Crain's Chicago Business - 11/29/21 by crainschicago

WALGREENS: Drugstore giant faces community backlash over store closures. PAGE 3

CONCERTS: Expert urges safety changes after Astroworld. PAGE 4

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Dodge muscle cars coming to Belvidere?

FORUM C U LT U R E

Stellantis is believed to be exploring Illinois factory for building electric versions of Charger, Challenger

ALYCE HENSON

BY JUDITH CROWN

Sydney Charles

BACKSTAGE

DRAMAS

Social issues fueled tensions in Chicago’s theater community during the pandemic shutdown. Here’s what audiences can expect in the comeback season | PAGE 13 FIND THE COMPLETE SERIES ONLINE

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The sprawling auto assembly plant in Belvidere is in line for a retooling to produce electric and hybrid Dodge Challenger and Charger muscle cars. The Belvidere plant, just east of Rockford and owned by Amsterdam-based Stellantis, has been producing the Jeep Cherokee. But output has been curtailed due to the shortage of microchips and the company this month announced the layoff of 400 workers. Stellantis was established early this year with the merger of Fiat Chrysler and France’s PSA Group and includes the Chrysler, Dodge, Jeep and

Ram brands. But the future for Belvidere looks bright. Stellantis is expected to relocate production of the Dodge sports cars from Brampton, Ontario, according to Sam Fiorani, vice president of global See STELLANTIS on Page 8

Breathing new life into downtown relics

Don’t want to work in a classic Loop office building like the Bryant Block anymore? How about living there? BY DENNIS RODKIN Eight stories tall and dripping with arches and pillars, the Delaware Building at Randolph and Dearborn streets played a role in the rebuilding of downtown Chicago after the Great Fire of 1871. Known as the Bryant Block when it opened in 1874, the building was among the first completed in “the Burnt District,”

a handsome example of Chicago rising out of the catastrophe. The same Italianate relic now could play a role in the coming post-COVID rebuilding, as the shrinking demand for office space and rising interest in downtown living crisscross, creating new life for old office buildings. Even the rundown See CONVERSIONS on Page 34

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2 NOVEMBER 29, 2021 • CRAIN’S CHICAGO BUSINESS

GREG HINZ ON POLITICS

I’m fed up—and turkey has nothing to do with it

he puts it on his website, an “America First Republican with a backbone.” What’s really notable beyond his chest-beating, though, is what Lombardi also says on his campaign website: “Joe Biden, high capacity magazines are needed to control tyrannical governments. Reread the Constitution, not rewrite it.” Yes, he put that on his website. At a time when some local school boards can’t even meet without fearing for their lives. Lombardi’s spokesman says the statement is “hyperbole” and that Lombardi isn’t seeking violence, merely adherence to the Constitution. But after Jan. 6, his call to make it easy for someone to grab their rapid-fire gun and storm any government they don’t like could not be more clear. Lombardi should be ashamed of himself. So should Illinois GOP Chairman Don Tracy, who through a spokesman declined to comment, thereby ducking the question of what kind of party he would lead. Finally on my list is Mayor Lori Lightfoot, whose management of efforts to control violent crime in this town are pretty much a disaster. The numbers don’t lie. As of this writing, the number of Chicago murders is up 59% over pre-pandemic the number DON’T GIVE ME THIS BUNK ABOUT 2019, of shooting incidents is up 57%, and “MY BODY” AND “MY FREEDOM.” motor-vehicle thefts are up 15%. Yes, COVID has Centers for Disease Control caused crime waves else& Prevention or refusal of where. But in Chicago, it’s authorities to try a carrot bebeen wave upon wave, and fore employing the stick. But though it showed signs of it’s now been a full year since ebbing early this year, crime vaccines started to appear, went back up, with every maand almost a full year since jor category but one now up they became freely available. year over year even as COVID The evidence is overwhelmhas eased. ing that they’re safe and The mayor gets credit for effective. putting a lot of effort into proDon’t give me this bunk grams such as Invest South/ about “my body” and “my West that are designed to give freedom.” If you get drunk young people alternatives to in a corner bar, it’s your crime. But at the same time, affair. If you get drunk and some solid reporting by the get behind the wheel, you’re Tribune’s Gregory Pratt shows a danger to everyone you that even top ex-Lightfoot encounter. Ergo, unless you aides believe she and Police can guarantee your breathing Superintendent David Brown won’t infect someone else, have muffed implementation you’re a threat. And you are a of the police consent deprime reason this pandemic cree that’s the foundation to persists. rebuilding trust in police and Next up: the continuing poreducing crime. larization and endangerment That is affecting investment of what’s left of American civil and job growth in this town— life. An example: Jack Lomand scaring people to death. bardi is a self-styled tough It’s time for some big changguy running for Congress es, mayor. against Democratic incumI’m not optimistic. More bent Lauren Underwood in later. Oh, and happy holidays. the Trumpified GOP—or, as y tradition, the Thanksgiving season is the time to uplift, to wax eloquent about the good things that have occurred and, in the Pilgrim tradition, give thanks. Not this year. Oh, me and mine are still here, and that’s occasion for thanks. Mel and I are even having a couple of people over for turkey. But overall, I have to join much of Chicago and America in being in a grumpy mood this year because, frankly, too much is occurring that is perniciously troubling and destructive. Let’s start with the obvious, the—what is it?—fourth or fifth wave of COVID-19. There’s nothing like a trip back to the 12th century to put your worldview of human progress into perspective. What’s truly provoking, though, is that we didn’t have to be in this holding pattern of slow progress, a partial regression, and then finally moving a little more toward the nirvana of no masks, no social distancing and no deaths. I’m talking about you, you folks who refuse to be vaccinated, refuse to wear masks and refuse to care about anything except stroking your ego. Yes, the powers that be have made some mistakes, be it mixed messages from the

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New Buffalo votes to ban new Airbnb-style rentals

Officials in the tourist town along the Lake Michigan coastline voted last week to stop issuing new permits for popular short-term rentals in areas zoned for residential use BY DENNIS RODKIN The City Council in New Buffalo voted last week to prohibit new short-term rentals in most of the town, the culmination of an oftentense struggle over Airbnb-style rentals in the southwestern Michigan getaway capital. The three council members who were present voted unanimously to adopt an ordinance that will ban permits for new short-term rentals in areas zoned for residential use, which make up the great majority of the 2.5-square-mile town. New permits will be allowed only in areas that are zoned for commercial use but contain dwelling units. The ordinance will “provide some equity to the people who live here,” Mayor John Humphrey said at the meeting, “that we won’t be living with an unfathomable amount of people.” Short-term rentals, offered through Airbnb, VRBO and similar websites, have been proliferating for years in New Buffalo, a town of about 1,700 full-time residents 70 miles from downtown Chicago. City officials estimate there are about 200 now, both those operating with city permits issued before a moratorium went into effect in May 2020, and those operating without permits. Humphrey, who was elected in 2020 in part because of his outspoken opposition to short-term rentals, said at last week’s meeting that short-term rentals now constitute about 1 of every 11 homes in town. “There is a saturation level,” Humphrey said. He and others

have complained about shortterm renters bringing noise, litter and a lack of neighborly respect. They also contend home prices have risen fast because of buyers counting on the cashflow, which pushes affordability out of reach for full-time homeowners. At last week’s meeting, several owners of second homes urged the city council to reject the ordinance. (A Crain’s reporter attended virtually, via Zoom, so many of their comments and full names were difficult to capture.) A speaker named Adam said the proposed ordinance was “a blunt instrument” that is not backed up by data, but by anecdotal evidence from some full-time residents who have interacted with the “bad actor” short-term renters who misbehave. Diane said she and her husband have offered short-term rentals in their New Buffalo home for 15 years “without incident.” In 2019, before he was mayor of the town, Humphrey spoke at a city council meeting about what he considered the harmful impact of short-term rentals on his New Buffalo neighborhood. “High-occupancy, short-term rentals are a threat to local residents’ quality of life, safety and security,” Humphrey said then. He said that at a single shortterm rental across the street from his home, one weekend there were 13 cars parked, including on his lawn. Support for cutting off new permits, Adam said, appears to be based on the notion that “this tourist town is going to be better off without tourists. None of that

makes any sense.” Jim Kramer, who said he owns a retail business in town, told the city council that by stopping the growth of short-term rentals, “what you are doing is a public relations nightmare” for a town whose largest industry is tourism. Other New Buffalo residents voiced their support for halting the spread of short-term rentals. Ron Watson said that on his street, eight homes have short-term rental permits, and they are capable of hosting 10 people each. “That’s too high a density,” Watson said. “Fifteen years ago, I had peace and quiet. I don’t have it today.” Over the past few years, as New Buffalo has had its moratorium on new permits and appeared likely to stop them permanently, opponents have said it’s an infringement on their property rights. At last week’s meeting, a second-home owner named Kristin said she bought a New Buffalo property in 2020 “with the intention of being able to rent it.” The ordinance would permanently remove the possibility of generating income with the home, which would be “inequitable,” she said. New Buffalo’s old zoning rules, which were written before the era of Airbnb-style, short-term rentals, do not meet today’s demands, Humphrey said. “What we can’t do is just allow things to go on as they have.” The ordinance includes a requirement that city officials evaluate its impact by Nov. 1, 2022, and determine whether it should be amended.

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CRAIN’S CHICAGO BUSINESS • NOVEMBER 29, 2021 3

State Farm gains a price edge Nation’s largest auto insurer holds the line while rivals hike rates

WALGREENS COURTS TROUBLE WITH STORE-CLOSING PLAN Community backlash over shutdowns isn’t what drugstore giant needs as it tries to become a neighborhood health center BY ALLY MAROTTI A DECISION TO CLOSE FIVE STORES in San Francisco lands Walgreens squarely in the middle of a broader debate over community disinvestment. With dozens of additional stores on the chopping block, the Deerfield-based drugstore chain must be delicate as it executes cost-cutting measures. Walgreens says the five San Francisco stores—the last of which closed Nov. 17—were shuttered due to organized retail crime. Such crimes, in which brazen professional thieves make off with large hauls of merchandise, have

become rampant. A Walgreens spokesman says theft in those particular stores was five times the chain average, forcing the company to spend 49 times the chain average on security measures there. Since Walgreens announced its plans last month, however, local leaders and media outlets have questioned the company’s claims. The city’s mayor was skeptical, and others pointed See WALGREENS on Page 35

CONSUMERS ARE APPLYING GREATER SCRUTINY TO CORPORATIONS, PARTICULARLY WHEN IT COMES TO DIVERSITY AND INCLUSION.

Finally, a technology sector Chicago can call its own Digital agriculture startups and giants find favorable growing conditions BY JOHN PLETZ There are no farms in Fulton Market, but more agriculture companies are calling the Near West Side neighborhood home. Farmers Business Network, a Silicon Valley-based agricultural technology startup that just raised $300 million, plans to grow to its Chicago office to 250 people. Farm equipment gi-

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ant Deere, based in Moline, has leased space that could hold up to 200 software workers. They join San Franciscobased Climate Corp., which acquired Chicago agriculture data startup 640 Labs seven years ago and continues to add software engineers and data scientists, according to job postings. There also are homegrown startups, such as digital ag-real

estate platform Tillable and autonomous company Sabanto, along with Hazel Technologies, a Northwestern University spinout that makes products that extend the shelf life of produce. Another neighbor is S2G Ventures, which has raised $1 billion to invest in food- and agriculture-related companies. Chicago is poised to cash in as technology that has disrupted

other industries for the past two decades—from e-commerce and Big Data to the internet of things and artificial intelligence—is unleashed on agriculture. Agriculture technology is a roughly $10 billion global market that’s projected to double by 2025, according to Juniper Research in Hampshire, England. That compares with regulatory and compliance technology used by banks and other

TODD WINTERS

BY STEVE DANIELS In the early stages of the pandemic last year as commuters stayed home, State Farm steeply cut car insurance rates in every state. More than a year later, the Bloomington-based giant has generated growth in many states like it hasn’t seen in years. Consider New York and Michigan, the fourth- and fifth-largest states, respectively, for auto insurance sales. Together they account for 9% of total premiums. State Farm’s auto policies grew 9% in each of those states in the 15 months after the company filed for dramatic rate cuts, according to regulatory filings. The reduction in New York was 12.6% and in Michigan 11.6%. In Texas, the second-largest U.S. auto insurance market, State Farm’s policies rose 4% in just seven months after slicing rates 12.4%. Crain’s surveyed State Farm’s auto policies in 14 large states after its rate reductions. Overall, policies in those states grew 3%. In many cases, though, the interval between the reductions and the insurer’s most recent filing was less than a year. In six states where policy differences could be tracked over more than a year, aggregate growth exceeded 5%. Those six states—Pennsylvania, New York, Michigan, Connecticut, South Carolina and Arizona—accounted for 18% of total U.S. auto premiums generated in See STATE FARM on Page 35

 PRICE POINTS State Farm generally has gotten what it was looking for—more customer growth—in large states following its steep rate cuts last year. INCREASE IN NUMBER OF AUTO INSURANCE POLICIES

In selected states since rate cuts

New York 12.6% rate cut (May 22, 2020) 9% From 1.39 million policies to 1.52 million on Aug. 6

Michigan 11.6% rate cut (May 18, 2020) 9% From 1.14 million policies to 1.24 million on Aug. 12

South Carolina 6.6% rate cut (May 26, 2020) 6% From 1.06 million policies to 1.12 million on July 9

Texas 12.4% rate cut (June 3, 2020) 4% From 3.15 million policies to 3.27 million on March 31 Source: Rate filings

See TECH on Page 12

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4 NOVEMBER 29, 2021 • CRAIN’S CHICAGO BUSINESS

JOE CAHILL ON BUSINESS

Why ethanol’s recent surge looks temporary

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BLOOMBERG

mate objective of stopping the rise in global temperatures. The recent COP26 summit of world leaders set out a goal of net-zero carbon emissions by 2050 in order to limit temperature rise to 1.5 degrees Celsius. Underlying the goals are various expectations, including a massive shift to electric vehicles. But ethanol interests point out that even if such a shift occurs, it will take years. In the meantime, lots of traditional fuel-burning cars will remain on the roads, spewing emissions. Wouldn’t it be better if at least some of those emissions contained 34% less carbon? “Renewable fuels like ethanol remain the single most affordable and abundant source of low-carbon motor fuel on the planet—and are critical to meeting carbon reduction goals today,” Emily Skor, CEO of trade group Growth Energy, told Congress Nov. 16. “Recent research shows there is no path to net-zero emissions by 2050 without biofuels.” Industry lobbyists argue that expanding government supports for biofuels would THE INDUSTRY WILL NEED NEW help counter the recent rise in gas prices while advancing climate goals. MARKETS FOR ITS PRODUCT. Ethanol has had plenty of government backing over the ADM, a leading ethanol refiner years, thanks to the power of that has been looking for a way U.S. senators from farm states. out of the business. Farmers in Now the industry relies mostIllinois and across the country ly on a mandate requiring oil also benefit as higher ethanol refiners to use ethanol in an production bolsters corn prices. amount specified by the U.S. EnMore than a third of the nation’s vironmental Protection Agency. corn crop goes into ethanol, acThat so-called “renewable fuel cording to the U.S. Department standard” tops out in winter of Agriculture. months at about 10% of the The question, of course, is gasoline sold at filling stations. where ethanol goes from here. The industry is pushing to lift Some portion of the recent the limit in the winter. upturn reflects pent-up demand Successful lobbying could from the pandemic. Driving extend ethanol’s current boom likely will normalize over the and help preserve its viabilinext year or so, potentially ty as an auto fuel during the bringing down ethanol demand transition to electric-powered and prices. cars. But eventually EVs will be Cyclical fluctuations are only so prevalent that demand for part of the picture. Ethanol’s gasoline and the ethanol it conlonger-term prospects hinge to tains will start falling sharply. some extent on its role in the Beyond that point, the industry escalating campaign against will need new markets for its global warming. Long touted as product. a “renewable fuel,” ethanol isn’t Some are already moving completely clean. A 2012 study in that direction. ADM, for by Argonne National Laboratory example, is converting most of in Lemont found that ethanol its ethanol production capacity consumption emits 34% less to produce clean-burning jet carbon than burning gasoline. fuel. The U.S. and the European That’s a big difference, but Union set a goal to produce 4 ethanol still pumps greenhouse billion gallons in “sustainable gases into a steadily warming aviation fuel” annually by 2030, atmosphere. Environmentalists which sounds like a lot, until argue that the ripple effects of you consider that the U.S. alone cultivating large amounts of produced 14 billion gallons of corn for ethanol also contribute ethanol last year. It will take a lot to climate change. of new business to offset the loss Yet industry advocates say of that volume. ethanol is essential to the ultillinois corn farmers and ethanol refiners got an early Christmas present this year as prices for the corn-based fuel surged. How long the gift keeps on giving will depend in part on industry lobbyists’ efforts to hitch ethanol to government climate change policy. Ethanol prices soared as Americans returned to the roads this summer. After hitting historic lows during the depths of the pandemic, traffic on the country’s streets and highways climbed 12% so far this year. More driving means more gasoline sales, which means more ethanol sales. Federal law requires oil refiners to include ethanol in the fuel they produce. Higher demand has been a boon to an ethanol industry plagued for years by excess capacity that depressed prices and squeezed profits. After sinking as low as 83.6 cents per gallon in April 2020, near-term ethanol prices at the Chicago Board of Trade leapt 45% to $2.21 this year. Higher prices boost profits at companies like Chicago-based

People attend a makeshift memorial Nov. 7 at the NRG Park grounds in Houston where 10 people died in a crowd surge at the Astroworld Festival.

‘I’m the ghost of the Who concert tragedy’

Concert safety expert and ex-Chicagoan Paul Wertheimer hopes Astroworld deaths can bring needed change BY STEVE JOHNSON IF YOU ATTENDED Chicago concerts with mosh pits in the 1990s, you might have seen an unlikely figure in the middle of them: fortysomething Paul Wertheimer, soaking in the environment, building his knowledge of crowd safety and dynamics and, yes, even liking some of the music. “I particularly enjoyed aggressive music, metal, punk, alternative,” he says. But he was there to work, and he turned himself into one of the nation’s leading authorities on concert safety, featured in the New Yorker and testifying frequently as an expert witness. His expertise is being called on following still another tragedy in the live-music industry, the inadequately managed audience at Travis Scott’s Astroworld concert in Houston this month, which resulted in 10 crowd-crush deaths. And Wertheimer’s tone is, what, righteous anger? “I don’t know if it’s righteous,” says the veteran crowd safety consultant. “It’s passionate. I’m just sick and tired of what I’ve seen the industry do just because they can make more money. They’re willing to sacrifice people. It’s the cost of doing business.” What happened in Houston was “reckless” for several reasons, he’s been saying in the days following the Nov. 5 incident. Scott, he notes, is a performer with a track record of inciting chaotic crowd behavior. Among other events, he pleaded guilty to disorderly conduct in Chicago after a 2015 Lollapalooza set where he reportedly urged fans

to jump security barricades. things: to accept this danger if That set, unlike his headlining you want to see the show and performance at Astroworld, then to feel a responsibility that it must be your fault, you must ended after just one song. Yet the Astroworld pre-event have done something wrong, operations plan, which Wert- you should have realized that a heimer reviewed for an NPR crush was going to happen, you report, does not address key should have realized you had to escape.” crowd safety issues. That mindset, that an unruly “In that 56-page document, the crowd is not even mentioned,” he crowd was at fault, was evisays. “The audience in a stand- dent in the Houston aftermath, ing-room environment, the most where one security official, acdangerous and deadly in live cording to a Washington Post entertainment history: not even report, publicly blamed “waves mentioned. Crowd crush, crowd of dumbasses” with “no value in surge, crowd collapse, crowd other people’s lives.” Houston officials and those craze, moshing, stage diving, crowd surfing: not even men- with the giant concert promoter tioned. The profile of the crowd: Live Nation—which put on the not even mentioned. It’s as if this “I’M JUST SICK AND TIRED OF WHAT I’VE was an event not for an audience.” SEEN THE INDUSTRY DO JUST BECAUSE And it’s reckless because it’s all THEY CAN MAKE MORE MONEY. THEY’RE happened before, says Wertheimer, WILLING TO SACRIFICE PEOPLE.” 72, who is principal Paul Wertheimer, Crowd Management Strategies of Crowd Management Strategies in the Los Ange- Astroworld event and also runs les area, where he’s lived since Chicago’s annual Lollapalooza music festival—have defendleaving Chicago in 2004. “It’s a recurring nightmare ed their safety plan, citing, for I’ve had for the last 40 years, instance, the scores of security seeing the same thing over and personnel they had on hand. But a plan that doesn’t adover again,” he says. Yet concert promoters are dress the potential for crowd largely unregulated, he says, the crush, a deadly force that can festival or standing-room-only bend metal barricades and typticket model is allowed again in ically kills people by asphyxiamost places and the audience tion or cardiac arrest, is no kind has been trained not to question of plan, Wertheimer says. His life-changing odyssey what happens at concerts. “They’ve been groomed,” he into the world of rock-concert says, a deliberately provocative crowd safety began at one of the word that he uses repeatedly. “They’ve been groomed on two See CONCERT on Page 12

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HELP US MEET THE ONGOING HUNGER CRISIS. The need for food remains high. Food insecurity is still surpassing pre-pandemic levels. Together, we can help the families who need us. And we can take on the root causes of hunger, investing in local partners, providing job training, and bringing food, dignity and hope to our neighbors.

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345 N. Morgan St.

Furniture-maker joining Fulton Market parade An Allsteel showroom adds to the run of interior brands that are pouring into the trendy former meatpacking district, which is now a corporate HQ hot spot

2022

GEN X LEADERS IN HR

NOMINATE NOW! Deadline is Dec. 21

Crain’s Chicago Business is proud to announce Crain’s 2022 Notable Gen X Leaders in HR, a special editorial feature within Crain’s February 7 print issue and online that will profile top Chicago area HR executives.

BY DANNY ECKER Office furniture-maker Allsteel is poised to set up shop in the Fulton Market District, adding to a run of furniture brands planting their flags in trendy former meatpacking neighborhood. The Muscatine, Iowa-based company is nearing a deal to lease close to 24,000 square feet in the 11-story building Sterling Bay is developing at 345 N. Morgan St., according to sources familiar with the negotiations. If the deal is completed, Allsteel would open a new office and showroom in the 200,000-squarefoot building under construction kitty-corner from Google’s Midwest headquarters. It’s unclear whether the company would vacate its long-standing showroom space in the Merchandise Mart as part of the move; an Allsteel spokeswoman didn’t provide a comment.

ON THE MOVE

Nominate at ChicagoBusiness.com/NotableHR Nomination deadline is Friday, Dec. 21. Section publishes Feb. 7, 2022 To view Crain’s Notable Executives nomination programs, visit chicagobusiness.com/notablenoms.

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Allsteel, whose brand is part of furniture giant HNI, is on track to join a fast-growing list of designer furniture brands leasing space in Fulton Market, many of which are defecting from the Merchandise Mart. Publicly traded furniture company Knoll led the way in 2018 when it left the Mart for a newly built office building at 811 W. Fulton St.; Zeeland, Mich.-based Herman Miller followed suit with a long-term lease of a redevel-

oped building at 1100 W. Fulton St. Then came a rash of deals this year from furniture and interior design brands Teknion, Gabriel and Tarkett, all inking deals for showrooms and offices in Fulton Market buildings. Those deals have collectively turned Fulton Market into a burgeoning outpost of designer furniture to go along with its status as a hotbed of offices for big corporate brands, such as Google, McDonald’s, Mondelez International, Kimberly-Clark and, most recently, tractor-maker Deere. Allsteel’s pending lease also comes amid a surge of office deals in Fulton Market, while leasing elsewhere downtown remains relatively sluggish and the downtown office vacancy rate stands at a record high. For Sterling Bay, Allsteel would follow a lease that supply chain management company Havi Group recently signed for half of the building, where it will relocate its main office from suburban Downers Grove. With both deals in place, the building would be just more than 60% leased, with about 10 months until it is completed. Sterling Bay broke ground on the building in August after landing a $100 million construction loan. Sterling Bay’s Russ Cora oversees leasing at 345 N. Morgan. Savills Vice Chairmen Robert Sevim and Joe Learner recently represented Havi Group in negotiating its lease at the building.

11/24/21 2:42 PM

A VISION FOR WELLNESS GROWS AT THE GARFIELD PARK CONSERVATORY

Honoring Front Line Health Care Workers, Polsinelli will match up to $50,000 in gifts to the Elizabeth Morse Genius Children’s Garden

BUILDING A GREEN OASIS FOR CHILDREN SUPPORT THE NEW EMG CHILDREN’S GARDEN Investing in our West Side and enhancing the health of communities makes Chicago a more just and stronger city. After 20 years, the Children’s Garden is in dire need of renovation. Please contribute and double your gift to support nature play. Access to nature is essential to the physical, psychological and social wellbeing of children. Make your gift today at gpca.givecloud.co/emg. If you are interested in learning more, please contact donations@garfieldpark.org.

GARFIELD PARK CONSERVATORY ALLIANCE

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8 NOVEMBER 29, 2021 • CRAIN’S CHICAGO BUSINESS

STELLANTIS from Page 1 vehicle forecasting at AutoForecast Solutions near Philadelphia. The move is part of a reshuffling of plants as Stellantis develops a new platform for its electric vehicles. “This is not speculation,” said Fiorani, citing industry sources directly familiar with the automaker’s planning. Stellantis announced in July that it would invest at least $35.5 billion in vehicle electrification and new software through 2025, including an electric Dodge muscle car by 2024. A Stellantis spokeswoman cited the company’s commitment to EVs but declined to comment on “rumor or speculation about the future of any of our facilities.” “When it comes to new investment and product allocation, many factors are taken into consideration to bolster our global competitiveness and position the company for future growth,” she said. Belvidere is the right size for the Challenger and Charger, Fiorani said. “As cars have fallen out of favor in the American market, these two remaining models will survive the next generation, but be produced at a lower volume,” he added. He anticipates annual production of 200,000 after the changeover, with a third model to be added, a Chrysler electrified crossover. Plans of course, could change

when they are fully disclosed, especially to the union representing about 3,000 hourly workers at the Brampton plant. “Stellantis has had no discussion with myself or the union to inform us of their plans to move our current product line up to another facility,” said Ardis Snow, plant chair for Unifor Local 1285. “We do have indicators that are telling us that and we have been questioning the company on it. “The company owes it to this membership to be honest and transparent of their plans. If their plans are to move our products to another facility, they will be in for the biggest fight of their lives.”

INCENTIVES

Influencing the Stellantis decision are EV incentives at the state and national levels. Gov. J.B. Pritzker on Nov. 16 signed the Reimagining Electric Vehicles in Illinois Act in a ceremony at Rock Valley College Advanced Technology Center in Belvidere. The new law provides tax credits and exemptions for manufacturers and their suppliers. The credits range from 75% to 100% of income tax withheld for creating new jobs or 25% to 50% for retained employees, depending on factors such as company location. There also are credits for training expenses and costs for construction

wages and building materials. Elected officials and representatives of the governor’s office had conversations with local Stellantis officials to determine the kinds of incentives they would need to support investment, says state Sen. Steve Stadelman, D-Rockford. “They wouldn’t have had those conversations if they were not seriously considering retooling the plant and keeping it as part of their portfolio.” In addition, the clean energy law passed this year includes a $4,000 rebate for residents who buy an EV. There also are federal tax credits available, which would be expanded under President Joe Biden’s proposed $1.7 trillion social spending bill. Pamela Lopez-Fettes, executive director of the Belvidere and Boone County economic development organization Growth Dimensions, says the new state law goes far to allay concerns by Stellantis and its suppliers that Illinois wasn’t as competitive as other Midwestern states. “We feel that we’re in a very good position,” she says. Because the Belvidere plant is operating under capacity, the facility could begin retooling while still building Cherokees, according to Fiorani. Stellantis has said Jeep would offer an all-electric SUV by 2025, but Fiorani expects that pro-

STELLANTIS

‘Belvidere is the right size for the Challenger and Charger,’ says Stellantis VP

Production of the Dodge Challenger and Charger is expected to be moved from Brampton, Ontario. duction to be moved to another plant. Belvidere started the year with 3,600 employees on two shifts and, before the most recent layoff announcement, was operating a single shift with 2,100 workers. The initial Challengers and Chargers are expected to be hybrids rather than fully electric because buyers aren’t ready to shift completely to electric-only cars, Fiorani says. Consumers are worried about running out of battery charge when they are far from home and not being able to easily find a charging station, he adds. The company, he notes, has promised to eventually produce a fully electric sports car. But isn’t a fully electric muscle car something of an oxymoron? An

800-horsepower Dodge Challenger Hellcat with an internal combustion engine means 15 mpg and CO2 tailpipe emissions, which isn’t sustainable, Fiorana says. By comparison, the Tesla Model S Plaid with 1,000 horsepower returns 101 mpg equivalent and produces no tailpipe CO2. “Electric cars are not slow,” he says. A new Chrysler electrified crossover is needed because the brand will be down to minivans after the expected demise of its 300 sedan. “Getting more vehicles into showrooms will be necessary,” Fiorani says. “The brand needs something both electrified and unique to make buyers look at Chrysler again.”

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10 NOVEMBER 29, 2021 • CRAIN’S CHICAGO BUSINESS

EDITORIAL

A holiday gift: The chance to be together again maybe—this new normal of work from home all week and isolation may actually really be just temporary. Of course, no one believes that the five-days-inthe-office workweek is coming back. Even before the pandemic, flex time and shorter workweeks were becoming the norm, and for good reason. Scores of studies show that people are actually more productive in environments that are more flexible. But, increasingly, there are signs that coming back together as safely as we can is good for the work soul. As I write this, I recognize that we are once again facing another wave of this deadly virus, and HR teams around the city are probably gnashing teeth and re-evaluating return-to-work plans. But there is also much to be thankful for as we carefully gather again with family and friends this holiday season. Of course, we are grateful for modern medicine and what has emerged to fight this pandemic so quickly, as well as for the brave and weary front-line health workers who have fought this thing courageously these so many months. But we are looking ahead to 2022 with increasing optimism that we will see a return to something like normal, with opportunities to collaborate with co-workers and our networks outside of work as well. Here at Crain’s, we are bullish and have our full slate of events scheduled to be in-person in 2022. Why? We are encouraged by the enthusiasm we see when we do gather together. And in surveys of our readers and past attendees to our events, there is overwhelming anticipation in coming back together. If you’re ready, we’re ready. We can’t wait to see you again. JIM KIRK Publisher and executive editor Crain’s Chicago Business STEPHEN J. SERIO

his month, at separate events—live and in person—two new CEOs of important nonprofits in this city took to their respective stages on the same day to enthusiastically thank everyone in attendance for being at their annual fundraisers. The warmth and happiness from incoming YWCA Metropolitan Chicago CEO Nicole Robinson, who officially starts in January, and Chicago United chief Tiffany Hamel Johnson, who was installed at the height of COVID-19 last year, were both infectious and genuine. Most important, their tone in their respective remarks underscored what was felt by most everyone I talked to in those big ballrooms that day: We are back. Together. Safely. Likewise, here at Crain’s, we’ve also started gathering again. Safely, of course. And, oh man, is it exhilarating. At the first in-person Crain’s Real Estate Forum in nearly two years, attendees listened to a riveting conversation between one of our senior reporters, Alby Gallun, Loop Capital CEO Jim Reynolds and producer Derek Dudley about the visionary television and film production company Reynolds and Dudley are building on the South Side. A great Crain’s event, just like the old times of 20 months or so ago. Vax cards and masks and wristbands may be the new normal at the moment. But no one I saw paid any mind. The overall mood I’m experiencing at the myriad live events I’m now attending is one of jubilation. And, yes, thankfulness. I suspect as more and more of us return to the office in the coming weeks and months, we’ll all feel something similar as we reacquaint outside of Zoom. Grateful that we are here and back together. Much has been written over these past several months about the traditional work routine in which scores of us

head downtown or to suburban office parks four or five days a week being over, forever. There’s been lots of handwringing over what the sudden change in mindset means for the city’s central business district and suburban office complexes that dot our region. But here is what I’m also starting to hear from local executives: worry that current work-from-home trends might be more detrimental to younger workers who benefit in their growth from working alongside veteran colleagues. Worry about a lack of the spontaneous collaboration that happens in person, and a worry that without that collaboration, growth and innovation will slow or stall. And there’s the worry that a lack of in-person networking like I’ve experienced the last several weeks in general is bad for business, as we miss out on ideas and introductions to those who can help grow our businesses. I’m now seeing and sensing a shift for the first time since the onset of this awful pandemic that maybe—just

YOUR VIEW

immigrants have already paid billions in Social Security without any future compensation for their contribution. In Illinois alone, immigrants’ household income reached $71.6 billion in 2019 and immigrants paid $21.4 billion in state, local and federal taxes. New Americans in Chicago contributed $4.4 billion to the federal government and $1.6 billion to state and local taxes. Hence, the false demonization of immigrants combined with the hypocrisy of politicians who would legislate against the same people who have strengthened our nation’s economy and social fabric is off-putting.

BROAD SUPPORT

Some in Congress have said they agree the immigration system needs to be fixed, but they criticize the reconciliation bill as a partisan vehicle driven by Democrats. Nonsense! A recent poll by the American Business Immigration Coalition, or ABIC, of battleground-state voters shows the majority of the public from all sides of the political spectrum support commonsense immigration solutions. Ironically, both parties are squandering an opportunity to bring more immigrant communities into their tent. The

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

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young immigrants who work at have spent my entire life workmajor corporations, foundations, ing to create healthier comthe public sector and various munities and strengthen local social impact organizations, inneighborhood economies. I came cluding at the Resurrection Projto this country in 1972 and my ect. Farmworkers, TPS holders family and I have been blessed and essential undocumented to live the American Dream since employees have added tremenour arrival. Like me, millions dous value to our society, econof other immigrants across the omy and the tight labor market country have contributed to the during these turbulent times. social and economic fabric of the However, this nation’s farms, U.S. Unfortunately, millions more Raul I. Raymundo is technology firms, banks, food are stuck in limbo, yet to release a co-chair of the their full potential as a result of a American Business services, health care industries, community organizations and Immigration Coabroken immigration system. many other employers report sigGiven the current budget rec- lition and is CEO nificant worker shortages, which onciliation debate, there is an and co-founder of threaten the economy. Job creundeniable economic and social the Resurrection argument to legalize the status of Project, a social im- ators and current employers are being hampered by an outdated, Dreamers, Temporary Protected pact organization broken immigration system that Status (TPS) holders, farmwork- in Chicago. is not meeting the current needs ers and essential workers. The reconciliation process is the first step of the economy. If these immigrants are given a path for to getting our immigration system overhauled. Major immigration reform last oc- citizenship, the U.S. economy would grow by curred in 1986. Sen. Richard Durbin, D-Ill., $1.21 trillion over the next 10 years and boost has for years championed passage of the federal, state and local tax revenue by $31 bilDream Act to create a citizenship path for lion annually. Furthermore, undocumented

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Latino population has quadrupled in the past four decades and more than 62 million Americans—19% of the total population— identified themselves as Hispanic or Latino in the 2020 census. Much of this growth is driven by U.S.-born children of Latino immigrants who are coming of voting age. Last year, my son voted in his first presidential election. My twin daughters will be of age to do the same in the next national elections. ABIC pursued a bipartisan solution for the reconciliation bill. Its members met with 41 Republican senators and held 47 public events with senators from both parties searching for a compromise bill, but found no congressional Republican leader was willing to take public action, even though privately many agree with ABIC. It is now time to break the logjam! Democrats should not squander this opportunity; the budget reconciliation bill must include immigration reforms for Dreamers, farmworkers, TPS holders and essential undocumented employees. The nation’s economy, social fabric and the Democratic Party will benefit from the Republicans’ missed opportunity to bring in more immigrants-turned-citizens and their families as allies.

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

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CRAIN’S CHICAGO BUSINESS • NOVEMBER 29, 2021 11

LETTER TO THE EDITOR

Chicago, stand with McDonald’s CEO

e: “With CEO under scrutiny, what’s McDonald’s plan?” (Nov. 3), I’d like to urge the community to take time to learn more before drawing a conclusion. I come from humble beginnings with a seventh-grade education. I came to this city and rose to success through the McDonald’s system as a franchisee on the West Side, ultimately owning my own medical supply company. I fundamentally understand the challenges and triumphs our communities have endured and continue to face, battling crime and years of systemic oppression and inequity. After hearing about the text messages McDonald’s CEO Chris Kempczinski sent to Mayor

Lori Lightfoot last April following horrific shootings that killed two Chicago youths, I wanted to learn more before drawing a conclusion about Chris’ character. I personally connected with him, and after hearing from him, I know firsthand that he is truly sorry for his words and lack of understanding surrounding these two community tragedies. He knows the gravity of his texts on the affected families, as well as the broader community, and is taking the necessary steps to make it right. Like every company, McDonald’s has room for improvement in deepening its connection with the Black community. Chris is a CEO with a willingness to make

a difference and a track record of progress. He has helped make McDonald’s more inclusive at every level of the company. I saw it for myself at an event celebrating the Chicago Black business community that Chris hosted at his company’s headquarters last month. No doubt, this experience is driving him to develop a deeper connection to our community, enabling him to go further in his journey to understand others and to make McDonald’s even more inclusive. If we work together, and show Chris understanding, grace and support, we can all learn from this moment and make an impact that could be felt across Chicago, across America and around the world.

Ephesians 4:32 says, “Be kind and compassionate to one another, forgiving each other, just as in Christ God forgave you.” Chicago, I am telling you, let us come to together and work this out. This man seeks to learn, seeks to understand and seeks to be present in the community. I am committed to working with Chris on his ongoing work for both the community and the company that I truly love—a company that has given me the economic opportunity to help so many people in Chicago and around the country. WILLIE WILSON Chicago

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12 NOVEMBER 29, 2021 • CRAIN’S CHICAGO BUSINESS

Rents rise, vacancies fall as warehouses sizzle

Records are falling amid insatiable demand for industrial space. ‘I’ve done this for 27 years, and I’ve never seen anything like this,’ says one broker. BY ALBY GALLUN If you need to lease industrial space in the Chicago area these days, prepare to pay up. Local warehouse rents are jumping amid a multiyear boom that’s gaining momentum, as logistics, e-commerce and manufacturing firms keep gobbling up space. Developers are stamping out new buildings as fast as they can but are having a hard time keeping up with demand, partly because of a shortage of building supplies. “I’ve done this for 27 years, and I’ve never seen anything like this,”

said broker Matthew Stauber, executive vice president in the Rosemont office of Colliers International. The Chicago-area industrial vacancy rate dropped to 6.03% in the third quarter, the lowest rate in more than two decades, according to Colliers. The vacancy rate fell from 6.29% in the second quarter and 6.72% a year earlier. It’s already a record-breaking year as measured by one key metric: net absorption, or the change in the amount of leased space versus the prior period. Net absorption totaled 32.9 million square feet in the Chicago area in the first

three quarters, eclipsing the previous annual record of 26.6 million square feet set in 2016. Stauber estimates that rents in some markets have jumped as much as 10% in the past six months. Rents typically rise 2% to 3% over an entire year. “What we are seeing is a phenomenon where landlords are hesitant to commit to terms too far in advance because the rental rates are accelerating at such a rapid pace,” he said. The third quarter included some big leases, led by Amazon, the biggest consumer of local warehouse

space over the past two years. The Seattle-based e-commerce giant leased a 1.2 million-square-foot warehouse in Huntley, about 55 miles northwest of Chicago.

LEASES

A former Caterpillar campus in Montgomery, about 45 miles southwest of the city, emerged as another hot spot. Tangent Technologies, an Aurora-based plastics company, leased a 1.1 million-square-foot building at the property, now called the Grid at Route 31, while Georgetown, Ky.-based U.S. Medical Glove signed a lease for about 980,000 square feet there. DSV, a Danish logistics company, leased 700,000 square feet at the property. Developers are going full tilt,

though demand for industrial space continues to outpace supply. They have already broken the record set for construction in 2017, when they completed 24.8 million square feet in the Chicago area. They delivered 27.2 million square feet through the first nine months of 2021, according to Colliers. But one thing standing in the way of even more development is a shortage of key supplies. Contractors are facing delays of several months on orders of precast concrete panels used for the walls of industrial buildings, roofing materials and loading dock equipment, Stauber said. “The pace of development is being constrained by a shortage of raw materials,” he said.

Startups and giants in the growing agriculture tech sector look to Chicago TECH from Page 3 companies, which will grow to $130 billion during the same period, and digital content, such as games and music, which will top $430 billion. “Historically in Chicago, we haven’t put all the pieces together: the talent, the companies, the academic institutions and the capital,” says Brad Henderson, CEO of P33, an effort by civic and cor-

porate leaders to boost Chicago’s tech economy. “Agriculture is 10% of Chicago’s economy. Having 10% of our economy changing so rapidly because of all these digital trends, that’s going to be a massive amount of capital that’s going to be invested to transform it.” Food and agriculture is one of four areas where the city is focusing its economic development efforts. World Business Chicago,

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the city’s public-private partnership for economic development, worked with Deere as it looked for office space here. WBC says the number of food and agriculture companies in Illinois, from giants such as Mondelez and ADM to startups, has risen to 300 from about 100 since 2018. Five new agtech companies expressed interest in coming to Chicago in the past week, says Mark Tebbe, chairman of WBC’s innovation and venture strategy group.

ATTRACTION

The city’s deep and wide talent pool, as well as its proximity to farms, are a powerful attraction. Tech companies launched in the San Francisco Bay area also find themselves drawn to Chicago for the same reason as commodities traders and equipment manufacturers did: It’s in the middle of the country and the heart of the nation’s agriculture production base. The Midwest is home to five of the

top 10 university biotech and agtech programs in the U.S. “Chicago has an incredible talent pool in agriculture, transportation and technology, with a mix of technical folks, business folks, as well as industry specialists,” says Charles Baron, who co-founded Farmers Business Network, an e-commerce and data platform for farmers, with University of Illinois engineering graduate Amol Deshpande, seven years ago. “It’s a phenomenal place for us: Chicago is a stone’s throw from farmers, and it’s the center of the agriculture and logistics world.” FBN has about 60 workers here now, and it’s likely to grow to 250 or more, becoming the company’s largest office, Baron says. The company has about 800 employees overall, and it plans to add 300 more this year. It’s working closely with Chicago-based ADM, which is an investor in FBN. The agricultural processing giant also is a launch

partner for FBN’s new products, which enable farmers to sell their goods on the startup’s e-commerce platform and allow their customers to track carbon offsets related to those transactions. “Having Climate, FBN and Deere in Chicago creates pretty good density,” says Corbett Kull, who co-founded 640 Labs and went on to launch Tillable, an ag-focused, e-commerce startup in Fulton Market that employs about 20. “It’s good for Chicago and good for the ag-tech economy.” As ag-tech startups multiply, they are gaining traction, says Craig Rupp, another 640 Labs co-founder, who has since started Sabanto, an autonomous agriculture startup with 15 people, 10 of whom are in Chicago. “I know people who left (farm equipment manufacturer) CNH (Industrial) in Burr Ridge and now are at startups,” he says. “You’re starting to see people move from company to company.”

Expert puts focus on concert crowd safety CONCERT from Page 4 darkest points: the infamous Who concert in Cincinnati in 1979 where 11 people died, essentially, from the force of other human bodies. He was a city public information officer called to the horrific scene, and what happened there proved to be unshakable. Raised in Chicago, in Hyde Park and Albany Park, Wertheimer moved back to his home city after guiding a comprehensive investigation into what went wrong at the Who show. He was making a good living here in PR through the late ’80s, he says, but every so often after another deadly incident at a public event, “a reporter would call and say, ‘Such and such happened somewhere. Didn’t you write the report for the (Cincinnati) task force?’ “ “I realized, I’m the ghost of the Who concert tragedy. I’m going to resurrect that Who report. I thought we needed attention on how fans are treated at a concert . . . just with the theme of simply, ‘Why can’t we

make concerts safer? We can make them safer.’ ” So Wertheimer started Crowd Management Strategies, in 1992, and began amassing as much data as he could on how crowds and concerts worked, a lot of it gleaned from firsthand observation. He became a thorn in the side of promoters, and even got pulled from a mosh pit and arrested at a 1995 Pearl Jam Soldier Field concert that was allowing some festival seating.

SINGLED OUT?

A Chicago Reader article about the incident was headlined “Who’s Afraid of Paul Wertheimer?’ and questioned whether he was singled out for having raised concerns about event safety beforehand. Wertheimer pressed on and for a time he believed his message about crowd protection was getting through: Somebody had to advocate for the audience members, and many municipalities into the early years of the last decade, he thought, were taking it

seriously when things went wrong. “Then things, in my opinion, started to change, where deaths of all kinds had suddenly become acceptable,” he says. “The industry keeps rolling along, not changing anything significantly. And I saw a change, and it was a change of values.” He notes that it will take official investigation and the resolution of the myriad post-Houston lawsuits to really start to unravel what happened there. But he says he finds himself encouraged again by the fervent and relatively sustained public response to the Astroworld deaths. One measure: He’s done close to as many interviews this month, he says, as he did back in winter 2003, when the Station rock club fire in Rhode Island (killing 100) and the E2 nightclub stampede in Chicago (killing 21) happened within three days of each other. “This has grabbed people’s attention,” Wertheimer says. “I hope it can be corralled into something.”

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CREATIVE PIVOTS: Artists found uncharacteristic ways to survive and thrive. PAGE 14 NEXT ACTS: The arts’ recovery depends on marshaling the necessary resources. PAGE 18

ANDREA LEVY

CULTURE

INGENUITY REAFFIRMED: Chicago has always had the rare ability to rise from adversity. PAGE 19

BACKSTAGE

DRAMAS Social issues fueled tensions in Chicago’s theater community during the pandemic shutdown. What can audiences expect in the comeback season? BY JUDITH CROWN FIND THE COMPLETE SERIES ONLINE

ChicagoBusiness.com/CrainsForum

Chicago theaters were among the first organizations to close at the start of the pandemic and the last to return. As they came back to life, they faced the twin challenges of skittish audiences and a reckoning over racism. Closed as “nonessential services,” theaters retrenched. They laid off or furloughed workers, got by with Paycheck Protection Program loans and grants, and experimented with virtual and outdoor performances. With the arrival of vaccines earlier this year, managers were able to plan their comeback seasons. Steppenwolf reopens this month with Tracy Letts’ “Bug,” and the Goodman launched in August with “School Girls; Or, The African Mean Girls Play.” The delta variant dampened the celebration, with nervous ticket buyers delaying their purchases until closer to showtime. “We just have to move forward or we’ll never reopen,” says Deb Clapp, ex-

ecutive director of the League of Chicago Theatres. Meanwhile, George Floyd’s murder and the Black Lives Matter movement shined a spotlight on inequalities in local and national theater. A nationwide coalition of theater artists of color in 2020 launched “We See You, White American Theater.” The group published a detailed set of demands that cover the hiring and treatment of Black, Indigenous and people of color artists, working conditions, equitable salary structure, the use of donor money and board representation. It was signed by 300 artists, including celebrities Lin-Manuel Miranda and Viola Davis and local theater activists Wardell Julius Clark and Sydney Charles. The Chicago theater community experienced its upheavals, first at the Victory Gardens Theater, where the Playwrights See DRAMAS on Page 20

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14 NOVEMBER 29, 2021 • CRAIN’S CHICAGO BUSINESS

Chicago creatives did the pandemic pivot

Forced to take time off in the shutdown, stage managers, actors and musicians pushed themselves into out-of-character directions and pursuits BY JUDITH CROWN During the pandemic shutdown, Marcus Carroll, a Chicago stage manager, went for a long walk. With the theater world on hiatus, he figured it was good time to do something that few people get the time to do—take five months to hike the 3,000-mile Continental Divide Trail. Carroll joined with two buddies to walk from the Mexican border in New Mexico to the Canadian border in Montana, while keeping in touch with job prospects. “As a stage manager, you function as a facilitator for other people’s work,” he says. “Hiking the trail was something I could do for myself.” Taking a hike is one creative way to pivot. Actors, musicians, designers and crew members explored different ways to pay the bills, hone their skills and learn about other, possibly more lucrative fields. For performers and theater workers, the pandemic provided a time to step off the treadmill, for contemplation and a more peaceful pace of life. Carroll was working on the mu-

Stage manager Marcus Carroll, left, hiked the 3,000-mile Continental Divide; singer/actress Christine Bunuan sewed masks for friends and family.

short backpacking trips and found “being out in the woods helped me decompress after having become so wound up in worrying about my career and life direction.” The walk took Carroll through icy paths and bear country. “Trail angels” opened their homes to the hikers. Near the end of the trail in Montana, Carroll got a tip about an opportunity at “Love Actually? The Unauthorized Musical Parody,” “I WANT TO COACH T-BALL AND GO TO which opened this DANCE RECITALS. THAT’S NOT A LIFE month at the ApolTheater. CONDUCIVE TO THE THEATER SCHEDULE.” lo Carroll is back in Chicago managing Jesse Klug, lighting designer the show, which sical “Hit Her With the Skates” runs through Jan. 2. He commemat the now-closed Royal George orated the journey with a podcast, when the pandemic hit. Realiz- “Camp Walk-Along.” ing there was no quick return, he Actress and singer Christine moved to Tennessee to live with Bunuan stayed closer to home his family and took a part-time after returning from a touring job. He had earlier been on a few production of “Miss Saigon.” The

company was performing in Fort Myers, Fla., when the tour was canceled. “I came back March 16 to a completely different city,” she recalls. People in Florida were out and about, going to the beaches. Bunuan started sewing masks for friends and family in health care, at first using her own clothes and bedsheets, then buying fabric. She sold some on an Etsy website, mostly to cover the cost of donating. “I stopped counting but probably made between 800 and 1,000 masks,” she says. By the start of this year, she was able to book parts in some TV series. Last month, she began rehearsals for a holiday show, “Mr. Dickens’ Hat,” at Northlight Theatre in Skokie. “It will be fun to start after a pandemic with a play that’s brand-new,” she says. Musician William Denton also stayed closer to home. The principal trumpet with the Lyric Opera

of Chicago, Denton got by with reduced salary, unemployment and some teaching. Mostly he practiced a lot. “If you don’t use it, you lose it,” Denton says, referring to the muscles brass players use to produce a strong sound. “When (the orchestra) started back up again, everybody hit the ground as if nothing had happened.” The opera reopened in September with Verdi’s “Macbeth,” and Denton says the Lyric audience seemed “large and enthusiastic.” Lighting designer Jesse Klug used the time to explore a career switch to UX, or user experience, web design. Klug typically traveled half the year and decided he’d prefer to spend more time at home with his two young children. Klug determined that web design was a field where he could draw on the skills he uses in lighting. He started an online program in UX over the summer and

has landed some freelance gigs. Would he go back to lighting design as theaters reopen? “That’s a question I try to answer for myself almost every day,” he says. He’s taken jobs occasionally when they’re available but hopes to fully transition out. “I want to coach T-ball and go to dance recitals,” he says. “That’s not a life conducive to the theater schedule.” Web design could be a field that’s more pandemic-proof, Klug adds. An outbreak could happen again, and “I’m looking to hedge my bets.” Actress, director and activist Sydney Charles pivoted to working at a cannabis dispensary during the pandemic. She filled orders at a retail location and worked with Teamsters representatives to unionize cannabis workers. Charles says she wanted to learn about the industry and its growth. “I like to make trouble,” she says. She’s also interested in possibly getting into the business in the future. For now she’s glad to return to theater, where she’s assistant director and dramaturge on “Bug” at the Steppenwolf Theatre. And she was set to make her Lookingglass Theatre debut in the remount of “Her Honor, Jane Byrne” this fall. Some theater professionals found the pandemic provided a surprising respite from the usual breakneck pace of daily life and the chance to try different things, “We spent time meditating,” says trumpeter Denton. “Getting back full swing, it’s easy to get sucked back into the rat race, the pressure cooker. I want to preserve that peace and tranquility I was able to work on when I had time.”

Some aren’t so sure they want to keep audiences tethered to Zoom BY STEVE HENDERSHOT When the pandemic lockdown hit and performance venues shuttered, Chicago theater companies got creative in their efforts to stay connected to their casts, crews and audiences. Many theaters began livestreaming performances. American Blues Theater, for example, managed its annual production of “It’s a Wonderful Life” last year by coordinating Zoom performances from each of the actors’ homes, and it also launched an online concert series from its rehearsal space. Now that live performances

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are resuming—this year’s 20th anniversary production of “It’s a Wonderful Life” is moving back to a traditional stage at Victory Gardens’ Biograph Theater—companies are weighing whether and how much streaming content still makes sense to offer. Gwendolyn Whiteside, American Blues’ artistic director, says she’s planning to keep producing digital content, including the garage concerts—just not at the expense of a return to traditional performances. “What we’ve heard is, ‘Yes, please keep these going—and also add the live performances back in.’ So we’re not losing anything, just adding more programming,” says Whiteside. “We will only do Zoom as much as our audience wants us to.” Other theater groups aren’t

as confident that streaming should remain part of their repertoire. Chicago Shakespeare Theater leaned on its Chicago ShakesStream channel during the pandemic with productions such as a freshly imagined monologue from a character from “MacBeth.” Yet, now that Chicago Shakespeare Theater has resumed live performances, debuting a Beatlesinspired take on “As You Like It” at its Navy Pier theater in October, the calculus has changed. Criss Henderson, the theater’s executive director, believes some pandemic-era tactics might be best left behind. “There are plenty of online entertainment content providers in the world,” Henderson says. “I’m not sure that live theater-makers necessarily need to be trying to get into that market.”

PHOTO COURTESY OF CHICAGO SHAKESPEARE THEATER

Theater companies rethink future of the streaming model

“Macbeth” is re-examined through the eyes of the title character’s best friend in Chicago Shakespeare Theater’s production of “I, Banquo,” which was streamed on demand in March and April.

11/23/21 3:22 PM

Chicago Arts and Culture The thread that weaves our city together. Arts and culture bring so much more than entertainment to our city. The economic, social, educational and mental wellbeing fostered by our strong arts and culture community is part of what makes Chicago so unique. At CIBC, we celebrate the organizations that bring the creativity, history and imagination of our city to life.

CIBC proudly supports Art Institute of Chicago

Hubbard Street Dance Chicago

Arts Alliance Illinois

Lyric Opera of Chicago

Auditorium Theatre

Museum of Science and Industry

Broadway In Chicago and the CIBC Theatre

Ravinia Festival Association

Chagrin Documentary Film Festival

Remy Bumppo Theatre

Chicago Academy for the Arts

South Asia Institute

Chicago Children’s Choir

The Deer Path Art League

Chicago Symphony Orchestra

United Performing Arts Fund UPAF

Collings Foundation, Inc.

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16 NOVEMBER 29, 2021 • CRAIN’S CHICAGO BUSINESS

Investment in nightlife could attract residents, businesses BY WILLIAM JOHNSON Chicago is the largest Midwestern city, but residents don’t think the city’s entertainment, culture and nightlife are keeping pace with that status. While 70% of Chicago residents believe the city is attracting new businesses and residents, only 28% think leisure and nightlife options contribute to this growth, according to a recent study conducted by the Harris Poll. This perception may have implications for Chicago’s retention of current residents and its longterm growth: Nationwide, 44% of U.S. adults say that the presence of restaurants plays a role in how they rate their city as a place to live, according to the Harris Poll. Roughly one-third of U.S. adults say enter-

tainment options play a role in how they rate their city, while 1 in 4 cite arts and culture organizations. Further data paints an even more worrisome picture for Chicago’s reputation. Only 37% of residents view the city as “up and coming,” and 49% describe the city as “boring.” And while 59% of residents believe Chicago has improved in the last five years, this falls below the sentiment of residents in other metros, where, on average, 67% of residents say their city has improved in recent years. For inspiration, Chicago can look to what’s unfolding in nearby met-

ros, where residents are more optimistic about the vitality of their cities. In Detroit and Indianapolis, 45% and 40% of residents, respectively, say that their cities’ entertainment options attract new people and businesses. Chicago was once known for its thriving nightlife. As Chicago leaders plan for future growth, they should examine opportunities to increase investment in the city’s leisure and entertainment to keep residents going out—and staying local. Data from the Harris Poll is based on responses from 1,996 adults in a nationwide study and 3,931 adults in a city-level study. William Johnson is CEO of the Harris Poll, a public opinion, market research and strategy firm based in Chicago.

w SURVEY ON CHICAGO’S CULTURE AND ENTERTAINMENT SCENE Percentage of Chicago-area residents who say their city is attracting new residents and businesses 70%

Chicago area U.S. residents

76%

Percentage of Chicago-area residents who think that leisure and nightlife— such as entertainment venues, restaurants, festivals—are responsible for attracting new residents and businesses to their city Chicago area All surveyed major metros

28% 37%

All U.S. adults

39%

Percentage of Chicago-area residents who say Chicago has changed for the better in the last five years Chicago area All surveyed major metros

59% 67%

Source: The Harris Poll

What happened when artists lost their audiences Canceled live performances created opportunities to re-examine, step back and renew creative approaches Traditionally, about a dozen Rhino volunteers would gather in The pandemic stopped live per- someone’s home and share a pizza formance in its tracks—the kind of while discussing the submitted poperformances that involved audi- ems. When those meetings shifted to Zoom, it allowed for the inclusion ences, anyway. “It was cataclysmic,” says poet of some out-of-town alumni. But and comedian Mark James Heath. the old sense of relationship, com“You never thought ‘live’ was go- munity and fun was hampered. “There is a magic to the live, ing to go away. If anything, it was like, ‘Yeah, this internet might fall spoken word that we did miss,” apart, but they’ll never be able to says Jan Bottiglieri, a Rhino Poetry stop us from meeting and per- editor. “So as pleased as we were forming in front of each other.’ that we were able to keep the boat afloat, everyone has been talking And then it was the opposite.” The lockdown had a less obvious for months now about how great but still powerful impact on artists it will be when we can finally sit at whose mediums don’t depend on that table again together.” Now Bottiglieri is searching for public performance. Visual artists and literary types found that while a formula that will balance the they could still make their art, their group’s new digital capabilities business practices and creative with its old sense of community. processes were upended, forcing Her plan is for Zoom to remain part them to adapt on the fly. Now, as of the group’s toolkit because it allive concerts, art fairs and studio lows for editorial subgroups to vet classes begin to resume, the ques- more poems more quickly. Zoom tion facing arts professionals of also diminishes the travel burden every stripe is which of their pan- for people such as Bottiglieri, who demic improvisations should make lives in Schaumburg, about an hour from Evanston. But she also plans it into their regular repertoire. The Evanston-based literary for in-person gatherings to reclaim journal Rhino Poetry managed to their spot as Rhino’s default. Visual art professionals also are re-examining their “YOU NEVER THOUGHT ‘LIVE’ WAS practices. Pre-pandemic, Emanuel Aguilar, co-ownGOING TO GO AWAY.” er of Patron Gallery in West Mark James Heath, poet and comedian Town, was a regular traveler on the global art fair circuit. produce its annual journal in both But the pandemic proved profitable 2020 and 2021. Its distribution for his gallery—in part because of a model—a printed journal that home decorating boom—and Aguis mailed to most customers— ilar realized he didn’t need to be in wasn’t disrupted in the same way perpetual motion in order to sustain his business. as live music or theater.

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KAITLYN RAITZ

BY STEVE HENDERSHOT

Heather Styka

Mark James Heath

Emanuel Aguilar

“This community is just moving across the world, from city to city, with the same people, the same vendors, the same artists and the same clients, just jumping around the world to different convention centers,” Aguilar says. “Maintaining relationships is important. But do I need to do that 12 times?” Aguilar plans to cut back on art fairs and events at Patron’s Chicago gallery. He believes that digital viewings will recede but some elements will remain, such as virtual walk- throughs by the artist. What will remain is what’s “really effective in terms of being supplemental” to the gallery ex-

perience, rather than replacing it, Aguilar says. A more selective approach to in-person gatherings is also resonating with performers. When the pandemic first hit, singer-songwriter Heather Styka was already growing tired of the grind of booking, touring and promotion. After years on the road, along with hosting open-mic nights at acoustic staple Uncommon Ground, she realized that she valued her musical community more than commercial success. “The thing that I realized I missed was the late-night song rounds that happened after the music conference, after the music festival, after the show. I missed those moments big-time, because what was fueling me was the person-to-person connection, not the knowledge of how many streams I got that day,” says Styka. In response, she has scaled back her performance schedule—in-person concerts as well as electronic ones—and is placing greater em-

phasis on a handful of key shows, such as a late November concert at Space in Evanston. She’s also dialing up her investment in small communities, such as a songwriters group she’s belonged to for the past decade that’s just beginning to resume meeting in person. A different sort of therapeutic impulse helped sustain the Chicago Printmakers Collaborative during the pandemic. Revenue for the Lincoln Square-based studio has come primarily from the tuition that students pay to take classes in disciplines such as screen printing and lithography. During the lockdown, when studio classes were canceled, Deborah Maris Lader, the collaborative’s director, began selling collections of printed goods online—and was surprised when they sold well. “I think people just needed a treat—a visual treat,” Lader says. Now classes have resumed, but the collaborative’s digital storefront remains, as does another pandemic-era addition, online classes. Lader expects that going forward, those digital offerings will make up a meaningful portion of revenue. As poet and comedian Heath has returned to the stage—he performed twice last month at a literary showcase hosted at the Green Mill in Uptown—he’s reminded of the dynamics that make live performances special and that have been in short supply during the pandemic. “It’s great to be in the room with people again, and it presents all these new sorts of challenges and ideas. I’m a completely different performer than if I’m just in my house doing it for the camera,” Heath says.

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CRAIN’S CHICAGO BUSINESS • NOVEMBER 29, 2021 17

CREATIVE TRANSFORMATION

Fund artists to create a new market of ideas A MONEY t 6018North, an experiThe Polsky Center, New mental contemporary art Venture Challenge and 1871’s space I founded and run accelerator programs have within a repurposed 1910 manlaunched Foxtrot, Groupon, sion, we connect diverse artists Grubhub and Venmo, to name and audiences through uniquely a few. Would artists leave if we engaging cultural experiences. similarly invested in artists and 6018North promotes connecart spaces? If we look at the tions and risk-taking not only to above innovators, they all move advance the state of art, but to goods and money. What if we percolate civic imagination and Tricia Van Eck is paid artists to similarly reshape expand possibilities. If we connect the founder and circulation patterns of money, people and take risks, others are artistic director goods and services? encouraged to do so. of 6018North, I write this as the city of Society is now at a crossroads, an experimental Chicago passed a budget with slowly recognizing entrenched arts and culture $26 million in arts and culproblems. As both artists and enorganization in ture investments. This follows trepreneurs know, it’s difficult to Chicago. emergency pandemic funding forge new, alternative paths. We from the $16 million the Joyce, MacArthur, need a new marketplace for ideas that spark Terra and Walder foundations invested to people’s imagination and drive demand support Black, Latinx, Asian and Indigfor change. Creating a new market requires enous arts organizations. The Chicago connecting, educating and persuading the Community Trust and other foundations media, academics, organizations, politicians also stepped up their giving to arts and and the public to see the world differently. community organizations. The ongoing This is what the arts does. In Chicago, we need is vast, however, with large swaths of have major universities that churn out artthe city underserved and undernourished, ists, but the ambitious leave for New York, long before the pandemic. Los Angeles or elsewhere. Why?

hows, ncert o dismall riters past o re-

MENTORSHIP Cash infusion, meant to stop the bleeding, is a first step. What is needed is longterm investment. Looking at the innovation accelerator programs’ mentorships, what if innovators and investors mentored artists and art spaces? Imagine seeding future artists and projects like Theaster Gates’ Stony Island Arts Bank, Floating Museum, the Franklin or many other artist-run projects that fill huge gaps not being met. Since artists are problem-solvers and idea generators, what if we paid artists salaries (not small grants that barely cover expenses) to address social problems? What if we then connected innovators with these artists, and investors funded these collaborations with real investor-grade seed money?

MARKET When young hedge funders learned that Steve Cohen bought contemporary art, these aspiring investors followed his lead to create a bull market. Similarly, Chicago’s business schools could and should start an art gallery to create a new market of dealers and collectors. In the meantime, Chicago has a number of for-profit and nonprofit galleries, from more

established galleries such as Richard Gray, Rhona Hoffman, Monique Meloche, Patron and Corbett vs. Dempsey, to artist-run spaces such as 65Grand, Roots & Culture, the Silver Room, Trap House Chicago and Woman Made Gallery, to name a few. Other models, such as 3Arts, offer artists cash awards and co-funding. Spread the wealth. Buy their work. Support their projects. A market, however, is more than pushing merchandise; it creates audiences. It shapes our present and future. Artists have the potential to envision and advance a world that enhances and sustains quality of life, not just for the few, but for all Chicagoans—maybe that is why they have been marginalized. At this inflection point—with melting glaciers, raging fires and hurricanes, social unrest and a pandemic—let’s try something new. Imagine a future where artists, entrepreneurs and investors co-design projects with aldermen, city departments, corporations and communities. People across the city working with artists, entrepreneurs and investors can rise to the challenge to reframe our expectations, habits and policies before it is too late. If we actually believe in creative transformation, we must invest in artists and arts organizations.

The Great Lakes — a fifth of the world’s fresh water.

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We’re invested in protecting this vital resource for generations to come. Learn more about our efforts to support policies that ensure all people in the Great Lakes region have clean water from lake to tap.

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18 NOVEMBER 29, 2021 • CRAIN’S CHICAGO BUSINESS

PUBLIC ROLES

The final act is still unfolding

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museums worldwide he events of the were forced to close. past 20 months Most performing arts placed us in organizations didn’t starring roles of a horreopen until fall 2021, ror movie or a Greek after being dormant tragedy. Act 1: A mysfor over a year. With terious plague invades health safety as a top the land, fear and priority—for guests panic rages, and life as and performers—atwe know it comes to a tendance is far from near halt. Act 2: Heroes Michelle T. Boone is board chair of Arts arise and bring aid and Alliance Illinois and president of The Poet- pre-COVID levels. relief, while others sow ry Foundation. Claire Rice is the executive Earned revenues are down and expenssuspicion and deceit. director of Arts Alliance Illinois. es are rising. Many Act 3: Flowers begin to smaller organizations with tight quarters bloom, we mourn losses, but hope is in the and those based in communities heavily air, and we gather again . . . we gather once impacted by COVID remain closed and are more. unsure when, or if, they can safely resume Only this isn’t a script, and the final act operations. continues to unfold. Government grant programs have been The ongoing impacts of the coronavirus essential to organizational survival, and pandemic on arts and culture cannot be generous donors have supported both overdramatized. While some stages, halls, nonprofit and for-profit creative businesses. galleries and museums have welcomed This has been a lifesaving resource, as giving patrons back, we still face a long road to to the arts fell 8.5% in 2020 as donors shifted recovery. The reopening of these venues is insupport toward education, human services deed a much-needed stimulus for a return to and the environment at record levels, acvibrancy downtown and beyond, and as others provide incredible examples of innovation cording to a recent report by Giving USA. This period of uncertainty and limitation and resilience in the arts and culture sector, in the arts has hurt our city’s economy and the reality is: We are not all right. Not yet. diminished its creative workforce, drivIn 2020, Art Newspaper reported attening workers either out of the state or into dance of the world’s 100 most-visited art mualternative professions entirely. Without seums dropped by a staggering 77%—from continued investments in the arts, we risk 230 million in 2019 to just 54 million—as

losing even more young, creative talent. The true devastation to artists and cultural organizations gets obscured from the public, because throughout the pandemic, artists continued to do what artists do: create, make and inspire. Performances went online; world-class artists created in fields, on roofs and in parking lots; museums made collections accessible virtually; and arts educators generated thousands of hours of engagement for learners at home. It’s tempting to focus on the positives: incredible stories of hope and help. But then we risk taking for granted the creatives who have done so much for us throughout this pandemic. The truth is, the issues facing creatives today existed long before COVID-19. Despite the incredible value the arts-and-culture sector brings to our city and state, the arts have always struggled with lack of funding, insufficient investments in Black and Brown communities, poor labor practices and non-living wages. Creatives have long stitched together gig work and lived

paycheck to paycheck, often without basics like health insurance or stable housing, while also often juggling crushing student debt. These issues may have been exacerbated by the pandemic, but certainly weren’t caused by it. The arts have a long road ahead to get “back to business.” And so, we send the rallying cry to our colleagues in philanthropy, our elected officials and civic and corporate leaders to marshal the resources necessary to sustain Chicago’s creative sector. If you agree that creativity plays a vital and essential role in our city and state, we encourage you to get a subscription to a dance/theater/music series; become a member at a museum; buy a painting from a local artist; commission a poem or song as a gift; or support your neighborhood cultural venue with a donation. Your active participation and advocacy are essential for the arts recovery, and you can play a big role in changing the narrative and position us all as the creators of our own powerful ending. Scene.

JOURNEYS

‘Dancing into a new era’

the hope it sparks your knowlhen the pandemic edge that you already have reached Joel Hall Danceverything you need right now ers & Center, COVID to thrive in business. restrictions permanently shut the doors of our home in Edgewater. I started by thinking about There for 10-plus years, JHDC myself. had been an organization in conIn the beginning of this journey, stant motion, alive with the misI made sure I was moving forward sion of bringing urban jazz dance in alignment with my highest self. performance and education I asked questions like, “What is to movers from marginalized Jacqueline my intention for this life?” and backgrounds. When Edgewater Sinclair is the “Is this the task of my lifetime?” shut down, most of our income artistic and and “Is taking this on going to streams were eliminated. For the executive director be for my highest good?” When first time in our 47-year history, of the Joel Hall it was clear my answers were all JHDC was forced to stop moving. Dance Company. unequivocally “yes,” I followed up As a new leader faced with this with, “Does JHDC’s new mission line up with unprecedented struggle, I didn’t have an my hopes and dreams?” It did. MBA to fall back on, nor had I ever read a single book on business. However, in the I moved to questions about the Joel stillness before action, I found an honest, Hall family. artistically voiced, experiential approach to Jazz dance is by the people, for the people, business—the same one I use to create art and based on conversations where everyand choreograph dance. Despite the stagone’s individual voice has value. As a leader gering challenges of the last 18 months, my balancing what is best for each individual approach enabled JHDC to thrive—not just with what is best for the collective, I asked survive—during the pandemic. myself the question, “What is the highest All it required was inner/outer aligngood for the community, the dancers, the ment, adaptation and unrelenting storytellemployees, the stakeholders, the creators, ing. I offer you the story of how I brought the children and the larger world?” JHDC into a new era during a pandemic in

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A rendering of the new Joel Hall Dancers & Center. I chose a course of action and adapted as needed. I knew that change and dedication would serve JHDC’s best interests. I led change by leaving a stable 30-year career in education so I could focus fully on the mission ahead. I kept my eyes open for where we could kick-ball-change-pivot to best effect—including seeing the closing of our leakyroofed, temperamentally heated building in Edgewater as an opportunity. When it became clear that our move to online classes was not a forever solution, I knew that getting JHDC a forever home was essential. I told our story on repeat. Once committed to this course of action, I was on fire. I shared JHDC’s mission and vision with everyone. Personal and professional connections heard me. They led me to a team of directors and consultants who handle the business, so I can handle the

art. The Logan Foundation heard me. They generously helped JHDC acquire a forever home to upgrade and customize to our needs in Albany Park. We’re dancing into a new era. I’m jazzed to say we are beginning work on a 7,800-square-foot dance studio and theater scheduled to open in 2022. We have a team dedicated to expanding outreach to schools, building programs for movers of all abilities and focusing on how our new home can serve and strengthen our new community and our world. While I can’t know what your journey to thriving business will be, here’s some unsolicited advice. Get clear on your story and tell it with all the fire and passion you can manage. Told enough times, your story will light up all the right people and get them intrigued enough to invest in you and what you’re doing. You already have everything you need.

11/23/21 3:22 PM

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CRAIN’S CHICAGO BUSINESS • NOVEMBER 29, 2021 19

RESILIENCE

Keeping ‘faith in our collective ingenuity’

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PHOTO BY CHERYL MANN

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PHOTO COURTESY OF CHICAGO DCASE

of the 2020-21 season, including hen I think about the salaries and benefits, and quickly history of the Joffrey pivoted to virtual classes and Ballet, I am remindonline learning for thousands of ed of the many ways it should students of the Joffrey Academy not exist. In 1956, it was a and Joffrey Community Engagedream born of wild ambition, ment. We transformed Joffrey a small ensemble of artists Tower into a model of COVID competing with larger compasafety, which allowed rehearsals nies with established legacies and training to continue when and donors. In the late ’80s lockdown restrictions eased. Our and early ’90s, it was stifled Greg Cameron is by infighting, pushing it to the president and CEO staff and administrative team brink of financial ruin. Then, of the Joffrey Ballet. embraced working remotely, even as we made difficult salary in 1995, thanks to the leaderreductions and formulated several creative ship of then-Mayor Richard M. Daley, first financial models to preserve as many lady Maggie Daley and a committed group ongoing projects as possible. The estabof civic leaders, the Joffrey made its way to lishment of our Company Artist PartnerChicago where it began anew. ship Program gave our artists a chance to Fast-forward a quarter-century and you learn and contribute to all aspects of the will see that the Joffrey and Chicago are administrative side—from development to the foundation for preeminence among marketing to human resources. Peers and the world’s best. Some might call it good colleagues subsequently became stronger fortune. I call it Joffrey resilience. In the and more collaborative. era of COVID-19, resilience is our guiding The pandemic lockdown also gave us a principle. chance to explore new tools and expand Through thick and thin, there has always our audiences. We launched the Joffrey been a path forward for the Joffrey and our Studio Series, a digital offering that uticity’s dance community. We have perselized the Joffrey’s Gerald Arpino Black Box vered through wars, recession, the AIDS Theater at Joffrey Tower, as an opportunity crisis, 9/11 and now a once-in-a-generto re-create the magic of the stage for a ation pandemic that has touched every digital audience. In total, the Joffrey procultural institution around the globe in duced seven world-premiere works for a ways big and small. virtual audience, reaching online viewers In the spring of 2020, revenue streams in over 20 countries, free of charge. dried up. The artists who marveled onBut perhaps our greatest feat was to stage night after night were forced to isolate. We were left with nothing more than a recognize that the health and vitality of Chicago’s cultural community mattered, hope, that the philanthropy of our closest too. And as did many arts institutions, we allies would keep our missions alive. It is embraced the mantra of “care and feedwhy the COVID-19 pandemic has been ing,” which went far beyond the walls of so uniquely devastating for so many, a Joffrey Tower to our partners at Lakeview startling realization that our financial and Pantry and our first “Joffrey Day of Seraudience models that have been reliable vice” in honor of Juneteenth, which saw for so long could suddenly be so fragile. Joffrey staff members volunteer their time But I have always believed that artists to help cultural organizations around the and the people who support them have city. Those partnerships continue today. the capacity for unlimited creativity. They As we approach the holiday season, I are also the best kinds of optimists, which find myself thinking about the Joffrey’s is exactly what you need in a crisis. And in reimagined version of “The Nutcracker,” set typical fashion, the Joffrey and dance here in Chicago on the eve of the opening of the in Chicago and around the world found a 1893 World’s Fair. The fair is often invoked way back to the stage by putting our faith as the pinnacle of achievement, when in our collective ingenuity. Chicago rose from literal ashes in 1871 to The pandemic lockdown forced us to create something entirely magnificent and think hard about the status quo. For the unlike anything the world had seen before. Joffrey’s part, the artists and our stuChicago has always found a way to build dents were first on our minds. We started its way back to prominence in the face of by guaranteeing the contracts of all 43 adversity. We are doing it again once more. members of the company for the duration

A mural in the South Shore community was created in collaboration with Dorian Sylvain, the city’s Invest South/West artist-in-residence for the Auburn Gresham neighborhood.

PUBLIC ROLES

Revitalized arts, culture essential to city’s recovery

of the top major U.S. cities in efore the pandemic, Chicagovernment support for arts go’s arts sector was a $3.2 recovery and artist relief. billion industry, representGoing forward, we’ll continue ing over 85,000 jobs. Chicago’s to make certain these resourcarts landscape has been devases are distributed equitably tated by the pandemic, but the across the city. To that aim, resilience of our talented artists we’ve centered racial equity in and venues as Chicago’s cultural our grant-making. Sixty percent scene continues to safely reopen of Individual Artists Program gives us renewed hope for better times ahead. Revitalizing our Erin Harkey will be grantees are Black, Indigenous and people of color, as compared city’s arts and culture scene is the next commisessential to our post-pandemic sioner of the Chica- with 38% in 2016, and grants were awarded to artists and orgarecovery, and the arts must be at go Department of nizations in all 50 wards in 2021, the center of bringing Chicago Cultural Affairs & back, in all 77 neighborhoods. Special Events, sub- as compared with 35 in 2016. Additionally, we’ve increased According to a recent report ject to City Council our investment in public art as by Arts Alliance Illinois on the approval. She was we employ artists and creative impact of COVID-19 on our nominated to the workers throughout Chicago. creative sector, the for-profit and post this month by This year, we dedicated $20 nonprofit arts and culture indus- Mayor Lori Lightmillion to public art through new try lost an estimated $150 billion foot following the investments like the Capital Plan, in sales of goods and services retirement of Mark and nearly a third of its jobs (2.7 Kelly after five years O’Hare Terminal 5 expansion and the Chicago Monuments million) between April and July of public service. Project. To strengthen our local last year. Ninety-five percent of TV & film industry—one of the largest and creative workers reported a loss of income, most diverse in the U.S.—our Chicago Film 55% reported having no savings to fall back Office led the city’s efforts to bring a record on, 32% had faced eviction and 52% experi15 productions to Chicago this fall, at an esenced food scarcity. timated economic value of $750 million this Mayor Lori Lightfoot recognizes the year alone. Of course, we’ll also continue to important role artists and cultural organizabook Chicago-based musicians and artists tions play in Chicago’s economic recovery for the many special events and exhibitions and bolstering the quality of life in our city. we present at Millennium Park and the A tireless advocate and supporter of the Chicago Cultural Center, as well as facilitate local creative community, she truly is our hundreds of neighborhood festivals, mar#ArtsMayor. Her leadership is evidenced in kets and more. the passage of the 2022 Recovery Budget, Collaboration will continue to expand, where the Chicago Department of Cultural including our partnership with the DepartAffairs & Special Events, or DCASE, will see ment of Planning & Development to embed an increase of $26 million in new arts and artists in the mayor’s Invest South/West culture investments to support artists and initiative and the We Will Chicago citywide creative industries. plan, building on our initial two-year investThis investment will transform DCASE’s ment of $5 million to support cultural and cultural grants budget and increase direct community development. And, in partnersupport for the arts sector from $2.7 million ship with our Cultural Advisory Council, we to $20.7 million over the next two years. will advance a new direction for Chicago’s Our increased grants budget follows the cultural policy in which the arts are embedannouncement of “Arts77,” a recovery plan ded in initiatives and strategies across city that leverages over $60 million in initial government—including CPS, CTA, libraries funding to support local artists and creative and parks, just to name a few. industries. Combined with other programs, The pandemic upended the arts sector, this year alone, the city provided nearly but investing in Chicago’s creative economy $100 million in funds to support the arts will pay dividends for years to come. landscape—all told making Chicago one

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20 NOVEMBER 29, 2021 • CRAIN’S CHICAGO BUSINESS

Continued from Page 13

the board declined to conduct a search to replace the departing artistic director, but rather combined artistic and managerial responsibilities under executive director Erica Daniels. The seven-member Playwrights Ensemble, which had asked for a “transparent and equitable leadership search,” collectively stepped down, posting that the theater “purposely ignores the mission it made for itself and abuses the very resources it claims to value and support.” There was an additional indignity. While many theaters opened their lobbies as sanctuaries for Black Lives Matters protesters, Victory Gardens management boarded its home at the Biograph Theater in Lincoln Park. That drew demonstrators who wrote on the boards, “Wake up VG,” and the all-too-familiar names of police victims. The uproar led to the exits of Daniels and board chair Steven Miller, a co-founder of Origin Ventures and a major donor. Victory Gardens’ subsequent talent search led to Martin, an associate producer at the Goodman and native of Little Rock, Ark. Martin earlier co-founded a theater company in Des Moines, Iowa, and was producing director of the Williamstown Theatre Festival. He rounded out a Black managerial trio alongside acting Managing Director Roxanna Conner and board Chair Charles E. Harris II, a partner at Mayer Brown. In June, the theater announced a new fourmember Playwrights Ensemble. In an interview, Harris acknowledged that the board in 2020 was detached from the concerns of the artists, having encountered them primarily on festive opening nights. Victory Gardens had a record of presenting plays that “spurred discussion,” Harris says, and board members asked why they were on the receiving end. “A lot didn’t understand and probably still don’t,” he says. “We learned a lot about the artists and what they care about,” Harris says. The Playwrights Ensemble now attends and participates in board meetings—a measure put in place to bridge any gap in knowledge and understanding between board and artists, “THE POWERS THAT BE STILL ARE TRYING he adds. Another blowTO OPERATE UNDER THE OLD PARADIGM. up came this year, when Steppenwolf THERE IS A NEW PARADIGM.” video producer Lowell Thomas reActor and director Wardell Julius Clark signed, accusing says that although the pandemic the renowned company of burying exacted a painful economic toll “claims of harassment, racism and on theaters, the racial reckoning sexism to avoid accountability and is likely to have a longer-lasting real change.” Playwright Isaac Goimpact. “For some theaters, it will mez supported Thomas and said open new doors,” says Feinberg, he considered, but didn’t pull his who supports TimeLine, Victory play “I Am Not Your Perfect MexGardens, Lookingglass Theatre ican Daughter.” Their comments and others. “Or will it be, same old, were posted on the theater websame old? We’ll see how that goes.” site Rescripted. Artistic director Shapiro announced her resignation less than three weeks later. A ROUND OF SOUL-SEARCHING Steppenwolf Executive Director Tensions at Victory Gardens mounted in spring 2020 when Brooke Flanagan says that when Ensemble resigned following a controversial hiring decision. That was followed by public callouts of Steppenwolf this year and the departure of artistic director Anna Shapiro. “The powers that be still are trying to operate under the old paradigm,” says Clark, an actor and director who is a company member at TimeLine Theatre and has worked at Victory Gardens. “There is a new paradigm.” Some changes have come quickly with Black artists being elevated to high-profile positions. Victory Gardens this year hired Goodman producer Ken-Matt Martin as artistic director after a six-month search. Steppenwolf elevated ensemble member Glenn Davis as a co-artistic director. And Mercury Theater, which closed during the pandemic, resurrected itself with the hiring of a new artistic director, Christopher Chase Carter. Other Black artists were hired for top positions at Second City, Hubbard Street Dance and the House Theatre of Chicago. “We built a bigger table so there are more voices at the table,” says Mercury Executive Producer Walter Stearns. While works with racial themes are nothing new, they are front and center in the comeback season. Goodman this fall featured a play about civil rights activist Fannie Lou Hamer. Steppenwolf will present Tony-nominated “Choir Boy,” about a young gay Black man written by ensemble member Tarell Alvin McCraney of “Moonlight” fame. Victory Gardens kicks off its season in January with Martin directing “Queen of the Night,” an exploration of “masculinity and queerness through the lens of multi-generational Blackness.” And TimeLine opens with “Relentless,” recounting the experiences of a Black Victorian-era family that resonate today. That’s a start, activists say, but more changes are needed. Diversity is necessary at the board level but also in theater audiences. Better compensation and working conditions for underpaid actors and crew are concerns that transcend race. Philanthropist Janice Feinberg

P013-P021_CCB_20211129.indd 20

“Art is the thing that shakes up culture and moves it forward,” says actress and activist Sydney Charles.

TH TO

In Ch of the Mo tra att cul the

In t of t

2, Number of respondents who participated in activity

DRAMAS

50 0

Note

The examination of what stories are told and who is part of telling them is overdue, says PJ Powers, co-founder and artistic director of TimeLine Theatre.

11/23/21 3:22 PM

Sour by W

eatre.

CRAIN’S CHICAGO BUSINESS • NOVEMBER 29, 2021 21

Charles E. Harris II is board chair at Victory Gardens Theater.

PHOTOS BY ALYCE HENSON

After Victory Gardens’ management boarded up its home at the Biograph, artists painted “Black Lives Matter” on the wood.

THE SLOW RETURN TO LIVE THEATER In 2020 and 2021, the League of Chicago Theatres hosted a cohort of 15 Chicago theaters to conduct the COVID-19 Audience Outlook Monitor survey, a longitudinal tracking study of audience attitudes about going out to cultural events during and after the COVID-19 pandemic. In the past two weeks, did you do any of the following activities in person?

Number of respondents who participated in activity

2,500 2,000 1,500

Eat in a local restaurant Visit a museum or gallery Attend a movie theater Attend a live performance

1,000 500 0 June July Aug. Sept. Nov. Mar. May July Sept. 2020 2021

Note: In 2020, the cohort included only 14 theaters. Source: League of Chicago Theatres survey conducted by WolfBrown

Steppenwolf’s Brooke Flanagan: “The stresses of the past year have taken a toll on everyone.” a claim is brought to leadership about harassment of any sort, it “is taken very seriously and investigated internally and often with external counsel review.” Staff doesn’t learn of the outcome because of privacy laws, but “action is taken when warranted,” she adds. Shapiro’s exit had been in the works for some time knowing that her second three-year contract was up in August, Flanagan says. “The stresses of the past year have 2000 taken a toll on everyone, and we were no exception,” she added. 2500 Shapiro remains1500a Steppenwolf ensemble member and is directing a production1000 this season. 2000 The theater company in July named Davis and another ensem1500 500 ble member, Audrey Francis, as co-artistic directors. Davis, who joined the ensemble in1000 2017, had 0 won acclaims for his Broadway performance in “Bengal Tiger at 6/20Zoo,” alongside 500 the Baghdad Robin Williams in 2011. Francis also 11/2

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joined the ensemble in 2017, having co-founded a Chicago acting conservatory. In the spring, Steppenwolf published a diversity action plan that covers work and hiring practices, training, credit and compensation, transparency and wellness. For example, the company pledged to complete a salary survey and update salary ranges, standardize its process for contracts, and seek more people of color for its vendors and contractors. It also said it would publish accountability dashboards and explore how it can better support the mental health of its staff and artists. Flanagan says Steppenwolf has expanded diversity in recent years, but the demands of “We See You, White American Theater” showed that certain practices still were causing harm. Staff reviewed the coalition’s demands to determine what changes could be made quickly and which would

take longer. “No one is going to undo 400 years of racism in a season,” she says. The upheavals have prompted soul-searching across the Chicago theater landscape. The examination of what stories are being told and who is part of telling them is overdue, says PJ Powers, co-founder and artistic director of TimeLine Theatre. “I as a co-founder and white leader am the first to acknowledge we are a work in progress,” he says. “I can see progress made on a daily basis, but I don’t get a free pass for that.” One concern is the diversity of theater boards, largely composed of affluent, white baby-boomer donors. It’s essential for boards to be focused on finances, but you can’t have that priority supersede the other values of the organization, Powers says. TimeLine has three people of color on its 20-plus member board. Reforms might require long-serving board members to cycle off, or a theater could be less rigid in defining who is a quality candidate. “Many Black artists don’t have the wherewithal to make big donations, but it’s offensive to presume people of color wouldn’t be capable of financial commitment,” Powers says. “I hope the landscape a year or more from now better reflects our full community on a consistent basis.” Diversity also is needed in the makeup of audiences, says actress and activist Sydney Charles. If the audience is all white, maybe the marketing department hasn’t done its job, she says. “They need to go out of their comfort zone— are theaters hiring the right people to do that? Other issues transcend race. The hours are long and the pay isn’t great—except at the top. “We See You, White American Theater” says a theater’s highest paid executive staff members should make no more than 10 times the yearly salary of the lowest-paid member. Joffrey Ballet President and CEO Greg Cameron says there’s been a seismic shift in the willingness of people to acknowledge the problem. “People are committed to engaging in the challenging conversations of making things better—it is forever work,” he says.

COURTING NERVOUS AUDIENCES

The national trauma of COVID-19 also makes for gripping drama, and Theater Wit returned with “Mr. Burns, a post-electric play,” about the rise of a culture after a pandemic. The Wit had performed the play earlier, but artistic director Jeremy Wechsler wondered, “What does it mean to see a play about a pandemic after we’ve all experienced it?” In the first act, people are shivering around a firepit, talking about the television they’ve seen. “It’s not a crazy exposition. It’s what everyone did last year,” Wechsler says. In early October, the theater was at only 50% capacity, but sales were climbing weekly, Wechsler says. Theatergoers have been nervous about the delta virus and are

making decisions closer to showtime. “People are not used to having a social life. For 18 months, nothing.” Wechsler says. “We have to retrain ourselves for public life.” The Joffrey reopened in midOctober in its new home at the Lyric Opera House with “Home: A Celebration,” a performance of four works. The company reduced its subscription goal by 30% from its pre-pandemic year and recently had reached 96% of that paredback target. “That’s a major victory,” Cameron says. With continuing anxiety about COVID, theaters are navigating a raft of considerations as they reopen. More than 75 venues adopted League of Chicago Theatres protocols to require masks, proof of vaccination or a negative COVID test. Should there be an intermission? An open bar? Steppenwolf welcomed audiences earlier this month with “Bug,” a drama of “love, paranoia and government conspiracy,” and the opening of its $54 million arts and education center, named for board chair and donor Eric Lefkofsky, the billionaire co-founder of Groupon. The play is performed with one intermission and the bars are open. Black Ensemble Theater is taking a different approach. Although the theater requires employees to be vaccinated, it won’t require that of audience members, but they must be masked. Tickets are being sold at reduced capacity to enable social distancing. This month, it offered the musical revue “Ladies, Living and Loving Life,” with no concessions and no intermission. “It’s come in to the theater, stay in your seat and then go,” says founder and CEO Jackie Taylor. Then there’s the job of checking the air filtration systems, something many public buildings were forced to consider earlier in the pandemic. “Our 107-year-old building was closed for 16 months, so we have to give it a little love and attention,” says Conner of Victory Gardens. TimeLine is performing its 2021-22 productions at Theater Wit on Belmont Avenue while its new facility in Uptown is under construction. TimeLine’s previous home on Wellington Avenue in Lakeview doesn’t meet health and safety guidelines, Powers says. What’s ahead in the next acts? Activists say the recent appointments are encouraging, but Black managers will be tested as they try to reform antiquated processes. “We’re shifting the standard and that’s making everyone uncomfortable,” Charles says. “Art is the thing that shakes up culture and moves it forward.” Meanwhile, after months of viewing streamed films and TV series from their couches, ticket buyers seem happy to experience live performances. “People have grabbed us in the lobby and said how great it is to be back,” Wechsler says. “There will be a theatrical explosion of joy and creativity in 2022. I hope audiences are there for it.”

11/23/21 3:22 PM

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PEOPLE ON THE MOVE

Advertising Section

Crescent Cleaning Company, Chicago

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

ARCHITECTURE / DESIGN

FINANCIAL SERVICES

HEALTH CARE

MARKETING

Eastlake Studio, Chicago

JAG Capital Management, Chicago / St. Louis

Cancer Treatment Centers of America, Zion

The Mx Group, Burr Ridge

Kate Hurt joins JAG as Senior Vice President of Operations. Previously, Kate was the Chief Operating Officer of a wealth advisory firm. Kate earned a BS in Marketing from Eastern Hurt Illinois University, an MBA from Southern Illinois University Edwardsville and completed the Women’s Leadership program at the Olin School of Business at Washington University. George Margvelashvili, Margvelashvili CFA® joins the firm as an Equity Research Analyst focusing on the technology sector. Previously, he was a research analyst at Fisher Investments. George earned a BS in Financial Economics from the University of Maryland Baltimore County and an MS in Finance from the University of Texas.

Cancer Treatment Centers of America® (CTCA), a premier national oncology network of hospitals and outpatient care centers, is pleased to welcome Dr. Barbara Buttin to the medical staff at the Zion, IL hospital. Dr. Buttin is board-certified in Gynecologic Oncology and Obstetrics and Gynecology and has held positions at area hospitals, including Northwestern Memorial and Central DuPage. She has a special interest in minimally invasive surgery, including the newer application of HIPEC for ovarian cancer.

Mel Chotiner is an interior designer with more than 21 years of experience in the Chicago market. She specializes in the delivery of creative solutions, nurturing client relationships, and leading collaborative teams through the full design process. Her experience spans corporate offices, branding, and repositioning projects of all scales. In her new role as Director/Senior Designer, she will lead design teams as well as taking a leadership role focused on the future of the practice.

BANKING First Bank of Highland Park, Northbrook As one of the five largest privately held banks in Chicago, First Bank of Highland Park, is pleased to welcome Philip Pujdak as Banking Apprentice. He is enrolled in Harper College’s Banking Apprenticeship Program. For the next two years, Philip will study to earn a business degree and receive hands on training as he works alongside our team of experienced bankers.

BUSINESS SERVICES / CONSTRUCTION Cumming, Chicago

FINANCIAL SERVICES UBS Financial Services, Inc., Chicago L. Rita Fiumara, Senior Retirement Plan Consultant & Senior Vice President – Investments with UBS Financial Services, Inc. has been recognized as a Top Women Advisor in the Captain category by the National Association of Plan Advisors (NAPA) in 2021. Rita has devoted her 25-year career in equipping and supporting Plan Sponsors with best practices in meeting their Fiduciary responsibilities, while encouraging employees toward achieving their retirement planning goals.

Tom Erdelac has joined Cumming as an associate director of project management with more than 20 years of experience in the AEC industry, during which time he has received multiple awards from the AIA, ASID, and ALA. In his new role with Cumming, Tom will be leading the project management efforts for the international construction consultancy throughout the greater Chicago region and surrounding areas.

CONSULTING HBR Consulting, Chicago Andrew Lamont joins HBR Consulting’s IT Managed Services team as Director, Infrastructure and Network Engineering, overseeing the architecture, deployment, and operations of a large-scale network and compute infrastructure and working closely with software development and InfoSec teams. Andrew has 25+ years’ experience in the public and private sectors, successfully developing and delivering high-performing, resilient technology solutions to meet a variety of business needs.

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REAL ESTATE

The Mx Group is pleased to introduce Toni Midderhoff Miller as vice president of marketing. The Mx Group is a B2B agency that impacts the marketplace for companies that impact the world. Midderhoff Miller’s extensive knowledge of brand strategy will elevate The Mx Group’s brand by highlighting the agency’s capabilities, resources and subject matter experts within the industry. She will use her B2B and B2C marketing experience to make an impact on The Mx Group’s global community of clients.

Cancer Treatment Centers of America® (CTCA), a premier national oncology network of hospitals and outpatient care centers, is pleased to welcome Dr. Dennis Citrin to the medical staff at the Zion, IL hospital. Dr. Citrin is a board-certified medical oncologist with more than 40 years of experience, including a previous long-held position at CTCA and on the faculty of several medical schools, including Northwestern University Medical School. He devotes his practice to all stages of breast cancer.

MARKETING The Mx Group, Burr Ridge As a leading agency that strives to create meaningful end-to-end experiences for today’s B2B buyers, The Mx Group is thrilled to welcome Brendan Turner as senior vice president of digital experience. Turner will champion a focus on consumer marketing and technology to manifest a seamless digital experience for The Mx Group’s growing client list. Turner will guide The Mx Group’s digital strategies and strengthen capabilities for business analysis, product design, website development and more.

LAW Riley Safer Holmes & Cancila LLP, Chicago RSHC welcomes new partner Kalia Coleman to our Chicago office. Kalia joins us after nearly six years with the U.S. Attorney’s Office for the Northern District of Illinois, where she most recently served as Deputy Chief of the General Crimes Division. She is also a former Cook County Assistant State’s Attorney. She focuses her practice on Government Enforcement, Investigations & White Collar Criminal Defense work, advising businesses and key executives facing a wide range of complex legal issues.

REAL ESTATE Darwin Realty/CORFAC International, Elmhurst

HEALTH CARE Cancer Treatment Centers of America, Zion

Crescent Cleaning Company welcomes Max Andrews as Business Development Manager. Max brings 20+ years delivering best in class partnerships to Chicago’s real estate’s finest properties and firms. Max’s long-time involvement in BOMA in Chicago along with many other CRE networking associations has earned him accolades from partners to competitors as a stalwart business professional of the highest level of integrity and trust. Max will guide Crescent’s strategic new business development in Chicago.

To order frames or plaques of profiles contact Lauren Melesio at lmelesio@crain.com or 212-210-0707

Parker Ray has joined as an associate working with Principal Noel Liston and Vice President Nicholas Krejci primarily in the Elgin/1-90 submarket and Lake County. Parker previously worked at ABCO Electrical Construction & Design in Chicago and is a recent graduate of University of Iowa’s Tippie College of Business. Earning several Dean’s List Honors, Parker graduated from the University of Iowa in 2021. He also holds an Illinois real estate broker’s license and is OSHA 30 Certified.

REAL ESTATE ML Realty Partners, Itasca Maria Marcus joined ML Realty Partners as Senior Accountant. Ms. Marcus has spent several years working in the Chicagoland real estate industry at companies like Avison Young and JLL and most recently was employed with Pacific Retail. She holds a Bachelor of Science degree in Accountancy from Northern Illinois University.

COMPANIES ON THE MOVE

ADVERTISING SECTION

To place your listing, visit www.chicagobusiness.com/companymoves or contact Debora Stein at 917.226.5470 / dstein@crain.com HONORS, AWARDS & CERTIFICATIONS

MERGERS & ACQUISITIONS

Balanced Environments, Inc. Old Mill Creek, IL 847-395-7120 www.balancedenvironmentsinc.com

Nova Group, GBC St. Louis Park, MN 952-448-9393 www.novagroupgbc.com

BEI earns only Chicagoland award from NALP for Landscape Design & Maintenance

MINNEAPOLIS, MN – October 11, 2021 – Nova Group, GBC (“Nova”), an industry leading commercial real estate due diligence advisory firm, announces the acquisition of Carlson Environmental Inc. (“Carlson”), a full-scale environmental consulting firm in Chicago. As with previous strategic acquisitions, Nova Group, GBC sees Carlson as an ideal fit with Nova’s commitment to providing quality turnkey services to their global Commercial Real Estate client base.

NON-PROFIT HEALTH CARE Sinai Chicago, Chicago Sinai Chicago announces the addition of Brandon King as Vice President of Facilities, Construction & Real Estate. King will provide oversight of all facilities operations, environment of care, construction and real estate functions. Previous leadership positions include Chicago Public Schools, UW Health, and SSM Health of Wisconsin/Northern IL. He received his undergraduate degree from University of Wisconsin-Milwaukee and his Masters from University of Illinois at Urbana-Champaign.

Illinois Humanities Board of Directors, Chicago Illinois Humanities has named Susan Eleuterio as Board Chair. Susan — professional folklorist, civic leader, and educator — joined the board in 2013 and succeeds Mae Hong of Rockefeller Philanthropies. Susan has conducted fieldwork, research, and public humanities programming across the United States. “The humanities are critical in strengthening the resilience of our communities. I’m honored to work to expand crucial access to the humanities throughout the state,” said Susan.

Balanced Environments Inc., is proud to announce, they earned the National Association of Landscape Professionals Award of Excellence— GOLD for the Commercial Landscape Management of Covenant Living, Northbrook. “To be the only Chicago suburban landscape group to win this coveted award in 2021 is just amazing. To be recognized for our amazing team effort is really special,” stated Sales Director Gayle Kruckenberg.

11/23/21 10:11 AM

SUPPLY CHAIN DISRUPTION

NAVIGATING TODAY’S CHALLENGES

Amidst the lingering pandemic, shortages keep arising in many corners of American life, from rental cars to paper goods, food products, furniture, clothing and more. As fall began, supply headaches once viewed as temporary were predicted to extend well into next year. Executives involved at various stages of the supply chain shared their thoughts with Crain’s Content Studio.

How is your organization involved with supply chain issues? Chandra Brown: MxD, which stands for “manufacturing times digital,” advances and optimizes supply chain performance with sensors, software and analytics, and we also serve as a convener of supply chain organizations. Additionally, we’re making the manufacturing supply chain more secure by offering low-cost solutions, raising awareness and creating targeted training programs. Terry Ruhl: H.W. Lochner provides planning, environmental,

engineering, project management and construction management services to multimodal clients across the United States, developing innovative solutions that transform transportation infrastructure challenges into opportunities for enhancing economic growth and quality of life. Vishal Garg: Wynnchurch Capital is a private equity firm with expertise in strategic sourcing, logistics, demand planning, sales and operations planning, and materials management. By leveraging our broad market knowledge and long-term industry relationships, we can quickly

“THE ABILITY TO QUICKLY ALTERNATE AND PIVOT IS THE KEY TO MINIMIZING DISRUPTION.” —ALEXANDER BURGESS, BCD

evaluate needs and provide the appropriate resources to implement sustainable solutions. Because there are few issues that we’ve not seen, we can provide guidance to management teams on how to best navigate current challenges. Alexander Burgess: BCD is a source for innovative, purpose-built IP video and analytic solutions, helping protect everything from retail stores to critical infrastructure, hospitals, water treatment facilities, power grids, prisons, schools and stadiums. We work with key partners throughout the supply chain. What’s the biggest impact of the COVID-19 pandemic on the supply chain? Burgess: The pandemic has changed how we operate. As so many companies have had to

pivot their business structure, the economy pivoted as well. Shopping in-person greatly decreased. More work was being done on houses, causing a labor backup. Parts needed for repairs became scarcer. In our industry, graphics cards and SSD hard drives became as sought after as toilet paper. This change in everybody’s environment completely re-prioritized how the economy runs, and in turn, the supply chain fell further behind as it had to adapt to this new economic model. Ruhl: COVID-19 caused a step change in consumer demand, resulting in a severe imbalance to commodity and container flows. At the same time, demands for personal protective equipment and other supplies resulting from the pandemic caused a massive outflow of products from Asia to points all over the world, including areas not familiar with such high concentrations of container terminal traffic nor the exports available for a return container trip. In the United States, I’ve heard anecdotal numbers like four to six times the imbalance between inflow container demands compared to outflow needs. Hence, we not only have a sizable backlog in U.S. ports, but the Asia ports don’t have containers for new shipping orders. Brown: The pandemic has exposed fragile aspects of supply chains that perpetuate wide-spread disruptions, driving a need to secure the U.S. manufacturing supply chains by strengthening their current structure, improving transparency and increasing resiliency. One of the largest impacts is that it’s increased the adoption of digital and has highlighted the need to accelerate adoption. Companies that do it fast and well are going to thrive. Garg: Ultimately, the most impactful aspect of the pandemic has been the uncertainty of demand and supply which has created an unusually challenging environment. To maintain high service levels, our teams have developed creative ways to collaborate with suppliers to satisfy demand. As many of our customers are seeing growth well

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into 2022, we’re working diligently with our portfolio companies to develop processes, infrastructure and organizational flexibility to react to quickly changing demands. Besides the pandemic, what other factors are causing supply chain shortages? Garg: Many companies are experiencing labor shortages. Our leadership and HR teams are developing retention and career growth plans, and improving employee engagement to retain and attract talent. These efforts have helped meet customer demand, but the issue remains a primary focus. Burgess: Freight overall is backed up, causing a huge bottleneck—a key example is the California port situation. The rise of cryptocurrency has resulted in people hoarding graphics cards for data mining purposes, expediting the Intel chip shortage. Tariffs have raised international costs. Bots have wiped out online inventory of products. Labor is scarce now, as companies are having trouble filling vacancies. The pandemic has had such a massive ripple effect on the economy, flooding all of these other regions. Ruhl: I’ve been discussing this very question for some time with the University of Denver’s Program Director of Supply Chain, Jack Buffington, and his detailed analysis conveys that the current disruption is symptomatic of a greater underlying issue—one of supply chains and national infrastructure and systems not keeping pace over time with the changes in consumer demand protocols and available technology. With the opportunity for people to use ecommerce to a greater degree, the systems that supply goods are susceptible to the classic industrial engineering and operations research paradigm that illustrates instability in one critical component in the system can break down the entire network. The change in consumer demands has exposed a deficiency in the lean, just-in-time delivery network that companies involved in the current

11/22/21 10:19 AM

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from all levels to get new innovative ideas on how to solve these supply chain issues could lead to new opportunities.

CHANDRA BROWN CEO MxD info@mxdusa.org 312-281-6900

supply chain have developed to optimize resources and responses to individual consumer needs. Brown: We’re experiencing supply chain vulnerabilities that have been building for years. Just-in-time inventory saved money and space, but manufacturers by and large did not have backup plans when reliable suppliers went silent during the pandemic. Offshoring lowered costs, but factories never felt farther away than when ports and canals turned into bottlenecks. We can’t snap our fingers to change decadeslong industry practices, but we can immediately change the mindset and approach to future planning. Are certain commodities impacted more than others? Burgess: Manufacturers, most notably automobile companies, have been devastated by the chip shortages. This same chip shortage led to graphics cards being hoarded like gold in our industry. Restaurants have been impacted by scarcity of customers and staffing. Raw materials for equipment have been delayed. The cost of lumber has skyrocketed. Furniture has seen heavy impacts. Stores are back to limiting how much toilet paper you can buy at one time. There’s even a shortage on chicken wings! It’s hard to say that some commodities are more impacted than others, as it’s all relative. However, it’s safe to say that the impact has been widespread and greatly significant. Garg: We’re seeing a wide variety of raw materials impacted by supply chain challenges. Metals, resin and freight are requiring the most

ALEXANDER BURGESS VP - Global Supply Chain BCD aburgess@bcdinc.com 847-509-2945

management calories recently. Resin price increases and supply shortages have resulted in allocation rationing which can shut down plants like we saw in automotive OEMs due to microchips. Large increases in freight, port delays and container shortages will require supply chain teams to micromanage their supply chain and mitigate potential threats. Brown: As the other panelists mention, semiconductor chips are certainly front of mind, given how much market share has gone overseas and the investment it takes to build capacity domestically. We recently added Intel to the list of MxD’s partners, and we’re proud to support their digital manufacturing practices. That said, the impact goes well beyond microchips to cover products from consumer-packaged goods to the defense industrial base. The process of buying raw materials from external suppliers remains a manual and time-consuming process, and there are few ways for manufacturers to predict what might happen if, for instance, they change a supplier. In today’s environment, how can companies continue to operate while minimizing disruption? Ruhl: At a macro level, we all must begin to recognize that the “middle ground” is the most fertile area for innovation and change within such a complex, multistakeholder system. The ongoing polarity between various parties in the infrastructure and supply chain debate has done nothing to solve the problem.

“ . . . CYBERSECURITY IN THE MANUFACTURING ENTERPRISE HAS NEVER BEEN MORE IMPORTANT. “ —CHANDRA BROWN, MXD

VISHAL GARG

Managing Director Wynnchurch Capital vgarg@wynnchurch.com 847-604-6126

When we begin to recognize that all stakeholders involved hold value and can benefit from each other, only then will multiparty solutions result. Burgess: Prioritization, focus and flexibility. The ability to quickly alternate and pivot is the key to minimizing disruption. Companies should be proactive and start determining plans to mitigate risk. If they have a product that’s essential to their operation, they should play devil’s advocate and start thinking of backup options. Companies should assess their biggest areas of risk and figure out their options, should those come to

TERRY RUHL

Chair, Incoming CEO H.W. Lochner truhl@hwlochner.com 303-478-7694

realization. The more preemptively flexible they are, the more prepared they’ll be for any disruption that comes their way. Garg: Companies truly need to understand their value proposition to their customers, focus on their core products and develop flexible supply chains that allow them to meet their customers’ demands. Because many companies have global supply chains, this environment has brought a unique opportunity to rethink local versus foreign supply, working capital investments versus price increases, and long or short supply chains. In addition, engaging employees

Brown: Manufacturers have gotten creative, and some are downright ruthless when it comes to accessing needed parts. Currently, that means getting on the phone and making offers, sending drivers out to supersede backups in rail, and adjusting shift times to align with deliveries. Additionally, cybersecurity in the manufacturing enterprise has never been more important. It’s crucial to both national security and the security of organizations’ product lifecycle and supply chains, and its urgency has only been accelerated by the COVID-19 pandemic as bad actors take advantage of increased vulnerabilities. What are the biggest threats/risks to the supply chain today? Burgess: The biggest threat is that we really don’t know what’s going to be the next item or market to dry up. Because of this, it’s really hard to be proactive. In our industry, graphics cards were on shortage, but then a new way of data mining led to a SSD hard drive shortage. This was something we couldn’t see

The security industry’s leading supply chain experts Averaging fewer than 5 days to ship globally Lean Six Sigma supply chain team with over a decade of expertise in leveraging trust Purchase components by the truckload and built-to-order from stock Strategically located global warehouses for just-in-time inventory

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SUPPLY CHAIN DISRUPTION

NAVIGATING TODAY’S CHALLENGES coming, forcing us to be reactive. The unclear road ahead means that you really need to stay on top of your needs, and can’t afford to fall asleep at the wheel. Brown: As organizations digitize and become more interconnected, they must be constantly vigilant with not only their own security practices but also with those of their suppliers. For example, the U.S. Department of Defense mitigates cyberthreats to its suppliers through regulations, including the Cybersecurity Maturity Model Certification that will be required in a few years for all defense contracts. Ruhl: With continued supply chain bottlenecks adding to inflationary pressure, market stability is not likely to continue, and losses may become more prevalent. In addition, polarity on political issues, labor relations and technology exploitation may continue to provide additional threats to overall “system” resolution. Without funded improvements to the common economic good, additional lag in timely infrastructure improvements could impact the overall economy as

well as the individual supply chain membership. Garg: The biggest risk to global supply chains are political environments between countries that are heavily invested in each other. It will also be important to navigate new regulations and guidelines that could require changes in supply chains. If companies are given sufficient time to learn about these changes, make the appropriate adjustments and partner with their customers, they’ll successfully manage risks that could impact the value chain. Why is transparency important, and can suppliers have too much of it? Brown: Increasing transparency results in clear economic, quality and reputational benefits. Manufacturers typically lack visibility though all layers of their suppliers. Lacking that visibility, manufacturers don’t have enough lead time to mitigate disruptions when they occur. It may not be possible for an OEM to become familiar with its tier three suppliers

through traditional methods—this is where applying new technologies for data and analysis becomes essential. Garg: In an environment of unpredictability, the more predictable a business can be, the

“THE BIGGEST RISK TO GLOBAL SUPPLY CHAINS ARE POLITICAL ENVIRONMENTS BETWEEN COUNTRIES THAT ARE HEAVILY INVESTED IN EACH OTHER.” —VISHAL GARG, WYNNCHURCH CAPITAL better outcome it will have with its customers. Companies that can provide good, dependable and consistent information to customers are able to manage challenges better. A supplier should share critical information that can help a customer plan their business better, but it’s also important to realize that more information doesn’t guarantee a better outcome. The amount of information shared should be under the criteria “will this help the customer be successful?”

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Burgess: There’s no such thing as too much transparency, and it’s critical that you give accurate information because information is the one thing that suppliers can control. Even if the news is bad—for example, “your order will be pushed back an additional

Vishal Garg

Managing Director vgarg@wynnchurch.com

two months”—it’s important to share that. Now the customer can plan for their next course of action instead of sitting around waiting for the order. Setting proper expectations is essential; it’s better to be proactive than reactive. What advice do you have for manufacturers to ensure their supply chain team is strong enough to weather future disruptions? Ruhl: Manufacturers and retailers may need to investigate more robust inventory and storage allocation options within their purview. At an aggregated scale, recent events may alter existing views on warehousing, and even future development of more inland-related port options. The advancement of digitization, and blockchain technologies in particular, is another promising area for consideration that may redefine supply chain transactions for the global suppliers to better respond to the needs of the consumer. Burgess: Manufacturers should be flexible and always keep their eyes open to other options. They should think worst case scenario and plan for that. While we’re all hopeful that everything will go back to normal one day, the reality is that it’s unlikely to happen. Everyone needs to keep their head on a swivel, looking at all of the options out there. Those who focus too much on one element with “this is how we’ve always done it” unyielding thinking won’t be prepared for an alternate. It’s important to be open to new ways of thinking, and possibly unearthing even better processes as a result. Garg: Focus on reducing lead times and ensuring supplier

alignment. Investments in supply chains should include dual sourcing for core products, domestic and foreign supply, and evaluating vertical integration. Have conversations with your suppliers about your expectations so that they can prepare to meet your needs. Uncertainty will continue to create surprises, and being able to react quickly will separate winners and losers. Brown: Look for ways to bring more data and digitization into the manufacturing supply chain to address crises of the future—before they happen. Manufacturers also need to keep in mind the digital literacy and other skills necessary in their workforce to effectively manage these tools. The digital manufacturing and cybersecurity skills gap is an enormous and growing challenge. Apprenticeships and other training programs can help; I encourage manufacturers to look outside their companies for ideas and resources—and to do it now. What can business leaders and officials in the supply chain industry do to prevent future problems? Garg: It’s important for business leaders and officials to provide transparency on the issues and remain flexible so that we can solve them. Recently, Ryan Petersen, CEO of Flexport, tweeted about the container shortages at the ports and the traffic jam that was occurring due to existing processes. Within days, local regulators changed the rules to allow for stacking containers higher to create more room to process existing containers. We’ll never be able to prevent future problems, but staying flexible will allow us to solve them. Brown: Public-private partnerships—the combination of government leadership and investment with the ingenuity and practical experience of industry—is a tried-and-true method to tackle systemic problems. Implementing cybersecurity practices is also essential. As manufacturing shifts to a digital paradigm, the risk of cyberattacks against physical and digital assets increases. The manufacturing supply chain is protected when all its parts are protected. Burgess: Leaders should take a deep look at their businesses and figure out what products and/ or components they need to be

Partner Co-investment; 2Figures as of 08/31/2021

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11/22/21 10:19 AM

SPONSORED CONTENT

ABOUT THE PANELISTS CHANDRA BROWN is CEO of MxD, a national institute funded by the U.S. Department of Defense and industry members that aims to increase American manufacturers’ competitiveness through the adoption of digital tools. She oversees all technology investment, partner relationships and project execution for the $120 million portfolio of advanced manufacturing technology, cybersecurity and workforce development research and demonstration. She has more than 25 years of manufacturing experience and in 2013 was appointed by President Barack Obama as assistant secretary for manufacturing in the Commerce Department.

successful. Once they determine this, they should over-invest. Even if they have to be flexible and call an audible on other product, they’ll at least have their core need. The benefit of being able to continue shipping product to customers in a timely fashion greatly outweighs the risk of having too much inventory up front. It’s important to never run low on essentials.

ALEXANDER BURGESS is vice president - global supply chain operations for BCD, a security industry leader in video data infrastructure solutions. He joined the company over six years ago as procurement manager. Before that, he was a forecast analyst at Grainger on the global sourcing team, with direct accountability for inventory from China. Through the University of Wisconsin Center for Professional & Executive Development, he has earned both the Lean Six Sigma Green Belt, as well as certification in advanced management and leadership.

VISHAL GARG is a managing director at Wynnchurch Capital, a private equity firm that provides capital, connections, expertise and experience to help middle-market companies write the next chapter of their growth story. He has more than 15 years of experience at blue chip companies with responsibility for manufacturing, supply chain and continuous improvement globally. Prior to Wynnchurch, he was vice president - global operations and supply chain at an operating company for Dover Corp. and before that held positions at ITW, Tyco International and Eaton Corp.

fundamental to providing resiliency and reserve capacity in the supply chain system is lacking, leading to the coastal ports serving as an overburdened storage area in high-demand locations. Moreover, the fact that space is limited along coastal ports—and costly as well—and that the distribution centers adjacent to the ports are also full in many instances, exacerbates the problem. From a

persist for several more months to a couple of years. My hope is that the investments made today will ease the pain of future disruptions. The silver lining to the immense challenges that the pandemic caused is the acceleration of technology that it catalyzed.

TERRY RUHL is chair and incoming CEO of H.W. Lochner, which provides planning, environmental design, construction engineering and inspection, and right of way services for surface transportation, rail, transit and aviation clients across the United States. Previously, he led the transportation and national governments business for architectural/engineering firm CH2M, also serving on its board and corporate leadership council. During his tenure, it became one of the largest transportation consulting providers in the industry. He is a Fellow of the American Society of Civil Engineers.

Burgess: The worst may not be over, but as we’ve gotten more accustomed to operating under these conditions, we’re better at recognizing how to be proactive. Riding a bike for the first time without training wheels is scary, but as you get more comfortable, the rides become smoother and

less daunting. Navigating through supply chain shortages is similar. As you become increasingly acclimated with your process, you become more confident and proficient. While the worst of the shortages may not be over, hopefully the procurement anxiety will be getting less cumbersome.

“THE PUBLIC AND PRIVATE SECTORS NEED TO COME TOGETHER TO CRITICALLY ASSESS VULNERABILITIES AND STRENGTHEN THE RESILIENCE OF SUPPLY CHAINS . . . “ —TERRY RUHL, H.W. LOCHNER Ruhl: With the current drag on the economy, the supply chain disruptions are a problem of national significance to solve. The public and private sectors need to come together to critically assess vulnerabilities and strengthen the resilience of supply chains, including the development of a more cohesive and flexible multimodal transportation infrastructure plan. What’s your outlook for supply chain shortages—is the worst over? Ruhl: I don’t see the changes in consumer demands that have resulted from the pandemic changing anytime soon. Importantly, the lack of storage and ongoing labor shortages

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transportation system standpoint, it begs the question of a more holistic network of connectivity between coastal ports, and perhaps further development of inland ports and storage facilities in the United States, thereby increasing the resiliency of the existing “system.” Garg: The global market will take another 9-12 months for supply chain to serve at pre-pandemic levels. The current issues—labor and material shortages, transit difficulties involving both people and products and uncertainty of demand—will take a long time to work through a global supply chain. Adding uncertainty around trade regulations, tax changes and other regulatory issues will make solving these issues more challenging. Brown: The challenges will

11/22/21 10:19 AM

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36 W. Randolph St.

Droopy office market may increase conversions CONVERSIONS from Page 1 Delaware, whose exterior is among the grungiest in the Loop and whose street level houses a corporate-owned McDonald’s that hasn’t reopened since the pandemic, could be polished up and turned into apartments or condos. “It’s ideal for that,” said Steven DeGraff, a Chicago attorney who heads the investment group that took ownership of the Delaware in 2018 in a foreclosure against the previous owner. The tall windows and central atrium were designed to maximize natural light hitting the interior, and the building “is close to restaurants, close to theaters, close to offices,” DeGraff said. When his group took over the building in 2018, DeGraff told Crain’s Danny Ecker that the options for its next use included hotel space, co-working, residential and others. Now, “I would say residential is more likely,” he said last week. No specific conversion plan has been announced yet for the Delaware, which is about 75% vacant, DeGraff said. “The pathway for a lot of these old downtown office buildings is a new lifecycle as residential,” says Joe Slezak, whose Rosemont-based development firm has converted disused commercial buildings in Chicago and Milwaukee to residential use. It’s certainly not a new idea, but Slezak believes it has new urgency in the wake of the pandemic, with numerous downtown office buildings likely to stand empty as workplace footprints diminish. In just the past few weeks, Crain’s has reported on two Loop buildings being tossed back to their lenders—one on Wacker Place in the East Loop and another on Adams Street near Willis Tower. The string of givebacks is likely to continue. Conversion to residential “seems like where everything is pointing” for 65 E. Wacker Place, said Lynne Viccaro, a spokesperson for Acres Capital, the Union-

dale, N.Y., investment firm that in early November received the building in a deed-in-lieu of foreclosure transaction. Viccaro said the firm is considering all options and has made no definite plan for the 28-story brick and limestone building, but that a switch to residential use “is where the industry is headed.” Refilling empty office buildings with residential users faces headwinds—key among them, the spate of downtown crime— but also has demand on its side. Both the apartment market and the condo market have soared in 2021. In mid-November, the National Association of Realtors reported that Chicago has the third-highest potential among big U.S. cities for office-to-residential conversions. The reason: Office vacancy is high and rents are falling, while apartment vacancy is low and rents are rising.

MIGRATION TRENDS

Between 2010 and 2020, the population grew by more than 44% in the Loop (including the Lakeshore East neighborhood north of Millennium Park), according to a study from the Chicago Loop Alliance. In the same period, the population of the city overall grew by about 1.9%. Half a century ago, “people were leaving downtown, but now they’re finding their way back,” says Michael Edwards, president and CEO of the Chicago Loop Alliance. Leading the return in the 1990s and early 2000s were affluent empty nesters looking to live near arts institutions and restaurants. Converted former office buildings along Michigan Avenue, including the former homes of Montgomery Ward, Encyclopedia Brittanica and Crane Plumbing, accommodated them, and featured park and lake views. The headwind then wasn’t so much crime as the lack of grocery stores and other residential life needs, because “living downtown wasn’t something we did in Chicago,” says Louis D’Angelo. Around the turn of the last century, his

firm, Metropolitan Properties of Chicago, converted the Britannica building at 310 S. Michigan Ave. into the Metropolitan Tower condos and developed condos on several former office floors of the McCormick Building at 330 S. Michigan Ave. At the time, D’Angelo recalls, many of the potential buyers were coming in from the suburbs and wanted an all-walking lifestyle, but the nearest grocery store was on Roosevelt Road. “We’d ask them,” he recalls, “ ‘Where you lived in Winnetka, did you walk to the grocery store? No? You’ll have to drive to the grocery store here, but probably not as far.’ ” Two decades later, grocery stores have filled in—among others, there’s a Whole Foods in Streeterville, a Mariano’s in Lakeshore East and a Trader Joe’s in the South Loop. Now it’s often younger adults who want to live downtown, Edwards says. “They don’t want to own a car or they don’t want to use the car,” he says. “They want to walk to work, walk to dinner.” For this group, Edwards says, apartments that are smaller and less lavish than what the empty nesters demanded are de rigueur. That could fuel office conversions inside the Loop, he says, because there’s less willingness to pay a premium for postcard-pretty views. There’s nothing groundbreaking about switching uses for a building. Countless former warehouses in the neighborhoods around the Loop went residential, and conversions continue. In July, the National Life Building, a 1902 skyscraper on LaSalle Street, reopened as the Millennium on LaSalle apartments. (A spokesperson for the apartment building did not respond to Crain’s request for comment.) The difference this time may be the urgency. Empty downtown buildings “look like uncertainty,” Slezak said, and after the blows the business core of Chicago suffered from COVID and social unrest in 2020, “anything the city can do to end the uncertainty, we should be doing.”

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CRAIN’S CHICAGO BUSINESS • NOVEMBER 29, 2021 35

WALGREENS from Page 3 out Walgreens’ previous plans to close stores for reasons other than theft. The reaction highlights the balance Walgreens must strike between pursuing profits and maintaining strong relationships with the communities it serves. Typically, closing an unprofitable store makes good business sense for a company—especially for a 9,000-store chain like Walgreens—even if it ruffles a few customers’ feathers, experts say. But consumers are applying greater scrutiny to corporations, particularly when it comes to diversity and inclusion. “People are more sensitive to the issues, and that’s where it’s important how Walgreens handles it,” says Erik Gordon, professor at the University of Michigan’s Ross School of Business. “If it starts to become something beyond local protests, that’s where Walgreens is going to have to make its case.” Walgreens expects to close another 150 U.S. locations over the next three years as it works to cut $1.3 billion in costs, according to its annual report filed with the Securities & Exchange Commission. At the same time, CEO Roz Brewer has set lofty growth goals for the company as she works to transform it from a pharmacy chain into a medical care provider. Walgreens plans to put medical clinics in 1,000 of its stores by 2027, more than half of them in areas with limited access to such services. Walgreens long-standing role

as a community pharmacy, coupled with its new ambitions in health care, make store closings even more fraught.

RESENTMENT

If a merchandise retailer closes shop in a community that’s experiencing disinvestment, it’s a blow. Pharmacy closings hit communities harder. Losing a neighborhood drugstore makes it more difficult for customers to get essential medicine, particularly in urban areas where residents might not own cars, and in areas with higher rates of chronic disease. That impact can spawn lingering resentment in communities, which in turn could hurt the company’s efforts to attract customers to its new medical clinics. Residents of the Jeffery Manor neighborhood still rue the loss of a Walgreens store two years after the company shut down its location at 95th Street and Jeffery Boulevard. It felt like more than just an additional lost store in a steady stream of closures, says Lovie Bernard, a 70-yearold resident who has lived in the neighborhood for 50 years. It felt like the main hit in a greater trauma to the neighborhood. Bernard used to walk to Walgreens three or four times a week. Now she drives 5 miles to Indiana to do her shopping, and picks up her prescriptions from a Walgreens there. “Our neighborhood is pretty much barren,” she says. Walgreens declined to comment on the closure to Crain’s, but representatives met with area residents shortly after it

was announced. The representatives told residents the location had a higher percentage of Medicaid prescriptions, and that Walgreens loses money on such prescriptions, Block Club Chicago reported. Jacqueline Marsh, a resident of nearby Calumet Heights, attended that meeting. The 73-year-old used to pick up her prescriptions from the Walgreens. She says some of the former customers still don’t understand why the store, which seemed to always be busy, was closed. Marsh had her prescriptions transferred to a nearby Jewel-Osco and stopped shopping at Walgreens altogether. “I’m very unhappy with Walgreens. Peri- Jacqueline Marsh, a resident of Calumet Heights, used to pick up her prescriptions from the Walgreens in the od,” she says. “It never Jeffery Manor neighborhood. “I’m very unhappy with Walgreens. Period,” she says. crossed my mind that the U.S., according to its annual with customers, says Amanda Walgreens was dissatisfied with us, that they didn’t report. The upcoming 150 store Sharkey, associate professor want to be here. That never closures are additional, and part of organizations and strategy crossed my mind until one day of a separate cost management at the University of Chicago’s Booth School of Business. As program. it’s over, they’re gone.” Financially lagging stores Walgreens looks to close more More hard feelings could be in store as Walgreens moves will likely be the target, says stores, it needs to be crystal forward with another wave of Dylan Finley, an equity analyst clear with customers on the reaclosings. The company won’t at Morningstar. He notes that soning, Sharkey says. “The idea that they are this disclose which stores it plans strategy lines up with the comto close, or explain how it de- pany’s financial priorities in an important touchstone in the cides which locations to shutter. industry where competition is community will definitely make Between March 2018 and the intensifying and profit margins it harder for them to pull away from locations that they for fourth quarter of fiscal 2020, the are under pressure. But community outrage over whatever reason don’t feel like company closed 769 stores and related assets as part of a plan additional closings could ulti- are profitable or don’t want to to “optimize store locations” in mately hurt Walgreens’ image be in,” she says.

TODD WINTERS

Community backlash against Walgreens shows the risks of drugstore closings

State Farm sticks with deep pandemic rate cuts, while rivals reverse theirs important to State Farm. Before the pandemic, Chevy Chase, 2020. Texas by itself made up an- Md.-based Geico was on track to overtake State Farm by as early other 9%. The question now is whether as next year. (Geico’s 2020 marthe nation’s largest auto insurer ket share was 13.6% while State will hold the line even as its main Farm’s was 16.2%.) A State Farm rivals—Allstate, Geico and Pro- spokeswoman in early 2020 said gressive—hike rates in response the company had “no intention of to rapidly rising inflationary ceding our leadership position.” COVID may well have given pressures that have led to underState Farm an opening to hold writing losses. State Farm’s once-command- onto its crown—or at least deing market share in auto insur- lay the succession. As a mutual insurer, technically by its policy“FUNDAMENTALLY, AUTO INSURANCE owned holders, State Farm doesn’t have to reIS A COMMODITY PRODUCT.” spond to shareholdBrett Horn, analyst, Morningstar er pressures when markets churn and ance has ebbed steadily over the profits temporarily disappear. last four years. What for more Its capital position is remarkably than a decade had been a reli- strong, so it can afford to absorb able share of more than 18% of losses for a year or two if it choosU.S. premiums dropped to 17% es. “Regarding auto rates, our apin 2018 and 16% in 2019, according to the National Association of proach remains the same—to make incremental adjustments Insurance Commissioners. Market share always has been based on driving behaviors to STATE FARM from Page 3

HOW TO CONTACT CRAIN’S CHICAGO BUSINESS EDITORIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312-649-5200 CUSTOMER SERVICE . . . . . . . . . . . . . . . . . . 877-812-1590 ADVERTISING . . . . . . . . . . . . . . . . . . . . . . . . . 312-649-5492

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ensure the rates we have in place reflect anticipated driving and claim volume, and to minimize the impact to customers as much as possible,” spokeswoman Angie Harrier says in an email. “We’re unable to speculate about future rate adjustments. Even with recent adjustments, State Farm auto rates remain below preCOVID-19 levels, although miles driven and claim volume have increased.” She says the company will have more to say in its annual report at the end of February. While State Farm’s improved policy growth is likely cause for cheer in Bloomington, it still lags faster-growing Progressive, based in the Cleveland suburbs. As of Sept. 30, Progressive’s auto policies were 8% higher than at the same point in 2020, according to a Securities & Exchange Commission filing. Geico, by contrast, has stalled. Parent Berkshire Hathaway reported growth of just 159,000 policies at Geico in the first three

quarters of 2021, or about 1%. Allstate brand auto policies were roughly flat year over year. Allstate is boosting rates by high-single-digit percentages in virtually every state, company executives told analysts last month. Progressive has a head start and raised rates by an average of 6% in 20 states during the third quarter, according to a Nov. 22 Goldman Sachs report. If State Farm doesn’t follow suit, “That’s going to have negative implications for everybody else,” says Brett Horn, analyst at Morningstar in Chicago.

NO PIVOT YET

State Farm shows no signs of pivoting if its advertising is any indication. The ads, featuring star athletes like Kansas City Chiefs quarterback Patrick Mahomes, continue to pitch the company’s “surprisingly great rates.” For years, insurers like State Farm and Northbrook-based Allstate, which sell most policies through thousands of agents

around the country, haven’t been known for low rates. Rather, consumers get help from an agent when they have a problem and the promise of reliable claims service. Geico and Progressive, which sell in large part directly to consumers over the internet or phone, have pushed savings as their main marketing message. If State Farm persists in keeping rates below pre-pandemic levels, Geico and Progressive could be tested in ways they haven’t been for years. The highest inflation in decades has consumers more price-sensitive as well. “Fundamentally, auto insurance is a commodity product,” Horn says. Yet State Farm can’t absorb underwriting losses in perpetuity, even with a net worth of $126 billion as of the end of 2020. “State Farm isn’t immune to some of the industry trends,” spokeswoman Harrier says. “We continue to monitor our own trends to evaluate any adjustments that may be needed.”

Vol. 44, No. 48 – Crain’s Chicago Business (ISSN 0149-6956) is published weekly, except for the last week in December, at 150 N. Michigan Ave., Chicago, IL 60601-3806. $3.50 a copy, $169 a year. Outside the United States, add $50 a year for surface mail. Periodicals postage paid at Chicago, Ill. Postmaster: Send address changes to Crain’s Chicago Business, PO Box 433282, Palm Coast, FL 32143-9688. Four weeks’ notice required for change of address. © Entire contents copyright 2021 by Crain Communications Inc. All rights reserved.

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