Crain's Chicago Business

BEARS: Arlington Heights bid forces a tough negotiation with Chicago officials. PAGE 3

JOE CAHILL: A voice is missing in Illinois’ energy debate. PAGE 4

CHICAGOBUSINESS.COM | JUNE 21, 2021 | $3.50

WHY YOU CAN’T GET A RIDE IN CHICAGO Slow return of drivers explains long waits and high prices

active ride-hailing drivers on the road at the end of April 2021, down 60 percent from April 2019. There are 1,000 active cabbies—a decrease of 82 percent from 2019.

But those numbers represent a big jump from the early weeks of COVID stay-at-home orders. In April 2020, there were only 15,000 active ridehail drivers and just 700 cabbies.

See DRIVERS on Page 19

JOHN R. BOEHM

AS CHICAGOANS RETURN to offices, restaurants and airports, some have griped of trouble hailing once-ubiquitous cabs downtown, as well as long wait times and higher prices for rideshare services.

In part, the trouble reflects a mismatch in supply and demand: Drivers aren’t returning as fast as customers. The city’s Department of Business Affairs & Consumer Protection estimates there were 27,000

BY A.D. QUIG

Can Insight stop the bleeding at Mercy?

NEIGHBORHOOD INVESTMENT

New owner has ideas for struggling safety net

BY STEPHANIE GOLDBERG

A SECOND CHANCE FOR

Money is vital to any community revitalization.

Here’s what else is needed, as seen through this beleaguered neighborhood. PAGE 13

JOHN R. BOEHM

AUSTIN

The sale of Mercy Hospital & Medical Center entrusts one of Chicago’s most vulnerable hospitals to a Michigan biotechnology firm with no experience running a full-service hospital.

Insight Chicago paid $1 to buy struggling Mercy from Catholic hospital chain Trinity Health.

The newly formed nonprofit entity is owned by neurosurgeon Dr. Jawad Shah, 54, who also runs the

Insight Institute of Neurosurgery & Neuroscience, which operates outpatient programs and a 20bed surgical hospital in Michigan.

With 412 beds on Chicago’s South Side, Mercy presents challenges that Insight hasn’t faced in its home state. The hospital serves large numbers of low-income patients on Medicaid, which pays hospitals far less than private insurers.

See MERCY on Page 28

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CHICAGO BOOTH INSIGHTS Doing good doesn’t have to hurt the bottom line. PAGE 8

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MCDONALD’S Speeding up the drive-thru: Would you like privacy with that? PAGE 2

6/18/21 2:52 PM

2 JUNE 21, 2021 • CRAIN’S CHICAGO BUSINESS

GREG HINZ ON POLITICS

as under existing law, with generous figures for transit ($155 billion), Amtrak and other rail ($120 billion) and electric-vehicle infrastructure ($25 billion). The caucus proposal is roughly similar to a plan now being backed by 21 bipartisan senators, including Illinois’ Dick Durbin, a Democrat.

“I’m looking for any way to get it done. We can’t afford to do nothing,” says Schneider, a member of the Problem Solvers Caucus. The nation really needs far more, something like $4 billion, to invest and catch up with items such as deferred maintenance and reconstruction of roads and bridges, but a step toward that will help, he argues. The caucus plan includes raising the gas tax and indexing it to inflation, a step that won’t be popular in suburban areas such as Schneider’s, but that’s better than putting it on the plastic. Schneider says the bigger obstacle in passing something is, as usual, the Senate.

Davis is “not optimistic” that a bipartisan deal can be reached. Now the chairman of a subcommittee that deals with roads and bridges, and the potential chairman of the House Transportation & Infrastructure Committee if Republicans control IN UTTERLY TOXIC WASHINGTON, the House in 2023, he generally is a COMPROMISE IS A DIRTY WORD. roads-and-bridges guy and wants to avoid anything that smacks of field and Republican Rodney the Green New Deal. But he Davis of Taylorville, both of is an Amtrak fan. He likes the them about as moderate as idea of public-private partthey can be in their parties, nerships as a funding means, give or take. hedges on a gas tax and says Biden started the bidding he’s convinced Democrats at $2 billion, money for not really want to ram through only roads, bridges and something big on a party-line airports but transit, trains, vote rather than hacking out incentives for high-tech ina compromise. dustries like chipmakers and The final outcome could “human infrastructure” like go either way. Some lawsenior and child care, all paid makers on the GOP right for partially by reducing the want to drive spending big corporate tax cuts Donald numbers way down. Some Trump pushed through a few on the Democratic left want years ago. Biden since has to go the budget reconciliacome down to $1.7 trillion. tion route and pass the big Republicans don’t like plan—including human inthe idea of adding human frastructure—at all costs. In infrastructure spending or between is Biden, who must corporate tax cuts at all, and keep almost every single they are leery of spending on Democrat together or settle anything related to climate on a much-reduced plan. change. But GOP lawmakers, Prognosis? As I’ve said at least some of them, have before, if politicians can’t slowly come up on their bidagree on a plan to cut lots ding for everything else, with of ribbons and support the the bipartisan House Probtransportation center of the lem Solvers Caucus proposmidcontinent here in Chicaing to spend $1.249 billion go, they might as well go on over the next eight years. vacation.

That’s about twice as much Chicago caught a little glimpse of the future a few days ago. It was hard not to be impressed, even if you’re not a passenger railroad fan.

Right there in Union Station was a sparkling Amtrak long-distance train, complete with refurbished passenger coach and sleeping cars, white linen and china in the dining car and a powerful new, low-polluting locomotive up front. Lots more like that is on the way—and to a lot more cities, from Louisville and Toronto to Minneapolis and Iowa City—if Congress approves its plan for $75 billion in capital expenses, Amtrak says.

But will it? That’s the billions-and-trillions question as Congress gets down to decision time on President Joe Biden’s huge infrastructure plan in coming days.

There’s a compromise to be made here—one that, like all good compromises, will tick off the hard-liners in both camps. But in now utterly toxic Washington, compromise has become a dirty word. So where do things stand?

Here’s what I hear, including thoughts from two Illinois congressmen who are sort of in the middle of this, Democrat Brad Schneider of Deer-

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BLOOMBERG

What it’ll take to get an infrastructure deal done

McDonald’s drive-thru automation clashes with privacy concerns An Illinois law that’s resulted in drawn-out, multimillion-dollar settlements from the likes of Facebook and Six Flags is now threatening the Chicago fast-food chain

BY ALLY MAROTTI An Illinois privacy law that has ensnared Facebook, Six Flags and other companies in yearslong lawsuits with multimillion-dollar settlements is now threatening McDonald’s efforts to reduce its drive-thru times.

The Chicago-based fast-food giant has been working for years to speed up drive-thrus, a key element of CEO Chris Kempczinski’s plan for revenue growth. The company streamlined menus, getting rid of more complicated items, and saw its efforts pay off during

the pandemic in the form of samestore sales growth.

That was the relatively low-tech part. The high-tech part, however, could prove to be a legal snag.

In November, McDonald’s announced a plan to deploy technology at some stores that allows automated ordering and payments, as well as tools that alert crew members when customers are nearby to ensure fast pickup.

A recent lawsuit takes aim at technology McDonald’s uses in some drive-thrus that allows voice automated ordering. The lawsuit alleges that McDonald’s artificial

intelligence voice assistant violates an Illinois’ law protecting consumers’ biometric information, which can include data from iris and fingerprint scans, facial maps and voice information.

The 2008 law is one of the strictest of its kind in the country. It allows private citizens, rather than just governmental entities, to file lawsuits and has turned Illinois into a hotbed of legal activity over the issue. Facebook last year agreed to pay $650 million to millions of its Illinois users to settle a See McDONALD’S on Page 7

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6/18/21 1:31 PM

CRAIN’S CHICAGO BUSINESS • JUNE 21, 2021 3

White Claw bulks up for seltzer wars With Big Beer converging on it, the top-selling brand seeks new growth

White Claw is making a post-pandemic push into bars, restaurants and other outlets as new rivals with deep pockets challenge its dominance in the growing hard seltzer market.

Competitors including Molson Coors, Anheuser-Busch and Constellation Brands already have dented White Claw’s market-leading share of seltzer sales, which plunged to 42 percent from 55 percent in the past year. Experts say newer hard seltzer brands have been more successful in untapped market niches and at leveraging their parent companies’ robust distribution networks.

The competitive onslaught will test White Claw’s ability to stay on top of a hot market it helped launch in 2016. Annual hard seltzer sales in retail stores now top $4.5 billion, according to data from market research firm Nielsen. Small firms that pioneer lucrative markets often struggle to hold their ground when industry giants take notice of the sector.

Some slide into also-ran status, and others become takeover targets, including craft brewers such as Goose Island Brewing, which sold to Anheuser Busch after helping establish the market.

White Claw’s strategy hinges on a big increase in production capacity to support a move into new distribution channels and accelerate innovation. Its parent company, Chicago-based Mark Anthony See WHITE CLAW on Page 29

ALYCE HENSON

BY ALLY MAROTTI

Lincolnwood Village President Jesal Patel in a vacant building at Ridgeway and Touhy avenues, an area of Lincolnwood that is under development.

MORE SUBURBS SEEING GREEN IN WEED After watching neighbors rake in tax revenue, holdouts are taking another look at recreational marijuana BY JOHN PLETZ

LINCOLNWOOD IS RETHINKING its stance on weed.

The suburb of about 13,000 decided two years ago not to allow recreational marijuana sales.

After seeing neighboring Chicago, Skokie and Evanston indulge and reap the tax benefits, Lincolnwood is revisiting the ban.

With the prospect of 119 new pot shops opening up in the city and suburbs after Gov. J.B. Pritzker signs off on changes to the state’s

marijuana law, Lincolnwood and other communities that rejected recreational weed sales are now more open to the idea.

“It’s been a couple years since cannabis became allowed,” says Lincolnwood Village President Jesal Patel. Its plan commission will hold a hearing next month. “The last time we See WEED on Page 29

“THE LAST TIME WE DISCUSSED IT, THERE WERE A LOT OF UNKNOWNS. I THINK MOST QUESTIONS HAVE BEEN ANSWERED.” Jesal Patel, Lincolnwood village president

Bears bid highlights headaches at Soldier Field The team’s offer for Arlington International Racecourse forces another tough negotiation with Chicago officials about its future at the lakefront stadium The Chicago Bears’ veiled threat to move from Soldier Field to the suburbs turns the spotlight back on the issue the team has grappled with for years: Compared to other NFL teams, they’re financially hamstrung by their stadium.

The Bears are one of three NFL teams without a naming-rights deal for their venue, missing out on the $10 million to $20 million that industry consultants esti-

P003_CCB_20210621.indd 3

mate the team could pull in annually from such a sponsorship agreement. While modern stadiums across professional sports have become part of miniature entertainment districts that give franchises year-round opportunities to engage with and milk revenue from fans, Soldier Field has little room for such development, nor have the Bears been allowed to do much with what is there. Then there are long-standing restrictions on signage inside the Chicago Park District-owned

stadium, a barrier at which the team has slowly chipped away, most recently in 2015 with an assist from a lease amendment tied to the Lucas Museum of Narrative Art that never materialized next door.

They’re the types of issues the Bears want Chicago officials to address once and for all as they leverage a possible move to Arlington Heights and the prospect of building a new stadium See BEARS on Page 19

JE KOONCE/FLICKR

BY DANNY ECKER

The Chicago Bears have long felt hamstrung by their connection to Soldier Field.

6/18/21 4:19 PM

4 JUNE 21, 2021 • CRAIN’S CHICAGO BUSINESS

ON BUSINESS

The only voice not heard in Springfield’s energy debate aligned legislators, of course, tout the jobs saved by keeping nuclear plants open.

What about customers? Do they think the benefits justify the costs? And how do they feel about subsidizing Exelon plants after ComEd admitted to a massive bribery campaign in Springfield that gave the utility more power to raise rates?

In most transactions, customers’ opinions matter a lot.

Customers usually can walk away if they don’t like the terms of a deal.

Electricity customers can’t walk away. If you want power to run a home or business in Northern Illinois, you have to deal with ComEd. And when state legislators authorize new utility charges, you have to pay.

Pritzker makes much of the fact that his proposals would end the ratemaking regime that ComEd obtained by bribery.

So-called “formula” ratemaking approved by Springfield a decade ago reduced regulatory oversight of ComEd rates.

ComEd’s charges for delivering power climbed 37 percent between 2011 and 2019, according to a 2020 report IN MOST TRANSACTIONS, on formula rates by conCUSTOMERS’ OPINIONS MATTER. sumer advocacy group Illinois PIRG. Formula ratemaking has to outside the circle of influence. go, but should be replaced by Even influential groups like the something better for customers.

Illinois Manufacturers’ AssoIllinois PIRG warns that Pritzciation and the Illinois Retail ker’s new ratemaking proposal Merchants Association say they could lead to even higher rate were shut out of meaningful hikes than ComEd obtained negotiations. under the formula system.

In this case, seats at the table If you think alarm over belong to energy giant Exelon possible rate hikes is the reason and its Commonwealth Edilegislators haven’t agreed on son subsidiary, environmental final legislation, you need to groups, labor unions and green brush up on Illinois politics. The power companies. A final bill holdup is a squabble between would have something for each enviros and labor unions over of them. phasing out fossil-fuel burning Exelon has secured commitplants. The former want a faster ments from legislators for $700 phaseout, and the latter want a million in subsidies for three slower one. of its nuclear plants, on top of Something tells me they’ll $235 million in annual support work it out. It’s easier to reach that ratepayers already shell agreement when somebody else out to prop up two other Exelon is picking up the tab. plants. The subsidies also please Lawmakers may believe unions because Exelon has they’ve done their jobs if they threatened to close the plants reach a deal that satisfies each if lawmakers don’t approve powerful interest group with a the payments. Environmentalstake in energy legislation. But ists, for their part, are looking their job is to make good policy forward to $200 million a year for the entire state of Illinois. to finance wind and solar power A bill that drives up electricity generation projects. costs in Illinois is bad policy.

Altogether, the legislative Relatively low electricity prices package under consideration have been an economic advantage would add $4 to $5 per month for Illinois. Springfield politicians to ComEd customers’ bills. appear willing to horse-trade away Supporters call it a fair deal, arthat advantage. Higher power guing that nuke and renewable costs would give residents and subsidies benefit customers by businesses another reason to leave ensuring stable power supplies the state. They already have too and helping Illinois meet its many. carbon-reduction goals. UnionThe likely outcome of talks over a new energy bill in Springfield is anybody’s guess at this point.

There’s even a chance lawmakers won’t pass any legislation, which would deal Gov. J.B. Pritzker a major setback in his push toward a carbon-free future.

Here’s something you can bet on: If politicians reach a deal, your electric bill will rise. Any legislation that passes almost certainly will include costly new subsidies for nuclear reactors and additional surcharges for renewable power development. Those proposals and others on the table would cost Illinois residents and businesses nearly $3 billion in the next five years alone.

“The proposed energy legislation being circulated will be the largest rate hike on consumers and businesses in history,” a coalition of business organizations warned in a recent open letter to Pritzker.

How can this happen? It’s just the way public policy is made in Illinois. Powerful interest groups haggle among themselves and send the bill to everybody

P004_CCB_20210621.indd 4

An insider’s view of the restaurant industry There are challenges and opportunities as a huge economic driver revs back up from the pandemic shutdowns; here’s what’s working for establishments now

BY EMILY DRAKE AND TODD CONNOR Chicago Comes Back is a weekly series on ChicagoBusiness.com providing leadership insights to help your business move forward, written by leadership consultants Emily Drake and Todd Connor.

Drake and Connor facilitate Crain’s Leadership Academy. Drake is a licensed therapist, owner of the Collective Academy and a leadership coach. Connor is the founder of Bunker Labs and the Collective Academy and is also a leadership consultant.

Check out previous installments at ChicagoBusiness.com/comesback.

EMILY DRAKE: I’m wondering if June 11—the day the city officially reopened following a global pandemic—will become an anniversary or holiday. Either way, there’s certainly room to honor the moment, if not celebrate. From our vantage point, few industries carry the weight and excitement of the return like the hospitality industry. We thought we’d get the perspective of someone who is helping restaurateurs realize dreams: Allan Perales, chief operating officer at Goldstreet Partners.

TODD CONNOR: Amen. And Allan, it’s so good to chat with you again. We had the good fortune of meeting you through Crain’s Leadership Academy in 2017, and it’s been a thrill to watch your leadership evolution, especially hearing about your role in so many restaurant owners’ ability to stay open or have an opening night in the past year. Let’s start with a question we rarely ask, but will be helpful as we navigate the land of hospitality and real estate: What do you do?

ALLAN PERALES: I’m so happy to get the opportunity to talk about what’s going on. There’s a lot to get excited about as it relates to restaurants and returning. Navy Pier was jumping the other weekend, and I can’t wait to see that happening more throughout Chicago. Back to your question: I help restaurateurs open new restaurants—and close restaurants. But the majority of my business is opening restaurants and helping them find locations, especially a first location.

We scout multiple neighborhoods, and I help them negotiate a lease, plan their buildout and get ready for opening.

ED: We’ve also been watching the trends around employees’ ability and willingness to return to work, if their jobs were eliminated or they stepped away for other reasons. We know this has been especially poignant to watch in the restaurant industry, when things shut down but also as things are opening up. What are you seeing?

AP: The abruptness of opening up Chicago is real. It offers a lot of excitement but also challenges. Some restaurant owners have employees who aren’t willing to come back because they got another job or be-

JOHN R. BOEHM

JOE CAHILL

CHICAGO COMES BACK

J.P. McIntyre, general manager at Luke’s Lobster, which recently reopened its location on LaSalle Street near Randolph Street for the first time in more than a year. cause they’ve left the industry altogether. Many owners have to re-establish relationships with vendors, too, and maybe reconcile past due balances. But restaurants that are still around today post-pandemic: They’ve got that survival instinct.

They are coming up with solutions to address issues day to day, and the adaptive leadership you talk about so often is really on display.

Plus, if you have a good reputation, a good culture and pay people well, you’re going to thrive in this transition.

TC: The culture being the defining factor mimics so much of what we see across industries. People want environments that support growth, perhaps no matter what the work is. What other trends are you seeing? Or what’s changing around their preferences for space?

AP: Like any industry, it’s about short-term versus long-term thinking and assessing your risk tolerance as a leader and business owner. The spaces that get leased the fastest are ones that were former restaurants because you don’t have to take a blank space and build it out. Owners that closed last year simply left everything behind: tables, chairs, equipment.

There’s a high probability that a space like that will pass inspections and other regulatory hurdles quickly. In other words, it’s easier.

Buildouts require permits, and the city is backlogged, as are so many supply chains, with requests—not

to mention it’s still hard to get materials. Outdoor patio space is the other trend. The city did such a good job of expanding seating, so as we return and reopen, customer comfort level can be honored. And lastly, leasing language: Where we didn’t have pandemic language and clauses before, we certainly do now. That can add time to negotiations and progress, but it’s an important thing to consider as a tenant.

ED: A lot to consider, and yet we hear from leaders like Betsy Ziegler at 1871 that it’s never been a better time to start a business. What’s your personal optimism level? And the forecast for your clients?

AP: Entrepreneurs are creative, and that creativity has gone a long way. Expanded seating, ordering to-go and picking up, liquor to-go, these weren’t considerations in the same way before. The solidarity we’ve witnessed over the past year is a huge asset—focusing on your neighborhood and supporting local businesses. I’m optimistic.

New restaurant groups are starting, too. For example, a former GM of a restaurant getting together with the former executive chef of another restaurant, they are coming together and opening their first concept. I can see the discipline and the excitement behind these young, fledgling groups, and I’m just thrilled I get to be a part of it.

They’re going to own Chicago in five years and nobody has any idea.

6/18/21 1:30 PM

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THE TAKEAWAY

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OUR AUDIENCE. Our print and digital written roundtable features provide a unique opportunity to present Crain’s audience with compelling insights around the most important business issues. Secure your spot at an upcoming Roundtable and take a seat at the table with other thought leaders in your industry.

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Technology: AI Chicago technology professionals will discuss their visions for the next generation of AI, including which applications have the potential to unlock currently unimaginable possibilities in technology and business.

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M&A Trends Chicago executives involved with M&A will share their thoughts on deal trends, including some of the new winners and losers that have emerged in the changing landscape.

Koo heads the architecture firm Koo, which is behind such bold Chicago buildings as theWit Hotel in the the Loop, where a yellow zigzag streaks down the glassy facade; the new amoeba-shaped community center at the Chicago Housing Authority’s Altgeld Gardens housing development on the Far South Side; and Sable, a 223-room hotel that opened on Navy Pier in March. Her next project is a 25,000-squarefoot, $30 million e-sports venue near McCormick Place. Koo, who’s 57 and lives with her husband and son in Edgebrook, started her career in advertising. By Dennis Rodkin

>

Join a Select Group of Thought Leaders

Jackie Koo

Your firm has designed hotels, schools and other building types. Is there a Koo style that they have in common?

I would say they’re not blank. They’re not just glass boxes that reflect their surroundings. They have their own presence and identity.

Do you two play e-sports together now?

I've tried to play with him online a few times but was hopeless. I watch things that he’s introduced me to.

He’s helped expand my horizons on what the potential and importance of e-sports is. He plays Fortnite. In April 2020, near the beginning of the pandemic, there was a concert event where rapper Travis Scott was presented doing a concert on Fortnite. It was a big onetime event.

Of course the graphics in these games are stunning, but what really hooked me were the musical events on the Fortnite's party royale island. The Travis Scott concert was fantastic and BTS debuted a video there. It really opened my eyes. E-sports is a lot more than just gaming. It isn’t just watching other people play video games competitively. It’s evolved into a form of communication that encompasses music and all these other things. It’s a cultural phenomenon that’s part of the future of worldwide cultural communication.

>

You’re the mother of a 12-year-old, Nicolas.

What does he think of you doing an e-sports venue?

As a family, we’ve stayed in hotels that I designed and my son is like, “That’s nice, mommy,” but now that I’m designing an e-sports space, suddenly I’m the cool mom.

<

> How have you incorporated that idea into the look or the vibe of the e-sports venue?

The concept is about a journey through time. Architecturally, you are entering the existing heavy timber building and going into the modern technological space.

> Have you shown the renderings to Nicolas?

Yes, and he thinks they are cool.

>

To find out about full benefits, rates and how to reserve your spot, contact Sarah Chow at schow@crain.com or (312) 280-3172

P006_CCB_20210621.indd 6

Now that the pandemic is lifting, are there places you hope to travel soon?

We had to cancel a trip to Copenhagen at the start of the pandemic, so I still have a hankering to go there, but more immediately we’re going to a wedding in Marquette, Mich.

6/18/21 1:28 PM

CRAIN’S CHICAGO BUSINESS • JUNE 21, 2021 7

In attempt to speed up drive-thrus, McDonald’s faces scrutiny under privacy law with certain menu items they’ve ordered previously.

Though that may speed up lawsuit regarding its facial-tagging feature. Just earlier this month, Six drive-thru times, the lawsuit alFlags Great America agreed to pay leges McDonald’s failed to inform $36 million to settle a class-action customers that their voiceprint lawsuit over its use of fingerprint biometrics are being collected, and does not disclose what it does scanners at the entry gates.

The law requires companies col- with the data or how long it will be lecting biometric data to obtain stored.

Ultimately, the fate of McDonprior consent from people. They must also detail how they’ll use it ald’s with this lawsuit will depend on how exactly the technology and how long it will be kept.

The new lawsuit homes in on works, says Matthew Kugler, an asvoice assistant technology that sociate professor at Northwestern McDonald’s acquired from start- University Pritzker School of Law. up Apprente in 2019. The tech If it is just transcribing the voices, it analyzes speech signals when a might not violate Illinois’ biometcustomer is ordering, rather than ric privacy law.

But if the company is using voice just transcribing what they say, acrecognition to identify people, it cording to the complaint.

In other words, the assistant “ex- will either need to start abiding tracts the customer’s voiceprint by the law’s consent requirements or find a different way to speed up drive-thru THE NEW LAWSUIT HOMES IN ON times, Kugler says.

VOICE ASSISTANT TECHNOLOGY “McDonald’s needs to know privacy law exTHAT MCDONALD’S ACQUIRED FROM ists, but McDonald’s is not in a corner,” he says.

STARTUP APPRENTE IN 2019.

McDonald’s said in a statement that its biometrics” and obtains identify- voice-ordering system enables auing information on the customer, tomated drive-thru ordering but is like age, gender, accent and more, not used to identify customers. It according to the complaint. The also doesn’t try to match the voice lawsuit also alleges McDonald’s of someone ordering with data on incorporates license plate scan- McDonald’s customers. The comning technology to identify cus- pany also says it does not store tomers, so they can be presented voice features or voiceprints that McDONALD’S from Page 2

Our projects are more than just buildings.

identify customers.

“This technology was specifically developed and deployed in a way that does not identify any customers, and the allegations in this complaint demonstrate a misrepresentation of the technology and its purpose,” the statement says. “We intend to fully defend against these claims in court.”

CONVENIENCE VERSUS PRIVACY

The lawsuit was first filed in Cook County Circuit Court in April but was moved to federal court in Chicago late last month. It seeks class-action status. Attorneys representing the McDonald’s customer who filed the lawsuit, Shannon Carpenter, did not respond to requests for comment.

Lawsuits involving Illinois’ biometrics privacy law have thus far been focused largely on the collection of fingerprints or facial geometry, such as through social media tagging features. But voiceprints can be “very alarming,” says Adam Schwartz, senior lawyer at the Electronic Frontier Foundation, a nonprofit that advocates for user privacy.

Biometrics are important to protect because unlike a stolen credit card or social security number, you can’t change your fingerprints, face or voice, he says. That type of data can be easy to collect without a consumer knowing. Such technology also typically results in

convenience for the company or the consumer.

“Certainly customer convenience is significant, but any customer convenience needs to be weighted against the very grave privacy issues,” Schwartz says.

Drive-thru business is vital for McDonald’s. Two-thirds of its restaurants worldwide—that’s 25,000—have drive-thrus, according to information the company released in November. During COVID, about 70 percent of sales in top markets occurred via drivethrus.

The dependence on drive-thru orders during the pandemic was not unusual, especially among fast-food restaurants. Nearly all

the major drive-thru joints managed either flat or positive sales growth in 2020, according to data from market research firm Technomic. That includes Wendy’s, Taco Bell, Chick-fil-A, Sonic and others.

Drive-thrus will likely remain invaluable resources that chains are willing to invest in, according to Technomic. Already, companies such as Pizza Hut, Chipotle and Shake Shack announced plans to develop more drive-thrus.

McDonald’s plans to roll out its new drive-thru concepts to 10,000 restaurants worldwide. It is unclear how many locations have the voice ordering feature targeted in the lawsuit.

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Blue Cross and Blue Shield Morgan Park Solution Center Impact Project of the Year

What we do impacts how people live, work and play. How we do it has the potential to transform the world.

We are honored to once again be named Interior Contractor of the Year at the Chicago Real Estate Awards benefitting the Greater Chicago Food Depository.

Oracle Industries Innovation Lab Buid-To-Suit Project of the Year

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6/18/21 3:20 PM

8 JUNE 21, 2021 • CRAIN’S CHICAGO BUSINESS

Customers increasingly expect your company to make a difference for supporting social causes. In that same Aflac survey, the vast majority of customers (77 percent) and investors (73 percent) said they are motivated by a company’s commitment to improving society.

COMMUNITY SUPPORT

Businesses can approach this as an extension of the support they already provide to their communities. They’re no strangers to donating prizes to church and school raffles, purchasing uniforms for youth athletics and so many other worthwhile causes. Keep doing those YOUR CUSTOMERS, EMPLOYEES AND things, and go further.

INVESTORS ARE INCREASINGLY There are ways you can be responsive to EXPECTING YOUR COMPANY TO TAKE AN the issues affecting your community and ACTIVE ROLE IN BETTERING SOCIETY. your customer base insurance company Aflac in 2020 in a more active and comprehenall but confirmed the risks. More sive way. Rather than just taking than half of respondents said it’s inbound requests, seek out opporimportant for companies to take tunities directly. a stand on social issues, but about Evaluate your suppliers and outthe same amount said they’ve side vendors. If you want to show stopped supporting a business be- support for marginalized commucause of its position on an issue. nities, consider minority-owned Still, there are good reasons for suppliers, service providers, aca company to consider its options countants and legal services.

Christina Hachikian is a clinical associate professor of strategic management at the University of Chicago’s Booth School of Business.

GETTY IMAGES

T

he news is filled these days with major corporations stepping up to—or being pulled into—various social and political stances. Coca-Cola’s opposition to Georgia’s new election laws is resulting in threats of boycotts, while Facebook is losing customers to alternative platforms since it shut down former President Donald Trump’s account.

Small and midsize businesses watching all this might be wary to support a cause for fear of losing customers. A recent survey by

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

Assess how you make hiring decisions. If your company’s leadership is predominantly white males, make an effort to recruit and promote female or minority executives. Examine whether the ways in which you advertise or screen for a position affect the makeup of applicants and look for opportunities to broaden your reach.

Give employees paid time off to

dedicate toward skill-based volunteer work that extends the reach of your firm.

In choosing, pick a few consistent and targeted approaches that will best support the communities in which your company works.

Of course, as you go down this path, consider how you share with your stakeholders the support you are providing. Of growing popularity is certification as a B Corporation, which requires verification that a company meets standards for “social and environmental performance, public transparency and legal accountability to

balance profit and purpose.” More simply, talking about issues you are engaged with in an annual report, company meeting or with customers can be important to convey what you are doing behind the scenes and might get others invested in the same effort.

The point: These actions don’t have to be controversial. Your customers, employees and investors are increasingly expecting your company to take an active role in bettering society. Doing so can be good for your community, and it doesn’t have to hurt the bottom line.

SPONSORED CONTENT

Frederick August Krehbiel, Former CEO & Co-Chairman of Molex Inc., Dies at 80 Frederick August Krehbiel, former CEO and Co-Chairman of Molex Inc. passed away peacefully, with his two sons by his side, at Hinsdale Hospital on June 3, 2021 after a brief illness. He was 80.

Fred was born on June 2, 1941 near Downers Grove, Illinois to Margaret (Veeck) and John Krehbiel. As a boy, Fred struggled with dyslexia before it was widely understood.

With the help of his teachers at Avery Coonley School, who recognized that he learned differently, he overcame this challenge and developed a life-long passion for reading and learning. Fred’s hero as a child was his uncle Bill Veeck, who at various times owned the Chicago White Sox, the Cleveland Indians and the St. Louis Browns. Fred spent many summers with Bill’s family at the ballpark and at their homes in Maryland and New Mexico. Bill helped Fred to develop a can-do attitude, a creative spirit and an ability to connect with people from all walks of life. Fred went on to graduate from Downers Grove North High School in 1959 and Lake Forest College in 1963 with a bachelor’s degree in political science.

In 1965, Fred joined Molex, a manufacturer of electronic interconnecting products that was founded by his grandfather. Two years later, in response to inquiries from overseas companies looking to purchase connectors, Fred’s father, who was then at the helm of Molex, asked him to start an international division. In its first year, Molex International generated $54,000 in revenue. Over the next four decades, Molex’s international operations grew to over $2 billion in revenue. Molex was one of the first US companies to establish a presence in Japan, and subsequently expanded to Mexico, South America, Europe, China and Southeast Asia. After serving as president of Molex International for much of the 1970s and 1980s, he became CEO in 1988 and subsequently co-chairman along with his brother,

P008_CCB_20210621.indd 8

John, until Molex was sold to Koch Industries in 2013.

In addition to his career at Molex, Fred founded Ballyfin, an award-winning hotel in Ireland; co-owned MT Sobek, a leading adventure travel company; and owned the sailboat, Insatiable, which won the 1989 Chicago to Mackinac Race and represented the United States at the 1987 Admiral’s Cup Regatta.

Fred was an active civic leader who served on the boards of The Northern Trust Company; Tellabs, Inc.; DeVry, Inc.; W.W. Grainger; Nalco Chemical Company; the Chicago White Sox; the Chicago Zoological Society; Rush University Medical Center; the Art Institute of Chicago; the Chicago Symphony Orchestra; the Chicago Lyric Opera; the Chicago History Museum; the World Wildlife Fund; the Hinsdale Community House; the Museum of Science and Industry; The Foundation Board of Trinity College Dublin; The Taft School; Lake Forest College; and Avery Coonley School.

Fred is remembered for his integrity, work ethic, sense of humor, creativity, positive attitude, humility, generosity, and his love of travel and Irish art. He was happiest when reading a good biography, playing with his grandchildren, working on his photo albums, or planning the next big adventure with family and friends.

Fred is survived by his wife, Kay; his two sons, Liam (Karen) and Jay (Silvia); five grandchildren, Jack, Morgan, Anthea, August and Adele; his brother, John; and many loving nieces and nephews.

For those who wish to make a memorial gift, in lieu of flowers, the family suggests that donations be made to support the Lung Cancer Research Fund at Rush University Medical Center. Contributions can be directed to Rush Office of Philanthropy, 28057 Network Place, Chicago, IL 60673-1280 or http://rush.convio.net/FKrehbiel. Funeral services have been held.

6/18/21 1:26 PM

CRAIN’S CHICAGO BUSINESS • JUNE 21, 2021 9 SPONSORED CONTENT

talking

HEALTH

HOW TO BUILD A RESILIENT WORKFORCE How can employers encourage resilience among workers and why is it important?

COMPETITIVE POWER VENTURES

As the pandemic eases and new challenges arise, employers have a critical role to play to help employees adjust. Life has been uniquely stressful over the last year which can lead to anxiety, depression and other mental health concerns that can impact workers’ resilience.

A rendering of Competitive Power Ventures’ gas-fired plant in Grundy County.

Why the Senate left Springfield without voting on that energy bill

The developer of the massive new natural gas plant in Grundy County threatened to scrap the project, which is already under construction, if the measure passed as it was couldn’t plow ahead on a project with a 30-year life expectancy The fate of a $1.3 billion natu- when it might be required to shut ral gas plant under construction down in a few years.

“A viable scenario was that each in Grundy County is mainly what kept the Senate from acting on facility would have to reduce by the most ambitious state energy 20 percent every five years,” says Tom Rumsey, CPV senior vice bill in 25 years.

Competitive Power Ventures, a president of external and regulaSilver Spring, Md.-based power tory affairs.

“When you’re building a brandgenerator, threatened to pull the plug on a massive gas-fired facil- new combined cycle plant, you ity it’s building in Morris if the have very little carbon emissions bill passed as it was then drafted, to start with,” he says. “You can’t take from what you don’t have.” the company confirms.

The measure would require That was what Senate President Don Harmon was referring periodic reductions in emissions but leaves it to state offiTHE ISSUE DOESN’T APPEAR cials to determine how INSURMOUNTABLE. OBSERVERS PREDICT to achieve SENATORS WILL RETURN WITHIN THE NEXT those. CPV felt it couldn’t FEW WEEKS TO VOTE ON A FINAL PACKAGE. take the risk of an acrossthe-board to after the Senate’s adjourn- percentage reduction being imment when he said somewhat posed on the industry at large cryptically: “There are signifi- even though older plants pollute cant investments and significant more than newer ones like Three jobs associated with those (gas) Rivers.

Harmon and Gov. J.B. Pritzker plants. People could be out of a job Monday if we passed that bill have expressed optimism that the issue could be worked out. today.”

Harmon directed environmental advocates who’ve been negotiA MATTER OF WHEN The issue for CPV is provisions ating with organized labor and environmentalists have champi- industry to find common ground oned that not only would set a firm on the issue of interim carbon “decarbonization” date for the reductions on the way to an end burning of natural gas to generate date of 2035 for coal-fired plants electricity, but also would require and 2045 for those fueled by gas.

CPV doesn’t object to the 2045 steady declines in emissions over date, even though its plant still the years leading up to that.

For the company, whose CPV will be viable at that stage. “We Three Rivers plant is the largest in would go forward,” Rumsey says, its U.S. portfolio, the uncertainty if a shutdown is required by 2045, that language created meant it so long as the plant doesn’t have

BY STEVE DANIELS

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to reduce emissions in the meantime.

He emphasized that CPV is fully supportive of decarbonization and is a developer of renewable projects, as well as modern gas plants. “We’re very much in favor of the state going lower-carbon,” he says.

BIG-TICKET PLANT

And Three Rivers is no ordinary gas plant. When it comes online in 2023, it will have the capacity to generate 1,250 megawatts, enough juice to light 1.3 million homes. To put that in context, that’s nearly the generating capacity of Exelon’s Dresden nuclear plant, which coincidentally is just up the road in Morris. Ironically, Dresden, which Exelon has slated for premature closure this coming fall due to poor economics, would get ratepayer-funded subsidies in the bill to stay open for at least the next five years.

There already are about 225 union workers on-site at Three Rivers, and that will nearly triple during peak construction, Rumsey says. Once the plant is operational, it will need only about 25 workers—part of the reason gas plants are so much more cost-efficient than nuclear facilities, which need hundreds of employees at each nuke plant.

There isn’t a deal between CPV and environmentalists yet, Rumsey says.

The issue doesn’t appear insurmountable, though, and observers predict senators will return to Springfield within the next few weeks to vote on a final package.

Says Harmon, “The Clean Energy Jobs Act has always been about jobs.”

Gail Smith, MS, LMFT Behavioral Clinical Account Manager Gail.Smith@Cigna.com Cigna

Gail Smith is a Licensed Marriage and Family Therapist and behavioral health expert at Cigna, a global health services company.

Resilience is the ability to cope with difficult times and bounce back by utilizing support and available resources. Employees with low resilience are more likely to experience poor mental and physical health, leading to increased costs for employers. For example, companies likely saw pharmacy costs rise with a surge in demand for antidepressants during the COVID-19 outbreak1 and experienced 2.8 to 6.2 times higher medical costs for individuals with behavioral health conditions.2 The Cigna Resilience Index study shows that twothirds of full-time employees lack high resilience.3 The young adult population is the least resilient and something employers may overlook.

While workforce resilience remains at risk, it’s important to note that it is a skill that anyone can learn and practice. Resilience is like a muscle that needs to be developed and continually strengthened.

What can employers do?

Build a resilient culture. Managers can model resilience by showing positive ways to handle pressure. Engage in your own self-care and encourage it in others. Since work has blended into home life, it’s more important to take time off to refuel and make it known that employees should too. Resilient leaders help employees problem-solve, maintain perspective and move towards common goals to achieve success. Create an open, inclusive environment where employees can ask for help.

Evaluate the work environment. As business adjusts to a new normal, employees are uncertain about work arrangements. Will they return to the office? Will they lose the flexibility of virtual work arrangements? Take an in-depth look at who really needs to be in the office, who can work from home, and who can be given flexible arrangements. Be transparent and communicate.

Ask workers about their concerns. Recognize that the workplace will not be exactly the way it was before, and we all need to adapt.

Help workers manage stress. Provide employees with information on available resources. Ask your insurance carrier what behavioral health benefits are included in your policy at no extra cost. Cigna’s Resilience Index found that workers with access to expanded mental health services are more likely to be resilient than those without access (48% vs. 35%).1 An Employee Assistance Program (EAP) is a good place to start. EAPs provide counseling sessions, as well as help with a broad range of work-life issues from childcare to financial and legal concerns. Remind employees what’s available and which EAP alternatives may be an option for them. For example, Cigna offers an emotional well-being package with three free counseling sessions and digital resources that include both self-guided resilience and on-demand peer coaching tools.4 Consider healthcare integration. Mental health is connected to physical health. Employees are more likely to use resilience-building resources when they’re integrated into one health plan. An integrated plan can be easier for employers to manage too.

Experts believe the effects of the pandemic will be with us for years. Resilience is an important tool needed to deal with the challenges ahead. Employers that make it a priority now to help employees build resilience can strengthen the health and well-being of their workforce and organization going forward.

Sources: 1. Antidepressants Global Market Report 2021, Businesswire, April 26, 2021. 2. Milliman Research Report, How do individuals with behavioral health conditions contribute to physical and total healthcare spending?, August 13, 2020. 3. Cigna Resilience Index, U.S. Report, 2020. www.cignaresilience.com 4. Employee assistance program services are in addition to, not instead of, health plan benefits. These services are separate from health plan benefits and do not provide reimbursement for financial losses. Program availability may vary by plan type and location, and are not available where prohibited by law.

Product availability may vary by location and plan type and is subject to change. All group health insurance policies and health benefit plans contain exclusions and limitations. For costs and details of coverage, contact a Cigna representative.

All Cigna products and services are provided exclusively by or through operating subsidiaries of Cigna Corporation, including Cigna Health and Life Insurance Company (CHLIC) or its affiliates.

6/18/21 3:19 PM

10 JUNE 21, 2021 • CRAIN’S CHICAGO BUSINESS

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Business is an afterthought in Springfield J.B. Pritzker

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f the voting public got the wrong impression that J.B. Pritzker was going to be all about making Illinois a great place to do business when elected governor, he certainly didn’t correct those misapprehensions on the campaign trail.

Rather, he touted his record as a business leader and venture capitalist as he ran for office, and his deep and abiding ties to the city and state’s business community were widely seen as evidence that, as governor, he would at least understand the concerns of the area’s employers and investors if not give them a place at the table as his administration made decisions affecting the state’s economic competitiveness.

As the governor’s bid for re-election now looms, business leaders have a right to wonder if they properly understood candidate Pritzker’s messaging.

The recent wrangling over the governor’s massive energy agenda in Springfield is a case in point, but it’s only the latest example of decision-making at the highest levels that includes everyone but those who will have to pick up the tab. No one on Team Pritzker, it seems, consistently stands up for the business community.

As Crain’s Steve Daniels reports, the Senate left Springfield having failed to vote on legislation to both keep open the nuclear plants that Chicago power giant Exelon plans to close and to put Illinois on a path to a carbon-free power-generation future.

But a lingering dispute between environmentalists and labor over the timetable to close fossil fuel plants remained stalemated and forced Senate President Don Harmon to adjourn the chamber’s proceedings without a vote.

Earlier that day, Daniels reported that a coalition of business organizations, led

by the Illinois Manufacturers’ Association and the Illinois Retail Merchants Association, had made an 11th-hour plea to kill or at least stymie the bill. One of their central complaints was that the Pritzker administration and legislative Democrats hadn’t issued cost estimates for the bill. It wasn’t that they and their members weren’t willing to pay more—these organizations have backed power bill hikes in the past in order to maintain the electric reliability so necessary to keep their enterprises humming. Their concern was that the measure as then configured could raise power costs for their various members by 8 to 15 per-

cent. The business coalition was frustrated that those percentages are, at best, an educated guess—no estimates have been forthcoming from the policymakers themselves—and when the fine points of the bill were being hammered out in the month prior to the thwarted vote, business organizations like the manufacturers, the retailers and the Building Owners & Managers Association were not invited to take part.

So who was in the room? Environmental advocates and union representatives, green power companies, as well as Exelon and its Commonwealth Edison subsidiary.

The measure those favored few were

hashing over that day promised nearly $700 million over five years to Exelon for its nuke bailout. It promised more than $200 million per year for support of new solar and wind development. It pledged more than $200 million annually for various energy-oriented social programs, including electric-vehicle infrastructure and “equity” investments.

All of that would be charged to ratepayers in the form of surcharges on their electric bills. Unlike in past energy bills, there were no caps imposed on how much rates could go up. As Daniels points out, that serves two purposes. It ensures the money for the various interests doesn’t run dry, as it has for new ratepayer-funded solar development under the 2016 Future Energy Jobs Act. And it prevents critics from providing a solid cost estimate for how much ratepayers will have to shell out to support all of these mainly private-sector interests.

As Crain’s columnist Joe Cahill forcefully argues in this week’s issue, lawmakers and Team Pritzker may believe they’ve done their jobs if they reach an energy deal in the next few weeks that satisfies each powerful interest group with a stake in energy legislation. But their job is to make good policy for the entire state of Illinois. A bill that drives up electricity costs in Illinois is bad policy.

That’s especially noteworthy as Texas, home to the nation’s fourth-largest city right behind Chicago, struggles yet again with an electrical grid on the fritz. Affordable and reliable electricity has long been one of Illinois’ key competitive advantages. Any legislative step that undercuts that reliability—and doesn’t take into account the needs and concerns of the businesses and residents who will pay for it—is a step down the wrong road, one that leads away from Illinois.

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YOUR VIEW

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The tech investment we need to improve prisons

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Write us: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited. Send letters to Crain’s Chicago Business, 150 N. Michigan Ave., Chicago, IL 60601, or email us at letters@chicagobusiness.com. Please include your full name, the city from which you’re writing and a phone number for fact-checking purposes.

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in their voices. Ensuring affordur prison system is broken. able communication is a nonWith some studies sugnegotiable human right. gesting recidivism rates as I recently accepted the ophigh as 83 percent, we are overportunity to join the managedue to overhaul our system—one ment team of Aventiv, a prothat is far too punitive. We must vider of communication and take on glaring issues like overpotechnology to the corrections licing of misdemeanors in comand government services secmunities of color and address the tors, to help with their ongoing root causes of behaviors that lead to incarceration such as mental Yusef D. Jackson, an at- operational transformation to illness, lack of education, poverty torney, businessman make phone calls and other forms of communication more and addiction. and entrepreneur, affordable to the incarcerated.

My family and I have long been is a senior executive I accepted this opportunity beinvolved with prison reform ef- of Aventiv Technolcause I strongly feel we need forts. I spent most of my child- ogies and its parent hood Christmases at the Cook company, Platinum fundamental reform in communications technology that County Jail, visiting inmates on Equity. will improve the lives of the one of their loneliest days of the year. Growing up, I regularly accepted collect incarcerated, enhance their chances of sucphone calls routed from prison to my home cessfully returning to society and reduce the from those seeking support in their fight for likelihood of recidivism and a return to prisjustice, hearing the barely disguised anguish on. We all benefit when prisoners are more

Sound off: Send a column for the Opinion page to editor@ chicagobusiness.com. Please include a phone number for verification purposes, and limit submissions to 425 words or fewer.

6/18/21 1:23 PM

F plea

CRAIN’S CHICAGO BUSINESS • JUNE 21, 2021 11

YOUR VIEW Continued on rehabilitation and reducing recidivism.

Tom Gores, the head of the company’s owner, has committed to invest tens of millions of dollars in new infrastructure. By the end of 2021, we will have deployed 400,000 tablet devices to U.S. TO INNOVATE, DEVELOP AND DELIVER TECHNOLOGY prison facilities, putting tools to improve re-enTHAT NOT ONLY CONNECTS BUT ALSO IMPROVES, try outcomes for the incarcerated quite litEMPOWERS AND CHANGES THE LIVES OF THOSE erally at their fingertips.

While right and imWHO ARE INCARCERATED, WE MUST INVEST. portant, these efforts the company has taken steps to become are not enough. Regulatory and legislative part of the solution by initiating a transfor- reform are also required.

In late March, U.S. Rep. Bobby Rush inmation of its culture and business practices, changing management, reducing its fee troduced the Martha Wright Prison Phone structure and promoting policy that focuses Justice Act, which would ban unreasonprepared to return home and become contributing members of our community.

Aventiv has been criticized for its high rates and fees, and, quite frankly, for being part of the problem. Over the last 18 months,

00 ke n d 00 tis. rs ic re d o ror nt d st ve ly

Chief executive officer KC Crain Group publisher/executive editor Jim Kirk

Associate publisher Kate Van Etten *** Editor Ann Dwyer Creative director Thomas J. Linden Assistant managing editor/ Joe Cahill columnist

ly d ne he ul aor es

Assistant managing editor/digital Ann R. Weiler Assistant managing editor/ Cassandra West news features

able phone and communication charges for those who are incarcerated. Rush has regularly introduced similar legislation since 2005. Now is the time for it to pass.

The Rush plan suggests a cost of 4 to 5 cents per minute. At Aventiv, we have reduced the average cost of calls to less than 15 cents per minute with a commitment to fall below 10 cents per minute. In Cook County, today the price is less than a penny. Cities such as San Francisco and New York have absorbed the cost of phone calls.

To modernize these systems—replacing rudimentary wall phones with tablets enabled with SMS, email, apps, video calling, eBooks, etc.—we must invest. To innovate, develop and deliver technology that not only connects but also improves, empow-

ers and changes the lives of those who are incarcerated, we must invest.

We envision a system that provides every inmate with a secure digital tablet so they can connect with loved ones and access educational offerings, faith-based programming, mental health resources, job training, employment resources and second-chance programs that improve re-entry outcomes.

Of the 11 million Americans who churn through the prison industrial complex and the over 2 million incarcerated, up to 95 percent will be released. Imagine a society where people come out better prepared than when they entered. We have the opportunity to make this a reality. But it will take investment—private industry and the public working together.

CRAIN’S WEBCAST

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Thursday, June 24 | 1-2 p.m.

Deputy digital editor Todd J. Behme Digital design editor Jason McGregor Associate creative director Karen Freese Zane Copy chief Scott Williams Copy editor Robert Garcia Deputy digital editor/ Sarah Zimmerman audience and social media

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Health insurance after the pandemic

Health insurers emerged largely unscathed from the economic fallout of a pandemic that hammered other segments of the health care industry. But COVID-19 has presented a variety of unprecedented challenges and opportunities for payers, including Blue Cross of Illinois’ parent company. Crain’s health care reporter will sit down with Health Care Service Corporation CEO Maurice Smith to discuss navigating the public health crisis and his post-pandemic strategy for one of the nation’s largest health insurers.

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12 JUNE 21, 2021 • CRAIN’S CHICAGO BUSINESS

Affordable housing coming to the Loop A rare downtown plan calls for transforming a vacant city-owned plot at Van Buren Street and Plymouth Court into a carbon-neutral 20-story residential high-rise The winners of a green-building competition have a plan to transform a city-owned Loop plot at Van Buren Street and Plymouth Court into a carbon-neutral, all-affordable 20-story residential high-rise.

Mayor Lori Lightfoot last week announced Assemble Chicago—a group including Community Builders, Studio Gang Architects, DesignBridge and JAQ—won this year’s C40 Reinventing Cities. With approval from the City Council, Community Builders will purchase the property across from the Harold Washington Library, recently appraised at $7.95 million, for $1.

The $102 million project will feature just over 200 units—including studios and one and two bedrooms—priced for tenants earning 30 to 80 percent of the area median income. Thirty percent is equal to $28,000 for a family of four, and 68 units will be set aside for those in that income bracket.

The building will also feature a food hall highlighting minority-owned restaurants, nonprofit offices, a produce grocer and a wellness clinic, Lightfoot said.

Also on tap: $2 million worth of improvements to nearby Pritzker Park, including a spray fountain, community stage, rain garden, landscaping and restrooms.

STUDIO GANG ARCHITECTS

BY A.D. QUIG

WINNING BID

Assemble Chicago won out over three other net-zero mixed-use proposals “due to its superior design, commitment to affordability, family-sized units, development team experience, proposed purchase price and community feedback,” the city says in a statement.

Groundbreaking could occur later this year. The site contains several city-owned parcels and a four-level parking garage, all vacant. It’s not clear if the developers have secured financing for the project.

Will Woodley, Community Builders’ regional VP for real estate development, said in a

A rendering of a proposed housing development at Van Buren Street and Plymouth Court. video promoting their pitch that Community Builders has already constructed 2,000 homes for a mix of incomes in Chicago.

In the same video, Studio Gang principal Jeanne Gang says the project—a change from its largescale Loop projects like Aqua and the St. Regis—allows the firm to use “its design skills toward a project that addresses . . . geographic inequities in the city.”

The contest is sponsored by C40, a global network of cities aimed at combating climate change. The building will be

constructed with a low-carbon concrete mix “that helps achieve LEED Zero Energy Certification and Living Building Challenge Materials Petal Certification,” the city says.

While the project featured design excellence and sustainability, their main credit was a commitment to equity, city Planning Commissioner Maurice Cox said at a news conference on Studio Gang’s rooftop.

“Then, of course, the deep, deep experience in affordable housing” the development

team brought, he said.

“This will bring transformative change to this underutilized plot of land in the Loop, not some far-flung location on the outskirts of town, but in the heart of our city, we’ll have affordable housing that will really transform the lives of the residents who will be there,” Lightfoot said.

The 2019 winner was a mixed-use project with 77 rental units called Garfield Green in East Garfield Park, led by Preservation of Affordable Housing.

Suburban apartment rents surge to record high Landlords cruised through the coronavirus pandemic with few problems, and they’re gaining momentum as demand continues to grow both in and around Chicago Life is good if you own apartments in the Chicago suburbs right now. Not so much if you need to rent one.

The median net suburban apartment rent jumped to $1.60 per square foot in the first quarter, an all-time high and up 5.4 percent from a year earlier, according to the Chicago office of Integra Realty Resources, an appraisal and consulting firm.

The suburban occupancy rate rose to 96.1 percent, up from 95.1 percent in first-quarter 2020 and its highest level since 2016.

Suburban landlords cruised through the coronavirus pandemic with little trouble, and they’re gaining momentum as the Chicago economy comes out of it. One possible reason: After plunging in 2020, the job market, the most important driver of demand for housing, is recovering, though local employment is still well short of pre-COVID levels.

But the pandemic disrupted the housing market so much that it’s hard to draw a single

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sweeping conclusion from the first-quarter data. Last summer and fall, downtown landlords suffered as professionals worked from home and civil unrest turned city life upside down. Some people moved out of downtown Chicago, but a big drop in the number of people moving in had an even bigger impact on demand for downtown housing.

The suburban market, meanwhile, didn’t miss a beat. Some renters who left downtown moved to the suburbs, but that “wasn’t a huge driver of demand” for suburban apartments, says Integra Senior Managing Director Ron DeVries.

The suburban market fared better because factors that hurt demand for downtown apartments—corporate work-fromhome policies and the decline in people seeking out dense, urban living—didn’t have the same effect on the suburbs.

Now, demand is rising in both downtown and the suburbs. DeVries posits that some suburban properties may be renting to out-of-towners who took a job in the Chicago area

during the pandemic but waited to move here.

“There could be some people who are making that choice to move now, so that’s resulting in some additional demand,” he says.

FORECASTING

Integra’s data covers more than 350 large suburban properties with more than 100,000 apartments combined. Of 10 suburban submarkets, the median rent rose the most in Will County, 12.3 percent over first-quarter 2020. Two submarkets suffered declines: the North Shore, -1.9 percent, and Lake County, -1.2 percent.

Integra forecasts that suburban rents will rise by 3 to 4 percent over the next year, fairly consistent with past years.

In most places, landlords still have the upper hand over tenants. The median two-bedroom apartment in the suburbs rents for $1,542 per month, up nearly 14 percent from first-quarter 2016, according to Integra.

Rising rents have given developers the confidence to keep building and lenders the confi-

COSTAR GROUP

BY ALBY GALLUN

A rendering of One Oak Brook Commons, a 250-unit apartment building built on the former McDonald’s headquarters in Oak Brook. dence to finance new projects.

Developers have completed more than 2,000 apartments in the suburbs so far this year, according to Integra.

Another nearly 2,500 units are under construction, with projects including One Oak Brook Commons, a 250-unit building on the former McDonald’s headquarters site in Oak Brook, and 8000 North, a 153unit development in downtown Skokie. It will be a big year for developers, but DeVries doesn’t expect the annual total to sur-

pass the roughly 3,900 units completed in 2019, the highest suburban apartment total since at least the mid-1990s.

Rising construction costs are likely to curb development over the next year, DeVries says.

Even though rents are increasing, cost are rising more quickly, making development less profitable.

“It’s just not going to make economic sense because these rents will not support these higher construction costs,” he says.

6/18/21 3:28 PM

CRAIN’S CHICAGO BUSINESS • JUNE 21, 2021 13

IMPACT INVESTING: Venture development could play a major role in Chicago’s future. PAGE 16 COMMUNITY VOICES: These developers bought back the block with the help of the Land Bank. PAGE 18 A PLANNER’S VIEW: Gentrification isn’t inevitable in neighborhood revitalization. PAGE 18

Earl Chase, executive director of Heartland Housing, and Athena Williams, executive director of the Oak Park Regional Housing Center, are redeveloping the Laramie State Bank building in Austin.

A SECOND CHANCE FOR AUSTIN

JOHN R. BOEHM

CRAIN’S CHICAGO INVESTMENT BUSINESS NEIGHBORHOOD

Money is vital to any community revitalization. Here’s what else is needed, as seen through this beleaguered neighborhood, among the 10 places targeted under the mayor’s Invest South/West initiative. | BY JUDITH CROWN

Over the Memorial Day weekend, Shawnie Jones was getting ready to open Chicago Eats, a sports bar on Chicago Avenue in Austin, featuring chopped steak on Texas toast and green apple lemonade, with or without tequila.

The West Side entrepreneur saved for five years while operating a food truck and also landed a $150,000 city grant. Besides providing a gathering spot for the community, she wants to show neighbors what’s possible. “We went to school together. We went

to church together,” Jones says. “If I can do this, you could do it too. The same resources are here for you.”

Austin is getting attention as one of 10 neighborhoods targeted under Mayor Lori Lightfoot’s Invest South/West neighborhood development initiative, which focuses on a 1.5-mile stretch of Chicago Avenue between Austin Boulevard and Cicero Avenue that the community has named “Soul City Corridor.”

The long-suffering neighborhood on

“I DO FEEL LIKE THERE IS A LIGHT SHINING ON AUSTIN. THINGS THAT FOLKS HAVE BEEN WORKING ON ARE CULMINATING INTO A MOMENT.” Darnell Shields, executive director, Austin Coming Together

the Far West Side bordering Oak Park has endured decades of disinvestment, crime, population loss and overall neglect. Chicago Avenue had been written off as an urban desert, with little to catch the eye beyond small storefronts, litter and vacant lots.

A partnership of Heartland Housing and the Oak Park Regional Housing Center in March won a city competition to redevelop the Art Deco landmark Laramie State Bank See NEIGHBORHOOD on Page 14

SPONSORS

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14 JUNE 21, 2021 • CRAIN’S CHICAGO BUSINESS

CRAIN’S CHICAGO BUSINESS

NEIGHBORHOOD Building, which the city hopes will spark investment on the corridor and beyond. Already about 20 projects are in various stages of completion, including Jones’ sports bar, a broadcast studio, a fitness club and a grocery store.

While the $750 million Invest South/West program, which includes money for infrastructure and economic development, has been welcomed, much more is needed, experts say. This includes a fresh look at the conventional formulas used for commercial and mortgage lending, locating retail stores and job sites, as well as hiring and training workers. Leadership and persistence are needed too.

There has to be a balance in the search for returns, says Brian Fabes, managing director of the Corporate Coalition, an alliance of Chicago-area companies attempting to reduce inequities in the region. “If we’re only maximizing short-term financial returns, we will not get grocery stores in places where people are hungry,” he says.

Michael Davidson, senior director of community impact for the Chicago Community Trust, adds, “The private sector needs to step up.

Open a (bank) branch. Lend to an entrepreneur.”

Community activists in Austin acknowledge they wouldn’t be riding a wave of momentum without the corporate come-to-Jesus moment following the murder of George Floyd and recognition of how inequality is baked into the economic system. Since then Chicago companies—and firms across the country—have pledged billions of dollars to advance racial equity.

JPMorgan Chase has committed $800 million locally to be invested in Black, Latino and other underserved communities by 2025. Discover Financial Services is opening a call center in Chatham to employ 1,000 workers by 2024. And BMO Harris has a $5 billion, five-year pledge to enable inclusive economic recovery, part of which comprises a program to improve access to capital for Black- and Latino-owned small businesses.

Will that be enough? Or will the private sector lose interest and patience? “I do feel like there is a light shining on Austin. Things that folks have been working on are culminating into a moment,” says Darnell Shields, executive director of the nonprofit Austin Coming Together.

“We need long-term investment. It can’t be one or two years.”

STARTING POINT: LARAMIE BANK

Over the past 20 years, the community’s population declined nearly 20 percent to 95,000. Of Chicago’s 77 community areas, Austin came in 12th for violent crimes per capita in 2017, with 2,096 per 100,000 residents, according to the community’s Quality-of-Life Plan, published in 2018. The community child poverty rate is 44 percent, as compared to 31 percent for Chicago overall.

Six in 10 men in the community between 20 to 24 were unemployed

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Continued from Page 13

and not in school, the study found.

The study also found that $150 million to $180 million—representing 85 percent of disposable income—goes to Oak Park and River Forest, where there are eight supermarkets for two-thirds of the population. “This is an economic desert,” says Malcolm Crawford, president of the nonprofit Austin African American Business Networking Association, or AAABNA, and manager for the Chicago Avenue corridor under the Invest South/West program. “You want to take someone out to dinner? You take them to Oak Park. Want to work out? You do it in Oak Park.”

But the neighborhood didn’t give up on itself. Starting around 2010, community groups began collaborating and formed Austin Coming Together, a nonprofit network of some 50 organizations. With a $50,000 grant from the nonprofit community development organization LISC, the members developed the Quality-of-Life Plan that outlines priorities for economic development, education, housing, public safety and other concerns. Following the report’s 2018 publication, the group formed task forces to engage with funders, including BMO Harris, which donated $10 million through United Way to help implement their plan.

Meanwhile, newly elected mayor Lightfoot vowed to place a priority on neglected South and West Side neighborhoods, so there was “a beautiful convergence of interests,” Shields says.

Chicago Avenue emerged as a strong candidate for redevelopment dollars because of its proximity to mass transit, robust traffic counts and availability of public land, says Maurice Cox, who joined the city as planning and development commissioner in 2019. Austin’s Qualityof-Life Plan was comprehensive, he says, but needed to identify a starting point. “Residents advised us to start at the Laramie Bank, an architecturally significant building that has been derelict for too long.” The city solicited proposals to redevelop the building and also identified 10 properties along Chicago Avenue available for development.

The team from Heartland Housing and the Oak Park Regional Housing Center in March bested six competing proposals with a $38 million plan that calls for a bank branch, coffee shop, business incubator and an adjacent building with 76 affordable apartments and a parking structure. The project is expected to be completed in mid2023.

“It should be a business and financial-services hub,” says Athena Williams, executive director of the Oak Park Regional Housing Center and a longtime Austin resident. “It’s a place for people to come in have their coffee and do their banking.”

The project is being funded by a mix of tax credits, grants and donations, says partner Earl Chase, executive director of Heartland Housing.

The goal is to create a critical mass

w AUSTIN: A DEMOGRAPHIC SNAPSHOT A comparison of the Far West Side neighborhood to other areas in the city shows stark differences.

POPULATION LOSS: The exodus from Austin has far outpaced the city’s decline as a whole.

Percentage population change, 2000-18 Austin -19.4%

Total population 94,762 -6.1%

Chicago

2,718,555

RACIAL MAKEUP: African Americans make up nearly 80 percent of Austin’s population, compared to about 30 percent citywide.

80%

79.1%

70

Austin

Chicago

60 50 40 30

32.8%

10

29.7%

29.0%

20

0

14.4%

4.8% White non-Hispanic

Hispanic or Latino

0.5% 6.4% Asian non-Hispanic

Black non-Hispanic

2.1% 1.1% All other categories

HOUSEHOLD INCOME: The median income of $33,420 lags the citywide median of $55,198.

40%

39.2%

Austin

Chicago

30 25.4%

25.3%

20

20.5% 14.6% 15.6%

10

11.0% 7.8%

0

Less than $25,000

$25,000-$49,999

$50,000-$74,999

$75,000-$99,999

14.3%

13.2% 9.4%

$100,000-$149,999

JOB STATUS: About 56 percent of Austin’s population is the labor force, compared with about 67 percent citywide.

Share of labor force employed* Austin

3.7% $150,000 and over

86.4% 91.0%

Chicago Share of labor force unemployed* Austin 13.6% 8.9% Chicago *Does not include employed population in the U.S. armed forces.

EDUCATION LEVELS: Austin exceeds the city in the percentage of residents with a high school diploma or equivalency but falls behind in the percentage with a bachelor’s degree.

40% Austin

35.3%

Chicago

30

20

23.2%

22.9%

20.2%

22.7% 17.6%

15.5%

15.6%

10 7.1% 0

Mars city art g owne brea an A “I’ walk shop have ple a each

Less than high school graduate

High school graduate or equivalency

Some college, no degree

9.1% 5.7%

Associate degree

5.0% Bachelor’s degree

Graduate or professional degree

Sources: U.S. Census Bureau, Chicago Metropolitan Agency for Planning and American Community Survey. Covers the period 2014-18.

and increase the tax base to motivate private investment. “You want retailers and banks feeling safe in their investment, that the demographic base is a good target,” Chase says. “This project plays a small role in that. If it’s catalytic, it will stimu-

late further development. The hope is that Austin will look like Oak Park, or any other neighborhood that’s thriving and self-sustaining.”

Corridor manager Crawford re-imagines the Chicago Avenue stretch as “Soul City,” which will

keep residents in the neighborhood and draw visitors, while celebrating African-American food, art and culture. The AAABNA is teaming with developer Lennox Jackson to build a mixed-use project with 30 condos and 10 retailers. Entrepreneur

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lation 94,762

18,555

%

ries

CRAIN’S CHICAGO BUSINESS • JUNE 21, 2021 15

Marseil Jackson landed a $250,000 city grant for his broadcast studio, art gallery and wellness center. The owners of popular Lincoln Park breakfast spot Batter & Berries plan an Austin opening in the fall.

“I’m excited by the opportunity to walk out the door and go to a coffee shop,” Crawford says. “When you have walkability, that’s safety. People are out, moving around, seeing each other.”

A LONGER-TERM HORIZON

Access to capital has been the stumbling block inhibiting commercial investment and home ownership in Austin and other South and West Side neighborhoods, but financial institutions and nonprofits are taking a fresh look. They are joined by a new generation of benefactors such as family offices and socially minded funds.

Of BMO Harris’ $5 billion equity initiative, $3 billion is slated for community development and neighborhood revitalization. An additional $500 million is designated specifically for Black- and Latinoowned commercial businesses.

The special-purpose credit program for Black and Latino borrowers is to “make sure we provide access to capital for them to invest in their businesses in way we haven’t done in the past,” says Vice Chair Eric

Smith. The bank is training branch managers to provide more flexibility, he adds. BMO also is investing in private-equity and venture-capital firms that support minority- and women-owned businesses.

Developers and the retail chains they’re courting need a more expansive formula for assessing opportunity and risk. National chains use yardsticks that are specific and unyielding, says Calvin Holmes, president of the nonprofit Chicago Community Loan Fund, or CCLF. They insist on a certain population density and minimum household income.

He points to developer Leon Walker’s (see Page 16) successful courting of Starbucks for the Englewood Square shopping center, for which CCLF was a funder. Despite an anemic average household income of $29,000 within 1 mile, compared to the citywide median income of $62,000, a deeper analysis showed there were 1,000 families in the densely populated neighborhood earning more than $50,000.

This gave Starbucks the confidence to open in the center alongside a Whole Foods and Chipotle.

“DL3 (Walker’s development firm) used alternative analytics to build a case that these retailers could be successful,” Holmes says.

Besides being willing to use those

alternative analytics, private-sector investors need to adopt a longer-term horizon than the typical five to seven years. “Often in low-income communities, you might need 10 to 15 years.”

Equally important is opening access to good-paying jobs with benefits, which paves the way for homeownership and savings. “How do we get people from the neighborhoods into the hot job market downtown—or bring the jobs to the neighborhoods,” Holmes says. “We need to provide economic anchors in the neighborhoods to keep people in Chicago and not have them move elsewhere.”

Some CEOs have concluded it makes sense to bring jobs to the community rather than require employees travel hours to a job site.

When Discover CEO Roger Hochschild concluded in 2019 that the company’s next call center needed to be on the South or West Side, he ran into institutional resistance.

Site location teams typically seek out neighborhoods with top high schools, solid infrastructure and ample transportation, which perpetuates the imbalance, Hochschild says. “Those who are close to jobs are close to even more jobs, while people living on the South and West sides have multihour commutes,” he says.

It took a while for Discover managers to warm up to the idea of a call center in Chatham. “The real estate team kept bringing us great buildings in River North,” Hochschild says. “But once people understood the vision, they were hugely supportive.” One of the managers hired for the center said he could be a better father to his daughter because he wouldn’t have the 1½-hour commute that he has now, Hochschild adds.

Corporations also are reconsidering the traditional hiring criteria for entry-level jobs, which typically led them to recruit at four-year universities. A network of more than 40 companies led by Aon, Accenture and Zurich created an apprentice network that establishes alternative pipelines. Aon’s program provides paid entry-level jobs to students at Harold Washington College while they attend school.

Resources need to be coordinated to enhance private investment, says MarySue Barrett, president of the Metropolitan Planning Council. Tax credits can be directed to workforce training, transportation and housing assistance—a “wraparound approach,” she says. For example, if workers at a call center or a downtown office can get their transit subsidized, that would go far to help workers build savings.

Turning around Austin and other neighborhoods also will require leadership and persistence. Planners point to the experience of Pullman, where U.S. Bank invested more than $100 million, including a 180-acre plot of land and $50 million in New Markets Tax Credits.

The effort—which took the better part of 10 years—was spearheaded by the nonprofit Chicago Neighborhood Initiatives, headed by community development veteran David Doig. It attracted more than $340 million in local investment and created more than 1,580 jobs. The redevelopment landed a Walmart, a Whole Foods distribution center and a plant operated by Method, a manufacturer of green cleaning products.

Neighborhood turnarounds require patience, Cox says, adding: “You have to take the long view, but there are incremental steps in between.” For example, the city invested $250,000 in a pop-up plaza opening this month.

“You can show progress every month—it doesn’t take 10 years to get businesses into empty storefronts,” he says.

It’s helpful to have cranes working and scaffolding on buildings. “It’s part psychology, part reality,” Cox says. “People see that something is happening.”

3%

over

1.0%

ntage

SUPPORT WHERE IT MATTERS MOST

6%

or egree

hood ating d culwith build conneur

Community commitment has been one of the guiding principles of our framework since our inception. We believe our banks can’t truly serve our area without giving something back. We must be good citizens, and encourage local participation and support. We’re proud to partner with local organizations dedicated to meeting the educational, economic, and equity needs of our communities. As a bank built to serve Chicago, we are committed to our city: to its continued growth and success, to economic development, and to the empowerment of all its neighborhoods and the people in them.

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Banking products provided by Wintrust Financial Corp. banks.

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CRAIN’S CHICAGO BUSINESS

TRANSPORTATION

Ditch ‘cars first’ mentality to achieve equity T Roberto Requejo is program director of Elevated Chicago.

his year our country commemorated the centennial of the Tulsa Race Massacre. On June 1, 1921, a well-organized white mob killed between 100 and 300 people and destroyed Tulsa’s Black commercial district, burning to the ground more than 1,200 homes. In one day, the Greenwood District, known as “Black Wall Street,” disappeared entirely.

As a prelude to this genocidal act, in 1919 white mobs left 1,000 Black families homeless during Chicago’s Red Summer, one of more than 30 instances of attacks on African American lives, businesses and homes in American cities, many still struggling with the devastation of the 1918 flu pandemic.

Echoes of these horrific events are still

audible as we reflect on 2020’s convergence of the COVID-19 pandemic and the racial justice protests.

While racial massacres and lynchings grabbed headlines, more subtle and pervasive acts of racism through public policy took place throughout the 20th century. In the 1940s and ’50s redlining, contract-buying and “land clearance” and “redevelopment” laws targeted communities of color to enrich white real estate agents, developers and lenders.

Beginning in the 1960s and ’70s, highways were built on and across Black and Latinx neighborhoods as public transit there was dismantled and public housing neglected and left to deteriorate. Thriving commercial cor-

ridors and neighborhoods steadily decayed, and blocks that once brimmed with stores, theaters, restaurants and community institutions turned into vacant land and empty buildings, despite their historical significance. White residents took the highways to the suburbs or hunkered down in white-only neighborhoods in the city.

Today, many of us wonder: How can we repair the damage done? What is the responsibility of white-led organizations in these restorative efforts?

Which policies work?

My organization, Elevated Chicago, is betting on a new tool to address racial inequities and bring back the splendor of our city’s historically Black, Asian and Latinx enclaves: equitable transit-oriented development, or ETOD. The organizations in our coalition believe that we can only counteract explicitly racist policies with explicitly anti-racist ones, built by and for people of color.

That’s why we partnered with the office of Mayor Lori Lightfoot to change the

IMPACT INVESTING

Venture development: A new tool for urban revitalization

I

Leon Walker is managing partner of DL3 Realty in Chicago.

This growing national interest in the welfare of disinvested urban markets translates into a diverse cohort of funders inspired to co-invest in real estate development projects located in urban neighborhoods.

Those funders include government, foundations, commercial banks, businesses, accredited investors, high-net-worth individuals and anchor institutions. The industry is starting to see the integration of public and foundation capital within a framework designed to induce both private capital and measurable social impact.

At the same time, an emerging group of venture developers in the community development industry is tapping private-impact capital to accelerate revitalization in economically stagnant neighborhoods. An increasing number of impact investors, including private foundations, family offices and high-net-worth individuals, are seeking new opportunities that yield both financial and social returns. Venture VENTURE DEVELOPERS FIND OPPORTUNITIES FOR development is where the interPRIVATE INVESTORS TO PUT CAPITAL TO WORK IN ests of these two groups intersect.

UNDERSERVED URBAN NEIGHBORHOODS. Venture developers find opportunities for private investors to as the federal Low-Income Housing put capital to work in underserved Tax Credit, New Markets Tax Credits urban neighborhoods. By overand Section 1031 exchanges, remain looking these communities, private important sources of equity capital investors often miss out on opportuand have helped to leverage private nities to invest in areas that are beinvestment for real estate developginning to move toward higher levels ment in low-income neighborhoods of inclusive economic growth. for years. f you’ve never heard of venture development, you will. It could play a major role in Chicago’s future.

Across the country, municipalities and economic development practitioners are increasingly looking to partner with market forces to stimulate economic development in urban “red zone” neighborhoods.

Red zones are parts of the city where poorer people tend to live and redevelopment doesn’t happen as often, if at all.

Residents in what we call the city’s “green zones” generally have higher incomes, and their neighborhoods are often in better shape. The renewed desire to collaborate with private investors is driven in part by a philosophical shift that views inclusive development in “red zones” as key to improving regional economies.

Private investment in low-income markets is not entirely new. Historically, it has been driven by tax policy. Government subsidies, such

P013-P018_CCB_20210621.indd 16

Venture developers are uniquely positioned to identify and successfully pursue opportunities for private investment in communities rising out of economic stagnation.

Venture developers have the ability to manage the needs of a wide range of investor and stakeholder interests and to understand the importance of development based on a community’s needs, and they are willing to take short-term financial risks in lower-income neighborhoods to achieve higher long-term investment returns.

Like venture capitalists, venture developers are willing to place bets on future growth, appraise risk in a disciplined manner and leverage their own knowledge and expertise to support an investment over time.

Despite the earnest efforts of government, philanthropy and grassroots community organizations, most rising neighborhoods are overlooked by mainstream businesses and private-equity investors who perceive them to be too risky to warrant a real estate investment.

To be economically viable, real estate developments in lower-income neighborhoods will likely always need some level of public support and mission-driven capital.

However, if projects can also be positioned to attract private dollars that serve not just as an investment in the project but also as an equity investment in the neighborhood, then holistic, equitable development becomes far more scalable.

At DL3 Realty, we have come to

appreciate the venture development model, and we believe it is important to share with others the opportunity to think differently about catalyzing transformative change in urban neighborhoods.

The current wave of private-impact investors seeking to deploy capital in socially responsible projects offers one such opportunity to scale the work that venture developers are pursuing in historically disinvested communities across America.

Impact investors provide a critical pressure test for venture development, and they should consider partnering with an established venture developer who can offer them a viable strategy to fund financially rewarding projects that also serve as a catalyst for transformative change.

Over time, impact investors should further enable venture developers by moving past project-based funding to participating in integrated capital stacks that can be used across a series of complementary, place-based developments.

As impact investors become more confident in a venture developer’s ability to use a refined set of investment criteria to appraise risk and its commensurate return in urban markets, they should support an equity fund that venture developers can use to build a pipeline of new developments.

All told, the transformative power of venture development could very well hold one of the most important keys to the kind of future our city deserves.

6/18/21 12:48 PM

obso near In we p and Inste busi curre cour to tra inste outs inves

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SANDRA STEINBRECHER, JAMES GUYTON AND DARIS JASPER

CRAIN’S CHICAGO BUSINESS • JUNE 21, 2021 17

obsolete rules that govern development near transit in Chicago.

Instead of a “cars-first” mentality, we prioritize people walking, biking and using public transportation.

Instead of banning apartments and businesses near transit, a common occurrence in much of Chicago, we encourage those vital land uses adjacent to train stations and bus routes. And instead of bringing proposals from outsiders to communities of color, we invest in developments co-owned by

residents to avoid displacement.

Chicago’s new ETOD Policy Plan, created by more than 80 people and organizations and supported by many more, was adopted in 2020 and is now being implemented by the Chicago Transit Authority and the city departments of Housing, Transportation, and Planning & Development.

In Washington Park, the CTA Garfield Green Line station was once the gateway to a successful Black entertainment and business district. Today,

community leaders in our coalition are hard at work shaping a renewed vision. The Green Line South Community Table, convened by poet and activist Leslé Honoré and including residents and Black-led organizations like Emerald South Collaborative, is collaborating with the Chicago Metropolitan Agency for Planning, the city, philanthropy and businesses.

Using a modest grant from Elevated, they have leveraged millions of dollars. They are making the walk to

and from the station safer and more beautiful through art, culture and traffic calming; planting sunflower fields in vacant lots; turning an empty school into a climate-resilient business incubator; reviving a historic CTA station as commercial space— the list goes on. They are not alone.

Other organizations led by people of color, like Endeleo Institute, the Foundation for Homan Square and the Garfield Park Community Council, are testing ETOD solutions in the West and South sides, spurring development that is healthy, climate resilient and well connected to jobs.

The best way for government, corporations, anchor institutions and philanthropy to start repairing the unspeakable horror of race massacres and insidious consequences of racist policies perpetrated over the past century is by reinvesting in communities of color.

Community organizations know the ingredients for success because they enjoyed them in the past: quality transit; safe and walkable streets; gentle urban density; and a healthy mix of homes, commerce, green spaces and cultural institutions.

What communities of color need to restore their stolen vitality are sizable and steady investments, new development rules like ETOD and the self-determination that comes with real equity. It is up to all of us to support their success.

n

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pact al in rs e

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18 JUNE 21, 2021 • CRAIN’S CHICAGO BUSINESS

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COMMUNITY VOICES

Buying back the block THESE FIVE DEVELOPERS PURCHASED 12 ABANDONED LOTS WHERE THEY PLAN TO BUILD STATEOF-THE-ART AFFORDABLE HOMES.

T

he movement to “buy back the block” is a call to action to put Black communities into Black ownership. It’s about keeping the resources generated in Black communities within those communities, benefiting the people who live and work there rather than watching dollars drain to outside owners who have little interest in the community beyond making a return on their investments.

In West Woodlawn, where too many houses sit vacant and abandoned, we’re answering that call to action in a literal way—by purchasing and redeveloping 12 vacant lots on the 6300 block of South Langley Avenue.

We’re five Black community developers who have worked independently for years, cumulatively rehabbing hundreds of vacant housing units into modern homes across Chicago’s South and West sides in communities like Chatham, Roseland, East Garfield Park and Englewood.

We acquired many of these properties through the Cook County Land Bank Authority, which exists to address the blight created by the economic housing crisis of 2008. By being intentional about empowering developers who know their communities, the Land Bank is a true partner to “little guys” like us and a true partner to Black neighborhoods where tax-delinquent properties and vacant land are often left to decay for years.

Developers can be competitive, but

together, the five of us always felt like a community because we supported each other and shared a vision: uplifting and investing in the communities where we live and grew up.

One day we put together our numbers and realized that our work had created more than $100 million in Black wealth and is generating $1.5 million in annual tax revenue.

That’s when we realized: We could either stay in our own lanes, doing pretty well independently, or we could pool our skills and resources and pour them into a community that needed them, maximizing our impact on individual lives and an entire community. So we bought a block.

Through the Land Bank, we purchased 12 abandoned lots where we’ll soon build new, state-of-the-art homes in a community that desperately needs quality and affordable housing.

These transactions would not have been possible without the Land Bank, which removes enormous barriers from the process of acquiring vacant homes and clearing title without using any taxpayer money. Without the Land Bank, these homes would have either remained abandoned or been purchased by a large developer who had the resources to sit on them for years until gentrification guaranteed a hefty return.

Not us. Our architect is already working on design concepts. We will, as always, hire from within the

Bottom row, from left: Sean Jones, Bonita Harrison and DaJuan Robinson. Top row, from left: Keith Lindsey and Derrick Walker. They are real estate developers who build affordable and market rate developments on the South and West sides. community, helping to ensure that the reach of our project ripples to as many Chicagoans as we can reach.

Architects, accountants, attorneys, carpenters, landscapers, HVAC professionals, plumbers, electricians, security staff—an all-Black team reflective of this community will transform this block from top to bottom, creating over 150 jobs before we’re done next year.

This is where we will have some of the greatest impact: employing formerly incarcerated citizens, who often struggle to move forward without much help once they’re outside; older citizens, who may have a hard time finding work; and those who haven’t had many opportunities but who, once given a chance, find tremendous pride and do an outstanding job in building up the neighborhood.

For us, our work isn’t just about

this block. We know that a largescale project like this has the power to attract more investment to West Woodlawn, which has boarded up and vacant homes on nearly every block. A nearby commercial corridor on 67th Street is also ripe for redevelopment for Black-owned businesses.

And we know it will happen; development breeds development, and development breeds stability. Each new owner is an anchor that holds our neighborhood in a safe harbor ahead of the next economic crisis.

Until then, we’ll build up our neighborhoods one block at a time. And when the nearby homeowners need a little help, perhaps with cutting the grass or shoveling the snow, we’ll have our crews do that, too. Because that’s what neighbors do. That’s what it means to be part of a community.

URBAN PLANNING

Gentrification is the first conversation to have A Manisha Kaul is principal/Chicago studio director at Design Workshop, an international landscape architecture, planning and urban design firm.

one-size-fits-all approach to neighborhood revitalization does not automatically lead to thriving neighborhoods. As Chicago gears up for change in the policies and programs to reverse decades of disinvestment through the Invest South/West initiative, with ideas generated from an amazing local and nationwide talent pool of planners and urban designers, there are key things that need to be kept in mind. While public-private partnerships are essential to revitalize communities, other critical factors need to be embedded in the process of creating framework for healthy and equitable communities.

1. Growth from within is a sustainable way to launch a successful revitalization program. Access to affordable home ownership and job opportunities within the neighborhoods will be helpful in elevating the community as a whole and reinstate the dream of home ownership. Ownership of and connection to the land is essential to create a framework of rootedness and a stake in the success of the neighborhood fabric.

Maximizing access to and availability of apprenticeship and job programs will engage the people within

P013-P018_CCB_20210621.indd 18

the community and provide a ladder to a future in a variety of professions, including entrepreneurship. Job opportunities should be focused around creating a public realm that exudes the notions of care and participation, where safety of the neighborhood is implemented by the residents. Existing societal building blocks should be used to create safe neighborhoods.

2. Community needs to play an integral role in rethinking its future.

Providing equitable and hands-on opportunities for residents to contribute ideas to creating the framework and vision not only allows them to become more invested in their neighborhood’s vision but also generates a wealth of great ideas—many times emanating from unexpected quarters. Other cities like New York, Boston, Philadelphia and Detroit have successfully implemented programs ranging from urban rewilding to food harvesting that takes advantage of available vacant lands, including tiny rooftops and backyards.

These programs have not just helped create investment in the land, but also provided tangible health benefits to community members. As anticipated investment pours in, it must be paired with opportunities

for local residents to build a healthy community—nature areas, parks, playgrounds, recreation and community centers, grocery stores and restaurants, community gathering areas. All economic and public realm investment will ensure healthy, happy and thriving neighborhoods.

3. An equitable society needs mixed-income neighborhoods.

Development in the South and West sides should be centered around creating mixed-income neighborhoods with a range of housing opportunities.

Opportunities need to be created so that all residents of the neighborhoods have equitable access to enjoy and participate in the change and success. We have to intentionally cultivate opportunities for people across the economic spectrum to live and thrive side by side.

4. Narrative of success is a story worth sharing. Perception drives narratives about neighborhoods enough to drown the success stories. To proactively change perceptions, we need to highlight the achievements of individuals and businesses that are striving every day to make a difference in their neighborhoods. Their success stories

deserve more airtime to strengthen the narrative of hope and success in the disadvantaged communities. It is time to tell the stories of the community’s growth and success from within rather than promote a narrative generated by special interests.

5. Gentrification will be the outcome if we do not integrate equitable policies and enforce them. While all the opportunities I’ve listed are important for creating resilient, symbiotic and regenerative neighborhoods, the single greatest thing that planners and designers of South and West Side communities need to be cognizant of is that gentrification is imminent if we don’t build in strategies to ensure that the transformation of neighborhoods keeps pace with success and the growth of families that inhabit them. Employment opportunities are critical to maintaining this balance. We should demand that private investors such as corporations be committed to creating equitable, diverse and vibrant communities and prioritize the growth of existing community members while they are focused on making neighborhoods attractive for future residents.

Gentrification is a discussion that needs to happen before investment and transformation take place, not after.

6/18/21 12:48 PM

CRAIN’S CHICAGO BUSINESS • JUNE 21, 2021 19

DRIVERS from Page 1 Supply squeezes tend to boost prices, and the ride-hailing industry is no exception. The average per-minute fare for an Uber or Lyft in Chicago in April this year was up 36 percent compared with April 2019, pre-pandemic. The rise has eroded ride-share companies’ price advantage over taxis, which operate on fixed fare schedules.

Before COVID-19, “it looked like nothing could stop the rideshare juggernaut,” says Joseph Schwieterman, director of the Chaddick Institute for Metropolitan Development at DePaul University. “Then COVID completely reversed things, where the reliance on voluntary labor in the ride-sharing sector has come back to haunt them, as our urban problems worsen. People have heard war stories about high ride-share fares and may be now looking to cabs first.”

Robert Kellman, Uber’s manager of Midwestern policy, says prices will drop as more drivers come back. Uber says it’s luring them with high wages, which now average $35.30 per trip in Chicago, before tip. Those wages, which reflect the surge pricing that irks customers, act as an incentive for more drivers to hit the road during times of high demand. Eventually, the increasing supply of drivers will reduce prices, Kellman predicts. Prices are already starting to stabilize, he says, “with fewer and fewer trips experiencing higher than normal prices.”

The reasons for drivers’ reluctance to return range from worries over contracting the virus or experiencing another round of shutdowns to enhanced unemployment benefits and fear of carjacking. Some have simply moved on to a new job.

When the pandemic hit, veteran cab driver Manuel Rosales surrendered his taxi medallion and started delivering for DoorDash, Uber Eats, Grubhub and Amazon Flex.

“Just the food, not the people,” he says. “Less contact while driving deliveries made me feel safer.”

He saved money, too. Commercial insurance on his cab, plus the cost of his affiliation, total at least $460 a month. With deliveries, he pays just a little over $70 in insurance per month. Plus, he says he can work fewer hours and feels safer delivering to addresses, rather than picking up strangers in masks from street corners.

Rosales says he will return to his taxi business eventually, especially if the food delivery business slows down because more people want to dine in.

Shoib Hasan, the owner of Globe Taxi Association in Chicago, says only 21 of the roughly 200 cabs in his lot are back on the street. He calls drivers every day to urge them to return. Those that are driving “are making good money,” he tells them. At O’Hare International Airport, cabbies who used to have to queue for 90 minutes can nab a fare quickly.

Customers who have complained that wait times are too long and prices are too high for Uber and Lyft appreciate the convenience of hailing a cab off the street.

REBOUND

According to data scientist Todd Schneider’s analysis of public BACP figures, the local cab industry appears to be having a quicker post-COVID rebound, with yearover-year growth outpacing that of ride-hailing companies. Taxi trip growth was 315 percent in April, more than twice the 145 percent rise for ride-share apps.

Ride-hailing will remain dominant, as Uber and Lyft drivers vastly outnumber cabs. Taxi trips had been declining for several years, with many drivers pushed to bankruptcy by the dropping value of their medallions. But after years of ride-hailing having a price advantage, the two industries might be evening out.

JOHN R. BOEHM

Driver shortage makes for long waits and high prices for Uber and Lyft

Loading zones for ride-share services at O’Hare International Airport.

As of the end of April, per-minute fares—for the first time since data was consistently reported—were cheaper for cabs than for ride-hailing services, according to Schneider’s analysis. A solo ride with Uber or Lyft cost an average of $1.27 per minute in April, while cabs were $1.19. And since April of last year, the gap has been closing for the average total trip cost. In April this year, the average taxi fare per trip was $23.24. For ride-share, it was $22.11.

Bruce Schaller, an urban transportation consultant and former deputy commissioner for traffic and planning in New York City’s Department of Transportation, says he expects now that Uber and Lyft have gone public, they’ll be under more pressure to halt the practice of keeping prices low.

“They’re really under the gun

WHERE’S MY RIDE? While demand for rides is rising as the city reopens, drivers haven’t yet returned to the wheel at pre-pandemic levels. That could change as riders return and unemployment checks run out.

ACTIVE CHICAGO RIDE-SHARE DRIVERS ACTIVE CHICAGO TAXI DRIVERS April 2019

April 2019 65,689

April 2020 14,765 April 2021 26,952

5,593 April 2020 724 April 2021 1,002

Source: Chicago Department of Business Affairs & Consumer Protection

now. They were under the gun a year ago . . . they did their IPOs and started to make promises about (becoming) profitable,” Schaller says. That pressure eased during the pandemic but will soon return, meaning fares will stay high, he predicts.

Furquan Mohammed, an attorney who has worked with both

Note: “Active driver” is defined as having driven four or more times in a month.

cabbies and lenders on medallion restructuring for decades, says despite the cab pickup, the industry won’t return to its pre-COVID numbers for some time.

“It’ll pick up in April (of 2022). I don’t think you’ll see 3,500 cabs on the road,” he says. “(COVID) probably sped up the demise of the industry by about five years.”

Chicago Bears’ Arlington Heights bid puts their future in Soldier Field in doubt BEARS from Page 3 they could own and operate as they please. But some sports stadium and marketing experts say new sponsorship rights or signage at the NFL’s smallest stadium might not be enough to entice the Monsters of the Midway to stay as the lucrative upside of leaving beckons after their lease expires in 2033.

“There are limitations on what they can do in the building, and in 2033 it’s going to be a 100-plusyear-old building with a 30-yearold renovation. It’s relatively untenable going into the next generation,” says sports business consultant Marc Ganis, president of Chicago-based SportsCorp.

“That’s why I don’t believe this is simply a negotiating position. I believe this is a serious plan for the future.”

The Bears and the city were destined to clash over the team’s future at an outmoded Soldier

P019_CCB_20210621.indd 19

Field as the lease expiration approached, and Churchill Downs’ move to sell the 326-acre Arlington International Racecourse property has effectively forced it on Mayor Lori Lightfoot’s administration. It’s a negotiation occurring against a sports industry backdrop in which team owners are increasingly becoming real estate developers, expanding the footprint of their venues to amplify game-day experiences, sell more concessions, create more assets to sell to sponsors and simply get fans to show up earlier and stay later.

And that doesn’t include revenue from separate corporate events and concerts. Los Angeles’ new SoFi Stadium—another NFL venue built on a former racetrack—includes a 6,000-seat performance space adjacent to the stadium bowl. The Bears could also look no further than Wrigleyville’s transformation into a mixed-use destination over the past decade as a model for the sur-

roundings of a new stadium.

But with Lake Michigan to the east, a rail yard to the west, a museum to the north and a convention center to the south, Soldier Field isn’t conducive to adapt to that trend, says Ganis, who contends that leaving behind the lakefront venue and its limitations wouldn’t be much of a sacrifice for the Bears.

“I don’t think they’re giving up anything other than a couple of nice aerial shots of downtown Chicago and the lakefront,” Ganis says. “This site has served the city and the Bears well, but sometimes cycles just come and go. You keep trying to dress it up and it costs you more and more to achieve less and less result.”

WISH LIST

The Bears have scratched and clawed before for more revenue opportunities at Soldier Field, winning a bevy of new allowances as part of the 2015 deal, includ-

ing rights to put team sponsor brands on stadium entrances, the stadium ticket office and its parking garages, among other assets.

The Bears also laid out a more ambitious wish list in that lease amendment, explicitly stating that the team and city would continue discussing the development of a welcome/visitor center, a Bears hall of fame and a Bears sports bar and restaurant, among other retail and commercial features.

It’s unclear whether those projects are under consideration now.

And it’s equally fuzzy whether the notoriously change-resistant McCaskey family, which owns the team, is seriously considering a relocation or if it is running the traditional threaten-to-leavefor-leverage play that the owners of the Chicago White Sox, Cubs and many others—including the Bears themselves—have called before. Lightfoot belittled news of the team’s racecourse bid last

week as the latter, calling it in a statement a “negotiating tactic.”

Less ambiguous is the fact that the Bears are leaving a lot of money on the table under their current lease structure, says Tony Schiller, a partner at Chicago-based sports marketing firm Paragon Marketing Group, which represents PNC Bank, one of the Bears’ biggest sponsors.

Abandoning Soldier Field would mean walking away from the team’s legacy in the heart of the city, “but what they’d be sprinting toward is the opportunity to create a new legacy with more control and in some ways with more potential,” Schiller says. “They can’t sell naming rights, they can’t build an entertainment district, they can’t make decisions unilaterally. . . .In a market where they’re selling out every game and the passion is off the charts, they are so far from doing what they could do if those limitations were removed.”

6/18/21 4:18 PM

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6/17/21 9:07 AM

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2021

BIG DATES July through December nonprofit events

For more than a decade, Crain’s has been publishing its Big Dates calendar of nonprofit events in its end of year special issue, The Book, in print and online. As a special feature this year we are publishing an update of nonprofit events taking place July through December 2021. What follows are new and updated event submissions provided to us by area nonprofits. Please visit an expanded version of this calendar with more information and links online at ChicagoBusiness.com/BigDates.

JULY Thursday, July 1

South East Chicago Commission, Hyde Park Farmer’s Market.

Friday, July 9

Simon Youth Foundation, Founders Celebration.

Monday, August 16

Bear Necessities Pediatric Cancer Foundation, Golf for the Bear.

Chicago Scholars, Swing for Scholars.

The Institute for Clinical Social Work, Summer in the City, “Shifting Paradigms - Becoming More Human in Our Work”.

Chicago Minority Supplier Development Council, 2021 Dolores Saxton Walker Scholarship Classic Fundraiser.

Sunday, July 11

Chicago Loop Alliance, Sundays on State.

Mercy Home for Boys & Girls, 11th Annual Mercy Home Golf Classic.

Monday, July 12

Thursday, August 19

National Kidney Foundation of Illinois, Middle Market Open.

HACIA, HACIA’s Scholarship & Education Foundation Annual Golf Outing.

Thursday, September 9

Collision Repair Education Foundation, Kennedy King College Auto Collision Program Fundraiser.

Onward Neighborhood House, Golf Outing.

Friday, September 10

American Cancer Society, Skyline Soiree.

National Able Network, 4th Annual Veteran of the Year Award Luncheon.

Saturday, September 11

Scottish Rite Dyslexia Foundation, 5-K Run Walk for Dyslexia.

Monday, September 13

Chicago Parks Foundation, Play for the Parks, Golf Invitational.

The Nature Conservancy, Midewin: Explore the First National Tallgrass Prairie.

New Horizon Center for Children & Adults with Developmental Disabilities & Autism, 29th Annual John Tompkins Charity Golf Outing.

Les Turner ALS Foundation, 2021 Strike Out ALS 5k and 1 Mile Run, Walk & Roll.

Friday, August 20

Reading Power Inc, Play for Literacy Golf & Games Event.

Thursday, July 15

Friday, July 16

March of Dimes, Movie Night Under the Stars.

Saturday, July 17

Genesys Works Chicago, Signing Day.

Saturday, August 21

Jackson Chance Foundation, Owl Ride for Jackson.

A Safe Haven Foundation, Global Virtual Run/Walk To End Homelessness.

Monday, August 23

Sunday, July 18

Tuesday, August 24

Chicago 16 Inch Softball Hall of Fame, 25th Anniversary Reunion.

Friday, July 23

Union League Boys & Girls Clubs, 2021 Wine Dinner.

Saturday, July 24

Save Abandoned Babies Foundation, Ride, Baby, Ride Motorcycle Run.

July

Mercy Home for Boys & Girls, Mercy Home Heroes Challenge.

AUGUST Sunday, August 1

Envision Unlimited, In Motion.

Meals on Wheels Chicago, Nourish Our City.

Monday, August 2

La Rabida Children’s Hospital, 32nd Annual Golf Classic.

Thursday, August 5

Association Forum, Honors Gala.

Cornerstone Services, Summer Chi.ill.

Global Leadership Network, The Global Leadership Summit.

Saturday, August 7

United Relief Foundation, In Honor of Purple Heart Veterans Cruise.

Monday, August 9

Midtown Educational Foundation, 28th Annual Golf for the Kids Outing.

St. Coletta’s of Illinois, Kennedy Golf Invitational.

Wednesday, August 11

JDRF Illinois, Diabetes Lesson Plan for School Nurses.

Friday, August 13

Simon Youth Foundation, Tees for Education.

Saturday, August 14

Salt and Light Coalition, Radiate Gala.

P020_023_CCB_20210621.indd 21

Genesys Works Chicago, Genesys Works 6th Annual Golf Outing.

Northern Illinois Food Bank, 23rd Annual Hunger Scramble Golf Outing.

Wednesday, August 25

Deeply Rooted Dance Theater, A Deeply Rooted Evening for Chicago’s Healing: GOSHEN (preview).

Thursday, August 26

Tuesday, September 14

Chicago Architecture Center, Together Again Gala 2021.

Wednesday, September 15

Chicago Cultural Alliance, Journey Chicago.

Friday, September 17

Cristo Rey St. Martin College Prep, Elevate.

CURE Epilepsy, Unite to CURE Epilepsy: Tenacity. Discovery. Hope.

Saturday, September 18

Adler Planetarium, Celestial Ball.

Alliance for the Great Lakes, September Adopt-a-Beach.

Apparel Industry Foundation, Scholarship Competition.

DuPagePads, Run 4 Home Virtual Run & Walk.

Cara Collective, Cara Summer Social presented by Slalom.

Les Turner ALS Foundation, ALS Walk for Life.

Chicago Dancers United, Dance for Life.

PAWS Chicago, PAWS Chicago 21st Annual 5K Walk/Run.

Friday, August 27

Tuesday, September 21

United Way of Metro Chicago, Board Leadership Institute Program - Fall 2021 Cohort.

Thursday, September 23

Garfield Park Conservatory Alliance, Beer Under Glass.

Monday, August 30

Metropolitan Planning Council, Better//Together: MPC’s 2021 Annual Event.

Bernie’s Book Bank, Walk As One Chicago.

American Cancer Society, Chicago Select Golf Invitational.

Better Government Association, Character Matters.

Bernie’s Book Bank, Birdies & Books Charity Golf Classic.

Strides For Peace, Race Against Gun Violence.

SEPTEMBER

U.S. Holocaust Memorial Museum, Annual U.S. Holocaust Museum ‘What You Do Matters’ Virtual Chicago Event.

Wednesday, September 1

Beyond Hunger, Hunger Action Month.

Illinois Holocaust Museum and Education Center, Women’s Leadership Committee Soirée.

Thursday, September 2

CommunityHealth, All in Chicago Breakfast Summit.

Friday, September 3

United Way of Metro Chicago, Responsible Business Leaders Program - Fall 2021 Cohort.

Tuesday, September 7

The Salvation Army, Hope Fore Kids Golf Classic.

Wednesday, September 8

Eversight, FANTASEA: 2021 Gift of Sight Masquerade.

United States Holocaust Memorial Museum - Midwest Regional Office, 2021 Risa K. Lambert Midwest Virtual Event.

Friday, September 24

Rebuilding Together Metro Chicago, Run to Rebuild.

Saturday, September 25

Friends of the Forest Preserves, 5th Annual Beer in the Woods.

National Ovarian Cancer Coalition, Together in Teal - “Everywhere as One” National Broadcast.

Sunday, September 26

United Relief Foundation, In Honor of Gold Star Mothers Cruise.

Monday, September 27

Juvenile Protective Association, All in for Kids Golf Outing.

Wednesday, September 29

National Kidney Foundation of Illinois, Golf Classic.

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Thursday, September 30

Monday, October 4

Sunday, October 17

September

Tuesday, October 5

Monday, October 18

Illinois Environmental Council, 19th Annual Environmental Leadership Dinner.

Midtown Educational Foundation, 30th Annual Reach for Excellence Gala.

Friday, October 8

Tuesday, October 19

Illinois Chamber of Commerce, Annual Meeting.

Saturday, October 9

Illinois Chamber of Commerce, 14th Annual Workers’ Compensation & Safety Conference.

OCTOBER

South East Chicago Commission, 3rd Annual SECC Regional Economic Development Symposium.

Thursday, October 21

Friday, October 1

Sunday, October 10

Chinese American Service League, Annual Gala.

CommunityHealth, All In Celebration.

Envision Unlimited, Envision Golf Classic.

National Ovarian Cancer Coalition, Annual Together in Teal Walk.

National Ovarian Cancer Coalition, Team Teal runs the Chicago Half Marathon.

National Ovarian Cancer Coalition, Teal Lights Cruise.

Chicago Zoological Society, Conservation Leadership Awards Dinner.

Casa Central, Annual Gala.

Alzheimer’s Association, Walk to End Alzheimer’s.

Leyden Family Service & Mental Health Center, Don’t Stop Believing.

March of Dimes, 2021 Construction & Transportation Awards.

PAWS Chicago, TEAM PAWS Chicago.

Mercy Home for Boys & Girls, 2021 Bank of America Chicago Marathon.

Monday, October 11-15

Current, Chicago Water Week 2021.

Wednesday, October 13

Saturday, October 2

Girls Inc. of Chicago, Strong Smart Bold Awards Fundraiser.

American Cancer Society, Discovery Ball 2021.

National Headaches Foundation, National Headache Foundation’s 35th Annual Gala.

South Suburban Family Shelter, Keeping Dreams Alive Gala.

Stories Matter Foundation, StoryStudio Writers Festival.

Thursday, October 14

Bright Promises Foundation, 2021 Awards.

Apparel Industry Board, Rev Up Chicago 2021.

YMCA Chicago, Annual Recognition Dinner.

Lynn Sage Breast Cancer Foundation, Virtual Fall Benefit.

North Branch Works, Annual Fall Fundraiser.

Saturday, October 23

Deeply Rooted Dance Theater, Roots & Wings.

YWCA Evanston/North Shore, YWomen Gala.

Friday, October 15

Sunday, October 24

North Shore Board of the Northwestern Settlement, An Evening Under The Stars.

Fox Valley Food for Health, Under the Harvest Moon.

Sunday, October 3

Have Dreams, Night of Dreams - 25th Anniversary Gala.

JDRF Illinois, JDRF One Walk.

Polished Pebbles Girls Mentoring Program, Every Girl is a CEO Conference.

CJE SeniorLife, Celebrate CJE.

FARE, Contains: Courage® Research Retreat.

Openlands, 2021 Conservation Leadership Award Ceremony.

Saturday, October 16

WINGS Program, WINGS 21st Annual Purple Tie Ball.

Donka, Race for Abilities.

Pioneer Center For Human Services, Empty Bowls Art Auction.

Tuesday, October 26

Chicago Scholars, 25th Anniversary Gala.

Wednesday, October 27

Female Strong, Young Entrepreneurs Academy (YEA!).

Grant Park Music Festival, Advocate for the Arts Awards Benefit.

Mount Carmel High School COCKTAILS ~ DINNER ~ AUCTION ~ PADDLE RAISE S E P T E M B E R 18 , 20 21 | 6:00 PM

HONORING

M a r t y a n d J u l i e H u g he s f o r t he i r commitment and passionate support.

Mar t y, a 1966 graduate of Mount Carmel High School, is the Chairman of HUB International and 2019 Crains Lifetime Achievemnt Award Winner.

T O

P020_023_CCB_20210621.indd 22

D O N A T E

G O

T O :

W W W . M C H S . O R G / C A R A V A N G A L A

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Thursday, October 28

National Kidney Foundation of Illinois, 36th Annual Gift of Life Gala.

October

Juvenile Protective Association, All in for Kids Virtual 5K. JDRF Illinois, 2021 JDRF Ride to Cure Diabetes.

Union League Boys & Girls Clubs, 44th Annual Gala.

Tuesday, November 9

Bulletin of the Atomic Scientists, 2021 Bulletin Annual Dinner.

Executive Service Corps, Philanthropy in 2022: Predictions and Preparations.

DECEMBER Wednesday, December 1

Illinois Chamber of Commerce, Illinois Chamber’s New Laws Forum 2021.

NOVEMBER

Thursday, November 11

La Rabida Children’s Hospital, Friends of La Rabida Awards Celebration.

Pioneer Center for Human Services, Pioneer Center 15th Annual Holiday Inspiration Luncheon.

Tuesday, November 2

Friday, November 12

PAWS Chicago, PAWS Chicago’s 20th Annual Fur Ball.

The Salvation Army, WBBM Salvation Army Good Neighbor Radiothon.

Wednesday, November 3

Thursday, November 18

Sunday, December 5

The Salvation Army, Starlighter.

YWCA Metropolitan Chicago, Leader Luncheon 2021: Be the Change!

Thursday, November 4

Friday, November 19-20

Hispanic Alliance for Career Enhancement, HACE Latino ERG Symposium.

Chicago 16 Inch Softball Hall of Fame, 25th Annual Hall of Fame Inductee Dinner.

North Suburban Legal Aid Clinic, 2021 Annual Meeting.

Saturday, November 20

FARE, College Food Service Summit.

DuPagePads, Wake Up Your Spirit Breakfast.

Garfield Park Conservatory Alliance, FLEUROTICA.

The American Cancer Society, Taste of Hope.

Friday, November 5

Illinois Chamber of Commerce, 2021 Women in Business Conference.

March of Dimes, Signature Chefs: Feeding Motherhood.

World Business, Chicago Consular Corps Gala.

Saturday, November 6

Chicago Zoological Society, Wines in the Wild.

St. Coletta’s of Illinois, St. Coletta’s Caritas Benefit.

P020_023_CCB_20210621.indd 23

Chicago United, Bridge Awards.

Beyond Hunger, Fall Benefit Concert.

Ecker Center for Behavioral Health, One Magical Evening.

Wednesday, November 24

Cornerstone Services Inc, The Champagne Luncheon.

Friday, December 3

Heartland Alliance, Annual Holiday Brunch: A Benefit for Heartland Alliance Health.

Thursday, December 9

Rebuilding Together Metro Chicago, Housewarming Party.

Saturday, December 11

Bernie’s Book Bank, Patrick Mannelly Award.

JDRF Illinois, One Dream Gala.

Sunday, December 12

Cantigny Park, USA Cycling National Cyclocross Championship.

WINGS Program, Sweet Home Chicago.

Saturday, November 27

South East Chicago Commission, Southside Shop Local Kick Off. Three Fires Council, BSA.

More information and events can be found on the 2021 Big Dates calendar online at ChicagoBusiness.com/BigDates

Tuesday, November 30

Chicago Scots, 176th Annual Saint Andrew’s Day Gala.

November

JDRF Illinois, National Diabetes Awareness Month.

Special note: Event information based on submissions provided to Crain’s Content Studio and have not been verified. Please visit the nonprofit website to get the most up to date information.

6/17/21 9:07 AM

24 JUNE 21, 2021 • CRAIN’S CHICAGO BUSINESS

PEOPLE ON THE MOVE

Advertising Section To place your listing, visit www.chicagobusiness.com/peoplemoves or, for more information, contact Debora Stein at 917.226.5470 / dstein@crain.com

ACCOUNTING

FINANCIAL SERVICES

LAW

MANUFACTURING

REAL ESTATE

BDO, Chicago

BMO Harris Bank, Chicago Peter Caligiuri has joined BMO Harris Bank as Head of Correspondent Banking, where he will lead BMO’s team that covers community and regional banks on a nationwide basis, providing banks with access to BMO’s capabilities in Fixed Income, Interest Rate Hedging, Foreign Exchange, Treasury Management Services and International Banking products and services. Caligiuri has over 30 years of experience in corporate and commercial banking. In his most recent role at another financial institution, he was focused on delivering broad product capabilities including credit, capital markets, derivatives, cash management, commercial card payments, trade finance and custody/trust services.

For more information, please visit www.bmoharris.com/correspondent

Gemini Builds It! & Showcase Acrylics, Elgin

Baum Realty Group, Chicago

BDO named Darin Kempke as Assurance Office Managing Partner for the Chicago market.

Kempke is responsible for overseeing the local and central region SEC assurance practice. With over 31 of experience, he will continue providing audit and corporate finance services to clients, with a focus on the manufacturing and distribution, energy, technology, life sciences and construction industries. As part of his new role, he will also accelerate BDO’s Chicago expansion.

Croke Fairchild Morgan & Beres, Chicago Jason Arnold joins Croke Fairchild Morgan & Beres as partner, focusing his practice on M&A, securities and compliance, corporate governance and business counseling. Jason has held inhouse counsel roles for Fortune 500 companies and served as outside counsel for both public and private companies. He has advised purchasers and sellers on company mergers and acquisitions, strategic investments and joint ventures ranging in size from $5M to over $3B. Jason will work in the firm’s Chicago office.

Gemini Builds It! & Showcase Acrylics welcomes Eric Maddux as their new General Manager. Eric brings over 15 years of leadership experience in the market research, installation and commercial project industries as well as consulting and purchasing experience. In his previous role, Eric managed over 300 employees as well as managed relationships with union contacts. He will oversee all P&L responsibilities and assume the role of operational leader for both Gemini and Showcase Acrylics.

BUSINESS ORGANIZATIONS Business Leadership Council, Chicago Cory Thames has joined the Business Leadership Council (BLC) as Chief Engagement Officer responsible for building and strengthening BLC’s internal and external stakeholder base. Thames brings to this role his unique experiences as a former Deputy Commissioner for Intergovernmental Affairs at the Chicago Department of Aviation and as a former Deputy Director of Community Engagement for the Obama Foundation. Thames, 33, a lifelong Chicagoan is a proud resident of the South Shore community.

CONSTRUCTION Consolidated Flooring of Chicago Chicago Consolidated Flooring of Chicago is pleased to welcome Jim Wilson as Director of Business Development. Jim is an accomplished business development and sales professional with over 20 years of experience in the commercial real estate industry. Jim is excited to utilize his vast knowledge, experience, and hunter-mentality to assist the sales team in gaining market share.

Skadden, Arps, Slate, Meagher & Flom LLP, Chicago

HUMAN RESOURCES Tandem Family of Companies, Westchester The Tandem Family of Companies welcomes Hugh LaRoche as CEO. Hugh possesses experience as a consummate business growth leader and a strong passion for creating amazing workplaces. As the CEO, he will oversee all operations including finance, sales & marketing, benefits brokerage, the employee assistance program, and all HR solutions. Hugh finds great satisfaction in aligning businesses of all sizes with effective and creative HR solutions. Welcome to the family, Hugh!

LAW CONSTRUCTION SERVICES Omni Ecosystems, Chicago Omni Ecosystems welcomes Kathleen Morro as Director of Operations, overseeing the Omni Construction and Omni Products teams. Providing collaborative leadership and effective management, Kathleen excels at creating a cooperative and effectual environment to ensure that project teams successfully meet the strategic and financial objectives of Omni Ecosystems’ clients and deliver the best possible sustainable outcomes.

LAW

Skadden is pleased to announce that Matea Bozja has been promoted to counsel.

Ms. Bozja represents clients in diverse real estate matters, with a specific focus on REIT-related transactions. Ms. Bozja’s practice includes property acquisitions and sales, joint venture formations, and financing and leasing transactions.

Her clients include institutional investors, buyers, sellers, landlords, operators and borrowers that own, lease, manage and finance various types of properties.

TECHNOLOGY Discovery Partners Institute, Chicago

NON-PROFIT Invest For Kids, Chicago

LAW Skadden, Arps, Slate, Meagher & Flom LLP, Chicago Skadden is pleased to announce that Amanda Brown has been promoted to counsel.

Ms. Brown represents a range of clients in federal and state court actions, including in securities, shareholder derivative, antitrust and breach of contract matters. She has experience advising clients in various stages of litigation, including the pleading phase, pretrial motion practice, discovery, trial preparation and settlement negotiations. She also advises clients in internal and government investigations.

Following a 17-year career producing & reporting on the restaurant scene for ABC7, 13-time James Beard Award-winning journalist Steve Dolinsky Dolinsky is working exclusively with Baum Realty Group as a Director and will focus on the hospitality, culinary/food & beverage arena, supporting brands with geographical expansion & assisting restaurateurs with site selection for new and Gallagher existing concepts.

Site selection guru & consummate deal maker, Kevin Gallagher, has joined Baum Realty Group as a Managing Director. Gallagher specializes in retail site selection for national tenants & developers, and in the sale & leasing of retail properties.

He also has significant experience advising national restaurant groups as well as medium and large box users.

Invest For Kids (IFK) welcomes Katie Hurley Wales as their new Executive Director. Katie brings nearly 20 years of nonprofit leadership and proven success in development, marketing, special events, advocacy, board management, programming, and strategic direction.

She joins IFK from the Harold E. Eisenberg Foundation, where she served as Executive Director for the last 11 years. Katie’s expertise and energy will advance IFK’s mission to serve Chicago-area youth from disadvantaged communities.

Discovery Partners Institute (DPI) is pleased to announce that Lupita Lopez and Prithviraj Pramanik have joined the DPI team. Lupita Lopez joins as the Events and Social Media Lopez Coordinator, where she is responsible for DPI’s social media posts, online and in person event support along with other communication efforts.

Prithviraj Pramanik joins the team as a visiting Pramanik PhD student through a 9-month Fulbright Scholarship where he is working in DPI’s R&D team and studies cost-effective urban air quality measurement techniques that can increase the spatial coverage of air quality monitors (AQMs) using multimodal sensing.

Chuhak & Tecson, P.C., Chicago Adam Beattie, litigator and member of the Condominium & Common Interest Community Association practice group, has been elevated to principal. His practice includes litigating breach of contract, internal business disputes, landlord and tenant disputes, commercial evictions, trust and trustee disputes, collection of assessments, and enforcement of common interest association declarations and rules.

Adam also provides general counsel to board members regarding their duties and obligations.

LAW Skadden, Arps, Slate, Meagher & Flom LLP, Chicago Skadden is pleased to announce that Jessica Schmiege has been promoted to counsel. Ms. Schmiege focuses on mergers and acquisitions, corporate governance and other corporate and securities matters. She has advised public and private companies on a variety of transactions, including mergers, stock and asset acquisitions, divestitures, cross-border transactions and reorganizations. Ms. Schmiege also advises clients regarding securities law compliance, disclosure issues and governance matters.

PHILANTHROPY Robert R. McCormick Foundation, Chicago The Robert R. McCormick Foundation recently appointed Kim Tyler as Chief Financial Officer.

Tyler will oversee the finance and information technology teams for the McCormick Foundation, which also includes Cantigny Park, its museums and Cantigny Golf. Tyler joins the McCormick Foundation with an established career in accounting, financial planning, data analytics, and operations with deep expertise in accounting controls, strategic planning, forecasting, and contract negotiation.

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

SPONSORED CONTENT

HEALTH CARE INNOVATION

IMPROVING THE PATIENT EXPERIENCE

While health care innovation accelerated over the last decade, the COVID-19 crisis presented unique opportunities for the U.S. health system to do it in real time. Telehealth, which providers adopted at an unprecedented rate, is just one example. Three health care leaders shared their insights with Crain’s Content Studio on the innovations that will change health care and medicine, helping physicians support patients and families everywhere.

How is your organization involved with health care innovation?

Dr. Steven J. Lester: Mayo Clinic has a long history of innovation and there are more examples of health care innovation than I could begin to outline here. For example, I’m the founder and have the privilege to be the chief medical officer of the Mayo Clinic and ASU MedTech Accelerator, which helps empower medical startups to better navigate challenges while bringing forward life-changing innovations. I’m also honored to be the medical director for our complex care program, which helps employers provide access to high-quality, cost-effective care for individuals with complex medical conditions. These are just a few of the programs in an evolving portfolio of programs and activities designed to enhance the innovation ecosystem at Mayo Clinic.

Rich Fahn: “Innovate or die” has become a reality for most businesses.

As an insurance broker, NFP provides best-in-class vendors to support clients’ goals. Not only do we evaluate hundreds of companies bringing new technology to the market, but our strategic corporate venture

milder issues before clinical care is needed. To support patients, we’ve found that it’s increasingly important to offer short wait times to schedule visits—within seven minutes with trained primary care physicians and within one to seven days with mental health specialists, with same-day appointments available. Finally, we continue to partner with innovative health plans and large employers across the country to implement virtual-first plan designs and offer virtual primary care to support their members, wherever and whenever they need care.

What’s the most exciting health trend or development you’re seeing?

Fahn: The intersection of technology and data has revolutionized digital tools such as apps, telemedicine, artificial intelligence, robotics, transparency and visibility—allowing consumers to make better, more informed health decisions. They no longer have to access care in person; they have information at their fingertips and can take control of their health needs, enabling better outcomes. Historically, consumers found it difficult to find information on the cost and quality of care,

RICH FAHN

VP - Corporate Benefits NFP rich.fahn@nfp.com 224-374-1540

receive a definitive diagnosis in our individualized medicine practice.

And in the world of oncology, 50% of our patients with advanced cancers found a sequencing-based druggable target—or simply stated, based on an understanding of a unique genetic code, we’re able to precisely define the best medication at the most appropriate dose for our patients.

STEVEN J. LESTER, MD

PRENTISS TAYLOR, MD, FACP

Consultant, Professor of Medicine Mayo Clinic mcccpi@mayo.edu 507-422-6102

VP - Medical Affairs Grand Rounds Health Doctor On Demand sales@doctorondemand.com

Taylor: The most exciting trend we’re seeing is an increased focus on diversity, equity and inclusion as it relates to health care. While this has always been a core part of our strategy, we’re seeing an increase in questions from employers and consultants about DEI initiatives.

Currently 43% of our providers are people of color and 20% identify

as LGBTQ+. Being able to provide affirmative, culturally competent care for all of our patients is a priority.

What innovations have you recently implemented?

Taylor: We’ve made monumental strides in bringing integrated care to patients in the comfort of their

“ . . . BASED ON AN UNDERSTANDING OF A UNIQUE GENETIC CODE, WE’RE ABLE TO PRECISELY DEFINE THE BEST MEDICATION AT THE MOST APPROPRIATE DOSE FOR OUR PATIENTS.” — DR. STEVEN J. LESTER, MAYO CLINIC capital arm, NFP Ventures, invests in early-stage benefitech and insurtech companies. The fund’s investment strategy combines a disciplined approach related to the “future of risk” to keep ahead of market trends and provide thought leadership to our industry. We’re at the forefront of innovation because our clients demand it.

Dr. Prentiss Taylor: At Grand Rounds Health and Doctor On Demand, we’ve fully integrated our mental health practice with our national medical practice. This means that providers can easily communicate between the practices, make internal referrals and drill down on improving “whole-person health.” We also added chat-based mental health coaching for addressing

P025_027_CCB_20210621.indd 25

putting individuals and businesses at a disadvantage and frequently resulting in higher costs and dangerous gaps in quality of care.

Lester: Imagine a new dawn for medicine where cancer is commonly intercepted, treatment of diseases is more precise and less toxic, prescribing medication is safer and the burden of inherited genetic disease is reduced. While once only imagined, this new dawn of medicine is becoming a reality and part of the promise of individualized medicine.

Our ability to decode the DNA that constitutes the human genome is accelerating our understanding of the causation of disease and helping to tailor patient-specific treatment plans.

For example, approximately 30% of patients on a diagnostic odyssey can

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6/14/21 9:20 AM

HEALTH CARE INNOVATION

IMPROVING THE PATIENT EXPERIENCE own homes. Coordinated medical and mental health video visits, home delivery of prescriptions and delivery of remote patient monitoring device kits are examples of solutions that give patients access to convenient care. We’re also committed to providing a continuous care experience—one that balances direct clinical support with tools to enable patients to effectively self-manage conditions.

Fahn: NFP Connect is a newly launched integrated, clientcentric digital platform to support and accelerate our digital transformation. It makes it easier for us to share best practices, enhance our efficiencies, aggregate data and streamline our systems across our entire enterprise.

One component is a proprietary COVID-19 cost-impact model tool that helps clients better prepare for the effects of the pandemic and make informed fiscal decisions.

It uses demographics, regional infection rates and cost of care data to estimate the financial impact of the pandemic across employers’ workforces. Another exciting component is the ability to host an interactive open enrollment where

employees are virtually educated, engaged and enabled through the process. It provides a personal experience with access to deeper insights, empowering clients to improve employee education.

Lester: During the pandemic, while cases were surging, we were able to use electronic intensive care unit remote monitoring technology to support staff and patients at a New York City hospital. This allowed our physicians to participate in virtual rounds, manage patient medications and ventilators—and it provided physicians on the ground with more time to care for more patients. Additionally, our work with technology company Medically Home powered a new advanced home care model so patients can receive hospital-level care at home—an important innovation during the pandemic.

What other innovations are on the horizon for your organization?

Lester: We’re currently engaging with the digital revolution and working to make care nonlinear and patient directed. By developing

automated provider and digital diagnostic platforms, we aim to streamline care for patients and provide high-quality care more conveniently, and at a lower price. Additionally, by harnessing the vast potential of data from wearable devices, we can use remote diagnostics to predict adverse events before they happen and respond more quickly to public health crises.

results of health care innovation is the translation of research into bedside care for patients. When you can help a patient in a way that didn’t exist yesterday, it’s incredibly rewarding.

Taylor: We lean on our clients and market feedback to drive innovations in care delivery. Given the increased demand for mental health care

“BEING ABLE TO PROVIDE AFFIRMATIVE, CULTURALLY COMPETENT CARE FOR ALL OF OUR PATIENTS IS A PRIORITY.” — DR. PRENTISS TAYLOR, GRAND ROUNDS HEALTH AND DOCTOR ON DEMAND

Taylor: Doctor On Demand recently merged with Grand Rounds Health.

Together we’re delivering a first-ofits-kind virtual entry point for Total Virtual CareTM. Integrating medical and mental health care with clinical navigation means we’re innovating the ways that patients find the right care at the right time. We’ll continue to create an experience that’s seamless, personalized and connected—ensuring a better care experience, better integration and better outcomes.

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Enhance your medical plan with the Mayo Clinic Complex Care Program.

Learn more at mayoclinic.org/complex-care-program Phone: 507-422-6102 | Email: MCCCPI@mayo.edu

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P025_027_CCB_20210621.indd 26

Fahn: We plan to continue aggregating data from all areas of our business, pulling in third-party data in real time, and using that data to interact with employees through mobile in a personalized way. For us, innovation is about ideation that connects problems with solutions, positively impacts people and helps clients be even more well-covered.

Our approach is collaborative,

inclusive and purpose-driven. While many people equate innovation solely to technology, true innovation is about creating value in our everyday lives—by solving problems, enhancing convenience and reducing costs.

How is your organization staying current, given that new solutions are becoming available on an almost daily basis?

Fahn: As an insurance/employee benefits consultant, we’re continually evaluating new solutions to ensure that we’re providing the best available plans, programs and services to solve our clients’ most significant challenges. Our innovation lab and venture capital arms have helped us not only analyze data, evaluate new solutions and address challenges but better position our organization to support our clients moving forward.

Our innovation lab consists of a team supported by associates who interact with new technology vendors to solve problems and reduce costs. We initiate and advance conversations to identify the most significant challenges, create connections to facilitate collaborative ideation and partner with companies that provide forward-thinking solutions.

Lester: With more than 71,000 people on staff, including more than 7,000 physicians and scientists, we’re driving innovation through programs such as the Mayo Clinic Platform, Center for Digital Health, business accelerators and government and industry collaborations. Plus, we encourage our staff to go out and learn from others within health care and other industries, because some of the best ideas come from other sectors.

Also, we’re an academic medical institution and play a significant role in sharing knowledge through our College of Medicine and Science that educated 135,000 learners in 2020. One of the most satisfying

access, we developed a chat-based coaching solution to address issues like burnout, stress, emotion management, career challenges, motivation and goal setting. The convenient, 24/7 access to providers via chat empowers patients to develop self-coping skills, thus mitigating the risk of subclinical issues before they become costly clinical conditions. It also enables early identification of health issues so that patients can be referred to higher levels of care when necessary.

What effect has the pandemic had on health care innovation?

Taylor: Within the virtual health care space, COVID-19 has drastically increased the demand for and use of telehealth services.

Patients are becoming more and more comfortable with virtual-first solutions like ours to address health care concerns. It’s worth noting that the increased use of telehealth isn’t just for urgent care or COVID19-related concerns. We examined our data from April 2020 and saw a meaningful increase in visits for chronic conditions and behavioral health needs compared to the same time period in 2019.

Fahn: The pandemic accelerated the need for our company and our clients to innovate and adapt— virtual care and enhanced mental health programs are two examples.

Before the pandemic, many providers weren’t fully equipped to provide virtual care, nor did all patients feel comfortable with receiving care virtually. Although some may have been initially apprehensive about this “new” way of care, they’ve accepted this necessary solution. Virtual care and other changes fueled by both necessity and innovation will continue to be essential to provide patients with the best care possible.

6/15/21 12:13 PM

SPONSORED CONTENT How is health care innovation impacting health equity?

Taylor: Virtual care can be strategically leveraged to address health equity and social determinants of health for underserved populations. We’ve improved access to primary and mental health care in geographic areas that experience provider shortages, especially for rural populations. We’ve also found that it’s important to focus on the diversity of a practice, and to train providers on delivering culturally affirmative care. Studies have shown that patients of color fare better when they’re seen by a provider from a similar background. Another way that technology is positively impacting health equity is the use of video for providers to see inside patients’ homes. Video visits allow providers to glean key information about their patients’ living environment—like food, housing insecurity or other social contexts—that may affect health outcomes.

Lester: Health disparities in our communities have been magnified during the pandemic. Everyone deserves the ability to live their best life, and health and wellness is a key component of that. We’re investing $100 million over the next 10 years to address health disparities, eliminate racism and advance equity and inclusion on our campuses.

From recruitment and training to diversifying clinical studies and deploying digital and telehealth technologies, we’re innovating to meet those goals.

What are some other challenges to innovating in today’s environment?

Fahn: There’s an immense amount of data available to all health care stakeholders, including insurance companies, health care providers, IT companies and more. One challenge is using that information to solve for competing goals such as keeping costs down, curing diseases and extending lifespans while improving the quality of life. Innovators must act strategically and create solutions that benefit and further progress the health care industry as a whole so we can keep moving forward together.

Lester: One of the biggest areas of opportunity is in creating a culture and environment where innovation can thrive, and it empowers us to bring new products and services to the market. We’re fortunate to have a strong culture of innovation. We empower our staff to create, and we provide resources to facilitate their creativity. Then, we connect these ideas with investors, entrepreneurs and business collaborators to bring them to life. This connection to others

is critical because it gives us insight into the ever-changing needs of individuals and organizations.

How can employers help their employees engage with their overall health?

Taylor: Employers should provide benefits such as virtual services that make it easy for employees to focus on things like primary care with care team support, along with mental health. Employers can also encourage employee participation in their health benefits by lowering the copay for key services that have a meaningful impact on overall health and wellbeing. Lastly, employers should evaluate their corporate culture to prioritize employee health, from management training and resources around mental health to looking at how employees are using—or not using—available paid time off.

Fahn: Employees are demanding bestin-class, personalized, accessible health care that’s delivered in a way that’s convenient and easy to understand.

Therefore, employers need to provide targeted, multi-faceted solutions to manage their diverse employee populations. They need to embrace innovative tools and technologies to keep employees engaged.

Lester: Employers are starting to partner with organizations like us to create innovative solutions that remove barriers found in the health care industry. For example, we work with employers and their trusted payer partners to design programs that enhance health benefits for employees’ serious and complex needs. The programs can be designed with a variety of optional benefits, and many barriers to care—like travel, lodging costs and coordination—can be covered by the employer. By providing these solutions, employees receive highquality care in a timely manner and employers see cost savings from accurate diagnoses and treatments for their employees.

P025_027_CCB_20210621.indd 27

RICH FAHN is vice president – corporate benefits for NFP, an insurance broker and consulting firm that provides employee benefits, property and casualty, retirement and individual private client solutions. He has more than 25 years of experience in the health and welfare benefits industry, including prior roles at various insurance companies and Excell Benefit Group, an independent insurance brokerage that he founded. He has been featured on national TV broadcasts, quoted in numerous publications and frequently presents at industry events. He is a chartered benefit consultant (CBC) and a member of the National Association of Health Underwriters.

STEVEN J. LESTER, MD, is a consultant and professor of medicine at Mayo Clinic, a nonprofit worldwide leader in medical care, research and education. He joined Mayo in 1999, serving as the inaugural associate chair of medicine for innovation and as associate chair of medicine for research within the department of internal medicine.

He currently serves as associate medical director for the departments of business development and contracting and payer relations where he helps form collaborations between employers, trusted payer partners and Mayo Clinic through the Mayo Clinic Complex Care Program.

PRENTISS TAYLOR, MD, FACP, is vice president of medical affairs at Grand Rounds Health and Doctor On Demand, a virtual care provider.

Previously, he was medical director at Advocate Aurora Health Care, launching its patient-centered medical homes sites. He is a graduate of Harvard Medical School and Northwestern University’s Kellogg School of Management, and is a fellow of the American College of Physicians and the American College of Preventive Medicine. His peers have named him, multiple times, as a “top doctor” in Chicago Magazine and US News & World Report.

Fahn: In the last few years, there’s been a tremendous amount of money invested by private equity firms, venture capitalists and companies not historically involved in the health care space, such as Google, Amazon and

Tesla. We’re still in the early stages of investments, but there have been significant enhancements in health care delivery and disease management. While this will result in improved quality of life and extended lives, health care

costs will rise in direct relation to more complex care and the investments required. I believe these costs will eventually level out in the long term as research and technology improves efficiency and effectiveness of care.

What’s your short- and longterm outlook for health care innovation?

Lester: We’re bullish on the shortand long-term outlook for health care innovation. We invest in the brightest talent, give them state-ofthe-art facilities and support them with the infrastructure to make their ideas a reality. Our driving focus at the center of it all is that the needs of the patient come first. Whether we’re helping employers give their staff access to our care through our complex care program or developing the next medical breakthrough, everything we do is centered on doing what’s right for the patient.

“ . . . TRUE INNOVATION IS ABOUT CREATING VALUE IN OUR EVERYDAY LIVES—BY SOLVING PROBLEMS, ENHANCING CONVENIENCE AND REDUCING COSTS.” — RICH FAHN, NFP

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Demand Better.

Because a better healthcare experience is better for your employees and your business.

To learn more about virtual care, visit doctorondemand.com. ©2021 Doctor On Demand, Inc. All rights reserved. Doctor On Demand and the Doctor On Demand logo are trademarks of Doctor On Demand, Inc. and may not be used without written permission.

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Insight CEO Dr. Jawad Shah, right, and hospital CEO Atif Bawahab.

Insight has a plan to stabilize Mercy Hospital MERCY from Page 1 Trinity has said the hospital was generating monthly operating losses of $4 million and that the aging facility would require at least $100 million of capital investments in the next five years “to maintain a safe and sustainable acute care environment.” Trinity sought approval to close Mercy just as Insight stepped up.

With the acquisition, Insight took responsibility for Mercy’s survival— and the continued availability of important health care services in the community it serves. Promising to invest $50 million in Mercy within the next two years, Shah expressed confidence in his ability to stabilize the hospital’s finances.

“Having a fresh set of eyes, we definitely would do a few things a little bit differently (than Trinity) in terms of how to run the operational side, as well as the facility, to make it as efficient as we possibly can,” Shah says.

NEW LEADER

To run Mercy, now called Insight Hospital & Medical Center, he appointed Atif Bawahab, who doesn’t have experience running a full-service, acute care hospital. In addition to that role, Bawahab, 33, will continue serving as the parent company’s chief strategy officer and CEO of its surgical hospital near Detroit.

Bawahab doesn’t have the “experience you would expect to do a big turnaround in a place like Mercy,” says Tim Classen, an associate professor of economics at Loyola University Chicago’s Quinlan School of Business. “Health care needs new ideas, new inspirations, new innovations and new leadership strategies. But that’s a big stretch to come into a facility that’s been struggling so hard and make it profitable.”

Bawahab says he’s feeling the pressure, but not because of his age or experience. “There’s a lot to do in terms of stabilizing (the hospital), but we really do see this as a tremendous opportunity just to show what we can provide to this community,” he says.

For now, Insight is focused on

identifying opportunities to beef up lucrative service lines that can help prop up critical, money-losing departments like the emergency room, as well as labor and delivery.

Take a service line like stroke, for example, Shah says: “On one hand it helps the community tremendously. At the same time it’s very beneficial for the hospital financially. When you see these sorts of alignments and opportunities to implement them, you can see why we’re confident the hospital will do well.”

Attracting privately insured patients for profitable surgeries will be difficult for Mercy, which competes with nearby top-ranked academic hospitals, including University of Chicago Medical Center, Northwestern Memorial Hospital, and Rush University Medical Center.

Even clinics in Mercy’s neighborhood have affiliations with larger hospitals, which will make it hard to get referrals for the lucrative procedures that Shah hopes will keep the hospital afloat.

“They’re not just going to change the payer mix,” Classen says. “It has to be that they’re doing certain procedures in the city that are attractive to private payers like Blue Cross, to attract the patient volumes into those higher margin services.”

Negotiating with vendors is one area where Shah says he sees a big opportunity for savings.

“There’s tremendous waste in hospitals,” Shah says, referencing a time that Insight negotiated a $27,000 discount on a device used in spinal fusion procedures at its Michigan hospital.

Still, as part of nearly $19 billion-revenue Trinity, a Livonia, Mich.-based chain that also owns three-hospital Loyola Medicine across town, Mercy already had access to deep financial resources and economies of scale.

The hospital posted net income of $4 million in fiscal 2020, compared with a net loss of $36 million a year earlier, according to Trinity’s financial filings. Trinity invested just $6.9 million into the hospital in 2019, according to the latest state data.

Smaller hospitals tend to make

more aggressive operating decisions than large nonprofit systems around medical coding to get higher reimbursements from payers, for example, says Jordan Shields, managing director at Chicago-based investment banking firm Juniper Advisory.

“You should expect that (a large health system is) going to make different decisions than an organization that is small, very agile, new to acute care—and that nobody has ever heard of, so there’s no reputational risk,” Shields says.

To operate as a nonprofit, the Chicago hospital sits under Shah’s Firdaus Foundation, an Islamic charitable organization he launched nearly a decade ago. Firdaus, which means paradise in Arabic, aims to “make sure that good work is housed and protected in a way that it can last longer than anyone’s life,” Shah says.

OTHER REVENUE

In addition to his medical practice, Shah’s revenue-generating businesses include leasing space at his biomedical technology campus, renting out the Insight & Conference Center auditorium and offering management and consulting services. The company also houses a health startup incubator with two portfolio companies, one of which is run by his 19-year-old daughter.

Shah has a 5 percent ownership stake in private equity-backed Pontiac General Hospital, which in 2016 came under fire for accepting a $400,000 payment in exchange for a residency program slot. An Insight representative says in a statement that Shah now has “zero involvement” with the facility and that his “past involvement was very limited and he was not involved in any alleged wrongdoing as it pertains to EEOC complaints against Pontiac General executive leadership.”

While Insight is very aggressive when it comes to growth, Shah says the firm doesn’t carry any debt.

“I don’t want to risk other peoples’ money,” Shah says. “For me, if the only one I’m hurting is myself, then it’s easy to take risks.”

6/18/21 2:52 PM

CRAIN’S CHICAGO BUSINESS • JUNE 21, 2021 29

White Claw looks to restaurants and bars for growth as others expand in seltzer Brands, worked with co-packers in Tennessee and New Jersey to can White Claw before it opened two of its own breweries in Arizona and New Jersey last year.

Its third, in South Carolina, is set to start production in September. The additional capacity will give White Claw the output it needs to expand from its existing stronghold in retail stores into bars, restaurants, concert venues and sports arenas. White Claw also plans to ramp up new product rollouts.

“We’ve been leaving cases on the table because we know we haven’t been able to meet demand,” says John Shea, chief marketing officer for parent company Mark Anthony Brands. “Now that we don’t have those same types of constraints, we can open it up and see how big the brand can actually be.”

Shea won’t disclose how much capacity White Claw has added, how much it’s invested in new breweries or sales figures for the company. Mark Anthony Brands invested about $250 million into its Arizona facility and was on track to do $4 billion in revenue in 2020, according to news release from the city of Glendale, Ariz., announcing the facility. Other reports indicate the company invested $400 million into the South Carolina facility.

In the past, capacity constraints made it difficult for White Claw to keep retail shelves stocked, let alone supply new outlets or expand offerings. That created openings for competitors like Truly. New product rollouts have helped the No. 2 brand in the category boost its market share to 28 percent from 22 percent

in the past year.

“When you’re the biggest dog in town, every little dog is going to start taking nips out of you,” says beverage industry consultant Bump Williams.

“How do you stymie or slow that promiscuous shopper from going out and trying everything that is out there in the marketplace?”

White Claw has launched several new products this year, including 18– and 24-packs, White Claw Iced Tea and White Claw Surge, which has 8 percent alcohol in a single can compared to 5 percent in regular White Claws. Variety packs are also big sellers for the brand, Shea says.

It had two on the market and recently launched a third, which features new flavors such as strawberry and pineapple.

White Claw is also looking to a frontier largely untapped by hard seltzers: bars and restaurants.

Shea won’t say how much of the company’s sales are from such venues, but he did say it was a “very low number.” In the past year, hard seltzer sales at eating and drinking establishments were $987 million, down about 34 percent from almost $1.5 billion the year prior, according to Nielsen data. The pandemic stymied hard seltzers’ progression onto bar and restaurant menus, says Danelle Kosmal, vice president of Nielsen’s beverage alcohol practice.

“Now that we’re in the recovery phase and everything’s opening up, there’s so much upside for seltzer in” those types of venues, she says.

STRONG CONNECTIONS

Getting into more bars and restaurants requires strong distribution networks. White Claw has those relationships in the retail

HARD SELTZER, HARD SALES Hard seltzer sales growth is slowing as big-name competitors enter the market, but experts say there are still plenty of customers to win over.

HARD SELTZER SALES Retail (off premise)

$2.7 billion $755.7 million

With competition getting more fierce, White Claw’s market share in hard seltzer has plunged since last year from 55 percent to 42 percent. world, says Jake Bolling, co-founder and CEO of Skupos, a software platform for convenience stores.

But so do large competitors like Anheuser-Busch, which makes the No. 3 hard seltzer in the category, Bud Light Seltzer, with about 8.4 percent market share.

Bolling says Bud Light captured some market share from White Claw in convenience stores when it launched its hard seltzer. It evened out, but the example illustrates the power of a strong distribution network. Big beverage companies already have beer on tap and other products in bars and restaurants, and they can more seamlessly get those businesses to carry additional offerings, experts say.

Competition is heating up as hard seltzer’s intense growth

discussed it, there were a lot of unknowns. I think most questions have been answered.”

Roselle and Glen Ellyn are reconsidering bans after voters backed the idea in referendums.

Elmhurst is likely to revisit its prohibition. Lake County, which had a one-year moratorium on recreational weed, recently decided to allow sales, cultivation and manufacturing in unincorporated areas.

It’s another sign of legal weed gaining wider mainstream acceptance as controversy gives way to economic reality. Marijuana sales are an enticing source of tax revenue, especially as municipalities try to dig out from the pandemic.

‘THE SKY HASN’T FALLEN’

A number of suburbs banned sales of recreational marijuana in the months leading up to the start of legalized pot in January 2020. But residents in many communities, such as Naperville and Wilmette, have voted to allow weed sales in recent elections.

“It’s gone from the scourge of civilization to a no-brainer,” says Stewart Weiss, a partner at Elrod Friedman who serves as general counsel for several suburbs. “People have gotten used to these facilities. The sky hasn’t fallen; revenue

P029_CCB_20210621.indd 29

has been collected.”

Cook County, which taxes marijuana sales in Chicago and other suburbs, has rung up $6.8 million in weed revenue since October.

Chicago, which levies its own tax, has pulled in $2.8 million, according to the Illinois Department of Revenue. It doesn’t disclose figures for other municipalities.

Municipalities and counties can charge a sales tax of up to 3 percent on weed, which means a suburban pot shop can generate $500,000 to $750,000 in tax revenue annually.

Even using a more conservative estimate of $300,000 a year, Patel says “that’s 4 to 5 percent of our gross sales tax revenue, which is a big number. It’s the equivalent of a car dealer.”

Lincolnwood’s tax revenue peaked at $8 million prior to the recession and rebounded to about $7 million before the coronavirus pandemic hit. “COVID affected us,” he says.

The suburb recently joined neighboring communities in adopting a tax on package liquor sales, which should produce $250,000 a year, or about what a cannabis shop might produce, Patel says. It’s also reconsidering its ban on video gambling.

“The tax revenue could be significant,” says Elmhurst Mayor Scott Levin, who was elected in April. “I

suspect in the next year or so, we’ll at least look into it and say, ‘What’s been the experience of other communities?’ It doesn’t mean we will or we won’t, but there are enough reasons to look at it.”

TEMPTATION

In Naperville, which reversed course and dropped its weed ban last year after voters approved a referendum, marijuana taxes could rival what the city gets from its slice of the state sales tax from its downtown retail district, Mayor Steve Chirico predicts. The City Council limited the number of dispensaries to three but could increase it if new licensees want to locate there. “If we wanted to expand, we could,” he says.

Some communities aren’t willing to change their stances on weed, even as neighboring communities enjoy the fiscal benefits.

Oak Brook isn’t reconsidering, says Village President Gopal Lalmalani.

“While the tax revenue is tempting, especially as evidenced by the positive tax experience of those towns that have welcomed dispensaries, I think the overall sentiment of our community remains against it,” adds Larry Herman, a newly elected village board member.

Legalized marijuana is still in its infancy, with just 110 dispensaries statewide. The lack of retail outlets

$1.5 billion

$290 million

2019

Marijuana taxes tempt more Chicago suburbs WEED from Page 3

Bar/restaurant/venue sales (on premise) $4.6 billion

WHITE CLAW

WHITE CLAW from Page 3

2020

2021

2019

$987.4 million

2020

2021

CHANGE IN SALES FROM PREVIOUS YEAR Retail (off premise)

Bar/restaurant/venue sales (on premise)

240.0%

70.8%

-34.0%

Hard seltzer

300.0

Hard seltzer

160.0

400.0%

In

200.0

3.6%

80.0 0.0

Total beer 2019

Source: Nielsen

2020

Total beer

100.0 0.0 2019

2021

-55.7%

2020

2021

Note: Previous year change for retail sales is from June. For on premise, the change is from April of the previous year.

starts to cool. Retail sales growth slowed to 70.8 percent last year from 252.9 percent growth the year prior, according to Nielsen. Outsized growth in 2020 was in part an anomaly driven by customers stocking up during lockdowns. But 2021 growth also is down sharply from the 189.6 percent rise over the same time period two years ago, signaling a longer-term slowdown as the industry begins to mature.

Molson Coors, Constellation Brands and Anheuser-Busch— which all have seltzers among the

top 10 in the market—aren’t just trying to steal customers from White Claw and Truly, Johnson says. They’re trying to win over beer, wine and liquor drinkers or get customers to reach for their products during certain occasions, like picnics or concerts.

“The reason everyone is entering this category is not because they think it’s going to be a fight-to-thedeath blood match,” Johnson says.

“It’s because they think there’s a lot of white space there to bring new consumers into the category.”

THE SPOILS OF WEED Cities and counties can collect taxes on marijuana sales. Here’s the take so far for Cook County and the city of Chicago. (Cook County tax also applies to Chicago sales.)

Chicago MONTHLY REVENUE Cook County $1 million 0.8 0.6 0.4 0.2 0.0

Oct.

Nov.

Dec.

Jan.

Feb

Mar.

Apr.

May

June

Source: Illinois Department of Revenue

has been cited as a limiting factor on overall sales. With 185 new retail licenses expected to be issued this year, it’s not expected to dilute sales, thus tax revenue, generated by at current stores.

“Once the number of cannabis stores reaches the saturation point, revenues and growth will, indeed, be expected to level off on a perstore basis, a phenomenon we’ve seen take place already in more mature adult-use markets like Oregon,” says Jamie Schau, research director at Brightfield Group, a Chicago-based cannabis research firm. “But 100-plus new licenses will get Illinois nowhere near the saturation point.”

Even with 185 new licenses, Illi-

nois will have one dispensary per 57,000 residents, compared with one dispensary for about 10,000 residents in Oregon, she estimates.

In Colorado, one of the nation’s oldest legal-marijuana markets, sales per dispensary have tripled even as the number of stores have nearly doubled since 2014, according to New Frontier Data, a research firm based in Washington, D.C. Illinois lurched into recreational cannabis last year before supply or many new retail outlets could open, which limited sales. New Frontier forecasts that recreational marijuana sales in Illinois will roughly double this year to $1.4 billion.

6/18/21 4:19 PM

30 JUNE 21, 2021 • CRAIN’S CHICAGO BUSINESS

Caterpillar HQ could set 16-year high for a suburban sale The owner of the Deerfield property is hunting for a buyer to make a big bet on the future of workspaces The investment firm that got Caterpillar to move its headquarters to Deerfield has put the heavy equipment maker’s north suburban home up for sale, lining up what could be the priciest suburban Chicago office deal since before the Great Recession.

A venture of Charlotte, N.C.based investor Barings has hired the Chicago office of Eastdil Secured to market the Corporate 500 office complex at 500-540 Lake Cook Road, according to a flyer.

It’s unclear whether there is an asking price for the four-building campus just north of the Cook County border, but sources familiar with the offering estimated the property will fetch bids between $180 million and $200 million.

If Barings can find a buyer in that range, it would mark a substantial gain from the $154 million that one of the firm’s subsidiaries paid for the 696,770-square-foot complex in 2015, according to Lake County property records. The company financed that acquisition with a $77 million mortgage, records show.

If the property trades for $188 million or more, it would be the

highest price paid for a suburban Chicago office property since 2005, when the 150-acre former AT&T campus in Hoffman Estates was sold for more than $338 million, according to research firm Real Capital Analytics. Tellabs’ Naperville headquarters sold for just under $188 million in a 2014 sale-leaseback.

OFFICE BIDDERS

Barings will need to find a buyer looking for a major bet on the future of suburban offices coming out of the COVID-19 pandemic, which has pushed many companies to rethink their office needs.

Some investors argue the crisis has bolstered high-quality suburban offices by accelerating the pace of millennials moving to the suburbs, which could push more companies to open suburban offices to attract talent. That would be a sharp reversal from the last several years of the pre-pandemic era, during which corporations flocked from the suburbs to downtown offices in pursuit of young, mostly urban-dwelling workers in a tight labor market.

But it’s still unclear how much wind suburban landlords will have in their sails. Companies adjusting

COSTAR GROUP

BY DANNY ECKER

If the Corporate 500 complex in Deerfield trades for $188 million, it would be the highest price paid for a suburban Chicago office property since 2005. to life with remote workers have been drastically cutting back or trying to sublease their workspace, pushing the suburban office vacancy rate to a record high 25.5 percent at the end of March, according to Jones Lang LaSalle.

Corporate 500 proved its appeal to major tenants before the pandemic when Barings lured Caterpillar’s corporate headquarters from Peoria to the property in 2017. The company signed on to move into roughly 100,000 square feet that was about to be vacated by Beam Suntory, which was moving its headquarters to theMart downtown.

The complex today is 90 percent leased, with no tenant occupying more than 17 percent of the property, according to the marketing flyer. The campus houses the corporate headquarters for 17 tenants, including home and security products maker Fortune Brands. The property has a weighted average lease term of just under five years, a measure of tenants’ remaining lease commitments to the property.

In addition to its leasing efforts, Barings spent more than $7 million on capital improvements to the property, sources say, including adding a fitness center

and outdoor amenity spaces for tenants on the 31-acre campus. A Barings spokeswoman didn’t respond to a request for comment.

Few suburban office properties have traded during the pandemic as buyers and sellers have tried to gauge the rents buildings will command moving forward. One of the only multi-tenant office properties in the northern suburbs sold over the past year was next door to Corporate 500 at 570 Lake Cook Road, where Chicago-based BA Investment Advisors paid $16 million in December for the five-story building.

A SUPPLEMENT OF CRAIN’S CHICAGO BUSINESS

The MAKING IT guide will connect Chicago area students, parents and career counselors with employers searching for skilled trade talent and offering rewarding careers.

Learn how to get in front of your future workforce.

Contact Sarah Chow at Schow@crain.com or 312-280-3172

P030_CCB_20210621.indd 30

6/18/21 3:18 PM

CRAIN’S CHICAGO BUSINESS • JUNE 21, 2021 31

A Kenwood beauty brought back to life The rehabber who has just completed a complete overhaul of this 19th-century house on Kimbark Avenue is putting it on the market for $3.8 million BY DENNIS RODKIN allowed “was the only thing that kept it standing,” he says.

The house had windows on the exterior that had been covered over inside, updates that had lowered some ceilings, and four tons of unused brick chimney barely supported from below. “The turret was leaning,” Baggetto says.

Two years later, the six-bedroom, 5,270-square-foot house is almost entirely new, yet faithful to its 1890s origins and its neighbors, which are all of similar vintage. Baggetto is putting it on the market, listed with Susan O’Connor Davis of Berkshire Hathaway HomeServices Chicago.

The asking price is $3.8 million.

MORE PHOTOS ONLINE: ChicagoBusiness.com/residential-real-estate

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

P031_CCB_20210621.indd 31

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

VHT STUDIOS PHOTOS

VINCE BAGGETTO has been designing kitchens for more than 30 years professionally and occasionally rehabbing houses for fun. When he spotted a 19th-century house in Kenwood that was sorely in need of revitalization, he knew it would start with the kitchen.

The house, on a pretty block of Kimbark Avenue, “would need a gourmet kitchen,” Baggetto says, to complete the overdue 21st-century transition he had in mind.

When Baggetto bought the house in May 2019, “it was collapsing in on itself. Rotting timbers, and everything we touched disintegrated.” Its location in a landmark district where demolition is not

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6/18/21 3:16 PM

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