Crain's Chicago Business, October 23, 2023 by crainschicago

CHICAGOBUSINESS.COM I OCTOBER 23, 2023

Hollywood strike helps put Cameo back on track With the unexpected boost, the Chicago startup has returned to growth. Will it last? By John Pletz

The Hollywood actors strike has been a drag for audiences, but it’s given Cameo an unexpected lift. Nearly 5,000 performers have joined the platform for celebrityvideo shoutouts since the strike began in mid-July. The amount of talent signing on in September was 246% higher than a year earlier. Cameo has always been a side hustle for actors, but it became a more compelling option after the Screen Actors Guild and American Federation of Television & Radio Artists, or SAG-AFTRA, went on

strike. Well-known actors can earn hundreds of dollars for recording birthday greetings and other shoutouts for consumers. They can earn thousands doing pitches for businesses on Cameo for Business. CEO Steven Galanis says the company sold 17.5% more Cameos in September than it did a year earlier. It was the first month of year-over-year growth in more than two years. “This is our slow season,” Galanis says. “Anytime you can grow nearly 20% a year, that’s a huge win.” Before the strike began, the See CAMEO on Page 28

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MADELEINE DOUBEK The case for why election reform is needed is playing out on Capitol Hill.

POLITICS A quiet tussle over nursing home taxes could boost your burden.

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Case for election reform plays out in U.S. House I t’s past time to try some new approaches in the way we run elections. The crisis of leadership in the U.S. House ought to drive home that point. House Democrats and some Republicans ousted Republican U.S. House Speaker Kevin McCarthy Oct. 5, and the devil they knew might very well look better than not having any devil at all, now that GOP Reps. Steve Scalise and Jim Jordan have failed to build Madeleine enough support to take over the Doubek gavel. We’re now heading into week three of a House that isn’t just divided, it’s careening on the edge of collapse. As reform advocate Unite America has noted, the eight House members who started causing McCarthy so much trouble were elected in partisan primaries by 12% of their districts’ voters. That’s beyond the opposite of majority rule. Unite America calls it the “Primary Problem” and it absolutely is.

We’re either polarized and shouting past each other or completely disengaged from our governments and don’t care. If the federal government does shut down, more of us will care again quickly who depend on it for work or other benefits. As the U.S. House drama unfolds daily, Illinois local, state and federal candidates are circulating petitions to try to secure a ballot spot for the March 19th primary. We’ve already sorted our polarized selves with Democrats dominating and clustered in and around the Chicago metro region, and Republicans dominating and spread out around the rest of the state. Majority Democrats further cemented that self-sorting by creating gerrymandered districts that concentrate Illinoisans into deep-blue or rich-red districts with as little competition as possible. In Indiana and plenty of other states, majority Republicans did the same. This unending, majority power thirst for power, control and as little competition as possible fuels the polarization that is driving our dysfunction to new levels.

Here’s how the Illinois election story will go: If more than an incumbent gives it a go for an office and collects voter signatures to try for a ballot spot, the wouldbe candidates in a race will try to knock off their competitors by challenging those signatures or other paperwork. New election approach No. 1 ought to be lowering signature requirements and making it easier for would-be candidates to check voter registration before someone signs their nominating papers to cut down on the candidate challenge game. If history holds, most of the offices on our ballots will feature only one candidate and that easy winner will not be incentivized to listen to constituents. In the handfuls of instances where there are two or more candidates in a primary contest, they’ll battle for a small number of votes and the candidate who is less mainstream, better financed and more organized will win. Illinois and many states have systems that require voters to ask for one party or another’s ballot to participate in primary voting. Many people are more independent-minded and just don’t want to be boxed in

like that. A few years ago, Unite America noted 10% of voters cast primary ballots that effectively chose 83% of Congress. So, new election approach No. 2 ought to be fully opening up our primary elections to let all voters choose among all candidates, as five states do, and then letting the top four or five of any party advance like they’re considering doing in Nevada. The voter turnout next March will be higher than the last primary because it’s a presidential election year, but only the most partisan voters tend to cast primary ballots and that produces winners on their party’s edges who don’t represent the majority of their constituents. New election approach No. 3 should be approving rankedchoice voting for all our elections. Ranked-choice voting effectively erases the “Primary Problem” because the election winner will have won the support of a majority of voters and is much more likely to represent more of their constituents. Ranked-choice voting could encourage more people to take a shot at running and boost voter

turnout, especially if combined with fully open primaries. If four candidates run, voters could rank as many as they like. If no one wins a majority outright, then the last-place candidates are eliminated and votes are counted until a majority winner is declared. Candidates are less likely to tear each other down as they seek to be in voters’ top preferences. Studies also have shown RCV benefits candidates of color. Ranked-choice voting also eliminates costly runoffs. The good news is Illinois lawmakers authorized a task force to consider ranked-choice voting. We all rank all the time. It’s as simple as ordering pizza toppings or thinking about whether you’d rather have ice cream, gelato or soft serve. Let’s get going on giving it and these other approaches a go. They’ll give more of us greater choices and stronger voices in our governments and those are wins we need. Madeleine Doubek is executive director of Change Illinois, a nonpartisan nonprofit that advocates for ethical and efficient government.

Chicago might soon require 15 days off for all workers An amended proposal to provide seven sick days and eight days of paid time off could be voted on as soon as next month By Justin Laurence

Chicago employers could be required to provide their workers 15 paid days off annually under a tweaked proposal being negotiated at City Hall that advocates hope will be approved in the next month. In July, Ald. Mike Rodriguez, 22nd, introduced an ordinance that would mandate employers in the city provide their full-time employees with 15 days off without differentiating between sick days and vacation time. The ordinance also allowed unlimited days to be carried over each year and did not require workers to provide documentation for medical issues to be excused from work. The measure was pushed by the Chicago Federation of Labor and other worker-advocacy groups and is meant to retain Chicago’s reputation as a national leader in worker’s rights. Chicago’s existing paid sick leave ordinance mandates five sick days per year for employees working at least 80 hours within a 120-day period. A state law that takes effect next year guarantees five days of paid leave regardless of the reason, but Chicago was intentionally left out of the state legislation. That puts a deadline of Dec. 31 for the city to implement a new policy to avoid being eclipsed by the rest of the state. Rodriguez, an ally of Mayor Brandon Johnson’s, told Crain’s on Oct. 18 that the advocates “have listened and are trying to get to a good compromise,” but regardless of whether business groups concerned about the legislation ultimately sign on, 2 | CRAIN’S CHICAGO BUSINESS | OCTOBER 23, 2023

he said “we’re definitely going to do something that’s for working-class folks.” “The fact is, as the pandemic showed us, paid time off is really important for people to protect themselves and their families,” he said. Rodriguez said Johnson is on board with the legislation. Another source confirmed that a representative of the mayor’s office was at the negotiating table during a meeting with business leaders on Oct. 18. After weeks of negotiations with the Chicagoland Chamber of Commerce, the Illinois Retail Merchants Association, the Illinois Restaurant Association and others, a tweaked ordinance is set to be introduced at a meeting of the City Council’s Committee on Workforce Development by the end of October. The amended proposal, as drafted, would still mandate 15 days off for employees working 40 hours a week, but it would be split between seven sick days and eight days of paid time off. Unlike the original proposal, employers would be able to establish pre-approval policies to “ensure continuity of business operations,” according to a fact sheet obtained by Crain’s. Workers would have to provide their employers with documentation if they require three consecutive sick days, and only 14 days of sick leave could be rolled over annually. The changes came at the requests of business leaders and city officials, but also increase the chances proponents get enough votes on the measure to deliver the 15 days

off to workers without further watering down the proposal. Approving the measure before a vote on Johnson’s $16.6 billion budget would provide another win for the mayor and his progressive City Council allies and could dampen any criticism from his movement that the mayor’s first budget doesn’t deliver on his sweeping campaign

promises. Representatives of the business groups on the other side of the negotiating table declined to comment. Negotiations are expected to continue, and the final language of the ordinance could be tweaked before a committee vote. Among the ongoing concerns from business leaders is the re-

quired payout for unused days off and how many days can be rolled over. The ordinance would primarily benefit workers in lower-wage jobs who have not unionized. The measure would set baselines that employers or collective bargaining agreements could go above and beyond.

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Fight over nursing home taxes could affect homeowners

A rendering of the proposed 95th Street remake.

There’s a push on to override Pritzker’s veto of a measure that would shift hundreds of millions in property taxes from nursing facilities to others

DEPARTMENT OF PLANNING & DEVELOPMENT

By Greg Hinz

City, Chicago State reveal plan to remake 95th Street The South Side university unveiled its new $250 million concept reimagining the half-mile stretch on its campus — a plan with no official funds to back it up yet I By Corli Jay

hicago State University has shown its hand on a promise to redevelop part of its campus and the surrounding region. The South Side university unveiled its new economic development plan reimagining the half-mile stretch of 95th Street between Martin Luther King Drive and Cottage Grove Avenue — one with no official funds to back up a $250 million price tag. The plan, which was shown at a community meeting Oct. 16, is a collaboration between CSU and the Department of Planning & Development “to create an inclusive, place-based vision for 95th Street,” according to a letter from Mayor Brandon Johnson that leads the study document. The report was funded by The Chicago Community Trust. See 95TH STREET on Page 30

Four potential development sites were detailed, including multistory mixed-use buildings, three on the CSU campus and one on a vacant 7,000-squarefoot lot.

A high-stakes lobbying battle has broken out in Springfield over whether to sustain or override Gov. J.B. Pritzker’s amendatory veto of a little-noticed but impactful bill that would slash property taxes by nearly two-thirds for hundreds of nursing homes located in Cook County. If enacted into law, the measure would shift tens of millions of dollars “and maybe more” in annual property taxes from nursing facilities to homeowners and other businesses, according to Cook County Assessor Fritz Kaegi’s office. Some south suburban communities would be particularly affected. A trade group representing nursing-home operators says, with costs rising fast, the industry deserves the tax break. In an apparent effort to underline its point, the Health Care Council of Illinois PAC has donated to the political war chests of dozens of state lawmakers since midsummer, with $100,000 going to a fund operated by Illinois Senate President Don Harmon. Pritzker and allies counter that the tax shift is not warranted, especially since the nursing home industry won an estimated $700 million in higher state Medicaid payments last year. Pritzker’s amendatory veto means lawmakers will have to consider the matter again, with a simple majority of both houses needed to concur and a 60% margin needed to override.

The fray has largely gone under the radar. The provision involved was quietly tucked into a much larger property tax bill that mostly dealt with routine matters. The provision to cut nursing home taxes surfaced as an amendment introduced on May 19 in the state Senate, was approved by the full Senate on the same day, then sent to the House for concurrence. With lawmakers set to return to Springfield this week for their an-

“We consistently argue for living wages for frontline nursing home workers. (But) these for-profit facilities, which receive significant state and federal funding, have the means to meet these wage demands.” — Greg Kelley, president, SEIU Healthcare Illinois nual veto session, behind-thescenes maneuvering has picked up. In one sign of the intensity of the conflict, SEIU Healthcare — the union representing health care, child care, home care and nursing home workers — last week issued an unusual statement denying See TAXES on Page 30

Judge tells feds to give back another $8.6M to Rishi Shah The Outcome Health founder’s assets have soared since they were frozen by prosecutors By John Pletz

A federal judge has ordered the government to return another $8.6 million to Outcome Health founder Rishi Shah as he awaits sentencing later this year on fraud charges. U.S. District Judge Thomas Durkin’s order brings the total returned to Shah since his conviction in April to $13.4 million. He previously ordered prosecutors to turn over $4.8 million. The ruling gives Shah more money to hire attorneys for appeal, although it’s not clear how much additional money he has beyond what the government

froze. However, it also could provide additional funds for the government to pursue as restitution when he is sentenced in December. Federal prosecutors froze $23.9 million belonging to Shah and co-founder and co-defendant Shradha Agarwal when they were charged with fraud in 2019 in connection with raising nearly $1 billion from venture capitalists and lenders for their health care-advertising company Outcome Health. They personally received about $69 million in dividend payouts, much of which went into a variety of investment funds.

After their convictions, the feds moved to seize the assets. Shah challenged it, arguing that the government had frozen funds that weren’t traceable to the fraud at Outcome Health. Much of the money prosecutors froze already had been invested in a dozen venture-capital and other investment funds. As an entrepreneur, Shah had been investing in startups before the fraud at Outcome Health, which happened between 2015 and 2017. He and Argarwal had put money in several of the same funds in which they invested tens of millions in payouts they

received when the company raised money. (Shah owned 80% of their joint investment vehicle.) Prosecutors admit they inadvertently froze some funds that Shah and Agarwal invested before the fraud. It gets more complicated, however, because the value of many of those investments soared during the massive runup in startup valuations between 2020 and 2022. In one instance, a $1.2 million investment is now worth $22.3 million. However, just $550,000 of that original investment can be connected to the fraud at Out-

Former Outcome Health CEO Rishi Shah

come Health. That $550,000 is now worth $10.2 million, according to court filings. Altogether, the value of Shah and Agarwal’s investments that were frozen by the government has roughly doubled to $50.2 See SHAH on Page 30 OCTOBER 23, 2023 | CRAIN’S CHICAGO BUSINESS | 3

Home sales hit their lowest point since 2012 New data shows sales across metro Chicago dropped sharply in the first nine months this year, as higher interest rates undercut housing demand By Dennis Rodkin

Fewer homes sold in the Chicago area in the first three quarters of the year than in any comparable period since 2012, data released Oct. 19 shows. In the city, 17,504 homes sold from January through September, according to Illinois Realtors, a statewide industry association that tracks sales. That’s the lowest for the first nine months of any year since 2012, when 14,335 homes sold. It’s also a drop of nearly 26% from the same period in 2022. In the nine-county metro area, 69,405 homes sold in the first nine months of the year, also the lowest since 2012. It’s a drop of just under 24% from 2022. Comparing sales so far this year to the comparable period in the last five relatively normal years prior to the COVIDinspired housing boom shows that the city is lagging behind the larger metro area. In the city, home sales in the first three quarters came to just under 84% of the average for the years 2015 to 2019, while in the

metro area, sales this year were almost 98% of the volume in those years. Clearly, the city’s luster as a home market has not yet returned to what it was prior to 2020. The steep drop shows how sharply the Federal Reserve’s inflation-fighting program of raising interest rates has cut into the once-frenzied housing boom, a reversal that reverberates through the economy. On average, homeowners spend an estimated $6,300 on furniture and other items after buying a home.

Less spending With nearly 21,500 fewer homes sold in the region this year than in the first three quarters of 2022, a rough estimate would be that about $135.3 million less money was spent on rugs, curtains and the rest. The figure could be even higher, if those who do buy feel so stretched by the shrinkage of how much home they can afford, thanks to the one-two punch of still-rising home pric-

This house on Lake Avenue in Wilmette sold for $763,000 in September. I BERKSHIRE HATHAWAY HOMESERVICES CHICAGO

es and high interest rates, that they have to curtail spending on things for the new home. The median price of homes sold in September rose by 6.6% in the metro area, to $325,000, and by 1.4% in the city, to $324,450. Nationwide, the median price was up 2.2%, according to data released separately by the National Association of Realtors. The increases are driven by the

extreme shortage of inventory that results in large part from existing homeowners’ reluctance to put up for sale a home where their mortgage has an olden-days mortgage rate below 4% because they would have to buy a new place at a considerably higher rate. Last week, rates crossed above 8% for the first time in 23 years. September home sales were down 19.6% from a year ago in

the metro area, to 7,608 sales, and down 11.3% in the city, to 1,830. In both the city and the metro area, it was the lowest-volume September since 2011. The Illinois Realtors data uses the U.S. Census Bureau definition of the Chicago metro area, which comprises Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will counties.

Chicago housing remains cheaper than most big cities A Redfin report shows the new income level for someone to afford a median-priced home here By Dennis Rodkin

Even with housing affordability shrinking faster in Chicago than in most other big U.S. cities, it remains one of the best bargains among them for homebuyers, according to a report. A buyer would need a household income of about $91,400 to afford that median-priced home in the Chicago area in August, according to a report last week from Redfin, the online real estate marketplace. That’s the second-lowest income needed among the 10 largest U.S. metro areas. Only Philadelphians need a lower income — $75,003. Chicago maintained its rank as second-most affordable even though affordability declined by one of the biggest rates among that same group of cities. It took nearly 26% more income to buy a median-priced home in Chicago in August 2023 than the amount needed a year earlier, Redfin reports. In only one of the 10 largest metros did the amount of income needed go up by more. In Miami, buyers needed about 33% more income to afford a median-priced home there than they did at the same time a year ago. Together, Chicago’s two sec4 | CRAIN’S CHICAGO BUSINESS | OCTOBER 23, 2023

ond-place rankings show clearly that housing affordability remains one of the metro area’s competitive strengths against other big job markets. There’s no denying that affordability is greatly diminished, harder than it’s been in 15 years, as Crain’s reported in September. It’s just that things are worse, and have long been worse, in other major cities. Among the 10 biggest metros, Los Angeles is where buyers need the highest household income, about $237,300, or about 2.6 times what they need in Chicago. In New York, it’s a little under $198,000, and in Washington, D.C., slightly over $150,000. The shrinkage of affordability has slowed down, Redfin’s report shows. In a report late last year, Redfin said the amount of income homebuyers would need was up nearly 42% from a year earlier. That makes the latest figure, an increase of about 26%, look easier. Chicago maintained its rank as second-most affordable even though affordability declined by one of the biggest rates among that same group of cities. It took nearly 26% more income to buy a median-priced home in Chicago in August 2023

This house on Austin Avenue in Jefferson Park sold for the Chicago area’s median price, $335,000, in September. I CENTURY 21 SGR

than the amount needed a year earlier, Redfin reports. In only one of the 10 largest metros did the amount of income needed go up by more. In Miami, buyers needed about 33% more income to afford a median-priced home there than they did at the same time a year ago. Together, Chicago’s two second-place rankings show clearly that housing affordability remains one of the metro area’s

competitive strengths against other big job markets. There’s no denying that affordability is greatly diminished, harder than it’s been in 15 years, as Crain’s reported in September. It’s just that things are worse, and have long been worse, in other major cities. Among the 10 biggest metros, Los Angeles is where buyers need the highest household income, about $237,300, or about 2.6

times what they need in Chicago. In New York, it’s a little under $198,000, and in Washington, D.C., slightly over $150,000. The shrinkage of affordability has slowed down, Redfin’s report shows. In a report late last year, Redfin said the amount of income homebuyers would need was up nearly 42% from a year earlier. That makes the latest figure, an increase of about 26%, look easier.

City re-ups contract with Jones Lang LaSalle to assess spaces for possible migrant housing Downtown appears to be a likely focus of the search Johnson administration officials are working with a prominent real estate brokerage to assess brick-and-mortar buildings that could be used to house new arrivals pouring in from the southern border. As the migrant crisis intensifies — and as commercial office landlords saddled with vacant space sense an opportunity to leverage city dollars to fill it — Mayor Brandon Johnson is re-upping a contract with brokerage Jones Lang LaSalle to scout out spaces that can be turned into shelters. And it looks as if downtown office spaces are likely to be a focal point of the search. In August 2018, the city inked a contract worth $2.3 million with JLL for site reviews, appraisals and brokerage services. That contract expired this year on Aug. 5, but was extended to 2025, spokesman Michael Grimm said in an email to Crain’s. The city’s contracting website does not list an extension and Grimm did not share further information on the cost of the contract. Under the broader contract, JLL has a specific task order to perform broker services related to the migrant response, Grimm told Crain’s. Those efforts are being led by JLL Executive Vice President Hugh Murphy, a 20year veteran of City Hall who worked as an auditor, housing commissioner, aviation commissioner and later as former Mayor Richard M. Daley’s chief management officer. Between May 15 and Sept. 29, the city had scouted 250 locations that could be used to house migrants, Beatriz Ponce de León, deputy mayor of immigrant, migrant and refugee rights, told council members during an Immigrant & Refugee

FILE PHOTO

By Leigh Giangreco and Justin Laurence

Rights Committee hearing in September. Identifying additional space has become more urgent as border state governors have accelerated the pace of buses flowing toward Chicago in anticipation of the Democratic National Convention next summer. On Oct. 16, at least 11,241 residents were staying in city shelters, 3,338 were housed in police stations and 549 were sleeping at O’Hare International Airport, the city’s Office of Emergency Management & Communications reported. The city is now operating 24 shelters, OEMC confirmed to Crain’s.

Vacant commercial space As the city continues its search for office space that could be converted to shelter space, it’s likely to center on vacant commercial space in the downtown area where the buildings are less likely to need extensive updates as opposed to vacant spaces across the city, Ald. Walter Burnett, 27th, told

Crain’s. “The only thing they have to do is put a shower in,” he said. “In other communities, they have to do major construction.” Under the city’s existing contract with JLL, the company presents the city with building options, Pacione-Zayas said. City employees assess the physical space at the site, but the process requires additional vetting as well, she added. Under its basic guidelines, the city needs spaces that can house 200 people or more, are in need of very little repairs and either have shower banks or the capacity to hook up to shower trailers. The city sets all the terms and requirements of the leasing agreements for the buildings, Grimm said. In September, the city entered a deal to turn a 50,000-squarefoot office building at 344 N. Ogden Ave. into a temporary shelter, Crain’s reported. While the shelter would operate out of an office rather than a residential building, Gov. J.B. Pritzker’s emergency declaration allows

more flexibility around zoning restrictions, according to Pacione-Zayas.

Frustration Commercial landlords have been calling the city to offer their vacant space because of the city’s ability to pay lease terms comparable to high-end office tenants even as the demand for office space has lessened. The pairing could prove beneficial to both parties as the city scrambles to find space to care for migrants in an effort to stop relying on the city’s police districts and airports. However, downtown council members like Burnett are pushing back, arguing that enough shelters have opened in his neighborhood. Of the 24 shelters in operation, at least three have opened in Burnett’s ward, including the sites at 344 N. Ogden, 1640 W. Walnut St. and 939 W. Lake St. “We’ve got a number of vacancies in my community, and the builder-owners are asking the city and I’m telling them they can’t, there’s enough in our

ward,” he said. On the city side, a small cadre of about four public employees are working together to scout the sites. “It’s a pretty lean team,” Pacione-Zayas told Crain’s. That group includes representation from the city’s departments of Assets, Information & Services and Family & Support Services, as well as the Office of Emergency Management & Communications and the Office of New Americans. “It’s an all hands on deck, if we need to plug in and be able to try to visit as many spaces and places,” she said. “If you could see our deputy mayor of infrastructure’s calendar, it’s completely chock full of visits, multiple visits in a day. One time when I did a visit, we did at least four to five sites.” Public meetings held to discuss the new housing sites have often devolved into ugly clashes between residents and frustrations from council members who feel the city has not given them the proper heads-up. But Pacione-Zayas counters that the timeline from identification of a site to its opening date is moving at breakneck speed, even for those inside Mayor Brandon Johnson’s administration. Her team briefs the mayor once a week to discuss the visits, price point, capacity and demographic makeup of the sites, and then determines which will open next. After that point, the city starts the process of engaging council members if the space is viable so they can set up community engagement meetings in their ward, she said. That entire process usually takes about seven to 10 days, though Burnett said the notice for council members is about three days. “We never get like a week’s notice,” Burnett said, adding that the Johnson administration’s approach is still better than former Mayor Lori Lightfoot’s on migrant housing. “Although they’re giving us a short notice, they’re giving us a notice.”

New pickleball social club set to open in Lincoln Park this winter The club will take over a 40,000-square-foot space in the Market Square shopping center By Corli Jay

A new social club will be coming to Chicago this winter. Social Pickleball Fun, or SPF, is the name of the pickleball social club that will debut in Lincoln Park at 2121 N. Clybourn Ave. The club will take over a 40,000-square-foot space in the Market Square shopping center that was once occupied by rock climbing gym Brooklyn Boul-

ders, which closed last year. The space, described in a press release as “the city’s largest indoor facility” with courts dedicated to pickleball, will include eight pickleball courts, a turf field, as well as saunas and showers. The club’s dining options will feature fare from the founders of Chicago-based restaurant Honey Butter Fried Chicken, Josh Kulp and Christine Cikowski, and former Galit chef de cuisine Tom

Carlin. The first phase of the space will to include an all-day coffee bar. The club is expected to be complete by mid-2024. “When designing SPF, we set out to create an experience that is very uniquely Chicago, while giving guests a space to stay active and engaged with friends and family throughout the year,” SPF partner Richard Green said in a statement. “We can’t wait to open

our doors to this incredible community and offer a new way for sports and recreation enthusiasts of all ages and skill levels to stay active, have fun and relax, all under one roof.” The venture is owned by a group of investors in Chicago and New York. SPF has partnerships with event management company Toss & Spin and pickleball paddle maker ProXR Pickleball.

A rendering of the Social Pickleball Fun interior. I COURTESY OF SPF

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Iconic Ramova Theatre in Bridgeport will reopen after sitting dormant for decades The venue will open its doors again this fall with an attached grill, brewery and beer garden after undergoing intense renovations By Corli Jay

Nearly 40 years after closing its doors, the Ramova Theatre will once again welcome guests when it reopens this fall. Ramova, located at 3520 S. Halsted St., once served as Bridgeport’s main movie theater and is an iconic fixture in the South Side neighborhood. The venue — revamped for music and live events — will reopen with an attached grill, beer garden, and brewery after undergoing renovations and receiving public and private funds totaling a multimillion-dollar investment. The price tag for the renovation project has been previously reported at $30 million. Representatives with the theater were not immediately available for comment. “We’re on a mission to revive this theatre the right way,” Tyler Nevius, Ramova’s lead investor, said in a statement. “We’re doing a complete rehabilitation to this pillar in the community, bringing back its historic grill, creating a

world-class entertainment space (and) adding a brewery where we hope people will meet their new best friends.” “Personally, it is the culmination of decades of talking about impact in the community that we care about with my wife,” Nevius, a resident of Bridgeport, told Crain’s. “Hopefully it means driving positive, exciting change with my neighbors here in Bridgeport. It means, hopefully, bringing something exciting to the South Side, it means creating an amazing space for the creators of Chicago that deserve something like this.”

New offerings Nevius worked with Chicagobased architecture firm O’Riley Office to turn the theater into a live music venue that seats more than 1,500 people. The reimagined venue will also feature a new brewery called the Ramova Brewery, which will serve drinks from New York City-based partner Other Half Brewing. The space will also feature an out-

door beer garden that will serve as an unwinding spot before and after concert sets.

Revived eatery In addition to reopening the theater, the project also will revive the Ramova Grill. The grill closed in 2012, but will reemerge as a 20-seat restaurant led by Kevin Hickey and Brandon Phillips of Bridgeport-based restaurant The Duck Inn. Operations for the grill and brewery will be overseen by Chicago-based food director Sarah Loberg. Thalia Hall venue manager Pete Falknor, who also served in roles at the House of Blues and The Empty Bottle, was named as director of operations for the venue. Along with bringing live music to the neighborhood, it will also have educational programming and workshops. Local Ald. Nicole Lee, 11th, was not available for comment but previously said, “It’s going to be a big economic boom, (making) for a second major attrac-

A rendering of the renovated Ramova Theatre in Bridgeport. I RAMOVA THEATRE

tion in the ward.” In 2001, the city purchased the theater to preserve the site. Local development firm Baum Revision and Our Revival Chicago, a venture led by Nevius, bought the property for $1 in 2020, with $6.8 million in tax increment financing from the city, and broke

ground on the project in 2021. The Ramova Theatre opened in Bridgeport in 1929 and has been closed since 1985. The theater was named to the National Register of Historic Places in 2021 following attempts from Bridgeport residents to save the theater dating back to 2005.

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OCTOBER 23, 2023 | CRAIN’S CHICAGO BUSINESS | 7

More than half of Water Tower Place mall could ditch retail By Dennis Rodkin

Five of the eight retail floors at Water Tower Place may be put to other uses, a clear sign of the fadeout at the archetypal high-rise mall that launched a transformation of North Michigan Avenue half a century ago. MetLife Investment Management, which has owned the mall since Brookfield Property Partners walked away from the poorly performing asset in April 2022, has authorized its brokers to lease space on the five floors to users other than retail stores, the real estate news service CoStar reported Oct. 13. The five floors are also for sale. While moving retail out of more than half the 818,000-square-foot retail portion of Water Tower Place would be a tectonic shift at Chicago’s original high-rise mall, which opened in 1975, it’s certainly not a surprise. In the past three and half years, COVID shutdowns and organized retail theft by smash-andgrab teams have battered North Michigan Avenue and other shopping districts. Crain’s reported earlier this

month that the Cook County Sheriff’s Office has established a highly visible presence on North Michigan Avenue in an effort to reduce the crime. Water Tower Place’s losses in the past few years have been huge. The mall’s Foodlife food hall and Mity Nice Bar & Grill closed in 2020. That next year brought the departure of Water Tower’s longtime major tenant, Macy’s, which had space on all eight floors and been in the mall for four decades, originally an anchor tenant under the name Marshall Field’s. CoStar reports Macy’s vacated about 323,000 square feet, or nearly 40% of the mall. Among the other retailers that bailed on Water Tower Place in the past few years was a bevy of fashion brands: Baby Gap and Gap Kids, Abercrombie & Fitch, Henri Bendel and Vera Bradley. MetLife’s decision to offer space to medical offices and other nonretail users appears to be acknowledgment that retail tenants aren’t in the cards for Water Tower Place. Meredith O’Connor, a JLL commercial real estate agent who is representing the floors with fellow

FILE PHOTO

The archetypal high-rise mall has suffered in the 2020s, and now the owner is open to uses other than retail on the top five of its eight stories

agent Tom Kirschbraun, referred questions to Dave Franecki, spokesman for MetLife Investment Management. Franecki declined to comment.

Going out of fashion The mall opened in October 1975 on the lowest floors of a 78-story mixed-use tower that also housed a luxury hotel and condominiums. A month later, an official of the Greater North Michigan Avenue Association told the Chicago Tribune that “the public has come out of the woodwork” to shop at what the paper called an “exciting” new place. A survey by the North Michigan group that year indicated that 75%

of the mall’s foot traffic came from the suburbs and the rest from other parts of the city, a sign that Water Tower Place could revive the city as a shopping destination and recapture much of the traffic that State Street had lost to suburban shopping malls in the first decades after World War II. In subsequent decades, North Michigan Avenue became a shopping mecca for the Midwest, as three more high-rise malls and free-standing stores for Neiman Marcus, Disney and Apple arrived. The 2020s have been bitter for North Michigan Avenue. By August 2021, 26% of the street’s retail space was vacant, Crain’s reported. That figure was up from 3.6%

five years earlier. CoStar reports North Michigan Avenue’s vacancy has risen to 33%, or at least 1 million of the street’s 3.2 million square feet. The condo and hotel sections of Water Tower Place are not part of MetLife’s holdings in the tower. Water Tower Place is not alone in giving up retail space, if that’s what plays out with leases. As brick-and-mortar retail stores have gone out of fashion in the age of shopping on the internet, redevelopment plans at many malls, including Northbrook Court and Hawthorn Mall in Vernon Hills, have entailed replacing disused department stores and other space with residential uses.

in the U.S. cricket community, which has long lacked professional-level play. “They have not had a domestic league to support or stadiums to go to,” Dunmore said. Leaders in the Chicago cricket community see the professional league as an opportunity to rally the city around the sport. “That’s the ultimate goal,” said longtime local resident Fazale Haq, a board member for the Midwest Cricket Conference. “We want to provide the grassroots for the league.” Chicago has a long history of both recreational and minorleague cricket play. Matches have been held at Washington Park on

the city’s South Side since the 1930s, and the park’s four fields remain some of the most popular grounds to play in the area. Still, the sport has yet to break into the broader Chicago market. Haq sees the professional game as something that can transform the sport into a spectacle that even non-players enjoy. “Right now, cricket is playerfocused,” he said. “As soon as we transition that into an entertainment stage, I think that will change the game. It’s not about cricketers watching other cricketers play. It’s about casual mom and dad coming in and paying for it.”

As professional cricket makes U.S. debut, Chicago could host a team By Jack Grieve

Chicago could eventually play host to yet another professional sports team. Major League Cricket, which hosted its inaugural tournament in July, is the first professionallevel league in the U.S. for the world’s second-most popular sport. It launched this summer with six teams and is looking to take U.S. cricket to the next competitive level. Despite the sport long being popular in the Chicago area, none of the original MLC cities are in or even near the Midwest. As the league stands now, the teams are based in Los Angeles, New York, San Francisco, Seattle, Texas and Washington, D.C. The league is still finding its footing and is unlikely to announce any new teams in the immediate future, but expansion is the ultimate goal for MLC — and Chicago is ripe to host a team. “There are definitely some really strong markets for cricket in the 8 | CRAIN’S CHICAGO BUSINESS | OCTOBER 23, 2023

U.S. that we don’t currently have a team for, and Chicago is certainly high on that list given the size of the market and the demographics,” said Tom Dunmore, MLC’s vice president of marketing. “Chicago certainly has a lot of the strong characteristics for a major-league cricket team in the future. It’s a really good potential market; all the metrics support it.” That ripeness is in large part thanks to the city’s strong overseas immigrant population. The sport originated in England but has since become dominant in other Commonwealth countries. The Indian Premier League, for example, is now home to the most elite level of play. “Cricket is a sport driven a lot in the U.S. by immigration from South Asia, particularly,” Dunmore said. “That’s where the sport is most popular — in India, in Pakistan and so forth.” Those migration trends were front of mind for the league as it scouted the original U.S. host cit-

ies and will remain a factor in future expansion efforts, therefore making Chicago an appealing contender as an expansion city. “We are looking at the top 10 markets for cricket in the country, and that’s driven a lot by the patterns of immigration,” Dunmore said. “Teams are going to be based in big cities, big metro areas with big South Asian populations. We think they are going to be very successful in those cities.”

Early signs of success The league has already seen early signs of success. The inaugural tournament in July saw packed crowds at the league’s new stadium in Grand Prairie, Texas. “What we showed this summer by building a stadium and then selling it out for most of the matches is that fans will come and watch it,” Dunmore said. “The desire for tickets was really beyond what we could serve during the tournament, so the tournament has shown that there is a market for it.” The new league is filling a void

MAJOR LEAGUE CRICKET

Major League Cricket, the first pro-level league in the country for the world’s second-most popular sport, launched this summer in six cities

Illinois is a centerpiece in a new $1 billion hydrogen hub project A coalition of Midwest states and 70 corporate and university partners had been pursuing the massive effort for more than a year By John Pletz

Illinois is a key player in a Midwest project that will receive $1 billion in federal funding to develop hydrogen as a clean energy source. The $1 trillion infrastructure bill that was passed in 2021 included $7 billion for clean-hydrogen hubs. The Biden administration announced seven hubs Oct. 13, including the Midwest Alliance for Clean Hydrogen, known as MachH2, which involves Illinois, Michigan and Indiana. The Biden administration estimates that the Midwest hub will create 12,100 construction jobs and 1,500 permanent jobs. The hub will involve multiple projects that will create large-scale hydrogen production from various sources, including nuclear, natural gas and renewables such as wind power. “This is a historic day for MachH2 and the entire Midwest,” said Dr. Dorothy Davidson, a nuclear industry veteran who is CEO of MachH2. “This is a huge deal, a critical step in moving forward in decarbonizing. It’s a prime area to do it in the Midwest because of all the transportation that’s here.” Illinois has been pursuing the project for more than a year. The group involved governors of Illinois, Michigan and Indiana, as well as 70 corporate and university partners, including energy companies such as Constellation Energy — which operates several Illinois nuclear plants — Exelon, Nicor, Invenergy and Ameren, as well as Argonne National Laboratory, the University of Illinois, University of Chicago, Governors State University, Illinois Institute of Technology, University of Illinois Chicago, Northwestern and several other Big Ten universities. Other corporate partners include BP and USG. Hydrogen, like batteries, is one of several technologies being explored as an alternative to fossil fuels for transportation and industrial uses.

One of the key challenges in hydrogen fuel cells is the energy required to separate hydrogen from water. “With robust and well-established agricultural, manufacturing and transportation infrastructure networks, a hydrogen hub in the Midwest offers opportunities to advance an unparalleled, comprehensive hydrogen ecosystem,” Illinois Sen. Richard Durbin and Rep. Bill Foster wrote in a letter supporting the project. “As the state with the most abundant nuclear power facilities, a growing number of other carbon-free energy sources and a commitment to achieving net-zero carbon emissions, Illinois is a prime state from which to maximize existing energy infrastructure for hydrogen. Illinois has been a leader in clean energy deployment, and we look forward to incorporating clean hydrogen into our resource mix.” Illinois is home to a hydrogenvehicle manufacturing startup, Hyzon Motors, that is building fuel cell components in Bolingbrook. This year, the Illinois Legislature created a $10 million tax-credit program for users of clean hydrogen. One of the assets of the Midwest in development of hydrogen infrastructure has roots in the agriculture economy. “The existing ammonia-distribution network is arguably the most extensive hydrogen distribution network in the country,” the coalition said as it was pursuing the grant. The hydrogen hub is one of several multibillion-dollar programs funded by the federal government that Illinois is pursuing, alongside semiconductors and life-sciences programs. Gov. J.B. Pritzker pulled together the state’s research universities, national labs and private-sector organization into a group called Innovate Illinois. Over the past several months, Pritzker has been talking to civic organizations about the importance of winning federal grants as a way to ensure that Illinois doesn’t get left behind in the rapid transition of new and existing industries.

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OCTOBER 23, 2023 | CRAIN’S CHICAGO BUSINESS | 9

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EDITORIAL

Chicago’s credit rating upgrade highlights good news — and bad

and recreation dollars that started trending upward on Lightfoot’s watch. So that’s the good news. On the other side of the ledger, however, are continuing uncertainties that could bedevil the city — and taxpayers — in the coming year and beyond. The pension situation, while improved, remains one of Chicago’s biggest

The rising revenue tide that’s lifting Johnson’s boat right now is due in large part to an uptick in tourism and recreation dollars that started trending upward on Lightfoot’s watch.

EVAN WISE/UNSPLASH

hicagoans have learned to take good news where we can find it — even if enjoying these fleeting moments of optimism requires a certain selective consciousness. Just as a for-instance: Homicides are down so far this year. That’s something to celebrate — as long as you don’t dwell too long on the burglary and carjacking numbers. And word that Chicago is one of the best bargains among major cities for homebuyers is wonderful if you’re new to the market — but maybe not so much if you’re trying to sell. You say Chicago’s in for a milder-than-usual winter? No complaints here — just try not to worry about climate change while you’re stowing away the lawn chairs and ironing boards you use to stake out your snowed-in parking space each year. So it goes with the Oct. 19 news that Fitch Ratings granted the city of Chicago a one-notch increase in its credit rating, raising us from BBB to BBB+ with a stable outlook. It’s a move in the right direction, to be sure — and it comes less than a year after the city shed its lone junk rating from Moody’s Investors Service last November. Chicago has struggled under selfinflicted financial wounds for years, particularly an unfunded pension liability, which has ballooned to around $35 billion. But the upgrade reflects that City Hall has ramped up its contributions to its anemically funded retirement funds — and it acknowledges that the city plans to make advanced payments on those accounts this year and next. Meanwhile, in an effort to save on debt, the city aims to refinance bonds in the fourth quarter of 2024, a maneuver the Johnson administration ex-

pects will free up about $89 million. Moody’s cited these conditions, noting the upgrade was “driven by a decline in the city’s long-term liability burden stemming from steady growth in the economic resource base and improved debt management practices.” As any politician worth his salt would, Mayor Brandon Johnson was quick to claim credit for the improved report card

— his $16.6 billion spending plan for 2024, unveiled Oct. 11, includes $187 million more in revenue than projected as recently as last month — though Fitch’s move was as much a cautious endorsement of aspects of his budget outlook as it was a nod to former Mayor Lori Lightfoot’s recent stewardship. The rising revenue tide that’s lifting Johnson’s boat right now is due in large part to an uptick in tourism

financial challenges. “The depth of the city’s pension liability and its consumption of operating resources continues to constrain the city’s overall creditworthiness,” Fitch notes, and that burden remains high compared to other metros. Factor in the added pressure of supporting thousands of new migrants being bussed in from border states — an ongoing effort that will cost the city hundreds of millions this year alone — as well as projections of greater budget deficits in the years ahead, and the fiscal squeeze facing Team Johnson comes into sharper focus. A slightly improved credit rating will help matters somewhat, but the decisions this administration makes from here on out will determine whether the recent upgrades are a durable trend.

PERSONAL VIEW

How can leaders prepare for the AI revolution? By leaning into their humanity.

’ve experienced some monumental pivots in the business world, big inflection points where anything felt possible — except accurately predicting the future. The emergence of the internet had a life-changing effect in the transformative solutions it enabled. Likewise the mobile broadband revolution that followed, untethering people and things from places,

catalyzed yet another wave of change that impacted all of our lives, both personally and professionally. Yet there may not be a bigger change than the one happening with artificial intelligence. Perhaps for the first time in human history, trying to project what the near future of work might look like may be pointless. To some people, a statement like this

elicits a powerful emotion: fear. But to contemporary leaders, it should elicit excitement about something very different: opportunity and growth. During these monumental pivots, I’ve watched as a lot of rank-and-file employees across industries succumb to a victim mindset. Change is coming, they think, and the first casualty will be my job. Leaders need to know that fear, doubt

Write us: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited. Send letters to Crain’s Chicago Business, 130 E. Randolph St., Suite 3200, Chicago, IL 60601, or email us at letters@chicagobusiness.com. Please include your full name, the city from which you’re writing and a phone number for fact-checking purposes. 10 | CRAIN’S CHICAGO BUSINESS | OCTOBER 23, 2023

and uncertainty are normal. It’s not a viewpoint that should be looked down upon or punished. In fact, employees who are concerned about job loss are correct: Some jobs will change and others will be made redundant by tech. Leaders must consider how to help their teams move up the value chain and See AI on Page 11

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

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From Page 10 commit to investing in their futures. Leaders must also lean into their humanity, recognizing that many of the people around them are scared and should be approached with empathy. It’s also up to role-model leaders to provide an alternative mindset that sees these changes for what they really are. Yes, in the process of a once-in-a-generation technological revolution that AI represents, it’s a certainty that some jobs will be affected negatively. But history shows us that innovation actually leads to more jobs, not fewer. It’s just that, like most things, those jobs will look different, and roles will evolve.

cate the why and how behind the transformation that’s going to be completed so everyone in the organization understands it as the end goal. I understand why the promise of AI scares some employees and even the leaders meant to help shepherd them. Having had the benefit of personally experiencing more technologically driven transformations than I can count, I can affirm it helps to know that despite the uniqueness of the challenge, the outcome will likely benefit the organization — and the impact of the organization on society at large can be even greater than it is today. What’s most important for lead-

ers and their teams to understand is that none of this technology reduces the need for human intelligence. In fact, in a world where the future is impossible to predict, these are the combined skills you can all but guarantee will be ever more vital in this new era of intelligence. Anne Chow, a senior fellow and adjunct professor of executive education at Northwestern University’s Kellogg School of Management, is a former CEO of AT&T Business. She is now lead director of FranklinCovey’s board of directors, a director at 3M and co-author of “The Leader’s Guide to Unconscious Bias.”

GETTY IMAGES

PERSONAL VIEW

A leader’s job In this moment, it is a leader’s responsibility to help concerned employees find meaning and purpose in the search for what future skills are needed and how to evolve existing roles in a way that harnesses these new technologies. It is a leader’s job to inspire hope, to remind people that change is happening around us all the time, whether we like it or not. What we do in anticipation and response is called transformation, and that is up to us. These two words, change and transformation, are often used synonymously even though they couldn’t be more different. Change is a given: Technology changes, competitors change, even and especially customers and the market change. Transformation requires a choice and action. A leader’s duty right now is to articulate those actions clearly. Maybe it’s a companywide search for all of the time-consuming and routine actions that can be improved and sped up by AI. Maybe it’s an attempt to reckon with the reams of additional data created by the technology and finding a way to use existing human intelligence within a company to morph that data into actual, actionable intelligence. For a transformation to be successful, it has to be planned, strategized and well executed. It has to start, as all vital plans do, with a compelling why. And as hard as it might be to determine what the future will look like, charting a transformation means being able to point to a specific destination. An end goal. A north star visible to all employees. And to remind them that AI isn’t coming for their jobs; it’s coming to make them even better at their jobs, which in many cases will make those jobs more satisfying and can lead to even more rewarding careers. This is often a tough sell, since employees already on alert for signs of disruption often associate phrases like “increased efficiency” or “higher productivity” with layoffs. That’s why it’s so important to lead transparently with the plan, which starts with some experimentation that enables early learning. Communi-

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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

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BANKING / FINANCE

INDUSTRY ACHIEVERS ADVANCING THEIR CAREERS

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10/18/23 1:21 PM

exclusive list includes THESE COMPANIES ARE CHICAGO’S MOST Crain’s early AI adopters, innovators

INNOVATIVE

tackling new challenges and firms crunching vast amounts of data to reinvent their industries | By John Pletz

ollow the bouncing ball of innovation in Chicago and you’ll find companies that were investing heavily in artificial intelligence long before most of us typed our first ChatGPT prompts. Others are using vast amounts of data to reinvent sports and trucking. There also are innovators tackling new challenges we’ll encounter in a world filling up with electric vehicles, as well as entrepreneurs who have come up with new ways to make old products better. Our Most Innovative Companies list is based on an evaluation of the patents awarded to Chicago companies in 2022, as assessed by Ocean Tomo, an advisory, investment-banking and consulting firm specializing in intellectual property. Ocean Tomo, which is part of J.S. Held, averages the scores of the individual patents received by each company. To qualify, a company must have been awarded at least three patents.

The Top 25 1. Narrative Science/Salesforce 2. Riddell 3. Uptake Technologies 4. Reynolds Consumer Products 5. Midtronics 6. Kreg Therapeutics 7. CCC Intelligent Solutions 8. Wilson Sporting Goods 9. Provisur Technologies 10. Stats Perform 11. CME Group 12. Lynk Labs 13. Nielsen 14. Scholle 15. G&W Electric 16. SunCoke Energy 17. Rauland-Borg 18. Joinesty 19. Fellowes 20. Sennco Solutions 21. Amphenol 22. USG 23. Chamberlain Group 24. Inventus Power 25. Pregis

Nick Beil is a co-founder of Narrative Science, says ChatGPT ignited a wave of experimentation with generative AI. | GEOFFREY BLACK

1. Narrative Science/Salesforce What it makes: AI software for business Patents last year: 11 ChatGPT and other purveyors of generative artificial intelligence got the world asking questions of their computers. That’s a good thing for Narrative Science, which has been building software capable of generating human language for nearly a decade. Its software is now thinking of questions people might ask by anticipating the answers they’ll seek when they’re looking at all the data, charts and graphs wrought by decades of computer-

Source: Ocean Tomo

ization in the workplace. Last year, the company was awarded several patents for technology that generates text from charts, providing answers in simple, easy-to-understand narratives and prompting other questions and answers. Narrative Science was bought by Salesforce at the end of 2021 and became part of the San Francisco-headquartered software maker’s Tableau business intelligence unit last year.

A new product due out soon will allow users to follow certain metrics to help them understand “what happened, why it happened and what to do about it, in a way that looks more like a newsfeed,” says Nick Beil, a Narrative Science co-founder who now is a senior vice president at Salesforce. He says ChatGPT ignited a wave of experimentation with generative AI that will both turbocharge use of the technology

and raise the stakes for all tech companies. “People use Chat GPT or Google’s Bard and come back and say, ‘If I can do this with my kid’s history assignment, why in a business context am I not using natural language as an interface?’ ” says Beil. “You start to realize the whole world’s expectations around how you interact with machines changed overnight. It’s created a nice catalyst to rethink the art of the possible for analytics.”

The most prolific companies and organizations when it comes to patents 377 273 215 168

Deere

Illinois Tool Works

State Farm

Motorola Mobility

159

Motorola Solutions

117

Groupon

Zebra Northwestern Technologies University

67 CME Group

Brunswick NuCurrent

58 Molex

Argonne Knowles Trading Fenwal National Lab Technologies International

Littelfuse

University of Chicago

Panduit

Source: Ocean Tomo

OCTOBER 23, 2023 | CRAIN’S CHICAGO BUSINESS | 15

MOST INNOVATIVE COMPANIES

2. Riddell

5. Midtronics

What it makes: Football helmets and shoulder pads Patents last year: 7

What it makes: Battery-testing and service equipment Patents last year: 4

Wha Pate

Riddell has been putting technology into football helmets for a long time. Now it’s the technology behind the scenes that could change the game. The company is using data on player impacts it has collected over two decades to produce a line of helmets that are made with an athlete’s size, age, position and stage of competition in mind. “Quarterbacks see more impacts to the back of the helmet than other players,” says Thad Ide, senior vice president of research and development. “Linemen tend to see more impacts, but they’re lower level and more to the front of the helmet.” Riddell can adapt the helmet for different players by adjusting the position of the player’s head inside it, using particular types of pads, which can vary in thickness or shape, says Vittorio Bologna, the Des Plaines-based company’s director of product creation. The company has a proprietary database of 10 million player collisions gathered over two decades, as well as more than 50,000 head scans. It’s been making custom helmets for professional and college players based on digital scans of players’ heads for six years. The company has also broadened the product line to semi-custom helmets. Now its new technology will bring many of those custom benefits to off-the-shelf products used by high school and younger athletes, who make up the largest number of the country’s football players. Riddell estimates there are nearly 100,000 college players, but 1 million high school and 2 million youth-league players. “This isn’t a flash in the pan,” Ide says. “This is something we’ve built on for nearly two decades to collect the data and develop the technologies. We’re going to continue to develop new technologies.”

While many automakers are still trying to figure out how to make electric vehicles, Midtronics has been thinking a lot about what happens years down the road, when those cars and trucks need service or go up for sale. The Willowbrook-based company has long been the leader in equipment used to test and repair traditional lead-acid batteries. Lithium-ion batteries are far more volatile and carry exponentially higher power: 400 to 1,000 volts, compared with 12 volts for those found in traditional cars. Midtronics makes devices that help dealers and other shops repair batteries. One device helps technicians balance the load across individual modules within a battery after replacing a module, a crucial step. Another device helps technicians discharge all the power from a battery before servicing, removing, transporting or storing it. The company is using battery know-how gained over 39 years to develop algorithms that can

“WE’RE PRETTY GOOD AT USING A CRYSTAL BALL TO DETERMINE WHAT THE NEEDS ARE GOING TO BE IN FOUR TO FIVE YEARS.”

4. Reynolds Consumer Products

What it makes: Predictive-analytics software Patents last year: 3

What it makes: Trash and storage bags; cooking foil and papers Patents last year: 5

16 | CRAIN’S CHICAGO BUSINESS | OCTOBER 23, 2023

founded by Brad Keywell in 2014, just as the concept of the internet of things — the idea of connecting all types of equipment and infrastructure with wireless sensors — began to take hold. “There’s a lot of machine learning and AI behind the scenes in a lot of places, Uptake being one of them,” Silva says. “We still need to prove to our customers this is a good approach. “In a lot of areas, we’re working with companies where they might have had some systems in place for a large amount of time, and we need to show them how they can incorporate AI into their day-today and see this is the right tool for the job.”

Reynolds is one of the oldest household brands, famous for its foil, waxed and parchment papers, and food-storage and trash bags. It’s still cooking up innovation. Best-known for its Hefty line of slider storage bags, the company also includes Presto, a division that makes private-label products for retailers, including zipper-style storage bags. Last year, the Lake Forest-based company won patents for a design to make storage bags safer for kids. The idea is to make zip-style bags harder to access by concealing the flaps that open them.

The company declined to comment on its patents. When it spun off from Reynolds Group in 2020, Reynolds said its goal was to generate 20% of annual revenue from new products introduced in the previous three years. It’s not clear whether the storage bag designs will make it to the shelf, but here’s one potential use: keeping marijuana gummies away from kids as legal access spreads across the U.S. “Ingestion of edibles by children is going up,” says Nancy Cowles, executive director of Kids In Danger, a Chicago-based nonprofit advocate for children’s product safety.

estimate the capacity of an EV battery, which helps determine the range of a vehicle and, potentially, its value. It’s also working on a product that will detect faults that could lead to overheating, which is particularly dangerous in lithium-ion batteries. “The average age of a car on the road today is 12½ years old. Sooner or later, these (EV) cars are going to be 12½ years old,” says Kevin Bertness, chief technology officer at Midtronics. “Hopefully by the time the industry recognizes what we’ve recognized already, there’s a product ready.” The company has earned more than 200 patents for its intellectual property. “It’s become a way of life for us,” CEO Steve McShane says. “We’re pretty good at using a crystal ball to determine what the needs are going to be in four to five years.”

Wha Pate

MIDTRONICS

RIDDELL

— Steve McShane, CEO

3. Uptake Technologies For years, Uptake Technologies’ algorithms have helped trucking companies make sense of mountains of data generated every day by dozens of sensors gathering more information by the second. Companies such as United Road and NFI Interactive Logistics use Uptake’s software, which relies on a type of artificial intelligence called machine learning, to detect anomalies in the data and predict failures. “We’ve seen enough trucks fail to know what a coolant leak event looks like, so our customers can inspect it and avoid the failure,” says Brian Silva, Uptake’s director of data science. The Chicago company has been awarded 49 patents since it was

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6. Kreg Therapeutics

8. Wilson Sporting Goods

What it makes: Specialty hospital beds Patents last year: 3

What it makes: Sports equipment Patents last year: 4

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vertical bed came along in 2015. Along the way, he received 20 patents and built a team of about a dozen engineers, led by Carlos Portillo, vice president of manufacturing. “I was a hospital-equipment salesman,” Poulos says of his aha moment. “I was on the front line with the nurses, seeing what they needed.” In late 2020, he sold a majority interest in the 200-employee company to Milton Street Capital, a private-equity firm in Houston, for an undisclosed price. The vertical bed “was the No. 1 driver of the acquisition,” says Christian Jorgensen, a former executive with hospital equipment maker Hillrom who now is CEO of Kreg. “The thing we saw in these beds was remarkable.”

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CCC Intelligent Solutions has been using digital technology to speed the process of dealing with wrecked cars since the company launched 43 years ago, when insurers were still using printed guides and newspaper ads to figure out how much a totaled vehicle was worth. These days, the Chicago-based company is using artificial intelligence to predict repair costs for insurers, collision-repair shops and automakers. Using photos provided by customers, CCC’s software can fill in an appraisal for an adjuster. “When people think of insurance, they probably don’t think ‘super-innovative, AI-driven company,’ “ says Marc Fredman, chief strategy officer. “We started getting involved in AI 10 years ago.” The company has an AIengineering team of more than 100 people and spends more than $100 million a year on research and development. It has invested heavily in machine learning and computer vision, which allows computers to identify patterns from images. “Today 30% of all auto claims

CCC INTELLIGENT SOLUTIONS

What it makes: Software for insurers and repair shops Patents last year: 4

duct ould h is thi-

are submitted through mobile phones through pictures,” Fredman says. “We collect half a billion new photos a year.” CCC also developed computer models that assess photos of damaged vehicles to predict repair costs. “Our algorithms are much more accurate than what existed before, which was largely guesswork and tribal knowledge,” Fredman says. Eight of the 10 largest U.S. auto insurance companies are using its Estimate STP product, although it’s still only used on a fraction of all claims.

The pandemic got Wilson Sporting Goods thinking a lot harder about reinventing one of its bestknown products: the tennis ball. A traditional ball is relatively simple: It’s made from rubber, filled with air and covered with glued-on strips of felt. Producing one got much more complicated during the pandemic. With materials and factories halfway around the world, supply chains were stretched to their breaking point. Lead times grew to about 18 months, leaving store shelves empty and players scrambling. The Chicago company’s materials scientists and engineers already had been rethinking how it makes tennis balls, says Bob Thurman, head of research and development. “How do we reinvent the product we’re making so we can manufacture it in a new and unique way that allows us to get out of capital-intensive processes we’ve used for 50, 60 years:

molding rubber compounds and lot of hand labor that goes into making these products?” he says. “We were thinking, how do we condense these large factories into something that’s smaller, faster, more economical and put them in geographies that are closer (to customers)?” Wilson engineers came up with a ball made out of plastic that can be sourced almost anywhere, along with new manufacturing methods. “When you reinvent the process, it opens you up a new way of innovating the product itself,” Thurman says. Wilson already has made an airless basketball, which debuted last winter during the NBA’s Slam Dunk Contest. “Two things make a tennis ball bounce: the air on the inside and the rubber that’s there,” he says. Then there are the all-important intangibles: making it sound like a tennis ball and making it behave, and play, like a tennis ball. “We think we’re very close on that,” Thurman says. “Performance is king,” he adds. “If people hit this ball and it doesn’t feel like a tennis ball, they won’t buy it.”

9. Provisur Technologies What it makes: Food-service equipment Patents last year: 7 Architects have long been aware of the benefits of form following function when designing a building. But what about when it comes to cutting bacon? Provisur Technologies figured out that forming — or pressing a pork belly into a uniform shape — before slicing can pay off, too. Starting with a rectangle or square means consistent slices with less waste. The company — which owns such industrial brands as Cashin, Formax, Beehive and Hoegger — has long been a leader in making machines for grinding, forming and slicing food, from burgers and nuggets to bacon and sandwich meat.

“The vast majority of U.S. retail bacon is sliced on our machines,” says Brian Perkins, president of the Mokena-based company. “The name of the game is quality, yield and automation.” “We’re always trying to improve the product,” he says, noting that Provisur spends about 8% of its revenue on research and development. The company also received patents last year for technology that provides multiple heat sourc-

PROVISUR

After years of distributing medical products, Craig Poulos decided to tackle a big problem. The Kreg Therapeutics founder built a chair-bed that allowed hospitals to accommodate patients who are severely overweight. Then he followed it up with a bed that can safely stand intensive-care patients upright, without requiring the removal of tubes or wires, reducing bedsores and helping them breathe by taking weight off their lungs. The so-called verticalization beds, which are manufactured by the company in Melrose Park, like the chair-beds, are specialty products that hospitals rent on demand. Poulos started working on the chair-bed in 2003 and brought it to market eight years later. The

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es to large ovens to better control temperatures and the cooking of varying sizes and types of meat. It also received patents for conveyor technology. “If the weakest link is material handling, the core technology fails.”

10. Stats Perform What it makes: Sports data and analytics software Patents last year: 5 Stats Perform long ago recognized the power of data in sports. And that was before the explosion of streaming, betting, fantasy sports, smartphones, social media and artificial intelligence. A pioneer in player tracking and statistics that have been relied upon by broadcasters and sports teams, its technology now allows users to produce statistics, graphics, highlights and predictions in real time. The company is using artificial intelligence to automate the pro-

cess, whether it’s generating highlights during a broadcast or social media posts. Last year, the company received an audio-processing patent for detecting and isolating bursts of sound, such as the pop of a tennis ball being served on the court. Stats Perform, which is owned by private-equity firm Vista Equity Partners, declined to comment on its patents, which also included ways to generate highlight sequences as well as trackable video frames. “Extracting statistics in real time

and making it automated is geared toward fantasy leagues and sports betting,” Chris Wichser, senior managing director of Ocean Tomo, says of Stats Perform’s patents. “They want to automate this process, doing away with any manual editing.” Stats Perform is using AI to generate predictions during a game of which team will win, or how many shots a player will take. It’s pushing deeper into the type of large language models that make ChatGPT work. OCTOBER 23, 2023 | CRAIN’S CHICAGO BUSINESS | 17

Long-empty Gary home of trailblazing Black developer is getting restored for resale Once the showpiece of a neighborhood of about 200 Black-built homes, the Monroe Lane house ‘deserves to be lived in’ again By Dennis Rodkin

In a Gary neighborhood that was developed in the 1950s by prolific Black homebuilders, a long-derelict house is being restored with a dual purpose. The goals are both to honor the builders, a pair of brothers who came up to Indiana from Alabama in the Great Migration, and to eliminate a blemish on the venerable neighborhood. “This house was the showpiece when you came into the neighborhood, which was built to be attractive and idyllic at a time when housing wasn’t being built for African Americans,” says Yejide Ekunkonye, founder of the Say Yes to Means nonprofit, “but that’s not what you see now.” The house on Monroe Lane has plywood over all its windows, a tarp on the roof and a construction dumpster in the front yard, but that’s an improvement over the derelict look it took on over the years before Indiana Landmarks bought it from a longtime owner in 2022. Ekunkonye says neighbors regularly mowed the yard and cut back weed trees, but otherwise the house “looked bad.” It was a sorry state for the former home of Geter Means, a partner with his brother, Andrew, in Means Brothers, which built 11 subdivisions and nearly 2000 residential units, including houses and apartments, primarily employing Black workers. While Geter Means’ house was showy for the time — with a big picture window

across the front, curby wrought iron on the porch railings and a light green permastone exterior — Andrew Means and his wife, Katie, lived in a more conservative red brick house a block over in the same subdivision, originally called Andrew Means Park Manor and now known as Means Manor. Ekunkonye, who lives in the brick Means Manor house that her grandparents, Joseph and Tometta Ridley, bought from the brothers in 1952, launched Say Yes to Means to raise awareness that “this is one of few communities built by Black people from the inception and shouldn’t be forgotten.”

Group steps in Hoping to save the eyesore former home of Geter Means, Ekunkonye got involved with Indiana Landmarks, which acquired the house from the absentee owner and is doing exterior rehab and cleaning out and flood-proofing the waterlogged basement. Blake Swihart, director of Indiana Landmarks’ Northwest Field Office, in Gary, says the combined cost of purchase and rehab will be about $170,000, with funds coming from the group’s Black Heritage Preservation Fund and other funds. Once the house is stabilized by the planned improvements, Swihart says, the group hopes to sell the property to someone who will do the interior renovations and live in it. Rather than become a museum,

The house on Monroe Lane has plywood over the windows, a tarp on the roof and a construction dumpster in the yard, but that’s an improvement over the derelict look it took on over the years before Indiana Landmarks bought it in 2022. I BLAKE SWIHART

“it’s a house that deserves to be lived in,” Swihart says. Gary, the former steel capital 30 miles southeast of the Loop, has many swaths of empty lots and deteriorating buildings. That’s one reason Means Manor stands out. The development of about 200 houses has few visible trouble spots other than the Geter Means house. “This is a nice place,” Ekunkonye says. “My grandfather always reminded us that it was. It still is.” Lawns, trees and houses are all well kept, and residents smile at an unknown visitor. A handsome old Baptist church on 21st Avenue, built of stone by the Means brothers, towers over the south side of the neighborhood. On a three-block walk between the Geter Means house and her own, Ekunkonye points out a row of four houses on Van Buren Street that, like hers, are all still in the

hands of the families that bought them new in the 1950s.

A success story According to his 1973 obituary in the Chicago Tribune, Andrew Means “arrived in Gary with $6 in his pockets in 1920 and became a millionaire real estate developer.” He worked for two years in the steel mills before he became a building contractor, “determined to supply decent housing to Gary’s (black residents), who in the early 1920s were living in tar paper shacks.” With his wife, he launched the homebuilding firm on $90 they had saved. Younger brother Geter Means joined the firm later and eventually spun off his own company, Geter Means & Son Construction. He died in 1970. Andrew Means, according to research by Ekunkonye, was part of a U.S. trade mission to Spain, rep-

resenting the construction industry, and was invited along with his wife to a formal dinner at the White House with President John F. Kennedy. He may also have pushed to open the doors for Black residents to be allowed to borrow federally backed Federal Housing Administration home loans, she says, and listed the house in the Green Book, a resource for Black travelers who were shut out of white-owned hotels and restaurants in the mid-20th century. Her research is not yet complete. “He was a model citizen,” Ekunkonye says. While the house where Andrew and Katie Means lived is in private hands and nicely maintained, Swihart says it was “vital to keep the (Geter Means) house from deteriorating more. It’s significant to the heritage of the neighborhood, to Gary and to Black cultural history, which needs to be preserved.”

A Gibsons eatery in Fulton Market is finally a go The restaurant group has long wanted to open an outpost in the red-hot neighborhood. It finally found a spot. By Jack Grieve

After a years-long search for the right Fulton Market District space, Gibsons Restaurant Group is well on its way to opening a new eatery in the booming neighborhood west of downtown. The heavyweight Chicago restaurant operator inked a 15,000-square-foot ground floor lease at 919 West Fulton St. with real estate developer Fulton Street Cos. The restaurant will be the group’s 13th in the Chicago area. Gibsons will operate on the ground floor of a 400,000-squarefoot, 11-story office building that Fulton Street Cos. expects to be ready in early 2025. The restau18 | CRAIN’S CHICAGO BUSINESS | OCTOBER 23, 2023

rant will likely open later that year or early in 2026, said Fulton Street CEO Alex Najem. “For years we were looking for the right opportunity to expand our brand into Fulton Market and after an exhaustive search we have found the perfect location and partner,” Gibsons Chairman Steve Lombardo III said in a statement announcing the plans. The specific vision for the restaurant has yet to be decided. Gibsons owns or operates more than a dozen restaurants offering different types of cuisine, including Gibsons Bar & Steakhouse on Rush Street, Hugo’s Frog Bar & Fish House, Luxbar, Quartino Ristorante & Wine Bar and Gibsons Italia. “We’re hoping they do a con-

cept like on Rush Street and maintain the checkered tablecloths,” said Najem, who frequents the flagship Gold Coast steakhouse. Najem sees the Gibsons name as a selling point for his company as it looks to lease 200,000 square feet of still-available office space. A Dom’s Kitchen & Market store was originally planned to operate alongside Gibsons, but Najem said that deal has since fallen through. Gibsons is just the latest in a flock of restaurants heading to Fulton Market. Known since the 1990s for its “Restaurant Row” on Randolph Street, the area keeps adding restaurants as its development boom continues. Chicago restaurant groups in-

A rendering of the building at 919 West Fulton St. where Gibsons will operate a new restaurant I COURTESY OF FULTON STREET COS.

cluding DineAmic Hospitality and Lettuce Entertain You Enterprises have recently expanded in the neighborhood, betting that

its dining and nightlife scene will remain a magnet for tourists, downtown office workers and Chicagoans alike.

CRAIN’S CHILD MENTAL HEALTH

After Leo began having angry outbursts at age 11, his mom turned to their primary care physician for help.

KIDS NEED CARE FROM ALL DIRECTIONS The scope of youth dealing with mental health issues puts pressure on resources and providers I By Jon Asplund

hen Leo began showing anger, causing tension at home and at school and seeing a decline in grades, his mom says things got to a point that they knew that something had to change. They needed help figuring out what was going on. Leo was 11 at the time. “He had a lot of angry outbursts, and he wasn’t talking about what he was feeling and what was going on,” says his mom, Jacinda, who asked that her family’s last

name not be published. That’s when they talked with their primary care physician “about whether professional help was the right thing.” Leo’s doctor at Northwestern Medicine suggested he work with the Mood, Anxiety, ADHD Collaborative Care Program, or MAACC. Leo’s doctor prescribed medicines and Leo was partnered with a therapist. Leo, with a diagnosis of attention-deficit/hyperactivity disorder, then set off on the road to improved behavior, concentration and mental health.

Leo’s experience is not an isolated case. A children’s mental health crisis in Chicago and across the nation that predates the isolation and chaos of the COVID-19 pandemic has outgrown the abilities of psychiatrists and therapists to treat it alone. The scope is such that Gov. J.B. Pritzker created the Children’s Behavioral Health Transformation Initiative to evaluate solutions for families in need. Increasingly, parents and children are navigating a See MENTAL HEALTH on Page 20

ALYCE HENSON

CRUSHED BY CRISIS,

“While this generation of kids may be much more open about mental health, there’s still stigma and some families, for example in Latinx and immigrant populations, that are still challenged” and reluctant to get care. — John Parkhurst, psychologist and coordinator of the MAACC program at Ann & Robert H. Lurie Children’s Hospital

SPONSORS

OCTOBER 23, 2023 | CRAIN’S CHICAGO BUSINESS | 19

CRAIN’S

CHILD MENTAL HEALTH

MENTAL HEALTH From Page 19

landscape that requires family pediatricians, schools and mental health providers working together to address children’s mental health conditions. “While this generation of kids may be much more open about mental health, there’s still stigma and some families, for example in Latinx and immigrant populations, that are still challenged” and reluctant to get care, says John Parkhurst, psychologist and coordinator of the MAACC program at Ann & Robert H. Lurie Children’s Hospital. “When you think about it, it is pretty courageous of families to deal with mental health.” For Leo’s family, the process wasn’t easy and is still taking a coordinated effort, Jacinda says. “The patient is trying to understand what’s going on, the parents are learning, and learning to be accepting, the school office and individual teachers are involved, everything.” Leo says his love of comics and superheroes helped him navigate his treatment course. “It was confusing at first. I didn’t know I had ADHD. All I knew was that I was distracted and frustrated more often,” says Leo, now 14. “Doctor Strange, really Dr. Parkhurst, helped. I like comic books, and I called him Doctor Strange, because he was a doctor, but he was a stranger to me. He rolled with it and it made it more comfortable.” Nationally, the number of children ages 3-17 diagnosed with anxiety grew by 29% between 2016 and 2020, and those with depression by 27%, according to data from the federal Health Resources & Services Administration. In 2020, suicide was the second-leading cause of death for young people ages 10-14 and 2534, and among the top nine leading causes of death for people ages 10-64, according to a report by the Centers for Disease Control & Prevention. Closer to home, in a 2021 Youth Risk Behavior survey, 42% of Illinois high school youth reported having felt sad or hopeless almost every day for two or more weeks in a row during the 12 months before the survey. In addition, some 20.3% of Illinois high school youth reported seriously considering attempting suicide in the 12 months before the 2021 survey. “The amount of behavioral health illness has accelerated significantly” in recent years, says Dr. John Cunningham, physician-in-chief at UChicago Medicine’s Comer Children’s Hospital and the George M. Eisenberg professor of pediatrics. “The need has increased exponentially. I can’t imagine what it’s like to be a parent of a young child or adolescent right now.” Cunningham notes that’s still not known what will be the longterm impact of the COVID-19 pandemic on the neurological 20 | CRAIN’S CHICAGO BUSINESS | OCTOBER 23, 2023

After Jacinda (left) consulted with her family doctor about Leo’s behavior, her son was partnered with a therapist. I ALYCE HENSON

development of youth.

Role of the doctor Parkhurst says that a conservative estimate of the problem shows that about 16% of children have mental health challenges that are causing real impairment and require treatment. “But 16% of the Chicago area population is more than 300,000 kids,” says Parkhurst. “We don’t have the numbers of mental health clinicians to handle all that.” That’s where the pediatrician comes in, Parkhurst says. A family’s primary care physician needs to be the first line of defense, he says. If a behavioral health condition is found early enough, the pediatrician, family and schools can play the major role in treating the problem, he says. “Mental health, behavioral health, is really part of total health,” says Dr. John Walkup, Northwestern Medicine’s chief of child and adolescent psychiatry. “We’ve got to be putting it on the docket of the pediatrician, the internal medicine doctors, the family doctors. There are some 47,000 primary care doctors in the U.S., and some 8,000 child psychiatrists. That’s your opportunity to reduce the mental health burden.” At Linden Oaks Behavioral Health in Naperville, providers look to pediatricians as a vital resource, says Ryan Lauterwasser, manager of adolescent impatient and swing units at the hospital. Linden Oaks clinicians also are integrated in primary care practices, “so you’ve got a behavioral health professional right in the doctor’s office,” he says. Integrated management of patients’ care is an advantage of a hospital system-based program, Lauterwasser says. Linden Oaks is part of NorthShore–Edward-Elmhurst Health. As much as the isolation and

chaos of the pandemic exacerbated the mental health crisis for youth, “one of the silver linings of COVID was it brought things to light,” says Mashana Smith, psychologist and mental health consultant with Lurie’s Children’s Center for Childhood Resilience. “We were in a mental health crisis already. We already had a workforce showing the effects of rising anxiety. COVID helped to show that.” “For decades, we’ve been addressing mental health issues for only about 50% of the children who need it,” Smith says. “Many of those who do get (services), get (them) school.” Smith says that there is a multitiered system of mental health support that schools provide. From the beginning, all children should get their social- and emotional-learning instruction from their first interactions with teachers and classmates. “School provides students with the building blocks of making healthy relationships, self identity and naming their emotions,” she says. Beyond that, schools can provide a form of mental health care through small group discussions and teachers using evidence-based supportive techniques for students.

Health care starts in school The Center for Childhood Resilience helps run a statewide program that takes school-based mental health care a step further, bringing trauma-focused care into the classroom, she says. Resilience Education to Advance Community Healing, or REACH, teaches educators at about 525 schools in Illinois how to create a safe and healthy learning environment. Much of the work, Smith says, is trauma-focused, helping children to process trauma in their lives and gain skills to cope with it, “so

trauma doesn’t define them.” Children who have been exposed to trauma, such as violence in the home, in the community or in school itself, experience neurological changes in the physical structure of their brains, she says. Chronic trauma can lead to dysregulation of emotions and a hopeless worldview, leaving children seeing life as unpredictable and dangerous. “They’re more likely depressed, anxious, feeling guilty,” Smith says. “They don’t do well academically. They’re distracted, prone to intrusive thoughts and have poorer problem-solving skills.” Teaching resilience takes healthy adult-child relationships with educators or therapists or coaches, she says. It also takes healthy environments. “We’re teaching schools how they can be welcoming, supporting and inviting (by) supporting those positive relationships and building and leveraging children’s strengths,” Smith says UChicago’s Cunningham agrees that there has been better recognition of the crisis at the state level. Cunningham points to the Children’s Behavioral Health Transformation Initiative, which is tasked with redesigning how to deliver behavioral health services for children and adolescents. It’s led by Dana Weiner, a University of Chicago Chapin Hall child-welfare expert. “I’m optimistic about that partnership,” Cunningham says. For all the challenges, the growing realization and funding of programs are actually making a difference, says Joe Kreul, vice president of crisis services for the Illinois region at mental health treatment provider Rosecrance. “I’d describe it as, honestly, progress,” he says. “Some new funding from (the Illinois Department of Health & Family Services) and other places is helping shore up some of the gaps.”

Coming out of COVID is an understanding that children with mental health needs aren’t just like adults, “only smaller in size,” he says. “There’s more need for wraparound services,” Kreul says. “For kids, life happens to them; they’re not in control. So it takes guardians, family, school and community.” Rosecrance, an independent, not-for-profit mental health and substance abuse care provider, is one of a number of regional agencies contracted by the state of Illinois to be first responders through the state CARES line, serving Medicaid recipients and the 988 Suicide & Crisis Lifeline. Rosecrance’s model is really “intensively community-based,” Kreul says. Treatment combines school and community, clinicians, parents and peer support, where a counselor with lived experience can say “I’ve been there, too,” he says. Of course, not all mental health issues start out discussed calmly at the pediatrician’s office. Far from it. Child and adolescent emergency department visits have been on the rise for more than a decade, and the pandemic has only accelerated the problem, says Dr. Jennifer Hoffmann, pediatric emergency medicine physician at Lurie Children’s and assistant professor of pediatrics at Northwestern University’s Feinberg School of Medicine. “We’ve seen an increase in suicide risk among adolescents,” she says, which brings many patients to the emergency department, but also “more adolescents need to use the emergency department because they’re finding it hard to find the community services or inpatient services that they can get into.” When getting inpatient care is a barrier, the issue just compounds as children in need of mental health help are simply “boarded” in the emergency department, Hoffmann says.

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CHILD MENTAL HEALTH “That’s one of the biggest changes in recent years. We’re caring for kids in emergency departments for days and weeks,” she says. “Some of the most vulnerable kids (are) impacted by being in the most unconducive space. They’re the kids who need specialized services, and they are in the worst place to get them.” In August, the Emergency Nurses Association, American Academy of Pediatrics and the American College of Emergency Physicians put out an urgent call for help for that very reason. Nationally, the groups say half a million children and adolescents with mental health and behavioral health conditions each year are evaluated in emergency departments for psychiatric emergencies. What’s needed, they say, is an increase in treatment education and resources in the short term — and the long term. Comer Children’s chief Cunningham sees the same issues. Increased emergency room visits are not sustainable, he says, so mental health issues have to be addressed in other ways and in other places. One way to help keep patients from using the emergency room for treatment is to provide home health help, such as in-home nursing, he says. Hoffmann says that a number of mental health programs at emer-

CRAIN’S

Key findings of ‘The State of Mental Health in America’ 2023 report

Depression

Substance-use disorder

Consistent treatment

Mental health providers

w Over 1 in 10 youth in the U.S. are experiencing depression that is severly impairing their ability to function at school or work, at home, with family, or in their social life.

w 6.34% of youth in the U.S. reported a substance-use disorder in the past year. That is equivalent to over 1.5 million youth in the U.S. who meet the criteria for an illicit drug or alcohol use disorder.

w Nationally, only 28% of youth with severe depression receive some consistent treatment (7-25+ visits in a year).

w In the U.S., there are an estimated 350 individuals for every one mental health provider. However, these figures may be an overestimate of active mental health professionals, as it may include providers who are no longer practicing or accepting patients.

opened up a five-bed observation unit that can provide a brief therapeutic intervention.” But in the long run, Hoffmann says, “we need additional investments in capacity.” She says telehealth has been a

boon, but it faces post-COVID barriers of heightened regulation and lack of funding. And she agrees that the work of supporting children’s mental health needs to start with prevention in a primary care setting.

w 16.39% of youth (age 12-17) report suffering from at least one major depressive episode in the past year.

w Most (57.3%) youth with severe depression do not receive any care.

w 11.5% of youth (over 2.7 million individuals) are experiencing severe major depression.

gency departments, including at Lurie, are working on “novel approaches,” like segregating observation rooms in a less chaotic area of the department. “Psychological urgent care can serve as a bridge,” she says. “We’ve

“We typically see the child in an emergency setting at one point in time, but it’s typically their pediatrician who can see issues begin early on,” she says. “But because of shortages in all areas, they end up returning to us.”

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Working to advance racial equity and economic mobility for the next generation in the Great Lakes region.

+PZDF'EO PSH OCTOBER 23, 2023 | CRAIN’S CHICAGO BUSINESS | 21

CRAIN’S

| CHILD MENTAL HEALTH COMMENTARY

A pivotal moment for Illinois kids — and educators E

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ers in addressing this pressing xacerbated by the pandemic, challenge. the current mental health crisis With challenge also comes opis well documented, and it’s felt portunity: A majority of students in homes and classrooms here in Illiwith mental health needs receive nois and nationwide: those supports in their schools, per Forty-two percent of Illinois high the Journal of School Health in schoolers reported feeling sad or 2019. Since 2021, the Illinois State hopeless almost every day for two Board of Education has invested Elor more weeks in a row, according Mashana ementary and Secondary School to the Youth Risk Behavior Survey Smith is the Emergency Relief (ESSER) funds to of 2021; nearly half of surveyed Illi- associate support Learning Renewal postnois students reported it’s hard or director of very hard to manage their emo- School Mental pandemic, including social-emotional learning and trauma-respontions; and Hispanic and multiracial Health, sive practices. students reported lower well-being Healing REACH (Resilience Education to than their white peers, according to Centered Advance Community Healing) is the American Institutes for Re- Engagement with Ann & one of those ESSER-funded initiasearch this year. It’s also affecting teachers. While Robert H. Lurie tives — a statewide, evidence-informed program currently providing the numbers show most Illinois Children’s free trauma-responsive assessment teachers are staying in the profes- Hospital of sion, and more are joining the field, Chicago Center tools, training and communities of practice to more than 500 K-12 teachers also say they’re burned for Childhood out, taking more sick days and Resilience and schools to help them create safe, healthy learning environments. needing more support. In fact, Illi- an assistant More in-school support for chilnois school staff report low profes- professor at dren is crucial, as is support for sional well-being, with fewer than Northwestern teachers and school staff. REACH two-thirds feeling energized by or University’s provides new educator wellness looking forward to going to work, Feinberg strategies. We’re aiming for imaccording to data from AIR this School of Medicine. proved whole-school wellness in year. This is just part of the picture informing all Illinois schools — a win-win-win for stuthe response by health care practitioners, dents and families, educators and adminisstate agencies, nonprofits and so many oth- trators.

In a

We have made significant progress breaking through the stigma of child mental health to make clear what social and emotional learning (SEL) and trauma work is and is not. While there is still work to do, testimonials from schools across the state recognize the need and embrace the program’s resources. Without continued funding, the unintended consequence is enthusiasm for SEL, mental health and trauma-responsive practices will wane, not because the need dissipated, but because financially strapped schools simply do not have the resources to provide these supports. Illinois has made sizable progress on addressing mental health needs. According to

the State of Mental Health in America rankings, Illinois is improving overall (from 36th to 12th); CPS is making big strides, including establishing school-based behavioral health teams; and just this summer, the new Healing Centered Illinois Taskforce was enacted. While the challenge is great, our strategies are working: 94% of REACH schools report having already realized benefits. ESSER dollars are sunsetting, and we cannot afford to let these programs sunset, too. Additional public and private funding is needed to bridge the financial gap post-ESSER. We must not let progress fall to the wayside, because we know students are creative and open to learning when they feel safe and supported.

Our young people are screaming their pain

22 | CRAIN’S CHICAGO BUSINESS | OCTOBER 23, 2023

Andrea Durbin is CEO of Illinois Collaboration on Youth.

Jocelyn Vega is the director of Trauma Initiatives.

if we do not address the root of their suffering and collective traumas. Child development expert Dr. Gabor Mate says: “We have to look for those conditions, not in the individual mind or brain or personality of the child or youth; we have to look at them in the social conditions that drive children in those directions. And unfortunately, in the public conversation around it, it’s all about the pathology and how to treat it, and it’s not about the social or cultural causes that are driving children in those desperate directions.” We must seize this critical opportunity to improve our services, policies and systems for this and future generations. While individual therapy can help youth recover from trauma and address specific mental health challenges, there are many things that we as nonclinicians can do as well: w As an individual, take a breath and remember to not take it personally when a

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y almost any measure, young people today are struggling. The widespread scope of children’s and youth’s mental health needs challenges us to respond to the unhealed collective traumas brought about by the pandemic and ongoing experience of violence, isolation, environmental destruction and lack of resources in our communities. These emotional and structural traumas are lived in the body. Stanford University reported how “pandemic related stressors have physically altered adolescents’ brains,” which once typically appeared in children “who experienced chronic adversity” before COVID-19. We are witnessing the consequences of children who dually navigated traumas and rapid shifts during lockdowns along with their own individual developmental and biological changes. The unprecedented growth in mental health needs reflect the societal challenges of living for many just starting their lives. For example, in 2021, the CDC reported a 60% increase of attempted suicide by girls compared to a decade ago. This emerging research points to the stark reality that youth need us more than ever. Responding to youth mental health means we must make changes beyond requiring youth to change their behavior. Instead, we have a collective responsibility — as parents, as community members and as service providers — to hear the unbearable messages that youth are desperately trying to communicate with us. We miss the point

youth rejects your perspective and lashes out. Focus on their personhood instead. w As a family member, focus on restoring the connection to youth who are often pushed out of relationships with us and even with themselves. Youth often reject to verify the depth of your connection as protection. w Schools are often the first place that witnesses the signs of trauma in youth. Every school needs a proactive plan to connect

them to support and resources. w As health and human service providers, we must be attuned to the unique needs of LGBTQ+ youth and youth from other marginalized populations who are especially vulnerable. w On a policy level, we must seek to remove the economic and social barriers that contribute to poor mental health. Young people are screaming at us to make change. We need to listen to them.

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COMMENTARY | CHILD MENTAL HEALTH

In-school mental services are desperately needed

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chool is firmly back in session, and the tragic reality is that too many Chicago children and teens frequently experience trauma, through gun violence, substance abuse, domestic and relationship violence, and grief and loss. Even worse, due to systemic barriers perpetuating cycles of poverty and violence, children in Black and Brown communities are disproportionately impacted by traumatic events.

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classmates’ ability to focus and learn.

In-school mental health services help students heal and teachers teach We know trauma is affecting our kids’ ability to learn, but there are things we can do to help them heal. Mike Shaver For example, Brightpoint, the nonis president profit child and family service orgaand CEO of nization I lead, works within ChicaBrightpoint, a go Public Schools to support child and students from elementary through family service high school. Kids bring their trauma organization, Choose to Change (C2C) is a to school with them formerly school- and community-based A June 2023 University of Chica- known as program combining wraparound go Education Lab study found that Children’s mentoring and trauma-informed an “astonishing 38 percent” of Home & Aid, group mental health services for Black and Latina adolescent girls in serving over Chicago schools showed signs of 30,000 children students in communities disproportionately affected by gun viopost-traumatic stress disorder and families a lence. Brightpoint began C2C with (PTSD). This is double the rate of year in 67 our partner, Youth Advocate ProPTSD among service members re- Illinois grams Inc. (YAP) in 2015, and over turning from Iraq and Afghanistan. counties. the last school year alone served That same study found that placing adolescent mental health programs in Chi- over 500 teens, resulting in reduced violent cago schools significantly reduced PTSD, crime arrests and increased school attenanxiety and depression among Black and dance. Chicago Public Schools has further invested in a C2C-informed intervention Latina teens. Research shows that trauma affects the through a network of community-based brain by causing it to “go offline,” sending organizations servicing an additional 400 a person into self-protection mode when youth in Chicago. With continued support triggered. This trauma response keeps a from the city, this model can expand to student from accessing the part of the help even more teens heal from trauma. The C2C program has revealed missed brain that works to process and retain information correctly. That traumatized opportunities to offer help much earlier in a student’s behavior can also affect their student’s life, which makes school-based

Youth participate in a Brightpoint program in Englewood. | BRIGHTPOINT

programming in elementary schools even more vital. If we can intervene earlier in a child’s life and offer supports and resources to them and their families, we will see fewer students in crisis as teens. We’ve seen these positive effects in action at Schubert Elementary in the Belmont Cragin neighborhood. In addition to offering on-site mental health services, our therapists have cultivated community partnerships to help Schubert students and their families obtain food, diapers, and access to Medicaid and work permits. Combined, early mental health services and assistance with practical needs help children thrive at home and school.

Let’s work together to help our students get the mental health services they need Mayor Brandon Johnson’s transition plan calls for in-school interventions like C2C, school-based mental health services, and community hubs to offer desperately needed mental health and wellness services to our students. We are at a point where these services aren’t merely a “nice to have” perk. It’s time to normalize and fund on-site mental health services that address our students’ needs. I encourage the mayor, with the support of civic leaders and council members, to work to make these services readily available to our students.

It wasn’t just COVID-19 that worsened mental well-being

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Belongingness has been well he COVID-19 pandemic documented as being a protective brought child and youth factor, meaning that when chilmental health into greater dren feel a sense of belonging focus. However, data on the mental they are more resilient and less health of young people has illumivulnerable to the impact of stress, nated that this crisis has been anxiety and trauma. Yet over the growing for well over a decade. Depast two decades, youth ages 12spite the fact that other metrics of 24 have seen a 70% reduction in child well-being have improved the time spent in-person with over the past two decades, indica- Orson friends and are currently experitors of children’s mental health Morrison is a encing a public health epidemic have worsened. In recent years, licensed of isolation and loneliness. data from the American Psycho- clinical Young people are particularly logical Association and CDC re- psychologist, burdened by the psychological disvealed that only 45% of youth ages consultant, tress and anxiety about our chang15-21 report their mental health to educator, the ing climate and the impact that be excellent, over 40% felt per- co-owner of global warming has on a host of sistently sad and 1 in 10 youth have LifeSpan Counseling & environmental outcomes, such as seriously considered suicide. rising sea levels, droughts, wildfires Data on child and youth mental Psychological and extreme rainfalls, as they exishealth are concerning for all Services and tentially sit with the uncertainties groups, however some populations the associate of their futures and those of the of young people are more affected director of next generations. due to social and environmental clinical Gun violence is another condeterminants of health such services at cerning public health epidemic household income, geographic lo- DePaul that significantly impacts the mencation, access to health care, com- University tal health of young people. In remunity safety, exposure to abuse, Counseling & cent years we have seen the numinvolvement in child-welfare and Psychological ber of both gun deaths and mass juvenile-justice systems, and other Services. shootings increase. For each of the adverse childhood experiences. Experiences of discrimination, be it on the past three years, the United States has averbasis of race, ethnicity, sexuality, gen- aged 600-plus mass shootings per year. In der-identity and immigration status, also the United States, gun violence is now the lead to disparities in the youth mental leading cause of death in children. Social media has also become a fixture in health crisis.

the lives of children and youth. While there are some benefits to social media, data shows that social media can displace important health-promoting activities such as in-person socialization, exercise and sleep. Social media also encourages social comparison and a pressure to conform to unrealistic standards. Constant access to information about the above social issues on social media feeds can also create height-

ened fear and anxiety in our children. Child-serving systems and policymakers must continue to prioritize children’s mental health, address the barriers to accessing quality mental health services, be mindful of the ways in which indicators of mental health are tracked across various populations, and promote interventions that help children feel connected, safe and engaged in their families and communities. OCTOBER 23, 2023 | CRAIN’S CHICAGO BUSINESS | 23

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CHILD MENTAL HEALTH

Illinois takes on youth behavioral health crisis Officials have become serious about writing policy that could help transform how families and children find and access treatment in communities across the state I By Katherine Davis

s the severity of the child mental health crisis came into full view during the COVID-19 pandemic, Illinois state officials became serious about writing policy that could help transform how families and children find and access treatment in communities across the state. The effort is led by Dana Weiner, who is working for Gov. J.B. Pritzker’s office on loan from the Chapin Hall Center for Children at the University of Chicago, where she’s long studied behavioral health and well-being in children. Now, as Illinois’ chief officer for children’s behavioral health transformation, Weiner has spearheaded a report that outlines the state’s various plans for addressing the child mental health crisis. The report, ambitiously titled “Blueprint

leaders and providers to gather a full view of the challenges in the system statewide, from Chicago to downstate rural towns. She intends for the Blueprint for Transformation to support the state’s ability to address child mental health conditions across the spectrum, from anxiety and depression to more serious issues like post-traumatic stress disorder. A key piece of the strategy is implementing mental health screenings in every school district in the state. The report points to the fact that hearing and vision screenings have long been required in schools to detect issues that could interfere with a child’s ability to learn and argues that mental health conditions should be treated the same. Because nearly every Illinois child is enrolled in school, it serves as a useful touchpoint to reach each child and family. “It makes perfect sense to put it in schools,” says Andy Wade, executive director of the National Alliance on Mental Illness of Illinois, or NAMI Illinois, an educational and support organization. “This is a place where we know that we can reach all of our young people.” While much about how a statewide universal screening program would work still needs to be determined, Weiner says she envisions screenings being self-reported by children of a certain age and/or their parents, with mental health professionals intervening and connecting a child to care if a disorder is detected and services are sought. The screening would be

Behavioral health teams, which may include a nurse, psychologist, counselor or social worker, now reach every school.

School screenings Chicago Public Schools, which enrolled more than 323,000 students this academic year, does not currently offer universal mental health screenings to every student, but the district has worked to enhance its mental health offerings broadly, CPS spokeswoman Mary Ann Fergus told Crain’s. The district allocated more than $35 million to social and emotional learning behavioral health support for students in this year’s budget, adding additional social workers and counselors, Fergus said in a statement. Behavioral health teams, which may include a nurse, psychologist, counselor or social worker, now reach every school. As of August, CPS had 840 staffed counselors, 610 staffed social workers, and 240 staffed school psychologists, Fergus says. “The social-emotional learning and mental health of our students

The possibility that remains a top priority at mental health screenChicago Public Schools,” ings in schools could she says. “We recognize provide intervention that our students need to for struggling children be healthy, safe, and enbefore they reach such gaged in order to thrive as an acute crisis makes individuals and as scholBrewer supportive of ars. We strive to provide the Blueprint for Transstudents with equitable formation’s effort. access to mental health “There’s so much poresources regardless of Dana Weiner is where they live or go to working for Gov. J.B. tential in doing that,” she says. school.” Pritzker’s office on Another upside is the Universal mental health loan from the Chapin fact that earlier interscreenings in schools have Hall Center for vention could alleviate the potential to catch Children at the mental illness sooner, ulti- University of Chicago, pressures on the health system, which is expemately reducing the num- where she’s long riencing a widespread ber of children who find studied behavioral labor shortage that’s themselves in a severe cri- health and wellmaking mental health sis and needing to visit an being in children. workers especially emergency room or be harder to come by. hospitalized, experts say. “We can’t add capacity infiniteDr. Audrey Brewer, an assistant professor of pediatrics at North- ly,” Weiner says. “We have to also western University’s Feinberg reduce demand.” Establishing universal mental School of Medicine and attending physician at Lurie Children’s Hos- health screenings in every Illinois pital, says she often treats young school district could still be years patients with attention-deficit/hy- away, Weiner says. And even once peractivity disorder, or ADHD, as the program is established, there’s well as trauma-like symptoms, in- no guarantee all or most students cluding stress, anxiety and depres- will feel comfortable disclosing sion, especially among older chil- their mental health care struggles in a school setting. dren and teenagers. But NAMI’s Wade points out Some patients have even come to Brewer after reporting suicidal that many Americans, and espeideation, a phenomenon Brewer cially youth, have made significant has studied extensively. In a 2022 strides in breaking down stigmas study published by the American and being more open about menAcademy of Pediatrics, Brewer tal health struggles. “This generation is a lot more and her team found that child emergency department visits for willing to talk about mental suicidal ideation spiked nearly health,” Wade says. “One of the re60% from 2016 and 2017 to 2019 freshing things about the mental and 2021 in Illinois, with an addi- health landscape right now is that tional 57% surge in hospitaliza- for all the challenges our young tions during 2020 — the first year people are going through, they’re also bringing a lot of strength.” of the COVID-19 pandemic.

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for Transformation,” calls for state agencies to better collaborate on expanding mental health service capacity, making services easier to find on a comprehensive website and providing intervention earlier, among other things. “What we learned was not only that we don’t in some places have enough of the services we need, but also it’s extremely difficult for families to know where to go and to navigate the service system,” Weiner says. While writing the plan, Weiner says she consulted several stakeholders, advocates, state agency

part of enrollment at the beginning of each school year and could be completed within 5 to 10 minutes, she says. Weiner is currently conducting research on Illinois school districts currently offering mental health screenings. She intends to provide a complete picture to the public in the future, but for now, she estimates that about 30% of Illinois’ more than 800 school districts have some type of universal screening practice, either for mental health or social emotional learning needs. Part of her research will include how effective existing programs are. “We want to first learn what has worked, what hasn’t worked,” Weiner says.

24 | CRAIN’S CHICAGO BUSINESS | OCTOBER 23, 2023

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A pronounced city-suburban divide in access to services in schools By William Johnson

Illinois leaders are correct to focus on stepping up mental health services in schools in the wake of COVID-19, as our surveys demonstrate how dealing with the pandemic negatively affected students. But not all Illinoisans were disrupted the same way, and state leaders need to ensure that resources reach the children who were hardest hit. It is clear that the city of Chicago itself is the epicenter of this crisis. “The last few years have been challenging for all of us and this is especially true for our children,” Gov. J.B. Pritzker observed in August in announcing that the state is making $10 million in federal money available as grants. He understated. The need is clear. In a recent Harris Poll survey of Chicago-area parents of school-age children (ages 5-17), 90% said that the local, state and/or federal governments need to provide more aid to support students’ mental health, and 92% said that school districts ought to prioritize offering mental health services. Pluralities of these parents said that the pandemic harmed their child’s social health (42%) and emotional development (36%), while significant numbers also reported negative effects on behavioral development (35%) and academics (33%). Not all area residents had the same experience or the same supports, however. Digging into the numbers, it’s clear that residents of the city itself are suffering dispro-

William Johnson is CEO of The Harris Poll, a global public opinion polling, market research and strategy firm. portionately. An astounding 85% of parents based in the city said that schools in their area aren’t doing enough for mental health, while only 53% of suburban parents said the same, for example. Where a plurality of parents in the city (39%) said that the pandemic hurt their children’s behavioral health, a plurality of suburban parents (44%) reported no effect at all. Suburban parents more often, by double-digit margins, said that they were satisfied with the support their school gave regarding emotional health (81% satisfied versus 69% among city dwellers), behavioral health (75% vs. 64%) and social health (84% vs.72%). The differences regarding what supports schools currently offer is perhaps most striking. Fully 80% of suburban parents said that their child’s school offers health care — a school nurse, for example — while fewer than 2 in 3 city parents said the same (63%). More than 70% of suburban parents reported academic or career counseling at their school, while barely half (52%) of urban parents said the same. The gap for mental health

counseling was smaller, but only because fewer suburban schools have it (61%), not because city schools are better off (53%). Because of the differing experiences, parental desires also vary according to where in the region they live. We asked respondents about resources they would like to see their schools provide, from mental health support to school nurses to security guards. While the order of priority was largely the same across the area, urban parents expressed more urgency. So while mental health counseling was the top priority across the region, a greater percentage of city parents (67%) want more of it in schools than suburban parents (60%). Majorities of urban respondents also supported more academic and/or career counseling (53%) and security (51%). The biggest difference: 47% of city parents want more health care (such as a school nurse) while only 36% of suburban parents said the same. Every school ought to have a nurse. State leaders prioritizing our kids’ mental health is a necessary first step. “As a governor, as a father, I refuse to let our youth fall through the cracks,” Pritzker said in February. He has also vowed to “build the best behavioral health system in the nation.” These are great aspirations and Illinois is off to a good start. But Pritzker and the rest of our city and state leaders need to ensure that the places hit hardest get the resources they need. Spending money may be necessary, but it’s not sufficient if it’s not properly directed.

Harris Poll: Effects of COVID on mental health Overall, what type of impact has the pandemic had on each of the following aspects of your child’s development? Emotional health (mood, self-esteem)

Positive impact

No impact

Negative impact

City residents

29%

35%

36%

Suburban residents

28%

35%

36%

10%

20%

30%

40%

50%

60%

70%

80%

90% 100%

Behavioral health (attention span, coping mechanisms)

Positive impact

No impact

City residents

Negative impact

31%

Suburban residents

30%

25% 0%

10%

20%

39% 44%

30%

40%

50%

60%

31% 70%

80%

90% 100%

Note: Values may not equal 100% due to rounding

District efforts Offering mental health services to students should be a priority for local school districts.

Agree

Disagree

City residents

94% 6%

Suburban residents 0%

10%

20%

90% 30%

40%

50%

60%

70%

80%

90%

10% 100%

Source: Harris Poll • City of Chicago and Cook County suburban residents with school-age children OCTOBER 23, 2023 | CRAIN’S CHICAGO BUSINESS | 25

CDPH faces smaller budget, severe staffing shortage By Katherine Davis and Jon Asplund

Facing a shrinking budget and a dramatic staff shortage, leaders of the Chicago Department of Public Health fielded questions from the City Council’s Committee on the Budget & Government Operations last week about how the agency will stand up new programs and address an ongoing migrant crisis. Despite the city boosting its contribution to CDPH by 9% to $76.8 million from the corporate fund, the agency’s budget is still slated to shrink by about 9% to $888 million in 2024, city budget documents show. The significant drop in funding comes as federal grants expire, many of which were given to CDPH during the onset of the COVID-19 pandemic. Many of these grants came from the Centers for Disease Control & Prevention; the Department of Health & Human Services; the Federal Emergency Management Agency; the $30.5 billion American Rescue Plan; and the $2.2 trillion Coronavirus Aid, Relief & Economic Security Act, also known as the CARES Act. Questioned by several council members about why the department is so dependent on grants, CDPH’s Acting Commissioner Fikirte Wagaw said the phenomenon isn’t unique to Chicago. CDPH leadership warned the City Council last year that expiring grants would pose long-term issues for the agency’s budget. “Most public health departments at the local and state level are predominantly funded

through grants, which is not a good model and is exactly what you’re pointing out,” Wagaw said. “I don’t know the answer forward. I don’t think anybody does. But we are certainly committed to working with this body and the mayor’s office and other partners in trying to think about how to improve how we fund public health services.” Meanwhile, Wagaw revealed to City Council members on Oct. 19 that despite hiring 126 workers this calendar year, CDPH still has nearly 500 vacant positions across the department, with the biggest shortfalls in mental health services, nursing and environmental permitting. Chronic understaffing has been the norm at CDPH, one council member said. Budget & Government Operations Committee Chairman Ald. Jason Ervin, 28th, said CDPH, “to my mind, always” leads the percentage of city job vacancies. He called it a longstanding issue and without full staffing, “those are services that our citizens are not receiving. We need to dig a little deeper to understand what’s the hang-up, what’s the hold up?”

Concerns CDPH is promoting its open jobs on social media and among current employees, keeping jobs open for longer periods of time and working internally to streamline hiring, Wagaw said. The department is also aiming to recruit students from the City Colleges of Chicago. Budget and worker constraints

come as Mayor Brandon Johnson pushes for the CDPH to launch and manage much of his so-called “Treatment Not Trauma” plan, a mental health initiative that Johnson campaigned on and calls for CDPH opening two pilot mental health clinics under next year’s budget. To support the new clinics and other “Treatment Not Trauma” services, next year’s $16.6 billion budget proposes adding about 21 mental health workers to CDPH for a total of 53. But new positions include psychiatric nurse practitioners, clinical therapists and case managers — positions CDPH is already having trouble hiring for amid industrywide shortages. “I am worried that . . . it always takes us so long to hire staff,” said Ald. Rossana Rodriguez-Sanchez, 33rd, who originally proposed the “Treatment Not Trauma” ordinance in 2020. For some positions, such as clinical therapists, Wagaw said CDPH has lowered hiring requirements to applicants needing fewer degrees or certifications, but in a way that maintains high levels of care. Rodriguez-Sanchez also raised a separate workforce concern during the hearing, saying she is concerned that city money is being used on non-city-employed community health workers. Instead, she would prefer that those health workers be employed by the city. “I really want to be able to see a moment when that is a public model, with really good jobs,” Rodriguez-Sanchez said.

FILE PHOTO

City Council members questioned health department leaders about how they will address key issues, including the ‘Treatment Not Trauma’ plan

As the worker shortage conversation continued, Ald. Jeanette Taylor, 20th, expressed her dissatisfaction with CDPH’s previous leadership and attention to this issue. “I’m going to be very respectful but disrespectful — please don’t be like your predecessor,” Taylor said, referring to former CDPH Commissioner Dr. Allison Arwady, who was fired by Johnson in September. “You have a long answer to everything, and we see nothing that gets done. I want to see you take this in a different direction.” Taylor added that she and the City Council are willing to help CDPH fill vacancies. Aside from budget and worker issues, council members also raised concerns about CDPH’s role in addressing the migrant crisis that’s so far brought thousands of immigrants to Chicago from across Central America and South America. Wagaw said CDPH coordinates

with local hospitals and federally qualified health centers to attend to migrant health care needs. She added that the department is providing disease control and mental health services. However, most of the health care provided to migrants comes from Cook County Health. Last week’s hearing also touched on how CDPH is responding to the opioid crisis in Chicago. Ervin, who pointed out that Chicago is losing more residents to opioids than homicide, said, “We need to be doing more in this area.” Wagaw responded by saying she shared the sense of urgency, adding that Chicago will receive $16 million from opioid settlements that’s intended to be used for remediation programs. Council members were also supportive of CDPH placing the opioid antidote Narcan into Chicago public libraries and other facilities. So far, 10,000 Narcan kits have been distributed, Wagaw said.

Study shows reach of Lukas Walton’s philanthropy Builders Vision’s first impact report aims to show the result of all its investments made to address environmental challenges By Corli Jay

Lukas Walton’s philanthropic investment organization Builders Vision released its first impact report to show the result of $3 billion in investments made to address environmental challenges. The study of the Chicago billionaire’s operation examines the three focus areas of oceans, food and agriculture, and energy. Findings from the report show that the company created more than 2,000 jobs that promote ocean health, has committed over $1 billion to creating sustainable and healthy food and agriculture systems, and developed more than 10 new products to aid in the transition to clean energy. The study uses data from investments made between January 2020 and June 2023 with the creation of an impact measurement and management, or IMM, team. The impact data was veri26 | CRAIN’S CHICAGO BUSINESS | OCTOBER 23, 2023

fied by New York-based consulting firm Dalberg Advisors, according to the company’s press release. “We believe that IMM creates the most value for Builders Vision and our partners when it’s integrated into each step of our investment and grant-making process,” Joanna Cohen, head of the impact measurement and management team at Builders Vision, said in a statement. “IMM is much more than a box-checking exercise. It’s core to helping us articulate and remain accountable to our nearand long-term goals, measure and manage progress toward those goals with integrity, and provide transparency around those learnings with others.”

Individual partners The report also highlights the impact of individual partners, such as California-based water supplier Moleaer, which devel-

oped a nanobubble generator that improves water quality. According to the report, the technology is a cost-effective and chemical-free way to increase sustainable food production and has been developed in more than 50 countries. Also featured in the report is Growing Home, an urban farm on Chicago’s South Side based in Englewood. The report’s findings show that 76% of the food grown on the farm is distributed to those facing food insecurity. “If you can find the right purpose-driven investments that are addressing real problems in the world, they’re going to be attractive investment opportunities,” Builders Vision President Matt Knott told Forbes. The company has 158 partners in the focus area of oceans, 125 in energy, and 166 in food and agriculture. As of summer 2023, Builder Vision has invested in close to 450

Lukas Walton I WALTON FAMILY FOUNDATION/YOUTUBE

startups. The company uses grants and investment funds to allocate to its various partners. The company boasts of going “beyond the check” by helping its partners with technical assistance and relationship development, among other support. Builders Vision is headquartered in Chicago and was launched by the Walmart heir in

2021 as a unified platform. Its asset management team, Builders Asset Management, was founded in 2012. S2G Ventures, the investment arm of Builders Vision, was founded in 2014. Builders Initiative, the philanthropic arm of Builders Vision, was formed in 2017. Builders Vision was listed in Crain’s 2023 Best Places to Work in Chicago.

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A rendering of the two-story bathhouse with a rooftop pool coming to Fulton Market I GENSLER

Fulton Market condo plan ditched in favor of a ‘social bathhouse’

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A New York-based bathhouse company inked a build-to-suit deal for a site that was originally earmarked for million-dollar-plus condominiums

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A Fulton Market District developer has abandoned plans to bring a 10-story condo building to the northwest corner of Madison and Morgan streets, opting instead for a long-term, build-to-suit lease with a New York-based modern bathhouse. Fulton Street Cos. bought the 17,000-square-foot parking lot site at 1010 W. Madison St. in September 2020. The developer originally planned to break ground in early 2022 on a building with 25 luxury condominiums that would run from just under $2 million to almost $6 million. The project, dubbed Momad, would have been the first condo-style concept for the firm, which has spearheaded a flurry of new office and rental buildings across Fulton Market and the West Loop. Fulton Street Cos. shifted away

CAMEO From Page 1

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Chicago-based startup inked a deal with SAG-AFTRA that allows actors’ work on Cameo’s B2B platform to count toward the $26,470 income threshold they need to receive health benefits. The union estimated that 86% of members didn’t make enough money to qualify. “From a talent-onboarding perspective, these are some of the best months we’ve ever had,” Galanis says. Cameo was a darling of the Chicago startup scene, especially after it enjoyed phenomenal growth, fueled by COVID-19 lockdowns, which left celebrities looking for ways to make money and consumers with fewer options to spend it. Big-name investors were starstruck, pumping $100 million into the company, which achieved “unicorn” status as a venture-backed company valued at $1 billion. But Cameo fell hard once peo-

from that plan because the firm saw Chicago’s condo market taking a turn for the worse and could not justify the increasing cost of construction, said CEO Alex Najem. Leasing to the trendy recovery spa “just seemed like a much better deal,” Najem said. It’s a sign that even the hot Fulton Market area isn’t immune to slowing condo demand in Chicago. The city’s condo market has been hit hard in the 2020s, with the slower-than-expected return of office workers and downtown draws like theaters struggling to regain pre-pandemic activity levels, as well as the perception that crime is out of control in and around downtown. Fulton Street Cos. and the bathhouse company, called Bathhouse, are working with architecture firm Gensler on the planned 40,000-square-foot, two-story spa with an accompanying rooftop

restaurant and pool. Construction could begin as early as the beginning of 2024, with hopes of the bathhouse opening by spring 2025. Bathhouse started in 2019 with its first location in Brooklyn. It’s currently expanding that space, opening a new spot in Manhattan and preparing to enter at least one other market. The company seeks to modernize the traditional bathhouse with an emphasis on the social experience, co-founder Travis Talmadge said. It offers saunas, steam rooms, pools, hammams and more. The high-energy Fulton Market neighborhood was particularly attractive for Bathhouse. “A lot of them are fit and interested in peak performance in some regard,” Talmadge said of the area’s residents. “Tuesday night looked like Saturday night everywhere I stuck my head in.”

ple began to venture out of their homes again. The company did its third round of layoffs just as the actors strike began. Today, it has 33 employees, down from a peak of about 375. The company’s revenue still isn’t as high as it was during the peak of the pandemic, but it’s four times larger than in 2019, Galanis says.

The goal is profitable growth.” Cameo is relying more on technology and less on people to run the business, improving the bottom line. In August, the company posted earnings before interest, taxes, depreciation and amortization for the first time in more than three years. “The past year and a half hasn’t been fun by any stretch of the imagination,” Galanis says. “It’s been super painful. There’s definitely light at the end of the tunnel. Cameo has proven it’s here to stay, and we ain’t dead yet.” At some point, the actors strike will end. Cameo will have to persuade the talent to continue their side hustles, or the company could find itself lurching through another boom-and-bust cycle. Galanis is optimistic he can hang onto the gains. “Once talent comes on the platform, the overwhelming majority stay,” he says. “That problem of 86% of SAG actors not being able to make their health care, that was last year when there wasn’t a strike.”

Challenges ahead Cameo still faces several challenges. It’s mostly a discretionary consumer purchase, and there’s the question of attracting repeat customers. And it shares the same struggles of other venture-backed startups trying to survive in a world where money is harder to get and valuations have plummeted by half. “If you raised money, when the music stopped, it became a race to get to cash-flow positive,” says Steven Kaplan, a professor at the University of Chicago’s Booth School of Business who co-founded its entrepreneurship program. “Some companies will make it and some won’t.

United Airlines former CEO and Executive Chairman Oscar Munoz was the featured speaker last month at Crain’s Power Breakfast. In a conversation with Crain’s Group Publisher and Executive Editor, Jim Kirk, Oscar spoke about his experience leading the United Airlines’ turnaround as well as the successes and lessons learned through personal challenges and perseverance. PRESENTING SPONSOR

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From Page 3

The economic plan centers investment into the commercial corridor that will impact the surrounding communities using the South Side institution as an anchor development to guide future investment. Four potential development sites were detailed, including multistory mixed-use buildings, three on the CSU campus and one on a vacant 7,000-squarefoot lot on the corridor’s north side. The plan calls for the development of 35,000-45,000 square feet of commercial space for academic and retail use, as well as student and family housing. The project is estimated to cost $250 million, according to officials at the meeting, but no funds have been secured for the project as of yet. The Planning & Development Department and CSU established a memorandum of understanding agreement in 2020. “We’re asking local, state and federal governments, we’re asking the private sector and we’re asking the philanthropy to continue to invest in Chicago State University and the 95th Street corridor, which will result in the development of a first-class university village that bolsters community well being that we all deserve,” said CSU President Zaldwaynaka “Z” Scott. “We worked with Chicago State on this plan, and they do have a large need for housing. So (it’s) really a big opportunity and sort of a public-private partnership to develop some of these housing and retail spaces,” said Jasmine Gunn, city planner of the Far South Side region for the DPD. According to Gunn, the report is also a result of the $1 million planning grant awarded to DPD and the Chicago Transit Authority. The vision for the sites also includes access to green spaces and a coffee shop that connects from a school bookstore.

Transit improvements The nearly $3.6 billion Red Line extension project and $45 million modernization project for the Metra 95th Street stop were heavily referenced during last week’s meeting — both are blocks away from the campus. “With the Red Line extension underway, the Metra redesign, burgeoning development and new attractions, the future will be really bright. And it’s so exciting to see a public education-

SHAH From Page 3

million, according to court filings. Shah’s attorneys and prosecutors are still fighting over whether the government is entitled to not only the initial proceeds of Shah’s and Agarwal’s payouts when they were frozen, but also

From Page 3

A rendering of the proposed 95th Street remake I DEPARTMENT OF PLANNING & DEVELOPMENT

According to the document, recent, ongoing and planned investments for the area total over $4.5 billion. They include the $19 million Discover Customer Care Center in Chatham, investments into Metra’s 95th Street as a “gateway to CSU” and the $35 million Pullman National Monument that opened in 2021. Ald. William Hall, 6th, who was also in attendance, detailed his experience traveling to Evanston and envisioning life at Northwestern. He explained that the study allows the same investment into the area near Chicago State. “We are excited today to see what the future of the South Side will look like with Chicago State as the anchor. We have a five-star university right here on the South Side of Chicago, leading statistics that can just literally bring so much joy to us,” he said. According to the study, Chicago State generates $1.6 billion to the state’s economy annually. The majority of the school’s stu-

dents come from surrounding neighborhoods and it is the only public university in Illinois with a majority-Black student body. Community resident Eli Washington said that though he was impressed with the presentation, he wanted more details. “I am concerned, they’re putting a lot of emphasis around the Metra station, which is a concern for me; it is definitely something that’s needed, but I don’t know if it’s gonna have the biggest bang for the buck,” said Washington, who serves as chairman of the nonprofit organization Chesterfield Community Council. Washington said he supports the idea of using the school as an anchor but thinks that a commercial corridor is just as important. “I look at places like the University of Chicago and Northwestern, which is the anchor, and I do think that the community or the school can be more open. But I would like to see more of a commercial anchor more than anything else because people always talk about there’s a food desert, so some type of a grocery store, or just some type of office structure that’s willing to locate on the South Side of Chicago.” Washington said he’s heard promises for the last 20 years on investing in the corridor but is hopeful as CSU President Scott is “putting the right pieces together.” A virtual “public kick-off meeting” is scheduled for Nov. 1 at 6 p.m.

the appreciation since then. It’s no small matter: If Shah wins, he could get another $15 million. The money is at issue because not only are Shah and Agarwal facing prison time when they’re sentenced, prosecutors also have said they will seek $400 million in restitution from the pair. The co-founders, along with

fellow Outcome Health executive Brad Purdy, were convicted of overbilling pharmaceutical companies, such as AbbVie, that advertised on Outcome Health’s network of television and computer screens in doctors’ offices. The overbilling inflated Outcome Health’s financials, which investors and lenders relied upon to fund the company.

al institution at the heart of this kind of transformational plan,” Andrea Sáenz, president of The Chicago Community Trust, said during the meeting at the school’s Gwendolyn Brooks Library. The study references the University of Chicago Arts Incubator at 301 E. Garfield Blvd. for being a “dynamic hub of exploration that centers people of color” and Northtown Library Apartments in West Ridge as a relevant project example.

Other investments

30 | CRAIN’S CHICAGO BUSINESS | OCTOBER 23, 2023

“misinformation” that it favors an override. “We consistently argue for living wages for frontline nursing home workers. (But) these for-profit facilities, which receive significant state and federal funding, have the means to meet these wage demands,” SEIU Healthcare Illinois President Greg Kelley said in the statement. A fact sheet distributed by the health care council and its lobbyist to lawmakers says the tax-cut bill would provide “critical relief” to 300 nursing homes in Cook County “that have been experiencing escalating property taxes and systemic inequities. . . .The current system is not sustainable and is adding to the financial burdens that could force some nursing homes to close and reduce access for residents in their communities who need it the most.” The bill would grant the relief by cutting the tax rate on nursing homes from 25% of their market value (today’s standard for all commercial property in Cook County) to the 10% figure used for single-family residences. The fact sheet asserts the impact on taxing bodies and other taxpayers would be minimal. But Pritzker in his veto message disagreed, saying he has been hearing from worried municipal officials, especially in the south end of Cook County, where many businesses have departed and nursing homes comprise a disproportionate share of the property-tax base.

‘A zero-sum game’ That tracks with the view of Sarah Wetmore, acting president of the tax watchdog Civic Federation, when asked for comment: “Because the Cook County property tax system is a zero-sum game, any reductions to the property tax paid by one category of taxpayers means others will need to pay more. Such an impact could be particularly acute in regions of the county where the property tax base is already narrow.” Pritzker’s message also tracks with data from Kaegi’s office, which at the request of the Illinois Municipal League ran some preliminary figures. Kaegi’s team found the tax shift from nursing homes to other taxpayers would exceed 2% of total valuations in several towns and hit

8.5% in Robbins. Chicago has a much wider tax base, but, even there, other taxpayers would have to have to pick up $441 million in valuation being removed from nursing homes, says David Morrison, deputy assessor for policy and intergovernmental affairs. Morrison said he could not translate that into the actual tax shift without further research. But the additional tax load picked up by non-nursing homeowners would certainly be in “the tens of millions” of dollars a year and possibly in the hundreds of millions, he said. Harmon, via a spokeswoman, said he voted for the bill because it would treat nursing homes in Cook County “the same way we already treat nursing homes outside of Cook County as well as assisted-living homes, supportive-living homes and other facilities across the state that provide care in addition to housing. It was approved by Democrats and Republicans in both houses of the General Assembly.”

Major donations A political spokesman for Harmon confirmed the Senate chief has received major donations from the nursing home PAC — more than $1.5 million since the beginning of 2020, according to Illinois State Board of Elections records. But others have received big money, too, including state Senate GOP Leader Dan McConchie, whose committees got $450,000 in the 14-month period ending last November. Harmon’s Chief of Staff, Jake Butcher, is a former lobbyist who represented the Health Care Council of Illinois, and his law firm continues to be retained by Harmon’s political committee to handle election chores. Harmon’s spokesman said that lobbying work ended several years ago — by 2018, according to state records. Any action on an override will have to begin in the Illinois House. The main sponsor of the property tax bill, Rep. Stephanie Kifowit, D-Aurora, said she will push for an override to keep homes from closing, but will allow the nursing home clause to be removed if that’s needed to save the underlying bill and its other provisions. A spokeswoman for Illinois House Speaker Emanuel “Chris” Welch said he will consult with his caucus before commenting.

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95TH STREET

Wicker Park greystone stays true to its past

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This blend of old and new, complete with an original carriage house out back, goes on the market priced at $4.9 million When Jaala and Brian Good turned an early 20th-century Wicker Park two-flat into a 21st-century house, they didn’t lose sight of its past. That’s particularly evident in the breakfast room, one corner of the addition they put on, where the windows frame a view out to the original carriage house out back. Seen in the photo at the top of the story, it was built with the house in 1907 and originally had a hayloft above the space for horses. They redid the small building as a gym inside, but retained its historical look on the outside. The blending of old and new runs throughout the house. A couple of their children’s bedrooms still have the ornamental plaster of the living and dining rooms they used to be, and an

old-time pair of parlors was opened up to be one large living room. Even outside, where they installed a patio, they used salvaged street pavers, which match the old brick alley that services their block of Pierce Avenue. The house has a stately, ornate greystone facade, seen at the bottom of this article. With the last of four kids they raised in the home headed for college, the owners are “starting a new chapter,” said Brian Good, a retired asset management professional. Jaala Good has been an athome mom. They put the house on the market last week, priced at $4.9 million and represented by Maryellen Joyce of Berkshire Hathaway HomeServices Chicago. The property is a 48-foot-by-163-foot lot with a six-bedroom, 6,500-squarefoot house and the coach house.

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