Crain's Chicago Business - 10/4/21 by crainschicago

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JAMESON SOTHEBY’S INTERNATIONAL REALTY

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So, who’ll foot the bill for a new Bears stadium? It’s a tricky issue the team is poised to explore with Arlington Heights officials as they work toward a purchase of Arlington International Racecourse BY DANNY ECKER

MORE BEARS INSIDE

While Mayor Lori Lightfoot pleads with the Chicago Bears to give her a wish list that would keep the team at Soldier Field for another generation, the Bears appear to be far more focused on building their own stadium in Arlington Heights. But a key question remains about how the franchise would pay for it—and how much it will lean on taxpayers in the northwest suburb to help. That’s just one of the next steps for the franchise as it works toward a $197.2 million purchase of Arlington International Racecourse and a likely plan to redevelop the site with a venue it could

GREG HINZ: Three reasons not to bet on a Bears move just yet. PAGE 2 JOE CAHILL: Can Chicago avoid another sack? PAGE 4 The team’s awkward 50-year relationship with its landlord. PAGE 19 own and operate as it pleases. While it’s still too early to determine the scale of what the team would build on the See BEARS on Page 19

These mansions out in cold How antitrust cops even in white-hot market are helping United High-end home buyers have been on a shopping spree, but some homes linger unsold. Is it too late for them?

BY DENNIS RODKIN

IN THE VORACIOUS HOUSING MARKET of the past year and a half, some properties that had sat on the market for so long they were beginning to look unsellable got picked up by buyers. Among many others are a mammoth blufftop mansion in Lake Forest that was for sale almost continuously from 2007 until it sold in 2020 for less than its 1987 price, a vast St. Charles estate whose centerpiece mansion is a 1990s mashup of Japanese and airport hotel styles and a historical Lake Shore Drive mansion that hadn’t been updated in decades and first hit the market in September 2015, nearly six years before it ultimately sold. The boom reopened formerly logjammed mansion markets in See MANSIONS on Page 22 NEWSPAPER l VOL. 44, NO. 40 l COPYRIGHT 2021 CRAIN COMMUNICATIONS INC. l ALL RIGHTS RESERVED

“IF YOU GOT AN OFFER IN THIS COVID MARKET, THAT’S THE BEST OFFER YOU’RE GOING TO SEE. IF YOU DIDN’T TAKE IT, I DON’T KNOW IF (THE HOUSE) WILL EVER SELL.” Michael LaFido, agent, Exp Realty

BY JOHN PLETZ United Airlines stands to gain as antitrust enforcers get tough again. The U.S. Department of Justice is suing to block a partnership formed earlier this year by American Airlines and JetBlue Airways, which strengthened the two airlines in key United markets such

as New York and Boston. In the short term, JetBlue’s lower cost structure would give American a leg up in competing for price-sensitive leisure travelers on routes from Newark to Fort Lauderdale, Fla., and from New York to Miami. Air travel is skewing toward leisure See UNITED on Page 21

LABOR

ECONOMY

Art Institute union is riding a national wave.

Downtown parking garages gain as CTA, Metra lose.

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Case against American-JetBlue deal could defuse a threat to the carrier’s East Coast stronghold

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10/1/21 3:46 PM

GREG HINZ ON POLITICS

3 reasons not to bet on a Bears move just yet

potential investment partners, inside sources say. Money is cheap right now with low interest rates, the NFL likely will lend the team money if need be and Bears’ fans can be dinged for pricier seat licenses and the like. Beyond that, the current rage among those NFL billionaires is to own their playpens so they can maximize the revenues from ancillary entertainment district shopping, dining, perhaps wagering and more—kind of what the Ricketts clan has done bit by bit around Wrigley Field. On the other hand, interest rates are rising. Long-suffering Bears’ fans have limits to what they’ll pay. Big government assistance isn’t coming, at least not there. And assuming risk— big, hulking risk, combined with diminished family control over the enterprise—is not the kind of thing the McCaskey family is known for. So we’ll see. Item Three may be the most important. That’s whether Mayor Lori Lightfoot can come out of her stupor and devise a deal salable to both taxpayers and the team to renew their lease in a renewed Soldier Field. Call it status quo plus. One key person to watch in that drama is Bob Dunn, who made his name building and rebuilding NFL stadiums and now is pushing the huge One Central mixed-use development on air rights immewest of THE RELOCATION GAME IS SOMEWHERE diately Soldier Field. IN THE FIRST HALF. LOTS OF TIME LEFT. If Dunn can come up with a plan to dome Soldier Field at a talking not just a few convenient reasonable price—I hear he just tailgates each fall but intense may be working on that very development of hundreds of acres of property into a 365-day- thing—and improve the team’s cash flow by easing the way a-year recreation complex filled for stadium naming rights and with crowds, congestion and some other tweaks, the possibiltraffic? Is that what residents ity of a win-win-win exists. really want? We’ll find out. For Lightfoot, there’s the Item Two has to do the prospect of a major economteam-owning McCaskey/Halas ic boost for the South Side clan. consistent with her economic In a National Football League equity drive. And she’d dodge of billionaire owners, the family the “mayor who lost the Bears” is literally a mom-and-pop oplabel—while also opening eration. To build the Arlington up the possibility of hosting a Heights stadium (figure $1.5 Super Bowl or Final Four. The billion on the low side), pay off Bears would get a much-imthe Chicago Park District lease proved home in a world-class ($100 million) and develop location and a big boost in the rest of the property (who local revenues, all at no real knows), the clan is going to risk to the team. While a lot have to either massively dilute of seats wouldn’t be added, its ownership share by bringing something like 80% of NFL in lots of new partners, add a revenues comes from TV, not ton of debt to a business that seat sales. And Dunn? He saves now has little, if any, or do both. an anchor for One Central. Does this family have that in I’m not predicting it will turn them? Maybe. The major team out that way. But it could. The shareholder outside of the McBears’ relocation game is someCaskeys, insurance mogul Pat where in the first half. There’s Ryan, has a right of first refusal lots and lots of playing yet to if the team ever goes for sale come. and has been quietly looking for f their intent was to make a point, the Chicago Bears have accomplished the mission. By winning rights to buy the former Arlington International Racecourse property for $197 million, the Monsters of the Midway have underlined the reality that transforming the team into the Monsters of the Backstretch is a distinct possibility. But what is possible and what actually will occur are not necessarily the same. While the Bears leaving Soldier Field for Arlington Heights now appears to be at least an even bet, don’t wager your 401(k) quite yet. Ergo, three things to watch in months to come as drama over the Bears’ eventual home remains a lot more interesting than their production on game day. Item One: How much blowback will there be in Arlington Heights if the Bears actually try to move in? Initial media coverage from the northwest suburban community focused on a mix of self-congratulatory hometown boosterism and gold-rush-seeking comments from restaurateurs, barkeeps and the like eager to pull in a bunch of new business. Very understandable. What, however, happens when the rest of the village figures out that the Bears are

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Art Institute union riding a national wave Unionizing at cultural institutions—a trend fueled by pandemic layoffs—could spread to staff at other local museums BY STEVE JOHNSON Sparked by 2020’s pandemic-prompted layoffs and the year’s push for social justice, the nascent labor movement at the Art Institute of Chicago appears headed for an election that, if successful, would make the iconic institution the first major museum in the city to have a broad swath of its workers unionize. The move also makes the Art Institute part of a national wave of unionization at leading cultural organizations, spurred by COVID layoffs, and could entice other local museum staff onto that bandwagon. Last month, employees working to organize some 640 of their peers at the Michigan Avenue museum and at the affiliated School of the Art Institute announced a majority of those workers signed cards designating as their bargaining representative the new Art Institute of Chicago Workers United, which would be a part of the American Federation of State, County & Municipal Employees, the massive national union. In a news conference outside the museum and in letters to management, organizers asked the institutions to voluntarily recognize the worker group, a step that would forestall a formal election in the coming months and allow the union to start negotiating for goals including better wages and a greater say in how the school and museum are run. “We are saying, with one voice, that it is our will to form this union,” Art Institute librarian and union or-

ALAMY

2 October 4, 2021 • CRAIN’S CHICAGO BUSINESS

ganizer Kevin Whiteneir said at the Sept. 22 event that was punctuated by supporters chanting the union’s name—which they pronounced as “A-I-C-Whoo!” Museum leaders are less enthusiastic. In a letter to staff, while emphasizing they support workers’ rights to unionize, they said the voluntary recognition shortcut will not happen. “We want to be sure we honor each of your voices, whether you support unionization, do not support it or are still undecided,” said the letter signed by James Rondeau, Art Institute president and Eloise W. Martin director, and his leadership team. “Forgoing an election where each of you can make your individual voices heard is not in keeping with our values.” The view was similar at the uni-

versity, workplace to slightly less than half—about 300—of the people the new labor group is aiming to unionize. The nonmanagement staff who would be represented range from museum curators to school mailroom workers, from academic advisers to art handlers. “SAIC has long been committed to working collaboratively with staff on issues of importance,” school spokeswoman Bree Witt said via e-mail. “In our view, the school can best continue to address these issues, including matters such as compensation, job stability and professional opportunities, without the involvement of a union.” In interviews last week, union organizers said they are disappointed in what they see as See ART INSTITUTE on Page 7

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Labor flexes muscle with food giants Why workers are winning for a change

BY ALLY MAROTTI

SOARING DEMAND FOR PACKAGED FOODS and a tight labor market are giving food industry workers something they haven’t had in decades: bargaining power. A weeks-long strike at Mondelez International’s Nabisco bakeries ended recently with workers winning pay hikes and bonuses while refusing to yield on benefits. At South Side tortilla-maker El Milagro, employees are pushing back on production demands and seeking higher pay. Other food manufacturing giants, such as Conagra and Kellogg, can expect similar challenges as employees flex their newfound negotiating muscle. Workers are using the leverage they’ve gained as packaged-food companies scramble to meet still-high demand and struggle to fill vacancies amid a tight labor market. The shift means potential improvements in pay, benefits and working conditions for people who bake cookies, package snack foods and more.

El Milagro employee Irma Gonzalez

TODD WINTERS

See LABOR on Page 18

The biggest MBA programs in town are online holdouts

The pandemic pummeled Loop operators. But office workers, still shy about transit, are starting to drive in.

Traditionalists like U of C and Northwestern risk losing a lucrative slice of the market at a critical time

BY ALBY GALLUN The coronavirus pandemic has been especially tough on downtown parking garages, but commuters like Treacy Greer have softened the blow. Before the pandemic, Greer used to ride the CTA’s Red Line from Rogers Park to get to her job downtown. Now she drives, parking her car at a garage near her office in the Loop. The commute costs more, but it’s a price she’s willing to pay to avoid catching the virus on a crowded train. “It just feels like an avoidable risk,” Greer says. The rebound in car commuting is one pleasant surprise for downtown garage owners and operators in the COVID era, bringing in customers that

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wouldn’t consider paying to park in pre-pandemic times. It’s not the only one: A bigger share of hotel guests and tourists are traveling to and around downtown by car, rather than by taxi or Uber, filling some more parking spots. The problem, of course, is that the number of people working in and visiting the central business district remains a fraction of its pre-COVID levels. And the recent delta surge has delayed the recovery expected this fall by many downtown businesses that depend on office workers, including restaurants, stores and parking garages. The volume of workers entering Chicago-area office buildings has nearly doubled since early spring, but it’s still less than a third of its volume in Febru-

STEPHEN J. SERIO

The car’s comeback is easing parking garage firms’ pain The 9,176-space parking structure under Millennium, Maggie Daley and Grant parks lost $15.3 million in 2020 as revenue dropped 53% from 2019. ary 2020, before the pandemic swept into the city, according to Kastle Systems, a Falls Church, Va.-based company that sells building security systems. Parking companies are better off than they were last year, which was downright brutal. The biggest downtown parking garage—the 9,176-space structure under Millennium, Maggie Daley and Grant parks—lost See PARKING on Page 20

BY ELYSSA CHERNEY As demand for MBA programs rebounds after years of waning interest, business schools must confront a pivotal decision: Join the growing crop of universities providing fully online degrees or stick with the traditional model that puts a premium on in-person networking. Though online MBAs were once considered an inferior credential offered almost exclusively by for-profit and less selective institutions, the concept is gaining traction among students, employers and more prestigious universities as a more flexible— and perhaps more practical— pathway for working professionals to bolster their résumés. And with elite schools like UC

Berkeley and the University of Michigan recently jumping into the online space, pressure is building for competitors to consider the option, lest they lose out on a lucrative slice of the market. The University of Illinois at Urbana-Champaign launched a wildly successful online MBA in 2016, but Northwestern University and the University of Chicago, which boast two of the country’s highest-ranked programs, have no immediate plans to follow suit. “Ten years ago, this would have been a heresy, and yet now a lot of top programs are embracing it,” Jeremy Shinewald, founder of admissions consulting firm mbaMission, said of online See MBA on Page 21

10/1/21 3:50 PM

4 October 4, 2021 • CRAIN’S CHICAGO BUSINESS

JOE CAHILL ON BUSINESS

Can Chicago avoid another sack?

team playing at Soldier Field hasn’t closed those fault lines. But it gives tens of thousands of people from across the region a reason to come downtown and mingle with folks from other parts of metropolitan Chicago. That experience helps foster a feeling of common identity rooted in the city. I don’t doubt the Bears would draw enough fans to fill a stadium in Arlington Heights. But in abandoning a downtown location roughly equidistant from all their fans, they would appear to favor some over others. Consider the differing impact of the move on fans from various locales. For fans from Lake Forest, travel time to Bears games would drop to 40 minutes from more than an hour. Fans from South Holland, by contrast, would see their travel time double to an hour. The move also would take some shine off one of our region’s most important economic attractions. A thriving downtown sets Chicago apart from all but a handful of American cities. The city’s lakefront, Michigan Avenue, museums, A BEARS MOVE WOULD BE ANOTHER restaurants and other cultural and entertainment assets draw PAINFUL BRUISE FOR THE CITY. visitors from around the world and attract businesses out-of-towners to wonder if seeking new office locations. Chicago is safe to visit, and That creates jobs, drives up locals to think twice about vendemand for a wide range of serturing out at night. Reputational vices and helps support housing damage control gets harder prices across the area, not just in every day, with newspapers as the city. far away as England reporting Some point out, correctly, on Chicago shoplifting gangs. that pro sports teams in other At the same time, a historic cities have moved to suburban pandemic has led some city locations without appearing dwellers to re-evaluate another to harm local economies. But risk of living in dense neighthose cities generally lack borhoods. After a couple of downtown areas on par with decades that saw suburbanites Chicago’s. Have you ever heard move downtown, the past year anyone gush over downtown has witnessed an outflow of Dallas or Los Angeles? Many Chicagoans who are trading other cities, including Balticondos and townhouses for more, Cleveland and Minneapthe suburban tract houses they olis, have gone the other way, once shunned. building new stadiums downA departure by Chicago’s town that helped spark urban NFL franchise would stand revivals. as a high-profile example of Of course, downtown Chicathe trend, another signal that go will retain its attractions no downtown is no longer the matter where the Bears play. place to be. But if they move to Arlington That would be bad news, not Heights, the city would lose only for Chicago but for the some valuable free advertiswhole metropolitan area. A ing. No longer will television vibrant urban core helps bind viewers across the country see the region together. Anything the magnificent Chicago skyline that weakens it loosens bonds and lakefront when they tune in throughout a sprawling, to Bears games. 9,600-square-mile metropolis I don’t mean to overstate the that already suffers too much impact of a Bears move out of geographic factionalism. Didowntown. It wouldn’t be an vides between North, South and economic body blow on its West would only deepen when own. It would be the latest in a there’s less sense of connection series of painful bruises for the to a central hub. city. True, having a pro football he Chicago Bears’ suddenly serious interest in moving to Arlington Heights couldn’t have come at a worse time for Chicago. As team officials move toward buying land for a suburban stadium, city leaders are trying to reignite a downtown economy battered by COVID and control a crime wave that’s spreading fear all over town. While the possible loss of an NFL franchise pales beside those and other challenges facing Chicago, it’s potentially another dent in a banged-up municipal fender. Losing the Bears would fuel an emerging narrative of urban decline that’s gained momentum over the last year or so. It’s not so much the direct financial impact that matters as the effect on Chicago’s reputation, a hard-to-quantify but undeniably important asset that underpins the entire metropolitan region. The city’s image has taken a beating lately. Rampant carjackings and expressway shootings generate headlines, causing

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In a struggling industry, some see hope in this unusual combo Here’s how the leaders of the Chicago SunTimes and WBEZ see a combination working BY ALLY MAROTTI Industry observers are optimistic about the Chicago SunTimes and city public radio station WBEZ’s plan to join forces, creating possibly the first scenario in the nation in which a public radio station owns a newspaper. The organizations signed a nonbinding letter of intent Sept. 29 to figure out a partnership. “Lord knows we need some sort of new approaches and experiments” in journalism, said Rick Edmonds, media business analyst for the Poynter Institute, a nonprofit journalism school and research organization that owns the Tampa Bay Times. “This is an interesting new thing.” There are clearer paths for newspapers to become nonprofits now, and precedent has been set for nonprofits owning newspapers. Besides the Tampa Bay Times model with Poynter, the Philadelphia Inquirer is owned by a nonprofit called the Lenfest Institute. Lenfest advised on the proposed Sun-Times/WBEZ merger, said Lenfest CEO Jim Friedlich. The combination is a win for both organizations, but also for Chicagoans, who will benefit from stronger local journalism, he said. “Each news organization brings unique strengths and audiences to the combined entity—the digital and real-time news capability of the SunTimes marries wonderfully with the broadcast reach and audio expertise of WBEZ and Chicago Public Media,” he said in an email. “The merger will serve Chicago with the public-service journalism it both deserves and needs.” Indeed, the heads of both organizations said Sept. 30 that the goal is to expand their reach. Together, they can reach 2 million readers per week across broadcast, print and digital, said Matt Moog, who was interim CEO of WBEZ for a year until the board made his position permanent last week. Since news of the deal broke Sept. 29, Moog has been telling his employees this isn’t about job cutting, it’s about expanding and innovating in journalism. He emphasized his point the next day. “There are no plans for staff reductions of any kind,” he said. “The fundamental premise of this entire combination is that this is about growth, this is about investing.” Moog said WBEZ employs

about 155 people and has 30 job openings, about half of which are in the newsroom. Sun-Times CEO Nykia Wright declined to comment on how many employees the paper has but said key positions in its newsroom are open as well. Both leaders declined to comment on terms of the deal and said details around the combination are still being sorted out. That includes what products will be delivered to readers and listeners. Wright said there are no changes planned to the SunTimes print publication, but the organization does want to bolster its digital subscriptions. They are also still working out the future structure of the newsrooms. There are beat overlaps, but that doesn’t mean cuts, Wright said. Everyone is so used to hearing about consolidation in the industry, that people think only one person can cover a beat, she said. “This is the third-largest city in the U.S.,” she said. “There’s a lot out there that is not being covered.” Poynter’s Edmonds agrees. He has written for several years about how local NPR stations, already robust news organizations, were further stepping up to fill news coverage voids left as papers have shrunk in recent years.

FUNDING

One benefit to a paper becoming nonprofit is a new revenue stream: funding from philanthropic organizations. The news release said that in addition to Sun-Times investor Michael Sacks, the Pritzker Traubert Foundation and the John D. & Catherine T. MacArthur Foundation “have stepped forward with early and enthusiastic support.” Moog said that support is helping to finance the Sun-Times acquisition. Chicago Public Media, which operates WBEZ and sister station Vocalo, is a longtime beneficiary of both foundations. MacArthur Foundation President John Palfrey said his organization is eager to be an early supporter of the collaboration, which he hopes will strengthen local journalism and help newsrooms diversify their staff. “We are pleased to see emerging models devoted to addressing the crisis in the news media business and the significant

challenges facing our democracy today,” he said in a statement. Supporting journalism and media is one of MacArthur’s key areas of funding, and it specifically looks to prop up reporting from nonprofit organizations, one of the biggest examples of which is ProPublica. It has awarded $116 million in grants and investment through these efforts between 2015 and 2020 and says it seeks to strengthen American democracy by bolstering independent media. Chicago Public Media has received nearly $5.6 million from MacArthur through various grant programs since 1982, according to its website. The money has helped underwrite general operations, acquisitions, new projects and hallmark programs like “This American Life.” WBEZ’s Race, Class and Communities Desk, which the station added in 2018, also received financial support from the Pritzker-Traubert Foundation. Foundation co-founder Bryan Traubert, a retired ophthalmologist and husband of Penny Pritzker, is a director on WBEZ’s board. Some industry observers have pointed out even before the merger that Chicago’s journalism scene is at an inflection point. Hedge fund Alden Global Capital bought the Chicago Tribune earlier this summer, and dozens of journalists left the paper in buyouts that followed the deal. A steady drumbeat of leadership and other employees have continued to leave since. At the same time, more publications around the area are making the switch to become nonprofits. And all the while, WBEZ has been hiring. A final agreement has not yet been reached, and leaders expect the deal to close by the end of the year. Of course, nonprofit ownership does not provide a shield against the newspaper industry’s headwinds, Edmonds said. Circulation costs continue to rise. And in a two-paper town like Chicago—a dying breed— advertising dollars are sometimes split. “Those (challenges) will remain for the Sun-Times,” he said. Still, a partnership with WBEZ parent Chicago Public Media will help secure the future of the Sun-Times, Jorge Ramirez, chairman of the Sun-Times board, said in the release. “The primary goal of every Sun-Times investor has been to strengthen and secure the future of the paper,” he said. “The right transaction with Chicago Public Media can do that by creating a strong and sustainable Sun-Times for the journalists and for Chicago.” Elyssa Cherney contributed.

10/1/21 1:13 PM

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6 October 4, 2021 • CRAIN’S CHICAGO BUSINESS

THE TECH TAKEAWAY

William Payne PRESENTS

Payne, a seasoned business and technology executive from the telecommunications industry, is the new executive director of Polsky Science & Technology, a group within the Polsky Center for Entrepreneurship & Innovation at the University of Chicago. Payne, who declines to give his age, and his wife live in Glen Ellyn and have three grown children. By Laura Bianchi

Thursday, Oct. 21 | 9-10 a.m.

FORECASTS

OPPORTUNITIES In partnership with Bank of America, Crain’s Chicago Business will host a Middle Market webcast featuring a Our expert panelists will discuss the current challenges and opportunities in the middle market space and a provide a forecast of what’s ahead in Q4 and 2022.

What’s the hot tech at Polsky now? Quantum technology, such as communications, data security, sensors and computing. It feels as exciting as the early stages of telecommunications because of the broad applications.

What was your childhood like? My parents were both college educated. They sent me to private schools on the South Side of Chicago, and my father was always interested in science.

panel discussion with CEOs from a range of industries.

Was he an inspiration? I spent a lot of time with him working on science projects. I remember when we made an optical burglar alarm using a silicon photo detector. It took first place at a science fair. For Christmas, I always got science kits.

CHALLENGES

You worked on broadband optical communications, high-speed internet and technologies for mobile telecommunications during the early days of telecoms at Motorola, AT&T, Bell Laboratories and Nokia. How did that feel? To be on the front end of cable internet and 4G/LTE cellular, which have become pervasive in our lives, was exciting and quite satisfying. No matter where you go in the world, everyone is on the internet, looking at a phone.

What was your turning point? Between my junior and senior years in high school, I participated in a twoweek program at Purdue called the Minority Introduction to Engineering. It was a decisive moment.

PRODUCED BY

A favorite movie? “The Imitation Game,” about Alan Turing, who decrypted German intelligence messages during World War II. Even after all of his contributions, he was ostracized because he was gay. Even now, people will question science based on how they feel about the messenger—their race, sexual orientation and more.

> Have you felt that? Early in my career, there were times when I would make a suggestion during a meeting and people would just nod. But then a Caucasian would make the same comment and people would acknowledge it, appreciate it more.

> Most embarrassing career moment? When I first got promoted at Motorola, I was driving to the CEO’s welcoming meeting for new VPs when I hit a traffic jam. A deer had been struck on I-290.

> What happened when you arrived? There I was, the only African American, feeling proud of my advancement, and I walked in 12 minutes late.

> What did you say? “You are probably not going to believe this . . .”

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10/1/21 4:44 PM

CRAIN’S CHICAGO BUSINESS • October 4, 2021 7

Art Institute workers move toward union vote ART INSTITUTE from Page 2 counterproductive resistance on the part of management. In frequent internal communications that the workers label as undermining and management sees as informational, Art Institute leaders emphasized voluntary steps they’ve taken toward pay equity; improved communications on matters such as diversity, equity and inclusion; and what management sees as generous benefits. “The Art Institute has been committed to ensuring that the wages and benefits that we’re offering are either on par with or surpassing our peers,” said Kati Murphy, the museum’s public affairs director. “In all the time that I’ve worked here, this is the most communication I’ve ever had with management ever,” said Katie Bourgeois, a mailroom technician and dock manager at the school. “I’m getting like weekly emails from (school President) Elissa Tenny telling me what’s up.” Their current focus, Bourgeois and other organizers said, is to strengthen their hand by increasing the proportion of workers signing union cards before they call on the National Labor Relations Board to hold the determinative election. “We want to make sure,” Whiteneir said, “that when we now have to go through the election process, that we show up in full force and say, ‘This is an overwhelming majority of our employee base that wants to be represented by, that wants to be part of, this union effort.’ “ “We’re not going to stretch this out forever,” added Eala O’Se, an organizer and a material source manager at the school. “But the timeline is dependent on making sure that we have the support we need.” Unionization of cultural institutions is a national trend fueled recently by pandemic layoffs that, in many institutions, hit employees of color especially hard. AFSCME has been pushing to organize cultural workers, said Illinois chapter spokesman Anders Lindall, with the Philadelphia Museum of Art, Minneapolis’ Walker Art Center and Los Angeles’ Museum of Contemporary Art among those where workers have recently banded together. In New York, workers at the Whitney, the Guggenheim and the Brooklyn Museum have organized recently with the United Auto Workers, among other examples. The Brooklyn Museum’s NLRB election, held in August, saw the unionization effort win by an overwhelming margin. “I do think that if the pandemic deepened the sense among employees in Chicago that there wasn’t a lot of transparency, there wasn’t a lot of accountability, that their jobs were somewhat tenuous and at the whims of top management, that that has been true around the country,” said Lindall. Between them, as the pandemic forced periods of long museum closures and limited attendance that devastated revenues, Art Institute and the SAIC cut more than 150 jobs during the pandemic and put scores of workers on furlough while also instituting management pay cuts.

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Past attempts to organize Chicago museum workers have seen only minor success. Some technical workers at the Museum of Science & Industry belong to the International Brotherhood of Electrical Workers, while the Service Employees International Union represents nonmanagement staff at the DuSable Museum of African American History. But unionization drives early this century at the Field Museum and Chicago History Museum failed, as have more recent attempts to unionize part-time faculty at the School of the Art Institute, said Therese Quinn, professor and director of

museum and exhibition studies at the University of Illinois at Chicago. “It’s wonderful to see there has finally been success across the museum and school,” said Quinn, a former full-time faculty member at SAIC. “Whenever we see a large institution like the Art Institute of Chicago unionize, it sends out a ripple effect and it incites other organizing attempts.” In the view of non-Chicagoans, “this is the major cultural institution in many ways,” she added. “Nationally and internationally, people are going to have their eyes on this. And it puts Chicago more solidly on the map as a union town.”

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10/1/21 12:47 PM

8 October 4, 2021 • CRAIN’S CHICAGO BUSINESS

Chicago investor poised to buy Lakeshore East high-rises The sale of the Tides and Shoreham, which total more than 1,100 apartments, could represent a further thawing of the downtown apartment investment market The owner of the Presidential Towers housing complex in the West Loop is stocking up on more apartments in Chicago, with a deal in the works to buy two high-rises totaling more than 1,100 units in the Lakeshore East development. Waterton, a Chicago-based apartment landlord, has a preliminary agreement to buy the Tides, a 608-unit tower in Lakeshore East, and the Shoreham, a 548-unit building next door, according to people familiar with the transaction. It’s not clear what Waterton is paying for the properties, but the combined price could approach $400 million. The deal could represent a further thawing of the downtown apartment investment market, which froze up in the early months of the COVID-19 pandemic last year. Investors and lenders hunkered down as rents and occupancies plunged, with few large buildings changing hands. But the downtown market has shaken off its funk this year, with rents bouncing back to above pre-pandemic levels and investors more willing to put their money at risk. Sales of big buildings are starting to pick up: In July, San Francisco-based FPA Multifamily paid $175 million for McClurg Court Center, a 1,061-unit com-

plex in Streeterville now known as Arrive Streeterville. More recently, Dallas-based Lincoln Property has agreed to pay more than $90 million for the Bernardin, a 171-unit tower in River North, according to people familiar with the property. Yet investors still have one reason to be wary of the city: Cook County Assessor Fritz Kaegi is in the process of reassessing downtown properties, and some have already been hit with big increases, raising the prospect of higher property taxes, which can depress the value of buildings.

PROPERTIES

Waterton is buying the Tides, at 360 E. South Water St., and the Shoreham, at 400 E. South Water, from the AFL-CIO Building Investment Trust. The trust invested in the construction of the buildings and bought out its development partner, Chicago-based Magellan Development Group, about five years ago. The towers are directly south of the St. Regis Chicago, a new 101-story skyscraper on East Wacker Drive designed by Jeanne Gang. A Waterton executive did not return calls, nor did a representative of Washington-based PNC Realty Investors, a unit of Pittsburgh-based PNC bank that oversees the properties for the trust. An executive at CBRE, the broker

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BY ALBY GALLUN

The Tides, left, and the Shoreham, right, could sell for a total of about $400 million. selling the two buildings, declined to comment. The Shoreham, which opened in 2005, and the Tides, which opened in 2008, aren’t that old, but they could use some work, like new appliances and finishes in their apartments. By investing some money into a renovation, a new owner could hike rents, boosting the value of the buildings, according to CBRE marketing brochures for the properties.

“While in excellent condition with good bones and achieving desirable rents, there remains a rent gap compared to the top-tier downtown Chicago multifamily assets,” says the brochure for the Shoreham. “Additional premiums can be achieved by instituting an upgrade program on the interior finishes to improve the premier luxury features such as quartz countertops, under-mount sinks, new cabinets, lighting, tile back-

splashes, and flooring.” Waterton specializes in fixer-uppers, or “value-add investments,” in industry parlance. Founded in 1995, the firm owns about $7.7 billion in assets nationwide. In addition to Presidential Towers, a 2,346-unit property in the West Loop, Waterton’s Chicago properties include the Belden-Stratford in Lincoln Park, River North Park in River North and North Harbor Tower, next to Lakeshore East.

Sterling Bay lands $125M loan for Lincoln Yards building BY DANNY ECKER Sterling Bay has begun work on its first new building at Lincoln Yards after landing a $125 million construction loan, kicking off a long-awaited $1 billion first phase of the sprawling North Side megaproject. The Chicago developer announced Sept. 30 it has secured the financing for an eight-story life sciences building at 1229 W. Concord Place from Bank OZK, the Little Rock, Ark.-based firm that has been one of the most aggressive construction lenders in the city for several years. The 320,000-squarefoot building, dubbed Ally, is expected to be completed by spring 2023 along the south side of Concord on the west bank of the Chicago River. The loan and groundbreaking are key steps for Sterling Bay as it looks to jump-start a 55-acre, mixed-use campus along the North Branch of the river between Lincoln Park and Bucktown. The developer, which has partnered with Chicago-based real estate private-equity firm Harrison Street and the investment arm of

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JPMorgan Asset Management on the new project, won City Council approval for the 14.5 millionsquare-foot Lincoln Yards project in early 2019.

MOMENTUM

Sterling Bay has started early work on the new building without any tenants signed, its largest wager to date on a local life sciences sector that has lots of momentum. Demand from biotech and pharmaceutical companies for lab space in Chicago more than tripled between early 2019 and late 2020, according to brokerage CBRE, while venture capital flowing into those fields surged. That has prompted new life sciences-focused projects from developers such as Sterling Bay and Dallas-based Trammell Crow, which are betting local biotech startups that are born at local universities will grow in Chicago if they have the high-quality lab space to do it. The glassy Ally building will include 128 feet of frontage along the river, 42,000-square-foot floor plates and a tenant amenity space and fitness center on the build-

ing’s first and second floors, according to a website detailing the project. Sterling Bay has already had leasing success at a smaller life sciences building in Lincoln Park at 2430 N. Halsted St., where tenants include molecular engineering technology company Evozyne, neurological disorder research firm Vanqua Bio and gene therapy-focused Northwestern spinout Exicure. The existing inventory of life sciences lab space in Chicago “prevents the industry from reaching its highest potential here,” Sterling Bay CEO Andy Gloor said in a statement. The new building and those that follow at Lincoln Yards “will meet the needs of today’s most exciting and rapidly expanding life sciences companies, create a new home for scientific research in Chicago and help the city continue to build its reputation as a major player in this critically important sector,” the statement said. Gloor said earlier this year at an Executives’ Club of Chicago event that life sciences buildings could account for several million square

GENSLER

The eight-story life sciences project will be the first new development at the planned megaproject, which won City Council approval more than two years ago

A rendering of Ally at 1229 W. Concord Place. feet of development at Lincoln Yards, making “the majority of our use up there.” A Sterling Bay spokeswoman declined to share the total estimated cost of the Ally project.

INVESTMENTS

Harrison Street has also been a leading investor in life sciences properties and late last year announced it had raised $720 million for a fund that will target properties in the sector. The firm has partnered with Sterling Bay on three other life sciences projects totaling about 1.9 million square feet in San Diego and Denver.

With its backing of the Lincoln Yards building, Bank OZK over the past 14 months has led construction loans totaling roughly $400 million for Sterling Bay projects in Chicago, including a large piece of a $100 million mortgage for Sterling Bay’s new office project at 345 N. Morgan St. in the Fulton Market District. Bank OZK is the primary lender on Sterling Bay’s 47-story hotel and residential tower under construction at 300 N. Michigan Ave. and put up a $31 million construction loan for a 15-story office building that New York-based Vista Property Group is developing at 601-609 W. Randolph St.

10/1/21 12:58 PM

Stepping up when it matters most Last year, we committed $1.25 billion over five years to build on our long-standing work in support of driving racial equality and economic opportunity. To date, we’ve directly funded or invested nearly $400 million of this commitment, in addition to other ways we continue to make an impact in our communities. Our actions include: •

$36 million to 21 Minority Deposit Institutions (MDIs) and Community Development Financial Institution (CDFI) banks that support minority-owned businesses. This is in addition to our approximately $100 million in deposits to MDIs and our existing $1.8 billion CDFI portfolio.

•

$300 million to 100 equity funds to provide capital to diverse entrepreneurs and small business owners

•

$10 million grant to fund the Center for Black Entrepreneurship (CBE), in partnership with Spelman and Morehouse colleges

•

$25 million to 21 Historically Black Colleges and Universities (HBCUs), Hispanic-serving institutions (HSIs) and community colleges in support of job skilling and placement

•

Establishing new partnerships and coalitions focused on building skills and creating job opportunities for people of color

•

$60 million to increase access to capital and career opportunities for Black, Indigenous and People of Color (BIPOC) affordable housing developers

•

33 million+ masks, more than 272,000 bottles of hand sanitizer and 8 million gloves to communities in need

•

$1.35 million in grants to support mental health initiatives for young people of color

•

$25 million founding partnership in the Smithsonian’s new initiative on race, Our Shared Future: Reckoning with Our Racial Past

These are just some examples of how we’re working with community partners, business leaders, experts and academics across the public and private sectors to continue to drive progress. At Bank of America, we call this a nice start.

Paul Lambert President, Bank of America Chicago

What would you like the power to do?® Go to bankofamerica.com/chicago to learn more. Bank of America, N.A. Member FDIC. Equal Housing Lender

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10 October 4, 2021 • CRAIN’S CHICAGO BUSINESS

OPINION EDITORIAL

Now we have proof: Vaccine mandates work

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hroughout the agony of a pandemic that’s dragged on for nearly 20 months with no signs of abating, it’s been easy to overlook one important fact: While we have witnessed unprecedented global suffering, we have also beheld scientific marvels—astonishing pharmaceutical breakthroughs that beleaguered nurses and doctors slogging through the 1918 flu epidemic, our last such public health crisis, could only have dreamed of. Starting in early 2020, scientists around the world collaborated with blazing speed to produce remarkably effective vaccines to counter the effects of a coronavirus that had never been detected among humans before. That speed owed itself in part to the ability to piggyback off of earlier breakthroughs, the result of decades of prior work on vaccine technology that allowed scientists to chop not just days or months but years from the usual production timelines. As one prominent researcher recently put it, the rapid development of COVID-19 inoculations represents “a sea change in how to develop vaccines.” At the same time, pharmaceutical companies and research institutions around the world, including North Chicago’s own Abbott Labs and the University of Illinois, created quick, affordable and reliable tests to detect COVID. Equally extraordinary is the news just emerging that Merck, Pfizer and Roche, among others, are poised to seek authorization for antiviral pills that in clinical trials are cutting the risk of hospitalization and death among people who test positive for COVID, a potential game-changer in

United Airlines pilot Steve Lindland receives a COVID-19 vaccine from nurse Sandra Manella at United’s onsite clinic at O’Hare International Airport. the fight to curb this disease. In a previous era—say, the mid-20th-century, one in which the world gladly rolled up its sleeves for a vaccine to eradicate the scourge of polio—these breakthroughs would be embraced and celebrated. Sadly, we don’t live in that world right now. Instead, misinformation about COVID and the interventions that could have brought us closer to stopping it in its tracks has

clouded Americans’ thinking and only prolonged the social and economic disruption. That’s why CEOs like United Airlines’ Scott Kirby should be commended for declaring definitively that it’s time to use the tools at our disposal—in particular, our proven, safe and effective vaccines—to bring this virus to heel and put us on the road to recovery. When Kirby in August mandated that

all the Chicago-based carrier’s employees must be vaccinated by the end of September or face termination, some industry observers worried he’d have a mutiny on his hands. The final tally proved otherwise: Fewer than 3% of United’s U.S. employees—or about 2,000 staffers—sought exemptions for medical or religious reasons. Once the tally was done, United said it was beginning the process of firing 320 workers for failing to provide proof of vaccination by the deadline. For a company with 67,000 employees, that’s a virtual drop in the bucket. “This is a historic achievement for our airline and our employees as well as for the customers and communities we serve,” Kirby said in a statement to employees once the final count was in. “Our rationale for requiring the vaccine for all United’s U.S.-based employees was simple—to keep our people safe—and the truth is this: Everyone is safer when everyone is vaccinated, and vaccine requirements work.” One-quarter of companies have instituted a vaccine mandate for U.S. workers, a sharp increase from last month, Bloomberg News reports, and an additional 13% of companies plan to put a mandate in place. United’s experience suggests even more employers can and should do the same. Yes, there’s a risk some staffers may jump ship rather than take the jab. But it’s well past time to weigh that risk against the cost of allowing this virus to incinerate the economy, particularly when the world’s science community has given us the ability to douse the flames.

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YOUR VIEW

Illinois created a weed mess. Here’s how to fix it.

happen between the license fter more than a year of award and opening day—indelays, the state of Illinois cluding designing and building is expected to issue about the facility and passing all in400 cannabis business licenses spections and approvals. in 2021— mostly to social equity owners from communities disproportionately impacted by the Currently, extensions are war on drugs. The resulting flood individually granted, not of new business owners has creuniversally guaranteed. ated an artificial land rush—a The land rush situation was competition for real estate and entirely avoidable. The Illinois limited resources—that’s collid- Andy Poticha is CEO Cannabis Social Equity Proing with pandemic-related sup- of Cannabis Facility gram was created as part of the ply chain issues. Cannabis Regulation & Tax Act Construction, an One solution wouldn’t cost affiliated brand of that legalized recreational marthe state a dime: time. We call on Mosaic Construcijuana as of Jan. 1, 2020. Many state lawmakers to grant a uni- tion, a national large cannabis companies were versal extension giving new can- design/build firm grandfathered in under the pronabis business owners at least a based in Northvision that operating medical year to build their facilities. cannabis dispensaries could brook. Under current regulations, a transition immediately to recrenew business is on the clock from the day ational sales, while new social equity busiits license is awarded and is expected to nesses were left waiting for over 18 months. be running within six months. However, The state dragged its feet and is now obtaining a license is the inception of an making vulnerable new businesses ask expensive, risky and complicated process. permission for the extra time they clearly Even under ideal conditions, myriad steps need. Licensees can apply for—but aren’t

assured—a six-month extension. With no intervention, 400 companies are competing for resources within overlapping six-month windows. Expert design/build contractors like us, as well as legal, financial and risk advisers, will guide licensees through the bottleneck, but more challenges lie ahead.

were submitted. Most new licensees are scrambling to convey certainty as they pitch investors for the capital required to launch their multimillion-dollar enterprises. These factors are converging while cannabis investor confidence is wavering in Illinois due, in part, to the state’s ad hoc licensing approach.

Construction supply chain issues

Time, flexibility and certainty will help.

compound the land rush. Cannabis entrepreneurs under tight deadlines for construction must also contend with pandemic-related supply chain shortages. For example, license winners looking to build ground-up, prefabricated steel buildings are seeing delays of six to nine months for shell construction alone, not including the buildout of the cannabis facility inside. Materials including high-performance HVAC systems are stalled, while lumber supply remains volatile as well. Finally, these delays are happening as we approach the challenging winter season. Construction costs and time horizons have skyrocketed since license applications

The solution is simple and in the state’s control: Move immediately and universally to grant extensions. Cannabis licensees need more time, flexibility and the certainty that they can launch their business leveraging high quality resources, goods and services. Time will allow entrepreneurs to seek investment with surety and create the generational wealth that was intended by the social equity cannabis program. The state must make amends for its own delays and treat new cannabis entrepreneurs as the business partners they are, important future generators of significant tax revenue for Illinois and leaders in the cannabis industry.

Peo

ple

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

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CRAIN’S CHICAGO BUSINESS • October 4, 2021 11

READERS RESPOND

‘Da Arlington Bears has a good ring to it’ Readers reacted on social media to the Bears’ deal to buy the Arlington International Racecourse property

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are ch ch se nois ng

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horrible time to be Arlington Heights or Chicago. Plus, like every other city with a suburban stadium that hosts a Super Bowl, all the action such as hotel and restaurant revenue will stay downtown.

JAYSUM HUNTER

MARTY BALOGH

We actually need our first professional

Bears trying to weasel two cities against

football team this year.

er or s e nor y 0 e

or s e mur ll me ve-

officials should try to attract and land another NFL team to Soldier Field. It’s time for the third-largest market to expand and have two professional teams.

If the Bears relocate to the burbs, the city

KEVIN MCDONNELL

each other to get new stadium at zero cost to the team. GREG MARTIN

If this is about landing a Super Bowl,

dome or not, in January/February it is a

Arlington is a better business deal.

There’s more space and opportunity. Chicago screws up everything. TURK GUY Agree, Bears and city screwed up, and

that’s why Soldier Field is the way it is now. Heck, look at Sox Park. But I disagree on the space. While the grounds are 300+ acres, it’s pretty landlocked for access. A lot of residential properties on the south/Euclid side and Metra Rail on the north side. I would think (there would) be more uproar from those homeowners. . . .Traffic: Only

one major road in, Route 53, with two fixed exits at Euclid and Northwest Highway. Currently at Soldier Field, you have four major highways into the city, along with a heavier public transit system. . . .Bears are 25 years too late to this property. But hey, if they will pay 98% of the cost with private funds (higher ticket prices too) with minimal public dollars, let ’em go at it. GREG MARTIN Da Arlington Bears has a good ring to it.

RAFAEL MURILLO

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We are thrilled to recognize Mary Dillon, one of Chicago’s foremost civic and corporate leaders. Curious, consistent and collaborative, she presided over Ulta Beauty’s transformation over the last eight years, now well-positioned to continue to lead the industry. Mary is well-known for embracing diversity and inclusion, seeing it as a powerful force that drives authenticity, equity and innovation. She has contributed enormously to Chicago’s leading status throughout the world through her vision, entrepreneurial spirit, and dedication to service and philanthropy.

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President and CEO Health Care Service Corporation Blue Cross Blue Shield of Illinois is a great role model for companies around the world, especially for its Blue Door Neighborhood Center concept in the city’s Morgan Park neighborhood that combines workspaces and community resources. Inclusive economic development like this, and the company’s commitment to changing the way health care is delivered to underinvested communities, who were the most affected by COVID-19, and its focus on mitigating health disparities, is impactful and represents true corporate leadership.

Roger C. Hochschild CEO and President Discover Financial Services

Discover Financial Services is committed to corporate social responsibility and making a difference in local communities. The company’s newest customer care center, in Chicago’s Chatham neighborhood, is an example of inclusive site selection and equitable economic development. Discover seeks to contribute to diversity, equity and inclusion through programs that positively impact employees, customers and the communities in which it operates.

2021 Chicago Sister Cities International Volunteer off th he Year

Kimiyo Naka

2021 Chicago Sister Cities International Volunteer of the Year Kimiyo Naka, Chair of the Osaka Committee of CSCI, is a dedicated citizen diplomat who helps promote Chicago as a global city. She has strengthened Chicago’s profile in Japan, built partnerships with Japanese and business communities in Chicago, organized events showcasing Japanese culture, and has served our city selflessly.

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10/1/21 3:09 PM

12 October 4, 2021 • CRAIN’S CHICAGO BUSINESS

YOUR VIEW

For Chicago companies looking to diversify, stop overlooking City Colleges students

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erations, e-commerce and prorom one year to the next, curement. Sitting in class felt Chicago companies say like getting the keys to a world they believe a diverse workI had been able to see only force makes them stronger. But through a keyhole, and opening every year, many of those compathe door revealed a world every nies return to the same universibit as fascinating as I thought it ties, rather than looking right next would be. door when recruiting underrepDuring my first year, I applied resented students. These candifor a scholarship through Pepsidates are right here in Chicago. I Co. I knew that working at a maknow because I’m one of them. If jor company like PepsiCo could Chicago companies want to build Antoinnette Smith stronger, more diverse work- attended Olive-Har- be the next step in achieving my goals. I got the scholarship and, forces, they should invest in the vey College and in the summer of 2020, accepthome-grown talent they can find graduated with an ed an internship at PepsiCo, at City Colleges of Chicago. associate degree in where I was able to apply what As a kid growing up on the supply chain manI had learned. It wasn’t theory South Side, I always wanted agement. anymore. It was hands-on, reto know how things worked in the warehouse when it comes to the sup- al-world, practical knowledge. I was part of a pilot program to recruit loply chain. The complex logistics of distribution of brands and products from all cal talent from City Colleges of Chicago beover the country moved like a finely tuned cause leaders at the company had noticed machine. There was something beautiful what I knew: As one of the largest commuabout the harmony of it, like each element nity college networks in the country, City was part of a symphony. I wanted to know Colleges of Chicago is packed with students who bring a different set of life experiences everything about it. At the age of 23, inspired by women I knew and perspectives than typical four-year colon the corporate side, I took a job as a ship- lege students. We also have the drive, work ping clerk in a distribution center for a major ethic and intellectual curiosity that makes pharmacy. When I asked these women how for great hires and future leaders. During the 2020-21 academic year, my they had gotten to where they are, the answer was always the same: They went back on-the-job learning at PepsiCo continued to school. So when I was 25, I enrolled in Ol- while I studied full time. This summer, I ive-Harvey Community College to major in interned full time at PepsiCo and will return to the co-op model in the fall as I comsupply chain management and logistics. I took classes in economics, logistics, plete my coursework for graduation in May purchasing, inventory management, op- 2022. This valuable experience has allowed

me to gain deeper insights into the industry, to see the supply chain in action and to understand what it will take to launch my own business someday, which is my 5- to 10-year goal. It’s good to see PepsiCo helping even more students of color gain access to education and jobs. Earlier this year, the PepsiCo Foundation announced a $40 million scholarship program, investing in 4,000 Black and Hispanic students throughout the country,

including 425 Chicagoans like me and partnering with City Colleges of Chicago, Hundreds of companies like PepsiCo in Chicago are looking to diversify their workforces while bringing in the best possible candidates to develop into future business leaders. And thousands of students in Chicago like me are ready to seize opportunity and do great work from day one. We’re from the South and West sides. We’re the solution, and we’re right here.

An open letter to Illinois leaders: We can solve the Chicago area’s water challenges

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STEPHEN SERIO

ur region faces complex stormwater challenges, exacerbated by climate change. Fortunately, there are economic and practical means to address these problems as a region. Earlier this year, the cities of Joliet and Chicago agreed to work together to provide water to residents of Joliet through Chicago’s water system, thereby avoiding looming water shortages due to rapidly depleting groundwater supplies. Building upon that progress, there is great potential for further cooperative decision making in the region to benefit stormwater and wastewater services. Forthcoming federal infrastructure bills may provide funds to facilitate these needed changes. Intelligent and coordinated stormwater management can optimize solutions utilizing new and existing conveyance, storage and treatment systems at multiple scales within a cohesive regional strategy to avoid property loss, damage to ecosystems and degraded quality of life. But the region’s water governance is fragmented and requires a unified approach bearing vision, authority and responsibility to mitigate water-related climate impacts. Perhaps a reimagined arm of the Illinois EPA with a water ombudsman could be created, with influence over local utilities and planning agencies to coordinate investments. Our region’s stormwater challenges can

be addressed by a multitude of actors and approaches. Urban planners and engineers have the tools it will take. Green infrastructure (e.g., rain gardens and bioswales) slow the stormwater runoff, treat it and store it in the ground. High-powered concentrated

pumps and treatment plants do the heavy lifting to ensure service compliance with local and national standards and policies. Given the urban region’s large geographic area and imperviousness, both large- and small-scale approaches are needed.

One of our greatest assets is Lake Michigan, which should be used responsibly to store excess stormwater in a fashion that reduces the chance of sewage contamination. If we add a third, rigorous, level of treatment (i.e., tertiary treatment) to present wastewater reclamation plants, effluents would be clean enough for reuse. They could thus be allowed to return into Lake Michigan without threatening potable water supplies. Mixing river and lake waters requires investment in wastewater treatment upgrades to produce quality water that can be delivered to the lake, as occurs in Milwaukee, Green Bay and every community on the state of Michigan’s shore. And the Chicago Area Waterway System, which connects Lake Michigan to the Mississippi River via the Lower Des Plaines and Illinois rivers, offers our region its largest conveyance services. Let’s work with these assets to reconnect hydrologic flows between the Great Lakes and Mississippi systems as historically happened on occasion in the marshlands between them. Let lake and river levels find equilibrium, allowing the lake to flow into the river and drain, and the renewed river watershed to drain into the lake. There is power in allowing the lake and river to flow in a natural rhythm. It is a power that not even our most ambitious conventional Continued on next page

10/1/21 11:16 AM

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CRAIN’S CHICAGO BUSINESS • October 4, 2021 13

YOUR VIEW

Drug pricing legislation will kill Illinois’ startup bioscience industry

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Continued from previous page infrastructure can match, dollar for dollar, incorporating natural principles into engineering solutions. Leveraging our regional hydrology makes sense; allowing flows to equilibrate between the lake and the river (at the main branch, Wilmette and Lake Calumet) can mitigate flood risks. The locks discharging waters into the canal and down the Illinois River can continue to serve their present purpose, augmented by the lake’s storage capacity. When lake levels threaten to rise above river levels, the river water can be reduced to accommodate the flows via advance conveyance through the canal and managed use of the region’s existing and new storage assets in an intelligent way. Due to inadequate investments and uncoordinated planning across jurisdictions, capacity to convey sewage flows to treatment plants is inadequate; there simply is no regional plan for sewer investments. When fully built, the Tunnel and Reservoir Plan, or TARP, will convey and store up to 17.5 billion gallons of sewage and stormwater, but it has taken more than 50 years, and by the time it is completed in 2030, half of its anticipated life will be over. Our next plan must be designed and built more

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quickly and be informed by climate data, as flooding in the region is predicted to worsen. A joint plan within a regional system that is resilient, economic and just can guide coordinated investments and unite communities. Our greatest challenge to achieve a secure and inclusive water future is coordinating leadership across jurisdictions and sectoral silos, but if we don’t address it, we will face increased flooding and sewage overflows. We need an agency with the mission, responsibility and authority to sustainably coordinate investments in stormwater, wastewater, potable water and ecological water—a “One Water approach”—with collaborative decision making and broad and inclusive stakeholder input, to achieve resilient and affordable water services. Existing infrastructure and management have served the region well for much of its history, but recent experiences and climate change forecasts indicate it is time to plan, design and implement solutions for the next 100 years. This is now possible thanks to new climate forecasting tools and datasets that enable projection of precipitation levels and impacts at a finer scale, including the work of University of Illinois professor

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lowering drug prices. It gives the he Illinois bioscience comAmerican public the impression munity is experiencing that they can have any drug that’s a renaissance. Fueled by been invented for any price, public and private investment however low. Overlooked in and the passion of our commuthat bargain is that investors and nity’s members, we are expericompanies will stop investing in encing unprecedented growth, new research programs. Many For example, nearly 1 million companies will be forced to give square feet of Class A lab space up identifying medicines that hacurrently is either delivered or ven’t been invented yet. under construction. According to Allowing the government to a recent report, Chicago has had John Conrad is presdictate what a company may the most significant increase in ident and CEO of bioscience venture-capital fund- the Illinois Biotech- charge for a novel drug will have a chilling effect on innovation. ing of any major U.S. market over nology Innovation the past three years. Organization, iBIO, Economic studies on the impact of government price setting, Everything is clicking into in Chicago. including nonpartisan reports place for the life science community to grow and drive innovation to improve by the Congressional Budget Office, have patients’ lives and build sustainable growth warned that “negotiations” will result in fewer new medications, essentially defundin a critical and rapidly expanding sector. So why are Congress and the Biden ad- ing research and development for the most ministration proposing government-dictat- challenging diseases. This could mean less ed pricing policies, like those included in HR money for new treatments for Alzheimer’s, 3, that will kill our startup bioscience ecosys- cancer and rare diseases. A comprehensive study published earlier tem and reduce patient access to lifesaving this year by Vital Transformations estimates new medications? President Biden recently backed propos- that the number of new drugs in developals, like HR 3, currently being discussed in ment by small and emerging bioscience the House and Senate that would allow the companies would be reduced by 90% over government to dictate the maximum price the next 10 years. Sadly, this would mean that a company may charge for a novel about 60 new medications that could save or drug. HR 3 calls for a 95% excise tax pen- enhance the lives of patients would fall out of alty should a company refuse to accept the companies’ R&D pipelines. Just in the past decade, the U.S. bioscigovernment’s price. This approach would threaten many companies with financial ence industry has created vaccines and therapies for COVID-19, treatments for cystic ruin. Government-dictated price setting will fibrosis and sickle cell disease, and cures for end our bioscience renaissance in Illinois several cancers and hepatitis C. In the midst and send us back into the dark ages of drug of a global pandemic, are we going to kill the development. When looking at venture cap- innovation ecosystem that provided patients ital, the Vital Transformations report found with these lifesaving therapies and vaccines, that over the next 10 years HR 3 would neg- the ecosystem that is working on new innoatively impact $487 billion in corporate ven- vations every day? The fact is that nonpartisan, independent ture partnerships that could lead to 68 appublic polls have demonstrated that once proved therapies. This is not “negotiating” drug prices, a Americans understand what government term often used by commentators and elect- “negotiation” is and what the trade-offs ed officials to describe how they propose are—restrictions in access or a slowdown

in innovation for new treatments—support evaporates. The impact on private venture capital will be even greater. A recent letter by leading private bioscience venture firms, including a number of Chicago-based companies, representing more than $183 billion in bioscience-focused capital, warned that government-dictated pricing for novel therapeutics will force their firms to “shift our investments toward areas still governed by markets, such as technology and consumer goods.” Companies with drug candidates in development would fail to raise more capital, making it pointless for them to spend existing dollars on ongoing research. The Illinois bioscience community will be disproportionately impacted because we have created a sizable bioscience industry. According to the Vital Transformation’s report, government-dictated price setting will put an estimated 9,500 Illinois jobs at risk, costing the state $17 billion in lost economic output. The explosive growth of our commu-

nity will stop and our new state-of-the-art wet lab buildings with 1 million square feet of Class A space will sit empty, or be significantly underutilized and precious public and private investments would be wasted. The past 18 months with COVID has demonstrated the importance of having a robust bioscience R&D ecosystem. The Wall Street Journal recently reported a number of House Democrats will introduce an alternative proposal on cutting prescription drug costs. The proposed legislation will strike a more balanced approach to reducing patient out-of-pocket costs, while also protecting R&D investments for new drugs. Our Illinois congressional members and senators need to stand up to the politics driving the current discussion about government-dictated price setting. We call upon our delegation to take the time to consider, develop and propose policies that will ease the cost of prescription drugs at the pharmacy counter and preserve our bioscience innovation ecosystem.

John Andersen is president of Greenleaf Advisors and Greenleaf Communities. His work includes the Chicago Area Waterways Study.

Don Wuebbles is professor emeritus of atmospheric science at the University of Illinois at Urbana-Champaign.

Pete Mulvaney has served as a water resources, urban planning and construction department manager for cities around the world.

Donald Wuebbles and his colleagues. A comprehensive evaluation with key stakeholders to assess the ecological and economic impacts of climate change is needed for sustainable water management. This requires coordination at multiple levels to include the state, regional and local water agencies. We must urgently investigate and illuminate alternative paths forward to invest and protect our common resources. There are many principal agen-

Francine van den Brandeler is water and climate lead at Greenleaf Communities.

cies, public interest parties and convening groups interested in this subject who can become involved in carrying it forward. Chicagoland is well placed to become a sustainable metropolis and safe haven in an uncertain climate future. To achieve that vision, the public and region’s leaders must work together to invest intelligently in gray and green infrastructure with consideration of the natural water cycle, from Lake Michigan to the Mississippi River.

10/1/21 11:16 AM

PEOPLE ON THE MOVE

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

ACCOUNTING

BANKING

LAW

NON-PROFIT

ORBA, Chicago

Evergreen Bank Group, Oak Brook

Freeborn & Peters LLP, Chicago

Heartland Alliance, Chicago

ORBA is proud to announce that Ilissa Sylvan, CPA, has been elected a Director. Ilissa has been with ORBA since 2011, managing audits, reviews and other accounting engagements for privately-held businesses, including professional service providers, real estate developers, manufacturers and clients in a variety of industries. Ilissa also assists small business owners with analyzing financial statements, general business consulting, and provides training and support.

Evergreen Bank Group is excited to welcome Andrea Tadych as Senior Vice President, Commercial Banking, reporting to Jim McGrath, Executive Vice President, Head of Commercial Banking. Andrea’s focus will be on developing relationships with small/mid-size businesses providing customized lending, banking, and treasury management solutions. Her 15+ years of commercial banking experience will serve her well as a trusted advisor to her clients as they strive to meet and exceed their business goals.

Freeborn & Peters LLP welcomes John Andreasen to the firm as an associate in the Bankruptcy and Financial Restructuring Practice Group in the Chicago office. Prior to joining Freeborn, John served as a Law Clerk to The Honorable Deborah Thorne, U.S. Bankruptcy Court for the Northern District of Illinois, where he wrote and edited drafts of published opinions, written rulings, and other bench memoranda for cases and adversary proceedings under Chapters 7, 11, and 13 of the Bankruptcy Code.

Heartland Alliance has named Joenell HenryTanner as its first Chief Racial Equity Officer. She brings more than 20 years of experience in the non-profit sector and recently served as Chief of Staff for Heartland Human Care Services. Joenell’s career includes 15 years of experience spearheading diversity, equity, and inclusion efforts across the U.S., Mexico, Caribbean, and Central America. She graduated from Loyola University New Orleans and received a Masters of Public Health from Tulane University.

LAW CONSULTING ACCOUNTING / ADVISORY CONSULTING

FMG Leading, Chicago / San Diego

Apple Growth Partners, Chicago

To meet growing demand from private equity clients, human capital advisory FMG Leading announces that Will Busch, III, Managing Director, Growth Strategies, will assume leadership of the firm’s Private Equity Practice. Mr. Busch specializes in helping PE investors utilize human capital and organizational growth levers to drive value creation at the portfoliocompany level. He designs innovative, pragmatic solutions to inform diligence, post M&A integration and growth acceleration activities.

Spearheading Apple Growth Partners’ Chicago team is Dirk Ahlbeck, CPA, tax principal and national restaurant practice lead. With more than 20 years of public accounting experience, Dirk’s expertise consists of servicing restaurants, including breweries and wineries, and other industries such as distribution, construction, and professionals in the service sector. A frequently requested presenter, Dirk provides business owners in the food industry best practices for tax planning and accounting.

DESIGN / CONSTRUCTION AMPS, Chicago

ACCOUNTING / ADVISORY CONSULTING Apple Growth Partners, Chicago Bruce Cook, CPA, MST, joined Apple Growth Partners as a senior tax manager for the Chicago team. Bruce is an experienced accountant, focusing on tax compliance and consulting, along with staffing, budgeting, and business development. Bruce works with several industries, including manufacturing, distribution, professional services, leasing companies, real estate, and restaurants. He holds a Master of Science, Taxation from Northern Illinois University.

Alvarez & Marsal Property Solutions (AMPS) has named Peter Kontos, AIA, Director of the firm’s project management service line. Senior Project Manager J.T. Kontos Garofalo has joined AMPS to work closely with Kontos as part of AMPS’s senior project management staff. AMPS’ project management services can support clients with any asset, at any stage of a project. The team has extensive Garofalo experience in developing & coordinating project schedules, scopes, budgets & cost assumptions, as well as in overseeing extended teams of consultants, contractors & vendors. With more than 35 years combined experience, AMPS staff acts as an extension of their clients’ team, prioritizing flexibility, attentionto-detail & teamwork in project management assignments.

BANKING BMO Harris Bank, Chicago

EDUCATION

Levoi Brown was named Head of the Economic Equity Advisory Group for BMO Harris Bank. In this role, Brown will lead a team of experienced advisors focused on building relationships with minority-owned companies by providing financial solutions to increase enterprise value, fund business growth, manage cash flow and optimize working capital. He also supports the strategy and execution of BMO EMpower, an initiative focused on creating an inclusive economic recovery across BMO’s U.S. footprint.

The University of Chicago Booth School of Business, Chicago

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Angela Pace-Moody has joined the University of Chicago Booth School of Business as its first Director of Global Diversity and Inclusion. Angela is an alumna of the University of Chicago, and she will draw on her 20 years of experience in higher education, government and non-profit to advance diversity and inclusion on Chicago Booth campuses in Chicago, London and Hong Kong.

Freeborn & Peters LLP, Chicago Freeborn announces that partner Erin McAdams Franzblau has been appointed as the firm’s Associate General Counsel for Employment Matters, effective September 16, 2021. She serves alongside Freeborn’s long-standing General Counsel, Steven Hartmann. Erin is in the firm’s Litigation Practice Group, with a focus on helping companies navigate employment laws. She litigates employment matters and counsels employers on nearly every sub-specialty of employment law. LAW Ice Miller LLP, Chicago Ice Miller LLP Director of Governmental Affairs André Ashmore was appointed president of the Prairie State College Foundation Board for 2021-2023. André has been on the board since 2018 and has served as the board’s vice president for the past year. The primary purpose of the Prairie State College Foundation Board is to provide financial support to fund student scholarships, attract and retain able faculty and staff, and provide for the college’s growth and development.

Norvell IP LLC, Chicago Samantha Yozze joined Norvell IP as Of Counsel and advises on intellectual property law, with a focus on trademark and copyright litigation across industries. She handles trademark and copyright cases in federal court and before the US Patent and Trademark Office’s Trademark Trial and Appeal Board. Samantha has managed 100s of cases in federal and state court, including all aspects of pre-suit activity and litigation through arbitration or trial. She earned her J.D at Chicago Kent School of Law.

Opportunity International, a global leader in providing financial services to lift people out of poverty, is pleased to announce the appointment Nelson of two high profile business leaders to the Board of Directors who have both been unwavering advocates of Opportunity’s work. Greg Nelson, a retired Microsoft executive, held a variety of roles including engineering, Lassonde business development, marketing, and sales. Nelson, who lives in Seattle, has an MBA from Harvard University. Janelle Muntz Lassonde formerly served as a Director of Credit Risk at UBS and is now a writer based in Toronto. Lassonde holds a B.A. from Northwestern University, an MBA from the University of Chicago, and a M.Sc. from the London School of Economics. NON-PROFIT

Northern Illinois Food Bank, Geneva

UCAN, Chicago

David Brearton and Michael Gurin have joined the board of directors of Northern Illinois Food Bank. Brearton is the former Mondelez International Financial Executive and Brearton a longtime donor of the Food Bank. Previously, he was Executive Vice President of Strategic Initiatives at Mondelez. He also was a member of Feeding America’s board of directors for eight years, serving as Board Gurin Chair from 2010 to 2014. Gurin is CEO/CTO of CogniTek and the founder and CEO of MG Fuels. He has spun out other companies including HygraTek and Aivance Health. With over three decades of experience in the materials science and energy industries, he holds over 60 patents. Gurin regularly volunteers at the Food Bank’s Mobile Markets.

The UCAN Governing Board elected Christa Hamilton as president and CEO of the 152-year-old youth services agency. UCAN provides a continuum of services to and impacts more than 21,000 children, youth and families each year. A Fellow of Leadership Greater Chicago, Christa is the first African American and first woman to lead UCAN, and has distinguished herself by addressing community needs and program efficiency. Since 2014 Christa had served as CEO for Centers for New Horizons.

Levin Ginsburg, Chicago

LAW

Opportunity International, Chicago

NON-PROFIT

LAW

Levin Ginsburg is pleased to announce that Kevin A. Thompson has joined the firm as a Partner and head of the firm’s Intellectual Property practice group. Kevin has over 22 years of experience helping clients protect their brands, focusing on domestic and international trademark, copyright, privacy, internet law, and domain name issues. Kevin is a graduate of the DePaul University College of Law (J.D., with Honors, Order of the Coif, 1998), and the University of Wisconsin-Madison (B.A. 1993).

NON-PROFIT

NON-PROFIT Northern Illinois Food Bank, Geneva Justin Massa and Wilbur You have joined the board of directors of Northern Illinois Food Bank. Massa is Executive Director at IDEO’s Chicago studio and leads its business Massa development in North America. Previously, he was the founder and president of Food Genius, a big data firm. He serves as a consultant with the Food Bank’s My Pantry Express program. You is the CEO and Founder of Youtech & You Associates, a marketing and advertising agency in Naperville, Scottsdale, and Plano, TX. He also is an Advisory Board Member to The Alkaline Water Company, Inc. and is Managing Partner of UrbanMatter Chicago. He was named to the 2021 Forbes Magazine’s Annual 30 Under 30 list. He serves as a consultant for the Food Bank’s direct-to-neighbor marketing.

REAL ESTATE CA Health & Science Trust, Inc., Chicago CA Health & Science Trust, an externally managed private REIT and affiliate of CA Ventures designed to invest in the acquisition, development and renovation of core plus and valueadd medical office and life science facilities, has hired Loriann Duffy, former director of property operations for Northwestern Memorial Hospital, as senior vice president of property management where she will lead the national operations teams to ensure best-in-class tenant satisfaction and patient experiences.

TRANSPORT / LOGISTICS TTX Company, Chicago TTX Company is pleased to announce the promotion of Shannon K. Bagato to the position of Vice President of Law – General Counsel, effective October 1, 2021. Shannon has been in-house counsel at TTX for nearly 20 years in roles of increasing responsibility, including her promotion to AVP in February 2018 and Corporate Secretary in March 2021. As the company’s VP & General Counsel, Shannon will lead the Company’s legal, corporate secretary, corporate compliance and government affairs efforts.

9/29/21 7:20 AM

CRAIN’S CHICAGO BUSINESS • October 4, 2021 15

Pritzker makes his play for electric vehicle business A new bill would expand and amplify tax breaks for automakers and suppliers wanting to build the next generation of green transportation in Illinois

A major push has begun in Springfield to lure investment from the fast-growing electric vehicle business with significant new financial incentives and other aid. An initial bill was filed Sept. 27 by state Rep. Dave Vella, a Democrat from Loves Park whose district is just west of Stellantis’ huge Belvidere plant. Tens of millions of dollars and thousands of jobs potentially are on the table. Even bigger and more comprehensive plans are being developed by Gov. J.B. Pritzker, whose government has been in touch with major producers and suppliers and expects to run a bill in the Legislature’s fall veto session in mid-October. The move to boost Illinois’ presence in a burgeoning industry comes as major auto producers quickly pivot from vehicles powered by internal combustion engines to electric cars and trucks. For instance, Ford last week announced plans for $5.6 billion in

ker prepares to seek re-election, something that thousands of new jobs would help him obtain. “The governor’s goal is to build an ecosystem, not only to build vehicles but the supply chain,” said one senior administration official. “The governor repeatedly has said this is a key area for us.” Crain’s previously reported that activity was underway in hopes of convincing Samsung to build a massive battery factory next to electric producer Rivian’s plant in Normal. Industry sources say that plant could employ as many as 7,500 people, and while Pritzker aides decline to even mention Samsung’s name, they confirm that there have been several new developments.

GROWING EDGE

The first is Vella’s bill, which would expand and amplify the state’s existing Edge payroll tax credit program by allowing electric vehicle producers and suppliers to retain not only their own state income tax payments but withholding from employee pay“WE WANT TO MOVE ILLINOIS INTO A checks. Specifically, any firm that invests at least POSITION OF BEING A PRODUCTION $100 million in and CENTER. WE WANT TO START SOME adds or retains at least full-time jobs at DISCUSSION ABOUT HOW TO DO THAT.” 1,000 an electric vehicle producer would get tax State Rep. Dave Vella, D-Loves Park credits for construcnew electric battery and auto-as- tion costs, job training and utility sembly plants in Tennessee, with charges. The credits could cover that state reportedly offering $500 up to 100% of withholding and be million in tax breaks. refundable. The move also comes as PritzVella said he did not directly

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BY GREG HINZ

The move to boost Illinois’ presence in a burgeoning industry comes as major automakers quickly pivot to electric cars and trucks. discuss his proposal with Stellantis but said the firm “in general terms” let him know that it would need state aid if it were to convert its current plant to production of electric vehicles, say a battery-powered Jeep Cherokee. “This is a first opening bill,” Vella said in an interview. “We want to move Illinois into a position of being a production center. We want to start some discussion about how to do that.” Vella declined to put a specific number on the size of the aid or number of jobs at stake. But the former easily could run to tens of millions of dollars, and adding two more shifts at Stellantis’ plant could boost employment from

1,800 now to 5,000, he said. If Illinois acts quickly enough now, any new or revamped plants and their work “will not be easily exported,” Vella added, saying his bill is a logical extension of the green-energy package that lawmakers approved a few weeks ago. A senior administration official said Vella’s bill “has many of good aspects to it” but is not necessarily what the governor will propose. The administration has talked to Ford about potentially assembling electric Explorers at its South Side plant, as well as Stellantis and other producers. It also has begun coordinating with academic researchers, some of them at Argonne National Lab, which

has expertise in developing better batteries. Officials say they don’t yet know what will be in the governor’s package. But among items being discussed are lengthening the Edge tax credit period from 10 years to 20 years and building some sort of temporary relief from local property taxes. An incentive package of that size potentially could run into some objections from liberal Democrats, depending on how many jobs are involved and how many of them are unionized. But it also could pull in some Republican votes, too. The veto session is scheduled to open Oct. 19 and continue for six days over two weeks.

Boeing exec shares a rosy forecast for air travel Carbary also said that Boeing was working very closely with the Boeing forecasts that commer- Civil Aviation Administration of cial aviation should be back to 2019 China as it waits for its 737 Max levels in two to three years, buoyed model to be cleared by Chinese by a strong domestic recovery in regulators. China—the first to ground the China and parts of Europe, the U.S. Max following the jet’s second fatal plane-maker’s China head said. Various countries’ vaccination crash in Ethiopia in March 2019— rates and differing quarantine re- still hasn’t lifted its ban, though quirements will pose some hurdles, a test flight was conducted in the but “we’re anticipating in the next country in August. Other markets in Asia, including India and Singa“I THINK IT’S IMPORTANT TO pore, have cleared UNDERSTAND THAT CHINA IS THE LARGEST the model to fly in recent months. AVIATION MARKET IN THE WORLD.” “We’ve been sitting side by side, Sherry Carbary, president, Boeing China answering technical questions, and two to three years that the aviation we’re going to continue to do that market will fully recover to 2019 lev- until the CAAC is comfortable that els,” Boeing China President Sherry the Max can safely fly again,” CarCarbary said on the sidelines of Air- bary said. “We’re answering all of show China 2021 in the southern their questions and in parallel, we’re staying close to our customers and city of Zhuhai last week.

BY BLOOMBERG NEWS

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helping them be ready to unground their airplanes and take additional Max.” Boeing has bold predictions for aviation in China, saying earlier in October that it expects Chinese airlines will need 8,700 new aircraft for a total of $1.47 trillion by 2040, doubling the country’s commercial fleet size as air travel booms.

PLENTY OF ROOM

Indeed, the Chinese aviation market is so large that there’s room for Boeing, Airbus and local player Commercial Aircraft Corp. of China, Carbary said. China is keen to reduce its reliance on Airbus and Boeing and sees home-grown manufacturer Comac as key to that. Comac signed a deal with China Eastern Airlines Corp. recently to buy five C919 passenger jets. The C919 is comparable to the Airbus A320 and Boeing’s 737. “I think it’s important to understand that China is the largest aviation market in the world,” Carbary said. “And there is plenty of room for all three manufacturers to sup-

BLOOMBERG

Plane-maker’s China leader predicts commercial aviation returning to 2019 levels in 2 to 3 years

Various countries’ vaccination rates and differing quarantine requirements will pose some hurdles. port China for the near term and into the medium and long term.” Separately, Boeing, along with Guangzhou Aircraft Maintenance Engineering, announced plans to create additional capacity for the 767-300 Boeing converted freighter by opening two new conversion lines at Guangzhou Aircraft’s facility. Boeing forecasts 1,720 freighter

conversions will be needed over the next 20 years and of those, 520 will be wide-body conversions with Asia carriers accounting for more than 40% of the demand. Part of Boeing’s 767 freighter family, the 767-300 converted freighter is a workhorse of the skies, able to carry up to more than 50 tons and fly almost 3,850 miles.

10/1/21 11:14 AM

16 October 4, 2021 • CRAIN’S CHICAGO BUSINESS

Nonprofit taps businesses for college scholarships BY ELYSSA CHERNEY Entrepreneur turned philanthropist Pete Kadens and money manager Ted Koenig didn’t waste any time approaching the candidate they wanted to run their new and boundary-pushing nonprofit. The organization, which puts a novel twist on the premise that finances shouldn’t stand in the way of a college degree, was well in the works when Chicago Public Schools superintendent Janice Jackson announced her departure from the district last spring. “It was maybe five or 10 minutes before we reached out,” joked Kadens, who’s known for leading successful solar energy and marijuana companies before stepping back to focus on his family’s foundation. Now the trio is publicly detailing their plans for the first time—and they’re not tempering expectations for how the new or-

what it calls a “first-of-its-kind” scholarship program: The organization will pay the full cost of college for CPS graduates in need and offer the same support to a parent or guardian who wants to resume their own studies. It will also help provide counseling, mentoring and career guidance to high school students.

‘MULTIGENERATIONAL ISSUE’

“I believe that poverty is a multigenerational issue and so we have to solve it with multigenerational options,” said Kadens, who launched a smaller version of the initiative that provided scholarships to about 80 students at a high school in his hometown of Toledo, Ohio, last year. “The parents cannot go to college or postsecondary unless their kid is enrolled . . . it creates this unique degree of stickiness.” Modeled after “promise” programs that pay for tuition and related expenses for public school graduates in oth“I THINK WE CAN MOVE MOUNTAINS er cities, HOPE Chicago projects it can provide HERE BY GETTING THE BUSINESS about 24,000 scholarships COMMUNITY BEHIND THIS EFFORT.” and assist 6,000 of their family members pursuing Ted Koenig, co-founder, HOPE Chicago postsecondary education in the next 10 years. The ganization, called HOPE Chicago, initiative also represents the type will tackle some of the city’s most of public-private collaboration intractable problems from educa- that’s being tested in the city’s Intional inequity to runaway crime. vest South/West program to uplift blighted communities. Jackson joins as its CEO. In Toledo, all of the students With the ambitious goal of raising $1 billion over the next de- who had parents take advantage cade, HOPE Chicago is rolling out of the program returned to col-

lege for a second year, Kadens said, and about 90% of all students in the program remained enrolled. Kadens and Koenig, president and CEO of middle-market buyout firm Monroe Capital, provided an initial $20 million donation to cover the nonprofit’s operational costs for its first three years. The co-founders plan to leverage their vast networks of business executives, civic leaders and philanthropists to grow investment in the program. The nonprofit has also secured an additional $25 million in outside commitments and aims to raise $100 million in its first year alone. Koenig, who founded his firm in 2004 and shepherded a spinoff through an IPO, said banks, law firms, private-equity firms and real estate developers can all play a part by investing in students because “just donating money alone hasn’t worked.” He said he will personally reach out to his contacts. “Every middle-market business that’s here in the city benefits from an educated and stable and thoughtful workforce,” he said. “I think we can move mountains here by getting the business community behind this effort and basically building an arsenal for Janice to do her thing.” Once again, the group is moving quickly. The first cohort of 14 students have already received scholarships and began classes at Chicago State University and the City Colleges of Chicago. The

WTTW NEWS

HOPE Chicago, co-founded with a $20 million donation from Pete Kadens and Ted Koenig and led by ex-schools chief Janice Jackson, will cover the full cost of college for CPS graduates and their parents in a multigenerational equity strategy

HOPE Chicago CEO Janice Jackson says she welcomes more investment from the corporate world. organization is working to finalize agreements with other two- and four-year institutions that will participate in the program, eyeing the state’s 12 public universities, community colleges and trade schools.

IDENTIFYING SCHOOLS

Jackson, who rose through the ranks as a teacher and principal before being tapped to head CPS in late 2017, possesses a deep knowledge of the district and the challenges faced by its most vulnerable students. She said she’s in the process of identifying CPS schools that can take advantage of the program and will focus on ones on the South and West sides, where the need is greatest. About 81% of high school students graduated from CPS in the 2019-20 school year, according to district data, but only 67% enrolled in college. Students attend-

ing North Side schools were more likely to attend college than peers in other parts of the city, with just 75% of graduates remaining enrolled in college. With college tuition increasing substantially to compensate for years of decreased government funding, student aid from state and federal sources doesn’t go as far as it used to, putting college out of reach for more students, Jackson said. She said she welcomes more investment from the corporate world, which hasn’t been consistent in the past. “We’re going to bring together all these groups. We’re going to do something right away,” she said. “If we’re really serious about making sure students get to and through school, reducing violence, reducing poverty and increasing opportunity, this is a surefire way to do that, and we’re standing up the infrastructure.”

Rosemont developer targets high-end hotel buying spree First Hospitality teams with a New York investor on a fund aimed at picking up $1 billion worth of upscale and luxury hotels nationwide over the next few years

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sets will inevitably see a strong rebound in the years following the pandemic, ultimately creating significant value for investors,” Georgetown CEO Adam Flatto said in the statement. “First Hospitality has a stellar reputation, and we are honored to partner with them as we launch this venture.”

LEADERSHIP

The joint venture will be led by First Hospitality President and CEO David Duncan and Georgetown Managing Director and Head of Hospitality Michael Fishbin, who joined the company in February 2020. Stephen Schwartz, who founded First Hospitality in 1985, will continue as the firm’s chairman, and his family will keep “long-term strategic control” of the firm, the statement said. “We have maintained a steadfast focus on the long-term growth and success of First Hospitality for over three decades,” Schwartz said in the statement. “Our family is ex-

COSTAR GROUP

interest” in First Hospitality and spearhead the acquisition process, One of the Chicago area’s most with First Hospitality serving as the prominent hotel developers and manager of properties they buy, the managers has a big appetite for firms said in a statement. The partnership is a gutsy wamore hospitality properties, betting hotels nationwide are poised ger on a property sector that was for a strong post-COVID-19 come- initially leveled by the pandemic and has labored to recover since back. Rosemont-based First Hospitality then, with a murky outlook for when or if certain types of “WE KNOW THAT HOSPITALITY ASSETS WILL travel will ever as robust as INEVITABLY SEE A STRONG REBOUND IN THE be they were preCOVID. While YEARS FOLLOWING THE PANDEMIC.” leisure travel Adam Flatto, CEO, Georgetown surged nationwide over the last week announced it has part- summer, business travel remains nered with New York-based com- at a historically low level, and both mercial real estate firm Georgetown have been set back by the spread to launch a new fund that will aim of the delta variant. But First Hospitality and to buy $1 billion worth of upscale and luxury hotel properties across Georgetown are among the investhe U.S. over the next few years. tors salivating at the opportunity Under the agreement, Georgetown to buy low and ride the market up. “We know that hospitality aswill take a “significant ownership

BY DANNY ECKER

First Hospitality Group developed the tri-brand Hilton hotel at McCormick Place in 2018. cited to partner with the Georgetown Co. to continue acquiring exciting assets and grow our management portfolio nationwide.” First Hospitality has been especially active in Chicago over the past few years. The firm developed the tri-brand Hilton property that

opened next to McCormick Place in 2018 and was part of the development team behind the 223room Sable hotel that opened in the middle of Navy Pier this year. The company owns or manages more than 50 hotels nationwide, including 21 brands.

10/1/21 11:13 AM

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18 October 4, 2021 • CRAIN’S CHICAGO BUSINESS

Snapchat’s parent eyes new Fulton Market offices The social media company and third-party logistics provider MoLo Solutions are joining the leasing momentum of the trendy former meatpacking district The parent of a popular social media app is planning to more than double the size of its office in Chicago and move it to a new Fulton Market District building, while a fast-growing Chicago-based transportation logistics firm has an even larger deal lined up to join them. In one of two leases that are close to being finalized at 167 N. Green St., Santa Monica, Calif.-based Snap is in advanced talks to lease about 25,000 square feet at the 17-story building, according to sources familiar with the deal. Snap, best known for its disappearing photo and message app Snapchat, would relocate its local office there from a boutique office building the company leases today at 648 N. Clark St. in River North. In the other deal, third-party logistics provider MoLo Solutions is nearing a lease of more than 93,000 square feet in the building, where it would relocate from the

COVID-19 pandemic that has kept deal activity relatively sluggish elsewhere downtown, with office vacancy at a record high.

STRING OF DEALS

Companies including Kimberly-Clark, TikTok, Hazel Technologies, Calamos Investments and Tock have signed on for new Fulton Market workspace this year, following the lead of corporate giants Google, McDonald’s, Glassdoor and Mondelez International. If the Snap and MoLo deals are finalized, they would also notch another pair of big leasing wins for Chicago developers Shapack Partners and Focus, which completed the 750,000-square-foot Green Street building late last year. Not including Snap and MoLo, the building is close to 70% leased, with a tenant roster that includes auto insurance claim software provider CCC Information Services, professional services firm Kroll (formerly Duff & Phelps), convenience store company Foxtrot Market, aviation maintenance SNAP’S PLANNED EXPANSION SIGNALS company Jet Support and co-workIT WILL JOIN THE RUN OF MAJOR TECH Services ing provider WeWork. It’s unclear how COMPANIES BEEFING UP HEADCOUNT much Snap is planIN CHICAGO IN RECENT YEARS. ning to expand its local workforce as part roughly 33,000 square feet it leas- of the move, and a spokesperes today nearby at 120 N. Racine son for the company couldn’t be Ave., sources close to the discus- reached. But the planned expansion signals Snap will join the run sions said. The negotiations are poised to of major tech companies such as add to the recent leasing streak Google, Facebook, Uber, Glassin the trendy former meatpack- door and others that have beefed ing district, despite an ongoing up headcount in Chicago in re-

COSTAR GROUP

BY DANNY ECKER

Chicago developers Shapack Partners and Focus completed the 750,000-square-foot building at 167 N. Green St. late last year. cent years, largely drawn to its affordable talent pool. Snap is eyeing part of the 16th floor at the 17-story Green Street building, space that comes with a 2,000-square-foot outdoor deck. The building also includes a fullsize basketball court on its top floor that converts into a large meeting space.

BOOMING BUSINESSES

Publicly traded Snap is coming off a second quarter in which its year-over-year revenue more than doubled to $982 million and its user base surged to 293 million daily active users, a 23% jump from the same period in

2020, according to the company. MoLo Solutions—whose name is short for Modern Logistics—is slated to lease two floors at the Green Street building, an expansion triggered by its rapidly growing headcount. The company has hired around 300 people this year alone, bringing its total workforce to around 520 people, according to a source close to the company. Spokesmen for MoLo and Shapack Partners couldn’t be reached. MoLo last month ranked 41st on Inc. Magazine’s list of the 5,000 fastest-growing companies in the country and was the fastest-growing in Illinois based on percent-

age revenue growth from 2017 to 2020. The firm is adding to a trend of transportation logistics firms in Chicago bulking up on office space as the pandemic-induced surge in online shopping has boosted demand for services from businesses that help distribute products people buy on the internet. While many companies in other sectors have been downsizing their office space after adjusting to life with remote workers, Chicago’s robust collection of third-party logistics and freight tech companies have been on hiring sprees and adding to their office footprints.

Packaged-food workers gain leverage amid shortages and strong demand LABOR from Page 3 The packaged-food companies, for their part, face at least a temporary setback in their long-standing campaign to squeeze labor costs. In the short run, losses at the bargaining table could put more pressure on profit margins at a time when other costs are rising. “We’re at a tipping point,” says Michael LeRoy, a professor of labor law at the University of Illinois at Urbana-Champaign. “People are walking off of their job, and they have no concern that the employer’s going to hire a replacement for them.”

PAY RISES

Like employers in other industries, packaged-food companies are doing what they can to appeal to potential workers, adding benefits and upping pay. Food manufacturing wages were up 4.6% in July over last year, but such raises have had little effect on the industry’s growing labor gap. According to industry group Consumer Brands

P018_CCB_20211004.indd 18

Association, the consumer packaged-goods industry—including food, beverage, personal care and household items—has 143,000 job openings but added only 6,000 workers last month. “That is barely chipping away,” says Katie Denis, vice president of research and narrative at the association. “Employees have the upper hand right now because there are so many job openings.” At the same time, demand for the products made at the understaffed facilities has remained high. Sales of packaged products have dipped only once in the past 18 months, Denis says. In the second quarter of 2021, sales were up 8.7% over the year prior. That’s “crazy” growth, considering the run on toilet paper and other packaged products that dominated the second quarter of 2020, she says. Many food manufacturing workers feel like they have borne the brunt of the pandemic. Some have watched colleagues get COVID-19 and felt they’ve risked their own lives coming to work

while their employers rake in revenue. “Workers have just had enough,” says David Woods, international secretary-treasurer at BCTGM, the union representing the Mondelez employees who recently went on strike. “Not just here, but I think it’s across the country, and I think it’s growing. The labor market is slammed right now.” More than 1,000 workers went on strike at Mondelez facilities, including a bakery in Chicago’s Marquette Park neighborhood. Ultimately, they approved a four-year contract retroactive to March that promises a 2.25% raise followed by annual 60-cent hourly wage increases, $5,000 signing bonuses and a doubled 401(k) contribution. As important as the raises were, the union’s biggest success was in blocking cost cuts the company sought to impose, Woods says. Mondelez backed off demands to curtail generous health care coverage and premium pay for weekend work. Mondelez issued a statement on

the new contract, saying it marks a “significant step forward for both the company and its employees.” It added that it will be well positioned to increase capacity as it anticipates additional volume growth. The union has other big food companies in its sights. BCTGM represents workers at facilities operated by ADM and Conagra, both based in Chicago, as well as Battle Creek, Mich.-based Kellogg and other packaged-food giants. “We’ve got a lot of contracts opening up right now, and it’s the same fight. The companies are going after the same things,” Woods says. “They want to work the workers longer and pay them less. . . .The workers are going to say enough is enough.”

BREAKING POINT

Workers have reached their breaking point, says Laura Garza, worker center director for Arise Chicago, the workers’ rights nonprofit helping the nonunionized El Milagro workers. Garza says 85 of the company’s employees have

contracted COVID, and five have died. Workers want to be valued, she says. They know there’s power in collective action, especially as El Milagro tortillas remain in short supply at grocery stores throughout Chicago. El Milagro, which did not return requests for comment, has not agreed to meet with workers. El Milagro employee and Spanish speaker Irma Gonzalez says through a translator that the company needs to incentivize longevity and pay its longtime workers more. “Without enough personnel to meet production goals, you’re going to see shortages of products like tortillas,” she says. “If we want to address the shortage, that’s where it has to start.” The challenge during this new era of labor negotiations is for unions and workers not to overplay their hand, says LeRoy at U of I. “It’s a generational inflection point,” he says. “This requires a new way of thinking for management, and labor is going to have to rethink how to harness their power.”

10/1/21 3:48 PM

CRAIN’S CHICAGO BUSINESS • October 4, 2021 19

The long road to the suburbs and back— again and again Here’s a look at the Bears’ 50-year awkward relationship with its landlord—the Park District—and City Hall

BLOOMBERG

BY STEVEN R. STRAHLER

A new stadium for the Bears could run upward of $2 billion, in addition to the cost of buying the land.

Who’ll foot the bill for a new Bears stadium? BEARS from Page 1 326-acre property and how much it would cost, the prospect of financing a modern football temple is now front and center for a team whose owners have never owned a professional sports stadium and whose family wealth is tied to the franchise itself—which Forbes estimates is worth some $4 billion— unlike the fortunes that many billionaire sports owners have built separately from their teams. That could mean substantial changes to the Bears’ financial backing or even the McCaskey family’s already-complex controlling ownership as plans for the stadium progress. And it will certainly require officials in the village of Arlington Heights to determine whether traffic congestion, new infrastructure costs and an assortment of incentives they are asked to shell out will be worth allowing the Monsters of the Midway to become the Monsters of the Northwest Highway. Calculating the cost of building a new stadium in Arlington Heights is difficult, though the reported price tags on National Football League stadiums recently built in single-team cities like Las Vegas, Atlanta and Minneapolis suggest the Bears would have to spend upward of $2 billion to build such a venue, in addition to the cost of buying the land. It’s unclear whether the Bears have engaged outside financial partners to help foot the bill for the racetrack acquisition and beyond, but that may not be required to realize their vision, says sports business consultant Marc Ganis, president of Chicago-based SportsCorp. The National Football League would likely shoulder some of the burden via a loan program it has used to help other stadiums land financing, Ganis says, similar to the $500 million loan the league approved to build the $5.5 billion SoFi Stadium that opened last year on a former racetrack near Los Angeles. Personal seat licenses and suite sales could also help pay for a significant portion of the cost, as would a naming rights agreement that experts have estimated could generate $10 million to $20 million per year for the Bears—money

P019_CCB_20211004.indd 19

the team misses out on as a tenant at Soldier Field. Portions of the sprawling Arlington site could also be sold off to other developers that could build housing, restaurants, retail space and other hospitality-focused properties that pair nicely with a stadium. Then there’s the team’s ability to borrow money against the new contractually obligated income streams, not the least of which would be the more than $300 million per year from the league’s new collection of media rights deals, according to Forbes. On top of that, owning a venue in Arlington Heights opens up the possibility of including an in-stadium sports betting operation, something the team has recently started exploring at Soldier Field but gotten pushback on from the Chicago Park District. “They don’t need a (financial) partner, though that doesn’t mean they wouldn’t take on one,” Ganis says. “But they could do this themselves with traditional government participation for things like infrastructure.”

FINANCIALLY CONSERVATIVE

Some sports economists aren’t so sure. University of Chicago professor Allen Sanderson has his doubts that the notoriously financially conservative McCaskey family has an appetite for a mountain of debt that would likely be needed to fund construction of a new stadium. The team “in some ways is a mom-and-pop store,” he observes, with assets worth far less than the league average. Also complicating matters is a familiar problem for multigenerational family businesses: Ownership stakes are gradually splintering. After 98-year-old principal owner Virginia McCaskey dies, her controlling stake could be split among the families of her 11 children, leaving Aon founder and prominent Chicago businessman Pat Ryan as the franchise’s largest individual shareholder, according to a 2013 Chicago Tribune report. The possibility of shares in the team going up for sale could factor into plans to finance a new stadium. A Bears spokesman declined to comment. Hanging over all of the financing questions is whether Arlington

Heights officials will lend a hand. Diana Mikula, the assistant village manager, said in a statement that there have been “no requests nor discussions regarding financial commitments” to the Bears, acknowledging that there will be “a lot of opportunity for public discussions as things progress and the village is provided with additional information.” But taxpayer participation in developing a new stadium is almost inevitable, says Paul Sajovec, who worked for firms that prepared feasibility studies for sports facilities and convention centers before becoming chief of staff for 32nd Ward Ald. Scott Waguespack. Though it’s unlikely that any municipality would come up with cash to help finance a stadium in the current economic climate, public subsidies for pro sports venues in recent years have become more nuanced to obfuscate the cost to taxpayers, Sajovec says. As opposed to selling bonds that saddle taxpayers with a long-standing debt burden, for example, cities can forgo certain revenue streams such as amusement or sales tax revenue, offer property tax rebates or turn to tax-increment financing to build new roads and infrastructure. “In a real sense, that’s every bit as much a cost to the taxpayer,” Sajovec says, adding that other costs to maintain new roads, provide police and fire protection and help with security at a stadium also stresses public coffers. “You really can’t find an example of a new stadium that’s built without some sort of significant amount of public subsidies and incentives. They just come in all shapes and sizes.” Sajovec also noted most new stadium developments drastically overestimate their local economic impact, especially NFL stadiums that host just 10 games per year. Winning the Bears can be enticing for any municipality looking to raise its profile, Sajovec says, “but the real questions should be, ‘At the end of the day, how are we better off as a community for having this? What have we gained on a random Tuesday afternoon (without any events)? How are the dynamics better than they are now?’ ” Greg Hinz contributed.

As a professional football pioneer and charter member of the National Football League, the Chicago Bears never extended their first-mover advantage to stadium economics—something the team hopes to correct with a nearly $200 million agreement to buy Arlington International Racecourse’s 326-acre site in Arlington Heights. The Bears missed out on the first stadium-building spree of the 1960s, when professional football surged in popularity and its televised version began to supplant baseball as America’s pastime. New, rich entrepreneurs such as Lamar Hunt, an oil industry scion, who owned what became the Kansas City Chiefs, were entering the game and bidding up player salaries while figuring out ways to merchandise their brands. The NFL absorbed the upstart American Football League, and the Super Bowl was born. In contrast, the roots of the Bears-owning Halas family were in football when football wasn’t all that profitable. Through the 1960s, the Bears were tenants and junior partners to the Cubs at Wrigley Field, where there wasn’t enough room to provide two standard-sized end zones. The team’s move to Soldier Field in 1971 was envisioned as a stopgap until a publicly financed city stadium was ready. Because Soldier Field hadn’t been designed as a football stadium, fewer than 20% of the seats were between the goal lines and none was that close to the field. The Bears signed a three-year lease with two one-year options, and Soldier Field’s owner, the Chicago Park District, contributed $700,000 to put in synthetic grass and improve seating and other amenities. The Bears were still tenants, however, and they would remain behind the stadium-building curve for generations, in part because this is Chicago.

THE BOSS

Lacking the entrepreneurial wherewithal to develop a stadium project on its own, the Halas family depended on the goodwill of City Hall. That evaporated when word got out in 1975 that the team was considering a proposal in Arlington Heights. Mayor Richard J. Daley, the Boss, just returned to office for a sixth term, famously fumed, “They can use the name Arlington Heights Bears, but they’ll never use the name of Chicago if I’m the mayor.” In subsequent years, as the team considered scheduling games at Northwestern University’s Dyche Stadium, Comiskey Park and even Notre Dame Stadium, the Bears, City Hall and the Park District continued their awkward relationship.

The Bears signed a 20-year lease in 1980, with the Park District agreeing to preventative maintenance and a few upgrades, notably new seating closer to the field in the north end zone. The team agreed to finance 54 skybox suites at a cost of $2.8 million. By then, Mayor Daley had died, and so had George Halas’ son and heir apparent, George Jr., known as Mugs. After the senior Halas’ passing in 1983, his grandson, Michael McCaskey, a Harvard educated MBA, became CEO. And then, of course, another Daley—Richard M.—became mayor in 1989. The scene was set for another personality-driven, Bears-City Hall stalemate.

‘MCDOME’

With the Soldier Field lease’s expiration looming and after the General Assembly had rejected a $300 million domed stadium proposal (dubbed McDome) as part of a McCormick Place expansion bill, McCaskey in 1995 proposed an openair stadium. Illinois taxpayers would foot two-thirds of the projected $285 million cost. It didn’t fly, particularly with Jim Edgar as governor. At the same time, the Bears were seeking leverage on multiple fronts, which didn’t enchant Daley. The team floated four potential sites near O’Hare, in Hoffman Estates and the western suburbs. An actual plan came from a group of Hoosiers who pitched a $482 million complex with restaurants, entertainment and a Bears Hall of Fame in Gary. Daley reacted with a $171 million renovation plan for Soldier Field and promises of new revenue streams for the Bears, which the team rejected. Then, in 1999, after another suburban feint by the Bears, Edgar was succeeded as governor by the more deal-friendly, Daley-friendly George Ryan, and McCaskey was fired by his own mother, team principal owner Virginia McCaskey. Ted Phillips took over as CEO, and things started moving. In late 2000, the parties agreed on the controversial design that came to be: a seating bowl plopped atop the original structure, overflowing the colonnaded sides. “I’m pleased that after years of false starts, we finally have a plan that works for taxpayers, the museums, the Park District, the Bears, and the other teams and groups that use Soldier Field and the surrounding area,” Daley announced. How that plan has worked out has been a source of debate by fans, government watchers and taxpayers. “As much as people decry the changes in the historic structure,” says “Soldier Field: A Stadium and Its City” author Liam Ford, “it’s still standing only because of the Bears.”

10/1/21 3:48 PM

20 October 4, 2021 • CRAIN’S CHICAGO BUSINESS

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Downtown parking garages gaining customers PARKING from Page 3 $15.3 million in 2020 as revenue dropped 53% from 2019, according to an annual report filed with the city. Its owners have injected more than $16 million in cash into the business to shore up its balance sheet. Parking operators have tried to adapt to the changing tastes and commuting patterns of their customers. Monthly passes are out— few drivers want to pay for a full month of parking if they’re only coming into the office two or three days a week—and punch-card type passes are in. “It’s been a total reset in behavior,” says Jim Buczek, chief operations officer in the commercial division of SP Plus, a Chicago-based parking company with 350 locations here. “People are looking for new ways to purchase parking.” SP Plus, which was known as Standard Parking until 2013, has bounced back from the depths of 2020. The firm, which has garages across North America, reported net income of $13.7 million in the first half of 2021, vs. a net loss of $85.4 million a year earlier. Its share price has nearly doubled since bottoming out in July 2020. The summer was especially strong for some parking garages as more people drove into the city to shop, attend events and visit tourist attractions. Memorial Day weekend was “fantastic,” and business over some summer weekends exceeded 2019 volumes, Buczek says. When the city reopened fully on June 11, Millennium Garages, the international joint venture that owns the garages under the lakefront parks, experienced an immediate jump in business, says Millennium Garages CEO Jim West. West has noticed a pickup in online business and sales of daily passes this year, but sales of monthly passes are still only about 55% of 2019 levels, he says. If you are only going to be in the office Tuesday, Wednesday and Thursday, why pay for the entire month? Though this year’s results will fall well short of 2019—Millennium Garages’ total occupancy in August was about 75% of August 2019—they’ll come out ahead of last year, and the momentum is moving in the right direction, West says. “We’re exiting 2021 in a pretty good place,” he says. “I am far more optimistic than I was three

WORKER BEES The occupancy rate at Chicago-area office buildings, as measured by the number of people who swipe their key cards when they arrive at work, is still a fraction of what it was in early 2020, before the pandemic, according to an index calculated by building security company Kastle Systems. OFFICE OCCUPANCY RATE chicago metro area

100%

Average of top 10 U.S. metro areas

90 80 70 60 50

34.4%

40 30 20

30.7%

10 0

Apr. 2020

July

Oct.

Jan. 2021

Apr.

July

Oct.

Note: The U.S. average encompasses Houston; Austin, Texas; Philadelphia; New York; San Francisco; Dallas; Los Angeles; Chicago; San Jose, Calif.; and Washington, D.C. Source: Kastle Systems

to four months ago.” Still, he’s careful about predicting the future. “This is COVID. There are lots of factors at work,” West says. “The question is what’s transitory vs. permanent. No one can say what’s permanent.”

TRENDS

The downtown parking garage looked vulnerable even before the pandemic, as ride-hailing apps like Uber and Lyft became more popular and driverless cars seemed to be on the horizon. If people didn’t need their own cars to get around, why would they need a parking spot? Those predictions may still pan out in the long run, but people prefer to drive themselves in a pandemic. Hotel guests depended heavily on ride-hailing companies to get around pre-COVID: Guests in about 10% of occupied rooms at downtown hotels served by SP Plus parked a car during their stay, Buczek says. Now guests with cars account for about 20% of occupied rooms. More city residents are using cars, too. At downtown apartment buildings with SP Plus garages, the number of cars per unit has jumped 10% since the beginning of the pandemic, Buczek says. But the future of the Chicago office market remains the biggest question facing garage owners and operators. If more companies

with downtown offices allow their employees to work remotely or on a hybrid schedule, that will make it harder for downtown parking garages to recover from the pandemic—even if a lot of them commute by car rather than train or bus. Parking companies are encouraged that more downtown professionals are coming into the office, but the numbers are still well below what they expected a few months ago, before the delta variant derailed many companies’ return-to-office plans. Downtown Chicago office buildings were 30.9% full as of Sept. 15, up from a low of 9.4% in April 2020, according to Kastle, which gathers its data from keycard swipes. It’s unclear whether the worker occupancy rate will ever rise back to 99.6%, where it was in early March 2020. But the number should rise further as the current surge in delta cases eases and more companies call their employees back to the office. John Hammerschlag, president of Hammerschlag & Co., a Chicago-based owner of parking garages, is feeling better about the downtown market. More cars have been pulling into a 1,168-stall garage the firm owns at Madison and Wells streets in the Loop. “We haven’t filled it yet to capacity, but it’s certainly doing a lot better than it was six months ago,” he says. The market “is weak, but it’s coming back.”

10/1/21 4:01 PM

CRAIN’S CHICAGO BUSINESS • October 4, 2021 21

United could benefit from antitrust case against American-JetBlue partnership UNITED from Page 1 customers as businesses remain grounded by COVID-19. Once the pandemic recedes, the JetBlue-American combo would complicate CEO Scott Kirby’s plans to increase United’s share of lucrative premium travel on popular business and international routes. JetBlue, which also serves business travelers, feeds additional passengers to American’s international flights. “Beyond a doubt, if (the venture) doesn’t go through, it helps United,” says George Ferguson, an analyst at Bloomberg Intelligence. “United has to be ready to fight the leisure game, and not having the combination helps them because JetBlue can deliver seats at lower fares.” The Justice Department calls the alliance between American and JetBlue, which was announced in July 2020 and took effect in January, “a de facto merger between American and JetBlue in Boston and New York City.” The two carriers combined their operations and share revenue at Logan, JFK, LaGuardia and Newark Liberty airports, the suit says. United declined to comment on the suit, which was filed Sept. 21. American, the second-largest carrier at Chicago’s O’Hare International Airport, said in a statement: “We look forward to vigorously rebutting the DOJ’s claims and proving the many benefits the Northeast Alliance brings to consumers.” American and JetBlue say the

partnership allowed them to increase capacity faster in New York and Boston. “(It) is working exactly as it was intended—helping both American and JetBlue more quickly recover from the devastating impact of the pandemic and grow in a highly competitive market traditionally dominated by Delta and United.”

OVERLAP

Among the routes with the heaviest overlap, cited by the DOJ, are Boston to Chicago, where American and JetBlue would have 48% of the market. With JetBlue’s 55 flights, the two carriers operated 245 flights in September, eclipsing United’s 200 flights, according to Cirium, an aviation-data provider. JetBlue’s 136 flights from Boston to San Francisco, another United hub, dwarf United’s 87 flights, Cirium says. The DOJ also noted in its lawsuit that JetBlue and American have 36% of the flights from New York’s LaGuardia and JFK airports to Chicago. United recently returned to JFK with flights to San Francisco and Los Angeles. American says the joint venture enabled it to increase capacity from New York by 18 percentage points, compared with pre-pandemic schedules, “growth that we could not have achieved profitably alone.” United serves the New York market mostly from Newark, where JetBlue doubled its flights in September from pre-pandemic levels. Even with the new flights, its schedule is

less than a quarter of United’s. “Code shares make it easier to fill an aircraft to make money, and the joint venture with JetBlue increases ability of American to compete at slot-constrained airports,” says Morningstar analyst Burkett Huey. JetBlue, which previously operated domestic flights and some service to the Caribbean and Latin America, recently launched service from New York to London, a key United market. “United wants to compete in premium international business travel,” Huey says. “The centerpiece for that is New York and London. Any entry of a new competitor is a bad thing.” Although the DOJ’s opposition to its rivals’ joint venture potentially helps United, the Chicago-based carrier also could suffer from the Biden administration’s renewed focus on airline competition. The Department of Transportation plans to issue 16 daily takeoff and landing times during peak periods at Newark to a discount carrier, a move likely to boost price competition at a key United hub. “Opening up more slots at Newark to lower-cost carriers will provide air travelers with more choices and lower prices,” Polly Trottenberg, deputy transportation secretary, said in a statement. United gave up the 16 slots to Southwest Airlines to win approval for its 2010 merger with Continental Airlines. When Southwest later pulled out of Newark, the FAA planned to retire the slots. But dis-

THE AMERICAN-JETBLUE THREAT TO UNITED The United routes where JetBlue would increase American’s scale. The Department of Justice says the partnership between American and JetBlue would reduce competition in air travel in the Northeast. FLIGHTS PER MONTH Boston to O’Hare

Boston to Los Angeles

American JetBlue

American

190 200

United

Newark to Miami American

112 45

Newark to Phoenix American

JetBlue

81 134

United

American

New York (JFK) to San Francisco 225

JetBlue

60 30

United

New York (JFK) to Los Angeles

United

JetBlue

213 60

American

JetBlue United

113 60

Source: Cirium

count carrier Spirit Airlines sued, and a federal appeals court ordered the FAA to reconsider. “We continue to believe that adding even more flights out of Newark—at a time when (it) remains the most-delayed airport in the country—is bad for the flying public,” United said in a statement. Competition in the U.S. airline industry had largely been in a holding pattern since American merged with US Airways in 2013, reducing the number of traditional full-service carriers to just three. The Justice Department’s opposition to the joint

venture between American and JetBlue caught many by surprise. Noting that JetBlue offers both business class and coach service, the department called the carrier a “uniquely disruptive competitor” at risk of being reined in by the joint venture. “It’s nice to see they’re making arguments about mergers they should have been making a decade ago,” says Darren Bush, a professor at the University of Houston Law Center who opposed the last round of mergers. “After letting the horses out of the barn, the DOJ has warned the remaining horses to stay there.”

Online MBA programs are growing in popularity. But there are some holdouts. But whether schools will jump on the internet bandwagon rests programs. “They’ve come to un- largely on the type of student derstand that they can appeal to they’re trying to entice. Residential, full-time programs a much larger demographic and leverage their own brands and typically attract younger applitheir own resources—somewhat cants looking to enter an ultraexpensively—without watering competitive company or make a major career shift. Part-time down their degrees.” That’s not an easy task. If programs, on the other hand, are schools want a piece of the on- held on evenings or weekends line game, they’ll have to devise and cater to older adults who a curriculum that’s engaging and continue working during their justifies the steep price tag (some studies. The latter group is where ononline programs cost well over $100,000). Prestigious schools line MBA programs will have the must also ponder whether add- most appeal, said John Byrne, editor-in-chief of the MBA-oriented web“TEN YEARS AGO, THIS WOULD HAVE site Poets & Quants, BEEN A HERESY, AND YET NOW A LOT OF who estimates about 350 online MBA proTOP PROGRAMS ARE EMBRACING IT.” grams have emerged in at least the last deJeremy Shinewald, founder, mbaMission cade. “It’s not going to ing an online option would up- hurt big brand-name residential set high-powered donors who MBA programs, but it will start to aren’t on board with the idea, whittle away the part-time MBA market and the executive MBA Shinewald said. Online or not, business schools market,” he said. “Frankly, people are eager to see more students af- just don’t have the time, or don’t ter years of declining enrollment. want to devote the time, to go to In 2020, applications to U.S. pro- school at night or on the weekgrams increased for the first time ends anymore when they can do in five years as the pandemic it online.” spawned economic uncertainty and schools loosened admissions CASE STUDY processes, such as temporarily The University of Illinois, which dropping GRE or GMAT require- unveiled its online MBA five years ments. Marketwide enrollment ago and later eliminated its dwindata for 2021 hasn’t been re- dling residential program, proleased yet. vides a unique case study. Since MBA from Page 3

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launching with a little more than 100 students, enrollment in the fittingly named iMBA program has exploded to more than 4,200 this year. Byrne called it the “fastest-growing MBA program on the planet” and gives it high marks for quality, though the school doesn’t participate in formal rankings due to objections about methodology that give greater weight to test scores and selectivity. The program in U of I’s Gies College of Business offers live video classes in which students and professors can interact, optional in-person immersion trips and instruction by renowned faculty, who make themselves available for virtual office hours. While some programs provide only prerecorded lectures with little peer contact, iMBA students can choose whether they want to participate in real time or asynchronously for every class. There’s another key element that sets the iMBA apart: Tuition costs about $22,104. Jeffrey Brown, the dean at Gies, said the university brought price down by scaling the program and leveraging online capabilities. While there were significant upfront costs—such as investing “several million dollars” in professional-grade film studios where professors record lectures in front of green screens and hiring staff to design course material—the goal was to offer a high-quality MBA at a more affordable price.

“We wanted to disrupt this space,” Brown said. “We didn’t price it at profit-maximizing level. I would say we priced it at a mission-maximizing level, which really is about creating access in a way that is financially sustainable.” Still, the program’s paid off. Brown said he’s “very pleased with the financial contributions the program is making” and officials confirmed the program is profitable but declined to share exact figures.

GROWTH INDUSTRY Since unveiling the iMBA in 2016, the University of Illinois at UrbanaChampaign boasts one of the fastestgrowing online MBA programs in the world. iMBA ENROLLMENT ON 10TH DAY For the University of Illinois at Urbana-Champaign

4,288 3,539 2,448

ACCEPTANCE

Not every university is racing to create a fully online degree. And some still see drawbacks, though online learning is becoming more accepted as a result of the pandemic. “You’re probably not going to get a job at a top private-equity firm with an online MBA,” says Shinewald, the admissions counselor. “You’re probably not going to get a job with any other amazingly prestigious employer . . . a VC firm, a consulting firm, at least for now.” Greg Hanifee, associate dean of degree operations at Northwestern’s Kellogg School of Business, said a completely virtual option is not being considered, though the part-time and executive MBA programs are incorporating more online and hybrid courses to accommodate student schedules. “We know that our students value the networking and in-person aspects and don’t want to to-

1,592 787 2017

2018

2019

2020

2021

Source: Gies College of Business

tally give that up,” he said. “We’re not hearing from applicants that they’re choosing other schools because they never have to go to campus.” Loyola University Chicago, which revamped its MBA program in 2020, said it’s also gotten feedback that the majority of students want to take advantage of in-person components. Business school Dean Maciek Nowak said students eager to interact have even organized additional events off campus. “They like the flexibility of online, but they also want networking of in person,” he said. “That is ultimately the balance at the graduate level.”

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22 October 4, 2021 • CRAIN’S CHICAGO BUSINESS

MANSIONS from Page 1 Lake Forest and the Barringtons and led to new high water marks for prices in Burr Ridge, Hinsdale, Lincoln Park and other affluent areas. High-end home buyers have been on a shopping spree. By the end of August, more Chicago-area homes had sold at $4 million and up than typically sell by November or December. But even in a market that mopped up many long-unsold homes, some high-end properties still hadn’t been tapped by buyers as of mid-September. Examples include Michael Jordan’s Highland Park estate and a modern take on an Italian villa next to the 606 in Bucktown. Both homes originally went up for sale in February 2012. Also among the wallflowers standing alone at the big dance: a bunch of upper-priced homes on the Gold Coast, and a lavish mansion in Lake Forest whose price has roller-coastered up and down since 2010 and is now at $4.9 million. Why did the boom leave these homes unsold? Mostly it’s about price. “We’ve had the best luxury market in a long time,” says Michael LaFido, the Exp Realty agent who recently signed a buyer for the opulent Barrington Hills

mansion used in the TV show “Empire.” “If you got an offer in this COVID market, that’s the best offer you’re going to see. If you didn’t take it, I don’t know if (the house) will ever sell.” In June 2020, the early days of the pandemic buying boom, a Naperville mansion that LaFido represented sold for $4.75 million. That’s a little more than half the $8.75 million the sellers were asking for the 17,500-square-footer on 3 acres when they first put it on the market in 2015. By the time of the sale, the sellers had cut more than $3 million off of their asking price. Jordan, on the other hand, has held firm to his $14.855 million asking price since 2017.

MATTERS OF STYLE

After price comes style. Some high-end homes are so extensively tailored to the owner’s individual taste that buyers “can’t picture themselves in it,” LaFido says. On Ford Lane in Naperville, an ornate home inspired by European villas, with Corinthian columns flanking the front door, domes on the roof and several levels of terraces climbing up from the swimming pool, has been on and off the market a few times since June 2016. Inside are numerous columns, archways, murals and specialty paint finishes.

Real estate agents will tell the owner of a mid-priced home who wants to get the home sold and move on to neutralize all that color and heavy finish with taupe, gray and white. Many high-end sellers “aren’t in a hurry to sell,” says Dominique Gagnon, the Jameson Sotheby’s International Realty agent representing the Ford Lane house. Gagnon said her client “put so many beautiful things in that home. He wanted it to be perfect for him.” He is content to wait, she said, for “somebody who loves all the details, somebody who is buying with their heart.” The asking price is now just under $3.65 million, down from $4.4 million in June 2016. The homeowner bought the lot, 0.95 of an acre that backs up to the DuPage River, in 2004 for $575,000. Crain’s couldn’t determine what he spent to build the five-bedroom, 9,450-square-foot house, which includes a pub, a movie theater, an elevator, a wine cellar and a gym. The home that may have the longest tenure on the market in the Chicago area is a stately New England colonial shingle-sided house on 21 acres in Barrington Hills. Known as Valley View Farm, the property first came on the market in July 2005 at $6.6 million. It has

ARC REALTY GROUP

There’s been a shopping spree for high-end homes, but some linger unsold

The asking price for this mansion on Sussex Lane in Lake Forest has risen and fallen for 11 years, reaching $11 million at its height and now at $4.9 million. been on the market most of the past 16 years, with occasional breaks. The asking price is now $2.85 million. At that price, with almost 8,300 square feet inside and a pool and tree-dotted acreage outside, the estate would seem like some families’ COVID-era dream. “Everybody’s dream is different,” says Mimi Noyes, one of two @properties agents representing the house. Noyes adds that it’s not too late for Valley View Farm to attract a buyer, as “we’re still seeing a lot of activity in our market,” the Barrington area. On Sept. 20, a 12,000-square-

foot home on County Line Road in Barrington Hills went under contract to a buyer 11 years and two months after it first went on the market at $4.3 million. By the time it went under contract, the asking price was down to $2.45 million. Noyes said she and her fellow listing agent, John Morrison, could not divulge the sale price until after the deal closes. Also recently landing a buyer but not yet closed is the modernist glass house in Northfield that its architect and owner, Tom Roszak, has had on the market since April 2017. Maybe Michael Jordan should keep his fingers crossed.

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CRAIN’S CHICAGO BUSINESS • October 4, 2021 23

She drove the electric Rivian R1T pickup for three days. Here’s what she thought.

R.J. SCARINGE BELIEVES trucks can save the world. That’s why the 38-year-old vegan spent years developing the R1T, the first-ever production vehicle from the company he founded 12 years ago. After multiple production delays—the coronavirus pandemic, the semiconductor shortage and the essential fact that Rivian had never made any production vehicles all contributed—I found myself driving the $73,000 R1T “Launch Edition” in the Rocky Mountains. It is, at long last, Scaringe’s message to the world: This is how we save the planet. “For me, my central focus is climate and carbon,” Scaringe told me last month over a metal bowl of vegetable curry in Breckenridge, Colo. Rivian, which anticipates an $80 billion initial public offering this fall and is on the hook to deliver 100,000 electric vans to Amazon by 2030, had just announced it would start delivering R1Ts. But how’s the truck? Starting on Sept. 22, I spent three days inhabiting a Forest Green R1T. I crossed the continental divide on paved switchbacks and scaled unpaved shale-shingled peaks near a quite unbothered family of fluffy mountain goats. I ate all my meals from a $5,000 two-burner camp kitchen that fits into a gear tunnel beneath the vehicle. My first impression was that Scaringe and his tight-knit team did try to think of everything when they made it. It felt as if they had taken their own notes over many back-country climbing and biking trips, then made a vehicle to suit their own Patagonia-loving lifestyle. But there remain some significant red flags waving at us from the truck bed of R1T as it cruises by. The discerning consumer would do well to pause to consider them before making a blind— and I do mean blind, as sales are currently restricted to online— purchase. Let’s discuss.

NO WORKHORSE

Laden with vegan-leather seats and an all-glass panoramic roof, the R1T is no workhorse. Its front end will not sustain a snowplow; its 16-inch center touchscreen should not get wet and won’t respond to input from gloved fingers; and its stiff, not-very-adjustable seats lack the comfort of the premium work rigs that double as offices and conference rooms for contractors on the move.

RIVIAN

Clever gimmicks like hidden flashlights, intelligent storage and integrated camping gear will appeal to outdoorsy types. But it’s just a little delicate around the edges and lacks the needed comfort for contractors on the move. BY HANNAH ELLIOTT

Between the truck bed, frunk, storage bins, gear tunnels and more, the R1T offers 68 cubic feet of storage. After nine hours during my longest day of driving, my neck and shoulders felt like they had been wedged into rear-row coach status on a transatlantic flight. Scaringe wants you to believe that this is a truck for campers and climbers, and Rivian did pack enough treats inside to surprise and delight the demanding outdoor enthusiast. At the beginning of my test, I happily stuffed my carry-ons, duffel bags, coats, and scarves into the lockable 11.6-cubic-foot gear tunnel that runs the width of the truck. It’s an elegant solution for secure storage without eating into rear-seat legroom, and its doors also double as seats. A full-size storage space under the bed of the truck gives an additional 14.3 cubic feet for luggage and gear. Part of the R1T’s charm is its cleverness: The standard removable Bluetooth speaker stored in the center of the console doubled as a lantern as we ate tacos off the camp kitchen at night. The driver’s side door holds a torch flashlight like the umbrellas that RollsRoyce first installed in its coaches. The rear contains a standard air compressor that I used to refill my tires after coming off the rocks we crossed on the trail near Lake Dillon and the Old West town of Montezuma. (We had let some air out earlier to help improve traction.) The ground covered was not the most extreme I’ve had for an electric vehicle or off-roader. Leave that distinction to the boulders I climbed in Moab

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in the electric and hybrid Jeep Wranglers and the week I spent in Death Valley dunes in the Rolls-Royce Cullinan. But the R1T proved capable enough in its Off-Road, All-Purpose, Sport and Conserve modes, which adjust the power, braking, ride height, stiffness and handling to enhance the truck’s ability.

HIGH POINTS

With nearly 15 inches of clearance, it had me crawling over gullies and up hard-packed inclines with little effort. I loved the shape and feel of the steering wheel and the craftsmanship of the natural-grain ash-wood trim along the doors and dashboard. The cabin seal proved quiet as I plunged through the wilderness. Rivian’s fit-and-finish elements and build quality are better than what Tesla has given us to this point. But it is expensive to be so seductive. The $73,000 starting price of the R1T I drove didn’t include such other practical things as the three-person tent with cargo crossbars ($2,650), wall charger ($500) or camp kitchen ($5,000). The upcoming Ford F-150 Lightning, for comparison, starts at a far more affordable $39,974. A less-loaded R1T Explore version is due out in January 2022 if Rivian can produce it on time. That one starts at $67,500. I drove the R1T 200 highway miles round trip (periodically switching driving duties with another journalist) between Breckenridge and Denver, so I can attest that the R1T is quick—very

quick. Its 800-plus horsepower and 900 pound-feet of torque from four electric motors easily pushed it to 100 mph as I glided past RVs lumbering down Loveland Pass. And that’s plenty of power for hauling—more than the F-150 and its peers. I experienced no anxiety related to range, which Rivian says is 314 miles on a single charge of its largest battery option. I found this to be a reliable estimate; in fact, on some segments of the offroad portion of my drive, the truck showed more charge on it than when I had begun, thanks to energy regeneration as I braked down steep grades. My longest day over nine hours of driving saw the battery go from 215 miles to 89 miles of range. Using DC fast charging, you can add 140 miles of range in 20 minutes, Rivian says. It will take hours to recharge fully. Unfortunately, as with several other absent applications, including the basic and essential hill-descent control, the truck lacked the ability to monitor actual battery life usage in real time on my trip. “Not yet,” was the refrain from Rivian engineers when asked. Rivian offers neither Apple CarPlay nor Samsung connectivity. Such applications as adaptive cruise control and highway assist required a car restart before they’d work properly. The Highway Assist was so sensitive about navigating gentle corners and speed that it works only if you’re going in a straight line or under the speed limit.

The custom Pirelli Scorpion All-Terrain tires also fared poorly. I got a flat cruising at 8 mph down an easy, straight grade when a small, sharp rock punctured the sidewall. Using the spare tire ($600 to $800, depending on wheel size) hidden in the truck bed, and aided by two Rivian employees, the switch took all of 10 minutes, but I wish Rivian had put as much thought into its antiquated, flimsy tire jack as it had the modern camp kitchen. It was after the flat that my windows started to fidget; the rubber lining inside had curled up improperly and was blocking them from rolling. I eventually could get them up in fits and starts. The windshield wipers in the Rivian truck ahead of me went on the fritz, erratically jerking. “These are preproduction models,” the Rivian employees assured me. The trucks that customers get won’t have any of these pesky glitches, they promised. I look forward to hearing from those who paid the $1,000 deposit required to reserve one, neither seen nor driven. Rivian (like all electric vehicle companies) still lacks a convenient charging network. Relying on existing CCS fast-charging stations, it installed additional chargers to support my test route. Rivian offers four service centers for the entire United States— one near LAX airport, one in south San Francisco, one in the Seattle suburbs and one in Brooklyn, N.Y. (Tesla has nearly 200.) Repairs on customer trucks will eventually be done via “mobile” repairmen, a spokesman told me, which sounds to me more like waiting for the cable guy than prompt and reliable service. Rivian trucks have been run only in tightly controlled scenarios since their inception; they have yet to last even a month in real-world driving by real-world people. Even if the R1T does prove rugged and reliable, I have yet to see any evidence that the core of America’s truck-loving customers will be taken by its altruistic promise. Scaringe will need at least some of those good ol’ boys to get into his rig if he is to have a real chance at fulfilling all that world-changing talk. I am not a complete cynic. I hope that Scaringe and his band of true believers succeed with their plans to fix the world. But until we see more, I’ll keep my climate-saving efforts to driving old, already made cars and eating vegetable curry.

Vol. 44, No. 40 – Crain’s Chicago Business (ISSN 0149-6956) is published weekly, except for the last week in December, at 150 N. Michigan Ave., Chicago, IL 60601-3806. $3.50 a copy, $169 a year. Outside the United States, add $50 a year for surface mail. Periodicals postage paid at Chicago, Ill. Postmaster: Send address changes to Crain’s Chicago Business, PO Box 433282, Palm Coast, FL 32143-9688. Four weeks’ notice required for change of address. © Entire contents copyright 2021 by Crain Communications Inc. All rights reserved.

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