Crain's Chicago Business, August 14, 2023

Melody Winston, senior executive at Living Fresh Market

Sterling Bay seeks a thaw at City Hall

After a frosty relationship with Lightfoot, the rm hopes Johnson will help reignite Lincoln Yards

By Justin Laurence

As it works to jump-start the stalled $6 billion Lincoln Yards project, developer Sterling Bay is hoping newly elected Mayor Brandon Johnson will be more accommodating than his predecessor was.

Stronger support from the fth oor of City Hall could be the difference-maker in Sterling Bay’s e orts to nance critical infrastructure improvements for the ambitious redevelopment of 53 acres along the Chicago River between Lincoln Park and Bucktown.

A TOUGH MARKET FOR SUPERMARKETS

In 2019, the developer agreed to front the costs of nearly half a billion dollars in essential infrastructure work to improve the site and link it to surrounding neighborhoods. ose costs would be repaid from a $1.3 billion tax-increment nancing district approved after a contentious City Hall ght just a month before former Mayor Lori Lightfoot took o ce.

In a statement, Sterling Bay says it “took on the responsibility of the municipality by both -

nancing and building” the infrastructure because the city, under former mayors Rahm Emanuel and Lightfoot, was “unwilling” to build it itself. “Developers almost never fund construction of infrastructure out of pocket,” the statement adds.

Yet four years later, Sterling Bay has been unable to raise the upfront capital to fund the roadwork. As a result, it’s behind the estimated schedule for the improvements outlined in a redevelopment agreement, or RDA, with the city.

Projections in the RDA called for Sterling Bay to complete work on a bridge connecting the northern and southern portions of the site and several key streets throughout the development by the end of 2022. e extension of e 606 trail and a complicated realignment of Elston Avenue were meant to begin last year. While some prep work and studies have been conducted, construction of those critical projects has not begun.

See STERLING BAY on Page 22

Cost of cash is extra painful for privately held banks

By Steve Daniels

Banks’ cost of cash has risen so dramatically in the past year that many are seeing the money they earn on loans and other assets drop despite substantial loan growth.

e issue is particularly acute for privately held community banks, even the largest ones in the market, which generate income almost entirely by collecting deposits and making loans.

Exacerbating the issue for them is their shortage of capitalraising alternatives, unlike their publicly traded peers.

Even the age-old answer to such quandaries — selling to a bigger rival — is o the table for many because their investment portfolios are littered with unrealized losses on long-term bonds they bought when interest rates were low. Selling would mean having to account for those losses, which would meaningfully

lower any takeout price.

Dealmaking in the Chicago market — and most other markets — has been practically nonexistent this year.

Highland Park-based First Bank Chicago is a case in point. With $2.2 billion in assets, it’s one of the area’s largest privately held banks. In the rst six months of 2023, its interest expense — mainly interest paid on deposits

With $2.2 billion in assets, Highland Park-based First Bank Chicago is one of the area’s largest privately held banks. IGOOGLE See BANKS on Page 21

GREG HINZ

The upcoming race to replace Kim Foxx will be a referendum on her legacy.

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REAL ESTATE

A colorful Victorian in Elgin is for sale for only the second time in 134 years.

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On the South and West sides, retail grocers struggle to make a pro t while neighborhoods struggle to attract palatable options I PAGE 13

GEOFFREY BLACK

e state’s attorney race will boil down to Foxx’s legacy

After the tumultuous change of the Kim Foxx years, are voters looking for something di erent in the next Cook County state’s attorney?

Barring the presidency, who should be the next county prosecutor may well be the biggest question on the ballot here next year, as voters decide whether to continue the unabashed progressive policies that the outgoing Foxx promoted or temper, if not reverse, some of her actions after a spike in carjackings, robberies and other violent incidents since the COVID-19 pandemic hit.

The contest augurs to be a little quieter than the war over policing in last winter’s mayoral race between law-and-order hopeful Paul Vallas and reformer

Brandon Johnson. But “a little quieter” doesn’t mean the race will lack drama — or sharp differences.

Just two candidates so far have declared for the office and are scheduled to appear at Democratic Party slating in a few days. They’re former assistant prosecutor and defense attorney Eileen O’Neill Burke, who resigned as an appellate court justice on Aug. 1 to run for the job, and Clayton Harris III, a longtime local government official who worked for former Mayor Richard M. Daley, ran the Illinois International Port District and has the backing of Cook County Board President Toni Preckwinkle. In between his government gigs, Harris was director of governmental affairs at Lyft, something I suspect you’ll be hearing more about.

In interviews, both candidates were careful to say they support both criminal justice reform and locking up violent felons. “It’s

not an either-or,” Harris puts it. “People need to be held accountable. But we don’t need to jail everybody for minor offenses.”

However, in a sign of broader ideological divisions, the two take different stances on one of Foxx’s signature actions: her decision to prosecute as a felony only those shoplifting cases that involve goods worth at least $1,000 or a defendant with 10 prior convictions. Advocates said the old policy needlessly hurt poor people in search of necessities and young folks who did not deserve a lifelong record. Merchants said the decision endangered their livelihoods, with stores now routinely keeping locked up such basic items as toothpaste and shampoo.

O’Neill Burke said she’d stick with the law, which sets the felony level at $500. “I’m not a legislator,” she said. When blanket immunity of sorts is

offered for certain offenses, “you encourage the crime.”

Harris said he’d proceed on “a case-by-case basis.” He added, “There’s a difference between stealing a Gucci bag and a bag of groceries.”

O’Neill Burke, 58, emphasizes that she’s worked on all three sides of the criminal justice system: prosecution, defense and judicial. Raised by a single mother after her union-leader father died, she declines to comment directly on Foxx’s record — “She’s not the person I’m running against” — but says that while “some very good things” occurred during Foxx’s tenure, what the office is doing now “just isn’t working.”

In her view, the o ce’s biggest problem is lack of sta and lack of training, both of which worsened under Foxx. “I’m not a progressive. I’m not a conservative. I’m a follow-the-law person. . . .We’re at a critical juncture now.”

Harris, 53, suggests he’d run

the office much like Foxx, who before she became state’s attorney was Preckwinkle’s chief of staff. But he implies his focus might be a little different.

“I respect Kim Foxx a lot. She did some very important things in the office, and we’re not going to let it go back.” Still, he adds:

“My house has been broken into. I know what it feels like to be violated. I know what it’s like to drive down my block and turn around because of police tape.”

Both said they would have voted for the state’s new SAFE-T law, the one that abolishes cash bail, though O’Neill Burke emphasizes it was important for lawmakers to make pro-law enforcement tweaks in the final version.

Others yet could enter the race, including former Cook County Commissioner Richard Boykin and ex-Chicago Inspector General Joe Ferguson. But it’s getting late to raise the millions a first-class candidate will need.

After a hiring binge, consulting rms are cutting back

After ramping up headcount during a post-pandemic rebound, consulting rms have been laying o sta ers even as the economy continues to expand and unemployment steadies at levels not seen since the groovy ‘60s.

oughtworks, a 30-year-old Chicago-based consultant, has dismissed more than 1,000 employees — about 10% of its total — in two rounds of layo s this year, culminating in red ink and a reorganization announced last week.

Chicago’s West Monroe Partners has dispatched more than 430 professional sta ers, nearly one in ve. Accounting and advisory rm Grant ornton trimmed about 3% of its ranks in June.

e retrenchment re ects an industry exposed to struggling technology clients, lower M&A deal values and higher interest rates that have crimped regional banks’ and other lenders’ ability to fund transactions. Consulting rms are scrambling to reposition themselves as markets shift, leaving them with surplus workers in some areas and less appetite to hire new ones.

William Blair analyst Andrew Nicholas says job postings fell 60% year-over-year at seven consulting rms the investment rm tracks after headcount rose 11% last year at ve of those rms. Employers are delaying starting dates for some new hires, according to Andrew Allen, an assistant dean at the University of Illinois at Urbana-Champaign’s Gies College of Business.

e impact is stronger at tech-oriented consulting rms like oughtworks and West Monroe, as clients slow or postpone projects. Less a ected are Huron Consulting Group and other rms tied to less-cyclical markets, such as health care and higher education. In fact, Huron, which devotes about 80% of its work to those two sectors, said employment rose 22% in the year ended June 30 when it reported robust secondquarter results late last month.

e general theme, however, is less rosy.

e Wall Street Journal reported that three of the Big Four accounting rms have cut up to 5% of U.S. sta , with moves “heavily focused on the advisory sides of the rms.”

‘Substantial mismatch’

Consulting rms, after hiring aggressively, found attrition slowing earlier this year as recession warnings were sounding. When accounting and advisory rm Baker Tilly axed 180 sta ers in June, CEO Je rey Ferro in an employee memo blamed a “substantial mismatch” between plans and resources.

West Monroe CEO Kevin McCarty says in an email that “lack of certainty” is forcing business leaders to focus on short-term decisions while holding back on longer-term initiatives, leading to shifts in client demand.

Mergers and acquisitions value has fallen in four out of the past six quarters to the lowest level since the depths of the pandemic three years ago, according to PitchBook.

KMPG said tech-related transactions fell this year to $71.3 billion from $315.6 billion during the rst six months of 2022. e number of transactions was less a ected, their size reduced by higher borrowing costs and less access to credit.

Increasing chances of an economic soft landing could ease

concerns at consulting rms as business picks up or some employees feel more con dent testing the job market. Tech rms also are counting on better days ahead. Big players like Facebook parent Meta and Google reported higher revenue in the second quarter, as did Amazon. A year ago, they were registering lower or slowergrowing results.

“I do see some consulting rms tightening up a bit; it’s not like they’re disappearing from cam-

pus,” says UIUC’s Allen. “ ey’re still here, they’re still hiring. It’s just going to be interesting how this year plays out.” About 25% of the business school’s graduates heading into the workforce go into consulting, he says.

While many workers worry how arti cial intelligence gains will affect their jobs, the tech industry and the consulting rms that rely on it are salivating, comparing the

See CONSULTING on Page 20

Greg Hinz

Firms are scrambling to reposition as they deal with struggling technology clients, lower M&A deal values and higher interest rates

Steven R. Strahler

The South Side is getting its rst Chick- l-A

The chain, known for its chicken sandwiches and cult following, is expected to open the restaurant next year I

Chick- l-A is coming to Pullman, another sign of revitalization in the historic South Side community.

e fast-food chain, known for its chicken sandwiches and its cult following, is expected to open the restaurant next year. It will be the South Side’s rst Chick- l-A.

e restaurant will be built on part of a six-acre parcel just south of 111th Street and right o Interstate 94, said David Doig, president of Chicago Neighborhood Initiatives, a local economic development advocacy group. Doig’s group has the property under contract, in partnership with nonpro t organization Hope Center Foundation. e land housed an o -track betting facility for decades and was

See CHICK-FIL-A on Page 17

Rolling Meadows of ce landlord hit with $82M lawsuit

Continental Towers joins the list of big suburban of ce properties in distress amid weak demand for workspace and higher interest rates

e owner of a three-building o ce complex in Rolling Meadows has joined the crowd of landlords facing foreclosure after it allegedly defaulted on its nearly $85 million mortgage, according to a lawsuit led recently in Cook County Circuit Court.

Adding to a staggering amount of o ce property distress as remote work pummels demand, a joint venture of Philadelphiabased Rubenstein Partners and Chicago-based Glenstar was recently hit with the complaint over its debt tied to Continental Towers, a nearly 911,000-squarefoot complex at 1701 W. Golf Road in the northwest suburb. Investment management company Wilmington Trust and lender Wells Fargo led the suit on behalf of bondholders in the loan, which was packaged with other loans and sold o to commercial mortgage-backed securities investors.

By Ally Marotti

e case is part of a wave of foreclosure lawsuits against ofce landlords grappling with several factors driving down their property values. Companies cutting back on space with the rise of remote work have pushed o ce vacancy to a record high, while higher interest rates have made it far more di cult for owners to pay o maturing debt. Some owners have thrown up their hands and surrendered their properties to their lenders rather than face a lengthy foreclosure process. Other landlords are trying to work with their debt part-

ners to buy time for the market to recover, or are cooperating with them on e orts to sell their properties to recover as much of an unpaid loan as possible.

At Continental Towers, the Rubenstein-Glenstar joint venture recently requested a modication to its loan after the mortgage was transferred to Miami-based special servicer Rialto Capital, according to a Bloomberg report tied to the loan. Rialto is overseeing the debt on behalf of bondholders.

e loan report said Rialto was evaluating the request as of mid-July. But the foreclosure suit is a step toward eventually seizing control of the property if the parties can’t reach a deal.

Rubenstein and Glenstar have su ered a series of tenant losses at Continental Towers, which they bought for just under $122 million in 2018 when the complex was 89% leased. e duo paired that nancing with $53.6 million in equity to complete the deal and fund new building upgrades and leasing e orts, according to a 2019 presale report on the CMBS loan from DBRS

See LAWSUIT on Page 17

Development site next to Grant Park hits the market

The offering will test developers’ appetite for another residential high-rise near the lakefront while demand for rental units remains strong

e developer of the city’s tallest apartment building has put a vacant lot next to it up for sale, an o ering that could tee up the development of another residential tower rising just as high, and with as many as 621 units at the southwest corner of Grant Park.

Miami-based Crescent Heights has hired the Chicago o ce of CBRE to court buyers for the 43,123-square-foot site at 1201 S. Michigan Ave., according to a

marketing yer. e parcel is adjacent to Nema Chicago, the 76-story skyscraper that Crescent Heights completed in 2019 and that stands as the tallest all-rental unit building in the city. A new tower at 1201 S. Michigan could rise as high as 900 feet — close to the same height as Nema — under the property’s current zoning, the yer said.

e o ering will test how developers feel about a downtown apartment market that has proven to be resilient in the wake of

the COVID-19 pandemic. High rents and occupancy at apartment buildings in the urban core have been a bright spot while many commercial properties in the central business district struggle from a lack of regular foot tra c in o ce buildings.

But keeping that balance of supply and demand will require some moderation from developers, which are already projected to add 3,700 new units downtown

on Page 20

BLOOMBERG

Like other South Side neighborhoods, Pullman has experienced disinvestment in recent decades.

Danny Ecker

Developer Crescent Heights is looking to sell the vacant lot next to Nema Chicago, the 76-story apartment skyscraper (center) it completed in 2019. I COSTAR GROUP

Danny Ecker

Higher interest rates have made it far more dif cult for owners to pay off maturing debt.

Duly Health & Care shakes up the C-suite

The new CEO of the biggest local physicians group replaces the chief nancial of cer and other top execs

Katherine Davis

Duly Health & Care’s new CEO shook up the executive ranks of the area’s largest physicians group.

In an internal company memo obtained by Crain’s, Duly CEO Dan Greenleaf said seven top executives, including Chief Financial O cer Mike Templer and Chief Operating O cer Donna Cooper, left Duly e ective Aug. 1.

Replacing Templer as CFO is Chris Dunleavy, according to the Aug. 1 memo. Dunleavy comes to Downers Grove-based Duly from Steward Health Care, a Dallasbased for-pro t hospital and urgent care system, where he was also CFO, according to a bio on Duly’s website.

Duly named Ryan West interim “operations leader” of the organization’s Chicagoland business, appearing to take on a least some of Cooper’s former responsibilities. West has been with Duly since 2021, serving as the CEO of its Indiana-based South Bend Clinic. Duly will conduct a search for an executive to oversee Chicago-area operations permanently, according to the memo.

Pattern

While West oversees Duly’s Chicagoland business, Carol Brockmiller, CEO of Duly subsidiary Quincy Medical Group, will take charge of the South Bend Clinic on an interim basis, according to the memo.

Finally, the memo indicates that Duly has appointed Mark Danielson as interim head of contact center operations.

“Mark brings with him 25 years of progressive contact center experience with a relentless focus on patient experience, breaking down internal silos, and transforming delivery models,” the memo reads.

A Duly spokeswoman declined to discuss any executive changes, but the company website shows Dunleavy and West in their new roles.

The memo says Duly also

parted ways with Christos Georgacopoulos, LaToya McGhee, Brian McGoldrick, Joe Paul and Bill Soukup. Efforts to reach them for comment were unsuccessful, but LinkedIn profiles show Georgacopoulos was executive director of business excellence; McGhee was senior vice president of revenue cycle; McGoldrick was vice president of operations, and Paul was vice president of real estate and facilities. Crain’s was unable to find contact information for Soukup or determine his former title.

Chicago is safe from running out of homes, but other cities aren’t

The reason for that locally isn’t a good one

Count Chicago among the big metro areas that won’t be hit by the critical shortage of housing forming in some parts of the country.

e reason isn’t a happy one: We’re losing population, which lightens demand for homes.

at’s according to a study of which cities have enough housing units to keep up with their fast population growth and which are headed into a housing shortage, published Aug. 7 by the Bank of America Institute. It ranks cities into one of four categories, hot, warm, cool and cold. Chicago is in the third, cool.

e likelihood of a long-term housing shortage is high in the hot group. ese are cities like San Antonio, Orlando and Las Vegas, where “buoyant labor markets continue to attract people” but the housing stock is “al-

ready relatively stretched,” the report says. ose cities’ growing shortages are helping jack up home prices. In Orlando, the report says, home prices rose 58% between June 2019 and June 2023.

By contrast, the possibility of a housing shortage is low in Chicago because its existing housing stock is su cient, given its population loss. Chicago is in the cool group with New York, Baltimore and Los Angeles, among others.

Low building rate

Of 27 big U.S. metro areas, Chicago ranks near the bottom for new housing permits in the rst ve months of the year, the report says. e number of permits issued in the Chicago area is equal to about 0.05% of the local population. Only Detroit has a lower gure.

e median for the 27 metro

areas, 0.2% of the local population, is about four times what Chicago is building.

e low rate of building would be troublesome if the Chicago metro population were growing. at’s the mix that heats up the risk that San Antonio and others will run critically low on housing supply. San Antonio’s population grew by about 1% in each of the rst two quarters of the year, the report says.

But Chicago’s population loss, about 0.5% in both the rst and second quarters, reduces the pressure to build new homes to make room.

Chicago’s status as a cool market is notably better than being in the group of metro areas described as cold in the Bank of America report. ose are cities where there’s a large stock of existing homes and out ow of population.

In the cold cities, including St. Louis, Detroit and Miami, “house prices might cool faster” than others because of the excess of

Duly for less than a year.

Growth

Duly, one of the nation’s largest medical groups — and the largest in the Chicago area by revenue — serves about 2.5 million patients across more than 150 locations in Illinois and Indiana. e for-pro t primary and specialty care provider, formerly known as DuPage Medical Group, grew out of a single doctor’s o ce opened in the early 1960s in Glen Ellyn by Dr. Robert McCray.

It now employs more than 1,000 physicians, o ering dozens of specialties, ranging from orthopedics and cardiology to dermatology and cancer care.

“We thank each of them for their contributions and tireless service to Duly,” the memo reads. Greenleaf’s memo doesn’t give any reasons for the shakeup but urges employees to “continue to focus on patient care while supporting each other as we continue to transform this great organization.”

e changes continue a pattern of executive turnover at Duly, which quietly named Greenleaf CEO in June, the organization’s third new leader in the past four years. He replaced Tami Reller, who had served as CEO of

Duly’s net revenue last year climbed 41% to $1.98 billion, according to Crain’s data. Duly previously told Crain’s it attributed the growth to the acquisitions of the South Bend Clinic and Quincy Medical Group in downstate Quincy.

e group’s growth also has been fueled by a $1.45 billion investment in 2017 from Los Angeles-based private-equity rm Ares Management. Privateequity rms typically look to cash out their investments within ve to seven years, often through a sale of the company or an initial public o ering of its stock. Ares has held its stake in Duly for six years. e rm declined to comment on Duly’s leadership changes or its future plans for the physicians group.

supply, the report says.

In St. Louis and Detroit, the excess inventory of homes is largely the result of longtime shrinkage of the population, the study’s authors note. Meanwhile, in Miami it’s because inbound population ow, particularly during the pandemic, spurred a construction boom that has not slowed although Miami’s population has begun to dip.

at’s “consistent with some press reports suggesting that many people who moved to Miami in the beginning of the pandemic have since moved away, partly due to the rising cost of living in the city,”

the report says.

Bank of America’s study looks at all a metro’s housing stock, not only the inventory of homes for sale, to provide “a longer-term view on housing supply,” it says.

at’s because the low inventory of homes on the market is in large part a function of homeowners with old sub-4% mortgages “locking in” to the homes they have rather than trade to a new place with an above-6% rate. If interest rates drop, much more of the housing stock that Bank of America counted could go on the market.

Dennis Rodkin

Duly Health & Care CEO Dan Greenleaf

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A Chicagoan to know: Julie Giese of NASCAR

Giese, 45, is president of NASCAR’s Chicago Street Race. The inaugural event took place July 1-2. Despite a rain delay, it was NBC’s most-watched NASCAR Cup Series race in six years, with 4.8 million viewers. Weeks later, Giese is turning her thoughts to the second and third Chicago street races, expected in 2024 and 2025. She lives in Streeterville. I

Best moments of the race?

e sheer joy and excitement of the crowd. Overcoming the weather and completing the race Sunday night. Plus, introducing NASCAR to so many people. Over 80% of attendees were at their rst NASCAR race.

Any changes for the next races?

Nothing has been decided yet.

Your early in uences?

I grew up on a dairy farm in central Wisconsin. All through high school, I started my days milking the cows, going to school, doing more farm chores and homework, eating dinner and sleeping. e cows never took a vacation, and neither did we.

Worst job?

Baling hay and loading it on a wagon in the middle of summer. It was always hot, but we had to wear long pants and sleeves to avoid getting scratched.

What did you learn?

e value of hard work. I’m grateful for that now, but I didn’t always love it at the time!

How did you get into racing?

My dad was a race fan. He got me hooked on it. My brother and I watched NASCAR with him on weekends.

Was it a straight line to your NASCAR career?

No. I was majoring in animal science when I had an epiphany during a summer internship at the University of Wisconsin, Madison. I realized it would be more fun to work in racing. I switched to marketing my senior year and turned my thoughts to a career in motorsports.

What would surprise people about racing?

How athletic it is for the pit crews. Most are former college athletes. To be able to jump over the retaining wall, change four tires, and refuel in 10 to 12 seconds requires incredible skill and strength. ey practice every day.

Have you ever raced?

Absolutely not! I like two feet on the ground.

Any heart-pounding experi ences at the track?

Once, when I was working at Daytona International Speedway,

By Laura Bianchi

NASCAR Hall of Famer Tony Stewart was giving media rides on the newly paved track. When he found out that I had worked there for 10 years and never taken a ride around the track, he picked me up, threw me into the back seat, strapped me in and hit the accelerator.

How was the ride?

Tony didn’t hold back, and the 31-degree banks were exhilarating, to say the least. What were you thinking?

“Now I know why I’ve never been in a race car.”

What’s more your speed? Music festivals, Broadway in Chicago and watching golf tournaments, hockey and football games.

Logistics rm expanding, moving to the Loop

A few months after its largest tenant walked out, the owner of a landmark Loop o ce building has landed a deal with a new company that bucks a pair of trends in the battered downtown o ce market.

Total Quality Logistics signed a ve-year lease for 36,322 square feet at 125 S. Clark St., according to a statement from real estate services rm Transwestern, which oversees leasing in the 20-story building. e move is an expansion by the third-party logistics company, which will move from roughly 31,000 square feet at 328 S. Je erson St. in the West Loop.

e deal stands out as a rare addition of workspace at a time when many companies are cutting back on it, given the rise of remote work that resulted from the COVID-19 pandemic. TQL is also going against the grain by moving from the trendy West Loop o ce submarket to the heart of the Loop, which has seen a slew of companies decamp from older buildings in favor of newer o ce properties elsewhere in the city.

Critical moment

e leasing victory comes at a critical moment for the owner of 125 S. Clark, a venture of German real estate investor Commerz Real AG. Co-working provider WeWork was the largest tenant in the building — which is now dubbed the National — but recently shuttered its four- oor, 112,000-square-foot location at the top of the property.

Commerz Real led an eviction lawsuit earlier this year against the shared-o ce giant to formally retake possession of the space. e landlord also is seeking unpaid rent from WeWork, which had a lease in the building running through late 2033, according to federal court records.

With TQL on board, the building is now 69% leased, according to Transwestern. at’s down from 88% when Commerz Real bought the building in 2018 — mostly a result of WeWork’s exit — and slightly below the 74% average for o ce buildings in the Loop midway

HOTEL PROPERTY

1701 J DAVI D JONES PARK WAY SPRINGFIELD, IL

Currently closed and in need of updating, this 2-story former Howard Johnson and most recently Motel 6 flagged hotel has 79 rooms with a large parking area and excess land situated on 8.61 acres. The property features a restaurant, meeting rooms, breakfast rooms and an outside pool. Good visibility, and is the closest hotel to the Abraham Lincoln Capital Airport.

P reviously Valued Well Over $2,000,000 Suggested Opening Bid $500,000

On-site Inspections 12:30pm to 2:30pm on August 23, September 6 and 12

through the year, according to data from brokerage CBRE.

“No other building in the Central Loop is attracting and retaining tenants like e National,” Transwestern Executive Vice President Eric Myers said in the statement. “Even in a struggling market, this building continues to get deals done partly due to its unmatched amenities and competitive pricing. ese advantages set e National apart from other buildings in the Central Loop, allowing it to close large new deals that other buildings in the submarket simply cannot match.”

Working in Commerz Real’s favor is that it has no debt on the Clark Street property. Many landlords are trying to nd new tenants while they face imminent deadlines to pay o maturing loans, which some are struggling to do after a jump in interest rates over the past year. at has set o a wave of distressed properties in the city, while buildings owned free and clear by their landlords might be more exible with lease terms to help get a deal done.

It’s unclear what prompted TQL to expand and move to the Loop; a spokesman for the company did

Protein Bar embarks on franchise growth push

Protein Bar & Kitchen is launching a franchise push, hoping to grow its footprint to 100 stores open or in development in the next three to four years.

e move was a long time coming for the Chicago-based fast-casual chain, said CEO Je Drake. It was gearing up for franchising pre-pandemic but, like other restaurants, had to switch to survival mode.

“Finally, after the pause of the pandemic, we are really well positioned,” Drake said. “We can compete really well in the better-for-you fast-casual (space).”

Protein Bar, which has 15 locations, mostly in Chicago, is looking to expand to the Southwest, Texas and Charlotte, N.C. ere is some seasonality to the chain’s shake and smoothie sales, thus the targeting of milder climates, Drake said.

e company also sees capacity for about 30 Chicago-area locations, Drake said. As it expands, Protein Bar plans to open corporate-owned and licensed stores, too, such as the upcoming licensed spot in Salt Lake City International Airport.

Done well, franchising can boost a chain’s revenue quickly without a

not respond to a request for comment. But third-party logistics providers have been a bright spot in an otherwise dreary downtown o ce market since 2020. Buoyed by demand for their services from companies trying to bolster their supply chains, tenants including Spot Logistics, Tra c Tech, Loadsmart and MoLo Solutions have belied the broader market by expanding their o ce space downtown over the past three years.

TQL’s departure from its current o ce sets up a leasing challenge for the venture of Chicago-based Blue Star Properties that owns the 10-story building on Je erson Street. e logistics rm is the largest tenant in the building, which is 76% leased, according to real estate information company CoStar Group.

It’s perhaps a bittersweet loss for Blue Star, which helped transform 125 S. Clark from an outdated property into one of the most competitive o ce buildings in the Loop. e developer, led by Sterling Bay co-founder Craig Golden, sold the property to Commerz Real for almost $197 million, a sum that dwarfed the total investment Blue Star and its joint venture partner, Wolcott Group, had put into the building.

A spokesman for Blue Star did not respond to a request for comment.

Myers, Kathleen Bertrand and John Nelson of Transwestern negotiated the TQL lease on behalf of Commerz Real. CBRE brokers Jon Milonas and James Otto represented TQL.

major increase in overhead costs, which are borne by franchisees. It also generates upfront cash in the form of franchisee fees. e strategy has become more popular in recent years, as operating costs have risen. Potbelly is in the midst of a similar push, and it is getting some traction.

Experts say competition for franchisees with the resources and acumen to deliver consistent quality and service is high. Franchises outperformed other restaurants during the pandemic because of the exibility in their model. However, rising interest rates are pushing up the barrier to entry for franchisees, said Rich Shank, senior principal and vice president of innovation at market research rm Technomic.

“ e bigger challenge is nding people who can meet the nancial hurdles today,” he said.

Protein Bar will require a onetime $40,000 franchise fee, plus 5% annual royalty and 2% annual marketing fees, Drake said. Payback is expected in three to four years.

e company wants franchisees that will open four or ve locations over three years, with the opportunity to build more later. e typical store will take six to eight weeks to develop once construction begins.

Protein Bar opened a restaurant in Northbrook in June that will serve as a prototype for new franchised locations. It is 1,800 square feet and re ects new food-buying habits consumers developed during the pandemic, with an entrance for pickup orders and parking for delivery drivers.

It is near a Trader Joe’s and a tness studio, two co-tenants by which Protein Bar has thrived, Drake said. e expansion will also be largely focused on suburban locations, particularly those with a mix of o ce and residential.

“ e customer has gone to the suburbs and to the neighborhoods,” Drake said. “We believe the suburbs and neighborhoods are sort of where Protein Bar belongs longterm.”

Protein Bar began as a single store across the street from Willis Tower in 2009. Before the pandemic, its bread and butter was serving Loop o ce workers grabbing a healthy meal or snack.

Ally Marotti

Protein Bar’s Northbrook location

Danny Ecker

Total Quality Logistics signed a ve-year lease for 36,322 square feet at 125 S. Clark St. I COSTAR

Citigroup slashing space, relocating to

Citigroup is getting rid of twothirds of its suburban Chicago o ce space and relocating it to Schaumburg, a win for one local landlord and another case of remote work’s unrelenting assault on demand for workspace.

e New York-based banking giant has signed a lease for 49,400 square feet on two oors at Schaumburg Corporate Center in the northwest suburb, the company con rmed. Citigroup is expected to move its suburban o ce to the property at 1515 E. Wood eld Road in January from its longtime space at 50 NW Point Blvd. in Elk Grove Village, where its lease for just more than 146,000 square feet expires at the end of this year.

e move is in line with the trend of companies shrinking their o ce footprints in the wake of the COVID-19 pandemic, which set o a remote work movement that has driven up the suburban o ce vacancy rate to almost 29%, a record-high. e Chicago suburbs have collectively lost 3 million square feet of tenants since the beginning of 2020, according to data from brokerage Jones Lang LaSalle, a wave of attrition that is pushing some landlords to the nancial brink and others into foreclosure.

Yet owners of newer and more recently updated buildings such as Schaumburg Corporate Center have found a silver lining as e ects of the public health crisis fade: Many rms seek them out as they try to encourage employees to show up rather than work from home.

“ e nature of how we work has changed,” a Citigroup spokesperson said in a statement. “ e majority of our roles across the U.S. are hybrid, o ering our people the exibility to work up to two days a week remotely. As we implemented this model, we knew we needed to evaluate the space we utilize across our real estate portfolio. Our move to Schaumburg Corporate Center is helping to maximize use of our real estate footprint, so when our people are in the o ce together, they have an optimal working environment.”

e ight of tenants to top-tier buildings has been a boon for Schaumburg Corporate Center, which Chicago-based developer Glenstar spent $30 million renovating before the pandemic. In addition to Citigroup — which is now the 1 millionsquare-foot property’s largest tenant — Glenstar said it has signed 11 other leases totaling roughly 154,000 square feet during the rst

half of 2023. Almost 60% of that space was leased to new tenants, according to Glenstar.

e wins have been critical after a pair of big losses for the complex. In 2021, Verizon cut its footprint at the property from 5½ oors to one. en last year, PepsiCo vacated more than 100,000 square feet at the property as part of a consolidation of its Chicago-area employees downtown at the Old Post O ce. With the recent run of new deals, Schaumburg Corporate Center is now just under 70% leased, close to where it was when Glenstar bought the complex for $74 million in 2017.

“ ese leases are indicative of the broader trend of companies moving to fully amenitized trophy buildings in desirable suburbs,” Glenstar Principal Michael Klein said in a statement. “Across our o ce portfolio, we are focused on creating the type of new, modern spaces that are in demand by companies as they re-

Lime wants scooters on the Lakefront Trail

Lime, one of three electric scooter companies with a business license to operate in Chicago, is testing the waters in what could be the early stages of a lobbying e ort to bring e-scooters to the Lakefront Trail.

e San Francisco-based transportation company says it has seen signals that its users are interested in accessing the trail and is now gathering more information in preparation to make a case for expanded access to the city.

“We’re following the lead of our riders who showed signs of wanting to use the Lakefront Trail, so now we’re looking for more concrete data before we approach the (Chicago) Park District and city,” a Lime spokesperson said. “Anything we do on this would be hand-in-hand with the Park District, (the Chicago Department of Transportation), the mayor’s o ce, the aldermen and our community partners across the city.” at data-gathering e ort includes a survey the company sent to its users in late July with questions related to expanding scooter access on the trail. “ is is just the rst step and the data will determine what we do next,” the spokesperson said. “We certainly believe the city is a willing partner to look at situations on the ground and evaluate them.”

e 18-mile Lakefront Trail is one of just a few areas in the city where e-scooter access is banned. Other prohibited scooter zones include e 606 and the Chicago Riverwalk.

Electric bikes are allowed on the Lakefront Trail. Privately owned individual scooters often can be spotted on the trail as they are not equipped with the same geographic boundary technology that prohibits rental vehicles from accessing restricted zones.

With Lime’s e ort still in its preliminary stages, the Park District ofcials “are not currently discussing expansion to e-scooters on the Lakefront Trail,” said a statement from agency spokesman Zak Morched. “For the public’s safety and to create a more enjoyable experience for pedestrians and cyclists on the Lakefront Trail, unauthorized motor travel on or near the open space and paths is strictly prohibited.”

Any push to expand electric

turn to the o ce and want as many employees as possible to embrace the move.”

Like most o ce landlords under pressure to ink new leases, Glenstar has a lender to deal with at Schaumburg Corporate Center. e developer took out a nearly $78 million senior loan in 2017 from Square Mile Capital, which has since been acquired by San Antonio-based Afnius Capital, to nance its acquisition of the property. Square Mile also provided a $19.5 million mezzanine loan on top of that as Glenstar took on the renovation of the complex, according to real estate research rm MSCI Real Assets.

Debt tied to o ce properties has recently been a focal point for prospective tenants. Some worry landlords may face imminent foreclosure or fail to follow through on promises such as cash to help build out new o ce space.

It’s unclear when the Schaum-

burg Corporate Center debt is due to mature, and an A nius Capital spokesperson did not respond to a request for comment. But Glenstar has a “great relationship” with its lender and is getting its full support in its lease-up e orts, Glenstar Executive Director Mickey Stefan said.

“ at’s how we’ve been able to land Citigroup and (other tenants),” Stefan said. “ ey’ve been a great partner to have on this, allowing us to be creative and to get some deals done. e market knows that we’re well capitalized and well nanced.”

Citigroup, meanwhile, might not have had a choice whether to move.

Its o ce building in Elk Grove Village, which includes its logo on the exterior, was sold in March to a venture of Plano, Texas-based Aligned data centers for $29.1 million, according to Cook County property records. at sale was one of several Aligned has completed for properties near the Citigroup building.

It’s likely that Aligned’s plan for the building would be to convert it to a data center, given its focus on the sector, booming demand for such facilities and the struggling ofce market. O ce landlords in the suburbs would celebrate such a move, which would help cut competition at a time when supply and demand are so far out of balance.

Aligned has yet disclose its plans for the property, and a spokeswoman declined to comment.

CBRE brokers Gary Fazzio and James Otto negotiated the new lease at Schaumburg Corporate Center on behalf of Citigroup. Bill Saviski and Christian Domin represented Glenstar.

scooters to the trail would likely be met with opposition from at least some of the city’s bicycle advocacy groups, which have long lobbied against scooter access on the basis that the space should be prioritized for pedestrian and bike usage.

But a growing group among transportation safety advocates see e-scooters as a partner in advocating for better car-free infrastructure.

“We don’t see (rental scooters) as being a safety concern in terms of con icts between traditional cyclists and others,” said Michael Podgers, policy lead at Better Streets Chicago. “Anything that opens this up is going to be a good thing.”

“I genuinely don’t know what the argument is against it,” added Christina Whitehouse, founder of Chicago-born advocacy group Bike Lane Uprising. “When the city’s public transportation system has been operating at a failing rate, why would we spend all this energy redlining people from the longest, safest bike route in the city?”

Lime brought its electric scooters to Chicago in 2019 as part of a pilot program in partnership with the city. In 2022 Chicago o cials awarded Lime, Superpedestrian and Spin two-year licenses to operate in the city. Lyft, which operates the city’s Divvy bikeshare program, also was permitted to launch e-scooters.

Now closed because the long-term owner retired. This 2-story, approximately 13,000 sq. ft. building is ideal tocontinue to be used as a surgical center, although zoning allows for multiple alternative uses. Located just 1 mile from Chicago and the Illinois border, ALL equipment is included in the sale. Low Indiana property taxes and Doctor’s malpractice insurance. Large off-street parking lot. Across from Wolf Lake, Hammond Music Venue and lakefront development.

Citigroup plans to leave its longtime of ce at 50 NW Point Blvd. in Elk Grove Village (left) and occupy 49,400 square feet on two oors in the Schaumburg Corporate Center at 1515 E. Wood eld Road (right). COSTAR GROUP

Danny Ecker

Jack Grieve

JACK GRIEVE

Northwestern isn’t the only player fumbling the ball as the sports scandal intensi es

If it wasn’t clear before now, the unmistakable signs emerged as the local press was invited to Northwestern University’s Evanston campus on Aug. 9 to watch a football practice and sit in on a press conference afterwards:

A siege mentality has set in there.

It happens. When organizations are beset by the kind of allegations swirling around Northwestern’s athletic department — disturbing accusations of sexualized hazing, physical violence and systemic abuse, a steady stream of lawsuits detailing an alleged culture of denial and negligence, cringe-inducing headlines chipping away at a gilded reputation — one response is to circle the wagons.

But that’s the wrong response, at least for leaders who claim to be taking those allegations seriously. And it’s well past time university leadership — as well as the Big Ten Conference and the National Collegiate Athletic Association — show that level of seriousness, communicating loudly, plainly and consistently that abuse of any sort is not only intolerable but also completely inconsistent with the very mission of student athletics.

Northwestern’s handling of the situation, under relatively new President Michael Schill, has been just shy of abysmal.

Schill fumbled the ball almost from the beginning, rst suspending Pat Fitzgerald, the head coach who oversaw the football

program when the worst of the hazing allegedly took place, then changing his mind and ring him after the student newspaper published a former player’s graphic allegations of hazing within the program.

Eventually, Schill and his board hired former U.S. Attorney General Loretta Lynch to investigate the athletic depart-

ment, but that move came nearly a month after the controversy broke open — and long after people in leadership within the athletic department as well as other o ces of the school were aware of rumors of abuse, if the subsequent lawsuits are to be believed.

e gap between those rst murmurs of wrongdoing and the university’s clumsy

and belated actions created an environment that breeds the sort of re exive defensiveness and misplaced sense of victimhood on display during that Aug. 9 press availability — the rst time current players spoke publicly since the hazing scandal rst surfaced.

Several Wildcats football players and coaches were spotted wearing shirts emblazoned with the message: “Cats Against the World” and the number 51, an apparent reference to the number ex-coach Fitzgerald wore when he was a Wildcats player. One of the student-athletes trotted out before the cameras by team leadership referred to the shirts as “a reminder of sticking together through this di cult time.”

Asked whether the shirts might send the wrong message to onlookers and alleged victims of abuse, interim head coach David Braun told the press, “It certainly isn’t my business to censor anyone’s free speech.” at the football program put on this tone-deaf display on Athletic Director Derrick Gragg’s watch lends credence to claims that the culture surrounding Northwestern’s sports programs is warped and in serious need of reform. Gragg declared, hours after the presser concluded, that “hazing has no place at Northwestern,” but the words ring hollow when the supposed grown-ups in the room — coaches and team sta — say otherwise through their actions.

What Chicago lost when James O’Connor died

On July 31, Chicago lost a titan and I lost a friend.

James J. O’Connor passed away after 86 years that were packed to the absolute fullest. Regrettably, Chicago has suffered the loss of numerous devoted civic leaders recently — Bruce White, Lou Simpson, Andy McKenna Sr., James Crown and, most recently, Rocky Wirtz. While unbelievably accomplished in their own right, these heavyweights were also all connected by their respect for and relationships with Jim. I can’t think of anyone with a wider reach held in higher esteem. From business circles to government halls, from the North Side to the South Side, from elementary schools to higher education, Jim was universally known and respected.

I rst met Jim some 50 years ago when I was in the law department at First Chicago Corp. and Jim was a director on the board. I immediately recognized his energy, integrity and intelligence, but I wasn’t the only one. Soon, he would become presi-

dent of Commonwealth Edison at age 40, CEO at 43, and among the youngest leaders of a publicly held company in the U.S. In addition to distinguishing himself in that role, Jim served on countless corporate boards, including United Airlines, in addition to raising a wonderful family with his wife, Ellen, and somehow serving on even more nonpro t boards.

I got to work most closely with Jim in our shared capacity as cochairs of Big Shoulders Fund for over 25 years. During our tenure, I often said that working alongside Jim was great because he did 95% of the work, and I still got 50% of the credit. It was back in 1986 when Cardinal Joseph Bernardin asked Jim O’Connor to pick up the mantle of supporting Chicago’s inner-city Catholic schools. I did not know Bernardin particularly well, but I imagine it would have been di cult to say no to him. As a nonreligious person myself, the only comparison I can make is that it must have felt something like saying

no to Jim. You didn’t want to disappoint him, not because of fear of retribution but rather because you wanted to live up to what he saw in you.

While it seemed like a hopeless case, turning back the generational tides of inner-city Catholic school closures, Jim did not blanch or demur. He marched forward and never stopped for the next 37 years. Under Jim’s active leadership, Big Shoulders Fund has raised over $600 million in support of 92 Catholic schools in under-resourced communities, serving over 25,000 children in Chicago and northwest Indiana. Without Jim, I doubt it would have raised $1 million.

I also valued Jim’s friendship and counsel, on the golf course and the late phone calls, he could nd the positive in anything. Jim publicly bragged that he had never lost a golf match to me, but that was guaranteed because I wouldn’t let him keep score when we played. If I had a personal or professional problem, I could not only count on Jim for absolute discretion, I also knew that I would leave our conversation with a sense of absolute direction. Jim lled a similar role with so many of our peers.

Sincerity was Jim’s superpower. ere

was never a separate agenda. As a native son, if it was important to Chicago, it was important to him. He was so involved in civic institutions like the Field Museum, United Way, Chicago Urban League, Joffrey Ballet, Museum of Science & Industry and others because they help make Chicago a vibrant, global city and bring jobs and resources to our communities. He served on newly elected Mayor Harold Washington’s transition team because he wanted to help position him and our city for success in the face of discord. And best of all, Jim never browbeat or intimidated to get his way. He saw the better angels in each of us and simply invited us to prove him right. Because of Jim, lives have changed for the better. Certainly the hundreds of thousands of children living on the margins who have attended Big Shoulders Fund schools, but also the many worthy causes and career opportunities he made possible. ere is no one person who can replace all that Jim O’Connor meant to our city and its vast neighborhoods, industries, civic institutions and community-based organizations. Instead, we are all now called to do a little more. Or better yet, a lot more.

John Canning is co-founder and chairman emeritus of Madison Dearborn Partners and both a trustee and co-chair emeritus of the Big Shoulders Fund.

Judge orders feds to return $5 million to Rishi Shah

A federal judge ordered the Justice Department to release nearly $5 million in assets seized from Outcome Health founder Rishi Shah after he was charged with fraud.

Even though Shah was convicted earlier this year, $4.9 million in investments should not have been frozen because they were made before the crimes occurred, the judge ruled.

Prosecutors froze about $55 million in total assets, mostly holdings in startups and investment funds, owned by Shah and Shradha Agarwal, a co-founder of Outcome Health who also was convicted of fraud in April. Shah, however, owned about 80% of the assets.

Because Shah, Agarwal and fellow Outcome Health executive Brad Purdy were convicted of fraud, any money they received from it is subject to forfeiture or to make restitution to investors and customers of the company. They won’t be sentenced until fall, and so far neither forfeiture nor restitution orders have been entered.

Outcome Health charged pharmaceutical companies millions to advertise drugs on a network of TV and computer screens in doctors’ o ces. Shah, Agarwal and Purdy were convicted of overbilling the customers, which in ated Outcome Health’s nancials, which were then used to raise $488 million from investors and $435 million from lenders. About $69 million of that money went to Shah and Agarwal.

Prosecutors froze money nearly four years ago and said they will seek to seize the assets as illgotten proceeds of a crime. Shah’s attorneys claimed $4.9 million of that was incorrectly frozen money that Shah wants to use for legal fees for representation at sentencing and for an appeal.

e government sought to keep the money frozen, arguing that it will be needed to pay restitution that it will ultimately seek. But it hasn’t done so yet.

“While the Mandatory Victims Restitution Act allows the government to . . . enforce an existing restitution order, it says nothing about a future one,” U.S. District Judge omas Durkin wrote. “ e court declines to take that leap.”

The fight over Shah’s assets has been contentious and complicated. Shah and Agarwal sought before trial to have $10 million of the frozen assets returned to them so they could use it to hire lawyers, but the request was denied.

After his conviction, the government sought to seize the frozen assets, which is standard practice in such cases. Agarwal

did not contest the forfeiture, but Shah fought it.

e ght may not be over. Shah’s attorneys have questioned how the government traced his assets and hinted that the value of improperly frozen assets now may be worth more than they were at the time. Some of the frozen assets in startup investments grew signi -

cantly while he was awaiting trial, which coincided with a run-up in the value of tech stocks and venture-backed tech companies.

“To the extent that Shah believes that the amount of untainted property presently restrained exceeds $4,856,482.41, the court will require further brie ng and proceedings on that issue,” Durkin wrote.

The money was improperly frozen before the Outcome Health co-founder was tried and convicted of fraud, the judge ruled

John Pletz

Rishi Shah

PEOPLE ON THE MOVE

ENGINEERING / CONSTRUCTION

Ardmore Roderick, Chicago

Ardmore Roderick (AR), one of Illinois’ largest minority-owned infrastructure engineering rms, welcomes Joe Willhite as Chief Operating Of cer. With over 20 years of diverse experience in the engineering consulting industry, Joe has led teams across the United States. He has developed business plans, tracked KPIs, and analyzed staf ng needs & billability trends. His proven track record of steering company growth for global consulting rms is integral for Ardmore Roderick’s continued growth.

INFORMATION / DATA TECH

Wavicle

Data Solutions, Chicago

Andrew Simmons has joined Wavicle Data Solutions as Retail and ESG Associate Practice

Lead. Simmons will lead a team that combines deep experience, impactful thought leadership, and delivery excellence to help retailers drive pro table and sustainable futures. He brings advisory and implementation expertise from his 15-year career in the technology, data, and analytics industry, which included leadership roles at Accenture AI and Clarity Insights, where he focused on retail and ESG clients.

NON-PROFIT

Ada S. McKinley Community Services, Inc., Chicago

Ada S. McKinley Community Services, Inc. welcomes Lauren Youngblood as Senior Director of Development. She is responsible for raising awareness of the programs and activities of the 104-year-old human services agency among corporations, foundations and individuals. Lauren has an extensive background in cultivating philanthropic relationships which includes serving as Vice President of Strategic Engagement at Perspectives Charter Schools, and Development Director at Habitat for Humanity Chicago.

NON-PROFIT

Uniting Voices, Chicago

Donielle McCutcheon has been elected Secretary of the Uniting Voices Board of Directors. Donielle is currently a Partner with Sidley Austin where she is an experienced strategic regulatory counselor for healthcare and global life sciences companies. She is a vocal supporter of arts education and accessibility. Donielle has a BA from the University of Michigan and attended the University of Chicago Law School. She has been on the Board since 2019.

FINANCIAL SERVICES

Wintrust Financial Corporation, Rosemont

Wintrust Financial Corp., a nancial services holding company based in Rosemont, Illinois, with 175 locations across Illinois, Indiana, and Wisconsin, is pleased to announce the promotion of Chad Steinke. Chad was promoted to Retail Banking Market Head for Wintrust Financial. Chad has 19 years of experience in the nancial services industry. Chad joined Wintrust in 2010.

LAW

Hahn Loeser & Parks, Chicago

The Firm welcomed associate Nathan Scurtu, who focuses on estate and business succession planning, guardianships, trust & probate administration and real estate transactions. Practicing in Chicago since 2018, Scurtu represents clients in hospitality, entertainment, retail, construction, manufacturing, transportation and e-commerce. A member of ve bar associations (Illinois, Chicago, DuPage County, American, Romanian), he earned his J.D. from Chicago-Kent College of Law and a B.A. from Loyola.

NON-PROFIT

Uniting Voices, Chicago

Brian Egwele has been elected Treasurer of the Uniting Voices Board of Directors. Brian is currently the Managing Director and Founder of Egwele & Company, an independent boutique investment bank. Brian is a civic leader and philanthropist who places an emphasis on creating programs for historically under-resourced communities. Brian graduated Summa Cum Laude from Tulane University. He previously served on Uniting Voices’ Ambassadors Board and has served on the Board of Directors since 2018.

FINANCIAL SERVICES

Wintrust Financial Corporation, Rosemont Wintrust Financial Corp., a nancial services holding company based in Rosemont, Illinois, with 175 locations across Illinois, Indiana, and Wisconsin, is pleased to announce the promotion of LaShonn Swain. LaShonn will assume the role of SVP, Head of Retail for Wintrust Bank, N.A. LaShonn has more than 20 years of experience in the nancial services industry. She joined Wintrust in 2018.

LAW FIRM

Dussias Wittenberg Koenigsberger LLP, Chicago

Dussias Wittenberg

Koenigsberger LLP is pleased to announce that it has elected a new partner, Alexa Goutos. Alexa focuses her practice on complex issues in family law, including custody/allocation of parental responsibilities, pre- and post-nuptial agreements, contribution to college education, enforcement matters, and the disposition of marital and non-marital assets.

NON-PROFIT

The Night Ministry, Chicago

Human services leader

Carol J. Sharp has been appointed President & CEO of The Night Ministry, a Chicagobased non-pro t that provides human connection, housing support, and health care to those who are unhoused or experiencing poverty. A Chicago native, Sharp brings deep passion for serving marginalized communities to the role. Before joining The Night Ministry, she held in uential leadership positions at Youth Guidance, Girls Inc. of Chicago, and Perspectives Charter Schools.

WEALTH MANAGEMENT

BMO Family Of ce, Chicago

Amy Griman has been appointed Global Head of BMO Family Of ce, an integrated wealth management provider that serves individuals, families and family of ces across their tax, estate, investment, philanthropic, risk and capital needs. Amy brings over 25 years of experience to her role leading our ultra-af uent client group which has over 120 employees across the United States and Canada.

A TOUGH MARKET FOR SUPERMARKETS

On the South and West sides, retail grocers struggle to make a pro t while neighborhoods struggle to attract palatable options I

The closing of three South Side Walmart stores in the spring disheartened residents who already face limited options for fresh produce, meat and pharmacy goods. It was the latest blow to neighborhoods that earlier had lost two Target stores and, more recently, the Whole Foods in Englewood.

“ e Black community has lost trust in grocers,” says Melody Winston, senior executive at Living Fresh Market in Forest Park, who aims to expand in the city. “ ey don’t know who is going to stick around and who won’t.”

By Judith Crown

In light of the recent round of corporate store closings, is it even possible to operate pro table supermarkets on the South and West Side sides? Why is this so di cult, and what does it take?

Operators face substantial headwinds. Many Black and Brown communities have lost population, and median income has stagnated, says Mara Devitt, senior partner at retail consultancy McMillan Doolittle. ese stores have fewer opportunities to sell fancy, high-margin foods such as $8 crackers and $12 blocks of

See GROCERS on Page 14

“The Black community has lost trust in grocers. They don’t know who is going to stick around and who won’t.”

Melody Winston, senior executive at Living Fresh Market

Melody Winston, senior executive at Living Fresh Market GEOFFREY BLACK

GROCERS

Continued from Page 13

cheese. If safety becomes an issue for customers, sta and delivery people, additional investment for security is required. “If the return on investment looks better in another location, the retailer will go there,” Devitt says.

e closing of the Whole Foods store in Englewood brought the issue to a head. Not only did the neighborhood lose a marquee store brand, but in its place came Save A Lot, which has a reputation on the South Side for unfriendly stores where a shopper might encounter spoiled lettuce, a dirty freezer case or an expired date on meat.

“You can’t take me from a Bentley (in Whole Foods) to a Pinto,” says Ald. Stephanie Coleman, 16th, who represents Englewood. e Englewood Save A Lot lease was acquired by Ohio-based Yellow Banana, owned by a Black investor group. In 2021, the group took over 38 Save A Lot stores in ve states. It operates eight in Chicago.

Yellow Banana has lined up $26.5 million in nancing to upgrade South Side stores and reopen one in Auburn Gresham. Some residents are skeptical, as the stores have yet to improve after two years of new ownership. But the operator still has a chance to prove itself in Chicago.

Supermarket operators in these disinvested communities face obstacles, but they can be successful.

e Aldi chain shows that it’s possible, with its small store footprints, low operating costs and nofrills formula. It runs 33 stores in Chicago including more than a dozen on the South Side. Independent operators say there’s room for stores that forge close ties with their communities, providing jobs, special services and events.

Grocery stores leave ‘because they can’

An analysis of neighborhood demographics sheds light on the problem.

In Englewood, where the 2016 opening of a Whole Foods was hailed as a breakthrough, the population declined through the pandemic. e median household income of $34,557 is roughly half the Chicago median of $65,781, according to data compiled by McMillan Doolittle. e unemployment rate is 17.1%.

In Kenwood, where Walmart closed one of three South Side stores, the population is more stable, but the median income of $41,918 is still well below the city median. eft rates in the Englewood and Kenwood neighborhoods have been on the rise since 2019, according to data tracked by McMillan Doolittle.

Announcing the closings that also a ected Chatham, Little Village and Lakeview, Walmart said its Chicago stores haven’t been pro table since the rst one opened 17 years ago. e stores lost tens of millions of dollars a year, and annual losses doubled in the past ve years, the company said.

In retail, grocery has the nar-

rowest of pro t margins, well under 1%, notes Rob Karr, CEO of the Illinois Retail Merchants Association. at makes the job hard enough. But executing in neighborhoods with lagging disposable income makes it all the more dicult, he says, adding, “What is the size of the market basket?”

Walmart still operates city locations. Its store in the Pullman industrial park is busy thanks to its proximity to Interstate 94. And the store on North Avenue in the West Side Hermosa neighborhood has survived. Although the neighborhood has lost population, the median income of $56,881 is close to the city level, according to McMillan Doolittle. e theft rate in the neighborhood is well below that of Kenwood and Englewood.

e South Side closings leave a bitter taste. e stores left “because they can,” says Coleman, the City Council member. She noted that the Walmart announcement came during the transition in city government. “If they were going to leave, that was the perfect time,” she said.

ere are still Jewel and Aldi stores on the South Side. But residents may have to travel farther or order online if they have access to the technology. Delivery fees add to the cost of an online order. It’s a stark contrast to North Side, Near West and suburban neighborhoods, where residents typically have a choice of Jewel, Pete’s, Mariano’s, Whole Foods and Trader Joe’s within a few miles.

A case in point: Oak Park and River Forest have seven supermarkets, including three Jewel Osco stores that also serve neighboring Austin, which with a larger population has no full-service grocers.

“Austin is shopping in Oak Park,” says Elizabeth Abunaw, an entrepreneur who runs farmers market stands in Austin and is planning a full-service supermarket on Chicago Avenue in Austin.

e stores bene t from serving customers in two neighborhoods, and Austin residents still gain access to fresh food. But that equation doesn’t help revitalize the Far West Side community.

e loss of national chains leaves smaller, less-capitalized independents, who often struggle to stay pro table. “Grocery infrastructure takes a lot to maintain,” Abunaw says. Over time, she notes, business owners face expensive repairs. If the business isn’t generating enough income to cover the cost of the upgrades, they gure it’s not worth it. “ e stores get run down, people stop shopping there and they end up closing,” she adds.

To succeed, supermarkets need the backing of a vertically integrated supply chain, says developer Leon Walker, who built the Englewood Square shopping center with Whole Foods and other national chains. “You need the buying and pricing power that comes with quantity,” he says.

Before the arrival of Walmart and Target, it was primarily the Aldi and Save A Lot chains that dominated on the South and West sides. ey competed with limited formats and low prices but still had the backing of a large distribution network.

SUPERMARKET SUSTAINABILTY IN CHICAGO NEIGHBORHOODS

Store longevity has a lot to do with neighborhood demographics within a 10-minute drive.

While the Save A Lot stores su ered from neglect, Aldi has been winning customer loyalty, Walker says.

‘A horrible reputation in the Black community’

“Save A Lot has had a horrible reputation in the Black community for a decade,” says Asiaha Butler, co-founder and CEO of the community group Resident Association of Greater Englewood, or RAGE. Members of a 16th Ward committee on grocery stores surveyed ve Save A Lot stores and photographed dirty xtures, moldy fruit and packages past their expiration dates.

at has the potential to change, following Yellow Banana’s acquisition of Chicago Save A Lot locations from the Missouri parent company that has shed its retail stores to concentrate on wholesaling. Residents are exasperated that the stores haven’t shown improvement, even basic cleanups, since they were taken over in 2021.

Yellow Banana’s defenders say improvements take a while, noting that the group swallowed 38 stores.

LaForce Baker, vice president of community impact at World Business Chicago, helped the company apply for a $13.5 million community development grant through the Department of Planning & Development. Tax credits and other funding provide a total of $26.5 million for store remodels.

“I understand why people feel the way they do about the Save A Lot brand,” Baker says. “But it takes a few years to get stores redone. People should give it a chance.”

Yellow Banana executives declined interview requests. In a statement, the company said that its focus, amid challenging, in ationary conditions, has been to ensure the right mix of products at the best value. “We’ve also been working diligently on our plans to completely reshape the Save A Lot shopping experience in our locations through extensive remodels and the opening (or reopening in some cases) of stores in areas where few other fresh, a ordable grocery options exist and where other national chains have

exited,” the statement read. e company added that it’s working with the city to get the remodels underway in the coming months.

One South Sider willing to cut Yellow Banana some slack is Carlos Nelson, CEO of the Greater Auburn Gresham Community Development Corp. He’s worked with Yellow Banana executives over the past two years to reopen and “reimagine” a shuttered Save A Lot store at 79th and Halsted streets.

During the pandemic, the community teamed with the Greater Chicago Food Depository to distribute food and essential goods through the store. During that time, Nelson was introduced to attorney Michael Nance, co-founder of the investment rm that launched Yellow Banana, who discussed buying and reopening the store. e Auburn Gresham revamp subsequently became part of Yellow Banana’s larger expansion in Chicago.

Auburn Gresham had the luxury of time to plan the reimagined store, which will include murals by local artists and feature products from local vendors, Nelson says. But he acknowledges that Yellow Banana has stumbled in Chicago, partly because it didn’t have local decision-makers in place. “When they ran into problems in Englewood, they didn’t know how to engage the community,” he says.

With the departure of national chains, farmers markets and independent operators are striving to ll the demand for heathy food. In Gar eld Park, Angela Taylor coordinates shipments of produce from a network of community gardens that are sold at a market based at e Hatchery, a nonpro t food and beverage incubator. “ ere’s nothing here except mom-and-pop shops and gas stations,” says Taylor, wellness coordinator for the nonpro t Gar eld Park Community Council. “We’re a food island.”

In Austin, Abunaw has been navigating the city permit process to open a full-service market, Forty Acres Fresh Market, on Chicago Avenue west of Central Avenue. Abunaw moved to Chicago in 2012 and one day found herself in Austin,

where she was surprised to nd no amenities such as ATMs, pharmacies or supermarkets. “I decided I wanted to open a low-cost, fresh produce market on the West Side — on Chicago Avenue because that’s the street I wound up on.”

Since 2018 Abunaw has been supplying produce at farmers markets, pop-up stores and neighborhood events as well as through home delivery. A variety of grants gave her the working capital to expand. In 2020 she teamed with Westside Health Authority to purchase a former Salvation Army building at Chicago and Waller avenues. Abunaw has scouted stores on the West and South sides and hopes to avoid the formats that are bare bones and transactional. “You go in, buy groceries and come out,” she says. Compare that to a Pete’s Fresh Market, she says: “It’s like stepping into the Wizard of Oz. Everything’s in color. Mountains of fresh food. You want to dive into it.” Melody Winston plunged into the supermarket business in 2021 after a grocer in her family’s Forest Park mall closed. Winston’s father, Bill Winston, founder and pastor of Living Word Christian Center, recommended that the family take it over “to serve this community and others the way they should be served,” as she puts it.

e expansion required a crash course in the supermarket business. Winston toured 17 stores in two days during a visit to her supplier in Kansas City, Kan. She’s been upgrading the store, Living Fresh Market, in preparation for a September relaunch. She aims to differentiate her store with pickup service for seniors, cooking classes and training for food entrepreneurs. Eventually she plans to expand to South and West Side neighborhoods and provide the personal touch that corporate-owned chains are unable to o er.

Winston, who grew up in Chatham, has scouted some of the closed Walmart stores but says she needs rst to ne-tune the Forest Park store. “I want to get this one right rst,” she says. “Give me six more months.”

Englewood’s chilly reception puts Yellow Banana on notice

Save A Lot takeover proves a hard sell in the community

Judith Crown

e closing of Whole Foods in Englewood last year and community outrage over its replacement by Save A Lot licensee Yellow Banana put a spotlight on how di cult it is to attract and keep mainstream food stores on the South Side.

When Whole Foods announced it would leave Englewood after a six-year run, residents pleaded for any retailer but Save A Lot, given its poor reputation in Chicago. “We were vocal that Save A Lot was not our preference at this site,” says Asiaha Butler, co-founder and CEO of the community group Resident Association of Greater Englewood, or RAGE. Although Yellow Banana has raised $26.5 million in funding to upgrade the store it acquired in 2021, residents say the stores have shown not even modest signs of progress.

Yellow Banana was busy digesting its acquisition of 38 stores in ve states and didn’t understand how people’s patience with Save A Lot had worn thin, says developer Leon

Walker, who built the Englewood Square shopping center with Whole Foods and other national chains.

“People were fed up,” he adds.

e question now is whether Yellow Banana can prove itself in Englewood and elsewhere and reverse the Save A Lot stigma.

e Englewood community sought an alternative to Yellow Banana to no avail. e 2013 lease between Walker’s rm, DL3, and Whole Foods speci ed that if Whole Foods chose to leave, a right of rst refusal would go to a Roseland supermarket owned by Walker and licensed to be a Save A Lot. But Walker says he was out of the supermarket business by the time Whole Foods opened in 2016. His priority was that Whole Foods nd a supermarket rather than a non-food retailer such as an auto parts chain. And while Walker says he suggested subtenants such as Cermak Fresh Market, the decision was up to Whole Foods and parent Amazon.

Ald. Stephanie Coleman, 16th, who represents Englewood, says

she proposed a number of local food retailers, including Living Fresh Market in Forest Park, with no success. “ ere was no transparency,” she says.

LaForce Baker, vice president of community impact at World Business Chicago, who worked with Whole Foods to nd a replacement, says he reached out to major chains including Trader Joe’s, Jewel and Mariano’s, but none were interested except Yellow Banana. He says local food retailers, including Cermak Fresh Market and Pete’s Produce (not related to Pete’s Fresh Market), also declined. One drawback, he notes, was the relatively small size of the Englewood store at 18,000 square feet. Most conventional markets are at least 30,000 to 40,000 square feet.

Easy addition

e Englewood store was easy for Yellow Banana to digest because it was in good shape and could serve as a model for the Save A Lot upgrades, Baker says.

Yellow Banana executives declined interview requests. In a statement, the company said it is “working diligently on our plans to completely reshape the Save A Lot shopping experience,” and that it’s committed to working with community organizations “to nd creative ways we can work together to address challenges facing the communities we serve.”

Walker notes there’s still value left by Whole Foods. “Whole Foods enabled us to build a center on a historically disinvested corner in Englewood, and lift up local businesses that have product on the shelves,” he says. Importantly, Whole Foods will be paying rent on

its space through 2032, the end of its 15-year lease (not Yellow Banana, which is paying rent to Whole Foods). “ at credit is important to the viability of the shopping center.”

Walker’s DL3 is building rive Englewood, the rst multifamily housing in the community in 75 years. at density will come too late to help Whole Foods but is needed to attract new retailers. It’s important that the vacant space at the shopping center was lled, Walker says, as an empty storefront would discourage further investment. “When these stores leave, it’s a black hole that collapses all of the good e orts that have been made,” he adds.

When Whole Foods announced it would leave Englewood after a six-year run, residents pleaded for any retailer but Save A Lot. | WTTW NEWS

Thoughtful development is key to a sustainable model for grocery stores

Food insecurity in communities across the South and West sides of the city is a crisis that has been building for years, stemming from decades of chronic disinvestment in these neighborhoods and the resulting depopulation trend that continues to this day. In some cases, our communities are one grocery store closure away from a food desert.

e Greater Chicago Food Depository estimated that while food insecurity is overall 19% higher compared to pre-pandemic levels, it is 37% higher for Black households. is is directly related to the disparity in life expectancy across Chicago ZIP codes; lack of access to high-quality preventive health care and food resources on the South and West sides contributes to chronic health conditions and early deaths.

Our current challenges to attract and sustain supermarkets and premium grocery stores in these communities is the result of a history of racist policymaking: institutionalized and corporate discrimination such as residential and supermarket redlining that disparaged once-thriving Black communities, and the devaluation of majority-Black neighborhoods by reducing the value of residential and commercial real estate through property appraisals. is has caused a prolif-

eration of cheaper food markets such as dollar stores and gas stations in place of high-quality grocery options, as corporate supermarket chains and investors turn to well-resourced neighborhoods to open up shop.

In order to attract and sustain new fresh food markets and grocery stores in our communities, the city of Chicago must drive signicant long-term investments over one-o projects, cut the red tape that is sti ing economic development, limit the creation of additional low-quality food options through moratoriums on dollar/ convenience stores, and demand stricter public health and facility standards and enforcement so that existing supermarkets can operate safely for years to come.

Additionally, the city should consider a fund for local Black- and Brown-owned grocery store options, such as cooperative ownership supermarket models, franchising and farm-to-table programs to diversify food market ownership.

At the same time, the city must commit to investing in a long-term working- and middle-class agenda to repopulate South and West Side communities that have suffered signi cant population loss. is includes mixed-use and single-family devel-

How to sow seeds for change in a food desert

Being a new mother lead me to becoming a community organizer. Even though I had few obstacles during my pregnancy and giving birth, my breastfeeding journey was rocky, which led me to learn about the disparities of breastfeeding, especially for Black women.

As I did research about my struggles with breastfeeding and being a new mother, I learned lots about babies’ rst nutrition, mother’s milk. Even with all the bene ts of breastfeeding, Black women are still not breastfeeding as long as our white and Latinx counterparts. is is the foundation to human nutrition and provides the basis for healthy communities.

And as I continued to create spaces for community in my new home with my children on a new side of town, Austin on the West Side, my eyes were opened to the void. I saw vacant lots and vacant buildings, which led me to see the opportunities that were everywhere.

Around this time, the Austin Community Food Co-op was created with the goal of providing a sustainable grocery option for the Austin neighborhood and surrounding communities. e co-op became a movement for food justice in Austin. We looked at gaps in the community when it came to

healthy food options. In Austin, as well as most West Side communities, residents must go outside of the community to get quality food products. Tens of millions of dollars leave the West Side, going to other towns and Chicago neighborhoods. It’s unacceptable for Austin, with a population of almost 100,000, to have only a handful of fresh food options in a worldclass city like Chicago.

When the COVID-19 pandemic hit, West Side residents were devastated. What it revealed was how many people were missing life’s basics. e lack of proper housing, consistent health care and healthy food options became apparent. What the COVID-19 pandemic really revealed was the pandemic of isolation that residents have been dealing with for decades. Residents are isolated in their homes by the fear of violence, which also keeps residents from connecting as a community.

Historically, especially for Black people, food has been a way for their communities to connect. With the lack of spaces for residents to come together for nourishment and community, new city initiatives to generate food businesses were started. e Hatchery Chicago, a food business incubator in the Gareld Park community, helped food business-

opments that provide a ordable housing and critical health care amenities and o er new jobs and other supportive community assets. Revitalizing these areas will attract new commercial development, including grocery options.

e good news: Much of the planning, strategy, resident engagement, and partnership development for these equitable developments has already happened at the community level. At the nonpro t Far South Community Development Corp., or Far South CDC, our Bringing Communities Back Initiative presents a comprehensive strategy to revitalize the greater Roseland area and once-thriving South Halsted commercial corridor by repurposing nearly 1 million square feet of blighted areas into thriving community anchors and new housing. is will spur economic growth and repopulate Far South Side communities that have experienced decades of disinvestment.

Over the past ve years, Far South CDC has raised more than $30 million in public and private investments for this development initiative and related programs. e estimated total cost is $350 million — a relatively small amount in comparison to the multibillion-dollar developments currently planned by the city for downtown and adjacent a uent neighborhoods.

Far South CDC and other community-based developers need the city’s help to fund the thoughtful, transformational development strategies we have created through years of work in our South and West Side neighborhoods. ese are pragmatic and detailed work plans that outline a viable way forward. It is only through such community-driven equitable development projects that we will be able to repopulate these areas and create a grocery model for our communities that is sustainable for generations to come.

es thrive through the pandemic.

Alongside the possibilities of former Mayor Lori Lightfoot’s Invest South/West initiative, now is the time to create and sustain businesses in historically disinvested areas. Here are some examples of those underway:

e Austin Community Food Co-op, Forty Acres Fresh Market (Austin), the Community Grocer Initiative (West Gar eld Park), Healthy Lifestyle Hub (Auburn Gresham) and Go Green on Racine (Englewood).

Add to that the Chicago City Council’s recent passage of an ordinance to support the business activities of urban agriculture,

which allows community residents to grow and harvest their own food. is ordinance allows community gardens and urban farms to apply for and receive a license to sell whole, uncut and unprocessed produce directly to community residents, restaurants, food stores and wholesalers from an on-site produce stand.

Gaps still exist for creating sustainable food businesses in Black communities, but we are seeing the possibility of what a more food-secure community can and should look like when plentiful, healthy food options are available nearby.

Abraham Lacy is president of Far South Community Development Corp. and interim executive director of the Roseland Medical District.

Vanessa Stokes is economic development director at Westside Health Authority.

The Hatchery Chicago, a food business incubator in the Gar eld Park community, helped food businesses thrive through the pandemic. THE HATCHERY

The Bringing Communities Back Initiative presents a comprehensive strategy to revitalize the greater Roseland area. I FAR SOUTH CDC RENDERING

Morningstar.

e venture was expecting one of its biggest gut punches at the time from its second-largest tenant, heavy equipment manufacturer Komatsu, which in 2020 moved its North American headquarters out of more than 105,000 square feet at the complex to another o ce property near O’Hare International Airport.

But weak demand for o ce space during the public health crisis made it di cult for the owners to lure new users to Continental Towers, and the property was just 64% leased last fall, according to Bloomberg loan data. Another large tenant, electronics giant Panasonic, didn’t renew its lease for more than 47,000 square feet when it expired at the end of 2022. e property generated $2.1 million in net cash ow last year, roughly half of the owners’ debt service, loan data shows.

Rubenstein and Glenstar have continued to make mortgage payments, according to loan data, but the owners defaulted on the loan in May when the property’s liabilities rose above a certain threshold, the lawsuit alleged. e owners at the time owed just under $82 million on the mortgage after factoring in various fees as well as reserves the owners had set aside, according to the complaint.

Spokesmen for Rubenstein and Rialto Capital did not respond to requests for comment.

A Glenstar spokeswoman de-

CHICK-FIL-A

From Page 3

owned by racetrack owner Hawthorne. Doig declined to comment on the sale price, and Hawthorne representatives declined to comment.

Rev. James Meeks, Hope Center’s CEO, said landing a Chickl-A is going to be a signi cant step for Pullman.

“It means everything,” Meeks said. “If we can establish good relationships, good partners, some of these communities that have

clined to comment.

Glenstar had pulled Continental Towers out of distress before. e developer led a joint venture with Chicago-based Walton Street Capital that bought the complex out of foreclosure in 2013 for $58.5 million, according to Cook County property records. e property was almost half empty at the time, but Glenstar and Walton Street spent roughly $30 million on renovations and another $35 million on leasing to ll up most of the complex before selling it

Wednesday nights and hundreds of others for activities throughout the week, Meeks said. ey need more dining options.

Pullman, now a Chicago neighborhood, was once a town founded in 1880 by the inventor of the railroad sleeping car, George M. Pullman. It was a company town, built by and for Pullman’s employees. Chicago annexed Pullman in 1899, a couple of years after its founder’s death.

Like other South Side neighborhoods, Pullman has experienced disinvestment in recent decades.

President Barack Obama designated Pullman as a National Monument in 2015, making it the rst unit of the National Park Service in Chicago, which brought it some attention.

to Rubenstein. Glenstar retained an interest in the property during the 2018 sale.

Other distress

Continental Towers has plenty of company in the pool of distressed o ce properties in the Chicago suburbs. e owner of the four-building Riverway o ce complex in Rosemont was hit last month with a $115 million foreclosure lawsuit, one of the largest cases of o ce distress ever in the Chicago suburbs. Earlier this

year, a lender representing bondholders in a CMBS loan led an $80 million foreclosure complaint against the owner of the two-building Central Park of Lisle o ce complex in the western suburb.

Just more than a mile west of Continental Towers, the owner of a 485,000-square-foot o ce property at 3800 Golf Road was hit with a $30 million foreclosure lawsuit in January, but the property was sold in April to Rosemont-based Brennan Investment Group, which swooped in

with a plan to raze the building and develop warehouses on the 40-acre site.

e value of distressed o ce properties nationwide at the end of June was $24.8 billion, marking the rst time since 2018 that neither retail or hotel properties were the biggest contributors to commercial property distress, according to data from research rm MSCI Real Assets.

e Real Deal Chicago rst reported news of the foreclosure lawsuit against the owners of Continental Towers.

the expressways, it’s a developing area, and we know that Black people do spend money,” he said. “If they have something that’s good, they will go.”

Now in Pullman, there’s also a Potbelly, a barbecue restaurant called Lexington Betty’s and more. Soon, a 110-room Blackowned and locally owned Hampton Inn is set to open north of Culver’s. Several stakeholders said the success of those restaurants helped convince Chick- l-A.

“Now that (Chick- l-A is) coming, others are going to come,” Waller said. “People look for others to be there rst.”

been neglected for years can come back.”

Meeks led the charge in recruiting Chick- l-A to Pullman. He is the founder and recently retired head of the 10,000-seat Salem Baptist Church, just across the street from Chick- l-A’s future home. ough Chick- l-A locations are typically closed on Sunday, when 6,000 people ock to Salem Baptist, the church draws 800 people for Bible study on

e e orts of some groups and community members — such as CNI and its $350 million revitalization e ort — are also helping to attract development. Meeks and his nonpro t Hope Center Foundation have undertaken other community-betterment

e orts, such as a plan to build new homes in neighboring Roseland.

e Chick- l-A will be corporate-owned, and it is not looking for subsidies from the city, Doig said.

“ ey know their numbers and it makes economic sense,” Doig said.

A Chick- l-A spokesperson declined to con rm that the company was planning a Pullman location but said in an email that “we are always evaluating potential new locations.” e company recently opened three locations in the city and plans to open another 10 to 15 stores in the Chicago area over the next ve years.

It’s not easy to persuade a cor-

poration to open a location on Chicago’s South Side, said Baron Waller, a Culver’s franchisee who operates locations in Pullman, Bronzeville and elsewhere. He said many companies are scared o by crime reports, lower income levels or demographics.

Convincing corporate

When he was trying to open a Culver’s in Pullman, he had to convince corporate that “it’s by

Indeed, Doig said CNI and Hope Center are talking to other restaurants, such as Fatburger, Panda Express and Portillo’s. e community still needs a sit-down restaurant, such as Applebee’s, Chili’s, or something that serves breakfast — of particular importance to the after-church crowds.

ere are still ve or six spots to be lled on the plot of land that once was home to the osite betting facility. Ald. Anthony Beale (9th) predicts it won’t take long to ll them up, like it might have in the past.

“We have a lot more tra c, we have a lot more things to o er, and so business are saying, ‘Hey, what’s going on in Pullman? Let me see if I can be a part of it,’” he said. “To have a Chick- l-A? at is huge.”

BLOOMBERG

Rev. James Meeks, Hope Center’s CEO, said landing a Chick- l-A is going to be a signi cant step for Pullman.

Continental Towers

GOOGLE

REAL ESTATE

Unlocking Opportunities: Exploring Private Credit in Real Estate Financing

Deep industry experience and a network of key relationships de ne COURTNEY MAYSTER’S role as a seasoned real estate attorney. With projects ranging from acquisitions and dispositions to nancings and developments, Courtney is known for her ability to get a deal over the nish line.

COURTNEY

312-521-2677

cmayster@muchlaw.com

In June, Courtney was named Much’s Managing Partner after being unanimously elected by the rm’s equity partners. She leads efforts to continually elevate operations, retain and recruit top talent, and drive strategic growth. In every initiative she champions, Courtney embodies Much’s entrepreneurial spirit and prioritizes a people- rst culture that supports employees and clients alike.

It was reported that “private credit funds are expected to hit $2.2 trillion by 2027,” according to Bloomberg Law. What are you seeing and hearing from your real estate clients?

Private credit is a major trend right now, and it’s not going anywhere. Private credit is a popular alternative to traditional lending not only for

our real estate clients, but also for the larger business community.

With the market where it’s at right now, the private credit sector is growing rapidly, lling the gaps created by rising interest rates and economic stagnation. Private equity rms and debt funds see new options for deploying dry powder. Additionally, individuals and asset managers with cash on hand see

private debt vehicles as an attractive investment opportunity.

at said, even when the banks fully reengage, many people envision a future where private credit is a complementary resource to lending from banks, credit unions, insurance companies, and other nancial institutions.

Overall, our clients remain optimistic and excited about where the real estate industry is going. You still see cranes on the Chicago skyline, especially in certain areas – Fulton Market, West Loop, and pockets o Chicago Avenue. I say it all the time: People in real estate don’t like sitting on the sidelines.

What are the driving factors behind the surge in private credit as an alternative to traditional lending?

It’s no secret that traditional lending sources are slowing down, due in part to liquidity issues, in ation, and strict government regulations. Deposits have been decreasing for a while now, which means banks have to be

far more selective when it comes to lending. is is where private credit comes in.

Notwithstanding the more aggressive loan terms, borrowers like the certainty they get when they work with private credit. e deals have signi cantly more exibility and face

advise and support my clients. ey call me for everything from real estate transactions to restaurant recommendations, and I truly wouldn’t want it any other way. It is a top priority for all of our clients to feel like their Much experiences are continually being elevated.

lower levels of regulatory scrutiny. Private lenders are quick and nimble when it comes to approving loans – fewer credit committees and less red tape. Borrowers trust that even in today’s economic landscape, their deals will get done.

What potential risks are associated with private credit from both the borrower and lender sides?

On the borrower side, as with any loan, a higher interest rate adds pressure, and loans through private credit typically have a relatively high spread to start. In this market, borrowers need to run their numbers and evaluate that risk.

On the lender side, private credit faces lower levels of regulatory scrutiny. at’s a valuable perk, but it means appropriate due diligence and creditworthiness assessments are even more vitally important.

As Much’s Managing Partner, what are your priorities for the rm and your clients?

For the rm, I want to continue the great success of those before me and keep Much moving forward. I care deeply about legacy and tradition, but I never take my eye o the future. We will continue to recenter our values and update our approaches so they make sense for the current time and for the people who work at Much now. I want to keep us forward thinking, always a step ahead in terms of innovation, talent, culture, and client service. I want our attorneys to have successful practices, of course, but I am just as focused on their personal growth and well-being.

For clients, meaningful relationships are at the core of everything I do. I would not have taken on this role if it meant I could not still actively

What excites you about the future of the real estate industry?

As a born-and-raised Chicagoan, I love to see our city evolve. I am grateful to live in a place that always has construction activity and developments in the neighborhoods because it means the real estate industry remains exciting.

While the last few years have changed how people work, brick-and-mortar buildings aren’t going anywhere. In fact, the Chicago skyline keeps expanding, and downtown seems to get busier every day. I get to work on reimagined o ce spaces as well as new restaurants, retail spaces, multipurpose production facilities, and multifamily and industrial buildings. Real estate impacts everyone.

Finally, I’m excited by the real estate community’s commitment to prioritizing diversity, equity, and inclusion. Every industry has space to grow, but I’m seeing more women hold leadership positions in commercial real estate. As Much’s rst woman Managing Partner, I feel a deep responsibility to open doors for people who are ready for an opportunity.

Much and its nearly 100 attorneys provide the culture of service and creativity that you nd at boutique rms, but with the sophistication and resources that you expect from the largest rms. Much counsels clients on matters of corporate law and nance, real estate, commercial litigation, labor and employment, insurance, health care, construction, estate planning, and so much more. Visit muchlaw.com.

“For clients, meaningful relationships are at the core of everything I do. I would not have taken on this role if it meant I could not still actively advise and support my clients.”

We’re Much.

Attorneys who embrace passion and pragmatism in equal parts. Champion big ideas over big law. Care about people’s quality of work and their quality of life. Remain laser-focused on taking you to the next level.

We’re a law firm that gets your business.

A Closer Look at Chicago’s Hospitality Market: A Business Case for Adaptive Reuse

847-783-3300

Construction costs remain at an all-time high with the average cost of a new construction up nearly 18 % since January 2020. Whether you are an established hotel brand or a pop-up boutique, hotel developers across the board are facing nancing challenges. Interest rates are at a 22-year high and capital markets are reluctant to invest in Chicago. e city’s central business district is reporting vacancy rates north of 20% as remote and hybrid work arrangements continue to keep employees at home.

In this somewhat settled but still very volatile marketplace, hospitality recovery has been glacial. More hotel owners, operators and developers are looking at adaptive reuse as the way forward.

If we are willing to embrace the challenge of transforming existing structures into vibrant hospitality spaces, we can meet the demands of modern travelers and see the hospitality market heat back up.

As senior vice president, STEVE SMITH is responsible for the strategy and operations of Leopardo’s retail, of ce, industrial and mixed-use markets. He has amassed decades of construction expertise and personally overseen construction projects totaling more than $1 billion. His project experience includes Fortune 500 rms and many of the world’s most-recognized brands including AMC Theatres, Apple, Audi, Bank of America, CVS, HarleyDavidson, Lexus, Trader Joe’s, and Walgreens as well as Hilton, Hyatt, and Loews. Steve holds a bachelor’s degree in construction technology from Western Illinois University, and is a member of the International Council of Shopping Centers (ICSC).

game. Many of us are optimistic about a boost in booking revenues because of the 2024 Democratic National Convention.

What is the industry doing to lure more travelers, leisure and business alike?

A major trend is the shi towards more boutique and lifestyle hotels that o er unique experiences and cater to speci c niche markets. Chicago with its 77+ neighborhoods is full of local inspiration for such hotels. Our historical landmarks, cultural in uences, and the distinctive preferences of both tourists and locals play a signi cant role in shaping the city’s hospitality scene and attracting travelers seeking personalized and authentic experiences.

e accelerated adoption of technology has also transformed hotel operations and personalized the guest experience. More spaces are designed with a heavier emphasis on wellness.

reimagined into something new create a strong brand identity and story that captivates guests.

From the owner and developer perspective, there is a myriad of incentives offered by governmental agencies that may help offset escalated costs of construction. But adaptive reuse isn’t for the inexperienced. It requires innovative design thinking and strategic planning to optimize the layout and amenities, all while adhering to zoning and regulatory requirements.

What are some challenges to navigate?

Not every vacant office building is a candidate for a hotel conversion. The configuration of the floor plate, availability of natural light and efficient layout of the common areas are key factors.Typical floor to floor heights in existing office buildings are greater than new hotel construction, and highrise office buildings are already equipped with adequate vertical transportation and emergency exit requirements.

What other factors make of ce buildings good targets for hotel conversion?

e urban settings of these buildings are prime locations for hotels as well. Proximity to public transportation, other o ce or convention centers, restaurants and retail are all important factors when selecting a hotel site.

What about the regulatory landscape of older buildings?

Hospitality construction in Chicago requires navigating a complex web of regulations, logistical challenges, and permitting. From zoning to building codes and environmental considerations, there are numerous compliance requirements to adhere to.

While there are some attractive tax incentives in place for restoring and repurposing a historic building, navigating the di erent agencies and designations is not easy. Leopardo has experience with historic landmarked projects and can help guide clients through the process. It’s also worth noting that Chicago

has more than 350 places listed on the United States National Register of Historic Places, and Chicago Landmark is a separate designation (from the Mayor and the City Council).

ABOUT THE AUTHOR

Leopardo has successfully delivered several prominent hospitality renovation projects including Tao Chicago, Hilton Canopy + Hilton Garden Inn and Hyatt. They currently have a 101-room shortterm rental hotel under construction in the Streeterville neighborhood and two more hotel projects in the pipeline. For more information on Leopardo’s depth of expertise and scope of construction-related services, visit Leopardo.com

How does Chicago’s hotel market compare to other major metros?

We’ve recently experienced strongerthan-expected demand (resulting from attractions like Taylor Swi and convention center bookings). Since Chicago is very dependent on business and convention-related travel, whether the market recovery continues will be a wait-and-see

Guest’s expectations have changed and contactless check-in, higher e ciency HVAC systems that recycle the air, and touchless elevators and doorways are here to stay.

What is so appealing about adaptive reuse projects?

From an end-user perspective, adaptive reuse hotels have the potential to provide those authentic experiences. Older buildings

“At the end of the day, business travel and major conventions drive hotel occupancy, so it follows that Chicago provides more hotel options in already densely populated of ce blocks.”

STEVE SMITH

Senior Vice President Leopardo Construction swsmith@leopardo.com

CONSULTING

From Page 2

potential impact to the dawn of the internet three decades ago. Implementation of generative AI, which drives applications like chatbots, will open up vistas, tech rms and their consultants hope. ree months after Accenture said in March that it would cut 19,000 jobs, it announced plans to add 40,000 AI-related positions, doubling that number.

ZS, a management consulting and technology rm founded 40 years ago in Evanston by two Northwestern professors, says it is tapping AI to help biopharma clients speed product development, part of a push deeper into health care, where related revenue has grown 20% annually for ve years. Whereas ZS initially targeted sales force functions, it now also applies AI to research and development and other technology-related areas and to supply chain issues, according to Chief Operating O cer Sandra Forero.

She says ZS hasn’t laid o any of its 13,000 employees this year, of whom 800 are in Chicago and Evanston, citing the rm’s strategic shift as a factor. Forero said she expects health care-related revenue to continue to grow by 10% to 20% annually.

With other rms laying o people, “in technology there’s great

DEVELOPMENT

From Page 3

in 2024 — the most for a single year since 2017, according to appraisal and consulting rm Integra Realty Resources. Less than two blocks north of Crescent Heights’ site, a 73-story, 738-unit apartment tower under construction at 1000 S. Michigan Ave. is expected to get its rst tenants next year.

CBRE is playing up the 1201 S. Michigan site as a rare chance to build a residential high-rise overlooking Grant Park. A project could include a single tower or two of them built in phases, the yer said.

e yer also points to the success of the 800-unit Nema Chicago next door. Crescent Heights landed a $340 million mortgage from KKR Real Estate Finance Trust to pay o its $328 million construction loan before the tower was

talent out there to be found,” she says. “We do bene t from that.”

oughtworks reported a 13.5% dip in revenue for the quarter ended June 30, attributing twothirds of the shortfall compared to what it promised to pullbacks by three large clients. e rest was due to “broader economic factors,” CEO Guo Xiao told investors on an earnings call last week. Second-quarter revenue for the tech-sector business, which this year has accounted for a quarter of overall revenue, su ered a 27% drop.

“ e change in client behavior that we have highlighted in recent quarters, including incremental project ramp-ups and delayed decision-making, continued during the quarter to a greater extent than anticipated,” Guo said. Storm isn’t over

e company has missed its earnings-per-share estimates by wide margins in three out of the past four quarters, and the most recent quarter was the rst among them where it underperformed its revenue guidance. It lost $105 million last year despite a 21% revenue gain, to $1.3 billion, and another $20.4 million through the rst half of this year. Its stock has plunged 85% since a 2021 initial public o ering.

Bloomberg in early May reported that an Apax Partners-led consortium and the Canada Pension

completed. en in 2021, KKR added $65 million in mezzanine debt, underscoring the property’s high value.

New supply

e yer does not include an asking price for the 1201 S. Michigan site, which is within the sprawling Central Station project that has been developing with residential buildings south of Roosevelt Road over the past three decades. Crescent Heights has owned the Michigan Avenue property since 2012, when it bought the site along with the adjacent land on which Nema Chicago was built.

at acquisition came a year after the developer bought the apartment tower across the street at 1212 S. Michigan Ave., which it ultimately sold in 2018.

A Crescent Heights spokesman did not respond to a request for comment.

Plan Investment Board were exploring a potential bid to take oughtworks Holding private by acquiring shares they don’t already own. A oughtworks spokeswoman said the rm doesn’t comment on “rumors or speculation” and declined to make any executives available for an interview. e rm doesn’t disclose how many employees it has in Chicago.

Guo sounded as if the storm isn’t over, telling investors that another top client paused a major initiative in early July. “And we believe that some of our clients are still adjusting and adapting to the challenging macroenvironment. We’re probably going to continue to see project turnovers” in the third quarter.

Meanwhile, Huron reported second-quarter gains of 78% in net income and 27% in revenue and raised its outlook, news that accounted for a big part of a 35% rise in share price year-to-date. Its rate of employee attrition is heading below what it was before the pandemic, said Chief Financial O cer John Kelly. In Huron’s case, that’s good news.

“If we were to have a higher attrition rate, that just means we have to be more aggressive in the market, bringing people in because of the demand we’re seeing right now across the business,” Kelly told investors on an earnings call.

ose people are out there.

New supply coming to the market hasn’t scared o other developers from joining the apartment party. Canadian developer Onni Group recently proposed 2,500 rental units next to the riverfront site where Bally’s plans a massive casino and hotel complex. at’s on top of the 2,600-unit apartment project Onni plans to begin soon across the Chicago River on the southern tip of Goose Island.

Crescent Heights is looking to sell its Michigan Avenue site as it plans another high-rise in the Fulton Market District. e developer paid $34 million this year for a full-block development site at 420 N. May St., where it has proposed a 52-story apartment tower that would be the tallest building in the trendy former meatpacking corridor.

CBRE Vice President Tom Svoboda is marketing the 1201 S. Michigan site on behalf of Crescent Heights.

— soared more than six times to $32.3 million from $5.3 million in the same period the year before, according to a recent ling with the Federal Deposit Insurance Corp.

e net result: Net interest income — money made on loans and securities minus cash paid to depositors and lenders — fell to $17.7 million from $22.5 million despite loan growth of 27% in the year that ended June 30.

First Bank CEO Eric Ephraim declined to comment on the landscape he’s facing.

Ordinarily, unless loans are souring because of recessionary conditions, loan growth like that would mean a major increase in net interest income; a decrease would be almost unimaginable.

Blame this highly unusual situation — which most banks are su ering through, not just First Bank — on how rapidly the Federal Reserve hiked interest rates last year combined with a skittish banking industry shoring up its cash at almost any cost following shocking bank failures earlier this year due to panicked depositors eeing.

“ e No. 1 issue is less about margins and more about liquidity,” says Paul O’Connor, whose Chicago-based boutique investment banking shop, Angkor Stra-

tegic Advisors, serves the banking industry. “Just having cash has become a much bigger issue.”

Fight for deposits

Banks are ghting hard to keep and attract deposits with one-year certi cates of deposit at returns of 5% or more easy for consumers and businesses to nd. Lenders are turning increasingly to brokered deposits — so-called “hot money” from investors who look for the highest-paying deposits — to stay as liquid as possible.

In the past, rising interest rates generally were viewed as good for banks. ey would hike the rates they charge on loans considerably faster than they would increase their payouts to depositors, and their margins would improve. Not so today. ose margins are getting pinched.

Many banks are responding by tightening lending standards. With the economy’s health still viewed as hard to predict and bread-and-butter loan sources like commercial real estate under pressure, the skimpy lending margins available to community banks make them less attractive.

O’Connor predicts many banks will choose to shrink their balance sheets over the next year in response.

“It would make more economic sense to pull back than to try to outrun this,” he says.

at’s bad news for businesses

needing credit, particularly those in early stages of growth.

e results at other large privately held local lenders are similar to First Bank Chicago’s.

Ballooning interest costs

Chicago’s Marquette Bank, a South Side xture with $2.1 billion in assets, saw its interest costs mushroom nearly 10 times in the

rst half of the year to $8.4 million from just $874,000 in the same period last year.

Net interest income declined slightly to $27 million from $27.1 million despite a 9% increase in loans year over year.

Chairman Paul McCarthy didn’t respond to requests for comment.

Chicago’s Lakeside Bank, with $2.5 billion in assets focused in large part on commercial real es-

tate, paid just $3.3 million in interest costs in the rst half of 2022. e same time frame this year? $23.2 million, seven times more.

Net interest income in the rst half was $40 million, the same as last year — even as loans grew more than 13%.

A representative for Lakeside CEO Philip Cacciatore didn’t respond to requests to speak to him.

Chicago’s Lakeside Bank, with $2.5 billion in assets, paid just $3.3 million in interest costs in the rst half of 2022. I GOOGLE

While the redevelopment agreement doesn’t penalize Sterling Bay for missing the deadlines, the work is needed to connect the site to nearby areas, making the housing, retail and o ce space more accessible and marketable.

A four-year plan presented to the city in January 2022 for e Steelyard, a “mixed use lifestyle district” on the southern portion of Lincoln Yards, estimated that three new buildings would be completed by 2024, but the developer has yet to break ground and is preparing to release updated plans for that portion of the site in the coming months.

Sterling Bay has cleaned up the site, built temporary athletic elds and constructed just one building since 2019, a life sciences o ce building at 1229 W. Concord Place on the southern tip of the site that has yet to be occupied, along with road improvements on Concord Place to support the building.

Sterling Bay’s e orts to nance the infrastructure were bogged down amid struggles to obtain necessary city approvals during the Lightfoot administration. Sterling Bay CEO Andy Gloor has blamed Lincoln Yards’ slow progress on the former mayor, telling Bloomberg she “put a brake on our entire project.”

Lightfoot red back in a statement to Crain’s, calling Gloor’s comments “unfortunate and demonstrably false.”

With Lightfoot now out of o ce, Sterling Bay aims to convince her successor that the economic bene ts of the project — including union jobs and 6,000 units of housing, with 20% set aside as a ordable — are worth signing o on an agreement that was decried by some of his closest allies in 2019 as a giveaway to a rich developer.

“We look forward to continuing to work with our partners and the current administration to advance Lincoln Yards,” Gloor said in a statement to Crain’s. “We have great momentum going and bringing this critically important project to Chicago in a timely manner is our priority.”

Barring the emergence of a private investor or investors willing to fully fund infrastructure improvements without any support from the city, Sterling Bay will require Johnson’s backing for a city-supported transaction.

Financing push

Early in Lightfoot’s tenure, Sterling Bay pushed a plan to raise money for infrastructure work by creating a second special taxing district covering Lincoln Yards. at would allow for the sale of bonds backed by taxes generated within the special taxing district paid by property owners, Sterling Bay and its partners.

Lightfoot rejected the proposal because it would upend the way the city has used special service areas, or SSAs, according to for-

mer administration o cials. e city traditionally creates SSAs along neighborhood business corridors to fund perks within the districts to pay for extra security, trash cans, snow removal and placemaking e orts, not to pay for hundreds of millions in complicated infrastructure work.

e former mayor also worried that granting the request would lead to a ood of similar proposals from other developers and hesitated to expend political capital supporting a measure she deemed unlikely to win City Council approval, the former ofcials say.

In its statement, Sterling Bay calls the SSA “a viable nancing mechanism to ultimately kickstart construction on critical public infrastructure” at Lincoln Yards, and says Lightfoot’s deputy mayor for economic development, Samir Mayekar, told Sterling Bay she rejected the SSA for fear of “bad optics and political blowback.”

Mayekar declined to comment on Sterling Bay’s characterization of his remarks.

With an SSA blocked, Sterling Bay looked to raise capital through an entity that serves as a conduit bond issuer for similar projects.

Last summer, Sterling Bay executives pitched Lightfoot and senior advisers on a bond deal through the Wisconsin-based Public Finance Authority. e deal would have provided Sterling Bay an undisclosed sum ranging in the hundreds of millions of dollars to begin the infrastructure work.

In a statement, Sterling Bay says the bond nancing “was devised by the developer to place thenancial risk on the developer with no exposure or risk to the city.”

But it needed city approval, because the transaction would involve the issuance of city notes backed by TIF proceeds and because the Public Finance Authority requires it.

Lightfoot eventually approved the deal, but Sterling Bay says ris-

ing interest rates had soured the economics of the proposednancing before the city gave the green light. Sterling Bay walked away, blaming Lightfoot’s approval process for the deal’s failure.

“Sterling Bay needed the city to work faster,” the developer’s statement said. “ e city’s slowed timeline for approval ultimately killed the deal and the jobs that would’ve accompanied it.”

Cultivating relationships

Former Lightfoot administration o cials said Sterling Bay didn’t bring the city into the deal until after it had been fully negotiated, forcing the administration to sift through hundreds of pages of documents to ensure Chicago taxpayers would not be put at additional risk and that the deal would not a ect the city’s recent credit rating upgrades.

“Mr. Gloor’s recent comments omit that when the company made a more reasonable request in 2022, the Lightfoot administration helped facilitate an additional nancial lifeline to the project, while protecting tax dollars,” Lightfoot said in her statement to Crain’s.

Sterling Bay does not deny initially negotiating the deal without input from the administration, but says it stressed in meetings with city o cials that the structure “did not place any burden on the city or its taxpayers.”

Sterling Bay’s hopes for city support now depend largely on Johnson, and an e ort to cultivate a relationship with the new mayor appears to be underway. After previously contributing $1,500 to Johnson’s mayoral opponent, Paul Vallas, Gloor attended a fundraising dinner for Johnson’s inaugural committee hosted by R4 Services CEO Trisha Rooney. e event was meant to a ord members of the business community the opportunity to meet the mayor-elect, Rooney said.

Sterling Bay declined to an-

the City Council, Ald. Brian Hopkins, to the 32nd Ward, which is represented by vocal opponent Ald. Scott Waguespack.

Waguespack said he wouldn’t serve as a total roadblock to the development, but he has pushed back on some of Sterling Bay’s proposed infrastructure designs, saying they need to bene t the entire area, not just the buildings within Lincoln Yards.

“It’s not very pedestrianfriendly or bike-friendly at all,” he said. In his view, Sterling Bay is pushing for designs that would get “hundreds and hundreds of cars from (their) building straight to . . . the highway.”

Sterling Bay says in response that all of the proposed work in that area of the development “was informed by tra c studies” approved by the city. It adds that the road projects near the current life sciences building and the proposed Steelyard district will “provide increased mobility to Chicagoans who access the area by foot, bicycle or vehicle.”

swer questions about the fundraiser and whether, or how much, Gloor contributed to Johnson’s inaugural fundraising committee. Unlike political campaign committees, the inaugural committee is not required to disclose its donors.

While Sterling Bay executives have met with the mayor’s o ce, both sides say the talks haven’t addressed the speci cs of the Lincoln Yards project.

Sterling Bay says a bondnancing arrangement like the Public Finance Authority deal remains the “most viable” infrastructure funding option for the site, adding that it has “revisited” such a transaction since last summer, “but given the turnover in administration, going back to seek city approvals is not something we’ve done to date.”

Jason Lee, a senior adviser to Johnson, told Crain’s on Aug. 2 that the mayor’s o ce had not directly received requests from Sterling Bay on the Lincoln Yards project and that the administration would need to evaluate any deal to “understand what the parameters and what the implications” are for the city.

Gloor and his team also have met with the new chair of the City Council Zoning Committee, Ald. Carlos Ramirez-Rosa, 35th, who doubles as Johnson’s City Council oor leader. Ramirez-Rosa described the meeting as introductory without getting into the speci cs of the Lincoln Yards project.

But he did tell Crain’s in June that, despite his previous opposition to the TIF deal, he supported the Lincoln Yards project because of the union jobs and affordable housing it could provide.

New ward map

A new challenge for the developer is the city’s redrawn ward map. Revamped ward boundaries shifted the Lincoln Yards site from the 2nd Ward, represented by the project’s chief backer in

Waguespack also said he opposes an SSA for Lincoln Yards, but he acknowledges that his council colleagues likely would approve one if Johnson backs it. Hopkins, for his part, said the SSA should be put to a City Council vote.

“Let’s see who’s in favor of jobs, economic development, union workers having opportunities and a ordable housing to be built,” Hopkins said. “Let’s see who’s in favor of that and who isn’t.”

Sterling Bay su ered another setback when two TIF districts near Lincoln Yards expired in 2021 and 2022. ose districts could have been tapped — through a process allowed by state statute known as porting — to pay for work supporting Lincoln Yards.

In December 2021, the city’s TIF investment committee approved spending $12.6 million from those adjacent TIF districts to prepare for major improvements at the complicated Elston and Armitage intersection, one of the infrastructure projects Sterling Bay agreed to helpnance.

“It was always assumed that that TIF would be extended,” Hopkins said. “How is Sterling Bay supposed to get nancing for a public works project? Who’s going to give a private company a loan to build a road for the city? It’s just ridiculous.”

As it seeks nancing for the infrastructure work, Sterling Bay is also looking to recapitalize the development.

Crain’s previously reported Sterling Bay is seeking new investors, including approaching the Chicago Teachers Pension Fund on buying into the project at $100 to $150 per square foot, potentially more than a $300 million deal for the $12.1 billion fund.

Sterling Bay did not provide an update on its discussions with the pension fund or whether it had pitched other public pension funds, but the deal was not on the agenda for the Aug. 4 meeting of the fund’s investment committee.

An architect’s rendering of the Lincoln Yards project. I STERLING BAY/GENSLER

A colorful Victorian in Elgin is for sale for only the second time in 134 years

Much of the interior is close to its original state I

An ornate Victorian house in Elgin that has changed owners only once since it was built in 1889 is for sale.

Lynda Quindell, whose parents bought the eight-bedroom house on State Street in the early 1960s, is asking $650,000 for it. On a bluff overlooking the Fox River, the property, a little under two-fifths of an acre, holds both the main house and a large original coach house. It came on the market this month, represented by Naomi Campbell of Coldwell Banker Realty.

The exterior, an exuberant composition of towers, carved wood fans, spindles, shingles and other details, is an example of the Eastlake style, a lavishly ornamented subset of Victorian design that was popular in the late decades of the 19th century. It’s one of Elgin’s grandest Victorians, which is particularly appropriate because the Grand Victoria casino boat sits almost directly across the Fox River from the house.

Inside the house, Campbell says, “it’s amazing how everything has been kept looking original,” with a substantial wood staircase curving up from the foyer, pocket doors between rooms, flowers and other patterns carved onto door frames, and an arched fireplace.

One important change made over the years, Campbell says, is that two rooms that used to be a gentlemen’s smoking parlor and a ladies’ parlor have been combined into one larger room, “and nobody has smoked in that house for 70 years.”

Quindell’s parents, Sue and Arthur Izzo, bought the house in 1963, according to an article by an Elgin historian. Arthur died in 2005 and Sue in 2016, and Quindell, who lives nearby, “kept using the house but didn’t live there,” Campbell says.

The original owners, whose surname is still etched in a glass panel above the front door, were Ora and Anna Pelton. Ora Pelton was a surgeon, and the couple built their house on a blufftop stretch on the west bank of the Fox River that was known as “rich man’s row.” Several of the other houses in the row have since been demolished and replaced.

e Peltons’ architect, Gilbert Trumbull, designed several Elgin houses, apartment buildings, churches and a sincedemolished City Hall, but none of them that are still standing are as fanciful as the Pelton house.

The house, about 42 miles northwest of the Loop, needs some updating, Campbell says. It has a dated kitchen and baths, no air conditioning and a boiler for heat.

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