Crain's Chicago Business

Chicago’s marketing makeover

BY DANNY ECKER

Lynn Osmond has made a career out of opening minds to new experiences. In her new role as Chicago’s top tourism o cial, her challenge is changing minds about a city battered by a drumbeat of bad press.

She spent the past quarter-century popularizing architecture as head of the Chicago Architecture Center. Before that, she built mainstream audiences for classical music as a symphony executive in New

York, California and her native Canada.

“You’ve got to get them in through the John Williams and the popular music before they go into the Proko evs and the Mahlers,” Osmond says.

Now she is selling another product that could use a public image boost: Chicago. As the city’s COVID-pummeled hospitality sector labors to recover from the public health crisis, hopes for improving a national reputation sullied by crime and the

pandemic are pinned in an outsize way on Osmond. e 65-year-old started in May as CEO of Choose Chicago, the agency that promotes Chicago as a convention and vacation destination.

Her task of rebooting leisure and business travel to Chicago amid persistently negative storylines would daunt any experienced salesperson, let alone one with no prior experience running a convention and visitors bureau.

With the health of the McCormick Place convention center—one of the area’s most important economic engines—at stake,

New Choose Chicago CEO calls cultural attractions and a vibrant downtown key

Lynn Osmond

Baxter CEO José Almeida

Can she lead Illinois GOP out of the wilderness?

“This certainly isn’t going to be a quick fix,” concedes Tony McCombie. “It’s not going to happen overnight,” she adds, suggesting that gaining as few as three seats in the next election would be cause for celebration.

McCombie is the new leader of Illinois House Republicans. Incom ing newbie officials like her tend to promise the moon rather than modest improvements. But, in this case, McCombie may be right to manage expectations downward.

Essentially, she faces the same question Republicans do national ly: How to make the GOP com petitive again in increasingly blue suburbs, be they Wheaton; Mesa, Ariz.; Philadelphia’s Main Line towns; or Orange County, Calif.

The problem is particularly acute here, as McCombie takes over leadership of a caucus that lost five of its 45 seats on Nov. 8 and now is a super-superminority whose very relevance is in question in a body

with at least 78 Democrats.

So what does McCombie bring to the table?

The woman from Savanna in northwestern Illinois is, with no offense to outgoing state GOP leader Jim Durkin, something new for a party that clearly needs change. She’s the first woman ever to head a House caucus, and that can’t hurt. Equally important, she’s not from the Chicago suburbs like almost all GOP leaders for the past half-century have been. She’s from downstate, potentially enhancing her ability to explain to rural voters that now compromise the Illinois GOP’s backbone exactly why they need to give suburban Republicans the ability to follow the first rule of politics: Represent your district, not an ideology.

That’s task one: improving internal communication within the caucus. Or as McCombie put it in an interview, “What we need to do is explain the benefits of someone who will vote with you 90% of the

time as opposed to a Democrat who will vote your way 0% of the time.” In that vein, there will be no caucus rule requiring members to vote a certain way, McCombie said.

Task two: developing a small-do nor contributions base that’s not dependent on the whims of some deep-pocketed official, like Bruce Rauner, or wealthy business type, as in Ken Griffin or Dick Uihlein. McCombie doesn’t mention any of them, but putting together a small version of what Democrats have done nationally with ActBlue would be enormously helpful.

McCombie, 40, is a business woman. An “Army brat” whose family moved around the country, she graduated from Western Illinois University, worked in the bank ing and insurance industries, and eventually opened a restaurant with her mother. That got her involved in the local chamber of commerce and eventually to the mayor’s position and state representative.

McCombie can be jaw-drop

GREG HINZ ON POLITICS

pingly candid. Asked if she and her husband have children, she replied, “No, we can’t.” She supported former Ohio Gov. John Kasich for president. When asked if Donald Trump should run again, she said, “No. It’s not good for Illinois” to have someone who twice lost the state by roughly a million votes to potentially head the GOP ticket.

I hope she sticks to that candor. It may help her in what’s to come, with House Speaker Emanuel “Chris” Welch commanding such a majority that he can make Mike Madigan look like a friend of Republicans.

McCombie says she’ll do her best to grab a seat at the table in Springfield negotiations while urging her members to reach out to

Democrats on legislation of mutual concern. But when asked about big issues that are coming up soon, she said she’s not expecting much in the way of meaningful changes in the controversial SAFE-T criminal justice reform law that became a big election issue. There may be room to talk on a proposed ban on assault weapons, but, “I’ll wait to see what the definition of an as sault weapon is.” And when asked if the state needs new abortion laws, she swiftly replied, “We repeal the (anti-)parental-notice law.”

Durkin did his best, McCombie concludes, but, “We need some one who is going to go in a new direction.” She’s the woman in the bucket. We’ll see how she does.

Illinois voters signal they’re ready for this reform

Before we tumble too far into the bruising Chicago election season, some significant election results from the Illinois midterms flew under the radar and deserve your attention.

The great people-powered elec tion results you probably haven’t heard all about came from Peoria, Skokie and Evanston.

In Peoria, members of the local Green Party collected signatures to get a nonbinding question on the ballot, asking voters whether they wanted an independent resident redistricting commission drawing state and federal political districts every 10 years. A resounding 74% of those who voted said they’d prefer an independent commission rather than having whatever party holds power drawing districts in Illinois. While the question and the results themselves won’t change anything, the overwhelming sup port for an independent commis sion nonetheless sends a powerful message about what Peoria voters think about the foundational prac tice of drawing political boundaries. They’re telling elected officials in Illinois they strongly believe there’s a better way.

How districts are drawn, how our governments are organized and how elections are run all are key to shaping how productive, construc tive and responsive our politics and governments are.

In Skokie, a group of residents fed up with the same officials keeping a grip on things for decades got organized more than a year ago. They collected 12,000 signatures to get three questions on their ballots, asking voters if they wanted nonpar tisan elections, staggered terms for trustees, and a combination of at-large and district representation for their village board. All three questions were approved with between 53% and more than 60% of the vote.

The results are even more im

pressive given the fact that longtime Mayor George Van Dusen and his Caucus Party were sending out mailers saying the changes would divide the village. After the vote, Van Dusen told the Pioneer Press he would see to it that the changes the people wanted are made.

Gail Schechter, a Skokie Alliance for Electoral Reform steering com mittee member, told the Pioneer Press people were fed up with a lack of competition in the community. A post-election press release from the alliance said voters “have affirmed their desire for open, transparent, and fair elections with choice on the ballot and equitable representation.”

Skokie, the release added, “is becoming a leader in expanding democracy at this pivotal moment in American history.”

Voters in nearby Evanston might want to lay some claim to some of that history-making. With support from City Council members, and a concerted campaign effort from FairVote Illinois and Reform for Illinois, a whopping 82% of voters said they want ranked-choice voting instituted for their local elections going forward.

Starting with the 2025 local election in Evanston, residents will rank candidates on their ballots. If a candidate gets more than 50%, he or she wins. But if no candidate passes that threshold, the person with the fewest votes is dropped and those who voted for that candidate will have their second choices tallied. That process is repeated until a can didate has more than 50% support among the electorate.

Ranked-choice voting is perhaps the hottest attempt to change both the way we vote and govern at the moment. Nevada voters took the first step toward approving an open primary and new general election system where voters rank the top five candidates who come out of the primary. Ranked-choice voting also just won support in Ojai, Calif.;

Fort Collins, Colo.; Portland, Maine; Portland, Ore.; and Multnomah County, Ore.

Supporters believe it helps ease negative campaigning and allows people to stop picking the lesser of two evils, or the candidate they be lieve has a chance at winning even if not their most favored choice. It also eliminates the need for runoffs and ensures winners have the support of a majority of voters.

From the Midwest to the coasts, people are organizing and trying to find better ways to ensure districts are drawn with less political bias, elections are more competitive, and winners can govern for a full

and diverse majority.

In Illinois, these developments are taking hold in key corners. Sev eral Democratic state lawmakers are eager to see ranked-choice voting implemented in more elections. Efforts are underway to replicate the Evanston effort in other Illinois communities.

Perhaps this is the start of

something big. Peoria, Skokie and Evanston voters could lead the way toward more people-powered movements to improve our demo cratic foundations.

Madeleine Doubek is executive director of Change Illinois, a nonpar tisan nonprofit that advocates for ethical and efficient government.

Wintrust Community Banks received the highest score in Illinois in the J.D. Power 2022 U.S . Retail Banking Satisfaction Study of customers’ satisfaction with their primary bank. Visit jdpower.com/awards for more details. Banking products provided by Wintrust Financial Corp. banks.

BOTCHED BUYOUT ROCKS BAXTER

Shares tumble after a massive write-down shows it overpaid for Hillrom and raises questions about future growth I

BAXTER INTERNATIONAL ubbed its biggest acquisition ever, tanking its stock price while raising doubts about CEO José Almeida’s growth strategy and potentially making Baxter itself a takeover target.

The Deerfield-based medical products manufacturer last month disclosed a $3.1 billion impairment charge related to the $10.5 billion purchase last year of Hillrom, confirming Almeida overpaid significantly for the Chicago-based maker of hospital equipment. e charge re ects declining sales for Hillrom’s front-line care, patient support systems and surgical solutions businesses. Hillrom-related revenues dropped by mid-single digits in the third quarter compared to the year-earlier period, contributing $735 million to Baxter’s overall sales of $3.8 billion in the third quarter,

BY KATHERINE DAVIS

IF

Airlines’ shift away from small jets eases congestion at O’Hare

United and American move to bigger planes, potentially clearing the way for rivals to expand at Chicago’s biggest airport

BY JOHN PLETZ

ere are fewer planes in the skies over O’Hare International Airport these days, and it’s not just because of COVID-19.

United and American airlines, the two dominant carriers at O’Hare, are trading small, regional jets for larger planes that are more pro table to y. Regional jets account for 46% of the ights at O’Hare, down from 54% in 2019, according to aviation-data rm Cirium.

e result is less crowded airspace over O’Hare. Total ights are down 25% from 2019, but the number of seats has fallen just 18%. O’Hare’s on-time perfor-

mance this year through August is 77.9%, better than the national average of 75.8%, according to U.S. Department of Transportation data. Before the pandemic, O’Hare trailed the national average by 5 percentage points.

e decline in aircraft numbers is unlikely to a ect the airport’s revenue, which is based on the cumulative weight of aircraft and the total number of passengers using the airport. Fewer, larger aircraft likely will produce the same landing fees and carry the same number of passengers. If there is any shortfall in landing fees, airlines pay more to cover it.

As airlines switch to bigger

aircraft, or “upgauge” from 50seat regional jets to 150-seat single-aisle planes, it means less-frequent ights to and from some smaller cities, making it less convenient for passengers traveling to those places. However, it allows airlines such as United and American to concentrate their ying at the times most in demand, as well as to add new routes.

Fewer ights by the big carriers won’t likely free up gates for competitors. But it could enable others to increase their ying at O’Hare from other terminals, such as Terminal 5, which has

JOE CAHILL ON BUSINESS

Give Choose Chicago the funds to compete

Choose Chicago has a new CEO, a new top convention marketing executive, and a plan to revitalize tourism and conventions in Chicago. If only it had the money.

As my colleague Danny Ecker reports, the convention and tourism agency’s budget still lags pre-pandemic funding levels. Even worse, Choose Chicago has far less money than counterparts in cities that vie with Chicago for tourists and conventions.

Choose Chicago’s budget, financed by local hotel taxes that plunged when COVID squelched travel in 2020 and 2021, rose to $26.6 million this year from $16.2 million in 2021. That’s well below $30.6 million in 2019, and less than half what rival agencies in New York and Orlando spend.

Less money means less resources, particularly staffing. Choose Chicago has filled vacant leadership roles, naming Lynn Osmond as CEO in May after the job was vacant for nearly a year, and hiring Dustin Arnheim to oversee convention marketing several months after his predecessor left. But total headcount of 56 staffers is down from 75 before the pandemic.

Choose Chicago needs more staffers, not fewer, as it tackles the daunting challenge of luring vacationers and conventioneers back to Chicago. Some 30.5 million people visited Chicago last year, up from 16.3 million in 2020 but barely half 2019’s 60.8 million. On the convention front, meetings are down about one-third this year compared with 2019, with attendance at events running at roughly twothirds of pre-pandemic levels.

NUMBERS GAME

Revving up the recovery will be difficult for a depleted Choose Chicago staff competing against rivals operating at full strength. Compounding the challenge are fears that rising crime has made Chicago unsafe for visitors.

Sales often comes down to a numbers game; the more people selling your product, the more product you sell. With fewer staffers and other marketing resources, Choose Chicago can expect to bring in fewer visitors.

Already, Chicago is falling behind in the nationwide postCOVID convention rebound. Archrivals Orlando and Las Vegas have matched their 2019 convention numbers, and industry prognosticators predict several other cities will reach

that level this year or next. Chicago, however, isn’t expected to fully recover until 2025.

That’s a lot of un-booked hotel rooms, un-ordered restaurant meals, un-sold tickets at local museums, theaters, sporting events and other local venues. In fact, conventions and tourism have long been a key economic engine for the city and state. Before the pandemic, tourism generated $16 billion in local spending, including $1.1 billion in tax revenues, according to Choose Chicago. The agency reported 153,700 tourism-related jobs in 2019.

GLOBAL REPUTATION

A thriving conventions and tourism sector also burnishes Chicago’s global reputation, laying the groundwork for future investment. A vacationer wowed by the city’s skyline, restaurants and theater scene starts to think Chicago would be a great place for a business meeting. A corporate executive who comes to town for a convention realizes that Chicago’s air travel connections make it an ideal location for a new company office, or even a headquarters.

Yet state and city o cials consistently shortchange the agency charged with promoting this vital industry. ey turned a deaf ear when one of Osmond’s predecessors at Choose Chicago lobbied for more government funding. For the most part, the agency has been left to depend on uctuating hotel tax revenues.

We can get away with that in ordinary times. But these are far from ordinary times. Chicago’s convention and tourism sector faces the twin challenges of bouncing back from COVID-19 and repairing the city’s bruised public image.

ose challenges call for an extraordinary e ort to market Chicago around the country and the world. Such an e ort requires more sta , more advertising and more promotions. And that takes a bigger budget.

Imagine what Choose Chicago could do with, say, another $20 million. A huge increase for Choose Chicago, that amount would be a rounding error for the city and state, with their combined budgets of nearly $63 billion.

Choose Chicago needs a consistent funding stream on par with its chief competitors. If city and state leaders really want Chicago to remain a top-tier convention hub, they’ll nd the money.

ALMEIDA CAN’T IMPROVE PERFORMANCE, BAXTER’S SHARES COULD FALL FURTHER, POSSIBLY CATCHING THE EYE OF AN OPPORTUNISTIC ACQUIRER.

Baxter CEO José Almeida

Massive O’Hare project clears last hurdle

BY GREG HINZ

The big terminal modern ization and expansion plan at O’Hare International Airport has been officially cleared for takeoff.

In an announcement on Nov. 21, the Federal Aviation Admin istration said it has signed off on the multibillion-dollar work, concluding it is in the public in terest and will not cause signifi cant air traffic problems.

The project, which will add dozens of gates and hundreds of thousands of square feet of pas senger and retail space, will be one of the largest public works programs in the city’s history. It will come in later and cost more than originally expected, but officials said the scope remains the same.

Under the latest plan, two new remote satellite terminals will be the first to open, in 2027 and 2028, off the existing Terminal 1, where most United Airlines flights are located.

Once that is done, full-scale work will begin on the center piece of the project: the demo lition and reconstruction of Ter minal 2, which will be converted into a combined domestic and international terminal. That will locate customs and related facil ities at the center of the airport, and not at the somewhat remote Terminal 5, as is the case now.

Officials had estimated the project’s cost at $8.5 billion—but that’s in 2018 dollars, when the plan was unveiled and approved by the City Council under for mer Mayor Rahm Emanuel.

The total cost of the project is now $12.1 billion, Chicago’s Avi ation Commissioner Jamie Rhee said on Nov. 21. The increase is due to a combo of inflation and extra projects that airlines have agreed to, she said.

MILESTONE

The project will be funded by federal grants and taxes on air lines and passengers, not by gen eral city revenue like property taxes.

“This is about remaining competitive on a global stage,” said Mayor Lori Lightfoot, who along with U.S. Transportation Secretary Pete Buttigieg made the official announcement at O’Hare on Nov. 21. “Everything we do will have a major effect both in Chicago and throughout the country.”

Lightfoot noted that the soonto-be-demolished Terminal 2, where last week’s news con ference was held, was officially opened in 1963 by President John F. Kennedy. The new termi nal project will be a milestone as well, she said.

Rhee declined to say exactly when construction work will be gin, but declared the two satellite

terminals will open in 2027 and 2028.

Work on the new Terminal 2 will begin in phases in 2026 and be completed along with all oth er projects by 2030.

ENVIRONMENTAL APPROVAL

Buttigieg couldn’t say for sure if Chicago will win a competi

tion for major federal funding for the project, but he did say, “I certainly wouldn’t be surprised if a lot of strong applications from Chicago came in.”

In its statement, the FAA said it “concluded that proposed construction projects and changes to air traffic procedures will not significantly affect any

environmental resources, in cluding noise, air quality, water resources and historic sites.”

U.S. Rep Jesus “Chuy” Gar cia, who serves on the House Infrastructure Committee, also attended the news conference. He’s also is running for mayor. He stood several feet to Light foot’s left, and did not speak.

Suburbanites paying far more for heat than Chicagoans

Nicor Gas, which serves most of suburban Chicago, is charging at least 55% more for natural gas than Chicago’s Peoples Gas is through December

BY STEVE DANIELS

Following a pre-Thanksgiving cold snap, it’s going to cost sub urbanites a lot more to stay warm than Chicagoans.

The cost of natural gas, which makes up at least half of a heat ing bill this time of year, is 60% higher this month for customers of Nicor Gas than it is for those served by Peoples Gas.

That trend will continue next month when the temperatures likely will be colder. Nicor’s charge for the fuel will be 55% higher than Peoples’.

Nicor serves 2.3 million cus tomers in most of suburban Chi cago while Peoples delivers gas to more than 872,000 customers in the city of Chicago.

The disparity is unusual. Util ities purchase the fuel on behalf of their customers and pass the cost along at no markup.

But the companies have vari ous strategies available to them to keep the costs as low as pos sible. Those include hedging a portion of the costs ahead of time and storing gas purchased during the warm-weather months for

delivery in the winter.

Nicor’s gas charge for Novem ber is $1.14 per therm. That’s the highest Nicor’s price has been in a cold-weather month in more than a decade. Peoples’ gas charge for November is 71 cents a therm.

For a household consuming 120 therms—on the low side in the suburbs and slightly more than average in the city—the suburban difference in the No vember heating bill from gas price alone will be $52.

SEEKING ANSWERS

In December, when average residential consumption is more like 180 therms, the difference in cost for Nicor and Peoples cus tomers using that amount will be about $55. Nicor’s per-therm gas charge in December is 85 cents while Peoples’ is 55 cents.

Nicor isn’t shedding any light on why its costs are so much higher than Peoples’. Its gas charge also is considerably high er than the other big gas utility in the state—Ameren Illinois.

“Nicor Gas cannot speculate on the natural gas pricing strategy of

other companies,” spokeswoman Allison Erdman Gregoire said in an email. “As the largest natural gas provider in Illinois, we set our (gas charge) according to current market fundamentals and nearterm factors that influence nat ural gas prices. The filed rate for December reflects that strategy and helps to mitigate the impact to customers from the current volatile commodity market.”

Peoples also said it couldn’t speculate about Nicor’s strate gies.

“Our storage and hedging, and broader market conditions, came together in a way that en ables us to pass along reduced natural gas costs to our cus tomers for December,” Peoples spokesman David Schwartz said in an email. “Based on cur rent information, we expect gas charges for January and Febru ary to be similar to what we saw in November, in the 70s in cents per therm.”

For the five-month heating season, running from November through March, Peoples proj ects the average monthly bill will be $25 to $30 higher than

last season’s. That would mean a five-month total for the average household of $1,140 or so. Last season’s average household bill was $999.

STRAINING BUDGETS

Natural gas prices have moder ated since August when forward prices foreshadowed an aver age Chicago heating bill topping $1,400 this winter. Still to be de termined is how cold it will get, which can influence prices sig

nificantly. Major cold snaps like polar vortexes can lead to spikes in prices.

Heating costs are straining household budgets, particularly in Chicago where more lowincome customers live. About three in 10 Chicago households are hit with late charges. Nearly 20% are more than 30 days be hind on their gas bill. After years of rock-bottom gas prices, costs have climbed, thanks to the war in Ukraine and other factors.

CITY OF CHICAGO

The FAA approves one of the largest public works programs in city history, adding dozens of gates and redoing terminals at o’Hare

A rendering of Studio Gang’s wood-beamed vision for o’Hare’s interior

Let’s rise to the challenge, Chicago. Only a hunger-free community can really be healthy. When we help feed our neighbors, we truly become a greater Chicago.

Historical apartment building in Streeterville sells for $10.5 million

BY ALBY GALLUN

A landmark 13-story building in Streeterville designed by Harry Weese that has gone from apart ments to condos and back again has changed hands for $10.5 million.

Brad Management, a Los Angeles-based investment firm, has sold the 25-unit property at 227 E. Walton St. to Chicagobased Altitude Capital Partners, according to Marcus & Millichap, the brokerage that arranged the sale. Built in 1956, it’s a small but architecturally significant build ing, one of several in Chicago de signed by the Chicago architect and the only one with landmark status in the city.

Yet a property’s architectural pedigree doesn’t guarantee fi nancial success for its owner, and that may be the case with 227 E. Walton. Not only did Weese de sign the building, but he devel oped it, too, teaming up with real estate broker John Baird on the project. Their original plan to sell the units as cooperative apart ments didn’t work out, so they rented them out instead.

Another developer converted the building to condominiums in 1969. It remained that way until 2018, when Brad Management bought all the units and turned them back into apartments.

It’s an investment strategy that gained traction several years ago. Amid soaring apartment val ues and a sluggish condo mar ket, many investors have gone through the trouble of acquiring entire condo buildings and con verting them to apartments.

They aim to profit on pricing dif ferences between the two markets. Theoretically, an investor should be able to pay a premium for the condos and still sell the building as a rental property for a much higher per-unit price. In 2021, for instance, a Brooklyn investor sold an Edgewater building it had de converted to apartments for $43 million, about 31% more than it had invested in the property.

ADDITIONAL PROFIT

Brad Management didn’t make out as well. The firm paid $10.3 million for the condos in mid-2018, according to Marcus & Millichap and property docu ments filed with Cook County. But it sold the property for just 2% more—$10.5 million.

Jerry Wise, owner and chair man of Brad Management, did not return calls. But Marcus & Millichap Senior Managing Di rector Kyle Stengle said the num bers don’t tell the full story be cause Wise’s firm also acquired a cell tower on the building that it sold off profitably in a separate transaction.

“The gain looks worse than it actually was,” Stengle said. “The full story is not $10.3 million to $10.5 million.”

He said he couldn’t provide de tails about the cell tower transac tion because he didn’t advise Brad Management on that investment.

Altitude Capital plans to fix up the building with a gym, club room, lobby restoration and other improvements, said Brian Dohman, managing partner of the firm. He declined to say how much the firm plans to spend on the project.

“We think it will be a great asset to own for a long time,” he said.

BREAKING FREE

The building’s history also in cludes a brief plan in 2019 to con vert the building into a boutique hotel. But Brad Management dropped the idea about a month later, unable to secure the sup port of Ald. Brian Hopkins, 2nd, who represents part of Streeter ville.

Whatever its function, the building’s form will remain pro tected by its landmark status, approved by the city in 2012. Weese, who died in 1998, may be better known for other build ings, including the Seventeenth Church of Christ, Scientist, at 55 E. Wacker Drive, and the Chicago Metropolitan Correctional Cen ter at 71 W. Van Buren St. Outside Chicago, the architect’s most ac claimed work is the Washington Metro subway system, which fea tures stations with coffered vault ed concrete ceilings inspired by Roman architecture.

The Streeterville building offers a modern design while borrowing from the past, with a brick facade and the three-sided bay windows that were a defining feature of the early Chicago School skyscrapers more than a half-century earlier. The design represents the archi tect’s effort to break free of the boxy glass-and-steel International Style championed by Ludwig Mies Van der Rohe and his disciples, ac cording to a 2012 report prepared for the Commission on Chicago Landmarks.

“Weese fought for modern ar chitecture that would be more humane and responsive to his toric architectural tradition and to urban context,” the report says. “227 E. Walton Place exempli fies Weese’s interest as a modern architect in the primacy of hu man scale and texture over the machine-made, in contextual de sign over a ‘one-size-fits-all’ ap proach, and in the importance of the continuity of architectural his tory rather than a clean break from the past, all of which set him apart from the American architectural mainstream of the 1950s.”

The building is one of several in Chicago designed by Harry Weese but the only one with landmark status in the city

Tim Degnan, influential Daley aide, dies at 82

Longtime confidant of Richard m. Daley helped revive mcCormick Place’s expansion

BY STEVEN R. STRAHLER

Tim Degnan, a longtime confi dant of Richard M. Daley who was the mayor’s alter ego and political enforcer during the administration’s early days, died Nov. 20 at his Oak Brook home. He was 82 and had been in declining health with diabe tes and other ailments, according to his son, Tim Degnan Jr.

Degnan was among a cadre of aides who arrived at City Hall with Daley in 1989, including chief of staff Forrest Claypool, Chief Finan cial Officer Ed Bedore and policy chief Frank Kruesi. As director of in tergovernmental affairs, Degnan co ordinated mayoral initiatives among aldermen, administrative agencies and other public bodies.

“Although virtually unknown outside the city’s political establish ment, the 54-year-old Degnan is the man to see at City Hall—a New Age patronage chief and political fixer who is both Daley’s main link to his Bridgeport roots and the principal connection between the mayoral inner circle and the often-torpid bureaucracy,” Crain’s said in a 1995 profile. “In a business that over hypes the concept, he is the ultimate loyalist, a contemporary of the may or who has shelved his own ego and devoted most of his career to the

Daley cause. Their wavelengths are perfectly attuned, their level of mu tual trust absolute.”

After legislation died in Spring field that would have authorized expansion of McCormick Place in the early ’90s, Degnan wheeled and dealed, putting together a coalition of legislators that included two Chi cago Republicans receptive to what City Hall could do for them.

“They pieced it together,” recalls Claypool. “That was a key moment, one of many.”

The Daley-Degnan relationship was second-generational: They grew up a mile apart in the Bridgeport neighborhood when Richard J. Da ley was mayor and Degnan’s father, Francis “Bud” Degnan, also worked for the city, rising to become com missioner of Streets & Sanitation.

CITY JOBS

Timothy Francis Degnan became an 11th Ward precinct captain, studied civil engineering at the Illi nois Institute of Technology and, in the classic Chicago fashion, got rec ommended for a job with the city, in the fledgling IT department. Even tually, he moved to a house on the patriarch Daley’s block. He was on track to succeed his father at Streets & San, named acting commissioner by newly elected Mayor Jane Byrne

in 1979, but was shipped back to data processing after reports that a bank he worked for lent him money to cover gambling debts.

But the tide would soon turn.

Degnan helped engineer Daley’s election as state’s attorney in 1980 and then filled his vacated state Sen ate seat. When Daley was elected mayor at the end of the decade, De gnan followed him to City Hall.

“For the first five years of the Daley administration, he got stuff through the City Council that laid the foundation for the next 20 years,” says John Doerrer, who joined the administration and later held the same title as Degnan, director of in tergovernmental affairs.

William Daley, the mayor’s broth er, told Crain’s in 1995: “Every chief executive, whether in business or politics, needs someone like Tim who anticipates the needs of the (CEO). Tim plays that role with Rich. They know each other so well. He’s loyal, but not to a fault.”

The gambling-debt coverage rein forced Degnan’s wariness with the media. Mike Royko had done a col umn on it, and Chicago Sun-Times political columnist Steve Neal wrote in 1992 that “Degnan is so tight lipped that he gets lockjaw when asked about the weather.”

After weeks of trying in connec

tion with the profile, Crain’s loos ened Degnan’s lockjaw—a bit. “I try to be a good listener to people. Even though I’m from Bridgeport, I’m flexible,” he said of his negotiating style, which often meant staying si lent during long meetings, asking a salient question and then ratifying a predictable consensus. “I like get ting things done,” he said. “I like see ing the mayor accomplish things.”

Degnan also invested in a subur ban construction supply business, which he insisted steered clear of city contracts. “Small business is a lot like politics: Have the product delivered on time and keep the cost down,” he said. The gambling issue “was a mis take . . . and I learned from it.”

Not everything went Da ley’s or Degnan’s way, including

doomed plans

“It’s just tough to go down that road and spend so much energy and see it come apart,” Degnan said for the profile. A Chicago casino was another failure. “There’s no question I think we could have done a better job with the casino complex. I sec ond-guess myself once in a while on that opportunity,” he said.

After leaving City Hall in the mid1990s, Degnan partnered with thenstate Sen. Jeremiah Joyce as a polit ical consultant, on campaigns that included Rod Blagojevich’s race for Congress in 1996. Degnan also worked for Elmhurst-based con struction supplier Glenrock until about 10 years ago, his son said. “He was still hands-on with it.”

for a third Chicago airport at Lake Calumet.

Tim Degnan

‘Love, Charlie’ director talks Trotter legacy

BY ALLY MAROTTI

In 1990s Chicago, Chef Charlie Trotter was a giant.

Almost as soon as he opened his eponymous restaurant in Lincoln Park in 1987, his name shot up among the city’s greats. There was Oprah Winfrey, there was Michael Jordan, and there was Charlie Trotter.

“Before Charlie Trotter, Chicago was known for its architecture. After Char lie Trotter, it was known for its food. He put Chicago on the map for food,” said Rebecca Halpern, writer and director of “Love, Charlie: The Rise and Fall of Chef Charlie Trotter,” a new documentary about the world-renowned chef.

But Trotter’s story was a complicated one. His restaurant closed after 25 years, and Trotter died a year later at age 54 after suf fering a stroke. In many ways, Trotter was con sumed by his work.

In the 97-minute film, Halpern weaves together Trotter’s tale through interviews with his family, friends and colleagues—including Alinea’s Grant Achatz, Rick Bayless, former Chicago Mayor Rahm Emanuel, and celebrity chefs Emeril Lagasse and Wolfgang Puck. There is some footage of Trotter with the late Anthony Bourdain, too.

What Halpern found to be the most re velatory, though, were the hundreds of postcards and letters Trotter wrote to his family and friends, back before he opened his restaurant, before he was the famous Charlie Trotter. Back then, he was just Chuck.

Halpern sat down with Crain’s to dis cuss the making of the film, what it taught her about Trotter and Chicago’s restau rant scene, and why she was so fascinated with who Trotter was before the restau rant.

“Love, Charlie” is in select theaters and available for streaming on Amazon and Apple TV. The interview has been edited for length and clarity.

CRAIN’S: Why did you decide to make this documentary? What drew you to Charlie Trotter?

HALPERN: I was hired to direct the film. Renee Frigo, founder of Lucini Italia olive oil—which Charlie Trotter discovered and championed—she felt after he died that someone needed to pay homage to him for all the things that he did in the culinary world. (Frigo produced the film.)

Were you familiar with Trotter’s work before starting the project?

My mother was a food writer in Chicago in the ‘80s and ‘90s. I grew up in the same hometown and went to the same high school as Charlie. I just felt like Charlie Trotter was in my blood.

The fact that I never met him and never ate at the restaurant and really only knew what the media was telling me about him worked in our favor. I wanted to unpack who he really was. It was through these letters and postcards that he wrote to Lisa (Ehrlich), his first wife, and his friends and family that I was able to get a glimpse of Chuck.

As a viewer, that part seems integral to the film. How vital was it?

For me, the Chuck piece of the film is al most the most important part of the whole movie, because that’s who he really was. That was his authentic self. When we go to work every day and we go into meetings, we have to put on a persona, we have to play a role. But for chef Charlie Trotter to have played that role for 25 years and then

to lose the stage on which he played that role must have been so devastating for him. He died a year later.

What struck you the most about Trotter’s story?

How human the themes are. This isn’t just a chef movie; it’s not a movie about food. It’s about what happens when your identity be comes consumed by your work. For anyone

who’s passionate about what they do, who’s motivated, who’s ambitious and driven, it’s a story that’s going to resonate. On the one hand, it’s inspiring. “How can you be more excellent in your own life?” is the question that Charlie Trotter’s story asked of us, the audience. But it’s a sad story also, because his relentless pursuit of that excellence is the thing that cost him his stable family life, relationships with his loved ones and friends, his reputation in some cases. Ulti mately, it cost him his life.

What was it like making this film?

We started production on day one of the COVID lockdown. All of a sudden, we had all the time in the world to make a movie, (but) we were super limited by what we could do. I found myself sometimes work ing 20 hours a day just because I could. Some people joked I spent more time with Charlie Trotter than I did my husband during the pandemic. But it was a labor of love, just like Charlie’s work was.

The film is filled with images of postcards and letters Trotter sent to his friends and family. How did you decide to present those?

One of the things I wanted to do in the movie was really humanize him. I wanted it to have this kind of homemade quality, like this was stuff that Chuck pulled out from under his bed to share with all of you. One of the things that Charlie Trotter felt about himself and that he was sort of criti cized for was being an enigma, so how can I make him less of that? How can I make him a relatable person? By stripping away the artifice of the formality of the restau rants, of the technical genius, of his cook ing and his innovation. By really showing the torn, frayed edges of his postcards. How did you get such good access?

When I came on board, Charlie Trotter’s family and Lisa, neither of them had really signed on. It wasn’t until I started talking about what I wanted to do with the movie: an intimate human portrait of a man who became consumed by his work persona. That’s the story that appealed most to Lisa, who had all of the postcards and knew that that story could not be told without those. But for those postcards, there would be no Chuck in our film.

The stuff about Chuck was infinitely more interesting than the stuff about chef Charlie Trotter. All the glossy magazine covers, the accolades. I found that to be really sort of boring compared to his own true character of Chuck.

The word “burnout” is never used in the documentary, but that’s what came to mind when interviewees were discussing Trotter’s later years in the restaurant. At what point did you make the connection between his drive and his eventual downfall?

That became pretty evident fairly ear ly on in my research. Whether you think it was burnout or someone else thought it was passion or someone else thought it was suicide, at the end of the day, the guy became consumed by his work. Had he not died a year after the restaurant closed, then we’d be having a different discussion about Charlie Trotter. He was so prescient in his postcard writing; it was almost as if he knew how his life story was going to play out before he lived it.

rebecca Halpern’s new documentary shows the late chef as he was before opening his world-renowned restaurant, when his family and friends called him Chuck I

PAUL ELLEDGE PHOTOGRAPHY

rebecca Halpern

A union poses a question to pols—and a chill runs down the biz community’s spine

Right now, it’s only an entry on a questionnaire for candidates seeking elected office in Chica go: Question No. 30 out of 36, to be exact. But in light of the signifi cant tailwinds lately energizing the la bor movement in Illinois, it’s a question worth tracking, because it could have dire consequences for industries still clawing their way back after a disastrous pandemic:

“Research has found that increas ing Chicago’s minimum wage would not only help many low-wage workers but would also help the city’s economy. Would you support a $25-an-hour mini mum wage to bring more money into the working-class economy and grow the tax base?”

That’s the question posed within a form being circulated to candidates seeking the endorsement of the regional council of SEIU, one of the biggest unions in the state. As Crain’s political columnist Greg Hinz reports, SEIU claims a fair bit of the credit for passing a $15 minimum wage a decade ago. Chicago’s minimum wage is now $15.40 an hour and, by current law, that ground floor will rise automatical ly with inflation. It’s not expected to get close to $25 for years.

But now a $25 target is at least in the conversation if not on the drawing

board—and it comes at a perilous time for restaurants and other businesses in the hospitality and services sector still struggling with the aftereffects of COVID, while also absorbing the spiraling cost of raw materials and factoring in rent hikes

driven by rising property taxes.

Similarly, talk of a $25 minimum wage also comes as Chicago and, more wide ly, the state of Illinois continue to com pete—and, more often than Illinoisans would like, to lose—in the nationwide

YOUR VIEW

competition to lure investment and jobs to the Land of Lincoln. With the recent passage of the Workers’ Rights Amend ment and a governor who’s signaled strongly that there’s little the unions want that he’s not prepared to deliver, Illinois already has a reputation as a place where labor wields too much control. And that gives major employers one more reason to bypass Illinois as they consider where they want to put down roots.

As noted above, the $25-an-hour talk is just that at the moment—talk. In this case, however, talk isn’t cheap. In fact, it could be very costly indeed.

FTX collapse highlights need for inclusion

Cryptocurrency has been all the rage in recent years, with Sam Bankman-Fried, the former CEO of FTX, a crypto exchange, at the cen ter of it all. He charmed Washington by lavishing millions of dollars in cam paign contributions on lawmakers and crypto-friendly candidates. And Bank man-Fried’s bold philanthropic com mitments even attracted the attention of local leaders.

In fact, last May, Chicago Mayor Lori Lightfoot announced a pilot program with FTX to support low-income Chi cagoans and provide them with FTX products, which were risky and un proven. Lightfoot praised FTX for its supposed financial inclusion benefits and ability to serve communities ex cluded from traditional banking. Light foot’s message mirrored, in many ways, Bankman-Fried’s own claims, including those he made before Congress when he stated that FTX and cryptocurrency would promote economic security and financial inclusion.

Unfortunately, it was all too good to be true.

Last week, Bankman-Fried resigned as CEO, as FTX filed for bankruptcy, hold

ing less than $1 billion in assets against $9 billion in liabilities. U.S. regulators are also investigating whether the crypto ex change mishandled customer funds. As the crypto market plummets, people who have put their money into cryptocurren cies are seeing their wealth vanish. A bil lionaire no longer, Bankman-Fried’s for tune has been wiped out. On top of this, Chicagoans who were supposed to benefit from the pilot program are now left in the lurch.

Time will tell how much money has vaporized due to the collapse of FTX— whose U.S. division was headquartered in Chicago until it moved to Miami earli er this year—and people may pass judg ment on those who fell victim to the grift. However, it is worth considering that crypto’s appeal may be a symptom of something much larger: Americans’ de sire for greater economic control and security.

While cryptocurrencies have been volatile and plagued by scams, fraud, and hacks, retail investors might have

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.

gravitated to them because of their promise of wealth at a time when there is tremendous wealth inequality world wide. Those excluded from financial in stitutions—an acute problem in Chica go—face an especially dire situation in that they are both denied opportunities to build wealth and access basic banking services.

After decades of deregulation, big banks have grown bigger by acquiring community banks and shrinking their footprints in low-income communities to serve wealthier neighborhoods. Case in point: there were over 14,000 banks in 1985 and fewer than 5,000 today.

This shift in banking left vast swaths of America as banking deserts. The need for financial services remains, howev er. Today, unbanked or underbanked Americans lack access to free or lowfee checking or savings accounts, free check cashing, online bill payments, and wealth-creating loans.

Consequently, the void was filled by predatory alternative financial services

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.

Ameya Pawar, left, is a senior fellow with the EconomicSecurity Project and senior adviser to the Academy Group. He served two terms on the Chicago City Council and co-chaired the Chicago Resilient Families Task Force, which recommended a guaranteed income pilot.

Tonantzin Carmona is a David M. Ruben stein Fellow at Brookings Metro.

TALK OF A $25 MINIMUM WAGE ALSO COMES AS CHICAGO AND, MORE WIDELY, THE STATE OF ILLINOIS CONTINUE TO COMPETE—AND, MORE OFTEN THAN ILLINOISANS WOULD LIKE, TO LOSE—IN THE NATIONWIDE COMPETITION TO LURE INVESTMENT AND JOBS TO THE LAND OF LINCOLN.

such as currency exchanges, check cash ers, payday lenders, and auto title lend ers. These financial service providers extract over $100 billion annually from underbanked and unbanked people, which means they often spend more on fees and usury interest annually than on food.

To combat financial exclusion, many policymakers have turned to organiza tions and foundations that push finan cial literacy and a bevy of other policies that do everything but make banking ubiquitous. At best, these organizations tinker on the margins, and their failure to embrace real solutions paved the way for cryptocurrency. Policymakers, for

example, may have been attracted to crypto because it offered simple solutions to com plex problems, re quiring little more than their endorse ment.

As it turns out, cryptocurrencies were a distraction from discussing policy proposals that could address root causes to critical problems. The crypto debacle should prompt us to refocus.

For the last few years, consumer ad vocates have pushed a medley of public

policies and pro grams to ensure ev ery American has access to the bank ing system. The federal gov ernment could pro vide direct check ing accounts and simple transaction services to all communities through the post office. The Federal Reserve could also authorize “Fed Accounts,” which are accounts that are given directly from the central bank to individuals, businesses, and institutions. Financial institutions could also be required to provide free or

low-cost bank accounts and services to their customers. Or, states and cities can launch banks as public options, as North Dakota did over a century ago.

Not everyone will agree with these proposals. However, they serve to rekin dle discussions to explore potential solu tions not revolving around simple fixes or otherwise unproven or risky products.

As Chicagoans prepare for the munic ipal elections in 2023, they should pay attention to candidates’ economic prior ities. What are the candidates’ plans for enhancing financial inclusion? Chicago ans deserve and benefit from proposals that take on challenging problems headon.

Assistant

Will new Skokie rule foil this big condos-toapartments deal?

BY ALBY GALLUN

A group of residents in a Skokie condominium building have scored a victory in their push to block a plan to convert the property to apartments. But it still might not be enough.

Responding to concerns from the building’s residents about the fair ness of the deal, the Skokie Village Board voted unanimously Nov. 21 to approve a proposal to make socalled condo deconversions harder to pull off. Under current state law, a single investor can take over an entire condo building only if own ers of 75% of the property agree to a bulk sale of the property. The Skokie measure passed last week would in crease the threshold to 85%.

The move would complicate a plan by Chicago-based Trilogy Real Estate Group to acquire all 277 con dos in one of three towers in the Optima Old Orchard condo com plex on the west side of the Edens Expressway. Trilogy, which already owns more than 60% of the units in the tower, wants to buy the rest, but a small, vocal group of residents is fighting the deal.

Calling Trilogy’s proposed buy out a “hostile takeover,” Rabbi Ralph Ruebner, an Optima resident, has argued that the deal would result in many elderly and vulnerable residents losing their homes in the building, known as Maple Tower.

It’s a debate that has roiled many local condo properties over the past several years as large investors have pursued condo deconversions in the city and suburbs. Because apart ment rents and values have risen so much and condo values haven’t, investors like Trilogy can profit from the pricing discrepancy by decon verting.

Yet the deals are difficult be cause not every condo owner wants to sell. Some hold out for higher prices, while others refuse to sell at any price, often out of an emotional attachment to their condo or fears they won’t be able to find a comparable new place to

live at a reasonable price.

Illinois condo law gives them some protection by requiring that a supermajority of owners—75%— vote to approve a bulk sale. The only other municipality in the state with a higher threshold is Chicago, which approved an 85% voting require ment in 2019.

IMPEDIMENT

The Skokie measure, which would apply to all condo buildings in the village with 10 or more units, would impede Trilogy’s plan, but might not stop it. Since Chicago approved its 85% rule three years ago, inves tors have acquired and deconvert ed multiple buildings in the city. In 2021, for instance, owners of nearly 90% of a 51-story condo tower in River North voted to approve a bulk sale, though the buyer is struggling to line up financing for the $190 mil lion deal, the biggest deconversion ever in Chicago.

“Obviously, 85 is higher than 75, but it can still happen,” said Asher Bronfeld, president of the Maple Tower condo board.

The village still has to finalize the new ordinance, which would prob ably go into effect by the end of the year, Skokie Mayor George Van Du sen said at the board meeting.

It’s unclear what Trilogy will do next. Jesse Karasik, the firm’s chief investment officer, declined to comment Nov. 22. In an interview earlier this month, Karasik said he was confident Maple Tower condo owners would approve a proposed sale to Trilogy whether the village’s voting requirement was 75% or 85%.

Bronfeld said he’s neutral on Tril ogy’s proposal. But many people in the building have strong opinions about it, including residents who see the deal as an opportunity to sell their condos for a price they could never achieve in a traditional sale.

“Some people want to sell and some people don’t, and it gets con tentious between owners,” Bronfeld said. “Not everyone’s going to be happy.”

Trilogy real estate Group wants to take over a 277-unit condominium tower next to the edens expressway. The Skokie village board’s action has made that harder.

The optima old orchard condo complex at 9725 Woods Drive in Skokie.

COSTAR GROUP

MICHIGAN AVENUE

CUES FROM ABROAD: International cities returned vigor to their retail districts. PAGE 16

FEAR FACTOR: Crime has to come down to bring people back to the area. PAGE 18

NEW ECONOMICS: Market shifts are putting Mag Mile landlords in a bind. PAGE 19

BY JUDITH CROWN

Avisit to Water Tower Place these days can be a shock for Michigan Avenue shoppers. With the beloved Foodlife food hall closed during the pandemic, lunch is limited to lonely hamburger and pizza stations on the lower level. On a late summer Friday afternoon, few visitors are seen taking in the Chicago Sports Museum or dining at the adjacent Harry Caray’s restaurant on the seventh oor. e departure of department store anchor Macy’s leaves a gaping hole inside the landmark shopping mall.

Water Tower Place is the most glaring casualty on the Magni cent Mile, which is recovering from the pandemic and the

2020 looting wave that devastated merchants. e shopping center is less than half occupied. e vacancy rate on the street is 30.1%, far worse than the low point of the 2008 recession, and is the result of an exodus of national retailers including Gap and Uniqlo. Most recently, Banana Republic, a longtime xture on the avenue, gave notice that it wouldn’t renew its lease.

But the malaise on Michigan was setting in well before COVID. Rents were ris-

ing, merchants were downsizing and the stores are similar to what shoppers can nd at Oakbrook, Old Orchard or many other U.S. malls.

People are likely asking, “Why am I spending money coming to Chicago to shop in a regional mall?” says Peter Hanig, president of Hanig’s Footwear and one of the few, if any, locally owned merchants on the avenue.

Much is at stake. Michigan Avenue is one of the city’s star attractions. It’s the

premier shopping district, with landmarks including the historic Water Tower, the terra-cotta Wrigley Building and the 100-story 875 North Michigan Avenue (formerly the John Hancock Center) with its observation deck. It’s also an economic driver that draws U.S. and international leisure travelers as well as business meetings and conventions. As of pre-pandemic 2019, the shopping nexus was the single biggest contributor of sales tax revenue in Cook County.

e neighborhood can no longer rely only on retail for its prosperity, stakeholders say.

A broader reimagining of the area is needed, with an expansion of dining and entertainment.

“This is not how we return to 2016, but how we reconceive it to be competitive in 2026,” says Nichole Benolken, who manag es the 360 Chicago Observation Deck at 875 North Michigan. “We don’t want to be considered a re tail-exclusive district any longer. We want to be a district that offers different opportunities.”

That will take time. Benolken is part of a working group devel oping a master plan. It is draw ing from an Urban Land Institute report published last year that offered ideas, including a bridge connecting the Mag Mile to Oak Street Beach, adding colorful mo bile seating and tables, as well as restaurants and food trucks.

“Michigan Avenue should be a fun place,” says Greg Kirsch, executive managing director in the Chicago office of Cushman & Wakefield. “A place where you can hear music and people watch.”

To be sure, pockets of prosperity still exist.

Canadian women’s apparel chain Aritzia is leasing the former Gap location on Ohio Street, buck ing the trend of retailers shunning multilevel stores. It’s hard to find an open table at the Starbucks Roastery on the corner of Erie Street. The 900 North Michigan Shops are 98% leased, showing that a vertical mall can survive and thrive. In September, the Interna tional Manufacturing Technology Show at McCormick Place brought more than 80,000 visitors to town and traffic to the Mag Mile area.

But more dramatic changes are needed, some say.

“We’ve seen the same old thing for an extremely long time,” says Peter Caruso, managing director at Jones Lang LaSalle. “We’re fi nally in a position to potentially see some real change, what retail looks like in the 21st century.”

LOOKING FOR EXPERIENCES AND EXCLUSIVITY

Warning signs were coming be fore the pandemic. Landlords are looking to lease multilevel stores configured 15 years ago. But mer chants are seeking shorter leases and smaller spaces as they merge online and brick-and-mortar strat egies—15,000 square feet rather than 40,000 square feet. There’s less need to showcase inventory, because the retailer can ship cus tomers the desired size and col or, says John Vance, principal at Stone Real Estate. “The retailer is saying, ‘I’ll lease the ground level, but I won’t lease the second, third and fourth floors.’” What happens to those upper levels? “The answer is not there yet,” he says.

Some retailers favor neighbor hood stores over downtown lo cations, “more stores where their customers live” says Kimberly Bares, CEO of the Magnificent Mile Association. And retailers know exactly where their custom

MICHIGAN AVENUE

ers live because they sell to them online.

A more elusive piece of the puz zle involves bringing experience and exclusivity—a reason to come to the Mag Mile because consum ers won’t find those anywhere else.

“There are fewer unique or ex citing destinations today along the Mag Mile to attract local visitors and tourists, and high rents make it difficult, if not impossible, to attract smaller, local tenants,” the Urban Land Institute report says.

There should be merchandise that shoppers can only buy on the Mag Mile, Caruso says. Maybe a store teams with an artist who pro duces a personalized jean jacket. An experiential dimension helps. In Tokyo, consumers design and decorate Kit Kat bars at the Kit Kat Chocolatory. Why not have a store where families could design their own Oreos or other treats, Caruso asks. The success of the Starbucks Roastery and the Apple store un derscores that consumers want more than a straight-up transac tion.

Given the popularity of arts and crafts shows, could the commu nity—through public and private support—find a way to showcase the apparel and home goods by lo cal artists, Hanig asks. These could find a home in pop-up stores or marketplaces, an experimentation to see what works, he adds.

Adding food and entertainment is a priority. “We will never over come the reputation of being a 10 (a.m.) to 5 p.m. shopping district only if we don’t also expand our view of what belongs on Mich igan Avenue,” Benolken says. Aside from the hotels, there aren’t many late-night dining options for Lookingglass Theatre goers or observatory visitors. “When 900 North Michigan closes, it’s quiet up here,” she adds.

Adding restaurants at street lev el is tricky because their volumes can’t justify prime spots that can rent for more than $300 a square foot. That’s why restaurants along the Mag Mile and in the vertical malls typically are found on the upper floors. Moreover, older, multistory buildings don’t have the equipment that is required to ventilate exhaust out the roof.

More accessible food is needed on the avenue, Vance says, add ing, “Not everyone has time or de sire to sit down at the Cheesecake Factory.” Food trucks or fast-casu al restaurants on the side streets could expand the options.

More venues are beginning to be part of the mix. The Museum of Ice Cream opened at Tribune Tower during the summer. And an immersive Harry Potter experi ence runs at Water Tower Place on floors of the former Macy’s space through May 2023.

SMELLING THE FLOWERS

The distinctive planters in the Michigan Avenue median that showcase spring tulips or fall

mums are lovely to look at. But ex perts question the amount of real estate they take and point out that there is no place to stop and smell those flowers.

Alicia Berg, a professional plan ner who served as chair of the Ur ban Land Institute research panel, says an “aha moment” in the re search came with the recognition that the streetscape wasn’t de signed to encourage extended vis its. “Michigan Avenue is a people superhighway,” she says. “It facil itates getting people up and down the street. But there are no places for pausing.”

The ULI report suggested add ing benches, tables and chairs in place of some planters, as well as at new and existing plazas. Those

plazas, like the spaces at Water Tower and Jane Byrne Park, could be used for art shows, plus im promptu or scheduled entertain ment.

Street art is another way to bring people to the avenue, help them slow down and start conversa tions. Hanig brought the memo rable Cows on Parade exhibit to Chicago in 1999 that featured 300 decorated fiberglass cows up and down the street. He brought back a smaller exhibit three years ago. “Art can stop people, teach them, bewilder them,” he says. “It chang es the way you’re relating to the environment.”

Design firm Lamar Johnson Collaborative is developing ren derings for the Mag Mile Associa

tion of what the street could look like with wider sidewalks and ground-level cafes and restau rants, Bares said. It also will show a bridge that would connect Mich igan Avenue to Oak Street Beach, a proposal in the ULI report. In recent years, focus shifted south ward to the Apple store and the Riverwalk, the report notes. The proposed bridge would anchor and return heft to the north end of the avenue and offer stunning views as well. Sponsoring an in ternational design competition for the bridge would generate re newed excitement and attention to the street, ULI says.

Another conundrum: Could the avenue be better connected to Navy Pier? The neighborhood’s

Kimberly bares, Ceo of the magnificent mile Association

Nichole benolken manages the 360 Chicago observation Deck at 875 North michigan.

Peter Hanig, president of Hanig’s Footwear

elevated sidewalk levels make for an upstairs-downstairs trek to the pier. But signage could be improved. “If you’re a tourist, some way nding could help you get around better,” Berg says.

e timing could be fortuitous, with the bridge becoming part of plans for the reconstruction of North DuSable Lake Shore Drive, which has been on the drawing boards for about a decade. City and state planners hope to land federal infrastructure funds for the $3 billion megaproject.

Representatives of the Mag Mile Association have met with the Chicago Department of Transportation to discuss the district’s infrastructure needs, Bares says, including potentially redesigning

Michigan Avenue to create wider sidewalks to allow for cafes, restaurants, sidewalk furniture, way nding signage and the bridge over DuSable Lake Shore Drive. “We’re working to ensure we are eligible for federal transportation dollars,” Bares says.

BRIDGING THE GAP

While recon guring the avenue will take years, modest improvements are underway. A pop-up shop in the Wrigley Building run by Argentina’s consulate features empanadas and handmade scarves. Another Wrigley Building pop-up sponsored by ve Nordic consulates o ers food and crafts.

e association was working to extend city funding of hospitality “ambassadors”—uniformed representatives on the street to greet visitors, provide directions and help people cross the street.

e Michigan Avenue district late last year was designated a special service area, which enabled the city to raise tax dollars from property owners to fund improvements. e nearly $750,000 annual funding over three years will be used for digital pedestrian counters, surveillance cameras for property owners and o -duty law enforcement o cers, Bares says.

e association also is seeking to raise money for improvements through the creation of a business improvement district, or BID, a vehicle that enables property owners to add a tax levy but provides exibility in the way building owners are assessed for the funds. A BID also has been suggested for LaSalle Street, which has su ered from the exodus of o ce workers and the relocation of anchor banks. Chicagoland Chamber of Commerce CEO Jack Lavin says BIDs are commonly used in New York City. He expects enabling legislation to be introduced to the Illinois General Assembly in the spring, and then the Chicago City Council will have to designate speci c districts. Funds could be used for streetscapes, marketing and branding, or other uses, Lavin says.

In the meantime, the avenue is ramping up for this year’s holiday shopping season. e annual Magni cent Mile Lights Festival kicked o this month with a nighttime parade featuring Disney characters Mickey Mouse and Minnie Mouse, reworks and the lighting of more than 200 trees on the avenue. No doubt visitors will be lining up at Starbucks for holiday lattes and binging on chocolate at It’Sugar.

e street has had its ups and downs in the past. It didn’t always feature high-end retailers like Ralph Lauren, Burberry and David Yurman. ere were fast-food outlets and a discount shoe store, Kirsch says. Walton Street used to be a backwater.

But the COVID-fueled downturn is forcing a market reset, an adaptation of space to today’s consumer.

“We have a long way to go,” Kirsch says. “But it’s part of an evolution.”

900 N. Michigan Ave.: 900 North Michigan Shops Includes Bloomingdale’s. Opened 1989. Mall is 98% leased.

830 N. Michigan Ave. Vacant (Uniqlo closed 2021, Topshop closed 2019, Borders closed 2011)

669 N. Michigan Ave.: Nike Opened 1992

646 N. Michigan Ave.: Starbucks Roastery Opened 2019, replacing Crate & Barrel, which closed 2018.

600 N. Michigan Ave.: Under Armour Opened 2015, replacing Eddie Bauer, which closed 2014.

520 N. Michigan Ave.: Shops at North Bridge Includes Nordstrom. Opened 2000. Mall is 79% leased.

835 N. Michigan Ave.: Water Tower Place Includes American Girl Place, which opened 2008 and relocated from 111 E. Chicago Ave. Replaced Lord & Taylor, which closed in 2007. Macy’s closed in 2021. Mall is 46% leased.

717 N. Michigan Ave.: It’Sugar Opened 2022, replaced Disney Store, which closed 2021.

633 N. Michigan Ave.: Burberry Flagship opened 2012. First opened 1981. Renovated 2001.

625 N. Michigan Ave.: Coach Will relocate to 444 N. Michigan Ave. next year. First opened 2001.

555 N. Michigan Ave.: Aritzia Opening 2023, replacing Gap, which closed 2021.

401 N. Michigan Ave.: Apple Store Opened 2017. Relocated from 679 N. Michigan Ave.

PHOTOS BY JOHN R. BOEHM

What Chicago could learn from Tokyo, Milan and Mexico City

Howard Schultz, the longtime driving force at Starbucks, under stands how to attract crowds: “If there’s a sense of en tertainment and excitement and electricity, you wanna be there.”

On the Mag Mile, Starbucks con tinues to deliver on this formula at the Roastery, where there are consistent lines down the block. It’s truly one of few bright spots that remain on the otherwise tired sea of sameness the Mag Mile has become.

It should be no surprise. Chica go has invested in its other down town gems over the last 15 years, developing the River Walk, Fulton Market, East Lake Shore, Wrig leyville and Millennium Park. It’s high time for some focus on rein venting the Michigan Avenue corridor. The key to success will be differentiation: offer ing unique and memorable experiences that matter to win back traffic.

But total reinvention will take time. The Urban Land Institute’s TAP report is on tar get, but the recommendations are several years away from implementation. There are programs that should start now to address safety, attract innovative concepts and offer well-marketed, integrated events to re-es tablish the Mag Mile as a must-visit destina tion for both visitors and locals.

Other international cities have succeeded in reinvigorating their traditional shopping districts post-pandemic to get the crowds back without major structural changes. Here are a few learnings from abroad:

Offer hot brands and food con cepts. Harajuku, the bustling fash ion district in Tokyo, attracts traf fic by offering the hottest brands and new experiences. Shein’s first ever permanent store location opens this month—a digitally led destination with plenty of options for customers to document their experiences on social media. (If you don’t know Shein, it’s one of the world’s largest fashion retail ers.) Also this month, a crowd-at tracting 3D video billboard will be operating for just 30 days. Luxury brands and unique food offerings round out an ever-changing and engaging place to visit time and time again. Chicago has two of the USA’s hottest new food con cepts: Dom’s Kitchen & Market and Foxtrot. It would be wonder ful to see both with real flagship locations on Michigan Avenue. Rooftop seating would be nice, too. Chicago is able to attract hot brands from other cities as well. Supreme just opened a store in Wicker Park on Nov. 10. This store should be on the Mag Mile along with other brands popular with Gen Z and younger crowds.

Provide inclusive yet exclusive events. No city does this better than Milan. Fash ion Week, Design Week and countless other events bring influencers and celebrities to Milan, and crowds flock to the city center to be a part of the excitement. Mag Mile events like a Tower to Tower short sprint relay team competition (Tribune to Water) would take advantage of Chicago’s strengths in archi tecture, food and sports to bring out a di

verse group of visitors who want to be a part of an exclusive event.

Embrace the weather. It’s tough to en tice shoppers to come out to shop when it is freezing or blazing hot. In Oslo, Norway, shopping in the dark winter months is tru ly magical. Store entrances are surrounded by lanterns, outdoor seating has heaters and faux fur wraps at each table. Intimate, heat ed pop-up tents with seating are available in open areas for small gatherings. These are all simple ideas we can implement now. There is underutilized open space by the Water

Retailers and mall operators in upscale shopping destina tions like the Polanco neighborhood of Mex ico City and San Pedro Garza Garcia outside of Monterrey provide extremely clean, con venient, well lit and affordable parking facil ities with highly visible security personnel in the lot, at all entrances and throughout the buildings. What is different is that in many locations the security personnel at entranc

Make it safe and easy to

Finding Michigan Avenue’s future in the best of past

Growing up, I remember the Magnificent Mile as an area of specialty shops and exclusive nation al department stores. I remember Bonwit Teller & Co. and I. Magnin as well as the luxury brands such as Marlowe cashmere and Paul Stu art. Shops whose glowing interiors spilled out onto the sidewalks. They bestowed a sense of delight to shop ping on Michigan Avenue. It was a further point of pride when our own hometown gem, Crate & Bar rel, opened a flagship at Michigan and Erie. The experience of strolling the Magnificent Mile and shopping felt as exclusive as the wares. I cher ished the beautiful sky blue cloth napkins from Crate & Barrel, and the coat from Bon wit’s that was a splurge purchase.

And then it started to change. I remem ber the alarm among Chicagoans when

the Disney and Victoria’s Secret stores opened. The Mag Mile seemed to have an identity cri sis. How do you have exclusive, luxury designers and brands such as Paul Stuart and Tiffa ny’s alongside H&M? Turns out that you don’t. One sector will suffer, stumble and fall, and very possibly they both will. The Disney Store, Victoria’s Se cret and H&M are all gone now, leaving holes in the street land scape. And so, too, are many of the luxury department stores and specialty shops.

Technology has altered the landscape further, eroding the vibrancy of areas like the Mag Mile. The convenience of our online orders being delivered within hours was helpful during the pandemic. But it has inconveniently created less social connection and fur

thered isolation.

What’s the future of retail and, specifi cally, Chicago shopping areas like Mich igan Avenue? If we can’t go back, and the current state sees landlords giving up their properties, what can we look forward to in a renewed Mag Mile? I propose that it would benefit from the mixed-use trend.

CONNECTION AND COMMUNITY

Before the days of instant order and de livery, I witnessed the connections that a physical store creates. Owning a nationally acclaimed boutique for 12 years in Wicker Park, I saw casual connections become friendships. A staff member would soothe nerves while also helping a young man find a shirt for a new date. Some dates ac tually came from customers bumping into each other in the store. Other encounters turned into professional connections. For our part, we loved becoming part of cus tomers’ families and traditions.

And that is where the opportunity exists: using the technology that has distanced us to create a new retail and lifestyle space that creates connection. Digging into data from apps such as Shopify and Salesforce, we can glean insights into what consum ers will value in the reimagined Mag Mile. QR codes in empty storefronts could sur vey passers-by for their choices of what they’d like to see. This would provide valuable information into what the com munity wants.

I can imagine shared open spaces like pocket parks where all generations can gather. Theater and musical performances in intimate settings. Youth orchestra play ing plein air (weather permitting). Pastry, flower and independent coffee shops that offer much more humanized options. Pot tery galleries where you can buy or learn to create pieces. More small independent restaurants and cafes sharing ethnic di versity and farm-to-table regional foods.

Tower and north of the Michigan Avenue bridge that crosses the Chicago River, as well as other spots along the avenue.

visit.

Mara Devitt, a 40year resident of the Chicago area, is a senior partner at McMillanDoolittle, where she consults with leading retailers and brands to help them grow.

Julia Knier, a busi ness development consultant, owned the now-closed lifestyle boutique Public I.

CROWD SOURCING

es behave more like a greeter. They are wel coming rather than intimidating and are dressed in business attire. This provides customers with a sense of well-being rath er than an expectation that something bad is about to happen. At City Market, an up scale grocery store, these greeters distrib uted plastic gloves to each patron during the pandemic—a unique way to personally interact with each guest. These are subtle differences that have big impact on how shoppers feel about a location.

The first time I remember visiting the

Mag Mile was to attend the inaugural “Taste of Chicago” held there in 1980. The event was suggested by restauranter Arnie Morton and moved forward by Mayor Jane Byrne. Two leaders, thinking differently and taking a risk. The stakeholders of the Mag Mile need to think differently and act now. We have our own hot brands, influ encers and celebrities and can certainly take advantage of the weather variations Chicago has to offer to build compelling, vibrant experiences that will draw visitors back to this fantastic street.

FUNDAMENTALS

Transformation entails more than changing retail M

uch ado has been made of today’s alarming ly empty Magnificent Mile, once Chicago’s retail and tourism crown jewel—and for good reason. With a 29% vacancy rate, jobs have vanished, Chica goans and tourists have less rea son to shop the street, and falling tax revenues are impacting the city’s already strained budget. Even locals like me and my fam ily, who have long lived, worked and played on or close to the av enue, have forsaken it with the exit of so many resources and its recent public safety issues.

Yet given its impressive assets— spectacular architecture, broad sidewalks and proximity to Lake Michigan and the Chi cago River, with its stunning new riverwalk— and the fact that it has long generated an out size share of the city’s jobs and tax dollars, it’s an asset that must be revitalized.

Fittingly, some of our city’s best minds have come up with outstanding ideas to re imagine and redevelop this stretch of North Michigan Avenue, which runs north of the Chicago River to Oak Street. The most com prehensive, imaginative and exciting road map comes from a panel convened by the Urban Land Institute. It includes shrewd, pragmatic, success-focused advice on every conceivable fix for the grande dame boule vard, from reimagining its streetscape to be even more magnificent and addressing pub lic safety issues to rebranding and market ing the area anew and establishing publicprivate partnerships.

But the most critical part of this equation, from my perspective, is wedged in the middle of this list and leaves some significant con cepts unstated. I’m talking about the idea that we must coordinate development strategies. ULI’s road map focuses on creating distinct retail zones for luxury boutiques, experiential retail, traditional department stores and the now-booming Chicago Riverwalk—a fitting strategy by every measure. Yet it stops short of noting this effort must also be diverse, equita ble and inclusive by design.

versity, equity and inclusion have a beneficial impact on all businesses. In fact, in analyzing over five years of data that included 1,000 compa nies, McKinsey found a strong con nection between diversity in com pany leadership and the likelihood of financial outperformance. Com panies in the top quartile for ethnic diversity are 36% more likely to out perform their less diverse peers.

In retail, DEI increases innova tion and profits and improves the customer experience, yet an analy sis of the most recent data from the Equal Employment Opportunity Commission found that the num ber of executives of color working in retail has hardly changed in the last decade and remains disturbing low.

As a Black business owner and city resi dent, I have always found the Mag Mile to offer a high-end experience with little social or economic diversity in the mix to attract all types and classes of people. Changing this equation will take unwavering intention and vigilant execution.

What must happen?

To me, diversity, at its most obvious, is a matter of who we see in a workplace or a restaurant or a store or an attraction. That means we need to improve Chicago’s transit shortcomings to make the Mag Mile easily accessible to all and increase minority and women business ownership.

That brings me to equity—or more simply put, the sheer opportunity to own a business or work on the Mag Mile. But can smaller businesses owned and staffed with diverse teams, from restaurants to attractions to bou tiques, afford Mag Mile rents? Likely not. ULI suggests the city should work with the Cook County assessor to define and establish tax abatement programs to make it possible to welcome the diverse tenants who have tra ditionally been priced out of North Michigan Avenue. That’s a good start, but these busi nesses will also need investors—from banks to private equity—and diverse talent to oper ate profitably.

And bring back the real hot dog stands. Let’s create an environment for small businesses, with tax incentives to revital ize the Mag Mile. This will yield greater private investment, promote tourism and

encourage a vibrant business climate. We can get social connection, communi ty and experiences that we all need and desire. And a renewed Michigan Avenue district can bring that.

As we knew even before the events of 2020, diversity, equity and inclusion are business imperatives—in all fields. In mine, com mercial real estate, the leaders of the large developers shaping America are 93% white and male. These companies are building the nation’s largest mixed-use, retail, office, in dustrial and multifamily projects—the kind of spaces heralded for the cutting-edge live, work and play environments we need to bring to the Mag Mile.

Yet we know from benchmark studies by McKinsey and other consultancies that di

Finally, inclusion is a matter of how we experience an environment. What do cus tomers, clients and employees experience as they frequent Mag Mile’s many offerings? McKinsey data showed that nationally more than 60% of Black consumers face racial dis crimination in retail venues.

Changing the current retail equation will take significant work on behalf of all par ties involved in transforming the Mag Mile. But we must not forget that diversity, equity and inclusion are mutually reinforcing para digms. We must focus on all three to achieve sustainable change.

Quintin Primo III is CEO of Capri Investment Group and a partner in Prime Capri Interests.

Harajuku District, Tokyo

michigan Ave. in 1978

ALAMY

The first fix must be to make the Mag Mile a safe place to visit

If we come, they will build it—filling in the Magnificent Mile’s papered-over store fronts, re-imagining its dark and hollow interiors, and meeting the demands of our experiential ly hungry psyches and seemingly bottomless wallets.

But too many of us are afraid to go there.

Fixing the “missing teeth” along Michigan Avenue north of the Chi cago River is ultimately a market problem that only a radically evolv ing consumer market can fix and eventually will. The core problem is fear itself.

The internet, COVID-19, and the violent aftermath of George Floyd’s murder took their toll with empty and boarded-up retail storefronts on the avenue and throughout Chi cago’s already eroded retail scene. The shock of televised looting rampages echoes still.

Perception is creating a shared reality on all Chicago streets, where reasonable fear of be ing violently terrorized in random spots has become a social pandemic keeping people in their homes. Shootings, armed carjackings, and purse muggings on and off North Mich igan Avenue get the publicity that the neigh borhoods don’t.

Every street is important, but Michigan Av enue is strategically more important to our

big-city quality of life, to jobs for ev ery neighborhood, and to Chicago continuing to play on the world’s stage as it has virtually its entire life.

“Without a more concerted ef fort to reduce actual crime and the perception of it, any revital ization strategies are not likely to have a significant impact,” stated last March’s 31-page Urban Land Institute Mag Mile report full of re vitalization strategies and tactics, including an off-the-boulevard ca sino (coming soon to the Medinah Temple) and a perception-shifting advertising barrage suggesting the avenue’s never been better (even though that’s not yet so).

Eventually, even the Chicago Bears replace head coaches and general managers who can’t figure out how to win. Perhaps, the same might develop with a studious police super intendent who can’t figure out how to make a narrow strip spanning two of the city’s 900 police beats free of fear, for us and our visitors.

Since F.W. Woolworth’s North Michigan Avenue dime store and cafeteria of Indi ana limestone—where a polished red gran ite, 30-story office and hotel building now stands—Chicago has almost continuously reinvented its welcoming face to the world on the avenue anchored by the Water Tower. Brands more venerable than Macy’s and the

Workers clean up a shattered window pane at the ralph Lauren store on michigan Avenue on Aug. 10, 2020.

Gap have come and gone, but the core asset of the Mag Mile is intact.

The place itself is the enduring star. It is for myriad compelling reasons that the Chicago Architecture Center and Apple’s most elegant store recently located to the incomparable urban environment of primal Chicago energy where river meets lake, where Jean Baptiste Pointe du Sable founded this city at its most auspicious spot and immediately began trad ing with the world’s indigenous and interna tional.

Fun options, world-class retail could transform the Mag Mile

A majority of Harris Poll respondents also say crime in downtown Chicago concerns them. Any efforts to bring people back to michigan Avenue will have to address that, writes the poll’s Ceo.

The answer is straightfor ward even if executing it is not: Chicago must reframe the Magnificent Mile as an expe riential destination—a place to play as well as shop—giving Chi cagoans and tourists alike new reason to visit it.

Downtown is already an asset in terms of how locals view the city, according to a recent Harris Poll survey of Cook County resi dents. About half—51%—had a positive view of the neighborhood (versus 30% with a negative out look). That easily outstripped the South (16% positive and 69% neg ative) and West (17%-63%) sides, only trailing the North Side (63%-14%). Im portantly, downtown scored higher than the city as a whole (41%-38%), meaning that it is

burnishing Chicago’s reputation.

The data illustrates a portrait of downtown’s boosters: They are young and live within the city itself. The generational split is striking: 79% of Chicago-ar ea residents ages 18-34 enjoy spending time downtown, while only 50% of those 55 and older feel the same.

Those who live in the city are also much more likely to enjoy spending time downtown: 71% of city-dwellers agreed, compared with only 55% of suburbanites.

This makes sense: People who choose to live in the city are pre disposed to like it; they are also likely to be young—taking full advantage of young, urban professional life before start ing families. A trick going forward will be to

maintain younger Chicagoans’ warm feel ings as they age out of city living and move to the suburbs themselves.

But simply keeping existing fans won’t solve the Mag Mile’s problems—and warn ing signs abound. While a plurality of area residents (46%) described downtown as “established,” nearly three times as many described it as on its way down rather than on its way up (35%-13%). Contrast that with views of the greater Chicago area, includ ing the suburbs, where “up” outperformed “down” 27%-20%. A majority (54%) also dis agreed with the assertion that downtown is attracting new residents and businesses;

Pivoting 360 degrees on the throbbing top of the two-tiered Michigan Avenue Bridge, one sees best the sightlines of Chicago’s ar chitecture montage, changing and integrat ing with every several degrees of rotation. Below, river tour boats load and launch full from ridiculously early spring to brutally late fall at the gateway to the Magnificent Mile. This place will thrive so long as Chicago does, and vice versa.

Chicago’s advantage of large, affordable floorplates was its historical retail advan

that, again, pales next to the greater metro area, which 61% said is attracting new resi dents and businesses.

The pandemic accelerated the rise of e-commerce, so stores and the city need to

William Johnson is CEO of The Harris Poll, a global public opinion polling, market research and strategy firm.

Paul O’Connor was the founding chief executive of World Business Chicago, urban strategist for SOM’s City Design Practice and is now an independent consultant.

tage—offering more square feet of custom er experience than its smaller counterparts in New York City and elsewhere. Perhaps the current large-scale empty spaces can be innovatively re-imagined, or they can be subdivided into technologically integrated shopping, dining and service immersions. The Avenue and its entities could take a step ahead by being the most thoroughly adapt able digital consumer space on the planet. Maybe someone should talk to Brexitpaperwork-weary Harrods in London about

creating an immersive offering of their store on North Michigan Avenue. Or Fortnum and Mason’s for a long-term relationshipbuilding, ultimate food and cooking experi ence. China has vast experiential bookstores; Japan and Korea have way cool fashions, as does Montreal. How about a floor of Brook lyn shops? What retail wows could Google do in the right space? Work the marketplace for cutting-edge solutions to innovate here, the nation’s traditional test-market city. Make it safe, and they will come.

attraction. We’re talking about a stretch that already includes acclaimed museums, the aters and destination dining experiences. Everything is in place for a revival; we just need to spotlight it.

The solution? Bring the Mag Mile into the 21st century. It may have gotten its name as a retail destination, but that was when in-per son shopping played a more central cultural and financial role in our lives. The future of retail is experiential, both in terms of rede signing the experience of in-store shopping and also making the user experience seam less between online and offline shopping.

It’s not just about individual stores, how ever. Drawing people back to Michigan Avenue itself will mean keeping the mix of attractions fresh. “Most retailers on North Michigan Avenue can be found in any siz able suburban mall, and merchandising is largely identical to what shoppers can find elsewhere, including online,” a report from the Urban Land Institute noted in the spring. That will mean a rotating list of lim ited-time exhibitions, displays and pop-up stores—think of “Prince: The Immersive Experience,” which you can catch through year’s end.

Landlords on the avenue are facing a quandary

lender doesn’t want the building back,” Vance says.

BY JUDITH CROWN

Michigan Avenue landlords are in a bind. They’re servicing debt on buildings acquired in the past five to 10 years when prices were more robust, if not inflated. Now they’re trying to lease space that was configured 15 years ago, renegotiate leases and manage requests for breaks on rent.

“At more than 30% vacancy on the street, it feels ugly,” says Greg Kirsch, ex ecutive managing director in the Chicago office of Cushman & Wakefield.

This year, Water Tower Place owner Brookfield Property Partners handed the property to its lender, MetLife Investment Management, an admission that the time and cost needed to reinvent the mall— which is less than half leased—wouldn’t be worth it.

Earlier, the Santa Monica, Calif., co-owner of the Shops at North Bridge took a $28.3 million loss on its invest ment as it transferred its 50% stake to partner Alaska Permanent Fund. The Nordstrom-anchored mall is in better shape, with 79% occupancy, but the third floor is mostly empty.

Higher valuations as a result of the 2021 reassessment of the district have result ed in a wave of grousing and appeals to the Cook County assessor and the Board of Review. “Taxes kill many of my deals,” says Peter Caruso, managing director at Jones Lang LaSalle. “They’re astronom ically high.” Taxes, maintenance and in surance can add $100 per square foot to base rents, he says.

A spokesman for Cook County Asses sor Fritz Kaegi says the office accounts for retail vacancies and strives for a uni form and fair process. “If it’s a down year and a landlord has less income from a proper ty, you need a reduction in the as sessed value,” the spokesman said. “Be cause it’s a triennial process, we don’t think (a property owner) should benefit from that reduction for three years run ning.”

A restructuring of avenue real estate could end up being more profitable for owners and investors, brokers say. Devel opers traditionally lured anchor tenants with subsidies and passed a dispropor tionate share of costs to smaller tenants. It will be difficult to fill the more than 300,000 square feet vacated by Macy’s at Water Tower Place, but cutting up the space could theoretically yield better fi nancial results for the owner.

give shoppers an affirmative reason to head back to stores. Most Chicagoans (50% of area residents, including 52% of city-dwell ers) see the Mag Mile as a commercial hub rather than a cultural destination or tourist

One other way to improve the Mag Mile? Stop me if you’ve heard this before, but deal with crime. More than three-quarters of respondents (77%) said that downtown is more dangerous than it was a year ago. Turning that around will make the rest of the revitalization possible.

Does it make sense for landlords to hold out for higher rents if there are no takers? Transactions sometimes come down to a deal between the tenant and a lender through the landlord, says John Vance, principal at Stone Real Estate. The result is likely more flexible terms that can provide upside to the landlord and lender if the store does well but also pro tect the retailer on the downside. “The

A long-term strategy could be for own ers to tear down their buildings to make way for apartment towers—or sell them to a high-rise developer. That way, the fortunes of the ground-floor merchants wouldn’t make or break the property owner, Kirsch says. “It will take two or three years for bigger projects to be an nounced, but when they come out, they’ll be massive,” he says. “Those will replace antiquated, single-tenant flagships.”

Building owners are trying to navigate the new economics of Chicago’s rental market

Water Tower Place

JOHN R. BOEHM

ALAMY

MICHIGAN AVENUE

Crime wave still haunts Chicago’s famed retail strip

BY JUDITH CROWN

Since a looting wave along Michigan Avenue during the spring and summer of 2020 caused damage and mayhem, crime remains a top concern for retailers, residents and other stakeholders.

“There is a perception that there is crime on the avenue,” says John Vance, principal at Stone Real Estate. “This is funda mental. Nothing happens of sig nificance until that perception is changed.”

The data doesn’t allay con cerns. Theft in the Chicago Police Department’s 18th District—a nearly 5-square-mile area bound ed by Lake Michigan, the Chicago River and Fullerton Avenue, and which includes the Magnificent Mile—increased 74% from Janu ary 2022 through early November compared with the same period in 2020, department data shows. Car thefts have more than dou bled in the district over the past two years. And while burglaries are down by more than half, rob

bery is up 22%. Overall safety on the avenue has improved, but the prob lems—carjackings, robberies

and muggings—are real, says Peter Hanig, president of Hanig’s Footwear at 875 N. Michigan Ave. Most incidents are off Michigan

and tend to be at night, he says, adding, “The crime is opportu nistic.”

In May, Illinois Gov. J.B. Pritzker

signed legislation aimed at crack ing down on high-profile smashand-grabs and other organized retail theft. The law, which goes into effect Jan. 1, creates stiffer penalties for the ringleaders of re tail theft operations.

Funds raised through the Mich igan Avenue area’s designation as a special service area will be used for surveillance cameras for prop erty owners and off-duty law en forcement officers, says Kimberly Bares, CEO of the Magnificent Mile Association.

Addressing public safety was the top recommendation of an Urban Land Institute report pub lished last year, which assessed how to revitalize Michigan Av enue. The report suggests that the Chicago Police Department increase its enforcement and vis ible presence on the street, with the inclusion of officers on foot or horseback, and to coordinate with Northwestern University to bolster its resources and enhance neighborhood safety.

Steve Hendershot contributed.

The perception of the magnificent mile as being unsafe is backed up by data showing increases over the past two years

A window is shattered at a clothing store along michigan Avenue after it was looted on Aug. 10, 2020.

THE FUTURE OF BIOTECH

The last year has been a busy one for patent law involving questions that could have major implications for the biotech eld. That includes whether work-from-home arrangements might impact where patent lawsuits can be brought and if a proposed law would answer the pleas of Federal Circuit Judges for clari cation on what it means to be patent eligible. Patent litigator Emer Simic, a partner at Neal, Gerber & Eisenberg, unpacks these recent developments and explores their implications with Crain’s Content Studio.

EMER SIMIC

Partner

Neal Gerber Eisenberg esimic@nge.com 312-269-5305

EMER SIMIC is a partner in Neal Gerber Eisenberg’s Intellectual Property practice group. A registered patent attorney, she has substantial experience representing patent challengers and owners in HatchWaxman and patent infringement matters before the U.S. District Court and the Patent Trial and Appeal Board. Simic focuses her practice on client counseling and patent litigation in the life sciences space, with a particular focus on pharmaceuticals. She has extensive experience managing complex pharmaceutical patent disputes before the U.S. District Court and on appeal to the U.S Court of Appeals for the Federal Circuit, including management of parallel inter partes review proceedings.

CRAIN’S: The pandemic greatly increased the number of employees working remotely and changed the way many companies think about how and where their employees work. What implications could this have for the legal jurisdictions where patent cases are being brought?

EMER SIMIC: A recent Federal Circuit case, In re Monolithic Power Systems Inc., has created concerns that certain work-fromhome arrangements could be enough to establish venue for patent infringement matters. As a result, companies may face lawsuits in nonpreferred jurisdictions based on the presence of remote workers.

e Federal Circuit answered the latter question in the negative in two cases (In re Cray and In re Celgene) where the plainti s attempted to establish venue based on the presence of an employee working from home in the relevant jurisdiction. But, in both cases, the Court explained that a factor that could favor nding venue is the storing of the employer’s materials/inventory at an employee’s home or the defendant requiring the physical presence of an employee in a particular jurisdiction.

In In re Monolithic Power Systems, the defendant provided its employees with equipment to be used in or distributed from their homes and also solicited employees to work in the district where it had been sued. Despite a vigorous dissent, the

based on the presence of remote workers and hedge their bets that any venue challenge will be postponed until a er trial in their preferred forum. Companies should therefore examine their employees’ remote work arrangements and consider whether they want to make modi cations to reduce the risk of being sued in a nonpreferred jurisdiction.

CRAIN’S: Why is the Amgen v. Sano case being closely watched by the biopharmaceutical industry? And what is the potential signi cance of the Supreme Court having agreed to review the case?

SIMIC: In Amgen v. Sano , the Federal Circuit invalidated patent claims to a genus of antibodies for failure to meet the enablement requirement of U.S.C. 112 of the Patent Act. is case raises crucial questions about the appropriate breadth of patent protection, particularly for discoveries in the biopharmaceutical industry.

In Amgen, the challenged patents claim a genus of antibodies that bind to one or more of 15 amino acids of a particular protein target (PCSK9). e claimed antibodies are de ned by their function — binding to particular residues on a protein — rather than being de ned by a particular structure. ese types of claims have been frequently pursued in the biotech arena by innovators seeking to capture the full scope of their breakthrough invention by patenting a broad functional or structural genus in addition to claiming speci c embodiments.

rehabilitate functional genus claims or at least clarify what is required for enablement of genus claims under U.S.C. 112.

CRAIN’S: U.S. Sen. Thom Tillis (R-N.C.) recently proposed the Patent Eligibility Restoration Act to help x and clarify the legal standard for patent eligibility which has been the subject of much criticism in recent years. What issues is this legislation hoping to address?

SIMIC: Tillis’ proposed legislation, which rewrites Section 101 of the Patent Act, springs from a decade of dispute in the courts about what is or is not eligible for patent protection. e crisis in this area of patent law can be traced in large part to the Supreme Court’s 2012 decision in Mayo v. Prometheus. Faced with a challenge to the patent eligibility of a medical diagnostic method in Mayo, the Supreme Court set forth a test for patent eligibility and declared certain exclusions from patent-eligible subject matter, including laws of nature, mental processes and naturally occurring phenomena. e Court also invalidated the medical diagnostic

test in question and cast doubt on the patent eligibility of such methods.

Post-Mayo, district and appellate courts struggled to apply the Supreme Court’s test in Mayo and frequently issued inconsistent decisions. Meanwhile, diagnostic tests were largely dead in the water. A study published by the Washington and Lee Law Review (April 2022) found that within four years of the Mayo ruling venture investment in diagnostic technologies was down by $9 Billion. Tillis’ proposed bill is intended to remedy the eligibility crisis and transforms Section 101 from a single sentence into a detailed recitation of what subject matter is included and excluded from patent protection.

On its surface, Tillis’ bill appears to provide some needed clari cation on patent eligibility. Whether it rehabilitates diagnostic patents as Tillis promises is not crystal clear. It’s also hard to predict if this bill will pass given signi cant opposition by the ACLU and other organizations. However, many are hopeful that this is the legislative solution that is sorely needed to x the Section 101 crisis and put U.S. innovation back on top.

e Supreme Court’s 2017 decision in TC Heartland established that patent cases can be brought where a defendant resides (i.e., in the defendant’s state of incorporation) or where the defendant has committed acts of infringement and where the defendant has a “regular and established place of business.” is Supreme Court decision has resulted in an increase in patent lings in Delaware, where many corporations are incorporated. e courts have also elded signi cant disputes over what it means to have a “place of business” in this context. For example, are Google’s servers or remote workers’ homes a place of business?

majority refused to resolve the venue dispute on the writ of mandamus and instead held that defendants could raise the question later on appeal.

It remains clear that the “place of business” requirement is not established by the mere presence of an employee working at their computer from home, but the Monolithic decision suggests that venue may be satis ed if an employee uses their home to store the defendant’s equipment and/or if the defendant solicits the employee to work in that speci c district. is development may encourage plainti s to le suit in a given jurisdiction

Sano argued, inter alia, that Amgen’s claims were not enabled because there are millions of antibody candidates within the scope of the claims but only a limited number of disclosed embodiments. e Federal Circuit agreed and explained that the claims were not enabled because the functional limitations of the claims were broad, the disclosed examples and guidance in the patent were narrow, and, that under these facts “substantial time and e ort” would be required to reach the full scope of claimed embodiments.”

Many in the biologics industry view the Federal Circuit’s decision as making it signi cantly harder to defend genus claims arising from a biopharma discovery such as a class of antibodies. e Supreme Court’s willingness to take up the Amgen case provides some hope that it will

NON-PREFERRED JURISDICTION.”

— EMER SIMIC, NEAL GERBER EISENBERG

Diving into the latest trends in life sciences patent litigation.

Giving Tuesday is a global day of generosity transforming communities and the world. With so much attention given to what divides us, generosity brings people together. Generosity can be as simple as helping a neighbor or advocating for a cause. It is also a great time to get involved with a local charitable organization.

Crain’s Content Studio is proud to showcase the nonprofit organizations serving communities in Chicago you see here. Please consider supporting them with your money, time or other resources on this Giving Tuesday and beyond.

65 worthwhile charity options to consider in this season of need

A Chicago-based center of service, advocacy and social change, run and led by people with disabilities.

accessliving.org

Providing state-of-the-art afterschool and summer program opportunities for Chicago teens to explore their passions and develop their talents.

afterschoolmatters.org

For 125 years we have inspired hope for children and their families. Support our legacy and double the impact of your gift!

($:$ up to $85,000)

allendale4kids.org

To protect, conserve, and restore the Great Lakes, ensuring healthy water in the lakes and our communities for all generations of people and wildlife.

greatlakes.org

Working to discover treatments and a cure for ALS, and to serve, advocate for, and empower people affected by ALS to live their lives to the fullest.

alsachicago.org

To build a healthy and happy community where pets and people thrive together. anticruelty.org

Advancing health, education and economic opportunity through comprehensive, collaborative and effective programs in English and Spanish.

associationhouse.org

ACT increases the collective impact of our 50+ member organizations to improve education and economic development outcomes for Chicago’s Austin area.

austincomingtogether.org

Distributing free quality books to increase book ownership and empower children to gain knowledge, explore new ideas and strengthen reading skills.

berniesbookbank.org

Providing healthy food, critical resources and services to hungry families on Chicago’s west side and near-west suburbs for over 40 years.

gobeyondhunger.org

Strengthening 92 schools that provide brighter futures for 25,000 children from Chicago and Northwest Indiana’s most underresourced neighborhoods.

bigshouldersfund.org

Cara Collective’s vision is to fuel a courageous national movement to eradicate relational and financial poverty. caracollective.org

Casa Central transforms lives and strengthens communities. Our full lifecycle of social services propels a diverse population toward self-suf ciency.

casacentral.org

Improving children’s lives by creating a community where play and learning connect. chicagochildrensmuseum.org

Empowering more people to shape our global future by fostering engagement and expanding access to diverse perspectives from across the globe.

globalaffairs.org

CYSO’s mission is to inspire and cultivate personal excellence through music. After 75 years, CYSO continues to shape generations of young musicians.

We exist to show God’s love to ex-offenders and their families by providing Biblical mentoring and vocational training to help them live godly lives.

cyso.org

cpoministries.org

At Child’s Voice, children with hearing loss learn to listen and talk. For more than 25 years we have worked to prepare each student for success.

childsvoice.org

DMSF’s mission is to give high school scholarship assistance and educational support to Chicago students from under-resourced communities. dmsf.org

The Executive Service Corps engages highly trained professionals to provide nonprofits with the consulting services they need to be successful.

execservicecorps.org

Our mission is to end hunger.

chicagosfoodbank.org

Corner st on e SE RV IC ES cornerstoneservices.org

Founded in 1969, Cornerstone Services helps people with disabilities, promoting choice, dignity and the opportunity to live and work in the community.

Cradles to Crayons provides children, ages 0 -12, living in homeless or low-income situations, with essential items needed to thrive, free of charge.

cradlestocrayons.org/chicago

Championing the fight to end HIV/AIDS through awareness, prevention and the pursuit of a cure, while supporting those who are living with the disease.

diffachicago.org

The DuSable is dedicated to the collection, documentation, preservation, and dissemination of the history and culture of people of African descent. dusablemuseum.org

Fatherhood Educational Institute’s mission is to promote positive father involvement and improve the lives of children in disadvantaged communities.

fatherhood-edu.org

We provide pathways to career success for high school students in Chicago through skills training, meaningful work experiences and relationships. genesysworks.org

Our mission is to aid people with substance use disorders in their recovery by providing comprehensive behavioral health solutions. haymarketcenter.org

We are a courageous human rights and social justice organization that positively impacts the lives of those who face barriers to a safe, stable, and secure future.

heartlandalliance.org

To help children thrive and families flourish through innovative, community-based programs. hephzibahhome.org

HODC’s mission is to develop, manage, and preserve housing that is affordable to low- and moderateincome households in Chicago’s northern suburbs.

hodc.org

To provide help, healing, and caring services infused with Jewish values to strengthen lives in our community. jcfs.org

La Casa Norte shelters and houses unaccompanied youth, youth-led families, and families experiencing or at risk of being homeless in Chicago. lacasanorte.org

JCC Chicago is a world-class organization that provides innovative programming for people of all ages to bring communities together. jccchicago.org

Ensuring that seniors and individuals with disabilities bene t from nutritious meal programs that improve quality of life and maximize independence.

mealsonwheelschicago.org

Legal Council uses the power of the law to secure dignity, opportunity, and well-being for people facing barriers due to illness or disability. legalcouncil.org

1 11/10/22 3:51 PM

A solution for kids and families in crisis, providing a safe home, healing, education, life skills, and opportunities to build resilience and success.

mercyhome.org

Transforming the lives of Chicago-area youth by providing equal access to high-quality music education. meritmusic.org

Sharing life with individuals with intellectual and developmental disabilities through a full continuum of care.

misericordia.com

Encouraging the planting and conservation of trees and other plants for a greener, healthier, and more beautiful world.

mortonarb.org

The NHF is working to advance education, awareness, advocacy, and research for the 40 million Americans living with migraine and headache disorders. headaches.org

The Nature Conservancy is dedicated to conserving the lands and waters on which all life depends. nature.org/illinois

NHS works to create opportunities for people to live in affordable homes, improve their lives, and strengthen their neighborhoods. nhschicago.org

New Moms strengthens families by partnering with young moms as they progress towards housing stability, economic mobility, and family well-being. newmoms.org

The Night Ministry provides human connection, housing support and health care to members of our community who are unhoused or experiencing poverty. thenightministry.org

Nourishing Hope, formerly known as Lakeview Pantry, provides food, mental health counseling and other social services for anyone in need. nourishinghopechi.org

Partnering with families, we support people with developmental disabilities to achieve the lives they want to live in their communities. orchardvillage.org

PAWS Chicago is the city’s largest comprehensive No Kill animal shelter that has led the reduction of homeless pets euthanized in the city by 91%. pawschicago.org

Perspectives Charter Schools’ innovative A Disciplined Life® education model prepares students for life in a changing world and equips them with the tools they need to succeed. pcsedu.org

We exist so families can get better together. ronaldhousechicago.org

RUSH is improving health in our community by providing highquality mental health services, building a strong health care workforce and more.

rush.edu

The Salvation Army’s mission is to meet human need without discrimination by providing shelter, meals, and other services to those who need it most. salarmyncil.org

Improve the quality of life for individuals with intellectual disabilities through educational, residential and vocational programs and support. shoreservices.org

We lead the fight for racial and economic justice by litigating, shaping policy, and training and connecting people in the advocacy community.

povertylaw.org

Skills for Chicagoland’s Future reduces barriers to employment and increases equity by connecting unemployed and underemployed Chicagoans to jobs.

skillsforchicagolandsfuture.com

Providing year-round sports training and athletic competition in a variety of Olympic-type sports for children and adults with intellectual disabilities. soill.org

We aim to elevate marginalized voices and provide opportunities to earn income with dignity. We have provided “a hand up, not a handout” for 30 years.

streetwise.org

Our mission is to improve the well-being of the communities we serve by providing accessible, high-quality healthcare. tap360health.org

Thresholds provides innovative behavioral and primary healthcare to people with mental health and substance use conditions. thresholds.org

We plant fruit trees to feed people, create jobs, and benefit the environment. The families and communities we serve become self-sufficient.

treesthatfeed.org

Tutoring Chicago delivers the power of education through one-to-one tutoring. tutoringchicago.org

Our goal is to ensure our neighbors have access to the resources needed to thrive. United, we’re building a stronger, more equitable Chicago region.

liveunitedchicago.org

We serve individuals, families, and communities who need it most, when they need it most, by ensuring they have a place to call home.

voaillinois.org

Support and accelerate business growth, targeting women and serving all diverse business owners, in order to strengthen their impact on the economy.

The mission of the YMCA of Metropolitan Chicago is to strengthen community by connecting all people to their purpose, potential, and each other.

wbdc.org

ymcachicago.org

How Osmond plans to revive Chicago’s tourism

she’ll have to succeed with a smaller staff and budget than her predecessors had.

Osmond has some wind at her back as the pandemic wanes. Lei sure travel has recently returned at a faster clip, with downtown hotel revenues exceeding 2019 averag es in two of the past four months, according to hospitality data and analytics firm STR. Conventions and trade shows are back—albe it with crowds that in many cases are smaller than they were before COVID—and Osmond enjoys broad support from local civic and cultural leaders who have known her for more than two decades.

But with inflation and a slowing economy weighing down travel budgets, achieving her ambitious goal of drawing close to 54 million visitors to the city next year—near ly 90% of 2019’s record-high fig ure and up from 30.7 million last year—will likely require a dramat ic improvement of Chicago’s real and perceived problems.

“We need, as Chicagoans, to get our mojo back and start talking about why we love this city,” Os mond says. “That’s my job. To start, locally, making Chicagoans proud.”

Osmond spent her first five months on the job rebuilding Choose Chicago’s workforce, add ing eight staffers for a full-time headcount of 56 people today, down from roughly 75 before the pandemic. Most notable is Dustin Arnheim, hired from Baltimore’s tourism agency as her second in command. He is charged with sta bilizing Chicago’s convention and meetings business, a sector that traditionally accounts for 1 out of every 5 hotel room nights down town.

Arnheim’s role was perhaps the most glaring vacancy for Choose as convention organizers consid ered other markets that were re allowing large gatherings earlier than Chicago. The National Con fectioners Association’s Sweets and Snacks Expo moved to Indi anapolis last year for that reason, and recently announced the show would begin alternating between Indianapolis and Las Vegas from 2024 through 2032.

SELLING POINTS

Osmond says Chicago’s stron gest selling points have always been the vitality of its hotels and restaurants and its arts and cul ture scene. That’s why she is fo cused on convincing event clients and tourists that crime is not out of control and that downtown remains vibrant. She is quick to point out, among other positives, that Chicago was recently named the “best big city in the U.S.” by Conde Nast Traveler for the sixth consecutive year.

Osmond’s background is far dif ferent from those of predecessors Don Welsh and David Whitaker, who were well versed in marketing tactics for major cities after run ning tourism agencies elsewhere, and mostly measured success by hotel occupancy and room rates.

Osmond, a former clarinet play

er with a degree in music from Queen’s University in Ontario, has spent the last 25 years overseeing a tourist attraction in the Chica go Architecture Center, known for architecture boat tours on the Chicago River. Her assessment of local tourism’s well-being is more closely tied to local cultural insti tutions like the one she ran.

Keeping McCormick Place and hotels as full as possible is crucial, “but it’s really important that the museums are healthy, it’s really important that performing arts are (healthy), that our neighborhoods are healthy, that our restaurants are healthy,” she says. Convention and trade show planners “are say ing, ‘We really want to sell Chica go (to attendees and exhibitors) holistically, not just McCormick Place. We want to sell you as a des tination.’ So that’s really what our focus has been.”

Osmond plans to lean on her re lationships across Chicago’s civic and corporate landscape to help spread the positive word on the city. The West Loop resident has ties to Mayor Lori Lightfoot, who appointed her in 2019 to the Com mission on Chicago Landmarks. Her business connections include BMO Financial Group Chairman David Jacobson, Underwriters Laboratories CEO Jenny Scanlon and Related Midwest President Curt Bailey.

tination at architecture-related events around the world. She says her knack for forging strong rela tionships with donors to the CAC translates well to working with groups that stage big meetings and conventions across the city.   Those skills came in handy after McDonald’s CEO Chris Kemp czinski called Chicago a city “in crisis” in his Sept. 14 comments to the Economic Club of Chica go. Osmond worked the phones as calls came in to Choose from event organizers worried their exhibitors might be scared off from attending. None pulled out of Chicago, according to a Choose spokesman.

“We have to be careful about washing our linen in public, be cause that tail comes back to hit us,” she says.

METHODS

Osmond is using some tradi tional methods to try to shape pub lic perceptions of Chicago, includ ing a “When You Go You Know” ad campaign that launched in June and will continue “for a few years,” she says. Choose is also spotlight ing Chicago’s best attributes on fast-growing video app TikTok, re cently hiring San Francisco-based travel-focused production com pany Matador Network to help it generate Chicago promotional content on the platform.

Yet Choose’s shrunken bud get—which relies heavily on pan demic-battered hotel tax reve nue—will require hard choices on how to dole out scarce resources. The agency had roughly $26 mil lion to work with this year, down

PLANS TO LEAN ON HER RELATIONSHIPS ACROSS CHICAGO’S CIVIC AND CORPORATE LANDSCAPE TO HELP SPREAD THE POSITIVE WORD ON THE CITY.

“She has an intimate knowledge of what we do here,” says John Curran, a former Choose Chicago executive who is now senior vice president and general manager of tour bus operator Big Bus Tours. He says Osmond’s connections make her better-suited than her predecessors to quickly rally sup port for her broad pro-Chicago push, and she has more marketing chops than most people realize.

“She was very good at creating a narrative of ‘wind in your hair, sun on your face’ “ as her architecture boat tours grew to a fleet of six ves sels today, Curran says.

A former Choose Chicago board member, Osmond served on the initial search committee to replace Whitaker after his contract expired last year. But after six months of fruitless hunting raised concerns across Chicago’s hospitality sector about the difficulty of the job and a potential lack of resources to do it—the committee turned to her. “I thought it was my obligation,” she says.

In a statement on Osmond, a Lightfoot spokeswoman says that a “fresh perspective was needed to rethink how to attract tourists and business travelers alike. Lynn is that new thinker who has an im pressive track record leading the Chicago Architecture Foundation and is a passionate advocate for Chicago.”

Osmond shrugs off her lack of experience running a tourism agency, noting that she spent years marketing Chicago as a des

from $31 million in 2019. Its 2023 budget has not been finalized, but a source familiar with the plan ning says it will likely be close to $28 million.

By comparison, the 2022 budget for New York City’s tourism arm was $63.1 million, according to its most recent annual report. The comparable budget for Orlando, Fla., one of Chicago’s chief rivals for conventions and trade shows, was $67.3 million, Visit Orlando records show.

Osmond grew the CAC’s bud get from $2.5 million to $25 mil lion, and she sees opportuni ties to pad Choose’s coffers with more sponsorship revenue tied to high-profile events like the James Beard Foundation Awards or ma jor sporting events. She pulled off big partnerships while leading the CAC, inking a deal with Allstate in 2011 to sponsor the inaugural Open House Chicago weekend festival.

Osmond faces several recruit ment tests in 2023, an off year for a couple of the biggest shows at McCormick Place. Her first chance to notch a big win is im minent as the city vies to host the 2024 Democratic National Con vention, with a decision expected early next year.

OSMOND

PEOPLE ON THE MOVE

BANKING

Byline Bank, Chicago

CONSTRUCTION

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

LAW FIRM

Nixon Peabody LLP, Chicago

Brad Lutz has joined

Architects as a managing principal and multifamily/ residential practice leader for the Florida-based architecture firm. In his new role, Lutz will also oversee the multi-disciplinary firm’s newly opened Chicago office, which joins current practice sites in Orlando, Fla.; Tampa, Fla.; and Nashville, Tenn. Prior to joining Baker Barrios, Lutz spent 15 years with Humphreys and Partners Architects, most recently serving as its regional director in Chicago.

With 30 years’ experience serving small businesses, Ushma Patel has been named a Senior Divisional Assistant for Byline Bank’s recently expanded Business Banking Group. Patel works closely with customers and the Business Banking team to provide exceptional service and solutions, and to ensure a smooth, accurate, and timely loan closing process. She prides herself on her customer service excellence, delivering the elevated experience that all business owners receive when they bank with Byline.

Steve Cieslak has joined Graycor as Chief Financial Officer (CFO) and serves on the company’s Executive Committee. He is responsible for information technology, corporate level finance and accounting functions. As a 19-year finance veteran, Steve will be partnering with Graycor’s operations and leadership teams to create long-term value for the company and our clients. Formerly he was CFO at Nordex Group, a wind turbine manufacturer with over $1 billion in annual revenue.

Nixon Peabody LLP is pleased to announce that Daniel S. Stringfield has joined the firm as partner in our Intellectual Property Group where he focuses on IP and technology issues. Dan is a veteran patent litigator with extensive trial and appellate experience. He works with clients across a range of industries as they enter new markets in IP-intensive areas, seek to protect market share and generate revenue through IP acquisition and enforcement, or to resolve IP claims brought against them.

BANKING

First Bank Chicago, Northbrook

First Bank Chicago announces the promotion of Adam Brook to Chief Operating Officer. He leads a diverse team of professionals that oversee daily business operations including IT, Facilities Management & Security, Loan & Deposit Operations, and Enterprise Risk Management. He works closely with senior leadership to ensure policies and procedures are in place to support the Bank’s infrastructure and growth plans while upholding a sound risk management framework.

Adam joined First Bank in 2011.

BANKING

First Bank Chicago, Northbrook

First Bank Chicago, one of the top five privately held banks in Chicagoland, announces the promotion of Kimberly Smith to VP, Loan Servicing.

Kim is responsible for overseeing the day-to-day functions of the Loan Operations Servicing team. She manages a diverse group of employees that are responsible for maintaining and servicing the Bank’s consumer, commercial loan and lease portfolios. Kim joined First Bank Chicago in 2015.

LAW

DLA Piper, Chicago

World Business Chicago, the city’s public-private economic development agency, named Jeffrey S. Torosian, Partner, DLA Piper, to its board of directors. World Business Chicago leads business acquisition, workforce and talent, community impact and inclusive economic development, support of the business community, and promotion of Chicago as a leading global city.

MEDICAL

Loyola Medicine, Maywood

Loyola Medicine has appointed Jeffrey Schwartz, MD, as chair of the Department of Thoracic and Cardiovascular Surgery at Loyola University Medical Center and Stritch School of Medicine. Dr. Schwartz first joined the medical staff at LUMC in 1998. He inherits a department with a strong legacy of excellence led previously by Mamdouh Bakhos, MD, who served as chair for more than 30 years. Dr. Schwartz has held various leadership positions at Loyola, including co-director of the Center of Aortic Diseases.

NAME CHANGES

Skyline Construction (formerly ACCEND) Chicago, IL (312) 815-5300 skylineconstruction.build.com

ACCEND Construction has

its name to Skyline Construction, as part of a companywide brand consolidation including Unimark and Skyline Capital Builders. ACCEND has operated as a sister company to Skyline Construction for years. This rebrand uni es all companies under one name, making it easier for clients to identify and partner with the company in Illinois, Washington and California.

All day-to-day operations, registered entity names and local teams remain the same. The Chicago of ce will continue to be led by the same local construction experts who are deeply knowledgeable in building commercial of ces, structures, healthcare, hospitality and life science projects.

TXI, Chicago

Strategy and product innovation firm TXI welcomes Gretchen Goodrich as Client Partner. Formerly at Kin+Carta, Gretchen brings 20+ years of experience helping Fortune 100, financial services, and healthcare clients find opportunities for innovation, drive measurable outcomes, and build cloud-based, modern applications and platforms. At TXI, Gretchen will spearhead client projects, build relationships with key client stakeholders, and nurture a healthy pipeline of work.

TECH AND TELECOM

SOFTWARE Comcast, Chicago

Nicholas J. Inman has been named Vice President of Finance for Comcast’s Greater Chicago Region, which serves more than 3 million customers in Illinois, Northern Indiana and Southwest Michigan. In his new role, Inman will oversee all the region’s financial activities, facilities and equipment inventories.

Kindle Communications Chicago, IL (312) 334-4400 kindlecommunications.com

Kindle Communications, a WBENCcerti ed women-owned experiential agency specializing in live and virtual events, corporate communications and digital solutions, is excited to announce the opening of their new of ce at 600 W. Fulton St. in Chicago’s West Loop.

As a Chicago-based company, Kindle is proud to recommit and continue to invest in the local community. The of cial grand opening took place on Monday, November 14.

Graycor, Oakbrook Terrace

Baker Barrios Architects, Chicago

Baker Barrios

Baxter’s future growth questioned after massive write-down on Hillrom deal

according to a press release.

Baxter shares tumbled 6% when Baxter revealed the charge in its third-quarter earnings release on Oct. 27. The stock has dropped 36% this year, as the diversified medical equipment and pharmaceutical supplier has lowered its fullyear earnings guidance in every quarter. Meanwhile, the S&P 500 Health Care Sector Index is down 3.8%.

On the third-quarter earnings call, Almeida tried to reassure investors about the acquired business, blaming the charge on supply chain constraints, rising interest rates and declining equity valuations.

“I want to underline our continuing confidence in the potential of the Hillrom acquisition,” he said. “Integration of our legacy organization is advancing swiftly and, as previously shared, we are achieving even greater value capture through cost synergies than initially anticipated.”

Almeida said the primary obstacle for Baxter and Hillrom’s growth is supply chain issues constricting their access to semiconductors and other electronic components for products. Baxter appears to be hit particularly hard by those pressures, according to one Wall Street report.

“It’s also become increasingly clear that these challenges are more unique to Baxter’s mix of

businesses than many other medtech peers,” JPMorgan analysts wrote on Oct. 14.

Along with the impairment charge, Baxter’s third quarter report revealed the company is freezing hiring, cutting discretionary spending and looking to sell off lagging parts of the business. But the damage may already be done, and the charge could raise questions among investors about Almeida’s acquisition acumen and his vision for Baxter’s growth path. In its quarterly filing, Baxter said it could take more impairment charges in the future if there are more adverse changes to macroeconomic conditions and Baxter’s earnings forecasts.

“If you have impairment charge after impairment charge on the assets that you’re acquiring, investors could question future acquisitions,” says Julie Utterback, a senior equity analyst at Morningstar. “Maybe there’s questions about management’s timing and decision-making around when to purchase assets like this.”

If Almeida can’t improve performance, Baxter’s shares could fall further, possibly catching the eye of an opportunistic acquirer. Baxter stock trades at 15.5 times earnings per share, below the 16.76 average for the S&P 500 Health Care Index.

“From a valuation perspective, the shares are very cheap,” Utterback says. “Right now, it’s a very good value so it would be

a good target from a valuation perspective.”

But any interested buyer would need deep pockets; Baxter’s market cap is $27.8 billion. The possibility of Almeida selling Baxter often arises because he sold his last company, Covidien, to Medtronic for about $50 billion in 2015. Baxter declined to comment for this story.

Baxter will face an uphill climb to improve its core business and the newly acquired Hillrom lines. Hillrom makes a smart hospital bed system, patient monitors, information technology products and other medical equipment. Almeida expected the acquisition to advance his plan to turn Baxter into a digital health care supplier as more hospitals and doctors rely on tech-forward equipment and devices.

In the overheated mergers and acquisitions climate of late 2020, Hillrom drove a hard bargain. After his initial offer of $9.6 billion was reportedly rebuffed, Almeida boosted his bid to $10.5 billion, a generous 26% premium to Hillrom’s stock price at the time media reports of the sale first surfaced.

DISAPPOINTING OUTLOOK

Baxter predicted the deal would be low double-digit accretive to its earnings per share in the first full year after closing. Instead, Baxter expects profits to decline this year, even after excluding the cost of the write-

Baxter’s

down.

“Obviously, this change in outlook has been disappointing and suggests that Baxter is not going to be able to achieve the targeted accretion from the Hillrom deal in 2022,” Utterback says.

The deal came at a bad time. Supply chain issues are making it harder to get parts—a problem expected to persist into 2023—and cash-strapped hospitals may soon start cutting back on expensive equipment purchases amid continuing inflation. Baxter Chief Financial Officer James Jay Saccaro said on the third-quarter earnings call that the company’s orders remain strong, but he voiced

concern that hospital spending may decline as hospitals reassess their budgets.

Hillrom’s lead product, a smart hospital bed, is likely to be on the list of items that can wait while hospitals balance their budgets as prices rise for many other crucial items, like medications, bandages and single-use medical devices.

“Things like beds and basic equipment . . . those are some things that hospitals can delay the purchase of in tough times,” Utterback says. “And we’re going into a potentially weaker environment. There is more uncertainty around the Hillrom story over the next year or so.”

been expanded in preparation for the demolition and reconstruction of Terminal 2 and is home to most of the city’s common-use gates.

“Bigger planes are a net bene t for O’Hare: It means lower emissions, less runway congestion and added safety,” says Joe Schwieterman, a DePaul University professor and transportation expert. “Parking RJs frees up resources to expand into new markets.”  United and American declined to discuss their route and capacity plans at O’Hare, but both carriers have been adding new destinations. American added nine cities, such as Costa Rica and Anchorage, Alaska. United recently said it will add ights from Chicago to Barcelona, Spain, and Shannon, Ireland. It previously added Milan.

“Hopefully more destinations will come into Chicago as a consequence and improve connectivity,” says Paul Karas, who previously led Gary/Chicago International Airport and oversaw the redevelopment of John F. Kennedy Airport in the early 1990s.

O’Hare o cials declined an interview request.

Use of regional jets is drop-

ping at large airports nationwide. But the decline is noteworthy at O’Hare, where small planes account for 310,272 scheduled ights this year, the most among the 10 busiest U.S. airports. At O’Hare, RJs represent 46.1% of all ights, compared with 43.4% at No. 2 Charlotte-Douglas International Airport, an American Airlines hub, according to Cirium data. In 2019, O’Hare and Charlotte were tied for the lead in RJ ights, at 54.3%.

ARMS RACE

United and American, O’Hare’s dominant carriers, have sharply trimmed their RJ ying at the airport. Regional jets now account for 47% of United’s ights, down from 58% in 2019, according to Cirium. RJs are 53% of American’s ights, compared with 59% pre-pandemic.

e shift marks the decline of an arms race that began two decades ago, when United and American ooded the airport with regional jets in an e ort to serve as many markets as possible as frequently as possible, clogging the skies over O’Hare so badly that it had the worst ontime performance of all U.S. airports. For four years, the Federal Aviation Administration capped the number of ights during the

busiest periods of the day.

O’Hare has added new runways and recon gured the air eld since then, and the economics of ying have changed, accelerated by the pandemic that hit air travel harder than any previous crisis.

e move away from small jets is key to United CEO Scott Kirby’s plan to improve pro tability and grab more market share. “We have not realized our full potential domestically because we have been dependent on single-class, 50-seaters,” the company said in presenting its “United Next” plan to investors more than a year ago.

United plans to retire 200 small, 50-seat regional jets by 2026, reducing their use from 33% of ights to 10%. e change at O’Hare will be even more dramatic, dropping from 42% of ights to 4%.  e United Next plan calls for its overall departures at O’Hare to return to pre-pandemic levels by 2026.

e pandemic’s aftere ects are speeding up the transition away from RJs, Andrew Nocella, United’s chief commercial o cer, told investors July 21. A surge in pilot retirements during the worst of COVID-19 has left carriers with more pilot vacancies than there are new pilots entering the industry. at’s forcing regional carri-

ers that y RJs for United and others to raise pilot pay, reducing the cost advantage of RJs over planes own by the major carriers.

Rising jet fuel costs, up threefold from 20 years ago, further erode RJ economics. United es-

timated in 2021 the fuel cost of a new Boeing 737 Max was 55% lower on a per-seat basis than a 50-seat jet.

“High fuel costs are the nail in the co n for RJs,” Schwieterman says.

A red stone jewel filled with 19th-century details

Built in the 1890s, the house on Fullerton Parkway in Lincoln Park has been in one family’s hands since 1965, ‘before people started tearing out everything that was old in a house’ I

Astandout among standouts, this red stone Victo rian is one bead in a string of jewels along the 600 block of Fullerton Parkway. Several other Victo rians made of stone or brick as well as the hand some Lincoln Park Presbyterian Church combine with venerable old trees to make the 500 and 600 blocks one of the most beautiful residential settings in the Chicago.

The elaborate stone facade is rusticated here, col umned there and topped by multiple steep roofs. It all suggests there’s a lot going on inside, which is true. The interior has stained glass windows, an intricately carved wood stair rail, pocket doors, glazed tile fireplace man tels and other artistic finishes all intact from the time the house was built in the mid-1890s.

That’s thanks in large part to the family that has owned the house since 1965 and spent much of the interven ing time restoring it. “This place was a dump back then,” said Nancy Heckman, whose parents, Marshall and Sarah Holingue, bought the property when it was a rooming house, chopped up and shabby. They paid about $18,000 for it, she says. That’s the equivalent of $190,000 today.

The Holingues didn’t move in; they lived around the corner on Geneva Terrace and continued operating it as a boarding house while fixing it up. Their daughter moved into one of the rooms when she came home from college and over the years expanded her footprint in the house as she married and had four children.

With their kids raised and only one left at home, Nancy and Bobby Heckman are putting the six- bedroom house on the market Dec. 1. Represented by Sheila Doyle of Baird & Warner, it’s priced at just under $2.9 million, a price that reflects the fact that the kitchen and baths need updating.

BY DENNIS RODKIN

VHT STUDIOS PHOTOS

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