Crain's Chicago Business, December 18, 2023

CHICAGOBUSINESS.COM I DECEMBER 18, 2023

Pritzker family office launches venture fund

Tom Bowen is a Chicago political strategist.

At $190 million, 53 Stations is one of the largest venture-capital funds in Chicago, alongside S2G Ventures, Jump Capital and Lightbank

By John Pletz

Another part of the Pritzker family is getting into the venturecapital business.

The Pritzker Organization, the family office of Hyatt Chairman Tom Pritzker, launched a $190 million venture-capital fund called 53 Stations. It’s led by Jason Pritzker, Tom’s son and vice chairman of The Pritzker Organization, and Kevin King, a former partner at venture-capital fund General Catalyst, based in Cambridge, Mass. They’re joined by Kelly Goldstein, a venture investor formerly with HQ and Harlem Capital.

At $190 million, 53 Stations is one of the largest venture funds in Chicago, alongside S2G Ventures, Jump Capital and Lightbank.

It joins several other Pritzkerfamily venture funds. J.B. and Tony Pritzker, who are cousins of

Tom, launched Pritzker Group Venture Capital more than two decades ago. Their sister, Penny Pritzker, makes venture investments through a firm called PSP Growth.

Jason Pritzker, 44, founded two startups, including Yapmo, now called Konverse, and Visible Vote. He also was an early investor in Chicago-based e-commerce company Raise Marketplace.

The Pritzker Organization has traditionally focused on private equity, or buying controlling interests in mature companies, and later-stage, growth-equity investing. Among its growthstage investments are Blue Voyant, Dataminr, Nimble Robotics, Palantir, SpaceX and Uber.

The idea to launch a venture fund came up at a corporate strategic retreat a few years ago, See PRITZKER on Page 34

FORUM

ELECTION SYSTEM

EQUITY Clarence Shaffer is working as a security contractor while being the primary caretaker for his 88-year-old mother.

GEOFFREY BLACK

Voting reform initiatives in Illinois and elsewhere aim to give voters more say in the outcomes I PAGE 15

GEOFFREY BLACK

MAKEOVER

A popular salvo against poverty Sixty years after the ‘war on poverty’ in the U.S., Chicago and Cook County are trying guaranteed income programs to provide some measure of economic security I PAGE 25

VOL. 46, NO. 50 l COPYRIGHT 2023 CRAIN COMMUNICATIONS INC. l ALL RIGHTS RESERVED

GREG HINZ It’s time to size up Gov. Pritzker’s presidential ambitions.

MADELEINE DOUBEK Here’s a gift that Illinois politicians would be wise to give voters.

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GREG HINZ ON POLITICS

Time to size up Pritzker’s presidential ambitions

A

s Joe Biden continues to sink in polls — and as J.B. Pritzker continues to show a bit more presidential leg just about every week — it’s time to ask: Does Illinois’ two-term Democratic governor have his eyes set on a possible White House bid and, if so, does he really stand a chance?

The answer to both questions is yes. But not exactly in the way you might think.

After talking to Team Pritzker a bunch of Greg Hinz and other pros whose judgment I trust, I’m pretty much convinced Pritzker’s activity is aimed at down the road, as in the 2028 election, and maybe other ambitions that could be given a push with an expanded national profile. No, he’s not running against

Biden. And if Biden does abruptly drop out — driven by a health scare, a GOP surprise or a Democratic Party in revolt? Unlikely. But in this utterly unpredictable, no-rules political environment, it’s not impossible.

As even casual political observers know, Pritzker has been going out of his way for months to do the kind of things presidential wannabees do. Like leading the charge in Springfield to enact abortion protections, limits on gun sales and other items that are popular in the Democratic base. Or giving speeches in New Hampshire and Florida, and making frequent appearances on cable TV. Or setting up and funding a national abortion-rights group led by his highly capable former campaign manager, Mike Ollen, and dropping $1 million into a key Wisconsin Supreme Court race.

Even his appearance at a Crain’s

luncheon recently seemed to fall into that mold as Pritzker avidly described how the state’s economic prospects have turned around on his watch. Creating lots of jobs is good politics.

Given that — and Pritzker’s ability to self-fund a race — he’s naturally put into an A-list of post-Biden potential nominees, along with California Gov. Gavin Newsom and Vice President Kamala Harris, says David Yepsen, former director of the Paul Simon Public Policy Institute at Southern Illinois University and an experienced presidential campaign watcher by virtue of his earlier long tenure as political editor of the Des Moines Register. If Pritzker ever got to voters in a Biden-less primary, “I think he could do well,” says Yepsen.

But it might never get to voters.

In March 1968, when Lyndon Baines Johnson hung it up in mid-cycle, there were still plenty of delegates yet to be claimed in

late primaries in places such as California and New York. This year, the cycle has been intentionally tightened, with candidates for president required to declare their candidacy in most states by now and virtually all by the end of the January, notes Democratic strategist Pete Giangreco.

That means any Pritzker 2024 shot would depend on Biden dropping out after most or all delegates are selected. In other words, maneuvering through a brokered convention, one in which Pritzker’s advantage of being able to spend a lot in a hurry would be minimized as other potential candidates such as, say, U.S. Transportation Secretary Pete Buttigieg get a chance to strut their stuff in party backrooms. As Giangreco puts it, “The window where Pritzker’s millions make a difference is rapidly closing.”

Team Pritzker has insisted from

the beginning that he’s for Biden and that building support for abortion rights, et al., actually will help the incumbent win a general election against Donald Trump.

Also, a higher profile could help Pritzker better sell the state to business, or lead to a cabinet job.

From the opposite direction, the Illinois Republican Party raises some notes on some issues, such as crime, that could hurt a Pritzker bid. “If Democrats want high taxes, unserious handling of crime, and even more lax border policies, then J.B. Pritzker is their man,” says state GOP Party Chairman Don Tracy in a written statement.

Still, with the nation seemingly unhappy with the notion of a repeat battle between two octogenarians — and the Democratic National Convention right here in Chicago — I’m not making any final predictions. People wrote off Barack Obama, too, a year out.

MADELEINE DOUBEK ON GOVERNMENT

Here’s a gift Illinois pols would be wise to give voters

P

ssst! Hey you, lawmakers and wannabe elected officials. Have I got a winner of an idea for you!

Not sure if you’ve had time to scroll through social media lately, but I came across an exchange that went something like this: “Got the property tax bill today. Spouse’s reaction? Guess we’ll be having cat food for Christmas dinner.”

This was followed by several comments from people chiming in who similarly felt the tax-bill pain, and a few even said Madeleine who they’d had to sell Doubek their homes and find someplace cheaper to live because the tax lift just got too heavy.

So, the winning idea? Work hard, get elected and turn yourself and your colleagues into champions of government streamlining and efficiency. Seriously, I don’t know why more of our bright public servants haven’t seized on this one yet and pushed harder to get it done. Perhaps it’s because, as they come up through the ranks in government and politics, they start locally and become friends with the many other local government officials who fear losing their jobs or having to tell government workers they might lose theirs.

Whatever the reason, this remains a cause that is ripe for someone or several someones to dig into and own.

My own property tax bill arrived a few weeks ago. I did the math and it went up from 2021 to 2022 by 6.9%.

Sure, it could have been much worse, but it’s never, ever gone down.

My bill had charges for 15 different units of government or 2 | CRAIN’S CHICAGO BUSINESS | DECEMBER 18, 2023

tax funds. There wasn’t just township government; there’s the township road and bridge fund and the township general assistance fund. There’s mosquito abatement and water reclamation and park districts.

There isn’t just one consolidated school district in my community.

We’ve got a community college, a high school district and an elementary district. They all have administrators and managers and pensions we’re supporting. And, if that’s not enough, there’s four different line items for various components of Cook County government.

Among the 15 lines listed on the bill, not one charged less money or held the line, of course. They all charged more, and they always do.

But the reality, of course, for all of us supporting all of these governments — either through homeownership or our rental rates — is that we’re not always getting raises every year or ones big enough to keep up with these bills and the other inflationary increases.

Illinois isn’t as big as California or Texas or Florida, but Illinois does win the prize for having the most units of government of any state. That shouldn’t be a point of pride for any of us.

Almost three years ago, the fine researchers at the Civic Federation conducted a study, did the counting and found we have 8,923 local government units. The Civic Federation found that figure was 30% higher than the U.S. Census of Governments numbers frequently cited by media.

Over the years, some state lawmakers have tried to introduce laws to encourage streamlining, efficiency and consolidation. There have been task forces that take testimony about the bloat, but inertia always seems to win the day and not enough of these efforts

have been enacted as law.

When the efforts have succeeded, the government officials who are targeted by an effort to streamline typically get organized and fight back, making the case to their supporters that their government unit couldn’t possibly go away or share services with another. Those efforts have tended to win because most of us average residents are busy with our own lives and jobs and running the kids around to after-school activities. But the jolt of those rising tax bills does hit and stops us in our tracks now and then.

I have seen and read enough

stories from communities downstate to know that some people find their township governments much more necessary than some of us do in the metro region, where we have municipal and county governments that easily could cover the services townships provide.

So, one-size-fits-all solutions won’t necessarily work, but surely there ought to be more that can be done to economize, consolidate and cut back on some of these government units.

As the late, wonderful former Civic Federation President Laurence Msall said back in 2021,

“Streamlining redundant services makes financial sense and would put Illinois governments in line with best practices.”

Doing so in 2024 not only would be a tremendous way to honor Msall, but I’m betting the elected officials who turn themselves into successful efficiency champions would reap the rewards of a grateful voting and taxpaying public.

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

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Co-working giant plans big expansion in suburbs workspace strategies and indiIWG aims to open vidual users looking for low-risk offices they can lease with little 17 locations in the commitment and across a broad Chicago area next year network of locations.

By Danny Ecker

The Hampton Social in Orlando I PHOTO COURTESY OF PARKER HOSPITALITY

Chicago restaurants expanding to the South Tantalized by warm weather and growing populations, restaurant groups see it as a way to diversify and grow revenue streams, albeit a risky one I By Ally Marotti

T

antalized by warm weather and growing populations, Chicago-based restaurant groups are flocking to the South.

And for many groups, the migration has just begun.

Restaurants headquartered in Chicago opened 224 locations in 2021 throughout Florida, Texas and other Southern and Sun Belt states, according to data from market research firm Datassential. Those openings included chains such as McDonald’s and sitdown spots like The Hampton Social. Openings ticked up further in 2022 to 240, according to the data. Compare that to 42 in 2019, before the COVID-19 pandemic.

Expanding outside of Chicago is a way to diversify and grow See RESTAURANTS on Page 34

“If it wasn’t for our Southern stores, we would’ve lost our entire company.”

— Brad Parker, founder and CEO of Parker Hospitality

Co-working provider IWG plans to open more than a dozen new locations in the Chicago area next year, adding to a massive bet it is making on demand for shared office space in the wake of the COVID-19 pandemic.

The company announced on Nov. 28 that it will debut 17 new flexible office locations over the next year in buildings throughout the Chicago area — primarily in the suburbs — as well as two more Illinois locations, in Peoria and Moline. Zug, Switzerlandbased IWG, which operates the Regus, Spaces, HQ and Signature co-working brands, will add the new offices to its collection of 64 locations already operating across the state.

It’s part of a larger wager IWG is making that office space leased on short-term, flexible deals has a bright future as the remote work movement weakens demand for traditional workspace.

While big office landlords are getting pummeled by companies shrinking their office footprints, demand for co-working spaces has been resilient thanks to companies incorporating such shared offices into their broader

Even embattled co-working giant WeWork, which filed for Chapter 11 bankruptcy protection earlier this month, has many locations that are performing well and stand to continue operating as the company reorganizes.

Over the past year, IWG has

“Our expansion in Illinois comes at a time when more companies are discovering that hybrid working boosts employee happiness and satisfaction.”

— Mark Dixon, IWG CEO and founder, said in a statement added 600 locations globally and 300 across the U.S., according to the company. Its total footprint now includes about 4,000 locations in more than 120 countries.

The company earlier this year announced plans for four new locations in Chicago, all of which See IWG on Page 34

Draper & Kramer takes loss in $59M apartment sale

By Rachel Herzog

Longtime Chicago developer Draper & Kramer has taken a loss on a South Loop apartment tower, selling the Aspire Residences to a New Jersey landlord for less than the construction loan it used to build them.

A venture led by Antheus Capital, a major South Side multifamily owner, last month paid $59 million for Aspire Residences, a 24-story, 275-unit high-rise at 2111 S. Wabash Ave. that opened in 2020, according to Cook County property records. Draper & Kramer took out a $69 million construction loan to build the apartment

complex, Crain’s reported in 2019.

The deal is evidence that strong rental demand in downtown Chicago may not be enough to offset the negative impact of high interest rates on pricing. Nationally, multifamily sales were down by 64% year over year as of October, according to data from research firm MSCI Real Assets.

Through a spokesman, Draper & Kramer confirmed the sale but declined to comment further.

Antheus Capital could not be reached for comment, and the company’s founder, Eli Ungar, did not immediately respond to an email Wednesday.

CBRE’s John Jaeger and Justin

Puppi represented Draper & Kramer in the sale. Peter Marino, a vice chairman in the Chicago office of CBRE Capital Markets, arranged a nearly $33 million Freddie Mac loan for the acquisition.

The sale expands Antheus’ South Side apartment portfolio, which now totals about 7,000 units, and is the investor’s second purchase from Draper & Kramer in recent months. Antheus Capital bought the 1,869unit Lake Meadows apartment complex in Bronzeville for $161 million in June.

Draper & Kramer also sold the 1,675-unit Prairie Shores to a joint venture of Golub and Far-

COSTAR GROUP

New Jersey-based Antheus Capital bought the 24-story tower in the South Loop for less than the Chicago landlord paid to build it

2111 S. Wabash Ave.

point Development in 2019.

The firm listed another large South Loop apartment tower, the 656-unit high-rise at 1130 S. Michigan Ave., at the same time it listed Aspire. That listing has been taken

off the market, Pete Evans of Berkadia, a commercial real estate services firm, confirmed. A Draper & Kramer spokesman did not respond to a question about the firm’s plans for that building.

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Comedy theaters in Chicago are still trying to rebuild from the pandemic Institutions like Second City and The Annoyance say comedy class enrollment and ticket sales remain down from 2019 Chicago’s comedy scene was once a late-night affair.

On Saturday nights at Second City, the last show didn’t start until 1 a.m. At iO Theater on Clybourn Avenue, the comedians and employees would stick around until 3 a.m. The Annoyance Theater & Bar in Lakeview always scheduled its hottest show for the 10 p.m. slot, and another act started two hours later. Now, midnight feels late at the theaters, with emptying bars and thin crowds.

The pandemic has changed the way Chicago’s comedy theaters do business, and operators say the new normal has yet to emerge.

Show attendance and comedy class enrollment remain below 2019 levels at some theaters. That data stings in an industry that splits its revenue between the box office, enrollment and sales from the bar.

Theaters are trying what they can to push those numbers higher.

They’ve moved showtimes earlier, changed the format of their shows and deployed marketing techniques to recruit students. Ultimately, operators say they are fighting harder to get people into their theaters but have fewer marketing dollars to do so.

“We’re constantly dealing with trying to figure out what’s making people come or not come, and it’s very hard to nail down,” said Jennifer Estlin, executive producer at The Annoyance. “The one thing I would say we have figured out is people go out earlier than they used to.”

The Annoyance now sometimes pushes its 8 p.m. show up an hour. Ticket and bar sales still lag 2019 numbers. The theater closed its kitchen because it wasn’t profitable, and it’s toying around with streaming shows in a way that doesn’t hurt in-person

WTTW NEWS

By Ally Marotti

attendance. It also changed its model, running more shows at a time for a shorter duration, offering audiences more variety.

Making concessions The situation is not dire enough to force The Annoyance toward the brink of closure, but concessions must be made. Some actors are paid based on ticket sales. Business was so slow earlier this year, Estlin said she delayed a planned bonus for employees until she was awarded a grant.

“That’s not a great way to have to do business, just to hope and pray on grants,” she said.

Theaters of all types have struggled to recover from the pandemic, as patrons have been slow to return to in-person performances.

The theory is that people prefer to stay home, stream Netflix and go to bed early. Chicago’s theaters have not bounced back as fast as music and dance venues, perhaps due to the complexity and expense needed to produce plays.

Additionally, donations have not

kept pace with inflation and subscription rates have declined, Crain’s reported last month.

Comedy outfits can be nimbler than theaters that plan far in advance and stage long runs of plays. Sketch and improv shows don’t run as long, so a comedy theater can cut it short if tickets aren’t selling well. They also are not as dependent on season ticket sales, which patrons have become more reluctant to purchase post-pandemic. People still hesitate to make long-term plans.

Comedy theaters also have a revenue stream that other theaters don’t: sketch and improv classes.

While the shows draw tourists to the city, those classes lure aspiring comedians to move to Chicago.

Stars such as Amy Poehler and Stephen Colbert trace their comedic roots to the city. Many students work their way through the classes at several theaters, going to the shows there, learning and performing themselves.

Operators say class enrollment has not recovered from the pan-

demic, either. The Annoyance reports enrollment is down 17% from 2019. Steve Plock, general manager at iO Theater, estimated its enrollment is only about 50% of 2019 levels. Plock said the theater is advertising to potential students. It is also working to bring back other revenue streams, like hosting corporate groups in the theater’s event space.

“We have a big building and a big space, and we want to fill it,” he said. “We just want to get back to where we were pre-COVID.”

A new chapter The iO Theater reopened about a year ago under new ownership.

Its co-founder closed it permanently in June 2020 and put the theater up for sale. About a week prior, Second City had put itself up for sale, too. The announcements marked a new chapter for Chicago comedy. IO’s co-founder had run the theater for four decades. The former Second City owner had also been involved for decades. At the same time, Chica-

go’s comedy performers called for major efforts to improve diversity and equity at both theaters.

Ultimately, Chicagoans Scott Gendell and Larry Weiner bought the iO Theater building and brand in 2021. They did some renovations and reopened the theater in November 2022. Second City’s new owner is New York-based private-equity firm ZMC. It is focusing on geographical expansion for the nearly 65-year-old comedy institution: Second City is set to open a Brooklyn location early next year.

Some industry members say the new ownership of the city’s comedy giants was a chance to bring change and growth that was needed in the community. Though there is still discourse. The union representing teachers, facilitators and music directors at Second City said late last month said that it might go on strike if an agreement isn’t reached soon. The union — the Association of International Comedy Educators — was formed in 2021 and is still negotiating its first contract, according to a news release from the union.

While big theaters were shuttered or changing hands, smaller outfits — such as Logan Square Improv and Clash on Clark — were gaining prominence and creating other opportunities for people to perform. Chicago’s comedy scene has shifted to smaller stages.

Julia Morales founded Stepping Stone Theater in late summer 2020 to try to create more opportunities for diverse comedians. The nonprofit theater doesn’t have a physical space; it runs training programs out of other theaters.

Morales said she’d like to see more inclusivity instilled at Chicago’s comedy institutions as they build back from the pandemic.

“There’s still a lot of work to be done,” she said.

City again asking for offers on historic Stock Yards Bank building Completed in 1925, it needs an extensive rehab but should be put back into use, says new Chicago Planning Commissioner Ciere Boatright

By Dennis Rodkin

City officials are reigniting their effort to get someone to revitalize the old Stock Yards Bank building, an oversized replica of Philadelphia’s Independence Hall that towers over Halsted Street south of Bridgeport.

“This is the right time, with the mayor’s commitment to holistic development across all neighborhoods,” said Ciere Boatright, whom Mayor Brandon Johnson tapped in October as the new commissioner for the Chicago Department of Planning & Development, or DPD. 4 | CRAIN’S CHICAGO BUSINESS | DECEMBER 18, 2023

“We want to put this vacant building — it’s been vacant for 50 years — back to use,” Boatright said. “It’s an awesome opportunity to bring economic development” to the area around the old Union stockyards just south of Bridgeport.

The 35,000-square-foot Stock Yards Bank building was completed in 1925 at 4150 S. Halsted St. The asking price is $1.9 million.

Development proposals are due Jan. 12. Boatright said city officials have no specific preference for a use type, such as housing or office space. “We’ll see what the proposals are,” she said.

Also available is an empty lot across the street, a little under an acre where the Stock Yard Inn stood from 1913 until it was demolished in 1971. Boatright said potential developers can apply to buy the bank building with or without the empty lot, but cannot buy the lot separate from the bank.

Spur for redevelopment In 2000, the city acquired the already-vacant bank for $200,000 through eminent domain to prevent demolition. Since then, several efforts to get the building, which the city designated as a landmark in 2008, back into use

have failed to launch. Notable among them were City Hall’s 2006 pitch to get it reused as a banquet hall and steakhouse, and a 2017 concept from architect Helmut Jahn’s firm to make it into an “energy bank” generating renewable energy for nearby businesses.

One likely obstacle to redevelopment is that the building is essentially a shell, its handsome red brick exterior and tall spire concealing an interior that has been stripped nearly bare. That’s seen in the interior photos in this 2020 story on the building by WBEZ. A spur for redeveloping the site could be the recent news that another long-empty 1920s building on Halsted, the Ramova Theatre

not even a block north, is undergoing a thorough rehab by an investor group that includes Jennifer Hudson, Chance the Rapper and Quincy Jones.

Almost a century ago, the Stock Yards Bank, founded in 1868 and also known in the past as the Live Stock National Bank, spent $500,000 — the equivalent of nearly $9 million in today’s dollars — to build its new fireproof bank building near the entrance to the vast Union stockyards. With the Tudorstyle hotel, it presented a sophisticated gateway to the 375-acre stockyards packed with over 100,000 animals at a time.

The bank was designed by architect Abraham Epstein. It closed in 1965 and the stockyards closed in 1971.

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THE TAKEAWAY

A Chicagoan to know: Hermilo Hinojosa After two decades at the Boys & Girls Club of Chicago, Hinojosa, 52, was named founding Executive Director of GreenLight Fund Chicago earlier this year, overseeing a $6 million budget. The Boston-based GreenLight Fund is a national nonprofit that each year identifies community needs and works to address them. Hinojosa and his wife live in the home where he grew up, in the Tri-Taylor neighborhood on the Near West Side. They have two children, ages 21 and 18. I By Laura Bianchi How do you identify Chicago’s needs?

said, “If we don’t do this, who will?” I stayed for 20 years.

The real magic is having hundreds of conversations with people across neighborhoods and leaders across sectors, as well as examining public reports.

There are so many barriers affecting families here. Gun violence.

Disparities in education. We narrow them down and bring the best nonprofit programs to the city to address them.

A rewarding experience?

Tell us about growing up in Tri-Taylor.

We had our fair share of gangs, drugs and violence. Once, when I was 6 years old, I stepped out of my house to go to school and saw yellow police tape three doors down. A neighbor had been shot and killed on his own front steps.

How did you avoid trouble?

I think the gangs realized that I wasn’t cut out for that life. I was known as a good student, not a tough guy.

When did you become an activist?

At the University of Illinois, I participated in some protests, sit-ins and administration meetings to address the lack of students from Chicago’s inner-city neighborhoods.

Your first job?

Selling Christmas cards door to door at age 5. My mother was able to bring home discards from the printing press where she worked, and I tried to sell them for $1. If someone hesitated, I knocked it down to a quarter.

An experience you’ll never forget?

Five days into my job at the Boys & Girls Club, at age 25, we were getting ready for Friday night activities when we heard a barrage of bullets outside. My colleague and I ran to a window and saw a young boy crumpled on the ground, shot in the stomach.

What happened?

My co-worker told me that we had to go outside and get him. I was stunned, but we pulled him in and called 911. As my adrenaline began to wear off, I told my co-worker, “I’m not sure I can do this job.” And he 6 | CRAIN’S CLEVELAND BUSINESS | DECEMBER 18, 2023

Years ago, we had a teen mom and high school dropout who finished school with us at Latino Youth High School. She then got married and eventually started a business. This past fall, her daughter entered Loyola University on a full-ride scholarship.

Breaking generational cycles of poverty like that is what I hope for, and it’s what drew me to GreenLight.

CHICAGO BOOTH INSIGHTS

For startup founders, this is the classic dilemma

I

The story The story should frame the narrative of the unmet need, the

ing on time and on budget while adding value, so investors will be enthused about the next round. It is not wise to raise more money than necessary for each stage.

Dr. Steven Gould is consulting director for Polsky Science Ventures at Chicago Booth and is responsible for leading the formation and launch of new science-based ventures from University of Chicago faculty research.

The next round

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recently met with a researcher who has identified multiple novel drug targets that may allow the development of new therapies to improve the outcomes of several diseases with no good current treatments. It was an exciting conversation that quickly led to a discussion around forming a biotech startup and raising $50 million as the initial round of financing.

And then reality struck: Was that a realistic plan? Does a biotech startup need that much at this stage? Will it result in majority ownership by the investors and dilute the founder(s)? This is the classic dilemma faced by every founder, no matter the sector: How much to raise and when to raise it?

I am surprised how few founders think strategically about the right amount of capital for initial financing. The critical task is to craft the story around the startup, identify the milestones that must be accomplished to raise the next round at a higher valuation, and determine the timelines and the right amount of money to achieve those milestones — all while factoring in the existing funding environment.

unique solution, the existing evidence that validates the proposed solution and the business opportunity that comes with successfully developing this scientific discovery. Think of the mRNA research that enabled the extraordinary clinical and commercial success of COVID vaccines within one year of the onset of the pandemic. The story needs to be sufficiently compelling to attract investors.

The milestones For biotech companies, the milestones to get from the bench to the bedside are crucial. Getting into

clinical trials is the most important step to discover whether the product will be safe and effective. The early biotech pre-clinical and clinical milestones for FDA approval are well known to biotech investors and should guide the plan.

The amount of money and the timeline Rather than beginning with a plan to raise $50 million, the story should precisely define the amount of money and time needed for each of the critical milestones.

Each milestone achieved should demonstrate capability of execut-

You will always need the next round. But the other key element often overlooked by founders is factoring in the time to complete the next raise. It takes up to six months to complete any venture financing. If you spend the last dollar completing the final milestone without proper positioning for the next stage, things will come to a crushing halt. This is the art of raising capital at this early stage.

Advice for small businesses and entrepreneurs in partnership with the University of Chicago Booth School of Business.

The funding environment Most of the steps above are in the founder’s hands. The wild card is the broader funding environment. We are in a very challenging time for venture funding. According to PitchBook, third-quarter 2023 deal value fell to the lowest figure since second-quarter 2018, and first-quarter pre-seed and seed activity slumped to a 12-quarter low. Yet as challenging as this may seem, founders should not be discouraged, as there is a huge amount of dry powder sitting on the sidelines with VCs waiting

for the right opportunities.

I remain an eternal optimist: Great ideas that solve great problems will always attract thoughtful investors. But the same intellectual rigor, discipline, planning and execution that leads to cuttingedge scientific discoveries must be applied to the business of raising capital to deliver those discoveries to the world.

NOTABLE LEADERS IN SUSTAINABILITY Nominate a leader who leads sustainability initiatives at an organization and makes an environmental impact.

NOMINATE BY FEB. 23 ChicagoBusiness.com/NotableNoms

DECEMBER 18, 2023 | CRAIN’S CHICAGO BUSINESS | 7

By Danny Ecker

Six months after it warned investors about its ability to stay in business and said it was paying to get out of its massive headquarters lease, Groupon has signed a deal for a new — and much smaller — main office in the Loop.

The online-deal company confirmed it is subleasing about 25,000 square feet in the office tower at 35 W. Wacker Drive, where it will move in January from its nearly 300,000-square-foot headquarters at 600 W. Chicago Ave. Groupon is subleasing the Wacker Drive building’s 25th floor from media conglomerate Publicis Groupe, which has been trying to offload more than half of its massive office in the 50-story tower.

The short-term sublease deal — Groupon has signed on for just 22 months, according to a spokesman — comes as the company nears the end of its lease at 600 W. Chicago. Groupon disclosed in May that it paid a $9.6 million fee to termi-

nate its deal at the end of January 2024, two years before it was due to expire. Groupon also disclosed at the time that there was substantial doubt that the company could remain a “going concern,” raising questions about whether it would need office space at all.

Small consolation For downtown office landlords, the sublease helps take a small chunk of available office space off the market, but it’s only a small consolation as they grapple with record-high vacancy. The decimation of Groupon’s office footprint is one of the most stark examples of big companies cutting back on workspace over the past few years. Fueled mostly by the remote work movement, office supply and demand have been pushed so far out of balance that a historic number of big office properties downtown are in distress, collectively threatening the vibrancy of Chicago’s urban core.

In a statement to Crain’s, Grou-

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pon interim CEO and board member Dusan Senkypl said the company “has always had a thriving office culture, and this move to a space that is better aligned to our new hybrid working ethos is a great step to kick off 2024 for our Chicago team.”

With its core business of discounts for brick-and-mortar merchants struggling during the COVID-19 pandemic, Groupon moved to reduce its costs with two waves of layoffs over the past 15 months that cut a total of about 1,000 jobs. It’s unclear how many employees the company has in Chicago today.

The company’s stock price has recovered somewhat since its warning to investors sent shares below $3 apiece in mid-May. Shares closed yesterday at $10.92.

Groupon reported a net loss of $81.4 million during the first nine months of this year, a big improvement from a $180.1 million loss during the same period in 2022 but still far from the $90 million in net income it reported during the first nine months of 2021, according to regulatory filings.

Publicis Groupe earlier this year put 350,000 square feet of its

block of available office space on the secondary market.

A Publicis Groupe spokeswoman declined to comment.

Jones Lang LaSalle broker Andy Strand negotiated the new sublease for Groupon. Cushman & Wakefield’s Steve Schneider is marketing the 35 W. Wacker space for Publicis Groupe.

Wacker Drive office up for sublease, more than half of the 685,000 square feet it leases in the building on a deal that runs through the end of 2030, according to marketing materials. At the time, that offering surpassed Groupon’s 291,000-square-foot sublease listing for its 600 W. Chicago offices as the city’s largest

After strikes, Dick Wolf’s Chicago franchise reawakens ‘Chicago Fire’ and its sister shows resumed shooting last month

By Brandon Dupré

Wolf Entertainment’s One Chicago television shows are ramping back up as the city’s film industry lands its first major productions following the Hollywood writer and actor strikes that halted the industry for months.

“Chicago P.D.,” “Chicago Med” and “Chicago Fire” all resumed shooting at the end of November, eyeing a season premiere on Jan. 17, providing unions and industry workers in Illinois a shot in the arm before the holidays and the promise of a busy new year.

“We needed to get back to work, it’s the medicine the entire industry needed,” said Anthony Barracca, secretary treasurer of the IATSE Studio Mechanics Local 476, which represents industry workers who supply the sets, lighting and makeup for the state’s film and television productions.

Economic fallout Over the summer, two of Hollywood’s largest unions representing industry writers and actors went on strike over contract negotiations with major studios, bringing the entire entertainment industry to a stop. On Nov. 8, the second of the two unions reached a tentative agreement, putting to end what was, at nearly four months, the

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The company is moving in January from its massive longtime home at 600 W. Chicago Ave.

35 W. Wacker Drive

WIKIPEDIA

Groupon signs deal for new Wacker Drive HQ

longest strike ever for film and television actors. The Writers Guild of America, or WGA, ratified their new contract in October.

A Crain’s analysis estimated the economic fallout from the Hollywood strikes has the potential to cost Illinois as much as $500 million in lost expenditures from the film and television industry as it remained on hold during the busiest production months of the year.

On top of that, many union workers have been without jobs.

The strike sidelined some 2,000 full-time and part-time members of the Local 476 and around 5,500 actors and writers in the Midwest, according to union leaders.

But with the strike now over, Chicago is getting back to work and is ramping up faster than just about anywhere else in the country, Barracca said, adding that about 50% of the Local 476 are now back to work.

While production before the holidays is welcomed, industry

observers expect the real bulk of television and film production to come following the new year, when productions won’t be interrupted by the holiday break.

In a statement, the Illinois Film Office said that it is “confident” the state’s film industry will “continue building and come back strong in 2024.”

Barracca said that he expects there to be up to 10 shows filming in the first quarter of 2024, up from seven shows during that same period last year. “The Chi” is currently in preparation and set to begin filming in December, according to Barracca, with the “The Bear” and the comedy “Deli Boys” both slated to begin shooting in January.

Studio operations The resumption of production is also welcome news for Chicago’s newest film and television production facility, The Fields Studios, a $250 million project set to open in the spring on a 21-acre campus at Diversey Avenue and Pulaski Road. A prolonged strike could have affected the studio’s ability to book productions in advance, a spokesman for The Fields Studios told Crain’s.

Chicago’s largest studio, Cinespace, is also back to work with the One Chicago collection resuming filming there.

Historic Little Village theater’s owners seek landmark status They want the Apollo’s 2000 recognized for its ornate architecture and as a sort of monument to the U.S. as a land of possibilities The longtime owners of a grand old movie palace in Little Village want to get it declared a Chicago landmark, both for its ornate architecture and as a sort of monument to the U.S. as a land of possibilities.

“This is the epitome of the American Dream,” said Evelyn Stell, whose Mexican immigrant parents have operated the Apollo’s 2000, formerly the Marshall Square Theatre, since 1988.

“Two young immigrants walked into a world of possibilities and built their business,” Stell said.

“You hear about these stories, but my parents have lived it.”

Lidia and Javier Galindo were immigrants from Durango, Mexico, in their 20s when Javier renovated the crumbling old movie theater, a candidate for demolition, into a nightclub in 1988. Later that year, they bought it. In the ensuing 35 years, they’ve hosted wrestling matches, quinceañeras, former presidential candidate Al Gore, architecture fans and, in their early days, the Mexican rock stars Maná.

They’ve also raised three daughters, one now an attorney, another a pharmacist and the third finishing up her college education.

“This is exactly what this country is built on,” says Stell, the attorney daughter.

The family recently presented their building to the Commission on Chicago Landmarks for preliminary landmark recommendation, the first step toward an official designation. There’s likely to be little opposition, as the building owners clearly support the designation.

If it comes, landmarking has not only a symbolic but a practical side, Stell said. Maintaining the monumental brick and terra cotta facade is “a financial hardship” for the family, she said. But with landmark status, they’d be able to seek funding through the city’s AdoptA-Landmark Fund and other grants.

Scaffolding now lines the sidewalk on Cermak Road in front of the building as workers repair some of the terra cotta on the upper facade. Keeping the building in good shape, though costly, is part of “being an anchor for this business district,” Stell says.

Further restoration, Lidia Galindo says, would help the family “open out more to the city.”

Neighborhood draw Fully restored, the building could become “not only an anchor but a catalyst,” Stell said, by hosting events that draw people from across the city who would spend money in the neighborhood’s other businesses.

Designed by architect Alexan-

DENNIS RODKIN

By Dennis Rodkin

der Levy and built in 1917 for both vaudeville and movies, the 1,350seat Marshall Square Theatre was an anchor for the community that was then called South Lawndale.

Mike Royko worked there as an usher when he was young and wrote about it at least twice when he was the city’s best-known newspaper columnist, in 1986 and again in 1997, a few months before he died.

easily, Javier Galindo said. “We love this building. It speaks to me.”

Though they haven’t shown movies, the Galindos have preserved the trio of historical projectors in the projection room, hefty metal machines with exhaust hoses running to the ceiling. Out front

stands the old ticket booth wrapped in metal scrollwork.

They’re all part of the history enshrined during the Galindos’ 35 years in the building.

Stell demonstrates that she inherited her parents’ love of the old theater’s historical details

when she points out that the tall blade sign on the front of the building, added in the 1930s, is supported by a beam that tunnels into one of the huge plaster medallions on the front.

“We inherited that,” Stell says.

“My family didn’t do that.”

Family history The Galindo family’s history with the theater stretches back to early 1967, when Javier Galindo arrived in Chicago with his parents on a train from El Paso shortly after the historic January blizzard.

They arrived on a Thursday and on Sunday went to the neighborhood theater, the Marshall Square, to watch “black and white Mexican cowboy movies,” he recalls.

Twenty-one years later, married to Lidia, who came up from Mexico with her parents at age 16, Javier Galindo was a musician managing a dance club when the Marshall Square’s owner asked if he could turn the shuttered, rundown theater into a dance club, too.

“I went home and told Lidia I found what I really wanted to do,” he recalls, “and she said to do it.”

They’ve held on since, despite, according to Stell, a failed 1990s business plan that focused on Hispanic dances and concerts.

By the end of the decade, she says, “we reinvented our business plan and began to host private events,” such as weddings and quinceañeras.

The primary change the Galindos made to the building came early: ripping out the theater seats and replacing the sloped main floor with level floors for dancing, seating and a bar. Otherwise, they were careful to protect the building’s vintage details. In particular, they mounted all screens, speakers and other technical equipment on the plaster walls, never on the ornate gold piping and other trim that runs through the building.

“You can patch the plaster, but you can’t replace the gold trim” as

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@MidAmCarpenters DECEMBER 18, 2023 | CRAIN’S CHICAGO BUSINESS | 9

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From

EDITORIAL

Chicago’s selective-enrollment schools are a civic asset worth saving

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t’s no secret: When he campaigned for his current job, Mayor Brandon Johnson emphasized a view — shared by his Chicago Teachers Union backers — that Chicago Public Schools’ neighborhood schools need to be reinvigorated. On the campaign trail, Johnson likened the city’s school choice system to a “Hunger Games scenario” that forces competition for resources and ultimately harms schools and students alike.

As any parent with kids in the CPS system can attest, the process of applying for high school in this city can be nearly as stressful as applying for college. It’s an unfortunate byproduct of Chicago’s selective-enrollment schools, a system that has its roots in the second Daley administration.

But along with that sometimes nervewracking process has come the creation of 11 high schools scattered throughout the city, spanning from Northside College Prep in the Hollywood Park neighborhood to Whitney M. Young on the Near West Side to Gwendolyn Brooks in Pullman, all delivering world-class, college-level education to a wide swath of public school students, tuition-free.

It’s a system that, despite its flaws, has undoubtedly helped to create academic opportunities for a range of young people, launching them into college and careers.

And, almost as important, it’s given middle-class families a reason to come to and remain in Chicago rather than de-

camp for the suburbs in search of better resourced schools when their kids get to high school age. And that, in turn, has helped to stabilize many neighborhoods and revitalize many more — though of course the positive effects have not always extended to every corner of the city.

Against this backdrop comes news that the Chicago Board of Education intends to explore a move away from selective-enrollment schools — though officials are quick to stress that their Dec. 14 vote is meant to kick off a community-level discussion.

District leaders want to ensure “fully resourced neighborhood schools, prioritizing

schools and communities most harmed by structural racism, past inequitable policies and disinvestment,” in the district’s words.

The school board aims to pursue that policy goal as part of its five-year strategic plan, which will be finalized this summer. As Chalkbeat Chicago reports, CPS CEO Pedro Martinez, board President Jianan Shi and board Vice President Elizabeth ToddBreland declined in an interview to specify changes or say how much they want to move away from the choice system, saying they want to collect community feedback on how far the district should go.

That said, it’s possible to read between the

lines of the just-adopted resolution: The CTU and like-minded supporters aren’t fans of selective-enrollment schools in particular or school choice in general. Unfortunately, abolishing such schools would deny parents the ability to choose which one meets the needs of their children, creating a significant barrier to the equity and fairness the union and its supporters say they’re striving for.

It’s hard to argue with the stated premise of the board’s resolution. Yes, neighborhood schools need fixing, and all CPS students deserve a fair shot at a highquality education, no matter where they live, what resources they have, or what impediments stand in their way.

But undoing the legacy of outstanding high schools such as Walter Payton, Jones, Lindblom or Lane Tech — which, like others in the selective-enrollment system, consistently rank among the best high schools in the entire state and sometimes the nation — would be a wrongheaded move that would have dire consequences well beyond the classroom. These schools have enhanced the quality of life in Chicago for countless students and families and have become a hub of community in neighborhoods across the city. They have also helped make Chicago Public Schools an attractive option for parents who might otherwise seek greener pastures beyond the city limits. The Board of Education should think carefully before dismantling these prime civic assets.

PERSONAL VIEW

This is a powerful solution for climate change

“C

sult is incredibly healthy, carbonommon Ground,” a new rich soil and food loaded with nudocumentary about retrients, minerals and vitality. generative agriculture, The system is also highly profitis selling out showings across the able. According to Spins, the country with this primary mesChicago-based company that is sage: Growing food using regenerthe leading source of data in the ative methods is a powerful solunatural products industry, regention for climate change. erative products have been growThe world is suffering yet aning at more than 20% for the past other drastic weather year with Jim Slama is year. They align perfectly with the massive heat waves, droughts, managing desires of the values-oriented floods and wildfires. It can feel as director of consumer seeking products that though there is little hope in sight Naturally are better for themselves and the to solve climate change.

Chicago, the planet.

Yet “Common Ground” offers a association of Simple Mills, one of our resimple message: Let’s grow nutri- the natural ent-dense food in a manner that products indus- gion’s standouts in producing packaged goods with regenerasequesters vast amounts of car- try in the tively grown ingredients, embodbon in our soil. According to the region. ies this movement. Simple Mills Rodale Institute, if we converted all global croplands and pastures to regen- has become the market leader in nutrierative and organic, we could sequester ent-dense crackers, baking mixes and more than 100% of current annual CO2 cookies that are gluten free and often oremissions. Farmers using these practices ganic. Founder and CEO Katlin Smith has grow organically, using crop rotations, cov- built an amazing team of experts who emer crops and, in many cases, rotational bed sustainability into all aspects of prodgrazing of livestock and/or poultry. The re- uct design.

Said Christina Skonberg, Simple Mills’ head of sustainability and mission, “We design all our new products with an eye toward diversifying consumer diets and agricultural ecosystems by utilizing a wide variety of ingredients beyond the most dominant crops in our food system.” They work directly with farmers who prioritize regenerative principles and incentivize positive ecosystem outcomes. Priority crops include almonds, cocoa, coconut sugar, sunflower and even squash, buckwheat and flax.

Chomps is another Chicago-based company and utilizes regeneratively raised beef in its meat snack products. “All of our beef is sourced from cattle that are certified humane, grass-fed and grass-finished and follow rotational grazing methods,” says Rashid Ali, co-founder and co-CEO. “Because of our rapid growth, we are adding farms that are regenerative organic certified and/or land to market certified. These are considered to be the gold standards of third-party certification for ranchers.”

Ali adds: “Grass-fed cows produce much higher levels of omega-3 fatty acids, which

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

are critical for heart and brain health. Grassfed beef is also leaner than conventional beef and has higher levels of antioxidants.”

Fulton Market-based Vital Proteins became the market leader in the collagen category in part by stressing that their cows are grass-fed and raised on pasture.

Rotational grazing on pasture is an essential tool to restore degraded grasslands.

According to the USDA, this practice improves soil structure and limits erosion, makes land drought resistant, reduces costs and increases profit, produces healthier animals and sequesters large amounts of carbon in the soil.

Chef Rick Bayless, a fan of regenerative farming, is a longtime customer of Indiana rancher Greg Gunthorp, who produces pastured pork, lamb and turkeys. Gunthorp recently contracted with BP to pasture his sheep on a 900-acre solar site. The sheep will be rotated daily to control vegetation without a lawnmower in sight. It’s truly a regenerative win-win, with some of the best-tasting meat around.

See CLIMATE on Page 11

Sound off: Send a column for the Opinion page to editor@chicagobusiness.com.

Please include a phone number for verification purposes, and limit submissions to 425 words or fewer.

10 | CRAIN’S CHICAGO BUSINESS | DECEMBER 18, 2023

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CLIMATE From Page 10

Small to medium-sized farms have taken the lead in adopting regenerative practices, but Big Food companies are embracing regenerative at scale. General Mills has a goal to advance regenerative agriculture on 1 million acres of land by 2030. Cargill is “committed to support farmerled regenerative agriculture practices and systems across 10 million acres of agricultural land in North America by 2030.”

Danone has already transitioned most of its milk sourced in France to regenerative production and is working across its global supply chain, including in the U.S., to transition farmers to regenerative practices.

Regenerative agriculture is also driving one of our region’s biggest food trends: the increased production of grain, including delicious and highly nutritious artisanal and heirloom varieties, that is grown organically. Harold Wilken, owner of Janie’s Farm and Janie’s Mill in downstate Danforth, was ahead of his time in 2005 when he abandoned conventional agriculture and started growing and milling organic grain. Today, his products are used in leading bakeries and food processors in Chicago and beyond — Publican Quality Bread and Jenny’s Tofu are just two of his customers — and he has played a pioneering role in persuading a growing number of farmers to follow his model.

The Chicago area is home to two leading pasta companies utilizing regeneratively produced ingredients. In Northbrook, Barilla’s legume pasta line uses lentils and chickpeas, great rotational crops that add diversity and natural nitrogen to the soil. Bartlett-based Rana Meal Solutions sources organic wheat for its line of fresh pastas in their club, retail and foodservice channels.

Chicago-based Yishi Foods uses organic and sustainably grown oats for its innovative line of oat cereals and spreads. Quaker and parent company PepsiCo are moving toward regenerative oat production in partnership with Walmart and Archer-Daniels-Midland, creating a major global initiative to encourage farmers to adopt regenerative practices.

According to Bill Weiland, CEO of South Barrington-based Presence Marketing and a leading prognosticator of food trends: “Oats are a leading regenerative grain. They are an excellent cover crop that also are a great cash crop for farmers in a rotation. Companies like Oatly have grown quickly and are now focusing on moving their supply chain to source regeneratively grown oats. This will have a dramatic impact on nutrient density while sequestering vast amounts of carbon in the soil.”

“Common Ground” is a master class on how regeneratively grown food uses ancient techniques to build soil. With narration by Hollywood stars including Jason Momoa, Laura Dern, Rosario Dawson and Woody Harrelson, filmmakers

Josh and Rebecca Tickell demonstrate ways farmers can build healthy soil, sequester carbon and make more money doing so.

Farmer Rick Clark is featured in the film, which describes how he transitioned his 7,000-acre farm to regenerative organic. He’s the fifth generation of Clarks to farm the land, 100 miles south of Chicago and straddling the Indiana-Illinois border.

Clark transitioned to organic production after experiencing massive amounts of erosion on his then-conventionally farmed land two decades ago. He now grows a diverse array of corn, soybeans, rye, wheat, oats, sorghum and peas, while also rotationally graz-

ing cattle and sheep. “While my yields are lower, I’m producing much healthier food without exposing my family to the toxic chemicals in conventional agriculture,” he says. “We are also sequestering vast amounts of carbon in the soil and have an incredible amount of resilience in the event of drought or massive storms.”

As a result of this system, he hasn’t used any chemical inputs in years; in the film, he states that he saves more than $400 an acre doing so. And with more than $2 million a year in savings, it goes without saying that it is much easier for Clark’s farm to be profitable. “Now we just need to get my neighbors to convert.”

Regenerative agriculture is also driving one of our region’s biggest food trends: the increased production of grain, including delicious and highly nutritious artisanal and heirloom varieties, that is grown organically.

BLOOMBERG

e s r , s e t n

PERSONAL VIEW

DECEMBER 18, 2023 | CRAIN’S CHICAGO BUSINESS | 11

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Condo where Mike Royko lived in the early 1980s is rehabbed, up for sale T

he condo where legendary newspaper columnist Mike Royko lived in the early 1980s, describing himself as “Condo Man” before reverting to his traditional “Bungalow Man” persona, is on the market after an extensive rehab.

Cherie Berzon is asking $1.4 million for the four-bedroom condo in a mid-1920s Italian Renaissance-derived tower on Lake Shore Drive. Berzon bought it in 2020 from the woman who bought it from Royko in 1985.

Listed with Lynn Kummerer of Luxury Living Real Estate, it came on the market Nov. 24.

Kummerer’s listing nods to Royko’s time in the space with a photo in the listings of the 2018 book “The Best of Royko,” a collection of columns from his years at the Chicago Tribune, edited by his son David Royko. The cover shows a dapper Royko in a suit, tie and top hat leaning on an umbrella, an apt choice for what the Pulitzer Prize-winning columnist called his “Condo Man” years on Lake Shore Drive.

The famously working-class Royko bought the sixth-floor condo in 1981, shortly after the death of his first wife, Carol. Royko wrote of his time there as an “anthropological study of those relatively new urban creatures, Condo Man, High-Rise Man, Lakefront Man, Health Club Man, Singles Bar Man and all the others.”

He couldn’t do the study from afar, Royko wrote, but had to immerse himself in the culture, like an anthropologist exploring an unfamiliar people. He bought a fancy bike for riding along the lakefront, but wrote that he turned out to be too fat for it and joined the “New Vo Reesh Health Club.”

“From my living room window I had a splendid view of the sun coming up over the lake. . . .And over the Dopemobile, a camper that arrived in the park each morning to sell strange herbs and spices while a nearby policeman slipped tickets under windshield wipers,” Royko later wrote.

It was while living there that Royko moved from the Chicago Sun-Times to the Chicago Tribune following press baron Rupert Murdoch’s purchase of the Sun-Times.

Royko sold the condo in 1985.

Cook County records show neither what he paid for it in 1981 nor how much he sold it for in 1985.

“About a week ago the moving truck came, and I have reverted to my natural state of Bungalow Man,” Royko wrote in October 1985. The next year, he married his second wife, Judy, and, in 1992, they moved to Winnetka. Mike Royko died in 1997, and Judy Royko sold the Old Green Bay Road property in 2004. In a twist that the columnist, a devoted fan of the Chicago Cubs, might have turned into comedy, the Winnetka home where he lived out his days was later demolished and the site is now part of Cubs President Jed Hoyer’s $5.7 million, 1.4-acre estate.

Three years ago, Berzon bought Royko’s former condo for $900,000, according to the Cook County Clerk’s Office. Her renovations included updating the electrical from antique cloth-wrapped wiring, replacing all 28 windows with modern insulated models and adding electric blinds to most of them, re-plastering walls and restoring a decorative plaster ceiling in the library.

Kummerer declined to discuss the seller’s reason for moving.

12 | CRAIN’S CHICAGO BUSINESS | DECEMBER 18, 2023

VHT PHOTOS

The Pulitzer Prize-winning newspaper columnist lived in the four-bedroom on Lake Shore Drive, observing characters he called ‘Health Club Man’ and ‘Singles Bar Man’ before reverting to his preferred role as ‘Bungalow Man’ I By Dennis Rodkin

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Finalists named for the 2024 ChicagoCIO ORBIE® Awards

The ChicagoCIO ORBIE® Awards honors chief information officers who have demonstrated excellence in leadership. With support from Crain’s Chicago Business, ChicagoCIO will honor the CIOs who are driving innovation and transforming Chicagoland’s leading organizations. The ORBIE Awards will take place on April 11th at Marriott Marquis Chicago. To learn more about the event visit https://chicagocio.org/awards/details. The finalists are below:

SUPER GLOBAL | Over $10 billion annual revenue & multi-national operations

JASON BIRNBAUM SVP & CIO United Airlines

ANUJ GAUR Global CIO, Marmon Holding Inc.

JANE POSSELL EVP & CIO - Operations, Analytics and Security CNA Insurance

ATUL VERMA CIO - US Personal & Business Banking Bank of Montreal

GLOBAL | Over $2.5 billion annual revenue & multi-national operations

MARK BLOOM Global CIO Arthur J Gallagher & Co

PRAVEEN JONNALA SVP & CIO CommScope Inc.

MIKE POWELL CTO SEKO Logistics

KRIS RAO Chief Information & Digital Officer HNI Corporation

JOHN YIN Global CIO Berlin Packaging

LARGE ENTERPRISE | Over $3 billion annual revenue

BHAVANA DEVULAPALLY SVP & CIO Ventas, Inc.

NORM FLEMING Chief Information Technology Officer Chicago Public Schools

DR. ALOK MEHTA CIO - Business Systems Kemper Insurance

SAMIR SHAH SVP & CIO Fortune Brands Innovations

CHRIS WALTER CIO Central Garden & Pet Company

ENTERPRISE | Over $1 billion annual revenue

MIKE CARR VP IT Clune Construction Company

ANDREW COLLYER CIO Fitch

GARRET FITZGERALD CDO Enru Logistics and Postal Optimization

MANOJ POONIA CTO Somatus, Inc.

TIM WALTER CIO Edward Don & Company

LARGE CORPORATE | Over $300 million annual revenue

MARK DAHLBERG VP IT Sysmex

PAUL HAISMAN CIO Rotary International

RAJ SAMPOORNAM SVP & CIO Byline Bank

PAUL SCHORR CIO Optimas Solutions

LACHLAN TIDMARSH SVP & CIO Blue Cross Blue Shield Association

CORPORATE | Up to $300 million annual revenue

JON BEYER CIO - Executive for IT & Digital Solutions Evangelical Lutheran Church in America

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ANIL CHOUDARY CTO Alliant Credit Union

NEIL GOODRICH Chief Innovation Officer Envista Forensics

AKSHAY PATEL VP & CIO College of American Pathologists

KHAN TRAN CTO Avante Health Solutions

12/5/23 2:07 PM

PEOPLE ON THE MOVE

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

ACCOUNTING

BANKING

HEALTH CARE

LEGAL

LEGAL

ORBA, Chicago

Cornerstone National Bank & Trust Company, Chicago

Medical Home Network, Chicago

Benesch, Chicago

Benesch, Chicago

Medical Home Network (MHN), a nationally recognized non-profit dedicated to transforming care in the safety net, welcomes Henish Bhansali, MD as Chief Medical Officer. Dr. Bhansali brings deep experience in both value-based care and community healthcare to his role at MHN with more than 12 years of experience in healthcare management, medical education, and healthcare consulting. He will lead the efforts of MHN’s clinical team to empower health centers to provide whole person care for patients.

M. Reas Bowman has joined Benesch as a Partner in the firm’s Litigation Practice Group. Reas practices commercial litigation, primarily representing Bowman clients in disputes involving real estate and financial services.

He represents national lenders, loan servicers, and debt buyers in disputes to enforce commercial loan agreements and defend lender liability actions.

Collins Fiona Collins has joined Benesch as an Associate in the firm’s Litigation Practice Group. Fiona (Fi) has done extensive work in large-scale toxic tort litigation. His experience includes trial strategy, civil matters in state and federal courts, and active participation in the discovery process.

William E. Walsh has joined Benesch as a Partner in the firm’s Litigation Practice Group.

Bill represents clients in the financial sector in litigation and regulatory Walsh matters. He has deep experience in complex commercial litigation and class actions, including matters related to securities fraud, market manipulation, auditor liability, and highfrequency trading.

Cole Hardy has joined Hardy Benesch as Of Counsel in the firm’s Intellectual Property Practice Group. Cole is a seasoned technology transaction attorney with a passion for innovation and a keen understanding of the ever-evolving legal landscape in the technology industry.

ORBA, one of Chicago’s largest public accounting firms, welcomes Kaleb Spreitzer and Stephanie Becker to the firm. Kaleb joins ORBA’s Tax Group as a Tax Associate. He will Spreitzer be preparing state and federal individual income tax returns for clients.

Stephanie Becker joins the firm’s Marketing Department as a Manager of Marketing and Business Development. Stephanie will be working with Becker practice and industry groups to respond to proposals and assists with the planning, development and implementation of a variety of marketing and business development projects and programs.

Cornerstone is excited to welcome Robert Conrardy, CFA, as Executive VP. Bob will oversee Wealth Management and Fiduciary Services. With over 35 years of experience, he has held several leadership and advisory roles at BMO, Bank of America, Savant, and Cargill and is active in Chicago’s start-up community. Bob earned an MBA from the Univ. of Chicago – Booth and a BBA from the Univ. of Wis.– Madison. Bob is a Governing Member at the Brookfield Zoo and active with WGA Evans Scholars Foundation.

LAW FIRM

BANKING First Bank Chicago, Skokie

ACCOUNTING / CONSULTING CLA (CliftonLarsonAllen LLP), Chicago Jim Milliken has advanced to principal at CLA. With over 10 years of leadership experience in private real estate development firms and property management companies, he works extensively with lenders throughout local and global institutions. Jim is also a leader in the real estate division of CLA’s outsourcing practice (BizOps) where his team of accounting professionals serve clients in various capacities from daily transactional recordkeeping to CFO-level tasks.

Explore CLA at CLAconnect.com.

First Bank Chicago, one of Chicago’s top 5 privately owned banks, congratulates Simon Yohanan on his appointment as co-chair for the D’Vine Affair event hosted by Catholic Charities in February 2024. Yohanan, SVP/ Managing Director, Middle Market Banking, is one of many employees giving time, talent and resources to our community and neighbors as part of our bank-wide culture of caring.

We applaud Simon’s efforts to assist Catholic Charities in meeting their mission of serving those in need.

CONSTRUCTION Clayco, Chicago

ARCHITECTURE Gensler, Chicago Bringing nearly three decades of experience in the design industry, Erik Lucken has returned to Gensler as Strategy Director. With a focus on workplace strategy, he partners with clients to explore opportunities to align the physical environment with work process, culture, and business performance goals. Specializing in applied research, Erik has extensively studied workforce demographics and the design imperative to support both how and why people work today.

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

P014_CCB_20231218_v3.indd 1

Clayco welcomes Marilynn Rubio, Executive Director of Civic and Social Impact.

In her new role, Rubio will lead community engagement and philanthropy for both the company and the Clayco Foundation, dedicated to enhancing local communities. With 16 years of experience in community engagement and leadership roles, Marilynn aims to align giving, social justice, and community efforts with Clayco’s values, contributing to positive and lasting change.

Croke Fairchild Duarte & Beres LLC, Chicago Croke Fairchild Duarte & Beres welcomes Nancy Zhao to the firm as an associate, focusing her practice on mergers & acquisitions, asset purchases, venture capital financings, and securities offerings.

She represents a range of clients from startups to public companies in both domestic and cross-border transactions. Nancy received her J.D. from Washington University in St. Louis School of Law, and also serves as a first violinist with the Chicago Bar Association Symphony Orchestra.

Ardmore Roderick, Chicago Ardmore Roderick, Illinois’ leading minorityowned infrastructure engineering firm is pleased to announce David Castañeda as Vice President of Aviation. With more than 22 years of global aviation experience, David has led major programs including landside and airside facilities and infrastructure projects. David will play an integral role in driving Ardmore Roderick’s nationwide aviation expansion.

Benesch, Chicago Ryan J. Levitt has joined Benesch as Of Counsel in the firm’s Litigation Practice Group. Ryan is an individual for whom criminal defense was always a calling.

Whether it is defending the wrongfully accused, challenging government overreach, helping a client through one of if not the most difficult circumstances of their lives, or anything in between-he finds a passion and purpose in every case.

LAW FIRM

LEGAL

LEGAL

Hahn Loeser & Parks, Chicago

Benesch, Chicago

Hahn Loeser & Parks welcomed Ryan T. Johnson as a partner in its Litigation and Construction Practices.

Johnson has over 15 years of experience representing clients in construction matters, professional liability, and complex commercial litigation in Illinois and nationally, including jury and bench trials in state and federal courts and arbitration proceedings. He earned his J.D. from Drake University Law School and received a B.A. in English from the University of Iowa.

Jane Moye-Rowley has joined Benesch as an Associate in the Firm’s Litigation Practice Group. Jane focuses their practice on complex commercial litigation in federal and state courts across the country. They have experience conducting critical legal research, drafting memorandums and motions, and appearing in administrative hearings.

Kabat Chapman & Ozmer LLP, Chicago

LEGAL Benesch, Chicago

LAW FIRM ENGINEERING / CONSTRUCTION

LEGAL

Michael Best & Friedrich LLP, Chicago Michael Best is pleased to announce the addition of Partner Andrew Shelby, further strengthening the firm’s deep Labor & Employment bench. With more than 15 years of experience, Andrew is a seasoned commercial litigator and trial lawyer who counsels clients on disputes involving employment issues, class actions and business torts, real estate and merger transactions, professional negligence, and breach of contract. Andrew joins Michael Best as the firm celebrates 175 years of legal excellence.

SaDella Duval D’Adrian has joined Benesch as an Associate in the Firm’s Litigation Practice Group. SaDella focuses on civil litigation and has experience drafting a wide variety of briefs, D’Adrian pleadings, motions, and written discovery. She previously worked at a legal center that provided services and support for refugees, asylum seekers, unaccompanied minors, and victims of violence.

Meghan Golden has Golden joined Benesch as an Associate in the Firm’s Litigation Practice Group. With a concentration on civil litigation, Meghan brings considerable experience in drafting a diverse array of briefs, motions, and written discovery documents. She also conducts legal research to further facilitate the efficient resolution of legal disputes.

Rob Schnitz has broad experience and deep knowledge in the areas of hospitality law, labor and employment law, internal investigations and commercial law.

Prior to joining KCO, he spent 22 years at Hyatt Hotels Corporation.

Rob’s experience also includes negotiating complex commercial contracts, privacy, corporate governance, litigation, public relations, crisis communications, enterprise risk management, mergers and acquisitions, franchise matters, government affairs and business torts.

REAL ESTATE @properties Christie’s International Real Estate, Chicago @properties Christie’s International Real Estate is pleased to announce that Rachel Scheid has been promoted to Vice President of Brokerage Services from Vice President of Education. In her new role, Scheid will co-manage the brokerage’s Gold Coast, East Lincoln Park and Bronzeville offices, helping agents grow their business through @properties Christie’s International Real Estate’s innovative technology, marketing and coaching programs. She will also play a key role in agent recruitment.

12/13/23 10:17 AM

CRAIN’S VOTING AND DEMOCRACY

ELECTION SYSTEM MAKEOVER Voting reform initiatives in Illinois and elsewhere aim to give voters more say in the outcomes I By Judith Crown

V

oters in Evanston will see a new type of ballot in the city’s next local election that will allow them to rank candidates from highest to lowest preference. The method, called ranked choice voting, is designed to ensure that a candidate wins with a majority of voters. It also attempts to solve the conflict posed by third-party spoiler candidates.

Evanston is the first Illinois municipality to adopt ranked choice voting, which is being used around the country for local and statewide elections as well as primaries. It was employed in the 2021 New York City mayoral election won by former police officer Eric Adams. And it generated national publicity when former Alaska governor and

vice presidential candidate Sarah Palin was defeated in her bid for a U.S. House seat.

Under traditional systems, a candidate wins with a plurality — unless there’s a runoff — which means a majority of voters didn’t prefer him or her, says Andrew Szilva, executive director of the nonprofit FairVote Illinois, part of a national initiative advocating for electoral reform. In a ranked choice election, the last place candidate is eliminated, and his votes are redistributed to the voter’s second choice. It can require several rounds, but, ultimately, “the winner is supported by the majority,” Szilva says.

For example, a supporter of Elizabeth

GEOFFREY BLACK

Tom Bowen is a Chicago political strategist.

What is ranked choice voting?

The method is designed to ensure that a candidate wins with a majority of voters.

It also solves the conflict posed by third-party spoiler candidates.

Ranked choice ballot 1st choice

2nd choice

3rd choice

4th choice

Candidate A Candidate B Candidate C Candidate D

See VOTING on Page 20 SPONSORS

DECEMBER 18, 2023 | CRAIN’S CHICAGO BUSINESS | 15

CRAIN’S

VOTING AND DEMOCRACY I COMMENTARY

N T

vote, you benefit by gaining the recently had dinner with a loyalty of a passionate minority group of Illinois mayors, and who stick with you no matter conversation strayed to the what, while viciously attacking topic that often dominates when other credible candidates to municipal leaders get together: knock their performance down the divisive and toxic nature of tobelow yours (sound familiar?) day’s politics, and the frustration That is, our electoral system is we feel when that style gets in the designed to amp up negativity way of making the progress our Daniel Biss is and division. Fortunately, there’s residents expect. mayor of an alternative.

In a democracy, the tone of po- Evanston.

With ranked choice voting, votlitical discourse has two sources: the broader culture and the specific rules ers can rank the candidates. If one candiof our electoral and governing systems. date gets an absolute majority of firstUnfortunately, the cultural problem — place votes, they’re elected. But if not, the mostly resulting from digital technology votes of those who supported the lastand especially social media — is largely place candidate are reallocated to their beyond the authority of local government. second choices. This process repeats until The good news is that we can improve the someone gets over 50% and is named the winner. rules.

Most American elections use the “first past the post” system, meaning that whoev- Disincentivize polarization er gets the most votes wins. That works well This system disincentives polarization in a two-candidate election, but it can result and rewards collaboration. Yes, candidates in strange outcomes with larger fields, like want to defeat their opponents. But they the seven-candidate 2010 Illinois Republi- also want to be the second choice of their can gubernatorial primary, which Bill Brady opponents’ voters, which discourages won with under 21% of the vote. trashing the other candidates. An election This system rewards polarizing behav- system that rewards candidates who behave ior. If you can win with a small share of the collaboratively will select public officials

ALAMY

Evanston adopts ranked choice voting.

Illinois should, too.

I

who conduct themselves in that way.

That’s why I was delighted in 2022 when Evanston voters overwhelmingly passed a referendum establishing ranked choice voting for our municipal elections.

Starting in 2025, we’ll elect our mayor and city council using ranked choice voting, and I expect that over time we’ll get a more collaborative, and therefore more productive, city government.

By the way, acting collaboratively doesn’t put the thumb on the scale for any particular ideology. Evanston is an avowedly progressive community, and I’m an avowedly progressive mayor. I don’t demand consensus before taking action, and I’m not particularly enthusi-

astic about pushing people toward the center. The problem with the polarization gripping our politics is not that it blocks some hypothetical moderate consensus, but rather that it causes huge fights that paralyze our governments. To make progress, we need government bodies that are able to engage productively across difference.

Whatever your preferred policy outcome, a government (or any organization made up of multiple human beings) will be most productive when it deals with disagreement honestly, respectfully and collaboratively. That’s what ranked choice voting encourages, and that’s why I hope it is adopted across Illinois.

elections.

once using a ranked ballot.

We need healthy competition to lead our country — including regular intraparty competition between different flavors of Democrats and Republicans in November elections. With FFV for congressional and state elections, voters would choose from up to five credible candidates in each November race. Imagine a general election for the Senate with two Democrats, two Republicans and an independent. For presidential elections, instant runoff voting (minus the top-five primary) can deliver similar benefits. These are the hiring systems we need to deliver the best of the best to Washington, D.C., and state capitals and to hold them accountable for results.

able at the time: Britain’s countryn less than a year, it appears side district elections, which used likely that Americans will be plurality voting (i.e., the most choosing between two presivotes wins). That seems logical, dential candidates whom the mabut it’s a really bad idea. Why? In jority already don’t want. And plurality elections, a candidate many Americans are already far can win with far less than a majortoo familiar with feeling less than ity. For example, in any three-way happy with their ballot choices. race, one person can win with only How can this be?

Katherine M. 34% of the vote. As a result, a vote If your company’s hiring prac- Gehl, former for a candidate unlikely to win, tices regularly delivered only two CEO of Gehl such as a Libertarian or a Green, finalists who were so undesir- Foods, is risks being “wasted” or, worse still, able as to create a “lesser-of-two- co-author of “spoiling” the election in favor of a evils” choice for your most im- “The Politics most-disliked candidate. That’s portant positions, what would Industry” and you do? Likely declare that your founder of The why third-party and independent candidates rarely get traction. company’s success depended on Institute for That’s why the two major parties winning the war for talent, create Political do everything they can to keep poa top-flight committee to urgent- Innovation. tential “spoilers” out of the race. ly delve into root causes, and Plurality voting is an almost insurthen design a new hiring system to ensure your firm competes for the best of the mountable structural barrier to entry for new competition, and when combined best.

We’re losing the war for talent to run with our system of low-turnout party our country because our system of hiring primaries that often advance candidates and firing — our elections — is funda- with less appeal to the general electorate, mentally flawed as a result of a little- November voters will reliably be disapknown historical mistake. When our pointed. That is, until we use the power founders created the details of our elec- given each state, in Article 1 of the tions, they copied the only example avail- Constitution, to change the rules of our

16 | CRAIN’S CHICAGO BUSINESS | DECEMBER 18, 2023

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Here’s how to return healthy competition to our elections I

‘Laboratories of democracy’ The solution is a new election design called Final Five Voting (FFV), an earlier version of which is already in effect in one of our federal system’s valuable “laboratories of democracy” — the state of Alaska.

FFV is the combination of two simple changes to our election system: open, topfive primaries that advance five candidates to the November election regardless of party, and instant runoff general elections, which guarantee majority winners.

Instant runoffs are exactly like a series of physical runoffs except that instead of needing to repeatedly return to the polls for each round, voters cast all their votes at

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COMMENTARY I VOTING AND DEMOCRACY

ers may not know a new voting system was put in place and struggle to navigate a new ballot without any prior education or information. Lastly, since ranked choice voting would only apply to Oak Park board elections and not any other local elected boards, there was concern this would further complicate the ballot and voters would be dissuaded from voting altogether.

Ultimately, the board paused further dis-

cussion while a state task force assesses ranked choice voting as a viable option in Illinois. While the future of ranked choice voting in Oak Park is unclear, the board firmly holds the right to vote as a cornerstone of democracy. The possibility that ranked choice voting might silence the voices of an electorate weighed heavily for a majority of village board trustees and can be expected to inform the board’s final decision.

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also clear the details still needed he village of Oak Park is a Chito be discussed with the county cago suburb that proudly touts clerk. Additionally, questions were a reputation of having a highly raised regarding the impact to earengaged electorate. With over 20 citily voting. As a community that sees zen commissions and six governing a fair number of early voters across boards, Oak Park’s style of governing 54 countywide sites, Oak Park votcan be described as collaborative ers would need special ballots and with many opportunities for residents to influence the political land- Lucia Robinson voting booths to process their ranked votes. With the uncertainscape. Recently, ranked choice vot- is an attorney ties surrounding new software and ing was proposed to Oak Park’s main and village of specialized equipment, ranked governing board as an alternative to Oak Park choice voting could present signifits current election process. This pro- trustee. icant operational barriers for Oak vided an opportunity to evaluate the importance of voter participation and access Park voters.

The board discussion also highlighted in local elections.

Ranked choice voting is an election pro- substantive issues starting with the referencess where voters rank candidates from most dum whereby voters would choose this new to least preferred. A candidate who secures a voting system. The timing of such a referenmajority of votes, wins a seat. However, if no dum, the 2024 spring primary elections or first choice candidate receives a majority, the the fall presidential election, was an importcandidate with the fewest first-choice votes ant discussion point. Board members voiced is eliminated and the ballots of the eliminat- strong support for the latter given higher voted candidate have their second-choice can- er turnout for presidential elections. didate counted. This process is repeated until all seats are filled. For Oak Park, it would Confusion and unease be a significant change from the current votIn addition, the draft referendum we were ing system, which elects board members presented raised concerns. It contained a based on a plurality of votes. nine-point explanation to describe the mulIn considering this proposal, the Oak tiple rounds of vote counting and candidate Park board noted several procedural chal- elimination. This was concerning for several lenges. While there was general agreement board members who noted the referendum that a software upgrade to the local county’s was long and potentially confusing. Furtherelection system would be required, it was more, there was general uneasiness that vot-

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ALAMY

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CRAIN’S

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

+PZDF'EO PSH DECEMBER 18, 2023 | CRAIN’S CHICAGO BUSINESS | 17

CRAIN’S

VOTING AND DEMOCRACY

Voting and election reforms proposed as a remedy to unwieldy politics Amid hyperpartisanship, gridlock and polarization, momentum is shifting toward ways to better serve the interests of a larger share of the U.S. electorate I By Judith Crown

R

anked choice voting, or RCV, is a way of casting ballots that allows voters to rank candidates in order of their preference. But ballots in ranked choice voting elections are more complex than traditional elections where the winner only needs to garner a plurality. In traditional elections, every submitted ballot that follows the instructions is counted toward the final result. With RCV, votes are reallocated to second, third and fourth choices so that the winner achieves a majority. Election and voting experts acknowledge that no method is perfect. Hyperpartisanship, gridlock in Washington, D.C., and statehouses, and political polarization are reasons some say the traditional voting method needs to change and that RCV is the answer.

Here’s a closer look at RCV, which has gained traction in recent years .

How does ranked choice voting work?

Votes are counted in rounds. In the first round, if a candidate earns 50% or more of the vote, he or she wins and the counting stops. If not, the candidate with the fewest votes is eliminated. Votes for the eliminated candidate are allocated to the voter’s second candidate choice or, subsequently, to his or her third- or fourth-choice candidates. This continues in rounds until a winner is identified with a majority of votes.

Are voters required to rank?

There is no obligation to pick more than one candidate. Voters may rank as many as they wish.

Are there secondary benefits to ranked choice voting?

Proponents say ranked choice discourages negative campaigning because candidates are also looking for second-choice votes from their opponent’s supporters. Some candidates even campaign together. Proponents also maintain ranked choice voting has helped elect more women and people of color because voters have access to a wider range of candidates.

Does ranked choice favor one political party over another?

Losers in political campaigns have said the system favors the op-

posing party. But advocates say this type of voting is nonpartisan and has support in the major political parties, as well as among third parties and independents.

Where is ranked choice voting used?

Evanston adopted ranked choice for its municipal election in 2025. Nationally, it’s used in Maine and Alaska, as well as a number of municipalities, including New York City, San Francisco and Minneapolis.

Is it possible that voters could face traditional and ranked choice on a single ballot?

Voters could, and typically will, have both ranked choice voting races and plurality voting on the same ballot. Evanston, for example, will start using ranked choice voting for city elections. Voters there will rank the candidates for mayor, but will also have another page on the ballot where they vote

Do some groups object to ranked choice voting?

Opponents say the method could be confusing and disenfranchises voters who are not well informed on all the candidates in the mix.

What is a nonpartisan Final Four or Final Five primary election?

Instead of a closed Democratic or Republican primary, all candidates appear on a single ballot, regardless of political affiliation. The final four or five finishers advance to the general election, which is determined by ranked choice voting, or what is also called instant runoff voting.

What is the advantage?

Proponents say the current system yields candidates who are extreme on either side of the political spectrum because the closed primaries attract the angriest and the most partisan voters. And because turnout in those primaries is low, it isn’t necessarily representative. The elected official ends up governing with the narrow, partisan base top of mind.

What is the difference between a closed primary and open primary?

In a closed primary election,

only voters registered with that party can participate. In an open primary, registered voters can choose which primary to vote in on Election Day, regardless of their registration. Under a Final Five system, all registered voters would be able to vote in a single open primary with candidates from multiple parties on the single ballot.

Are the proponents of ranked choice voting and Final Five at odds?

Advocates of Final Five say they are solving a more pressing problem and that ranked choice voting on its own is less impactful. In fact, they are addressing two concerns by using ranked choice in the general election. Ranked choice activists in Illinois say they’re not opposed to Final Five but are working to advance what is more politically feasible.

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Where is Final Four or Final Five voting used?

Voters in Alaska approved a Final Four system in 2020, and it was first used in 2022 to fill the state’s only seat in the U.S. House following the death of Republican Don Young. There is a grassroots movement in New York City to adopt Final Five voting and in a number of states, including Nevada and Wisconsin.

Sources: FairVote Illinois, Alaska Division of Elections, Final Five Voting NYC

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What is the benefit?

Ranked choice voting ensures that a candidate is elected with a majority, not a plurality. Put another way, it eliminates the situation of more voters having opposed an elected official than supporting that person. By rank-

ing multiple candidates, voters have a greater say in who gets elected even if their top choice doesn’t win.

for their state representative using plurality.

18 | CRAIN’S CHICAGO BUSINESS | DECEMBER 18, 2023

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VOTING AND DEMOCRACY

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ver the past 20 years, more and more jurisdictions across the country have moved to a ranked choice voting system. Minneapolis, New York City and San Francisco are among the cities that have made the change. Closer to home, Evanston will start using ranked choice in April. Could Chicago become the next major city to embrace it?

Not immediately. In the short term, more public education and prep work needs to be done before such a move could plausibly be considered.

According to a recent Harris Poll survey, only 20% of Cook County residents even knew that some state lawmakers had proposed implementing ranked choice in Illinois.

While supporters had hoped the state would move to it by the 2024 presidential primary, less than half of Cook County residents (42%) were even somewhat familiar with the concept before being surveyed.

Nationwide, few Americans are familiar with ranked choice voting and confusion about it is common.

Locally, more than half of all Cook County residents (56%) agree that it is confusing. Even among the Cook County residents who claimed high familiarity with the system, 41% consider it confusing.

While each jurisdiction’s ranked choice system may differ, the general idea is that rather than casting their ballot for a single candidate, voters would rank contenders for office in order of preference. A candidate who secures more than 50% of voters’ first-place picks wins. If no one does this, the candidate with the fewest number of first-place votes is eliminated and their votes are reallocated to the remaining candidates according to their supporters’ next choices. This process

William Johnson is CEO of The Harris Poll, a global public opinion polling, market research and strategy firm. continues until a candidate amasses more than 50% of the total vote.

Ranked voting is polarizing. Opponents have nicknamed the system “rigged choice voting” and argue that it is too confusing and could increase distrust in the voting process. They also point out that it can end up redistributing votes to, and ultimately elect, less popular candidates. Alaska, for example, first used ranked choice in 2022 when three Republican House candidates in a special election garnered 60% of the vote, but a Democrat (who garnered a plurality in the initial tally) won the race because she was the second choice of enough of the also-rans’ supporters. Several states, including Florida, Idaho, South Dakota and Tennessee, have banned ranked choice voting outright. More states are expected to follow suit.

The costs of runoffs Proponents argue that ranked choice better empowers voters because it prevents relatively few voters from playing a decisive role in a crowded field. Take Chicago’s 2019 mayoral election, for example, which resulted in a runoff between Lori Lightfoot and Toni Preckwinkle. They amassed only 33% of the vote combined during the first round of balloting, meaning that two-thirds of Chicago voters had not voted for either candidate.

Ranked choice proponents argue that their system would have allowed those voters to have their second, and perhaps third, choices counted, thus better reflecting the will of the city.

Ranked choice advocates also argue that it would eliminate costly runoff elections, saving an estimated $3 million annually, according to the ranked choice advocacy group FairVote Illinois.

Eliminating runoff elections could also reduce voter fatigue: Many voters fail to return to the polls for runoff elections, especially if they are not enthusiastic about the remaining candidates.

Support for ranked choice often falls along ideological lines. According to the Harris Poll survey, more self-identified liberal Cook County residents (44%) supported implementing such a system than self-identified conservative (28%) or moderate (28%) residents. Likewise, liberal (56%) and moderate (55%) Cook County residents report more often than conservatives (40%) that it would be an improvement on the current voting system.

Overall, Cook County residents seem to prefer the status quo over transitioning to ranked choice.

Sixty-six percent of Cook County residents said they were satisfied with the current voting system.

When we asked directly about moving to ranked choice, a plurality (36%) were neutral about the idea, with a third (33%) supporting it and a quarter (24%) opposing it.

The bottom line: It’s conceivable that as local voters learn more about ranked choice, support for it will rise. But right now, Cook County residents are too unfamiliar with it to properly evaluate such a system, or decide whether it is right for Chicago.

Harris Poll: Familiarity How familiar are you with the concept of ranked choice voting?

At least somewhat familiar

Not very/not at all familiar

58%

42%

Harris Poll: Support Based on what you know, how much do you support or oppose implementing a ranked choice voting system during elections?

Strongly support

Somewhat support

Strongly oppose

Not at all sure

7%

Neutral

Somewhat oppose

12%

11%

21%

13%

36%

Source: Harris Poll • Cook County residents Note: These questions were asked prior to providing respondents with a high-level definition of ranked choice voting and therefore results reflect unaided familarity.

DECEMBER 18, 2023 | CRAIN’S CHICAGO BUSINESS | 19

CRAIN’S

VOTING AND DEMOCRACY

VOTING

consensus, because they are accountable to a broader and more diverse electorate, she says.

Using more than $15 million from the 2015 sale of her family’s food business, Gehl is funding reform efforts in her home state of Wisconsin, in Nevada and in other state intiatives. She’s also raised money from business leaders on different sides of the political spectrum, including hedge fund billionaire Ken Griffin, a right-of-center political donor, and billionaire LinkedIn co-founder Reid Hoffman, who has favored Democratic causes.

In the early 2000s, Gehl served as a special assistant to Chicago Mayor Richard M. Daley for technology economic development and is a former Crain’s 40 under 40 selectee.

From Page 15

Andrew Szilva is executive director of the nonprofit FairVote Illinois.

GEOFFREY BLACK

Warren in the 2020 Democratic primaries might think her vote didn’t count when Warren dropped out after Super Tuesday. But in a ranked choice election, that voter might have ranked Bernie Sanders second and Joe Biden third, giving her more of a say in the outcome. In the 2016 presidential election, votes for third-party candidates Jill Stein and Gary Johnson would have been reassigned to second-choice picks Donald Trump or Hillary Clinton, eliminating their spoiler effect.

Ranked choice voting is part of a pro-democracy movement — initiatives aimed at moderating the chaotic and polarized state of politics. A recent study of the nation’s politics by the Pew Research Center found deep voter dissatisfaction. Only 4% of U.S. adults say the political system is working extremely or very well. A growing share of the public dislikes both political parties, and 63% of Americans say they are dissatisfied with the presidential candidates who have emerged so far. Other reform proposals outside of the voting process include term limits for members of Congress, age limits for elected officials and replacing the Electoral College with a popular vote for presidential elections.

Advocates of ranked choice voting say this is an option that can engage voters and expand participation. The Illinois General Assembly is creating a 20-member bipartisan task force to assess county voting systems and determine what changes are needed to make them compatible with ranked choice. State Sen. Laura Murphy, D-Des Plaines, who co-sponsored a bill for ranked choice voting this year, hopes a system can be in place for the presidential primary in 2028. “We need a change that encourages more people to vote,” she says.

Voters in west suburban Berwyn endorsed the concept of ranked choice voting in an advisory referendum last year. Trustees in the nearby village of Oak Park this fall considered a ballot referendum for the March primary but, instead, opted to wait for the state task force report. In Chicago, Ald. Matt Martin, 47th, earlier this year introduced a resolution calling for a hearing on ranked choice voting.

Another even more ambitious reform has the potential to reduce the number of extreme candidates that emerge from party primaries and promote bipartisanship. Final Four or Final Five systems eliminate the party primary in favor of an open primary in which Democrats, Republicans and independents compete.

The top four or five vote getters move on to the general election and compete in a ranked choice or instant runoff process.

More than 80% of U.S. House races aren’t competitive, says Katherine Gehl, founder of the Chicagobased Campaign for Final Five Voting. House members from safe red or blue districts focus on primary

How Americans feel when they think about politics Percentage of those who feel each of the following emotions when thinking about politics these days.

Always/often

Sometimes

Rarely/Never

No response

Excited 4%

18%

78%

Hopeful 10%

33%

1%

56%

Angry 55%

34%

11%

25%

9%

Exhausted 65% 0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

1%

100%

Majority of Americans say partisan fighting gets too much attention, while issues and policy get too little Percentage of those who say the following level of attention is currently given to each topic in our county these days.

Too much

Right amount

Too little

No response

Disagreements between Republicans and Democrats 57%

20%

22% 1%

37%

22%

2%

64%

3%

The 2024 presidential election 39%

Policies elected officials in Washington are working on 13%

20%

Policies local elected officials are working on 25%

8%

66%

1%

Important issues facing the country 5% 0%

78% 1%

16% 10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Source: Survey of U.S. adults conducted July 10-16, 2023. “Americans’ Dismal Views of the Nation’s Politics,” Pew Research Center.

20 | CRAIN’S CHICAGO BUSINESS | DECEMBER 18, 2023

voters who represent a small slice of the electorate — typically 8% to 10% —but hold the more extreme views of the party.

“The politicians are answering to that 8%,” Gehl says. “No one should win an election until November voters have had their say.” Eliminating

the partisan primary should change the way representatives do their jobs, providing flexibility to reach across the aisle, negotiate and find

V

V b d “ e s l t e

F v a

Avoiding ‘weird outcomes’

PLU

Alaska is the first U.S. state to enact a Final Four election and showcased the upside of the process with the election of Democrat and Native American Mary Peltola to the state’s sole seat in the U.S. House. The death last year of the state’s long-serving Republican representative, Don Young, triggered an open primary that drew 48 candidates to replace him, including Sarah Palin. In the special ranked choice election, Peltola emerged victorious after Palin and another candidate split the Republican vote.

Peltola went on to win a full term in November 2022.

Palin initially blamed her defeat on the ranked choice process, but analysts say Peltola won by highlighting issues that Alaskans cared about most, including energy, the environment, jobs and avoiding identity politics. Peltola has assembled a bipartisan staff and works well with the state’s Republican senators, including moderate Lisa Murkowski, political analysts say.

“Mary is immensely popular, she’s seen as a transformative candidate” says Anchorage attorney Scott Kendall, a former aide to Murkowski who drafted the ballot measure for the nonpartisan open primary that sends the top four candidates to the general election.

“I wanted to push the competition to the general election ballot,” Kendall adds. “So many fewer people show up. You have 5% or 10% of the electorate deciding the race.

That leads to weird outcomes.”

What’s happening in Alaska is interesting, says Chicago political strategist Tom Bowen, who worked on Barack Obama’s 2008 presidential campaign as well as the mayoral campaigns for Rahm Emanuel and Lori Lightfoot. “It’s not such a blood lust competition.” The state of the world is too dangerous to allow primaries to be driven by the most angry and ideological voters, adds Bowen. With a Final Four or Final Five system, there will be more choice and more diverse constituent groups who are in a position to influence the outcome, he says. That takes the emphasis away from primaries and puts it in the right place, the general election, where the larger share of voters participates, he argues.

It’s no surprise that the major po-

Plu pick The win

Res Pro

Note

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CRAIN’S

VOTING METHODS EXPLAINED Voting is the cornerstone of U.S. democracy, but the framers of the U.S. Constitution left details to the states. Article I, Section 4, says, “The times, places and manner of holding elections for Senators and Representatives, shall be prescribed in each state by the legislature thereof; but the Congress may at any time by law make or alter such regulations, except as to the places of (choosing) Senators.”

For the first half century of U.S. elections, voters didn’t use paper ballots. Those allowed to vote (only white, land-owning men)

went to the local courthouse and publicly cast their votes out loud. The first paper ballots were nothing more than scraps of paper on which a voter wrote his candidates’ names and dropped them into the ballot box.

The U.S. has over 8,000 election jurisdictions, and more than 200 use an alternative voting method for some or all of their elections.

Starting with the method most American elections use, plurality voting, here are three alternative methods for choosing representation.

GETTY IMAGES

acmore

VOTING AND DEMOCRACY

’

PLURALITY VOTING

APPROVAL VOTING

RANKED CHOICE VOTING

RANGE VOTING

e to and procrat tola U.S. the repered canding ked ged ther ote. m in

Plurality voting lets voters pick just one candidate.

The candidate with the most votes wins.

Approval voting lets voters pick all the candidates they want — one, two, or however many — and no ranking is necessary. Again, the candidate with the most votes wins.

This method is used in two U.S. cities — Fargo, N.D., and St. Louis.

Also known as instant runoff voting, or RCV, this method requires voters to rank candidates in order of preference, with the candidate having the fewest first-choice votes being eliminated in each round until a candidate has more than half the remaining first-choice votes. Many in-use ballots limit the rankings to three.

Also called score voting, it allows voters to assign a score to each candidate, with the highest-scoring candidate winning the election.

feat but ighared the ding asand ubderna-

litical parties are defending the partisan primary as a proven system that voters understand. In Nevada, the parties are trying to block a years-long effort by the political action committee Nevada Voters First to establish open primaries and ranked choice voting by amending the state constitution through a ballot initiative. Funding is coming from out of state — with the largest infusion from Gehl’s Campaign for Final Five Voting.

As a purple state with 40% of voters registered as independents, Nevada is ripe for change, says Mike Draper, a partner at the Las Vegas government affairs firm leading the campaign.

Independents form the largest voting block, but they can’t participate in closed party primaries. The combination of an open primary followed by a Final Five election with ranked choice voting is an attempt to interject competitiveness into politics, he says.

Top Nevada lawmakers, including Democratic U.S. Sens. Jacky Rosen and Catherine Cortez Masto have said an open primary would be too onerous for voters and complicate the election process.

In Maine, the state Legislature voted to repeal statewide ranked choice voting after a court advisory opinion questioned whether the system violated the state constitution. Ranked choice voting had been approved in a 2016 referendum and its status was in limbo for a while. But in 2018, Maine voters passed a “people’s veto” referendum that reversed the Legislature’s action.

Residents were informed on the issue, says Anna Kellar, executive director of the League of Women

ular, anney e to allot pen our ion. petilot,” peo% of ace.

a is ical ked denyornuel ch a tate o althe ers, r or be erse n a me, asis it in lecvot-

po-

Resistance to “spoilers”: Low Prospects for U.S. adoption: High

Resistance to “spoilers”: Medium Prospects for U.S. adoption: Medium

Resistance to “spoilers”: Medium Prospects for U.S. adoption: Low

Resistance to “spoilers”: High Prospects for U.S. adoption: High

Note: A spoiler is a non-winning candidate whose presence on the ballot affects which candidate wins. Sources: U.S. Election Assistance Commission, Fairvote.org

Voters of Maine and Maine Citizens for Clean Elections. “It was in the news all the time,” she says. The desirability of ranked choice voting resonated because former Republican Gov. Paul LePage, a polarizing politician, had won his first race with less than 40% of the vote.

“There was a sense that ranked choice voting was solving a problem that people understood,” Kellar says. Today, ranked choice voting is used for all of Maine’s congressional races and presidential elections, for gubernatorial and state Legislature primaries, but not for the state’s general elections. It’s also used in some local races.

Concerns about confusion, disenfranchisement Because ranked choice voting is new to Illinois, battle lines have yet to be drawn. Voters are just becoming familiar with the concept. Szilva says FairVote Illinois isn’t opposed to the idea of Final Five Voting, but that ranked choice voting is more achievable because it’s better known and more widely used. The idea of a single open primary isn’t widely discussed and the established Illinois parties would be loath to cede their control, strategists say.

Szilva speaks to local groups around the state, demonstrating how ranking works by having meeting attendees vote on their phones for their favorite cartoon character, car or food. Local FairVote chapters are in Bloomington/Normal and one in DuPage County, he says.

One group with no use for the ranking system is the Illinois Opportunity Project, a right-of-center group that advocates for reduced taxes and says ranked choice vot-

ing is overly complicated and leads to voter confusion. Ranked choice and open primaries could theoretically benefit Republicans, who have been a minority in Democratic Illinois. But Katie Clancy, a spokesperson for the Illinois Opportunity Project, says ranked choice voting “is a solution in search of a problem.” The process makes it harder to vote, harder to tabulate results, decreases voter confidence and risks disenfranchising vulnerable voters, she says. Representatives of the project testified against ranked choice voting at a General Assembly hearing last spring.

Voters with knowledge of the process say the ramifications are not clear cut. “We need more moderate members of Congress, but I’m not convinced ranked choice voting or Final Five is a cure,” says Chicago urban planner Daniel Knickelbein, a registered Democrat. Ranked choice advocates may be overstating how effective it would be in producing more moderate candidates, he says. If the concern is making sure a candidate has a majority, an easier reform is to require a runoff, he adds.

Ranked choice voting favors “high information,” voters who are well-informed by watching cable news or following other news outlets,” says Chicago campaign strategist Peter Giangreco. But it has the potential to disenfranchise the “low information” voters who don’t track elections that closely and are accustomed to picking a single candidate, he adds.

Advocates say ranked choice voting is supposed to boost turnout.

“But if you make elections more complicated, people could throw

Where is ranked choice voting used?

As of November 2023, 50 American jurisdictions have ranked choice voting (RCV) in place, reaching approximately 13 million voters. This includes two states, three counties and 45 cities.

Statewide Local/primary elections Military and overseas voters Presidential primaries Special elections

Sources: Fairvote.org

up their arms and say, ‘I don’t know enough, I’m not going to vote.’ ” says Giangreco, who has worked on campaigns for Obama, U.S. Reps.

Mike Quigley and Danny Davis, and former presidential candidate Sen. Amy Klobuchar of Minnesota.

Defenders say voters aren’t obligated to rank candidates and there’s no evidence that groups have been disenfranchised. “People rank things in their daily lives all the time.

Like their top 10 favorite songs, says Alisa Kaplan, executive director of Reform for Illinois, which spearheaded the campaign for ranked choice voting in Evanston.

Evanston voters last year approved the ballot measure for ranked choice voting by a decisive 82%. It’s supposed to go into effect for the next local election in 2025. “I

don’t want to say it was easy,” Kaplan says. City Council members raised questions and concerns about confusion and disenfranchisement. “Elected officials have learned to win under the current system,” she adds. “Those officials would say, ‘the current system elected me, there can’t be anything wrong with it. Does that mean I wouldn’t win the next election?’ ” There’s one more major hurdle: Evanston’s elections are administered by Cook County, which must supply new software for a ranked choice election. “The clerk’s office has met with and had preliminary discussions with Evanston officials,” says a spokeswoman for the Cook County Clerk’s Office. “No additional details have been determined at this point.”

DECEMBER 18, 2023 | CRAIN’S CHICAGO BUSINESS | 21

CRAIN’S

VOTING AND DEMOCRACY I COMMENTARY

Approval voting forces politicians outside their bubbles

THOMAS J. LINDEN

W

vote for the four you like.

You may have heard of ranked choice voting (RCV), but approval votward? ing is different. With RCV, Once a year, your you rank candidates in Fox News-obsessed uncle order of preference. Apand your campus-protestproval voting is just pickleading cousin are forced all-you-like. You can to be in the same room support both systems. with those outside their Chris Raleigh is the director of After all, liking multiple partisan bubbles. things is our thing.

Are there fights? Some communicaTo the voter, the power years. But for most of us, tions and of approval voting may most of the time, even advocacy for not be obvious. Yet this our most partisan rela- The Center for tives tone it down when Election Science. ability to pick multiple candidates forces politiforced to be in person for the holidays. These face-to-face cians into a new situation. They interactions can even rebuild lost have to travel outside their bubempathy and lead to new mutual bles if they want to win.

Currently, campaigns look at the understandings. We want these values in our democracy. To do electorate and say, “Who do I need that, we need to find a similar bub- to talk to . . . and not a single perble-bursting force that works year- son more.” They know voters can vote for only one candidate and round.

My organization fights for a sys- they bank on that. Using powerful tem called approval voting because voter analytics, campaigns essenwe’ve seen it do just that. tially put each voter into buckets Approval voting works like this: — those worth speaking to, or not.

Do you already support the canImagine a ballot with 10 candidates (a party’s primary, for example). didate? You’re not worth it. Are you You really believe in three candi- likely to disagree with the candidates. With approval voting, you date? Also unworthy. Politicians check all three of their boxes. Or if are creating their own bubbles in you hate six candidates, you simply which they live, deciding who mathat makes the holidays so special? And awk-

ters and ignoring everyone else.

This is approval voting’s power.

Every connection with a voter can become a vote for a campaign, even if they like someone else, too.

But what the voters expect also changes: “You want my vote, you come speak to me.”

We’ve seen this shift since approval voting was adopted in St. Louis in 2020. In the past, candidates could win with support from a small faction, especially if many

candidates ran. The last pre-approval voting mayor won with just 32% of the vote in 2017, mostly representing only her corner of the city.

In 2020, activists won a ballot measure to adopt approval voting.

Only four months later in St. Louis’ first approval voting election, Tishaura Jones came out on top with 57% approval. Prior to the change, in 2017, Tishaura Jones received only 30% of the vote.

What happened? Jones connected with voters outside of her neighborhood, meeting people on both sides of the city’s divides.

Voters finally could say that they supported Jones along with other candidates they agreed with.

What could your uncle and cousin agree on this holiday season? That their vote matters, and politicians should care what they think. Your family could agree on approval voting.

SHOWCASE INDUSTRY LEADERS AND THEIR CAREERS RECOGNIZE TOP ACHIEVERS IN CHICAGO’S PREMIER PUBLICATION New Hires / Promotions / Board Appointments / Retirements / Special Acknowledgments

MAKE AN ANNOUNCEMENT Debora Stein / dstein@crain.com

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22 | CRAIN’S CHICAGO BUSINESS | DECEMBER 18, 2023

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P023_CCB_20231218.indd 23

PROGRAM KEY Day Camp

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Overnight

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Special Needs

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Virtual

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Illinois Governor JB Pritzker was the featured speaker at Crain’s Power Lunch last month. In a conversation with Crain’s Group Publisher and Executive Editor, Jim Kirk, the governor discussed the current challenges and successes in Illinois and Chicago.

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ECONOMIC SECURITY

A popular salvo against poverty Sixty years after the ‘war on poverty’ in the U.S., Chicago and Cook County are trying guaranteed income programs to provide some measure of economic security I By Cassandra West

C

larence Shaffer’s financial situa- So when work is slow and his paycheck is tion is a mirror of the times, rising less, the $500 helps him make the payand falling as the economy fluc- ments and not lose his coverage.

The “war on poverty” turns 60 next tuates.

When he was born, the poverty rate was month, but it never actually ended. Pover19.5%, so alarmingly high that the U.S. ty is too persistent. But the declaration led president at the time, Lyndon Johnson, de- to safety net programs like the Suppleclared a “war on poverty” in his 1964 State mental Nutrition Assistance Program, or of the Union speech. By 1973, the rate had SNAP, formerly known as food stamps; fallen to 11.1%, then rose to 15.1% in 2010, Medicare; Medicaid; the Head Start probefore dropping to 11.5% in 2022. The gram and expanded Social Security. Now numbers reflect how precarious personal with guaranteed income pilots being introduced by Cook County, the city of Chifinances can be, as Shaffer knows.

Born in Chicago, Shaffer, 60, lived for cago and a host of municipalities around years in California and had good-paying the country, another anti-poverty policy jobs in the Los Angeles area as a security iteration promises a measure of financial manager for the Academy Awards and as a stability for low-to-moderate-income computer analyst for Fox Television and households.

Sony Pictures. Today, he’s back in suburban Cook County working as a security Poverty interventions contractor while being the primary careWith a poverty rate of 16.9%, the city of taker for his 88-year-old mother. Because Chicago under Mayor Brandon Johnson his work is unstable, so is his income. is addressing economic security in less “My job is whenever they call, so it’s not direct-cash ways: by eliminating the subvery often that I’m working,” Shaffer says. minimum wage for tipped workers, pass“It’s either feast or famine in my business, ing a new paid leave policy (though it faces and mostly famine.” amendments), pushing for a The “famine” led him to aphike on the real estate transfer ply last December for the Cook tax to fight homelessness County Promise Guaranteed and exploring a municipally Income Pilot program, created owned grocery store. to provide economic stability, “There are interventions opportunity and security to that are required at the houselow-income households. Fundhold level to stabilize people ed by the American Rescue and families,” says Ameya Plan Act, or ARPA, the $42.5 Pawar, a former City Council million pilot is the biggest pubmember who is a senior advislicly funded guaranteed iner with the Economic Security come pilot in the country, Project, an economic empowcounty officials said at the time. Ameya Pawar erment advocacy organizaMore than 230,000 applications tion. It assisted Cook County came from county residents hoping to get with its Promise Guaranteed Income Pilot the unconditional $500 monthly cash and is a strategic partner with the Johnson payments over two years. Shaffer submitted administration on the public option grohis application on the last day and made cery store. the cut.

Pawar, who earned a master’s degree in Getting the $500 a month “keeps you social work from the University of Chicafrom worrying, since you know that mon- go, says he learned in his first year “that ey is coming in every month,” Shaffer says. people who are living in concentrated He uses the money for life and health in- poverty are not just experiencing it at a surance payments. “My job doesn’t offer that. They do, but it’s at a more costly fee.”

See INCOME on Page 26

Clarence Shaffer is working as a security contractor while caring for his 88-year-old mother. Because his work is unstable, so is his income. I PHOTO BY GEOFFREY BLACK

Poverty incomes The Census Bureau poverty definition uses a set of income thresholds that vary by family size and composition to determine who is in poverty. If a family’s total income is less than the family’s threshold, then that family and every individual in it is considered in poverty.

U.S. Department of Health & Human Services poverty guidelines (using Census Bureau thresholds) $30,000

Single person

Family of four

$20,000

$10,000

$0

2017

2018

2019

2020

2021

2022

2023

2017

2018

2019

2020

2021

2022

2023

Source: U.S. Department of Health & Human Services

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DECEMBER 18, 2023 | CRAIN’S CHICAGO BUSINESS | 25

ECONOMIC SECURITY

INCOME From Page 25

household level. They are also experiencing what’s happening around them. And what makes Chicago unique and, obviously, well documented is that you have communities that have been for generations excluded from participating fully in the economy.”

Former Mayor Lori Lightfoot and city Department of Family & Support Services Commissioner Brandie Knazze in April 2022 launched the city’s yearlong Chicago Resilient Communities Pilot). The $31.5 million guaranteed income program funded by ARPA dollars was designed to improve the financial stability, health and well-being of Chicago residents living in poverty. It ended in June 2023, after providing 5,000 Chicagoans 12 monthly payments of $500 with no strings attached.

Johnson says he’s committed to expanding the program. During a budget briefing in October with Crain’s editorial board, city Budget Director Annette Guzman said the administration is “looking to see where there is funding that could be shifted into” a guaranteed income program. “It is another way that we’ll be working to help those who are unhoused or who are finding it difficult to stay in the city of Chicago because of how high our rents are.”

The Johnson administration did not respond to a request asking when it expects to announce reauthorizing a guaranteed income program.

“It’s not insignificant that you have two (guaranteed income) pilots happening in the Audra Wilson third-largest city and the second most populous county in the United States,” says Audra Wilson, president and CEO of the Shriver Center on Poverty Law. “We see how families are using this money. This is one of many efforts to continue to support families that are living in poverty.”

The Inclusive Economy Lab at the University of Chicago Harris School of Public Policy will issue initial findings from the city pilot a year from now and from the county pilot a year after that. “Chicago and Cook County are where the boldest experiments are happening” when it comes to guaranteed basic income, says Carmelo Barbaro, the lab’s executive director.

“Cook County is the largest by dollar amount and the city’s is largest in terms of the number of participants and ultimately the place where the rest of the country tries to learn from.”

Cook County Board President Toni Preckwinkle said during an October meeting with Crain’s that the county is committed to making its guaranteed income program permanent. One of the ways to fund it is out of the Cook County Equity Fund, she said. Her administration established the fund in 2020 to address institutional and

Falling short Across Illinois, for all household sizes and in all locations, the Federal Poverty Level is well below the ALICE Household Survival Budget, which is the estimated cost of the essentials needed to live and work in the modern economy. A family of four saw that budget jump 10% in 2021 vs. 2019 while the federal poverty level only increased by 3%.

The Federal Poverty Level vs. ALICE Household Survival Budget Federal poverty level

ALICE Household Survival Budget

Single adult annual total

$12,800 $25,104 Family of four annual total

$26,500 $62,916 $0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

$50,000

$55,000

$60,000

$65,000

Source: ALICE Household Survival Budget, 2021; Assistant Secretary for Planning & Evaluation; HHS poverty guidelines for 2021; U.S. Department of Health & Human Services Note: ALICE (Asset Limited, Income Constrained, Employed) refers to people who earn more than the Federal Poverty Level, but not enough to afford the basics where they live. ALICE research quantifies and describes the number of households that are struggling financially.

structural barriers to racial equity.

Preckwinkle has made racial equity, and with it, closing the wealth gap, a centerpiece of her administration.

“When I got this job, I started doing some research on regional economic growth,” she told Crain’s. “What I learned is that those regions that have the least inequality are the most economically vibrant, and one of the drags on economic growth in this region is tremendous inequality.”

Earlier in the year, Preckwinkle became co-chair of a coalition of elected leaders, Counties for a Guaranteed Income, that advocates for programs that provide no-stringsattached cash payments to people in need. Mayors for a Guaranteed Income launched in 2020. Evanston Mayor Daniel Biss is a member; Mayor Johnson is not listed on the website.

The city of Evanston and Northwestern University joined the growing guaranteed basic income, or GBI, movement in December 2022, dispensing $500 monthly to 150 individuals for one year. Northwestern provided $400,000 in funding for the pilot program. Additional funds came from ARPA, the city of Evanston and the Evanston Community Foundation.

Even historically less progressive cities like Birmingham, Ala., and Columbia, S.C., have launched pilots, The Washington Post reported.

Old idea made new The idea of a guaranteed income isn’t a pandemic-inspired invention. It goes back to the founding of the United States. In 1776, Thomas Paine proposed a type of basic income in his pamphlet, “Common Sense.” In 1966, the Black Panthers’ Ten-Point Program called for the government “to give every man employment or

26 | CRAIN’S CHICAGO BUSINESS | DECEMBER 18, 2023

a guaranteed income.” Today, the U.S. has nearly 100 GBI demonstration pilots, according to the Arlington Community Foundation in Virginia. More are in the works.

All aren’t government funded or sponsored. In 2019, former Mayor Michael Tubbs founded the Stockton Economic Empowerment Demonstration in Stockton, Calif. Funding came from donors, and it became one of the country’s most high-profile guaranteed income experiments, giving 125 randomly selected residents $500 per month for two years with no strings attached. Participants’ job status, financial stability and overall well-being improved, according to a study of the program.

Richard Wallace, founder of Equity and Transformation, or EAT, a Chicago nonprofit, knew of the results in Stockton and thought his organization could do its own version. EAT launched the Chicago Future Fund guaranteed income program in 2021 for formerly incarcerated residents of West Garfield Park. The program provided $500 for 18 months to 30 participants who were 18-35 years old and earned less than $12,000 per year. EAT spent a year and a half fundraising to get its experiment off the ground.

“It was an opportunity to advance a model around addressing issues like income volatility, psychological wellness, physical functioning and recidivism in Black communities,” Wallace says.

Why West Garfield Park? The West Side neighborhood has been historically impacted by redlining and contract selling, has a population that is 93% Black and a per capita income of $11,739. It’s also home to the demographic with the highest unemployment and homicide rates in Chicago, Wallace says. “There’s a direct correlation between joblessness and homicides. We’re going to begin to wrestle with these facts in an effort to bring about an equitable Chicago, a safer Chicago. How long can we leave the folks who are in need outside of the safety net simply

because of their background?”

Guaranteed income programs won’t make everyone who participates whole, proponents agree, while critics say the programs disincentive people to work. Stockton participants reported increased financial independence and selfsufficiency and improved health, according to the Journal of Urban Health. In most cases, GBI recipients have jobs, albeit, low-paying ones.

“There’s a pilot program called (Cook County) Promise that’s been giving thousands of low-tomoderate-income families $500 in cash every month to help them meet basic needs,” former President Barack Obama said during the Obama Foundation’s 2023 Democracy Forum in November.

“The thesis is that you improve financial stability,” he said. “You improve the well-being of lowincome families. They actually can fix a busted car. They don’t have electricity turned off. Their lives are more stable. It doesn’t discourage them from working full time. It, in fact, makes it easier for them to go out and find a job. And work full time.”

LaTanya Jackson Wilson, vice president of advocacy for the Shriver Center on Poverty Law, says public assistance disincentivizes people to save money, a policy that keeps people mired in poverty. “When people are on public assistance, they’re limited to the amount of money they can save,” she says. Even when inheriting a house that’s not worth a lot, for example, a person on government assistance would have to give it up or lose their benefits.

GBI advocates say that today’s economy is unjust and often precarious. Guaranteed income isn’t enough to live on, but it can make recipients less vulnerable.

“During the pandemic, we passed policies that would have started to level the wealth inequality in America,” says Natalie Foster, president and co-founder of the Economic Security Project. “We passed the Child Tax Credit, which

sent a check to every parent in America with no strings attached.

We sent stimulus checks to so many families across America.

There is precedent now for what it looks like to guarantee economic security in America,” Foster says.

“We know we can do it. So now the challenge is how we amass the political will to do it again.”

The Economic Security Project is urging states to adopt and expand child tax credits. Earlier this year, two Illinois lawmakers introduced legislation to offer a $700 credit per child that would be phased out for single taxpayers earning more than $50,000 annually and joint filers earning more than $75,000.

In 2021, the temporary federal Child Tax Credit in the American Rescue Plan was the largest child tax credit ever, providing monthly payments of $250 or $300 per child without having to take any action.

Child poverty rates dropped from 9.7% to 5.2%. But after those payments ended in the second half of 2021, the rate skyrocketed to 12.4%.

The Center for Tax & Budget Accountability says, the federal Earned Income Tax Credit “has become one of the more effective anti-poverty programs in the United States.” For every $1 a state spends on refundable tax credits, like the EITC or CTC, that amounts to $2.52 in local economic activity.

Many families who were financially struggling and experienced the benefits of tax credits now find themselves back where they were pre-pandemic, Wilson, of the Shriver Center on Poverty Law, says. “Actually, it’s worse than where we were pre-pandemic because what has changed is inflation. . . .Everything else has actually gone up, so to be back where we were means that people are faring worse.”

Wilson acknowledges other measures that are being enacted to help families who are “continually on this hamster wheel” of trying to keep up with everyday obligations. “It’s great that you have a minimum wage that is rising, great that you’ve eliminated the subminimum wage, but people complain that (they) don’t feel it because everything else is still a pressure on (them).”

Wilson wishes more would appreciate the interdependence of government, businesses and workers. “The city of Chicago is having a lot of challenges now under a new administration. You’re talking about a foreclosure rate of commercial properties that has grown exponentially,” she says.

As buildings hollow out and remote work brings fewer people downtown, workers in industries like tourism and hospitality are feeling the pinch. They no longer have the base they once had through hospitality and restaurants, an irony that compounds the problem, Wilson says. “No matter what you do to help the individual, if you’re not looking at the entirety of the circumstances that keep people constrained and mired in poverty, then we’re going to feel like we’re always having this conversation.”

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ECONOMIC SECURITY I COMMENTARY

A st

D

G

the statistics. According riving through the to the Chicago MetropolGarfield Park neighitan Agency for Planborhoods, I am ofning’s most recent Comten awestruck by the many munity Data Snapshot, images of beauty, including 40% of West Garfield institutions, like the Golden Park residents have Dome and Garfield Park household incomes less Conservatory. But also by than $25,000. In East Garthe sight of neighbors help- Yolanda field Park, 49% of houseing one another, manicured Fields is the hold incomes are less lawns sprinkled throughout executive than $25,000. In the U.S., the community like dia- director of the poverty threshold for monds on display, nestled Breakthrough a family of four is $29,960. with displays of beautiful Urban The poverty rate in both murals and community Ministries, a East and West Garfield gardens. nonprofit that I am also saddened by fosters commu- Park is above 45%.

It is impossible to live, the truth that poverty lives nity developwork or worship in any here. Economic poverty ment in West or South Side neighboldly stakes its claim Chicago’s East borhood without hearing throughout Garfield Park Garfield Park through the absence of neighborhood. conversations that include both lament and public safety, grocery stores and hospitals, thriving retail, solutions for creating a thriving financial institutions, and opportu- community. Eliminating poverty in nities for employment. Words like our community requires a strategy “poor,” “underserved,” “at-risk” and that includes expanded safety-net “needy” are used to describe many programs, access to quality early of the people who call Garfield Park childhood education, good-paying home, mostly by those who do not jobs, affordable housing and a reformed criminal justice system live here.

Economic poverty is evident in that includes support for those

re-entering our community.

The proposed strategies for creating thriving communities often involve comprehensive community development plans but little talk about what inspired Black Americans to relocate from the South to Chicago during “The Great Migration” — the hope of a better life.

That hope didn’t prevent the harsh economic or political reality of redlining or the indifference of city government officials they faced when they arrived. It did, however, help them create new lives.

Economic poverty levies additional taxes on the people it entraps. That tax cripples the lives and dreams of resilient, hardworking adults and children. Repeated disappointment, broken promises and neglect opens pathways to discouragement that lead to self-inflicted wounds on individuals and the community. It is not enough to reduce poverty. While homeownership may not be for everyone, to truly create thriving communities, access to wealth-generating opportunities must exist. Along with economic opportunities, we a must address generational poverty by

BREAKTHROUGH URBAN MINISTRIES

Where poverty is pervasive, solutions must be radical and relentless

A client shops at the Breakthrough client-choice food pantry.

ensuring access to necessities like safety, health care and recreational spaces that allow families to thrive.

At Breakthrough Urban Ministries in East Garfield Park, we partner with people to build connections, develop skills and open doors of opportunity. Our work centers on housing, health and wellness, youth and education development, violence prevention and community economic development. We have built five facilities, all located within a three-block radius, dedicated to each of those areas. Those experiencing home-

lessness have temporary shelter, families access free food in our Fresh Market, youth receive academic support and can participate in sports. Residents build community through sewing clubs, technology and fitness classes.

There is no one way to address poverty but many ways to provide hope in a community like ours. At Breakthrough we create an atmosphere of hope through radical hospitality and relentless engagement. Hope manifests where people feel invited, welcomed and accepted.

kno it — In pan the lead prev The of Wit and ern evic pro tanc thei free sch wor stam nati Med the cred kee aflo T of t hav

Percentage of households in Cook County earning $100K+ annually who are financially healthy:

40% 44% 69% OF BLACK HOUSEHOLDS

OF LATINX HOUSEHOLDS

OF WHITE HOUSEHOLDS

WHITE HOUSEHOLDS ARE 3X AS LIKELY TO OWN STOCKS OR MUTUAL FUNDS. BLACK AND LATINX HOUSEHOLDS HAVE AC C CESS TO EVERY Y TYPE OF SAVINGS LESS ACCESS AND INVESTMENT ACCOUNT. AND Income alone is not enough. Our commitment is to close the wealth gap. When we do, ever yone benefits.

Join us by contacting Dan Tollefson at DTollefson@cct.org.

28 | CRAIN’S CHICAGO BUSINESS | DECEMBER 18, 2023

29 |

ress vide s. At moical ageeoand

Advance the proposed statewide child tax credit BREAKTHROUGH URBAN MINISTRIES

G

versation has changed, uaranteeing ecobecause for a brief but nomic stability is enduring moment, a within our reach. I new social contract was know this because I’ve seen forged. The expansion it — and you have, too. of federal Child Tax In 2020, as the COVID Credit (CTC) in 2021 pandemic swept across was one of the most efthe globe, our elected leaders did something Natalie Foster fective public policies in our nation’s history, liftpreviously unthinkable: is president They offered a guarantee and co-founder ing millions of lowof economic security. of the Econom- income kids out of poverty and millions of With speed, nimbleness ic Security middle-income kids out and efficiency, our gov- Project, an of economic precarity. ernment adopted an organization eviction moratorium and that advocates Monthly checks of up to $3,600 offered parents provided rental assis- for ideas that tance to keep families in build economic reliable resources to pay for basic goods, like their homes; it provided power for all formula, diapers and free meals outside Americans. school supplies, and baschools and eliminated work requirements for food sic necessities like shelter, utilistamps; it mobilized free vacci- ties and food. The expanded fednation drives and expanded eral CTC slashed child poverty in Medicare; and it offered cash in half, decreased food insecurity the form of grants, loans, tax and improved educational outcredits, and stimulus checks to comes. That is, until 2022, when keep families and businesses a hyperpolarized Congress let it expire, pushing millions of kids afloat.

Three years later, even as many back into poverty.

With stalled progress on the of these pandemic-era policies have lapsed, the national con- federal level, Gov. J.B. Pritzker

ECONOMIC SECURITY PROJECT

lter, our acapate munol-

ECONOMIC SECURITY I COMMENTARY

and the Illinois General Assembly have the opportunity to secure a victory for Illinois families, with a statewide child tax credit legislation proposed by the General Assembly. We have a narrow window to advance this measure, which would mean $300 for Illinois families who earn less than the median income — 1.4 million kids and 2.8 million parents. Doing so would set Illinois families on a new trajectory.

Studies consistently show that investments like this have a multiplier effect on communities and the economy. Each dollar the state invests in refundable tax credits (like the federal Earned Income Tax Credit) translates to a little over $2.50 in local economic activity. Families who receive tax credits spend over 90% of the extra money immediately, mostly on food, child care costs and school expenses.

Altogether, this proposed credit

could create up to $1 billion in local economic stimulus in the first year alone, generating a net positive effect for everyone in the community. It’s the reason why the policy is politically popular and supported by community and business leaders alike.

Year over year, we consistently see how families plan their budgets around receiving their refund check on “Tax Day.” One Illinois mother told us the moment she gets her refund check, she scours winter sales to buy school supplies and clothes for her kids that will fit in the fall. No cent is wasted. Parents like her would make use of a Child Tax Credit by immediately redirecting the cash to local businesses in order to provide for their kids.

The policies we fight for here at Economic Security Project can create a new moral economy that centers racial justice and equity.

These are rights we deserve, and they are closer than we think. By approving a Child Tax Credit, Gov. Pritzker can join the growing wave of leaders on the state and federal level building a new relationship between how our government serves our needs, and create a virtuous circle that fosters stronger families and communities and builds a better economy for us all.

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ECONOMIC SECURITY I COMMENTARY

An encouraging move on community reinvestment

CHICAGO COMMUNITY LOAN FUND

A

room remains for means the Rolling Stones ingful improvements. noted many years The final rule, released ago, “You can’t alOct. 24, will bolster comways get what you want, munity development nabut if you try sometimes . . . tionwide in many ways. you get what you need.” As For example, the final rule the Community Reinvesttakes important steps to rement Act (CRA) celebrated its 46th birthday recently, it Bob Tucker is duce rampant grade inflation among regulated received a belated but interim sorely needed gift via a fi- president of the banks and expands data collection requirements to nal rule that modernizes Chicago better identify disparities. the CRA to help ensure Community Based on data from 2018 to that all Americans have ac- Loan Fund.

2020, if these new rules had cess to financial products been in place, nearly 10% of banks and services.

Originally enacted in 1977, the would have received a “Needs to CRA requires the Federal Reserve, Improve” rating, prompting federal Office of the Comptroller of Curren- regulators to work more closely with cy and Federal Deposit Insurance the identified banks to address their Corporation to encourage financial deficiencies and address inequities institutions to meet the credit needs in target markets.

The new rule also increases the of the communities in which they do business, including low- and value of community development moderate-income neighborhoods. financing in CRA assessments by Originally, it was authored to ad- further clarifying CRA credit actividress inequities in access to credit ties and explicitly mentioning vital and bring an end to discriminatory tax credit programs, such as the Low lending practices across the country Income Housing Tax Credit and known as redlining. While the up- New Markets Tax Credits programs. date takes important steps forward Such a change will be a boon to to advance its original purpose, community developers, particularly

in Chicago, who utilize such programs to finance much-needed affordable housing and neighborhood retail and commercial amenities.

Unfortunately, however, the new rule did not go far enough to directly address racial inequities in access to capital. Some detractors, such as Fed Board Governor Michelle Bowman, argued that insufficient evidence exists to prove that banks are not meeting the credit needs of their communities and stated the new rule creates too costly of a regulatory burden for banks. Yet, at the Chicago Community Loan Fund, we be-

lieve that racially discriminatory practices continue to be far more expensive. As studies by McKinsey & Company, Citi GPS, the W.K. Kellogg Foundation and others show: Racial discrimination continues to cost this nation trillions of dollars in revenue.

One encouraging sign in addressing racial disparities, however, was the decision to include Section 1071 small-business data from the Consumer Financial Protection Bureau in future CRA reporting. The change will allow regulators to more accurately home in on and address racial discrimination in small-business

lending, similar to addressing racial discrimination in residential mortgages via data collected by the Home Mortgage Disclosure Act. It is our hope that this step signals that the regulators will continue to look for more ways to address protected class discrimination in financial services, particularly along the basis of race, gender and sexual orientation. Numerous studies have demonstrated that a person identifying as Black, Latinx, Indigenous, LGBTQ+ or a woman is far more likely to face barriers to accessing affordable financial products and services than their counterparts.

On balance and locally, the newly modernized CRA rule will help bring significant economic opportunities to the 450,000 Chicago residents living below the poverty line and the neighborhoods in which they live. The rule will also help undergird state legislative efforts, such as the recently released Illinois CRA rule that seeks to raise requirements for state-regulated entities to invest in uplifting historically marginalized communities. While still a work in progress, the final federal CRA rule is a great gift to all Americans.

Although the final rule does not fully realize the bold vision laid out by its original authors, it provides an excellent platform to continue making improvements as it is implemented.

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30 | CRAIN’S CHICAGO BUSINESS | DECEMBER 18, 2023

CRAIN’S DINING AND ENTERTAINMENT GUIDE From private dining to specialty steakhouses, here are options for your next business meal.

BERNARD’S

11 E. Walton St., 2nd Floor, Chicago IL 60611 312-646-1402 • bernardschicago.com

THE M ROOM

450 N. Clark St., Chicago, IL 60654 312-224-1650 • mroomchicago.com

Experience an unforgettable evening at Bernard’s Cocktail Lounge, where sophistication and exquisite mixology converge. Nestled in the heart of the Gold Coast, Bernard’s beckons with its warm ambiance, exceptional service and a delectable cocktail menu.

Elegance and charm surround you, whether unwinding with friends, impressing clients or enchanting a date.

Join us at Bernard’s to relish every sip of the good life.

Elegance evolved. Located in Chicago’s River North, The M Room has redefined fine dining with an evolved Global-New American menu and a la carte offerings.

Immerse yourself in a symphony of taste with our meticulously crafted dishes, each elevating classic flavors with inventive ingredients.

BLVD STEAKHOUSE

MONARCH & LION

Located in the Fulton Market District, BLVD Steakhouse is a classic American steakhouse inspired

by Hollywood’s Sunset Blvd. Helmed by Celebrity Chef/Partner Joe Flamm, the restaurant embodies the glamour and luxury that defined Old Hollywood offering sophisticated yet approachable service along with prime cuts and fresh seafood, innovative twists on 1950s cocktails, and an award-winning list of wines.

Monarch & Lion is an elevated British Pub. Taste our traditional Fish and Chips, Chicken Tikka Masala and savory pies. Watch American and European sports while sipping from eight rotating beers on draft and a large selection featuring UK and local brews. Stunning craft cocktails include a turmeric-infused Gin and tonic, a Pimm’s Cup, and Honey Mustard Old Fashioned.

FORMENTO’S

REMINGTON’S AMERICAN GRILL

817 W. Lake St., Chicago, IL 60607 312-526-3116 • blvdchicago.com

925 W. Randolph St., Chicago, IL 60607 312-690-7295 • formentos.com

302 E. Illinois St., Chicago, IL 60611 312-973-2623 • monarchandlion.com

20 N. Michigan Ave., Chicago, IL 60602 312-782-6000 • remingtonschicago.com

Located in Fulton Market District within Chicago’s bustling West Loop, Formento’s is an Italian Steakhouse that features the bright and light flavors of Italy. Created as a nod to the owner’s grandmother, “Nonna Formento,” guests will experience an array of dishes steeped from traditional family recipes alongside new-age dishes. The world-class wine menu offers guests more than 600 varietals from around the world. At Formento’s, new world culinary creativity marries with generations past.

Located across the street from downtown Chicago’s cherished Millennium Park is Remington’s – a classic American grill and steakhouse serving up warm hospitality, unparalleled service, and satisfying cuisine.

Remington’s menu features classic American fare and Chicago Steakhouse classics. The luxurious and rich interiors create an appealing ambiance for travelers and locals alike with the perfect setting for social gatherings and private parties.

GRILL ON 21

ROSEBUD RANDOLPH

A Cut Above Classic. Located on the 21st floor of the Lasalle Hotel, Grill on 21 is a modern approach to a classic steakhouse, blending timeless dishes with a contemporary ambiance. Centrally located in the heart of Chicago’s Financial District, an ideal destination for professionals, fancy date nights, and locals alike. The menu features a diverse array of grilled steaks, chops, hearth-roasted fish, poultry, and plant-based items.

Rosebud Randolph, located steps away from Millennium Park, features three levels of stunning dining spaces, making it the perfect spot for any occasion. The menu highlights century-old, Italian, family recipes including hand-made pastas, meatballs, steaks, seafood and more. Rosebud Restaurants have been serving Chicago and the surrounding suburbs since 1976.

ITALIAN VILLAGE RESTAURANTS

ROSE MARY

71 W. Monroe, Chicago, IL 60603 312-332-7005 • Italianvillage-chicago.com

932 W. Market, Chicago, IL 60607 872-260-3921 • rosemarychicago.com

Kick off the New Year at Italian Village! Explore our 5 distinctive venue spaces and 3 cocktail lounges, perfect for hosting your post-holidays holiday party!

Starting now, take advantage of our exclusive New Year offer: Mention this ad to receive 10% off on a party you book with us (limited to $2,000 or more minimum expenditure events). Let the toasting new beginnings begin!

Located in the Fulton Market District, Rose Mary is inspired by Celebrity Chef/Partner Joe Flamm’s Italian heritage and the bold, bright flavors of Croatian cuisine.

The award-winning restaurant offers a seasonal menu featuring house-made pasta and risottos, fresh seafood, and grilled meats, along with craft cocktails and a diverse list of Eastern European wines.

208 S. LaSalle St., Chicago, IL 60604 312-634-0000 ext. 3 • grillon21.com

P031_CCB_202311218.indd 31

130 E. Randolph St., Chicago, IL 60601 312-473-1111 • rosebudrestaurants.com

12/12/23 10:48 AM

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321 N. Clark St. I COSTAR GROUP PHOTO

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Law firm is set to leave Wacker Drive for River North The move represents Honigman’s recommitment to its office footprint at a time when many rivals are cutting back on workspace

By Danny Ecker

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Law firm Honigman is poised to move its Chicago office from Wacker Drive to a similarly sized space in a tower along the Chicago River, a recommitment to its office footprint at a time when many firms are cutting back on workspace.

The Detroit-based firm confirmed it is in talks to lease about 27,000 square feet on one floor at 321 N. Clark St., where it would relocate next year from its office at 155 N. Wacker Drive. Honigman subleases about 28,000 square feet today at the Wacker Drive tower from law firm Skadden Arps Slate Meagher & Flom, which is leaving the building with the expiration of its lease next June.

If completed, the new lease would be welcome news for downtown office landlords getting sick of watching tenants scale back their space with the rise of remote work. Honigman maintaining its footprint would validate the importance of its office space amid a downsizing trend that has pushed vacancy to an all-time high and set off a historic wave of office buildings in distress.

The deal would also notch a win for a joint venture of Houston-based developer Hines, Los Angeles-based American Realty Advisors and Chicago-based Diversified Real Estate Capital, which owns the 35-story Clark Street building and poured $85 million into a major renovation of the property in 2019 to help

compete for new tenants.

A redone lobby, new tenant amenities and a highly accessible location were key reasons that Honigman chose 321 N. Clark as it searched for a new office, said Thomas Gaughan, the firm’s chief operating officer.

Honigman also wanted to build out a new office from scratch that’s not only designed for the way its attorneys and staff use it in the wake of the COVID-19 pandemic, but also provides options to expand its space in the future, he said.

Branding opportunity “We were really looking at opportunities to not only make a brand statement with a building and what it says about us as an organization, but similarly what does it say to the folks inside the organization about who we are and how we work,” Gaughan said.

“321 (N. Clark) gives us an opportunity to do that in Chicago.”

Honigman has nearly 50 attorneys in Chicago today, almost twice the number it had when it subleased the Skadden space in 2017. Its current headcount might have called for a bigger office footprint under its pre-pandemic space approach, which included multiple sizes of offices and extra space warehoused for future growth, Gaughan said.

But with many people using the office only a couple of days per week, Honigman will build out its new space with single-sized offices — many of which are unassigned — as well as more space for gathering. That strategy allows the firm to have a more efficient

floor plan, “and people get used to working where there is space available, which helps facilitate collaboration,” Gaughan said.

Gaughan said the new lease the firm is negotiating would be for more than 10 years, but with multiple options built in in relatively short-term increments that would allow Honigman to change its footprint based on the firm’s growth and how it uses its office space.

Honigman has been in the Chicago market since 2015, when it absorbed Chicago litigation firm Schopf & Weiss.

A spokeswoman for the 321 N. Clark St. ownership venture did not provide a comment on the Honigman lease negotiations.

The Hines-ARA-Diversified joint venture paid $340 million in 2016 for the 897,000-square-foot Clark Street office building, when the property was about 96% leased, according to real estate information company CoStar Group.

After completing the renovation, the ownership group refinanced the building in 2021 with $296 million in new debt to pay off a previous $245 million mortgage, according to research firm MSCI Real Assets. For now, that debt has allowed the owners to fend off pain from interest rate spikes that have rankled landlords with maturing debt over the past year.

The Clark Street building is about 80% leased today, with the American Bar Association and law firm Foley & Lardner as its largest tenants, according to CoStar Group.

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SUPER GLOBAL | Over $18 billion annual revenue & multi-national operations

DENEEN DEFIORE VP & CISO United Airlines

SHAUN KHALFAN SVP & CISO Discover Financial Services

RICARDO LAFOSSE CISO KraftHeinz

JOHN SANDER VP & CISO Wesco

GLOBAL | Over $2 billion annual revenue & multi-national operations

ROBYN CLARK CISO Illinois Tool Works, Inc.

NIDHI LUTHRA CISO Baxter International

DANIEL MAYER CISO Morningstar, Inc.

ANGELA WILLIAMS SVP & CISO UL Solutions

LARGE ENTERPRISE | Over $5 billion annual revenue

KHURRAM ANWAR Head of Global Information Security CF Industries

MAHMOOD KHAN SVP & CSO CNA Financial

JASON LISH CSO Lumen Technologies

ADAM PAGE CISO Zurich North America

ENTERPRISE | Over $2.5 billion annual revenue

DAN CREED VP & CISO Allegiant Travel Company

JIM CRIMENS VP, Global IT Security Stericycle, Inc.

MATT MORTON ED & CISO University of Chicago

SARA SCHMIDT SVP & CISO US Foods

LARGE CORPORATE | Over $900 million annual revenue

DARIN HURD EVP & CISO Guaranteed Rate

EVAN LINDEN CISO Nortek Global HVAC

LES MCCOLLUM, II CISO UChicago Medicine

NEIL WITEK CISO Oak Street Health

CORPORATE | Up to $900 million annual revenue

ALEX DICKSON CISO GCM Grosvenor

P009_CCB_20231218.indd 9

VIVEK MEHTA CISO GoHealth, Inc.

JASPER OSSENTJUK SVP & CISO NielsenIQ

MICHAEL SMITH SVP & CISO ATI Physical Therapy

12/5/23 2:05 PM

PRITZKER

IWG

Jason Pritzker says.

“We’re good at late-stage investing, and if we could get good at early-stage investing, that would be differentiated and allow us to participate in the full life cycle of a company from seed to scale,” he says.

The Pritzkers are getting into the venture game at a unique time: The move comes after a long bull run, when valuations have come down but investors are sitting on record amounts of capital, which they’ve been slow to deploy.

Because they’re investing their own money, the Pritzkers will have the benefit of patient capital.

However, the fund was set up with a traditional 10-year structure that would allow them to raise outside capital if they want.

53 Stations will look for startup opportunities in industries where they already invest or operate, such as construction, quick-service restaurants, car washes, health care staffing and wealth management. It also will look for opportunistic deals in other sectors.

have opened.

While one more new location is planned in the city for 2024, IWG’s Chicago-area expansion plan stands out for its emphasis on the suburbs, where co-working has been much slower to catch on than it has been downtown.

Some investors have speculated demand for suburban office space would grow out of a millennial migration from the city to the suburbs during the pandemic and the potential for companies to offer multiple office locations to local employees. Record-high vacancy suggests that suburban office renaissance hasn’t come to fruition so far, but IWG is betting that its shared-office brands will be more compelling than other traditional suburban workspace options.

“Our expansion in Illinois comes at a time when more companies are discovering that hybrid working boosts employee happiness and satisfaction,” IWG CEO and founder Mark Dixon said in a statement. “Our workplace model is also proven to increase productivity and allows for a business to scale up or down at significantly reduced costs.”

From Page 1

From Page 3

53 Stations partners (from left) Kevin King, Jason Pritzker and Kelly Goldstein. I PHOTO COURTESY OF 53 STATIONS

The firm — which takes its name from a parable about seeking enlightenment — plans

to do 20 to 30 deals over five years. It’s already made seven investments, including Chica-

go-based Black Buffalo, which makes smokeless tobacco alternatives.

and happy hour business pandemic. The company also is people are,’ ” Huy Do, research due to remote work. In Florida, planning two restaurants in and insights manager at DaRESTAURANTS lunch the warm weather draws people Nashville, Tenn., in 2025, said tassential, said in an email.

From Page 3

revenue streams, albeit a risky one. Customer tastes and expectations vary from city to city, and what works at home doesn’t always work elsewhere. It can also be expensive to set up shop in a new market, having to establish a supply chain and build out a management team. Quality control can be difficult: It’s easy for an owner to drive to several Chicago locations in a day and make sure the fries are crispy enough, but there’s no taste-testing from a far-flung locale. Restaurants also risk expanding too fast, stretching themselves too thin.

More and more Chicagobased restaurants have decided that expanding is worth the risk.

The city- and state-mandated COVID closures were a wake-up call, many restaurant owners say. Those with outposts in cities that had less stringent restrictions in place kept revenue flowing. Often, those cities were in the South.

“If it wasn’t for our Southern stores, we would’ve lost our entire company,” said Brad Parker, founder and CEO of Parker Hospitality, parent of The Hampton Social. “Not only did those Southern stores stay open and make money and provide income for our company, but after the pandemic (restrictions) were taken off, the sales were just staggering.”

The annual revenue of an 8,500-square-foot Hampton Social location in Florida is $11 million to $14 million, Parker said. A Chicago location that used to make $11 million annually is now between $7.5 million and $8.5 million. Parker said his Chicago locations have lost

out.

“If they’re working from home, they still go out, drink, have a happy hour,” he said.

“The sun is shining.”

Parker Hospitality has five Hampton Social locations in the South, two of which opened pre-pandemic and one of which is coming soon. It has 14 restaurants in total and plans to grow to 50 to 60 stores in the next 10 years.

Growth will be concentrated in Arizona, Texas, Florida and Georgia. No stores are planned for Chicago, Parker said.

Grappling with labor costs In recent weeks, some restaurant owners have said certain policies are making it more difficult to run a restaurant in Chicago. The City Council recently passed an ordinance to phase out the sub-minimum wage for tipped workers, a process that will begin in July. It soon after approved a measure requiring Chicago employers to provide employees 10 paid days off starting next year. Many restaurant operators say they are grappling with how to trim labor costs or cut back hours to afford such measures. Some said they are scouting locations outside the city.

Lettuce Entertain You Enterprises has operated restaurants outside of Chicago since the 1980s. Roughly half of its 120 restaurants are located elsewhere. The South, however, is new territory for the Chicago-based company. It recently opened Aba locations in Miami and Austin, Texas, and is set to open Summer House on the Lake at Disney Springs in Orlando, Fla., in mid-December.

Those deals were made pre-

34 | CRAIN’S CHICAGO BUSINESS | DECEMBER 18, 2023

Lettuce President R.J. Melman.

If the new Southern locations perform well, Lettuce will look to expand further. Having a restaurant in a warmer city helps bolster revenue streams when business gets slow in Chicago in the winter. The restaurant group has seen this theory play out in Las Vegas, where it has had restaurants for 25 years.

“From a recruiting standpoint, it’s pretty easy to get people to want to relocate there, too,” Melman said. “When you approach someone on Jan. 15 and (ask if they) want to move to Florida, usually the answer’s pretty easy.”

Lettuce does not plan to stop expanding in Chicago, but “we’re certainly taking a cautious eye,” Melman said. He said permitting can be easier in certain cities in the South, and there are direct flights from Chicago.

The Sun Belt — a chain of states that includes parts of the South, Arizona, California and others — also hosts Chicago-area snowbirds. That means there’s a built-in customer base that already knows the restaurant’s brand, mitigating the risks of expanding to a new geographical market.

Chicago-based restaurant owners are also watching population counts tick up south of the Mason-Dixon Line. Nine of the country’s 15 fastest-growing cities last year were in the South, according to U.S. Census Bureau data. Now, almost 39% of Americans live there.

“This could potentially make Southern metros more appealing hubs for new economic activity — perhaps a simple business case for ‘going where the

McDonald’s CEO Chris Kempczinski talked about this phenomenon during one of the fastfood giant’s earnings calls last summer. The Chicago-based chain is accelerating the rate at which it opens stores around the globe. In the U.S., it’ll be McDonald’s first significant store count growth in a decade.

Kempczinski told investors in July that the footprint is more reflective of the population profile from 20 or 30 years ago.

“Imagine the amount of shifts — people moving to the South, to the Southeast. That’s not reflected in our footprint,” he said.

“You end up finding there’s a number of places around the U.S. where we’re significantly underdeveloped relative to where the opportunity exists today.”

Targeting the Sun Belt Portillo’s has the same idea.

Since the Oak Brook-based hot dog and Italian beef chain went public in 2021, it has been expanding in Florida, Arizona and Texas. CEO Michael Osanloo has said the company is targeting growth in the Sun Belt.

Also eyeing warmer states is Girl & the Goat parent Boka Restaurant Group, which is planning a Nashville restaurant, and Sophia Steak parent Ballyhoo Hospitality, which is planning to open a restaurant in Juno Beach, Fla., in 2025. Additionally, Rosebud Restaurant Group is opening Mia Rosebud in Boca Raton, Fla., this month.

It will be Rosebud’s ninth location but first foray outside of the Chicago area, said Nick Lombardo, chief operating officer.

“For us, it just makes sense to be in Florida,” he said.

IWG is betting that its shared-office brands will be more compelling than other traditional suburban workspace options.

IWG said it will open a Regus location in west suburban Westmont and an HQ brand location in southwest suburban Frankfort early next year.

Other offices are slated to open later in the year in Arlington Heights, Downers Grove, Elgin, Libertyville, Lisle, Lombard, Naperville, Oakbrook Terrace, St. Charles and Vernon Hills.

An IWG spokeswoman said that some of the new locations will be newly built, while others will open in previous co-working spaces that were shuttered by other operators.

The majority of the new locations will be structured as “partnership agreements” with landlords, the spokeswoman said. Such agreements typically involve a co-working provider managing the flexible office space in a building and sharing revenue with the landlord, thereby sharing the risk that comes with operating office space whose users don’t have to make long-term commitments. That model has become more commonplace than co-working providers leasing space directly from a landlord and then trying to fill it up.

Take a look at the ‘big personality’ condo interior a chef for celebrities cooked up

ChicagoBusiness.com President and CEO KC Crain Group publisher Jim Kirk, (312) 397-5503 or jkirk@crain.com Editor Ann Dwyer Managing editor Aly Brumback Creative director Thomas J. Linden Director of audience and engagement Elizabeth Couch Assistant managing editor/enterprise Joe Cahill Assistant managing editor/special projects Ann R. Weiler Assistant managing editor/news features Cassandra West Deputy digital editor Robert Garcia Associate creative director Karen Freese Zane Digital design editor Jason McGregor Art directors Kayla Byler, Carolyn McClain, Joanna Metzger Senior digital news designer Stephanie Swearngin

Jaime Laurita, who has cooked backstage for Madonna, Aerosmith and the Police, mixed styles, colors and textures into his Bucktown condo I By Dennis Rodkin thanks to their third-floor northeast exposure.

After buying the three-bedroom condo 10 years ago this month, Laurita filled it with design flourishes including kitchen cabinets that look like they’re made of concrete and sound-proofing on the media room walls in a camouflage pattern. There’s even his own crafty take on an outdoor doggy bathroom.

It’s a home “with a big personality,” Laurita says.

Laurita and Lane are planning a move back out to the Barrington area, where they lived before this condo and where Laurita plans to open a retail design store.

They put the Armitage Avenue condo, which is on three levels, on the market Nov. 16. It’s priced at $799,000 and represented by Vince Anzalone of Dream Town Real Estate. Two outdoor parking spaces are included with the condo.

Copy editors Todd J. Behme, Beth Jachman, Tanya Meyer Political columnist Greg Hinz Notables coordinator Ashley Maahs POSITIVE IMAGE PHOTOGRAPHY

I

n his career, Jaime Laurita has done some of everything, creating menus for Madonna, the Red Hot Chili Peppers and many others while they toured, designing backstage spaces for performers and at-home interiors for private clients, writing a cookbook with singer Sarah McLachlan and marrying his husband, Rich Lane, on the reality TV show “The Real Housewives of New Jersey.”

So it’s not surprising that the Bucktown condo he designed for himself and Lane has some of everything.

“There’s notes of disco and notes of my Italian grandmother,” Laurita says. “I used a lot of tactile surfaces and shiny things. No matter where you stand in the condo, I want you to feel a vibe.”

The vibe starts with windows 20 feet high in the living room, filling the space with light

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DECEMBER 18, 2023 | CRAIN’S CHICAGO BUSINESS | 35

Meet Andrea.

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