Crain's Chicago Business by crainschicago

DISCOVER: Stock falls on news of new student loan probe and buyback halt. PAGE 3

HINZ: Lightfoot’s re-election path is looking easier. PAGE 2

CHICAGOBUSINESS.COM | JULY 25, 2022 | $3.50

TWILIGHT FOR THE TOWER

With companies cutting back on space as remote work rises, developers wonder if the city has seen its last tall office tower

COSTAR GROPU PHOTOS

hicago spent well over a century earning its reputation as a global skyscraper capital. From early feats of design like the Monadnock Building to renowned structures such as Willis Tower, the former John Hancock Center and Aon Center, soaring office towers have defined the city’s identity for generations as a muscular hub of midcontinent commerce and pioneering architecture. Now developers are sensing that era may be over. That was the signal sent last month by veteran office developer John Buck, who redrew much of downtown with skyscrapers over the past 40 years. After spending the first half of the COVID-19 pandemic unsuccessfully trying to get big companies to anchor a 60-story office tower in the West Loop, Buck finally scrapped the idea. “That was just a little too ambitious,” he says of his design for a 1.5 millionsquare-foot high-rise at 655 W. Madison St., which would have been the tallest new office building in the city since 1990. His new approach: build a pair of shorter, connected office buildings in phases, boosting his chances of finding tenants to

Chicago’s skyline is well known for office skyscrapers like Willis Tower (from the left), the former John Hancock tower at 875 North Michigan Avenue, 150 N. Riverside Plaza and the Aon Center.

Hurting for nurses, hospitals lower the bar Maintaining care standards will be a challenge as hiring criteria slip BY KATHERINE DAVIS With a nurse shortage plaguing the health care sector, Chicago hospitals are easing hiring standards, sometimes accepting associate degrees or less, rather than the previously preferred bachelor’s degrees, as they work to prop up shrinking nursing teams. Some of Chicago’s largest hospital

chains, including the University of Chicago Medicine, Advocate Aurora Health and Sinai Chicago, are among those shifting hiring practices. “It is a pervasive trend that we are seeing across the country,” says Therese Fitzpatrick, a senior vice president at Chicago health care consultancy Kaufman Hall & See NURSES on Page 20

BY DANNY ECKER

See TOWERS on Page 18

ILLINOIS HOSPITALS STEADILY LOSE WORKERS Since the COVID-19 pandemic hit the U.S. in March 2020, thousands of local hospital workers, including nurses, have left their jobs. The shrinking talent pool is making hospital reassess how and who they hire to keep operations running. 240,000 238,000 236,000 234,000 232,000 230,000 Jan. 2020

May 2020

Sept. 2020

Jan. 2021

May 2021

Sept. 2021

Jan. 2022

May 2022

Source: Bureau of Labor Statistics

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DOUBEK

LARGEST BANKS

How to make filling official vacancies more democratic. PAGE 2

This year’s list saw a shakeup due to some local mergers. PAGE 7

7/22/22 3:56 PM

2 JULY 25, 2022 • CRAIN’S CHICAGO BUSINESS

Summertime, and Lightfoot’s path looks easier

been for awhile now. Lori Lightfoot ought to be in political trouble. She is in some political trouble. But her prospects to survive it all continue to improve. She even can point to what now appears to be a late but real turnaround in the city’s crime numbers, with total shooting incidents down 19% year to date as of July 22, though still up 30% compared to pre-pandemic 2019. The best news for Lightfoot is that the really big names, with instant name recWHILE MUCH OF THE REST OF THE folks ognition and guaranteed financial backing, aren’t in the POTENTIAL FIELD CONTINUES contest and don’t look like TO DITHER, LIGHTFOOT HAS they will get in. Like U.S. Rep. Mike Quigley, D-Chicago. Or STEPPED UP HER GAME. former U.S. Transportation Secretary Arne Duncan, though some business leaders election contests—in this case, are still actively wooing him. Or for mayor of Chicago. Potential former Deputy Gov. Dan Hynes, candidates who don’t get out of who has told lots of people lately the box by early September—and that he’s quite happy in the private don’t have a campaign war chest sector. The lesser-known Ald. the size of Rahm Emanuel’s— Brian Hopkins, 2nd, has a similar probably aren’t running. appeal but is running out of time So, where does that leave the to make a move. race for mayor? About where it has ate summer is the time when many of us head for the hills—or, depending on your preference and pocketbook, the beach, Rome and London, or your Uncle Joe’s summer place with good fishing—for a nice vacation. In Chicago, the weeks leading up to Labor Day represent something else: the occasion to fish or cut bait not on tonight’s dinner, but on looming municipal

Some think ex-Chicago Public Schools CEO Paul Vallas has a lane—moderate conservative voice of reason—into a runoff election, with neither Lightfoot nor anyone else likely to get the 50% plus one needed to avoid a runoff. Vallas, who entered the race in June, is doing better on fundraising than usual, with more than $2 million in cash and commitments. A runoff between him and Lightfoot sure would be interesting. But can Vallas find campaign discipline? Can he come across not as a cranky codger but the seasoned hand Chicago needs in a time of trouble? Political progressives are vying in another lane. But which progressive? Chicago Teachers Union President Stacy Davis Gates could be a formidable contender, but has gone deadquiet lately. Others with politics similar to hers are state Rep. Kam Buckner, who’s already in the race; U.S. Rep. Jesus “Chuy” Garcia, who texts that he’s “not currently thinking of running”; Cook County Commissioner Brandon Johnson,

GREG HINZ ON POLITICS

who failed to return calls seeking comment; and Ald. Sophia King, 4th, who says only, “It’s kind of hard not to consider running, given all of the things that are going on in the city.” King, in my view, would be particularly dangerous to Lightfoot: a Black woman, on the progressive side, with appeal to lakefront voters. But if she could hurt Lightfoot, are her odds of getting to the runoff good enough to give up a relatively safe City Council seat? Then there are other candidates already in the race, like Ald. Ray Lopez, 15th, the only Latino now in the contest, and businessman Willie Wilson, whose Santa Claus impersonation on the campaign trail has made him very popular among some voters. Ex-Gov. Pat Quinn is clearly interested in run-

ning, though the issue he’s talking about—term limits—seems more a blast from the past. While much of the rest of the potential field continues to dither, Lightfoot has stepped up her game. Her fundraising, while not great, has improved. She’s figured out how to emulate Wilson with city money. She’s learned to think out of the box on big picture items, such as the proposed NASCAR race downtown and a dome for Soldier Field that you’ll be hearing about real soon. And while business leaders are less than thrilled with Lightfoot’s performance, they’re even more worried about some of the other people running. Bottom line as the candidates get ready to pass nominating petitions at the end of August: Lightfoot’s odds are rising.

Make filling official vacancies more democratic

hile we’re in the midst of state election season and hurtling toward city election season next year, let’s consider improving what happens when officials are not chosen by voters. It happens more than we might realize. In the current City Council, 10 of the 50 members initially were appointed to their seats—soon to be 11, given the resignation announcement of Ald. Michele Smith. They are: Alds. Sophia King, Michelle Harris, Nicole Lee, Silvana Tabares, Monique Scott, Roberto Maldonado, Jason Ervin, Carrie Austin, Emma Mitts and Tom Tunney. Eight of the 10 since have been elected after being given the advantage of incumbency. Still, that’s a full 20% of the body who were not chosen by constituents at the start. They’re literally representing 550,000 people in a city of 2.7 million and they were selected by mayors. Austin and the recently appointed Scott both succeeded family members who held the job before them. Austin is not seeking re-election as she faces federal corruption charges. Despite a just-approved attempt to curb nepotism in some city government dealings, the practice of mayors appointing family members has a long history in Chicago. Deb Mell was appointed to replace her father, Dick Mell. Darcel Beavers was named to succeed her father, William. Margaret Laurino replaced her father, Anthony. Mayor Lori Lightfoot made a point of saying she would use communitybased search committees to vet candidates who apply and recommend finalists. She’s done that with her appointments of Lee and Scott, though the recent Scott appointment still raised questions and criticisms. Would special ward elections be better than mayoral appointments? Those cost money and turnout

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probably would not be high. After his own appointment to a state Senate seat by Democratic party committee officials, state Sen. Mike Simmons noted some people believe special elections still benefit insiders because they can more efficiently mobilize and raise funds for a short campaign. After some criticism and claims of backroom dealing surrounding the appointment he vied for along with state Rep. Kelly Cassidy and four others, Simmons, Cassidy and other lawmakers introduced legislation to improve transparency in the appointment process. A year-old state law requires party officials to publicize how to apply for a legislative vacancy and to hold an open meeting to fill it. Even better would be a provision to allow for those party officials controlling the appointment to consider the comments and views of district constituents during at least one meeting before using their weighted votes to fill the vacancy at a separate meeting. That sort of public participation and deliberative transparency could be used by search committees mayors use and considered by mayors themselves. Or, mayors could cede this power and allow community committee members they name to listen to residents and appoint people to fill vacancies directly. Wouldn’t that more resemble a democratic, people-powered process? Of course, despite that new state law governing state legislative vacancies, creative state senators still managed to find new ways to game the system and control who succeeds them. State Sens. Steve Landek and Antonio Munoz both filed to run for re-election. Munoz’s son-in-law, Javier Loera Cervantes, also filed to run in his father-in-law’s district. In Landek’s district, his former chief of staff, Mike Porfirio, also filed to run. In both instances,

Landek and Munoz withdrew from the races after the candidate filing period, leaving Cervantes and Porfirio wide open lanes to win their Democratic nominations with no other candidates in the primaries. Variations on this scheme have occurred before with another state Senate seat in a prior cycle vacated by Peoria Republican Chuck Weaver. And former Congressman Bill Lipinski resigned after the primary and had his son, Dan, appointed to succeed him. Do we need city and state laws that say relatives and former

MADELEINE DOUBEK ON GOVERNMENT

employees simply cannot be appointed or elected to succeed their predecessors? That move might not withstand a legal challenge, but the appointment and election trickery never seems to end, does it? When any elected official resigns or retires, the process for finding a

replacement ought to be as open, community-focused and equitable as possible. That, after all, is what honors our democratic ideals. Madeleine Doubek is executive director of Change Illinois, a nonpartisan nonprofit that advocates for ethical and efficient government.

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7/22/22 2:54 PM

CRAIN’S CHICAGO BUSINESS • JULY 25, 2022 3

Darren Sloniger

JOE CAHILL ON BUSINESS

It’s time to fix Illinois’ auto insurance market

BLOOMBERG

This preacher resurrects West Loop real estate Darren Sloniger travels about 45 miles between his two gigs as minister and developer. To him, both jobs are about building communities. I BY DENNIS RODKIN

ome days, Darren Sloniger is leading worship at West Ridge Community Church, a “church for the un-churched” in Elgin. Other days, Sloniger is in Chicago, developing four residential projects that will put almost 1,000 new apartments on the western edge of the West Loop, what he estimates is about a half-billion dollars’ worth of construction. There’s about 45 miles between Sloniger’s two gigs, and you might assume the philosophical distance is far greater. But in Sloniger’s eyes, they’re both about building communities. “I never want to build a commodity,” Sloniger says, sitting on a couch See SLONIGER on Page 21

“I DON’T CONNECT WITH MAINSTREAM CHURCHES. SO I CREATED A CHURCH FOR PEOPLE WHO DON’T LIKE CHURCH.”

Student loan investigation obscures growth at Discover The consumer lender opened an internal probe into collection and servicing practices—a troubled area that regulators have targeted in the recent past BY STEVE DANIELS Discover Financial Services jolted investors with the news that it’s suspending share buybacks after opening an internal investigation into its student loan practices. The Riverwoods-based company, best known for its credit card business, also is one of the country’s largest private student lenders. A special board committee made up of independent directors is handling the probe, the company said. The move halts what had been one of the most aggressive share-buyback programs in Dis-

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cover’s history. In the first half of the year, the company spent $1.5 billion repurchasing shares. It was only in April that the board authorized a new $4.2 billion buyback program through June 30 of next year. Discover’s stock opened down more than 8% on the news. On an earnings call with analysts, CEO Roger Hochschild was asked multiple questions about the investigation but said repeatedly he was limited in what he could disclose. He did say the decision to halt buybacks was Discover’s and not a dictate from regulators. But the lack of disclosure and

guidance about the time frame for the investigation left one analyst pointedly reminding Hochschild that analysts would have to guess about when buybacks could be resumed in their modeling. In prepared remarks before taking questions, Hochschild said the internal probe concerns “our student loan servicing practices and related compliance matters.” Regulators have come down before on Discover for its student loan management. In 2015 the U.S. Consumer Financial Protection Bureau found that the company had engaged in “illegal See DISCOVER on Page 21

apidly rising auto insurance premiums highlight the need for real insurance regulation in Illinois. Like almost all states, Illinois requires drivers to buy auto insurance. Unlike most states, Illinois imposes virtually no restrictions on auto insurance rates. In Illinois, insurers can raise premiums as much as they want, as often as they want, without even telling the state insurance department beforehand. On top of that, Illinois is one of the few states that doesn’t prohibit excessive auto insurance premiums, according to consumer watchdog Illinois PIRG. The result is a marketplace distorted by inequitable government intervention. In truly free markets, consumers can walk away if they think prices are too high. The ability to say “no thanks” is the ultimate leverage in any negotiation, and state laws take it away from auto insurance customers. “If insurance companies can charge whatever the market will bear in a market where people are required to buy the product, the market will bear whatever the insurance companies want to charge,” says Doug Heller, director of insurance at the Consumer Federation of America. The recent spate of rate hikes shows that power imbalance in action. All the biggest players— Allstate, Geico, Progressive and State Farm—have raised rates aggressively since drivers started returning to the roads in large numbers after traffic dropped to unprecedented lows early in the pandemic.

MORE SCRUTINY

Accidents plunged along with traffic in 2020, a windfall for insurers. Some of that profit came back to customers in the form of rebates or rate cuts. But multiple rate hikes since last year have brought premiums back to or above 2019 levels in some cases. Traffic counts, however, only edged back to pre-pandemic numbers in the past couple of months, according to federal highway data. Insurers say they need to raise rates because traffic is up from 2020 lows and inflation has boosted the cost of auto repairs. In some states, insurers’ rationale for rate hikes would undergo scrutiny from expert regulators with the power to block the increases. In Illinois, we take insurers’ word for it. Now, there are good reasons to require that drivers buy auto insurance. But if the state forces us to purchase a product, it should also protect us against the price-gouging such a require-

ment invites. Many other states provide that protection, to varying degrees. A 2019 study by the Consumer Federation found that 21 states require regulatory approval of some or all rate hikes. Another 19 at least require that insurers notify regulators before raising rates. Illinois is one of only nine states that require filing only after insurers have boosted prices.

MORE PROTECTION

The Consumer Federation study shows that stronger regulation reins in rate hikes over the long term. Between 1989 and 2015, weighted average annual auto insurance expenditures in states requiring prior regulatory approval of rate changes rose 45%, compared with a 70% weighted average for “use and file” states like Illinois. California, the state with the strictest prior approval regime, had the lowest average expenditure increase—just 12.5% over a 26-year period that saw the national average climb 61.1%. In Illinois, the average expenditure rose 59%. True, auto insurance premiums are higher in California than in many other states, including Illinois. Premiums reflect risk levels driven by factors such as density and traffic congestion. California has some of the highest traffic congestion in the country, leading to higher rates. But it’s also worth noting, as Heller points out, that California hasn’t allowed any auto insurance premium increases since the pandemic hit, and required more rebates of 2020 profits than other states did. Rates in California would be far higher without prior approval, according to the Consumer Federation, which estimates the stricter regulatory approach has saved Californians $154 billion since 1989. What’s more, the group estimates California-style rate regulation would have saved Illinoisans $1.9 billion in 2015 alone. The study also shows tougher consumer protection doesn’t squelch insurers’ profits or send them fleeing from the state. Insurers in prior approval states earned average returns on net worth of 7.99%, above the national average of 7.69%. As for competition, California is one of the least-concentrated markets, and Illinois is one of the most concentrated. At a time when historically high inflation is punishing Illinois consumers, it’s getting harder to justify a regulatory system that leaves them powerless against price hikes in a product the state requires them to buy.

7/22/22 3:51 PM

4 JULY 25, 2022 • CRAIN’S CHICAGO BUSINESS

Amazon and Rivian unveil a fleet of custom electric delivery vehicles The companies project that 100,000 vehicles will be on the road making Amazon deliveries by 2030 Amazon and Rivian unveiled a fleet of electric delivery vehicles that will start making deliveries on Thursday in cities across the U.S. Amazon will start making deliveries in the custom-made Rivian electric vehicles in places like Chicago, Dallas, Nashville, Phoenix and San Diego as soon as this week, according to an Amazon statement. The partnership is part of Amazon’s $1.3

Amazon has tested deliveries with Rivian pre-production vehicles, reportedly delivering over 430,000 packages and covering over 90,000 miles since 2021.

INNOVATIONS

Many of Amazon’s delivery stations are now equipped with charging stations and the company says it will continue to build infrastructure to support its growing number of electric delivery vehicles. The companies are touting innovations in THE COMPANIES ARE TOUTING the new vehicles, such “360-degree visibilINNOVATIONS SUCH AS “360-DEGREE as ity,” sensor detection, automatic emergency VISIBILITY,” SENSOR DETECTION, braking and low-cost AUTOMATIC EMERGENCY BRAKING batteries. The adoption of EVs AND LOW-COST BATTERIES. is part of Amazon’s goal to reach net-zero carbon by 2040 under its climate billion-plus investment in the pledge. The company projects manufacturing company. that there will be thousands of The delivery vehicles are bethese vehicles on the road in 100 ing manufactured in Rivian’s cities by the end of this year and plant in downstate Normal.

AMAZON

BY TRINA MANNINO

Amazon will start making deliveries in the custom-made Rivian electric vehicles in places like Chicago, Dallas, Nashville, Phoenix and San Diego as soon as this week. 100,000 by 2030. “Today represents an important step, not just for Amazon and Rivian as partners, but also for transportation and the environment,” RJ Scaringe, CEO of Rivian, said in the statement. “In 2019, Rivian and Amazon committed to fast-tracking a new type of delivery vehicle that would result in a significant reduction of carbon emissions . . . we’re thrilled to see this partnership has kick-started decarbonization projects across the logistics delivery industry.” In an interesting twist, Rivian’s deal with Amazon gives the retail giant the latitude to purchase vehicles from other companies. Amazon can

buy electric trucks from Rivian’s competitors under its agreement with the startup, but Rivian can’t sell trucks to any other company during the agreement’s terms. The e-commerce behemoth has also ordered vehicles from Stellantis. The launch follows news from earlier this month of potential nonmanufacturing layoffs at Rivian, which could result in a reduction of approximately 5% of its staff. The manufacturer increased its workforce in the last year to ramp up production to fulfill its growing number of pre-orders for its R1T and R1S models. The company received

90,000 pre-orders as of March. Amazon and Rivian aren’t the only companies embarking on an electric delivery vehicle partnership. Just last week, it was reported that Walmart is partnering with Canoo, a manufacturer with a presence in Arkansas, Oklahoma, Texas, Michigan and California. The big-box store ordered 4,500 vehicles, with the option to purchase up to 10,000, according to Bloomberg. Walmart, too, has entered into agreements with other electric and autonomous vehicle companies like General Motors’ BrightDrop and startup Gatik, founded in 2017, to augment its own delivery fleet.

in some states. In Illinois, the Department of Insurance required auto insurers to disclose how much they made or lost insuring cars from 2019 to 2021. The data, made public, showed that Allstate and several other major insurers made profits of about 15% while drivers hunkered down in their homes in 2020 and early 2021. Ordinary profits are in the sin-

gle digits—often the low single digits. Allstate appears to have spent much of that bounty buying back stock. Last year, it spent $3.3 billion on share repurchases—the most laid out for that purpose since 2007. When this year’s rate hikes are in full effect, Allstate expects them to generate $2.2 billion, according to the filing.

INCREASED PRODUCTION

Allstate’s still losing money on car insurance after rate hikes The Northbrook-based insurance giant has jacked auto rates by 8.3% on average across the country, but it’s still in the red. Expect more rate hikes.

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increase in Illinois earlier this year. Northbrook-based Allstate is the second-largest auto insurer in its home state.

‘INFLATIONARY IMPACTS’

Allstate and other major auto insurers are scrambling to respond to higher costs to settle claims, thanks mainly to the rise in used-car prices. The cost of total auto losses is pegged to the cost of replacing a vehicle. The rate hikes are expected to continue. “Allstate continues to implement significant insurance rate increases given ongoing inflationary impacts on claim severities,” it said in the Securities & Exchange Commission filing. The price increases are spurring pushback from regulators

ALLSTATE

its auto business for every dollar of premium it collected. Not Allstate’s stock plunged on including the effects of claims July 21 on a disclosure to inves- payments due to costly wind tors that the company’s auto in- and hail storms, mainly in the surance business remains well Midwest, the auto business still in the red, despite substantial was in the red to the tune of rate hikes through the first half $1.02 for every dollar collected. Allstate reports secondof the year. quarter earnings in August. Based THE PRICE INCREASES ARE SPURRING early on auto premium levels in the recent PUSHBACK FROM REGULATORS IN past, the underwritSOME STATES. ing loss is likely to be in the neighborhood Shares were down 7.5% in of $500 million. The company said late in the late morning trading. For the year, the stock has dropped day on July 20 that it has hiked rates an average of 8.3% in all 50 more than 4%. In the second quarter, All- states plus another unidentified state paid out nearly $1.08 to territory since the beginning of cover claims and expenses in the year. That included a 12%

BY STEVE DANIELS

7/22/22 2:56 PM

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6 JULY 25, 2022 • CRAIN’S CHICAGO BUSINESS

UChicago Medicine names a new leader Dr. Mark Anderson, cardiologist and physician-in-chief at Johns Hopkins, will take over in October from longtime health system leader Dr. Kenneth Polonsky at the end of September. He first came to the university for an enDr. Mark Anderson, a cardiol- docrinology fellowship in 1978. ogist and medical leader at Johns Polonsky will remain on faculty Hopkins University, will become and serve as a senior adviser to the University of Chicago’s execu- University of Chicago President tive vice president for medical af- Paul Alivisatos. Anderson is director of the defairs, dean of the Pritzker School of Medicine and dean of the division partment of medicine at Johns Hopkins University School of Medof biological sciences. Anderson will replace Dr. Ken- icine, the William Osler Professor neth Polonsky, who has lead of Medicine and physician-in-chief of the Johns Hopkins Hospital. Before com“MARK IS AN EXTRAORDINARILY ing to Johns Hopkins 2014, he led the CarTALENTED AND GLOBALLY RESPECTED in diovascular Research MEDICAL LEADER WHO IS COMMITTED Center and the department of medicine at TO AN AMBITIOUS AGENDA.” the University of Iowa. “Mark is an exPaul Alivisatos, University of Chicago president traordinarily talented and globally UChicago Medicine since 2010, respected medical leader who the two-hospital academic med- is committed to an ambitious ical system said in a statement. agenda of basic, translational and clinical research, while preAnderson takes over Oct. 1. Polonsky announced earlier paring the next generation of this year that he would step down scholars, clinicians and leaders

WTTW NEWS

BY JON ASPLUND

in biological sciences and academic medicine,” Alivisatos said in the statement. “Mark is in a strong position to lead growth of our clinical enterprise and will have a significant focus on the expansion of UCM’s regional health system.” Among UChicago Medicine’s

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growth projects currently underway is a planned 500,000-squarefoot, $633 million free-standing cancer hospital to open by 2026 on its Hyde Park campus. Leadership in community health, health equity and access to care on the South Side will be a vital part of Anderson’s duties,

the statement said. “I am thrilled and humbled to join the University of Chicago community, and look forward to the opportunity to work across the University and the South Side to promote biomedical discovery, education and health,” Anderson said in the statement.

Civic Committee gets its first female chair

Jennifer Scanlon takes the post at the prestigious group where the Commercial Club of Chicago usually flexes its political and economic muscle BY GREG HINZ

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The Commercial Club has appointed the first woman to chair its prestigious Civic Committee. In a statement, the club said Jennifer Scanlon, president and CEO of UL Solutions, will succeed E. Scott Santi in the position. Scanlon already has served as chair of the Commercial Club, but the affiliated Civic Committee is where the group usually flexes its political and economic muscle. The Scanlon move is the latest step in a generational and demographic shift in the leadership of the big business organization. Earlier this summer, the club announced that University of Chicago exec Derek R.B. Douglas will succeed retiring Kelly Welsh as president of the committee and club, effective Aug. 1. Douglas will be the first African American to hold the job, in which he will run both organizations on a day-to-day basis.

ANOTHER MOVE

The Commercial Club also announced that its new chair will be Michael O’Grady, CEO of Northern Trust. “I look forward to this new role

Jennifer Scanlon and advancing our great policy work already (underway),” Scanlon said in the statement. Along with Douglas, “We will continue our work in the economic, transportation, technology and education sectors in order to make our region the very best place to live, work and do business.” The two new chairs take their positions effective immediately. The Commercial Club was founded 145 years ago. It’s best known for siring the historic Burnham Plan that lead to creation of the city’s lakeshore network of parks.

7/22/22 2:58 PM

CRAIN’S CHICAGO BUSINESS • JULY 25, 2022 7

Here are the Chicago area’s largest banks This year’s list—built with data compiled by S&P Global Market Intelligence—also ranks the 15 largest thrifts by assets

of Chicago saw an 11.8% rise in assets, amounting to $890.2 million last year. And Belmont Bank & Trust comes in at No. 25 with $879 million in assets, a 16.7% increase from 2020. Meanwhile, Northern Trust, BMO Harris Bank, CIBC and Wintrust Illinois maintain their recurrent first, second, third and fourth placings, respectively.

BY SOPHIE RODGERS Crain’s latest edition of Chicago’s Largest Banks saw a shakeup in rankings from last year due to recent acquisitions of banks in the greater metro area. Old Second Bancorp saw a whopping 104% increase in assets from 2020, bumping its way up from last year’s No. 9 to this year’s No. 6. The Aurorabased bank acquired Lombardbased West Suburban Bank in 2021. This explains West Suburban’s absence from the current list after ranking No. 11 for the past two consecutive years. After the merger, Old Second had $6.2 billion in assets as of Dec. 31.

THRIFTS

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JOHN R. BOEHM

ACQUISITIONS

Also missing from this year’s list are First Midwest Bank and Glenview State Bank. First Midwest, which ranked No. 5 the past two years (and had $20.7 billion in assets in 2020), was acquired by Evansville, Ind.based Old National Bancorp earlier this year. Glenview State Bank, No. 18 the last two years

(with approximately $1.5 billion in assets in 2020), was acquired by Champaign-based First Busey last year. The new list also features three

banks that did not make the cut last year: American Community Bank & Trust, International Bank of Chicago and Belmont Bank & Trust. These banks rank No. 23,

No. 24 and No. 25, respectively. American Community Bank & Trust saw a 14.4% increase in assets from 2020, totaling $900 million in 2021. International Bank

This year’s list also ranks the 15 largest thrifts by assets. The Federal Savings Bank ranks No. 3 with $796.6 million in assets, despite seeing a 43.9% fall in assets from 2020. Palos Heightsbased United Trust Bank comes in at No. 14 with $76.6 million in assets—a whopping 95.1% increase from 2020. Crain’s list of Chicago’s Largest Banks—built with data compiled by S&P Global Market Intelligence—is ranked by assets as of Dec. 31, 2021. The complete list in Excel is available exclusively to Crain’s Data Members and is available in our Data Center at https://www.chicagobusiness. com/data-lists.

7/22/22 3:06 PM

8 July 25, 2022 • CRAIN’S CHICAGO BUSINESS

CRAIN'S LIST LARGEST BANKS Ranked by assets. All figures are as of Dec. 31, 2021. Dollar figures are in millions. 2021 RANK BANK

1 2 3 4 5 6 7 8 9

ASSETS; % CHANGE FROM 2020

RETURN ON AVERAGE RETURN ON AVERAGE LOANS TO DEPOSITS ASSETS EQUITY RATIO COMMERCIAL LOANS REAL ESTATE LOANS

CONSUMER LOANS

OTHER LOANS

TOTAL LOANS; % CHANGE FROM 2020

NONPERFORMING LOANS; % OF ASSETS

NORTHERN TRUST CORP. Chicago

$183,743.5 8.4%

1.0%

14.2%

25.0

11.2%

8.9%

1.1%

78.9%

$40,468.4 19.9%

$138.8 0.1%

BMO HARRIS BANK NA Montreal

$166,661.0 8.3%

1.1%

10.0%

63.7

38.0%

8.8%

9.9%

43.3%

$87,823.6 0.8%

$809.3 0.5%

CIBC Chicago

$48,488.5 9.9%

1.2%

7.4%

74.6

33.4%

26.3%

1.4%

38.9%

$28,917.2 10.3%

$231.5 0.5%

WINTRUST ILLINOIS Rosemont

$46,697.0 10.4%

1.3%

13.9%

82.0

46.3%

16.4%

16.6%

20.7%

$32,708.5 9.0%

$97.9 0.2%

BYLINE BANCORP INC. Chicago

$6,685.4 4.7%

1.5%

11.7%

88.3

35.2%

36.7%

0.0%

28.1%

$4,537.1 4.5%

$25.1 0.4%

OLD SECOND BANCORP INC. Aurora

$6,214.4 104.0%

0.8%

7.4%

62.4

26.9%

44.2%

0.4%

28.5%

$3,421.9 68.2%

$41.6 0.7%

CENTIER BANK Merrillville, Ind.

$6,193.8 9.0%

1.4%

14.7%

91.7

6.0%

35.5%

7.5%

51%

$4,805.9 1.5%

$6.3 0.1%

FIRST AMERICAN BANK Elk Grove Village

$6,111.6 3.1%

0.9%

11.2%

44.8

23.0%

27.6%

12.4%

37%

$2,092.9 -11.5%

$29.8 0.5%

PARKWAY BANK AND TRUST CO. Harwood Heights

$2,880.1 0.4%

1.3%

12.1%

96.2

28.5%

45.9%

0.0%

25.6%

$2,193.6 -1.9%

$57.1 2.0%

10 11 12 13

REPUBLIC BANK OF CHICAGO Oak Brook

$2,526.1 9.0%

1.7%

16.5%

69.8

30.3%

32.0%

0.1%

37.7%

$1,481.1 -2.5%

$22.5 0.9%

LAKESIDE BANK Chicago

$2,340.6 7.4%

1.8%

19.4%

82.8

7.9%

50.5%

0.0%

41.6%

$1,657.5 1.6%

$11.8 0.5%

MARQUETTE BANK Orland Park

$2,020.6 9.2%

0.6%

6.2%

73.7

1.1%

21.4%

0.0%

77.5%

$1,278.2 4.4%

$18.4 0.9%

FIRST BANK OF HIGHLAND PARK Highland Park

$1,921.2 0.3%

0.5%

4.9%

84.0

41.8%

15.6%

0.3%

42.3%

$1,259.9 -10.3%

$23.3 1.2%

14 15 16

BANKFINANCIAL NA Olympia Fields

$1,699.8 6.5%

0.5%

5.3%

69.8

46.5%

9.8%

0.2%

43.5%

$1,050.9 4.0%

$0.7 0.0%

SIGNATURE BANK Rosemont

$1,675.1 31.8%

1.5%

17.3%

60.2

44.2%

40.1%

0.9%

14.8%

$911.0 -5.4%

$0.4 0.0%

AMALGAMATED BANK OF CHICAGO Chicago

$1,641.8 51.7%

0.5%

5.1%

34.5

3.1%

44.5%

0.0%

52.4%

$525.6 2.4%

$0.2 0.0%

17 18 19 20 21 22

PEOPLES BANK Munster, Ind.

$1,618.6 8.2%

0.9%

9.5%

67.7

11.8%

32.6%

4.8%

50.8%

$966.7 0.0%

$7.9 0.5%

PROVIDENCE BANK & TRUST South Holland

$1,361.0 11.6%

1.5%

14.1%

65.5

18.5%

45.3%

0.0%

36.2%

$782.4 -7.2%

$3.0 0.2%

INLAND BANK AND TRUST Oak Brook

$1,281.2 -0.5%

1.2%

9.0%

76.8

12.9%

45.4%

0.1%

41.7%

$820.0 -2.5%

$19.2 1.5%

EVERGREEN BANK GROUP Oak Brook

$1,196.3 -3.8%

2.2%

17.6%

97.4

2.7%

15.8%

67.6%

13.9%

$970.3 -2.4%

$1.1 0.1%

FIRST SECURE BANK GROUP Sugar Grove

$1,132.8 3.4%

0.7%

8.6%

69.1

28.2%

40.9%

2.7%

28.2%

$659.9 -16.5%

$11.9 1.1%

CORNERSTONE NATIONAL BANK & TRUST CO. Palatine

$949.3 6.8%

1.1%

13.3%

70.1

31.4%

45.4%

0.5%

22.7%

$591.5 -0.6%

$2.0 0.2%

AMERICAN COMMUNITY BANK & TRUST Woodstock

$900.0 14.4%

1.2%

12.3%

64.5

26.2%

49.4%

0.1%

24.2%

$518.3 -10.2%

$0.9 0.1%

INTERNATIONAL BANK OF CHICAGO Chicago

$890.2 11.8%

2.1%

19.3%

81.9

7.6%

48.4%

0.0%

44%

$630.9 11.2%

$24.6 2.8%

BELMONT BANK & TRUST CO. Chicago

$879.0 16.7%

1.5%

15.3%

65.4

19.5%

60.6%

0.5%

19.5%

$510.9 -1.5%

$0.2 0.0%

Data provided by S&P Global Market Intelligence, with additional research by Sophie Rodgers (sophie.rodgers@crain.com) | Includes banks with headquarters in Cook, DuPage, Kane, Lake (Ill.), Lake (Ind.), McHenry and Will counties, and reporting assets to the Federal Deposit Insurance Corp. “Commercial loans” includes secured and unsecured loans for commercial and industrial purposes; domestic only. “Real estate loans” includes only domestic nonfarm and nonresidential loans. “Consumer loans” includes unsecured domestic loans to individuals. Sum of loan types may not equal 100% because of rounding. “Total loans” includes domestic and foreign loans. 1. Includes figures for BMO Harris Bank NA and BMO Harris Central NA. 2. Includes figures for Wintrust Bank, Lake Forest Bank & Trust Co., Northbrook Bank & Trust Co., Hinsdale Bank & Trust Co., Barrington Bank & Trust Co. NA, Wheaton Bank & Trust Co., Libertyville Bank & Trust Co., Old Plank Trail Community Bank NA, Village Bank & Trust, Beverly Bank & Trust Co. NA, St. Charles Bank & Trust Co., State Bank of the Lakes, Schaumburg Bank & Trust Co. NA, and Crystal Lake Bank & Trust Co. NA.

CRAIN’S LIST LARGEST THRIFTS Ranked by total assets as of Dec. 31, 2021

Liberty Bank for Savings (Chicago) First Savings Bank of Hegewisch (Chicago) The Federal Savings Bank (Chicago) Lisle Savings Bank (Lisle) Hoyne Savings Bank (Chicago) Community Savings Bank (Chicago) North Shore Trust and Savings (Waukegan) McHenry Savings Bank (McHenry) Central Federal Savings and Loan Association (Cicero) Midland Federal Savings and Loan Association (Bridgeview) Central Savings, F.S.B. (Chicago) Mutual Federal Bank (Chicago) GN Bank (Chicago) United Trust Bank (Palos Heights) North Side Federal Savings and Loan Association of Chicago (Chicago) Source: S&P Global Market Intelligence

P008_CCB_20220725.indd 8

Percentage change from 2020

$910.6 million 3.5% $799.5 million 7.1% $796.6 million -43.9% $611.1 million 2.9% $526.2 million -0.1% $452.7 million 4.5% $339.8 million 40.3% $279.8 million 7.5% $200.4 million 2.2% $128.3 million 3.9% $114.6 million -2.7% $92.8 million 4.8% $84.7 million -15.1% $76.6 million 95.1% $50.1 million 1.2%

7/22/22 4:16 PM

CRAIN’S CHICAGO BUSINESS • JULY 25, 2022 9

Conversion snafus in First Midwest merger lead to irate customers The switch to Old National’s systems has been one of the gnarliest bank merger conversions in memory BY STEVE DANIELS First Midwest customers were greeted more than two weeks ago with the news that their bank now is called Old National. Many of them also were greeted with debit cards that couldn’t be activated, hourslong holding times on the phone and equally long waiting times to see someone at a branch, with lines out the door. The conversion of First Midwest’s systems to that of Evansville, Ind.-based Old National has been unusually rocky by most accounts and led to widespread frustration aired over social media. For Old National, which acquired Chicago’s First Midwest earlier this year, it’s an inauspicious introduction to a brand that is unfamiliar in Chicago and will rely on area businesses and consumers for much of its revenue and earnings. Old National said many of the problems stemmed from a vendor’s issues. “On Saturday, July 9th, as many of our retail clients were attempting to follow the step-by-step instruc-

tions they received in the weeks prior to the conversion in order to activate their new ONB debit card, our debit card provider was simultaneously experiencing technical issues with its activation line and call volume capacity,” spokeswoman Kathy Schoettlin said in an email. “This resulted in an unanticipated spike in calls to our client care center for assistance. While we continue to experience some intermittent issues related to debit card activation, our provider has assured us that the underlying problem has been resolved, and our call volume continues to decrease.” The bank added that the problems were confined primarily to retail deposit customers. “We are also pleased that the transition was largely smooth and seamless for our commercial, private banking and business banking clients,” she said. That wasn’t the case for Schererville, Ind., resident Kristen Cunningham. She has both a personal and business account with First Midwest. The transition for the personal side went fine. The business account was another story.

“I was able to set up the account online, however the debit card they gave me cannot be activated,” she said. “I tried before the merger, the day of and after. I personally went to my local branch, and they gave another number to call which did not work and they could not help me.” “I called again to try to activate it,” Cunningham said. “After putting all of my info in, it transferred me to a call center and said they have longer wait times and that I could hold or call back later. They disconnected me. . . .I feel like I am being held hostage or something. I would switch banks with my business account, but at the moment I don’t have an hour and a half to devote to the changeover.” Her complaints were echoed all over Twitter and Facebook. “We’ve all been through multiple bank transitions over the years,” wrote one Twitter user on July 11. “That’s what makes the First Midwest transition to Old National hot mess so surprising. This shouldn’t be this difficult.” Bob Starkey, president of the Dyer, Ind., town council, said he had numerous family members and friends upset about not having access to various banking services well into the week be-

fore last. “Not being able to check their account; not being able to transfer funds,” he said. One friend needed to transfer from savings to checking to pay a bill and couldn’t do it remotely and had to do it in a branch. At various points, cars in the Dyer drive-thru were in line, backed out onto the street. “That’s never happened before,” he said.

HEAD-SCRATCHER

Old National’s acquisition of First Midwest was a head-scratcher when it was unveiled a little over a year ago. Neither bank was much of a presence in each other’s markets, so the combination seemingly didn’t strengthen Old National within any of them. It also added the Midwest’s largest market by far—Chicago—to a bank that has thrived in far smaller scenes like its hometown, where it’s the top bank, and Blooming-

ton, Ind., where it’s the second largest by deposits. Old National has said the combination creates a “premier Midwestern bank.” The deal was pitched as a merger of equals, as First Midwest shareholders were paid a relatively low premium for their shares. Since then, Old National stock has performed poorly and lags its peers. The merger of equals today looks more like a full-blown acquisition. The First Midwest name, well known particularly throughout the south suburbs, is gone. And the troubles with the conversion are reminding First Midwest customers—in a negative way—they’re with a different bank now. Snafus with bank systems conversions aren’t unknown. But few are at this level of chaos and for this long. Missteps like this potentially open the door for other banks to pick up business they otherwise wouldn’t have gotten.

JOE LEARNER

ROBERT SEVIM

JON AZULAY

ADAM SOUTHARD

ALEX GREENE

CULLEN HURLEY

BERNICE RAMOS

Vice Chairman, Director, Central Region Lead

Vice Chairman, Co-Head Chicago Region, Director

Senior Managing Director

Managing Director

Associate

Executive Assistant

Savills Congratulates

savills.us

Savills congratulates the tenant advisory team led by Joe Learner and Robert Sevim on winning Office Broker of the Year for the second year in a row at the 33rd annual Chicago Commercial Real Estate Awards benefitting the Greater Chicago Food Depository.

Commercial real estate, unlocked. Solutions that power people and growth

P009_CCB_20220725.indd 9

7/22/22 3:13 PM

10 JULY 25, 2022 • CRAIN’S CHICAGO BUSINESS

EDITORIAL

n extraordinary report from Cook County Treasurer Maria Pappas reveals what happens when government not only doesn’t get out of its own way, but instead adds to the poverty and inequity that has plagued Chicago and the south suburbs for decades. In “Maps of Inequality: From Redlining to Urban Decay and the Black Exodus,” Pappas cleverly overlays maps and data to show how the federal government’s disastrous housing discrimination practices in the city combined with the decades-old Scavenger Sale program for tax-delinquent properties to spur the extraordinary exodus of Black residents who have simply given up on the region. Furthermore, the practices have kept blight the standard in South and West Side neighborhoods and large parts of south suburbs for years. In essence, the report details how those neighborhoods never had a fighting chance to attract investment, which remains the crucial problem undermining progress today. For sure, the federal government’s overtly discriminatory practice of drawing up “security maps’’ between 1935 and 1940, grading areas based on mortgage lending risk, lit the conflagration that wiped out any hope of wealth-building in Black neighborhoods in the city. But as the report points out, it is the onerous Illinois Scavenger Sale law that has made real investment in these areas nearly impossible. Pappas shows that the wards and suburbs where Black population has declined

ISTOCK

Scrap the Scavenger Sale

the most are also the ones with the most properties on the Scavenger Sale list, following longtime trends. More than 14,000 of the 27,358 properties on the 2022 Scavenger Sale list fall within the boundary of the 1940 Home Owners’ Loan Corporation “security map,’’ which greenlighted redlining. Additionally, properties that were redlined in 1940 are 2.75 times more likely to be distressed today than non-redlined property. Conversely, properties graded the best in 1940 are 60 times less likely to be distressed today than all other HOLC-graded properties. You would think, then, that a Scavenger Sale program would help spur investment

in those blighted areas. But that’s not the case. As the report shows, the bulk of Scavenger Sale properties never receive a bid. And only a few of the bids result in the actual transfer of property to new owners or see taxes paid off. The Cook County Land Bank Authority, which also competes with private bidders for properties and in many cases has an advantage over private bidders, took ownership of properties in less than one in 10 Scavenger Sales between 2007 and 2019. And many of the properties cycle through again and again on the sale list. “Because the majority of the properties at the Scavenger Sale are vacant lots or

abandoned businesses or homes, the sale’s inability to make anything but incremental change allows swaths of unused, deteriorating land in economically struggling, mostly minority city neighborhoods and suburbs to continue deteriorating,’’ the report concludes. Why the dismal track record? The county’s Scavenger Sale makes acquiring distressed property difficult. As the report states, it can take up to three years in some cases for private buyers to win a property outright. And bidders often must compete with the county and Land Bank, which are not on the hook to pay off delinquent taxes. Sound arduous? Maybe that’s why Cook County is the only county in the state that still conducts this kind of Scavenger Sale. Instead, most counties have moved to a cleaner trustee program, which allows counties to obtain tax liens on properties that aren’t sold at regular tax sales. If taxes and penalty fees aren’t cleared up by the owner, the property then goes into a trust where the liens are cleared, and the property goes up for sale. Any proceeds from an eventual sale are then distributed to the taxing bodies. Of course, there is no easy answer when it comes to fixing decades of discriminatory practices that have undermined property values and have led to disinvestment on a major scale in our region. But the Cook County system is long overdue for an overhaul. Let’s use reports like the one Pappas’ office just released as the starting point for the change that’s desperately needed.

We are not helpless to stop gun violence

So we resort to re-enactments—religious, civic and communal expressions of faith or sympathy—that have become idols, as the late theologian Jaroslav Pelikan wrote. Idols are images or events that ask you to look at them, but not through them. They exist for themselves and themselves only, and have no other impact or resonance. We attend these events, but nothing happens afterward, except the waiting that takes place before the next shooting occurs, and the cycle starts over again. We are writing not as pessimists or cynics, but as realists and pragmatists. Instead of learned helplessness and meaningless re-enactments, here is what can be done: The U.S. Bureau of Alcohol, Tobacco, Fire-

arms & Explosives and local law enforcement agencies can track every single gun that shows up at a crime scene and identify the dealers who sold that gun to those killers. In fact, we used this strategy effectively 15 years ago in the Chicago area and found that just two dealers were the go-to sellers to a large percentage of criminals. Once identified, those dealers should be held accountable—forced to be more careful

and law enforcement agencies should use their purchasing power—40% of the market—to demand that gun manufacturers cut all ties to irresponsible gun dealers and integrate gun safety technology into all future weapons. This would make it impossible for a stolen gun to be used by a thief. It would eliminate the accidental deaths that occur when children find and fire a parent’s gun. And it would make it useless if a criminal wrested a gun from an arresting officer. There’s nothing stopping government purchasers from acting now. In addition, government purchasers could insist that manufacturers only sell assault-style weapons to bona fide law enforcement agencies, not to the general public, or else lose their large lucrative government contracts.

The Rev. David Brawley is co-chair of East Brooklyn Congregations and Metro Industrial Areas Foundation, a Jamaica, N.Y.-based network of citizens organizations.

Technologists should stop creating

Amy Totsch is lead organizer of United Power for Action & Justice in Chicago

scams like crypto and design apps that identify and trace any video, tweet, message or other communication that

Write us: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited. Send letters to Crain’s Chicago Business, 130 E. Randolph St., Suite 3200, Chicago, IL 60601, or email us at letters@chicagobusiness.com. Please include your full name, the city from which you’re writing and a phone number for fact-checking purposes.

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YOUR VIEW

ur nation is stuck right now, paralyzed by the marriage of learned helplessness and meaningless re-enactments. After another bloody holiday weekend— seven dead and dozens wounded in Highland Park; at least 10 dead and 62 wounded in the city of Chicago more than 220 dead and more wounded in other cities and counties—we are seeing these two trends converge again. The learned helplessness is expressed by all of the rationalizations for inaction that get repeated endlessly in the various news streams. We are told nothing can be done about gun violence because guns are transported from states with loose laws to states, like Illinois, with tough gun laws. We are told that Congress and many state legislators are useless because of the leverage of the gun lobby. We are told that we can’t trace guns that show up at crime and massacre scenes, and we can’t identify the young men who take their frustrations or fantasies out on shoppers, school children or parade goers. We have learned to be helpless in the face of all those “nothing can be dones.”

i m a H l I A a c y h

Richard Townsell is head of the Lawndale Christian Development Corp. and a co-chair of United Power for Action and Justice.

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Michael Gecan is a senior adviser to Metro IAF.

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.

7/22/22 3:46 PM

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CRAIN’S CHICAGO BUSINESS • JULY 25, 2022 11

YOUR VIEW Continued includes scenes of violence, mayhem or murder. Those who send these messages are signaling their intent to do harm, the Highland Park accused shooter being the latest in a long line of these individuals. It’s time to take those messages seriously. And it’s time to intervene early and proactively with both mental health and criminal justice professionals when a young would-be killer starts to broadcast his intentions. Police departments should concentrate

on the very small portions of a city or county where most of the daily and weekly shootings and killings occurs. The only way to disrupt this pattern is to do what

the New York Police Department did when leaders like Bill Bratton, Jack Maple and John Timoney introduced and applied the CompStat approach to communities that were considered beyond repair. This required relentless leadership from the top and high standards for professional, accountable and respectful policing on the ground. We were in those neighborhoods when this transformation occurred, and in fact had been calling for many of the approaches the NYPD implemented, so we know it works. We also know that those on the right will reject this because they read “accountable” and “respectful” as too soft. And those on the left will reject this because many in that camp don’t believe

any level of policing is warranted. Let them both stew in their own ideological juices. There is simply no substitute for professional, accountable and respectful policing concentrated in those communities currently being decimated by murder and mayhem. Finally, a proven way to reduce gun

violence and crime of all kinds is to rebuild the abandoned buildings and often-vacant acres of some of our most distressed communities. Where we have built critical masses of thousands of new affordable homes and apartments in East Brooklyn and hundreds of renovated homes and apartments on the Southwest

Side of Chicago, crime has plummeted. It should come as no surprise that quality, safe and affordable housing, along with the relationships created by consistent organizing that addresses other issues, stops and reverses the chain reaction of decline, crime and hopelessness and triggers a new chain reaction of better health, better educational outcomes and equity generation. All of these approaches depend on one thing: leadership—fearless, consistent, steady, unwavering. We must unlearn helplessness and learn effectiveness. We must stop the re-enactments and engage in purposeful, incremental, long-term, meaningful action.

CRAIN’S CHICAGO BUSINESS

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7/22/22 3:46 PM

12 JULY 25, 2022 • CRAIN’S CHICAGO BUSINESS

Private equity takes first bite of city accounting industry The PE-backed deal for Shepard Schwartz & Harris is expected to be the first of many BY STEVEN R. STRAHLER The first ripple of an expected wave of private equity-related transactions in the accounting industry is making a splash in Chicago. Accounting and consulting firm Shepard Schwartz & Harris has agreed to be acquired by private-equity-owned Citrin Cooperman, a New York accounting firm with celebrity clients like film director Martin Scorsese, vintage rock groups like the Beach Boys and younger musicians like the Black Eyed Peas. Terms were not disclosed. Citrin Cooperman says the deal won’t be its last here, as the accounting industry transitions to higher-margin consulting work and looks to privateequity capital to fund the shift. Joel Cooperman, Citrin’s executive chairman, says his firm will add other acquisitions, partners and clients to what it gains with Shepard Schwartz,

which has about $16 million in annual revenue and 85 professionals. Stan Lazar, a Shepard Schwartz managing partner, says, “I’d be shocked if we weren’t $30 million in three years.” Allan Koltin, a Chicago industry consultant who represented both parties in the deal, says, “Of the top 25 CPA firms in the country, about half of them are in some type of PE discussion,” including the Big Four accounting firms that dominate the industry. As the giants once again weigh splitting their auditing and accounting units and try to build unified, global companies, “the mechanism to do that is either PE or an IPO. All of that is now on the table at the Big Four.” New Mountain Capital, a New York-based PE firm, took a 60% stake last fall in Citrin Cooperman, paving the way for 10 acquisitions, according to Cooperman. “I get calls from

firms every single day. Now, we have the firepower,” he says, projecting revenue of $450 million this year and perhaps $600 million next year.

ADVANTAGES

Private-equity ownership provides tax advantages to dealmaking in the accounting field. Partners in acquired firms get cash, which qualifies as a capital gain, compared with proceeds treated as ordinary income in a traditional purchase of assets. “It’s a huge advantage,” says Lazar, who with Mary Fuller, a Shepard Schwartz managing partner, will head Citrin Cooperman’s Chicago office. Fuller says the two firms began discussions about eight years ago. Consulting represents about 30% of Shepard Schwartz’s revenue and some 20% of Citrin Cooperman’s, the firms say. Shepard Schwartz dates back to 1935 and counts Riverside Investment & Development, John

Stan Lazar, Mary Fuller and Joel Cooperman Buck and Sterling Bay among its real estate clientele. It also specializes in construction, manufacturing and distribution industries. Citrin Cooperman’s book of business—or at least the 15% of it related to entertainment—is glitzier. Cooperman, 69, reconciled the concert books for The Who and Yes while working at an accounting firm now known as EisnerAmper—also PE-owned since last year. He says he had an offer

to pursue that line of work full time, handling royalty administration, music valuation and business management, but he did not want to get pigeonholed. Even so, after co-founding Citrin Cooperman in 1979, he continued to represent The Who until last year as the firm built up a substantial list of recognizable clients, including Jethro Tull, AC/ DC, Joan Jett & the Blackhearts and Gipsy Kings. Among its actor clientele are Ana de Armas, Liam Neeson and Chevy Chase.

Children’s hospitals prepare for the next pandemic BY JON ASPLUND When the next pandemic hits, telehealth will be easy and paid for and children’s development and mental health won’t be an afterthought. At least, that’s the plan as a network of children’s hospitals from around the country comes together to prepare for a coordinated response to a new pandemic or another disaster. The Pediatric Pandemic Network on July 19 brought in Ann & Robert H. Lurie Children’s Hospital of Chicago and four other hospitals with a $29 million grant from the Health Resources & Services Administration. The group, launched last year by five initial children’s hospitals, will focus on health equity and the unique needs of children during pandemics, Lurie said in a statement. “The COVID-19 pandemic has taught us that children are uniquely impacted by new infectious threats in their communities and that impact is felt far beyond hospital walls,” Dr. Larry Kociolek, medical director of infection, prevention and control at Lurie Children’s. Kociolek said that while “medical systems were well prepared to identify infectious threats and quickly implement ways to keep kids safe,” there were challenges with COVID-19 in scaling up treatments and prevention tactics and in shutting down children’s lives for too long.

P012_CCB_20220725.indd 12

“It took longer than it should have to get kids safely back in school,” he said. Next time, children’s hospitals need to learn from this pandemic and be more ready to work in the community, reaching institutions like schools, day cares, mental health, athletics “and other places where children congregate that is outside the oversight of an acute care hospital,” Kociolek said. The group will address not only infectious disease but clinical preparedness, mental health, health equity and community engagement, he said. A major key to future preparedness will be using telehealth to both treat a pandemic virus and to maintain nonpandemic health care, he said. The Pediatric Pandemic Network will need to address the logistical aspects of access to telehealth, ensuring that broadband is available in communities and ensuring that reimbursement issues are addressed, “so that providers can offer telehealth services without the risk of having to close their practice because that can’t get reimbursed for care,” Kociolek said.

GROWING SIZE AND REACH

In September 2021, HRSA launched the Regional PPN by funding pediatric hospitals including Cleveland’s University Hospitals Rainbow Babies & Children’s Hospital; University of California, San Francisco Benioff

GETTY

Lurie Children’s joins a network of pediatric hospitals that are using what they learned from COVID to offer better protection, without prolonged shutdowns

Children’s Hospitals; University of Louisville School of Medicine’s Norton Children’s Hospital; University of Utah Primary Children’s Hospital and Saint Louis University’s Cardinal Glennon Children’s Hospital. The new grant doubles the size and reach of the network and includes Lurie Children’s Hospital; Children’s National Hospital in Washington, D.C.; Children’s Mercy Kansas City; Seattle Children’s and the University of Alabama at Birmingham Department of Pediatrics at Children’s

of Alabama. Kociolek said that this second group of children’s hospitals will complement the first group, which had strong emergency preparedness credentials, by bringing expertise in infectious disease, telehealth, equity and mental health. Lurie comes to the table with expertise in infectious diseases and program evaluation—how to objectively and quantifiably assess that a project is doing what it is designed to do, he said.

“THE COVID-19 PANDEMIC HAS TAUGHT US THAT CHILDREN ARE UNIQUELY IMPACTED BY NEW INFECTIOUS THREATS IN THEIR COMMUNITIES.” Dr. Larry Kociolek, medical director of infection, prevention and control at Lurie Children’s Hospital of Chicago

7/22/22 3:16 PM

CRAIN’S CHICAGO BUSINESS • JULY 25, 2022 13

Factory-built affordable homes coming to Humboldt Park CBRE

BY DENNIS RODKIN

945 W. Lake St., highlighted in blue

Fulton Market landlord looks to cash out BY DANNY ECKER The owner of a single-story building near the heart of the Fulton Market District has put his property up for sale, hoping to net a big windfall while real estate investors are still clamoring for development sites in the neighborhood. West Loop real estate investor Peppercorn Capital has hired brokerage CBRE to sell the building at 941-945 W. Lake St., according to a marketing flyer. There is no asking price for the 15,000-square-foot building adjacent to the CTA Green Line Morgan Street station, but sources familiar with the offering said the building could fetch bids close to $15 million. A sale at that price would dwarf the $2.3 million that Peppercorn CEO Phil Denny said his venture paid for the property in December 2012, just six months before Google announced it would move to the historic meatpacking district. That relocation helped set off the transformation of the gritty area into what is now a corporate hub with trendy restaurants and hotels—and some of the highest property values in the city. Peppercorn’s property, which is surrounded by other ongoing or proposed redevelopment projects, will test how strongly investors crave centrally located Fulton Market parcels, as interest rates rise and fears of a recession grow. The corridor has largely defied the COVID-19 pandemic with a trail of office leases and pricey property sales, while owners in many other parts of downtown have been hurt.

‘COVERED LAND PLAY’

CBRE frames the Lake Street building as a so-called “covered land play” for a buyer, meaning someone would purchase the building for its current use with the eventual goal of redeveloping the site. The property is fully leased to product design and engineering firm MNML for just more than five years with no renewal options, according to the flyer. CBRE said in the flyer that a buyer could redevelop the site with various types of uses in a building as large as 173,408 square feet if it were

P013_CCB-20220725.indd 13

to pay into a city fund that allows for more development density. The brokerage points to other large projects around it as examples of what city planning officials may support. The site is one block west of where Related Midwest is building a 43-story apartment tower at 900 W. Randolph St., the neighborhood’s tallest building. Meanwhile, developer Sterling Bay is under construction with a 30-story apartment building a block west of Peppercorn’s site, and developers Newcastle Properties and Fulton Street Cos. are planning large projects near the property on the north side of Lake Street. The largest remaining development site in the neighborhood is two blocks north of Peppercorn’s property, where meat wholesaler Nealey Foods owns a 2.7-acre parcel running along the west side of Peoria Street and the Metra tracks running through the neighborhood. Sterling Bay earlier this year was negotiating to buy the site for more than $100 million, though the status of those talks is unclear. Denny said in an email that he aims to cash out of his Fulton Market development sites in order to redirect his capital several blocks west, where he owns a slew of industrial buildings, including a mostly vacant 80,000-square-foot office building at 240 N. Ashland Ave. That neighborhood, known as the Kinzie Industrial Corridor, is zoned for limited industrial uses with far less density than Fulton Market. Denny said in an email that he is betting that will eventually change to allow residential development in the neighborhood, boosting property values. The Lake Street listing comes shortly after Denny sold two other Fulton Market development sites at 1217 W. Washington Blvd. and 400 N. Elizabeth St. Denny purchased the Lake Street building from Trainor Glass, an Alsip-based glazing company that shut down and filed for Chapter 11 bankruptcy in early 2012. CBRE Senior Vice President Marcello Campanini is marketing 941945 W. Lake St. on behalf of Peppercorn Capital.

A house built in modules in a North Lawndale factory will soon be assembled on a lot in West Humboldt Park, the first of what a development firm hopes will be two dozen affordable homes for the area. In a factory on Polk Street, “we’ve built the biggest thing legally allowable on Chicago streets,” said Tim Swanson, an architect and founder of Inherent L3C. And by the end of July, they’ll truck it to a vacant lot on Lawndale Avenue, followed by a second unit the same size. Each unit is a full 720-squarefoot floor of the future two-story house. The two units will be assembled into a three-bedroom, twobath house designed to keep energy consumption low. The house will have hookups for future solar panels and include an alarm system and apps for monitoring energy and water use.

TARGETING BUYERS

The home is priced at $350,000, and Swanson says the targeted middle-income buyers may qualify for up to $81,000 in grants, a combination of micromarket recovery funds and money from the city and Inherent’s lending partner. The grants “make it affordable at 120%” area median income, he says. Those

are households with an income of $87,600 for a single person or $125,400 for a family of four. In the past two years, 33 houses have sold in the area Inherent is targeting, at an average price of $165,000, according to Crain’s research on Redfin, the online real estate marketplace. Three new-construction homes have sold in the upper $370,000s. The house comes with some unusual amenities: a life insurance policy on the primary earner in the household and a warranty that includes five years of winterizing, changing filters and other maintenance. These are components of what Swanson calls “building homeowners, not just homes.” Loss of income often leads to foreclosure, “and we want to prevent that,” he said. Inherent has a total of 24 lots in a 20-block area around Laura Ward STEM School, a CPS elementary building on Lawndale Avenue directly across the street from the first home’s site. “The idea is to take a community asset and surround it with housing,” Swanson said. A lead investor in Inherent is Harry Huzenis, who founded the Chicago residential brokerage Jameson Real Estate (now Jameson Sotheby’s International Realty) with his brother, Charlie, 40 years ago. While Jameson has been involved in development of homes

before, they’ve largely been high-end houses built by traditional methods. Huzenis said he got involved with Inherent because its use of modular homes “helps solve the problem of building affordable housing. It’s been used all over the country; we’re not inventing a new rocket ship.”

OTHER ATTEMPTS

Inherent joins several other developers using modular construction to bring costs down. Other developers’ efforts are underway in East Garfield Park and in South Shore, as well as other sites on the South and Southwest sides. Before launching Inherent, Swanson was the lead designer at Skender Construction, whose attempt to get into modular, or factory-built, apartments fell apart in 2020. Prior to that, he was the Chicago practice leader for Cannon, an architecture firm. Inherent employs 14 people at its factory in the K-Town section of North Lawndale. Swanson said that if the firm gets up to full capacity, it can build 100 houses a year. He hopes to complete a dozen this year and 40 to 50 next year. Along with the 24 planned for West Humboldt Park, he said he hopes to build clusters of modular homes in East Garfield Park, North Lawndale, West Pullman and Washington Heights.

HELP US MEET THE ONGOING G HUNGER CRISIS. S. The need for food remains high. The rising cost of groceries and other necessities puts more of our neighbors at risk of hunger. Together, we can help the families who need us. And we can take on the root causes of hunger, investing in local partners, providing job training, and bringing food and hope to our neighbors.

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7/22/22 3:39 PM

14 JULY 25, 2022 • CRAIN’S CHICAGO BUSINESS

YOUR VIEW

A deep dive into census data shows grounds for cautious optimism

Bad reve

som fined Hom the p natio

Recent news suggests a city in chaos. Census data shows a boom town. Which is true? Here’s what an analysis of long-term trends tells us about Chicago and where we’re headed.

Economically, the core is the most dynamic part of the city:

f you watch and read the news about Chicago, then dig into recent census data, it’s difficult to believe they’re about the same town. Mass shootings, the most homicides in the U.S., unruly youth creating havoc in the streets, carjackings by 12-year-olds, a homeless man set afire, neighborhoods hiring private security, corporate headquarters fleeing—all suggest a city in chaos. On the other hand, judging from the census numbers, you might think Chicago was a boom town. Hundreds of thousands of college graduates settled here over the last decade. The number of households is nearing the all-time high. More homes were built than at any time since the 1950s. Poverty is declining. How can these starkly different portrayals be reconciled? One way is to say Chicago had a good run up till 2020, but after that, due to a pile-on of crises—the pandemic, rising crime, racial strife, deteriorating finances—the wheels came off. Some believe COVID has changed the world irreversibly, and Chicago and other cities won’t ever be what they were. We don’t buy this defeatist argument. On the contrary, our analysis of long-term trends, and a deep dive into 2020 demographic detail released in March, suggests the city has more resources than it used to and is far better equipped to weather difficult days.

It has grown steadily since at least 1980,

and as of 2020 it was a mostly contiguous area of 83 square miles, taking in virtually all the lakefront between Evanston and 67th Street, and including half the city’s population: 1.37 million people.

The core accounted for 85% of new-home

construction, 69% of new households and all net population growth in the city during the 2010s. Its population density is 16,500 per square mile vs. 9,100 for the rest of the city.

The core is diverse by Chicago standards:

10% Asian, 14% Black, 18% Hispanic, 53% white and 4% other. The Black population in the core increased despite dropping elsewhere in the city.

The core includes almost all neighborhoods

we define as gentrified—that is, where the median home value is 150% or more of the regional median—and has become more affluent over time. That said, not all the core is wealthy. Most of its residents—723,000 people—live in neighborhoods where home values are in the middle range or lower.

Now for the not-so-good news.

First, the good news.

Change your metric to households, and Chicago grew at the fastest rate in modern times. The extent to which Chicago boomed during the 2010s isn’t widely recognized, since public attention focuses on population change, and the city added just 51,000 people. In fact, however, Chicago grew at a rate probably not seen since the 1920s: Households increased by 97,000—the

largest 10-year gain in modern recordkeeping—and will soon surpass the 1960 peak. Population hasn’t risen at the same rate due to declining household size, a trend throughout the developed world. However, households acquire housing, accumulate wealth and purchase goods and services, and so are an equally if not more important measure of economic potential than population.

The city—population 2.7 million— added 68,000 homes, the most since 1960. Dwellings here are at an all-time high. In contrast, during the same period, the San Francisco Bay Area added 83,000 dwellings for the entire region— population 4.7 million—despite gaining 464,000 people, one reason housing prices are so much higher there than here.

According to the Brookings Institution, the

residential population of downtown Chi-

cago exceeds 110,000 and since 1980 has grown at the fastest rate of any U.S. city by a wide margin. Downtown Chicago jobs rose by 153,000

between 2010 and 2020, the largest increase for any 10-year period in the modern record, reaching 632,000 before the pandemic. The total has since dropped, but still.

The number of college graduates in Chica-

go increased by 203,000 between 2010 and 2020, more than any other U.S. city except New York and Los Angeles, and higher than both on a percentage basis.

College grads are the chief source of immigration to Chicago and the main driver of population growth. Chicago’s college grads aren’t usually thought of as immigrants, but, like traditional immigrants, they’re primarily newcomers. According to the census, 55% weren’t born in Illinois, and based on reasonable assumptions, the share of city-living graduates who are Chicago natives may be just 10%. The point is worth stressing: Most of Chicago’s college graduates came from elsewhere. They made a conscious choice to live here, presumably knew what they were get-

Ed Zotti is a Chicago journalist, author and transit consultant. Rob Paral is a demographer and consultant. Mike Rothschild is a data scientist who works in the financial services industry. Pete Saunders is a city planner and director of community and economic development for the village of Richton Park.

P014_CCB_20220725.indd 14

ting into, and so are less likely to bolt at the first sign of trouble. That, plus their education and higher lifetime earnings potential, make them a formidable asset. Other features of this fast-growing group: The 203,000 gain outstripped the combined

increase in Asian residents (45,000), Hispanic residents (41,000) and white residents (9,000). It rivals the Hispanic population surge of 210,000 in the 1990s, the largest recent instance of traditional immigration to Chicago. If not for the additional grads, Chicago’s population would have fallen by 150,000.

The grad influx explains why white flight

ended in 2010. In the 2000s, the loss of white residents without degrees exceeded the gain in grads. The white population fell. In the 2010s, the reverse was true. The white population grew.

The city’s four major ethnic groups all saw

increases in college graduates during the 2010s: 29,000 of the newcomers were Asian; 23,000 Black; 37,000 Hispanic; 103,000 white, and the balance something else. The urban core, where most Chicago college graduates live, includes half of city residents. Chicago neighborhoods in which college grads exceed the U.S. average constitute a distinctive area we call the core, since it encompasses the central part of the city.

Violent crime is down, scary crime is up. The paradox is that violent crime here has plummeted. What has increased, especially since 2019, are frightening crimes. In 2000, Chicago recorded 48,000 violent crimes. By 2014, that fell to 24,000, a 50% decline. By 2021, violent crimes had ticked up to 26,000, still well below historical levels. The drop isn’t confined to affluent neighborhoods. Communities throughout the city, including the West and South sides, are safer. The long-term improvement notwithstanding, several frightening types of crime increased during the pandemic, including: Homicides, up from 508 in 2019 to 806 in

2021 (all numbers drawn from the city’s data portal).

Carjackings, which tripled from 422 to 1,346. Violent crime involving guns, up 50% from

8,260 to 12,495.

In addition, scary crime has spread into neighborhoods once considered safe. For example, in West Town, carjackings jumped from 24 in 2019 to 111 in 2021, the highest of any neighborhood. On the Near North Side, violent crimes involving guns doubled in a single year, from 117 in 2020 to 230 in 2021. Meanwhile, there have been well-publicized instances of crime associated with social media—most notoriously, the killing of a young man during a meetup near the Bean in May, and the looting of Michigan Avenue stores in August 2020. We’re not aware of any systematic attempt to track or study flash mob-type crime, which has been reported in cities around the U.S. since at least 2010. Still, it contributes to the sense of lawlessness.

7/22/22 3:42 PM

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CRAIN’S CHICAGO BUSINESS • JULY 25, 2022 15

YOUR VIEW Bad as this sounds, a closer look reveals a more nuanced story: The increase in homicides, with

some exceptions, has been confined to the West and South sides. Homicide is up nationwide due to the pandemic, the obvious explanation for the spike in Chicago.

While carjackings are up, rob-

bery—of which carjacking is a subset—has been flat for the past three years and has trended down over the past decade. Robbers aren’t committing more crimes; they’ve changed their modus operandi.

Despite the jump in crime involving guns, violent crime overall has risen just 6% since 2019 and over the past decade has been flat. It’s just that more crimes involve guns. What’s up with the guns? Partly, it’s the quantity. A University of Chicago Crime Lab study suggested that, based on the number of firearms confiscated by police, Chicago may have six times as many illegal guns per capita as New York due to lax gun laws in surrounding states. Why gun crime has increased over the past two years is less clear. An optimist might say that, to the extent it was driven by the pandemic, it’ll drop as the pandemic recedes. That may be true of homicide. But even if it falls, the city will continue seeing a lot of people shot to death. The murder rate here isn’t the country’s worst; it’s well below St. Louis and New Orleans, and substantially less than Atlanta, Detroit, Philadelphia and Washington, D.C. Nonetheless, due to Chicago’s size, murders will likely remain the most among U.S. cities, and we’ll continue to be the poster child for crime. So there we are: Crime is lower, but worse. Chicago’s future depends on a steady stream of talented newcomers. If fear of crime chokes that off, we’re hosed. As ethnic neighborhoods go, so goes Chicago. Chicago exemplifies what’s been called demographic inversion, in which once-poor inner-city communities become affluent, while some outlying middle-class neighborhoods decline. Nonetheless, neighborhoods outside the core remain a critical part of the urban ecosystem, serving as home to successive waves of newcomers and providing a path to the middle class. The exception has been much of the Black community. However, our analysis suggests a way forward has emerged.

We’ll start with a look at how the ethnic mix in Chicago has changed over the past 20 years.

Chicago’s traditional white communities are fading. Chicago’s white population is in the late stages of a long-term process we believe all major ethnic groups will eventually follow: The initial arrivals move up and out of the city, and a subset of their descendants graduate from college and move back. Second-wave arrivals eventually outnumber first-wave de-

P014_CCB_20220725.indd 15

partures. The white population reached that point in 2010. Older non-Hispanic white ethnic enclaves continue to shrink. For example, the Northwest Side, where a large Polish community once extended along Milwaukee Avenue, has become increasingly Hispanic. Nonetheless, the exodus of noncollege-educated white residents has slowed, no doubt partly because fewer are left. On the Northwest Side, the neighborhoods north of Irving Park Road have largely been absorbed into the core. A sizable non-Hispanic white presence seems likely to remain. That’s less certain on the Southwest Side. Garfield Ridge and Clearing, portions of which were more than 90% white 20 years ago, are now mostly Hispanic. On the Far Southeast Side, Hegewisch has also transitioned from white to Hispanic. Despite these changes, Chicago is one of the few places in Cook County where the white population is growing. In contrast, suburban Cook lost 378,000 white residents between 2000 and 2020. Hispanics are heading for the suburbs. Chicago’s Hispanic residents are following the classic immigration path, as seen not only in their improving economic status but also in the extent to which many are leaving—or being pushed out of— the now-wealthy central city. The community’s future increasingly lies in the suburbs. Over the past 20 years, 91% of the region’s Hispanic population growth—679,000 of 745,000 people—has taken place in the suburbs, where twothirds of Hispanics now live. In Chicago, Hispanic residents are moving en masse from areas near the core to the city’s periphery. Long-established areas like Logan Square, Pilsen and West Town are losing Hispanic population. The number of Hispanic residents in Logan Square fell 30% during the 2010s. Chicago neighborhoods with the greatest Hispanic growth include Austin, Garfield Ridge and Ashburn on the city’s border, which collectively saw an increase of 23,000 over the decade. Some Hispanic residents are moving into contracting Black communities, such as Englewood, Auburn Gresham and West Garfield Park, all of which had Hispanic population gains of more than 50%. Other indications of the demographic maturing of the Chicago Hispanic community include the declining percentage of immigrants—35% today, compared to 45% two decades ago—and rising education levels. In 2020, 16% of Chicago Hispanic residents had a bachelor’s degree, up from 5% in 2000. On the other hand, their slowing rate of increase in the city—5% in the 2010s—means Hispanic residents aren’t likely to be a major source of population growth. Asian immigrants, from China in particular, are having a disproportionate impact. Unlike Chicago’s Hispanic community, three-quarters of whom are of Mexican origin, no single nationality accounts for a majority of the city’s Asian population.

However, ethnic Chinese, the largest Asian nationality with about a third of the total, have had an outsize influence for two reasons. The first is their concentration in and around Chinatown, said to be one of the few, if not the only, growing traditional Chinese communities in a major U.S. city. The second is their high level of educational attainment: 60% of Chicago’s Asian residents have a bachelor’s degree, up from 38% two decades ago. Chinese immigrants and their children are helping invigorate Bridgeport and McKinley Park, while those with college degrees are a noticeable presence in the core. Asian residents are early in the immigration cycle. Their numbers grew by 31%, the most among the city’s major ethnic groups. They’re still mainly foreign-born at 67%, down from 73% two decades ago. To date, there has been no wholesale movement of Asian residents away from central Chicago; 37% were in the same five community areas in 2020 as in 2010. On the other hand, due to their higher levels of income and education, coupled with a high rate of intermarriage, many Asian newcomers settle in the core to start with. Chicago’s Asian population is up in all central community areas. Chicago’s Black community is headed in three different directions. On the whole, the 2020 census showed Chicago’s Black community making modest progress economically. The Black poverty rate fell from 34% to 26%, and Black college graduates increased by 23,000, despite the loss of 85,000 Black residents overall. However, a closer look reveals three diverging narratives: The West Side is in transition,

with departing Black households giving way to those of other ethnicities, primarily Hispanic residents. The five Far West Side community areas—Humboldt Park, Austin, East and West Garfield Park and North Lawndale—shifted from 81% Black and 14% Hispanic in 2000 to 67% Black and 26% Hispanic in 2020. Total households and dwellings increased during the 2010s.

Interior South Side Black neigh-

borhoods remain in decline. The bulk of Black population loss during the 2010s—61,000 people— occurred in this area. An influx of Hispanic residents is offsetting the loss of Black community members in some sections, but a cluster of eight communities stretching south and east from Englewood and West Englewood collectively lost 1,200 households and 3,000 dwellings, suggesting the area is emptying out.

The south lakefront is becoming

integrated into the core, with increasing population, income and educational attainment. As we’ve previously reported, this area, consisting of eight communities extending from the South Loop to South Shore, is becoming more like the north lakefront, with growing numbers of college-educated professionals who work downtown. It’s becoming more diverse

but remains predominantly Black. We believe this development is of critical importance. At first glance, a scattered but growing band of Far South Side neighborhoods with above-average numbers of college graduates suggests the old middle-class Black communities stretching from South Shore to Beverly are starting to revive. On closer inquiry, the apparent increase is more a function of subtraction than addition. Many of the college grads are aging holdovers from the 1970s and ‘80s, when the communities were Black professional enclaves; younger Black families without college degrees are leaving. Still, the area did gain 5,000 grads and remains largely middle income, so there’s hope. Realistically, though, the south lakefront is going to have to redevelop first. We can’t emphasize enough: What Chicago’s Black community needs above all is to attract more college graduates. The surest way to do that is to establish a lively Bronzeville commercial district to serve as a gateway, drawing in talented kids from elsewhere and, eventually, funneling them into other South Side neighborhoods. That’s what the north lakefront does for North Side neighborhoods. Decades will pass before Black grads arriving outnumber non-college grads leaving. But that’s the path forward, make no mistake.

Chicago is still mostly middle class. Some analyses have purported to show Chicago’s middle class has almost vanished, but census data indicates these claims are exaggerated. Pew Research Center, a nonpartisan research group, defines middle class as having household income between two-thirds and 200% of the regional median—in metro Chicago’s case, $50,000 to $149,000 for 2020. By this standard, 62% of city households were middle income; 34% were lower; and 4% upper. Ten years earlier, the numbers were 62% middle; 37% lower; and 1% upper. The citywide poverty rate—20% in 2000—rose to 24% in 2012, and has since fallen to 16%. The city’s median household income still lags that of the region, but the gap is narrowing. In 2010, the city’s median income was 77% of the region’s; in 2020, it was 83%. In sum, we find grounds for cautious optimism. Still, if the numbers tell us one thing, our eyes tell us another. Chicago has a thriving, dense core; some prosperous communities on the outskirts; and a vast, mostly poor, less-populated hinterland in between. Bridging that gap may not be impossible, but there’s much work to be done. To see more maps and graphics, read the op-ed online at ChicagoBusiness.com/census.

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7/22/22 3:42 PM

16 July 25, 2022 • CRAIN’S CHICAGO BUSINESS

Phil Stefani-connected weed shop to open in old Carson’s Ribs space BY JOHN PLETZ GRI Holdings, one of the most controversial winners of new retail marijuana licenses in Illinois, is on its way to opening a downtown store. The company, whose owners include restaurant owner Phil Stefani and former Chipolice commander Tom cago Wheeler, won approval July 15 from the Zoning Board of Appeals to open a pot shop in the former Carson’s Ribs restaurant at 612 N. Wells St. It’s the latest step in a long, strange journey that began more than two years ago, when the state of Illinois began accepting applications for new retail licenses, and has included lawsuits, lotteries and, in GRI’s case, even a pandemic payroll protection loan. With just 110 dispensaries statewide, the lack of stores has held back the growth of the industry in Illinois and hurt sales of existing cannabis companies, such as Cresco Labs, Green

Thumb Industries and Verano Holdings, which also sell marijuana to other retailers. Marijuana sales in Illinois have fallen the past two months. GRI hopes to open its first store, on Wells Street, this fall, Wheeler says. It would be one of the first new license holders to set up shop. Others who’ve received zoning approval include Mint Ventures, which will open at 201-15 N. Clinton St., and Green & Foster, which plans a store ther at 2114 S. Wabash Ave. O new entrants, such as Blounts & Moore, have filed for zoning approvals. GRI’s store will be the fourth in River North, joining Ascend, Cresco Labs, PharmaCann. “After all that waiting, we’re really excited for it to come to fruition,” says Wheeler, noting that he worked in the neighborhood as a police officer. The company told the city it expects to spend about $2 million turning the 6,400-square-foot former restaurant into a mari-

juana outlet, which will be called Green Rose Dispensary.

LICENSING PROCESS

GRI was one of 21 applicants that received perfect marks in the initial scoring, setting off a round of complaints and scrutiny about a licensing process that was designed to favor “social-equity” applicants as a way to diversify ownership of the cannabis industry. To achieve social-equity status, applicant groups had to be led by people who lived in neighborhoods disproportionately impacted by poverty, violence and enforcement of marijuana laws as part of the war on drugs—or those who had arrests or convictions for marijuana possession or their family members also could qualify. A third way to achieve social-equity status involved companies to employ at least 10 workers who met the requirements for residency or criminal records. The hiring approach proved controversial in minority communities, where it was quickly derided as the “slave-master” clause.

GOOGLE

GRI Holdings wins zoning approval as Illinois begins issuing long-awaited retail marijuana licenses

Street view of 612 N. Wells St., where a Carson’s Ribs restaurant used to operate. Although the hiring method was used by GRI, Wheeler defends the company’s social- equity qualifications. “I come from a disproportionately impacted area in Roseland,” says Wheeler, who also is a partner in a cannabis-consulting firm. “I still live here.” The law required these companies to make the hires before they got the license and to keep them employed. GRI received a $44,037 PPP loan to maintain its payroll. Marijuana is federally illegal, which prevents cannabis companies from getting traditional loans or banking services. Wheeler says when Hinsdale-based

Three popular New York restaurants coming to River North

Proposed grocery stores, artists’ cafe win latest city grants

New York hospitality company The Group is planning French, Italian and Japanese restaurants, one of which will take over a former Ruth’s Chris location Three popular restaurants with New York origins are coming to River North. Olio e Più, an Italian trattoria and enoteca, is slated to open in spring 2023 at 445 N. Dearborn St. La Grande Boucherie, an elaborate French brasserie, and Omakase Room, an intimate Japanese restaurant, will share the address of 431 N. Dearborn St. Both are are slated to launch in spring 2023. Hospitality company The Group is behind the three ventures, which has a number of New York restaurants, including renditions or original locations of the three coming to Chicago. Its River North locations are owned by Friedman Properties, a developer that owns more than 50 buildings totaling more than 5 million square feet, most of them in River North. Olio e Più will be situated in a street-level space Italian restaurant Mama’s Boy once occupied. Hand-stretched pizzas made in a

P016_CCB-20220725.indd 16

traditional wood-fired oven and housemade pastas are some of items on the New York location’s menu. “I know that with this expansion into Chicago, we will add something unique to an already bustling city,” Emil Stefkov, founder and president of The Group, wrote in an email.

BY GREG HINZ

LEGEARD STUDIOS

BY TRINA MANNINO

La Grande Boucherie rendering

BRIGHT POINT

La Grande Boucherie will aris evoke early 20th century P inside an Art Nouveau-inspired building. The space was last occupied by Ruth’s Chris Steak House. The two-story dining room will feature intricate limestone carved walls, curved stained glass windows and a 25-foot-long oval bar. Details on the Omakase Room are not yet available. The Group is planning to take restaurants to other cities next year as well. News of The Group’s three restaurants comes at a bright point for River North. The neighborhood recently has seen a rebound in its retail and

GRI applied for a PPP loan from the Small Business Administration, “we weren’t a cannabis company. . . .We had no license at that time.” The state had intended to issue licenses by May 2020, when GRI received its loan, but COVID and other problems delayed lotteries for more than year. Federal records show the loan was forgiven. The Illinois Department of Financial & Professional Regulation issued 149 of 185 new licenses to GRI and other lottery winners July 22. Because of litigation and other delays, the new retail licenses are more than two years behind schedule.

Olio e Più rendering restaurant real estate market, Crain’s Alby Gallun recently reported. The neighborhood’s 2021 retail vacancy rate fell to 19.3% compared to 22% a year earlier.

A long-anticipated grocery store under the Wilson el stop. A chain of grocery stores on the South and West sides. An artists’ work space and cafe in Woodlawn. Those are among the big winners of the latest round of Community Development grants from the Lightfoot administration that will support investment in mostly minority and low-income neighborhoods. Overall, the round announced on July 18 involves nearly $50 million in tentative awards that, if projects actually are completed, is paired with another nearly $50 million in private investment. The most eye-catching are a dozen projects that each will get at least $250,000. The single largest at any one location is $5.2 million toward completion and opening of the proposed Chicago Market co-op grocery store at 4620 N. Broadway. The facility has been empty since the stop on the Chicago Transit Authority’s el line was completed several years ago, with store organizers trying to come up with financing. Under the plan announced on July 18, the city’s money will go toward

a project that overall will cost an estimated $11.7 million. The Yellow Banana chain will be taking over five Save-A-Lot stores on the South and West sides and reopening one that recently closed. The city said Yellow Banana will get $13.5 million overall to spread among work at the six sites. Among other projects in line for help is an artists’ space and cafe at 525 E. 67th St., which has been allotted $1.2 million, and the CircEsteem conversion of a former theater at 4730 N. Sheridan Rd. into an entertainment venue and social services center. According to the city, it will get $4.2 million, about half of total project costs. Sixty-three other groups were selected for awards of up to $250,000 each. The entire list is posted on the city’s website. Mayor Lori Lightfoot said in a statement, “When our local entrepreneurs have the tools they need to grow their small businesses, they can thrive and make our neighborhoods that much more livable, functional and enjoyable.” Money for the projects come from development fees paid on some projects in the central area of the city and, in some cases, tax- increment financing revenue.

7/22/22 4:37 PM

CRAIN’S CHICAGO BUSINESS • JULY 25, 2022 17

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

BANKING / FINANCE

ENGINEERING

HEALTH CARE

LAW

ORBA, Chicago

BMO, Chicago

Collins Engineers, Inc., Chicago

King & Spalding, Chicago

ORBA, one of Chicago’s largest public accounting firms, welcomes Nate Hughes and David Kent to the firm. Nate Hughes joins the firm’s Audit Group. He works with clients to provide a Hughes range of audit services, including performing audits, reviews and compilations. He is also proficient in preparing income tax returns and assisting in special projects, such as tax projections and Kent consulting engagements. David Kent joins the firm’s Cloud CFO Services Group. He has more than 25 years of experience providing accounting and administrative support, including analyzing financial statements, preparing monthly and year-end journal entries, and reconciling bank statements.

Rick FlorJancic joins BMO as Head of Middle Market Investment Banking Coverage. In this role, FlorJancic and his team will partner with colleagues to deliver investment banking coverage and solutions to BMO’s Commercial Bank clients across North America. He brings over 24 years of M&A and capital markets experience advising clients and structuring transactions across a range of industries. Previously, FlorJancic spent 20 years at JPMorgan including leading regional IB coverage of the Midwest.

Elizabeth Collins Burkhart, P.E., has been promoted to President of Collins Engineers, Inc. Elizabeth joined Collins in 2007 most recently serving as EVP of Business Development. Collins Burkhart She will continue to lead the development of relationships that encourage innovation in addressing infrastructure issues. She participates in organizations including TRB, ASCE’s COPRI, and PIANC. Cecchi Locally, Elizabeth is on the Board of Directors for Trinity High School (River Forest). After 40 years with Collins—the last 6 as President—Dan Cecchi, P.E., is moving into the role of Sr. Vice President—Risk where he will oversee risk management companywide and provide guidance and insight as needed. Dan was pivotal in Collins’ growth to a 300+-employee nationwide operation.

Orthopaedic Research Society, Rosemont

ACCOUNTING Plante Moran, Chicago Effective July 1, Sandor Jacobson and Sean Pattison became co-leaders of Plante Moran’s restructuring and transformation practice, assuming leadership Jacobson from Tim Weed, who’s retiring after an impressive 36-year career. “Sandor and Sean are tremendous leaders with deep expertise in helping clients solve their most challenging and difficult problems,” says Weed, who has spent Pattison two years preparing for this transition. Jacobson and Pattison will focus on continuing to grow the practice, including serving clients, expanding into new geographies and verticals, and developing their growing staff. Sandor will lead the Chicagoland and manufacturing portion of the practice, while Sean will lead the Michigan, Ohio, and automotive/mobility portion.

BANKING First Bank Chicago, Westchester First Bank Chicago, one of the top five privately held banks in Chicagoland, is pleased to welcome Miguel A. Hernandez as Loan Operations Officer. Based in our Westchester loan production office, he is responsible for supporting our expansion strategy into the southwest suburbs while guiding our commercial loan portfolio documentation and reporting processes. Miguel comes to us from Inland Bank & Trust and brings over 18 years of banking expertise and five-star service.

P017_CCB_20220725_v1.indd 1

BANKING / FINANCE Providence Bank & Trust, South Holland The Board of Directors of Providence Bank & Trust is pleased to announce the appointment of William (Bill) Gleason to Director of the Bank. Mr. Gleason previously served as Director and President of The Leaders Bank, Oak Brook, IL. Providence Bank & Trust completed the acquisition of The Leaders Bank on May 1, 2022. Bill’s years of business, banking and board experience will add great value to the Bank’s Board of Directors.

ENGINEERING SPACECO, Inc., Rosemont

CONSTRUCTION E&K of Chicago, Inc., Chicago CDM Investment Group, Inc. is pleased to announce a planned leadership transition that will officially take place on January 1, 2023, with our affiliated companies E&K and Elljay. Jeff Shelton, Shelton current E&K of Chicago Unit President, will be named the Unit President of Elljay Acoustics, Inc. Jeff has over 19 years of experience in construction management as well as experience with specialty ceilings. Nelson His expertise will complement the Elljay team as they continue to grow. Ryan Nelson will be promoted to Unit President of E&K of Chicago. Ryan has over 10 years of experience with E&K, most recently as the Vice President. He will be responsible for the strategic leadership and operations of the Chicago office.

SPACECO, Inc. is announcing the promotion of Executive Vice President Daniel C. Stevens to President of the Rosemont-based firm. Bill Loftus, who has served as President for 21 years, will stay in leadership of the company, joining Brett Duffy and Michael Mondus as Principals. “I’m honored by this promotion and excited about the opportunity to lead SPACECO,” said Stevens, who will continue serving clients while taking on a larger role in the day-to-day business operations. “Our company’s strength has always been our client-centric approach and I looked forward to working with the great SPACECO team to continue our history of success.”

EXECUTIVE SEARCH Slayton Search Partners, Chicago

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

Slayton Search Partners is proud to announce the promotion of John Ratliff to Senior Vice President and Principal. John will be expanding his efforts to develop impactful relationships and recruit key leaders in the consumer and industrial sectors. He has proven himself highly capable of achieving tangible results for our clients and is a strong fit for this senior role in the Slayton team.

Sharon Smith-Terry was recently named the executive director of the Orthopaedic Research Society located in Rosemont, Illinois. She provides executive management oversight to the society that comprises 3700 members who are surgeons, engineers, and biologists. She is responsible for the P&L and oversees board governance. Sharon’s other duties include strategic planning, operations, DEI strategy, and business development. She is accountable for the overall success of the organization.

Danna Horton has joined King & Spalding’s Chicago office as a partner in the firm’s Corporate, Finance and Investments practice group. Horton counsels lenders and borrowers in real estate finance transactions, including first mortgage loans, mezzanine loans, construction loans and loan sales. She also advises investors in real estate joint ventures, acquisitions, dispositions and long-term ground leases.

LAW Thompson Coburn LLP, Chicago INTERIOR DESIGN Charlie Greene Studio, Chicago Charlie Greene Studio is proud to announce that Jen McCord and Cathy Grable have been named Equity Partners. With over 20 years in the industry and 6 with CGS, McCord Jen will continue to provide design direction on projects while also focusing on marketing and outreach efforts. Cathy joined CGS in early 2022 after spending nearly 25 years at Chicago-area firms. She will focus on operations, Grable project management, and mentoring. Naming these two outstanding professionals to leadership roles at CGS ensures our ability to continue our mission to create compelling interior spaces, provide excellent service to our clients, and grow strategically.

Jeff Shelley has joined Thompson Coburn as a partner in the Firm’s Private Client practice. Jeff counsels individuals, entrepreneurs, business owners, and family offices on estate planning and administration, transfer taxation, and business planning. Jeff’s scientific, tax, and business background gives him unique insights when providing clients with personal and business solutions. He assists businesses and their owners with transactions, tax planning, succession planning, and IP protection.

MARKETING Colman, Brohan & Davis Inc., Chicago Colman, Brohan & Davis, Inc. (CBD Marketing) has announced the promotion of two of its senior executives, Mary Olivieri and Mark Shevitz. Promoted Olivieri to President of CBD Marketing, Olivieri will guide the overall agency and its creative department to further nurture and innovate their clients’ exciting vision and unique brand identities. Now CBD’s Chief Strategy Officer, Shevitz Shevitz will oversee business and strategic development for the agency and its clients.

LAW

WEALTH MANAGEMENT

Hahn Loeser & Parks, Chicago

Professional Wealth Advisors, LLC, Downers Grove

The firm is pleased to announce that Anandita Vyakarnam has joined as a partner in the Intellectual Property Practice Area. Her extensive experience includes complex patent litigation, patent counseling and opinions, IP due diligence, licensing, prosecution and post-grant patent review. She has substantial experience with the drug approval process under the Hatch-Waxman Act and pharmaceutical patent litigation involving Abbreviated New Drug Applications. Anandita earned her J.D. from Columbia University.

Crystal Kolcz, CFP® joined Professional Wealth Advisors, LLC as Managing Director in their Downers Grove office. Ms. Kolcz has more than 15 years as a financial services executive. She will be leading a dynamic team of financial advisors and working to grow PWA’s goalsbased financial planning practice. The Financial advisors with PWA are registered with, and securities and advisory services offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC.

7/19/22 10:50 AM

18 JULY 25, 2022 • CRAIN’S CHICAGO BUSINESS

Has Chicago seen its last supertall office skyscraper? TOWERS from Page 1 kickstart one of them. “The office is here to stay,” he says. “But it is clear that virtually all users are going to reduce their footprints.” While the public health crisis hasn’t eliminated the office, Buck’s pivot signals it may be fueling the demise of the traditional office skyscraper. As companies embrace remote work and shrink their workspace, it’s harder for developers to ink the massive leases they usually need to finance skyline-altering office towers. Fewer big fish in the pond of office tenants could mean a permanent shift away from office buildings of 50 stories or more, developers say, and toward mid-rise, mixed-use properties chock full of amenities that will help persuade workers to show up rather than work from home. It’s a widespread movement with consequences for Chicago, the birthplace of the skyscraper and a city that now faces a future in which office megaprojects may no longer shape it or provide highly visible examples of downtown’s growth and vitality. Supertall buildings helped cement Chicago’s reputation as a center of innovation and “make-no-little-plans” boldness. The city could use that kind of symbolic boost nowadays, as big-name companies leave town and rising crime darkens perceptions of the local business climate. “Big buildings require a big tenant to be able to get financing, and there just aren’t that many big tenants,” says architect Jim Goettsch, who has designed office skyscrapers in Chicago since the late 1970s and whose namesake firm drew up plans for three of the last five office towers to open downtown. Goettsch expects more modestly scaled buildings to gain popularity in the future rather than supertall office projects. He points to the trendy Fulton Market District, where the volume of office leasing

Get Shorty: When developer John Buck couldn’t land an anchor tenant for a 60-story office tower on West Madison Street, he opted for the two shorter buildings shown in this rendering. whose Riverside Investment & Development completed skyscrapers at 150 N. Riverside Plaza, 110 N. Wacker Drive and 320 S. Canal St. since 2017. Lenders usually won’t make construction loans unless 30% to 40% of a proposed office tower has been pre-leased to a tenant with good credit. That often means finding a company that needs far more than 400,000 square feet—a challenge at any time, but especially when tenants are slashing their office footprints. Karen Case, president of U.S. commercial real estate at lender CIBC, says financing will be more difficult for larger office projects for the foreseeable future, calling the office sector “the most uncertain of any of the asset classes” as companies grapple with the rise of remote work. Even if developers can land a massive tenant to anchor onethird of a proposed tower, lenders might be more hesitant in the future to bet they can fill up the rest amid weakened office demand,

has been enough to fill a couple of office towers like those he has designed, “but there’s just a different attitude about what kind of building people want to be in and what kinds of organizations are filling them.” Few new office projects are launching today, regardless of size. Record-high vacancy, rising interest rates, soft office demand and signs of a looming recession are casting a pall on the entire office sector. Chicago has been through skyscraper droughts before, typically when economic downturns put the brakes on office construction overall. When the economy recovers, developers have stormed back with new, glassy office skyscrapers. But the next economic upswing may look very different. While companies have proven during the pandemic that they will flock to new or renovated offices, “it’s going to be tough” to finance classic large-scale office towers downtown, says John O’Donnell,

Chicago has also seen a skyscraper built in stages before. Health Care Service Corp.’s building at 300 E. Randolph St. opened in 1997 as a 33-story building, and another 24 stories were added in 2010. Chicago developer John Murphy could provide the next local test case for office skyscrapers. He’s planning a pair of 50-plus-story towers at 301 and 321 S. Wacker Drive, just south of Willis Tower. Murphy admits it has never been more difficult to build office towers so large, saying the “complexion of downtown is going to change dramatically” in the wake of the pandemic. Still, he’s not planning to overhaul his design like Buck. “We have two tower sites suitable for tenants that need in excess of 300,000 square feet,” he says, adding that sites along Wacker Drive are better suited for high-rises. “But will you see five to seven of those towers (downtown)? I don’t know.”

Case says. Tall towers are still going up in the residential sector, where strong apartment demand has driven up rents and fueled the development of skyscrapers, like the 76-story One Chicago in River North and 73-story apartment building under construction at 1000 S. Michigan Ave. But it now appears that the 60-story Salesforce Tower under construction at Wolf Point on the Chicago River will be the last tall office building to rise in the city for some time to come. Any future office skyscrapers are more likely to come from big companies commissioning built-tosuit projects rather than speculative projects from developers that would need to find anchor tenants. JPMorgan Chase could pursue such a project, having spent several years exploring options with local developers to leave its namesake Loop building at 10 S. Dearborn St. for a new tower, similar to what Bank of America and BMO Harris Bank did on Wacker Drive and next to Union Station.

w END OF AN ERA Office skyscraper development has mirrored economic cycles, but the rise of remote work may mean more modestly sized projects dominate the next decade. OFFICE BUILDINGS IN THE U.S. (100 METERS OR HIGHER, COMPLETE OR UNDER CONSTUCTION) 40 38 30

20 14

10 0

‘90

‘91

‘92

‘93

‘94

4 ‘95

3 ‘96

‘97

‘98

8 ‘99

7 ‘00

10 6

‘01

‘02

‘03

‘04

4 ‘05

‘06

‘07

‘08

11 5

‘09

‘10

‘11

‘12

‘13

4 ‘14

5 ‘15

7 ‘16

13 7

‘17

‘18

‘19

‘20

‘21

‘22

‘23

‘24

Note: 100 meters is about 328 feet. Source: Council on Tall Buildings & Urban Habitat

P018_CCB_20220725.indd 18

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NURSING from Page 1 Associates. But the increased hiring of nurses with less training raises questions about the effect on patient care. While associate-degree nurses can do many of the same tasks as those with four-year degrees, medical assistants and licensed practical nurses cannot. Some industry experts say that this lowerlevel talent frees up registered nurses to provide more and sometimes better care to patients. But others say their limited training means patients might not always get proper care. Hospitals’ changing recruitment strategies reflect the challenges they face amid the ongoing labor shortage caused by the COVID-19 pandemic. Stress and burnout pushed many nurses out of health care for good. The number of hospital workers in Illinois is still 9,000 below pre-pandemic levels, according to the U.S. Bureau of Labor Statistics. The American Nurses Association-Illinois predicts the shortfall of registered nurses in the state will reach 15,000 by 2025. As the nursing talent pool shrinks and recruiting becomes more competitive, hospitals are reassessing how and who they hire to keep operations running. The new approaches include hiring registered nurses with just two-year degrees, as well as licensed practical nurses, which only require a one-year degree, and certified nursing assistants, which typically require a four-to-12-week certification program. To fill the training gap, many hospitals are beefing up tuition reimbursement programs for those who pursue bachelor’s degrees. There’s also a financial advantage to looser hiring criteria. LPNs, CNAs and medical assistants earn less than RNs, easing some of the financial pressures hospitals face as a competitive hiring market drives up nurses’ salaries.

LOOSENING QUALIFICATIONS

Connect with Suzanne Janik at sjanik@crain.com for more information.

P020_CCB_20220725.indd 20

UChicago dropped its nursing qualifications from a bachelor’s degree requirement to an associate degree last year, says Ivan Samstein, executive vice president and chief financial officer. “It’s not just hiring individu-

als with an associate’s degree,” he says. “It’s also investing in them and funding a new program for them to get their bachelor’s degree in their first few years of working for UChicago Medicine.” Advocate Aurora is doing something similar, says Mary Beth Kingston, the 27-hospital chain’s chief nursing officer. Downers Grove-based Advocate is hiring more associate-level registered nurses and launched a loan-assistance program that helps nurses pay off student debt up to $20,000, hoping to encourage workers to get more schooling. Maggie Woziwoda, a bachelor’s degree nurse at Advocate Lutheran General Hospital in Park Ridge, says she’s noticed the change. Before the pandemic, she says it was rare to see an associate-level nurse hired at Advocate Aurora and similar large hospital chains, which is one of the reasons she decided to earn a bachelor’s degree over an associate’s. “I would have probably ended up working at a nursing home or a long-term care facility of some sort because that’s usually the only place that was hiring associatelevel nurses,” Woziwoda says. “But I really wanted to work at a level 1 trauma center.” Sinai Chicago is loosening qualification requirements for nursing talent as it works to fill open positions at its four hospitals. The city’s largest operator of “safety-net” hospitals serving primarily Medicaid and Medicare patients is hiring more associate-level registered nurses and looking at ways to add licensed practical nurses and medical assistant technicians to its staff. Sinai is also expanding internship-like programs for nursing school residents. “(There’s) less of a mandate on the laureate of the degree,” says Chief Operating Officer Dr. Airica Steed, who is also a registered nurse. While lower qualification requirements will likely bring more inexperienced nurses into hospitals, some experts and providers say patients don’t have to worry about receiving subpar care. Hiring more LPNs and medical assistants to handle lower-level tasks allows registered nurses to focus on work they’re uniquely qualified to do, Fitzpatrick says.

“There are a lot of activities that (registered nurses) are performing that quite frankly don’t need their level of expertise,” Fitzpatrick says. “As we think about getting other caregivers into that team, it’s really around redesigning the work and making sure folks are working to the top of their license.”

BUILDING PIPELINES

However, the challenge for hospitals will be maintaining clear lines between the roles of nurses with more training and those with less. If lines are blurred, patients could end up getting care from an unqualified worker, says Paul Pater, treasurer of the Illinois Nurses Association and an emergency department nurse at UI Health, where he’s noticed more medical assistants being hired. “I have major concerns with institutions that are hiring non-nursing staff to fill nursing-like roles because there’s a large, large difference in our education levels and the expectations,” says Pater, who holds a master’s degree in nursing. “Having fewer RNs in a system is a health care nightmare. There’s certain things that can only be done under a nurse’s license.” That’s why some health systems are building their own nursing pipelines, even at very basic levels. Rush University Medical Center has doubled down on internship opportunities and training programs for certified nursing assistant, medical assistant and other positions, says Rukiya Curvey Johnson, executive director of Rush’s education and career hub. This year Rush launched a 15week apprenticeship program for certified nursing assistants in partnership with community health nonprofit West Side United. The Beyond the Diploma program aims to train 30 CNAs this fiscal year. Later this summer, Rush and Harper College in Palatine will kick off an 18-month program to train 45 medical assistants. Though hospitals say it’s too early to tell if the relaxed hiring standards are making a dent in the nursing shortage, Johnson says the new approach “is here to stay,” adding, “I don’t think there’s any way we meet the demand by just relying on people who are fully educated with the degrees that we want.”

7/22/22 3:54 PM

CRAIN’S CHICAGO BUSINESS • JULY 25, 2022 21

Sloniger’s gigs as a developer and minister are about ‘building communities’ on the 18th-floor outdoor pool deck at Parq Fulton, an apartment tower that the Naperville-based firm where he’s a partner, Marquette Cos., opened this spring at Randolph Street and Ogden Avenue in Fulton Market. “I want to build a community, create something great, a place where people feel like they found the right place for them.” The Elgin church is 25 years old; the cluster of apartment developments much more recent. In 2019, Marquette opened the Mason, a 263-apartment building at 180 N. Ada St. It’s the first of four that line up running west to a yet-unnamed project at 140 N. Ashland Ave. that’s scheduled to open in late 2023. If all plays out as planned, in the course of four years, Marquette will have added 994 apartments, as well as a 49room hotel and several restaurants, in an area that Sloniger refers to as Fulton West. In the process, Marquette will have pushed the hot Fulton Market neighborhood farther west without pushing out existing residents, as the sites involved were all industrial or institutional. The new buildings may also help pave the way for redevelopment of empty spaces around the United Center a few blocks farther west and south. At the same time, the projects will show that a man who grew up watching his father build communities in south suburban churches can build a new one in the city’s hottest section. “Darren is a market-rate developer who’s a minister. That’s a unique character,” says Ald. Walter Burnett, whose 27th Ward encompasses Marquette’s projects. “He’s got a vision of what that area could be, not what it is, and he’s not afraid to invest in the West Side. Other market-rate developers would wait for somebody else to go over there first.” If Sloniger is not afraid to invest in the West Side, that’s because he started out as a developer there, working in the 1990s for Bethel New Life, whose founder, Mary Nelson, pioneered community development and affordable housing in Chicago. He says Nelson taught him how to use low-income housing tax credits and historic preservation tax credits. He also learned from her that “to develop a community, you have to be very concentrated in one area,” he says.

Marquette’s buildings are concentrated near Union Park and the Victorian-style Ashland Avenue el station. “They’re the two greatest assets over here,” Sloniger says, “and they’re the core of the community we’re building.”

BENEFITS OF EXPERIENCE

Marquette’s plans in the neighborhood are mostly new construction but incorporate some smaller existing buildings, including a historic women’s hospital on Ashland. Like the five-story red brick warehouse at Randolph and Ogden where Marquette plans a 49-room hotel with a bar and entertainment venue, the old Mary Thompson hospital building “contributes to the feeling of being in a neighborhood, not just being dropped into the congestion of high-rise row, the West Loop,” Sloniger says. One benefit of Sloniger’s Bethel experience, Burnett says, is that “on affordable housing, he gets it. You don’t have to push him. He may not be happy about (paying for) it, but he gets it.” The affordable units required by the city for Marquette’s cluster of projects will include some in the buildings and some in a building it rehabbed a mile southwest on Ogden. The city’s ARO rules allow developers to meet affordable housing requirements with offsite units. Sloniger, 54, says that “as a developer, I don’t like the cost burden the city creates with its (affordable housing) requirements, but as a person who sees the impact it has, I think it’s awesome.” That’s the kind of two-track thinking that coexists in the mind of a man who is at once a prosperous developer and an ordained minister. “I grew up poor,” Sloniger says of his childhood in Harvey, Markham and Chicago Heights. His father, Bob Sloniger, was the pastor at a series of south Cook County churches, and Darren attended Bible college intending to follow the same path. But after a stint in South Africa in 1989 and 1990 revealed the Dutch Reformed Church’s foundational role in apartheid, he decided “to step away from the church,” he recalls. Returning to Chicago, he got a master’s degree in city planning at UIC, interned in the city’s Planning Department and went to work for Bethel, combining his interests in religion and city planning. “What I hated about the non-

JOHN R. BOEHM

SLONIGER from Page 3

The view west from Marquette’s recently completed Parq Fulton takes in two of its other projects, a rehabbed low-rise warehouse and a new midrise apartment building. Beyond them is the site of a third, under construction. At the center is Union Park, one of two neighborhood amenities Sloniger believes will anchor the projects. profit world was having to deal with the bureaucracy of raising money, the constant fundraising,” Sloniger says. He started his own development firm in the mid’90s and later connected with Nick Ryan of Marquette, where they’re now partners. Much of Marquette’s portfolio is in Naperville, Houston and Nashville, Tenn. The West Loop, Ryan says, is largely Sloniger’s bailiwick. “He has more of the urban sensibility than I do,” Ryan says.

ROOM TO GROW

In the two decades that the partners have been building a development portfolio, Sloniger has also been a leader—he’s very careful never to say “the” leader—of the church in Elgin. He and the other three pastors all work as volunteers, rotating on a schedule he sets. “I don’t connect with mainstream churches,” he says. “So I created a church for people who don’t like church.” He describes services at West Ridge as mostly conversational, about “what people are going through,” and says the intention is “for everyone to feel welcome.” He lives with his wife, Shelby, and six children on 5 acres in Plato Center, about 47 miles northwest of the West Loop. But Sloniger, who’s “always a fan of good food and a good bottle of wine,” according to Ryan, has long been drawn to the West Loop’s hipness. Marquette finished its first West Loop project in 2014, the 233-unit Catalyst at Desplaines

Street and Washington Boulevard, east of the Kennedy Expressway. Soon after, Sloniger says, he was having dinner with Shelby at Smyth, at Ada and Randolph, and became intrigued by the neighborhood’s rougheredged west end. “It was fairly vacant over here,” says David Zadikoff, a partner in Cornerstone Restaurants, which paired up with Michael Jordan in 1998 to open a restaurant called 160blue in a one-story brick building on the site where Marquette’s 25-story Parq Fulton now stands. Ogden and Ashland “wasn’t where you expected a three-star restaurant, but we were an attraction,” Zadikoff says. In 2012, 160blue closed and Cornerstone opened bellyQ in its place. All the while, “the restaurant life on Randolph Street was moving west toward us,” Zadikoff says. BellyQ closed in 2018, and in 2020 a legal entity associated with Marquette bought the site for about $8.9 million, according to the Cook County clerk. Both Zadikoff and Sloniger say there’s little risk of displacing existing residents, because like the former restaurant site, all of Marquette’s buildings are on formerly vacant or commercial properties. Burnett says there’s more room to grow west of Ashland without displacement. “I see Darren driving people so guys start thinking differently about what they could do with all those surface parking lots by the United Center” a few blocks west and south of Mar-

quette’s Ashland Avenue project. Sloniger acknowledges development has been lucrative for him. But he’s determined, he says, “to put it to use to make change.” Through their nonprofit, he and his wife fund West Ridge, where he leads the program 20 weeks out of the year. They also fund programs at a school on Elgin’s east side that has a high incidence of poverty, and a community development program in Nicaragua. Pressed on how much money they devote to these causes, he says it’s “a couple hundred thousand a year.” Sloniger emphasizes that “we don’t get paid by the church or by any of these other things. We don’t need it. We want to always be the biggest contributor.” Most of their children are grown, so when war broke out in Ukraine and many people were fleeing the country, the Slonigers decided to help. They flew to Poland, rented a 10-passenger van and drove to the Warsaw train station where refugees were arriving. “We literally had no plan,” Sloniger says, “and it’s all women and children, so thank God my wife was there to convince them it was OK to come with us.” Ultimately, the couple negotiated leases to house 150 people, the costs of which are being covered by them and donors. On the way there and back, the Slonigers flew first class. “We pay for that ourselves,” he says. “I don’t want any confusion that all the money that’s donated is going to (the refugees’ needs).”

New student loan probe halts Discover’s aggressive share-buyback program DISCOVER from Page 3 collection practices” and misstated minimum amounts due on monthly statements, among other things. Two years ago, the bureau found Discover had violated the terms of its 2015 consent order. Discover paid $10 million to

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affected borrowers and another $25 million in penalties. Asked whether the new investigation was tied to the regulatory action, Hochschild acknowledged the existence of the order but said, “Beyond that, there isn’t really anything I can add at this time.” Hochschild added to the mystery by saying that the buyback

potentially could resume even before the investigation was complete. “There are many complex factors that go into it,” he said.

ACCELERATED LOAN GROWTH

Discover made the decision to halt share repurchases; regulators didn’t demand it, Hochschild said.

The student loan problems overshadowed what was a good quarter financially for Discover, which is seeing consumer loan growth accelerate while suffering very little in the way of loan losses. Credit card loans were up 15% at June 30 compared with the same point last year. For now, though, all investor

eyes are on the continuing regulatory troubles in student loans, which otherwise is performing well financially. Student loans made up 11% of Discover’s $88 billion in total loans at the end of the quarter. “As soon as we can, we hope to restart the buyback,” Hochschild said.

7/22/22 3:56 PM

22 JULY 25, 2022 • CRAIN’S CHICAGO BUSINESS

Billionaire in Winnetka beach wall spat buys neighboring home Justin Ishbia, who has been tangled up in a land swap deal with the Winnetka Park District, now owns another property away from the disputed park site built the house in 2013. Ishbia confirmed the purchase to Crain’s. “We plan to go forward with building a home,” Ishbia said. “We now have three contiguous lots.” That is, Ishbia now owns four lakefront lots, three in a row and a fourth separated from them by a park.

VHT STUDIOS

In June, Ishbia, head of Shore Capital Partners in Chicago, and Justin Ishbia, the billionaire the Winnetka Park District both private-equity executive tangled withdrew their application for up in a contentious lakefront permits that would allow the land swap in Winnetka, paid $16 park district to create a 1,000-foot million for the mansion next to beach. The plan hangs on Ishbia giving Winnetka a residential his $23.9 million property. At nearly $40 million just for property he owns between two the land, Ishbia has assembled parks in exchange for the park the most expensive residential district giving him a slice of the home site known in the Chicago park closest to his land. That swap has been hung up area. The only higher-priced residential transaction on record is on details of Ishbia’s request for Ken Griffin’s 2017 purchase of a privacy separation between the beach below home and the ISHBIA NOW OWNS FOUR LAKEFRONT his public beach. In revised plan LOTS, THREE IN A ROW AND A FOURTH documents Ishbia SEPARATED FROM THEM BY A PARK. submitted to the park district on July multiple floors at a Gold Coast 15, it’s revealed that on July 8, he condo building for more than paid $16 million for the home $58.5 million. Griffin bought on the other side of his. The lot, raw space and Ishbia has es- a little over an acre, contains a sentially done the same; he and 10,000-square-foot house and his wife, Kristen, plan to replace was sold to Ishbia by Leo and the four existing mansions with Milena Birov, the couple behind Heritage Luxury Homes, which one.

BY DENNIS RODKIN

Justin Ishbia paid $16 million for this 10,000-square-foot house on 1.06 acres next to the others he owns on Sheridan Road.

OPPOSITION

If the park district backs out of the land swap, Ishbia said, he would not resell the parcel that’s between two parks. “I have relatives who would be happy to live there seasonally,” Ishbia said of the property at 261 Sheridan Road that he bought for $6.2 million in November 2020. It’s the only property between Winnetka’s Elder Lane and Centennial parks. In 2020, after buying two neighboring Sheridan Road mansions for $8.2 million and $9.5 million, Ishbia bought bougth 261 Sheridan for $6.2

million, with the land swap already arranged with the park district. He would turn over the 0.56-acre site to the park district, which in turn would slice a 0.71-acre piece off the south side of Centennial Park and transfer it to him. This spring, Winnetka residents voiced opposition to aspects of the park district’s proposed beach development that were designed to create a privacy screen for Ishbia’s property. Ishbia stipulated in the agree-

ments and reiterated July 15 that “for my family’s privacy and security, I want something that says, this is where the public beach ends.” With the new addition on the other side of his land, Ishbia said, “we can go ahead no matter what the park district decides.” He declined to provide square footage or other details on the proposed mansion. Ishbia’s latest purchase is the third-highest-priced residential sale of the year so far in the Chicago area, coming in below two downtown condo sales at $20 million and $17.4 million.

2022

GEN X LEADERS IN SPORTS Crain’s 2022 Notable Gen X Leaders in Sports will recognize top Chicago area leaders in sports, between 40-55 years of age, for their success and accomplishments during the last 12 to 18 months.

NOMINATE NOW! Deadline is Friday, August 5

Nominate at ChicagoBusiness.com/GenXSports

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7/22/22 3:28 PM

CRAIN’S CHICAGO BUSINESS • JULY 25, 2022 23

A midcentury aficionado’s rehab of a 1950s classic The seller spent nearly five years rehabbing the four-bedroom home in River Forest I BY DENNIS RODKIN

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

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

VHT STUDIOS PHOTOS

“W

hen you come in here, somebody from ‘Mad Men’ should be standing there serving you a Manhattan,” Katie Conklin Struck says of the distinctly midcentury style of her family room. With a stone chimney and flanking wood built-ins, all beneath a tilted wood ceiling, the room looks as if it could have been a set in the popular midcentury-infused television series. But it’s not a set: It’s an actual house, built in the early 1950s on Franklin Avenue in River Forest. Struck, a health care executive and longtime fan of the midcentury aesthetic, bought the house in 2017 because, she says, it was both an authentic period piece and a place that needed a round of updating. She felt she was the one for the job, because she respects the style and wouldn’t “make it into something it wasn’t meant to be,” she says, such as “contemporary or country.” Struck took the rehab slowly, doing one section at a time so she could “put thought into each room,” she says. Five years passed and Struck was nearly done, putting finishing touches on the kitchen, when she took a new job that requires a move to Michigan. She put the house, a four-bedroom with 3,200 square feet of living space and roughly a quarter-acre lot, on the market this month. Represented by TR Youngblood Jr. of @properties Christie’s International Real Estate, the house is priced at $935,000.

Vol. 45, No. 29 – Crain’s Chicago Business (ISSN 0149-6956) is published weekly, except for the first week of July and the last week of December, at 130 E. Randolph St., Suite 3200, Chicago, IL 60601. $3.50 a copy, $169 a year. Outside the United States, add $50 a year for surface mail. Periodicals postage paid at Chicago, Ill. Postmaster: Send address changes to Crain’s Chicago Business, PO Box 433282, Palm Coast, FL 32143-9688. Four weeks’ notice required for change of address. © Entire contents copyright 2022 by Crain Communications Inc. All rights reserved.

7/22/22 3:33 PM

Our neighbors across the Chicago region deserve equitable opportunities for ssuccess, and we know how to make that possible. United Way of Metro Chicago works k with community groups to help them develop programs and initiatives to bring their visions to life. With your support, we can ensure individuals and families can meet their basic needs—like food, healthcare and housing—and work together to reverse the effects of disinvestment in our Black and Latinx communities.

UNITED, WE WILL BUILD A STRONGER, MORE EQUITABLE CHICAGO REGION. Join us at LIVEUNITEDchicago.org

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