ “Road to Rolex” club because each closed out 2021 with more than $12 million in volume. One noteworthy transaction involved selling two penthouse units at the Park Monroe, both fetching the building’s highest price-per-squarefoot resales in the last six years—and without publicly listing them. Skowron is involved with the Greater Chicago Food Depository, Heifer International and OneWorld Health.
The members of SwakeGroup take pride in selling clients’ homes at 99.58% of list price, on average, a level that it says is 2.25% higher than the Chicago average. The team also listed and sold Chicago’s first pre-certified Passive House Institute US renovation, as well as an “inventive reinterpretation” of a Lakewood Balmoral Historic District two-flat in Andersonville, which was one of only five single-family homes listed above $2 million to sell in that neighborhood in 2021. Todd Szwajkowski is also president of Dream Town’s LGBTQ Client Services Division.
In the past 18 months, Team Fallico has closed 352 homes and nearly $150 million in volume, becoming the No. 1 brokers at Dream Town and in the city of Park Ridge for three years running. Known for aggressively marketing all over Park Ridge, Craig Fallico was formerly a teacher and coach, and many of the Team Fallico’s clients (estimated at more than 7,000 over the years) are former students and athletes. The team hosts an annual “One-Ton” food drive in November.
Tommy Choi and Josh Weinberg, co-founders Keller Williams OneChicago
Tommy Choi, a 2020 Crain’s 40 Under 40 honoree, is a past president of the Chicago Association of Realtors. Noticing that 80% of millennials start their home search on mobile devices, the Weinberg Choi Residential team observed that millennials can use help in curating their home search and might have too many options being alerted to them. Deciding to “go analog,” team members made 500-700 calls each week to various realtors to bring the team’s listings to their attention, enabling them to be influencers to their clients.
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Lincoln Presidential Library, foundation cut ties LINCOLN from Page 1 president, starting with the Lincoln Home National Historic Site elsewhere in the state capital. “We’re really excited about the opportunity to broaden our scope and reach and to do that with very enthusiastic partners,” said Erin Carlson Mast, the foundation’s CEO. The split challenges both organizations. The 17-year-old museum, a state agency whose exhibits need some costly updating, loses its primary outside fundraising affiliate. And the private foundation loses its direct tie to the official library celebrating one of the nation’s greatest presidents, a connection that has been key to its pitches to donors. The backstory to this split is a museum-worthy historical saga, replete with tenuous scholarship, shaky institutional governance ethics and one recent museum director sacked for, essentially, lending the Gettysburg Address to Glenn Beck. In 2020, the library and museum fired the official state historian who wrote the 2019 report chronicling the story of the supposed Lincoln hat’s dubious provenance. The Lincoln library “is viewed nationally as, you know, evertroubled,” says Harold Holzer, a prominent Lincoln scholar and past leader of the national Abraham Lincoln Bicentennial Foundation. And that’s a shame, he added, because “the ALPLM has a fantastic collection for research or for display.” The library-foundation breakup won’t help that reputation. “As someone who works in nonprofits and education, it’s surprising and somewhat inexplicable to me that an association between an institution and its foundation partner should be terminated,” says Holzer, a longtime Metropolitan Museum of Art executive who now directs the Roosevelt House Public Policy Institute at Hunter College in New York City.
DIVIDED RESOURCES
On the horizon is another big potential fight. As the foundation pointedly noted in a news release announcing its new direction, the loan to the library of its Taper Collection, which includes many extraordinary Lincoln artifacts and also the hat, ends in October. “Our goal is still to make the artifacts available for the public, including the people of Illinois, to enjoy,” Mast says. “How we get there is what we need to figure out.” Library officials, meanwhile, insist the collection’s rightful place is in their museum, alongside its own highly regarded holdings. “What they’ve told their donors, what they’ve told us, is the collection will be here,” says Christina Shutt, who took over as executive director of the library and museum last June. The squabbling between the organizations—which have shared missions and some personnel
since the foundation’s founding in 2000 and both worked in the ALPLM’s buildings—confounds observers. “We just couldn’t get anyone to play nice,” says state Rep. Terra Costa Howard, D-Lombard, who tried to use her background as a family mediation lawyer to achieve reconciliation as the two sides were breaking up last spring. “It was so acrimonious and they had such bad blood at that point.”
POWER STRUGGLE
nois state historian,” Wheeler, in his list of woes besetting the institution. Some of the others: Rick Beard, who headed both the library and the foundation at the time, was fired by both after three arrests in 2007 and 2008 for shoplifting. Beard declined an interview request. Another former director, Alan Lowe—who did not return a call—was fired in 2019 after the state Office of the Executive Inspector General concluded he had improperly lent the library and museum’s most prized artifact, a Gettysburg Address copy handwritten by Lincoln, to an organization associated with Beck. In exchange, “Beck had promised Lowe he would fundraise” to help retire the outstanding debt incurred by the foundation to finance the Taper Collection purchase, then at $9 million, the historian’s report says. Beck’s group ended up contributing just over $50,000. That debt is also a huge remaining issue. The foundation owes just over $8 million on a loan that is due in October, foundation officials say. Library director Shutt says: “If the collection is paid in full before Oct. 31, then that collection becomes property of the state of Illinois and the people of Illinois, as it was always intended to be. If they somehow chose to wait and pay it off in November or some
Foundation leaders talk like the jilted partner in a long-term marriage, finally getting the message that it was over, while their library counterparts say it had to end because the foundation would not “provide meaningful transparency.” The foundation responds that its publicly available federal tax filings provide all necessary transparency. As this all was heating up last spring—when the foundation says the museum locked it out of its offices after the two groups failed to reach a new working agreement—both sides produced position papers and testified before the Legislature in terms that made the rift clear. Looming large in the background is the stovepipe hat, the supposed Lincoln artifact now known to be of dubious provenance that the foundation acquired as part of the Taper Collection. The collection was purchased for $23 million from Louise Ta- “IT’S SURPRISING AND SOMEWHAT per, a foundation board INEXPLICABLE TO ME THAT AN member at the time. As the 2019 report by ASSOCIATION BETWEEN AN former state historian Samuel Wheeler spells INSTITUTION AND ITS FOUNDATION out, the hat was sold to PARTNER SHOULD BE TERMINATED.” a downstate antiques shop for $1 before it Harold Holzer, past leader of the national was appraised at more Abraham Lincoln Bicentennial Foundation than $6 million when the foundation bought it at the other time, it would be disappointing and a total violation of urging of library officials in 2007. Wheeler declined to be in- our trust.” But the foundation doesn’t terviewed, but his take is clear. “My research convinced me have that money and, indeed, that senior officials at ALPLM has been struggling to pay off that had repeatedly weaponized the Taper Collection loan for years, stovepipe hat against the (foun- foundation head Mast says. What dation), as part of a power strug- seems a more likely possibility is gle dating back to 2012,” Wheeler that the foundation will renegotiwrote. “The same tactic was being ate to extend its loan terms as it employed throughout 2018 and has done in the past. Mast insists that having a new, 2019.” Wheeler’s report spells out that clear path forward, with the trouthe hat’s validity as a Lincoln arti- bled library relationship behind fact is unproven, but also empha- it, strengthens the foundation, sizes that the historian wanted to allowing it to focus on new partdo more research before releasing nerships and its annual Lincoln his findings, including examina- Leadership Prize, a key fundraistion of the hat by garment experts er that has gone to four heads of who could at least determine if state since its founding in 2006. “We have the opportunity now it was of Lincoln’s era. He wrote the 54-page research “Status Up- to lead our own projects, in addidate” under orders from ALPLM tion to supporting places like the officials, he says, and he was fired Lincoln home,” Mast says. The library has started its own within seven months. The library says it can’t com- membership program and is doment on personnel matters, but ing its own fundraising, Shutt spokesman Chris Wills said “his says, and she is not looking back, research into the hat had nothing either: “I came to my own conto do with his departure from the clusions that moving forward without the foundation was in the ALPLM.” Lincoln scholar Holzer includ- best interests, particularly at the ed “the loss of a really good Illi- ALPLM.”
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CRAIN’S CHICAGO BUSINESS • APRIL 4, 2022 37
West Loop apartments coming in big numbers
THE WEST IS THE BEST The West Loop has become the most popular destination for apartment developers in greater downtown, with more than 9,000 units in the planning phase.
APARTMENTS from Page 3
TRANSITION
The coming wave of apartment construction—and all the residents it will bring—promises to transform the West Loop, if most of the projects proposed there get off the ground. It could become the foundation for an urban success story, supporting a bustling and diverse 21st-century neighborhood where people can work and live and restaurants, stores and other businesses can flourish. But the transition won’t be seamless. The population of the West Loop will jump, shifting its demographics and putting new demands on infrastructure and city services. Not everyone will welcome the growth. As more tall towers rise in a neighborhood dominated by low-level structures, the building boom will spark more not-in-my-backyard debates and test the city’s planning framework protecting the neighborhood from development run amok. “People are going to be more vocal and not want their views blocked,” says Integra Senior Managing Director Ron DeVries. “They’ll fight the density and fight the traffic and all that other stuff.” Sterling Bay, one of the first big developers to push into Fulton Market, focused initially on office projects, including new buildings for Google and McDonald’s. Now, the firm is leading the pack in apartments as well: In addition to its 282-unit Morgan Street development, Sterling Bay plans three more buildings totaling 1,371 apartments in the neighborhood, one at 1245 W. Fulton St. and two at 1300 W. Carroll St. But it’s a crowded market. At Randolph and Peoria streets, Related Midwest is constructing a 43-story, 300-unit apartment tower expected to open next year. A venture led by Chicago developer Tom Roszak is building a 27-story, 375-unit project at Randolph and Elizabeth streets, which is also expected to open in 2023. Shapack Partners plans two Fulton Market projects totaling 591 apartments, while Fulton Street Cos. plans two buildings with 833. Though apartment develop-
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2022
2023
2024
In planning
West Loop 609 1,248
9,065
Near North 2,983
South Loop 867
738
975
Streeterville 1,639
Loop/New East Side TODD WINTERS
1,238
River North Gold Coast
STERLING BAY
section of the neighborhood where the number of proposed apartment projects has exploded in the past year or two. Chicago-based Sterling Bay was breaking ground on a 30-story building at 160 N. Morgan St., one of at least 19 multifamily developments planned or under construction in the former meatpacking district. Fulton Market has established itself as a popular destination for a growing number of companies, including McDonald’s, Mondelez and Deere. Now, it’s moving into a new growth phase dominated by residential development. “With its strong pipeline of incoming corporate headquarters, innovative retailers and promising tech ventures, the area now needs more multifamily options that can accommodate a young, modern workforce,” Sterling Bay CEO Andy Gloor says in a statement.
Related Midwest’s 43-story tower is under construction at Randolph and Peoria streets.
*South Loop figures do not include The 78 megadevelopment or Riverline on the Chicago River. Note: The boundaries of the West Loop are defined as the Chicago River on the east, the Eisenhower Expressway on the south, Ashland Avenue on the west and train tracks south of Hubbard Street on the north. Source: Integra Realty Resources
A rendering of the 30-story, 282-unit building Sterling Bay is developing at 160 N. Morgan St. ment in downtown Chicago plunged in the early months of the pandemic, the construction pipeline is filling up again amid soaring downtown rents. Among all the commercial real estate sectors, multifamily remains the strongest in Chicago—and lenders and investors are still eager to back new developments. “A lot of times, what gets built is a function of what capital’s available in the market,” DeVries says. The West Loop is already the top downtown neighborhood when it comes to multifamily projects already underway. Projects completed or currently under construction will add 2,139 apartments to the West Loop market in 2022, 2023 and 2024, versus 1,605 for the South Loop, the next busiest neighborhood, according to Integra. Still, not all developers will secure city approvals or construction financing for projects still in the planning stage. Rising interest rates and construction costs could make some projects unfeasible, or a recession could scare off construction lenders.
paid professionals who can afford high rents, potentially creating a neighborhood that’s largely white and relatively wealthy. But the city’s Affordable Requirements Ordinance, or ARO, will encourage some diversity. The ordinance requires developers that seek a zoning change to offer as many as 20% of their units at prices or rents affordable to lowor moderate-income residents. The city set the bar even higher in Fulton Market, aiming for affordable units to account for 30% of all housing built north of Lake Street. As the West Loop construction
boom accelerates, so will debates among residents, developers and city officials over issues like building heights, traffic and green space. The neighborhood is short of green space already, and Neighbors of West Loop is pushing for more, says Letourneau. “We’re talking about somewhere to walk the dog,” he says. Expect more disputes over building heights, too. Under a 2018 neighborhood plan, Letourneau’s group opposes buildings taller than 150 feet—10 to 15 stories. But many projects on the drawing board in Fulton Market
are 25 to 30 stories or more. As the area fills in, complaints about shadows and the “canyonization” of streets will only grow louder. The West Loop population jumped to 18,120 residents in 2020, up 61% from 2010, according to the Chicago Metropolitan Agency for Planning. With a construction boom already underway, the neighborhood could add several thousand more by 2030. Letourneau hopes the city can get it right. “More residents, we’re all for it,” he says. “More residents than the neighborhood can handle? That becomes a problem.”
LAND RUSH
Fulton Market—bounded roughly by Washington Boulevard, Halsted Street, Ogden Avenue and the train tracks north of Kinzie Street—accounts for 6,198 of the apartments proposed in the West Loop, more than two-thirds of the total. The land rush there has gained momentum since 2020, when West Loop Ald. Walter Burnett Jr., 27th, supported a proposal to lift a ban on residential construction north of Lake Street. The proposal, approved by the city last year, opened up a big section of the neighborhood to apartments. Burnett, who has embraced a pro-growth stance, is happy that his ward is so popular with developers. “It’s helping keep everything alive,” he says. “It’s helping keep construction alive. It’s helping sustain the businesses in the area.” It also will attract a lot of well-
4/1/22 3:43 PM
38 APRIL 4, 2022 • CRAIN’S CHICAGO BUSINESS
Loop hotel hits the market BY DANNY ECKER The real estate firms that recently bought the La Quinta Inn & Suites downtown as part of a massive portfolio acquisition are now trying to unload the Loop property, an offering that will test investor appetite for limited-service hotels in the city’s core as COVID-19 restrictions wane. A joint venture of real estate investor Highgate and investment firm Cerberus Capital Management has hired the Chicago office of brokerage Hodges Ward Elliott to sell the 239-room hotel at 1 S. Franklin St., according to a marketing flyer. There is no asking price listed for the nine-story property at the southeast corner of Franklin and Madison streets, but a source familiar with the offering said the building could fetch bids of more than $48 million, or at least $200,000 per room. The listing comes as the downtown hotel market labors to come back from a pandemic malaise, given Chicago’s heavy reliance on business travel and visitors tied to conventions and trade shows that so far aren’t drawing the same crowds they were before the crisis.
Average occupancy at downtown hotels last year was 43%, up dramatically from 27% in 2020 but still well below the 74% average in 2019, according to hospitality data and analytics firm STR. Yet the pain hasn’t been the same for all hotels. Unlike big, full-service properties that rely heavily on group business and events, limitedand select-service brands like La Quinta on the lower end of the hotel chain scale have performed better, often appealing to leisure travelers that have bounced back faster than the corporate side. Investors have noticed, as 74% of hotel sales nationwide in February were for limited-service properties, up from a roughly 33% monthly average between 2015 and 2019, according to data from research firm Real Capital Analytics. Highgate and Cerberus, which picked up the Loop hotel with their recent $1.5 billion acquisition of real estate investment trust CorePoint Lodging, are hoping to find a buyer looking to bet on the limited-service strength and the post-pandemic comeback of the Loop. Hodges is marketing the hotel as an opportunity to install new management and potential-
ly rebrand it through an option to terminate the La Quinta affiliation. The hotel generated net cash flow of just more than $912,000 in 2021, according to Bloomberg data tied to a loan covering CorePoint’s portfolio. The loan was packaged with other loans and sold off to commercial mortgage-backed securities investors. That was a substantial improvement from the $1.8 million in net cash flow losses in 2020, but well below the $3.2 million it generated in 2019, loan data show.
HISTORY
It’s unclear how much capital CorePoint had put into the property during its ownership tenure. The building itself dates back to 1958 when it was built as the headquarters of the Jewish Federation of Metropolitan Chicago. It served that purpose until 2006, when the federation relocated and the property was sold to La Quinta, which converted it into its downtown flagship and debuted the hotel in 2009. Spokesmen for the sellers couldn’t be reached. The La Quinta is a block south of a Hyatt Place hotel in the Loop that was sold in 2016 for close to $74 million, or nearly $360,000 per room.
COSTAR GROUP
La Quinta Inn & Suites downtown will test investor appetite for limited-service hotels, which are faring better than full-service rivals that rely more heavily on group business
La Quinta Inn & Suites at 1 S. Franklin St. Another promising deal came last year at the Residence Inn on LaSalle Street in the Loop, where Chicago developer Michael Reschke completed a big refinancing despite the pandemic hampering demand. But some downtown hotels have sold for low prices in recent months, particularly those owned by REITs. Irvine, Calif.-based Sunstone Hotel Investors recently sold Embassy Suites Chicago Downtown and Hilton Garden Inn Magnificent Mile in River North for a combined total of about $178,000 per room. That deal followed its sale of the Hyatt Centric Chicago Magnificent Mile in Streeterville for $167,000 per room. Sunstone’s executives cast Chicago in a harsh
light recently, noting on a conference call with analysts that the market “has been hindered by excess supply and an inability to drive meaningful rate and profitability growth.” One factor in play for all downtown hotels is that property taxes are expected to jump on commercial properties downtown after being revalued by Cook County Assessor Fritz Kaegi last year. Investors won’t know the full financial pain of those reassessments until the next batch of property tax bills comes out. Ryan Lindgren in the Chicago office of Hodges Ward Elliott is marketing the hotel on behalf of Highgate and Cerberus.
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Chicago expects influx of Ukrainian refugees, and aid groups are preparing most refugees going to Poland. Warsaw alone has absorbed 300,000 refugees, prompting the city’s mayor to contact Chicago, which also has a large Polish population, for help. Though details for Ukrainian relocations haven’t been finalized yet, the U.S. State Department provides agencies a onetime cash payment of $1,225 per refugee to set up housing, food and other necessities and $1,050 to cover administrative costs. The money, however, is distributed only after a refugee is resettled and often doesn’t cover all the expenses, Kano said, so RefugeeOne relies on foundations, corporate partners and private donors to fill the gap. The organization provides housing, furniture, new mattresses, support groups, language classes and mental health services. “We have to have private fundraising and find co-sponsoring groups,” Kano said. “We provide a dignified arrival for everyone who comes, and that takes resources. That’s why we have a very strong team that does nothing but cultivate donors and communicate with donors.” About 52% of RefugeeOne’s operating budget for 2019 came from private funding, while 48% was from the government, Kano said. When agencies scrambled to resettle Afghan refugees who were airlifted out of the country following the Taliban takeover in August, foundations provided
$50,000 to help RefugeeOne get a head start, Kano said. Other key details in the current crisis, such as whether Ukrainians will need to undergo the lengthy process of applying for asylum in the U.S. and when placement volume might increase, have not been communicated yet, according to Elma Kulovic, director of the Refugee Resettlement Program run by the Archdiocese of Chicago’s Catholic Charities.
STATUS QUESTIONS
The State Department hasn’t announced whether Ukrainians will be granted refugee status, which typically takes longer because paperwork is processed overseas, or arrive under humanitarian parole. The latter would allow them to come more quickly, but then require seeking asylum status after relocating, which is what occurred with the recent Afghan refugees. “We at Catholic Charities will be ready for (Ukrainian refugees), to serve them, but when they are going to start arriving, we don’t know,” said Kulovic, who added that she also needs to hire Ukrainian-speaking case managers because her organization doesn’t have any. “And, of course, Catholic Charities, I would just assume, is going to do an appeal to seek extra money to help this population, but we cannot make any plans yet because we don’t know what status they are going to arrive under. Will they be eligible for pub-
BLOOMBERG
REFUGEES from Page 3
According to the U.N. Refugee Agency, 3.9 million Ukrainians have fled the country since Russia invaded Ukraine and began bombings in February. lic benefits? Probably they will, but we still don’t have a clue.”
RESOURCES
Connor Mautner, founder of the nonprofit Chicago Refugee Coalition, said he’s received inquiries from donors asking how to support Ukrainian refugees and is working on expanding a resource center based at Sullivan High School in Rogers Park that provides food, clothing and other
materials to refugees. The Chicago Refugee Coalition isn’t a resettlement agency and operates solely on private funding, aiming to support families with additional needs that fall outside agency purview. Mautner said he’s concerned local organizations won’t have enough bandwidth to assist all the Ukrainians arriving here because of the prior funding cuts. “When the Trump adminis-
tration started systematically slashing the refugee admission ceiling, that basically led to a dramatic reduction in revenue for these organizations and, thus, there was a shriveling of capacity,” he said. “There was turnover, there was loss of institutional knowledge and really just an understanding of the processes that go into successfully resettling a family, and it really just led to tightening of belts.”
Investors fear that consumer loan defaults will start to rise as growth slows DISCOVER from Page 1 since the beginning of the year. Investors fret that consumer loan defaults will rise later this year or early next due to elevated costs while loan growth slows as more consumers watch their monthly budgets. Discover, in particular, relies more heavily on loan growth to fuel earnings than card rivals like JPMorgan Chase and Citibank, which focus on higher-end households who spend liberally on their cards but pay off their balances each month. The concern for Enova, which makes unsecured loans over the internet to consumers with below-prime credit ratings, is that loan losses will rise quickly. The price of oil is the primary proxy for these companies’ stock prices right now. But oil is far from the only inflationary pressure consumers are facing. Housing costs, utilities and food are among the areas affected, leaving consumers few, if any, places to turn to avoid losing purchasing power. Analysts at Wolfe Research
looked back at six periods in the past three decades where gasoline prices rose by 15% or more. Delinquency rates at credit card companies typically rose two to four quarters after the price spike started. “The current 50%-plus increase in gas prices is notably higher than any increases we have seen in the last 30 years and may exacerbate post-COVID credit normalization headwinds to the extent gas prices remain elevated,” Wolfe analyst Bill Carcache wrote in a March 17 report. Discover executives are watchful. “We feel we can react very quickly if we do see enough signs of a recession coming,” Dan Capozzi, president of U.S. cards at Discover, said at a March 9 investor presentation. “(We’re) not really sure whether this will abate or whether it will lead into a recession, but we’ll be ready just as we were going into the pandemic.” Enova CEO David Fisher is blunt. He says it’s been so long since the U.S. economy has experi-
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enced high inflation and correspondingly higher interest rates that investors are overreacting. “They haven’t seen it,” he says in an interview. Yet some investors old enough to have experienced inflation are worried, too. “Inflation is a terrible thing when it gets going,” activist investor Carl Icahn said in an interview March 22 on CNBC. “You can’t get that genie back in the bottle too easily. We saw it in the ’70s, we saw what happened.”
RESILIENCE
Another uncertainty is how aggressively the Federal Reserve will hike interest rates. Fed Chairman Jerome Powell most recently has signaled a more aggressive approach than his earlier statements forecast. Fisher says that as long as borrowers remain employed, he’s not worried about excessive loan losses. With more people going back to work as the pandemic’s impact has eased, Enova’s growth potential has improved since the beginning of the year, he contends.
“The size of the workforce is the same as our potential market,” he says. “We don’t lend to people without jobs.” Chicago in recent years has become a center for consumer lending, particularly firms catering online to borrowers with damaged credit. Enova is one of the pioneers in the industry. More recently, companies like Avant and OppFi have taken root here. Enova, Avant and OppFi combined employ at least 2,000 in the city. For now, both Discover and Enova say they see no signs that the U.S. consumer, who has been remarkably resilient through the pandemic, thanks in no small part to federal subsidies meant to keep businesses and individuals afloat, is cracking. Discover charged off a little over 2% of its credit card loans at the end of February—the highest rate since June 2021, according to a March 14 Securities & Exchange Commission filing. But that rate still is unusually low. Credit card loan balances fell for the second month in a row, but that’s not uncommon for the first two months
of the year as consumers take a breath after the holidays and often get tax refunds. Year-overyear loan growth was 7%, a strong rate for Discover. Enova saw demand for its high-cost loans surge in the first two months of the year. Consumer loan originations through February were more than twice what they were in the same period in 2021, according to a recent investor presentation. Meanwhile, loan delinquencies are in line with the same period in 2019, before the pandemic struck, Enova said. Enova’s customers tend to be people who live paycheck to paycheck and need a loan to cover an unanticipated expense like a car or home repair. The company has been a stellar stock market performer for years. Last year, Enova shares rose 65%. In the pandemic year of 2020, Enova stock gained more than 2% while the Standard & Poor’s 600 Financials Index lost more than 11%. This year so far? Enova is down more than 7% while the index is off less than 6%.
Vol. 45, No. 14 – Crain’s Chicago Business (ISSN 0149-6956) is published weekly, except for the first week of July and the last week of December, at 130 E. Randolph St., Suite 3200, Chicago, IL 60601. $3.50 a copy, $169 a year. Outside the United States, add $50 a year for surface mail. Periodicals postage paid at Chicago, Ill. Postmaster: Send address changes to Crain’s Chicago Business, PO Box 433282, Palm Coast, FL 32143-9688. Four weeks’ notice required for change of address. © Entire contents copyright 2022 by Crain Communications Inc. All rights reserved.
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