Crain's Chicago Business, April 15, 2024

As storms surge in the Midwest, cities struggle to contain all that water | PAGE 15

By John Pletz

FLOOD FIGHT

Pritzker leans into role as Illinois’ CMO

The governor and his economic development team are making a long-overdue pitch for the state to site-selection leaders

Illinois Gov. J.B. Pritzker in February invited a couple dozen site-selection consultants to a River North restaurant to get better acquainted.

Pritzker and his economic team were feeling good about some big wins, such as Stellantis and Gotion's electric vehicle and battery plants, respectively, and wanted to tell the state’s story. Mingling regularly with site-

QUANTUM COMPUTING

South Works site, former Lockport re nery eyed for potential factory. PAGE 3

selection consultants is a routine act for most states. Not so much for Illinois. ose gathered in the room guessed it hadn’t happened since the late Jim ompson was governor more than 30 years ago.

Pritzker is leaning into the promise he made when running for governor that he’d be the state’s chief marketing o cer. Illinois needs to rev up its economic development game to reverse stubborn population and

job-growth trends that have been a drag. e state’s population growth has been minimal, and job growth has lagged the nation.

“We have a good story to tell, and the time is right,” says Kristin Richards, director of the Illinois Department of Commerce & Economic Development, who made the pitch alongside the governor and John Atkinson, chairman of Intersect Illinois, a

BOOTH INSIGHTS

How to launch your businessto-consumer company this year. PAGE 8

CRAIN’S

Gov. J.B. Pritzker

STEPHEN J. SERIO

GETTY

Home prices keep defying gravity

Two years after the Fed started upping interest rates to ght in ation, the Chicago area continues to rack up double-digit price increases

Rodkin

Two years ago this month, when super-charged in ation had jacked up the cost of everything from two-by-fours to eggs to houses, the Federal Reserve began raising interest rates to put a lid on price growth.

Lumber prices went down. Egg prices went down (but then back up because of bird u).

House prices, particularly in the Chicago area, kept going up. e median price of homes sold in the nine-county Chicago metro area

was up more than 10% in the rst two months of 2024. In January, the median price was 10.1% higher than a year earlier, and in February it was 10.3% higher than a year earlier. at's nearly ve percentage points above the nationwide price increase in February.

“We’re going against historical norms,” said Matt Silver, a broker at Corcoran Urban Real Estate in Chicago and president of Illinois Realtors, a statewide professional association. “ ere used to be two or three paths” — i.e., raise interest rates and kill o demand or re-

duce interest rates and spark demand — “but it feels like we’re blazing a di erent pathway now.”

House prices are defying gravity. e long-term impact of that isn’t known yet, but Tassos Malliaris, professor of economics andnance in the Quinlan School of Business at Loyola University, says he can see one clearly: People who need to buy, such as those passing through lifecycle portals like having children, will buy less house.

“It’s the same thing people do

See HOME PRICES on Page 12

Fair housing bene ts the U.S. economy, not just those left behind

National Fair Housing Month every April celebrates the passage of the Fair Housing Act more than half a century ago, and yet large disparities persist when it comes to housing outcomes.

From 1934-1962, the government underwrote $120 billion in housing nancing, but only 2% went to minorities.

Orphe Divounguy

Minority communities were cut from access to credit in a system known as redlining. With higher interest rates for loans not backed by the government, many minority families were priced out of homeownership. Although the 1968 Fair Housing Act prohibited overt housing discrimination, the negative consequences persist today.

Communities of color, especially Black communities, are disproportionately concentrated in areas with limited credit access, high rental costs and, consequently, lower homeownership rates.

Addressing racial disparities in housing demands concerted e orts. is is because improving access to housing for everyone bene ts the U.S. economy at large — not just those who have been left behind. Housing stability is linked with improved health and educational outcomes, job stability, worker productivity and civic engagement.

Areas previously subjected to redlining continue to experience lower home values today. Less private and public investments resulted in fewer amenities that raise the attractiveness of a neighborhood. Although Black-owned homes appreciated faster than other homes during the pandemic, Black homeowners still have much lower home values than white homeowners.

Correction

Research indicates that individuals with homeowners as parents are more likely to own homes themselves, often supported nancially by their parents to overcome initial homeownership barriers. In the Chicago metro area, the Black homeownership rate remains 34 percentage points lower than that of whites — the same as it was a decade ago, according to data from the American Community Survey.  e fact that Black families are less likely to own and that those who own have lower home values and less housing wealth means having less to pass on to their children, stalling progress in narrowing the Black-white homeownership gap.

Racial disparities in the labor market also exacerbate housing a ordability issues for Black renters, who end up spending a larger portion of their income on rent compared to their white counterparts. Among Chicago renters, the typical Black renter household faces a larger housing burden, spending 43% of their income on rent compared with just 28% for the typical white household that rents. Such nancial strains hinder savings for down payments, making homeownership more elusive for Black renters.

Lastly, renters — especially young Black renters — are still more likely to report experiencing housing discrimination. Although discrimination against Black renters has declined over the last decade, minority home-seekers still face high levels of adverse treatment in urban housing markets. Higher housing burdens point to a greater need for housing assistance among Black renters.

e U.S. Department of Housing & Urban Development has long played a crucial role in providing rental assistance to low-income renters, particularly through the use of Housing Choice Vouchers.

e Housing Choice Voucher

In “Hispanic contractors struggle with cement ceiling barrier” that published in the Equity section of the 4/8 issue, the photo caption misidenti ed the initiative of which Blackwood Group is a partner in a $170 million conversion project. It should have said the project was part of LaSalle Street Reimagined.

program plays a vital role in aiding nearly 2 million low-income families and individuals by subsidizing rent payments in the private market. Recipients choose a house or apartment available in the private market and contribute about 30% of their income toward rent, while the federal government pays the di erence — which means landlords also bene t from the guarantee of receiving timely rent payments.

Vouchers are a crucial form of assistance for many low-income renters. However, the program has struggled to keep pace with rapid rent increases, such as those experienced during the pandemic, leading to a shortfall in available vouchers.

Across the Chicago metro area, there were six times as many rent-burdened households — paying more than 30% of their income on rent — than there were available

housing vouchers. It’s worse in areas where rents rose the fastest during the pandemic. In 24 of the nation’s 100 largest metro areas, there were more than 10 times as many cost-burdened renter households as there were available vouchers in 2022.

While the housing voucher program isn’t perfect, it can be improved and should be strengthened.

Opponents of a housing voucher expansion incorrectly infer that an expansion of the program would raise the overall price of rental housing. is is contrary to the bulk of empirical evidence that suggests that in the past, large voucher expansions have had no meaningful impact on average citywide rents. Instead, rent for lower-priced units fell, while rent for higher-priced units increased. is is because an increase in the supply and value of vouchers allows voucher recipients

to move to better neighborhoods. To ensure housing stability and its associated economic and social bene ts, such as improved health and educational outcomes, worker productivity and civic engagement, there is a pressing need for increased funding for housing assistance. is investment would support a more stable and prosperous society, bene ting the U.S. economy at large.

But ultimately, improving housing a ordability still lies in the ability to build a ordable housing. Regions that build more housing have been able to keep rents down. Zoning laws and land use regulations that limit the development of rental housing — especially a ordable rental housing — harm economic prospects for everyone, not just low-income renters, while also preventing progress in shrinking racial gaps.

Dennis

BLOOMBERG

According to data from Illinois Realtors, the metro-area median home price was $320,000 in February, traditionally one of the weakest months in the Chicago area’s cold-climate market.

Chicago restaurants are nally pulling off a dream: Composting

South Works site, Lockport re nery eyed for quantum computer factory

Gov. J.B. Pritzker sees a chance to make Illinois a tech hub. Developer Rela ted Midwest sees another megaproject opportunity.

Two massive industrial sites that symbolize Chicago’s manufacturing decline — a former steel mill on the South Side and a former re nery in the southwest suburbs — could get new life in the race to build cutting-edge technology.

PsiQuantum is considering the former U.S. Steel South Works site and the former Texaco re nery in Lockport for a facility to build and operate quantum computers, which could result in more than 1,000 jobs, sources familiar with the project tell Crain’s. A decision could come in the next few weeks.

two years that includes electricvehicle and battery manufacturing projects involving Stellantis and Gotion. It also would bring a long-awaited revitalization to one of two industrial sites in the Chicago area that had been left for dead. In the case of South Works, it would provide a longsought catalyst to revitalize a neighborhood badly in need of an economic boost.

“This is technology that is going to be part of people’s everyday lives a decade from now.”

Gov. J.B. Pritzker

When the margaritas are owing and the patio is full, Big Star in Wicker Park can churn through almost 580 limes in a weekend. Up until six months ago, those lime carcasses were thrown in the trash.

e taco joint, owned by One O Hospitality, is among a wave of Chicago restaurants that have recently started composting their food scraps. Others include Lettuce Entertain You Enterprises’ RPM restaurants and the Guinness Open Gate Brewery in Fulton Market. Instead of going into a land ll and generating methane gas as they decompose, a Chicago company called WasteNot Compost

Marotti

The task seemed impossible in the fast-paced, low-margin world of dining, but some operators now say it can be done | Ally

From September 2023 to February 2024, Lettuce Entertain You kitchens diverted more than 224,000 pounds of food scraps from the land ll.

PsiQuantum, based in Palo Alto, Calif., is among a handful of companies building quantum computers, which are radically di erent than existing technology. It’s looking for a site that would be home to a cryogenic facility that could consistently create temperatures near absolute zero, which is required to operate the computers. e project would result in 250 to 1,000 jobs to start and eventually grow well beyond that, said a source familiar with the plans.

Landing the company would go a long way to ful lling Gov. J.B. Pritzker’s vision of turning Illinois into “the Silicon Valley of quantum development,” adding to a streak of economicdevelopment wins over the past

e governor’s o ce declined to comment. PsiQuantum did not respond to a request for comment.

e massive, long-fallow lakefront property has stumped developers for years on how to repurpose it, with multiple suitors wary of unknown costs to clean up the land’s contaminated soil. But sources familiar with the property said a new developer is entering the mix: Related Midwest, which is believed to be closing in on an option to buy the entire 440-acre site in connection with the quantum

These Chicagoans traded their Ventra cards for car keys

The CTA is facing an in ection point. Some riders might not come back.

It should have taken Fawn Penn about 45 minutes to commute to their pottery studio in West Town. Instead, the 72 and 49 buses would take closer to an hour and a half on most days. Other times, the buses just wouldn’t show up.

“I would just have my little stoop that I would sit on, on North Avenue, waiting for the 72 to come,” Penn said. “Most of the frustration with it is you’re just cold and wet and annoyed at the fact that it keeps telling you it’ll

be two minutes and then it’s like, JK, it’s going to be 45.”

Penn has lived in Chicago for eight years; in that time they were an avid transit rider, rst on the Red Line and later on the westbound CTA buses. e wait times on that North Avenue stoop mounted after the pandemic. At rst, Penn expressed irritation through art, creating ceramic vases that featured drawings of waiting for the bus in the rain or spoofed ads in the style of those seen on the Red Line.

“It’s nice to no longer make those,” said Penn, who has since

ditched the CTA and bought a rst car. e new mode of transit has helped them get to work on time and lug around supplies for a new gallery in Roscoe Village.

“I had to then be on the West Side and on the North Side in the same day, and I just couldn’t do that,” Penn said. “Also, (the CTA) was a daily stressor for me. Just being low-level upset all the time.”

Penn is part of a growing cluster of frustrated CTA riders who are swapping their Ventra cards for car keys as the transit agency

John Pletz and Danny Ecker

Leigh Giangreco

LINDSAY EBERLY

Build a life at Sand Valley.

year-round beauty and serenity of the vast Wisconsin wilderness. And now – a new opportunity

Filmmakers document the city as historic epicenter of racist housing practices

‘Shame of Chicago, Shame of the Nation’ is a four-part series that looks at racially exclusive covenants and other methods of segregation that were developed here and exported around the country in the 20th century

Dennis Rodkin

In the 20th century, Chicago was an epicenter of the nation’s racist housing practices, a dark chapter with devastating modern-day ramifications, all of which a new documentary series lays out in painstaking detail.

In the four-part “Shame of Chicago, Shame of the Nation,” lmmakers Bruce Orenstein and Chris L. Jenkins trace a direct line from white Chicagoans using everything from bombs to legal documents to prevent African Americans from living in their neighborhoods, through entrenched segregation and into the modern day’s wide chasm between Black and white household wealth.

“It gives people a chance to see how what’s happening in Chicago today comes from what was happening then,” said Orenstein, an Albany Park native and lecturer at Duke University on the art of the moving image.

In the series, which premieres April 18 on WTTW-Channel 11, the filmmakers also detail how Chicago exported its racebased practices to cities around the country.

“It’s all coordinated and coming from Chicago,” Jenkins said. Race-based covenants that prohibited selling a property to Black people and often to Jewish and Asian people, appraisal standards that downgraded property values in areas where Black households were present, redlining that prevented mortgage lending in Black neighborhoods — all had their origin all or in part here.

it was getting this done,” Jenkins said.

Fill-in-the-blank documents creating racial covenants and other Chicago-born tools of segregation “were sent out to the real estate boards and (other) groups all over the country” by an early precursor of the Chicago-based National Association of Realtors, Jenkins said. ‘Wrong side of history’

Tools of enforcement

Wealthy homeowners in Hyde Park “really laid down the gauntlet,” Orenstein said, “and the real estate industry responded with this attitude that you should not introduce ‘inharmonious’ elements into a neighborhood.” The tools of enforcement included kicking out of the real estate board any white real estate professionals who knowingly were involved

e earliest evidence of enforced segregation in Chicago that the lmmakers document is from 1908, when white property owners in Hyde Park launched a campaign to push out any Black residents and businesses. “We don’t know if this is the rst in the country,” Orenstein said, “but it’s one of the rst.”

in transactions where Black people bought in white neighborhoods.

ese incidents were not contained within the city limits. Orenstein says Wilmette property owners “saw what Hyde Park did and copied it.” e documentary also covers the bombing of Black chemist Percy Julian’s new home in Oak Park in 1951. e same year, when a Black couple moved from Woodlawn to an apartment in all-white Cicero, the National Guard had to be called in after a crowd gathered to throw rocks and aming debris onto the roof of the 20-unit building.

Social Darwinism, a belief system that gave the so-called

Negro race an inferior rank on a hierarchy of races, informed the work of the Chicagoans who devised the system of appraising real estate, the “protective associations” that lobbied their neighbors to place racially exclusive covenants over whole neighborhoods and other tools of segregation, Jenkins said.

“One thing that is eye-opening is the deliberate coordination of these policies, in Chicago and across the country,” Jenkins said. After a 1917 U.S. Supreme Court decision struck down apartheid-like laws in Baltimore, St. Louis and other cities that had attempted to create Black-only and white-only zones, “those cities looked to Chicago to see how

In 2020, the National Association of Realtors issued an apology for “being on the wrong side of history.” In and near Chicago, there have been many other efforts to make amends for the error of racist housing practices, including a volunteer group that is scouring county land records to find every property that had racial covenants before the Supreme Court ruled them illegal in 1948, passage of a state law in 2021 that gives counties authority to black out any covenants that remain on property documents, even though they’re unenforceable, and markers placed in front of individual homes where Black residents were denied homeownership through the deceitful practice of contract buying.

There’s even an artist’s planting of thousands of red tulips in the footprints of buildings that fell into decay because of redlining and were demolished.

Nevertheless, the most ghastly scar that remains from the era is the enormous di erence in home values and neighborhood conditions between places where Black people were “permitted” to live then and places where they were excluded.

“The first step toward healing and repair,” Orenstein said, “is facing up to and confronting the truth. We open that door.”

Pritzker venture fund backs fuel-buying startup

The rm is among the investors supporting a Burr Ridge-based business, which aims to make purchasing diesel and gas as easy for companies to do as it is for consumers to buy products on Amazon

Pritzker Group Venture Capital is among the investors backing Fuel Me, a Burr Ridge startup that wants to make it as easy for companies to buy fuel as it is for consumers to buy products on Amazon.

Companies use Fuel Me to manage purchases of diesel fuel and gasoline for trucks, heavy

equipment and generators from a network of 500 fuel suppliers across the country. “ ere are no nationwide fuel providers,” says founder Carlo Passacantando.

Fuel Me raised $18 million in a deal that was led by Pritzker Group and New York-based Tribeca Venture Partners, and includes Chicago-based HPA as well as Bessemer Venture Part-

ners and FJ Labs.

It’s one of the larger startup deals in Chicago at a time when venture funding has slowed dramatically. It’s also the rst Chicago deal from Pritzker Group Venture Capital’s most recent fund, which has made eight other investments.

“We love these old-line industries that haven’t been innovated in,” says Sonia Nagar, a

partner at Pritzker Group Venture Capital. “Fuel is superantiquated. It’s still spreadsheets, phone calls and regional relationships.”

Passacantando got the idea for an e-commerce platform for fuel procurement after launching a traditional fuel-brokerage company in California. He and cofounder Boy Schook launched Fuel Me in Burr Ridge in 2020.

“When we were deciding where to build the platform, we wanted to be in a central hub,” he says. “Chicago is a major transportation hub.”

e Midwest is home to plenty

of heavy-equipment users, manufacturers and data centers, which also are important customers.

Passacantando says Fuel Me has signed up several Fortune 500 companies across various industries, though he declined to name them because the customers haven’t agreed to allow public disclosure.

Fuel Me has doubled its headcount in the past year to about 70, most of whom are in Chicago. Its business model relies on amassing enough scale to buy fuel at a lower price than it sells it.

John Pletz

A still from the docuseries showing authorities lined up to serve eviction notices to tenants who refused to pay unjust rent payments.

| “SHAME OF CHICAGO, SHAME OF THE NATION”

How to launch your business-to-consumer company this year

One of the most common questions students and aspiring entrepreneurs ask me is how to launch a consumer products company in today’s competitive and crowded product landscape. It is a fundamental question to consider for anyone looking to enter the saturated mix with yet another yoga pant, sparkling water, lipstick, handbag, bedsheet, nonalcoholic beverage brand. . . . e list goes on.

e truth is this: It’s going to be challenging.

For starters, the fundraising environment for consumer goods is softening as VCs are leaning toward AI-enabled businessto-business technology companies. Compounding this trend, investments are conservatively being directed toward founders with built-in audiences — A-list celebrities and mega-in uencers.

e climate is tough from a macro perspective. Adding to the complexity are micro forces, such as an entrepreneur’s proposition: If 80% of your o ering is conceptually the same as what already exists and you’re in need of outside capital, the slope gets steeper.

So, what to do? Focus on the other 20%.

Most consumer-focused inves-

tors look at four things at the early/seed level. Fine-tuning your product at this stage becomes instrumental. Consider these e orts after you’ve done your basic market research and sizing analyses: Create a unique product in an overserved market or a satisfactory product in an underserved market.

Consider if you have an advantage that competitors can’t mimic. It can be a special ingredient, patent or process. For instance, perhaps you have access to a topnotch contract manufacturer that can create bespoke formulations at a low minimum order quantity, or MOQ, thereby keeping your costs down. Or you might have access to a speci c audience or an untapped market.

Make your brand stand out and break through the clutter.

It’s not just about style and color palette but the narrative of your brand and the emotional and lasting connection it creates with the consumer. What do you want your customers to feel when they think of your brand: envy, joy, vanity, lust? Ensure you’re demonstrating that consistently across your channels, packaging

and products. e brand story you are telling should meet a consumer need and motivation while being compelling, memorable and ultimately relevant.

Execute an impactful and cost-effective go-to-market strategy.

e more organic the marketing strategy, the better. Start with your core consumers and identify the micro-communities of brand evangelists who are, or can become, obsessed with your product. You should be wary of spending an inordinate amount on paid advertising at this point, as attractive as that might be. Instead, focus on strategic partnerships, engaging local press and getting your product into the hands of potential consumers for free. Let your organic and direct momentum build.

Mobilize yourself to be an active in uencer.

Now is the time to flex your resourcefulness. Who do you know who is hot — meaning, who can you immediately contact within your network without asking for a warm intro? Start building those connections, with an eye toward creating access to vetted

suppliers, consumers, communities and distribution arms. Ultimately, investors are looking to de-risk and scale; they want to ascertain who you personally can convince and influence to grow your business.

en there is the question of funding. e magic number is around $2 million to start from scratch, launch with a few SKUs, establish your operational foundation and make a few early hires.

I recently moderated the “State of Consumer Business” panel at Booth’s 2024 SeedCon, and the consensus from investors a rmed this sentiment: Aspire for $2 million and pragmatically try to hit $500,000, at a minimum.

Business-to-consumer businesses rack up expenditures quickly, from inventory concerns to consumer experience costs such as prototyping, packaging, creative content and paid ads. To secure the needed capital, I recommend starting with friends and family, angel investors and accelerator programs that have exhibited a genuine interest, commitment and track record of success in the industry you are pursuing.

2024 will no doubt be a challenging year for consumer businesses, but that’s never stopped us

Mia Saini Duchnowski is a journalist, engineer, investor and entrepreneur who sold her rst VC-backed company, Oars + Alps, to S.C. Johnson. She serves as an entrepreneur-in-residence at the University of Chicago Booth School of Business’ Polsky Center for Entrepreneurship & Innovation.

entrepreneurs before, so don’t let it daunt you now. Keep the above tips in mind and power ahead with passion.

Advice for small businesses and entrepreneurs in partnership with the University of Chicago Booth School of Business.

New legal front in the Lifeway Foods family feud

In a federal lawsuit, CEO Julie Smolyansky is accusing her mother and brother of stealing trade secrets as well as falsely associating a new competitor startup with the company

Steven R. Strahler moved from the board.

Opening another legal front in its tussle with the widow and son of its founder, Lifeway Foods is accusing them of stealing trade secrets and falsely associating their new company with the maker of the fermented milk product known as ke r.

In an April 1 ling in federal court here, Lifeway said Edward Smolyansky and his mother, Ludmila, used knowledge they gained at Lifeway to launch a competitor, Pure Culture Organics — "brazen misconduct," the suit said, that also involved marketing their rm as if it were "under the same umbrella" as Lifeway.

Edward Smolyansky told Crain’s “our new ke r is based on an entirely new concept” and said April 10 that a response to Lifeway’s allegations had been led in court.

e sides have been duking it out in Cook County Circuit Court over the direction of Lifeway.

e Smolyanskys have sought to oust CEO Julie Smolyansky, the sister of Edward and daughter of Ludmila, and put the company up for sale.

After reaching a truce in 2022, agreeing to hire a nancial adviser to explore options for Lifeway, the parties led competing claims after the deal broke down last year.

Now, Edward Smolyansky says Lifeway recently dismissed its breach of contract claims in circuit court, ahead of a trial scheduled next month.

Lifeway, however, said it abandoned only one of its claims. e company said it is no longer seeking to bar Edward Smolyansky for allegedly making derogatory remarks about Lifeway, its board and its management after he "ceased making the disparaging comments." But four other counts "remain in place and are being actively litigated," a Lifeway spokesman said.

Two counts accuse Ludmila of disparagement and a breach of an endorsement agreement, another accuses Edward of a breach of an employment agreement and the fourth alleges each breached the proxy settlement agreement by nominating an alternate set of director candidates.

Meanwhile, Lifeway stock has soared, tripling since last summer to near 52-week and all-time highs. e company last month reported record sales in 2024, driven by increased volume and rising prices.

Ludmila's late husband Michael founded the Morton Grovebased company in 1986, aiming to popularize ke r — which is like a drinkable yogurt and is still Lifeway's staple product — after the couple immigrated from Ukraine. After Michael died in 2002, Julie became CEO and Ludmila remained an employee until 2010 and a director until 2023, a year after her son was also re-

In its most recent ling, Lifeway said Edward Smolyansky, in a text message last June, "taunted" a senior Lifeway o cer about possessing "the secret formula" and working on a "(t)op secret project." Last month, in a press release announcing the start of Pure Culture Organics, the defendants "touted Edward’s a liation with Lifeway and his knowledge of its

proprietary formula," Lifeway's lawsuit said.

e ling also alleged that the defendant Smolyanskys instructed agents at a California trade show last month to associate the startup rm with Lifeway.

"When asked if Pure Culture Organics was a new company, defendants’ agent responded: 'I think we’re under . . . are you familiar with Lifeway over there?' He then

pointed in the direction of Life way’s Expo West booth. After be ing told that the interlocutor was familiar with Lifeway, the agent responded: We’re under the same umbrella, is what I was told. It’s a brand new product, not on the market yet.' "

In an email to Crain's, Edward Smolyansky wrote that their prod uct "is unlike any other ke r in the world."

A breath of fresh air from City Hall

Mayor Brandon Johnson and his administration have come in for their fair share of criticism for various missteps and public relations snafus since coming into o ce last May: e plan to house busloads of migrants atop a toxic site in Brighton Park springs to mind as a prime example, as does the more recent o er to whittle down gate expansion at O’Hare International Airport.

Never let it be said, however, that Team Johnson didn’t get at least some credit for getting a few things right — most notably in the realm of real estate development.

Among the more encouraging moves Johnson has made since taking o ce is hiring a real estate industry executive, Ciere Boatright, to lead his Department of Planning & Development. During the con rmation process, the veteran of Chicago construction rm Clayco as well as Pullman’s Chicago Neighborhoods Initiative advocated for streamlining the department and cutting the red tape that too often tangles up much-needed investment at the neighborhood level as well as downtown.

“As a developer, I’ve experienced, to be completely honest, frustrations working with DPD,” Boatright said at her con rmation hearing before the City Council’s Committee on Economic, Capital & Technology Development. “You can complain about it or you can roll up your sleeves and do something about it.”

She hasn’t been doing something about it for long — she’s been on the job since Nov. 20 — but real estate industry insiders say they’re already seeing signs her perspective

PERSONAL VIEW

is being brought to bear on a department that had grown unwieldy under Johnson’s predecessors. At Crain’s Spring Real Estate Breakfast, Boatright elaborated on the steps she has been able to take since November. And she spoke in terms that real estate players in the audience could clearly understand:

“Development is hard. It’s really hard and it’s harder now than it’s been in a very long time,” Boatright told the audience gathered at the Hilton Chicago on April 11. “Capital’s constrained, interest rates are high, it’s hard to make the numbers work. . . .Our conversa-

tion (with developers) should start out with, ‘How do we get to yes from the city’s perspective?’”

at might not sound like much, but it’s a signi cant mindset shift from what has prevailed in the past: instructing her teammates to think of themselves as partners with developers rather than adversaries; to look for solutions rather than throwing up roadblocks.

Another mindset shift: thinking big about what can be done — and indeed must be done — to revive a downtown still su ering from a post-pandemic malaise. e Johnson

administration on April 3 greenlit a plan to turn four outdated Loop o ce buildings into more than 1,000 apartments, a subsidy that could potentially inject life into the vacancy-plagued central business district.  at project is actually a continuation of the LaSalle Street Reimagined Initiative launched in 2022 by former Mayor Lori Lightfoot. But Johnson and Boatright are looking well beyond that plan and showing a willingness to aim high on several fronts. For one, Boatright signaled that Lightfoot’s signature Invest South/West initiative may be due for a major re-evaluation while also emphasizing that sparking further investment in the South and West sides must continue to be an administrative priority.

Even bigger than that: Boatright underscored the importance of doing what’s prudent to keep Chicago sports teams operating within city limits. While the case has yet to be made that public nancing of any new stadium is a compelling need, this administration seems to recognize that a thoughtfully designed stadium development could be the type of catalyst for growth that the central area needs now.

Similarly, even seemingly pie-in-the-sky ideas — such as decking over the Kennedy Expressway in order to create new open space and even development opportunities were fodder for conversation as far as Boatright was concerned. at’s a long way from saying she endorsed the idea, but a willingness to visualize the possibilities and entertain creative solutions is the rst important step toward re-imagining the city at a moment of profound change.

Tourism is not a luxury. It’s an economic imperative.

Chicagoans root for what we love. From our favorite baseball team to our favorite Italian beef spot, we go all in. We band together with diverse but like-minded members of our community to support the cause, particularly when the cause is the community itself. Because at the end of the day, all of us are rooting for Chicago to succeed.

As the city of Chicago and state of Illinois face huge budget decits, we must once again turn to the tried-and-true workhorse of our economy: tourism.

must embrace events like the NASCAR Chicago Street Race and the Democratic National Convention, along with annual bucketlist events like Lollapalooza, the Sueños Music Festival and the Air & Water Show.

To care about this city is to want tourism and hospitality to thrive in Chicago and across the state. An in ux of visitors who stay in our hotels, dine in our restaurants and shop in our stores is objectively good for our economy and our community.

But this type of growth does not happen organically. It takes all of us, banding together to bet big on Chicago as a place that has what it takes to serve as a global host city to the world. To attract tourists, we

e inaugural NASCAR Chicago Street Race weekend helped drive nearly 30,000 hotel room nights and delivered more than $108 million in economic bene t to the city. Most fans who traveled to Chicago for the race say they plan to return to the city for vacation. Beyond that, more than 10 million television viewers around the world got to see the best of our city on display. e forthcoming DNC promises to do much the same.

Without question, there are costs, trafc and congestion to consider when hosting these large events. But there is also a very real cost to letting these opportunities pass us by. Event organizers have options — and they will go elsewhere unless we choose to embrace events for what they are: a platform for

economic opportunity and a driver of much-needed tourism revenue.

As we continue to emerge from a once-in-a-generation pandemic, we must not rest on our laurels. We must continue to aggressively and proactively pursue these opportunities to showcase all that Chicago has to o er — and in doing so, push back on the misconceptions and negative narratives around the city we all know and love.

We must also pair this with smart public policy. at’s why the Illinois Hotel & Lodging Association is proud to help lead the charge to incentivize these big events and major conventions to come to Illinois, and we are grateful for the hard work of our partners at Choose Chicago and the Chicago Sports Commission in helping to attract new and exciting global events to our city.

It’s a simple matter of competition. During and after the COVID-19 pandemic, cities and states across the country doubled down on their efforts to attract conventions and meetings to their destinations. Major events have a cascading effect, with one study showing

that for every $100 spent on lodging, hotel guests spend another $222 during their stay. That’s why we commend Gov. J.B. Pritzker for increasing the state’s funding for tourism promotion by more than $5 million in the budget he unveiled.

We have what it takes. Time and time again, we’ve continued to prove that Chicago can host world-class, largescale events that bring in visitors while minimizing the disruption to our local neighborhoods. We’ve done it before, and we must continue to do it moving forward.

Illinois hotels support 292,588 hospitality jobs that provide good-paying work and equitable income to Illinoisans from every walk of life. We generate $4 billion in state and local taxes, and without that tax revenue, each Illinois household would have to pay $1,652 in additional taxes to make up for the loss. Even in the best of times, tourism is not a luxury. It’s an economic imperative.

So let’s not just root for packed hotels, full restaurants and busy shops. Let’s make it happen.

Michael Jacobson is president and CEO of the Illinois Hotel & Lodging Association.

MEGAN BEARDER

Ciere Boatright

Brandon Johnson’s transparency problem should anger us all

Mayor Brandon Johnson has a transparency problem. A big one. And with the enormous challenges the city faces — violent crime all around us, a history of unconstitutional policing still in need of signi cant repair, caring for an in ux of migrants and so on — it should anger us all.

e Freedom of Information Act is a powerful tool for holding the government accountable and ensuring public o cials are making good decisions on our behalf. e statute grants transparency rights that, in the statute’s own words, are “necessary to enable the people to ful ll their duties of discussing public issues fully and freely, making informed political judgments and monitoring government to ensure that it is being conducted in the public interest.” It was FOIA, and the ability to enforce it in court, that forced Mayor Rahm Emanuel to release video exposing the murder of Laquan McDonald by Chicago police ocer Jason Van Dyke and its coverup.

I’ve represented clients in enough FOIA cases — literally hundreds of them — to doubt that many government officials want to be transparent. If they did, we wouldn’t need a statute mandating transparency. But one would expect a politician with even a tenuous understanding of self-preservation to have learned from Emanuel’s very hard lesson about the political costs of keeping information secret.

Remarkably, the Johnson administration seems to have learned nothing, let alone taken to heart FOIA’s command that “all persons are entitled to full and complete information regarding the affairs of government and the official acts and policies of those who represent them as public officials.”

In the last six months alone, we have filed nearly 60 FOIA lawsuits for our clients, mostly journalists and public-interest organizations, against the Johnson administration. In many of these cases, the administration has simply ignored FOIA requests past their deadlines. The administration often sends its small army of lawyers into court to try to defend its secrecy, usually unsuccessfully, at significant taxpayer expense. Seventeen of these cases are against the mayor’s office itself. Emanuel and Mayor Lori Lightfoot kept plenty of information secret, but they at least made sure their

own office was responding to requests, even if only to deny them. It takes lawsuits to get this administration even to answer.

It is not hard to understand why this is happening. In a recent court filing in one of our cases, the city conceded that neither the mayor nor the mayor’s chief of staff monitor compliance with FOIA. It’s little wonder then that city officials routinely thumb their noses at efforts to access information.

Combined with the mayor’s apparent disdain for the press and the role it plays in our democracy, it’s all starting to look not like incompetence or indifference, but a deliberate effort to make it as difficult as possible for the media and the public to do their jobs of holding the mayor and the administration to account.

But in the long run, a fight against transparency is not a fight any public official can win. Just ask Emanuel.

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We are proud to welcome BigLaw attorneys Hanna Conger and John Rooney to our team.

Matt Topic, who runs the transparency practice at law rm Loevy & Loevy, litigated the case forcing the city to release video of the murder of Laquan McDonald.

Brandon Johnson | BLOOMBERG

In Discover-Capital One deal, the lawyers will take it from here

They face some high regulatory hurdles to clear in order to win approval from the federal government, such as the acquisition’s threat to competition

e sudden departure of Michael Rhodes as head of Discover Financial Services will have little e ect on the deal that will see the credit card company swallowed up by Capital One as the work to get the acquisition across the nish line has moved from the C-suite to the law o ces.

Rhodes, who joined Discover less than two months ago and had been at the helm for just a few weeks when the $35 billion allstock Capital One deal was announced, is leaving to become CEO of Ally Financial.

“It is not atypical to see turnover among personnel, including highranking personnel in a target, because the writing is kind of on the wall that eventually they are going to be out of a job or at least demoted if the deal goes through,” said Jeremy Kress, assistant professor of business law at the University of Michigan’s Ross School of Business.

Another possible deal-breaker includes concerns about the combined company being so big that any potential failures could have ripple effects throughout the economy.

“At this point, they have done all the negotiations,” said Je Cross, a partner at law rm Smith Gambrell & Russell. “ ey have a written purchase and sale agreement. It is a done deal. It is now turned over to the lawyers.”

Capital One Chairman and CEO Rich Fairbank will become head of the combined company. Rhodes said at the time the deal was announced that he would remain in an advisory position for a year after the deal closed.

With or without Rhodes, Capital

One and Discover’s lawyers face some high regulatory hurdles to clear to win approval from the federal government.

“ ere are serious red ags,” Kress said.

e proposed acquisition will likely face challenges on fronts such as its threat to competition, particularly in certain markets such as subprime credit-card loans, Kress said.

Other possible deal-breakers for the federal government include concerns about the company being so big that any potential failures could have ripple e ects throughout the economy, as well as its pricing power with regard to interest rates, he added.

e Biden administration has played a strong antitrust hand, with the U.S. Federal Trade Commission, eight states and Washington, D.C., having sued to block grocery giant Kroger’s proposed $24.6 billion acquisition of Albertsons, citing concerns about reduced wages for workers and higher prices.

e Justice Department also sued to stop the merger of JetBlue Airways and Spirit Airlines, a deal the companies called o after the

HOME PRICES

From Page 2

with cars and vacations,” he said. “We want to go to Paris, but it’s too expensive, so we’re going to Michigan.”

Those who don’t absolutely have to buy may do it anyway. Some have gains they want to spend from the stock market, which is about to finish its strongest first quarter since 2019.

Others, Malliaris said, recognize that with no big downward shocks on the horizon and interest rates unlikely to slide back to pandemic levels anytime soon, “it’s less expensive to buy now than it’s going to be in the future.”

Rising home prices may also have an impact on the presidential election. In a race where each side believes only its guy can properly steward the U.S. economy, about 52% of homeowners and renters say housing affordability will be a factor in how they vote in November, according to a Redfin report released earlier this month.

“While the economy is strong on paper, a lot of families aren’t feeling the benefits because they’re struggling to afford the house they want or already live in,” Daryl Fairweather, Redfin’s chief economist, said in prepared comments on the report. “As a result, many feel stuck, unable to make their desired moves and life upgrades.”

Malliaris said he’s seen the resentment, though he didn’t connect it to the presidential race.

government won the rst round in court.

But Cross said Capital One and Discover’s lawyers could prevail by showing that the combined company would threaten the dominance of industry behemoths Visa and Mastercard, with consumers bene ting from the competition.

Discover’s stock price has surged since the deal was announced, gaining 18.6% to its highest in 2 1/2 years. But its March 28 close at $131.09 is still below the value implied by the terms of the deal, showing that Wall Street bettors are still uncertain about regulatory approval.   e rally has boosted Discover’s market capitalization to about $32.85 billion, eclipsing the $12.34

“Younger people in their late 20s and 30s feel that while their parents and grandparents were able to buy reasonably priced homes,” he said, “they cannot.”

To them, he has some advice: Be patient. “At some point, these older homeowners, people like me, will have to let go of those homes,” Malliaris said. The rising generation is smaller in number than the baby boomers, he noted, so “in terms of demand, these younger buyers will be in a good position.”

Two rationales for buying

Silver said buyers who’ve faced ever-higher prices have at least two rationales for going ahead rather than sitting the market out. One: “They’re making money” and believe, especially after COVID shifted what we need from a home, that spending that money to get the house they want is smart. Two: While it’s startling to see interest rates rise higher than they’ve been since the dawn of the 21st century, it’s congealed into normalcy.

“These are the rates now,” Silver said.

How much more expensive are homes now, four years after COVID changed everything? According to data from Illinois Realtors, the metro-area median home price was $320,000 in February, traditionally one of the weakest months in our cold-climate market. Prior to the COVID era, the metro-area median never went higher than $265,000, even during the fast and furious summer months, when prices are usually

billion market capitalization of Ally Financial, which Rhodes will lead Ally is an all-digital bank best known for its auto nancing business.

Major issues that had faced Discover and Rhodes, including the cleaning up of regulatory issues that led to the departure of CEO Roger Hochschild and selling the student loan business, have been pushed to the side as the company waits to see if the Capital One deals goes through.

“In deals like this, there are typically clauses in the contract that would restrict the . . . target’s ability to make material strategic changes while the deal is pending,” the University of Michigan’s Kress said.

“Discover is in somewhat of a holding pattern while the regulatory approval process happens.”

the highest of the year.

The data for the city looks different. The February median price in Chicago, $330,000, is not so far above is pre-pandemic levels. The median price was $315,000 or more in summer months in both 2018 and 2019.

These are just a few of the data points that show Chicago-area home prices have been defying gravity. There are others, including a map from ResiClub that shows home prices have flattened or gone down since their 2022 peak but have risen in all Chicago-area counties, as well as those in northwest Indiana and southeast Wisconsin.

The causes include:

the region’s long-term a ordability relative to other big metros; homeowners uninterested in selling because they have mortgages with pandemic-era interest rates, as little as half the rate they’d get now;

a low inventory of homes for sale when buyers still need to buy because of lifecycle reasons like marriage, children and divorce; prices that never rose to bubbly levels and as a result haven’t gone slack; and high employment gures that breed buying power.

Along with all of those, there’s “optimism,” Malliaris said. Pessimism swept in when both interest rates and talk of a recession were rising, Malliaris says, but “what’s currently moving the housing market is optimism that the U.S. economy will most likely avoid a hard landing.”

Mark Weinraub

BLOOMBERG

Why private-equity investors see a target-rich environment in Chicago’s accounting business

Private-equity investors are circling accounting rms as the industry, long tied to a partnership business model, braces for an uncertain future.

In 2021, private equity made a notable push into the accounting industry, buying national rms like EisnerAmper and Schellman, among others. e trend continued this year with Chicago-based players Grant ornton and Baker Tilly opening their doors to private equity.

“It’s de nitely a new trend,” said Michael Minnis, an accounting professor at the University of Chicago Booth School of Business. “ ere’s certainly been a lot of interest and activity in the accounting space by private equity."

Accounting firms, flush with outside capital, can make needed investments in artificial intelligence and other expensive software upgrades. The extra cash will also allow firms to attract talent from a dwindling applicant pool as potential employees have turned to industries with quicker and higher returns than one long reliant on the partnership model. Meanwhile, private equity eyes the cyclical cash flow of accounting and its steady returns.

But the trend has also piqued concerns over how private equity’s history of selling o assets, gutting companies and laying o workers to service substantial debt will unfold in the accounting business, a sector that's dominated by several giants while also being highly fragmented at the lower end of the scale — conditions that can attract private-equity investors keen to consolidate balkanized industries and wring out pro ts.

“ is gutting to fuel pro ts is always the concern when private equity gets involved in an industry,” said Jim Baker, executive director of Private Equity Stakeholder Project, a Chicago-based nonpro t that's critical of privateequity activity in essential industries.

‘Early innings’

The downsides of privateequity investments are well documented. Look no further than nursing homes or newspapers, two industries that suffered as a result of private equity’s costcutting measures. Alarms have also been raised over private equity’s push into the health care sector, with doctors voicing concerns over potential layoffs and increased patient caseloads for clinicians.

But for Steve Kaplan, a professor at Booth, the doomsday outlook of a private-equity takeover is largely overblown.

“ e view that private equity just guts rms is silly,” said Kaplan, who conducts research at Booth on private equity, venture

capital and corporate nance. “If you gut a rm you can’t make money and can’t sell it.”

e private-equity playbook often calls for acquisitions to be sold again in a few years or taken public, moves that haven’t yet played out in the recently acquired accounting rms.

“We're still in the early innings of this,” said Minnis, the UChicago accounting professor. “What does the exit strategy here look like and

how does that a ect the accounting industry? What’s the arc of this story going to look like? at’s all still to be determined.”

West Monroe, a Chicago-based digital consulting firm with around 1,000 employees in the city, sold a 50% stake in 2021 to MSD Partners, the investment firm that grew out of Michael Dell’s family office. Kevin McCarty, CEO of West Monroe, said the deal allowed the firm to

attract and keep employees by offering equity.

Attracting talent

The need for accounting firms to find new ways to attract talent is a real concern, and private equity is a solution to those problems, argues McCarty. Private equity's push into the industry comes as the median pay for young accountants has stagnated, losing ground to other more

attractive sectors, according to a Wall Street Journal analysis of salary data.

“I think partnerships are dead,” said McCarty, referring to the traditional business model of accounting rms that required employees to wait years before becoming a partner. “ ere's been a generational shift, and in order to attract young talent and stay competitive, you need to be o ering something more.”

Brandon Dupré

BANKING / FINANCE

Wintrust Government Funds, Willowbrook

FINANCIAL SERVICES

Calamos Wealth Management, Chicago

LAW FIRM

Croke Fairchild Duarte & Beres LLC, Chicago

Wintrust is proud to welcome Senior Vice President Sean Patrick Durkin to the Government Funds Division. In his new role, Sean will help grow the portfolio of over 550 government entities by focusing on County Governments, Community Colleges, and Northwest Indiana. Sean brings over 25 years of experience focusing in on the public sector and spent 16 years as an elected of cial in the City of Darien and the Village of Downers Grove. Sean is also a member of numerous professional organizations.

COMMERCIAL REAL ESTATE

Project Management Advisors, Inc., Chicago

Project Management Advisors, Inc., has named Melissa Gillham as VP of Marketing. In this role, she oversees PMA’s branding, communications, and business development support initiatives. With over two decades of experience, Melissa has a proven track record of leading marketing teams to drive revenue growth. Her expertise includes creating thought leadership and demand generation programs, marketing solutions across diverse product lines, and implementing effective customer retention strategies.

CONSTRUCTION

Clayco, Chicago

Sarah Coates joins Calamos Wealth Management as vice president-senior wealth advisor. She is responsible for advising clients on asset allocation, investment policy, taxef cient portfolio design, and overall investment management discipline. Before joining Calamos, Coates was an investment consultant and senior management leader with Fiducient Advisors. She has a B.A. in Economics from Simmons College and a J.D. from the University of Connecticut School of Law.

FINANCIAL SERVICES

Calamos Wealth Management, Chicago

James Maher joins Calamos Wealth Management as vice president-wealth consultant with 10 years of nancial planning experience. His focus is on holistic nancial planning, investment planning and behavioral investment counseling. Previously, Maher was the Director for Texas at MAI Capital Management. He served in the Air Force and recently retired from the USAF Reserve’s 301st Fighter Wing. He has a Master of Jurisprudence in Wealth Management from Texas A&M’s School of Law.

FINANCIAL SERVICES

Calamos Wealth Management, Chicago

Clayco welcomes David Rose as Project Director, working out of Clayco’s corporate headquarters in Chicago. David brings more than 12 years of experience in project management with a proven track record in numerous markets including high rise residential, commercial of ce and the K-12 sector. In his new role, David will oversee project teams from preconstruction through nal delivery.

CONSTRUCTION SERVICES

Power Construction Company,

Chicago

Ryan Miller, former director of new business development at Juniper Square Capital, joins Calamos Wealth Management as vice president-wealth consultant. He has over 15 years of investment industry experience and graduated from the University of Iowa with a BS in Business and has earned an Accredited Investment Fiduciary (AIF) designation.

FINANCIAL SERVICES

Calamos Wealth Management, Naperville

Power Construction welcomes Matthew O’Hare, a Certi ed Data Center Specialist, as the Managing Director of our new advanced technologies business group. Matt joins us from Element Critical Data Centers, where he served as VP of Construction, overseeing their nationwide capital development portfolio. His focused experience in design and construction includes Data Centers, HPC, Edge and Financial Algorithmic Processing environments.

Brad Karkula joins Calamos Wealth Management as a wealth advisor with more than 15 years of experience in the nancial services industry. Prior to joining Calamos, Karkula worked for Citi Global Wealth where he focused on advising legal professionals. Brad Karkula is a CFP ® professional and a graduate from Purdue University.

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

Croke Fairchild Duarte & Beres welcomes Jim Durkin as a partner in the rm’s Public Finance and Government Affairs & Regulatory Law practice groups where he will advise local governments on economic development and public nance matters. Jim served as minority leader in the Illinois House of Representatives from 2013 to 2023, and was a state legislator from 1995 to 2003. He is an experienced commercial litigator and has conducted internal investigations for public and private entities.

LEGAL

Benesch, Chicago

David Bluestone has joined Benesch as a Partner in the rm’s Intellectual Property Practice Group. David is a patent litigator focused on electrical, mechanical, and software technology matters. He has achieved several complete wins for leading technology companies enforcing their rights against competitors attempting to copy successful products and against non-practicing entities. David also counsels clients in intellectual property licensing, evaluation, and procurement matters.

PROFESSIONAL SERVICES

CrossCountry Consulting, Chicago

CrossCountry Consulting is pleased to announce that Brent Borio has been appointed Partner supporting the rm’s Accounting Advisory practice. With over 20 years of experience, Brent has deep knowledge of transaction and M&A support across a range of industries with a focus on diversi ed industrials, and brings vast experience across the transaction lifecycle including sell-side and buy-side work for corporate clients, private equity rms, and private equity portfolio companies.

TECHNOLOGY

Glory, Chicago

Glory names Joseph Gnorski President of Americas, drawing on his 17 years of leadership including successful tenure as Executive Vice President of Retail Markets, Americas. Gnorski’s deep industry knowledge and expertise in driving revenue growth and innovation position him to steer Glory toward continued success in the region. With a focus on customercentric solutions, he will lead the region’s strategic operations in alignment with Glory’s commitment to customers, team and technology.

FLOOD FIGHT

July 2, 2023, was a wet one in Chicago. What the National Weather Service called “multiple nearly stationary bands of showers and thunderstorms” dumped up to 9.1 inches of rain in some parts of the metro area. No injuries were reported, but ash oods inundated roadways, more than 10,000 homes reported ood-related damage, and preliminary estimates of losses totaled a half-billion dollars. A federal disaster was declared.

Chicago wasn’t alone in its misery. A few weeks later and a few hundred miles to the east, the city of Cleveland saw its own deluge on Aug. 23. Cleveland’s west side saw so many vital underpasses ooded that the neighborhood was virtually cut o for hours. And Detroiters often deal with periodic heavy rains and power outages, with spe-

ci c neighborhoods feeling the brunt during individual storms. e last widespread, catastrophic event, in June 2021, inundated parts of the Grosse Pointes, Detroit’s east side and Dearborn.

It’s a situation that is likely to intensify in Illinois, Michigan and Ohio, creating recurring threats to property, health and nances — for residents, and for cities and states.

With chronic deluges occurring far more often than decades ago, there’s no escaping today’s reality: Climate changes and their e ects mean that ooding in urban centers can no longer be ignored as rare acts of nature. Indeed, the Chicago area saw a virtual repeat of July 2’s ooding just weeks later in mid-September.

Images of torrential rainfall that ooded New York City streets and subway lines last September also increase awareness of how

As storms surge in the Midwest, cities struggle to contain all that water

By John Gallagher

widespread urban ooding has become. e question for cities now is what to do about it.

According to the Fifth National Climate Assessment, the U.S. government’s report on climate change, heavy storms became 45% more frequent in the Midwest from 1958 to 2021. Aaron Wilson, Ohio’s state hydrologist, said Cleveland Hopkins International Airport got more than 3 inches of rain in a day just four times in the 55 years from 1950 through 2004; that more than doubled to nine times in just the next 19 years.

In and around Grand Rapids, rain has increased more than 18% over the last 100 years, with nearly 25% more falling in areas just north and east of the city, some of the biggest precipitation increases in the state of Michigan, according to precipitation data from the National Oceanic and

Atmospheric Administration.

“We’re getting much heavier rain, and the intensity of the rain is incredible,” Candice Miller, public works commissioner for Macomb County outside Detroit, told Crain’s. “We’re struggling with it just like everybody else. We have to think how we can position ourselves for the future.”

Predicting such events with precision is di cult because, as the weather service notes, the most extreme rainfall is often quite isolated. e di erence of a few miles can mean rain falling harmlessly or devastating ooding, and that devastation has real consequences.

Brian Kazy, a Cleveland Ward 16 city councilman, told News 5 Cleveland after the August 2023 storm: “I was out last night

See FLOODING on Page 20

What it will take to prevent basements from becoming lakes

When Cicero received 8.5 inches of rain within several hours last July, streets and viaducts lled quickly. It wasn’t long before it was di cult to get to cars. e power went out, causing sump pumps to fail, and basements soon ooded.

Ten months later, residents of Cicero remain frustrated. Representatives from Voces Fieles Comunitarias Contra la Opresión (Faithful Community Voices Against Oppression), a local group that addresses the environmental justice issues related to ooding in Cicero, say many multigenerational households in the community have family members using basements as living spaces. ey’re concerned that their neighbors don’t know about the health risks of sewage backup from the Chicago area’s combined sewer system, meaning sewage and rainwater from storm drains are carried in the same pipes. Most of all, they want something to be done so that such events don’t happen again, and so far they don’t see the kind of action they’d like on that front. So, like many nonpro ts and activists across the city, they’re looking to lead the kinds of changes they want to see.

Reducing urban ooding is a complex problem with complex — and potentially expensive — solutions. In general, urban ooding can be divided into two categories, says Glenn Heistand, head of the Coordinated Hazard Assessment & Mapping Program at the Illinois State Water Survey, part of the University of Illinois Urbana-Champaign’s Prairie Research Institute. Fluvial, or riverine, ooding occurs when riverbanks over ow — it’s measured by ood maps, it’s what the Federal Emergency Management Agency focuses on, and it’s what people mean when they refer to “100-year oods.”

e term “the 100-year ood,” is misleading, Heistand says. What it really means is a 1%  annual chance of the event. But people think a 100year ood means once in 100 years, so if one has just taken place, they may get complacent, thinking it won’t happen again in their lifetime. But statistically it means there is a 1 percent chance of it happening in any given year. “Just like when you ip a coin, every time you ip the coin, you have a 50% chance of having heads or tails. And that percent chance doesn’t change every time. It’s not dependent on the other times you ipped it.”

Pluvial ooding, when rainfall exceeds stormwater capacity, is what Cicero and other communities experienced last summer. It’s increasingly common, particularly in cities like Chicago that have underground infrastructure built for the rainstorms of a generation or two ago rather than today’s weather. Pluvial ooding and its damage are often overlooked, hard to predict and complex to remediate. e reasons why pluvial stormwater ooding is increasing is multifactorial, which means the solutions are, too.

Communities like Cicero have generations of disinvestment in their stormwater infrastructure, says Delia Barajas, a member of Voces Fieles Comunitarias Contra la Opresión. Many of the areas that have seen this disinvestment are communities of color. In addition, neighborhoods with largely industrial development have more concrete, meaning fewer pervious surfaces to absorb water before it gets to the stormwater drains. And not all soil in the greater Chicago area is the same. Neighborhoods with higher clay content in the soil can struggle with creating e ective rain gardens, planted areas designed to absorb rain. And some of it is just bad luck.

Hard to predict

Heavy rain bursts, like what Cicero received last summer, are hard to predict, says Trent Ford, the Illinois state climatologist at the Illinois State Water Survey. Changes in weather patterns have shifted from rainfall over a number of days to intense rain bursts in a number of hours. And even if those bursts could be reliably predicted, it is hard to pinpoint what stormwater intersections will be hit. “Where the rain falls is random,” he says.

But that doesn’t mean that residents have to just put up with sewage backup in their basements. It is possible to mitigate the risk of urban pluvial ooding. And while some of the answers require big investments and big infrastructure changes, some are things that can be implemented on the residential level.

“But climate change is still going to overwhelm the system because it’s not designed for the kind of rain we have today,” says Margaret Frisbie, executive director of Friends of the Chicago River. Among the nonpro t’s projects are Over ow Action Days to raise awareness of the possibility of stormwater over ow before it happens and to suggest prepara-

tion techniques. ose days used to be focused in April, but the unpredictability of rain means the events could happen in July or any other time, and now the e orts are part of year-round education about ooding prevention.

In the years since Friends of the Chicago River was founded in 1979, water quality of the river has improved. Sewage was found in the river about once every three days back then, and that’s no longer the case. Since the Riverwalk opened, more people are spending time on the river and are more aware of ooding and other issues. e $3.8 billion Tunnel & Reservoir Plan, often referred to as the Deep Tunnel, is designed to reduce ooding from combined stormwater over ows. Two reservoirs are completed as well as Phase I of a third, with Phase II scheduled to be completed in 2029. And there are a number of government agencies and nonprofits working together to understand and mitigate urban ooding.

Friends of the River is focused on natural solutions to incorporate green infrastructure in ood mitigation. In March 2023, the nonpro t’s Greater Chicago Watershed Alliance launched the Natural Solutions Tool, a free, interactive mapping resource with 84 data layers for more than 1.5 million parcels in 176 municipalities.

“It’s . . . where there’s need, so the communities that ood, the communities that have particulate air pollution, the communities that suffer from a lack of trees, the communities that have open green space that needs to be restored, can see it all in one big giant tool,” Frisbie says. “It can be used by anybody for free to both plan and advocate for projects and protection.”

Voces Fieles Comunitarias Contra la Opresión is working with student researchers from the University of Massachusetts Amherst, the University of Illinois Chicago

and that requires money, says Brandon Evans, manager of outreach and engagement at CNT. For example, if a parking lot gets a lot of salt in the winter, plants that can withstand salt would be essential to have in a rain garden.

In Blue Island, another town that has been beset with stormwater ooding, CNT’s RainReady program noted that the rain gardens were not properly maintained. As a result, they did not function as intended and eventually became eyesores. “ ese elements exist best in a network,” Evans says.

Having rain gardens and bioswales — landscape features that collect stormwater runo and lter out pollution — in neighborhood schools, for example, can have a more meaningful impact than one at a single residence.

and elsewhere to help community residents where stormwater ooding happens most often — using photos and layers of data — so that predictions can be made similar to that for uvial ooding.

Information like this will make it easier to get funding for bigger infrastructure work. And that grant money is out there, says Nicole Chavas, president and  chief operating ocer of Greenprint Partners, a design and development rm that works with the Center for Neighborhood Technology, or CNT, on green stormwater infrastructure projects. And there’s an argument that municipalities will need to budget for urban ooding regardless. is is a “pay me now or pay me later” situation, climatologist Ford says, and “later is always more expensive.”

Other cities are being proactive. Milwaukee has a goal of zero overow by 2035 and is investing $21 million in green infrastructure to absorb 740 million gallons of water to make that happen.

Experts understand why some small changes feel like they are not enough to those who are repeatedly cleaning sewage out of their basement. But they note when the majority of a community comes together to implement these changes, they can make a di erence. If one neighbor disconnects a downspout or refrains from showering or doing laundry during a big storm — because that releases more water into the stormwater system when it is already full — it might not be impactful. But if 70% of a neighborhood does, it can make a di erence, says Kristin Ihnchak, a vice president at Greenprint Partners who leads the RainReady program in partnership with CNT.

Rain gardens

Rain gardens are often suggested as an urban ooding mitigation tool. And they work. But they need to be maintained to be e ective,

e RainReady program convened steering committees of residents — no municipality sta allowed — to discuss what various communities could do to mitigate risk. Each committee met three times, and residents were compensated for their time. e idea was not just to tell communities what they should do about ood mitigation, but to understand what the neighborhoods need and what they want.

While the scale of urban ooding is large, and some solutions expensive, there is funding available for communities looking to implement green infrastructure, says Greenprint Partners’ Chavas. In addition to bioswales and rain gardens, other solutions include residential retrots such as overhead sewer lines and rain barrel installation.

“Over the years, we’ve paved over landscape and removed the land’s ability to absorb water,” says Debra Shore, regional administrator and Great Lakes National Program manager at the U.S. Environmental Protection Agency and a former elected member of the board of commissioners of the Metropolitan Water Reclamation District of Greater Chicago. “We have to change that.” Shore is a fan of green alleys, which are built with pervious materials so the ground absorbs rain and doesn’t run o into garages and basements. ey also require someone to remove pebbles and other objects that create blockages. For communities that can’t yet a ord a green alley, it might seem counterintuitive, but one solution would be not to patch potholes in the existing alleys with more asphalt. ose breaks in the pavement may help serve the purpose of more intentional pervious materials.

Many people have no choice except to use basement space as living space, particularly some of the communities that have been hit by repeated urban ooding. Shore adds, however, that those who have the option might reconsider how they use their underground space. Chicago-area basements were designed for over ow, and rethinking how they are re nished and used may be another step in mitigating ooding risk.

Margaret Littman

Chicago’s current sewer system is not designed for the kind of rain we have today, says Margaret Frisbie, executive director of Friends of the Chicago River. | GEOFFREY BLACK FOR CRAIN’S

We need to rethink how we protect ourselves

Recurring, disruptive urban ooding is the new norm in Great Lakes cities. Multiple “500-year” rains have hit the Cleveland, Detroit and Chicago metros in the last decade, with Detroit getting socked twice in 2014 and 2021. Last September, 9 inches of rain fell in three hours around Chicago. A beleaguered engineer declared, “Nothing could be designed for that.”

the same way we’ve long planned for snowstorms. Consistent investment in human, gray and natural infrastructure is key. And the sooner we act, the more we’ll be shielded from the worst of these storms and the millions lost from their impact.

And yet, because these events are no longer anomalies, we have to design our cities for that kind of storm. Another problem? e impacts of these events don’t fall evenly, with formerly redlined neighborhoods being among the hardest hit. e Joyce Foundation funded a 2019 analysis by the Center for Neighborhood Technology, which found that 87% of ood damage claims in Chicago were paid in communities of color.

What are some good next steps to protect residents and businesses from its devastating e ects?

Public- and private-sector leaders must plan for urban ooding

e good news is that we’re not starting from ground zero. Promising approaches to engineering, community engagement and design to address urban ooding are being deployed throughout the Great Lakes region. We need to scale, systematize and invest in them. No small task. But with signi cant new federal dollars available for water infrastructure, climate-ready planning and training for workers, we can reduce our vulnerability to these storms. Now is the time to ramp up this work.

Cleveland, Chicago and Detroit all have snow emergency plans that include provisions for notifying residents, getting plows on the streets and storing snow on vacant land. Comprehensive, public-facing, proactive plans to deal with severe rainstorms are

just as important. For example, we need more e cient ways to notify residents and to have a workforce ready to fan out to clear storm drains to help reduce impacts on people and property. Building on successful community engagement programs like the Northeast Ohio Regional Sewer District’s Good Neighbor Ambassador program could be a place to start.

It’s also a mistake to leave local businesses and homeowners to fend for themselves in seeking federal assistance. Cities could help residents successfully access relief funds (with less stress), by having sta ready to provide application support. Expanding the capacity of existing entities, like already-sta ed Community Action Agencies, would help.

E ective ood resiliency requires both conventional ‘gray’ infrastructure and nature-based green infrastructure that soaks up rain where it falls. Pairing coordinated action on public and private property at the neighborhood level is also needed. Chicago has some promising examples, including Space to Grow, which transforms Chicago schoolyards to soak up the rain from storms and provide better places for kids to play and learn. e Center for Neighborhood Technology’s “RainReady” initiative works directly with homeowners and businesses to develop plans and site-speci c interventions to reduce ooding. is approach has been so e ective that Cook County invested $6 million in RainReady in 2023.

Flood-a ected neighborhoods should contribute to solutions

When I talk about ooding to residents from Robbins, a Chicago suburb, they want solutions that x ooding AND catalyze multi-generational leadership, create economic opportunities, address food injustice and much more to create a thriving community.

That’s because urban flooding is a quality-oflife issue resulting from land-use decisions rooted in racist practices and grounded in capitalism. Putting in new pipes alone won’t undo these problems.

lowest point, which were previously wetlands. Naturally, stormwater pools there. is, coupled with delayed sewer system maintenance and undersized pipes, lead to worse ooding.

ts, such as tax incentives for corporations, the privatization of social safety measures and a polluting, industrial mono-economy. Because of this, when residents spend money, very little is recirculated to support community wealth building.

Increased development (i.e., more pavement) and intensi ed storms because of climate change contribute to increased ooding. Communities of color face worse impacts. And they’re best positioned to design the solutions.   Marginalized communities face more damage because redlining forced them to live in the region’s

Analysis of ood damage payouts by the Center for Neighborhood Technology from 2007 to 2016, show that 87% of ood claim payouts went to communities of color in Chicago.   e deluge in the city in 2023 led to the Federal Emergency Management Agency setting up recovery centers throughout the South and West sides and in the west and south suburbs, because those areas su ered huge losses and are still recovering.

Flooding impacts don’t happen in a vacuum. Regional leaders designed these communities using development strategies motivated by racially biased economic bene-

People lost financial security when deindustrialization led to job loss. So, when they experience flooding — which occurs frequently because of those land-use decisions — residents have fewer finances to recover. Instead, the industrial legacy of pollution led to worse health outcomes, further degrading their financial resiliency. These cumulative impacts reduce people’s quality of life.  How do we address these quality-of-life issues? Community organizing.

Residents collectively amplify their ideas to government leaders. Decision-makers listen and redirect funding to technical firms that are committed to working WITH resident leadership to solve flooding AND other

cumulative impacts. In Chicago’s south suburbs, for example, CNT collaborated with residents to create the Urban Flooding Baseline tool, which mapped flooding risks and impacts with community knowledge at its center. They also participated in our Civic Innovation Hub leadership development program. Programs like these build community power in Chicago, Cleveland, Detroit and elsewhere.

Residents advocate that government leaders should invest in gray stormwater infrastructure that builds community wealth: through local procurement and entrepreneurship opportunities.

Investors can fund training programs with direct-hire pipelines by rms for gainful employment. Firms can work with community members and municipal sta to locate, design, install and maintain public sites for green stormwater infrastructure.

For example, at schools, students can participate in rain garden designs. In Robbins, residents noted that local youth could main-

Finally, better infrastructure, like smarter, modern sewers, is essential. South Bend, Indiana, installed sensors and other upgrades to divert water from one part of the system into another during heavy rains. Sensors not only reduce

tain sites and sell vegetables to ll grocery stores and the youth programming gap. Investors and government programs can nance local organizations to administer these programs.

Elizabeth Cisar is the Joyce Foundation’s Environment Program director.

Cyatharine Alias is senior manager for community infrastructure and resilience at Chicago’s Center for Neighborhood Technology.

over ows (keeping sewage out of basements and waterways), but also help reduce costs. South Bend saved more than $400 million in sewer upgrades because the sensors allow better water storage capacity.

We’ve gured out how to manage for big snowstorms — resi-

Soak up these recommendations for dealing with urban ooding

Last summer the Chicago area was hit with unprecedented storms, unleashing as much as nine inches of rain at a time on the South and West sides.

e aftermath was eye-opening: ooded homes and basements, cars ruined in underwater garages and residents of illegal basement apartments losing everything, unable to access insurance payouts or emergency FEMA funding. is ooding is about more than increasing rainfall from climate change. It highlights how our city’s most vulnerable communities face the greatest risks, worsened by a history of redlining and disinvestment. is disaster should be a wake-up call for our region’s leaders, making clear the urgent need to tackle these interconnected problems so our most a ected residents don’t have to live in fear every time it rains.

which provides funding and technical assistance to schools, businesses, institutions and other large property owners to design, install and maintain green infrastructure on their sites. e program also incentivizes real estate developers to integrate more green infrastructure into their projects than code requires. Programs like this have enabled MMSD to accelerate adoption of green infrastructure across its service area, hitting a key milestone in 2023 of 100 million gallons of stormwater managed.

dents, businesses and government all play a part. More torrential rain is coming. We can choose to strand fewer drivers and ood fewer basements. We just have to fully deploy the smart strategies we already have tested in our region. Let’s not wait until the next 500-year storm to get going.

To be sure, government leaders face many real conditions that seem to limit the holistic solutions, such as zoning specications, funding limitations or legal barriers. But those are hu-

man-built problems. With community organizing, proper investment and technical expertise together, these challenges can be undone and overcome to better serve communities.

At Greenprint Partners, we work closely with state and local governments across the country to plan, design and implement sustainable, equitable solutions to stormwater issues. We know that the challenges of urban ooding require multi-dimensional solutions, including infrastructure upgrades, policy updates and behavior change. As a Chicago-based rm, we have a unique vantage point into how solutions working nationwide could be successful here, given the right political support and leadership. Here are four recommendations for how Chicagoland could move the needle on stormwater and ooding, laying the groundwork for a more resilient region.

Take advantage of available federal funding while we still can.

An unprecedented amount of federal funding is available for climate resilience and water infrastructure projects. Unfortunately, small and low-capacity municipalities are not well-positioned to develop high-impact projects and successfully apply for and administer the money. Cleveland’s corollary to the Metropolitan Water Reclamation District of Greater Chicago, the Northeast Ohio Regional Sewer District, has committed to maximizing the amount of federal grant funding that supports projects in disadvantaged communities in its service area, leveraging its capacity and expertise to help small municipalities identify good- t projects, apply for funding and implement projects. Cook County is showing similar promise with its new $20 million Build Up Cook program, in which water infrastructure will likely be an area of focus.

Use simple and effective branding and communications. Rallying residents and political leaders around actionable solu-

tions begins with simple framing and compelling communications. e Milwaukee Metropolitan Sewerage District (MMSD) has rallied its ratepayers around a vision of zero over ows and zero basement backups for a healthier Milwaukee region and a cleaner Lake Michigan, activating the community to become fellow “Fresh Coast Guardians.” All of its stormwater programs and resources align with the Fresh Coast branding. MMSD sta are highly visible at community events, and successes are shared regularly on their active social media feeds.

Develop partnerships that activate government, institutions, businesses and residents to implement creative solutions.

Government alone cannot solve our ooding challenges. e paved surfaces that cause rain to run o into our streets, sewers and basements are found on public and private property alike. Green infrastructure — the use of soils, native plants and permeable pavements to help capture and store rainwater right where it falls — is an important item in the stormwater management toolkit but one that requires new approaches to policies, programs and procurement methods to get green infrastructure installed citywide. Again, Milwaukee is a national leader, with innovative programs like Fresh Coast Green Communities,

Center underserved communities in determining the solutions.

Decades of disinvestment and policy barriers in Chicago's communities of color have led to deteriorating infrastructure, environmental challenges and a lack of government services. It’s time to change the narrative of how public investments are made and who is at the table to shape policy decisions. All eyes should be on the RainReady Calumet Corridor Plan. Completed for six south suburban communities and funded by Cook County with an initial $6 million of American Rescue Plan Act funding, projects were prioritized by resident-led steering committees, whose recommendations re ected their collective wisdom and hopes for the future of their communities. e results span from a residential retro t program that will equip homes with overhead sewer lines and rain gardens to an intersectionimprovement project that will capture stormwater and improve crossing safety for an adjacent day care, projects that would not have necessarily risen to the top based on technical feasibility alone. By centering community voices in shaping policy and investment, we lay a more inclusive and durable foundation for the future, setting a precedent for how urban infrastructure challenges can be addressed with equity at the forefront.

Nicole Chavas, (left), is president and chief operating o cer of equitable planning at Greenprint Partners, a green infrastructure consulting and project development rm, where Kristin Ihnchak is also vice president.

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FLOODING

From Page 15

until after 2 a.m., and I saw the look in people’s eyes who couldn’t get home and (were) trying to get out, and it was scary,” he said. “We just got to come up with something, and we’ve got to do it quickly; this has just become too often a problem.”

Accurately de ne the issues

Flooding certainly can involve a river over owing its banks, but urban ooding often stems from other causes and requires other solutions. As a 2019 report by the Natural Resources Defense Council put it, “Urban ooding has little to do with bodies of water.” Rather, says Anna Weber, an NRDC senior policy analyst, urban ooding results from excessive rainfall and the inability of the existing capacity in our stormwater systems — gray infrastructure — to deal with it.

For example, in the 2021 event in Detroit, the failure of electric power to a key pumping station on the city’s east side contributed to massive back ow of rainwater into streets and basements in the Grosse Pointes. But even if the power hadn’t failed, so much rain fell that the existing pipes and pumps couldn’t have handled it all.

Flooding was inevitable, o cials said later.

What makes the problem worse is that in many older cities, the underground drains, pipes and pumps that carry away rainwater is the same setup that deals with sewage. Newer suburban communities often separate the stormwater and sewer systems. But in older neighborhoods, heavy rain mixes with sewage and sometimes backs up into basements, streets and nearby waterways.

Whether combined or separated, these urban water and sewer systems are vastly complex networks that carry freshwater into homes and businesses and carry away waste as well as rain runo and snowmelt. Across Chicago, Detroit and Cleveland, millions of homes and businesses connect to these underground networks. ese systems were built over many decades and are hugely expensive to maintain and upgrade.

And here’s the rub: e cities designed and built their underground infrastructure for the kind of rainstorms they saw 50 or a 100 years ago, not for today’s increasingly more severe storms. When the rain comes tumbling down, it often has no place to ow except where it hurts humans the most: streets and basements.

Protect the most vulnerable

Losses from urban ooding can run into the billions of dollars in property damage. Beyond that, urban ooding can also create health concerns ranging from stress to asthma stemming from mold exposure. Actual losses may be even greater than o cial estimates of property damage once health impacts and loss of gross domestic

Yearly U.S. precipitation vs. average annual precipitation

The number of inches above or below average

Source: National Oceanic and Atmospheric Administration, 2022

Note: Data is for the contiguous 48 states. 0 equals the average precipitation from 1901 to 2000.

U.S. land experiencing extreme single-day precipitation

The percentage of land area where a much greater than normal portion of total annual precipitation has come from single-day events

Change in U.S. precipitation, 1901-2021

Precipitation changes by U.S. climate divisions, as de ned by the National Oceanic and Atmospheric Administration

areas often are locales of more heavy industry, paved over with asphalt and with fewer natural greenspaces to absorb heavy rains. And low-income areas tend to see fewer upgrades and less reinvestment in infrastructure. “ ere really hasn’t been a funding scheme to support low-income communities on the maintenance piece,” Alias said.

Finally, urban ooding is often too localized to draw in state or federal aid. As the 2019 NRDC report put it, “ is limits the public assistance available to victims, who are then left on their own to deal with the aftermath, over and over again.”

Such complaints are heard in many cities. Residents of the Delray neighborhood in southwest Detroit have long complained about bearing the brunt of heavy industry and the problems it brings. Expansion, growth and development upstream can often cause oods downstream. As Ohio hydrologist Wilson said, “More vulnerable, poor communities tend to be in the lowerlying areas.”

Improve the infrastructure

Attempts to build out of the ooding problem with expanded systems are chasing the increasing impacts of climate change. Who is to say the 9 inches of rain Chicago received last summer will be the peak — is it just a harbinger of even worse to come?

But while the cities are working, often with federal relief dollars, to upgrade their stormwater systems, installing bigger pipes and more efcient pumps, Weber of the NRDC contends that these “gray infrastructure” projects, while necessary, are insu cient to deal with today’s urban ooding.

Source: National Oceanic and Atmospheric Administration

Note: All data is for the contiguous 48 states. The map was last updated in 2022. The yearly precipitation data is from 2022, 0 equals the average precipitation from 1901 to 2000. The single-day data is from 2021 and is a nine-year moving average.

product are considered. In the Midwest, the impact of excessive rain — urban ooding — often hurts poorer neighborhoods of color the most.

One study conducted by the nonpro t Center for Neighborhood Technology found that just 13 ZIP codes on Chicago’s South and West sides accounted for

nearly 75% of ood damage claims in the 2007-16 period. In those areas, more than 90% of residents were people of color.

Cyatharine Alias, a senior manager for community infrastructure and resilience with Chicago’s CNT, said many things explain the racial disparities. Among them: poorer Black neighborhoods tend to be in

more natural ood plains, a legacy of where people of color were allowed to live during the “Great Migration” of the 20th century. Poorer communities of color are also less likely to be covered by ood insurance, as another report by the Natural Resources Defense Council makes clear. en, too, economically poorer

at’s because many of the biggest problems stem from heavy rainfall exacerbating other issues — inadequate housing, poverty, health risks, lack of green spaces and underlying contamination from prior industrial uses.

“None of these questions exist in a silo,” Weber said. “When you’re talking about ooding, you can’t be just talking about ooding. Flooding a ects everything in a community, so you need to be thinking about these holistic solutions. We need to look at solutions that have multiple bene ts.”

Every region’s long-term goal is to better maintain the existing infrastructure and improve it as necessary.

e Northeast Ohio Regional Sewer District has overseen $9 billion in improvements since its start in 1972, and its leaders expect to spend another $6 billion. ey intend their current and future tunnels to hold back 98% of the combined sewer over ow from a twoyear storm until there’s room at treatment plants downstream. ey say bigger tunnels would cost too much. As it is, the district has reduced untreated over ows from about 9 billion gallons per year to 4.5 billion, and it aims for 494 million by 2036.

In Southeast Michigan, the Mich-

igan Department of Transportation has been installing new electric generators at each of its 144 pumping stations along Detroit-area freeways to help remove water from roadways.

Since the 2021 ooding in Detroit, the Great Lakes Water Authority, or GLWA, has mapped out hundreds of millions of dollars of upgrades to its stormwater system, many of them already underway. Among the steps: Upgrading the electric power supply to pumping stations like the one at Conner Street and East Je erson Avenue, where power failures in 2021 contributed to the disastrous ooding on the east side. New pipes and pumping upgrades are underway elsewhere along the system as well. And o cials say communication lines with suburban systems have improved so that storm ows may be diverted from one part of the system to where more capacity is available. Sometimes it’s just a matter of keeping water out of underground systems by forging alternatives. Consider the new Gordie Howe International Bridge now under construction over the Detroit River to Canada, along with a 167-acre Port of Entry inspection complex in southwest Detroit. Initially, GLWA CEO Suzanne Co ey says, bridge planners had expect-

ed to direct stormwater runo from the facility into the underground pipes that the authority operates. But GLWA planners persuaded the bridge builders to direct heavy rain from the site into the river itself, sparing the underground system that extra burden.

Still, as Co ey notes, the regional stormwater system was designed to handle about 3.3 inches of rain a day, not the 7 to 8 inches of rain at a time that sometimes deluges Detroit as it did in 2021. But the upgrades and better planning are paying o in greater resiliency.

“If we get 10 inches of rain, would we have ooding? Yes,” she says. “Are we much better prepared? You bet.”

In Detroit itself, the water department operates a machine known as a “nutcracker” to break up concrete that construction crews have dumped down drains at the end of a job to get rid of it. Blockages like that clog the stormwater system and can lead to backups and ooding.

In Macomb County outside Detroit, Public Works Commissioner Miller has been working to have hundreds of stormwater drains cleared of sediment, debris and junk.

“You can’t believe what you can nd when you start inspecting,” Miller said. “We have 500 drains, big drains, some enclosed, some not in-

spected since the 1960s. You have to spend money on inspecting old, enclosed drains and cleaning them out. Make sure all the assets you have are operating optimally.”

Encourage individuals to do their part

But upgraded and cleaned out pipes and greener rainwater basins aren’t enough, Weber argues. ere also needs to be a social component to any e orts to reduce the damage from urban ooding.

Residents of poorer districts should be able to get relocation aid so they can move to safer districts. Underlying problems like ground contamination from long-ago industrial uses must be addressed.

And disclosure of ood risks during property transactions can help, too.

“For people signing a lease for an apartment, someone should tell them that neighborhood oods every time it rains, right?” Weber says. “Really, really simple solutions like that can have a big impact.”

Some of those solutions are being funded, in part, in Chicago by the city’s Climate Infrastructure Fund, which provides grants of $50,000 to $250,000 to nonpro t organizations and small businesses for climaterelated capital projects in priority

areas such as green infrastructure.

If the big solutions cost billions of dollars and require government action, individual homeowners can take steps, too, to protect themselves.

Homeowners can install backup protection valves that prevent sewer over ows from backing up into a basement. e city of Detroit, for example, publishes a handbook that o ers tips on maintenance and explains how residents of 11 Detroit neighborhoods prone to ooding are eligible for a program that includes services that help mitigate damages.

en, too, homeowners can regrade their yards so that rainwater ows away from the foundation, lessening basement ooding. Gutter downspouts can be disconnected from the sewer system and repositioned to ow rainwater into a nearby rainwater garden where plants can absorb the overow.

Some communities let residents replace grass with native ground cover or vegetation. “To my way of thinking, it’s more attractive,” says Mayor William Tomko of Northeast Ohio’s Chagrin Falls. And homeowners can plant trees where roots will suck up excess groundwater.

One more thing o cials encourage: e next time a millage

proposal shows up on the ballot to support stormwater system upgrades, vote “yes.”

With such a complex problem, the solutions have to come from many di erent quarters — government and business and nonpro ts and individuals. “We can’t be operating in silos,” Weber of the NRDC said. “Everybody has a role to play in these solutions and we all have to be learning from each other. Otherwise, we just keep reinventing the wheel.”

As Kyle Dreyfuss-Wells, who leads the Cleveland-area’s Northeast Ohio Regional Sewer District, says, “We got here by a thousand cuts. We’re only going to get out of here by a thousand steps.”

Some of those solutions may be hugely expensive, but Macomb County’s Miller says people can’t be discouraged.

“We have been behind the eight ball by not investing enough in our infrastructure. Everybody knows that,” she said, but added, “You can’t look at anything that way. You have to think about incremental changes and doing a better job, what you can a ord, and think creatively and utilize value engineering in any way you can. Like an elephant — one bite at a time.”

Working to advance racial equity and economic mobility for the ne xt generation inthe Great Lakes region.

Cleveland reporter Grant Segall contributed to this story.

Feeling prepared

isn’t

the same as being adequately prepared for oods

Increasing ooding is a recipe for regional disaster unless action is taken to ensure proper preparedness

Roughly one-quarter of Great Lakes region residents have experienced ooding from extreme weather events in the past ve years, according to a new Harris Poll survey. Most feel ready to handle future ooding, our poll shows — and they had better be, because more is coming.

In many ways, the denizens of the region (which we de ned as Illinois, Indiana, Michigan, Ohio and Wisconsin) closely re ect national attitudes toward extreme weather. Roughly 3 in 5 of both regional and national residents worry about extreme weather and approximately twothirds of each are concerned about the e ects of climate change. Great Lakes residents more often than their national peers say that they’ve been affected by extreme events such as thunderstorms (72% regionally vs. 56% nationally), high winds (61% vs. 44%) and winter weather (40% vs. 27%) in the past ve years. And 26% say they’ve been a ected by ooding versus 34% nationally during the last half-decade.

Of course, Chicagoans don’t need long memories to recall severe ooding. Remember last In-

William Johnson is CEO of e Harris Poll, a global public opinion polling, market research and strategy rm.

dependence Day weekend? Nearly 9 inches of rain were reported in one day, ooding parts of the city and forcing NASCAR to cut 25 laps o of its banner race. City residents inundated 311 with ooding reports — more than 12,000 of them, according to a WBEZ study, or more than in all of 2021 and 2022 combined.

Climate vs. con dence

Most Great Lakes region residents, like most Americans, feel good about their ood preparedness — roughly three-quarters expressed faith in being able to handle ooding at all levels, from their own readiness through local, state, and national authorities and organizations. But the question remains how grounded that condence is given the growing e ects of climate change. Cities throughout the Great Lakes region are burdened with “archaic wastewater

systems, crumbling infrastructure and segregated housing creating a perfect storm of ooding vulnerability from sources that range from excessive rain and over owing rivers to lake storm surges and sewage system ooding,” Inside Climate News reported in August. “Rural areas, Indigenous communities and ecosystems in the Great Lakes also face severe risk from ooding, endangering hardfought gains in environmental restoration and community development.”

One in three (33%) Great Lakes residents think extreme weather in their area is worse now compared to ve years ago, with 37% thinking the same regarding climate change. If the weather does get more extreme, how well will the region handle it?

Great Lakes water levels have been above their historical average for the last decade or so. And statewide precipitation in Illinois has increased 12% to 15% in the last 120 years, according to the state's climatologist, while the number of 2-inch rain days has increased by 40%. “Signi cant events . . . now have the potential to ood roadways and structures near the shore that are typically

not at risk,” according to the National Weather Service. And conditions are not expected to abate any time soon. A 2022 American Geophysical Union study projected that baseline water levels for Lake Superior, Lake Michigan, Lake Huron and Lake Erie will rise by a half meter (more than a foot and a half) by mid-century. e economic e ects of ooding are well-documented in terms of ruined property and lost productivity. One study projected more than $5 trillion of damage globally by 2050. Floods also bring injury and death, and not just from waterborne and infectious diseases. A Yale School of Public Health study found that “ ooding also was associated with an increased risk of mortality due to cardiovascular disease, respiratory disease, and mental disorders.”

e Great Lakes have roughly 4,500 miles of U.S. and Canadian coastline, where more than 30 million people reside. Increasing and chronic ooding is a recipe for regional and national disaster unless action is taken to ensure that we are adequately prepared. is won’t be a problem any one institution or authority can solve. It will require coordination across

Extreme weather

Overall, do you think each of the following situations in the area where you live is currently better, worse or about the same compared to 5 years ago?

Source: The Harris Poll

and among di erent sectors. Government, private business and individuals will have to start pulling together now in order to forestall disaster later.

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COMPOSTING

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picks up the food scraps with a eet of electric trucks, hauls them to a local facility and turns them into compost.

Composting is a way to reduce emissions and waste, and many restaurant operators say it is something they’ve long wanted to do. But for it to make sense in the fast-paced, low-margin restaurant world, composting must be cheaper than or on par with the trash bill and easy enough to implement that it won’t compromise service. Operators say that the composting options in Chicago have reached a point where they can, if done right, save a restaurant money. Also spurring the trend: the post-pandemic push toward environmental sustainability.

“Right now, we have four dumpsters that we use at Big Star Wicker Park,” said Chris Miller, culinary director at the restaurant. “What we noticed right o the bat was we were lling up the dumpsters less. It’s saving us money.”

One O Hospitality started its composting e ort about six months ago and has expanded it to about half of its 12 restaurants, including Dove’s Luncheonette and e Violet Hour cocktail bar. e group had tried other composting companies in the past, but they were either not cost e ective or went out of business, Miller said.

Lettuce Entertain You, similarly, is working to add composting at more of its restaurants.

In RPM Seafood’s prep kitchen on a recent morning, employees were spread out at their stations stripping kale, skewering shrimp and extracting crab meat. Next to each employee stood a green compost bin.

“ ey’ve got leg meat there; they’ve got claw meat there. Any waste would go into that bin,” said Kelly Clancy, managing partner at RPM Restaurants, pointing between the growing piles of crab meat and the nearby compost bins. “We want to make it easy for them. . . .If you make it harder, they’re not going to do it.”

posting just during prep, then expanded into dinner services. It took education to get the systems owing. Sta ers had to learn what could go into the compost bins — beyond food scraps, compostable straws, paper napkins and bamboo bar picks are all ne — and what could not.

Between September 2023 and February 2024, the kitchens diverted more than 224,000 pounds of food scraps from the land ll. at is the equivalent of not driving more than 222,200 miles, according to a report from WasteNot.

“It was way more than what I was expecting,” Clancy said. “I had no idea how much garbage we were putting in.”

Savings not yet realized

e e ort has not yet saved the restaurants money, Clancy said, but she expects it will eventually. ey recycle glass and are working on recycling cardboard. Once all that weight is removed from the trash, she expects the costs to break even.

e company that composts RPM’s food waste, Chicago-based WasteNot, charges restaurants based on the size and number of the green containers that they ll with scraps. e cost can start at $24 per week.

principal at market research rm Technomic. If WasteNot and similar companies have made composting easier for restaurants to implement, it can help boost a dining establishment’s reputation with customers and employees alike — and that can be worth a little extra cost.

Daisies started saving its vegetable scraps last year when it moved to a larger location in Logan Square, said executive chef and owner Joe Frillman. Instead of throwing them into the garbage, the restaurant diverts the scraps into bins that Frillman’s brother hauls back to his farm in Michigan and feeds to his chickens. Daisies then serves those chickens’ eggs — about 3,000 of them per week — to its customers, creating a fullcircle system.

e process doesn’t save Daisies any money, Frillman said. e compostable bags the restaurant uses cost about $15 per week. But that’s a nominal cost, he said. It also helps with employee retention. “ e people that work here are really diligent about it because they see the product that comes back,” he said. “A lot of people work here because of the way we’ve aligned ourselves. ey’re trying to gure out a better way to do things in their careers and be a little more sustainable.”

Clancy started pushing to implement composting last summer, after working the NASCAR Street Race — Lettuce Entertain You was the food partner — when smoke from the Canadian wild res descended on the city. Clancy wanted to do something good for the environment.

Such an undertaking can be difcult. Sta ers need be trained, and it can be hard to break habits in established restaurants. e logistics of where to put compost bins for pickup must be gured out, particularly if the restaurant is operating out of a hotel or another building with limited alley space. Lettuce Entertain You launched its composting e ort at e Oakville Grill & Cellar, which opened last year.

e company has seen an in ux of commercial clients recently, said CEO Liam Donnelly. He theorizes that during the pandemic, when people were home and cooking for themselves, they realized how much food waste they generate. When it was time to go back to the workplace, they wanted to do something about it. Additionally, publicly traded companies have rolled out sustainability goals since the pandemic. WasteNot recently added McDonald’s West Loop headquarters as a client, for example.

Guinness’ new Chicago brewery, which opened last year, is on a similar quest. Breweries often send their spent grain from the beer-making process to farmers to feed cattle. Ryan Wagner, Guinness’ national ambassador and head of marketing, said that didn’t make sense in a metropolis like Chicago. Instead, it composts its spent grain with WasteNot.

“It’s much easier to start with a new restaurant because you can train people from day one,” Clancy said.

From there, it expanded to RPM Italian, RPM Steak, RPM Seafood, RPM Events and Pizzeria Portono. It was a slow introduction, Clancy said. ey started com-

Donnelly started WasteNot when he was 15 years old, biking around and picking up food scraps from restaurants and cafes. e company now has a eet of more than 30 electric vans that it uses to service commercial and residential customers. It bought a truck last year that can lift dumpster-size compost bins. at purchase allowed WasteNot to service the Chicago Gourmet food festival for the rst time.

e biggest issue with composting has always been nding commercial facilities that will do it in cities, said Joe Pawlak, managing

A few days after St. Patrick’s Day, several green compost bins sat lined up next to Guinness’ brewing tanks, lled with spelt and pilsner malt. Wagner stuck his hand into the spent grain and tasted some. It was still warm.

at “brewer’s snack,” as Wagner called it, had come from a justbrewed batch of a lower-alcohol grisette-style beer. It lled up more than three of the green bins. A beer with a higher alcohol-byvolume ratio, like the stout Guinness that was brewed for St. Patrick’s Day, would create almost double the amount of spent grain.

“I love those green trash bins,” Wagner said. “ ey make me very happy, because it’s just a reminder of what we’re doing.”

LINDSAY EBERLY

MARCH 19 | 11:30AM-1:30PM

THE FORUM AT 110 N. WACKER

At the latest Crain’s Forum event held on March 19, Chicago Police Department Superintendent Larry Snelling sat down with Group Publisher and Executive Editor Jim Kirk for an exclusive conversation about public safety in the city.

QUANTUM

project. Representatives from PsiQuantum met with o cials from Chicago Mayor Brandon Johnson’s o ce on the project last month, according to two sources familiar with the meeting.

Tech ambitions

If PsiQuantum comes to Illinois, it would further validate an investment in quantum that Pritzker made in his rst term, with $200 million that included the Chicago Quantum Exchange, a research partnership that includes the state’s top research universities, its two national laboratories and multiple Fortune 500 companies.

e state’s investment already helped land $230 million in federal research grants at Argonne, Fermilab and University of Illinois. Illinois is competing with Colorado for another $70 million in federal research money for quantum, which will go a long way to signal the nation’s hub for the industry.

Pritzker touted the Bloch Tech Hub, as the state’s effort to win the additional federal quantum funding is called, at an event April 1 at mHub, an advanced-manufacturing incubator on the near West Side.

“ is is technology that is going to be part of people’s everyday lives a decade from now. is means job opportunities. is means economic growth and development,” he said. “ ink about what happened in Silicon Valley 40 or 50 years ago and what it has led to and the opportunity, therefore, for Illinois to lead the next wave of technology development.”

Quantum computing — which involves harnessing the properties of a type of physics called quantum mechanics to exponentially increase the speed and security of computers beyond what is possible with existing methods — is still in its formative stages. e technology has the potential to lead to massive breakthroughs in everything from medicine to nancial trading and is seen as a national security priority for its encryption potential.

It’s still largely just an idea. Researchers and companies such as IBM and Microsoft have only recently begun to build machines and software. One of the promising approaches involves equipment that operates at super-cold temperatures near absolute zero.

PsiQuantum, which has raised about $700 million in venture

PRITZKER

From Page 1

public-private partnership focused on recruiting businesses. The February meet-and-greet was mainly with site-selection consultants in Chicago and the Midwest. "Many of these people weren’t familiar with strides Illinois had made," Richards says. e team plans to widen the audience in the coming months. “We’re taking this on the road," she says. "We will continue to host

capital and is valued at more than $3 billion, is one of the early leaders. Founded in 2015, the company says it’s on a “mission to build and deploy the world’s first commercially useful quantum computer.”

It has developed a process to build chips for quantum computers and plans to deliver its rst machines in about ve years.

at translates into a project of massive scale: two facilities totaling 500,000 square feet that could cost hundreds of millions of dollars, sitting on a site of more than 60 acres, a source familiar with the plan says. e facilities will require enormous amounts of power and water, which is why the company is looking at a former steel plant and re nery.

It also requires a lot of money.

Two years ago, the state passed an incentive package specifically aimed at chip makers. Now Pritzker is seeking $500 million to invest in quantum, including $300 million for a campus with a cryogenic facility.

At the time, Kristin Richards, the head of the state’s Department of Commerce & Economic Opportunity, dropped some big hints about a potential project in the works.

“We have heard from companies who have been in discussions with the state of Illinois about a location in North America and have said to

events like this and expand our reach, hosting site selectors in other states.”

Pritzker met last month with site-selection leaders in California as part of a trip to promote the state’s lm, technology and manufacturing industries.

His pitch goes something like this: e state’s nances are in better shape, with a reserve fund instead of a backlog of overdue bills, and improved credit ratings. Illinois has beat out other states for some big projects, such as Gotion’s battery plant. More

us: ‘If we want to be co-located somewhere, you would be attractive for all of your existing tech assets. How can you help us source the location?’" Richards said. "It’s about building out a campus and a cryogenics facility.”

ere also is the prospect of federal funding.

Sources familiar with the PsiQuantum project say it has been in the works for about a year.

With so much money up for grabs at a time when o ce, warehouse and other construction has slowed because of rising interest rates and weak o ce demand, the project has drawn interest from big developers and construction companies.

Related is well known for developing luxury residential towers in Chicago, including a 72story high-rise it recently began building on the infamous Chicago Spire site overlooking Lake Shore Drive. But the developer also has ties to a local industrial project: Chicago planning ocials in 2022 tapped Related to help develop a 300,000-squarefoot industrial complex in North Lawndale.

Related has recently made headlines for its planned partnership with the Chicago White Sox to develop a new baseball stadium at e 78, Related's 62-acre planned megaproject along the Chicago

recently, EV maker Rivian doubled down on Illinois, expanding its plant in downstate Normal while hitting the brakes on a new factory in Georgia.

Lot of

catching up to do

On the tech front, Illinois landed a big piece of a $1 billion hydrogen project and a $250 million biotech hub funded by Mark Zuckerberg and his wife, Priscilla Chan.

Pritzker also successfully pushed the state Legislature to provide him with more tools, including incen-

veloper Bob Dunn. But a DCEO spokeswoman said in a statement that the Landmark entity has not received any funding through the program.

Sources familiar with the South Works property said Landmark does not have an active deal to acquire the site.

Dunn did not respond to a request for comment.

Developers and Chicago city o cials for years have eyed South Works for a wide range of potential new uses. U.S. Steel worked for more than a decade with Chicago developer McCa ery Interests on a plan to build more than 13,000 homes and 17.5 million square feet of commercial space on the land, but the proposal was scrapped in 2016 amid environmental remediation challenges at the site. Soil contamination concerns also played a role in thwarting another residential plan for the land from an Irish developer in 2018.

River south of Roosevelt Road.

A Related Midwest spokeswoman declined to comment.

Historic, challenging sites

e two sites under consideration have a lot in common, but there are key di erences.

e South Works site runs along Lake Michigan between 79th Street and the Calumet River. It’s not far from the University of Chicago’s quantum-technology researchers. e site could qualify for an additional state tax credit because it’s in an underserved area.

But the land is still owned by U.S. Steel, which is in the midst of a messy merger with Japanese steelmaker Nippon Steel. U.S. Steel did not respond to a request for comment.

The site also is believed by many to require significant environmental cleanup. In August, Pritzker announced a preliminary $2.2 million grant from DCEO toward environmental remediation of the South Works property, part of a series of investments in underutilized properties and former industrial sites that are ripe for redevelopment. e grant was slated to match another commitment of nearly $7.6 million from a venture of Landmark Development, the real estate rm led by Wisconsin de-

tive programs tailored to the EV industry as well as a deal-closing fund. He’s pushing for another $500 million for quantum technology.

“He deserves credit for strengthening the incentive program, getting projects over the nish line,” says John Boyd, a principal at e Boyd Group, a site-selection rm based in Boca Raton, Fla. e state still has a lot of catching up to do, he says. “A lot of governors have been really proactive — Greg Abbott in Texas, Roy Cooper in North Carolina. Economic development is in the DNA of Ten-

Rapper Common was part of a group that was mulling a massive movie-production campus in 2019, right around the same time that former Mayor Lori Lightfoot identied the site as a possible option for a city casino. Neither of those ideas moved forward.

It's unclear whether Related Midwest would pursue a larger development at South Works if it is selected by PsiQuantum. But having an anchor tenant that Illinois' governor wants to nurture could help accelerate a broader redevelopment. Related has been trying to leverage a similar situation at e 78, where a partnership with the University of Illinois' Discovery Partners Institute to build a new research facility on the land is designed to help spur other development.

e 130-acre Lockport site sits between State Route 171 and the Sanitary & Ship Canal, near the Des Plaines River. It was part of a re nery that was built in 1911 and shut down by Texaco in 1981. Fifteen year later, a $500 million environmental cleanup began.

ere have been several proposals to redevelop the site over nearly 25 years.

In 2021, 181 acres were purchased by the city of Lockport, which is o ering to donate the land to PsiQuantum, sources familiar with its proposal said. e site is just a few miles south of Argonne National Laboratory, which has a quantum-communication test network that connects to Fermilab in Batavia and U of C’s campus in Hyde Park.

Justin Laurence contributed.

nessee, Georgia, Texas, the Carolinas, Indiana.”

Bashing Illinois has been part of their playbooks, he adds. Pritzker and his team still have a lot of hard work ahead to make lasting headway in changing a narrative that’s been reinforced for more than a decade.

“It takes more than salesmanship,” Boyd says. “It takes policy. Safe streets in Chicago, holding the line on taxes and spending. ere’s still some heavy lifting that needs to be done to improve the state’s business climate.”

Developers and Chicago city of cials for years have eyed South Works for a wide range of potential new uses. | BLOOMBERG

struggles to get back to prepandemic service levels. At CTA President Dorval Carter’s City Council appearance in February, transit advocates pointed to friends who had abandoned the CTA and become rst-time car owners since COVID hit. In interviews with lapsed riders, Crain’s found that reliability stood out as the main reason for leaving the system, though other issues, including safety and cleanliness, played major roles for their exits.

Faith Stevens, a 21-year-old student at DePaul University, moved to Chicago in 2021 from a Dallas suburb. She relied on the Red, Brown and Blue lines to get downtown to work on Michigan Avenue and to the school’s Merle Reskin eatre.

“I had multiple problems with people on the CTA. I got spit on one time. I was chased by a man on the train,” Stevens said. “I was out with a friend and a man just fully peed on our shoes and on our bags.”

By 2022, Stevens brought her Volkswagen Tiguan up from Texas. It wasn’t a choice she made willingly — particularly when DePaul gives her a free CTA card.

“I’m a college student. I’m not making a ton of money,” she said. “I had to start budgeting gas into my monthly needs and so that was really frustrating, especially as a freshman who is barely making money and just trying to enjoy college for what it is.”

Looking at regional car sales numbers, there’s no monumental shift in rider-to-driver conversions in the Chicago area. ough stayat-home orders suppressed CTA ridership in 2020, car sales didn’t shoot up immediately following the COVID-19 outbreak.  at lack of sales didn’t re ect a lack of demand for vehicles but rather the supply chain issues that caused a shortage of vehicles, according to Mark Bilek, a spokesman for the Chicago Automobile Trade Association. Vehicle registrations in the Chicago area sank in the second quarter of 2020, from 14 million in the rst quarter to 9.4 million, according to data from the association.

“Sales in 2020, 2021 and 2022 were signi cantly lower than in previous years,” Bilek said. “2023 sales rebounded somewhat and 2024 sales are nally back to pre-pandemic levels.”

While the numbers don’t bear out a full- edged abandonment of public transit and uptake of cars in Chicago, the CTA still faces an uphill battle when it comes to retaining and bringing back riders in the wake of the pandemic. With federal COVID relief dollars expiring in 2026, the transit system is sitting at a major in ection point. Ridership has increased since 2020, albeit slowly, and even the sunniest predictions put 2024 ridership rates at about 66% of pre-pandemic levels. Whether the CTA can secure more funding to boost service will determine whether the riders it still has will hang on or choose to drive.

In a statement to Crain’s, the CTA argued that it has “worked

diligently” to attract riders.

“In fact, everything CTA has done post-pandemic has been executed with an eye towards attracting former and new riders back to our system,” CTA spokesman Manny Gonzales wrote. “ e upward ridership trends, decreasing crime rates and improved service reliability that CTA is currently experiencing are evidence that our e orts have been productive.”

at same statement boasted that the transit system had restored bus service to near preCOVID levels. at celebratory tone might be premature, given that the CTA just announced in late March that it would boost service on 29 bus routes in an e ort to return to pre-pandemic scheduled service levels. is spring, riders should expect improved rail service as the CTA adds new operators. e CTA also has plans to add weekday rush-hour service to the Red, Green, Brown and Purple lines and the Blue Line’s O’Hare International Airport branch. If the agency ful lls that mission, and doesn’t fall short with ghost buses as it has in the past, it could lure back regular commuters frustrated with long wait times.

“If we don’t get help from Spring eld, we’re going to see cuts that make the system unrecognizable,” said Kate Lowe, an associate professor of urban planning and public a airs at the University of Illinois Chicago.

‘Perfect storm’

With the latest data putting Chicago’s o ce occupancy at 56.4%, it’s not realistic to rely on a sudden ridership boom to save the CTA. Organizations such as the Regional Transportation Authority have argued for a funding structure for the region’s transit system that relies less on fares, one that would move away from the requirement that fares cover 50% of operating costs.

“No other comparable agency in the country has such a strong requirement. Most states have dropped it or lowered it under 30%,” said Maulik Vaishnav, RTA’s senior deputy executive director of planning and capital programming. “ ere was such a pressure on our system to raise money from fares, and that is just not how we view transit. It’s more of a public

utility, especially during the pandemic.”

Lowe points out that COVID accelerated downward ridership trends that had been festering since the 2008 recession. RTA data show that bus ridership already started declining in 2008, when the CTA cut bus service, before plummeting in 2020. During that same period, the dawn of rideshare apps and outmigration of Chicago’s Black population chipped away at bus ridership. Meanwhile, rail ridership ticked up throughout the 2010s, buoyed by the rebirth of downtown.

“ ere’s a whole kind of perfect storm of things going on that are outside transit agencies’ direct control,” Lowe said. “ e thing that transit agencies can control is providing service, but that’s contingent on adequate funding.”

Even CTA’s loyal riders have left or curtailed how often they use the system since 2020. Isaac Work had been a regular CTA commuter for over a decade; he took the Halsted bus or the Orange Line from his home in Bridgeport downtown for work.

By early 2021 he had returned to the o ce and was taking the Red Line or the express bus from Uptown. When his wife ran into safety issues on the train and constant smoke- lled train cars aggravated Work’s asthma, he bought a car for the rst time. e couple has since adopted a hybrid commuting system, splitting their time between driving and the Metra, which Work said doesn’t have the same issues as the CTA.

“We’re actually moving next year, which I partially attribute to the state of the CTA,” said Work, who is relocating to Toronto. “We’re skipping town for a variety of reasons, but transit was half of mine.”

Compared to Chicago, Work said the reliability of Toronto’s transit system feels European.

Shawn Ursini also pointed to peer cities like Toronto as a model for Chicago. Ursini and his husband shared a vehicle before COVID but bought another because they nd the CTA so unreliable.

“Quite frankly, it’s becoming a liability for the city’s economic vitality,” Ursini said.

ough violent crime is de-

creasing on the CTA, riders like Ursini cited crime and other nuisance issues like open drug dealing on the trains among reasons they use it less frequently. Rather than contracted security, he would like to see more police who could enforce the law on trains. e CTA says “instances of crime on the system are rare” but pointed to the Chicago Police Department when asked for further details about how the transit system de ned “rare.”

“It’s absolutely ridiculous,” Ursini said. “If I go to New York City, I see police in the train stations in Manhattan, in the Bronx, in Queens and Brooklyn. Even Staten Island. is is not rocket science.”

Along with reliability, Chris Roth said “unenforced rule-breaking” deterred him from using the CTA. It once took him 20 minutes to ride four stops on the Blue Line to his ofce in Rosemont. at has turned into a 40-minute or even hour-long commute. Now Roth chooses to brave the construction on the Kennedy Expressway, which is faster than the CTA even in bumper-tobumper tra c, he said.

“It might be really long but I can rely on it being that time every time,” he said. “And to be frank, I know nobody has urinated in my car and nobody has smoked in my car.”

For lapsed CTA riders, the transit system isn’t too far gone. Each former rider expressed a willingness to return, if only reliability, cleanliness, safety and breathability improved.

“When child care comes into play, I’d love to be able to take the train two to three times a week, because it does save money,” said Albany Park resident Rose Colgan.

Colgan stopped taking the CTA to work and started driving in mid-February. She was eight months pregnant at the time and couldn’t physically stand around long enough while buses ghosted her or she waited for the Brown Line. She hates driving and used to love taking the CTA, but she does say she’s cut her commute time in half.

“It’s so frustrating to be stuck behind single cars when there are 60 people trying to get to their destination,” Colgan said of her experience on the bus. “I feel like a huge hypocrite when I talk about (driving) because I’m part of that issue.”

KEVIN ZOLKIEWICZ/FLICKR

Keynote Speaker Terry Crews

Thursday, May 16th 2024

The Salvation Army North and Central Illinois Division invites you to the annual Civic Luncheon. This event is a celebration of The Salvation Army’s programs and services and honors the recipients of The Salvation Army’s prestigious William Booth Award (Jewel-Osco) and Others Award (Mr Bruce Williamson). Honorees are recognized because they exemplify the spirit of Salvation Army founder William Booth by putting others 50 programs that help those in need, without discrimination, across Chicagoland.

To learn more or to register, visit or scan: SalArmyChicago.org/civic

or e-mail Keri Shay at Keri.Shay@usc.salarmychicago.org

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