Crain's Chicago Business

BEST NEW EVENT SPACES: Our exclusive list of business-appropriate spots. PAGE 18

MEDICAL DISTRICT: New CEO eyes a boom in development. PAGE 3

CHICAGOBUSINESS.COM | APRIL 11, 2022 | $3.50

He’s the man who would be king—of weed Cresco CEO Charlie Bachtell took a winding path to the top of a company poised to become the biggest U.S. marijuana firm

JOHN R. BOEHM

BY JOHN PLETZ

Cresco CEO Charlie Bachtell

A safety-net hospital that’s fighting Duly’s plan for a competing facility takes aim at its financial backer

BY KATHERINE DAVIS A big Chicago-area doctor’s group and its private-equity backers are squaring off with a downstate hospital in a fight with potentially big implications for Illinois’ health care industry.

Blessing Health System, a nonprofit three-hospital chain based in Quincy, opposes neighboring Quincy Medical Group’s plan to build a “small format” nonprofit hospital 2 miles from Bless-

ing’s Quincy hospital, which is a socalled safety-net facility serving many Medicare and Medicaid patients.

Blessing is urging Illinois hospital regulators to block QMG’s plan, arguing the proposed hospital would siphon off profitable surgeries and privately insured patients that keep Blessing afloat financially.

QMG, a physician group that joined forces with Downers Grove-based Duly See DULY on Page 6

See CRESCO on Page 31

CRAIN’S CHICAGO BUSINESS

PATH TO HOMEOWNERSHIP

REVITALIZING

NEGLECTED REAL ESTATE Housing advocates push to upgrade rental buildings and fund new construction in neighborhoods crying out for economic development I PAGE 13

JOHN R. BOEHM

Hospital brawl revolves around private equity

As a collegiate tennis player, Charlie Bachtell liked to outlast his opponents by pounding away from behind the baseline.

After nearly a decade in the marijuana business, the 43-year-old CEO of Cresco Labs is poised to finally surpass his rivals with a $2 billion acquisition that would give him the largest company in the U.S. market.

The proposed acquisition of Columbia Care also would solve some strategic problems that have been nagging Cresco. Buying the industry’s No. 6 player would give Cresco a pathway into large new markets for recreational marijuana that are set to open in New Jersey and Virginia, while adding scale and efficiency that could improve profitability and impress investors.

If Bachtell pulls it off, Cresco will reach the top of an industry that’s primed for explosive growth if Congress legalizes pot nationwide.

But the transaction comes with considerable risk that could give competitors—including

NEWSPAPER l VOL. 45, NO. 15 l COPYRIGHT 2022 CRAIN COMMUNICATIONS INC. l ALL RIGHTS RESERVED

TAKING ATTENDANCE What remote meetings meant for City Council attendance—and why it matters. PAGE 2

P001_CCB_20220411.indd 1

4/8/22 3:33 PM

2 APRIL 11, 2022 • CRAIN’S CHICAGO BUSINESS

GREG HINZ ON POLITICS

Pols dole out the money as Election Day nears CRAIN’S ILLUSTRATION/ISTOCK

W

Maybe that’s why Lightfoot’s plan got a hostile reception from aldermen.

Did anybody bother to think instead about spending that money on, say, anti-violence programs that might keep some people alive? Or maybe it’s that businessman and sometimes mayoral hopeful Willie Wilson, who has his own gas-giveaway program going and at least used his own money and not taxpayers’ funds.

In Springfield, the situation does not appear quite as bad.

So far. But we won’t know for sure until fiscal experts get a chance to read the fine print of the budget deal Gov. J.B. Pritzker and General Assembly Democrats now have rolled out.

If you’ll recall, Pritzker opened the bidding by promising $1 billion in one-year tax cuts for “working families”—somebody show me a family that doesn’t work, but I digress—while also stashing extra cash into the state’s underfunded pension plans and depleted rainy day account.

Then the state House and Senate came up with bigger totals, including a permanent hike in the earned income tax credit.

Well, the final deal was even bigger, $1.83 billion in mostly temporary tax relief, an extra $200 OUR PUBLIC SERVANTS WANT YOU plus million into the TO KNOW THEY FEEL YOUR PAIN. rainy day fund, all said to be affordable because of quite bubbly state Let’s start at City Hall—Lori revenues.

Lightfoot, proprietor.

We’ll see if that works out.

With other jurisdictions House Republicans are skepmoving to ease gas prices, tical. This budget is “untenLightfoot has a plan to spend able,” they said, meaning that $12.5 million she got from Pritzker sometime after the somewhere—excess funds election will have to try to relying around here and there, vive his graduated income tax officials say—to give a fortuplan. But Senate Republicans nate few drivers and Chicago went the other way. They reTransit Authority riders a leased a plan saying the state break. A total of 50,000 of the is so flush that it can afford former would get gas cards $2.2 billion in permanent tax worth $150 (about two tanks cuts. Yes, permanent tax cuts full) and 100,000 would get that would remain in place ride cards worth $50 each. next year after all the COVID If you’re the lucky winner, cash is gone. congrats. But the vast majority Sigh. of Chicagoans won’t be. And Look at the good side, as the case with the guaranthough, folks. You’ll have the teed annual income checks money quite soon to buy the the city started sending out candy of your choice, because to some folks this year, the I can guarantee you rebatequestion is what happens related largesse will arrive next year when all that federal before elections. Chocolate COVID-relief cash now sloshbunny anyone? ing around is gone. hen an Illinois House panel a few days ago considered a series of proposed tax cuts, the big fight wasn’t over the wisdom of the cuts or how big they should be, but rather a side item: whether to post stickers on gasoline pumps notifying buyers that a small part of the tax on gas had been suspended, courtesy of the Illinois General Assembly.

Tells you everything you need to know, doesn’t it?

From City Hall to Springfield to Capitol Hill, the candy man and candy lady are out in force. At a time when inflation is up and costs are rising, our dedicated public servants can’t wait to let you know they feel your pain and will haul out the collective plastic to ease it. After all, there’s an election coming up, dontcha know.

Nobody likes to pay taxes.

Especially me. I got the bad news from my accountant a few days ago and, trust me, you don’t want to know. But if we’re going to spend money on things we say we need, be it good schools or more cops or decent-size worker pensions, we have to pay for it.

And when we instead borrow money to take care of those bills, we only end up paying more in the end.

Some of the most powerful Chicago aldermen show up to work the least A wave of new aldermen campaigned against incumbents by citing their low attendance at meetings. Now, the freshmen are outperforming the veterans.

BY ALEX NITKIN, ERIN HEGARTY, CLAUDIA MORELL AND A.D. QUIG Virtual public meetings and better systems of accountability have sharply boosted aldermanic attendance rates at City Council meetings since 2019, according to a joint analysis by The Daily Line, WBEZ and Crain’s Chicago Business. The average Chicago alderman showed up to do the work of the City Council about four out of every five times they were required to since the start of the term in May 2019.

The B-minus average still represents hundreds of absences from City Council committees, when aldermen debate and approve the rules, taxes and fees that Chicagoans must live by and pay. Every

time the city approves new spending, a stop sign, a six-figure legal settlement or a zoning change for a new development, it has to pass through one of the City Council’s 19 committees first.

And while some aldermen brush it off, spotty attendance can make or break critical legislation. During a January meeting of the City Council’s Finance Committee, city attorneys had to shelve a $125,000 payment that would have settled a lawsuit with Lenora Bonds, a woman who sued the city after her son was shot to death by Chicago police in 2013. Not enough aldermen showed up to vote “aye” on the proposal, sending city attorneys back to the bargaining table with Bonds.

An attorney for Bonds did not respond to requests for comment.

Though this is a midterm progress report covering 2½ years, the City Council’s average attendance score of nearly 81% is a sharp jump from the term that ended in 2019, when a similar analysis of those four years found the average alderman showed up to just 64% of meetings (that 2019 tally has been adjusted from 65% based on revised calculations).

The improvement was driven in part by new policies put in place to track and publicly report attendance at committee meetings, which the council only instituted after WBEZ sued a committee chairwoman in 2019 for her failure to produce responsive records confirming regular attendance was See ALDERMEN on Page 8

N OT H I N G TO O B I G , O R TO O S M A L L .

You’ve turned to The Chicago Trust Company for small trusts. Did you know you can count on us to manage large wealth trusts exceeding $25 million, too?

From personal and corporate trustee services to estate settlement and specialty trusts, we offer a full range of administrative and fiduciary trust services. We are backed by Wintrust, which gives us access to a suite of complementary offerings that allow us to holistically address our clients’ specific needs.

W I N T R U ST W E A LT H .C O M / T R U ST E X P E RT S

CORRECTION In the April 4 Notable Residential Real Estate Brokers feature, the profile of Laricy misstated the time frame in which the team closed 543 units with volume of more than $268 million. The correct figure is 12 months.

P002_CCB_20220411.indd 2

4/8/22 3:10 PM

CRAIN’S CHICAGO BUSINESS • APRIL 11, 2022 3

JOE CAHILL ON BUSINESS

A wake-up call at Water Tower Place

JOHN R. BOEHM

A

Allyson Hansen

Illinois Medical District wants in on the life sciences boom Allyson Hansen aims to turn the Near West Side area into a real neighborhood that can compete with Fulton Market for residents and businesses I BY DANNY ECKER

A

llyson Hansen has taken over the Illinois Medical District during a public health crisis that should help it grow, provided she can make it a little less medical.

The new CEO of the state commission that oversees the hospital-anchored swath of the Near West Side has a chance to supercharge the area’s development while demand surges for clinical space, medical offices and pharmaceutical research labs in the wake of COVID-19. Appointed to the job in December, the longtime health system executive can leverage a 560-acre campus that was chartered 81 years ago to be a hub for the city’s health

“THERE’S NO DRAW TO LIVE IN THE IMD OUTSIDE OF YOU HAVING A JOB (THERE) THAT DEMANDS YOUR ENTIRE LIFE.” Marquette President Darren Sloniger

See MEDICAL DISTRICT on Page 26

Water Tower Place owner handing off mall to lender About a year after losing Macy’s, the Mag Mile mall’s largest tenant, Brookfield Property Partners has decided to call it quits and move on

BY ALBY GALLUN Turning around Water Tower Place is about to become someone else’s problem.

About a year after losing Macy’s, its largest tenant, the owner of big North Michigan Avenue shopping mall, Brookfield Property Partners, has decided to call it quits and hand the property over to its lender, according to people familiar with its plans.

It’s a step that would have been unthinkable before the COVID-19 pandemic swept into

P003_CCB_20220411.indd 3

town, setting in motion a wave of store closures on the Magnificent Mile, Chicago’s most important shopping district, and at Water Tower Place, its first vertical mall. Nearly a quarter of all Mag Mile retail space is vacant today, more than double its vacancy just four years ago.

By relinquishing the mall, Brookfield is acknowledging that the time, effort and money required to revive the struggling property wouldn’t be worth it.

Another factor: Water Tower Place has lost so much value that

its equity investment has been wiped out. It’s worth less than the more than $300 million in debt owed on it. Many real estate investors drowning in debt often wave the white flag and move on.

“Water Tower Place will no longer be part of Brookfield’s portfolio,” the company said in a statement. “After many discussions to carefully assess and identify all available options to move forward, we’ve determined that it is best to focus See WATER TOWER on Page 30

real estate reckoning is underway in Chicago as owners abandon landmark buildings.

Most recent and noteworthy was the decision—first reported by my colleague Alby Gallun—

by Brookfield Property Partners to hand Water Tower Place to the lender that holds the mortgage on the Magnificent Mile’s centerpiece.

Brookfield’s move reflects a hard-headed but sobering conclusion that the pre-eminent property on Chicago’s prime shopping thoroughfare is worth less than the $300 million owed on the building. The decision also indicates Brookfield doesn’t think repositioning Water Tower for changing times would yield an acceptable investment return.

Water Tower joins a wave of major commercial properties in and around downtown that have been forfeited to lenders by owners who see no upside in continuing to hold them. My colleague Danny Ecker recently reported that owners are walking away from 175 W. Jackson St., 300 W. Adams St. and 65 E. Wacker Drive. The Civic Opera House on Wacker is in receivership, and the owner of BMO Harris Bank’s longtime headquarters at LaSalle and Monroe streets appears to be preparing to relinquish the building.

I suspect we’ll see more properties go back to lenders as more owners reach the same conclusion. Prevailing wisdom among real estate investors seems to be that COVID-19, online commerce and crime have put a lasting dent in demand for retail and office space in the city’s biggest business and shopping corridors.

As much as these repossessions evoke the sense of an ending, they’re also the first stage of a new era for downtown and environs. The nature of that era is unknown at this point, but it will affect Chicago’s economic future in a big way. Downtown and the surrounding neighborhoods have always been, and always will be, key drivers of the city’s overall prosperity.

What will that new era look like? It could be a time of reinvention and renewal for the commercial heart of Chicago. Or it could be a period of decline and deterioration, casting a shadow over the city as a whole.

The future of downtown depends in part on what lenders taking possession of buildings do with them. Banks generally dislike hanging onto repossessed real estate for a long time. They prefer to cut their losses by selling quickly to who-

ever offers the best price. That means numerous downtown buildings could hit the market at the same time.

With top-tier real estate players treating the central city like a financial no-go zone, those properties could end up selling at fire-sale prices to bottom-feeders, the kind of landlords who skimp on maintenance and attract low-end tenants.

That worst-case scenario would be a disaster. Imagine a return to the downtown of the 1970s, replete with pawn shops, liquor stores and X-rated movie houses.

A better outcome is possible, if banks, investors, business groups and the city work together on a thoughtful plan to repurpose the central Loop and reinvigorate Michigan Avenue.

Both areas have suffered in recent years from trends that undermined their traditional roles in the local economy.

The rise of online shopping siphoned customers away from Michigan Avenue’s brick-andmortar retailers. LaSalle Street lost its mojo with office tenants as companies migrated to the newly hip West Loop. COVID exacerbated the situation by accelerating the shift to online shopping and spawning the work-from-home movement.

Then a crime wave frightened people away from areas they once frequented without fear.

None of these forces necessarily consigns Chicago’s traditional commercial districts to irreversible obsolescence. Just as the city center rebounded from its 1970s nadir, it can rise above the current challenges.

Signs of hope are peeking through the gloom. Some real estate developers are still willing to bet on downtown. Vornado is pumping money into a makeover of the Merchandise Mart. Onni Group is investing more than $1 billion in and around the city’s core. Veteran Chicago developer Michael Reschke’s plan to overhaul the moribund Thompson Center could help catalyze a LaSalle Street renewal.

A turnaround, however, requires a fresh vision of what these areas can become and a broad-based commitment to making it happen. An important first step has been taken, with two city-commissioned reports from the Urban Land Institute outlining various options for LaSalle Street and Michigan Avenue.

Now it’s time to distill those recommendations into a workable plan, and put that plan into action.

4/8/22 3:30 PM

4 APRIL 11, 2022 • CRAIN’S CHICAGO BUSINESS

J

pus Christi, Texas.

“Joe shines when it comes to breaking news, investigative journalism and connecting with Chicagoans,” Lyons said. “The viewers appreciate his depth of knowledge, storytelling and personality.”

Of Edwards, Lyons said: “Brad’s meaningful investigative work and storytelling is essential to the streaming strategy for CBS News Chicago. Brad is a perfect choice to lead this effort, his appointment underscores our commitment to our live streaming channel. We look forward to watching it flourish with Brad’s leadership.”

Last fall CBS 2 picked up meteorologist Albert Ramon, another one of Lyons’ original four on-air hires at NewsNation.

When Donlon joins CBS 2, it will mark the 14th change in 22 years to the talent lineup on the CBS-owned station’s nightly newscasts.

The announcement “JOE SHINES WHEN IT COMES TO about Donlon raised once again of BREAKING NEWS, INVESTIGATIVE hopes creating a team that JOURNALISM AND CONNECTING clicks with each other and with viewers.

WITH CHICAGOANS.” Granted it’s been close to 50 years since Jennifer Lyons, president it happened before— and general manager, CBS 2 when Bill Kurtis and Walter Jacobson first teamed up on “THE Ten Both NewsNation and WGN O’Clock News.” But with CBS are units of Nexstar Media 2 again under the leadership Group. of smart people who know “I am humbled, grateful and what they’re doing, who excited for the opportunity to knows? Maybe there’ll be join the award-winning team magic in the air again. at CBS 2,” Donlon said in a They’ll need that and a lot statement. “I love Chicago and more. In the latest Nielsen have always felt a connection ratings sweep, CBS 2’s late with the people here. This news ran dead last in key adult is home. There is no place I demographics, finishing sixth would rather be.” out of six.

Before joining WGN in 2018, Donlon spent 21 years Robert Feder has been as main anchor at NBC affilcovering the media beat in iate KGW in Portland, Ore. his hometown since 1980. His Earlier the St. Louis native column is published in Crain’s worked at KVOA, the NBC under an agreement with the affiliate in Tucson, Ariz., and Daily Herald.

KZTV, the CBS affiliate in Coroe Donlon, who stepped down last month after a stint at Chicago-based cable news startup NewsNation, has been hired as main news anchor at CBS-owned WBBM-Channel 2.

Starting May 2, Donlon will anchor the 5, Robert Feder 6 and 10 p.m. Monday-through-Friday newscasts with Irika Sargent.

Brad Edwards, who held the top anchor job at CBS 2 since 2019, will shift to primary anchor for CBS News Chicago, the station’s 24/7 streaming news service, and continue as an investigative reporter.

Donlon’s hiring reunites him with Jennifer Lyons, the president and general manager of CBS 2 who oversaw the launch of NewsNation.

They also worked together at WGN-Channel 9, where Donlon was main news anchor and Lyons was news director.

P004_CCB_20220411.indd 4

COSTAR GROUP

CBS 2 hires Joe Donlon as top news anchor Inspire11's new home, 1 N. Dearborn St., is nearly 90% leased, though it also has large sublease offerings available.

Consulting firm looks to hire up to 200, leases Loop office Inspire11 is doubling its downtown footprint but keeping it relatively small as it embraces remote work

BY DANNY ECKER One of Chicago’s fastest-growing companies is moving and doubling the size of its Loop headquarters, making room for as many as 200 people it aims to hire by the end of this year.

Consulting firm Inspire11 is leasing nearly 23,000 square feet at 1 N. Dearborn St., CEO Alban Mehmeti confirmed. The company, which helps clients including Northern Trust and other large firms use data and other digital tools to boost business, will move later this year from a nearly 12,000-square-foot office at 1 E. Wacker Drive.

It’s welcome news for downtown office landlords grappling with near-record-high vacancy and more companies cutting back on space rather than expanding, given the rise of remote work during the COVID-19 pandemic. Inspire11 is also committing to the Loop, which has endured the lion’s share of the losses, with more than 1.3 million square feet of net tenant move-outs over the past two years, according to data from CBRE.

GROWTH

Mehmeti said his five-year-old firm needed more office space to accommodate a workforce that has grown by 50% during the public health crisis to 300 people, with more clients hiring the firm to help them adjust to changing consumer behaviors during the pandemic. Roughly 200 of its employees are based in Chicago today, and Mehmeti expects to add between 150 and

200 more workers locally by the end of 2022.

Yet the firm is also like many others that are embracing remote work and trying to find the right office footprint to meet its needs. While 23,000 square feet is especially small for a firm that could soon have a local headcount close to 400, Mehmeti said he anticipates many of his employees will work remotely roughly half of the week and onsite with clients one day a week.

That may lead to overcrowding in its new office some days, “but we were willing to take the bet that on those days, people would go (work) in more general areas of the building,” such as the 17-story property’s amenity spaces, he said.

“We never forced people to go into the office (before COVID) because we thought the model was goofy,” Mehmeti said. “The whole goal was to drive camaraderie.”

He estimates his company will surpass $70 million in revenue this year. The firm ranked fourth on Crain’s 2021 list of Chicago’s fastest-growing companies.

After looking at buildings elsewhere downtown, Mehmeti said his company chose pre-built space in the Dearborn building for its proximity to public transportation and the property’s tenant amenity spaces. A more quirky driver: The company, which has “11” in its name as a nod to fictional guitarist Nigel Tufnel’s amplifier with nobs that “go to 11” in the 1984 movie “This is Spinal Tap,” had to be on the 11th floor in a new building, just as it is today at the Wacker Drive

tower. “That’s more karma-related,” Mehmeti said.

The Dearborn Street building has stood out in recent years from some of its vintage Loop office peers as proof that companies will lease space in older properties that have been updated with modern tenant perks.

Marketing software company ActiveCampaign, logistics provider FourKites, the Chicago Fire FC Major League Soccer franchise and artificial intelligence firm Narrative Science were among the companies that inked leases in the building in recent years.

The building today is nearly 90% leased, according to real estate information company CoStar Group, though it also has large sublease offerings available, including one from sports betting company Fubo Gaming, which just subleased space from Narrative Science last year.

VACANCY

Inspire11 is leaving behind a Wacker Drive building that is 80% leased, in line with the average for downtown office buildings at the end of 2021, according to CoStar. The 41-story building lost one of its largest tenants before the pandemic in insurance company Kemper, which moved to the Aon Center.

New York-based real estate firm AmTrust owns 1 E. Wacker and last year announced plans to renovate it as part of a larger $100 million investment in most of its downtown Chicago portfolio.

David Knight of Advocate Commercial Real Estate Advisors represented Inspire11 in negotiating the lease. Jack O’Brien and Caroline Colnon of Chicago-based Telos Group oversee leasing at 1 N. Dearborn St.

4/8/22 3:08 PM

tab doc.indd 1

22cb0132.pdf

RunDate 4/11/22

FULL PAGE

Color: 4/C

4/6/22 4:35 PM

6 APRIL 11, 2022 • CRAIN’S CHICAGO BUSINESS

Renowned physicist chosen as Fermilab’s first female director

BY ELYSSA CHERNEY

An internationally acclaimed scientist who was one of the first graduate students in Fermilab’s accelerator physics program has been appointed to lead the Batavia-based institute, becoming its first female director.

Lia Merminga, 61, will helm the facility starting April 18, according to the University of Chicago, which manages the lab. After working at accelerator labs in California, Vancouver and Virginia, Merminga came back to Fermilab in 2018 to direct its Proton Improvement Plan II project, which endeavors to

create the world’s most powerful neutrino energy beam by 2028.

Merminga succeeds Fermilab director Nigel Lockyer, who held the position for eight years, and she will be its seventh director.

Under Lockyer’s tenure, Fermilab was selected by the Department of Energy in 2020 to become one of five new research centers focusing on quantum computing, receiving $115 million in annual funding for five years. The university-operated Argonne National Laboratory in Lemont also was chosen as a site.

Merminga’s role will involve doubling down on the goal of establishing Fermilab as the leading

authority on the study of neutrinos, tiny fundament particles that scientists believe will reveal key insights about the universe and lead to innovation.

Merminga earned her bachelor’s degree in physics from the University of Athens, Greece, and graduate degrees—a master’s in physics and mathematics and a Ph.D. in physics—from the University of Michigan in Ann Arbor. She completed her doctorate on Tevatron, a powerful particle accelerator that operated at Fermilab until 2011, after she came to the facility in 1987.

“Lia brings to this critical role an exceptional track record of suc-

REIDAR HAHN

Lia Merminga will help the Batavia facility become the go-to for research on neutrinos, which scientists believe will reveal insights about the universe and lead to innovation Lia Merminga is taking over as the first woman to lead Fermilab. cess, passion for science, proven ability to execute major projects, focus on the talent and diversity of the Fermilab community, and strong commitment to the national and global high-energy physics communities,” U of C President Paul Alivisatos said in a statement.

“We are grateful to Nigel for his leadership of Fermilab and long legacy of building and strengthening international collaboration essential for advancing scientific discovery at a global scale.”

Fermilab is a boon for the state’s tech and research landscape. The 6,800-acre lab employs about 1,800 workers and scientists and ran a $491.6 million budget in 2019, with almost all of its funding coming from the federal government, according to the U.S. Department of Energy.

Fermilab, the department says, seeks to be the “frontier laboratory for particle physics discovery” and advances accelerator, detectors, computing and quantum technology.

DULY from Page 1 Health & Care in December, responds that Blessing is looking to block competition in hospital services in the downstate community.

Duly, a for-profit entity formerly called DuPage Medical Group, is the second-largest physician group in Illinois by 2021 revenue, according to Crain’s data. It is backed by Los Angeles-based private-equity firm Ares Management, a fact that Blessing highlights in its arguments to the Illinois Health Facilities & Services Review Board.

“The board should recognize this project for what it is, an attempt by a large, national private-equity company to set up a cherry-picking, profit-motivated, low acuity hospital in rural Illinois,” Blessing lawyer Anne Murphy said during a March 18 hearing.

QMG attorney Tracey Klein fired back that “the sole goal of this distraction is to preserve Blessing Hospital’s position as a monopoly in its marketplace, to prevent new entrants from entering the market.”

The controversy in Quincy is another flashpoint in the increasingly contentious debate over the growing role of private-equity firms in health care. The ruling in the case could shed light on the review board’s willingness to allow privateequity-backed hospitals and others to move into markets already served by existing hospitals.

“If the project were approved, you could say that it might show a receptiveness by this particular board for new hospital projects,” says health care attorney Daniel Lawler of Barnes & Thornburg, who represents hospitals but is not involved in the QMG case.

That would worry hospitals like Blessing. Safety nets have suffered financially in recent years, particularly those operating in rural areas. Over 180 rural hospitals across the U.S. have closed since 2005, according to data from the University of North Carolina at Chapel Hill.

P006_CCB_20220411.indd 6

If QMG’s hospital is approved, Blessing says it will be at risk of losing nearly $15 million annually in federal funding given to isolated community hospitals. It also fears that QMG doctors who currently perform surgeries at Blessing will take those procedures and the revenue they generate to the new hospital.

In making its case to the board, QMG says the new hospital would provide more innovative care and services not currently offered in the area, and that more competition in the area would improve care quality and lower costs for patients.

The board is expected to rule later this month on QMG’s application for a “certificate of need,” which would allow it to proceed with construction. However, the board has already indicated that it’s unlikely to approve the deal, issuing an intentto-deny notice last May, which QMG has appealed. Among other reasons, the board said QMG’s proposed hospital would create “unnecessary duplication of service” in the area.

Yet the board rejected arguments similar to Blessing’s in 2017, when it approved a new Mercyhealth hospital in Crystal Lake. The approval came despite a warning by the board’s staff that the new hospital would poach business from existing hospitals in the area that had space for more patients.

Ares, Blessing, Duly and QMG all declined interview requests. QMG and Duly issued a joint statement saying they “remain focused on physician directed care delivery and transforming the health care experience for patients.”

In a written statement, Blessing CEO Maureen Kahn said the QMG project “jeopardizes our ability to provide accessible healthcare for an entire region.”

While the battle in Quincy is taking place 300 miles away from Chicago, officials here are watching closely.

“Why Quincy matters to us in Cook County is that you want to

BLESSING HEALTH

Private equity’s role in backing Duly becomes an issue in Quincy hospital fight

Blessing Health System opposes neighboring Quincy Medical Group’s plan to build a “small format” nonprofit hospital 2 miles from Blessing’s Quincy hospital. make sure that it’s not the shape of things to come,” says Cook County Board Commissioner Bridget Gainer.

Private-equity firms, including Ares, have purchased and sold other hospitals and health care companies in Illinois. Ares, which has more than $300 billion in assets under management, also has a stake in The Aspen Group, a Chicago-based operator of dentist’s offices and medical urgent-care facilities.

EXITS

Los Angeles-based privateequity firm Pipeline Health purchased three Chicago-area hospitals in 2019, and came under scrutiny for closing Westlake Hospital just two weeks later. Now it’s selling its two remaining Illinois hospitals for $92 million.

Private-equity activity in health care services across the U.S. has steadily increased over the last decade, according to PitchBook. Deals totaled $77.5 billion in 2021, up from $66.3 billion in 2020 and $76.6 billion in 2019.

In Illinois, private-equity health care dealmaking surged to $35 billion last year on the mega-buyout of hospital supplier Medline Industries. Excluding that transaction, private-equity firms cut deals worth a total of $1.7 billion in Illinois last

year, about the same as 2020’s total.

“Health care is probably one of the highest-potential investment areas over the next 10 or 20 years,” says Harry Kraemer, a professor at Northwestern University and former CEO of Baxter International. “People are living longer, the baby boomers are getting older and . . . every time you extend life, people are going to need more health care.”

Blessing warns that privateequity financial practices would put health care at risk in Quincy.

They point out that Ares recently pulled a $209 million dividend out of Duly in a debt-funded transaction. A Moody’s Investor Service report said the distribution showed “the aggressive nature” of Ares’ financial policies and left Duly “weakly positioned.”

“This is an incredibly problematic and pretty controversial practice that private-equity firms will engage in,” says Eileen O’Grady, a research and campaign manager at Private Equity Stakeholder Project, a Washington, D.C.-based nonprofit that’s critical of private equity’s effect on essential industries. “There’s no benefit to the company itself or to the patients or to the workers. The only people it really benefits are the private-equity firms and their investors.”

Defenders of private equity say their investments can help prop up

struggling hospitals and give them more time to improve operations.

In a recent report, the American Investment Council, an industry trade group, highlighted private-equitybacked investment in urgent care facilities in rural areas.

“Private equity is playing a powerful role in expanding health care access to Americans living in rural communities,” AIC President and CEO Drew Maloney said in a statement.

Criticism of private equity’s health care push has intensified over the last several years, as firms have acquired nonprofit hospitals and transformed them into for-profit entities by cutting essential but unprofitable services.

While the circumstances in Quincy don’t involve a takeover of Blessing Hospital, QMG’s focus on lucrative specialized services could have a similar effect, Gainer says.

“If you take higher-paying, greater reimbursement or those that tend to be covered by private insurance, and you separate those out to a purely for-profit scenario, what you do is you weaken the ability to revive the health care for everyone else,” Gainer says. “It’s really important for us to understand that the health care ecosystem exists in a balance.

Before we can make changes to it, we have to be thoughtful.”

4/8/22 3:32 PM

CRAIN’S CHICAGO BUSINESS • APRIL 11, 2022 7

Weed shop wants to take over the old Rainforest Cafe

605 N. Clark St.

BY JOHN PLETZ When Rainforest Cafe closed its high-profile River North restaurant more than a year ago, it wasn’t clear what would take its place.

While the COVID-19 pandemic was tough on restaurants, the cannabis business was doing just fine. PTS, the owner of Consume Cannabis, wants to relocate a marijuana shop from 6428 N. Milwaukee Ave. on the far Northwest Side to River North.

Consume beat out four other weed shops to land a deal with Sean Conlon, who owns the property at 605 N. Clark St., which was home to Rainforest Cafe. At 22,000 square feet, it’s the type of large, high-visibility location that would appeal to a marijuana shop. The move was first reported

by Block Club Chicago.

“It’s one of the two or three most heavily traveled corners in Chicago,” Conlon says of the former Rainforest location. “We had approaches nonstop.”

If the deal gets approval from the city’s Zoning Board of Appeals, it would add to a growing cluster of pot shops in River North and make Clark Street the city’s boulevard of weed.

Consume would join Cresco Labs’ Sunnyside dispensary at 436 N. Clark St., along with Ascend by Moca at 216 W. Ohio St. and PharmaCann’s Verilife store at 60 W. Superior St. GRI Holdings, a company that won two of the retail pot licenses in last year’s lotteries, has applied to the ZBA for cannabis zoning at 612 N. Wells St.

Although the state can’t formally issue new retail licenses, winners of the dispensary lotteries already are locking down locations and beginning to work through the city’s zoning process.

COSTAR GROUP

Consume Cannabis’ plan to move to River North could face a legal challenge with other dispensaries nearby

PROXIMITY ISSUE

One potential challenge facing the deal is a state law that prohibits dispensaries from locating within 1,500 feet of each other. At least two other dispensaries appear to be within that range of the former Rainforest Cafe.

If regulators approve Consume’s move to the former Rainforest Cafe, it would be fourth marijuana shop along Clark Street. Cresco has a dispensary at 3524 N. Clark St. in Lakeview, and Dispensary 33 has a store at 5001 N. Clark St. in Andersonville.

Consume would be the second dispensary to relocate in the city before the state issues new licenses, which are on hold because of a lawsuit in Cook County Circuit Court. Cresco moved its Lakeview dispensary to a larger location last year. Two suburban stores also moved. The issue was a controversial part of the legislation in Springfield last year that provided additional lotteries for socialequity applicants.

P007_CCB_20220411.indd 7

4/8/22 3:09 PM

8 APRIL 11, 2022 • CRAIN’S CHICAGO BUSINESS

Here’s which aldermen show up the most ALDERMEN from Page 2 being taken. Committee chairmen are now required to take roll at the beginning of each meeting and post those reports with the city clerk at the end of the month.

More than a half-dozen senior aldermen with poor or middling attendance records also were unseated in 2019 by younger members, some of whom attacked the incumbents by pointing to the low score WBEZ and The Daily Line had calculated. And the COVID-19 pandemic pushed most meetings into cyberspace in 2020, making it easier for aldermen to log their presence. About two-thirds of the meetings this term have been held over Zoom.

While attendance improved overall, scores varied widely. The poorest records were held by some of the most senior members, including a few who will be asking voters for promotions this year.

VIRTUAL MEETINGS MADE A BIG DIFFERENCE FOR SOME

Several aldermen, such as No. 1-ranking Ald. Leslie Hairston, 5th, say the ability to meet virtually helped improve their attendance.

Hairston, whose ward includes parts of Hyde Park, Woodlawn and South Shore, closed out the last term near the bottom of the list, attributing her absences then to the work she was doing on a high-profile development in her ward, the Obama Presidential Center.

“It’s the nature of virtual meetings,” Hairston said. “Last time, you know, trying to put together the Obama Presidential Center, the community meetings, everything, sometimes it was not possible to be down here. With the virtual, then I can be there.”

With a 93% attendance rate, Hairston had a better attendance record than any of her 49 colleagues. But she’s also a member of only four committees, putting about 200 total meetings on her plate during that period—fewer than many other aldermen.

It’s a significant data point that her lower-ranked colleagues— such as Ald. Michelle Harris, 8th— are quick to point out.

“Unlike many of my colleagues, I’m on eight committees. I am one person,” said Harris, whose ward is on the city’s Far South Side. Harris is also chairwoman of the powerful Rules Committee, tasked with getting a consensus on the once-in-adecade process of drafting a new ward map. “I stretched myself to the limit. For me, even with Zoom, it’s been a little difficult with all the meetings all the time.”

The number of committees and subcommittees has grown in recent years under Mayor Lori Lightfoot’s leadership. Several of these newly formed bodies rarely meet, despite the benefit of six-figure budgets.

The number of commitments also varies by alderman, as each is assigned to bodies that oversee different corners of city government.

No one had to attend more meetings than Ald. Walter Burnett, 27th, who had to balance his

P008_CCB_20220411.indd 8

Read more on this joint investigation

by Crain’s, WBEZ and The Daily Line— including an interactive graphic—at ChicagoBusiness.com.

City Council obligations with the added commitment of serving on the Chicago Plan Commission, a city planning board, and Choose Chicago, a quasi-public-private partnership focused on boosting tourism. Burnett attended 300 of the roughly 360 meetings he was supposed to attend, or about 83%, beating the City Council average.

Burnett says prioritizing which meetings and mayoral press conferences to attend is a challenge.

“Plan Commission goes on all day. . . .While I’m at the planning commission, this committee meeting is going on,” Burnett said, pointing out with a laugh that he agrees with the City Council’s most prolific public commenter, George Blakemore, who “complained about how we have all these meetings at the same time, he can’t go to all of them.”

But the rise in virtual meetings has almost eliminated the problem of rampant double-booking, in which several committee meetings started at the same time, forcing aldermen to oscillate between meeting rooms during critical votes.

That was a major concern raised by aldermen during the prior analysis.

POOR ATTENDANCE STILL COMMON AMONG COUNCIL VETERANS

Still, one theme remains the same since the 2019 analysis: Younger, newer aldermen were far more likely to attend meetings than colleagues who’ve been around for decades. The average freshman alderman attended 86% of required meetings, usually surpassing the veteran they replaced.

New 39th Ward Ald. Sam Nugent, for example, attended 93% of meetings—far exceeding her predecessor, Ald. Marge Laurino of the powerful Northwest Side Laurino family, who attended only 64%.

Ald. Andre Vasquez, 40th, a Democratic Socialist who beat out 36-year incumbent Ald. Pat O’Connor, then-Mayor Rahm Emanuel’s floor leader, has attended 92% of required meetings, compared with O’Connor’s 48%. Vasquez is a member of eight committees and has the third-best grade of any alderman.

“It’s what the people pay us to do,” Vasquez said. “That’s what your tax dollars do. And like, this is your government, you should expect us to be there.”

Nugent agreed.

“How do you know what’s going on if you don’t show up to committee meetings?” she said. “We’re able to learn more about the legislation and ask questions of relevant stakeholders so they can explain the nuances of legislation.”

Ald. Ed Burke, 14th, the dean of the body with more than a half-century of experience under his belt, showed up to just 108 of the 194 meetings he was required to attend this term, giving him a 55% score—the second-worst on the council.

When confronted by a report-

er about his attendance record, Burke said he thinks he has “probably close to 100% attendance at meetings of committees I’m appointed to.”

“It’s my impression that I generally attend meetings of the committees I’m assigned to,” he said.

“I’m grateful this time, I’m not in the bottom,” Ald. Carrie Austin, 34th, said of her record this term. Her 63% attendance rate gave her a rank of 47 out of 50.

She was the former Budget Committee chairwoman WBEZ had to sue to get her committee’s attendance sheets. Austin is the second-longest-serving alderman on the City Council and one of two sitting aldermen under federal indictment.

In addition to having contracted COVID-19 early in the pandemic, Austin suffers from a heart condition. “A lot of my nonattendance was (because I was sick). So if I could have in the hospital, I did it (virtually) by my laptop.”

SOME OF THE LOWEST SCORERS HAVE EYES ON NEW ELECTED POSITIONS

The lowest score—54%—belonged to Ald. George Cardenas, 12th, who represents parts of McKinley Park and Little Village and has served on the City Council since 2003. He is running for a spot on Cook County’s Board of Review, a property tax appeals body.

Cardenas dismissed the attendance data, saying it’s “not possible” that he attended only 165 of the 307 meetings for which he was required to show up during the two-and-a-half-year period.

“Otherwise, how would I get stuff done here?” Cardenas said.

He is Mayor Lori Lightfoot’s deputy floor leader, meaning he’s one of two aldermen responsible for rounding up votes for her agenda.

“I’m always involved in conversations on everything. I’m telling you, I’m always up on everything that’s going on.”

He did not provide data, however, to dispute the findings of the joint analysis.

And while he spoke to the importance of showing up to meetings to “pay attention to what everyone else is saying,” he also noted that much of the City Council’s work does not happen in public. “There’s a lot of ways to be an effectual leader, and certainly being here is just one of them. . . .But I’m also being active and intentional—if you see me on the floor, I work the floor.”

Four other aldermen are looking to be elected to new gigs this year.

21st Ward Ald. Howard Brookins Jr. is running for a judgeship on the Cook County Circuit Court.

He made it to 58% of his required meetings, giving him the third-lowest record, above Cardenas and Burke. He doesn’t believe his low attendance will impact his judicial campaign.

“I try to make as many as I can,” says Brookins, who also operates his own law firm. “Clearly I have other obligations and responsibilities.”

Ald. Pat Dowell, 3rd, is running to replace retiring Rep. Bobby Rush in Congress. Her attendance

Leslie Hairston Highest attendance rate

George Cardenas Lowest attendance rate

CHECK YOUR ALDERMAN’S ATTENDANCE Attendance records varied widely during the 2½-year period, from the top alderman attending 93% of their required committee meetings to a 54% attendance rate for the lowest-scoring alderman. Freshman members of the City Council generally posted higher attendance rates than their veteran colleagues and the aldermen they replaced.

ALDERMANIC ATTENDANCE RATES Rank and name 1. Leslie Hairston 2. Samantha Nugent 3. Andre Vasquez 4. Felix Cardona 5. Daniel La Spata 6. Patrick Thompson 7. Pat Dowell 8. Scott Waguespack 9. Michael Rodriguez 10. Jason Ervin 11. Marty Quinn 12. Nicholas Sposato 13. Rossana Rodriguez-Sanchez 14. James Gardiner 15. Brian Hopkins 16. Matthew Martin 17. Michele Smith 18. Gregory Mitchell 19. Ariel Reboyras 20. David Moore 21. Carlos Ramirez-Rosa 22. Raymond Lopez 23. Michael Scott 24. Silvana Tabares 25. Walter Burnett 26. Thomas Tunney 27. Matthew O’Shea 28. Byron Sigcho-Lopez 29. Maria Hadden 30. Gilbert Villegas 31. Susan Sadlowski Garza 32. Chris Taliaferro 33. Harry Osterman 34. Sophia King 35. Debra Silverstein 36. Brendan Reilly 37. Roberto Maldonado 38. Stephanie Coleman 39. James Cappleman 40. Emma Mitts 41. Jeanette Taylor 42. Roderick Sawyer 43. Anthony Napolitano 44. Anthony Beale 45. Michelle Harris 46. Derrick Curtis 47. Carrie Austin 48. Howard Brookins 49. Edward Burke 50. George Cardenas

Ward 5th 39th 40th 31st 1st 11th 3rd 32nd 22nd 28th 13th 38th 33rd 45th 2nd 47th 43rd 7th 30th 17th 35th 15th 24th 23rd 27th 44th 19th 25th 49th 36th 10th 29th 48th 4th 50th 42nd 26th 16th 46th 37th 20th 6th 41st 9th 8th 18th 34th 21st 14th 12th

Total meetings 171 222 294 194 310 361 329 266 331 180 281 287 307 169 194 354 299 331 284 139 297 270 348 283 241 210 362 280 340 348 126 287 307 161 241 329 320 340 154 318 227 303 359 302 166 309 243 338 246 273

Percentage of total meetings attended 93% 93% 92% 91% 91% 90% 89% 88% 88% 88% 87% 87% 87% 86% 86% 86% 86% 85% 85% 85% 85% 85% 84% 84% 83% 82% 82% 82% 82% 82% 82% 82% 81% 81% 81% 80% 79% 78% 78% 73% 73% 72% 71% 71% 70% 65% 63% 58% 56% 54%

Source: Publicly available attendance records for 526 City Council meetings and committee meetings that occurred between May 2019 and December 2021

rate is 89% for this term. Ald. Gilbert Villegas, 36th, who had an attendance rate of 82%, is running for Congress as well, in the new 3rd District. Ald. Chris Taliaferro, 29th, is also running to fill a judicial vacancy in Cook County Circuit Court’s 11th Subcircuit; he attended 81% of required meetings. Ald. Raymond Lopez, 15th, who had a nearly 85% attendance rate in this analysis, said last

week that he’s running for Chicago mayor. And Ald. David Moore, 17th, who is running for Illinois secretary of state, posted an 85% attendance rate.

Alex Nitkin and Erin Hegarty cover City Hall for The Daily Line.

Claudia Morell is a metro reporter for WBEZ. A.D. Quig covers politics and government for Crain’s Chicago Business.

4/8/22 3:09 PM

CRAIN’S CHICAGO BUSINESS • APRIL 11, 2022 9

Vistria Group buys stake in wealth manager Mather Group The deal marks the first outside equity that fast-growing Mather has taken since its founding more than a decade ago and will help fuel continued rapid-fire acquisitions

BY STEVE DANIELS The Mather Group, a fast-growing wealth-management firm, has linked up with a local privateequity shop for the first time to provide more financial ammunition for future deal-making.

Vistria Group, co-founded

by Kip Kirkpatrick and Martin Nesbitt, has invested in Chicagobased Mather under an agreement announced April 6 in which the two firms agreed to continue pursuing Mather’s torrid pace of acquisitions.

Since January 2020, Mather has bought 10 advisory firms around the country. Its assets under management have increased to $8 billion from $1 billion just five years ago.

Mather provides a high-touch collection of financial services, such as estate planning, tax advice and money management to wealthy households—similar to the help that, say, Northern Trust offers the monied. But Mather focuses further down the wealth ladder than many such firms, with the average client holding between $2

million and $2.5 million in investable assets.

Founded in 2011 by Stewart Mather, a former Morgan Stanley adviser, Mather is a top 70 wealth-management firm in the U.S. The sector as a whole is rapidly consolidating with various companies like Mather hunting for deals.

NEW FIELD

For Chicago-based Vistria, which began nine years ago and has grown to $6.5 billion in assets under management, the Mather deal is its first in the wealthmanagement field. Vistria looked at 20 different firms before it came to terms with Mather Group, said Michael Castleforte, a partner and Vistria’s co-head of financial services.

“It’s a space we’ve liked for a while,” said Boris Rapoport, the other co-head of financial services for Vistria.

Plenty of private-equity money nationwide is chasing the growth in the business, fueled by demographic trends, market gains and an industry that has gradually but

Even with rising prices, homes more affordable in most of Chicago area

Two reports show it’s easier to afford a home now than it has been, but rising interest rates could change that

BY DENNIS RODKIN

Despite a rapid run-up in prices in 2021 that has shrunk affordability around the country, homes in much of the Chicago area are easier to afford than they have been historically, according to two new reports.

That’s in large part because wages have risen faster here than home prices, the opposite of what’s been happening in most of the country.

In 81% of the 586 U.S. counties that Attom, a nationwide property data source, analyzed for the report released April 7, wage growth lagged behind home price growth.

Also contributing: Home prices that, while rising, aren’t spiking as steeply as in most big U.S. cities.

In the metro area’s three core counties, Cook, Lake and DuPage, homes were easier to afford in the first quarter of 2022 than the historical average, according to Attom. The historical average is based on data going back to 2005.

In McHenry and Will counties, homes have become less affordable than they have been historically, and in Kane County, they’re about even with the historical level.

A separate firm’s data backs up Attom’s. The Chicago metro is one of the top three in improved home affordability since the previous peak of the market, in 2006, according to

P009_CCB_20220411.indd 9

a report on metrowide home prices released March 29 by First American Financial, a California title insurance company.

Both reports cite low interest rates as a key factor in affordability, but interest rates have been rising fast since the data was collected. The rate on a 30-year fixed mortgage started the year at about 3.1% and by the end of March had shot up by about half, to 4.67%.

Relatively slow home price growth in some big urban counties also contributed to keeping home prices affordable, according to Attom.

Among counties with populations of 1 million or more, Cook County had the third-slowest price increases in 2021, after Westchester County, N.Y., and Montgomery County, Md., near Washington, D.C., Attom found.

Crain’s reported in March that although the pandemic-era housing boom has been epochal in the Chicago area, it has nevertheless been markedly milder than in most other big cities.

Some of the cities where home prices have been shooting up the most have seen affordability fall off.

Some of the big-city U.S. counties where homes are the least affordable compared to their historical averages, according to Attom, are in Southern California, Oregon and Arizona.

firmly moved in the direction of fiduciary relationships. A far larger percentage of wealth advisers now are paid fees by their clients rather than commissions from the investment firms in which they invest their clients’ money.

Mather Group expects to close on another “four or five” acquisitions by the end of July, said Chris Behrens, the firm’s CEO. Behrens, 61, is the uncle of founder Mather, who died of cancer at age 42 in 2020.

The pace of deal-making got to the point where the firm needed to bring in outside equity for the first time, he said. Previously, the deals had been financed mainly with debt. Most of the acquired shops are small in terms of personnel.

Mather Group, which employs more than 140, has offices in Atlanta, Dallas, Houston, Knoxville, Tenn., and areas around San Francisco, Seattle, Washington, D.C., and Nashville. Tenn. About 60 of the employees work in the firm’s River North office.

Over the past six years, the firm has grown at a compound rate of 60% a year, Behrens said. He fore-

Michael Castleforte, from left, Chris Behrens and Boris Rapoport sees that continuing for at least the next several years, with hopes of expanding outside the U.S. within three years.

TIME FRAME

The entrance of a private-equity partner raises the prospect in the future of a possible initial public offering. But Vistria and Mather Group executives say the expected time horizon is longer than

the typical five years for a privateequity exit of an investment.

Vistria also has offered the potential for transferring the investment to a future Vistria fund, Behrens said. This investment is from Vistria’s fourth fund, which manages $2.7 billion. Terms weren’t disclosed.

“We really like the business, and we really like the partnership,” Castleforte said.

LUXURY HOME OF THE WEEK Advertising Section

REAL ESTATE AUCTION • APRIL 26, 2022 THE MOST UNIQUE, STUNNING & DRAMATIC CONDOMINIUM IN THE STREETERVILLE NEIGHBORHOOD OF CHICAGO

THE 2-LEVEL PENTHOUSE, UNIT 3205 AT 415 E. NORTH WATER STREET

PREMIER LOCATION ADJACENT TO NORTH PIER, NAVY PIER, THE RIVER WALK & THE MAG MILE OVER 00 0,0 $14,00 TED IN S E V IN UNIT THE

BR PARTIC OKER IPA INVITE TION D

9,279 sq. ft. 3 bedroom, 4 baths in the famous RiverView Condominiums. 60’ wraparound terrace. Over 1 million dollars of imported Italian stone and your own full-sized basketball court, enormous marble jacuzzi style tub, three 500 gallon salt water tropical fish tanks, squash court and so much more all in your unit.

The owner of this “Mansion in the Sky” has relocated out of State and the unit is currently vacant.

PREVIOUSLY PRICED TO: $12,995,000 • SUGGESTED OPENING BID: $2,500,000 VIEWINGS BY APPOINTMENT BROKER PARTICIPATION INVITED

FOR INFORMATION CONTACT

Rick Levin & Associates, Inc. | since 1991 312.440.2000 | www.ricklevin.com IN CONJUNCTION WITH

BERKSHIRE HATHAWAY HOME SERVICES CHICAGO

4/8/22 3:10 PM

10 APRIL 11, 2022 • CRAIN’S CHICAGO BUSINESS

EDITORIAL

We’re at a disadvantage for the federal cash grab

JOHN R.. BOEHM

A

s the former mayor of South Bend, Ind., and a onetime executive at consulting giant McKinsey’s first office here, Pete Buttigieg comes as close as anyone to qualifying as an honorary Chicagoan. And in a recent conversation with Crain’s political columnist Greg Hinz, the U.S. transportation secretary made it clear Chicago is still on his mind as he ponders what to do with roughly $1 trillion in new spending under President Joe Biden’s freshly passed infrastructure plan.

Chicago is well positioned to receive funds under two huge pots of money contained in the Biden plan, Buttigieg said, but the city, and more broadly, the region will have to compete against other parts of the country and tailor proposals intelligently in order to win those much-needed funds.

The good news in that statement is the recognition that the Chicago area has long been and is poised to continue to be a critical transportation hub for the nation and even the world. The bad news: Regional coordination will be key to success in the steeplechase for federal funding and, to put it in the mildest possible terms, coordination isn’t something we’re particularly good at around here.

Within Illinois’ balkanized system of government, local transportation agencies compete against one another for resources. As Hinz reported in the wake of his March 28 interview with Buttigieg and U.S. Rep. Lauren Underwood, D-Naperville, each entity is vying for a slice of the $2.9 billion the feds will award by year’s end, polishing up and preparing to pitch the

projects they care about most.

Reliable sources tell Hinz the local contenders could include reconstruction of North DuSable Lake Shore Drive, extension of the Chicago Transit Authority’s Blue Line to Mannheim Road as part of reconstruction of the Eisenhower Expressway (I-290), completion of the partially funded 75th Street rail grade-separation project, and renovation of Union Station as well as the addition of a new Metra stop in the booming Fulton Market District.

All of these proposals have features the Transportation Department might look

upon favorably. For instance, the Drive rebuild would add park and beach space, presenting a buffer against erosion as climate change raises lake levels. It also could dedicate a part of the roadway to bus-only lanes.

“I can see a lot of Chicago projects that will do well,” Buttigieg told Hinz. “The ones that do the best will be those that espouse policy positions we have posted,” including promoting safety and racial equity, spurring economic development and helping regions deal with climate change.

The equity piece of the puzzle in partic-

ular is one that deserves careful consideration. The March edition of Crain’s monthly Equity series underscored the point that Chicago’s existing transit infrastructure reinforces racial inequities by leaving South and West Side residents at a disadvantage to more affluent neighborhoods where access to job centers, shopping and health care is a relative breeze. And it’s easy to see how, in a scrambled scrum for federal funding, solutions to that historic problem could be overlooked.

As it is now, there’s no one person or agency within the city, the county or the state that has ultimate say-so over which projects to present to the feds for support. The Chicago Metropolitan Agency for Planning is, at least on paper, supposed to be the pivot point for that kind of decision-making but, unfortunately, it has little leverage to bring disparate agencies to the table to strategize and prioritize.

The danger is, as a result, the Chicago area could either miss out on opportunities to build intelligently for the long-term future or, perhaps worse, find itself building things that won’t solve the area’s future traffic, environmental and economic challenges.

The deadline to apply for that first slug of funding is May 23—lightning speed by federal standards. That means there’s little time for dithering. Mayor Lori Lightfoot, Cook County Board President Toni Preckwinkle and Gov. J.B. Pritzker should use their respective bully pulpits to bring transit chiefs throughout the region to CMAP’s table to draw up plans that can benefit the entire region, not just individual fiefdoms.

YOUR VIEW

A

Jobi Cates is founder and executive director of Restore Justice. Benjamin Ruddell is director of criminal justice policy at ACLU of Illinois. Jennifer Soble is founder and executive director of the Illinois Prison Project. Garien Gatewood is the director of the Illinois Justice Project. Barbara Flynn Currie is the former majority leader of the Illinois House of Representatives; she served in the House from 1979 to 2019.

Political attacks on Foxx’s resentencing initiative detract from actual efforts to make communities safer. They perpetuate a false opposition between a desire for compassion for people who commit crime and commitment to safety for all of us. The initiative, which provides limited opportunities for some individuals to be considered for reduced prison sentences, was made possible by legislation (Public Act 102-0102) signed into law in July 2021, and we believe it will enhance, not endanger, our communities.

On a case-by-case basis, the Cook County state’s attorney is asking judges to consider shorter sentences for people who meet specific criteria. The process is designed to minimize the risk that a person being resentenced and released early will commit another crime. The plan includes creation of strong re-entry plans to reduce the likelihood of recidivism, and it must be reviewed and ultimately accepted or rejected by the court.

But why would any prosecutor—a top agent of law enforcement—want to pursue resentencing? One reason is clearly our state’s still-overcrowded prisons.

Illinois is one of 10 states with the highest

Kim Foxx

per capita prison populations in the country. This is in large part due to a steady increase in the amount of time people actually serve because of both longer base sentences and reduced opportunities for earned release.

A good example of one such sentencing

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.

P010-P011_CCB_20220411.indd 10

Chie

Grou

Edito

Crea

Direc Eliza

Assis enga

Assis

Assis

Assis Cassa

Depu

Depu and

Digit

Asso

Copy

Copy

Cont

Polit

Senio Steve

Repo Elyss Ally M Steve

Cont

Public safety and justice are inextricably linked

rticle I, Section 11, of the Illinois Constitution reads, “All penalties shall be determined both according to the seriousness of the offense and with the objective of restoring the offender to useful citizenship.”

To that end, late last month, Cook County State’s Attorney Kim Foxx announced her office would begin seeking resentencings in a handful of cases for people who have already served lengthy prison terms, including elderly people and those who were incarcerated as teenagers. Foxx’s initiative will look at people who are serving far longer sentences than others who have been convicted of identical crimes and who have demonstrated they are ready to return home safely.

pers In to ca stay grow peop are e An sue r to co mov not w start cann hous sam to vi

Rese Vice

policy is Illinois’ mandatory firearm enhancement. The enhancement mandates that judges add a minimum of 15 years to a sentence for possession of a firearm while committing certain felonies, while most other states limit the firearm enhancement to between one and five years.

While most other states have a parole system, some type of earned release program, or both, Illinois eliminated parolefor-release in 1978 and enacted truth-in-sentencing in 1998, requiring many people to serve every day of their sentences for certain offenses or at least 85% for others. A person convicted of armed robbery with a firearm (without discharging it) would have likely served six years if convicted before 1978, nine years if convicted between 1978 and 1997, and 13.5 years if convicted in 1998-2000. Today, that

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.

4/8/22 3:06 PM

Sales

Direc

Even Chris

Mark

Prod

Even

Cust

Acco Claud Cour

Sales

Peop

Proje

Digit

CRAI

Keith

Mary

KC Cr

Chris

Robe

Veeb

G.D. C Mrs.

For s conc chica (in th (all o

rhat eh e ch o al m

or e h pcy pof as es

ea o re gs i-

g by le t, ke n’s he s.

nent dd to on ms, es end

es m, eh, enng ny ay rA th ld ted rs at

CRAIN’S CHICAGO BUSINESS • APRIL 11, 2022 11

YOUR VIEW Continued person would likely serve 24.7 years.

Incarceration comes with responsibility to care for people in custody. People who stay in prison for decades and decades grow old and get sick. More than 20% of the people incarcerated in Illinois state prisons are elderly.

Another reason for a prosecutor to pursue resentencing? An honest commitment to community safety. People who are removed from their families for decades cannot work, raise children, pay bills and taxes, start businesses, or pursue education. They cannot reduce the burden on single-parent households or care for aging parents. The same communities that have lost so many to violence lose again to extended incar-

ceration, which makes those communities even more vulnerable to continued crime and violence.

The state’s attorney’s political opponents are wrong to feed on false narratives to make people scared and threaten fair and safe criminal legal system reforms. We should focus on facts and justice and not use the strength of their empathy as an opportunity to attack. Public safety and justice are not in opposition; in fact, they are inextricably linked. Balancing meaningful reforms while holding those most accountable for violent crime is possible; it may not be simple, but it is something we can do if we allow efforts such as the Resentencing Initiative to light the way.

Editor Aly Brumback joins Crain’s in audience and engagement role on social media, the most effective Aly Brumback, former senior headlines to draw in digital readers audience and engagement editor and the best ways to make Crain’s at the Chicago Tribune, has joined newsletters useful for the publicaCrain’s Chicago Business as assistion’s audience. tant managing editor for audience A graduate of Ball State University, and engagement.

Brumback started at the Tribune in Brumback most recently had 2011. been working for Crain’s sister “We feel fortunate to have an edpublication Modern Healthcare as itor of Aly’s skill and experience an audience engagement specialjoin our award-winning team,” said ist. She joined Modern Healthcare Aly Brumback Crain’s Editor Ann Dwyer. “She’s alin August 2021.

In her new role at Crain’s, Brumback will ready making an impact, and we know she collaborate with reporters and editors to will help us to better serve our existing readers determine the best ways to frame stories while helping us to reach new ones as well.”

CRAIN’S CHICAGO BUSINESS

Chief executive officer KC Crain Group publisher/executive editor Jim Kirk Editor Ann Dwyer Creative director Thomas J. Linden Director of audience and engagement Elizabeth Couch Assistant managing editor/audience engagement Aly Brumback Assistant managing editor/columnist Joe Cahill

LAST WEEK TO NOMINATE!

Assistant managing editor/digital Ann R. Weiler Assistant managing editor/news features Cassandra West Deputy digital editor Todd J. Behme Deputy digital editor/audience and social media Robert Garcia

2022

Digital design editor Jason McGregor Associate creative director Karen Freese Zane Copy chief Scott Williams Copy editor Tanya Meyer Contributing editor Jan Parr Political columnist Greg Hinz Senior reporters Steve Daniels, Alby Gallun, John Pletz Reporters Elyssa Cherney, Katherine Davis, Danny Ecker, Ally Marotti, A.D. Quig, Dennis Rodkin, Steven R. Strahler

EXECUTIVES OF COLOR IN MANUFACTURING

Contributing photographer John R. Boehm Researcher Sophie H. Rodgers Vice president, product Kevin Skaggs Sales director Sarah Chow Director of research Frank Sennett Events manager/account executive Christine Rozmanich Marketing manager Cody Smith Production manager David Adair

Crain’s 2022 Notable Executives of Color in Manufacturing will recognize top minority executives in manufacturing for their success and accomplishments during the last 18 months.

Events specialist Kaari Kafer Custom content coordinator Ashley Maahs Account executives Claudia Hippel, Bridget Sevcik, Laura Warren, Courtney Rush, Amy Skarnulis Sales assistant Brittany Brown People on the Move manager Debora Stein Project manager Joanna Metzger Digital designer Christine Balch CRAIN COMMUNICATIONS INC.

NOMINATE NOW! Deadline is Friday, April 15

Keith E. Crain Chairman Mary Kay Crain Vice chairman KC Crain Chief executive officer Chris Crain Senior executive vice president Robert Recchia Chief financial officer Veebha Mehta Chief marketing officer G.D. Crain Jr. Founder (1885-1973)

Nominate at ChicagoBusiness.com/NotableManufact

Mrs. G.D. Crain Jr. Chairman (1911-1996) For subscription information and delivery concerns please email customerservice@ chicagobusiness.com or call 877-812-1590 (in the U.S. and Canada) or 313-446-0450 (all other locations).

To view Crain’s Notable Executives nomination programs, visit chicagobusiness.com/notablenoms.

cation

P010-P011_CCB_20220411.indd 11

4/8/22 3:06 PM

12 ARIL 11, 2022 • CRAIN’S CHICAGO BUSINESS

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 / ADVISORY

BANKING / FINANCE

ENGINEERING

MANUFACTURING

NON-PROFIT

BKD CPAs & Advisors, Chicago

Itasca Bank & Trust Co., Itasca

TranSmart, Inc., Chicago

Elkay Manufacturing, Downers Grove

BKD is pleased to announce the addition of Dave Clauson as a director in BKD’s Chicago office. Clauson will lead the firm’s environmental, social and governance (ESG) efforts for clients in the Chicago market and bolsters BKD’s growing national practice in this increasingly vital area.

Clauson is a dynamic, proactive and seasoned environmental management professional with more than 20 years of experience as a technical consultant and program manager in EHS and sustainability fields.

Itasca Bank & Trust Co., an independent community bank, is pleased to announce the promotion of Natalie Wojtowicz to Assistant Vice President, Operations and Branch Manager. She began her Wojtowicz career as a teller with Itasca Bank in October of 2013 and has held the positions of Assistant Teller Manager and Assistant Branch Manager.

Francesco “Frankie” Sorrentino has been promoted to Commercial/ Sorrentino HOA Relationship Officer.

He started his career at the Bank in October of 2015, managing the Customer Service department at the Itasca location. He then began working with commercial customers and his role expanded to assisting the Homeowners Association lending team, a growing area of the Bank.

TranSmart, Inc. welcomes William Stermer, PE, an industry veteran who joined the firm as Chief Transportation Lighting Engineer.

After 25 years with a multinational engineering firm, Bill is at the helm of TranSmart’s lighting engineering work as the company navigates exponential growth.

He has provided lighting project management for several high-profile IDOT, Illinois Tollway, and CDOT projects in the region. Bill is an IIT graduate and a licensed professional engineer in multiple states.

Elkay Manufacturing is pleased to announce that Christine Bedi has been promoted to Vice President, General Counsel, effective March 28, 2022, following Kathy Deighan’s announced intentions to retire from that same role later this year. As Vice President, General Counsel, Christine will lead Elkay’s Corporate Legal team, bringing significant strengths to the company’s legal capability for an increasingly complex set of global business needs.

Teach for America Greater Chicago-Northwest Indiana, Chicago

HEALTH CARE

NON-PROFIT

PROFESSIONAL SERVICES

Sinai Chicago, Chicago

Aspiritech, Evanston

West Monroe, Chicago

Sinai Chicago announces the addition of Dr. Julia Libcke as President of Schwab Rehabilitation.

Dr. Libcke brings expertise in rehabilitation and clinical leadership and a track record of excellent performance in both inpatient and outpatient operations. A graduate of the University of Michigan School of Nursing, Julia began her career as an RN and has led several inpatient rehabilitation teams at hospitals in Southwest Michigan, including the Rehabilitation Institute of Michigan.

Aspiritech, a quality assurance and data services company that employs more than 100 autistic adults, is pleased to welcome Tara May as its new CEO. She will be responsible for supporting Aspiritech’s growth strategy, building relationships with clients, and expanding a remote training program to allow the organization to scale. May has spent her career transforming companies into digital leaders, most recently as EVP of Media & Chief Digital Officer of Winsight, LLC.

Rissa Reddan joins West Monroe as chief marketing officer and partner. She oversees the firm’s marketing function of over 30 professionals in corporate marketing, industry marketing, client marketing, and marketing services roles whose work directly influences the firm’s global presence, strategy, and industry-leading growth rate. She has over two decades of marketing experience, most recently as a demand generation leader for Equifax’s $1.8 billion US Information Solutions business.

AUTOMOTIVE Sutton Auto Team, Matteson Sutton Auto Team (SAT) has named Dennis Banks Vice President of Growth and Strategic Planning, providing leadership for three dealerships in Matteson, IL., Kenosha, WI., and Coon Rapids, MN. Banks is executing a five-year strategy to create partnerships, leverage scale, and strengthen industry best practices while driving profitable growth. He brings more than 36 years of sales and sales leadership experience, including nearly three decades with Kraft Foods, to the role.

BANKING First Bank Chicago, Westchester First Bank Chicago, a Division of First Bank of Highland Park, is pleased to welcome Christina Bavery to our team as Senior VP, Managing Director, Commercial Banking. Based in our new Westchester office, she will support our expansion strategy in the Chicago marketplace, while growing and developing our Commercial Real Estate & Middle Market portfolios.

Christina brings 20+ years of commercial banking expertise and has held senior leadership roles with Fifth Third Bank & MB Financial Bank.

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

P012_CCB_20220411_v2.indd 1

CONSTRUCTION W.E. O’Neil Construction, Chicago W.E. O’Neil Construction has promoted Richard Davey and Chad Huber to Vice Presidents of Operations in the Chicago region. Richard and Chad have grown their careers within the company from Davey Project Engineering roles more than two decades ago into industry veterans overseeing W.E. O’Neil’s largest construction projects. Richard has significantly expanded the firm’s gaming portfolio with projects across the Huber country, and Chad has delivered many of the firm’s most complicated hospitality and senior living projects. In their new roles, Richard and Chad will assume the day-to-day operations responsibilities associated with overseeing the company. They are valued leaders within the company and will be catalysts for its continued growth.

REAL ESTATE Bridge Industrial, Chicago

LAW Taft Law, Chicago Jeff Mattson has joined Taft as a partner in the firm’s Mergers and Acquisitions practice.

Jeff has extensive experience representing middle-market companies in M&A transactions with purchase prices ranging from $20 million-$500 million. During his career, Jeff has closed more than 350 M&A transactions. He also advises companies on private placements, start-ups, equity compensation, and joint ventures.

NON-PROFIT The Community Builders, Inc., Chicago The Community Builders, Inc., a national missiondriven developer working in Chicago for 20+ years, is pleased to announce the promotion of Kemena Brooks to Director of Development. Ms. Brooks is a proven leader specializing in mixed-income, mixed-use and affordable housing development. Her work includes leading large scale efforts on the South Side, West Side and in Downtown Chicago. Her responsibilities will now include expanded roles in team management, business development, and regional strategy.

School of the Art Institute of Chicago, Chicago The School of the Art Institute of Chicago (SAIC) has named Courtney Rowe as its vice president for advancement. In her new role at the art and design college, Rowe will provide strategic leadership and oversight of philanthropic activities, including major gifts, planned giving, stewardship, alum and parent engagement, and corporate and foundation relations. Rowe’s previous experience includes the Peabody Institute of the Johns Hopkins University and the Museum of Contemporary Art Chicago.

Aqua Illinois, Chicago

Taft Law, Chicago Taft welcomes Samyoul Kim as an associate attorney in the Chicago Finance practice. Samyoul practices in the areas of commercial finance and corporate transactions, representing banks and other financial institutions in leveraged finance transactions. Samyoul advises clients in the developing cryptocurrency and digital asset space, with a focus on crypto-secured lending and crypto transactions involving cryptocurrencies, such as Bitcoin, Ethereum, stablecoins, and non-fungible tokens (NFTs).

Bridge Industrial promotes former Chicago region Partner Nick Siegel to Partner, Acquisitions. Siegel will now lead Bridge’s expanded national acquisitions platform, growing the firm’s value-add acquisition strategy while overseeing a team of experts focused on core markets including Chicago, New Jersey, New York, Miami, Los Angeles/San Francisco and Seattle. Since joining Bridge in 2015, Siegel has been involved in over 18.5 million SF of transactions across Chicago and South Florida.

UTILITIES

LAW EDUCATION

Teach For America (TFA) Greater ChicagoNorthwest Indiana is pleased to announce the hiring of Anajah Roberts as Executive Director. She began as a TFA corps member in St. Louis, and later returned to her hometown of Chicago where she rose up the ranks, serving as the Vice President of Corps Member Leadership and most recently as Interim Executive Director. Her personal experiences as a CPS student and daughter of a CPS teacher have shaped her lifelong commitment to educational equity.

NON-PROFIT Leadership Greater Chicago, Chicago Michelle Stohlmeyer Russell, Ph.D., is the new Chair of the Board of Directors for Leadership Greater Chicago. Michelle is a managing director and senior partner at Boston Consulting Group, Chicago where she leads the People and Organization practice for North America. As Board Chair, she will lead strategy, governance and fund development to further LGC’s mission and continue the legacy of driving transformative civic impact across the Greater Chicago Region.

Aqua, an Essential Utilities company and leading water and wastewater services provider, proudly announces Bob Ervin as president of Aqua Illinois. Ervin possesses nearly 25 years of utility industry experience, including his previous role as Aqua Illinois’ operations director. He will oversee 30 water and 16 wastewater systems across nearly 70 communities, nurture partnerships and spearhead infrastructure investments with a statewide focus on reliability and customer experience.

4/6/22 9:02 AM

CRAIN’S CHICAGO BUSINESS • APRIL 11, 2022 13

‘TROUBLED BUILDINGS’: City program offers a facelift for vintage South Side condos. PAGE 15 ADDED VALUE: Pilsen project could show Chicago the way on housing equity. PAGE 16

CRAIN’S CHICAGO BUSINESS PATHS TO HOMEOWNERSHIP

LITTLE LANDLORDS: Small owners provide a critical share of city’s rental market. PAGE 17

REVITALIZING NEGLECTED REAL ESTATE Housing advocates push to upgrade rental buildings and fund new construction in neighborhoods crying out for economic development

Tonya Trice, executive director of the South Shore Chamber of Commerce

JOHN R. BOEHM

By Judith Crown Ocie Windham has leased apartments in the South Shore and Chatham neighborhoods for more than 30 years. He keeps the rents affordable and maintains occupancy at 95%. But with rising real estate prices—in part to due to speculation surrounding the development of the Obama Presidential Center—he’s tempted to sell more of his 100 units.

If he does, it would be unfortunate for the neighborhood. Out-of-town owners who have been buying up property in South Shore often lack on-site management and haven’t been quick to tend to tenant concerns. “I hear from tenants in the buildings I sold and they curse me out,” Windham says.

“They want to rent from me because they see me one or two times a month, and my janitors are around all the time.”

At a time of intense interest in revitalizing Chicago’s predominantly Black neighborhoods and the housing stock, building wealth and providing a path to homeownership, deep-rooted market conditions stand in the way.

The announcement of the Obama Presidential Center in Jackson Park has attracted speculative buying and fears of gentrification that could displace residents. Yet much of South Shore awaits to be transformed.

Whether outside investors are discovering rental income doesn’t support the high prices they paid and there’s little money left for upkeep, or whether they deliberately are milking their properties, the result is the same.

“Outside investors aren’t maintaining the properties the way they should,” says Tonya Trice, executive director of the South Shore Chamber of Commerce. Trash piles up and repair requests go unanswered. Some landlords have stripped buildings of their architectural distinctiveness, Trice says. Storefronts on 71st Street and other commercial corridors sit vacant because property owners can capitalize on tax breaks while they wait for gentrification.

On the West Side in North Lawndale, community organizers have ambitious plans to build hundreds of affordable homes but struggle to line up low-cost See HOUSING on Page 14

SPONSORS

P013-P017_CCB_20220411.indd 13

4/8/22 2:28 PM

14 APRIL 11, 2022 • CRAIN’S CHICAGO BUSINESS

CRAIN’S CHICAGO BUSINESS

HOUSING

w RE

Continued from Page 13 construction loans. A partnership of United Power for Action & Justice, the Lawndale Christian Development Corp. and Chicago Neighborhood Initiatives raised $12.5 million to start construction but needs to double that amount so it can reach a critical mass of 100 homes. “We need the banking and philanthropic organizations to contribute so we can build at scale,” says Richard Townsell, executive director of Lawndale Christian.

Experts say better access to credit is needed to enable landlords and homeowners to upgrade properties.

Housing advocates say loans and grants from American Rescue Plan Act funds can be channeled to small operators for building upgrades in a simplified, streamlined process.

Shared ownership, in which local residents pool their capital to acquire property, could be a way to return control to the neighborhoods, activists say.

“We used to build housing for working people, and we don’t do that anymore,” says Nick Brunick, an attorney at Applegate & Thorne-Thomsen who specializes in affordable housing.

UPGRADING TWO-FLATS

The South Shore neighborhood is known for its variety of distinctive architectural styles from the early 20th century, including Prairie School and art deco. Like other South Side neighborhoods, South Shore saw a demographic shift from 90% white in the early 1960s to 94% Black by 1980.

Entrepreneur Alisa Starks recalls that when her family moved into South Shore in 1965, “we got dressed up to go to 71st Street.” Students in her kindergarten class were mostly white, but that reversed by the time she got to eighth grade.

“Property owners left, businesses left, there was instant devastation,” she says. The median income in 2019 was $34,215, according to IHS Data Clearinghouse, compared with $60,438 for all of Chicago. Onethird of the population is below the poverty line, as compared with 18.4% for Chicago, according to the Institute for Housing Studies at DePaul University.

To the southwest, the Chatham

Nor

ME

Nor

JOHN R. BOEHM

Sou

South Side entrepreneur Leon Stenneth in the past two years has purchased two buildings in Chatham that were owned by out-of-town investors. ment buildings, says Stacie Young, executive director of the nonprofit Community Investment Corp., or CIC, which finances the acquisition and rehabilitation of affordable rental housing. Most of the country’s affordable housing, about 70%, isn’t subsidized, Young says. Those naturally affordable rental units are no longer viable when owners don’t maintain them. Better to invest in repairs rather than let buildings deteriorate to the point where they have to be demolished and rebuilt with new construction that costs $250,000 to $300,000 per unit, she says.

Revitalizing a neighborhood, of course, requires a holistic approach that also improves commercial streets. “I wouldn’t buy a house if I have to walk past an abandoned building to get there,” says Ja’Net Defell, who leads Community Desk Chicago, an initiative of The Chicago Community Trust in partnership with the Boston Consulting Group

neighborhood also experienced white flight, but it evolved into a middle-class African American area, home to famous businesses that include Johnson Products and Seaway Bank. The population has declined from a 1970 peak, and the businesses were sold. Median income in 2019 was $38,208, according to IHS Data, and nearly 27% live in poverty. It has relatively more single-family homes compared with South Shore.

These neighborhoods have what analysts call “naturally occurring affordable housing.” That is, they’ve yet to encounter the gentrification of neighborhoods like Logan Square and Albany Park, where rising rents threaten to displace longtime residents and there’s demand for subsidized housing to keep housing costs affordable.

In South and West Side neighborhoods, the challenge is how to upgrade the thousands of twoflats, four-flats and small apart-

debt,” says Chicago Housing Commissioner Marisa Novara. “It’s not our goal for out-of-town investors to maximize profits on these buildings.”

Leon Stenneth, a South Side entrepreneur, in the past two years has purchased two buildings in Chatham that were owned by outof-town investors. There were problems with the boiler and the roof, and the hallways hadn’t been painted in more than 10 years, he said.

“They were not in the best shape,” he added. Stenneth, who also has a job in tech as an artificial-intelligence engineer, painted the common area, made the repairs and added laundry facilities. Even with charging affordable rent of $800 to $1,000 for a one bedroom, there’s room to keep up the buildings, make a profit and build wealth, he says.

Out-of-town investors aren’t the only problem. Tenant complaints have been directed at Pangea Properties, a Chicago real estate invest-

and JPMorgan Chase Foundation.

“You need to stabilize the corridors while you’re building the houses.”

Anticipating rising real estate values as a result of the Obama Presidential Center in Jackson Park, outside investors have bought into struggling condo buildings and converted apartments to luxury rentals, displacing residents. At one renovated building, Park Heights by the Lake, advertised rents are $1,500 or more for a one-bedroom apartment, with a one-bedroom penthouse listed at $3,600 or more.

Housing advocates say the city should provide protections like those in nearby gentrifying Woodlawn, such as affordability requirements for housing built on cityowned lots.

But South Shore isn’t yet a gentrification hot spot. In the northern part of the neighborhood, just south of Jackson Park, sit vacant and abandoned buildings. “Some of the buildings are encumbered with

w MEDIAN SALES PRICES Median price for single-family homes $400,000 $400,000

Median price for two to four units

NORTH LAWNDALE

Median price per unit for five-plus units

SOUTH SHORE

CHATHAM

$367,500

350,000 350,000 300,000 300,000 250,000 250,000 200,000 200,000 150,000 150,000 100,000 100,000 50,000 50,000 00

$281,500

$258,000

$235,000

$84,750

$66,667

$55,833 ‘17

‘18

‘19

‘20

‘21

$293,000

$159,500

$189,000

$190,000

‘15 ‘16 ‘17 ‘18 ‘19 ‘20 ‘21 ‘15 ‘16 Note: Amounts are expressed in 2021 inflation-adjusted dollars.

Sources: IHS Data Clearinghouse; Institute of Housing Studies at DePaul University

P013-P017_CCB_20220411.indd 14

CITY OF CHICAGO

$49,000 ‘15

‘16

‘17

‘18

‘19

‘20

‘21

‘15

‘16

‘17

‘18

‘19

‘20

‘21

4/8/22 3:26 PM

men land tham arou build Sout the S In Mart milli past ties i Pang often viola apar ema An are t Stree law vaca on p spac catio “We ed in shor says. ame and advo

AMB

Di the W wher to bu vidin affor build Th hood and the Luth subs Inter Med Data of th live i As cant hous Ligh initia city w lots Unite Lawn and tives The in ta

CRAIN’S CHICAGO BUSINESS • APRIL 11, 2022 15

w RENTAL AFFORDABILITY SHARE OF RENTS LESS THAN $900 (2019) North Lawndale

45.9%

Chatham Chicago

CHANGE IN RENTEROCCUPIED HOUSING UNITS, 2010-19

-7.2%

36.6%

South Shore

1.9% 2.4%

-9.7% -9.9%

-3.3%

58.4% 31.6%

-2.8%

8.8%

North Lawndale South Shore Chatham

$31,611 $34,215 $38,208

BY JUDITH CROWN $60,438

Chicago

JOHN R. BOEHM

Sources: American Community Survey 5-Year Estimates; Institute for Housing Studies at DePaul University

e enyears gs in outprobroof, aintsaid. e,” he a job ence area, aunng affor a keep t and

t the aints Propvest-

ment trust that’s one of the largest landlords in South Shore and Chatham. “There are growing concerns around management, upkeep of the buildings and the eviction rate of South Shore residents,” says Trice at the South Shore chamber.

In response, Pangea CEO Peter Martay said the REIT has spent $400 million of private capital over the past 13 years rehabilitating properties in underserved neighborhoods.

Pangea’s investments have turned often vacant buildings with code violations into safe and affordable apartments, Martay wrote in an email.

Another problem in South Shore are the empty storefronts on 71st Street and other corridors. State law enables property owners with vacant storefronts to get a break on property taxes, so they keep the spaces unleased, awaiting gentrification and higher rents, Trice says.

“We have business owners interested in opening stores, but there is a shortage of viable inventory,” she says. A lack of restaurants and other amenities discourages renters. Trice and other community leaders are advocating for changes to the law.

AMBITIOUS PLANS IN NORTH LAWNDALE

Different roadblocks exist on the West Side in North Lawndale, where nonprofit organizations plan to build single-family homes, providing not just comfortable and affordable housing but a path to build family wealth.

The North Lawndale neighborhood also suffered from white flight and then rioting and looting after the 1968 assassination of Martin Luther King Jr. Iconic companies subsequently left the area, including International Harvester and Sears.

Median income, according to IHS Data, was $31,611 in 2019, and 38% of the neighborhood’s population live in poverty.

As many as 3,000 city-owned vacant lots are ripe for a wide-scale housing development. Mayor Lori Lightfoot, who restarted an earlier initiative, last year announced the city would sell 250 of the city-owned lots for $1 each to the coalition of United Power for Action & Justice, Lawndale Christian Development and Chicago Neighborhood Initiatives that is developing the housing.

The city also allocated $5.3 million in tax-increment financing money

P013-P017_CCB_20220411.indd 15

City funds come to the rescue of ‘troubled buildings’

Vintage South Side condos in disrepair will get a lift from a Chicago Housing Department program

MEDIAN HOUSEHOLD INCOME (2019)

Coms not stors uild-

0

CHANGE IN OWNEROCCUPIED HOUSING UNITS, 2010-19

to prepare the sites.

Illinois is providing the North Lawndale consortium $10 million in subsidies to help homebuyers with their down payments. The partnership has marketed the homes to churches, nonprofits, renters and the children of area homeowners.

Townsell says there’s a waiting list of prospective buyers.

The partnership has raised $12.5 million in revolving construction loans, which will enable it to start construction on a first group of 23 homes. The partnership, however, is seeking another $12.5 million in order to fund 100 homes at $250,000 each.

Chase provided a $2.5 million grant, Townsell says, adding that the bank was embarrassed by a 2020 WBEZ report showing that between 2012 and 2018, 80% of its mortgages were made in white-majority neighborhoods, compared with 2% in Black and 5% in Latino communities. Foundations and wealthy individuals have provided zero-interest loans, and Townsell says he hopes an additional four or five banks will offer low- or no-interest financing to keep the home prices affordable.

“The banks say they can’t do it at zero,” he says. “What can they do it at? The banking and philanthropic community should put money where their mouth is.” For the long term, the coalition seeks to develop 1,000 of the 3,000 city-owned lots.

If successful, the project could be a model for Pullman, Chicago Lawn and other communities with ample vacant land.

TESTING SHARED OWNERSHIP

Larger, well-established developers are deft at using government subsidies for affordable housing. But it can be difficult for owners with limited resources to navigate complex rules. The Preservation Compact, a coalition of public and private organizations with a stake in housing preservation that is based at the CIC, is working to see whether American Rescue Plan Act funds can be used to rehab older rental buildings without subjecting small entrepreneurs to mountains of paperwork, Young says. Small operators could possibly band together to gain economies of scale in purchasing services from insurance brokers and building tradespeople, she adds.

The Preservation Compact last

year was successful in pushing the Illinois General Assembly to adopt an incentive to maintain affordable housing by offering reductions in a property’s assessed value.

The Chicago City Council recently adopted an ordinance that relieves city debt on vacant and abandoned properties in low- to moderateincome communities that have the opportunity for rehabilitation and reoccupation. “If debt like a pastdue water bill is an obstacle to a building being redeveloped, we’ll erase that,” says Novara. And the Building Department last year relaxed its plumbing code to expand the use of plastic pipe, which is less expensive than traditional cast iron.

Nonprofit leaders are waiting to see if, and how, banks liberalize their guidelines to make capital more accessible to developers, building owners and homebuyers.

Philanthropy will continue to play an important role. Billionaire MacKenzie Scott in March announced a $436 million donation to Habitat for Humanity, including $6 million to chapters in the city and suburbs. A spokeswoman for the Chicago chapter said funds will be used to strengthen programs in West Pullman, Greater Grand Crossing and Austin.

One experiment underway in South Shore is testing the potential of shared ownership. In 2020, a group of 27 residents from the Jackson Park Highlands section pooled their money to buy and rehab a troubled building with 16 apartments and five ground-level commercial spaces.

Residents of disinvested neighborhoods often are alienated because they lack ownership and control of local buildings and businesses, says entrepreneur Michael Kelley, a leader on the shared ownership project.

Kelly and others hope their model can be replicated on a larger scale, but they acknowledge that requires a lot of community education and coordination.

“We want to pull resources together so we can acquire some of these buildings and maintain the legacy of South Shore,” says Trice at the South Shore chamber. “We’re known for our properties, lakefront and golf courses. We need investors that respect the culture of the community.”

es are horrifically depressed— lower than they were in 2003,” Brown says, adding that condo owners throughout South Shore are at serious risk.

To find help, South Shore Works worked with other organizations, including The Neighborhood Network Alliance and the Center for Shared Ownership, as well as Ald. Leslie Hairston, 5th. In March, the city Department of Housing announced a preservation fund that will provide grants and loans to building associations and owner-occupants for repairs and maintenance. Funds will come through the Housing Department’s Troubled Buildings Initiative, a program to help reclaim troubled buildings, and the nonprofit Chicago Community Loan Fund.

The pilot is being launched at Jones’ 44-unit complex on Crandon Avenue as the South Shore Condo/Co-Op Preservation Fund. An ordinance was slated to be introduced to the City Council this month, with anticipated initial funding of about $5 million.

“These buildings need reinvestment, and it’s been hard,” Chicago Housing Commissioner Marisa Novara says. She hopes stabilizing the buildings will enable associations to attract more mainstream lenders.

Condo associations should be able to combine funds from the new city preservation program with Illinois Housing Development Authority resources to make inroads on the to-do lists, Brown says.

But the repairs required are considerable. Wind and rain have eroded the facades of

The vintage condo building on Crandon Avenue in South Shore is in frightful straits. It needs at least $1.5 million to repair a crumbling facade and upgrade pipes. The homeowners association doesn’t have enough cash reserves to fund needed repairs.

And the residents, mostly seniors on fixed incomes, are behind in paying monthly assessments.

The city has liens on the building.

“We’ve been on a treadmill,” says Adrienne Jones, president of the Cranston Condominium Association. “We have all these repairs to make, but no one would help us.”

After years of running in place, though, help finally is on the way in the form of a city assistance program targeted to South Shore condos and co-ops.

Jones’ building isn’t the only one in trouble. There are at least 30 vintage condo structures with similar challenges, according to one estimate. Most are along the lakefront and Jackson Park. Anticipating rising real estate values with the coming Obama Presidential Center in Jackson Park, investors are buying out and displacing condo owners who can’t afford the assessments needed to make repairs, says LaShawn Brown, chair of the working group on housing at the South Shore Works nonprofit. Many of the seniors have lived in their apartments for decades, and the job of finding new affordable housing can be daunting.

In one high-profile case, investors gained control of a condo building on East 67th Street and converted it to luxury rentals, marketed not to locals but to downtown and “WE HAVE ALL THESE REPAIRS TO North Side residents, according to Brown, MAKE, BUT NO ONE WOULD HELP US.” who is also a real esbuildings along the lakefront. tate broker.

If a condo doesn’t qualify for At the Cranston condos, “We a mortgage because there are had to take down decorative building violations or the home- gargoyles—many of which were owners association lacks ade- already broken,” Jones says. The quate cash reserves, investors building, which is nearly 100 can obtain units with lowball years old, still has elevators with cash offers and, ultimately, gain manual gates. And the garage requires a round-the-clock attencontrol of a building.

“Condo owners sell because dant because there are no ramps they feel their backs are against for self-parking.

But the new city program the wall,” Brown says.

Low sale prices drag down ap- funding has raised Jones’ spirpraisals for comparable condos its. When she got the news, “I on the market and owners lose thought I was listening to angels value on their property. “Pric- singing in my ear,” she says.

4/8/22 3:26 PM

16 APRIL 11, 2022 • CRAIN’S CHICAGO BUSINESS

CRAIN’S CHICAGO BUSINESS

COMMUNITY REBUILDING

The rest of Chicago could learn from this Pilsen project I

Guacolda Reyes is chief real estate development officer for The Resurrection Project, a nonprofit affordable housing developer.

n Pilsen, decent, safe and affordable housing has always been an issue, but in ways that are changing.

When my family and I arrived here in the 1990s, the issue was “safe and decent.” We wanted a peaceful neighborhood for our children to thrive. Instead, our community was plagued by absentee landlords—leasing illegal and inhospitable spaces, ignoring basic city code requirements and indifference to Pilsen’s success.

Also in the 1990s, The Resurrection Project, or TRP, started to empower Latinos to address neighborhood violence, advocate for clean streets, and began building its own “safe and decent” affordable homes for working families.

Today, we focus on preserving affordability and family wealth. Although, the community’s demographics have changed as others have discovered Pilsen’s diversity, transit-oriented location and other assets, long-term Latino families are now being challenged with affording higher property taxes and escalating rents, and often making difficult choices between investing in their children’s future or their own health care—or remaining in Pilsen.

Communities like Pilsen are vul-

nerable to economic shifts, and this predominantly lower-wage service work-oriented community felt the impact of the pandemic immediately.

Despite the city and state’s rental assistance programs and TRP’s bilingual outreach team, we were not surprised to see families moving out of Pilsen because many understood that the rental housing relief programs were temporary and their affordable housing needs were permanent.

In rebuilding communities after this devastating pandemic, how can we continue to provide safe, decent, affordable housing for working families? The city should invest in a version of the “New Homes for Chicago” program.

TRP built as part of “New Homes for Chicago” over 130 homes for the average price of $100,000. Today, these homes are valued at over $350,000 and our most recent survey documented that 70% of the original families who bought these houses still call Pilsen home. We are proud of the wealth created for these families because it has helped send their kids to college, support other financial needs and create generational wealth. At TRP, we con-

Casa Durango

tinue to educate and prepare families to buy from the existing market, albeit less affordable than before.

To preserve affordability and create balanced development, we are building larger projects like Casa Durango.

This project will bring 53 new affordable rental units to Pilsen families this fall. As Pilsen rents skyrocket, Casa Durango will offer affordable apartments for families earning between $27,950 and $55,920 per year for a family of four.

If we are committed to an equitable, diverse and affordable Chicago—one that benefits from and promotes all neighborhoods—we must preserve affordability while building generational wealth for families. As the city commits to equitable development, housing is

needed for all income levels. The city has a huge gap of affordable housing and to repopulate its neighborhood schools, places of worship and local businesses, affordable housing must be a priority.

At TRP, our urgency is to develop nontraditional assets into affordable homes and work with the community, city and local alderman for the long-awaited redevelopment of 18th and Peoria, which holds immense promise to create affordable homeownership, rental and other amenities to preserve the neighborhood’s rich Latino cultural heritage.

As I reflect on my life’s work of over 30 years, I am excited to see what partnerships evolve out of these past difficult two years. The city’s focus on

equi Raci a bo reso to a need and mun plac Fo chan and stree Ocam the s His s ed o niza othe cent

OPPORTUNITIES

VA

Affordable housing occupies ‘space between’

B

B

Stacie Young is president and CEO of Community Investment Corp.

efore masks, the space between our eyeballs and chin was just there, a given. Who knew how much we appreciated that space until it disappeared?

The same thing is happening in the housing arena. Just as I took for granted unmasked lipstick and unmuffled speech pre-COVID, for years we have taken for granted our existing Naturally Occurring Affordable Housing, or NOAH. It means rental housing that is affordable without using public subsidies. It occupies “the space between” (a term first coined in a Minnesota report). That space is between higher rent, market-rate buildings in higher-cost markets, and lower-rent governmentassisted subsidized properties.

NOAH includes the city’s backbone of vintage buildings, both multifamily and two- to four-flats, in neighborhoods with lower property values (compared to, say, the pricier North or Northwest sides).

Lower values mean relatively lower rents. From Community Investment Corporation’s experience of providing credit to finance NOAH preservation, we know that many of those buildings are owned by responsible small local

P013-P017_CCB_20220411.indd 16

businesses, and many of those small businesses are owned by people of color.

Incidentally, those diverse small businesses are providing quality housing and supporting the local ecosystem with local vendors and staff, while at the same time bridging the racial equity gap by building wealth for their families.

But back to those buildings.

The unsubsidized NOAH stock comprises 75% of affordable rental housing across the country. That’s a big chunk to overlook. Nor can we afford to overlook that chunk: Replacing lost rental units with new construction costs twice or three times as much.We need to pay attention to these buildings, and preserve them by keeping them in good condition.

So what needs to happen to preserve NOAH? Illinois and Chicago are lucky to have a head start with several strategies to keep rental building costs low: think energy efficiency; building code relief, including the new plumbing and building code; and the new statewide rental property tax incentive. Initiatives are also afoot to preserve two- to four-unit properties, which tend to be owner-occupied, and

house upwards of one-third of Chicago’s rental stock.

Plus, thanks to Chicago’s robust CDFI community, financing is readily available for NOAH properties, both big and small. CIC, one of those CDFIs, also partners with the city of Chicago to identify and preserve troubled rental buildings across the city, through a program called the Troubled Building Initiative. That program alone has preserved 14,600 affordable rental units since 2003.

Chicago’s arsenal of work is ahead of the curve but still not nearly enough.

That’s why a 12-year-old policy collaborative known as The Preservation Compact is pushing further by cataloguing and sharing what other cities and states are doing to preserve NOAH across the country.

Solving America’s affordable housing crisis will take more than simply building more housing. It will also require protecting our existing affordable housing by supporting established strategies, studying lessons learned in other cities and adopting what makes sense for our neighborhoods.

Mask-optional guidance may have you jumping for joy or furrowing your

brow, but either way, we all now think differently about the space between our eyeballs and chin. We also need to think differently about the NOAH stock.

When we see and support NOAH in that space between, we win on many fronts.

We help families live in quality housing.

We support responsible, smaller, diverse building owners in their efforts to build generational wealth. And we keep blocks and neighborhoods healthy and vibrant.

That’s something we should never take for granted.

4/8/22 2:29 PM

Re Ro a w Ch Di Ill As

e city using hood local must

velop dable mmur the 18th ense omenities rich

over what past us on

hink ween ed to tock. n that onts. sing. verse build locks rant. take

CRAIN’S CHICAGO BUSINESS • APRIL 11, 2022 17

PRESERVATION

‘Mom-and-pop’ landlords are a vital source of housing for Chicago renters

THE RESURRECTION PROJECT

A

Anthony E. Simpkins is president and chief executive officer at Neighborhood Housing Services of Chicago.

equitable development through the Racial Equity Impact Assessment is a bold start. Through advocacy of resources and endorsing policies to accommodate working family needs, we can preserve affordability and work toward optimizing a community’s full potential without displacement, leaving no one behind.

For example, a recent city policy change now provides decent, safe and affordable rental housing to a street vendor named Mr. Ananias Ocampo, who spent his life walking the streets of Pilsen as a “paletero.”

His story has inspired the city, elected officials and community organizations to collaborate to provide others like him an affordable, decent and safe place to live.

home is more than bricks and mortar. It anchors the larger community where children play, neighbors support each other and local businesses prosper. Chicago was once known for its South and West Side neighborhoods with beautiful homes, robust commercial corridors and strong middle class. These communities can prosper again, as thriving, mixed-income neighborhoods of choice. Revitalizing struggling areas and expanding homeownership for residents of color are intrinsically linked, and new approaches are necessary to reverse generations of neglect and discriminatory policies.

Through the Federal Housing Administration and other public initiatives, homeownership—and the attendant wealth it can build—dramatically expanded in the United States, allowing families to send their children to college, open businesses, fund investments and retirements, and to build prosperous neighborhoods. But African Americans and other communities of color were intentionally prevented from taking advantage of these opportunities. This and other forms of disinvestment stifled community development, causing these areas to lag behind in employment, economic opportunity, public safety and infrastructure. Over a 35year period, a home in a predominately white neighborhood appreciates in value by $225,000, while the same home in a predominately Black neighborhood only appreciates by $31,000.

Up to 70% of the average American family’s net worth is tied to homeownership. But in Illinois, only 39% of Black families and 53% of Latino families own their homes, compared to 75% of white families. The statistics are about the same nationally. As a result, the typical Black household in this country has a net worth of just $17,000 compared to $171,000 for white families.

Many majority-Black neighborhoods have also lost population. The loss of affordable multifamily rental buildings (two- to-four flats) is a significant contributor to this population decline and is at the core of the city’s affordable housing crisis.

Neighborhood Housing Services of Chicago (NHS), Communities United, Enterprise Community Partners and others have collaborated on the Chicago Flats Initiative, which focuses on preserving owner-occupied, twoto-four-unit buildings in Chicago and providing resources and counseling for both building owners and tenants.

These small “mom-and-pop” landlords in areas like Englewood, Chatham, South Shore and North Lawndale provide affordable and largely unsubsidized sources of housing for many low-to-moderate-income families. More than 60% of all Latino renters and 32% of all Black renters live in twoto-four-unit properties. Their reduction could result in significant displacement of Chicago’s vulnerable renters and the loss of wealth-generating assets for Black and Latino property owners.

Preservation of these properties supports existing owner-occupants, facilitates wealth-creation opportunities for new owner-occupants, and stabilizes the housing and lives of both renters and owners by preventing evictions and foreclosures. This is how we expand the availability of affordable homes and promote community revitalization. This investment also helps to catalyze economic development by creating jobs, returning vacant properties to the tax rolls, and providing support for local entrepreneurs and homeowners.

Community development financial institutions like NHS are missiondriven lenders focused specifically on providing credit access to borrowers of color and other under-represented communities. At NHS, for example, over 90% of our borrowers are borrowers of color. With robust government and philanthropic support, we can continue to help borrowers of color realize the dream of homeownership.

Our government and foundation leaders must focus on providing the resources necessary to support nonprofit and mission-driven neighborhood revitalization efforts. If they are truly focused on closing the racial wealth gap, this must be a central focus of any policies and targeted investments. It is the right thing to do for families and communities that have struggled for so long in the aftermath of widespread disinvestment, and in the long run, it will benefit the entire city.

VALUATIONS

Bias in home appraisals cripples communities

D Rep. Lamont Robinson is a Democrat who represents Chicago’s 5th District in the Illinois General Assembly.

P013-P017_CCB_20220411.indd 17

iscrimination in real estate has taken its toll on families for generations and continues to hurt Black and Brown people.

We must take significant steps on the state and local level to stop this undue practice.

That is why I have teamed up with advocates and community leaders to propose the Real Estate Valuation Task Force, an effort that will identify discriminatory housing industry practices and provide recommendations for state action.

Discriminatory behavior is rooted in decisions by the Federal Home Owners’ Loan Corp. and the Federal Housing Administration, agencies that weighed the racial and ethnic composition of neighborhoods when underwriting real estate loans. The effect was that both agencies devalued property or refused to make loans secured by property in communities of color.

When communities are systemically underappraised, homeowners lose equity and are forced to sell for less than what would be expected. It also leads to more housing contracts

falling through, as banks engage in a pattern of assessing lower values than the market suggests.

The consequences of depressed values are devastating. Not only do families lose wealth just because of their identity, their communities lose out on resources as well. Lower values lead to lower property tax revenues, impacting school funding, emergency response and other critical services that neighborhoods rely on.

The unwarranted stigma of lower property values can also make an area less attractive to commercial investment, creating a cycle of disinvestment that hurts job prospects and further damages a community.

While it has been known for decades that discriminatory housing practices have hurt people of color, a lot of work still needs to happen to begin to undo this pain. This is where the Real Estate Valuation Task Force, House Bill 4410, comes into play.

Under my proposal, representatives from state agencies, financial institutions, fair housing organizations and consumer protection groups

will come together to study and de- ganizations that adopt appraisal and termine whether there are racial appraiser qualification criteria.

This will be a thorough process, one disparities at both the borrower and community level of real estate. If so, that I am hopeful will spark creative they will be charged with developing ideas that can lead to real solutions legislative recommendations that can to the challenges minority communiaddress the root causes of these dis- ties face. State agencies will have the ability to recognize and implement parities.

State agencies would also be a fo- immediate fixes. For suggestions that cus for review, with the task force require statutory changes, I am ready expected to look at ways they can and willing to carry those proposals standardize various collateral un- through the legislative process.

Under the stewardship of Sen. derwriting standards, appraisal guidance, automated valuation models Mattie Hunter and the support of my colleagues, this proposal has already and other relevant topics.

The task force will also evaluate received strong bipartisan support in whether there are any barriers that both houses of the General Assembly. disproportionately prevent minorities from entering the ap- WHEN COMMUNITIES ARE praisal profession.

Throughout this process, SYSTEMICALLY UNDERAPPPRAISED, the Real Estate Valuation Task Force will be required to con- HOMEOWNERS LOSE EQUITY. sult with and receive feedback from civil rights advocates, consum- I fully expect it will be approved by er advocates, real estate appraisers, Gov. J.B. Pritzker soon.

We cannot fix real estate discrimismall lenders, trade groups, appraisal management companies, experts on nation overnight, but I am optimistic alternative valuation models, and or- we are on the right path.

4/8/22 2:29 PM

18 APRIL 11, 2022 • CRAIN’S CHICAGO BUSINESS

Our exclusive list of business-appropriate event spaces that opened during, or just before, the pandemic

Looking for a place to host a business event, holiday party or large corporate gathering? Here are businessappropriate event spaces that opened during, or just before, the pandemic, or which took the opportunity while closed to revamp. We focused mainly on spots in or close to downtown Chicago (with a few suburban places sprinkled in) that are conducive to business events. If you notice a spot that’s missing, it could be because representatives did not return our numerous requests for information. If you’re looking for a smaller place for a private dinner, check out our Best New Private Dining Rooms at ChicagoBusiness.com/PrivateDining2021.

By Danielle Braff

LOO

CA HIL CEN

Add Blvd Web Capa Squa Cost Cano Spec tique vem Willi form Chic Railw origi build to an Best corp

SOUTH LOOP

APOLONIA Address: 2201 S. Michigan Ave. Website: ApoloniaChicago.com Capacity: 150 for main dining room; 20 for private dining room Square footage: 5,300 total Cost: Private dining events start at $2,000 for food and beverage; full restaurant buyouts start at $12,000.

Special features: Expansive wine and beverage list at this restaurant, which opened in spring 2021; menu is adaptable to all allergies; wine/beverage options for diners; variety of service options; audiovisual accommodations in the private dining room.

Best for: Parties, events, meetings.

EAST VILLAGE

Address: 1721 W. Division St. Website: BotanicoChicago. com Capacity: 50 seated, 65 standing, 30 for wedding ceremonies Square footage: 2,500 Cost: Starts at $3,000.

Special features: Located above sister restaurant Mama Delia and lounge Bordel, the two-room private event space features vintage farmhouse dining tables, large-scale paintings, Murano crystal wall lamps, open chef demo kitchen and bar, mixed seating with velvet sofas and leather chairs, and massive windows and skylights providing natural light.

Best for: Intimate weddings, rehearsal dinners, product launches, parties, cooking and mixology classes.

P018-P024_CCB_20220411.indd 18

ETHAN JOLIE

BOTÁNICO

4/8/22 2:26 PM

CRAIN’S CHICAGO BUSINESS • APRIL 11, 2022 19

HYDE PARK

LOOP

CANOPY BY HILTON CHICAGO CENTRAL LOOP Address: 226 W. Jackson Blvd.

Website: Hilton.com Capacity: 30 Square footage: 675 Cost: Starts at $300 for the Canopy rental.

Special features: The boutique hotel opened in November 2021 across from Willis Tower. Housed in the former headquarters of the Chicago & North Western Railway, the hotel features original elements of the building; event space leads to an outdoor terrace.

Best for: Meetings, dinners, corporate events.

DAVID RUBENSTEIN FORUM Address: 1201 E. 60th St. Website: DavidRubensteinForum.UChicago.edu Capacity: 600 Square footage: 28,000 Cost: Full-day meeting packages start at $139 per person; room rentals range from $600-$8,500 per day.

Special features: The event venue, which opened in September 2020, has advanced, built-in audiovisual capabilities in all meeting rooms; personalized concierge meeting planning services; curated art program featuring blue-chip artwork and historical documents; LEED Gold-certified facility; BarDavid, a Mediterraneaninspired wine bar and cafe on the ground floor.

Best for: Meetings, conferences.

D E S I G N E D TO B E B R E AT H TA K I N G SOARING ABOVE THE HEART OF THE WINDY CITY, WITH RIVER VIEWS THAT STRETCH TO THE LAKE, YOU CAN SEE FOR MAGNIFICENT MILES AND MILES.

AAA Five-Diamond Hotel Award 2021-2022 LOCATED DIRECTLY ABOVE THE CHICAGO RIVER, STEPS FROM NORTH MICHIGAN AVENUE AND CHICAGO’S FAMED RIVERWALK, OUR ICONIC TOWER FEATURES 339 SPACIOUS GUEST ROOMS AND SUITES, 26,000 SQ FT OF MEETING & EVENT SPACE, A LUXURIOUS SPA, AN EXPANSIVE INDOOR SWIMMING POOL, AND A STATE-OF-THE-ART FITNESS CLUB. ALONGSIDE OUR IMPRESSIVE AMENITIES, WE DELIVER INNOVATIVE DINING EXPERIENCES AT BOTH TERRACE 16 AND REBAR, OFFERING UNRIVALED CITY AND RIVER VIEWS, A SEASONAL ROOFTOP PATIO, AND THOUGHTFULLY CURATED MENUS.

401 N WABASH AVE CHICAGO IL 60611

312.588.8000

TRUMPHOTELS.COM/CHICAGO

P018-P024_CCB_20220411.indd 19

4/8/22 2:26 PM

20 APRIL 11, 2022 • CRAIN’S CHICAGO BUSINESS

WILLOWBROOK

DELTA HOTELS CHICAGO WILLOWBROOK Address: 7800 Kingery Highway, Willowbrook Website: Marriott.com Capacity: Ballroom, 300; Atrium, 70; Oakbrook Room, 180; Hinsdale Room, 60 Square footage: Ballroom, 4,000; Atrium, 1,160; Oakbrook room, 2,210; Hinsdale room, 860; outdoor space available in summer 2022 Cost: Contact venue.

Special features: Opened in July 2021, the hotel—formerly a Holiday Inn— has a seasonal outdoor pool, natural light in the meeting spaces, full-service restaurant and a lounge.

Best for: Weddings, meetings, corporate events.

LOOP

FIVE IRON GOLF Address: 108 N. State St. Website: FiveIronGolf.com Capacity: 99 Square footage: 11,000 Cost: Starts at $50 per hour.

Special features: High-tech golf experience opened in December 2021; 11 TrackMan simulators with front-facing cameras so you can practice with instant video analysis; full-service bar and restaurant.

Best for: Corporate events, team-building events, parties.

LAKE FOREST

LOO SPONSORED CONTENT

HAUNTED TRAILS FAMILY ENTERTAINMENT CENTERS & PICNICS

THE FORESTER HOTEL Address: 200 N. Field Drive, Lake Forest Website: TheForesterHotel.com Capacity: 300 Square footage: 4,700 Cost: Starts at $500.

Special features: Opened in April 2021; flexible pre-function space, built-in audiovisual services including flat-screen TVs, free Wi-Fi, and custom catering options from an in-house executive chef who oversees the onsite restaurant, Oaken Bistro + Bar. Best for: Meetings, conferences, parties.

P018-P024_CCB_20220411.indd 20

Address: 1423 N. Broadway St. (Rt. 53) Joliet, IL 60435 Phone: 815-722-7800 x 109 Email: events@hauntedtrailsfun.com Website: htpicnics.com Looking for a unique place to entertain your clients or to hold a company picnic? Our beautiful 14-acre park, located on Rt. 53, features a 5-acre picnic grove that accommodates groups of up to 1,500 guests. In addition, we offer three go-kart tracks, two award-winning miniature golf courses, a laser tag arena, amusement rides, batting cages and hundreds of games. And our indoor entertainment center ensures everyone has a good time—rain or shine!

The picnic grove includes a beer garden, a baseball field, volleyball, horseshoes and bean bag toss for guests to enjoy. Picnic menus can be customized to your budget and tastes. Entrees are grilled onsite.

Ask our expert staff about reserving exclusive use of our park for your next company event. We’ll do the work—you take the compliments!

4/8/22 2:26 PM

MO

Addr Web Capa Squa Cost rent Spec men floor HDT Best

CRAIN’S CHICAGO BUSINESS • APRIL 11, 2022 21 LOOP HYDE PARK

MESLER CHICAGO AT SOPHY HOTEL Address: 1401 E. 53rd St. Website: MeslerChicago.com Capacity: 120 seated Square footage: 5,074 Cost: Contact the hotel.

Special features: Opened just before the pandemic, this space has indoor and outdoor dining areas, private dining room, outside fire pit and a variety of seating.

Best for: Business and leisure events, special occasions, wedding receptions.

PALMER HOUSE Address: 17 E. Monroe St. Website: PalmerHouseHiltonHotel.com Capacity: 1,653 total Square footage: 130,000, including three ballrooms, a 17,000-square-foot exhibit hall and 77 breakout rooms Cost: Varies depending on event, food and beverage, and season.

Special features: Closed amid the pandemic, this hotel reopened in January 2021 with a $5 million renovation and restoration that included the Lockwood Express, new pool and cosmetic refreshes to event space.

Best for: Weddings, corporate events, meetings, parties.

MEGAN SAUL

EVANSTON

PALMHOUSE Address: 619 W. Howard St., Evanston Website: PalmHouse619.com Capacity: 300 seated; 700 reception Square footage: 6,500 indoors; 4,000 outdoors Cost: Starts at $2,500 for the rental and bar package.

Special features: This venue, which opened in June 2021, has custom quartz bars, skylights, operational garage doors to the outside, catering kitchen, two green rooms, grand piano and lounge furniture.

Best for: Weddings, large corporate events, holiday parties.

LOOP

LOOP

LOOP

NT

o e-

es

BOTTLENECK MANAGEMENT

5

MONROE RESERVE

MUSEUM OF ILLUSIONS CHICAGO

PENDRY CHICAGO

Address: 100 S. Wacker Drive Website: SouthBranchChicago.com Capacity: 40 Square footage: 650 Cost: $1,500 minimum spend (no additional fee to rent the room).

Special features: Opened in March, it has a full menu, wines by the glass or bottle, horseshoe bar, floor-to-ceiling frosted windows, 60-inch flat-screen HDTV with HDMI and AirPlay connectivity.

Best for: Meetings, corporate events.

Address: 25 E. Washington St. Website: MOIChicago.com Capacity: 140 Square footage: 5,000 Cost: Starts at $1,500.

Special features: The museum has optical illusions, holograms, immersive rooms and photo ops.

Best for: Parties, team-building events, corporate functions.

Address: 230 N. Michigan Ave. Website: Pendry.com Capacity: Michigan ballroom, 80; Grand Ballroom, 300; rooftop, 100 Square footage: Michigan ballroom, 900; Grand ballroom, 3,120; rooftop, 100 Cost: Starts at $3,000 for the Michigan ballroom; $10,000 for the grand ballroom; $5,000 for the rooftop.

Special features: The boutique hotel opened in May 2021. The event space has a private outdoor terrace, full audiovisual functionality, pre-function space, built-in bar, private elevator access, kitchen stations and private office.

Best for: Weddings, corporate events, holiday parties.

P018-P024_CCB_20220411.indd 21

4/8/22 2:26 PM

22 APRIL 11, 2022 • CRAIN’S CHICAGO BUSINESS

PILSEN

PILSEN YARDS Address: 1163 W. 18th St. Website: PilsenYards.com Capacity: 220 Square footage: 6,000 Cost: Starts at $775.

Special features: Opened in January 2021, this industrial space has a large patio and a private cocktail bar; open air; Latin street food menu; radiant-heat cement floor.

Best for: Large parties, weddings, events.

FULTON MARKET

RECESS & CITY HALL Address: 838 W. Kinzie St. Website: ChicagoInRecess.com Capacity: Patio, 589; container, 30; Recess, 259 seated or 400 standing; City Hall, 300 seated or 987 standing Square footage: Patio, 14,000; Recess, 3,700; City Hall, 5,400 Cost: Contact venue.

Special features: Several options, from an entire patio to a lone shipping container; green room; roll-up glass-paneled garage doors that open onto a patio; raised platform that operates as a center stage.

Best for: Parties, meetings, corporate events.

STR

HYDE PARK

THE PENTHOUSE HYDE PARK Address: 5107 S. Blackstone Ave. Website: PenthouseHydePark.com Capacity: 200 for cocktail events; 180 for seated dinners; 150 for seated dinner and dance Square footage: 2,500 for the ballroom; 2,600 for the rooftop terrace Cost: Starts at $4,500.

Special features: Originally part of the Piccadilly Hotel & Theater, this hotel reopened in June 2021.

It had a ballroom on the top floor that has been transformed into The Penthouse Hyde Park. Art deco architecture, 20-foot arched windows with views of the skyline and lakefront.

Best for: Large corporate events, weddings, holiday parties.

P018-P024_CCB_20220411.indd 22

SAB

LINCOLN PARK

Addr Web Capa Lake rate resta Squa Grea Corp five r squa spac 36,00 Cost ballr mini for re Spec spac even Best even

PEPPER FAMILY WILDLIFE CENTER AT LINCOLN PARK ZOO Address: 2001 N. Clark St. Website: LPZoo.org Capacity: 80-100 for the conference room; 400-500 for the reception Square footage: Great Hall, 7,140; conference room, 1,140 Cost: Starts at $2,000 for the conference room; at $6,000 for the Great Hall.

Special features: Just opened in fall 2021, this space at the zoo has windows that look directly inside the lion exhibit. In-house caterer is Tigerlily Events.

Best for: Weddings, corporate events, parties, conferences.

4/8/22 2:26 PM

CRAIN’S CHICAGO BUSINESS • APRIL 11, 2022 23

WICKER PARK

LOOP

THE ROBEY Address: 2018 W. North Ave. Website: TheRobey.com Capacity: 120 seated; 220 standing Square footage: 7,000 Cost: Starts at $1,000.

Special features: Multiple spaces within this hotel, which opened just before the pandemic, with their own designs ranging from art deco, midcentury and industrial; panorama views of the Chicago skyline; two rooftop cocktail lounges; two versatile dedicated event spaces; secluded private alcove; floor-to-ceiling windows; curated food and beverage menus.

Best for: Cocktail receptions, weddings, meetings, corporate events, parties, formal dinners.

ROYAL SONESTA CHICAGO

ADRIAN GAUT

s e

Address: 71 E. Wacker Drive Website: Sonesta.com Capacity: 10-350 Square footage: Eighteen venues comprise 16,000 square feet of flexible space; 2,100-squarefoot penthouse ballroom plus 1,600-square-foot outdoor terrace; grand ballroom has 4,400 square feet with four flexible breakout options.

Cost: Contact venue.

Special features: Scheduled to open this spring, the hotel has completed a nine-month, $50 million property renovation. It has 18 venues containing conference rooms, ballrooms and more.

Ballroom has a 360-degree view of the Chicago skyline; meeting spaces have a dedicated convention services team.

Best for: Meetings, corporate events, weddings.

9 r

City

re m;

a

STREETERVILLE

LOOP

SABLE AT NAVY PIER

ST. REGIS CHICAGO

Address: 900 E. Grand Ave. Website: SableHotel.com Capacity: 175-250 for Great Lakes Ballroom; 150 for corporate meeting rooms; 200 for restaurant event space Square footage: 44,000 total.

Great Lakes Ballroom: 3,500.

Corporate meeting rooms: five rooms with up to 3,450 square feet. Restaurant event space: 350 square feet plus 36,000-square-foot rooftop.

Cost: Starts at $12,000 for the ballrooms; starts at $1,500 for minimum food and beverage for restaurant event space.

Special features: Pillar-free spaces, floor-to-ceiling windows, event manager, audiovisual.

Best for: Corporate meetings, events, parties.

Address: 401 E. Upper Wacker Drive Website: Marriott.com Capacity: Ballroom, 500; banquet in the ballroom, 250; boardroom, 350 Square footage: 5,000 ballroom; 550 boardroom Cost: Not yet available.

Special features: Expected to open in fall 2022, this hotel has executive and pre-function spaces with floor-to-ceiling windows. Marriott’s meeting app allows users to manage everything from food to billing.

Best for: Weddings, meetings, corporate events.

P018-P024_CCB_20220411.indd 23

4/8/22 2:26 PM

24 APRIL 11, 2022 • CRAIN’S CHICAGO BUSINESS WEST LOOP

WALDEN Address: 2145 W. Walnut St. Website: WaldenChicago. com Capacity: 300 seated or 500 cocktail reception in main event space; 250 seated or cocktail-style on second floor Square footage: 19,000 Cost: Starts at $4,000.

Special features: Once home to lighting manufacturers, this century-old, two-story brick building retains many of its original design elements, such as a bow-truss ceiling. Features large windows, restaurantgrade kitchen, two bars, 20 draft lines and private bridal suite. It opened in spring 2020; full-service event planning is included in fee.

Best for: Weddings, corporate events, large parties.

LOOP

TONARI ROOM Address: 456 N. Clark St. Website: RokaAkor.com Capacity: 45 seated; 60 standing Square footage: 1,200 Cost: Starts at $3,000 plus $250 bartender fee.

Special features: Located in the former Enolo Wine Bar, this space—which opened in April 2021—has a private full bar and bartender, audio and video, and floor-toceiling windows that open for ventilation or street access.

Best for: Corporate functions, business meetings, holiday parties.

LOOP

TREE HOUSE CHICAGO Address: 149 W. Kinzie St. Website: TreehouseChicago. com Capacity: 296 Square footage: 4,900 Cost: Contact venue.

Special features: Fullfunctioning restaurant by day, nightclub by night.

Golf simulator available.

Opened spring 2021.

Best for: Parties, weddings, events.

Address: 401 North Wabash Avenue, Chicago, IL 60611 Phone: (312) 588-8149 Email: tch_sales@trumphotels.com Website: trumphotels.com/chicago/meetings Take your meeting or event to the next level with exceptional views and unparalleled service in each of our event spaces. As a reinvention of Chicago’s meeting space, we offer ideal event venues for both business and pleasure.

Whether it’s an important meeting, an intimate social gathering or a glamorous, outdoor rooftop reception, your event will certainly make the right impression. With over 26,000 square feet of function and meeting space, including six salon rooms, an executive boardroom, the Skyline Room, the Riverside Room, the Terrace 16 outdoor rooftop patio and The Grand Ballroom, we have a space that fits every occasion. Each venue showcases Chicago’s historic architectural landmarks, along with its spectacular lake, river and city views. By pairing our

P018-P024_CCB_20220411.indd 24

MANUEL MARTINEZ

TRUMP INTERNATIONAL HOTEL & TOWER

SPONSORED CONTENT

GLENCOE

WRITERS THEATRE

spectacularly designed spaces with the hotel’s outstanding culinary team and prime location, we ensure that events at Trump International Hotel & Tower simply can’t be missed.

Address: 325 Tudor Ct., Glencoe Website: WritersTheatre.org/rentals Capacity: Ranges by space from 20-255 seated to 85150 standing Square footage: Contact venue Cost: Starts at $1,500 for the smaller spaces up to $10,000.

Special features: Six separate spaces ranging from larger space for receptions to intimate space for performances; rooftop terrace; eco-friendly, partially designed from wood and brick. Opened just before the pandemic.

Best for: Weddings, private dinners, performances, corporate events.

4/8/22 2:26 PM

TUESDAY, MAY 17 | 7:30-9:45 AM UNION LEAGUE CLUB | 65 W JACKSON BLVD.

Moderator: Noelle Perkins

GENERAL COUNSEL BREAKFAST

WHAT’S HOT IN LITIGATION:

CHICAGO’S TOP GCs TALK ABOUT CURRENT LEGAL MEGATRENDS IN BUSINESS

Jodi Caro

Our panel takes a closer look at how General Counsels today can best manage the risks and challenges in play. Noelle Perkins of Univar Solutions returns to moderate another stellar panel this year featuring Jodi Caro of Ulta Beauty, Alan Tse of Jones Lang Lasalle, and Darren Zeidel from Aon. Crain’s General Counsel Breakfast is exclusive to general and in-house counsel across a range of industries offering a unique peer-to-peer learning experience for attendees.

CLE credit will be available in partnership with ACC.

BUY TICKETS TODAY!

ChicagoBusiness.com/GeneralCounsel

Alan Tse

PRESENTING SPONSOR:

CORPORATE SPONSOR:

ASSOCIATION SPONSOR:

Darren Zeidel

tab doc.indd 1

22cb0131.pdf

RunDate 4/11/22

FULL PAGE

Color: 4/C

4/6/22 4:19 PM

26 APRIL 11, 2022 • CRAIN’S CHICAGO BUSINESS

CAREER OPPORTUNITIES

CAREER OPPORTUNITIES Chicagoland’s latest business news and events.

ChicagoBusiness.com

OUR READERS ARE 125% MORE LIKELY TO INFLUENCE OFFICE SPACE DECISIONS

Find your next corporate tenant or leaser.

A NEW ENERGY

Connect with Suzanne Janikat sjanik@crain.com for more information.

P026_CCB_20220411.indd 26

Hansen’s tenure begins with development momentum in areas around the IMD, which is the second-largest dedicated urban medical district in the country, behind Houston’s Texas Medical Center. Companies are flocking to trendy Fulton Market just blocks away, while big real estate projects are popping up along its borders in Pilsen, at the fast-growing Cinespace movie production campus a few blocks away and on the IMD’s southeast corner, where the Chicago Fire FC Major League Soccer franchise plans a $90 million training center.

Inside the district, an apartment building and hotel are under construction near the intersection of Ogden and Damen avenues, part of a long-stalled 1.2 millionsquare-foot mixed-use project known as the Gateway, while Naperville-based developer Marquette is building a 279-unit apartment building on Damen next to a 272-unit property it rehabbed and opened last year. Perhaps the most significant project in the district

JACKSON

Cinespace

290

2

HARRISON

RACINE

N

Illinois Medical District

LOOMIS

1

ASHLAND

2. Naperville-based developer Marquette is building a 279unit apartment building next to a 272-unit property it rehabbed and opened last year.

3. The Chicago Fire FC Major League Soccer franchise is planning to build a $90 million training center on what is now Addams/Medill Park.

MONROE ADAMS

United Center

ROOSEVELT

DAMEN

CAREER OPPORTUNITIES

MADISON

1. The Gateway: Construction is underway on a 161-unit apartment building and 135-room hotel that are part of a larger, long-stalled mixed-use project.

DE

CAREER OPPORTUNITIES

care sector and touts 80,000 daily visitors as well as prime access to public transportation.

If she succeeds, the IMD could fully realize its founding purpose, while boosting Chicago’s profile in the fast-growing life sciences industry and generating crucial jobs in a part of town that links the trendy West Loop to blighted neighborhoods on the city’s West Side.

But most of the investment in life sciences facilities in Chicago— and the growing companies that occupy them—is going elsewhere, to hot and emerging neighborhoods like the Fulton Market District, Sterling Bay’s North Side Lincoln Yards project and the former Michael Reese Hospital site.

Although they’re unproven as destinations for life sciences companies, those areas promise something Hansen can’t offer: a robust mix of restaurants, hotels and other amenities that make them attractive places to be.

Changing that won’t be easy for the IMD. First, Hansen must address issues with safety and security that industry experts say have kept real estate investors and other businesses away. She’ll also need to get the major IMD stakeholders—Rush University Medical Center, Cook County Health, University of Illinois Hospital & Health Sciences System and the Jesse Brown VA Medical Center—to cooperate to help the district function as a single destination, rather than a collection of siloed institutions.

“We have things that are missing from the medical district,” says Hansen, whose career in Chicago health care spans 25 years, with a focus on operations, planning and development roles at Advocate Health Care, UIHealth and most recently UChicago Medicine. “If you wanted to live here, there are things that don’t exist. And those are the conversations that we need to have with developers.”

New projects

OG

CAREER OPPORTUNITIES

MEDICAL DISTRICT from Page 3

WESTERN

.

To place your listing, contact Suzanne Janik at (313) 446-0455 or email sjanik@crain.com www.chicagobusiness.com/classifieds

New IMD boss has big growth plans for the area

was Chicago developer John Murphy’s $140 million transformation of the dilapidated former Cook County Hospital building into a 210-room hotel that debuted in mid-2020.

“There is an energy that is starting to form, and I think we have to anchor ourselves to that energy and continue to create more of it,” says Hansen, 58, a Columbia, S.C., native who now lives in La Grange.

She credits her experience at facilities overseen by her mother, a long-term care administrator, for prompting her to pursue a career in health care.

The IMD Commission, a special unit of government that oversees real estate use within the district, has to start with basics to cure its lifestyle sterility, says Hansen.

She’s focused on adding lighting and more widely sharing access to security cameras to help make the area more safe. She also plans to add more uniform signage, improve green space and find other ways to give the neighborhood a “personality” with things like jogging paths and 5K and 10K running events. The goal is to help draw more residents, more investors eager to serve them with projects like shops and restaurants, and ultimately more health care companies planting their flags in the IMD with the confidence that they will be able to attract and retain talent.

The Chicago City Council recently helped her cause in October, approving guidelines for denser and more mixed-use development projects within the IMD. It was the first change in nearly 25 years to the zoning rules that govern the district.

“There’s no draw to live in the IMD outside of you having a job (there) that demands your entire life,” Marquette President Darren Sloniger says. He acknowledges bigger real estate investors aren’t likely to bet on the district unless Marquette’s projects and other new apartment buildings show the area can generate high enough rents, but adds “I think (the IMD) has the opportunity to really pop right now that it hasn’t had in a very long time.”

Not that the IMD hasn’t tried.

The commission bought large plots of land along its southern edge in 2006 with an eye toward developing them with a mix of CALIFORNIA

CLASSIFIEDS

æ`ÛiÀÌ Ã } -iVÌ

3

uses, but the Great Recession thwarted that effort. It took another swing in 2013 when it tapped Chicago developer Jack Higgins to lead the Gateway project. But Higgins struggled for years to land financing and ultimately sold his stake in the venture in 2020, with only a pair of small retail properties built.

BREAKING DOWN WALLS

Brokers that have tried to recruit companies to the IMD say one problem is that the hospital systems stay in their own lanes when it comes to patient services like parking or transit within the district. They rarely share real estate, cautious in many cases about protecting their intellectual property and often competing with each other for talent.

That slows new development and makes it more difficult to entice lenders to finance new health care or even non-medical projects, says Murphy. Both he and a Milwaukee-based developer have drawn up plans for large lab and research buildings on the IMD campus. “Allyson is there to bring organization to a somewhat chaotic environment of growth,” Murphy says.

Hansen aims to break down walls between IMD hospitals by brokering meetings between counterparts at each institution that may not know they have similar real estate or patient service needs. She has spent the past few months on a “listening tour” with more than 100 interviews with key figures at the hospitals and around the IMD. Longtime Rush physician and executive Dr. David Ansell points out that IMD institutions are collaborating more frequently on things like warming centers for the local homeless population and handling the influx of COVID patients. Teaming up on real estate is far trickier, he says. Hospitals have different financial priorities and are increasingly focused on separate outpatient facilities that generate a growing share of their revenue.

“It’s hard enough to manage these capital investments within your own organization, let alone to partner with other organizations,” Ansell says. “Everyone’s got their own plans on their own timelines and different means of capitalization.”

4/8/22 3:31 PM

SPONSORED CONTENT

RETHINKING DIVERSITY IN RECRUITMENT AND HIRING

Building a more diverse workforce is both a business and ethical imperative. But for talent to succeed, companies must move beyond box-checking to prioritizing equity and inclusion.

The national racial reckoning that has unfolded over the past two years made workplace diversity, equity and inclusion (DEI) a pressing strategic priority. But in today’s historically tight labor market, recruiting top talent requires far more than simply welcoming more candidates of color into the talent pipeline. Three Chicago business leaders shared with Crain’s Content Studio how companies are rethinking recruitment to ensure new hires not only stick around—but also shine.

Which recruitment or hiring changes do you think have the greatest potential for building a more diverse workplace?

Mary Person: Many firms have become much more creative with their interview process. The traditional one-on-one interview is becoming less common, and many are turning towards panel interviews. These types of changes help to remove bias and bring more diversity to candidate selection.

Firms have also increasingly realized that to maximize diversity in their hiring they must reinvent their pipeline. That means recruiting at diverse universities and diversifying internship programs.

John Graham: We’re at a point where most companies who have made DEI commitments have done a lot of the initial groundwork: unconscious bias training, metrics dashboards, speaker series, pay equity audits, and more. Over the next two to three years, I think more companies will invest in having diverse groups of culturally aware recruiters and hiring managers. When recruiters and hiring managers have expanded

blind spot is misunderstanding DEI work as a one-time or one-leader subject and not an organization-wide activity.

Recruiting and hiring diverse talent is one aspect, but it’s just as important — if not, more so — to have the processes and systems in place to support diverse talent throughout the associate lifecycle.

Once hired, are opportunities for associate growth and advancement available and easy to navigate?

Do resource groups and associate communities not only exist, but thrive? Does the organization actively provide support and share resources to these groups, and do processes exist for associates to share feedback on company culture? DEI is not simply a value that organizations can claim—it’s a constant evolution.

Person: It is great to bring a variety of mindsets, cultures, genders and ages into your workforce. But you must ensure that you create a culture that supports that diversity—a culture that makes these new ideas feel valued and respected. Overlooking the equity and inclusion portion of DEI can be a real blindspot for some companies.

“FIRMS HAVE INCREASINGLY REALIZED THAT TO MAXIMIZE DIVERSITY IN THEIR HIRING THEY MUST REINVENT THEIR PIPELINE.” — MARY PERSON, CLAYCO exposure and understandings of the diverse talent groups they’re seeking to hire, it helps add dignity and humanity to the candidate experience that leaves a lasting impression, whether a candidate takes the job or not.

What do you see as potential blindspots, as business leaders look to recruit with DEI top of mind?

Teedra Bernard: One common

Graham: I agree. Diversity, or increasing numerical representation of diverse groups of talent, is a piece of the puzzle but it’s not the puzzle. I think leaders need to be cautious of using representation as a measurement of progress and instead examine the attrition for existing employees.

The increase of employees from diverse backgrounds doesn’t fix systemic issues within the culture.

In fact, it can often exacerbate unaddressed culture gaps and

MARY PERSON

Senior Vice President, Public-Private Initiatives Clayco personm@claycorp.com 312-465-3994

JOHN GRAHAM

VP, Employer Brand, Diversity & Culture Shaker Recruitment Marketing John.Graham@shaker.com 708-358-0110

Together We Build Opportunity For Everyone

TEEDRA BERNARD

Chief Talent and Diversity Officer TransUnion Teedra.Bernard@transunion.com 855-681-3196

RISE TOGETHER.

CLAYCO RISING is the most comprehensive diversity and inclusion program in the industry and is the culmination of 25 years of creating meaningful opportunity and enduring structural change for our employees, our minority-owned and womenowned business partners, and the communities where we live and work.

Leveraging our vast resources and strong partnerships, we are working toward one core purpose - lifting up others and helping them break through

and rise above the barriers of race, income, and gender.

We ask you to join us in helping drive real positive change and to build a safe, equitable, and diverse workplace for all!

claycorising.com

RETHINKING DIVERSITY IN RECRUITMENT AND HIRING

Building a more diverse workforce is both a business and ethical imperative. But for talent to succeed, companies must move beyond box-checking to prioritizing equity and inclusion. create harmful environments for diverse groups you’ve hired. At the end of the day, you can’t out-hire a bad culture.

To illustrate with an example, can you share what your firm is doing to integrate DEI across recruitment and hiring decision-making?

Bernard: Integrating DEI into recruiting and hiring processes starts with being introspective and reflecting on your organization’s own internal practices and principles. At TransUnion, we’ve focused on enhancing our data capabilities to better gauge progress on our commitments, and to drive and sustain long-term change. We’re focused on engaging diverse talent for open roles at TransUnion, and we’re training our recruiters to incorporate DEI best practices into our hiring processes.

From there, we’ve been able to prioritize relationship-building with associations and professional groups engaging predominantly Black and Hispanic candidates, as well as networking outreach to

veterans, women in technology, the LGBTQ+ community and people with disabilities.

Person: It’s imperative that companies create a culture of collaboration, in order to provide the best work environment for every employee. To do that, we must be accountable, review data and foster relationships across the company. At Clayco, we’re holding our programs accountable by setting objectives and measuring their success through data analysis, an incredibly valuable tracker in determining diversity and inclusion performance on projects. We also create a pipeline for career advancement, by providing mentorship opportunities at all levels.

Graham: At Shaker, we help our clients identify the culture gaps and attrition catalysts that drive great talent out. With our datadriven approach to developing culturally inclusive employee value propositions, we hold up a mirror for clients to better understand who they are through the lens of their marginalized employee base’s experiences. We then develop an

employer brand that speaks to who they are, who they aspire to be, and how they are working to bridge the gaps between reality and aspiration for their employees.

Do you see more companies integrating DEI into employer branding in the near future, or do you think this is something of a trend?

Person: The only time “trend” and “diversity” should be used together in a sentence is when we say diversity is trending upward.

There’s no question that pulling together the brightest minds and fueling innovation requires

part of employer branding—with good reason. People want to work for a responsible organization that shares their values. More organizations are also empowering their people to live as their true and authentic selves, and part of this empowerment is acknowledging and celebrating the diversity inherent in us. So yes, I think the move to integrate DEI into branding is here to stay.

Graham: I think we’re still in the early stages, for many employers, of figuring out what it means to integrate DEI into their employer brand. The obvious first instinct clients have is increasing

and diversity. Leaders can help promote dialogue by being active participants themselves — and by actively engaging other senior leaders from the start. Associates will take note of whether their leaders are tuned in, sharing their perspective and actively learning, so I can’t stress enough how important this is for the success of any DEI work.

Graham: When we think about building bridges, we often imagine two parties meeting in the middle.

However, marginalized people have historically been expected to cross to the side of those in power and privilege, which only maintains the

“NUMERICAL REPRESENTATION ON ITS OWN IS A WEAK METRIC, BECAUSE IT DOESN’T PROVIDE AN INDICATOR ON HOW YOUR CULTURE IS EXPERIENCED BY MARGINALIZED TALENT.” —JOHN GRAHAM, SHAKER RECRUITMENT MARKETING creating an equitable future within organizations.

Bernard: DEI has become a larger

HOW SHAKER CAN PARTNER WITH YOU ON YOUR DEI JOURNEY DEI won’t mean much if it’s not part of your employer brand and Employee Value Proposition. From our expertise in employer branding, we have learned that authentic employer brands are those that accurately reflect the lived experience of all employees.

We’ll use the insight we uncover to inform your culturally honest, inclusive employer brand—to weave what is real and true into your EVP and messaging.

INTRODUCING SHAKER’S

PROPRIETARY LIVED EXPERIENCE SURVEY Our unique, data-driven approach centers on improving the lived experiences of marginalized groups throughout the talent life cycle—so you gain a truer understanding of all your employees and the impact their lived experience has on them.

NOW MORE THAN EVER, EMPLOYERS MUST WALK THE TALK.

HOW IS DEI TRULY ALIVE WITHIN YOUR ORGANIZATION? CONTACT US AT SHAKER.COM FOR MORE INFORMATION.

the numerical representation of diverse groups of talent, but you have to also ask the tough culture questions—like, what environments are you inviting diverse groups of talent into? And is this environment one that would encourage them to stay and invite others to join?

Without digging into the culture conversations, the branding that’s created will be performative at best and harmful to the brand reputation at worst.

How can business leaders go beyond lip service and truly model the behaviors that help make a company more equitable and inclusive?

Person: Business leaders must realize it is not one person’s job or one department’s job to ensure diversity; it’s everyone’s priority. If you partner with nonprofits that promote equity and workforce diversity, go beyond the yearly donation. For example, I am a board member for Revolution Workshop, an organization that trains minority men and women, ages 18 to 36, on the hard and soft skills they will need to succeed in the construction and woodworking industries. I don’t just attend Board Meetings. I make it a point to stop by the shop and speak to the trainees. Being present is very important.

Bernard: When it comes to promoting inclusion, it’s important to acknowledge who is in the room during conversations about identity

comfort of one side. I encourage business executives to consider crossing a few bridges themselves.

Spend time with people who don’t look or think like you, and whose worldviews are shaped by different socio-economic circumstances.

Go to restaurants in a part of town where you are not in the majority.

Make time for a conversation with someone whose first language isn’t your own. These are the experiences that will widen the apertures for leaders, increase their cultural intelligence, and reduce their fears of otherness.

Can you share any insights on how to help people have honest conversations about race, equity and diversity at work? These topics have been largely taboo, so what can leaders do to help managers and workers get more comfortable being uncomfortable?

Bernard: One of the more effective ways to encourage dialogue about identity and equity is to normalize candid conversations in a workplace setting. Oftentimes, what feels “uncomfortable” is the lack of precedent around speaking up, so making these opportunities more routine—and less rare and high-stakes—can offset some of the unease.

Person: Yes, business leaders have to stop limiting these conversations to training sessions. Have a fireside chat or a roundtable event where

peop comf sessi intim resou shari goals and r Clay busin supp Black and a as Cl impo find

Gra educ to co histo expe unde in th unde chall Race not u those them with intel leade these a con Peop ques and h be un conv the l

How gau DEI leve futu

Bern

“DE OR CO

—T

DEI whet or st and r exam abou prior orga overa the m to ac prog Tran equit to re our s well incre for u share of th Dive share

ies

ve

or es

eir g, so rtant I

ut ine dle. have oss d the

e

es. on’t se ent

wn ty. ith sn’t ences r

ars

hts ave out

ve hat

et

ogue

s in , he ing ies d f the

have ions side re

SPONSORED CONTENT

people may feel a little more comfortable with being open. Hold sessions in smaller sizes so it’s less intimidating. Create employee resource groups for employees sharing similar experience or goals, so they can share stories and raise pertinent issues. At Clayco, for example, we’ve created business resource groups to provide support to employees. We have a Black employees resource group and a network of women, known as Clayco NOW—and, most importantly, we are still trying to find ways to do more.

Graham: I’m a historian by education, so my default is to connect the dots between history and modern-day lived experience. Leaders must work to understand why there’s discomfort in the first place and to better understand the context of the challenges employees are facing.

Race, equity, and diversity are not uncomfortable topics for those who’ve had to contend with them their entire lives. Along with expanding the cultural intelligence of their employees, leaders must also create space for these conversations to be had in a consequence-free environment.

People need to be able to ask the questions they otherwise could not and hear the answers that might be uncomfortable. The more these conversations become normalized the less uncomfortable they will be.

How can business leaders gauge the success of DEI hiring initiatives and leverage insights for the future?

Bernard: A critical part of any

our momentum, from increased leadership development programs to partnering with outside organizations. Don’t discount the storytelling opportunities when determining success — that’s where lessons are learned!

Person: Digging into numbers such as the diversity in your recruiting pool, your retention numbers, who’s climbing the ladder within—the list goes on and on.

And just when you think you have looked at everything, look a little deeper, such as your company’s external activities, and employee engagement activities. You must be vulnerable enough to look at all the data and open minded enough to realize the metrics may tell you that you still have a lot of work to do.

Graham: Numerical representation on its own is a weak metric, because it doesn’t provide an indicator on how your culture is experienced by marginalized talent. Attrition rate is a better metric, especially when paired with exit interview data. If you spend more time trying to understand why diverse groups of talent are leaving your organization or having poor experiences while there, then you have a chance at improving their experiences, as well as creating employer brand ambassadors.

TEEDRA BERNARD is the Chief Talent and Diversity Officer of TransUnion, a leading global information solutions provider using the power of information to help people around the world access financial opportunities. Bernard also serves as the executive sponsor of the African-Diaspora Alliance Network (ADAN), TransUnion’s networking resource group which advocates for a company culture rooted in diversity and inclusion by embracing all those of African descent. Prior to joining TransUnion in 2019, she was the director of HR for Hewlett Packard Enterprise Inc.

JOHN GRAHAM is VP, Employer Brand, Diversity & Culture at Shaker Recruitment Marketing, which has developed a proprietary research methodology and framework in employer brand and employee value proposition development. In his role, Graham works with clients to illuminate the experiences of marginalized employee populations and to make the necessary changes to foster equitable and inclusive environments. His bestselling book, Plantation Theory: The Black Professional’s Struggle Between Freedom & Security, has been featured in many fireside chats and Fortune 500 book clubs.

MARY PERSON is Senior Vice President of PublicPrivate Initiatives at Clayco, a full-service, turnkey real estate, architecture, engineering, designbuild and construction firm. As leader of the firm’s strategic initiatives in DEI, Person helms programmatic efforts to promote and increase diversity on Clayco projects, including the development of Clayco’s Construction Career Initiative (CCDI), which mentors and supports aspiring tradespeople of color. Prior to joining Clayco, Person worked at F.H. Paschen and the Chicago Transit Authority.

Where do you see DEI heading in the next few years?

Person: My hope is that a light bulb turns on and business leaders realize that diversity isn’t only the right thing to do for business, it’s the right thing to do—period. I

“DEI IS NOT SIMPLY A VALUE THAT ORGANIZATIONS CAN CLAIM—IT’S A CONSTANT EVOLUTION.” —TEEDRA BERNARD, TRANSUNION DEI initiative is transparency, whether through data and metrics or storytelling. Metrics for gender and racial representation, for example, are incredibly telling about an organization’s DEI priorities. But I also challenge organizations to consider their overarching DEI journey — and the many incremental steps taken to achieve long-term goals and progress. For example, as part of TransUnion’s racial and gender equity commitments, we’ve pledged to reach global gender parity in our senior leadership by 2030, as well as achieving a year-over-year increase at all levels of management for underrepresented groups. We share year-over-year comparisons of these data points in our annual Diversity Report, but we also share the unique actions driving

ABOUT THE PANELISTS

feel companies will begin to work together and begin to share ideas and strategies that work. Many leaders will realize that diversity isn’t just about race and that oneoff programs won’t be enough.

Graham: Many companies want to embed DEI into everything they’re doing, but they aren’t yet sure how to do it. Companies that have made strong investments in DEI infrastructure will push to leverage insights to improve their culture and ensure their marketing matches reality. We’re already helping clients understand, for the first time, what their culture gaps are through the lens of marginalized talent. Not everyone is ready to take the next step yet, but it’s clear the journey forward will continue.

We Place Value in Every Voice At TransUnion, cultivating a diverse, equitable and inclusive culture isn’t an endpoint — it’s a constant evolution.

Our commitment to provide a welcoming, safe and supportive professional workplace is reflected in our pledge to: →

Reach global gender parity in our senior leadership by 2030

→

Achieve a year-over-year increase at all levels of management for underrepresented groups

→

Continue building relationships with associations engaging with underrepresented groups, and outreach to veterans, women in technology, the LGBTQ+ community and people with disabilities

→

Build upon processes and systems to assist diverse talent throughout the associate lifecycle

TransUnion remains committed to fostering inclusion and continuing our Diversity, Equity & Inclusion journey for the long-term.

© 2022 TransUnion. All Rights Reserved | CSR-21-F99140

30 APRIL 11, 2022 • CRAIN’S CHICAGO BUSINESS

Water Tower Place owner moves on, hands Michigan Avenue mall over to lender Brookfield’s resources on other opportunities within our portfolio.”

A Brookfield spokeswoman declined to comment beyond the statement.

New York-based Brookfield is transferring ownership of Water Tower Place to MetLife Investment Management, a unit of the property’s lender, New York insurer MetLife.

“Water Tower Place is a high-quality real estate asset that is well-positioned in the Chicago market,” a MetLife Investment Management spokesman said in a statement. “While we cannot comment on specifics of this transaction, MetLife Investment Management has a proven track record in institutional real estate and a dedicated team in the Chicago area.

We look forward to discussing the future of this iconic shopping destination with our clients and other key stakeholders.”

Water Tower Place, a nine-story, 818,000-square-foot mall at 845 N. Michigan Ave., lost multiple tenants after the pandemic hit, including Banana Republic, Aritzia and Riley Rose. The Foodlife food hall and the Mity Nice Bar & Grill on the mall’s mezzanine level also closed in 2020.

After Macy’s decided to close its big department store at Water

Tower Place early last year, Brookfield started working on a major makeover of the mall. At one point, Target even considered taking over part of the 324,000-square-foot Macy’s space.

MetLife, meanwhile, was willing to be patient, agreeing to extend the maturity date on Brookfield’s mortgage on the property, most recently to April 1 of this year. Ultimately, however, Brookfield decided against moving forward with its plan. Now, it’s up to MetLife to turn around the mall, possibly with a partner, or just sell it off.

FINANCIAL DECLINE

Water Tower Place was a pioneer in Chicago retailing, the first indoor mall in the city when it opened in 1975, part of a big mixed-use complex that included condominiums, office space and the Ritz-Carlton Chicago. Chicago-based real estate investment trust General Growth Properties owned Water Tower Place through a joint venture for more than a decade before Brookfield took it over through its 2018 takeover of GGP. Brookfield also owns the Oakbrook Center and Northbrook Court malls.

Water Tower Place’s financial decline became clear in 2020, when Brookfield bought out its joint venture in the property, UBS Trumbull. Brookfield recorded a

JOHN R. BOEHM

WATER TOWER from Page 3

Water Tower Place $15.4 million loss from the deal and put Water Tower on its balance sheet at $394 million, according to the company’s 2020 annual report. The deal illustrated how far the mall sector had fallen since 2013, when UBS acquired its stake in Water Tower. That deal valued

the property at $819 million.

Brookfield’s decision to relinquish Water Tower isn’t the only sign of financial distress on the Mag Mile. Macerich, a California REIT, recently decided to transfer its 50% stake in the Shops at North Bridge mall to its partner, record-

ing a $28 million loss in the process. And about $55 million of debt secured by buildings at 545 and 555 N. Michigan Ave.—vacated last year by Gap—was recently transferred to a special loan servicer, a warning that a loan default could be on the horizon.

Crain’s Academy Equity Leadership

For strategic leaders in DEI practices

May 19-20, 2022 Chicago, IL For details, go to crainsacademy.com

P030_CCB_20220411.indd 30

4/8/22 3:32 PM

CRAIN’S CHICAGO BUSINESS • APRIL 11, 2022 31

Cresco’s Bachtell looks to conquer pot market with Columbia Care acquisition CRESCO from Page 1

JOHN R. BOEHM

crosstown rivals Green Thumb Industries and Verano Holdings—the opportunity to catch up and sprint ahead if the deal doesn’t go through or it isn’t integrated well.

“If they can close the deal, it keeps Cresco among the top players and upgrades their profile among the capital markets,” says Andrew Partheniou, an analyst in Montreal at Stifel GMP, who downgraded the stock to “hold” because of risks that lie ahead.

Columbia Care is the secondbiggest acquisition in industry history, but also the most complicated. Overlap between the companies in markets such as Illinois, New York, Massachusetts, Ohio and Florida will require divestitures because of ownership limits in each state. The deal also needs federal antitrust approval.

“We have good relationships with regulators,” Bachtell says.

“We’re good at that. I don’t know anyone in the industry who would be better able to navigate it than us.”

Because Cresco is doing the acquisition with stock instead of cash, the deal requires approval

by Columbia Care shareholders.

Owners of 25% of Columbia stock have pledged to support the deal.

TIME FRAME

If Cresco gets the necessary regulatory and shareholder approvals, the acquisition is expected to close about a year from now.

That’s when Bachtell would face a merger integration far larger than any he’s taken on so far.

Announced March 23, the deal would boost Cresco’s annualized revenue 58% to about $1.3 billion after divestitures, based on 2021 figures; more than double its store count to over 100; and likely increase headcount more than 50%, topping 5,000. Bachtell would have to meld the operations of Cresco and Columbia while simultaneously executing the divestitures required by regulators.

“The juice is worth the squeeze”

Sunnyside Wrigleyville is Cresco Labs’ flagship Illinois dispensary in Chicago. $600 million last year, with 600 employees across four states. But the Columbia Care acquisition is exponentially larger, involving 18 markets and 2,400 employees.

He says Cresco will follow the same playbook it used in successfully integrating previous acquisitions, retaining employees and improving throughput and margins. “I’m very confident in our ability to get this deal across the finish line,” Bachtell adds.

Since winning its first license in Illinois in 2015, Cresco quickly expanded into other markets

IF CRESCO GETS THE NECESSARY REGULATORY AND SHAREHOLDER APPROVALS, THE ACQUISITION IS EXPECTED TO CLOSE ABOUT A YEAR FROM NOW. says Bachtell, emphasizing his goal of making Cresco “the most important company in cannabis.”

Observers note that Bachtell walked away from previous deals when complications arose. Cresco pulled out of the $120 million acquisition of VidaCann in 2019 to conserve cash and scratched the $283 million purchase of Tryke in 2020 because of regulatory delays amid a decline in cannabis stocks.

Bachtell counters that Cresco closed five acquisitions worth

and became one the largest multistate operators, alongside other Chicago-based companies such as GTI, Verano and PharmaCann.

But it hasn’t always enjoyed the same recognition or respect from investors.

Cresco went public in Canada in 2018, the same year as Curaleaf and GTI, but trades at a lower valuation because its profit margins are slimmer.

“Profitability was the name of game in the last 24 months, and GTI was rewarded for that,”

HOW TO CONTACT CRAIN’S CHICAGO BUSINESS EDITORIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312-649-5200 CUSTOMER SERVICE. . . . . . . . . . . . . . . . . . 877-812-1590 ADVERTISING . . . . . . . . . . . . . . . . . . . . . . . . . 312-649-5492

P031_CCB_20220411.indd 31

CLASSIFIED . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312-659-0076 REPRINTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212-210-0707 editor@chicagobusiness.com

says Alexander Gastevich, vice president of V. Gastevich Investments in Chicago, a shareholder of Cresco, GTI, Verano and PharmaCann. “Cresco has been a little more focused on branding and the consumer side of things.

When I talk to consumers in the city, Cresco is the much bigger name.”

Cresco formed an early partnership with Chicago pastry chef Mindy Segal, creating a line of weed-infused edibles, as well as other brands. Bachtell’s long-term strategy for becoming the top-selling brand is to sell products not only through its own “Sunnyside” stores, but also through other retailers. Cresco claims to be the largest cannabis wholesaler in the U.S. That’s one reason Cresco pushed aggressively into the massive California market. It’s a tricky strategy. California doesn’t have the license limits found in Illinois and other states that protect prices. Late last year, a supply glut crushed prices in California, the primary reason Cresco missed revenue estimates. With the acquisition, Bachtell is doubling down in California.

“Cresco is the most aggressive large (multistate operator) in California; the second was Columbia Care,” says Alan Brochstein, who follows the industry at 420 Inves-

tor, based in Houston. “Cresco designed their company to create products to be sold by others.”

A soft-spoken former corporate lawyer, Bachtell is an unlikely front man for the cannabis industry.

He was born in Berwyn but grew up in Sedona, Ariz., where his mom was a real estate broker.

Bachtell returned to Chicago in 2000 to attend DePaul University’s law school after graduating from the University of Arizona, where he played varsity tennis.

CHANGE IN COURSE

Bachtell planned to be a sports agent, but became interested in real estate while working at boutique Chicago law firm. He joined Guaranteed Rate in 2007, just as the startup exploded from about 200 employees to 3,500 workers, becoming one of the nation’s largest mortgage brokers.

Bachtell was general counsel before he and broker Joe Caltabiano applied for a license to grow medical marijuana in 2013.

“Having gone through this with the overhaul of the mortgagebanking industry after 2008, where regulations were changing weekly, it felt like we’d read the book before,” Bachtell says.

He says weed presented an opportunity to do good and do well. “Growing up in northern Ar-

izona, there wasn’t a ton of negative stigma around the plant,” he says. “Show me another opportunity to change the way people think about medicine, change the criminal-justice system and get in on the ground floor of something new.”

Cresco and others have come under fire from social-equity activists who have been frustrated in their efforts to break into the marijuana industry in Illinois, which has been dominated by white entrepreneurs and investors who got a head start on recreational sales.

Bachtell has gotten praise, however, for expungement efforts, an incubator program for social-equity applicants and turning its former Lakeview dispensary into a training center for new owners and their employees.

“Charlie’s doing more than anybody else,” says Willie J.R. Fleming, a housing activist from Cabrini Green who is part of Public Square, a company that won a craft-grow license.

Bachtell is one of a shrinking group of founders who built companies from licenses in a single state to publicly traded giants and remain at the helm.

“He built a top-five company,” Partheniou says. “It’s not a small feat.”

Vol. 45, No. 15 – 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.

4/8/22 3:32 PM

tab doc.indd 1

21cb0471.pdf

RunDate 11/1/21

FULL PAGE

Color: 4/C

10/26/21 11:22 AM