Crain's Chicago Business

MARGINS

BY DANNY ECKER

Mayor Lori Lightfoot in Auburn Gresham, to

Dems should rethink parts of the SAFE-T Act

One side says it’s merely trying to end a system in which people are jailed not because they’re guilty but because they’re poor, guaranteeing genera tions of human misery.

e other, pointing to another summer of mayhem in the streets of Chicago, says the last thing scared citizens throughout Illinois need are dangerous criminals roaming free and laughing at the law enforcement system that released them.

page piece of work that covers any number of subjects. ose politicians who are re exively calling for junking it in its entirety are pandering. Would they really not want to boost protection for women in domestic abuse cases, expand help for police o cers who are burned out and require police to wear body cameras? All of those measures would disappear if the law is repealed.

CRITICS OF THE BILL SAY PROVISIONS ALLOWING JUDGES TO HOLD SOMEONE UNTIL TRIAL ARE TOO WEAK.

Who’s right? In a way, both are. And that’s the problem with the extraordinarily emotional debate over whether to amend or junk in its entirety a major criminaljustice reform measure known as the SAFE-T Act passed by the Illinois General Assembly and signed into law by Gov. J.B. Pritzker.

e bill is a massive, 700-

Critics come closer and, to a degree, hit the mark in the debate over another SAFE-T clause, the one that would end cash bail in Illinois starting Jan. 1.

Sponsors of the bill have a point when they assert that requiring cash bail doesn’t accomplish much except to give the accused the opportunity to ex his or her pocketbook. Major drug tra ckers can and do easily make bail. But some mope on a corner selling nickel bags can be locked up for many months.

Combined with lack of good jobs and good education in many

poor neighborhoods, such policies merely perpetuate a system in which too many people just give up, says state Sen. Robert Peters, D-Chicago, a chief sponsor of SAFE-T and a South Side Black man with some pretty horrid personal tales about how terrible some crimes are. “Why do we want to continue a broken system?” he asks.

But that’s where things get sticky. If you don’t have cash bail, judges have to be able and willing to lock up until trial people who clearly represent a threat to others, accused o enders who are more likely to commit crimes again than to show up for trial if they’re released on an electronic monitor in lieu of cash bail.

Critics of the bill say provisions allowing judges to hold someone until trial are too weak. For instance, someone accused of robbery, nonresidential arson, vehicu lar invasion, drunken driving that results in a death, second-degree murder or kidnapping cannot be held pretrial. Why? ose o enses are probationable, and SAFE-T

GREG HINZ ON POLITICS

limits pretrial detention to nonprobationable o enses.

Another example: Most of those accused of drug tra cking cannot be held under SAFE-T. Why? ey are deemed “nonforcible” o enses, and under SAFE-T someone has to be accused not only of a nonprobationable but a nonforcible o ense to be held until trial.

Lurking in the background is the experience here in Cook County, where Chief Judge Tim Evans a few years ago pretty much ordered an end to cash bail in a sort of preliminary test of what SAFE-T would look like statewide. Evans cites Loyola University Chicago research that relatively few, no more than a couple of percent, of those out on electronic monitors are arrested for another violent o ense while awaiting trial.

But that only counts people who are caught and charged with another o ense. Beyond that, as of May, according to county data reported by the Chiago Tribune, among those out on monitors are 94 people accused of murder, 534 charged with being a felon in possession of a gun, 569 accused of unlawful use of a gun and 53 with domestic violence charges. And that’s going statewide?

All of that may explain why Pritzker, Attorney General Kwame Raoul, and even Peters are talking about ne-tuning SAFE-T.

It’s on that and a handful of other provisions where ruling Democrats need to do themselves and their constituents a favor and take another look at SAFE-T. And they ought to do it before voters do it for themselves.

It’s time to streamline Illinois government

The envelope came in the mail mid-week. Important notice inside, it said, with a return address from the Cook County assessor’s o ce. I put o opening it for several days because I didn’t want it ruining my weekend. But, eventually, I had to face the music.

My home’s property had been reassessed and, sure enough, the assessed value went up by nearly 23%. If I were planning to sell sometime soon, this might be welcome news, but I’m not and it could very well mean my property taxes are going to soar because my property is worth more. Cook County Assessor Fritz Kaegi’s letter with the reassessment cleverly noted in bold: “An increase in your assessment does not cause the same increase in your property tax bill. In fact, Crain’s Chicago Business and the Chicago Tribune have reported that residential assessment increases in the past two years have meant only a 1% average increase in residential property taxes.”

at very well might be, but there’s another bit of reporting out there that made me nervous and I’m sure I’m not alone. e Daily Herald recently noted, “For the rst time since Illinois created a cap on property tax hikes more than 30 years ago, local governments can seek the maximum 5% increase this year.” A 7% in ation rate in 2021 made this scenario possible.

I’m supporting 10 local governments with my property taxes and I know plenty of communities have even more. e Herald reported a mass maxing out could mean more than a billion dollars in new revenue for local governments statewide.

If my governments and others in the state do start maxing out en masse, watch out. With the cost

of living already jumping, we just might see a tax revolt the likes of which we haven’t seen since the one in the suburbs that spurred the cap in the early ‘90s.

So, then, why is it that we aren’t seeing any real e ort at govern ment e ciency and streamlining?

It seems to me this is a signi cant untapped opportunity that could create oodles of voter goodwill for our elected o cials who currently are knocking on our doors and in vading our mailboxes and our tele vision screens looking for support.

ink about it. Why am I paying taxes to a mosquito abatement district? I’ve got bites on my ankles indicating it hasn’t helped me much. Why am I paying for three school districts or, more speci cal ly, why am I paying for three sets of multiple layers of school admin istrators and their pensions? Why am I paying for a township when I live in a municipality and a county that can or could provide all its ser vices? Why can’t the county take up mosquito abatement? Whose salaries am I paying at that pesky mosquito government none of us ever notice? Why can’t Chicago and Cook County economize by making joint purchases for things they both need or sharing equip ment they both need and use?

e possibilities are endless, if only our elected o cials would set their minds to it. A few of the state lawmakers who prioritized government streamlining now are out of o ce or on the way out. A few others introduce the same school e ciency and consolida tion e orts repeatedly only to see them languish.

Illinois has more governments than any other. Nearly 9,000, according to an inventory conducted by e Civic Federation.

at includes more than 850

school districts alone. Yet, a task force created in 2019 to examine local government consolidation and develop solutions zzled into oblivion with absolutely nothing to show for it.

Smart statewide o cials who aspire to move upward would be wise to nd a way again to cham pion this cause and see it through this time. Several state represen tatives and senators ought to take up the cause as a priority. And our local elected o cials ought to be demonstrating and touting e orts

MADELEINE DOUBEK

at e ciency and doing all they can to avoid that max-out pot of tax gold that’s tempting them.

We can and should do better.

I’m con dent I’m not the only one worrying about the next piece of tax-related mail to land who

thinks so.

Madeleine Doubek is executive director of Change Illinois, a non partisan nonpro t that advocates for ethical and e cient govern ment.

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JOE CAHILL ON BUSINESS

As September draws to a close, corporate executives are turning their attention to budgets and nancial forecasts for 2023.

months present an opportunity for executives to gure out policies that work for their companies.

Tips shrink at Chicago restaurants and bars

Almost one-third of Americans are tipping when they dine out because of in ation, according to a recent survey. Chicago-area restaurant workers are feeling the pinch. ‘I really do on I

BY ALLY MAROTTI

After Albany Park cocktail bar Nighthawk raised its prices this summer to o set in ation, bartender Grace Del Vecchio no ticed a change immediately: Customers were tipping less. Tips shrank to 10% to 12% from 15% to 20% before prices rose. ey often argue about the prices too, Del Vecchio says. e 23-yearold watched her Saturday night tip total dwindle from about $250 to $150. Weeknight tips dropped, too.

“When I’m opening a beer for you, I don’t care if you tip me. But when I’m making you a craft cocktail, I do care if you tip me. at’s a lot of work, especially if I’m making it for a group,” says Del Vecchio, who gets paid $10 an hour, plus tips. “I really do depend on tips.” Del Vecchio is not alone. Servers and bartenders around the city say

City looks to spark Loop housing wave with TIF money, incentives

Mayor Lori Lightfoot is o ering up public subsidies to try to bring at least 1,000 residential units to downtown’s pandemic-battered core over the next ve years

BY DANNY ECKER Stacy Donohue

Mayor Lori Lightfoot’s admin istration is hoping to get devel opers to turn outmoded LaSalle Street properties into residential buildings—complete with lots of a ordable housing—by dan gling a menu of public subsidies to try to jump-start new projects.

In a move meant to help revive and bring new foot tra c to the city’s pandemic-battered core, Lightfoot this week is expected

to announce a new initiative of fering tax-increment nancing money and other public incen tive programs to developers that convert properties in the heart of the Loop into housing, so long as at least 30% of the units cre ated are a ordable, according to sources familiar with the plan.

With a goal of creating at least 1,000 new Loop residential units—including 300 that are a ordable—over the next ve years, the city will be soliciting

proposals from developers and will support the e ort with funds from the LaSalle Central TIF District, a controversial pot of money that has e ectively been o -limits to new developments downtown since former Mayor Rahm Emanuel froze its use for private projects in 2015.

Vacancy-ridden o ce proper ties along LaSalle Street are said to be the focal point of the e ort,

JOHN R. BOEHM

Amid all the focus on the future, 2022 can start to seem like yesterday’s news. But there are still three months left in the year, plenty of time to accomplish big things. With that in mind, here are my thoughts on objectives some local business and government leaders should try to achieve before the calendar turns.

 Walgreens. It’s long past time for the giant drugstore chain to stop selling cigarettes. Walgreens is try ing to transform itself into a health care provider, with doctor’s o ces attached to its stores. Yet it contin ues to sell one of the world’s most deadly products. e leading cause of preventable death, smoking kills about 480,000 Americans annually from cancer, heart disease, strokes and other conditions.

Walgreens archrival CVS Health, which is also pursuing a broader health care strategy, stopped selling cigarettes years ago. Which company has more credibility as a health care provider? Not the one that still sells cigarettes. Walgreens CEO Roz Brewer hinted in March that an announcement on cigarettes was coming, which raised expectations that the company would nally kick the habit. Since then, nothing. ere’s plenty of time to snu out cigarettes this year.

 United Airlines. Chicago’s hometown airline will get a second chance to repair its relationship with the ying public during the holiday travel season. United and other mainline carriers bungled their last one, when they were unprepared for a summertime crush of passengers eager to travel again after COVID-19 kept them grounded for two years. Flight delays, cancellations and lost bags reminded yers how miserable the ying experience had become before the pandemic.

Another test of service and reliability is looming as the holidays approach. It’s also an opportunity for carriers to set themselves apart. If United delivers a better experience than competitors, customers will remember. And that could give United a competitive advantage well beyond 2022.

 Employers. With COVID-19 receding, uncertainty swirls around that cherished pandemic-era perk: remote work. Some companies are summoning all workers back to the o ce ve days per week, while others opt for various hybrid formats, and still others waver and wa e. e next few

In a highly competitive talent market, employers can’t a ord to get this wrong. e right policy starts with an understanding of why so many employees prefer to work from home. So seek their input and pay attention to it. Companies also should look at objective, company-speci c metrics that show how remote work has a ected productivity in their operations. Policies should be exible enough to accommodate the circumstances of as many employees as possible. Policies also should treat employees as adults who work hard wherever they are. If not, you need to improve your hiring practices.

 City Hall. Mayor Lori Lightfoot and the City Council need to work with business leaders on a plan to revitalize the Loop and North Michigan Avenue.

Both areas have been hit hard by COVID-19 and rising crime. And both are critical to the city’s future prosperity.

Michigan Avenue is Chicago’s showplace, a glamorous boulevard lined with high-end shops and striking architecture. It attracts outof-town dollars, creates jobs and generates an outsize share of city tax revenues. e Loop is the beat ing heart of commercial Chicago, home to nancial exchanges and global corporate headquarters. It’s also a major source of jobs and tax dollars.

Yet these key economic drivers are struggling, with o ce vacancies up downtown and empty storefronts dotting Michigan Avenue. Fortunately, the Urban Land Institute has written up recommendations for reinventing both areas. ose proposals can serve as a starting point for purposeful planning. ere’s no time to waste. e longer Michigan Avenue and the Loop languish, the harder it will be to restore them.

 Chicago CEOs. ere’s a long tradition in Chicago of business leaders coming together to advance important civic objectives. Today, no objective is more important than reining in crime across Chica go. Carjackings, robberies, express way shootings and a growing sense of lawlessness are spreading fear from Lakeview to Lawndale and Streeterville to South Shore.

Corporate leaders—most recently McDonald’s CEO Chris Kempczinski—have done important work by publicly calling attention to the problem and explaining how crime and the perception of crime make it harder to do business in Chicago. Now it’s time to pitch in on solutions.

ere’s more to do in 2022, Chicago

“(CUSTOMERS) ARE NOT AS GOOD OF TIPPERS AS THEY USED TO BE BECAUSE THEY’RE FINDING AN EXCUSE TO NOT TIP WELL.”

Nicole Flevaris, owner of Kinzie Chophouse

FDA outlines flaws in how it handled shortage of infant formula linked to Abbott recalls

BY KATHERINE DAVIS

e U.S. Food & Drug Admin istration is criticizing Abbott Lab oratories for conditions at a fac tory tied to a nationwide recall of baby formula.

A new FDA report said con ditions it observed at Abbott’s Sturgis, Mich., production facil ity were “not consistent with a strong food safety culture.” It also reveals lessons learned during the shortage and outlines what the federal agency is doing to prevent similar shortages in the future.

e ndings echo what FDA chief Dr. Robert Cali said in a May hearing before federal law makers when he described con ditions at the Sturgis plant as “egregiously unsanitary.”

North Chicago-based Abbott has been at the center of the for mula shortage after it recalled formula products made at its St urgis facility back in February af ter complaints were led with the FDA linking Abbott’s products to sickened infants. e FDA says it was rst noti ed of four cases of illness or death in infants who consumed powdered infant for mula between September 2021 and January 2022. Soon after, the FDA investigated Abbott’s plant and shut it down.

Abbott has since resumed pro duction, but formula remains in short supply. e FDA is also being audited by the O ce of the Inspector General in relation to the Abbott formula recall.

Abbott did not immediately re spond to a request for comment.

e FDA’s report serves as an evaluation of the agency’s re

sponse to the formula shortage and its interactions with Abbott since it rst received complaints about the company’s products.

e FDA’s evaluation team con ducted 43 interviews with 61 FDA employees. e agency said that while its evaluation for this report was focused on the infant formula industry, some of its ndings highlight system ic challenges that could require changes across the entire orga nization.

AREAS OF NEED

e FDA identi ed ve major areas of need, which include the agency requiring modern tech nology to access and exchange data in real time; su cient sta ng; training; equipment and regulatory workers; and an updated emergency response system that can handle multi ple public health emergencies at once. e FDA also says there needs to be more scienti c un derstanding about how Crono bacter sakazakii—the illness that complaints linked to Ab bott formulas—spreads in for mula manufacturing facilities. Lastly, the FDA said it needs to assess the infant formula in dustry broadly by examining its preventive controls and safety culture.

Findings from the report show that some of the samples taken from Abbott’s Sturgis fa cility were delayed in transit by third-party delivery companies, which presented challenges for the FDA rapidly testing formula for Cronobacter. e FDA says it is now evaluating procedures for more timely shipping and testing

of samples sent to regulatory lab oratories.

Other ndings from the report revealed that COVID-19 cases at the Sturgis facility delayed the FDA’s in-person response to complaints about Abbott’s prod ucts. e agency also mentions in the report that manufacturers are not required to make Crono bacter isolates available to the FDA for examination, which lim its the agency’s ability to identify sources of contamination.

“ ere is no single action to explain the events that occurred, rather the report identi es a con uence of systemic vulnerabil ities that demonstrate the need to focus on continued modern ization and investment in the ex pertise and tools needed to bet ter anticipate and address future public health challenges in this area,” says the report, which was written by Steven Solomon, di rector of the center for veterinary medicine at the FDA.

e FDA says work on mul tiple report recommendations has already begun. e agency has developed a Powdered In fant Formula Prevention Strategy to provide “targeted root cause analysis guidance” to formula makers.

“ e FDA is committed to working with Congress, state and federal partners, industry and other stakeholders to ensure nu tritious, safe infant formula and metabolic formulas are on store shelves for Americans who rely on these products as an essential source of nutrition,” the report concludes.

e formula drama turned into one of Abbott’s biggest head

aches of the year. With the Stur gis plant shut down and much of its product o store shelves, Ab bott lost market share to its com petitors. Additionally, several lawsuits have been led against Abbott by families alleging they were a ected by recalled prod uct.

TESTING

Since reopening its Sturgis plant, Abbott said in an Aug. 26 statement that it identi ed the presence of Cronobacter in “a couple” of batches during prod uct testing, which forced it to temporarily suspend production while it investigated potential contamination sources.

“In those cases, we found the issue, addressed it and no a ect ed product has been or will be distributed,” Abbott said. “ is con rms our quality systems work.”

Abbott maintained in the statement that investigations by the FDA and the U.S. Centers for Disease Control & Prevention did not nd any de nitive link between Abbott’s products and the four complaints of sickened children. Abbott says retained samples of recalled product and unopened containers of formula in the infant homes tested nega tive for Cronobacter.

Abbott’s baby formula brands, including Similac, Alimentum and EleCare, are housed inside its larger nutrition business, which also makes adult and el der products like Ensure. Ab bott’s nutrition segment gener ated 19% of Abbott’s $43 billion in sales last year, making it the company’s third-largest busi ness, after diagnostics and med ical devices.

As of Sept. 22, Abbott’s stock was down about 28% year to date.

Condo sells for the highest Chicago home price this year

BY DENNIS RODKIN

A condominium at the St. Re gis tower sold on Sept. 21 for a little more than $20.56 million, the highest price anyone has paid for a Chicago-area home this year.

The condominium, on two full floors of the undulating super tall tower designed by Studio Gang Architects and the firm’s principal, Jeanne Gang, has about 10,000 square feet of interior space and another 8,000 square feet of outdoor space. When it went under con tract in 2018, Magellan Devel opment Group was asking $18.5 million.

The additional $2 million in the purchase price presumably includes upgrades that the de veloper made to the buyer’s specifications before delivering

the finished product. Crain’s couldn’t confirm that because neither the agent for Magellan, Leila Zammatta, nor the agent for the buyer, Rachel Vecchio of Dream Town Realty, responded to requests for comment.

The buyer is not yet identified in public records.

TAKING THE LEAD

At $20.56 million, the sale of the 71st- and 72nd-floor con do at St. Regis comes in just above the $20 million purchase of the unfinished 89th floor of the Trump International Hotel & Tower in March.

It’s a further sign of the vol canic boom at the extreme up per end of the housing market, where rising interest rates don’t matter because people pay cash. The St. Regis condo is the seventh property in the Chica

go area to sell for $10 million or more so far in 2022. That’s more than the past three years’ sales combined. There were three in 2021, two in 2020, and one in 2019.

The $20.56 million that these unidentified buyers paid is among the highest prices ever paid for a single Chicago-area residential property, although there are two package pur chases that rank well above it. They are Citadel chief Ken Griffin’s 2017 purchase of four floors at No. 9 Walton on the Gold Coast for a combined $58.5 million and private-eq uity executive Justin Ishbia and his wife, Kristen, spending a combined $39.9 million for four lakefront mansions in Winnet ka over the past couple of years.

Prior to this sale, the highest recorded price at St. Regis was

$9.2 million, which buyers paid for a unit on the 91st oor in June. The listing does not provide

any details about the finishes or other upgrades. Neither does it include photos.

Among its ndings, the FDA said conditions at Abbott’s Michigan plant were ‘not consistent with a strong food safety culture’

The $20.56 million deal at the St. Regis is further evidence of the volcanic buying action at the extreme upper end of the housing market

BLOOMBERG

JOE PASSE/FLICKR

The St. Regis is an undulating supertall tower designed by Studio Gang Architects.

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Working together to drive progress

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Chicago Reader names new editor-in-chief

Enrique Limón will lead the 51-year-old alternative newspaper, which just became a nonpro t

e Chicago Reader has named a new editor-in-chief. Enrique Limón will ll the position at the city’s 51-year-old alternative news paper, starting Oct. 3.

Limón, who grew up between San Diego and Tijuana, Mexico, takes over the position after a nationwide search. Beginning his career at the San Diego CityBeat in 2008 as a col umnist and features writer, Limón is familiar with working with alter native weeklies. He also served as an alternative journalism fellow at Northwestern University’s Medill School of Journalism in summer 2009—when he said he rst fell in love with the Reader.

Limón was named editor-inchief of Salt Lake City Weekly in 2015, where he led his sta to re ceive local and national awards. Most recently, he served as found ing editor of Independent en Español, an international endeav or by e Independent meant to inform an audience of more than 50 million Latinos in the U.S. He launched the publication during the peak of the pandemic.

RESPECT FOR READER

After just two years leading In dependent en Español, Limón said he decided to return to Chica go because he considers the Read er an industry leader that’s always been ahead of the curve.

“I thought that I was done with weeklies, and just when I thought I was done, they pulled me right back in,” he said. “I don’t think that I would be joining another news room if it weren’t for the fact that it’s the Reader.”

Limón said he has taken inspira tion from the Reader in his former positions, looking to the publi cation as a model for how a local weekly should function.

“His experience at alternative media across the country will pro vide a great foundation to lead

the Reader team,” Publisher and President Tracy Baim said in a statement. “We have built a solid nonpro t newsroom, and he will provide new energy and ideas to take the Reader to its next phase.

“As an openly queer, multilin gual journalist and editor, Limón will contribute important new ideas into both Chicago’s journal ism community and the Reader.”

Baim will depart as the Read er’s president and publisher at the end of the year. She took over the position in 2018 after the publica tion was slated to be shut down by its then-owner, the Chicago SunTimes.

‘A NEW GENERATION’

Limón says that what he’s look ing forward to most in his position is adding his voice to a respected and storied newsroom.

“I’m looking forward to working alongside the Reader sta to hope fully draw a new generation of con tributors, whether they be journal ists, photographers, illustrators or what have you, particularly Brown and Black voices, LGBTQ queer voices,” he said. “I’m just interest ed in adding to the Reader’s arse nal of the fabled storytelling.”

After ling for nonpro t status in 2020, the Reader nally became a nonpro t in May of this year. Former owners Len Goodman and Elzie Higginbottom, who had bought it from the Sun-Times for $1 and assumed its debt in 2018, stepped aside.

Limón said the publication’s transition to a nonpro t is a main selling point for him.

“I think that’s what most news rooms, particularly alternative newsrooms and community news rooms, should be looking toward right now,” he said. “I think the model is just fascinating to me. I’ve lived tangentially in that notfor-pro t space, and now the fact that I get to go whole hog, it’s just very exciting to me.”

BY CORLI JAY

STEVE CONLIN

Enrique Limón

Jacob Rubin

William Blair

Team Lightfoot disputes ‘city in crisis’ narrative

BY GREG HINZ

Arguing that Chicago is getting bad rap that at least in part is un fair, City Hall is counterattacking on a recent speech by McDonald’s CEO Chris Kempczinski, who as serted in remarks before the Eco nomic Club of Chicago on Sept. 14 that high crime levels are taking a meaningful toll on the city’s eco nomic competitiveness.

In a letter released Sept. 21, Mi chael Fassnacht, head of the city’s World Business Chica go corporate recruit ment arm, writes that Kempczinski’s take, which received nation al media coverage, was “incomplete” and that the truth of where the city stands is “complex.”

“A headline like ‘Chi cago Is In Crisis’ makes for good media copy, but it doesn’t capture the complexity of the city’s situation,” the letter says. “We can only address and solve the challenges when we are hon est about what got us to where we are and how we can work togeth er.”

e same tone—at times strik ingly candid, while defending the city—continues through the vepage note. e letter is addressed to members of the Economic Club, the leadership forum that was the venue for Kempczinski’s Sept. 14 speech.

In an interview with Crain’s on Sept. 21, Fassnacht said the idea of writing the letter was his, but he conceded he discussed it with Mayor Lori Lightfoot, who chairs

development to long-neglected neighborhoods. And it points to Chicago’s transportation and hos pitality industries as bright spots that have enjoyed a relatively quick recovery from the COVID pandemic.

Particularly notable, though, is a direct challenge to the gist of Kempczinski’s speech. e letter terms “myth” the notion that Chi cago is home to fewer headquar ters of larger corporations than it used to be, despite the departure of Boeing and Citadel in the city proper and Caterpillar in suburban Cook County.

In the interview, Fassnacht took a softer tone. Asked directly if the perception is grow ing that Chicago is too dangerous of a place to expand or attract talent, Fassnacht replied, “If you look at the nation al media, it is one of the big challenges we have . . . even if it is not entirely true or fair.”

Fassnacht ducked most ques tions about crime, saying that’s not his job. e letter asserts that, despite complaints from Kemp czinski and earlier from Citadel CEO Ken Gri n, Chicago Police Superintendent David Brown has a plan to deal with safety is sues, and some progress has been made.

e latest gures on the po lice department’s website show a somewhat di erent picture.

For instance, while the number of murders in the city is down 16% so far compared with the same period in 2021—dropping to 497 from 591—the gure re mains well above the level of other recent years and much higher than statistics in New York City and Los Angeles.

Chicago’s deteriorating reputation on the crime front.

“ ere’s a general sense out there that our city is in crisis,” he said. “ e truth is, it’s more di cult today for me to convince (a McDonald’s executive) to relocate to Chicago from one of our other o ces than it was just a few years ago. It’s more di cult for me to re cruit a new employee to McDon ald’s to join us in Chicago than it was in the past.”

‘LET US KNOW THE PLAN’

Kempczinski acknowledged that corporate Chicago has a role to play in combating crime and improving public safety. “Let us know the plan so we can support it,” Kempczinski said. “It’s going to take partnership.”

On Sept. 20, Fassnacht met with McDonald’s U.S. President and World Business Chicago board

member Joe Erlinger, CPD’s Brown and First Deputy Superintendent Eric Carter, at McDonald’s head quarters. Public safety was a topic of the conversation.

At a press conference following the Sept. 21 City Council session, Lightfoot took a jab at Kempczins ki, implying fairly plainly that the executive didn’t know what he was talking about regarding her admin istration’s public safety strategy.

“What would have been helpful is if the McDonald’s CEO had ed

ucated himself before he spoke,” Lightfoot said. “We had those pro ductive conversations with other members of his leadership team; I think you saw that McDonald’s itself put out a full page ad talking about their full support of the city of Chicago.” She added that she preferred not to “look in the rearview mirror” and instead aimed to focus on “productive engagement” with the McDonald’s team.

Client Satisfaction

the WBC board and does not need bad publicity as she embarks on what may be a challenging re-elec tion race.

e letter asserts that a record 173 companies moved to or sig ni cantly expanded in the city last year, and it contends the city “is on a similar trajectory” this year with 121 such decisions so far. e 112 companies that are entirely new to the city in the past 18 months created more than 19,000 direct or indirect jobs, it notes.

BRIGHT SPOTS

e letter also discusses at length Lightfoot’s signature In vest South/West campaign to lure

e number of report ed shooting incidents is down a little more year to date, 18%. But burglaries and robberies are up by double digits each, and the reported number of motor vehicle thefts has soared 69% so far this year.

Fassnacht’s letter suggests that businesses meet with their local police leadership to dialogue, and urges businesses not to support politicians who oppose “reason able gun safety policies.”

Asking for a show of hands during his Sept. 14 speech, Mc Donald’s chief Kempczinski asked his audience of business and civic leaders how many of them were aware of the city’s public safety plan. Few hands rose.

While a rming McDonald’s commitment to Chicago as its home base, Kempczinski de scribed the di culties created by

In an open letter, Chicago’s top job recruiter pushes back on McDonald’s CEO Chris Kempczinski’s recent public critique of the city’s crime- ghting strategy

Justin Laurence contributed.

WHILE THE NUMBER OF MURDERS IN THE CITY IS DOWN 16% SO FAR COMPARED WITH THE SAME PERIOD IN 2021, THE FIGURE REMAINS WELL ABOVE THE LEVEL OF OTHER RECENT YEARS.

Michael Fassnacht

Lori Lightfoot

Chris Kempczinski

AP IMAGES

JOHN R. BOEHM

Banks buying into Chicago area see deposits fall

In a year when overall bank deposits in the Chicago region rose 5%, Huntington, Old National and others that recently acquired local lenders apparently saw a signi cant slice of customers leave

BY STEVE DANIELS

When bank CEOs decide to sell, a signi cant slice of their customers appear to be voting with their feet on the merits of the deals.

ree acquirers in three recent Chicago-area bank combina tions all saw local deposits fall after the deals were completed, according to new Federal Depos it Insurance Corp. data. Mean while, virtually all other banks in the region saw deposits climb or at least stay level.

Chief among them is Colum bus, Ohio-based Huntington Bank, which substantially ex

deposit-share report, released Sept. 16. Read the report below.

e TCF buyout made Hun tington the 13th-largest area bank by deposits, and CEO Stephen Steinour has identi ed Chicago as a growth priority. Huntington, with branches in 11 states, most ly in the Midwest, is the nation’s 21st-biggest bank by assets.

OLD NATIONAL

Another deposit loser is Evans ville, Ind.-based Old National Bank, a newcomer to the Chica go market by virtue of its $2.2 bil lion takeover of Chicago-based First Midwest this year. Local de posits slipped 4% to $12.3 billion from $12.8 billion.

And the June 30 snap shot came before the messy systems conver sion in July, which an gered many First Midwest customers and had some vowing over social media to change banks.

view State Bank and Busey’s combined deposits in the market of $2.28 billion.

In a statement, Old National President Mark Sander attribut ed the deposit erosion to broader trends rather than a reaction to the deal.

“Post-COVID, large markets have seen a substantial geo graphic realignment, which has disproportionately impacted banks that emphasize commu nity relationships,” he said. “Old National Bank has performed well relative to population trends, even as customers are tapping into liquidity, thus diminishing deposits.”

Representatives of Huntington and Busey didn’t respond to re quests for comment.

Overall, deposits in the area rose 5% to $569 billion. From mid-2020 until mid-2021, local deposits spiked 10%, a reaction to the pandemic as consumers and businesses socked away cash.

ending June 30. JPMorgan Chase remains the market leader, with 24% market share. It’s followed by BMO Harris Bank and Bank of America, with 15% and 11%, re spectively.

Rosemont-based Wintrust Fi nancial is the fourth-largest de posit holder. Its $40.3 billion in local deposits was up 10% from $36.6 billion. ( ose are the sum totals for all of Wintrust’s sep arately chartered banks in the market.)

panded its local presence with last year’s $6 billion acquisition of TCF Bank. Huntington’s de posits in the six-county area fell 8% to $8.9 billion as of June 30 from $9.7 billion the year before, according to the FDIC’s annual

e third is Champaign-based Busey Bank, which bulked up in the region with its $191 million buyout of Glenview State Bank last year. Busey’s local deposits were $2.19 billion on June 30. at was down 4% from Glen

Bank competition for deposits is quickening now, with custom ers nding higher-yield options for their cash due to the rapid rise in interest rates.

Chicago’s pecking order of top banks didn’t change in the year

CHASE GAINS

Chase also was a big winner, boosting its local deposits by 10% after excluding holdings in its Chicago main branch, which contains corporate deposits big

banks often shift between o ces.

Fifth largest was Chicago’s Northern Trust, which focuses on wealthy individuals and insti tutions and isn’t the retail bell wether the others are.

After an active 2021, bank merger activity largely has stalled out this year. e in ationary environment and the Federal Reserve’s aggressive campaign to boost interest rates in re sponse explain the drought. In addition, banks are leery of the potential for recession.

Chicago in recent years has watched one after another locally based bank sell to an out-of-town institution, leaving Wintrust as the sole remaining commercial bank of size still based here.

Weed-license winners sue state over ownership rules

BY JOHN PLETZ

e seemingly never-ending saga of the state’s new pot-shop licenses is back in court.

Two winners of retail marijua na licenses who previously sued the state over alleged aws in its application process are suing again. Having won retail licens es in lotteries, they’re suing the Illinois Department of Financial & Professional Regulation over rules that forbid licensees to sell those licenses or equity stakes in them until they build out their dispensaries and win nal ap proval.

e state’s rule has been con troversial, drawing criticism from license holders who say it’s pre venting them from raising cap ital they need to open their pot shops.

Haaayy and WAH Group sued the department in Cook County Circuit Court on Sept. 20, claiming the state’s cannabis law doesn’t prohibit the sale of licenses nor does it prohibit management service agreements with others to operate or help get stores up and running. ey’re seeking an injunction to prevent the depart

ment from enforcing its rules. A hearing is set for this week.

In its lawsuit, Haaayy said the state’s rulemaking cost it a $5 mil lion o er to purchase its license.

WAH Group said three purchase o ers for one of its two licenses were withdrawn after state reg ulators published guidance that precluded ownership transfers.

At the heart of the dispute is one of the quirks in the Illinois cannabis-licensing framework.

Under the law, the state issues a “conditional” license to open a retail shop, with a nal license awarded after the dispensary has been built out and passes nal inspection by the state regulatory department to open.

e department, however, says conditional licenses can’t be sold, and those who are awarded licenses can’t add new owners beyond those who were included in their original applications un til the nal license issued.

“( e law) does not autho rize the department to approve changes of ownership during the conditional-license period,” a state spokeswoman said in a statement. “ e administration is committed to supporting ap

plicants who were awarded a conditional license based on their application submitted in the competitive-scoring process.”

e lawsuit underscores one of the issues that has bedeviled the new marijuana law from the start. It was designed to increase diversity in the marijuana busi ness, which had been dominated by large, predominantly whiteowned companies.

RULES ISSUE

Gov. J.B. Pritzker and lawmak ers have wrestled with how to allow minority license winners to cash in on their good fortune while ensuring that out-of-state companies don’t buy their way into the market and out-muscle those applicants who make a go of operating retail stores.

Deputy Gov. Christian Mitch ell, who has been a point person on cannabis for the administra tion, said during an interview with WTTW this month: “On the one hand, you’ve got owners who are saying, ‘Hey, we want to change principal o cers so we can raise capital right now because we need it,’ ” he said. “On the other hand, you have

pretty much an equal number of folks saying, ‘Hey, wait a sec ond. We’ve got principal o cers who have been holding this for a couple of years; they’re people of color; we want that growth in this industry.’

“What we don’t want is some of these predatory folks who are coming in and saying, ‘Hey, I’ll give you some cash, but you’ve got to give me a majority stake in your business.’ ”

Scores of lawsuits have been led throughout the process that began when the Legislature le galized recreational marijuana three years ago.

Haaayy and WAH Group sued the state over its initial licens ing rules, which awarded extra points to applicants who were military veterans. ose points ended up being crucial when the state resorted to lotteries because of so many high scores.

A Cook County judge ruled their argument had merit and prevented the state from issuing licenses. When the judge retired, the case was in limbo, holding up the process until WAH Group, which successfully challenged the application scoring and won dispensary licenses in lotteries, dropped the litigation.

The plainti s claim regulatory requirements designed to boost diversity in the industry’s ownership ranks have sti ed access to capital, stymied store openings and, in one case, upended a multimillion-dollar deal

CHICAGO IN RECENT YEARS HAS WATCHED ONE AFTER ANOTHER LOCALLY BASED BANK SELL TO AN OUT-OF-TOWN INSTITUTION.

BLOOMBERG

GETTY IMAGES

Huntington, with branches in 11 states, mostly in the Midwest, is the nation’s 21st-biggest bank by assets. It expanded its local presence with last year’s $6 billion acquisition of TCF Bank.

Struggling bar, restaurant workers say customers are tipping less due to inflation

 INFLATION COMES TO DINNER

they are bringing home less mon ey in tips in recent months. The phenomenon is not universal— some restaurant operators say tips at their establishments are holding steady or increasing along with menu prices. Still, al most one-third of Americans are tipping less when they dine out because of inflation, according to a recent survey from online lending marketplace Lending Tree. More than two-thirds say they are dining out less, too, and smaller crowds equal fewer tips.

Most restaurant workers rely on tips to make ends meet and losing that income at a time when their cost of living has soared is doubly painful. Some are picking up extra shifts or working ad ditional jobs to make up for the losses and cutting back on their own spending. Others, including Del Vecchio, say they are consid ering leaving the industry alto gether.

For restaurant owners, that is a kick while they are already down. Illinois lost 300,000 of its 629,300 leisure and hospitali ty workers when COVID-19 hit in spring 2020, according to the U.S. Bureau of Labor Statistics. It is still rebuilding. The most recent count estimates 585,200 workers were employed in July. Many restaurants remain shortstaffed, struggle to attract new workers and face their own soar

Paying

Seeking

Opting for more fast other

Opting for more takeout reduce

Eating a snack at appetizers

Started using a dining-focused

Source: LendingTree

But the situation may soon call for it, Mallick says. Recent ly, a party of 15 diners at Bar Goa tipped $20, or about $1.50 per person. Mallick says the av erage tip at his restaurants has dropped to 17% from 20% in the last six months.

“People want to go out, then they get sticker shock,” Mallick says. “ e easy way to cut is” the tip.

BUDGETING

From a diner’s perspective, the costs of eating out have in creased in recent years. Some restaurants added extra COVID charges during the pandemic that became permanent fixtures as their operating costs went up. Even before inflation struck hard, restaurants were dealing with supply-chain is sues that drove up in gredient costs. Then inflation caused them to bump up menu prices.

should tip bartenders $1 to $2 per drink, or 15% to 20% of the tab.

The majority of customers do still tip properly at Chica go restaurants, says Sam Toia, president and CEO of the Illinois Restaurant Association. In such cases, tips are actually up, along with the menu prices. But not all diners have taken the menu price hikes in such stride.

There are some customers “that will say, ‘Screw this, prices are up, I’m not leaving as good of a tip,’” Toia says. “I’d be lying to you if I said otherwise.”

Stacy Donohue is giving it un til the end of the year. If the tip ping situation doesn’t improve by then, the 41-year-old plans to leave the restaurant industry.

Donohue works two jobs— bartending at Cody’s Public House and bartending and serv ing at indoor golf course X-Golf Wrigleyville—and occasionally bartends at festivals. She logs 50 hours most weeks, and brings

home $1,100 to $1,300 in tips. She used to work just one job at a Wrigleyville bar that closed ear lier this year, clocking 15 hours less a week and bringing home $500 more in tips. It doesn’t make sense to work more hours for less, she says.

“I’m not making the money that I was making, and also it’s incon sistent,” she says. “I have to nd another avenue to get the money.”

LUXURY OF THE

ing costs. Owners say they can’t afford to cover the loss of tips with higher wages, and without proper tips, the open positions could seem less appealing to po tential candidates. It’s a vicious cycle—staff shortages can result in poor service, giving diners one more reason to withhold tips.

‘RUDE AWAKENING’

“(Customers) are not as good of tippers as they used to be be cause they’re finding an excuse to not tip well,” says Nicole Fleva ris, owner of Kinzie Chophouse. “When there’s no one left in the service industry, they’re going to find a very rude awakening.”

The River North steakhouse instituted an automatic gratuity of at least 20% for parties of six or more after COVID hit, to ensure servers were getting paid. Peo ple continue to balk at it, Fleva ris says. “Pocketbook issues are front and center.”

Nearby, Manish Mallick is con sidering adding a minimum gra tuity for a certain party size at his restaurants, Bar Goa in River North and Rooh in the West Loop. Yet he worries doing so might turn away business. He already raised menu prices at least 10% across the board to o set in ation.

The cost of food away from home was up 8% year over year in August, according to the U.S. Bureau of Labor Statistics’ Consumer Price Index. People were willing to absorb some of the increased prices for a while, because there was pent-up demand for dining out after pandemic closures and they had extra money from stim ulus checks, says Mike Graziano, consumer products industry se nior analyst at accounting firm RSM U.S.

“The longer (inflation) goes on, the less willing people are to spend their money,” he says.

Typically, people have a bud get for how much they plan to spend on a meal at a restaurant, says Abigail Sussman, a profes sor of marketing at the Univer sity of Chicago Booth School of Business, who has studied how consumers respond to price in creases. If the total comes in below their set number, they’ll likely tip more generously. If not, they could skimp on the tip. Con sumers are likely making other choices to keep their total down too, like ordering one glass of wine instead of two, or eating out less, she says.

The appropriate tip for sitdown meal service is 15% to 20% of the total bill, pretax, according to the Emily Post Institute, an et iquette organization. Customers

Advertising Section

MOST RESTAURANT WORKERS RELY TIPS TO MAKE ENDS MEET AND THAT INCOME AT A COST OF LIVING HAS SOARED IS DOUBLY PAINFUL.

The appropriate tip for sit-down meal service is 15% to 20% of the total bill, pretax, according to the Emily Post Institute, an etiquette organization.

BLOOMBERG

When is a newspaper not a newspaper?

We live in a time when indepen dent, nonpartisan journal ism is increasingly rare—and more necessary than at any other moment in living memory.

With shouts of “fake news” echoing in their minds, people who care about the world around them and the fate of our frag ile democracy find it harder than ever to find trustworthy sources of verified, unbiased and balanced information. In other words, journalism. Which is why it’s disappointing to see the leaders of one such news orga nization—the Daily Herald—make a move that blurs the line between fact and fiction.

The newspaper and its owners, Paddock Publications, are now taking steps to undo the reputational damage created when its commercial printing division struck a deal to print and help distribute faux newspa pers created by conservative activist Dan Proft. As Crain’s has reported, these printed products, masquerading as real journalism, have been turning up in mailboxes around Illinois lately.

Mimicking the look and feel of actual newspapers, these publications, sporting names like “Chicago City Wire” and “West Cook News,” make inflammatory claims about the policies of Gov. J.B. Pritzker, May or Lori Lightfoot and other public officials, complete with splashy headlines on flash point topics ranging from cash bail and crime to property taxes and COVID policy. In short, they are propaganda. And when these publications started hitting the street,

there was reason to wonder where they came from and who was paying for them. Their pages contained next to no such dis closure.

It eventually came to light that these im itation newspapers were being printed by Paddock Publications’ commercial printing arm and distributed with a postage permit registered to Paddock.

Predictably, a kerfuffle ensued, prompt ing the governor to pull out of a candidates’ forum being hosted by Paddock’s Daily Herald. Within hours of the governor’s move, Paddock’s owners issued a letter to readers announcing that it was severing its ties to Proft’s Local Government Infor mation Services. Paddock’s letter eventu

ally proved persuasive enough to change the governor’s mind about attending the forum—though the letter seemed more in terested in scolding observers than explain ing why the leadership of a legitimate jour nalistic organization would have agreed to print and circulate this sort of product in the first place.

“Many critics cannot or refuse to differ entiate between a commercial printing op eration . . . and the Daily Herald’s editorial mission to be unbiased and fair,” the letter states, without addressing the still-unan swered question of whether LGIS mailed these materials on Paddock’s dime. “The perception for some has become that the Daily Herald favors one party over another

YOUR VIEW

and by printing for LGIS, it’s somehow pro moting its message. That is not true.”

Actually, producing and apparently pro viding postage for this stuff is pretty much the definition of promoting this message. And, to be clear, the look would be just as bad if Paddock had printed and lent its post al permit to sham newspapers that amount ed to unlabeled ads for Pritzker or Lightfoot.

We’re not talking about slick pamphlets, brochures or posters here—the kind of ma terial that voters are accustomed to finding in their mailboxes, stuck into their door jambs or pressed into their hands as they run for the train during campaign season. We’re talking about deceptively designed mailers that are clearly meant to simulate newspapers—printed and evidently dis tributed by a company that, however incon veniently in this case, happens to be in the news business.

That juxtaposition is a particularly un helpful one for the entire profession as journalists try to do what they do against challenging headwinds. Real journalists ask tough questions, hold power to account, correct the record when they get things wrong, and report only what they know— based on honest reporting and clear-eyed analysis—to be true. Journalism is a pub lic trust. And as “The Journalist’s Creed,” a time-honored declaration first published by the Missouri School of Journalism more than a century ago, puts it: “Acceptance of a lesser service than the public service is a betrayal of this trust.”

To solve labor shortage, construction must rebuild

The construction industry needs a wake-up call, be cause the supply chain isn’t the only thing that’s broken. A se vere workforce shortage is upon us and fixing it won’t be easy.

In fact, we may need to break some things before we can build.

Addressing the shortage and at tracting and retaining generations Y, Z and beyond will require break ing with tradition: traditional path ways, workplaces and approaches to building. We need to create new roads into the profession so we can bolster and diversify the pipeline.

While the pandemic has given us a glimpse of the impact of a labor shortage in the indus try, a far more serious shortfall is underway. According to a February Associated Builders & Contractors analysis, the industry will need “nearly 650,000 additional workers on top of the normal pace of hiring in 2022 to meet the demand for labor.” And nearly a half-million more will be required in 2023.

The next generation will require convinc ing that this is a profession that offers oppor tunities to thrive, and those opportunities

must be accessible and inclusive. The bottom line, too, must evolve beyond the profit margin and encompass societal impact.

Younger talent is looking for “The Big Why?” While earnings matter, how profits are made matters just as much. Companies need to demonstrate a commit ment to social impact. For Gil bane Building, this means build ing more than buildings. It means being dedicated to sustainability, investing in our people, creating economic opportunity and forging mean ingful relationships one hospital, one school and one community-based project at a time.

To build that network and advance good work, we need to attract employees to the field. At every level, the industry needs to be more thoughtful about creating pipelines for a diverse workforce. Gilbane recently announced a commitment to generate $4 billion in awards over five years to certified minority- and women-owned businesses, disadvantaged, LGBTBE and veteran-busi ness enterprises.

We also need to inspire interest in the bur

geoning workforce. Programs that introduce careers in construction in K-12 are a good start, and many exist. For example, the ACE Mentor Program offers valuable experiential learning and clearer pathways into the pro fession. Since Gilbane started working with ACE’s Chicago chapter in 2000, we have en gaged more than 3,500 students from 36 Chi cago Public Schools to hands-on workplace experience, with more than 90% from histor ically under-represented groups. It’s a good start, but we need more.

We must offer second-chance entry points for individuals considering a career change and provide the support needed to succeed. I speak from experience. After dropping out of college, and without much direction, an opportunity door was opened for me with Gilbane. It didn’t take long for me to see a possible future. I went back to school and earned my degree at night while work ing during the day. Many of my classmates struggled to balance school, work, bills and families. We need to make it easier for future talent from nontraditional paths—in the trades and on the business-side—to persist.

Every pathway must be valued and indi viduals celebrated for their distinct perspec

Write us: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited. Send letters to Crain’s Chicago Business, 130 E. Randolph St., Suite 3200, Chicago, IL 60601, or email us at letters@chicagobusiness.com.

Please include your full name, the city from which you’re writing and a phone number for fact-checking purposes.

tives. For many years, I didn’t appreciate that my “nontraditional” path to leadership in the industry was an asset. While colleagues discussed their more expected routes to the profession, I would avoid telling my story. I felt it was something to hide.

Today, I know that my experience is a strength. I also know the key to high-per forming teams and workplaces is bringing together individuals who offer diversity across every dimension: race, gender, eth nicity, culture and background.

And while it may seem obvious, creating truly diverse teams requires intention. We tend to be attracted to people like us, with shared experiences and ideas. Bringing to gether alternative viewpoints and perspec tives can be challenging, yet it is how we develop the best solutions, drive innovation and foster outcomes far beyond what we had previously imagined was possible.

The construction industry excels at break ing down structures to build anew. It’s time for the industry to bring the hammer down on some of the traditional approaches, prac tices and norms that will only limit growth.

Let’s get comfortable with getting uncom fortable. The future demands it.

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

Karrie Kratz is a Chicago-based vice president of Gilbane Building.

Put a lid on council members’ salaries and side gigs? That’s a start.

News of a proposed city ordinance to cap raises for aldermen and limit their side jobs sparked a social media conversation between Crain’s readers and recently re tired Chicago Inspector General Joe Fer guson—with the measure’s sponsor, Ald. Andre Vasquez, 40th, also chiming in. Join us on Twitter and keep the conversation going.

Marginal probity only after accepting a 9% raise and addressing only side gigs the lead sponsor does not himself pursue. ere should NEVER be an automatic es calator on legislator’s salaries, (same for property taxes). Another more for me, less

CRAIN’S

for thee “reform.” (re)Chicago. — @JoeFergChicago

speak. As someone who was steeped in the calcium themselves for a while, I know you understand that also! — @Andrefor40th

equip them with the authority and pay them accordingly. —@JoeFergChicago

ere aren’t any side gigs I do pursue, to be fair.

— @Andrefor40th

So stipulated and perfectly fair, Andre. Time for us all to stop nibbling and go to the core, holistically, with you now expe rientially steeped in the city’s dysfunction as a product of calci ed structural arti facts that slow our ability to meet a future that is now. — @Jo eFergChicago

Agreed and why this turnover in the coun cil presents the opportunity to dig in, so to

Would you suggest limits on all side gigs up to a certain monetary amount? Or $0 side gigs and turn alder into full-time po sition?

— @miriamcb Replying to @JoeFergChicago

Something to be examined. What is it we want alders to be doing? A question for a public commission on a municipal charter, which Chicago alone among major cities lacks. If we want full-time legislators, then

I like to start with a few good examples to help me evaluate things. Like, for an anticorruption measure, “How would this have a ected Ed Burke?” — @mosermusic

e side gig thing is ne. ere just needs to be more oversight, as in not having legal clients who also are seeking permitting in the city. Also getting rid of the scandal-ridden practice of alderman ic privilege. With every additional layer of government, there’s corruption.

— @latteconsrtve

Deerfield hotel owner looking to cash out

BY DANNY ECKER

A Chicago developer that re vamped a full-service hotel in north suburban Deer eld before the COVID-19 pandemic rocked the hospitality sector has put the property up for sale, a test of in vestor appetite for big suburban hotels as travel demand recovers.

A venture of Phoenix Develop ment Partners has hired brokerage Berkadia Hotels & Hospitality to sell the 300-room Hyatt Regency Deer eld at 1750 Lake Cook Road, according to a marketing yer.

ere is no asking price listed for the property overlooking the inter section of Interstates 94 and 294, which the Phoenix venture bought in 2018 for $31.5 million.

Phoenix spent an additional $14 million renovating all the hotel’s rooms, according to the yer, a project it completed in 2019. But the payo from that investment was upended after just six months, with the onset of the public health crisis bringing travel and big group events to a prolonged halt. Now Phoenix is looking to cash out, framing the hotel as an opportuni ty for a buyer to capitalize on the

revamped rooms as e ects of the pandemic subside.

e listing will show how inves tors feel about the health of the north suburban hospitality market, an area that has historically ben e ted from business travelers tied to a long list of nearby corporate headquarters. e Hyatt Regency Deer eld is next to the Walgreens Boots Alliance headquarters and across the I-294 tollway from the campuses of Horizon erapeutics and Baxter International, the types of demand generators that Phoe nix cited as key reasons for buying the property in 2018.

But corporate travel and group business demand have come back at a much slower rate than leisure travel over the past year, extending the pain for hotels like the Hyatt Regency Deer eld.

UPTICK

Among hotels in Lake County, revenue per available room aver aged $63 year to date through Au gust, according to hospitality data & analytics rm STR. at metric, which accounts for both occupan cy and room rates, was up 44% from the same period last year, but

Shape His Future. And Yours.

Genesys

Together,

Together,

still below the $72 year-to-date av erage through August 2019.

Phoenix CEO John Mangel said the ownership venture could opt to hold on to the property, “but we want to take the temperature of the market,” he said.

Mangel did not provide any expectations on pricing for a po tential sale. Multiple investors fa miliar with the hotel said they ex pected bids to come in close to the $32 million that the Phoenix ven ture paid for it, but far less than its total investment in the property.

e hotel generated $929,063 in net operating income in 2019 before the pandemic crushed de mand, the yer said.

e Deer eld o ering follows two of the biggest suburban hotel sales since the start of the pan demic. A venture led by Oklaho ma-based real estate investor Mark Be ort paid $30 million earlier this month for the 408-room Westin Chicago Northwest in Itasca, ac cording to DuPage County prop erty records, while a Be ort entity also paid about $34 million late last month for the 269-room Hilton Orrington hotel in Evanston.

ose deals illustrated the dec

imation of value for full-service, suburban hotels, though both sales resolved pending foreclosure lawsuits and both properties need heavy investment to make them competitive.

FINANCING

Phoenix nanced its 2018 acqui sition with an $18.9 million loan from New York-based Ares Com mercial Real Estate. An Ares-led venture also owned the property before selling it to the Phoenix venture. An Ares spokesman de clined to comment on the listing.

In addition to playing up Phoe nix’s renovation work, the Berkadia yer highlights the Hyatt Regency’s

location in Lake County, meaning it’s not subject to the property tax increases hitting many Cook Coun ty hotel owners in the wake of re assessment hikes by Cook County Assessor Fritz Kaegi.

Berkadia also noted that a buyer could bring in new management for the property, as the hotel’s cur rent agreement with Arlington, Texas-based Aimbridge Hospitali ty runs through April 2023.

Phoenix has also planted its ag in the downtown hotel mar ket, where it recently convert ed a 117-year-old former o ce building across the street from Willis Tower into a 350-room, du al-brand Hilton complex.

Sterling Bay plans big apartment building next to Lincoln Yards

The Chicago developer would construct the 359-unit, 15-story building on Kingsbury Avenue, along the eastern edge of the North Side megaproject

BY ALBY GALLUN

e developer of the Lincoln Yards megaproject on Chicago’s North Side is taking another step forward, teeing up plans for a 15-story apartment building on the development’s eastern edge.

A Sterling Bay joint venture wants to construct the 359-unit building on a vacant property at 2031-2033 N. Kingsbury Ave. that it acquired from steelmaker A. Finkl & Sons in 2016, according to a zon ing application led with the city.

e property is just outside the boundary of Lincoln Yards, a col lection of o ce, residential and lab buildings planned along the North Branch of the Chicago River west of Lincoln Park. Approved in 2019, the $6 billion project stretch ing from North to Webster avenues is just getting underway, with its rst building, an eight-story life sciences facility across the river, opening next year.

e property also is just south of a site where Sterling Bay wants to con struct a nine-story apartment build ing that would be the city’s tallest mass-timber structure constructed since the Great Chicago Fire.

Sterling Bay plans multiple of ce towers within Lincoln Yards, but apartments are easier than o ce buildings to develop these

days. Apartment rents are at re cord highs, and lenders are still ea ger to nance multifamily projects, though rising interest rates haven’t helped. But o ce space is in low demand these days as many pro fessionals work remote or hybrid schedules.

Chicago-based Sterling Bay would develop the apartment building in a joint venture with Dallas-based Lone Star Funds, one of its partners in the Lincoln Yards project. e building would be more horizontal than vertical, stretching across a long, thin lot directly across the street from Lin coln Yards, according to the zoning application.

Once part of a gritty industri al neighborhood, the block and those around it are poised for a residential transformation in the coming years. Just behind the de velopment site on Clybourn Ave nue, a development group plans to convert the former headquar ters of the Anixter Center into 136 apartments. Within a subsection of Lincoln Yards directly to the west, Sterling Bay plans four residen tial buildings totaling about 1,800 units, the tallest rising 595 feet.

“ e demand for multifamily housing across Chicago continues to grow, and 2031 N. Kingsbury sits at the cross section of sever

al of Chicago’s most populated communities like Lincoln Park, Bucktown, Wicker Park, as well as the future site of Lincoln Yards,” a Sterling Bay spokeswoman wrote in an email.

Designed by Pappageorge Hay mes Partners, the building on Kingsbury would rise 168 feet, ac cording to the zoning application for the project. e Sterling Bay needs the City Council’s approval for the building, which is not al lowed under current zoning.

To comply with the city’s A ord able Requirements Ordinance, the project would include 36 units set aside for low- and moderate-in come renters, according to the document. e Sterling Bay ven ture would also pay $5.1 million into a city a ordable housing fund.

A Chicago developer that revamped the Hyatt Regency in the northern suburb just before the pandemic tests how investors feel about the recovery of big suburban hotels

COSTAR GROUP

STERLING BAY

A rendering of Sterling Bay ’s planned apartment building at 2031-2033 N. Kingsbury Ave.

The Hyatt Regency Deer eld at 1750 Lake Cook Road.

EQUITABLE HEALTH

FITNESS DESERTS: areas where exercise options are inequities

REAL MEDICINE: Why hospitals panacea to communities

STATISTICS: Where Chicago ranks among U.S. cities on expectancy gaps.

BY KATHERINE DAVIS

Nestled on a leafy street and surrounded by multifamily buildings, a former hotel in Oak Park provides shelter for patients of Cook County Health with nowhere to go after receiving medical treatment. e Recuperation in a Supportive Environment Center, or RISE Center, came about during the early days of the COVID-19 pandemic, when Cook County Health was seeking ways to shelter homeless residents sick with the virus.

rough a partnership with homeless nonpro t organization Housing Forward, and with help from federal funding, Cook County Health set up 19 beds across 15 rooms for individuals and small families, who can stay for free as long as they need. In its rst year of operation, the RISE Center housed 110 people, says Cook County Health, which operates John H. Stroger Jr.

and Provident hospitals and is one of the Chicago area’s largest public, safety-net health systems.

e RISE Center is still in operation, providing a place for housing-insecure patients to recover from medical conditions and substance use disorders and eventually nd their way to a permanent home. While providing housing doesn’t sound like traditional health care, Cook County Health considers the RISE Center one of its many programs aimed at addressing the root causes of health inequities in the region among those of di erent races, neighborhoods and incomes, says Shannon Andrews, chief equity and inclusion o cer at Cook County Health.

“We believe that health is a funda-

In ation and worker shortages become a drain on nances at Chicago hospitals—and could hamper progress on achieving equitable care

MENDOLA, BLINDSALIDA MARGINS

A spoonful of fitness helps the ailments go down

Lawndale Christian Health Center and Malcolm X College aim to change health outcomes by getting people moving

BY CASSANDRA WEST

Where lack of green space, safe streets and access to healthy food intersect, chances are residents are more prone to developing chronic conditions such as diabe tes and cardiovascular ailments.

In Chicago’s more a uent ar eas, tness clubs, yoga and Pilates studios, spin centers and stores stocked with fresh vegetables aren’t hard to nd. Take Logan Square: e 3-square-mile area, with a median household income of $84,653, has more than a dozen commercial gyms, and its lowfood access rate is so negligible that it doesn’t register visibly on the Chicago Health Atlas chart.

A few miles away, in the North Lawndale neighborhood on Chi cago’s West Side, walkable green space is sparse, only 35.4 % of adults report that they feel safe in their neighborhood “all of the time” or “most of the time,” and 21.9% of residents have low access to food, according to the Chicago Health Atlas. e most recent data on adult obesity in the neighbor hood showed a rate of 58%, com pared to the rest of Chicago at 33.2%.

While the arguable term “food desert” is often used to describe communities where a large per centage of residents have little to no access to healthy foods, “ tness

desert” is how a Men’s Health arti cle described areas with “few if any places to work out.” Fitness inequi ty may not get as much attention as other socioeconomic di erences, but it’s just as real. Where people have fewer opportunities to engage in physical activities—even leisure ly walking—health concerns are more pronounced.

Aware of the health risks in his North Lawndale community, Dr. Wayne Detmer, chief clinical o cer of operations at the Lawndale Christian Health Center, or LCHC, and other clinicians knew a di er ent approach was needed.

“If we were really concerned about the well-being of folks in our neighborhood, we were going to have to think outside of the exam room walls,” he says. “We had to think about what everybody talks about these days, the social deter minants of health.”

e facts are sobering, Detmer explains. “ e statistics on the West Side are similar to statistics and neighborhoods around our city, where, because of the lack of resources, we have poor access to healthy food. We have housing that is subpar.”

North Lawndale also has a rate of diabetes that is 50% higher than the national average, and 41% of its residents have high blood pres sure, according to Detmer.

Several years ago, LCHC, which

serves a patient population that is 50% Black and 50% Hispanic, de cided to take a di erent approach. Rather than address medical problems with a pill, the center introduced lifestyle changes to improve health. Because diabe tes, heart disease and high blood pressure are directly related to what people eat—and how much they move—LCHC actually writes prescriptions for vegetables and tness through its Veggie Rx and Fitness Rx programs.

“Our providers are getting used to this idea of writing prescrip tions for vegetables, which they didn’t teach us in medical school,” Detmer says. “We’re now writing prescriptions for exercise, and we’re trying to break down any nancial barriers that folks might have.” Monthly membership at LCHC’s 60,000-square-foot Health & Fitness Center costs $15. For

Fitness Rx patients, need-based memberships are free.

Veggie Rx, developed with the Chicago Botanic Garden and the University of Illinois Chicago’s Chicago Partnership for Health Promotion, started in 2016. A few years later, LCHC introduced Fit ness Rx. e former helps patients with diet-related diseases who are also food insecure; the latter helps patients take control of their health in a safe exercise environment.

Similarly, at Malcolm X College, Roy Walker, executive dean of the health sciences programs, sought to “improve people’s conditions through education empowerment and motivation” around tness.

“Someone’s got to be a cham pion of this cause,” Walker says about creating a personal tness training program at the Near West Side campus. is was around the time he was working with several

physicians on incorporating nutri tion and physical activity counsel ing into their practices as a means to address comorbidities. “We know that inequity still exists in health care and health care service delivery,” he adds.

Workforce development may be key to Malcolm X’s educational of ferings, but Walker looks at it more holistically. “ e tness industry has kind of gotten a bad rap be cause people like to see beautiful bodies and all the other biases and perceptions that are tied toward that,” he says. “It’s not about the physical appearance of someone; it’s about the activity.”

at motivated Leticia Rodri guez, a Malcolm X sta member, to take the personal training class es as a health preventive measure. “I had been sitting a lot and gained weight, and I didn’t want it to get out of hand and get diabetes.”

City works to close health gaps at the neighborhood level

Among Chicago’s 2.7 million city residents, af fordable housing, access to quality health care, and other healthy living essentials are not equi tably distributed. Often, minority communities are the rst to fall behind.

In 2017, Chicago’s white residents were ex pected to live 8.8 years longer than their Black neighbors. Data from the Chicago Department of Public Health shows that the COVID-19 pan demic widened this disparity in life expectancy to 10 years. Today, Chicago’s Black residents’ lifespans average fewer than 70 years.

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

Chicagoans feel health ier than minority res idents: Nearly 6 in 10 white city residents (59%) described their personal health as be ing very good or excel lent—more than twice the number of the city’s residents of color who answered the same way (27%). Even more dis turbing, almost a quar ter (22%) of the city’s residents of color de scribed themselves as having only fair or poor health, versus 12% of white resi dents who said the same.

Windy City residents under stand this gap instinctively. White

Addressing the health issues that plague non-white communities through the health care system alone often fails to remedy the underlying

root causes—a fact that Chicagoans also instinctively understand. Poor health outcomes often result from other factors that must be dealt with separately. Inherent social issues often trigger minority communi ties’ health concerns, which is no doubt why city residents recognize that social programs are needed, in addition to medical treatment fa cilities to x pressing public health issues, including e orts to address public safety (81%), mental illness (76%), housing insecurity (72%), substance abuse (66%) and food in security (57%).

Nearly all city residents surveyed by e Harris Poll believe these

inequities should be addressed at the policy level, with most looking to city (43%) and state (24%) leg islators to take charge. Chicago’s leaders acknowledge that the city is undergoing a signi cant pub lic health crisis. In response, the city’s Department of Public Health launched Healthy Chicago 2025, a ve-year initiative intended to shrink the city’s racial life expec tancy gap. Healthy Chicago 2025 holistically addresses health ineq uities, prioritizing increasing access to a ordable housing, healthy food, public health systems and strength ening public safety.

Chicago residents with similar socioeconomic and ethnic back grounds typically live in the same areas of the city. But while most white residents (79%) agree that their neighborhood has the re

sources they need to live a healthy life, this decreases to 57% among residents of color. Residents’ dis similar perceptions of resource availability highlights the hyperlo cal nature of residents’ experiences and resource allocation.

To address these varying health and resource needs across di erent neighborhoods, Healthy Chicago 2025 divided the city into six re gions, dubbed Healthy Chicago Eq uity Zones. is approach should allow community leaders to tailor their solutions to each area’s partic ular challenges.

e Healthy Chicago 2025 plan has three years left and could be the prescription needed to address the city’s health inequities. If it falls short, however, a new approach to erase the growing racial health gap will be necessary.

An exercise class at Lawndale Christian’s Health & Fitness Center.

Hospitals alone can’t remedy health inequities

A ordable housing and health insurance reform are just two elements of a comprehensive approach, policy advocate says

BY KATHERINE DAVIS

While a key piece of achiev ing health equity, the activities of hospitals and other care pro viders make up only a “sliver” of what in uences someone’s over all health, argues Wesley Epplin, policy director for the Health & Medicine Policy Research Group.

Access to a doctor, treatment and medication is crucial during a health crisis, but many other factors, like housing, food, in come and neighborhood, dra matically influence someone’s health before they ever need to reach a hospital, Epplin ex plains.

On behalf of the Health & Med icine Policy Research Group, an independent nonpro t that researches and advocates for health policy changes, Epplin pushes for action that promotes health equity broadly, concepts like expanding a ordable hous ing, reforming health insurance

and diversifying workers in the health care industry, among other things. And he says hospi tals have a responsibility to help make progress on these issues, too.

Epplin spoke with Crain’s about the important role hospi tals play in achieving health eq uity and, more importantly, what they could be doing better. is interview, which includes both spoken and written text, has been edited and condensed for clarity.

CRAIN’S: More Chicago-area hospitals are launching pro grams aimed at addressing the root causes of health equity. What do you think about what we’ve seen so far?

EPPLIN: It seems as if there’s more of a focus on it. Whether or not that’s been effective is a dif ferent question. I am glad to see commitments from hospitals . . . but we need them to do more.

Like what?

Nonpro t hospitals need to make their obliga tions to be charitable and provide free and reduced-cost care to people who otherwise would not receive care. Given their nonprof it status, they don’t pay property taxes. Nonpro t hospitals need to make the property tax ex emption granted them worth it to local taxpayers in terms of pro viding a public bene t. Providing su cient free and reduced-cost care—to support people’s hu man right to health care—is the bare-minimum standard for non pro t hospitals.

What can hospitals do to make sure patients of all back grounds get the best care?

Hospitals need to make sure that at every level, their workers re ect the communities served, so that means real investment into hiring from communities who have been systematically exclud ed from health careers through

systemic inequity in such areas as educa tion. Hospitals must assess how medical rac ism and other structural inequities pervade their institutions and active ly dismantle the ways these inequities show up in diagnosis, treat ment, and interactions with both patients and workers.

From your lens, what have hospitals been getting right about their approach to health equity?

One helpful thing we’ve seen from some hospitals in terms of health equity is investment in community health workers, who are health work ers from a given community being served with training and educa tion to support the health of their communities. Community health workers have relationships with the community and share the culture and language. us, they

can often successfully reach peo ple with health information.

You say that health care is only one piece of the health equity challenge and that things like housing, education, income, job opportunities and so much else also contribute to poor health. Can you explain what you mean?

e risk we run as a society is fo cusing too much on health care and not on community condi tions. We really have to think about how community condi tions either contribute to health or detract from health and harm people’s health. We often don’t think about the things that hap pen before somebody ever needs health care that shapes people’s health trajectories. Everything that we encounter impacts our health.

SUFFICIENT FREE AND REDUCED-COST CARE IS THE BARE-MINIMUM STANDARD FOR NONPROFIT HOSPITALS.

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

Wesley Epplin

mental human right, and this goes beyond having access to medical care,” she says. “When you leave the health care establishment is oftentimes when the hard work be gins.”

Lance Brooks is a current res ident at the RISE Center. Earlier this year, the 30-year-old lost his apartment and began living at Pa ci c Garden Mission, a shelter on Chicago’s Near South Side. Soon after, he developed strep throat, which led to septic arthritis in his right knee. After a monthlong stay at Stroger Hospital, where he’s un dergone three surgeries to address the infection, Brooks arrived at the RISE Center in May to recover.

“I’m doing way better than I was,” says Brooks. “Before all this happened, I was at an odd time of my life. I never thought I would be in this position.”

If the RISE Center hadn’t been available, Brooks says he likely would have returned to Paci c Garden Mission. But being unable to walk and get around on his own would have made it di cult to reach the necessary recovery care and physical therapy he receives at Cook County Health.

Brooks, though unsure where he’ll go once he leaves the RISE Center, hopes to land a job in the next couple of months and, with an income, be able to nd housing.

“Now that I’m getting better, I see the light at the end of the tunnel,” he says.

More local hospitals are pay ing attention to the root causes of health disparities throughout Chi cago’s 77 neighborhoods and be yond after the COVID-19 pandem ic put into glaring perspective how dire health disparities really are, and the adverse impact they have on life expectancies.

Now, nearly every health system in the Chicago area, both public and private, has an equity program to point to. And solutions don’t al ways include what can take place within the four walls of a hospital. Programs range from expanding access to chronic disease medi cations to supplying housing and food to vulnerable communities.

But as the third year of the COVID-19 pandemic drags on, many hospitals nd themselves in a nancial bind that could threat en progress made on health equity initiatives as budgets get stretched thinner. Federal emergency fund ing to address the COVID-19 pan demic is dwindling. At the same time, in ation is driving up the costs of supplies and medications, and an industrywide labor shortage has increased salary costs. Addi tionally, all these rising health care costs are resulting in more unpaid medical bills, which a ect hospi tals’ bottom lines, according to a recent report from Chicago-based Crowe, a public accounting, con sulting and technology rm.

“ e problem with health care is each one of these institutions, whether it be a community health center or a hospital, is its own

self-operating business unit that operates on a year-to-year budget and is not rewarded for social-type of innovations that could make a di erence,” says Dr. David Ansell, senior vice president for commu nity health equity at Rush Univer sity Medical Center and associate provost for community a airs at Rush University. “ e whole fund ing mechanism really encourages short-term nancial thinking over long-term health thinking.”

U.S. hospitals and health sys tems are seeing some of the thin nest margins since the beginning of the COVID-19 pandemic, says a recent report from Chicago health care consultancy Kaufman Hall & Associates. roughout the entire pandemic, 2022 is on pace to be the worst year when it comes to nancial performance. e median operating margin for U.S. hospitals was negative 0.98% through July.

“ e margins are very slim,” says Leon Caldwell, senior director of health equity strategy and inno vations at the American Hospital Association, adding that “the eco nomic challenges are going to pro vide a challenge for every aspect of running a hospital,” including health equity programs.

While the RISE Center will be propped up by $14.1 million in American Rescue Plan Act funding that’s been given to Cook County Health, Andrews acknowledges that challenges persist.

“ ere is no way around that we are forced to work smarter and to be more creative about how we maximize the limited resources that we all have,” Andrews says.

WHY HEALTH EQUITY MATTERS

During the rst year of the COVID-19 pandemic, which has so far taken the lives of more than 7,800 Chicagoans, the life expec tancy for all Chicagoans dropped almost two years on average, to 75 years, according to data from the Chicago Department of Public Health. But Chicago’s Black and Latino residents saw even steeper declines.

By the end of 2020, life expectan cy for Black Chicagoans fell below 70 years to 69 years, with the gap between Black and white Chicago ans widening to 10 years, up from 8.8 years in 2017. e life expec tancy for Latino residents fell to 76 years, a three-year gap compared to white Chicagoans, who saw their life expectancy decline by one year, to 79 years. Asian Americans and Paci c Islanders in Chicago have the highest life expectancy at 80 years, but that’s down two years from 2019 to 2020.

Chicago fares worse than the national average. Nationwide, the life expectancy for all U.S. residents at birth dropped from 77 years in 2020 to 76.1 years in 2021, accord ing to new data from the U.S. Cen ters for Disease Control & Preven tion. Asian Americans led the way with the longest life expectancy at 83.5 years, followed by Hispan ic residents at 77.7 years. White

Yadiel Hernandez and his mother, Marta Rodriguez.

Americans are expected at birth to live 76.4 years, and Black Amer icans trail all racial groups at just 70.8 years.

Various factors contribute to life expectancy gaps, including homelessness, poverty, commu nity violence, poor education, lack of health insurance, and limited access to grocery stores, food and exercise. But an important piece of the puzzle is how residents interact and access their nearby health care institutions, like hospitals, urgent care facilities and primary care providers.

“We have a system of racism and economic deprivation that has de termined who gets access to the health care we have,” Ansell says. “COVID was the best example of how it works in Chicago.”

Most hospitals are required to pay attention to health equity in their areas as the A ordable Care Act requires tax-exempt health care institutions to publish com munity health assessments every three years. But the onset of the COVID-19 pandemic and other events in 2020 were a turning point on the issue of health equity for many health care providers, ex perts say.

Shortly after the murder of George Floyd, 36 Chicago-area health care providers declared racism a public health crisis and pledged to help more people of color access care.

“Finally, we as a collective of hospitals that have contributed to the inequities are facing that real ity and intentionally determining

that we’re going to address those,” says Brenda Battle, senior vice president of community health transformation at the Universi ty of Chicago, who helps coordi nate programs aimed at address ing chronic diseases facilitated through UChicago’s Urban Health Initiative. “It made me feel like we accomplished something.”

At UChicago Medicine, one of the largest health care providers on the South Side, serving some of the city’s most vulnerable patients, improving health equity has meant hiring more hospital sta from the communities it serves, signing con tracts with minority-owned busi nesses and providing more sup port to community organizations targeting health inequities. It’s also included directly helping patients manage chronic illnesses, like dia betes, heart disease and asthma.

Marta Rodriguez has tapped into resources at UChicago Medicine to help improve her son’s asthma. Her son, Yadiel Hernandez, 9, de veloped asthma when he was 2 and has dealt with regular asthma attacks ever since, Rodriguez said in Spanish through a translator during an interview at her home on the Far Southwest Side.

Yadiel has now endured multi ple stays in the intensive care unit, which his mom described as “dev astating.” Yadiel’s asthma was so severe last year that he was tempo rarily home-schooled for most of the third grade.

“He was missing a lot of school, and he was falling behind in his ed ucation,” Rodriguez says.

Because of the severity of Yadiel’s asthma, his physician referred him to Daniella Perez, a community health worker at the South Side Pe diatric Asthma Center at UChicago Medicine, who oversees dozens of asthma patients. Perez was able to negotiate with Yadiel’s Medicaid plan provider to cover a series of monthly injections aimed at pre venting asthma attacks.

“Without (Perez), I wouldn’t have been able to get the injections approved by the insurance,” Rodri guez says.

Since starting the injections, Yadiel is back in school and doesn’t have asthma incidents as often, his mom says.

UChicago Medicine says it served 265 child asthma patients from Sep tember 2020 to August 2021. Now it’s outpacing that, with more than 300 served in the year since.

UChicago largely funds its own health equity initiatives, but Battle says she spends a good portion of her time fundraising from foun dations, donors and government agencies, which have been integral to UChicago’s work. While UChi cago Medicine is among the city’s largest health systems by revenue, according to Crain’s data, it hasn’t been immune to the nancial chal lenges a icting health systems ev erywhere.

“We’re struggling, too,” Battle says.

“It is a di cult time because it forces hospitals and health care providers to focus on what they can nancially support and achieve,”

Battle explains. “But one thing we came to understand through COVID is that the issues that cre ated disparities is what also drives cost to health care institutions. We realized that if we don’t continue to invest in this work, that we will still have to nance the results of it.”

ATTENTION TO HEALTH EQUITY PAYS OFF

Focusing on health equity can sometimes be good for the eco nomic health of a hospital, espe cially for health care providers serving populations that are un insured or rely on government in surance, which often reimburses providers less for care than those with private insurance, says Dr. Joel Shalowitz, a professor of preventive medicine at Northwestern Univer sity’s Feinberg School of Medicine.

“ e way to lower costs is to re duce the need for medical care,” he explains. “Anything that you can do to keep (patients) healthy and keep them out of the hospital is actually going to save you money.”

Understanding how health dis parities a ect hospitals is part of what’s led to diversifying views on what health care means, and why hospitals are more often address ing housing insecurity and other poverty-related issues, Shalowitz says.

“It’s moved from disease care to health care,” he says. “In doing so, we recognize that there are a lot of other inputs into health other than treatment and prevention of dis ease. We’re always thinking and ex panding our de nition of what we mean by health.”

Northwestern Medicine recent ly gave $1.7 million across nearly 50 organizations o ering services like housing, nutritional support, transportation, child care, men tal health care and primary care. Funding went to organizations like the Northern Illinois Food Bank and the Oak Forest chapter of Sleep in Heavenly Peace, which provides beds for children sleeping on oors and couches.

“We recognize that these are looming issues,” says Northwestern Medicine Chief Medical O cer Dr. Jim Adams, who is also a practicing emergency physician. “We can’t be successful clinically if food, hous ing, transportation and access to medicine—if those are not ad dressed.”

Northwestern Medicine says that in scal year 2021, the enterprise provided more than $1.14 billion in “community bene ts,” which Adams describes as work aimed at addressing health inequities that isn’t revenue-generating. Besides the grant-funded work, Northwest ern Medicine also considers pro viding charity care and accepting patients on government insurance programs, like Medicaid and Medi care, as community bene t work.

“ ey are good investments in the community,” Adams says. “But they require thoughtfulness around how limited resources of health care organizations are de ployed.

“Every hospital in the country in this late-pandemic, post-pandem ic phase is under just enormous

nancial stress. ere’s not money to waste.”

PROGRESS DEPENDS ON COLLABORATION

While hospital systems are work ing to address Chicago’s life expec tancy gaps and other health dispar ities, there’s only so much they can do until larger societal issues have been addressed, experts say.

Oftentimes, hospitals receive pa tients during an emergency, when other factors of their life have al ready contributed to their poor health, says AHA’s Caldwell.

“Hospitals are not singularly re sponsible for health outcomes,” he adds. “It is truly a (systemic) issue.”

e fragmentation of health equity programs o ered by hos pitals, public health departments and community organizations presents obstacles. But the Chica go Department of Public Health is trying to address the issue. In 2020, CDPH launched its Healthy Chicago 2025 plan, an ambitious ve-year initiative to close the city’s life expectancy gaps. e cross-sector coalition promotes health and racial equity through coordinated action and planning. Coalition participants include health care providers but also ac ademic researchers, private busi nesses, faith-based groups and policy advocates, among others.

CDPH has made some progress as of late. Over the last year, the agency took a unique approach to addressing the mental health crisis that’s escalated during the COVID-19 pandemic. By giv ing grants to federally quali ed health centers, community mental health centers and other commu nity-based organizations, CDPH says it’s working to provide men tal health services in all 77 of Chi cago’s neighborhoods by the end of the year. Currently, services are o ered in 51 neighborhoods to pa tients regardless of their ability to pay, immigration status or health insurance—typical obstacles to pa tients receiving proper care.

West Side United is doing similar work with a collaborative strategy. e organization, founded in 2018, has become a model for stakehold er collaboration that aims to close life expectancy gaps, says Execu tive Director Ayesha Jaco.

It brings together health systems like Rush University Medical Cen ter and Cook County Health, as well as public health departments, the mayor’s o ce, and other city agencies to address systemic rac ism and poverty that often leads to shorter lives for Black and Brown Chicagoans. But West Side United isn’t immune to the macroeco nomic factors a ecting the health care industry. e organization re ceives much of its funding from its hospital partners.

“It’s going to make it challenging for sure,” Jaco says. “We’re con stantly thinking about where Plan B is or how we adjust, given the un certainty of the market and where some of those priorities might need to shift to, so that hospitals can continue to provide care and do what they do.”

Shannon Andrews, chief equity and inclusion o cer at Cook County Health.

Daniella Perez, a community health worker at UChicago Medicine’s Asthma Center.

Brenda Battle, senior vice president of community health transformation at UChicago Medicine.

What are Boston and Detroit doing better than Chicago?

COVID-19

has reduced U.S. life expec tancy by almost three years, accord ing to new data from the National Center for Health Statistics. This historic decline is even more striking for Black and Hispanic populations, which lost 4 years and 4.2 years, respectively (compared to the white population, which lost 2.4 years). This devastating burden on communities of col or has rightfully caught the country’s atten tion. But even before the pandemic, mortal ity data revealed a toll of structural racism that many preferred to ignore, even in their own communities.

Our work shows that di erences in health outcomes among racial groups vary widely across our country’s biggest cities and, unfor tunately, Chicago stands out. Of the 30 most populous cities in the U.S., Chicago has one of the largest racial gaps in life expectancy. Here, the average life expectancy for Black individuals is now 10 years less than that of whites. More speci cally, as of 2020, a Black baby born in Chicago could expect to live only 69.8 years, compared to a white baby who could expect to live 79.8 years. is dif ference is two years more than the racial gap seen nationally. In fact, only three big cities fare worse. Looking at it another way, be cause the Black death rate is so much higher than the white death rate in Chicago, our city has over 3,800 excess Black deaths annual ly. at is, Chicago experiences 3,800 extra deaths in the Black population each year that would not have occurred if the Black and white death rates were the same.

Most alarmingly, Chicago’s racial mortal ity gap was growing even before the COVID

MENTAL HEALTH

Maureen Benjamins, Ph.D., left, is a senior research fellow at the Sinai Urban Health Institute. Fernando De Maio, Ph.D., is vice president of research and data use at the American Medical Association’s Center for Health Equity and a professor of sociology at DePaul University. Together, they co-edited “Unequal Cities: Structural Racism and the Death Gap in America’s Largest Cities” (Johns Hopkins University Press, 2021). e ideas in this article are those of the authors and do not necessarily represent policy of the American Medical Association.

pandemic hit. In contrast to most big U.S. cities, which had stagnant or improving levels of equity, Chicago’s levels of inequity grew over the past decade. In fact, Chicago was one of only six big cities that moved in the wrong direction. Our inequities grew because the Black population experienced worsening death rates from 2009 to 2018, while the white population saw improve ments during this same time period. Unfor tunately, COVID exacerbated this trend.

So what can be done? Local e orts in clude a city health improvement plan, Healthy Chicago 2025, focused on equity,

as well as a chief equity o cer and O ce for Equity & Social Justice to spearhead and monitor government e orts. Partner ships like West Side United and the Chica go Gun Violence Research Collaborative also work to reduce the racial death gap in our city, emphasizing community en gaged approaches and a focus on breaking down structural barriers to health. Finally, local institutions like Sinai Chicago have re-doubled e orts to address inequities through practices such as the integration and training of community health workers into health care to more e ectively address the social and health needs prevalent in our most marginalized communities.

Societal inequities at play in disparate treatment access

The COVID-19 pandem ic showed the world that the prevalence of mental and behavioral health condi tions knew no bounds. With the country already experiencing a pre-pandemic mental health state of emergency, by March 2021, the dismal rates of depres sion and anxiety across the globe and overdose deaths in the U.S. drastically increased by 25% and 36.1%, respectively.

And while these mental and be havioral health challenges span every demographic, who gets ac cess to quality treatment still varies widely in America, with our socie tal inequities playing out dramatically in dis parate mental health treatment access and outcomes as well. e pervasiveness com bined with the complexities of these issues requires an in ux of both public and private investments in solutions that better address care coordination models, evidence-based

Amy Christensen is partner and co-head of health care for e Vistria Group. Vistria is a sponsor of Crain’s Forum.

treatment programs and work force development to ensure ad equate caregiver capacity to meet growing demand for treatment.

For many, a common barrier to obtaining care is the inability to connect with a mental health provider. As a result, primary care providers (PCPs) serve as the main line of defense for early de tection and management of men tal or behavioral health needs. However, the majority of primary care providers are not prepared to do so, with nearly two-thirds reporting lack of training and 70% reporting lack of time. In ad dition, two-thirds of primary care providers don’t have adequate referral ac cess to mental health specialists. With those factors, the average delay between onset of mental illness symptoms and treatment is 11 years. Futhermore, many patients su er from multiple conditions that not only re quire the knowledge to detect but also the

expertise to treat. In the U.S., it’s estimated that 60% of general mental health condi tions and 90% of substance use disorders are not adequately treated in primary care environments.

As a result, patients often move from one care setting to another and ultimately end up back in the same ER settings that, like PCPs, are ill-equipped to provide adequate care for behavioral health patients. Accord ing to e New York Times, emergency rooms across the country see at least 5,000 patients a night, waiting to receive their next level of care. Organizations like Beacon Spe cialized Living identi ed the need to make the transition from hospital to home more seamless by helping patients manage their conditions in a home setting with compre hensive services that help prevent hospital readmittance and have e ectively reduced emergency room visits by 92%.

To have a successful treatment mod el, the programming must also utilize evidence-based treatment. With the in creased rates of depression, suicide and

overdose, timing is of the essence, making it crucial to allocate resources toward ther apies that have demonstrable outcomes.

erapies such as medication-assisted treatment (MAT) have proven to be clin ically e ective in signi cantly reducing readmission rates to high acuity inpatient settings and provides a more comprehen sive, tailored treatment program. But as ef fective as MAT is, it is also inaccessible for many, due to inadequate funding and lack of quali ed providers capable of adminis tering the treatment.

Behavioral Health Group recognized this problem and built their Joint Commissionaccredited organization around MedicationAssisted Recovery as a key component to tackling the opioid epidemic. rough their services, 60% of their patients obtained em ployment after a year of treatment, 62% on medication-assisted therapy experienced lower health plan costs, 70% saw a decline in criminal justice incidents and 98% of their patients reported satisfaction with their treatment.

Despite these important actions, the stark (and worsening) racial gap in life ex pectancy remains. ere is nothing natural about this. e gap is directly produced by economic, political and social structures that unmistakably harm communities of color. By comparing big cities, we know that a 10-year di erence in life expectan

cy between Black and white populations is not inevitable. Cities like Boston; Jackson ville, Fla., and Detroit all have a smaller ra cial gap. If more equitable outcomes can be achieved in some cities, why not all? Why not Chicago? Who will join us in publiciz ing these tragic numbers, proclaiming their injustice, and working for equity?

MATERNAL HEALTH

A ‘birthing desert’ on Chicago’s South Side

Ina perfect world, when a pregnant woman walks into a hospital, her skin color, race and health outcomes are irrele vant and unrelated because, in this utopia, quality health care is equitably provided.

e truth is we don’t live in a perfect world, but we all must strive to create one.

When tennis superstar Sere na Williams nearly died in 2017 from childbirth complications after being ignored by medical professionals, the country re started a much-needed conver sation around disparate mater nal health outcomes.

Liz Dozier is founder and CEO of Chicago Beyond and a former principal of CPS’ Fenger Academy High School.

People of color, particularly Black and In digenous women, are at heightened risk for negative birthing outcomes. Black women, in particular, are three times more likely to die from a pregnancy-related cause than white women, and babies born to Black women are more than twice as likely to die compared to babies born to white women. at’s horrifying—and unacceptable.

Too often, proposed remedies to health disparities focus on “ xing” a ected pop ulations by changing or correcting indi viduals’ behaviors rather than addressing the societal issues that widen disparities. Some might argue that the Black maternal health crisis is caused by pregnant people’s choices—if only they sought out more pres tigious hospitals or stuck to a particular diet or wellness regimen, the situation would improve, right? Not necessarily. Data and lived experiences o er a di erent story.

“No one was really listening to what I was saying... Still, I felt it was important and kept pressing,” Williams wrote in a recent essay about her near-death experi ence.

expectant mothers must travel far beyond where they live to seek prenatal care.

How can we begin to address this crisis? A start would be to invest in community-based ap proaches that include certi ed practicing midwives providing Black families with holistic, cul turally informed and sciencebased maternal health care be fore, during and after birth. ese approaches can reduce maternal mortality and lead to improved outcomes such as lower rates of C-sections and fewer instances of pre-term or low-birth-weight infants.

Research shows that community-based approaches to maternal care, like doulas and freestanding birth centers (particular ly when Black-owned), make a di erence. is is why the organization I lead, Chica go Beyond, provided funding for Jeanine Valrie Logan, a birth-equity champion who works to address disparities in Black maternal health. Valrie Logan is bringing a nonpro t, Black midwife-led, cultural ly concordant, community-focused birth center to the South Side.

Already, Valrie Logan has made signif icant progress toward building the Chica go South Side Birth Center (CSSBC). She co-authored and helped pass House Bill 738 in the Illinois General Assembly, now law, that expands the number of licenses for birth centers from 10 to 17 on Chicago’s West and South sides and the East St. Lou is, Ill., area.

Bringing the rst freestanding and mid wife-led birthing center to the South Side means that Black women will have access to the maternal health resources in the community in which they live.

Ultimately, none of these approach es of a coordinated care model or evi dence-based treatment programs can e ectively begin to address the growing need across the U.S. without a strong com mitment to training, recruiting and retain ing a quali ed workforce. Investments in

our clinical workforce is pivotal to im proving outcomes for the most vulnerable and complex patients. is will require us to think beyond hourly wage rates and to be innovative in our model and supports to build career paths for these essential health care heroes.

On Chicago’s South Side, maternal care o erings are severely limited. Between 2019 and 2020, the number of South Side hospitals o ering maternity services dropped from seven to three. e lack of options available to women on the South Side has created what the Chicago Tri bune called a “birthing desert,” meaning

e truth of the matter is that system ic failures often prevent Black mothers and babies from receiving necessary care. And though we may never live in a perfect world, investing in community-based ap proaches can promise that healthy and safe birthing options are available to all moms and babies.

Tools exist to ful ll tech’s unmet equity promise

Diabetes

is on the rise in our city, and although health technology is helping Chi cagoans manage their condition, underserved communities are far too often not able to take advan tage of innovations such as blood sugar monitors. Putting contin uous glucose monitoring (CGM) into wider use is a strong response that advances health equity.

Since launching in 2014, the city’s Healthy Chicago Survey has found a steady increase in diabetes patients. Now, 12.5% of Chicagoans and 16.7% of Black Chicagoans have been diagnosed, with South and West Side neighborhoods showing elevated rates of diabetes-related hospitalization and death. Northwestern University researchers attribute the dispari ty to a lack of healthy food and other factors. Uncontrolled diabetes can lead to severe eye, heart, kidney, nerve and other condi tions and poses a serious community health threat.

Continuous glucose monitoring and its advanced sensor technology provide more timely data to help people with diabetes keep their blood sugar in a safer range with diet and exercise changes. But Black and Brown diabetes patients often are denied

the power of health tech to avoid complications. e cost is often not covered by insurance and tra ditional Medicare limit coverage to insulin-dependent patients. Physicians also may reject the op tion through lack of familiarity or unconscious bias.

Earlier and more widespread CGM use could lower costs and reduce disparate outcomes in communities of color. Utilization is associated with fewer ER visits and hospital stays, lowering the total cost of care. Mobile apps make it easier for patients to dis cover what triggers their blood sugar spikes and make changes that main tain healthier lifestyles.

Zing Health, a Medicare Advantage health plan, has been working with Chicago doc tors to promote CGM technology and cover the cost of the equipment with $0 co-pay for a wider range of preventive and monitoring uses. Before Congress enacted Medicare price caps, our Medicare Advantage health plans o ered $0 co-pay coverage on pre ferred insulin products.

We are seeing signi cant uptake of the technology from our members, and we ex pect over 10% of our members with a dia betes diagnosis to be using CGM sensors by

year’s end. is shows us that our seniors are not afraid to take up new technology. ey are excited to see the e ect diet, exer cise and sleep have on their condition and the impact of changes they make. We have noticed that diabetes patients come to value the technology’s role in helping them stick to blood sugar targets over the course of the day.

e purpose of health insurance is to re move nancial barriers to good health. In under-resourced populations, technology adoption is not well studied in clinical trials, but that should not stop insurers from doing the right thing and stepping in with clinical and payment policies that are likely to ben e t population health. Providers must be assured that they should not discount this option for diabetes patients based on their economic situation. To reduce avoidable ER visits, hospitalizations and severe illness, it’s vital that we get these devices in the hands

of all who need them.

e health care community also needs to do more diabetes education to commu nicate the bene ts of care management technology. Wearing a CGM sensor is not as imposing as some may think. I have demon strated the applicator to our members my self. is tech is simple and unobtrusive, and family caregivers can easily assist. Most patients are surprised at how easy it is to monitor blood sugar and incorporate what they learn into their everyday lives.

Treatment of many chronic conditions will bene t from wider health tech use, in cluding patient scheduling, telemedicine and rideshare apps for medical appoint ments. But the technology must be avail able and a ordable. Proactive policies and outreach will give people more control of their health and well-being and keep those in underserved communities from sliding into costly complications.

Immigrants in Illinois deserve health care coverage

Immigrants are a vital part of Illinois, paying billions of dollars in state and local tax es and powering our economy with billions in annual spending. They are entrepreneurs, com munity leaders, neighbors and essential workers. Yet undocu mented immigrants continue to face barriers in accessing qual ity, affordable health care and coverage.

e lack of available and af fordable health care coverage harms individuals, families and the state, while putting enormous stress on the health care system. Illinois is home to 182,000 un insured, undocumented adults, about 167,000 of whom have household incomes at or below 400% the federal pov erty level (about $52,000 per year). ese communities are mostly Black, Indige nous and people of color. Even immigrants who are eligible for coverage remain unin sured, because they face a range of enroll ment barriers, including fear, confusion about eligibility policies, di culty with the enrollment process, and language and

literacy challenges.

is is a health equity issue: Our country’s legacy of struc tural racism and the anti-immi grant actions and rhetoric of the past several years—separating families, increasing deportations and penalizing the use of public assistance—have a ected the physical and mental well-being of many individuals and fam ilies. Access to health care is a basic human right. Increased ac cess to care, timely preventative services and better management of chronic illnesses promotes improved health outcomes and reduces costs of late health in terventions. Health coverage means fewer sick days, increased college attendance and higher earned wages, which contributes to a stronger economy. Reducing the burden on local govern ments currently paying uninsured health care costs will save Illinois taxpayers. Few er uninsured patients seen in hospitals and at other medical providers will reduce uncompensated care costs. Providing health care for all in Illinois will balance

costs and prevent health-related nancial crises for individuals and families.

At the Shriver Center on Poverty Law, we are advancing health care for all with our partners. As part of the Healthy Illinois Campaign, the Shriver Center worked to extend state-funded Medicaid-like com prehensive health coverage to immigrants with low income: rst in 2020 for seniors ages 65 and older, then in 2021 for immi grants ages 55 to 64, and this year for im migrants ages 42 to 54 (becoming the rst in the nation to do so). ese initiatives are in addition to Illinois’ All Kids program, where children are eligible regardless of immigration status. e state has the op portunity to lead the country again by cov ering immigrants ages 19 to 41.

Fortunately, two pending bills in Con gress, the Health Equity & Access Under the Law (HEAL) for Immigrant Families Act and the Lifting Immigrant Families rough Bene ts Access Restoration (LIFT the BAR) Act, would dismantle many of the long-standing barriers to health coverage for immigrants, including Deferred Action for Childhood Arrivals (DACA) recipients. Currently, many immigrants must wait ve years before becoming eligible for federal

bene ts—due to unjust policy enacted nearly 30 years ago. Without the so-called “ ve-year bar,” about 30,000 more people in Illinois with legal permanent residence status would qualify for federal Medicaid. Both bills would remove barriers to cov erage, bring federal dollars to Illinois and save taxpayer dollars. We are calling on the Illinois congressional delegation to sup port this legislation.

Recent federal and state activity has fo cused on expanding immigrant eligibility for health coverage. e Biden adminis tration has proposed changes to public charge policies that are intended to reduce fears of enrolling in health coverage and accessing care. Additionally, several states have proposed or taken action to expand state-funded coverage to people with low incomes, regardless of immigration status.

Let’s protect the health of all people in Illinois, no matter where they were born.

Undocumented immigrants are as likely as other residents to work, but they are sig ni cantly more likely to be uninsured due to more limited access to both public and private coverage. Providing a pathway to a ordable health coverage makes families and communities stronger.

Dr. Eric Whitaker is founder and CEO of Zing Health, a Chicago-based Medicare Advan tage health plan.

INSURANCE

Stephanie Altman is director of health care justice and senior director of policy at the Shriver Center on Poverty Law.

ACCOUNTING

ORBA, Chicago

ORBA, one of Chicago’s largest public accounting rms, is pleased to announce that Giovanny Bucio and Inshal Hussain have joined the rm’s Audit Group. Giovanny Bucio is experienced in performing audit procedures and compliance testing, preparing accounting records and preparing income tax returns.

Inshal Hussain is knowledgeable in preparing income tax returns, reviewing nancial statements and performing tax research.

Gensler, Chicago

Ken Baker, FIIDA, Assoc. AIA joins Gensler’s North Central Region as Regional Managing Principal and is based in Chicago, where he began his career as an expert in of ce buildings and workplace design.

With 26 years at the rm, Ken brings a breadth of leadership experience, with expertise in shaping global accounts. He has designed over 20M sf of corporate environments across the globe.

Grant Uhlir, FAIA has been named the rm’s Global Director of Large Projects, offering counsel on complex multi-phase work while maintaining client relationships locally.

BANKING

Republic Bank, Oak Brook

Republic Bank, serving local businesses since 1964, is pleased to welcome Lori Hernandez as SVP/ Commercial Lending Team Lead. Based in our Addison of ce, she is responsible for supporting our expansion efforts by growing strong relationships with our middle market prospects and clients throughout the Chicagoland area. Lori brings over 24 years of experience in senior lending positions across commercial lending to the Republic Bank team.

INSURANCE

JMB Insurance Agency, Chicago

Kimberly Goldstein has been promoted to the newly created position of president of JMB Insurance (JMBI). In her new role, Goldstein will focus on the agency’s strategic growth and manage day-to-day operations of its growing, global portfolio of 2,000 clients. She will join the agency’s executive team to help secure and advance JMBI’s position as a leader in risk management services across industries, including Hospitality, Manufacturing, Mortgage Banking, Private Equity, Real Estate and Tech.

NON-PROFITS

YMCA of the USA, Chicago

YMCA of the USA (Y-USA), the national resource of ce for the 2,560 Ys across the country, has appointed Tina MacVeigh as their new Executive Vice President and Chief Learning and Leadership Development Of cer. In her new role, MacVeigh will be responsible for building a national learning and leadership development system to help YMCAs train and support staff who can meet the changing needs of their communities, today and in the future.

ACCOUNTING

PKF Mueller, Elgin

PKF Mueller, a CPA and Business Advisory Firm in the Chicago area, is proud to announce the promotion of Alex Krog, CPA to Partner, effective 10/1. Krog joined the Firm in 2012 and is a leader in the Employee Bene t Plan Audit group. Recently, his focus has been in the private equity area, having performed extensive work on both buy and sell-side due diligence for transaction engagements.

Over the past 24 years, his work on projects including The Post Of ce and Shirley Ryan AbilityLab has been instrumental in establishing Gensler as a leading practice for complex, large-scale mixed-use projects.

BANKING

Republic Bank, Oak Brook

LAW

ACCOUNTING

PKF Mueller, a CPA Firm in the Chicago area, is proud to announce the promotions of Chris Gent, CPA, CISA, and James Hare III, MAS, CPA, to Partner, effective 10/1.

Gent has over 10 years of public accounting experience providing assurance, accounting, and consulting services, including CFO, controllership, and outsourced accounting services to clients in various industries.

For the rst 9 years of his career, Hare worked closely on audit and review engagements, specializing in auditing 401(k) plans. In 2022, he joined the Client Advisory Services Department and is heavily involved in the Firm’s Philanthropy efforts.

ARCHITECTURE / DESIGN

HKS, Chicago

Global design rm HKS announced Janhvi Jakkal as Chicago Of ce Director. A seasoned healthcare architect with 20 years of experience, Janhvi was previously the Health Practice Leader for the rm and has contributed to the successful planning, design, and construction of millions of square feet of healthcare facilities. Her integrated approach helps the design team and clients make decisions that promote the best practices and evidence-based design strategies.

ARCHITECTURE / DESIGN

HKS, Chicago

Global design rm HKS announced Anthony Montalto as Chief Design Of cer. Formerly HKS’ Director of Design, Anthony cultivates the rm’s design culture by coaching teams to realize design excellence, and he believes design can signi cantly transform lives. As the Chief Design Of cer, Anthony is responsible for the design plan and course of action, overall design philosophy, design methodology/ process and more.

ARCHITECTURE / DESIGN

HKS, Chicago

Republic Bank, serving Chicagoland since 1964, is pleased to welcome Mark Wojack as SVP/Head of Business Banking. Based in our Oak Brook headquarters, he is responsible for driving our strategy of growing business banking relationships through his client-focused, needs-based approach. Mark brings over 30 years of experience in senior positions across C&I, commercial real estate, commercial construction, and small business to the Republic Bank team.

Akerman LLP, Chicago Akerman LLP has expanded its Data Centers and Digital Infrastructure Practice with partner Bruce “Eddie” Lowry in Chicago. In addition to data centers, Eddie focuses his practice on alternative energy and logistics legal issues. Eric Rapkin, chair of the Akerman Real Estate Practice Group said: “Eddie’s arrival signals our commitment to addressing our clients’ needs in this surging area of data center development. We are growing both in size and capabilities nationally.”

LAW

ENGINEERING / CONSTRUCTION

Milhouse Engineering and Construction, Inc., Chicago

David Sawicki, PG, CPG has been promoted to Vice President of Environmental at Milhouse Engineering and Construction, Inc. David brings 30+ years of technical and managerial experience in environmental consulting and services. As the founder of Milhouse’s Environmental group, David has proven himself a talented leader and visionary. Under his leadership, a new service line function has emerged for Milhouse supported by a team of talented professionals who are committed to protecting the environment.

Freeborn & Peters LLP, Chicago

Freeborn is pleased to announce that Alexander A. Pabon has joined the rm’s Chicago of ce as an associate. Alex is a member of the rm’s litigation practice group and complex commercial litigation team. He most recently served as a judicial law clerk for U.S. District Judge Robert E. Wier in Lexington, Kentucky and was previously a summer associate at Dressman Benzinger LaVelle, where he worked on various commercial and complex litigation projects in Kentucky and Ohio state courts.

TECHNOLOGY SERVICES

William Everett, Chicago

William Everett (WE), a premier Chicago-based, woman and Black familyowned management and information technology consulting rm, announced the elevation of Carlton R. McGee, Jr. to president. Carlton was formerly vice president in charge of dayto-day operations. McGee holds a B.S. in Physics from Morehouse College. He has also been elevated to the board of directors, along with SVP Blair C. McGee and Meghan C. McGee. After a rebranding, the rm’s new tagline is “Always On”.

TECHNOLOGY SERVICES

William Everett, Chicago

To Lauren Melesio lmelesio@crain.com or 212-210-0707

Tony LaPorte joins HKS as the Director of Brand Experience and is a Principal at the rm. Tony has extensive experience helping major global corporations, prestigious health care and higher education institutions, and small start-ups leverage their brand for strategic advantage. He is a recognized expert in environmental branding, experiential storytelling, and graphic design.

ENGINEERING / CONSTRUCTION

Milhouse Snow, Chicago

Malki Brown has been promoted to Vice President of Milhouse Snow, a subsidiary of Milhouse Engineering and Construction, Inc. As leader of the Milhouse Snow organization, Malki is responsible for exceeding customers’ expectations by providing exceptional service for all their snow and grounds management needs. Malki has been with the Milhouse family of companies since 2013 and has consistently shown a commitment to Milhouse’s mission to deliver superior solutions.

LAW

Honigman LLP, Chicago

Molly K. McGinley joined Honigman LLP’s Litigation Department as a Partner in the Chicago of ce. She concentrates on complex commercial class action defense and derivative litigation representing clients from small private to global public companies in energy, healthcare, digital health, tech, automotive, food and beverage and nancial services. She also advises clients on compliance with telemarketing and biometric privacy laws. She earned a J.D. from Loyola University Chicago School of Law.

William Everett (WE), a premier Chicago-based, woman and Black familyowned management and information technology consulting rm, announced the elevation of Blair C. McGee to Senior Vice President. McGee was formerly vice president of operations. Previously she was a personal banker with JP Morgan Chase, and is a licensed insurance broker and nancial advisor. She holds a BA in Economics from the University of Illinois-Chicago. Meghan C. McGee joins Blair, and newly named president, Carlton R. McGee, Jr., on the rm’s board of directors. Meghan holds a BA in Political Science and International Relations from the University of Miami and an MA in Security Studies from Georgetown University.

B. McGee

M. McGee

PFK Mueller, Elgin

Gent Hare

ARCHITECTURE / DESIGN

Baker Uhlir

Bucio Hussain

GEN X LEADERS IN SPORTS

GEN X LEADERS IN SPORTS

Behind Chicago’s legendary sports teams and sports scene is an army of people in charge of business operations, marketing and public relations, philanthropic initiatives and other crucial off-court (or off-field) endeavors. The honorees profiled here have created outreach programs to serve and engage their fan base. They promote diversity in sports overall by paving pathways to and financing for athletes from underserved demographics. They have founded nonprofits that ensure diversity in and access to sports for all. Their names might not be on the backs of jerseys and sweaters, but their work is highly visible, all the same.

—By Lisa Bertagnoli

METHODOLOGY: The individuals featured did not pay to be included. Their profiles were written from the nomination materials submitted. This list is not comprehensive. It includes only individuals for whom nominations were submitted and accepted after a review by editors. To qualify for the list, nominees must be based in the Chicago area, serve in a senior-level role at a sports organization, promote diversity within their organization and the sport, and demonstrate leadership outside their role at their organization via participation in nonprofits and professional organizations.

GARETH BREUNLIN

Senior director of marketing and advertising Chicago White Sox

Gareth Breunlin oversees the development of the club’s advertising and marketing initiatives, including youth marketing, retail, food and beverage, multicultural advertising, promotional calendar, special events and the annual marketing campaign. He was integral in the creation and launch of the 2022 Nike City Connect Southside jerseys, considered the best of Nike’s MLB new jersey program. He has created partnerships with Joe Freshgoods, Runsy, Katie Lukes and other local Chicago artists, and helped create premium ticket stock by designer Todd Radom, which is enshrined in the National Baseball Hall of Fame. Breunlin is involved in social justice work as lead designer for the Neighborhood Story Project, a collaborative book-making organization.

JAIME FAULKNER

President of business operations Chicago Blackhawks

Jaime Faulkner focuses on advancing the fan experience, the business model and nancial performance through her oversight of strategy and operations across corporate partnerships, ticketing, customer relations and integrated marketing communications. One of the highest-ranking female executives across the NHL, she transformed the organizational structure to be inclusive of business strategy and analytics, launched a new season-ticket membership program and introduced a new mobile app. Faulkner also brought Chicago hockey to Milwaukee for the rst time in 30 years, is investing in new highschool hockey programs, served on the search committee for the Blackhawks’ next general manager and is the team’s alternate governor for the NHL.

SUSAN GOODENOW

Executive vice president, brand and public affairs Chicago Bulls

Susan Goodenow manages the Bulls’ brand strategy and marketing e orts, directs all external communication and community-outreach initiatives, oversees broadcasting and works closely with Chicago Bulls Charities. She’s helped expand various teams across the organization, streamlining how they work interdepartmentally to craft messaging that directly aligns with what the Bulls brand represents across the globe. Goodenow is on the leadership board of Women’s Elevation, the Bulls’ women employee resource group. She also serves on the advisory board of the Women in Sports & Events Chicago chapter and the University of Georgia’s AdPR Advisory Council and is active in the American Red Cross of Greater Chicago’s Ti any Circle.

MATTHEW KOBE

Executive vice president, revenue and strategy Chicago Bulls

Matthew Kobe oversees revenue streams for the Bulls, including ticket and premium seating sales and partnerships. He leads the business strategy and analytics department, equipping decision-makers across the business with data and insights to better serve fans. Recently, he spoke on tech-enabled fan engagement at Stadia Ventures alongside counterparts from the Chicago White Sox, Chicago Fire FC and the Chicago Sports Commission. He has participated in Sports, a Strive Mentorship Program designed to foster connections between students of color with experienced industry professionals. Kobe also serves on the advisory board for the Indiana University Kelley School of Business Sports Industry Workshop and on the customer advisory board for Kore Software, a platform that helps organizations manage partnerships and sponsorships.

SARAH LAPORTA

Director of community and charitable relations Chicago White Sox

Sarah LaPorta directs White Sox Charities’ yearlong fundraising agenda, increasing charitable revenue from $900,000 in 2013 to $2.8 million recorded last year. Under her leadership, she also launched creative strategies to increase “50/50 Ra e” revenues, including setting a U.S. record for a one-time jackpot of $374,000. LaPorta advocates for inclusivity via numerous White Sox Charities grant recipients, which includes diverse community partners such as Center on Halsted, Girls in the Game, Casa Central Social Services, Gads Hill Center and Howard Brown Health, among others. LaPorta, a graduate of Eastern Illinois University, previously served as director of community relations for minor league a liates the Lehigh Valley IronPigs and Fresno Grizzlies.

MARCUS LEBEOUF

Vice president and general counsel Chicago Blackhawks

Marcus LeBeouf handles legal, compliance, risk and legislative matters for the Blackhawks, Fifth ird Arena, the Rockford IceHogs and the Chicago Blackhawks Foundation. He led the response to the 2021 lawsuit brought by a former Blackhawks player alleging sexual assault by an employee in 2010, working to rebuild con dence among employees and the broader community. LeBeouf orchestrated harassment/ discrimination training; launched an internal, anonymous reporting hotline; implemented a new employee handbook; reformed the Blackhawks’ youth hockey department and created privacy policies for the a liated entities. He’s also taken steps to assure that the Blackhawks receive legal support from a diverse group of professionals across race, gender and sexual orientation.

STEVE MCNELLEY

Vice president, sports marketing and partnerships Guaranteed Rate

Steve McNelley is responsible for creating and executing a comprehensive sports marketing strategy inclusive of partnerships and athlete relationships. He also manages the media budget, including linear, social, digital, OTT (streaming) and media agency relationships, all designed to drive awareness of and generate engagement with Guaranteed Rate’s sports content. Since joining Guaranteed Rate in 2021, McNelley has developed and expanded (by 1,450%) a sports partnership portfolio with more than 70 partnerships within the NHL, MLB, NASCAR, bowling and the Professional Pickleball Association, among others. When selecting brand ambassadors, he includes spokespeople who are women, people of color and who live with a disability, thus ensuring equal representation.

KIM MICHELSON CEO Honest Game

Kim Michelson is co-founder of Honest Game, an on-demand academic compliance solution for high-school administrators that automates ever-changing NCAA and National Association of Intercollegiate Athletics academiceligibility requirements.

She’s led the company to double its growth since its inception in 2020, with large district clients such as Chicago Public Schools, Charlotte-Mecklenburg Schools, Cincinnati Public Schools and more than 200 others, serving more than 100,000 individuals seeking post-secondary opportunities. Honest Game, 100% sta ed by women, is a public-bene t corporation. It won the inaugural Chicago Bulls Venture Pitch Competition in 2019. Michelson is a member of the Leadership Council for Loyola University Chicago’s Baumhart Center for Social Enterprise and Responsibility and co-founded Project Music, which raised funds for the Lydia Home orphanage.

MATT NYKIEL

Director of purchasing, CSS and warehouse Chicago White Sox

Matt Nykiel oversees the purchasing, ware house and central support team for the or ganization. He directs millions in spending throughout the organization with all front o ce and building needs, particularly the procurement of ballpark signage and promotional products. He leads the request for quote process for the franchise’s vendors and manages its Diverse Business Partners Program, which creates opportunities for numerous minority business enterpriseand women business enterprise-certi ed companies as part of the organization’s procurement process. His e orts helped the White Sox earn one of baseball’s best suppli er diversity utilization rates. He helped de velop an online MLB Supplier Data Manage ment System for a leaguewide initiative in working with diversi ed suppliers. Nykiel is a member of the National Minority Supplier Development Council.

JOHN ROWADY CEO and founder rEvolution

John Rowady marked the integrated sports marketing and media agency’s 20th anniversary in 2021, bringing on multiple clients including American Family Insurance, McLaren Racing, Q2 and Soccer United Marketing. In spring 2022, rEvolution also acquired Detroitbased integrated marketing agency Centigrade. And it partnered with e Kaleidoscope Group, a diversity and inclusion consulting rm dedicated to creating real organizational change, to help set active recruitment standards to create opportunities for people of all backgrounds. Rowady is an active Chicago Sports Commission Executive Committee member and also sits on the advisory group of rEvolution’s e-sports subsidiary (REV/XP). He is also a member of both the Vistage CEO network and Indiana Sports Corp.

JASON STANISLAW

Jason Stanislaw is responsible for operational management, marketing and pro t and loss for an eight-court indoor tennis club, 29 outdoor tennis courts, the aquatics center, indoor ice rinks and the platform tennis club. Over the last 18 months, he has grown platform tennis to 54 from 32 club-based teams; developed a regional strategic plan to impact grassroots tennis throughout the Chicago area; and rebranded and reorganized gure skating programming, nearly doubling revenue to $100,000 from $54,000. Stanislaw co-chairs the Wilmette Park District Social Equity Committee and is leading an e ort to foster diversity, equity and inclusion alignment among the park district, village, library and school district. He is volunteer board president of the Chicago District Tennis Association.

RAM PADMANABHAN

Chief operating officer and general counsel Chicago Bulls

Ram Padmanabhan leads decision making for long- and short-term operational and managerial issues. He’s also responsible for the team’s compliance with legal, regulatory and NBA requirements and oversees the nancial and human resources functions. He led the Bulls through all key operational decisionmaking during COVID-19, including implementing safety protocols, hosting games ( rst without fans and then with limited fans), and coordinating with the NBA as rules on access, testing and vaccination evolved. He’s the executive sponsor of BOLD, the Bulls’ Black employee resource group, supports the organization’s involvement in the NBA’s HBCU Summer Fellowship Program and is a director of Bulls Charities. Padmanabhan serves on the Chicago Sports Commission’s executive committee.

LOU SANDOVAL

President and managing partner Halo Advisory Group

Lou Sandoval helps early- and growthstage companies scale and become more e cient. e son of Mexican immigrants, he earned a merit badge for learning to sail en route to becoming an Eagle Scout. He joined the Chicago Yacht Club more than 20 years ago and recently served as the rst Hispanic commodore in the club’s 145-year history. He has completed 22 Mackinac races, winning it nine times, and in 2021 became the rst Latino sailor to be inducted into the Lake Michigan Sail Racing Federation Hall of Fame. Sandoval serves on boards to grow access to boating in diverse communities and was the architect of the diversity, equity and inclusion strategic plan for the sport’s governing body, US Sailing.

MIKE POWELL Executive director Beat the Streets Chicago

Mike Powell is responsible for all aspects of managing Beat the Streets Chicago, an independent nonpro t established in 1994 that empowers Chicago youth through wrestling. He builds culture, creates programs, develops coaches, recruits partners and fundraises for the organization. Since he took over in 2018, the nonpro t has grown from serving a handful to more than 2,500 student athletes from across Chica go; 85% are low-income children and 20% are girls. e organization also opened a facility in the Gar eld Ridge neighborhood in mid-2021, funded by a $2 million capital campaign. Powell is on the board of the Illinois Regional Training Center, which is associated with University of Illinois.

SHEENA QUINN

Senior director of public relations Chicago White Sox

Sheena Quinn oversees the team’s public relations strategy, including reputation management and development, business and charitable communications, SoxFest and multicultural community outreach. She launched BasebALL: One Game for All, the organization’s diversity initiative; supported e orts to promote the rst parkwide Pride Night; and helped the Game Changers series, an event that celebrates inclusivity through sports. Quinn supports the Chicago Sports Alliance, a Bears, Blackhawks, Bulls, Cubs and White Sox collaboration to identify solutions to gun violence. In 2016, Quinn served on the Asian American Paci c Islanders Initiative summit for Filipino American History Month at the White House; she also participated in MLB’s Katy Feeney Leadership Symposium.

ADRIENNE SCHERENZEL-CURRY

Vice president of community engagement and executive director of Chicago Bulls Charities Chicago Bulls

Adrienne Scherenzel-Curry provides oversight and strategic direction for the Chicago Bulls community relations, alumni programs, philanthropic foundation, and player and community engagements. She developed the organization’s Black Owned Business initiative, which is now in its third season; created the Black Joy photo series by paying emerging photographers to capture images on Chicago courts in the summer for Black History Month; restructured the community relations department; and has been hyper-focused on authentic civic engagement, aligning player interests with nonpro ts making system-level changes. Behind the scenes, Scherenzel-Curry supports the organization’s Black employee resource group and its Women’s Empowerment ERG, and works to provide support to displaced Ukrainian families.

BILL SMITH CEO Knockerball USA

Bill Smith identi es strategies and leads their implementation across functional teams, focusing on growth opportunities while maintaining e ective cost controls. Knockerball USA’s business combines games (bubble soccer, archery and others) with event management. Smith is currently vice chairman of the board for SamaraCare Counseling in Naperville, which o ers mental health and psychiatric services. He also recently completed a four-year term leading the board of the Indian Prairie Great Banquet, which o ers biannual retreats for both men and women to explore and expand their faith journeys. He is co-founder of SX5 as well as chief nancial o cer and a board member of BioBlend Renewable Resources.

LISA STRASMAN President NCSA College Recruiting

Lisa Strasman uses her experience as a former captain of Yale University’s women’s ice hockey team to lead a team of more than 1,000 former college and professional athletes and coaches who guide families through the recruiting process. She played an essential role in the sale of NCSA to Endeavor Group Holdings as well as its integration into IMG Academy. She also helped launch IMG Academy’s Women in Sports Committee, which improves accessibility for girls in sports, o ering full-ride scholarships and personalized recruiting support. She spearheaded the redesign of NCSA’s DEI committee and encouraged the creation of the Women’s Resource Group and the Black Engagement Network.

DAN TUN Co-founder and program director Dare2tri

By o ering free training opportunities as well as access to adaptive equipment, Dare2tri removes barriers for athletes with physical disabilities or visual impairments. Dan Tun’s responsibilities include the implementation of weekly training opportunities; the planning and execution of training camps; the training and supervision of sta , volunteers and contract coaches; and grant writing and sponsorship negotiations. He has worked with individuals from the grassroots level all the way through to elite, assisting Dare2tri athlete Kendall Gretsch at the 2020 Tokyo Paralympic Games. Tun works with running clubs to promote inclusion for individuals of all abilities and is a member of the 2021 Disability Lead Fellowship program.

LAURA WARREN

Senior vice president and general counsel Chicago Fire Football Club

In addition to overseeing human resources for the club, Laura Warren advises it on corporate transactions and contracts; sponsorship contracts and vendor management; intellectual property and marketing matters; match and event operations; media rights and communications; employment issues; athletic facility development and operations; compliance and litigation; and athlete health and welfare. She created the club’s rst in-house legal department, reconstructed its corporate structure and is leading the club through renegotiations of its Soldier Field lease. Warren also oversaw the execution of legal operations for the club’s development of a new lower division league team and secured the rst professional sports team institutional partnership with the Illinois Diversity Council.

Centennial Recreation Complex general manager Wilmette Park District

Will public subsidies spark Loop revitalization?

though several details remain un clear such as the number, types and sizes of properties will be eligi ble, as well as how much TIF mon ey could be dedicated to them. A Lightfoot spokeswoman declined to comment.

e initiative stands to be Light foot’s most impactful move since the onset of the COVID-19 pan demic to revitalize LaSalle Street and its Loop environs. e corri dor struggled with big departing o ce tenants before the public health crisis and has since grap pled with a loss of vibrancy on its blocks that has devastated near by retailers, some of whom have shuttered their stores. Some o ce landlords along the historic thor oughfare have surrendered prop erties to their lenders, while others are staring down dire debt troubles while soft demand for o ce space weakens their bottom lines.

Lightfoot is hoping public subsi dies will help breathe new life into the corridor and add to the recent momentum generated by Google, which announced in July that it intends to renovate, buy and bring thousands of jobs to the James R. ompson Center, LaSalle Street’s severely outdated northern an chor.

Using TIF money to spur down town development could stir controversy for a mayor who has prioritized development in dis invested neighborhoods over the urban core. TIF districts, which accrue property tax revenue above a baseline number in a designated area for a period of 23 years, are meant to target projects in blight ed areas that wouldn’t be redevel oped without TIF assistance. Ear marking such funds for downtown development could be a lightning rod for criticism.

But Lightfoot is acknowledg ing the need for the city to play a nancial role in bringing life back to the Loop. And the move to of fer taxpayer funds is in line with a recent city-commissioned Urban

Land Institute panel recommen dation on how to restore LaSalle Street’s vitality.

e LaSalle Central TIF District, which was created in 2006 to help revive severely outmoded Loop buildings, has been used to fund public infrastructure improvements since 2015. e district’s fund bal ance as of the end of last year was nearly $197 million, according to its most recent annual report.

CLOUDY FUTURE

One big question facing Light foot’s new program is whether it will entice real estate investors to bet on the future of LaSalle Street and the Loop. Residential devel opers have grumbled about the city ordinance passed last year re quiring at least 20% of units in new residential projects to o er rents well below market rates, arguing such units whittle away the nan cial bene ts of such deals. e 30% a ordable component would be even tougher to swallow, but help from the city through TIF could help o set construction and other costs.

e city is also bring ing public subsidies to the table to try to ensure that a ordable units are incorporated into resi dential conversions at all.

e zoning designation for LaSalle Street buildings like Bank of Amer ica’s distressed former o ce tower at 135 S. LaSalle St. already allows for those buildings to be convert ed into apartments. at means a developer could do so without having to commit to providing a ordable units like it normally would to get the city to sign o on a zoning change. In the only resi dential conversion to date on La Salle, a Florida developer turned a 13-story o ce building at 29 S. La Salle St. into a 216-unit apartment building called Millennium on La Salle that opened last year with no a ordable units.

Apartment redevelopments look good to developers these days

amid an apartment construction boom in the city and a cloudy fu ture for other asset types like o c es, hotels and retail space. Fueled by a strong job market and growing demand for rental units, average apartment rents downtown hit an all-time high earlier this year, ac cording to research rm Integra Realty Resources.

e ULI panel, which included local developers, architects and urban planners, was tapped by the city earlier this year for ways to draw new types of users to LaSalle and assess what role nancial in centives might play in bringing that vision to life.

e panel published a 36-page report in June encouraging the city to create the “LaSalle Landmarks Innovation District” with a frame work plan to turn the o ce-heavy nancial district into a more pedestrian-friendly mixed-use destination with residential units, o ce space that services entrepre

neurs and small businesses and service-oriented tenants like gro cery stores, medical o ces, cafes and restaurants, as well as visitor attractions like art galleries.

The report said financial in centives from the city would be crucial to getting private inves tors to buy into that vision, es pecially if any of the properties are to include affordable hous ing. The panel suggested Cook County’s Class L tax designation, Federal Historic Preservation Tax Credits, Low-Income Housing Tax Credits and Illinois’ recently passed affordable housing prop erty tax incentive should all be leveraged to help revive older buildings.

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Using TIF money to spur downtown development could stir controversy for a mayor who has prioritized development in disinvested neighborhoods over the urban core.

THE CITY IS ALSO BRINGING PUBLIC SUBSIDIES TO THE TABLE TO TRY TO ENSURE THAT AFFORDABLE UNITS ARE INCORPORATED INTO RESIDENTIAL CONVERSIONS.

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developers expect to begin work by the end of the year on a $40 million project that will put new commer cial space in the landmark Laramie Bank building and build mixed-in come apartments next door.

ough none of those projects have won nal city approval or bro ken ground, “that’s arguably $130 million of (planned) investment in a section of the city that hadn’t seen it in 40 years,” says Patton, CEO of 548 Capital, one of the most active developers in the city’s poorest communities over the past couple of years. “ at is game-changing.”

Patton’s optimism is the prevail ing sentiment among neighbor hood-focused developers nearly three years after Lightfoot launched what she called her “Marshall Plan” for investment-starved South and West Side corridors. Prompted by city-solicited bids, housing and commercial projects totaling al most $500 million in costs—most of which is slated to come from public funding and incentives— are moving through various city approvals, some in areas that have gone decades without meaningful investment. Neighborhood de velopers say Lightfoot’s strategy of directing $750 million in public money and resources into target ed, vacancy-ridden commercial districts di ers sharply from the lip

service those areas got from previ ous city administrations, which fo cused mainly on downtown.

Yet so far, the initiative is short on tangible results. None of the city-spurred projects in the In vest South/West corridors has put shovels in the ground, well behind the goal set more than two years ago by the city’s planning head to have the rst few buildings fully nanced and under construction within 18 months. e slow pace raises big questions about Invest South/West’s e ectiveness and ability to generate the broader, long-term ripple e ects that Light foot hopes for.

OTHER CONCERNS

Some developers and neighbor hood residents also worry any proj ects that actually get built will only add to the list of developments that rely on public funding for life support while failing to reverse depopulation trends that have driven away a long list of national retailers. Whole Foods’ April an nouncement that it would close its Englewood store—even as the city commits millions of dollars to an Invest South/West site on the same block—illustrated the persistence of long-standing problems plagu ing the neighborhoods Lightfoot hopes to revitalize.

“Some real planning took place, and (the program) has drawn at

tention to these underinvested neighborhoods,” says Rachel We ber, a professor of urban planning and policy at the University of Illi nois Chicago. “ e concern is that we’re going to end up with (sever al) Whole Foods” that require on going public funding, “and as soon as that support is withdrawn or it’s clear that is not forthcoming to oth er developers, that will be the end.”

Still, city o cials have earmarked hundreds of millions of taxpayer dollars for the e ort, hoping to lure private investors and philanthrop ic groups to help restore economic health to once-vibrant blocks. But with construction work yet to begin on a single Invest South/West proj ect, residents may not see Light foot’s initiative as an improvement on past city e orts—potentially a key factor in how much voter sup port the mayor can muster as she seeks re-election in February.

Most investors and real estate developers say it’s too soon to fairly judge the impact of Invest South/ West, which is meant to overturn decades of disinvestment. e COVID-19 pandemic has also slowed the process of gathering community feedback on projects, and rising construction costs and in ation have made it even harder to nance them.

Evaluating the program is also dif cult because Lightfoot hasn’t laid out speci c economic growth tar

gets for her massive outlay of pub lic funds. She never said how many jobs Invest South/West should cre ate, how much private investment it should induce, how many housing units or new businesses it should spawn, or how long it should take to produce any such gains.

During a ceremonial ground breaking last month for a $43 mil lion pair of a ordable housing proj

ects near 79th and Halsted streets in Auburn Gresham—ceremonial only, since the developers are still in the process of obtaining permits to begin work—Lightfoot boasted that by the end of this year, there will have been $2 billion in com bined public and private invest ment commitments across the 10 Invest South/West neighborhoods since the initiative began. But that

The city’s spotlight alone on neighborhood investment has given local businesses a noticeable boost, says Elizabeth Lockhart, whose family has run a series of small businesses in Austin for the past 45 years and owns 18 properties there today.

JOHN R. BOEHM

gure includes private projects like a $50 million redevelopment of old Humboldt Park warehouses backed by billionaire Morningstar founder Joe Mansueto and a $100 million Northwestern Medicine outpatient facility in Bronzeville that may have moved forward regardless of the city’s Invest South/West e ort. e city-solicited Invest South/ West projects are also almost en tirely backed by public subsidies rather than private investment. Nearly 40% of the Auburn Gresh am project is due to be funded with tax-increment nancing dollars, for example, while grants and pro ceeds from low-income housing tax credits account for much of the rest, according to a planning department report. A planning de partment spokesman says public assistance—from the city and oth er taxpayer sources—accounts for at least three-quarters of the funds backing Invest South/West proj ects, noting that ratio is in line with other publicly subsidized mixeduse projects around the city.

Other markers of Invest South/ West’s impact, such as economic growth in neighborhoods the city is targeting, don’t tell a clear story: In Austin, the number of small-busi ness loans doled out and the value of residential real estate in the area surrounding the Laramie Bank building hit ve-year highs in 2021, according to data from Master card’s Center for Inclusive Growth, which uses a mix of proprietary and publicly available data to track the economic health of U.S. census tracts. Yet Austin overall lost 1,100 jobs between 2019 and 2021, ac cording to Illinois Department of Employment Security data.

SPENDING DOWN

IDES data shows employment has been steady in Auburn Gresh am. But Mastercard’s hyperlocal data shows spending in the neigh borhood’s environs last year fell to its lowest mark since at least 2017.

Neighborhood-focused real es tate investors credit Invest South/ West with boosting Black-owned developers and construction rms that rarely get larger downtown work. Bigger-name developers in cluding Related Midwest and Far point Development have also tak en on Invest South/West projects, something planning o cials hope will spark more private investment in the neighborhoods. But several developers that declined to speak on the record for fear of political retribution say they have explored Invest South/West projects sole ly to score political points, not to make money.

Chicago Planning Commission er Maurice Cox, who leads Invest South/West, says the 41 bids sub mitted for the rst 11 city-solicited sites proves developers will take on projects in blighted corridors if the city provides various nancial in centives and dedicates more sta from multiple departments to shep herd them forward. He also notes

 PROPOSED INVEST SOUTH/WEST PROJECTS

Developers are forging ahead with plans for heavily subsidized projects in South and West Side commercial corridors, though none have broken ground. Here are the proposals generated so far by city-solicited bids.

Neighborhood Project Estimated cost

Auburn Gresham 757 and 838 W. 79th St.

58-unit a ordable residential units, commercial and restaurant space

Austin 5200 W. Chicago Ave.

Bronzeville 449-51 E. 47th St.

Englewood 914 W. 63rd St

25 mixed-income residential units and commercial space

Mixed-use project with eco-food hub, business incubator and commercial kitchen

Humboldt Park 3601 W. Chicago Ave.

Humboldt Park 4000 W. North Ave.

New City 1515 W. 47th St.

North Lawndale 3400-18 W. Ogden Ave.

44 mixed-income residential units, commercial space and new o ce for Neighborhood Housing Services of Chicago

Rehab of Pioneer Bank Building with business incubator, Latino cultural center, o ces

50-unit a ordable apartment building with business hub, youth programming space

60 mixed-income apartments, three townhomes, retail space and community center

gram—a Rahm Emanuel creation that pooled fees from downtown development projects and redirect ed them into the South and West sides—has funded small business es that are populating storefronts in some Invest South/West corridors.

RELIEF FUNDS

North Lawndale 4300 Roosevelt Road

South Chicago 8840-54 S. Commercial Ave.

Two warehouse buildings, two 5,000-square-foot buildings for community service programs

New and redeveloped buildings totaling 45 mixed-income apartments

South Shore 2908-26 E. 79th St./7901-33 S. Exchange Ave.

Source: Planning

Patton’s Chicago Avenue project and a $31 million mixed-income housing project in Englewood pro posed by veteran community de veloper DL3 Realty weren’t selected for city-solicited Invest South/West

Mixed-use rehab of Laramie Bank building, 78 apartments $43 million $40 million $29 million $14 million $27 million $21 million $40 million $31 million $84 million $24 million $26 million

39 residential units, rehab of Ringer Building for commercial use, 24 condominiums

Even the pandemic, a brutal setback for many neighborhoods, armed the city with federal relief money for development grants. Lightfoot recently announced a $13.5 million grant for Cleve land-based retailer Yellow Banana to revive a half-dozen South and West Side Save A Lot stores, includ ing one just steps from the Auburn Gresham project.

e city’s spotlight alone on neighborhood investment has giv en local businesses a noticeable boost, says Elizabeth Lockhart, whose family has run a series of small businesses in Austin for the past 45 years and owns 18 proper ties there today, most of them along Chicago Avenue.

Plans to redevelop the Laramie Bank building—where her family had accounts before Citizens Na tional Bank shut down in 1991—are helping Lockhart raise money for a 20-unit senior housing project she wants to develop four blocks east.

“It makes it easier to go to the bank. e bank supports you dif ferently (when the city is investing in the neighborhood), and funding has always been an issue, especially in our community,” Lockhart says.  But Invest South/West has also revealed how di cult it is to build consensus in a neighborhood about what development it needs, and the order of priorities. Winning bidders for the Auburn Gresham site encountered so much resis tance from residents who wanted more commercial development and less density that the developers redrew their plans and spread them across two properties.

e pushback highlighted the glacial pace at which even modest development projects come to gether when they require multiple public subsidies, an array of nan cial partners, months of communi ty review and approvals from sever al governmental bodies before they can begin moving dirt.

Brian Goldberg, whose Chica go-based LG Group is making its rst foray into the South Side as co-developer of a $20 million res idential building in Bronzeville, praises Invest South/West for help ing spark new projects that might not otherwise move forward.

Yet more than a year after plan ning o cials selected his rm for the project, he says he is still await ing city approval for the subsidies needed to move forward.

sites, but were hatched during that bidding process and are now seek ing city approvals.

“Most developers would tell you that if it were not for the city’s menu of nancial incentives, these deals

would simply not happen,” Cox says.

Projects have also bene ted from factors entirely separate from Invest South/West. e Neigh borhood Opportunity Bonus pro

“I hope if we do get approved, they can gure out how to acceler ate the (zoning) process,” he says. “ e easier they make it, the fast er they’ll get (projects) out of the ground, and the more developers will follow.” 32143-9688 notice required for change of address. © Entire contents copyright 2022 by Crain Communications Inc. All rights reserved.

Let

INFLATION AND HUNGER AFFECT ALL.

Only a hunger-free community can really be healthy. When we help feed our neighbors, we truly become a greater Chicago.

Please