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JOE CAHILL: Why are corporations so bad at one of their favorite tactics? PAGE 4

CONDOS: Big-dollar buyers coming back to downtown. PAGE 2

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U OF C’S NEXT TEST:

CRIME AND PUNISHMENT After two students were killed in off-campus shootings this year, the Hyde Park university faces a twin challenge that few of its rivals at the uppermost end of the higher education market must overcome

BY ELYSSA CHERNEY DESPITE ITS DOMINANCE as one of the country’s most elite institutions, the University of Chicago must battle a perception that looms over the entire city: rampant and rising crime.

For some prospective students, the thrill of going to college in an urban environment is part of the allure. But after a year in which gun violence claimed the lives of two U of C students—and in which the city’s broader reputation for crime became the stuff of national and even international headlines— U of C faces a twin challenge that few of its rivals at the uppermost range of the higher education market must overcome: reassuring nervous parents of students who have their pick of top-flight schools while avoiding the sort of heavy-handed security tactics that have flared tensions with the university’s neighbors in the past.

JOHN R. BOEHM

See UCHICAGO on Page 18

While other moguls launch themselves into space, Joe Mansueto’s focus is closer to home

BY DANNY ECKER While many people were binge-watching TV and stress-baking bread in home confinement during the early days of the COVID-19 pandemic, Joe Mansueto reread Thucydides’ “History of the Peloponnesian

War” to help pass the time.

“We’ve learned so much from the Greeks—democracy and what is a good life, and thinking more broadly,” he says. “Sound mind and sound body, I think, is a great philosophy. You want to take care of your body, but you’ve got to take care of your

ALYCE HENSON

This billionaire is bullish on Chicago Joe Mansueto mind as well.”

Call it a mantra for a billionaire’s second career.

Four and a half years after he stopped calling the shots at the publicly traded company he created, the founder of See MANSUETO on Page 21

A $4.7B firm flies under the radar

But not for long: The old Hewitt, now dubbed Alight, is about to get more visible due to a huge federal deal

BY STEVE DANIELS For the last 11 years, since Aon acquired Lincolnshire-based Hewitt Associates, there have been thousands working away in that northern suburb while their employer has churned through different owners.

The Hewitt deal never really worked out for Aon, and the global commercial insurance brokerage sold most of Hewitt to asset manager Blackstone in 2017. New York-based Blackstone then opted to take the See ALIGHT on Page 18

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2 JULY 26, 2021 • CRAIN’S CHICAGO BUSINESS

Big-dollar buyers return to downtown condos

BY DENNIS RODKIN

A suburban couple paid almost $6.7 million for a condominium at the St. Regis Chicago on Wacker Drive, another sign that big-money buyers are coming back into the downtown condo market.

The couple, who bought a four-bedroom unit on the 51st floor of the undulating glass highrise formerly known as Vista Tower, are not yet identified in public records. The agent who represented them, Rafael Murillo of Compass, declined to identify them but says they are a suburban couple casting “a vote of confidence in Chicago’s real estate market.”

While several multimillion-dollar units at the recently completed tower designed by Studio Gang have been under contract since years before the twin 2020 crises of pandemic and social unrest walloped the downtown condo market, these buyers put the unit under contract in April, as recovery was taking root.

I

STILL SELLING

These high-end sales are a sign that a recent wave of crime in the downtown area has not suppressed condo sales, at least at the very upper end of the market.

Lately, some real estate agents who specialize in downtown condos have openly worried that while the market’s post-COVID recovery has been strong, it could have been stronger were it not for a steady drumbeat of negative headlines.

In all of 2020, eight downtown condos sold for $4 million or more.

That’s one more sale in 12 months than there have been in less than

seven months this year.

More to the point: Five of the eight sold in 2020 were already under contract before the pandemic hit. After the pandemic spawned shutdowns of offices, restaurants and cultural amenities that contribute mightily to the allure of downtown neighborhoods, the high-end market showed a significant tilt toward suburban buying.

The recent run of high net worth people buying upper-end units “evidences a strong resurgence of the downtown condo market,” says Susan Miner, a Premier Relocation agent. She represented buyers who paid $6.75 million last week for a 22nd-floor condo at No. 9 Walton.

They put it under contract in May. Miner declined to identify the buyers or say where they’re from.

Murillo says he had one other client put a multimillion-dollar unit at the St. Regis under contract this spring, in April on a 70th-floor two-bedroom. The sale closed July 16 at slightly over $2 million.

St. Regis Chicago on Wacker Drive “There’s an appetite for new luxury condominiums of this caliber,” Murillo says. It’s in part because of the high level of amenities at the St. Regis and other relatively new buildings like No. 9 Walton, he says, but also because “money is cheap right now” thanks to low interest rates.

Prices are appealing downtown, too, thanks to the backlog of inven-

tory that built up during the crises.

The unit Murillo’s clients bought for almost $6.7 million was listed at $7.2 million in early 2019.

This suburban couple’s purchase was the second at St. Regis over $6 million. The first was in May, when buyers paid $6.36 million for a condo on the 66th floor. They had put their contract in four years ago when the 101-story tower was under construction. Their names do not yet appear in public records.

Rob Pontarelli, a media representative for Magellan, the St. Regis’ developer, said in an email that another condominium in the tower recently went under contract at a little more than $7 million.

Since November, when Magellan shook off its old deal with Chinese firm Wanda, rebranded the tower and inked a deal to fill the hotel at its base where Wanda was to have been, 29 buyers have put condominiums under contract, Pontarelli says. The total value is $61 million, according to Pontarelli.

If and when all those sales close, they alone may account for a considerable chunk of the downtown market’s recovery.

13 rays of hope in a dark time

t’s easy to overlook signs of hope amid daily reports of gun violence, COVID-19 creep and corruption. But there’s progress in groups of committed Chicagoans working to address community needs, from police oversight to improving the redistricting process.

It’s worth cheering that, in a month’s time, 430 residents applied to serve on an independent committee to forge a new ward map for Chicago. A small group of volunteers painstakingly reviewed applications and conducted interviews with dozens of applicants.

Now, 13 diverse Chicagoans are investing hours upon hours looking at neighborhood maps, talking to residents and starting to draw a new path toward representation. No one on the Chicago Advisory Redistricting Commission knows for certain if their efforts will be accepted by City Council, but they’re not deterred.

Sravan Suryadevara, a South Loop resident, teaches engineering, robotics and computer science in McKinley Park. His students motivated him to work on remapping.

“As someone who is passionate about voting, it was disheartening to hear young people dismiss this important privilege and responsibility, but I understand their indifference,” Suryadevara said.

“Unfortunately, not all votes are equal in our democracy.”

“Even a city like Chicago, one that leans heavily to one side of the political spectrum, can benefit from a citizen-led redistricting process,” he said. “My goal is not to drastically alter the city’s political landscape; it’s to show and advocate for an independent process that ensures every vote is important and equal. My hope is that bringing fairness, transparency and independence will motivate more young

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They are not the only ones. In the past couple of months, seven condos have sold for $4 million-plus condos in downtown neighborhoods where the buyers put them under contract in 2021.They include a Lake Shore Drive penthouse that sold in early July for $11.25 million. It had been for sale since mid-2019, but the buyers put it under contract in May.

JOE PASSE/FLICKR

A $6.7 million purchase at the St. Regis Chicago tower is one of several signs that affluent purchasers are confident enough to live in and around the Loop

people, like my students, to vote and determine the future of their city.”

Social worker and organizer Drea Hall is a longtime Chicagoan who got involved because she believes more people need to get engaged.

“I love the community. I love the people. I really feel like when it comes to political representation, our voices need to be at the table.

And when we’re not at the table, it means that resources may not be where we need them,” Hall said.

“I’m in Bronzeville. I love my community. We have good representation, but I think more voices need to be at the table and we need to know a little bit more details about what’s needed in our community, what’s maybe missing and what’s good that we could do more of?”

Through the summer, these 13 commissioners from the North, South and West sides are gathering to get insight from their fellow Chicagoans. They’re drawing wards and will readjust them after Census data arrives mid-August. Once they settle on a final map, City Council members may consider it. If at least 10 of them support the map, that will trigger a special election next spring, which would allow Chicagoans to choose the map they prefer.

Commissioners like Hall are encouraging their neighbors to come describe the hallmarks of their neighborhoods, what binds their community and the characteristics of the people in them.

“The formation of boundaries, that empowers people,” Hall said.

“When you’re empowered, you want to do better. You want to take care of the community. Here’s an opportunity for you to come out and weigh in on where you think you’re represented, where do the resources need to go and representation. Let’s talk about that some.”

As the first African American assistant director of civic engagement at the School of the Art Institute, getting involved might have come naturally for North Lawndale resident Apriel Campbell. She’s chaired several public hearings already and wants to keep listening and learning from Chicagoans.

“How the district boundaries are configured can make the difference between empowering and maximizing the voters’ voices or minimizing and muting those voices,”

MADELEINE DOUBEK ON GOVERNMENT

Campbell said.

“I believe it is important for as many people from different backgrounds, geographies, and skills to be engaged in this process,” she said. “We are the voters, we are the people and the power should

BE

reside with the people.”

Madeleine Doubek is the executive director of Change Illinois, a nonpartisan nonprofit advocating for ethical government. It is supporting the work of the Chicago commission.

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CRAIN’S CHICAGO BUSINESS • JULY 26, 2021 3

Dud deal smudges Hillrom’s makeover

Andy Gagliardo opted to join Compass and take advantage of the larger company’s technical prowess.

Hospital gear maker tries to ditch tech acquisition

Boutique real estate firms say technology points them to Compass As the industry evolves, local legacy agencies hitch their futures to a New York-based national firm to keep up with the digital demands of homebuyers and sellers BY DENNIS RODKIN WHEN JOSEPHINE GAGLIARDO opened a real estate agency in River Forest with her son, Joseph, in 1958, she felt she could offer something the bigger local brokerages couldn’t.

“A woman knows what a woman needs when it comes to buying a home,” Gagliardo told a newspaper reporter several years later, after entering a business that in the late 1950s was largely staffed by men.

Sixty-three years later, Josephine’s grandson, Andy Gagliardo, reversed course, deciding that

a big brokerage could offer something his small, family-owned operation couldn’t.

“Being small, I’ve got to pay much more to have all the technology at our fingertips that you need in this business now,” Gagliardo said. “I was always paying for new technology to keep up.”

On July 14, Gagliardo folded his grandmother’s firm, now with 37 agents, into Compass, a New York-based business founded in 2012 as, See COMPASS on Page 21

“THEY HAVE A 50OR 100-PERSON MARKETING TEAM. I HAD ONE PERSON DOING MARKETING.” Andy Gagliardo, whose small realty firm joined Compass

JOHN R. BOEHM

BY STEPHANIE GOLDBERG Hill-Rom Holdings hit an unexpected obstacle in its path from hospital bed-maker to digital medical device and analytics company. The Delaware Court of Chancery won’t let Chicago-based Hill-Rom, which now goes by Hillrom, out of its $375 million deal to buy Bardy Diagnostics, despite Medicare’s decision to significantly cut payments for Bardy’s wearable cardiac monitor.

Hillrom intends to appeal the ruling, but the episode underscores the perils of acquisitions in an industry that’s heavily dependent on the public and private insurers that pay for medical products and services in the U.S. And it comes at a pivotal time in the company’s digital transformation.

The Bardy acquisition was supposed to advance CEO John Groetelaars’ strategy for rekindling growth after years of sluggish sales in Hillrom’s largest business unit, which includes hospital beds. Aside from a one-time bump during the depths of the COVID-19 pandemic last year, demand for beds slowed as hospitals provided more services on an outpatient basis. As a result, Hillrom’s revenue grew just 2 percent to $2.9 billion in 2019.

Traditional equipment sales are expected to resume their preCOVID trajectory as the pandemic ebbs. To compensate, Hillrom continues to add more digital capabilities, including smart products that collect and transmit patient information.

See HILLROM on Page 20

Moto is rolling as growth strategy starts to show promise But will video change the way investors view a company known for police radios?

BY JOHN PLETZ Motorola Solutions’ stock has shaken off COVID-19 to reach record levels. The Chicago-based company’s share price is up 30 percent so far this year to about $220, nearly twice the 16 percent gain of the S&P 500.

Rebounding revenue is fueling the rise. Sales slumped 6 percent to $7.4 billion last year as COVID ravaged global markets but rose 7 percent to $1.8 billion in the first quarter. Motorola’s core business of selling public-safety equipment, crimped by the coronavirus

P003_CCB_20210726.indd 3

lockdowns, is on the mend. But what’s really paying off is a push into video surveillance equipment and software, which is growing at double-digit rates.

Now CEO Greg Brown faces a high-wire act: keeping the stock price aloft as the company navigates multiple business lines and geographic markets that don’t always move in sync. In February 2020, just a month before COVID hit the U.S., the stock peaked at $181.63. Within two months it was down by nearly one-third. It took Motorola a year to claw its way back.

The stock’s future prospects hinge on investors’ willingness to value Motorola more like a high-growth software company and less like a slow-growth seller of police radios. Today, Motorola’s stock trades at about 22 times next year’s projected earnings, up from a five-year average of 18, according to Morningstar. But it trades at a discount to the multiple of 30 times earnings enjoyed by peers in related industries, says Louie DiPalma, an analyst at Chicago-based William Blair.

See MOTOROLA on Page 22

MOTOROLA’S STOCK IS BACK ON TOP Shares have been trading at record levels recently, rising twice as fast as the S&P 500 this year. (Stock price adjusted for splits and dividends.)

WEEKLY STOCK PRICE CLOSE

Jan. 1, 1999, to July 16, 2021 $250 200

Pre-COVID high: $181.63

$160.66

150 100

Low: $10.38

50 0

COVID low: $123.53

’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20

Source: Yahoo Finance

7/23/21 4:13 PM

4 JULY 26, 2021 • CRAIN’S CHICAGO BUSINESS

ON ON BUSINESS BUSINESS

Why are companies so bad at buybacks?

Buybacks are recovering from COVID-19.

In the first quarter of 2021, stock repurchases surged 98 percent from the previous quarter, according to Fortuna Advisors. Buyback announcements hit the highest level since 2018 in the second quarter. The rebound follows a 27 percent drop last year as companies hoarded cash during pandemic lockdowns.

The numbers suggest a return to the pre-COVID popularity of corporate America’s favorite capital allocation tactic. Companies spent $710.3 billion repurchasing shares in 2019, far more cash than they devoted to capital expenditures, acquisitions or dividends.

Execs have long relied on buybacks to prop up stock prices; taking shares out of circulation elevates earnings per share, lifting stock values based on EPS. Trouble is, companies aren’t very good at buybacks. Local firms are even worse. A Fortuna study of 359 U.S. companies that repurchased at least $1 billion in shares or 4 percent of their market capitalization during the five years through 2020 revealed a median

POOR TIMING ON BUYBACKS COSTS COMPANIES PLENTY. “buyout effectiveness rate,” or BER, of -0.25 percent.

The median for Illinois-based companies was -1.3 percent.

Illinois’ best performer was Abbott Laboratories, ranked 58th with 4.1 percent. Top 20 companies nationally all exceeded 8 percent, with No. 1 Lennar coming in at 20.8 percent.

Fortuna’s BER assesses buyouts as investments by comparing the return on a buyout with the company’s total shareholder return. Buyouts that produce a return above TSR make better investments.

Companies generate positive BER by repurchasing shares when they’re undervalued compared with long-term price trends.

Buying at those levels boosts TSR by bringing in more shares for the same amount of money, or spending less to retire the same number of shares.

Some of the Chicago area’s most prolific buyback artists struggle to get the timing right. Aerospace giant Boeing, which spent $29 billion on buybacks during the five-year period, produced a dismal -8.4 percent BER. McDonald’s had a -1.1 percent BER on $26 billion worth of buybacks. Drugmaker AbbVie’s BER on $21 billion in buybacks was -3.6 percent. Pharmacy chain Walgreens Boots Alliance had a -7.1 percent effectiveness rate on $16.9 billion in buyouts.

Some companies with low buy-

P004_CCB_20210726.indd 4

out effectiveness can blame it at least in part on COVID’s impact on their business and share price. But buyout effectiveness also lags at some that were helped by the pandemic. For example, auto insurer Allstate’s -4.8 percent BER on $8.6 billion in buybacks came despite a decline in claims as lockdowns reduced traffic and accidents.

Local companies with above-average BERs included Abbott Laboratories at 4.1 percent, Fortune Brands Home & Security with 4.0 percent and Mondelez International at 3.7 percent. Those numbers can make a big difference.

Fortuna found that companies with above-average effectiveness rates had annual total shareholder return of 17.6 percent, compared with 9.1 percent for those with subpar BERs. It’s true that many companies produced positive investment returns on their buybacks despite negative BER. That’s largely due an increasing share price over the measurement period. But poor timing cost those companies plenty. For example, Fortuna calculates that better timing of buybacks could have saved McDonald’s as much as $1.6 billion.

Why aren’t companies better at buybacks? Psychology plays a role; CEOs are predisposed to consider their stock undervalued in the market, so they reflexively resort to buybacks to correct an imagined discrepancy.

“An underperforming share price can seem like an attractive time to repurchase shares, but for most this is a subpar value creation strategy,” Fortuna says in its report.

Then there’s continual pressure for buybacks from big institutional investors. Companies also turn to buybacks when they’re flush with cash and don’t know what to do with it. But cash often overflows when share prices exceed longterm trends, a bad time to buy back stock.

The real problem: Too often, executives don’t think about buybacks as investments of shareholder’s money, which is what they are.

“Companies aren’t really devoting a lot of effort to analyzing these capital outlays as an investment,” says Fortuna Associate Michael Chew.

That’s inexcusable, considering the billions companies spend repurchasing shares. Buybacks deserve the same level of due diligence management would require before making an acquisition or launching a new product line. Fortuna recommends that executives considering a buyback conduct a disciplined, objective analysis of their company’s intrinsic value. If the share price is below that level, it’s a good time to repurchase stock.

If not, it’s time to pass.

For lessons in leadership, try talking to the animals Residents of the Lincoln Park Zoo have something to teach us about creativity, collaboration and what it means to be social in a post-shutdown workplace

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

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

Check out previous installments at ChicagoBusiness.com/comesback.

While we’ve been talking about humans in leadership, it turns out that the animals living in our city have some insights to offer on collaboration, creativity and what it means to be social. The director of the Lincoln Park Zoo joins our discussion this week: Welcome, Megan Ross.

TODD CONNOR: Lincoln Park Zoo is such an incredible outdoor space and resource available to Chicagoans, and you hold a complex responsibility for leading that cultural institution, your employees and the animals who call it home.

How did you experience leading the Lincoln Park Zoo this last year? Anything surprise you?

MEGAN ROSS: To put things in perspective, until last year, Lincoln Park Zoo had only closed for five days since 1868: for President Kennedy’s funeral; for Sept. 11, 2001; and three weather events, including a polar vortex. Normally, we’re open year-round, and the animals see the public every day.

It’s their routine too. So when we closed our doors last year, we not only had to think about how we’re protecting people but how we are protecting the animals. We have a whole division of scientists here at the zoo called the Animal Welfare Science Team, and we collect behavioral data on our animals to see how and where they’re spending their time. Our African Penguins were really into their own thing before the pandemic— focused on each other, jockeying for positions and getting mates.

When the pandemic happened, they were acting the same way.

But now that people are coming back, they are actually starting to attend—meaning their focus is on visitors. The public went away, and now it’s as though the penguins are saying, “I’m going to watch you to see what you’re doing, because you haven’t been here in a while.” It’s interesting to watch and correlate it to how we’re reopening as humans.

EMILY DRAKE: Penguins have leadership lessons for us, too. Who knew? Curiosity is one of those traits we are interested in exploring in leadership, so it sounds like a trip to the zoo might need to be on the agenda for a team’s reopening plans. Speaking of reopening, can you tell us how your commitment to equity will inform your reopening and your

ISTOCK

JOE CAHILL

CHICAGO COMES BACK

plans going forward?

MR: Our tagline is: “For wildlife, period. For all, period.” Over the pandemic, it’s been strange for us to require reservations, which we know can be a barrier for certain individuals to get here. So when we got to Phase 5, the joy that we all felt here at Lincoln Park Zoo, at opening those gates with no table there to stop you walking in, no one has to check in with you, no barriers, really made us feel like we were coming back home. Having people come back to the zoo feels like we’re having a big family reunion. We’ve missed all of Chicago, and Chicago is all coming back to the Lincoln Park Zoo. So it’s not just the place that we have in Lincoln Park; we also have programs in Little Village and North Lawndale, and we’re starting to resume those programs, where we co-create opportunities with different partners in those communities. It’s been great to have new momentum for growth, both on the zoo campus and also in the community of Chicago.

TC: Reopening better than before seems doable but also a process, of course. You’ve been with the zoo for more than two decades, leading an institution that has been around a long time and, I think we can presume, will be around for a long time. From where you sit, what’s your forecast for the future of civic institutions in Chicago?

MR: Chicago has an amazing landscape of cultural institutions and other institutions, and that’s what makes Chicago so fabulous to live in. The question we ask is, how can

we connect wildlife and people together so they can thrive into the future? We’re really focused on how we can be advocates for wildlife in the city and how we connect residents to the wildlife that live here. We know greener cities tend to be areas where people are thriving, so the overall health of the city is at stake without safe, accessible outdoor spaces.

ED: We talk a lot about how we’re connected not only as neighbors but last year in particular as global citizens. We are living in and contributing to an ecosystem, and collaboration is essential. I’m wondering, if we zoom out even further, in the conservation community, what does collaboration look like now?

MR: Working on conservation is collaborative by nature. No single individual, no single institution is going to save all of the species of the world. That’s just not possible. You have to collaborate. So, collaboration is second nature to us. For example, we have things called Species Survival Plans, which are programs that look at one species of animal, and at Lincoln Park Zoo we house the population biologists who act as the Match.com for doing mathematical modeling to figure out how to make that species thrive. We can say things like: Those lions should come to Lincoln Park Zoo, and they should breed. Or: Those lions should go to Detroit Zoo and they should not breed. We’re making decisions collaboratively across the zoo and aquarium world based on how we can make sure these species thrive into the future. Working for the collective good is part of who we are.

7/23/21 4:43 PM

Building stronger communities in Chicago Bank of America is helping to meet the need for more affordable housing in neighborhoods across the country. Through Community Development Banking, we’re deepening our commitment to create more communities for people to call home.

Working together

In 2020, we committed $5.87 billion for affordable housing and economic development financing, resulting in over 13,000 housing units for people and families in need — many of which were constructed by diverse developers.

That includes over $79 million to create approximately 200 housing units right here in Chicago.

We’re also collaborating with organizations that are supporting affordable housing options here in Chicago. They include:

In addition, we’re joining Enterprise Community Partners to invest $60 million in capital to support minority developers and their work to build inclusive communities.

Spanish Coalition for Housing Chicago Urban League Neighborhood Housing Services The Resurrection Project

My teammates and I remain dedicated to helping more people find a place to live they can both love and afford. What would you like the power to do?®

Paul Lambert President, Bank of America Chicago

Go to bankofamerica.com/chicago to learn more about the work we are doing with our incredible partners.

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6 JULY 26, 2021 • CRAIN’S CHICAGO BUSINESS

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The first residents of a brandnew 189-unit apartment tower steps from Millennium Park have barely moved in, and the building’s developer is already putting it up for sale.

The venture including Tom Roszak and Dan Moceri have hired CBRE to sell the rental units in Parkline Chicago, a 26-story building at 60 E. Randolph St. that just opened its leasing office in February. The property is almost completely leased, another sign that the downtown multifamily market is bouncing back from a severe pandemic-induced slump last year.

“I’m pleasantly surprised,” said Roszak, partner at Moceri + Roszak. “It’s turned out well and people love the building.”

The tower also includes 24 condominiums on floors 20 through 26 that are not part of the sale.

Roszak declined to say what he expected the property to fetch. A CBRE executive did not respond to a request for comment. Only a few big high-end downtown multifamily properties have changed hands in the past couple of years, but prices of the handful that have sold ranged from about $380,000 to $480,000 per unit, according to Real Capital Analytics, a New Yorkbased research firm.

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The downtown apartment investment market has begun to perk up as occupancies and rents have rebounded and investors have grown more confident about the future. A San Francisco investment firm recently acquired McClurg Court Center in Streeterville, the second-biggest apartment complex in downtown Chicago, with 1,061 units. The Bernardin in River North, the Shoreham and Tides in Lakeshore East and 1407 on Michigan in the South Loop have all hit the market in recent months.

Roszak and Moceri are eager to sell, as well. They’re ready to move on to their next rental project: a 375-unit tower four blocks west of the McDonalds headquarters in Fulton Market. They expect to break ground on the development in October or November, Roszak said.

The development duo typically sell their buildings soon after leasing them up, cashing out of JeffJack, a 190-unit tower in the West Loop, in 2015 and Linea, a 265unit high-rise in the Loop, in 2018.

FILLED UP

Given the sorry state of the downtown market at the beginning of the year, Roszak figured it could take a while to fill up Parkline, but it didn’t. The building is 80 percent occupied but 96 percent leased, with the occupancy rate set to rise as many tenants move in over the next month, Roszak said.

The developers have pricing power, too. They started out renting Parkline’s apartments for about $3.10 to $3.20 per square foot and offered tenants two months rentfree, Roszak said. Apartments there now lease for about $3.75 per square foot with one month of free rent, he said.

“Apartments are hot,” he said.

“We’re happy about that.”

Parkline’s condos, meanwhile, aren’t so hot, at least not yet. The developers have yet to sell any of the 24 for-sale units but have not completed construction of them, Roszak said.

The condos range from $1.4 million for a 2,136-square-foot three-bedroom unit to $3.2 million for a 3,555-square-foot four-bedroom penthouse, according to the Parkline website.

Designed by Roszak, who started his career as an architect, Parkline features amenities typical of a high-end apartment building, including a two-story sky lounge, an indoor/outdoor pool, fitness and yoga studio, and media room.

7/23/21 2:48 PM

CRAIN’S CHICAGO BUSINESS • JULY 26, 2021 7

Mesirow picks woman to be next CEO ‘within two years’ President Natalie Brown is money management firm’s heir apparent; Larry Richman is named outside director ers “forever,” Price said. “He was well-acquainted with our senior Mesirow Financial Services has leadership.”

Mesirow, which manages monput a woman on track to be its next CEO. Natalie Brown, named presi- ey for institutional investors and dent last month, will succeed Rich- wealthy individuals while pursuing ard Price as CEO “within two years,” advisory, capital markets (including public finance) and Price said in a joint interreal estate investment view with Brown. services, has been anyBrown, 50, is an alum thing but placid lately. of accounting firm It reported a 5 perKPMG, Kraft Foods and cent decline in revemoney manager Nuveen nue for fiscal 2020, to Investments, where she $317 million, after a 12 spent 18 years before percent gain in 2019. A joining Mesirow in 2018 decade earlier, revenue as CFO. Natalie Brown was $526 million and in Mesirow is also breaking with tradition in naming its first 2015 $469 million, before Mesirow outside director, Larry Richman, sold its insurance business to Calthe former CEO of PrivateBank. ifornia-based Alliant Insurance He stepped down in March as U.S. Services. At midyear Mesirow had region chair of CIBC Bank USA, $47.2 billion in assets under mana unit of Toronto-based Canadi- agement, it said.

Price, 74, was named chairman an Imperial Bank of Commerce, which acquired PrivateBank in and CEO in 2011 following the death of James Tyree. In 2018 he 2017.

Price said his retirement in ceded the CEO role to Dominick March as a CIBC Bank USA direc- Mondi, then co-head of the capital tor, coupled with Richman’s retire- markets division, before stepping ment, opened the door to putting back into the role last September.

Mondi remained president until him on Mesirow’s board. Mesirow has had a banking relationship he left Mesirow in February (at 67, with Richman and his employ- Price said), a move the firm de-

BY STEVEN R. STRAHLER

scribed as a retirement. From what he said was a mountain location last week, Mondi declined to elaborate. “I’ve been retired for a number of months. I’m just enjoying Denver right now.”

Price, who joined Mesirow in 1972, says that once Brown becomes CEO he’ll revert to executive chairman, his title during Mondi’s CEO tenure. He pressed the board to add an outside director, a move he said Tyree had resisted because of the firm’s privately held, employee-owned status.

Brown joined Mesirow, she said, because of a better fit with its independent stance after Nuveen was acquired in 2014 by money manager TIAA-CREF. Mesirow’s continued independence has long been in question because of its smaller size relative to local rivals like William Blair and Robert W. Baird, let alone Wall Street competitors and behemoth money managers like Blackrock.

Price, who said Mesirow is debtfree, has long batted away takeover speculation.

Price said Richman “will assist our board in assessing new strategic business growth opportunities.” Brown said Mesirow would eschew diversification in favor of “building on what we have.” Despite the revenue drop in 2020, which she attributed mainly to the

pandemic-induced market upheaval in March of that year, she said Mesirow, without citing a figure, reported record profit in the 12 months ended in March 2021.

Brown grew up in northwest Indiana, the daughter of Ernie Nims, once a sportscaster for Channel 7 and now a financial adviser, and Sharon Kramer, a homemaker. After one of her grandfathers advised her to be a CPA, she majored in accounting at Indiana University and got an MBA from the University of Chicago’s Booth School of Business.

“You could see this happening,” former Nuveen colleague Peggy Wilson, a retired senior vice president of finance, said of Brown’s

rise. Brown has been spending time learning about employee needs in Mesirow’s disparate businesses, according to Wilson. “She’s great at in-the-moment feedback, whether it’s good or bad. A lot of CEOs aren’t good at that.”

Richman, 69, is a familiar figure on Chicago’s banking and broader business landscape. He was among acolytes of Norman Bobins after joining American National Bank and moving in 1981 to Exchange National Bank. At LaSalle Bank, which acquired Exchange 1989, Richman rose to CEO before LaSalle itself was acquired, by Bank of America, in 2007, precipitating his move to PrivateBank.

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8 JULY 26, 2021 • CRAIN’S CHICAGO BUSINESS

Chicago schools a sore spot in survey While Mayor Lori Lightfoot fared better in the second edition of the quarterly Chicago Index, the school district she oversees is disappointing respondents. But the City Council overall and local aldermen saw a jump in their ratings. | BY A.D. QUIG

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hoever takes over as Chicago Public Schools CEO will face a public that’s distinctly unhappy with schools now.

That’s the big takeaway from the second round of The Chicago Index, a quarterly survey that mixes traditional polling techniques with newer survey methods in an attempt to determine what residents think of their leaders and the challenges facing them.

As was the case in the first quarterly Chicago Index survey published April 7, schools were identified as a significant challenge in this second edition of the survey—just 25 percent of those responding said they are satisfied or very satisfied with CPS, compared to 96 percent who approve of the Chicago Fire Department, 90 percent of the Chicago Public Library and 43 percent of the Chicago Police Department, despite a continuing wave of street violence and heavy mistrust of police in some parts of the city. That is similar to responses in the last survey.

Meanwhile, 92 percent said improving the performance of Chicago’s schools was essential or very important. That’s a higher score than any other issue received in the survey, above curbing political corruption, addressing pension shortfalls and reforming the police department. Just 34 percent indicated they believe Chicago is a good place to raise a child.

The confidence in local schools is very low compared to similar surveys in other parts of the country according to Polco, which puts together the survey for Crain’s and The Daily Line. That will undoubtedly be a major challenge to the next CEO chosen to lead the district in the wake of Janice Jackson’s resignation from the post, which was announced in May. The new survey also finds that Mayor Lori Lightfoot gets somewhat better job performance marks than she did in the first round of opinion-gathering. Asked their view of how the mayor was doing representing the residents of Chicago, 25 percent of city residents in the latest findings said they “strongly” or “somewhat approve” of her job performance. The improvement could be due to how the question was phrased.

In the first round, respondents were asked to rate the mayor on a scale of “excellent,” “good,” “fair” or “poor.” Sixteen percent rated her excellent or good.

Those numbers differ from a WGN poll that was conducted from May 31 through June 1. That poll gave the mayor a 48 percent approval rating on her job performance. Polco, which conducts The Chicago Index research, attributes some of the difference to how the two were conducted, including the scale used to rate the mayor. The WGN poll, conducted via landline, text and online, used a three-point scale (approve, disapprove or no opinion) while The Chicago Index used a five-point scale (strongly approve, somewhat approve, somewhat disapprove, strongly disapprove or no opinion).

In The Chicago Index, 51 percent of respondents strongly or somewhat approved of the job Cook County Board President Toni Preckwinkle was doing representing Chicagoans. It’s the first time that question has been asked in the survey. The Chicago City Council overall and respondents’ own aldermen also got much higher ratings than the last survey, rising by roughly 20 points each.

PRIORITIES FOR THE CITY OF CHICAGO Respondents were asked to rate how important, if at all, they thought it was for the city to focus on each of the following priorities in the next two years. The percentages below encompass those who think these priorities are “essential” or “very important.” School performance has only become more important since the last survey.

Q1

Q2

Improving the performance of Chicago’s schools

88%

Investing in city infrastructure

92%

85%

Reducing political corruption

87%

90%

87%

Making sure that public funds are equitably spent across the city

73%

75%

Addressing pension shortfalls

71%

75%

Decreasing racism

74%

Reforming the police department

69%

Reducing the city’s budget gap

69%

Implementing strategies to reduce climate change

72% 70% 66%

59%

Working to solve labor conflicts

61%

63%

59%

QUALITY OF LIFE IN CHICAGO Respondents were asked to rate each of the following aspects of the quality of life in Chicago. Here’s how many Chicago residents rated each aspect as “excellent” or “good” for this quarter’s index.

As a place to visit

75%

Your neighborhood as a place to live

65%

As a place to work

57%

Chicago as a place to live As a place to raise children

51% 34%

MORE ONLINE: See complete Chicago Index coverage at ChicagoBusiness.com/chicago-index Sixty-five percent strongly or somewhat approved of the job Gov. J.B. Pritzker was doing, overall. That’s virtually unchanged from the last survey.

Respondents agreed with a 76 percent majority that Chicago is a good place to

visit. Sixty-five percent of those who live within the city said their neighborhood was a “good” or “excellent” place to live, and 51 percent said the same about living in the city overall.

But only 28 percent indicated Chicago is

Methodology There were 812 respondents who completed this quarter’s survey, administered by Polco. That number is significantly lower than the first survey, when more than 2,100 participated. While the goal of the index is to ultimately build a larger continuing jury whose changes in attitudes can be tracked over time, only 115 respondents were “repeat” respondents who took the survey both quarters. This round was open between June 7 and June 25. The credibility interval for this survey is plus or minus 4.1 percent.

Responses were statistically reweighted to account for lower response rates among women, renters, people of color and young people, as well as for higher response rates among people downtown and on the city’s North Side. For this quarter’s survey, 2,500 Cook County households were randomly invited to participate—with more invites going to areas that did not participate in the first round. Postcards were mailed to those homes to invite them to fill out the survey online. Crain’s, the Daily Line and WLS-TV/ABC-7 also invited readers and viewers to participate.

headed in the right direction, with 72 percent saying instead that things are on the “wrong track.” That finding is similar to the last survey as well.

Greg Hinz contributed.

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10 JULY 26, 2021 • CRAIN’S CHICAGO BUSINESS

EDITORIAL

Time for employers to mandate vaccines

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in their homes, and yet vaccine distribution has essentially flatlined.

As case counts rise nationwide, Los Angeles has reinstituted mask mandates, a path no major metropolitan area should want to go down now that we’ve tasted the freedom of breathing fresh air without hindrance. The good news is, we have the tools at our disposal to avoid L.A.’s fate. We have safe and effective vaccines.

The time for enticing vaccine refuseniks with lottery tickets and Little Dipper rides

THE TIME FOR ENTICING VACCINE REFUSENIKS WITH LOTTERY TICKETS AND LITTLE DIPPER RIDES AT GREAT AMERICA SHOULD BE OVER.

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overnments may not be able to require people to get vaccinated, but it’s beginning to look like employers can. And it’s in the business community’s interest to do so.

Another surge in COVID-19 cases will do widespread damage to an economy that’s only just recovering from the worst phases of the pandemic. With the highly transmissible Delta variant now circulating widely and other variants emerging, COVID case counts, hospitalizations and deaths are moving in the wrong direction nationwide, particularly in regions where vaccination rates are stubbornly low.

The only way to avoid a financial, social and, frankly, emotionally devastating return to lockdown is to get the maximum number of people possible immunized.

Vaccine resisters may think they are putting no one but themselves at risk, but they are in fact walking variant factories, and even if they’re skeptical of the guidance coming from doctors and scientists, they should be able to trust the evidence before their own eyes: More than 162 million people in this country have received COVID-19 vaccines. Those people are pretty much able to live their lives now without fear of being hospitalized or killed by the virus.

The virus now is almost exclusively killing people who haven’t been vaccinated.

As Crain’s Stephanie Goldberg reported July 22, the Chicago Department of Public Health has begun releasing the rates of infections, hospitalizations and deaths among residents based on vaccination

Re else So hand into cultu unw ly be

status. The figures show that as of that writing, no COVID-related deaths had been reported among the vaccinated population in July, and more than 95 percent of COVID hospitalizations and deaths in Chicago were among unvaccinated residents.

Here in Chicago, only 51.7 percent of residents are fully vaccinated; statewide,

that number rests at 50.3 percent. That’s a better level than many areas of the country, but still far short of the 70 percent threshold that’s widely considered to be the goal of public health officials seeking herd immunity. The city and the state have tried every form of incentive to get people vaccinated, from handing out amusement park tickets to offering to vaccinate people

at Great America should be over. Of course, there are people with medically defensible reasons to take a pass on the jab. For everyone else, the excuses are starting to wear a little thin, and their hesitancy threatens to tank the economy again. In New York, Mayor Bill de Blasio is calling on private employers to impose vaccine mandates. Chicago Mayor Lori Lightfoot can and should do the same here.

For the sake of our shared economic well-being—not to mention the well-being of our beleaguered health care workers—Chicago’s business leaders must declare they’re on the side of science and require employees returning to the office to get these lifesaving vaccines.

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YOUR VIEW

Affordable housing is a crucial part of infrastructure

L

ong before the pandemic, rising housing costs and inadequate incomes caused many of America’s lowest-income households to live with a severe housing cost burden—or, in the worst-case scenario, no place to call home at all.

Children in the critical developmental ages of birth to 6 years old experience lifelong negative consequences from unstable housing. Numerous studies show that housing insecurity affects children’s brain development, health and educational attainment. The long-term effects of childhood homelessness include higher risk for adult chronic diseases and earlier death.

These severe repercussions to children are a heavy cost to not just affected families but society at large.

Senators negotiating a bipartisan federal infrastructure bill just missed an opportunity to address the nation’s affordable housing shortage. Investment in affordable housing must be included in the larger economic recovery package that Senate Democrats are now working on—with enough funding to ensure even those with the lowest incomes can afford a home.

Because of insufficient federal invest-

ment, not a single state in the country has enough affordable homes to meet the need. In Illinois, based on data from the National Low Income Housing Coalition and Housing Action Illinois, there are only 39 affordable and available rental homes for every 100 extremely low-income renter households. Waiting lists for Housing Choice Vouchers are years long—and nationally, only 1 in 4 households who qualify for housing assistance receives it.

FALLING BEHIND

Surveys of Illinois renters conducted by the U.S. Census Bureau during the pandemic consistently show that Black and Latinx households more often report being behind on rent than white households.

Families with children are also more likely to be behind on rent.

People with lived experience who are leaders in the First Steps: Improving Child Health & Housing initiative of the Illinois chapter of the American Academy of Pediatrics consistently share long-term struggles trying to find affordable rental housing for their families. One mother related that even working two jobs, she was unable to

afford the combined costs of renting an apartment, other monthly bills and everyday living expenses for herself and her children. The long-term stress that comes from years of not being sure of being able to pay next month’s rent hurts the entire family.

Three key solutions to America’s housing crisis that the federal government should commit to include expanding rental assistance to every eligible household, increasing the supply of affordable housing for people with the lowest incomes and providing emergency housing assistance to help stabilize families in a crisis.

Building and preserving more affordable homes, plus guaranteeing housing assistance to those who need it, will have a broad, positive impact on child health and wellness and result in economic mobility and poverty reduction.

Research repeatedly shows that having a stable, affordable home as a child promotes learning achievement in school, better high school graduation rates and higher educational attainment as adults.

Overall, affordable housing promotes healthy, productive lives. Parents who live in stable housing can devote more quality

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

P010-P011_CCB_20210726.indd 10

time and attention to their children. They are also better able to maintain steady employment and financial security.

By providing housing assistance, we can reduce poverty, increase stability for vulnerable households and help avert homelessness—while also creating good-paying jobs in construction and freeing up household budgets to spend their incomes elsewhere.

A home is the most basic unit of infrastructure. The pandemic has been a reminder of this, as we were all encouraged to stay at home as much as possible. Critical investments in housing have a proven track record of reducing homelessness and poverty and are vital for helping the lowest-income families afford decent, stable homes.

Dr. Nancy Heil, FAAP, is co-chair and Amanda Henley is a community expert at First Steps: Improving Child Health & Housing, a project of the Illinois Chapter of the American Academy of Pediatrics.

Sheila Sutton is housing policy organizer at Housing Action Illinois.

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.

7/23/21 3:19 PM

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CRAIN’S CHICAGO BUSINESS • JULY 26, 2021 11

READERS RESPOND

How to address city crime Crain’s readers have their say on Facebook. Join the conversation: Facebook.com/CrainsChicago.

Re: “ ‘Until our residents feel safe, nothing else matters,’ ” July 15: So if these criminals did not have access to handguns, they would magically transform into fine, upstanding citizens? This is a moral, cultural problem enabled by a government unwilling to put responsibility where it actually belongs.

JAMES IVAN MCCARTHY

Yes, I agree with the mayor: Safety comes first, whether it’s the Gold Coast or Englewood.

A feeling of wild license now reigns, even downtown. We feel that anything can happen and our safety is just a matter of chance. We

need an emergency response to gun violence.

Bring in the feds—great! And do what we can do under our own power.

DOUG VAN TRESS

Is the City Council finally prepared to get tough with those who disrupt the public way, damage property, incite mob action and loot? I strongly urged the mayor and the City Council in my Sept. 14, 2020, post that if Cook County State’s Attorney Kim Foxx is not going to prosecute those individuals to the full extent of the law, then it is up to the mayor and City Council to take action. Ald. Anthony Napolitano’s “Chicago Criminal & Accountability

Ordinance” is a step in that direction. His ordinance will add strict financial penalties to offenses like illegal possession of a handgun, graffiti, looting and mob action or wilding. It should also hold organizations responsible for the actions of their members.

City Hall continues to nickel and dime Chicagoans . . . with petty fines, financially punitive penalties and harassing collection agencies. Time to unleash the similar financial abuse on those who really deserve it.

There needs to be a Special Litigation Division created within the city Law Department whose sole function is to seek to recover damages done by such criminal activities.

Some will argue that offenders won’t pay the fines and that is certainly true, but the threat of fines and the financial harassment for the failure of pay fines will deter many who might contemplate violating the public way.

It’s high time for the City Council and the Mayor to get serious with those who would violate the public way. Alderman Napolitano’s ordinance is very good start.

PAUL VALLAS

And again, criminals will not follow laws. So all these “programs” will only hurt the good people.

CARYN LINDAUER MCKAY

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

Associate publisher Kate Van Etten *** Editor Ann Dwyer Creative director Thomas J. Linden

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Assistant managing editor/ Joe Cahill columnist Assistant managing editor/digital Ann R. Weiler Assistant managing editor/ Cassandra West news features Deputy digital editor Todd J. Behme Digital design editor Jason McGregor Associate creative director Karen Freese Zane Copy chief Scott Williams Copy editor Robert Garcia Deputy digital editor/ Sarah Zimmerman audience and social media Contributing editor Jan Parr Political columnist Greg Hinz Senior reporters Steve Daniels Alby Gallun John Pletz Reporters Elyssa Cherney Danny Ecker Stephanie Goldberg Ally Marotti A.D. Quig Dennis Rodkin Steven R. Strahler Contributing photographer John R. Boehm Researcher Sophie H. Rodgers *** Director of digital strategy Frank Sennett Director of custom media Sarah Chow *** Production manager David Adair Account executives Claudia Hippel Christine Rozmanich Bridget Sevcik Laura Warren Courtney Rush Amy Skarnulis People on the Move manager Debora Stein Project manager Joanna Metzger Digital designer Christine Balch Crain Communications Inc. Keith E. Crain Chairman KC Crain Chief executive officer Lexie Crain Armstrong Secretary Veebha Mehta

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12 JULY 26, 2021 • CRAIN’S CHICAGO BUSINESS

YOUR VIEW

U

MICHAEL BROWNING/UNSPLASH

has already passed the majority ixteen months after our lives of the Chi Biz Strong Initiative, were first disrupted, Chiwhich, among other items, has cago’s independent restauextended the cap on fees that derants are still feeling the devaslivery services can charge restautating effect of the COVID-19 rants and made it easier to open pandemic. From the shared pain restaurants in recently vacated of a full shutdown last year to spaces. Passing the Expedited more than 30 regulatory changSign Initiative will build on this es, our restaurants have gone and send a clear message to the through hell and back. restaurant community that City Finally, after so much uncer- Sam Sanchez is Hall is doing everything possible tainty and pain, most restaurants owner of Third are reopened and ready to serve Coast Hospitality to support our businesses.

Currently, restaurateurs and locals and visitors again. But we in Chicago. other business owners need are not out of the woods yet. Far from it. Like all other restaurant owners, I to wait for an individual ordinance to be am facing workforce shortages, increasing passed by the entire City Council—which debt, and very real uncertainty about the meets once a month—just to put a basic future of my business and the industry as sign or awning on their business. When you plan to open a new restaurant and a whole.

Restaurateurs are eternal optimists, your alderman has already approved your however. We are on a path to rebuild, but sign, an operator still needs to wait anothwe still need help from local officials to get er 60 days to install it. Without a sign, you there. That is why I am joining my fellow can’t promote your business, it makes it restaurateurs and calling on Chicago’s City that much harder for diners to find you, Council to rise to the moment and pass the and you lose critical revenue. This proExpedited Sign Initiative, part of Mayor cess is unnecessary bureaucracy—in fact, Chicago is the only big city in the country Lori Lightfoot’s Chi Biz Strong Plan.

One of the best things about Chicago is with this archaic rule, and it can absolutethe thousands of independent restaurants ly make or break a restaurant. Even during across our 77 neighborhoods. It’s why the best of times, 95 to 97 cents of every we’re the culinary capital of the United dollar a restaurant takes in goes right back States. To help our neighborhood restau- into the food, staff and everything else that rants recover from COVID-19, the city goes with running the place. Our restau-

rants—from Little Village to Rogers Park, Pullman to Austin—have no time to spare if they are to stay in business, keep people employed and continue serving our communities.

Over the last year and a half, the city took action to alleviate restaurants’ daily struggles by making it easier to operate outside, extending licenses and cutting red tape.

The Expedited Sign Initiative is the next critical step we need to streamline the way

restaurants open and further invest in the city.

I own four restaurants in Chicago, and as I look to the future I plan to continue growing my restaurant group in this great city. Like many of my colleagues, I can only expand if I know the city has my back. The Expedited Sign Initiative is the kick-start we need to rebuild better than ever before.

A vote for this initiative is a vote for the future of our city and its restaurants.

The Midwest can propel the energy transition

.S. states are answering the Biden administration’s call to address climate change and re-establish the United States as a leader in the energy transition.

States along our nation’s coastlines—like California, New York and Texas—are setting ambitious goals to limit greenhouse gas emissions, promote clean energy investment and achieve midcentury climate goals.

But America’s heartland has the opportunity to truly be the driving engine of the U.S. energy transition.

The Midwest’s robust manufacturing capabilities, extensive renewable and traditional energy infrastructure, and long-standing intellectual capital make it uniquely placed to serve as a hub for the deployment and acceleration of innovative energy solutions.

And many of those technologies developed in the Midwest are already being deployed. The region has some of the highest wind, solar and carbon-free nuclear generation in the nation. Illinois, for instance, has the most nuclear capacity of any other state, with 11 nuclear reactors accounting for more than half of its electricity generation. These carbon-free technologies combined with abundant water supplies from the Great Lakes are the major resources required to produce hydrogen, making the region an ideal production, distribution and storage center for this technology that can help decarbonize the transportation, industrial and power generation sectors.

Last month, Secretary of Energy Jennifer Granholm launched the Department of Energy’s “Energy Earthshots” initiative to accelerate breakthroughs of more abundant, affordable and reliable clean energy solutions within the decade. The first Energy Earthshot—Hydrogen Shot—seeks to reduce the cost of clean hydrogen by 80 percent to $1 per kilogram. (A kilogram of

P012_CCB_20210726.indd 12

Petros Sofronis is the James W. Bayne professor in the Grainger College of Engineering at the University of Illinois.

James Stubbins is the Donald Biggar Willett professor in the Grainger College of Engineering at the University of Illinois.

Tim Lindsey is a senior adviser at the University of Illinois’ Smart Energy Design Assistance Center.

hydrogen contains about the same energy as a gallon of gasoline.)

And that’s why the University of Illinois at Urbana-Champaign partnered with Argonne National Laboratory to launch the Midwestern Hydrogen Partnership. As one of the nation’s top research and engineering schools, UIUC has the talent pool to help grow the economy with clean energy jobs.

In the Midwest, we are also uniquely capable of manufacturing fuel cells and fuel cell electric vehicles, or FCEVs, and deploying hydrogen solutions across our industrial sectors. The Midwest is a major manufacturing powerhouse for several vehicle lines, with 75 percent of cars and 60 percent of light-duty trucks currently assembled in the region. Automakers—like General Motors, Honda, Hyundai and Toyota—with large manufacturing presences in the Midwest are betting big on FCEVs. A number of companies in the Midwest are already deploying hydrogen technolo-

ISTOCK

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The next step to cut red tape for restaurants

gies as well. For instance, St. Louis-based Anheuser-Busch placed an order for more than 800 hydrogen-electric delivery trucks in 2018 and completed its first beer delivery using one a year later. Hyzon Motors announced in March it plans to open a new facility near Chicago for high-volume production of membrane electrode assemblies, key components of fuel cell stacks.

Iron ore miner and steelmaker Cleveland-Cliffs, the largest flat-rolled-steel supplier in North America, is beginning to integrate hydrogen in its production of hot-briquetted iron in order to meet its greenhouse gas reduction commitments.

General Motors and Honda established the first joint venture to mass produce an advanced hydrogen fuel cell system at a facility in Michigan in 2017. And in 2019, Indiana truck-engine manufacturer Cummins announced its collaboration with Hyundai to develop fuel cell technologies.

Low-carbon production of hydrogen is also key to transforming the vast agricultural activities in the Midwest. Fuel cell options for powering farm equipment and the evolution

of chemical processes for fertilizers would enable major reductions in emissions.

The Midwest has all the ingredients to be a leader in the emerging hydrogen economy, and private investment is beginning to recognize the potential in the region, but we must accelerate the development of road maps for how to integrate and take advantage of the emerging hydrogen economy. The Midwestern Hydrogen Partnership is actively working in this area, to help realize an expanded economy as a result.

According to one study, hydrogen is expected to support 700,000 jobs by 2030 and 3.2 million by 2050, generating more than $750 billion in revenue by midcentury.

With our leaders focused on creating a more sustainable future, the Midwest has the potential to build on its success and be at the forefront of the nation’s efforts to combat climate change with its ample low-carbon energy assets. To accomplish that, we will need a smart strategy, careful planning and policy support to transform America’s heartland into the low-carbon powerhouse it’s capable of becoming.

7/23/21 3:14 PM

CRAIN’S CHICAGO BUSINESS • JULY 26, 2021 13

Big warehouse proposed across from Goose Island

BY ALBY GALLUN A Chicago developer plans something near Goose Island that the area hasn’t seen in a while: a big industrial project.

Logistics Property has filed a proposal with the Chicago City Council for a huge two-story warehouse at the corner of North Elston and West Division streets. It’s a bit retro for the longtime industrial neighborhood, which is poised to become more residential because of city zoning changes approved about four years ago.

But big sites close to dense urban neighborhoods have become a hot commodity for warehouse developers in recent years. They’re hunting for locations to satisfy distribution and e-commerce tenants like Amazon that want to be as close as possible to customers, allowing them to speed up deliveries of products ordered online.

Amazon plans to open a delivery station in Bridgeport and recently acquired sites in Humboldt Park and Gage Park for two more warehouses. Target is opening a huge distribution center in Little Village that will employ 2,000 people.

Totaling nearly 601,000 square

feet, the Logistics Property building would be among the biggest industrial developments along the North Branch of the Chicago River in decades. The 12-acre development site sits within a stretch of river historically dominated by factories, cement producers, metal shredders and other heavy industries.

RESIDENCES

The city opened the door to more residential builders when it lifted longtime restrictions on housing and other commercial developments there in 2017. With the area’s proximity to downtown and wealthy residential neighborhoods like Lincoln Park and Bucktown, residential developers have moved in. Lincoln Yards, a $6 billion mixed-use development planned north of the Logistics Property site, would include as many as 6,000 homes. Another big project proposed on the south end of Goose Island would include nearly 2,700 units.

The city, however, did not scrap longtime industrial-only restrictions on most of Goose Island and properties just to the west, between the river and Metra train tracks. The Logistics Property site

sits within a planned manufacturing district, or PMD, a zone that’s off limits to nonindustrial uses.

Ald. Walter Burnett, 27th, who represents the neighborhood, said he supports the warehouse proposal.

“I think it’s fine,” he said. “It’s over in the PMD area. It’s right next to the expressway. Hopefully it will bring a lot of jobs to the city.”

It could also bring truck traffic and pollution to the area, concerns that residents and environmental groups have raised about other warehouse developments in the city. Activists rallied against a proposed Amazon warehouse in Bridgeport and the Target project in Little Village, but economic factors ultimately carried the day and the city approved the developments.

Logistics Property declined to comment. Founded in 2018, the Chicago-based company is developing warehouses in Chicago, Atlanta, Houston and other U.S. cities with an estimated end value of $2 billion, according to its website.

In Kenosha, Wis., the developer built a 748,300-square-foot warehouse leased to Amazon last year.

Amazon also has shown interest in the site at Elston and Division,

GOOGLE EARTH

The project is a bit retro for the longtime industrial neighborhood, which is poised to become more residential because of zoning changes approved about four years ago

Amazon has shown interest in purchasing the property at Elston and Division owned by Peoples Gas. which is owned by Chicago-based Peoples Gas, according to people familiar with the property. It’s unclear if the e-commerce giant is still interested in the property. An Amazon spokeswoman declined to comment. Burnett said he believed Logistics Property planned to develop the project without lining up a tenant in advance.

Logistics Property is betting on a new idea in industrial construction: the multi-story warehouse.

Most big industrial buildings are sprawling one-story structures, sometimes covering dozens of acres, often in places where land is plentiful.

But land is scarce in cities, and some developers have responded by building up, with trucks accessing upper floors by ramps. The Logistics Property proposal includes

two floors totaling about 255,000 square feet, with mezzanine space, including offices, covering about 90,000 square feet, according to the zoning application.

The multi-story warehouse is still a relatively new idea in the modern United States, and it’s unclear whether it will turn out to be popular among tenants. Whether it is or isn’t, the industrial real estate market is booming amid strong demand from logistics and e-commerce industries. That’s true for suburban and rural properties, and so-called infill markets in more urban locations.

“There’s never been a better time for industrial developers and investors for infill real estate,” said industrial broker Mike Senner, executive vice president in Rosemont office of Colliers International.

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14 JULY 26, 2021 • CRAIN’S CHICAGO BUSINESS

Advertising Section

PEOPLE ON THE MOVE

Berlin Packaging, Chicago

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

ACCOUNTING / ADVISORY CONSULTING

DESIGN / BUILD

FINANCIAL SERVICES

INDUSTRY HEALTH CARE

Floyd Advisory LLC, Chicago

Clayco, Chicago

LGIM America, Chicago

Gateway Foundation, Chicago

Floyd Advisory LLC is pleased to announce that Gregory Wolski, a nationally recognized accounting expert in M&A disputes and arbitrator, has joined the firm as a Partner in Chicago. Greg was a partner in EY’s Forensic & Integrity Services practice and has over 40 years of experience in due diligence, litigation, FCPA, private equity anti-corruption compliance, purchase price disputes, accounting and auditing and other advisory services. He served as EY’s global practice leader for the Transaction Forensics practice and has served as an independent arbitrator or as an expert on over 500 mergers and acquisitions matters.

Greg’s addition to the firm will further enhance our growing transaction advisory practice.

Charu Bhat has joined Clayco as senior process engineer in the firm’s integrated design and engineering group.

Most recently he led processing and packaging capital projects for Mars Wrigley and Greencore. In his new role, he utilizes his operational understanding to deliver processing, packaging and facility solutions to manufacturing, food, beverage and consumer product clients. Charu holds an MS in mechanical engineering from Purdue and an MS in industrial engineering from Oregon State.

LGIM America continues to attract top talent with the recent hires of Patrick Arey and David Budka as Senior Investment Directors/Defined Contribution Specialists.

Arey As part of the Defined Contribution (DC) Sales team, Patrick and David will establish and maintain significant relationships with key DC Investment decision makers and influencers - global consultants, national aggregators, retirement Budka specialist advisory firms and managed account providers – as well as other significant industry specialists across the DC landscape.

Both professionals have more than 20 years of experience within the financial services/defined contribution industry.

Illinois’ largest addiction treatment nonprofit, Gateway Foundation, welcomes Ciuinal Lewis, Ph.D. as Senior Executive Director for its Chicago centers. Dr. Lewis will help expand our existing community partnerships, build upon proven pathways to addiction treatment, and strengthen citywide recovery support services. With over 30 years of experience delivering health care to diverse communities, she brings a history of professionalism and compassion in behavioral health and education management.

ARCHITECTURE / DESIGN GREC Architects, LLC, Chicago GREC Architects is pleased to announce that Katherine Putnam and Kate Pedriani have been named Interior Design Directors. In this capacity Katherine and Putnam Kate will have leading roles in the firm’s corporate, residential and hospitality projects.

Their commitment to the studio’s wide array of clients and project types will elevate the experiences created by GREC. Pedriani CONSTRUCTION Leopardo Companies, Chicago Leopardo is proud to announce the addition of Justin Behm as Vice President of Tenant Interiors. He brings a decade of experience and joins from Executive Construction, where he played an integral role in the company’s success.

His addition to Leopardo serves as further investment in serving Chicago’s tenant interiors market, along with the quality of service and capabilities offered to clients and partners. In his new role, Justin will oversee all aspects of Leopardo’s tenant interiors work.

CONSULTING Kearney, Chicago Rich Besen has been appointed as Head of Innovation for Kearney’s Product Excellence and Renewal Lab (PERLab), a division in the management consulting firm. He has worked at a diverse array of companies including L’Oréal, OXO, and Apple, focusing on driving innovation and devising roadmaps to bring product concepts from start to finish. With experience in product design and strategic management, Rich will work with PERLab to discover hidden value in products to better meet customers’ needs.

EDUCATION

MANUFACTURING

Loyola University, Chicago

Berlin Packaging, Chicago

Loyola University Chicago announces that Goutham Menon, PhD, dean and professor of the School of Social Work, was appointed Board President of the Network for Social Work Management (NSWM), effective July 1. In addition to NSWM, Menon has been actively involved in various leadership roles across notable social work organizations, including the Council on Social Work Education, National Association of Deans and Directors, the International Consortium for Social Development, and husITa.

Berlin Packaging, the world’s largest Hybrid Packaging Supplier®, is pleased to announce that Ben Adams has joined the company as Chief Digital Officer. Adams will partner with Berlin Packaging’s industry-leading commercial team to develop and execute the company’s global digital strategy and lead the next phase of digital transformation.

Adams joins Berlin Packaging with more than 20 years of experience in digital strategy and e-commerce.

FINANCE Sycamore Advisors, LLC, Chicago Sycamore Advisors, LLC, an independent municipal advisory firm, has expanded by adding two staff members to further strengthen the firm’s national municipal Lamendola advisory practice.

Joining Sycamore are seasoned muni professional Jessica Lamendola (senior vice president) and Lucien Harlow-Dion (quantitative analyst).

Both bring a fresh analytical capacity and Harlow-Dion unique perspectives as the firm continues providing independent advice for high priority municipal projects for clients in the Midwest and Northeast. Sycamore Advisors, LLC is a Women Business Enterprise (WBE) registered with the U.S. Securities and Exchange Commission and Municipal Securities Rulemaking Board and provides services to state and local governments and leading not-for-profits.

HEALTH CARE Ann & Robert H. Lurie Children’s Hospital, Chicago Lurie Children’s has recruited a top senior leader, Audrey Williams-Lee, as the Chief People Officer.

She brings impressive experience leading a diverse, service-oriented workforce in major companies, such as the Hyatt Hotels Corporation and McDonald’s Corporation. In addition to her experience with Hyatt and McDonalds, Ms. Williams-Lee is passionate about child health and wellbeing; some of her community involvement includes working with organizations to help kids heal from trauma.

HEALTH CARE Sinai Chicago, Chicago Sinai Chicago is pleased to announce the addition of Dr. Gina Walton as Vice President of GME Diversity and Inclusion/Assistant DIO. Dr. Walton is focused on the recruitment, retention and well-being of minority physicians in residency programs and fellowships at Sinai Chicago. She graduated from the UIC College of Medicine. She has held clinical and academic positions at Vanderbilt Medical Center in Nashville and volunteered for Black Achievers YMCA and the Student National Medical Association.

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

MANUFACTURING

LAW Rope & Gray LLP, Chicago Global law firm Ropes & Gray is pleased to announce the arrival of Nichole LopezTackett, counsel in the firm’s leveraged finance practice, to its 100-lawyer Chicago office – a team known for “talented, sophisticated problem solvers,” who “understand what is important to clients,” writes Chambers USA in its 2021 guide. Nichole represents corporate borrowers, private equity sponsors, investment funds and lending institutions in a wide range of complex financing transactions.

TECHNOLOGY Discovery Partners Institute, Chicago Discovery Partners Institute (DPI) is pleased to announce that Olivia Palid and Stephanie Werner have joined the DPI team. Olivia Palid joins as a Visiting Palid Research Associate.

Olivia supports the Pritzker Tech Talent Lab as part of their Research Team.

Stephanie Werner joins the team as a Postdoctoral Research Associate with IWERC. Stephanie’s research Werner focuses on examining the participation and retention of marginalized groups in STEM using a lens centering on justice and equity.

Berlin Packaging, the world’s largest Hybrid Packaging Supplier®, is pleased to announce that Jared Burk has joined the company as General Manager of E-Commerce.

Burk will lead the Berlin Packaging Online commercial team and further develop its omnichannel experiences for customers and suppliers. Burk joins Berlin Packaging after 12 years at W.W. Grainger, where he led continuous improvement and operational effectiveness efforts, most recently as Director of Sales Execution & Operations.

MANUFACTURING Berlin Packaging, Chicago Berlin Packaging, the world’s largest Hybrid Packaging Supplier®, is pleased to announce that Rebecca Gummerson has been promoted to Vice President of Marketing from her prior role as Senior Director of E-Commerce. Gummerson will lead Berlin Packaging’s marketing efforts across its online and traditional channels and will help ensure a seamless omnichannel customer experience. Gummerson joined Berlin Packaging in 2016.

MANUFACTURING Berlin Packaging, Chicago Berlin Packaging, the world’s largest Hybrid Packaging Supplier®, is pleased to announce that Balaji Jayaseelan has joined the company as Vice President of Sustainability. Jayaseelan will be responsible for refining and executing Berlin Packaging’s sustainability strategy and working across the enterprise to fortify its Environmental, Social, and Governance (ESG) framework. Jayaseelan joins Berlin Packaging with over 15 years of experience leading sustainability programs for B2B and B2C firms.

NON-PROFIT Chicago Zoological Society, Chicago Cherryl Thomas has been elected Chair of the Chicago Zoological Society’s Board of Trustees. The first woman elected in the Board’s 100-year history. She has served on the Board since 2000 along with various other nonprofit boards over the years. Cherryl brings 40+ years of experience administering high-profile projects in the Chicagoland area. She founded Ardmore Associates in 2003 and merged with The Roderick Group in 2017 to form Ardmore Roderick, where she serves as Chief Strategic Officer.

NON-PROFIT The Joffrey Ballet, Chicago The Joffrey Ballet is pleased to announce the elevation of former Chief Marketing Officer Brian Smith to the new role of Chief Advancement Officer. Smith’s tenure at the Joffrey, which began in 2011, has been marked by record box office and attendance numbers. In his new role, Smith will oversee a newly integrated Advancement team that focuses on contributed and earned revenue goals while supporting the Joffrey’s commitment to diversity, accessibility, and education.

CRAIN’S CHICAGO BUSINESS • JULY 26, 2021 15

Fulton Market tower would rise 26 stories

BY ALBY GALLUN Nearly three years after buying a site at the west end of the Fulton Market District, Jeff Shapack has revealed what he wants to build there: a 26-story residential highrise.

The Chicago developer, one of the most active in the booming neighborhood, has filed plans for the 316-unit project at the corner of Fulton and Ada streets with the Chicago City Council.

Shapack is among several developers to march west in search of land in Fulton Market as the neighborhood’s core fills up. Housing developers in particular also have started to move north after the city lifted a ban on residential projects north of Lake Street this year.

Shapack plans his project at 1353 W. Fulton St., a 27,200-square-foot parcel he bought for $8.5 million in August 2018. Designed by Skidmore Owings & Merrill, the building would rise 270 feet and include 200 parking spaces, according to the zoning application.

AFFORDABLE UNITS

To comply with the city’s Affordable Requirements Ordinance, the project would include 63 units affordable to residents below certain income levels. The filing does not say whether Shapack plans apartments or condominiums there, but apartments are the preferred choice for most downtown housing developments these days. The downtown multifamily market is bouncing back from the coronavi-

rus pandemic, and landlords and developers are growing increasingly confident about the future.

Shapack, founder and CEO of Chicago-based Shapack Partners, did not respond to requests for comment. Shapack’s zoning attorney, Katie Jahnke Dale, a partner in the Chicago office of DLA Piper, referred a reporter to Shapack.

Fulton Market has been Shapack’s turf since the neighborhood started to take off nearly a decade ago. Ventures involving Shapack recently have developed the 182-room Hoxton Hotel at 200 N. Green St., which opened in 2019, and a 645,000-square-foot office building at 167 N. Green St. that opened late last year.

The building at Fulton and Ada would be Shapack’s second resi-

COSTAR GROUP

Chicago developer Jeff Shapack is among a growing pack of builders marching west in search of land in the neighborhood as its core fills up

Chicago developer Jeff Shapack plans to build a 316-unit residential tower on this site at Fulton and Ada streets. It would be his second residential project in the Fulton Market District. dential project in Fulton Market after the Parker Fulton Market, a 227-unit apartment high-rise at 171 N. Halsted St. A Shapack joint venture sold that property for $113

million in December 2017.

Shapack needs the City Council’s approval of his proposal and construction financing before he can begin building the project.

Cullerton backing new Wrigleyville golf venture

BY DANNY ECKER Former Illinois Senate President John Cullerton has his sights set on golf more than a year into his retirement from public service. It’s just planned for a bar.

The longtime state legislator is part of a group of investors seeking city approval to open an X-Golf entertainment venue at 3549-3551 N. Sheffield Ave. in Wrigleyville, according to a zoning application being introduced last week to the City Council.

If the city signs off, the virtual golf franchise could open as soon as late this year in the two-story former Starbucks across from Wrigley Field, said Garritt Cullerton, who’s working on the project on behalf of his former state senator father.

The venue would be the first in the city of Chicago for Los Angeles-based X-Golf America, which offers golf simulators in bar and restaurant settings and has been

events, Garritt Cullerton said.

Other Chicago-area locations have opened in north suburban Glenview and Libertyville.

The Wrigleyville plan is a bet on a strong comeback for post-pandemic entertainment options around Wrigley Field, an area that has been flooded with them in recent years as the owners of the Chicago Cubs redeveloped the area around the stadium.

FANS RETURN

Restaurants and retailers there endured a debilitating gut punch in 2020 with COVID-induced restrictions on gathering and the Cubs playing a partial season in front of no fans, but the crowds have returned over the past month, with Wrigley Field back to full capacity.

“We just thought that Wrigleyville was just the right neighborhood for it,” said Garritt Cullerton, a real estate agent for residential brokerage Compass and whose former DePaul room“WHAT (CUBS OWNERSHIP AND OTHER mates are co-inDEVELOPERS) HAVE DONE TO THE vestors in the projwith his father.

NEIGHBORHOOD IS PRETTY INCREDIBLE.” ect“What (Cubs ownership and Garritt Cullerton, son of John Cullerton other developers) growing quickly this year through have done to the neighborhood new franchise agreements. The is pretty incredible,” Cullerton Wrigleyville space, which at added. “I think post-pandemic different points was home to it’s going to be a hub of entertainHi-Tops, Harry Caray’s Tavern, ment and people will be itching O’Malley’s Liquor Kitchen and a to get out. I think it will come Starbucks that shuttered in 2019, back well.” would include eight golf simulaCullerton said X-Golf Wrigtor bays and a golf pro on staff to leyville would sign a 10-year offer lessons and work corporate lease for the full building, which

P015_CCB_20210726.indd 15

is owned by a family trust of late Wrigleyville real estate investor James Petrozzini, according to the zoning application.

Jim Saccone, who manages the property on behalf of the trust, confirmed the owners are finalizing a lease with the Cullerton venture and said X-Golf seems like a good fit for the neighborhood.

“I’m trying to put something back in there, and I think the concept should go over well,” he said.

Garritt Cullerton, who grew up just blocks from Wrigley Field but prefers the Chicago White Sox to the North Siders, said the plans germinated last fall as the pandemic wreaked havoc on bar owners, devastation he deemed temporary.

“I was starting to think people should start buying up bars that are struggling,” he said, noting that he and his roommates began pursuing X-Golf in early 2021. “I was thinking the timing would work out well. And hopefully it does.”

Other X-Golf locations charge between $35 and $55 per hour to rent simulator bays, depending on the day and time and the size of a party. X-Golf also offers digital leagues for players to compete against each other locally and club-fitting services. Cullerton said his group has yet to determine pricing for the planned Wrigleyville location.

John Cullerton unexpectedly announced his retirement from the Illinois Senate in November 2019, saying publicly that it was driven by plans to spend more time with his family. Cullerton, who is also an attorney with law

COSTAR GROUP

The former Illinois Senate president is part of a group aiming to open an X-Golf America simulator franchise and bar across from Wrigley Field

The two-story building at 3549-3551 N. Sheffield Ave. has been vacant since Starbucks closed its shop there in 2019. firm Thompson Coburn, was first elected to the state Legislature

in 1978 and served in the Senate from 1991 until January 2020.

COMPANIES ON THE MOVE

ADVERTISING SECTION

To place your listing, visit www.chicagobusiness.com/companymoves or contact Debora Stein at 917.226.5470 / dstein@crain.com NAME CHANGES

MERGERS & ACQUISITIONS

PKF Mueller Elgin, IL 847-888-8600 www.pkfmueller.com

PKF Mueller Elgin, IL 847-888-8600 www.pkfmueller.com

Mueller CPA is rebranding to PKF Mueller effective July 1, 2021. This change will better align the firm’s market presence with the strength of the PKF International network, allowing PKF Mueller to leverage the talent of 20,000 professional members of the global network.

Additionally, having marketed itself in certain niches with the PKF name for the last four years, this change will help provide clarity to our clients and business colleagues. Read the full press release at www.pkfmueller.com.

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7/23/21 2:57 PM

16 JULY 26, 2021 • CRAIN’S CHICAGO BUSINESS

Tiny sushi bar could give hotels a path to recovery

BY ALLY MAROTTI There’s a suite on the second floor of the Hotel Lincoln that used to generate about $80,000 in annual revenue. This year, it’s projected to bring in about $1 million.

It wasn’t posh decor or a comfier bed that boosted the suite’s performance; it was a tiny sushi restaurant.

Sushi Suite 202 is an omakase sushi restaurant that opened in February 2020 in a 750-squarefoot suite in the Lincoln Park hotel. The suite, once used mainly as a staging area for brides, is now a restaurant that serves six people at a time. Patrons check in at the hotel and use a keycard to enter the restaurant. It’s 17 courses of sushi for $125, plus tax, gratuity and a la carte sake. There’s a little lounge area in the room, too, for pre- or post-dinner drinks.

The hotel treats the sushi like room service. Daily shipments of seafood are delivered to the front desk, and the sushi is prepped in the hotel’s kitchen and brought up to the suite.

It’s a novel concept, a speakeasy-style sushi joint, and hotel general manager Dan White said it has created a lot of buzz and drives traffic to the hotel’s other rooms. That’s exactly what Hotel Lincoln wants, he said. Before the pandemic struck, Chicago hotels relied on restaurant and bar concepts to help drive traffic and set them apart in a crowded market.

Post-pandemic, as Hotel Lincoln looks to recover from months of lost nights, the sushi restaurant has become a vital revenue stream—and one the hotel is looking to replicate.

“The more people talk about what’s happening at Hotel Lincoln, the better for us,” White said. “The additional PR and buzz it creates is something that I think a lot of travelers are looking for now as op-

posed to just checking into a giant box and eating at the hotel restaurant.”

The company that runs Sushi Suite 202 is looking to open additional restaurants in Chicago hotels, said co-founder Michael Sinensky.

The first Sushi Suite was opened in New York about two years ago, and there’s a third location in the former Versace Mansion in Miami. Sinensky said he doesn’t plan to open more than one suite per city, but the company is planning to open three of its Sushi By Bou restaurants in Chicago by the fall.

Sushi By Bou is a more casual, faster and larger version of Sushi Suite. It serves omakase, but it does 12 courses in 30 minutes for $50. It seats up to 12 at a time, depending on the location.

Sushi By Bou locations are set to open in Hotel Lincoln and Claridge House in the Gold Coast, a spokesperson said.

PROFIT SHARING

Sushi Suite splits its profits down the middle with Hotel Lincoln. That means Sushi Suite doesn’t pay rent, either, which helped it weather pandemic closures—and COVID-caused aversions to intimate dining spaces— better than other restaurants. Still, the restaurants could ultimately aid its partner hotels’ pandemic recovery, Sinensky said. “We’re creating revenue for them in places that generally had none or were underperforming,” he said.

White from Hotel Lincoln agreed. The hotel did about $11 million in revenue in 2019 but saw a 70 to 75 percent revenue drop in 2020. White expects next year’s revenue to be about 85 percent of 2019’s. “2023 is maybe the year we stabilize,” he said. That means that $1 million Sushi Suite is expected to bring in will be a big help, he said.

Indeed, the hotel industry in Chicago is still hurting from reve-

PHOTOS BY NEIL JOHN BURGER

Sushi Suite 202 opened in Hotel Lincoln just before the pandemic. Now the hidden, six-seat restaurant is generating buzz—and a welcome revenue stream.

Sushi Suite 202, which occupies a 750-square-foot suite at the Hotel Lincoln, serves 17-course omakase meals. nue lost to the pandemic. Downtown hotel occupancy hit 50 percent during the week ended July 10 for the first time since before the pandemic, said Stacey Nadolny, managing director of hospitality consulting firm HVS Chicago.

Typically this time of year, occupancy is 80 to 90 percent.

Everything is trending in the right direction, but there’s still a long way to go, she said. That’s likely part of the reason why operators are pushing for more lucrative revenue streams to fill unused space in their hotels. For several years, hotel operators have been getting creative in that respect, but the pandemic is the first time that they have repurposed the hotel rooms themselves.

“It’s all about for these hotels what makes the most sense,” she said. “Now that this accepted concept of day use in the rooms is there now as well, it opens up” a lot more options.

It’s not the norm yet, but smaller and independent hotels are more frequently converting their suite space, she said. Some are using them as conference rooms, for ex-

ample. Others are pushing harder on finding more lucrative uses for space beyond the guest rooms.

The Chicago Athletic Association, for example, swapped out its ground floor gift shops for indoor golf simulators in its new Topgolf Swing Suites. Getting a group to spend $1,000 over three hours of eating, drinking and golfing likely tops the nightly rate of a hotel suite, Nadolny said.

Such partnerships are usually

win-win situations for the hotel and business that opens within, said Olivier Gompel, executive vice president of commercial real estate firm CBRE’s hotel advisory.

“It’s a competitive environment out there, and guests are very demanding,” he said. “They have a lot of options, so anything you can do to create more desirable amenities is great in terms of positioning your property. And you get revenue to go with it.”

With a brand-new law about to open 185 more retail licenses here, look for the trend to continue

BY JOHN PLETZ Days after a new law dramatically expands Illinois’ $1 billion cannabis industry, a New Yorkbased marijuana company has entered the market. It won’t be the last.

New York-based Ayr Wellness, a large publicly traded marijuana company, is buying two dispensaries in Quincy. Ayr, which operates in seven other states, said July 20 that it’s buying Herbal Remedies Dispensaries for $30 million in a deal that is expected

P016_CCB_20210726.indd 16

to close later this year.

More out-of-state companies are expected to look for a way into the Illinois market by winning, acquiring or investing in 185 new licenses that are scheduled to be awarded in three lotteries over the next month.

GROWTH PATH

Ayr grew out of a special-purpose acquisition company, or SPAC, formed in 2017. Most of its operations are in the fast-growing Florida medical-marijuana market.

It’s the latest weed company to move into Illinois, one of the largest cannabis markets in the country.

Atlanta-based Parallel, a marijuana operator led by Wrigley chewing gum heir William “Beau” Wrigley, bought six Illinois weed shops in a deal that could be worth up to $155 million.

New York-based Ascend Wellness, which entered the Illinois market in 2019, added to its presence by acquiring three Chicago dispensaries over the past year.

It bought Midway Dispensary on the South Side and MOCA Modern Cannabis stores in River North and Logan Square.

NEXT GREEN WAVE/UNSPLASH

Out-of-state weed firm makes a move on Illinois

Illinois is one of the largest cannabis markets in the country.

7/23/21 4:36 PM

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18 JULY 26, 2021 • CRAIN’S CHICAGO BUSINESS

The University of Chicago’s latest crime challenge: Reassuring nervous parents “Every year, we have students who initially have University of Chicago on their list, and they go to visit and shortly thereafter take it off of their list because of safety-related concerns,” said Andrew Belasco, chief operating officer of College Transitions, an Atlanta-based admissions company that advises high school seniors.

Located in Hyde Park, U of C has long combated the image that its campus is more dangerous than its suburban competitors such as Northwestern University. Though the university points to its police force of about 90 sworn officers along with its network of surveillance cameras and emergency phones to deter crime, changing attitudes about the role law enforcement should play on campus present a new challenge, especially given past complaints from Black South Side residents about racial profiling.

Even if the renewed attention on Chicago crime, which is surging after months of pandemic lockdown and protests over racial justice, deters future students from selecting U of C, the university known for its quirky essay questions and intellectual intensity can weather a slump. With an endowment of $8.6 billion, U of C is not only one of the country’s wealthiest universities, it’s also among the most selective.

The university, which will charge undergraduate tuition of $59,256 for the coming academic year, drew more than 34,000 undergraduate applications in recent admission cycles and accepted 7.3 percent of them to the Class of 2024, according to school data. Statistics on the incoming freshmen class weren’t yet available.

Arun Ponnusamy, a former assistant director of admissions at U of C who now privately advises students, said he hasn’t seen evidence that students considering U of C decline to attend because of safety

concerns, even when they’re from upper- to middle-class backgrounds who aren’t familiar with large cities.

“You’ve got the kids who are truly interested in an urban experience, and they recognize that crime may be part of that, but the flip side may be increased internships or research opportunities or the sophistication of life in a city,” said Ponnusamy, chief academic officer at national education consulting company Collegewise. “There’s a trade-off.”

That evaluation could change, however, if students are spooked by the news this year, Ponnusamy said.

STUDENTS KILLED

Both U of C students killed by gunfire in 2021 were random targets.

Max Lewis, a third-year student, died July 4 after he was shot in the neck while riding a CTA Green Line train back to campus from a downtown internship. A bullet fired from outside the train penetrated a window and hit Lewis, 20. In January, doctoral student Yiran Fan, 30, was killed in the parking garage of his East Hyde Park apartment building.

Fan was the first victim of a gunman who went on a shooting spree and died in a confrontation with Evanston police officers hours later.

U of C declined to make an administrator available to discuss its safety strategies. In a written statement, the university said that it was “deeply saddened” by the deaths of Lewis and Fan and that it’s committed to partnering with the city and local groups to improve safety.

“We consider safety and security to be a paramount priority and continue to strive to make our public safety practices a model for higher education and the law enforcement community,” the statement said.

“Violent crime is an urgent problem across the U.S., and we do not accept the toll that violence has taken in our city and in American cities nationwide.”

The university said it’s exploring ways to improve existing safety pro-

JOHN R. BOEHM

UCHICAGO from Page 1

U of C employs one of the largest police departments among private universities, a recent source of contention with some student groups. grams, “including expanding transportation options for students and others on campus,” but could not share details yet. It already provides a shuttle to the South Loop during the school year and offers discount programs with Lyft and ZipCar, though students have called for additional shuttles after Lewis’ death.

In the last year, the university conducted more than 40 meetings to discuss public safety with campus and South Side residents, the statement said.

U of C also described “extensive reforms” made to its police force, one of the largest among private universities, in recent years to increase transparency, add specialized training and revise policies based on feedback from public officials, South Side residents and a national task force on policing ordered in 2014 by then-President Barack Obama, a former U of C law professor.

Belasco, of College Transitions, said the University of Southern Cal-

ifornia in Los Angeles and the University of Pennsylvania in Philadelphia face similar challenges since they’re located in urban settings with a history of crime. He recommended that universities publish campus crime data online to assuage worried parents.

U of C shares some of that information on its website but only began releasing details about traffic and foot stops by its police officers in 2015 after a push by the student body. The university said it discloses data “beyond what Illinois law requires of police departments at private institutions.” By contrast, public records laws apply to the state’s public police forces.

BY THE NUMBERS

From 2016 to 2020, robbery was the most common crime reported in the Hyde Park and South Kenwood neighborhoods that border campus, accounting for 61 percent of all violent incidents,

according to the university. The university data, however, does not denote nonfatal shootings in its crime summary, instead lumping it into the category for aggravated battery or aggravated assault. It also doesn’t include information about Woodlawn, which is south of U of C and not fully included in the police department’s jurisdiction.

School officials said violent crime in the area is generally down “over more than a decade,” but more recent data paints a bleaker picture.

UCPD figures shows violent crime in Hyde Park and South Kenwood increased 3 percent from 2011 to 2020 and 4 percent from 2016 to 2020.

Though U of C often highlights the police department, it’s also generated controversy. Student groups calling for the force’s abolition conducted a 19-hour sit-in at the department’s building last summer and demonstrated outside the university provost’s home for seven days.

Remember Hewitt Associates? Meet one of Chicago’s newest public companies. digital transformation of its worker-benefits platform. Alight handles redubbed Alight Solutions public payroll, health care and retirement via a special purpose acquisition benefits for much of corporate company, or SPAC, early this year. America, and soon it will manage record-keeping Meet one of the larger publicly retirement-fund traded companies in the Chicago for the nation’s largest employer of area that you’ve probably never all—the federal government.

A multiyear contract Alight won heard of.

Alight employs more than 2,000 late last year to manage those benin the area—most of those in Lin- efits for all 6 million U.S. governcolnshire—and about 15,000 ment workers, including military, worldwide. Its market capitaliza- takes effect next year. When it does, Alight will be educating 36 million workers “EMPLOYEES ARE REALLY STRUGGLING on what their employprovide them in WITH STAYING HEALTHY AND STAYING ers some or all benefits.

Alight debuted on FINANCIALLY SECURE.” the New York Stock Stephan Scholl, CEO, Alight Exchange on July 6, shortly after its SPAC tion is $4.7 billion, making it easily deal closed. It became the latest in a a top 50 publicly held company in string of new publicly traded names in the Chicago area, some privately the area.

CEO Stephan Scholl, 49, who took held for decades, that turned to the over the company 15 months ago, “blank check” approach of going said in an interview that Alight is public. Acquisitions of firms like hiring aggressively to continue the Alight by shell companies often ALIGHT from Page 1

P018_CCB_20210726.indd 18

launched by big-name investors have given the companies’ owners a more efficient way to take their investments public than the traditional initial public offering.

For now, Alight has little analyst coverage, and Scholl appears eager to raise its profile.

“The reason I joined last year in the middle of a pandemic is that you can see employees are really struggling with staying healthy and staying financially secure,” he said.

‘IMPORTANT DECISIONS’

Scholl’s background is in software, having been a senior executive at PeopleSoft and Oracle, among other roles. His goal is to transform the employee experience with benefits into something engaging. Few workers would use that word to describe the way benefits are presented, but the choices employees make in terms of health insurance and retirement planning are critical to their lives and families.

“These are such important deci-

sions,” he said.

So Alight needs more software engineers and tech workers. For the first time in years, he said, the company is recruiting at local campuses like Northwestern and DePaul universities. “The pedigree of students has been amazing,” he said.

With all that hiring, growth will need to accelerate. Revenue in 2020 was more than $2.7 billion, up 7 percent from $2.6 billion the year before. The company reported a $103 million net loss, but cash flow—earnings before interest, taxes, depreciation, amortization and a $77 million restructuring expense—was $564 million, according to a Securities & Exchange Commission filing. The first quarter saw revenue close to even with the year before—$689 million versus $693 million.

Where will that growth come from? Obviously, the massive federal contract—the company doesn’t disclose a dollar figure for the deal—will boost revenue significantly in 2022. But the ques-

tion with such highly competitive contracts is always the same: How profitable is the deal? That won’t be known for another couple of years.

Otherwise, Scholl is looking abroad. Alight has penetrated the U.S. market well. It provides benefits services for 70 of the Fortune 100 corporations and about half of the Fortune 500, he said.

Only about 10 percent of Alight’s business is from outside the U.S., and that’s the target for a lot of the company’s future growth. Acquisitions will play a part in gaining more toeholds around the world.

Wage growth—and the difficulty many companies are having in hiring now that the economy is reopening—leads Scholl to say, “This is the decade and the era of the employee. We need to do a lot more for employees.”

Alight is positioned to benefit from that trend. It’s Scholl’s job to take advantage, or Chicago’s latest independent, publicly traded headquarters likely won’t stay that way for long.

7/23/21 4:13 PM

CRAIN’S CHICAGO BUSINESS • JULY 26, 2021 19

Microbe-meat startup becomes billion-dollar company

Nature’s Fynd, based in the Back of the Yards neighborhood, raised another $350 million and plans to have products on grocery store shelves this fall

BY ALLY MAROTTI Nature’s Fynd, a Back of the Yards-based startup growing meat from a microbe, just became a Chicago unicorn.

The company had already secured big-name investors, including firms backed by Al Gore, Jeff Bezos, Bill Gates and ADM. Its latest round of funding is $350 million, bringing its total funding raised to more than $500 million.

The round was led by a new investor, the latest fund from SoftBank, and drew new and repeat investors, according to a press release.

Nature’s Fynd isn’t disclosing its exact valuation, but chief marketing officer Karuna Rawal said the new round of funding puts Nature’s Fynd “firmly in the unicorn status.” Unicorn is industry jargon for a startup that is valued at $1 billion or more. Nature’s Fynd marks the 10th Chicago company to reach the status this year, according to World Business Chicago.

The new funding will help fuel Nature’s Fynd’s final push to get its products to market and expand globally, Rawal said.

ly showed that we can meet our consumers’ expectations for delicious meat and dairy alternatives with no trade-offs.”

The company plans to release its first products at retail locations this fall, Rawal said. Its breakfast items will likely be first, she said, with other products to follow.

“We’ve done a pretty wide range of meatless products, dairy-free products and even

shelf-stable products,” she said.

“Our challenge is going to be managing how we launch that pipeline and what’s the strategy for what comes first.”

GROWING

Nature’s Fynd employs about 100 people and plans to double headcount over the next few quarters, Rawal said. The company recently added teams in Singapore and India and plans

to expand into other regions. Jonas said in the press release that there will be a special focus on Asia, “where there is substantial

demand and need for sustainable protein.”

SoftBank saw the “tremendous global opportunities in front of” Nature’s Fynd and wants to help the company scale, Angela Du, investment director at SoftBank Investment Advisers, said in the press release.

“Nature’s Fynd is combining its unique fermentation technology with robotics to develop protein-rich foods that are significantly more sustainable to create and produced in a fraction of the time as animal– and soybased proteins,” she said.

ORIGIN

The protein Nature’s Fynd produces is made from a microbe in the fungi kingdom found in a Yellowstone National Park hot spring more than a decade ago. The microbe was discovered on a NASA-supported research mission with the initial goal of figuring out what type of extreme environments could foster life on other planets.

The protein is called Fy and is grown through a fermentation process. It is a complete protein, with all 20 amino acids, and is sustainable to produce. It is also versatile. In the company’s test kitchen, it has been made into meatless chicken nuggets, sausage patties and hot dogs; crafted into dairy-free chocolate mousse and cheese dips; smeared on bagels; and put inside pot stickers.

Experts say Nature’s Fynd could tap into a rapidly growing meat-alternatives market that has picked up speed as consumers sought to reduce their meat consumption and buy sustainable foods during the pandemic. But some wondered whether consumers would be ready for a protein grown from a microbe.

The products would need to taste good and mimic meat if Nature’s Fynd wanted to target the broader pool of consumers looking to reduce meat intake instead of eliminate it.

Nature’s Fynd released its first products directly to consumers earlier this year. The $15 breakfast bundle, which included vegan cream cheese and breakfast patties, sold out in 24 hours. In the press release announcing the new funding, CEO Thomas Jonas said the response “clear-

P019_CCB_20210726.indd 19

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CEO John Groetelaars aims to rekindle growth after years of sluggish sales in Hillrom’s largest business unit, which includes hospital beds.

Medicare scrambles Hillrom’s digital dealmaking HILLROM from Page 3 “In the med-tech world you’re valued based upon the growth rate of your company,” says KeyBanc Capital Markets analyst Matthew Mishan. “With its new product portfolio and acquisitions, (Hillrom) is attempting to improve and sustain a more durable level of revenue growth.”

Hillrom’s third-quarter earnings report due July 30 will give a clearer picture of the company’s post-pandemic growth prospects. Investors are bracing for a slowdown from third-quarter 2020 revenues, which included roughly $130 million in one-time COVID-related sales.

More telling will be results from Hillrom’s newer business lines.

Strong sales of advanced products and services have helped drive Hillrom shares up 17 percent to $115.20 year to date. Groetelaars has predicted more of the same.

“Despite a tougher comparison in our third quarter, we are on track to exceed our objective of $620 million in new-product revenue for the fiscal year,” Groetelaars said during the latest earnings call, noting that the company planned to launch 10 new products in 2021.

Revenue from new products, like a digital device that helps clinicians diagnose ear and eye conditions, grew 20 percent to $160 million in the second quarter. Connected care and digital products account for nearly one-third of the business today, Groetelaars says in an interview.

This isn’t the first time Hillrom, which spun off casket-maker Hillenbrand in 2008, has reinvented itself. The company started to shift beyond hospital equipment when it bought point-of-care diagnostics company Welch Allyn for $2 billion in 2015. It looked to further shed its reputation as a health care furniture maker in 2019 when it divested a host of “noncore assets,”

including its German hospital bed business, and rebranded with the tagline “advancing connected care.”

The diversification “became even more relevant when the pandemic hit, (highlighting) the importance of connectivity, virtual interactions and using technology to elevate traditional medical devices,” Groetelaars says.

RECURRING REVENUE

expected to influence rates paid by commercial payers in the short term, affects about one-third of Bardy’s revenue.

“For Hillrom, the amount of our revenue that’s actually exposed to reimbursement from commercial payers or Medicare is relatively low—it’s less than 10 percent of our total revenue,” Groetelaars says. “But having an expert network and having a very clear working knowledge of the process around establishing reimbursement and sustaining reimbursement is really important. We do have those capabilities.”

Hillrom has been focused on buying high-growth businesses like Bardy that can increase total revenue by 1 or 2 percentage points, analysts say.

Even though Bardy is a relatively small deal overall, it “could be a headwind now if they have to move forward with it,” Matson says.

Still, Hillrom’s connected-care portfolio is on track to represent roughly 30 percent of total revenue this year, or nearly $1 billion, Groetelaars says, noting that devices that

As part of its strategy to “advance connected care,” Hillrom in January agreed to pay $375 million for Bardy and its Carnation Ambulatory Monitor, which was priced at $365 per patch. In a statement announcing the deal, Groetelaars said the acquisition would provide “an attractive recurring, high-growth revenue stream and gross margin profile.”

That was before a Medicare contractor cut the price it pays for the device by 64 percent. The cut sent Bardy’s first-quarter revenue down 11 percent.

Hillrom went to court, arguing the change constitutes a “material adverse effect,” entitling it to cancel the acquisition. The judge disagreed, find- “(HILLROM) IS ATTEMPTING TO ing the cut doesn’t have a “materially IMPROVE AND SUSTAIN A MORE disproportionate impact” on the compa- DURABLE LEVEL OF REVENUE GROWTH.” ny compared with its Matthew Mishan, KeyBanc Capital Markets rivals.

Additionally, Hillrom acknowl- collect and transmit patient data edged the reimbursement rate risk are the company’s fastest-growing when it structured the deal to in- products.

Growth stalled during the early clude a risk-shifting earnout with a lower upfront purchase price, days of the pandemic as doctors down from an earlier offer of $450 postponed nonemergency visits and people avoided medical million, the ruling said.

“There’s going to be a lot of lob- care, but the segment is recovering bying by (extended home-care quickly.

“Now we’re refining our stratemonitoring) companies to try and get the payment back up, but that’s gy and making sure we’re clearly a couple years away and it’s unclear pointed to where the public is goif it will happen,” says Needham an- ing in the future and that we’re positioned to come out even stronger alyst Mike Matson.

Groetelaars says the Medicare than we came into the pandemreimbursement change, which isn’t ic,” Groetelaars says.

7/23/21 4:11 PM

CRAIN’S CHICAGO BUSINESS • JULY 26, 2021 21

Joe Mansueto is keeping his feet firmly planted in Chicago

JOHN R. BOEHM

Chicago-based investment research giant Morningstar has had no shortage of new ventures to sharpen his focus, becoming an office and apartment landlord, a professional sports team owner, a hotelier and a community developer, among other new business roles.

Not even a global health crisis has slowed down his recent streak of high-profile investments. Since buying the Chicago Fire FC—the city’s Major League Soccer franchise— in 2019, Mansueto has purchased the Waldorf Astoria Chicago hotel, bankrolled a $50 million office redevelopment in Humboldt Park and recently unveiled a plan to build a roughly $90 million training complex and headquarters for the soccer club on 32 acres in the Belmont Cragin neighborhood. His latest pursuit, though further from home, is just as attention-grabbing: He’s kicking tires on buying another soccer club overseas that could serve as

“I THINK (CHICAGO’S) GOT A BRIGHT FUTURE, DESPITE SOME OF THE CHALLENGES.” Joe Mansueto, Morningstar founder

an affiliate for the Fire, a farm team of sorts to help develop future MLS talent.

The mix of ventures amounts to a semiretirement that has been anything but quiet for the relatively unassuming 64-year-old.

Mansueto is traversing a path that few of his contemporaries with 10 figures of net worth have followed, plowing large sums of his wealth into not only charitable efforts but high-profile business ventures that

are making a sizable imprint on the Chicago landscape. And he’s doing it all while some investors in real estate and other sectors are wary of channeling money into a city wrestling with long-standing issues of violence and fiscal instability as well as new challenges brought on

by COVID-19.

“I love Chicago. It’s a world-class city,” Mansueto says while sipping green tea during a wide-ranging interview with Crain’s at the Wrigley Building, a city landmark he bought in 2018 for $255 million. “I think it’s got a bright future, despite some of the challenges.”

PAID UP

Mansueto has backed up that sentiment with his wallet before. In 2011, he was part of a group of deep-pocketed investors who helped rescue the Chicago Sun-Times from financial ruin.

And since the pandemic upended the economy 16 months ago, Mansueto has continued to plow money into Chicago-centric projects.

He paid nearly $55 million in November for the Waldorf, which was half the price it sold for five years before but a bold wager on a sector that could be years away from returning to pre-pandemic levels of demand, if it ever does. Mansueto took another gamble that same month when he and Chicago-based developer IBT Group kicked off work at the Terminal in Humboldt Park, a transformation of a dilapidated, 250,000-square-foot cluster of former locomotive headlamp factory buildings and warehouses into creative office space in a wholly unproven location for companies.

His other local investments are as varied as his interests, including major stakes in Chicago start-

up Foxtrot Market, a chain of upscale convenience stores that just announced plans for a national expansion; Lisle-based medical device maker Endotronix; and Tovala, a Chicago-based maker of smart ovens that’s now regularly advertising on TV. Mansueto says he’s like other investors who are concerned about the weight of local property taxes, underfunded pensions, gun violence and a perpetually unsettled public school system, but he calls his recent real estate plays a “longterm bet on Chicago” and hopes that other well-heeled Chicagoans will follow his lead in helping revive both downtown properties that have been stung by the crisis and those in heavily disinvested communities.

“These neighborhoods over time will get a lift up, and hopefully this investment will be a catalyst for making that come on a faster timetable,” he says.

Few high-net-worth investors have been willing to place big wagers on such projects in local neighborhoods, which is what has made Mansueto stand out as a partner, says IBT Principal Gary Pachucki.

Mansueto was the first prospective financial backer for the Terminal to walk the gritty property and not dismiss it as too risky or overhaul his plan, he says.

“A lot of times when you work with partners, especially partners that are really well-heeled, and they (believe) they are the smartest guys in the room,” says Pachucki, who describes Mansueto as a “quiet” personality with an understated mission “to do some good” in Chicago.

“Joe is generally aligning with people that he has confidence in what their vision is, and he’s letting

them make those projects happen,” he says.

BACKSEAT EXEC

Mansueto has spent far less time focusing on Morningstar since becoming executive chairman and handing the chief executive reins to Kunal Kapoor in 2017, but he stresses that he hasn’t lost his pull at the company he started out of his living room in 1984.

Mansueto remains the firm’s largest shareholder, with nearly 45 percent of its common stock, and trades emails multiple times each week with his successor, “who is doing an even better job than I was doing,” he says. The company’s stock price soared to an alltime high in April, helping push Mansueto’s net worth north of $5 billion, according to a recent Forbes estimate.

His first 22 months owning the Fire, meanwhile, have been far more turbulent. The pandemic began just eight days before the club was scheduled to make a highly anticipated return to Soldier Field, the centerpiece of Mansueto’s effort to relaunch the Fire brand in the city after 14 seasons playing home games in suburban Bridgeview.

Gov. J.B. Pritzker called Mansueto directly to ask him to postpone the home opener, thwarting months of marketing and buildup to what was likely to be a sell-out crowd. “It was the right thing to do,” Mansueto says. The team eventually debuted at an empty lakefront stadium in August.

It also didn’t help that one of the club’s first moves under his ownership—tweaking the name of the team and overhauling its logo— didn’t go over well with its most dedicated fans. Mansueto, who has said publicly he deserves the blame

CHICAGO FIRE FC

MANSUETO from Page 1

Joe Mansueto had a turbulent opening with the Fire, but he says he’s in it for the long run. for the logo selection, revealed a new iteration of the emblem that has been far better received and says he didn’t anticipate “just how deeply a sports team connects with a city and how passionate fans are about a sports club.”

Mansueto will have another chance to make a highly visible brand move for the team again after this season when its jersey sponsorship deal with Motorola Mobility expires. And though he describes his exploration of purchasing a foreign soccer club as nascent, Mansueto says he’s received a number of overtures from franchises in Europe looking for new investors and envisions an overseas affiliate he could “integrate” with the Fire to swap players during the season.

Whether or not that pans out, he’s not sweating the possibility of making mistakes as he finds his footing as an owner.

“For me, this is a project for the long run. I don’t really view this as (an investment) that I’m looking to buy and sell. It’s something I want to own forever,” he says. “You approach things differently if that’s the mindset.”

Local real estate agencies join national firm to keep up with digital demands COMPASS from Page 3 essentially, a tech company that does real estate.

“They have a 50- or 100-person marketing team” at Compass, Gagliardo said. “I had one person doing marketing.” By folding into Compass, he said, “We got accessibility to all their marketing, all their technology.”

Homebuyers long ago switched from shopping for homes via the plush seats of a local real estate agent’s sedan to conducting much of their search online, and the industry evolved rapidly in the same direction. Compass set out to capitalize on the change, and firms like Gagliardo Realty Associates are finding they have to choose whether to ride along.

Gagliardo was the second deep-rooted suburban real estate firm to sign with Compass this spring. In May, the fourth-generation family members running Griffith, Grant & Lackie, founded in Lake Forest in 1903, joined Compass as the 27-member Griffith, Grant & Lackie Group.

Brad Andersen, whose grandfather’s uncle, John Griffith, was the

P021_CCB_20210726.indd 21

firm’s founder, calls the arrangement a “strategic alliance.” Without selling their firm, Andersen said, they connected to “an incredible marketing and technology platform.”

Using Compass’ purpose-built technology portal, Andersen said, an agent who uploads photos of her newest listing can quickly create branded sales brochures and ads. The portal also includes a comprehensive CRM, or customer relationship management system, for every aspect of relationships with home buyers and sellers.

LEGACY BRANDING

By retaining a name that has more than a century of equity built up in the Lake Forest and Lake Bluff communities, Andersen said, they hang onto their “legacy brand as the local market experts.”

Other suburban boutique agencies that have joined Compass include Smothers Group Realty in La Grange in 2020 and the Hudson Co. in Winnetka in 2018. In the city, Compass acquired Conlon Christie’s International Real Estate in 2018 and Property Consultants Realty in 2020.

“We didn’t have the capital to have engineers on staff to be constantly improving the search engines,” said Joanne Hudson, who folded her 18-year-old Winnetka firm into Compass in 2018. “You can’t be a mom-and-pop shop anymore because the demand for information and the demand for speed has increased. In order to keep your clients satisfied, you have to be state-of-the-art.”

For Compass, picking up boutique firms is a way to grow its business with “established players who are well-known names in their communities,” said Fran Broude, a longtime Chicago real estate brokerage executive who joined Compass in August to drive its growth in Chicago.

Based on an industry tool called Broker Metrics, Compass reports, in the first half of 2021, it was second in market share in the Chicago-area real estate market, up from fifth in 2020.

Compass, which went public in March, reported in July that it now has about 1,400 agents in the Chicago area, up from about 860 in 2020—a 63 percent increase. The growth was not all by acquisition

of small firms; teams of agents switched from other brokerages to Compass, and new-to-the-business agents signed on as well.

The boutique firms that come over, Broude said, “are attracted to Compass’ technology package, yet they wanted the opportunity to hold on to their very well known local identity.”

COACHING

Along with easily assembled marketing materials and promotion of their listings, agents at Compass can get coaching and advice at almost any hour on how to push a home out on social media or how best to advertise a home’s particular amenities, Broude said.

“It’s very compelling for them to be able to connect to that talent pool,” Broude said.

Not all boutique firms are convinced. “Technology is very important, but there’s also the brand familiarity and the personal connections our agents are out there making,” said Larry Reedy. “It’s an agent-driven business, not a technology-driven business.”

Reedy is president of 90-agent LW Reedy Real Estate, a still-independent brokerage founded in 1951 by his grandfather, who was also named Larry.

Reedy said people often drop by the firm’s office on York Road in downtown Elmhurst to show off an old yellow LW Reedy giveaway T-shirt they found in a box or to reminisce about buying a house in Elmhurst 40 years ago with the help of an LW Reedy agent.

That connection, he said, is “consistency, familiarity.”

Reedy said he’s trying to keep the firm up to date on technology, and “it hasn’t been without a fair amount of research.” He uses one firm for digital marketing, social media and other exposure for home listings and another for the LW Reedy website, where clients can search for a listing or an agent.

Independence runs in the Reedy family. Another boutique suburban firm that has not affiliated with Compass is JW Reedy Realty in Lombard, founded by a different branch of the Reedy family in 1928 and now run by his grandson, John Reedy.

7/23/21 4:13 PM

22 JULY 26, 2021 • CRAIN’S CHICAGO BUSINESS

Can Moto keep its stock price aloft while navigating multiple lines and markets?

Motorola will play catch-up for the rest of the year. Brown told investors that Motorola expects to benefit from the Biden administration’s $1.9 trillion coronavirus-relief program, the American Rescue Plan, which includes $350 billion for state and local governments and $170 billion for schools.

“Fixed video is likely the biggest beneficiary of the American Rescue Plan,” Brown told investors when the company reported first-quarter results May 6.

ADDED UPSIDE

Openpath could give Motorola additional upside in corporate, government and education markets. “Our vision is video security and access control are better together,” says John Kedzierski, who leads the company’s video security and analytics business.

“There’s a lot of doors that need to be access-controlled. Security is a need-to-have, not a nice-to-have.”

But Motorola will have to contend with supply-chain issues for semiconductors that resulted from the coronavirus pandemic. Motorola said shortages resulted in lower sales of some of its public-safety equipment in the first quarter. A resurgence in COVID because of a new variant heightens concerns whether supply-chain constraints will ease. Sales in parts of Asia and

ALAMY

alyst at Northcoast Research in Cleveland. He estimates about 40 Axon Enterprise, the largest mak- percent of Motorola’s revenue is er of body cameras, trades at 95 recurring, compared with roughly 30 percent before the Avigilon times its projected 2022 earnings.

Investors are buying into recov- deal.

“They made a bet on video surery of Motorola’s legacy business and growth in new areas such as veillance with Avigilon, and it video, which began three years was the right bet at the right time, ago with the $1 billion acquisition starting with Chinese competitors of Vancouver-based Avigilon. The getting banned in the U.S. and company has made three acquisi- U.K.,” Housum adds. “With the tions since then, adding new capa- bolt-on acquisitions like Openbilities. On July 13, Motorola said path, people see they’re in these it would buy Openpath Security, nascent industries with great a California-based startup whose growth rates. I think you’re getting software is used to monitor and a little more trust from investors in control access to buildings, for an Greg Brown’s story.”

Brown was named CEO in 2008, undisclosed price.

The company has moved sev- the low point for Motorola when eral of its traditional public-safety the company’s misfortunes in the products, such as dispatch and cellphone business collided with the Great Recession. The stock “PEOPLE ARE CATCHING ON TO THE slumped as low $10.38 on a RECURRING-REVENUE SIDE OF THE STORY.” as split-adjusted baKeith Housum, analyst, Northcoast Research sis before he spun off the phone unit records management, to a cloud- in 2011, keeping the public-safety based offering in which customers business.

In recent years, he’s focused pay Motorola a monthly fee to host and manage the technology for on adding software and services, them. It also started selling body which now account for 43 percameras as a service, tied to its ev- cent of revenue. Brown has promised Wall Street that software and idence-management software.

“People are catching on to the services will grow 20 percent this recurring-revenue side of the sto- year, but growth was just 13 perry,” says Keith Housum, an an- cent in the first quarter.

MOTOROLA from Page 3

Motorola Solutions’ revenue is rebounding after a COVID-induced slump.

Latin America remain challenging. Motorola will have to keep expanding the customer base for Avigilon’s fixed video equipment and ramp up sales of body cameras, taking share from Axon, which dominates the space.

With Motorola’s products performing well, analysts are paying close attention to personnel. In the past year, three top executives have announced plans to retire: Gino Bonanotte, chief financial officer; Andrew Sinclair, senior vice president for software; and Kelly Mark, who oversees software and services. Housum says there

are no red flags, but “that’s a lot of turnover. Is your bench deep enough?”

In more than a decade at the helm, Brown has replaced members of his leadership team several times.

DiPalma says he’s encouraged so far. “We think the successful launch of 911 call management in the cloud following Mark’s departure and other recent new products will enable Motorola to take advantage of improved government spending conditions for public-safety solutions and help the company stave off competition.”

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CRAIN’S CHICAGO BUSINESS • JULY 26, 2021 23

Views highlight $6 million Lincoln Park condo The two-level unit has four east-facing balconies that overlook the green park; there’s also a big terrace on the west side BY DENNIS RODKIN

VHT STUDIOS PHOTOS

WHEN ALL OF LINCOLN PARK is stretched out below your windows, the condo interior needs to “look just as good,” Stuart Kipnes said.

When he bought this unit on two floors of a mid-rise in 2005, it wasn’t quite up to the comparison, he said. Nicely done when it was new five years earlier, it was nevertheless “flat, not a lot of texture.”

Kipnes, who was in the options brokerage business at the time, had the entire 6,000-square-foot interior and much of its 2,000 square feet of outdoor space redone. The work included sleek wall paneling that in some rooms, including the living room, morphs into built-in shelving, a complete kitchen rehab and wrapping a contemporary seethrough staircase with more traditional wood-paneled walls.

It resulted in an elegant, timeless look strong enough to hold its own against panoramic park and lake views but restrained enough to provide the feeling of calm presence that Kipnes wanted as a haven from his busy workdays.

The condominium, on the fifth and sixth floors of a Lincoln Park West building that was built in 2000, “feels more like a house than any condo I’ve ever lived in,” Kipnis said. That’s in part because of the multistory layout. It’s also because the condo has a “front yard,” four balconies on the building’s east-facing facade, and a “backyard,” a terrace on the west side that includes room for cooking, dining and lounging in either sun or shade.

Kipnes said the space, where he often hosted family and other groups, is now more than he needs. He’s putting the five-bedroom condo on the market priced at a little under $6 million. The listing agent is Joanne Nemerovski of Compass.

MORE PHOTOS ONLINE: ChicagoBusiness.com/residential-real-estate HOW TO CONTACT CRAIN’S CHICAGO BUSINESS EDITORIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312-649-5200 CUSTOMER SERVICE . . . . . . . . . . . . . . . . . . 877-812-1590 ADVERTISING . . . . . . . . . . . . . . . . . . . . . . . . . 312-649-5492

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

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TH I R D MILLENNIU M GROU P SALU TES THE B ROKERA G E COMMU N I T Y, O UR CO LLEA G UES AN D TEN AN TS WH O HAV E P ERS EV ERED D U RI N G T HE RECEN T CHALLEN GIN G T I MES .

T HE FU TU RE IS BRIGHT, IT IS HERE FOR U S .

300 South Riverside Plaza

5 40 W e st M ad i so n

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