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REIGNITING CHICAGO’S

EMPLOYMENT SPARK What will it take to boost employment on Chicago’s South and West sides?

Training, public investment, the nurturing of small businesses and the recruitment of big ones. PAGE 17 GETTY IMAGES

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GAMBLING: City casino bidders will have to show they can deliver benefits. PAGE 3

Illinois’ hot marijuana market chills out Why strong growth has turned to no growth in the newly legalized weed business

BY JOHN PLETZ Weed sales are in a funk.

Since peaking in July at $127.8 million, monthly sales of recreational marijuana in Illinois have plateaued at about $122 million.

It’s partly a seasonal slowdown along with an industrywide hangover from a pandemic-inspired spike in recreational marijuana sales. But the slump also

reflects the state’s delay in issuing licenses for new pot shops.

Illinois is on track to double sales to about $1.4 billion and take in about $428 million in sales taxes in 2021, just its second year of legal recreational marijuana sales. But the growth is about 10% less than it could have been, estimates Beau Whitney,

CRAIN’S CHICAGO BUSINESS

WHO HEADS CHICAGO’S

HOSPITALS What leadership looks like at the area’s top health care systems and why it matters PAGE 27

See MARIJUANA on Page 33

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BOOTH INSIGHTS Put your energy into retaining workers, not hiring new ones. PAGE 9

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THE TAKEAWAY She’s fighting the good fight for underrepresented attorneys.

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2 DECEMBER 20, 2021 • CRAIN’S CHICAGO BUSINESS

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This is the job you ran for, Mayor Lightfoot

ne week this month began with a near-riot across from Millennium Park—not part of a protest gone bad, but a gathering of young people turned violent. A 15-year-old was arrested and charged with a felony for badly beating a CTA driver as part of the festivities.

The remainder of that week was punctuated by more smash-andgrabs at Chicago stores, several carjackings and the killing of a 71-year-old grandfather in Chinatown who was out for a walk to get a newspaper. Prosecutors say they have “no clue” why the alleged killer, who has a record of gun offenses, fired more than 20 times.

The week ended with Mayor Lori Lightfoot, who urged Chicago storekeepers to hire more guards and take other steps to keep their shops safe, returning from a reelection fundraising trip to the West Coast.

After that setup, you might think this column is going to be about

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crime, and it is. Right now, the city is teetering. But it’s also about a wider subject. That’s racial equity, a hallmark of Lightfoot’s mayoralty, but one that must involve getting crime under control, too.

Here’s my thinking.

Lightfoot in part was elected on the premise that economic inequality is a prime basis of crime and other social disorders, and that reducing the former is needed to remedy the latter.

The mayor is absolutely right. A young person who sees no hope for a bright future, who is poorly educated and comes from a neighborhood that is a disinvested shambles, is at much higher risk of making the wrong choices than someone from an economically advantaged area.

That reality affects us all, something the Metropolitan Planning Council underlined a few years ago with a provocative study on the financial cost to the Chicago region of economic inequity.

To her credit, Lightfoot has done something about it. Her heart is in the mission, be it the Invest South/ West program or expanded funds for affordable housing. She’s jawboned hard—perhaps sometimes too hard, as in a recent dinner with the area’s congressional delegation in which, by some accounts, she singled out JPMorgan Chase CEO Jamie Dimon for allegedly doing too little to invest in needy areas. (Chase vehemently disputes that, and Lightfoot’s office denies she used his name in her comments.)

I don’t see the mayor put the same heart into fighting crime. And that’s really sad, because if achieving economic equity is part of the long-term cure to what ails Chicago, fixing a criminal justice system that now appears broken and protecting the mostly minority victims of crime is just as important in the short term.

This Chicago voter is tired of excuses that, oh, crime is up every-

GREG HINZ ON POLITICS

where because of COVID, or that long-term crime trends here are down. They’re not. Look at the city’s own website.

Maybe the North Side now is getting a taste of what the South and West sides too long have suffered.

But rarely a day goes by now that I don’t hear tales of someone moving out of Chicago, of a business in difficulty, of people afraid to walk on the street or drive their car.

Lightfoot isn’t solely or arguably even mostly responsible for this.

Long-term trends, COVID, State’s Attorney Kim Foxx’s office and Chief Cook County Judge Tim Evans’ crew all can share a piece of the blame, too. But in this town, there’s only one real leader, and that’s the mayor,

the one who gets the spots on CNN. Lori Lightfoot. And on this issue, I just don’t see enough leadership.

The system is broken. You know that 15-year-old I mentioned who sent a CTA bus driver to the hospital? He was arrested, released to a parent and given a police citation to appear in court. He never showed up. Now there’s a new warrant so police can go out and arrest him again. If the parents are being sanctioned, no one is saying so. Somewhere, the kid is probably laughing his butt off. The system is broken.

Mayors can’t work miracles. But they can lead. It’s time for this one to do that. I don’t know what the solution is. I do know Chicago needs a lot more than it’s been getting.

39% of Illinois’ missing workers likely retired

OVID-19 brought a lot of changes to the workforce besides Zoom and WFH, and for 111,400 Illinoisans age 55 and older, it brought something to do with their days other than go to work.

Those who were 55 and older at the pandemic’s start represent 39% of the 286,700 Illinois workers still missing from the workforce as of last month. While that is a lot, Illinois lost far fewer older workers than the national average of about 60% who retired—many never to return.

As 2021 comes to an end, the U.S. is facing record labor shortages and rising inflation. There were 11 million job openings in October and not enough workers to take those jobs, according to the U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey, or JOLTS. While younger workers who left the labor force during the pandemic are expected to return, the size of the newly retired population raised concerns that labor shortages across the U.S. may not end anytime soon.

Whether and when older Americans choose to rejoin the workforce will loom over policymakers for years to come. While the country faces more serious and likely more lasting labor shortages, this is less likely to be the case for Illinois.

First, COVID-19 fears are slowly dissipating as more Americans get their vaccines, better treatments emerge and new variants are almost certainly not causing more severe disease. In Illinois, 91% of the 65 and older population is fully vaccinated compared to 87% nationwide, according to data from the Centers for Disease Control & Prevention.

Second, Illinois has a relatively

younger population. While the 65 and over population—retirees— grew by 3% nationwide in 2020, the increase in the retirement age population was 13.3% lower in Illinois.

Another reason for optimism: Labor force participation among older Illinoisans was trending up before the pandemic. Before the pandemic, 21% of Illinoisans aged 65 and older were still in the labor force compared to 19% a decade ago. Americans live longer. That means they need more savings. As a result, they extend their work lives.

Only 36% of Americans believe they have enough money for retirement, according to the latest data from the Natixis Global Retirement Index. Older Americans, who tend to be net nominal lenders, have been hit hard by low interest rates and the unexpected inflation surge. They have more reasons to return to work than to stay on the sidelines.

In Illinois, where the population is relatively younger and more college-educated, the risks remain on the side of business investment and job creation. If enough opportunities aren’t available, older individuals who want to return could struggle to find jobs. More workers could also head for the exits—to states with lower costs, warmer weather and higher-quality amenities—and Illinois will continue to fail to attract workers from other states.

Loose credit and record federal government support led to a surge in job openings nationwide. Yet, job creation lags in Illinois. Illinois managed approximately 5.6% fewer job openings per unemployed person on average in 2021, according to JOLTS data. Now that

federal stimulus has run its course and the central bank is preparing to tighten policy, the number of new job openings will stall.

Labor shortages weren’t as severe in Illinois as in the rest of the country because Illinois created new vacancies at a lower rate than other states. Unfortunately, this means Illinois job seekers were less likely than other Americans to find a job and wage growth was lower. By September, wages and salaries had risen 4.5% less for Chicagoans during the year than for other Americans.

More sluggish nominal wage growth coupled with the country’s fastest unexpected price surges in the Midwest would explain why the second half of 2021 was particularly

ORPHE DIVOUNGUY ON THE ECONOMY

painful for Illinois families.

This year, 11 states—including Arizona, Iowa, New Hampshire, Missouri, Montana and Wisconsin— reformed their income tax systems to reduce residents’ overall tax burden.

They acted to cut taxes, reduce costs for residents and jumpstart their pandemic-damaged economies.

Unfortunately, Illinois’ state and local politicians stubbornly choose the higher tax-and-fee

model to finance the demands of public-sector unions at the expense of everyone else.

In 2022, Illinois voters will get another opportunity to right many wrongs. More older residents will likely find they have the time to do something about them.

Crain’s contributor Orphe Divounguy is chief economist at the Illinois Policy Institute.

B E ST I N C L A S S IN OVERALL CLIENT S AT I S FAC T I O N .

BE YOUR BANKER’S TOP PRIORITY. W I N T R U ST.C O M / P R I O R I T Y

CORRECTIONS “Fanning the flames of distrust,” a Dec. 6 letter to the editor, should have said there was a 0.05% chance that an officer would get a sustained complaint on any given call in 2018.

In Greg Hinz’s Dec. 6 column, the first name of Quintin Williams was misspelled.

Corrected profiles for Chimaobi Enyia and Jonathan T. Swain, who appeared in Notable Black Leaders and Executives on Dec. 13, can be found at ChicagoBusiness. com/notables.

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Banking products provided by Wintrust Financial Corp. banks. Source: 2021 Coalition Greenwich Market Tracking Program.

12/17/21 12:26 PM

CRAIN’S CHICAGO BUSINESS • DECEMBER 20, 2021 3

Sizing up Chicago’s casino bidders They’ll have to show they can deliver tax revenue, jobs and other benefits

BY A.D. QUIG Chicago’s casino bidders have done their best to wow city officials with their visions for the city’s first gambling emporium. The three hopefuls also need to demonstrate the skills and experience to build and run a casino that will deliver the benefits Mayor Lori Lightfoot hopes to get.

Lightfoot’s wish list for a city casino boils down to three key objectives: as much as $200 million in tax revenue to shore up ailing police and fire pension funds, good-paying jobs for city residents and spin-off economic benefits.

Crain’s examined the track record of each bidder to see how their existing casinos measure up on those criteria.

WHY ROBOTS

Grocers are betting on automated fulfillment centers to make internet orders more profitable amid the rise of online grocery shopping BY ALLY MAROTTI

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ow that online grocery shopping appears to be here to stay, grocers are building fulfillment centers to make internet orders more profitable.

Jewel-Osco unveiled a micro-fulfillment center complete with grocery-carrying robots in Westmont on Dec. 7 and plans to add another next year in Chicago’s South Loop. Mariano’s parent Kroger plans to open an automated fulfillment center just over the state line in Pleasant Prairie, Wis., in late

2022. Others are opening locations in Chicago neighborhoods where customers can pick up orders but can’t peruse the shelves themselves.

Grocers are turning to micro-fulfillment centers as labor costs soar and customers stick to online ordering habits developed during the pandemic. Currently, grocers fill online orders not from warehouses designed for that purpose, but from See GROCERIES on Page 33

REDUCING ADDITIONAL COSTS ASSOCIATED WITH ONLINE FULFILLMENT IS CRITICAL IN THE GROCERY BUSINESS.

JOHN R. BOEHM

WILL PICK OUT YOUR PRODUCE

RIVERS/RUSH STREET

Controlled by billionaire Chicago real estate mogul Neil Bluhm, Chicago-based Rivers operates casinos in Des Plaines, Philadelphia, Pittsburgh and Schenectady, N.Y. Each was built in a former industrial area along or near waterfronts, as a Chicago casino likely would be.

Rivers’ Philadelphia location is likely the closest equivalent to a Chicago casino in terms of scale and its location in a large urban center. Rivers Philly has about 2,000 gaming positions. The company’s two Chicago bids both propose roughly 2,800 gaming positions in Chicago.

The $595 million project occupies a formerly abandoned industrial site in the Fishtown neighborhood on the Delaware River north of downtown. State tax receipts See CASINOS on Page 35

Why can’t Chicago land a new head of tourism?

The growing sense that the job of Choose Chicago CEO is one that no one might want could have ugly ramifications for the city’s hospitality economy The tourism agency tasked with boosting Chicago’s pandemicbattered image is wrestling with a reputation problem of its own, and it couldn’t come at a worse time for anyone counting on more visitors coming to the city.

Choose Chicago’s fruitless sixplus-month hunt for a new chief

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executive and plan to relaunch its search heading into 2022 set off alarms this month around the local hospitality sector. Business owners that have collectively been pummeled worse than any other during the public health crisis and are longing for a citywide promotional jolt are instead bracing for another season without leadership atop the city’s marketing arm.

But what is more unsettling for some of the city’s biggest tourism stakeholders is that a once-coveted job promoting visitation to a market world-renowned for its major airport, convention center, restaurants, theaters and hotels is apparently now difficult to fill.

It’s a revelation that spotlights See CHOOSE CHICAGO on Page 35

CHOOSE CHICAGO VIA YOUTUBE.COM

BY DANNY ECKER

Choose Chicago, which relies on hotel tax revenues, is dealing with a budget crunch.

12/17/21 3:27 PM

4 DECEMBER 20, 2021 • CRAIN’S CHICAGO BUSINESS

JOE CAHILL ON BUSINESS

What local leaders should expect from Santa this year Here’s my list of who’s been naughty and who’s been nice in Chicago business this year.

NICE United Airlines CEO Scott Kirby. The airline boss showed how to

NAUGHTY

Boeing. Even as regulators approved fixes to flaws blamed for two

fatal crashes of its 737 Max jet, Boeing discovered problems with the long-range 787 Dreamliner. Suspended since October 2020, Dreamliner deliveries aren’t expected to resume until April. The suspension hurts Boeing’s bottom line and its customers’ post-COVID flight plans. American Airlines curtailed a planned ramp-up of international flying because Boeing couldn’t deliver 787s. If this continues, Boeing can expect to lose more sales to archrival Airbus.

McDonald’s CEO Chris Kempczinski. Credit the burger boss with the unforced error of the year. In a text exchange with Chicago Mayor Lori Lightfoot, Kempczinski added a post-script criticizing the parents of Chicago children killed in recent shootings. When a Freedom of Information Act request on an unrelated matter surfaced the message, outrage ensued. The blunder came at a time when Black franchisees were accusing McDonald’s of discrimination. Now the company is scrambling to make amends. The CEO of one of the world’s biggest consumer marketing companies should know better.

Mayor Lightfoot and Chicago Police Superintendent David Brown. Lightfoot and Brown have failed to stop a violent crime wave that’s terrorizing the city and trashing its reputation. Looting, expressway shootings, carjackings and smash-mob store invasions create an economically poisonous climate of fear. When streets seem unsafe, shoppers stay home, stores close and tourists go elsewhere. This problem must be solved—now.

Gov. J.B. Pritzker and Illinois legislators. The governor and state legislators showed that Commonwealth Edison’s recent admission to a massive bribery scheme in Springfield hasn’t diminished the utility’s political clout. They rewarded Com Ed and its parent, Exelon, with a $700 million nuclear plant bailout and other new laws likely to boost profits at the expense of customers who continue to pay for their corruption.

Anti-vaxxers. If everyone eligible for a COVID-19 vaccine had gotten one, the virus would likely be fading away by now. Everyday life—including commerce—would be back to normal. Instead, we have the delta and omicron variants driving up cases and threatening the economy. Why? Because vaccine refuseniks are numerous enough to allow the virus to mutate. Anyone who refused to get a vaccine without a genuine health reason or sincere religious objection owns a share of this.

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Who is Michael Reschke, the Thompson Center buyer?

A veteran real estate developer known for taking big risks downtown has lined up what may be his biggest gamble yet BY DANNY ECKER

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eteran Chicago developer Michael Reschke surprised the local real estate world on Dec. 15 when he announced a deal for his Prime Group to buy and revive the James R. Thompson Center—a move many developers deemed a long shot amid the COVID-19 pandemic.

But taking big downtown risks have become Reschke’s calling card over the past four decades.

The man that Crain’s in 1999 dubbed the “Harry Houdini of the Chicago real estate circus” for his ability to survive precarious development and ownership situations and pursue his next daring feat has lined up what may be his biggest gamble yet: Despite a public health crisis that has bludgeoned the downtown office and hotel markets—particularly in the Loop— the 66-year-old is betting on a strong comeback for both, with a plan to update the outmoded state building’s offices and potentially convert its upper floors into a hotel.

The $280 million-plus plan— offset in part by at least $148 million the state will pay to buy back offices on the lower floors— combines with a hotel project Reschke is close to finishing at 208 S. LaSalle St. to form a massive wager that the heart of the city’s pandemic-stung central business district is poised for renewal.

“A lot of people have questioned whether I have a screw loose or something,” Reschke said last week of the Thompson Center deal. Despite record high vacancy and big tenants vacating LaSalle Street, “it’s a very

ERIK UNGER

beat COVID-19 this year. While other CEOs waffled, he ordered all United employees to get shots. Those who failed to do so without a genuine medical or religious objection would be fired. The results dispelled any doubt about the effectiveness of mandates. More than 95% of the airline’s staff got vaccinations, far above a national rate in the 60% range.

State Farm. The nation’s biggest auto insurer learned a new trick in 2021. Known primarily for superior service, State Farm pivoted to become a price leader. When competitors reversed deep price cuts implemented during the depths of the pandemic last year, State Farm held the line. The move helped State Farm generate policy growth of 3% to 5%, while rivals Allstate and Geico flattened out.

Chicago’s weed merchants. Chicago has become a leading center of a fast-growing new industry, thanks to the aggressiveness and foresight of local marijuana entrepreneurs. Chicago startups were among the first to look beyond their home state for growth. As a result, the city is home to four of the largest weed companies in the country: Cresco Labs, Green Thumb Industries, Verano and PharmaCann. Their fast starts position Chicago for a healthy share of the industry’s future growth.

Arthur J. Gallagher. The biggest local company you may never have heard of took its place among insurance giants with its biggest acquisition ever, a $3.25 billion deal for the reinsurance business of Willis Towers Watson. A departure from Gallagher’s longstanding strategy of buying up small brokerages, the acquisition positions the Rolling Meadows-based company to expand beyond its customer base of small and medium-sized businesses and compete for Fortune 500 clients.

Frontline workers. I gave them a shoutout last year, but they deserve another. Health care workers and others on the frontlines of the COVID-19 fight haven’t wavered during two years of the worst public health crisis in modern memory. They got a bit of a break over the spring and summer, but now they’re facing another wave. We know they’ll come through for us.

Michael Reschke at a Crain’s real estate event in 2019. rational, I think, well-thoughtout project if you just study the project and what you’re working with.”

“It’s not crazy,” he added. “It’s wonderful.”

Here are a few things to know about the man setting out to give the Thompson Center a shot of life: 1. He’s been around.

Reschke rose to prominence in real estate as an office developer and investor, building a multibillion-dollar portfolio in the 1980s.

Despite a sluggish economy in the early 1990s, his firm developed the glassy 51-story tower at 77 W. Wacker Drive that served as the corporate headquarters for R.R. Donnelley and later United Airlines.

In 1994, he went public with real estate investment trusts for retail outlets and apartments and followed that in 1997 with Prime Group Realty Trust, which owned the Wacker Drive tower

and later purchased IBM Plaza tower and co-developed Dearborn Center (now Citadel Center) in 2003.

Reschke a few years later set his sights on LaSalle Street, where he bought an outdated, half-empty office building at 11 S. LaSalle St. with a plan to transform it into a high-end hotel—now the Residence Inn Chicago Downtown—and bought the Daniel Burnham-designed building at 208 S. LaSalle St. before spending close to $400 million renovating it and converting the first 12 floors into the JW Marriott Chicago, which opened in 2010.

2. He has a history of jousting with lenders—and creative dealmaking.

The threat of loan trouble has consistently lurked around the corner for Reschke properties dating back to his highly leveraged portfolio in the 1980s that See RESCHKE on Page 32

12/17/21 12:35 PM

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6 DECEMBER 20, 2021 • CRAIN’S CHICAGO BUSINESS

THE TAKEAWAY

Leslie Davis

Make an Impact in Your City and the World

Davis, 50, became CEO of the National Association of Minority & Women Owned Law Firms in March. Before joining the Chicago-based nonprofit trade organization that promotes equity and business opportunities for underrepresented attorneys, Davis worked as a litigator and partner for more than 20 years at major law firms handling complex commercial cases and is the first Black woman to lead NAMWOLF. Davis, who grew up in a Navy family and moved to Dolton in late adolescence, lives in Bronzeville with her husband, Theodore, and two teenage children. By Elyssa Cherney

Ready to join a community of highly accomplished, globally

>

conscious leaders? The Chicago Council on Global Affairs is

You have journalism degrees from the University of Iowa. How did you wind up becoming a lawyer?

I was covering the courts for the Daily Iowan newspaper. I would get so engrossed in what was going on and the objections that were being made and what the jury was doing and the way that things were unfolding that I’d look up and I wouldn’t have enough for my story. That was when I first got bit by the law bug and really by the trial bug. Instead of covering those stories, I wanted to be a part of those cases.

currently seeking next generation professionals who represent the diversity of Chicago and are interested in building the leadership skills needed to succeed and shape our city's global future.

Applications are open through March 14, 2022.

Learn more about joining the next cohort at: thechicagocouncil.org/EL

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What challenges did you face being a woman of color in the corporate legal profession?

Sometimes my white counterparts were given credit, opportunities or the benefit of the doubt, and that did not always happen for me. That can make you bitter if you allow it, but mostly I always let it push me and guide me. When respect, inclusion and value is not what’s being served, I leave the table.

<

>

Most interesting case in your legal career?

When I first got out of law school, I worked in New York at Court TV on the O.J. Simpson trial, as an associate producer for a live show. I did do some on-camera work, but I was not the talent. I would do the legal analysis, the background checking and all of that for the show.

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What are you most excited about in your new role at NAMWOLF? The fact that I get to discuss diversity, equity and inclusion every day and that I get to help women and minorities get the opportunities they deserve and want with corporations and institutions and governmental agencies.

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VISIT JOSEPHINUM.ORG

How was switching jobs during the pandemic?

The transition (from Big Law to the nonprofit world) has been great. Obviously, the pandemic has made it a little bit difficult because I have not been able to see people face to face as much. It’s been a lot happening via Zoom and online.

I keep making the joke that I could be a hologram for all some people knew because I truly did all of this via video—from the interviewing process to the onboarding and the overlap that I had with the former CEO.

What’s a fun fact people might not know about you?

I was already a Davis. I married someone whose last name was Davis, so everybody in our families is named Davis. When we go anywhere, people are always confused.

12/17/21 12:03 PM

CRAIN’S CHICAGO BUSINESS • DECEMBER 20, 2021 7

BY DANNY ECKER In a rare and high-profile rebuke of the tradition of aldermanic prerogative—where fellow Chicago City Council members defer to the wishes of a local alderman—the Council on Dec. 15 approved a plan for a $91 million apartment complex near O’Hare International Airport, scoring a long-awaited victory for developer GlenStar on the city’s Northwest Side, 33-13.

“Today, while you’re advocating for a great cause, you’re taking away your right to decide what happens in your ward tomorrow,” local Ald. Anthony Napolitano, 41st, warned during debate, saying residential zones in other wards could get switched to manufacturing at the whim of the city.

“I get the predicament we’re in here,” he continued, but argued it was a City Council member’s job “to come down here and support our communities . . . to push ordinances that make the city of Chicago just a little bit better. By doing that, we lean on our colleagues to support those ordinances, not building or developing in somebody’s ward against the wishes of that ward.”

But Mayor Lori Lightfoot, who rarely weighs in on individual proj-

ects, urged members to vote in favor of it, saying during debate that “this is a time not just to think about your own interests . . . but the city’s interests” to increase affordable housing. She pointed out that the development will be 20% affordable.

Allowing it to move forward, she said, would let workers at O’Hare International Airport “be closer to a job that they need. That’s going to make a difference in the lives of their families.”

In a 12-5 vote after a virtual meeting on Dec. 14, members of the council’s zoning committee OK’d GlenStar’s plan to develop a 297unit apartment project at 8535 W. Higgins Road.

The vote marked a rare departure from the practice of aldermen supporting projects in other wards only when that ward’s alderman supports it, commonly known as aldermanic privilege. The committee approved GlenStar’s plan despite staunch opposition from Napolitano, who has been trying to block GlenStar’s plan since a similar version was initially proposed in 2017.

Napolitano has argued that his constituents were concerned about the stress it would put on density and public resources.

But several aldermen spoke out

in favor of the project at the Dec. 14 meeting, saying the city’s larger need for more affordable housing— GlenStar’s project will include 59 such units on-site—and job creation outweighs the pushback from Napolitano and the residents he said oppose the project.

“We need projects like this all over the city, we need to break precedent sometimes,” Far North Side Ald. Maria Hadden, 49th, said during the meeting. While the approval “breaks precedent and decorum in how the city has done things,” she said, “we do need to all work together to solve our bigger problems. We have an affordable housing crisis, we have a housing crisis in general, and we need to walk the walk as well as we talk the talk.”

CONTENTIOUS PUSH

GlenStar’s four-year-plus push for the zoning change has been contentious. After the zoning committee rejected the initial proposal for the project, the developer sued the city in 2018, seeking a court order that the alderman and the committee violated the developer’s right to due process. GlenStar also alleged in the lawsuit that Napolitano was stonewalling the project because he didn’t want its 30 lower-income

FITZGERALD ASSOCIATES ARCHITECTS

Apartments near O’Hare approved despite alderman’s pushback

units in the area. But the developer voluntarily scrapped the lawsuit in early 2019, saying at the time it would pursue an office project on the site instead.

GlenStar put the residential plan back on the table in May, hoping a broader push from several aldermen and Mayor Lori Lightfoot to add affordable housing would help it earn the backing of more city officials—a bet that has now paid off.

The approval came after Ald. Napolitano restated his case against the project and warned his fellow aldermen against deciding what is best in someone else’s ward when residents in that ward oppose it, calling the approval “a complete overstep of our office.”

“Today it’s a commercial (property) that’s being forced into being changed into residential in (the 41st Ward). Tomorrow may be residential to manufacturing in your ward,”

Napolitano said. “Today I’m sitting in the hot seat. And you may like me, you may hate me—but your decision will definitely reflect the precedent when you are sitting on the hot seat tomorrow. . . .You may be the next person that has to deal with it.”

Napolitano argued that there are around 7,500 apartments close to GlenStar’s site, most of which are owned by “mom-and-pop” investors, and “now we’re going to let a corporate developer come in and add additional apartments when they’re not needed,” he said. He added that traffic in the area is already “unbearable.”

The five aldermen who voted against the zoning change were Ald. Brian Hopkins, 2nd; Ald. Anthony Beale, 9th; Ald. Raymond Lopez, 15th; Ald. David Moore, 17th; and Ald. Brendan Reilly, 42nd.

A.D. Quiq contributed.

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12/17/21 3:23 PM

8 DECEMBER 20, 2021 • CRAIN’S CHICAGO BUSINESS

Are bank overdraft fees finally on their way out?

BY STEVE DANIELS Chicago’s biggest retail banks, JPMorgan Chase and BMO Harris, have taken significant action in recent weeks to reduce the times their deposit customers are hit with overdraft fees, putting pressure on smaller banks in town to follow suit.

Penalties customers pay when they overdraw their accounts are back in the spotlight following a Dec. 1 report by the U.S. Consumer Financial Protection Bureau that was highly critical of the industry.

Additionally, McLean, Va.-based Capital One, one of the nation’s biggest credit card issuers and a major online bank, recently announced it’s scrapping the fees altogether.

Chase, the largest retail and commercial bank in both Chicago and the U.S., this year increased the minimum overdraft amount before fees kick in to $50 from $5. BMO Harris, the No. 2 commercial and retail lender in Chicago, made the same change last month.

In the new year, Chase will give customers one day to return their balances to less than $50 overdrawn. If they do that, the fees will be waived. Direct deposit customers will have access to their deposits two

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days early, eliminating overdrafts that occur toward the end of a pay period when funds run low.

Chase estimates the $50 threshold for the charges will result in eliminating those payments for 2 million customers nationwide.

The moves have some analysts predicting the eventual demise of overdraft fees, which for years have drawn regulatory scrutiny and action in Congress but continue to generate revenue augmenting banks’ income on loans. In its recent report, the CFPB estimated the industry collected $15.5 billion in 2019 from fees charged to consumers who overdrew their accounts. Those fees average around $33 per transaction.

Income from other consumer deposit charges, like ATM fees and maintenance fees, have declined more rapidly than overdraft levies, the CFPB reported.

“Aggregate and institution-level overdraft/(non-sufficient funds) fee reliance has been remarkably persistent before the pandemic and this persistence was mostly maintained even during the pandemic,” according to the report. “It is not possible to determine how much of the drop in overdraft/NSF fee reliance during

the pandemic was due to changing institution policies and practices and how much was due to changing consumer use patterns.”

The moves by the country’s biggest banks are likely to trickle down to smaller competitors. The industry argued in the past that customers generally appreciate having their debit transactions approved even if they pay for the privilege. Some changes, like gaining consumers’ approval for overdraft “privileges,” softened some of the most pernicious aspects of the practice.

But the fact that banks still generate the money they do from the fees demonstrates they remain alive and well.

GENERATING REVENUE

In the Chicago market, among locally based banks larger than $10 billion in assets, First Midwest is the most reliant on overdraft fees. It collected $7.2 million in the first nine months of 2021, 23% of its total retail fee collections and 5% of its noninterest income. (It has a pending deal to merge with Evansville, Ind.based Old National, which shows similar overdraft results.)

Among large out-of-town banks with substantial retail presences

ISTOCK

Major actions by JPMorgan Chase and BMO Harris to reduce the number of times their customers pay when they overdraw their accounts will put pressure on the industry

in the Chicago market, Columbus, Ohio-based Huntington Bank generates significant overdraft fees.

Through nine months, it collected $91 million, 36% of total deposit fees and 7.5% of total non-interest income.

Cincinnati-based Fifth Third generated $78 million, 17% of deposit fees and 4% of non-interest income.

Even before its recent changes to make overdrafts more consumerfriendly, BMO Harris collected only $13 million in fees through Sept. 30. That was just 5% of total deposit fees.

“We’re helping our customers understand overdraft protections while providing flexibility and choice, including account options

that fit customers’ unique cash flow needs and more cushion around fees,” emailed Erminia (Ernie) Johannson, group head for North American personal and business banking for BMO Harris’ Torontobased parent, BMO Financial Group.

Among smaller but still decently sized local banks, Chicago’s Marquette Bank, which serves mainly the South Side and south suburbs, is most dependent on overdrafts.

The $2 billion asset lender collected $1.7 million through Sept. 30, 54% of its deposit charges and 12% of its non-interest income. The fees are so meaningful that they account for 3% of Marquette’s total revenue— net interest income from loans and non-interest income from fees.

12/17/21 3:23 PM

CRAIN’S CHICAGO BUSINESS • DECEMBER 20, 2021 9

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fter months of cost-cutting just to stay solvent, businesses are back to hiring.

And despite there being millions of Americans still out of work, it’s been difficult to fill open positions and keep employees.

There are theories as to why this is happening, but I’m not wading into that debate. Instead, I want to offer ideas to retain the best talent over the long run.

With so many job options, it is important to think about why your valued team members should stay put. Some employers dangle new-hire bonuses. You can match those, but that puts you in reactive mode. You can counter these lures proactively with retention bonuses—say $750—for employees who stay at the company for a certain number of months.

Deferred compensation can also incentivize employees to finish a project or the year with the hopes of a larger year-end pay stub.

You could also consider what economists call efficiency wages, which essentially means overpaying an employee. Instead of $15 per hour, you go to $16.50 with

the idea that the extra money will keep the employee around, avoiding the costs of advertising, hiring and training a new employee. The higher wage enhances retention and also attracts new candidates to your job postings.

Attracting employees in this economy is certainly difficult, but failing to listen to your employees is a sure way to encourage them to look elsewhere. I recently read “You’re Not Listening: What You’re Missing and Why It Matters” by Kate Murphy and was reminded of the many reasons we fail to fully listen to employees.

The take-home message of Murphy’s book is that even when we’re trying to listen to others, we tend to focus our mental energy on what we want to say in response.

We’re not really listening, and that holds us, and by extension our businesses, back.

Maybe your company solicits employee feedback via performance reviews or other means.

Is your company taking those seriously? Are you willing to make broad changes to the structure of a department or to how work is

GETTY IMAGES

Hiring is a headache.

It’s better to focus on retention.

Stacey Kole is a clinical professor of economics at the University of Chicago’s Booth School of Business.

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

done to create new opportunities to learn and contribute, or are you paying lip service? If it’s the latter, your employees know you are not hearing them, and in today’s cli-

mate, this puts you at risk of losing them.

If you are receptive, don’t just wait for feedback to come to you.

Set up conversations to understand better your employees’ aspirations and insights. Maybe you’re constantly having to fill certain positions because the demands on those roles are too great or the jobs aren’t fulfilling. Making some small modifications to job descriptions or a department’s structure could help you retain high-quality employees.

If this isn’t your forte, consid-

er hiring an intern to gather this information. I’ve seen MBA students take on these kinds of assignments and offer unbiased views for companies that have difficulty considering change on their own.

Companies that survive and thrive are those that innovate to refine processes and their products. Right now, these types of innovations might lower your costs while making your company more attractive to a large pool of potential employees when you need them most.

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12/17/21 12:05 PM

10 DECEMBER 20, 2021 • CRAIN’S CHICAGO BUSINESS

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EDITORIAL

I

f December 2021 is starting to feel a lot like May 2021 to you, you’re not alone. Remember May? That was when vaccines were starting to get into broad circulation nationwide. Restaurants and theaters started to reopen. Mask restrictions slowly fell by the wayside. And, for a minute, there was reason to look forward to a hot vax summer.

We all know how that turned out.

Now, just as employers are setting backto-the-office target dates and people are getting comfortable going to live business networking events again, up crops the omicron variant. The onset of this new strain, which appears to be far more transmissible than delta, if perhaps less virulent than COVID classic, has even the fully vaccinated among us worried that two doses of Pfizer or Moderna are not enough.

And suddenly, cancellations are in the air: schools shutting down, holiday events nixed, travel plans rethought, get-togethers with friends postponed. At-home COVID tests are flying off drugstore shelves. Employers that had once required workers to return to the office are now sending them home again. And as Crain’s Ally Marotti reports, restaurants still smarting from previous COVID shutdowns are hanging up the “closed” sign again as employees test positive.

Public health experts tell us there’s something all of us can do to get us over the omicron hump and hopefully keep Chicago open for business as the new year begins: If you’re not vaccinated, get

GETTY IMAGES

Get boosted, Chicago

vaccinated. And if you are vaccinated, get a booster.

Unfortunately, our local health officials have little more than a bully pulpit from which to preach the gospel of inoculation.

In other places around the world, governments are approaching the omicron tidal wave with a greater sense of urgency. Just as a for-instance, the U.K. is putting on a major push to get boosters into as many arms as possible right now. They’re also renewing work-from-home advisories and mask requirements, but that’s essentially a

move to buy time to get more Brits boosted. They’re deploying the military to set up pop-up clinics and urging hospitals to suspend routine care to focus on boosters.

The goal: getting every adult in the country boosted by the end of the month.

Of course, one factor no doubt fueling the U.K. effort is the knowledge that the dominant vaccine there, developed by AstraZeneca, doesn’t offer the level of protection against omicron as vaccines developed by Pfizer and Moderna, the inoculations in wide circulation here in the U.S.

Even so, we could still take a page from the U.K.’s playbook. The early signals strongly suggest boosters offer better protection against omicron than the standard dosage does.

Just about 60% of Illinoisans are considered “fully vaccinated,” which until recently meant receiving one dose of Johnson & Johnson or two doses of Pfizer or Moderna. Going forward, you’re probably not going to be able to think of yourself as fully vaccinated until you get a booster to protect against delta, omicron and potentially whatever else is coming our way.

And yet, as of this writing, only about 20% of the Illinois population has been boosted. That’s not nearly enough to prevent a wave of illnesses that could send the most vulnerable among us to hospitals already straining under the weight of COVID. We must start framing vaccinations not as a personal choice, but as a civic duty.

Chicago, the “city that works,” can’t fully live up to its motto until all of us can do business safely again, and now that means getting a booster shot. Chicago can’t afford another shutdown like the one we experienced in the earliest days of the pandemic.

We need to get back to the office, to collaborate in person, to get back to the restaurants and theaters and museums and shops and bars that so desperately need our patronage, to fly and commute without fear, to gather with loved ones. And we can’t do that unless we get as many Chicagoans as possible vaccinated and boosted.

So roll up your sleeves, Chicago. It’s time.

YOUR VIEW

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institutions stepping up in a few critical ways to address these tech talent inequities: First, businesses must reach into college to engage Black and Latinx students as freshman and sophomores. Illinois likely loses more than 70 percent of Black and Latinx students who show up to college with an interest in STEM but leave school or ultimately pursue non-STEM majors.

Moreover, students of color often have less access to the early project or internship opportunities that companies look for when filling junior-year internships, which are the “golden ticket” for students seeking a first job. To address both challenges, companies can mirror the work P33 is doing with companies like M1 Finance, G2, and PwC to bring their young professionals into freshman classes at UIC and Illinois Tech, to provide in-classroom projects and exposure to tech professionals.

Second, widen your hiring aperture.

Companies express an interest in building more diverse tech teams but remain stuck in the habit of actively recruiting from only a few colleges in the region—colleges that are less diverse than the average. The

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

Chie

Cont

Chicago must develop diverse tech talent do something,” know well that a report 2. “Let me tell you about what spotlighting the latest diwe’re doing on this issue.” versity stats and trends in These reactions were neither Chicago tech won’t solve our cynicism nor yawns, but instead, persistent equity problems. productive energy.

What we need is business Which is why, at P33, we are and education leaders to step bullish on Chicago: As a city up in a few critical ways to enwe’re getting more honest about gage Black and Latinx students our areas for improvement and early and often throughout have momentum underway. the entire education lifecycle Matthew Muench is The toplines from our report (more on that later). senior vice presunderscore that while tech So I was spirited by the doz- ident for talent career opportunities in Chicago ens of responses we received solutions at P33, a are growing rapidly (more than earlier this month to Kather- civic organization 90 percent of Chicago compaine Davis’ article “Chicago’s that aims to boost nies anticipate growth of their Tech Diversity Problem Starts Chicago’s tech software engineering and data in College” and the report “The sector. teams over the next three years), State of Chicago Tech Talent” my organization, P33, published based these opportunities are not equally acceson data and executive conversations with sible to all Chicagoans (only 14 percent of the Tech Talent Coalition, a group of 40 our tech workers are Black or Latinx).

The opportunity gap results from shorttech-centric companies in Chicago from Allstate, United Airlines, and JPMorgan comings in the education pipeline as well Chase, to Relativity and Narrative Science. as barriers erected—intentional or not— by company practices.

What we heard fell into two categories: It will take businesses and educational 1. “Yikes, this is really bad. We need to

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growth of partnerships with Historically Black Colleges and Universities we’ve seen over the last 18 months is great, but also add more diverse Illinois institutions to your campus outreach.

Last, look at your numbers. Our survey revealed that a large minority of executives lacked access to detailed diversity and inclusion data, but that those who did have access to the data felt it was critical to the progress they have made with diversity and inclusion initiatives. Ask if somebody has the data already and can share it or start the process of pulling it together for internal use. It will enable focus and will help mobilizes internal partners.

Opportunity is cumulative, and so is the opportunity gap.

If our Chicago tech and business community’s response is unequal to the challenge, tech’s growth will exacerbate Chicago’s undeniable economic and social fissures. There’s a different path, one that builds Chicago into the country’s most inclusive tech city. That’s what P33 and the Chicago Tech Talent Coalition are working on. What actions will you take?

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.

12/17/21 3:08 PM

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CRAIN’S CHICAGO BUSINESS • DECEMBER 20, 2021 11

LETTER TO THE EDITOR

The case for a museum of architecture in Chicago

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rain’s recent article regarding the demolition of another pre-Fire residence reinforces my belief that Chicago is in desperate need of a museum of architecture (“Say goodbye to this 1860s West Loop home,” Dec. 7).

The overwhelming success of the two exhibitions now featured at the Wrightwood 659 Gallery prove that audiences are interested in Chicago’s architectural legacy. The success of “Reconstructing the Garrick” is in no small way due to the creative ingenuity of Chris Ware, Tim Samuelson (with his ability to render historical material in an engaging way) and Eric Nordstrom (who supplied material gathered from the Richard Nickel archives at the Ryerson Library at the Art

Institute of Chicago).

Exhibitions such as this are dependent on resources that, as of today, have no permanent home. Collections of artifacts, such as terra cotta blocks, building fragments and ephemera need a secure facility where they can be displayed, maintained and catalogued, and made accessible. Besides Samuelson’s collection of hundreds of objects, many of which are of massive in size, there is the collection of David Phillips, historical photographic negatives in dire need of archival storage and preservation. Important collections of architectural fragments owned by Nordstrom range from early wood frame house joinery to extraordinary sculptural building fragments.

His collection also includes archival material

from Chicago’s pioneering architects such as William LeBaron Jenney.

While their material recognizes past achievements, an architecture museum is necessary for more recent material that may not have a home. Methods of architectural presentation rapidly change, such as architectural model makings and renderings.

Today, much of this material is discarded.

Museums such as the Art Institute of Chicago, the Chicago History Museum and the Museum of Science & Industry are stewards of architectural material, but they are also multi-disciplined and have not made architecture one of their major concerns.

An architectural museum can also focus on education: classes on global warming,

housing and building techniques, energy efficiency and perhaps teaching building trades.

A building of approximately 50,000 square feet or more would serve this purpose.

Besides exhibition space, it would need elevator access, secure storage, preparation space for mounting exhibitions, classrooms and offices. Parking would also be essential.

Location can be anywhere in the city, since I believe people would have multiple ways of attending. Such a facility would become a destination for schools, organizations and planned groups.

JOHN VINCI Fellow of the American Institute of Architects Chicago

CRAIN’S CHICAGO BUSINESS

Chief executive officer KC Crain Group publisher/executive editor Jim Kirk Associate publisher Kate Van Etten Editor Ann Dwyer Creative director Thomas J. Linden Assistant managing editor/columnist Joe Cahill Assistant managing editor/digital Ann R. Weiler Assistant managing editor/news features Cassandra West Deputy digital editor Todd J. Behme Deputy digital editor/audience and social media Robert Garcia Digital design editor Jason McGregor Associate creative director Karen Freese Zane Copy chief Scott Williams Copy editor Tanya Meyer Contributing editor Jan Parr Political columnist Greg Hinz Senior reporters Steve Daniels, Alby Gallun, John Pletz Reporters Elyssa Cherney, Katherine Davis, Danny Ecker, Ally Marotti, A.D. Quig, Dennis Rodkin, Steven R. Strahler Contributing photographer John R. Boehm Researcher Sophie H. Rodgers General manager, product and technology Kevin Skaggs Director of research Frank Sennett Director of custom media Sarah Chow Events manager/account executive Christine Rozmanich Marketing manager Cody Smith Production manager David Adair Events specialist Kaari Kafer Account executives Claudia Hippel, Bridget Sevcik, Laura Warren, Courtney Rush, Amy Skarnulis People on the Move manager Debora Stein Project manager Joanna Metzger Digital designer Christine Balch CRAIN COMMUNICATIONS INC. Keith E. Crain Chairman Mary Kay Crain Vice chairman KC Crain Chief executive officer Chris Crain Senior executive vice president Lexie Crain Armstrong Secretary Robert Recchia Chief financial officer Veebha Mehta Chief marketing officer G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) For subscription information and delivery concerns please email customerservice@ chicagobusiness.com or call 877-812-1590 (in the U.S. and Canada) or 313-446-0450 (all other locations).

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or the past decade, the Nicor Gas Energy Efficiency Program team has been helping customers identify solutions to save money and energy. From rebates to energy assessments to free products, Nicor Gas has ensured that residential and business customers in northern Illinois are educated about natural gas energysaving opportunities. The program’s 10th anniversary milestone is a reason to celebrate, and the proof is in the numbers.

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“Whether we are providing rebates for energy-efficient projects and equipment or free energy-saving kits, we want to be a resource that our customers can rely on,” said Mike King, manager of program operations for the Nicor Gas Energy Efficiency Program. “We continue building partnerships with communitybased organizations, municipalities, and local leaders who support the program’s growth.

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CRAIN’S EVENT RECAP

TRANSPORTATION SERIES O’Hare Modernization Makes Headway Amid Pandemic What follows is a sponsored recap of an event moderated by Crain’s Chicago Business Political Columnist, Greg Hinz

W

ith the largest construction project in the city’s history underway to modernize O’Hare Airport, Chicago Department of Aviation Commissioner Jamie Rhee recently joined Crain’s political writer Greg Hinz for an exclusive webcast on the status of the $8.5 billion project. The webcast is part of Crain’s 2021 Transportation Event Series, exploring topics related to transportation and infrastructure in the region and state.

H.W. Lochner, a national transportation and engineering firm based in Chicago, sponsored the webcast. In opening remarks, Sadie Robb, project manager, associate vice president at Lochner noted that that the progress at O’Hare Airport is providing new jobs and opportunities for business.

Hinz kicked off the discussion by asking Rhee about current health procedures for people who want to fly. Recognizing the fluid nature of the pandemic, Rhee emphasized that the Department continues to work closely with public health officials and agencies to exceed the requirements for a safe airport environment. Both O’Hare and Midway airports have onsite testing facilities. With recent rule changes for overseas travel, both airports offer free testing for arriving international passengers as well as airport employees. Testing is available for domestic passengers for a fee.

Pre-registration online only takes a few minutes.

Mask requirements at the airports have been extended until March, and free masks are available. Social distancing is being practiced. Asked about the new Omicron variant, Rhee said that the Department continues to monitor the situation and will follow all recommended health protocols. She added that passengers have for the most part been compliant with the rules.

About 97% of city airport employees are vaccinated. The airlines have their own rules, though workers for United Airlines and the TSA are subject to a vaccine mandate. “Everyone

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is moving in that direction,” Rhee said.

The introduction of the vaccine last Spring helped jump start the air travel recovery, according to Rhee. Together, both airports are expected to log a little more than 1,000 daily departures this December. Midway traffic is close to 2019 levels. At O’Hare, domestic passenger load is at about 90% of pre-pandemic levels. International travel has been slower to recover, though seat capacity is up 69% in December compared to this time last year. Rhee expects Chicago’s geographic location as a hub for domestic connections to be an important piece of the air travel recovery.

Another plus: Southwest Airlines launched service from O’Hare last February and added an international destination in November to Cancun. “We hope the airlines continue to expand,” Rhee said. “We’re upgrading our facilities to make sure that happens.”

The growth of air cargo volume has been a bright spot at O’Hare.

Rhee said that the airport broke the 2 million metric ton mark for air cargo for the first time in 2020 and is on track to break that record again in 2021. Emergency supplies and a big boost in e-commerce account for much of the gains. “We performed a very important role in keeping the critical supply chain moving,” Rhee said. “We process $200 billion in freight a year, more cargo by value than any other U.S airport.”

Construction is under way of a new 900,000-square-foot cargo facility that will employ 400 people. Rhee is proud of the fact that minority-owned firms are being used to build the facility.

Terminal 5. It is expected to open in phases between now and 2023. Ten new gates and 350,000 square feet are being added to the building. A new security passenger checkpoint opened last May. Delta Air Lines is moving its operations to Terminal 5 with a new lounge planned to open in the third quarter of 2022. Behind the scenes, baggage systems are being replaced, concessions are under review, and $3.5 million in artwork by Chicago artists has been acquired.

Hinz asked when the next phase of terminal modernization will begin. It includes the replacement of Terminal 2 with a new O’Hare Global Terminal, two new concourses, the addition of more aircraft gates and other improvements. Rhee said that the FAA is conducting an environmental assessment of the plan and that she can’t comment publicly. But she thinks FAA approval would probably come in the second or third quarter of 2022.

Meanwhile, preparations for construction and design plans are moving forward. Also, the

MODERATOR

GREG HINZ

JAMIE RHEE

Political Writer Crain's Chicago Business

Commissioner Chicago Department of Aviation

Airport Transit System reopened in November with limited service after several years of delays. The “People Mover” takes passengers and workers between terminals.

Rhee expects the system to provide full-time service in early 2022.

Public Health Commissioner Dr. Arwady, along with her dedicated team who showed up every day for work. “We’ve been extremely fortunate to have really good, solid people in place,” Rhee said.

“Everyone rolled up their sleeves and dove in to make this place as safe and secure as possible.”

Hinz asked Rhee what it’s been like to run big airports during a pandemic. She credited the leadership of Mayor Lightfoot and Chicago Department of

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Status of improvements The last of a series of new and extended runways went into operation in December as part of the 16-year, $6 billion O’Hare Modernization Project. “We’ve reconfigured our antiquated airfield,” Rhee said. The changes have already led to a 64% decrease in system delays, she added.

Work on the $8.5 billion terminal modernization program has continued during the pandemic.

The first piece is the $1 billion expansion and upgrade of

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Court ruling is a blow to restaurants’ COVID claims

Sweeping decisions in the 7th U.S. Circuit Court of Appeals are a victory for insurers, which argued they shouldn’t have to pay business-interruption claims stemming from Gov. Pritzker’s pandemic actions to stop the virus from spreading in spring 2020

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Our Green Teams Program is a unique opportunity for your group to get outside and give back. Gather together safely at coordinated clean-up events to help keep Chicago's parks beautiful!

JOIN US WITH YOUR TEAM IN 2022 chicagoparksfoundation.org/greenteams

Shape His Future. And Yours.

BY STEVE DANIELS

Genesys Works partners with leading Chicago companies, connecting them with emerging young professionals.

We provide them with training in accounting, business operations, and information technology.

WIKIMEDIA COMMONS

In a sweeping set of rulings, the 7th U.S. Circuit Court of Appeals determined that governmental actions closing or restricting businesses in the early months of the pandemic weren’t losses that insurers have to cover.

The decisions in six cases, made public Dec. 10, upheld decisions by lower courts to dismiss suits claiming damages by an array of plaintiffs, including the Ritz-Carlton Hotel in Dallas.

But their sweeping nature means that the many other cases pending in lower courts, including by high-profile plaintiffs like the Billy Goat Tavern and Purple Pig restaurant, likely will fail over the same issues.

For insurers of restaurants, bars and other small businesses in the Chicago area, the decisions will come as a big relief. One in particular, Fond du Lac, Wis.-based Society Insurance, is a defendant in multiple cases because it specializes in covering local restaurants and bars and is small enough that adverse rulings could have meant its liquidation.

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The original Billy Goat Tavern in Chicago. the judges put forth.

In the linchpin cases—suits

by Sandy Point Dental in Lake Zurich, the owner of the Hyatt Place hotel in East Moline and a Southern Illinois restaurant owner against Cincinnati Insurance—a three-judge panel decided that Gov. J.B. Pritzker’s actions in the spring of 2020 to keep the virus from spreading out of control didn’t constitute a “physical loss” that virtually every business policy requires for payment of claims.

In the decision, Judge Diane Wood emphasized that businesses were able to function in part even during the most restrictive phases of Pritzker’s orders. Restaurants could serve takeout orders. The dentists’ office could perform emergency work. “(T)he businesses’ preferred use of the premises was partially limited, while other uses remained

possible,” she wrote. “Without any physical alteration to accompany it, this partial loss of use does not amount to a ‘direct physical loss.’”

With this ruling, the 7th Circuit joins four other federal judicial circuits around the country in arriving at this interpretation.

Unless another circuit rules that insurers are liable for these losses, the U.S. Supreme Court is highly unlikely to weigh in on what last year looked like it might be one of the most intense insurance industry legal wars in years.

The decisions are too recent to determine how Billy Goat and other local restaurants, hotels, bar owners and other businesses will respond in their cases before lower courts. But it seems clear that, if any are to succeed in Illinois, they will have to involve highly unique circumstances not present in most of these situations.

You provide the entry-level internships and the exposure to the career possibilities within your organization.

Our young professionals bring their new skills, their ambition, and their work ethic.

Together, we build a pipeline of diverse, talented, and engaged workers.

Together, we change the future of Chicago’s workforce!

Learn why industry leaders partner with Genesys Works Call our Executive Director, Kim Nicholas at (312) 525-9995 180 N. Wabash Ave., Suite 600, Chicago, IL 60601 | genesysworks.org/chicago

12/17/21 11:54 AM

PEOPLE ON THE MOVE

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

ACCOUNTING

CONSTRUCTION

HEALTH CARE

NON-PROFIT

REAL ESTATE

ORBA, Chicago

Lendlease, Chicago

physIQ, Chicago

The Cradle, Evanston

CRG, Chicago

ORBA, one of Chicago’s largest public accounting firms, welcomes Zachary Legear and Christopher Valletta, JD, LLM. Zachary Legear joins the Tax Group. He specializes Legear in preparing a variety of federal and state tax returns for individuals, trusts, corporations, partnerships and foundations. He also has experience working with real estate clients, not-forprofit organizations and small businesses.

Valletta Christopher Valletta joins the Business Consulting Group and provides consulting services in the areas of corporate transactions, estate planning, real estate fund formation, and trust and estate administration. He also performs investor due diligence on private and non-traded publicly available alternative investments.

Kinjal Patel has been named Senior Vice President and General Manager for Lendlease in Chicago.

He is responsible for leading construction business operations, pursuing new business ventures and fostering relationships across multiple sectors.

Throughout his 15-year career at Lendlease, Patel has held numerous management positions with escalating responsibilities, including a role as Vice President/Principal-in-Charge, overseeing Lendlease’s residential, mixed-use and commercial sectors.

physIQ recently announced the hiring of Gary Manning as Senior Vice President and General Manager of Healthcare Delivery.

Previously, Manning held pivotal roles helping to develop innovative digital health virtual care models, including Hospital at Home.

He will now play a critical role in physIQ’s expansion strategy and reflects the company’s commitment to providing solutions to healthcare organizations worldwide.

The Cradle is excited to welcome President and CEO Jason Friedman.

Friedman previously served as executive director of iMentor Chicago. He has held a variety of leadership roles in the child/family welfare arena and has broad ties into the Chicago business community. Friedman, who adopted one of his two children at The Cradle, is tasked with helping the nonprofit child welfare agency expand its therapeutic and educational services to include all families, regardless of how they were formed.

CRG is pleased to welcome Bryan Greger as vice president of construction management in the firm’s growing residential platform. With 25 years of experience predominantly in the multifamily sector, Bryan will oversee all aspects of CRG’s multifamily preconstruction and construction phases, including estimating, bidding, value engineering, contract negotiation and awarding. Prior to joining CRG, Bryan held senior construction administration roles with national design firms BKV and Cuningham.

CONSTRUCTION ACCEND Construction, Chicago Chris Przybysz has joined ACCEND Construction as Project Manager. In this role, he will work directly with clients and will be responsible for key project milestones such as developing site logistics plans, building assessments, creating detailed project schedules, and implementing practices to mitigate risk. Chris’ 10+ years’ experience working on tenant interior and capital projects in the Chicagoland and Bay Area markets will be extremely valuable to ACCEND’s clients and growing team.

CONSTRUCTION ACCEND Construction, Chicago ACCEND Construction is proud to welcome Project Manager Eric Touhey to their growing team. Eric brings over 15 years of international experience in tenant improvement, design build, global logistics and commercial construction. As Project Manager, Eric will work closely with his clients and vendors to develop comprehensive schedules and budgets. He will also lead a team to offer a quality construction experience to his clients and deliver sophisticated projects on time and under budget.

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

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NON-PROFIT Hephzibah Children’s Association, Oak Park CONSTRUCTION Lendlease, Chicago Myles Soverel has been named Director of Business Development for Lendlease in Chicago.

Previously, he was a project manager in digital advertising and marketing, working on cross-media ad campaigns for companies like Coca Cola and Johnson & Johnson; assisted in raising Series B funding for The White House and YouTube; and, shifting to CRE, focusing on corporate interior projects for multiple Fortune 500 clients. He has managed an internal team responsible for $35M in annual revenue.

HEALTH CARE UnitedHealthcare of Illinois, Chicago UnitedHealthcare of Illinois is pleased to announce Michael Morris, Vice President, Account Management, has been promoted to Executive Director. Mike will oversee the Sales and Account Management Teams for all segments of the business, collaborate with the network management team and affordability initiatives as well as product portfolio management. Prior to joining UnitedHealthcare of Illinois in March of 2006, Morris served as Assistant Vice President at AON.

Hephzibah Children’s Association, a comprehensive child welfare agency based in Oak Park, welcomes Richard H. Wesley, CPA, MBA, EdD, as its new chief financial officer. Wesley’s experience includes 33 years in accounting and 31 years in nonprofit administration. After serving in the U.S. Marine Corps, Wesley earned a bachelor’s degree in accounting from Western Illinois University. He earned an MBA from Lake Forest Graduate School of Management and an EdD at Olivet Nazarene University.

NON-PROFIT Open Communities, Evanston

EXECUTIVE SEARCH Slayton Search Partners, Chicago Slayton Search Partners is excited to announce that Molly Hull has been promoted to the position of Executive Vice President. Molly joined the firm in 2008 and has maintained her outstanding client relationships while expanding her reach and impact with leaders.

She will continue to make a profound influence across a broad spectrum of functional disciplines including general management, finance, sales & marketing, strategy, IT, and supply chain, among others.

INSURANCE BROKERAGE Lockton Companies, Chicago Lockton has named Brian Roberts Chief Operating Officer of its Midwest operations. As COO, Brian will be responsible for operations and business development for Lockton’s regional hub, including Chicago, Cleveland, Green Bay, Memphis, Milwaukee, Nashville, Pittsburgh and St. Louis. A skilled people developer and coach, he will also be responsible for attracting the best industry talent and maintaining Lockton’s position as the best place to work and do business in insurance.

Open Communities, the fair housing nonprofit serving Chicago’s north and northwest communities, announces the appointment of Cheryl Lawrence, JD, as CEO. Lawrence comes to Open Communities with executive-level experience in both the non-profit and business sectors. She served as the Executive Director at Lawyers’ Committee for Better Housing, one of Illinois’s preeminent housing and legal-aid organizations. She graduated from DePaul University and received her JD from UIC School of Law.

PRIVATE EQUITY FINANCIAL SERVICES Hilco Global, Northbrook Dan Arnold will be transitioning to the role of Senior Managing Director, Enterprise Valuation Services.

In this new role, Mr. Arnold will focus on building the Enterprise Valuation Services (EVS) practice, including originating new business in the core business valuation segment, as well as disputes and financial diligence practices. Additionally, he will be contributing to the development of a growth strategy and supporting recruiting efforts for the practice.

LAW Dykema Gossett PLLC, Chicago Paulina Garga-Chmiel joined Dykema’s Financial Services Litigation Practice Group and Commercial Mortgage-Backed Securities Special Servicer Group as senior counsel in the firm’s Chicago office. She will focus on loan enforcement and complex creditors’ rights issues. In her practice, Paulina represents lenders in foreclosure litigation, bankruptcy matters, UCC liquidations, collection actions, breach of contract disputes, loan restructuring issues, and creditors’ rights litigation and workouts.

Syndicated Equities, Chicago Syndicated Equities, a national real estate investment firm, is proud to announce that Jason Schwartz has been promoted to Chief Operating Officer. Jason is a Principal with Syndicated and joined the firm in 2010. He is focused on developing joint venture partnerships, sourcing new acquisitions, and raising capital from private and 1031 investors. In his expanded role, Jason will lead the company’s growth strategy while continuing to support existing investor and partner relationships.

REAL ESTATE Focus, Chicago Focus, a leading Chicagobased developer and general contractor, is pleased to announce the appointment of George Jalil to the role of Vice President, Investments and Acquisitions. With nearly 10 years of experience in capital markets and acquisitions, George will contribute to the strategic direction of the firm by identifying opportunities and exploring emerging markets. Prior to joining Focus, George was the Vice President, Acquisitions for Progenics Capital Management where he identified opportunities and acquired real estate in the Southeastern United States. George studied business at the University of Texas at Austin, McCombs School of Business and is currently an active volunteer and supporter of the March of Dimes.

REAL ESTATE Proper Title, LLC, Niles Proper Title, LLC, one of Illinois’ largest title insurance agencies, has hired Brent Fielder as executive vice president of business development. Fielder will lead Proper Title’s expansion into markets outside of Illinois.

Previously, he led multi-state title insurance operations for South Bend, Ind.-based Meridian Title Corp. Backed by Chicago-based @properties, Proper Title intends to grow via organic market-share capture and through acquisitions.

WEALTH MANAGEMENT BMO Wealth Management, Barrington BMO Wealth Management congratulates Ellaine Sambo-Reyther on her promotion to Market Manager and Director, Private Wealth Advisor in Barrington. In addition to leading the team, Ellaine is responsible for creating a customized and constantly evolving financial plan and strategy to help meet clients’ lifestyle, career, philanthropic and wealth planning goals. She has over 27 years of experience in the financial services industry.

12/15/21 9:16 AM

SPONSORED CONTENT

Workforce Health: A Business Imperative to Achieve Economic Prosperity economist.com), commissioned by Cigna, both executives and non-executive employees agree that worker well-being is fundamental to business success. Executives in particular view productivity as the top result of a healthy workforce, with more than 90% seeing investments in employee health and wellness having a direct impact on financial performance. Most executives and employees believe that a healthy workforce is critical to economic vitality; 90% of respondents say companies that prioritize health and wellbeing will recover faster than those that don’t.

Brian Marsella

Market President, Midwest Cigna Brian.Marsella@Cigna.com

T

he Cigna Midwest team is proud to recognize companies who are truly making a difference in workplace wellness. They understand that prioritizing workforce well-being is a key driver of business success. We’re proud to support Crain’s Healthiest Employers given our commitment to improving the health, wellbeing and peace of mind of the people and communities we serve.

The COVID-19 pandemic changed the world more than any event in recent history, significantly impacting the health and wellbeing of our workforce and the economy. As a result, the inextricable link between individual health and productivity, business performance, and economic prosperity is clear, and now is the time for employers to more actively engage and support the mental and physical health of employees.

In a recent survey by The Economist Intelligence Unit (healthyworkforce.

The survey also emphasized the importance of mental health. The combination of fatigue, burnout, and stress was recognized as the top barrier to business growth. Workers in the Midwest ranked these concerns higher than in other parts of the country: 41% versus 33% in the West, 38% in the Northeast, and 39% in the South. Many continue to struggle with the impacts of isolation, disconnection, and blurring lines between work and home due to the pandemic, and more people are seeking care for stress, anxiety, and depression. Across the U.S. over half (59%) of employees are looking for broader access to mental health benefits.

Research results uncovered other key differences related to mental health and worklife balance: • Industry differences: Employees in health care, financial services, and retail industries were most likely to rate fatigue, burnout, and stress as a significant barrier to business growth.

• Differences between executives and employees: While 41% of employees indicated that fatigue, stress and burnout are top barriers to business growth, only 33% of executives did the same, representing an 8% difference.

• Importance of work-life balance: The view of what best defines a healthy workforce

differs between executives and employees. For executives, having access to quality health care ranked highest (51% vs. 44% for employees).

Whereas employees prioritized having a good work-life balance (57% vs. 48% of executives, representing a 9 point difference).

conditions at work compared to employees in the South and West. Companies in our area are more likely to have a majority of employees working in-person which reinforces the need for broader, more holistic health and wellbeing strategies.

Employers can play a leading role in addressing the increased need for health and well-being support. This means more than providing health benefits and wellness programs; businesses also need to help build a culture of health designed to encourage employees to engage in those programs and their personal well-being. This culture should be created with strong leadership commitment and employee involvement, as well as encompass both physical and mental health, reduce stigma and support greater work-life balance.

As the country continues to manage the complexities of the pandemic, it is vital for employers to invest in the well-being of their most valued asset — their people.

Healthy, productive employees represent a true competitive advantage for American businesses, and help drive a robust economy.

How do we do that at Cigna? One effective tool we utilize is Mental Health First Aid Training. The goal is to help employees recognize and understand common behavioral issues, explore how stigma is associated with mental health, and offer resources for support. We’re also training and certifying our employer clients so that they can best support their own employees. Further, we help create a culture of wellness through our Midwest Well-Being Committee. This team develops regular employee programming focused on whole-person health including healthy cooking demos, exercise classes, financial wellness seminars, and weekly meditation classes. These are just a few of the ways that our Cigna Midwest team prioritizes physical and emotional health for our employees.

Find out more about The Economist Intelligence Unit’s exploration of how a healthy workforce drives economic vitality at healthyworkforce.economist.com.

Source: The Economist, “The Employer Imperative: Driving US Economic Vitality through a Healthy, Productive Workforce,” survey conducted by the Economist Intelligence Unit (EIU), commissioned by Cigna, in January and February 2021 among 1,200 consumers and 600 executives. https://healthyworkforce.economist.com Product availability may vary by location and plan type and is subject to change. All group health insurance policies and health benefit plans contain exclusions and limitations. For costs and details of coverage, contact a Cigna representative.

All Cigna products and services are provided exclusively by or through operating subsidiaries of Cigna Corporation, including Cigna Health and Life Insurance Company (CHLIC) or its affiliates.

As more companies return to work in-person, they’re taking steps to address employee concerns about workplace safety. The Economist study found that workers in the Midwest place a high priority on workplace safety and feel more confident about

ILLINOIS’ HEALTHIEST EMPLOYERS

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12/16/21 9:08 AM

16 DECEMBER 20, 2021 • CRAIN’S CHICAGO BUSINESS

The unraveling of Walgreens Boots Alliance If Walgreens goes through with a reported sale of its U.K. pharmacy business, it would largely undo a landmark merger that began in 2012 and reshaped the Deerfield-based company to be the world’s largest prescription drug buyer BY ALLY MAROTTI

BLOOMBERG

W

hen Walgreens began its merger with U.K. drugstore chain and medicine distributor Alliance Boots, it set itself on a path to become the largest prescription drug buyer in the world. Now, that deal is unraveling.

Walgreens Boots Alliance is reportedly exploring the sale of its Boots pharmacy so that the Deerfield-based company can focus on plans to transform its U.S. stores into health care destinations.

Walgreens declined to comment to Crain’s and has not confirmed its plans. Sky News, which first reported the potential deal, said the company could also spin off the chain into a separately listed company.

Analysts agree that offloading Boots makes sense for Walgreens. The company already sold the majority of distributor Alliance Healthcare to AmerisourceBergen earlier this year for $6.5 billion, including cash and stock. It also does not fit squarely into still-new Walgreens CEO Roz Brewer’s growth plans and renewed focus on health care in the U.S. market.

However, if Walgreens went through with a Boots sale, it would largely undo a merger that upended the company’s C-suite and took years to complete. Revenue goals Walgreens set for the deal were not met on time, and the fresh air the company hoped Boots executives would breathe into front-end retail never came.

The architect of the deal was Stefano Pessina, who spent four decades building a multinational pharmaceutical empire that culminated with the Walgreens deal. He became the company’s CEO after the merger, though he left that role to become executive chairman of the board earlier this year.

From the beginning, “it was a

The British division of Walgreens Boots Alliance will eliminate 700 positions. formed his family’s Naples drug wholesaler into European powerhouse Alliance Santé, then merged it with British medical supplies distributor UniChem in 1998 to create Alliance UniChem.

DEALMAKING

Pessina engineered another merger eight years later with U.K. pharmacy chain Boots Group to create Alliance Boots.

He worked with private-equity group KKR to take that private in 2007 in a $22 billion deal, which at the time was one of the largest leveraged buyouts in history.

ANALYSTS AGREE THAT OFFLOADING BOOTS MAKES SENSE FOR WALGREENS. THE COMPANY ALREADY SOLD THE MAJORITY OF DISTRIBUTOR ALLIANCE HEALTHCARE TO AMERISOURCEBERGEN EARLIER THIS YEAR FOR $6.5 BILLION. merger that made sense only to Pessina,” said Erik Gordon, professor at the University of Michigan’s Ross School of Business.

“He’s run out of stories that the investors will believe,” Gordon said. “The change agent was the lousy (stock) performance over the last five years.”

Pessina, an Italian mogul who is now in his 80s, was a well-known deal engineer long before he began fraternizing with Walgreens. First, he trans-

P016_CCB_20211220.indd 16

Then along came Walgreens.

The Deerfield-based company announced in June 2012 that it would pay $6.7 billion for a 45% stake in Alliance Boots—the first step in a two-part deal that created the largest prescription drug buyer in the world.

Walgreens shareholders approved the final step—and the ultimate $16 billion price tag—of the deal in late 2014. When completed, the merger reinvented the company. It got a new name—

Walgreens Boots Alliance—and new executives, many of them Pessina associates.

The new leadership was to focus on cost controls and financial discipline to spur growth.

The combined company was expected to produce revenue of about $130 billion in 2016. That did not happen. Sales were $117 billion in fiscal 2016, and did not crest the $130 billion mark until fiscal year 2018, according to company filings.

Profits also declined in the years leading up to the pandemic. Net income dropped from $5 billion in fiscal 2018 to about $4 billion the next year. It bottomed out at $456 million in 2020 amid pandemic closures and increased to $2.5 billion in fiscal 2021, which ended in August.

Boots started as a family herbal medicine shop in Nottingham, U.K., in 1849. It now operates about 2,200 stores in the U.K. and employs roughly 55,000 employees. When the merger occurred, it was a fixture on British high streets with unparalleled reach. Crain’s reported in December 2014 that the company sold “an astonishing” 38% of all cosmetics and beauty products purchased in the U.K., and its Boots No. 7 private-label brand was more ubiquitous there than Clinique was here.

One analyst told Crain’s at the time that the Alliance Boots management team was viewed as more sophisticated at phar-

macy retailing than their Walgreens counterparts. They were expected to help make the pharmacy, health care and retail portion of Walgreens’ stores seamless, a process that would theoretically keep customers coming back. But retail sales at U.S. Walgreens have been flat in the years following the merger, hovering between $26.7 billion and $27.3 billion between 2017 and 2021. That time frame includes the pandemic, when many patrons seeking COVID-19 vaccines flooded the stores.

Representatives from Walgreens declined to speak to Crain’s for this article but did issue a statement to Sky News.

“Walgreens Boots Alliance does not comment on market speculation, and Boots is an important part of the group,” the company said in the statement. “However, it is accurate that WBA announced a renewed set of priorities and strategic direction for the Group in October, which includes a more pointed focus on North America and on health care.”

‘RENEWED FOCUS’

The new direction Walgreens referred to is the drugstore chain’s reinvention as an integrated health care company. Brewer, who took the helm in March, targets 11% to 13% long-term growth in earnings per share—four times the company’s average over the past decade. She’ll have to integrate

a handful of newly acquired health care businesses that grow faster and more profitably than Walgreens’ current pharmacy and retail mix. She also plans to execute a $1.3 billion cost-cutting campaign.

All of that will unfold in an environment unlike the one that existed when Walgreens started its Alliance Boots merger. Reimbursement pressures are depressing margins, and strategic priorities—including at Walgreens’ arch-rival CVS—are to focus on health care, said Dylan Finley, equity analyst at Morningstar.

“Boots is by no means holding the company back, and adds value to the company,” he said.

“But it does seem to be out of the scope of focus for future strategic initiatives.”

It remains to be seen how a deal would play out, or what parts of Boots that Walgreens might hold onto, experts say.

Parts of Pessina’s mega-merger would remain. When Walgreens sold off most of Alliance Healthcare to AmerisourceBergen, that deal did not include operations in Germany and investments in China and Italy, for example.

Gordon said a sale would not be a reset for Walgreens.

“The Pessina era is not going to be remembered warmly by investors or employees,” he said.

“The company has lost years in which it should have been making progress instead of falling behind.”

12/16/21 4:12 PM

CRAIN’S CHICAGO BUSINESS • DECEMBER 20, 2021 17

OPENINGS GO BEGGING: Employer struggles to find workers in a jobs desert. PAGE 18 VIEW FROM THE GROUND: A Black workers group pushes for a paradigm shift. PAGE 19

JOBS

REIGNITING CHICAGO’S

EMPLOYMENT

SPARK

What will it take to boost employment on Chicago’s South and West sides?

Training, public investment, the nurturing of small businesses and the recruitment of big ones. | BY ALBY GALLUN

BEYOND $15 AN HOUR: Ownership will make the difference in changing the trajectory. PAGE 20

In the final weeks of the 2019 campaign for mayor, a man asked candidate Lori Lightfoot for a word as she walked out the door of Loncar’s Liquors, a South Chicago bar.

“He said, ‘Look, can you just bring us jobs? We want to work,’ ” Lightfoot recalled at a 2020 ribbon-cutting ceremony. “ ‘We know how to work, but we need the opportunity.’

I’ve never forgotten that moment.

This man was nearly in tears. Not just asking for something for himself, but something for his community.”

The request was simple enough, but the task is anything but for Lightfoot, now in her third year as Chicago’s mayor. She has made the revitalization of depressed South and West Side neighborhoods a key priority, highlighted by Invest South/West, an ambitious economic development program backed by $750 million in public funds.

Following the civil unrest in the summer of 2020, big banks, corpo-

rations and foundations offered to pitch in by pledging hundreds of millions of dollars to lift Black and Brown communities in Chicago.

But the comeback won’t be complete without jobs, especially for residents without a college degree.

Job loss is a major reason South and West Side communities have suffered so many economic and social ills in the first place, as steel companies and other manufacturers shut down over several decades. It was creative destruction at its worst— plenty of destruction, but not much creation to fill in the void.

The job loss has continued in the 21st century. By fall of 2020, 272,174 people were employed on the South and West sides, down 12% from 2001, according to the Illinois Department of Employment Security.

Even in 2019, before the coronavirus pandemic, 295,653 people worked on the South and West sides, down See EMPLOYMENT on Page 22

FIND THE COMPLETE SERIES ONLINE

South Works, a massive lakefront steel mill along the mouth of the Calumet River, once employed as many 20,000 workers. It shut down in 1992.

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12/16/21 4:10 PM

18 DECEMBER 20, 2021 • CRAIN’S CHICAGO BUSINESS

Openings go unfilled where jobs are most needed A small West Side manufacturer who’s hiring can’t ‘just pluck people off the street’ For decades, the economic challenge on the South and West sides has been too many people and not enough jobs. Freedman Seating faces the opposite problem.

The company, which makes seats for buses, trains and trucks out of a big factory in West Humboldt Park, has shrunk its workforce to about 600 people, down from 850 before the coronavirus pandemic. But it’s hiring again, with nearly 50 job openings. It’s struggling to fill them, says CEO Craig Freedman.

“We’re really constrained by labor,” he says.

Freedman’s situation shows that one of the biggest problems facing businesses today—finding employees—exists even in some Chicago neighborhoods that have been screaming for more jobs for decades. Skilled employees like machinists or welders are in especially short supply, but finding unskilled labor is tough, too, Freedman says.

Hiring has been a challenge for manufacturers for years, partly because the jobs have become more sophisticated. Many lower-skilled jobs have moved overseas. Working on a factory floor doesn’t require a college education, but it does require more training than it used to, leading to a jobs-skills mismatch.

The labor shortage has “become more acute” since the pandemic, Freedman says. “If we could just pluck people off the street, our problem would be solved. It’s not that easy.”

To attract workers, the company has increased wages by 4% to 20%, depending on the job, since 2019

PHOTOS BY PAUL GOYETTE

BY ALBY GALLUN

Craig Freedman, CEO of Freedman Seating in West Humboldt Park, says hiring has been a challenge for manufacturers for years, partly because jobs have become more sophisticated. Freedman employees, below, assemble seats for buses, trains and trucks. and has added new benefits, like family leave, he says.

Labor has been just one headache for Freedman in the COVID era. Many of its customers—companies that manufacture buses, train cars and other vehicles— have struggled with computer chip shortages and declining orders. Supply-chain problems also have disrupted Freedman’s business and pushed up costs of key raw materials. Hot-rolled steel costs about $1.40 per pound now, up from 25 cents previously, Freedman says.

Freedman Seating has been through many ups and down since the late 19th century, when company founder Hyman Freedman,

O

Craig Freedman’s great-grandfather, began making seat cushions for horse-drawn buggies.

The company, which makes seats for CTA buses, moved from Ravenswood to its current factory, a former Motorola plant at 4545 W. Augusta Blvd., about 20 years ago.

The West Side’s manufacturing base has only shrunk since then: Brach’s closed its candy factory in Austin in the early 2000s, putting about 1,100 people out of work.

A Helene Curtis factory in Humboldt Park that employed about 600 people closed around the same time.

By last fall, manufacturers in west central Chicago, which includes Humboldt Park, West Humboldt Park, Austin, Garfield Park, employed 5,928 people, down 58% from 2001, according to the Illinois Department of Employment Security. Over the same period, total employment in the area fell 11%, to 61,118.

Still, recruiting factory workers has only gotten more difficult over the past two decades. It’s not for lack of trying. A network of nonprofits, schools and other organizations—including the City Colleges of Chicago, Manufacturing Renaissance, Skills for Chicagoland’s Future and the Jane Addams Resources Corp.—offer job training and other programs to draw people into the industry. But factory work still suffers from an image as a dirty and difficult oldschool job.

“Trying to attract the youth isn’t easy,” Freedman says. “With this gig economy, they don’t want to work for anybody. They want to work for themselves.”

Manufacturing advocates say the problem will persist without more money, new ideas and a bigger commitment.

“It’s going to take a concerted effort, a collaborative effort between business, local organizations and the city to really develop an infrastructure to attract, train and retain a workforce,” Freedman says.

Recharge Chicago through urban-development investing Revitalizing communities could make Chicago the City That Works once again

BY WILLIAM JOHNSON Is Chicago past its prime?

Judging by what Windy City residents said in a new Harris Poll study, it may well be. More than three-quarters of Chicago-area residents consider the city established (43%) or declining (35%).

Less than half (47%) believe Chicago is attracting new residents and businesses.

City-dwellers are less likely (64%) than their suburbanite cousins (71%) to say that their neighborhood is enticing new residents and businesses. More city

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residents (23%) than suburbanites, on the other hand, describe their neighborhood as declining.

The good news is that the city problems are reversible.

Most Chicagoans (81%) agree that urban development initiatives offer a strong incentive to attract new residents and to spur growth.

Twice as many Chicagoans want local leaders to take charge (40%) of such efforts as prefer private-

sector entities (20%). And those living in Chicago itself are more likely to take advantage of existing or upcoming city projects such as the Obama Presidential Center (62% to 40% respectively), 606 trail (50% to 25%), 312 River Run (43% to 25%), and Lincoln Yards (39% to 23%).

But leaders face challenges. For one thing, only 30% of Chicagoarea residents, and 37% of city residents, believe that development initiatives have positively affected their own neighborhood.

These low numbers highlight an opportunity for local leaders to

bring meaningful projects to the area. But that involves the second challenge: revitalizing communities without gentrifying them— erasing their unique character or making them unaffordable for longtime residents.

Most Chicagoans (58%) see gentrification as a necessary side effect of urban development, but an even larger number—81%— want such renewal projects to work within a neighborhood’s existing footprint, instead of removing recognizable buildings, el tracks and other landmarks. Notably, Chicagoans of color (54%) are less likely than their white counterparts (61%) to feel that gentrification is a necessary re-

sult of urban development, likely because they have been disproportionately affected by gentrification driving up the cost of their neighborhoods.

So the challenge for city leaders is clear: Revitalize and restore Chicago without transforming its character. Maintain the diversity and personality that made it the City That Works in the first place.

Data from the Harris Poll is based on responses from 1,000 adults in the Chicago area on behalf of Crain’s Chicago Business.

William Johnson is CEO of the Harris Poll, a public opinion, market research and strategy firm based in Chicago.

12/16/21 4:11 PM

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CRAIN’S CHICAGO BUSINESS • DECEMBER 20, 2021 19

ON THE GROUND

Organizing for an alternative paradigm on job creation

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tional stories by Reveal iscriminaand other outlets have tion used documented it. Law to be free! firms have aggregated Now we got to pay for evidence to settle class it?” actions about it. State A factory worker laws like the Illinois exclaimed this after Day & Temporary learning that a West Labor Services Act Side manufacturer— target it. which shut out Black Segregation is the workers—had gotten Shay Mitchell and Anthony Stewart linchpin of wage a city TIF-based grant. are members of Black Workers Matter’s suppression and other It’s become a running General Organizing Committee. abuses. An on-site joke in our group, agency supervisor at an area factory told a Black Workers Matter—Chicago West Side BWM founder, “You Blacks complain too (BWM), because it widely applies. much (about wage theft). Everybody’s checks The “joke” points to truths that we Black are short.” workers in Chicago reckon with daily. Truths Second truth: The city’s development that must be confronted in any discussion of policies overlay and reinforce workplace rac“job creation efforts.” ism with geographic segregation. As Reader First truth: Since the ’90s, much of Chicolumnist Ben Joravsky and civic strategist cago industry has adopted a form of racialTom Tresser have detailed, the TIF statute ized capitalism that we’ve dubbed “The purports to address “blight,” but TIF has been Segregationist Employment Model.” This twisted to shift revenue burdens from rich divide-and-conquer strategy preys on immito poor neighborhoods. Examples abound. grants while systematically discriminating Lincoln Yards—a massive project in a white, against Blacks (and, less so, other U.S.-born gentrifying neighborhood—diverts $1.3 bilworkers) in hiring, assignments, training, lion in property taxes from city coffers, while promotions, discipline and firing. It’s wide10 Black and Brown poor neighborhoods spread. At BWM, we’ve fought long campaigns to integrate/reform big-name factories split $750 million (“Invest South/West”).

For Lincoln Yards, $1.3 billion; for Austin like Ferrara, Hostess and Bimbo.

(BWM’s base), $75 million. A ratio of 17-1.

On the West Side, jobs conversations turn Mayoral candidate Lori Lightfoot opon this common experience. Multiple worker posed the Lincoln Yards and the 78 TIFs, but groups have organized campaigns around conceded that fight after the runoff, before the Segregationist Employment Model. Na-

she even took office. Then her administration crushed a lawsuit that charged the TIFs with racist impact.

Politicians cut ribbons. Rarely do they circle back to measure job numbers and quality against promises—and whether locals got the jobs. Or environmental impact. Nonprofits go along because they’re paid to. We can’t “nonprofit” our way out of a bad system, anyway.

And the oft-promised transparency?

Consider the Amazon delivery station going up at Division Street and Kostner Avenue. Per common practice, 37th Ward Ald. Emma Mitts “privately” greenlighted it, including a tax abatement, before the public caught wind.

No labor standards, no community benefits agreement. Now residents are fighting for those.

“Jobs, jobs, jobs!” goes the mantra.

Yes, but as Jesse Jackson noted, even slaves had jobs.

So is there any hope? Yes—though not from the top.

First, the system’s contradictions have exploded. George Floyd protests forced performative but actionable corporate commitments to equity.

With COVID, workers exited en masse from bad jobs, forcing owners to raise wages and reduce hiring discrimination (though anti-Black managerial cultures, built over decades, rage on).

COVID negligence united essential workers across race.

Unionized workers struck back, culminating in Striketober.

Bosses can’t fire workers as easily, so more risk organizing. Power’s shifted. Some.

Second, after widespread reporting of speed-ups, surveillance and engineered churn (Amazon!)—it’s harder for investorsubmissive politicians to chant “Jobs!” while ignoring rights abuses.

Last, BWM and partners have forged new alliances, like the new citywide Equitable Development Roundtable. We’re organizing for an alternative paradigm for the city’s master plan, one built on democratic—rather than top-down technocratic—values, and borrowing proven best practices. Correspondingly, the city’s new Office of Labor Standards and Office of Equity & Racial Justice raise and legitimize workers’ and communities’ expectations of change.

Until we dismantle segregation-for-profit, however, fresh “job creation efforts” are good money after bad. Investment without system reform equals performative politics. Pieces get better; the whole gets steadily worse.

What good are “jobs” if workers can’t get them or are abused on them?

So we at BWM expect to fight on—from the bottom up.

After all, we still have to go to work.

FUNDAMENTALS

In some communities, it ‘always comes back to jobs’

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have suffered from decades of ear the corner of Mardisinvestment and disparities in quette Road and Wolcott essential services. Research by Avenue in West Englewood Northwestern University econis the New Mount Calvary Baptist omists finds that Black and HisChurch, where Yolanda Morris panic households in the Chicago runs a small but mighty food metro area are two times more pantry. A simple sign out front likely to experience food insecurity advertises, “Free Food.” as white households.

I will never forget my first It almost always comes back to visit to that food pantry on a jobs and wages. Many who face cold winter evening in 2007, the Kate Maehr is the hunger have multiple jobs, but people I spoke with, and how their executive director they aren’t paid enough to afford experiences continue to mirror and CEO of the food after covering their other the challenges facing so many in Greater Chicago basic needs like rent and utilities. our community in 2021. I recall a Food Depository.

Too many of our neighbors face working mother utilizing the food barriers that keep them from gaining any pantry because her hours had been cut. kind of employment—homelessness, mental She was caught in the crisis that swept health challenges, addiction, criminal records across our community during the Great or insufficient education and training.

Recession, then never truly receded, before Business, government, and nonprofit skyrocketing again during the COVID-19 sectors must approach unemployment and pandemic. The lines at local food pantries today are exponentially longer than they were underemployment differently. We need to build more on-ramps to the job expressway, in 2007. investing more in partnerships and programs Food insecurity continues to disproporto offer paid job training with wraparound tionately affect communities of color on the support services.

South and West sides—neighborhoods that

P017-P024_CCB_20211220.indd 19

At the Food Depository, we have rethought our own community responsibility and investment strategy. Since the beginning of the pandemic, the Food Depository has distributed more than $9 million in funds to our frontline hunger relief partners, with a priority on organizations serving the South and West sides. We are purchasing more food locally, with a priority on minority-owned businesses and groups like Growing Home and Chicago CRED that offer job training and employment for South and West Side residents.

During the pandemic, the Food Depository launched its own warehouse logistics and supply chain job training programs in partnership with Moraine Valley Community College and Metropolitan Family Services. One of our first graduates from the new program is a 52-year-old man named Jose, a native of Humboldt Park who has been in and out of incarceration since the age of 14, a background that was a barrier to most jobs. Jose completed the program and now is working full-time on our warehouse receiving team.

You don’t have to run a job training program to be part of the solution. You can purchase goods and services from local,

minority-owned businesses that hire or train young people of color and pay them good wages. You can lend your own expertise to provide supports such as criminal record expungement, soft skills, mental health services and more.

Earlier this year, the city of Chicago launched its first Food Equity Agenda with a commitment to provide every Chicagoan with access to affordable, healthy and culturally relevant food. This agenda builds tremendous opportunity to create wealth and opportunity on Chicago’s South and West sides by opening doors and eliminating barriers for Black, Indigenous and people of color growers, food businesses and entrepreneurs. The Greater Chicago Food Depository and food pantries like New Mount Calvary—one of our 700 hunger relief partners—are committed to ending hunger in our community. On too many days, it feels like we’re further behind in our mission than we were 15 years ago. It comes back to jobs.

Our community cannot afford to continue excluding people of color from opportunities to build successful careers. It’s time to invest in people.

12/16/21 4:11 PM

20 DECEMBER 20, 2021 • CRAIN’S CHICAGO BUSINESS

ECONOMIC PATHWAYS

People don’t just want $15 an hour.

‘They want equity.’

A

term commitment to s the Endeleo investment in people Institute’s exand places that have ecutive direcbeen marginalized in tor, Melvin Thompthe past. son, told WBEZ’s Recent initiatives, Natalie Moore recentincluding Invest ly, “People don’t just South/West spearwant a $15-an-hour headed by the city job. They want equity. of Chicago, privateThey want ownership. sector commitments They want buy-in, MarySue Barrett, left, is an impatient through the Corpoand that’s what we’re optimist, who concludes 25 years as rate Coalition and the trying to do along president of the independent Metropolphilanthropic sector’s 95th Street.” itan Planning Council this month and collective investments Thompson is will continue to help cities innovate. Vice through We Rise spearheading a new President Kendra Freeman guides the Together, are adding community-owned organization’s cross-functional work and exciting momentum. grocery store and centers equity in all policies, informed The game-changer Cafe DuBois, a social

by MPC’s groundbreaking 2017 Cost of is aligning these efenterprise coffee Segregation study. forts. Private invesshop and laundromat tor interest and expanded funds from the targeted to open in 2022 just a few blocks federal American Rescue Plan and infrawest of the CTA’s busiest rail station at 95th structure package, as well as from Rebuild and the Dan Ryan Expressway. Bookended Illinois, present a once-in-a-generation opby two educational gems—the Carter G. portunity to disrupt the status quo. WeavWoodson Regional Library and Chicago ing together the knowledge, network and State University—these new assets respond capital from multiple institutions reduces to neighborhood needs. complexity, yielding a multiplier impact In Washington Heights and in neighboron the growth of entrepreneurs of color, hoods across the region, we see innovative on family stability though job and wealth community leaders taking an all-in apcreation, and on neighborhood safety. proach to “buy back the block.” It’s a slow Here are lessons that the independent process fraught with barriers, especially in Metropolitan Planning Council, or MPC, Black and Brown neighborhoods. Does it learned over the past 15-plus years from have to be so difficult? facilitating technical assistance on coordiFor decades, community-centered nated economic development alongside organizations have envisioned the restored community allies on Chicago’s South and vibrancy of Black and Latinx spaces. Today, West sides and inner suburbs. the pathway to an equitable recovery starts with elevating the ideas of community Listen to local wisdom residents, mapping assets, co-designing the Lived experience is an important source development pipeline and making a long-

of data. Neighbors and employees who walk a corridor daily can provide savvy market insights and pinpoint community needs and challenges.

In 2020, tasked with helping Rogers Park residents envision future uses for a key parcel at Howard Street and Ashland Avenue near transit, the MPC updated its stakeholder engagement to respond to the realities of a pandemic. We offered more ways for individuals to connect and share ideas, including virtual design sessions, in-person workshops and DIY kits to channel one’s inner builder using multicolored foam blocks.

Know your sector strengths Metro Chicago is dominant in food production, distribution and logistics, technology, metals manufacturing and more. Fostering a network of researchers, suppliers and professional service providers will generate jobs and attract additional investors.

Innovative brands like Compañera, founded by two Latinas with a killer recipe for salsa macha, have been connected to

the support they need through the Hatchery, a food and beverage incubator in East Garfield Park. Knocking down barriers via food production facilities and financing allows smaller food entrepreneurs to participate in the growth of this robust segment of our economy.

Address unique local needs The expanding food ecosystem in Chatham includes Justice of the Pies, owned by acclaimed chef Maya-Camille Broussard, currently featured on Netflix’s “Bake Squad,” and ChiFresh Kitchen, a worker-owned catering and food service cooperative.

Nedra Sims Fears of the Greater Chatham Initiative describes how they are helping food entrepreneurs increase income and boost wages. After civil unrest during summer 2020, FoodLab Chicago helped South Side restaurants grow sales through online ordering and delivery “. . . when 30% of our food stores temporarily closed” and where “40% of our residents do not have cars and are unbanked,” Fears said.

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LITMUS TESTS

Big projects set the stage for communities to prosper

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ronzeville Lakefront, the megadevelopment planned for the vacant site that was once home to Michael Reese Hospital, presents promise. Since 2009, the site has obligated $13 million a year from Chicago taxpayers instead of generating tax dollars from new housing, businesses and jobs. This multibillion-dollar project will address these issues and generate tremendous economic impact with far-reaching consequences.

Bronzeville Lakefront is projected to generate $8.2 billion in direct and indirect economic impact and create 45,000 direct and indirect construction jobs and 31,000 permanent full-time jobs—exponentially more than the 4,000 jobs Michael Reese provided in its heyday. But unlike all other megadevelopments of this prominence and scope, this one will come alive in Bronzeville, a racially and socioeconomically diverse

P017-P024_CCB_20211220.indd 20

Zeb McLaurin is president of McLaurin Development Partners and a member of GRIT, the Bronzeville Lakefront development team. neighborhood on Chicago’s South Side.

Throughout my career as a developer, I’ve seen firsthand how projects like Bronzeville Lakefront cultivate immediate economic advantages for its residents and spark critical growth for community and its businesses. What I’ve learned from my two decades in this business is there’s more to economic impact than gathering and analyzing statistics, though that is the built-environment standard.

A more effective and immediate litmus test should be whether small, local minority businesses grow because of, and alongside, projects that promise to be impactful.

And I mean grow exponentially. That’s the lens in which we must view this work, because small, minority-led businesses are most likely to employ local residents.

They are the economic engines that recycle earnings, spending and growth in neighborhoods.

We’ve launched this concept many times over in our development work. One of my favorite examples is Brown Sugar Bakery.

When I first stepped foot into Brown Sugar Bakery, it had one location—Chatham, on Chicago’s South Side. But I could tell it had the infrastructure necessary to succeed: a passionate owner, dedicated staff and customer-led experiences. The business lacked one thing: opportunities to expand.

I worked with Brown Sugar’s owner, Stephanie Hart, to open her second location at Navy Pier during the first phase of its redevelopment in 2016. By 2018, with a grant from the city, Brown Sugar opened its third location on the West Side. From there, they were able to expand to online and packaged-goods offerings. Now Hart owns a manufacturing facility that’s created dozens of new jobs, boosted sales and increased real estate tax revenue in areas of Chicago that need it most.

Another example is Ja’ Grill, a popular Jamaican restaurant that serves a diverse clientele from its Hyde Park location. The owner, Tony Coates, previously had a Lincoln Park location.

When we began working with the Habitat Co. on Ogden Commons, a mixed-use development in North Lawndale on Chicago’s West Side, Coates was one of my first calls.

12/16/21 4:11 PM

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CRAIN’S CHICAGO BUSINESS • DECEMBER 20, 2021 21

ESSENTIAL WORKERS

‘We must not squander this moment to rebuild equitably’ T

Target resources over many years When 50 Chicago public schools were closed in 2013, it yanked the heart out of communities across Chicago’s South and West sides. In Bronzeville, residents rallied around the potential of the former Overton School on 49th Street. It’s a stunning, three-story, midcentury modernist glass box building, now on the National Register of Historic Places. The big vision is a multipurpose community asset with space for arts, technology, business and food. All the Overton Center of Excellence lacks is access to long-term, patient capital.

What local leaders need to “buy back the block” is straightforward: elimination of barriers and access to resources. Measuring progress will illuminate whether we’re serious about sparking and sustaining economic vibrancy in Chicago’s South and West Side neighborhoods and suburbs.

The MPC joins those charting a more equitable recovery, one that yields dramatically different results for neighborhoods that have been undervalued and underinvested in for decades.

adequately compensate for decades of beacon for Black Southernhe economic and racial wage stagnation. That is why compreheners who arrived during the reckoning from the sive relief must come from the local, state Great Migration of the 20th pandemic exposed what and federal levels, plus the private sector. century. At the same, Mexican many of us have long known.

The federal Build Back Better bill seeks immigrants were attracted to Low-wage work in America to make permanent provisions of the the city’s growing industrial is pervasive, and millions of American Rescue Plan that significantly hub and abundance of jobs in workers live from paycheck to helped low-wage workers and their famindustries that struggled to atpaycheck. There are similies during the height of the pandemic. tract native-born workers. But ply not enough jobs paying These include expansion of the Child Tax as investment grew downtown sustainable wages for people Credit, which cuts child poverty signifiand in surrounding neighwithout college degrees, who Audra Wilson is cantly while addressing long-standing borhoods, it shrank in precurrently make up the majority the president and racial disparities. Build Back Better also of low-wage workers. These CEO of the Shriver dominantly Black and Brown increases the quantity of affordable neighborhoods. “essential workers”—who grow Center on Poverty housing available to low-income families Still, there are emerging and harvest our food, stock our Law in Chicago. and would expand health care coverage signs of hope. We at the Shrivshelves, deliver our packages to 3.4 million people. er Center have long fought to advance and look after us when we are sick— The private sector also bears some policies that address long-standing enabled the majority of Americans to responsibility, and we are encouraged disparities, fuel opportunity and improve remain sheltered safely at home during by new public/private partnerships. quality of lives. We have worked closely the mandated lockdowns and beyond.

Initiatives like Invest South/West aim to with advocates and community memMany essential workers live on the commit more than $1 billion in pubbers to pass legislation ensuring paid South and West sides of Chicago. They lic- and private-sector investments in sick days in Chicago and parts of Cook are disproportionately Black and Brown, historically underserved communities County. We continue to pursue paid relegated to low-wage work because of through grants to businesses, new public sick days, along with family and medical our nation’s long history of racism and amenities and other neighborhood leave, at the state level. We also contindiscrimination, which have created large enhancements that will create jobs, ue to support movements like the One gaps in both opportunities and outcomes Fair Wage campaign, which in employment, education, health and seeks to end subminimum housing. These workers are overreprePROSPECTS FOR LONG-TERM ECONOMIC wages in the service indussented in the health care support, protry. We have long promoted tective services, construction and food RECOVERY REMAIN COMPLICATED. the concept of a guaranteed service industries—struggling to make basic income, the best hope ends meet with wages that are not comimprove safety and provide affordable to provide people with the resources to mensurate with the risk or physical and housing options. make important life choices that they emotional exertion their jobs require.

The COVID pandemic demonstratsee fit. Chicago is now launching one of That is why this moment is signified that our response to crisis depends the nation’s largest publicly funded pilot cant—for all of us. As we collectively upon the resiliency of our people and programs, providing 5,000 low-income work to rebuild and recover, we must institutions. We must not squander this residents $500 per month for one year continue to lay the groundwork for a moment to rebuild equitably. Now is foundation that all can stand on with pol- with no strings attached. the time to fight for livable wages and Even as low-wage workers make sigicies that address and dismantle instituincrease access to quality health care and nificant gains, prospects for long-term tional barriers that limit opportunity. sick and family leave so that low-wage economic recovery remain complicated.

This effort is especially important in workers in Chicago and across the counAs wages increase, so, too, does inflation, a city that has witnessed a decadelong try do not remain vulnerable in future thereby reducing workers’ buying power. trend of population loss on the South crises.

Even significant wage increases may not and West sides. Chicago was once the

Bronzeville Lakefront is projected to create 31,000 permanent full-time jobs.

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P017-P024_CCB_20211220.indd 21

Cinespace Studios, two institutions that employ thousands in a near-24/7 cycle. Ja’

Grill will open its second location at Ogden Commons that will be double the size of the

first and be accessible to its North and West Side customers.

These examples bring us back to what we envision at Bronzeville Lakefront, which will also include a life sciences hub, the Chicago ARC (Accelerate, Redesign, Collaborate) Innovation Center.

Significantly, this will be a transformational opportunity for small, local and minorityowned businesses, providing access to new markets, new clients and new relationships and leading to greater economic possibilities in the future.

When we, as developers, do the right thing and bring small, minority-led businesses along with us, everyone benefits.

That takes me back to the idea of promise.

Beyond economics, Bronzeville Lakefront will be the first megadevelopment in Chicago to fulfill the vow of equity and inclusion. When we model outcomes for an entire community through inclusion and scale of every size, this diverse, dynamic development model can change norms in the real estate industry—and beyond.

12/16/21 4:11 PM

22 DECEMBER 20, 2021 • CRAIN’S CHICAGO BUSINESS

EMPLOYMENT 4.7% from 2001. Over the same period, the number of people working in other parts of the city rose 9.1%.

Reversing the trend will take a multipronged approach that includes job training, public investment, the nurturing of small businesses and the recruitment of big ones. Being optimistic may be hard amid a global pandemic and crime wave that have only widened the city’s socioeconomic divisions. But job creation will be essential to bridging them.

The city’s boosters can already point to some promising job-creation stories just in the last year or so. In Chatham, Discover Financial Services recently opened a call center in a former Target store that will employ 1,000 people. At another shuttered Target in Morgan Park, Blue Cross & Blue Shield of Illinois has opened a community center and call center expected to employ more than 500. World Business Chicago, the city’s business development arm, is trying to lure more call centers and back-office facilities to the South and West sides.

In the Back of the Yards, Nature’s Fynd, a Chicago-based meat-alternative startup that employs about 150 people, is expanding into a new factory and expects to hire 200 more.

In South Shore, a group led by Derek Dudley, a producer of “The Chi” series on Showtime, is getting ready to break ground on a studio campus amid soaring demand for film and television studio space. Hundreds of people could work there, from hair, makeup and wardrobe specialists to directors who call the shots.

“What I’m betting on is creating resilient neighborhoods. In order to be resilient, you can’t just rely on one industry to create all the jobs,” says Leon Walker, managing partner of Chi-

Continued from Page 17

cago-based DL3 Realty, which redeveloped the Targets in Chatham and Morgan Park. “We have to be as adaptable and as flexible as the economy is.”

Another promising jobs generator is emerging about 20 minutes by car to the south, in Hegewisch. Kansas City-based NorthPoint Development is building an industrial park on the former site of a Republic Steel factory, a city-subsidized project that’s expected to employ 1,400 people when it’s complete.

The 2.3 million-square-foot development—the biggest industrial park in the city—got off to a strong start last year when Ford, which runs a big assembly plant nearby, moved into NorthPoint’s first building there. It was at the ribbon-cutting in September when Lightfoot told her story about the man outside Loncar’s.

MANUFACTURING IN A POST-INDUSTRIAL ECONOMY

Manufacturing could be one solution to the South and West sides’ economic woes, but it will never be the powerhouse it was in the mid-20th century. By 1970, Republic Steel employed as many as 6,300 people at its Southwest Side steel mill, which shut down for good in 2001.

South Works, a massive lakefront steel mill along the mouth of the Calumet River, once employed as many 20,000 workers. The site has sat barren since the mill shut down in 1992, though not for lack of trying by developers and city officials.

The city’s industrial base was always diversified, immortalized more than 100 years ago by Carl Sandburg’s famous poem describing Chicago as “Hog Butcher for the World, Tool Maker, Stacker of Wheat, Player with Railroads and the Nation’s Freight Handler.”

But it has withered. Chicago’s Union Stockyards, which

Thoma Fynd: “ food scie turin employed 40,000 people in the 1920s, closed in 1971. On Pershing Road nearby, the Central Manufacturing District, one of the nation’s first industrial parks when it opened in the early 20th century, attracted big corporate names, including Westinghouse, Wrigley, Goodyear, Ford and Spiegel. Most of the buildings, now with gaping vacancies, are still there, creating an imposing red brick wall between Ashland and Western avenues.

Factory jobs disappeared as foreign competition clobbered many manufacturers. Some slashed their payrolls here as they moved production overseas or embraced

automation and other efficiencies. By last year, manufacturers were the eighth-largest employer in the city, with less than 61,642 workers, or 5.6% of the city’s total workforce, according to IDES. The manufacturers in the city today employ only about half of the 122,623 people they employed in 2001, but the sector still offers growth opportunities.

A further expansion by Ford, which employs 5,000 people at its Southeast Side assembly plant, or by parts suppliers that need to be nearby, could create many more jobs.

Yet manufacturing faces one big constraint: Factory jobs now

require more technical skills and training than they did 50 years ago, says Dan Swinney, founder and senior adviser of Manufacturing Renaissance, a West Side nonprofit that promotes the industry through job training and advocacy.

Back then, “all you had to do was to do what the boss told you, have a good back and a good work ethic,” says Swinney, who worked as a machinist at Sunbeam and Victor Manufacturing & Gasket plants on the West Side before founding the nonprofit.

Today, even though joblessness is high on the South and West sides, it’s hard to find work-

GEOGRAPHY OF CHICAGO JOBS

Chicago ZIP codes that saw the largest decreases in employment between 2001 and 2020 were among the poorest in the city. Of the 14 ZIP codes with a 25% or greater job loss, 10 had median household income in the bottom half of all city ZIP codes. Seven were in the bottom quarter.

HOUSEHOLD INCOME

The 10 communities with the lowest household incomes are on the South and West sides.

UNEMPLOYMENT RATE

Areas on the South and West sides experienced the highest rates of unemployment.

$0 to $30,000 $30,000 to $65,000

$65,000 to $90,000

0% to 4%

4% to 6%

$90,000 to $120,000

$120,000 to $200,000

8% to 10%

10% to 30%

6% to 8%

COMMUTE TIME

Those who did work in struggling communities had some of the longest commutes.

COLLEGE DEGREE

Job loss hit areas of the city with low numbers of residents with college degrees especially hard.

Percentage of residents with a degree

Commute time in minutes 0 to 25

25 to 30

35 to 40

40 to 45

30 to 35

0% to 12%

12% to 21%

30% to 39%

39% to 49%

POPULATION LOSS SINCE 2000

Income, unemployment and education can contribute to population declines.

Change in population 21% to 30%

-40% to -10%

-15% to 0%

10% to 50%

50%+

0% to 10%

Sources: U.S. Census Bureau, CMAP

P017-P024_CCB_20211220.indd 22

12/16/21 4:11 PM

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CRAIN’S CHICAGO BUSINESS • DECEMBER 20, 2021 23

‘jobs, jobs, jobs,’ ” says Dan Giloth, an organizer with Black Workers Matter, an independent group of workers on the West Side. Workers “want jobs, but they don’t want jobs at any cost.”

BUILDING A BACK OFFICE

Thomas Jonas, CEO of Nature’s Fynd: “There’s a lot of talent in food science and food manufacturing that exists in Chicago.”

PHOTOS BY ALEX GARCIA

The Blue Cross & Blue Shield facility in Morgan Park offered a “career job,” says Sydney Humphries, who started working there in late November.

ers who have the skills and sophistication for factory work.

Freedman Seating, which makes seats for buses and trucks in a West Side plant, epitomizes the jobs-skills mismatch: The factory, which employs about 600 people, has nearly 50 job openings, says CEO Craig Freedman.

Some workers left when the pandemic swept into Chicago and never came back.

“We just can’t get anybody,” he says.

Chicago could emerge as a leader in high-tech manufacturing, nurtured by initiatives like MxD, an advanced manufacturing research center on Goose Island. Recent supply-chain bottlenecks could also motivate more manufacturers with overseas operations to shift more of their production back home. But Swinney says local businesses, government and schools need to invest more in training to create a solid foundation for growth.

“It requires a massive investment in our educational infrastructure,” he says.

FROM OREOS TO FY

Food production, an important manufacturing subsector in Chicago, could also be a source of new jobs on the South and West sides. Food is in the city’s DNA, with more than 1,200 companies here, including big names like Kraft, Wrigley and Mondelez.

Yet the industry also has shed jobs: Fewer than 16,000 people in the city worked in food manufacturing last year, down 34% from 2001, according to IDES. About

P017-P024_CCB_20211220.indd 23

1,100 people lost their jobs when Brach’s closed its West Side factory in the early 2000s. Mondelez eliminated about half of the 1,200 jobs at a Southwest Side bakery in 2016, when it moved production of its Oreo cookies to Mexico.

Still, a task force formed last year by Lightfoot to hatch ideas for the city’s post-COVID recovery identified food and agriculture as potential growth markets.

The goal: to help Chicago emerge as a hub of food innovation. The effort was already underway in 2018 when the Hatchery, a nonprofit food-and-beverage incubator, opened in East Garfield Park with the backing of food giants including Kellogg, Conagra and Mondelez and a $7 million subsidy from the city.

“There’s a lot of talent in food science and food manufacturing that exists in Chicago,” says Thomas Jonas, CEO of Nature’s Fynd.

The company’s story illustrates the potential. Founded in 2012, Nature’s Fynd has created a protein from a microbe in the hot springs of Yellowstone National Park. The protein, called Fy, can be used to make a variety of sustainable foods, including meatless hot dogs and chicken nuggets and even chocolate mousse. It recently rolled out a line of meatless breakfast patties and vegan cream cheese, now sold in local Mariano’s stores.

To finance its expansion, Nature’s Fynd raised $350 million over the summer, reaching unicorn status with a valuation in excess of $1 billion. The company currently operates out of a 35,000-square-foot space just blocks from the entrance of the old Union Stockyards—“the old way of getting protein,” Jonas says—and will move into a 200,000-squarefoot plant in the Marina Crossings park about 2 miles west.

Nature’s Fynd will hire a range of employees, from bioengineers with advanced degrees to floor workers whose education ended at high school, Jonas says. He expects many employees to come from nearby neighborhoods.

Aside from serving as a food success story, Nature’s Fynd also illustrates how important entrepreneurship and innovation are to job creation: Small businesses can grow up to be big businesses.

Many companies with a small number of employees also can generate a similar economic impact as a few employing hundreds. At the Plant, a 100,000-square-foot sustainablefood incubator founded in Back of the Yards in 2010, 21 businesses employ 105 full-time employees, says John Edel, president of Bubbly Dynamics, which runs the complex. Tenants include kombucha brewers, indoor farms and businesses that produce honey, coffee, cheese and chocolate.

“You don’t win games by just home runs,” says Michael Fassnacht, CEO of World Business Chicago. “The majority of games you win by singles, doubles and walks.”

A 21ST-CENTURY FREIGHT HANDLER

The distribution and logistics sector—another target industry identified by the mayor’s recovery task force—could also be a major source of jobs on the South and West sides. It already is.

Amazon is at the front of the pack, opening several big warehouses in the city to expand its distribution network and speed up delivery times. In the fall of 2020, the e-commerce giant moved into a warehouse in Pullman that employs more than 200 people. It plans to hire 200 more at a new one in Bridgeport and is building another in Humboldt

Starr Coutee used to commute an hour each way to her job at a West Loop social services nonprofit. Now, it takes her just 10 minutes to get to work at a new Discover call center in Chatham.

“It allows me to create a better work-life balance,” says Coutee, who has one child.

Coutee is one of about 5,800 people who have applied to work in the former Target, where Discover ultimately expects to employ 1,000, up from 220 now. The call center jobs start at $17.25 per hour and require at least a high school degree or GED, says Juatise Gathings, director of regional operations at Discover, who oversees the operation.

She’s off to a good start: The Chatham operation is beating Discover’s other call centers on customer satisfaction and other performance metrics. Its early success is one story World Business Chicago officials tell when they pitch other companies to open call centers on the South Side. Most companies site them in rural areas, not cities.

“We have to proactively tell the story of these neighborhoods,” Fassnacht says. “It’s not charity.

It’s a business opportunity.”

For residents without college degrees, back-office jobs are an appealing alternative on the South Side, with opportunities for advancement. While job hunters can find openings in retail and fast food, the Blue Cross facility in Morgan Park offered a “career job,” says Sydney Humphries, who started working there in late November.

There aren’t “a lot of jobs that you can grow in and be set up for the rest of your life,” she says.

Park expected to employ about 500.

An industrial park in Pullman—on a site along the Bishop Ford Freeway once occupied by a huge Ryerson Steel mill—demonstrates the sector’s potential. In addition to Amazon, the development includes warehouses occupied by Whole Foods Market, S.C. Johnson, a Method Products soap factory and two Gotham Greens greenhouses—all built since 2015.

Distribution is a natural fit for the Far South Side, with its sprawling network of interstates and rail lines, says David Doig, president of Chicago Neighborhood Initiatives, the nonprofit developer that has orchestrated Pullman’s renaissance.

“That’s our greatest asset,” he says. “How do we leverage that kind of infrastructure?”

Yet not everyone is sold on the idea. Environmental groups and FEEDING THE worker advocates have raised BINGE-WATCHING BEAST concerns about pollution and Derek Dudley dreams of walkcongestion from trucks and deliv- ing down 79th Street in the future ery vans, and working conditions and bumping into someone who in warehouses. Some worry that worked at Regal Mile Studios, the warehouse jobs, which typically studio campus he plans in South start at $16 to $20 per hour, will Shore. eventually be replaced by robots.

“Because I worked at that stuIn Little Village, Target recent- dio, I was able to put my kids ly opened a massive distribution center expected to gener- “IT’S VERY EASY TO COME INTO A ate 2,000 jobs. But DESPERATE COMMUNITY AND SAY ‘JOBS, the project attracted vocal opposition JOBS, JOBS.’ ” that only intensified after the project’s de- Dan Giloth, organizer, Black Workers Matter veloper botched the demolition of a power plant on the through school,” the imaginary site, sending a plume of dust over person tells him. neighboring homes. Allegations of Dudley, a producer and longenvironmental racism followed. time partner of Common, the Activists and community groups Chicago rapper, grew up in South also pushed back against the Am- Shore. He believes his studio azon projects in Bridgeport and project can be a catalyst in the Humboldt Park. neighborhood’s revival. Film and “It’s very easy to come into a desperate community and say See EMPLOYMENT on Page 24

12/16/21 4:11 PM

24 DECEMBER 20, 2021 • CRAIN’S CHICAGO BUSINESS

Continued from Page 23

Launched in 2019, the program is channeling $1.4 billion in public and private investment into 10 60656 target neighborhoods, including Auburn Gresham, South Shore, Humboldt Park and Austin. With large investments in housing and commercial space, it’s primarily a community revitalization initiative aimed at improving key commercial corridors that have seen better days.

But Maurice Cox, commis60644 sioner of the Department of Planning & Development, says ZIP CODES WITH LARGEST LOSSES Invest South/West also will cre60644 -45.1% ate about 2,000 permanent and temporary jobs, including those 60656 -44.9% in construction. In Englewood, -42.2% for instance, a development 60652 funded through the program will ZIP CODES WITH LARGEST GAINS include a $10 million “eco-food hub” employing about 45 people.

60633 66.9% Invest South/West also will generate jobs in another way, Cox 52% 60645 says: by bringing “the everyday 46.3% 60607 amenities that people look for 60652 in healthy neighborhoods”—restaurants, YOU CAN BRING JOBS TO THE PEOPLE, 2020 CHANGE IN JOBS VS. 2001, BY ZIP CODE coffee shops and other 45% to 67% 20% to 45% 0% to 20% OR THE PEOPLE TO THE JOBS. retailers.

0% to -20% -20% to -45% “It’s also about getple, or the people to the jobs. ting entrepreneurs in those storeTransit is part of the solution, fronts,” Cox says. “It’s jobs with a Note: 60606 and 60661 use the same data. In 2001 the data for both ZIP codes were too. The lack of frequent and small ‘j.’ ” combined. For mapping purposes, the 2020 figures were added together to make a If the strategy works, it could efficient bus and train service similar comparision. In both 2001 and 2020, the IDES combined the data for 60610 and 60654. Thus, those ZIP codes on the map use the same figure. Riverdale data was makes it hard for people on the help Lightfoot tackle one of the removed from the map because the Chicago portion of the ZIP code had too few people.

Far South or West sides to get biggest jobs of all: improving the Source: Illinois Department of Employment Security to downtown jobs that pay well lives of people on the South and and offer advancement. Recent West sides. research from the Metropolitan Planning Council and Equiticity found that residents of the South and West sides encounter bigger transit obstacles than people who live in other parts of the city.

Transit will be key when it comes to one of the biggest future job generators in the city: a casino. The city is reviewing five bids, all for sites close to downtown. In the South Loop, casino mogul Neil Bluhm is teaming up with Related Midwest on a proposed $2 billion project in the 78, a massive riverside mixeduse project. About 3,000 people would work at the casino, with at least another 1,000 indirect jobs connected to it, says Related Midwest President Curt Bailey.

Big real estate developments like the 78 will employ thousands of construction workers. But minorities are not well-represented in the construction trades. It’s a field that pays well and faces few threats from foreign competition or technological advances, even though it rises and falls with the real estate market. New initiatives—like the recently enacted $1 trillion federal infrastructure bill, which includes funding for apprenticeships, and local training programs like Hire360— could change that, opening doors in the industry for people of color on the South and West sides.

City officials also have high hopes for Invest South/West, the centerpiece of the mayor’s economic development strategy. Starr Coutee at Discover Financial Services’ Chatham call center. video production, another industry singled out by the mayor’s task force, is booming as firms like Netflix, Amazon and HBO crank out one show after another to satisfy a binge-watching public.

Dudley’s firm, ID8 Ventures, is teaming up with Chicago financier Jim Reynolds on the project and aims to break ground in the spring. Construction should take a little less than a year.

The producer envisions hundreds of people working on the campus, near where Stony Island Avenue connects with the Chicago Skyway. And he aims to work closely with the Chicago Public Schools to give high school students the skills they need to jump straight into the business.

“We’re not just talking about jobs, we’re talking about people being able to have a career in the film and television industry,” Dudley says.

You can bring jobs to the peo-

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MAPPING CHICAGO’S JOB GAINS AND LOSSES

60645

In 2020, Chicago had 4.3% fewer jobs than in 2001. But not all areas of the city had equal losses.

Some ZIP codes saw huge increases in jobs, as much as 40%, while others saw equally large job losses.

60607

60633

ALEX GARCIA

EMPLOYMENT

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26 DECEMBER 20, 2021 • CRAIN’S CHICAGO BUSINESS

Sterling Bay reveals four-year plan for Lincoln Yards

S

terling Bay over the next four years aims to build a mixeduse office complex and residential buildings totaling more than 800,000 square feet plus a riverfront park at Lincoln Yards, part of the next phase of the North Side megadevelopment.

The Chicago developer showcased its plans at an open house on Dec. 14, collecting community feedback on its vision for the 55-acre swath along the North Branch of the Chicago River, according to the city’s Planning Department. See more renderings below.

A presentation posted on the city’s website lifted the veil on the proposal, which will cover much of the southern portion of the campus on vacant land between Lincoln Park and Bucktown. Sterling Bay recently broke ground on its first building at Lincoln Yards, an eight-story life sciences lab at 1229 W. Concord Place. That building, dubbed Ally, and improvements to Concord Place itself will be completed in 2022 and 2023, according to the presentation.

FUTURE VISION

The next stage of development will be branded the Steelyard and feature a “mixed-use lifestyle district” with multiple buildings along an L-shaped promenade north of Concord Place between the river and Throop Street.

It’s unclear how Sterling Bay would finance any of the new buildings in the upcoming stage or whether any of them would require tenants to sign on before work begins. A spokesman

for the developer wasn’t immediately available for comment.

But projects slated for completion in 2024 include 460,000 square feet of office and retail buildings at 1685 N. Throop St. that includes “entertainment venues” and other “amenity space,” according to plans on the city’s website. Renderings show a glassy midrise office building with ground-floor retail along the south side of the promenade.

Also earmarked for 2024 is a two-building residential and retail complex along the northern edge of the promenade totaling 355,000 square feet. Those structures will overlook a park to the north that is also slated for 2024 completion.

Projects set to debut in 2025 include a larger portion of that park featuring artificial turf soccer fields and other athletic facilities, as well as a riverwalk with a canoe and kayak dock. The developer also aims to complete an extension of the 606 by then, connecting the campus to the elevated trail that stretches more than 2 ½ miles west between the Kennedy Expressway and the northern edge of Humboldt Park.

Last week’s open house satisfied Sterling Bay’s obligation to gather community feedback on stages of development for the megaproject, according to the Planning Department. The developer is also required to present its plans with the Chicago Plan Commission, though it does not need the commission’s approval to begin work since the master plan for the development was already approved in 2019.

GENSLER

Developer Sterling Bay told the public about its plans for the North Side megaproject, including more than 800,000 square feet of buildings and a park BY DANNY ECKER

A rendering of an office building planned at 1685 N. Throop St.

A rendering of a riverwalk running along the south portion of Lincoln Yards.

A rendering of connected residential buildings at the Steelyard.

P026_CCB_20211220.indd 26

A rendering of an entertainment venue at the Steelyard.

12/17/21 11:59 AM

CRAIN’S CHICAGO BUSINESS • DECEMBER 20, 2021 27

WORDS NOT ACTIONS: Medical schools slow to implement inclusion policies. PAGE 29 ACCENT ON EXCELLENCE: Multilingualism shouldn’t be a threat to equitable health care. PAGE 30

CRAIN’S BUSINESS HEALTHCHICAGO CARE LEADERSHIP

CLOSING THE GAP: Innovation, investment and inclusive projects will bring true health equity. PAGE 31

WHO HEADS CHICAGO’S

JOHN R. BOEHM

HOSPITALS Dr. Airica Steed is the chief operating officer at the 102-year-old Sinai Chicago Health System, one of the 10 largest systems in the Chicago area. She is the first Black person to hold that role.

What leadership looks like at the area’s top health care systems and why it matters

B

BY KATHERINE DAVIS

EING A BLACK WOMAN IN HEALTH CARE, Dr. Airica Steed knows firsthand the challenges, and sometimes downright racism and discrimination, people of color face in the industry.

The Chicago native started out in a variety of support services roles at local hospitals. She is now the chief operating officer at Sinai Chicago Health System, one of the 10 largest systems in the Chicago area, and the first Black person to hold that role in the system’s 102-year history.

“It’s a major feat,” says Steed, 43. “It’s very difficult to shatter that glass ceiling and get that door open for you. Not one role that I’ve had as I’ve ascended to this level has not been without some level of discrimination—some level of just feeling less than.”

But since joining Sinai Chicago in 2019, Steed says her optimism on diversity in health care has evolved as she’s watched the staff and leadership at the hospital system become more diverse.

“We’ve been intentional about diversity and inclusion,” Steed says.

For the last several years, and certainly since the onset of the COVID-19 pandemic and the murder of George Floyd, more health care systems have pledged to prioritize diversity, equity and inclusion. Nearly every hospital system has a DEI policy to point to, but still, many leadership teams remain overwhelmingly white, a reality that can stifle DEI at all levels of an organization.

Among the executives on Sinai Chicago’s senior leadership team, 38% identify as people of color. CEO Karen Teitelbaum, who is white, is stepping down at the end of this year, and the health system is executing a national search for

her replacement. Sinai Chicago spokesperson Dan Regan says the hospital system is also looking at candidates within the organization and keeping diversity an important part of the search. “(Diversity) is an important consideration and it’s something that the search firm, Spencer Stuart, is working on closely with the committee from the board of directors,” Regan says.

If Sinai Chicago indeed names a person of color as its next leader, three of the 10 largest hospital systems by revenue in the Chicago area would have non-white CEOs. Right now, there’s just two: Israel Rocha Jr., who leads Cook County Health System, and K. Ranga Rama Krishnan, who leads Rush University System for Health.

Nationally, only 16% of C-suite positions at hospitals in the U.S. were held by an ethnic or

“NOT ONE ROLE THAT I’VE HAD AS I’VE ASCENDED TO THIS LEVEL HAS NOT BEEN WITHOUT SOME LEVEL OF DISCRIMINATION.” Dr. Airica Steed, chief operating officer, Sinai Chicago Health System

See LEADERSHIP on Page 28

SPONSORS

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12/17/21 4:25 PM

28 DECEMBER 20, 2021 • CRAIN’S CHICAGO BUSINESS

CRAIN’S CHICAGO BUSINESS

LEADERSHIP racial minority, according to an American Hospital Association survey published in December 2020 that included responses from approximately 600 U.S. hospitals.

Local data on C-suite positions is limited.

While the number of racial and ethnic minorities in executive positions is small on a national scale, 96% of the AHA survey respondents reported that they had moderate to high priority commitments to foster more diversity and inclusion strategies at their organizations.

About 40% of respondents say they either implemented new policies or achieved an increase in diversity among their C-suite positions since responding to previous surveys, indicating there’s been some improvement.

While the health care sector still has a long way to go in diversifying, more systems are directing their attention to addressing health disparities among patients. In the survey, 96% also say they have a moderate to high priority commitment for improving health equity and reducing disparities across racial groups, as well as sexual orientation, gender identity and income levels.

WHY DIVERSITY MATTERS TO PATIENTS

A National Bureau of Economic Research study conducted in 2018 by researchers at Stanford University and University of California, Berkeley, set out to identify whether 1,300 Black male patients saw better outcomes when they were treated

by Black doctors.

The study, which randomized which patients were seen by Black doctors or non-Black doctors, showed that Black male patients seen by other Black doctors were more likely to engage with physicians and agree to preventive services, like cardiovascular screenings and immunizations.

Overall, the study’s findings showed that Black patients being treated by Black doctors could reduce the Black-white male gap in cardiovascular mortality by 19%.

But oftentimes, many Black and other nonwhite patients are seeing white doctors. Figures from the Association of American Medical Colleges shows that in 2018, the most recent numbers available, 56% of U.S. physicians were white, 17% were Asian, 6% Hispanic and 5% Black.

REFLECTING THE COMMUNITY

Sinai Chicago, like many other health systems, has appointed people to specifically focus on DEI. Dr. Gina Walton, Sinai’s vice president of diversity and inclusion for graduate medical education, joined the health system in July. She focuses on the recruitment and retention of minority physicians in residency programs and fellowships as Sinai Chicago aims to ensure patients see doctors who look like them.

The efforts have led to a team that’s becoming more diverse, Wal-

P027-P031_CCB_20211220.indd 28

JOHN R. BOEHM

Continued from Page 27

Israel Rocha Jr., CEO of Cook County Health System. ton says. Data from Sinai shows 76% of its 3,500-person workforce identifies as people of color and serves a patient population in which 96% identify as racial minorities. Sinai Chicago sees more than 360,000 inpatient, outpatient and emergency room visits a year across four hospitals and two community clinics in Chicago, all located on the South and West sides. In a city as racially segregated as Chicago, location of health care facilities largely determines which hospital a patient will frequent.

“We’ve been looking at different ways to evaluate our residency candidates so that we have a population that more closely reflects the population of the community that we serve at Sinai,” Walton says.

To do so, Walton says Sinai Chicago changed messaging and imagery on the system’s website to showcase more Black and Latino physicians.

The system has also expanded the criteria it uses to select residents.

Rather than just looking at medical school rankings and test scores, Sinai Chicago seeks candidates who understand the communities Sinai serves and are dedicated to addressing health disparities.

“A candidate who maybe worked in some way all throughout their medical school career or is from a community similar to our hospital service area or is culturally similar to our population and speaks Spanish—that is a really good candidate for us at Sinai,” Walton says.

Steed, who has now been working at the executive level at Sinai Chicago for nearly three years, says she was interested in working at the health system because of her ability to identify with the patient population.

“I was born on the West Side of Chicago and raised on the South

At Advocate Aurora Health System, the Chicago area’s largest hospital system by 2020 revenue, CEO Jim Skogsbergh says the hospital system’s biggest obstacle is recruiting and retaining top Black and Latino talent. Advocate Aurora Chief DEI Officer Ericajoy Daniels gets called weekly by recruiters interested in poaching her, Skogsbergh says.

“The biggest barrier we encounter today is the fact that this is a very sought-after talent pool,” Skogsbergh says.

Daniels is also a co-founder of the Black Directors Health Equity Agenda, a Milwaukee-based organization that aims to help Black health care leaders foster health equity at their respective organizations.

To help keep diverse employees at Advocate Aurora, Skogsbergh says the system continuously works to foster an inclusive environment, and regularly provides Black and Brown workers with opportunities for advancement.

While Advocate Aurora says it has had DEI policies in place for some time, Skogsbergh says the organization has “doubled down” on those efforts since the COVID-19 pandemic began and exposed many of the health disparities Black and Latino people experience in the U.S. The number of people of color on Advocate Aurora’s leadership team has increased 12.2% since January 2020. Today, 22% of the systems’ leadership comprises of people of color.

“It’s improving every single year,” Skogsbergh says. “We’re moving in the right direction.”

The leadership team and portions of the staff have undergone unconscious bias training, and the hospital system has adopted an informal policy of interviewing at least one, if not more, people of color for open roles, Skogsbergh says. The system also began offering management incentive payments for performance connected to meeting DEI goals. Goals that qualify for payments include in-

Side, so the communities that we serve at Sinai Chicago is like a homecoming for me,” Steed says.

“We have a particular lens and niche on caring for the most vulnerable, underserved communities throughout Chicago.”

A similar dedication to public service is what Israel Rocha Jr., the CEO of Cook County Health System, says brought him to the public health system. Besides improving and expanding care to Chicagoans, Rocha, who identifies as Hispanic, says he has been focused on using his influence to ensure the health system’s leadership remains diverse.

According to data provided by Cook County Health, nearly 60% of the leadership team identifies as people of color, with 78% of the entire “WE ARE CHALLENGING ORGANIZATIONS staff being a racial minority as well, the TO ASK THE QUESTION: ‘ARE WE RACIALLY highest levels of the EQUITABLE?’ ” 10 largest hospital systems in the area. Adam Kohlrus, Illinois Health & Hospital Association Nearly 70% of Cook County Health patients identify as creasing diversity among the staff people of color. and expanding the number of di“We wholly believe that the only verse-owned businesses Advocate way we can ensure that no one is left Aurora does business with. behind is to make sure that all the patients we serve—that their voice is ‘THINKING AND TALKING DIFFERENTLY’ (represented) in the boardroom, at The Illinois Health & Hospital the highest level, and at the C-suite,” Association is collecting data from Rocha says. “The value of having its members about how they’re adyour patients represented in your dressing diversity and inclusion at boardroom, decision-making room their respective hospital systems. and C-suite is without question. You Since June, more than 120 hospitals absolutely need it.” in the state have filled out the progress report.

The survey asks hospital systems ‘A VERY SOUGHT-AFTER TALENT POOL’ Some health systems struggle to assess themselves in four areas: to find diverse candidates for their their people, patients, community, leadership teams because of a com- and policies and practices.

“We are challenging organizapetitive market for such talent in the post-George Floyd era, when DEI tions to look at their patient populahas become a larger focus for many tions and demographics . . . and ask the question: ‘Are we racially equicompanies and organizations.

table? Do we represent the patients that we serve?’ ” says Adam Kohlrus, the assistant vice president of quality, safety and health policy at the IHA. “We don’t want this just to be a dashboard that’s going to score folks, but we really want it to be a tool to move them to action.”

Based on survey results, the IHA will help hospital systems determine areas where they could improve, such as adding diversity to leadership teams and staffs overall.

Early findings show many hospitals are piloting DEI trainings for staff and quality improvement practices for Black and Latino patients, Kohlrus says.

“We don’t have a lot of folks where these issues are not on their radar at all,” he adds. “My hope is that in a few years’ time, using this report the proper way, we’ll see folks evolve.”

The IHA isn’t the only local organization aiming to diversify health care at the leadership level. Insurance giant Blue Cross & Blue Shield of Illinois launched the Health Equity Hospital Quality Incentive Pilot Program earlier this year to support hospitals treating Black and Brown patients, who in some areas are most at risk for contracting COVID-19. An element of the program is focusing on health equity and reducing racial and ethnic disparities in care overall, not just during the COVID crisis.

By participating in the program, hospitals pledge to demonstrate a commitment to pursuing health equity over the next three years.

BCBSIL is working with hospitals to supplement and replace existing DEI bonus programs, which will collectively provide about $100 million in funding. Hospitals in the program include Memorial Health Systems in central Illinois and UI Health, the academic and clinical health enterprise of the University of Illinois Chicago.

Like many other institutional and systemic issues in the workplace, problems often stem from what’s occurring at the top. Many Black and Latino patients have been let down by the health care system, either by not having access to a nearby health care facility, adequate insurance or payment methods.

Those patients have also long had their unique conditions and lifestyles ignored by physicians who haven’t been trained to meet their needs. Long-term progress depends on keeping hospital systems, and particularly their leadership teams, accountable to different racial groups, a cultural transition experts say they’re seeing.

“You cannot improve quality, access to health care or improve coverage for health care without addressing health equity, health disparities and social determinants of health.

Five years ago, nobody was talking that way. Now, we are,” says Danny Chun, the IHA’s vice president of corporate communications and marketing, who retired from his role since being interviewed for this story. “Whether you want to attribute it to the events of last summer—the tragic death of George Floyd or the Black Lives Matter movement— people are now thinking and talking differently.”

12/17/21 1:45 PM

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Not exactly putting words into action Although medical schools largely support social justice, fewer than half have programs to recruit Black students

BY AMY KRAFT There’s a clear focus on stepping up diversity and inclusion in medical schools around the country. Log on to any medical school website and you will likely find a page dedicated to diversity and inclusion, or a solidarity statement in support of the Black Lives Matter movement. But actions speak louder than words, and progress on increasing the number of traditionally underrepresented students in medicine has been slow.

A 2020 medical school admissions officers survey administered by educational services corporation Kaplan, found that although the majority of medical schools express solidarity with the Black Lives Matter movement, only 48% have a specific program to recruit Black students.

“Support is there, but action isn’t necessarily there,” says Petros Minasi, the senior director of prehealth programs at Kaplan.

Action, according to Minasi, should include everything from pathway programs to encourage and prepare Black and Brown students for an education in medicine, to financial assistance to cover the steep cost of attending medical schools, and role models to mentor students along the way. These ideas are supported by a plethora of research on equity in medical schools.

In a city like Chicago, home to six medical schools, programs to recruit and graduate traditionally underrepresented students in medicine address only parts of the problem.

The University of Chicago Pritzker School of Medicine, ranked 11th on the U.S. News & World Report list of most diverse medical schools, has a mission that focuses on social justice and health equity, and serves the predominantly Black South Side of Chicago.

“Health equity, diversity and inclusion is not just an office on the side. It is integral to everything that we do because of the patients

we serve and the need to create a workforce that reflects the patients we serve,” says Dr. Vineet Arora, dean for medical education at the Pritzker School of Medicine.

The University of Chicago supports a number of National Institutes of Health-funded pathway programs, and the Pritzker School of Medicine sponsors two at the college level to help attract and train a diverse student body.

The University of Illinois College of Medicine at Chicago is home to the Hispanic Center of Excellence, or HCOE, formed in 1991 to address the severe shortage of Latinos in medicine. HCOE offers a number of programs as early as the pre-college level that focus on science workshops, Medical College Admission Test prep, seminars, and community service activities to help prepare students for the rigors of medical school and a biomedical career.

Efforts of this center, which year to year rely on a special appropriation through the Illinois Legislative Latino Caucus, have been worth it: According to a survey issued by the Association of American Medical Colleges, it is the only medical school in the continental United States in the top five medical schools with the highest number of Hispanic students.

Raul Vasquez, interim director of HCOE, says, “Our success is the result of the personal touch.” The center, Vasquez says, works with individuals to ensure that they are supported every step of the way.

“We are constantly looking for the leaks in the faucet and asking ourselves why people are falling off.”

Rush University Medical Center, Rosalind Franklin University, Northwestern University Feinberg School of Medicine and LoyolaStritch did not respond to multiple requests for comment. However, they all boast pathway programs on their websites.

But pathway programs are only one factor that impacts whether Black and Brown students will matriculate to and graduate from

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ients hlrus, qualt the to be score be a

CRAIN’S CHICAGO BUSINESS • DECEMBER 20, 2021 29

medical schools. The steep cost of medical school is another barrier to entry.

“Diversity also relates to your ability to afford medical school and the economic background that you come from,” Arora says.

The cost of attending medical school in Chicago ranges from $34,262 for in-state residents at UIC College of Medicine, a public school, to $66,096 annually for tuition, fees and health insurance at Northwestern University, a private institution. These numbers reflect the average for tuition and fees at medical schools across the nation, where rates continue to rise out of proportion to inflation and make an education in medicine a costly endeavor.

National data from more than 29,000 medical students found that 25% of all medical students come from the top 5% of household incomes, and 37% of these high-income students will pay for medical school using family or personal funds.

“Medicine is increasingly becoming a profession that is elite and closed to the lower class,” says Arora.

All of the Chicago-area medical schools interviewed by Crain’s mentioned grant programs and other financial assistance to aid socioeconomically disadvantaged

students. But the specter of debt might be holding Black and Brown students back even before they begin the application process, which alone costs thousands of dollars.

“There is a lack of understanding about how medical school can be funded,” says Norma Poll-Hunter, senior director of workforce diversity for the Association of American Medical Colleges.

Adding to the perceived financial burden is the lack of role models that minority candidates have to help them navigate the medical school process.

“Many people do not know about all of the opportunities that exist because there is no guidance,” says Poll-Hunter. “There are no role models who look like them.”

According to the AAMC’s 2019 U.S. Medical School Faculty report, 63.9% of medical school faculty are white. This trend is reflected in Chicago-area medical schools.

“Our student body is much more diverse than our faculty,” Arora says. “One of the things we’re exploring is how to remove barriers to retain our residents as faculty.”

Vasquez also acknowledged a lack of diversity at UIC, where 7.3% of the faculty are Latino, and recognized how this could lead to other problems. “I’ve seen a lot of poor mentorship, even within our university.”

But diversifying people in an institution is not enough, according to Arora. “Many schools are trying to diversify their student body and this is just the tip of the iceberg,” she says. “If you’re bringing diverse students into an environment that is not inclusive, you’re going to fail.”

The solution to creating a diverse and inclusive medical school, according to Poll-Hunter, starts as early as childhood. For example, many low-income Black and Brown families don’t have access to the best public schools. And other factors come into play, such as the higher number of young Black kids who get suspended from school compared to their white peers. This type of systemic racism, according to Poll-Hunter and others in the field, results in a dearth of Black male medical students.

In fact, research shows that Black males made up only 2.9% of medical students in the 2019-20 school year, a decrease from when the number was only slightly higher at 3.1% in 1978.

“It’s all about increasing diversity along the medical education continuum, from grade school all the way to faculty and leadership,” Poll-Hunter says. “The onus is on every actor, and it’s a shared responsibility to create a system that decreases the barriers along the way.”

ENROLLMENT BY CHICAGO-AREA M.D.-GRANTING MEDICAL SCHOOLS American Indian/Alaska native 6.0%

0.9%

0.1%

Asian

0.9% 3.7%

38.8%

ROSALIND FRANKLIN UNIVERSITY

Black/African American

38.2%

0.5%

4.0%

0.7% 3.2%

35.6%

47.3% 10.5%

19.1%

Native Hawaiian/other Pacific islander

1.8% 29.3%

UNIVERSITY OF ILLINOIS COLLEGE OF MEDICINE AT CHICAGO

UNIVERSITY OF CHICAGO PRITZKER SCHOOL OF MEDICINE

5.3%

49.4%

Hispanic/Latino/of Spanish origin

0.1% 5.3%

0.4% 30.2%

15.4%

2.7%

LOYOLA-STRITCH

8.3%

12.3% 52.2%

0.2%

White 1.3%

Other 1.7%

0.2% 4.5%

41.5

NORTHWESTERN UNIVERSITY FEINBERG SCHOOL OF MEDICINE

22.6%

RUSH UNIVERSITY MEDICAL CENTER

8.9%

8.0%

45.1% 10.4%

Unknown race/ethnicity

0.3% 11.5%

60.2%

9.9%

Note: The sum of the pie charts may not equal 100% because a student could designate multiple race/ethnicity categories.

Source: Association of American Medical Colleges

P027-P031_CCB_20211220.indd 29

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30 DECEMBER 20, 2021 • CRAIN’S CHICAGO BUSINESS

CRAIN’S CHICAGO BUSINESS

SO

Why we need more health care leaders with an ‘accent’

H

S

Pilar Ortega, M.D., is a clinical assistant professor at the University of Illinois College of Medicine in Chicago, president of the National Association of Medical Spanish and founder and immediate past president of the Medical Organization for Latino Advancement.

peaking with an accent that is unfamiliar to others is a lot like being pregnant.

When people hear an unfamiliar accent, like when they see you are pregnant, they feel at liberty to poke and prod (physically or proverbially).

For example, they might ask you to pronounce a certain word “to see how it sounds.” People tend to ask personal questions (“Was it hard to conceive?” or “Where are you from?”) or provide unsolicited opinions (“You must be having twins!” or “That’s such a cool accent!”) without thinking about how their actions or words may affect you.

Not to mention the fact that a person who might “appear to be pregnant” to an observer may not be. Just like someone to whom a listener attributes a “foreign” accent might have been born and raised on the other side of town.

Accent, one of multiple elements of spoken language, is defined as “a distinctive manner of expression.” The perception of some accents as native, standard or educated and others as foreign, immigrant or illiterate results in accent-based discrimination. When these perceptions pervade our health care leadership ranks, they result in systematic discrimination, and individuals with unfamiliar accents are less likely to be hired or promoted.

Although Title VII of the 1964 Civil Rights Act prohibits employer discrimination based on national origin, which includes language, employers are allowed to base employment decisions on a candidate’s language or accent if it “interferes materially with job performance,” a factor determined by the employer.

Health professionals who are immigrants often report accent bias as a significant barrier to career advancement.

A recent study found that Black African-born nurses in the U.S. believed that their accent when speaking English was perceived as a marker for “low level of intelligence” and “not suitable to lead.”

As a doctor, my accent has been the subject of speculation, curiosity and sometimes discrimination both by patients and colleagues: I have been asked where my accent is from. I have been asked where I learned to speak such good English. I have been told how surprisingly imperceptible my accent is when I am speaking English after someone finds out I am Hispanic. Among fellow Spanish speakers, some regional accents enjoy more social prestige than others despite all being equally valid (and, in my opinion, beautiful).

As a clinician scientist who studies the impact of language on health care, I am always eager to delve into a

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COMMUNITY VOICES

conversation about language, including my own accent. However, nobody should feel obligated to share overly personal information, particularly in the context of workplace micro- or macroaggressions. I have found that responding to comments about my accent with a question, such as “Why do you ask?” or “Why do you say that?” can be a good place to start a productive dialogue (or sometimes to end an unwanted barrage of questions).

We must be more than just curious about unfamiliar accents. We must embrace different accents as part of a larger celebration of multilingualism and advocate for diverse voices throughout the ranks of health professions.

Multilingualism is not a barrier or a threat but rather an opportunity to provide equitable health care to an increasingly diverse population. As of 2019, almost 66 million people in the U.S. reported speaking a non-English language at home. Many U.S. doctors and nurses have skills in non-English languages, but these skills are not commonly acknowledged or incentivized. In fact, many health professionals I know list non-English languages at the tail end

of their curriculum vitae under “hobbies” rather than as a marketable professional skill set. Some may intentionally hide or de-emphasize non-English language skills for fear of discrimination.

Bilingual staff, including students, may be overburdened by frequent requests to serve as untrained interpreters even if they are unprepared for such a role and fear making a medical error.

Language in health care should not be a source of shame, anxiety or minority taxation. We can change the narrative by associating multilingualism with the excellence that comes from diversity. But we can only do that if candidate selection processes are explicitly attentive to sources of bias, including accent bias, and if we teach and reward health professional multilingualism. We must support selected candidates through career advancement opportunities such that health care leaders not only look but also sound like their communities. Actions that augment and celebrate language justice and diversity at every level of health care—among patients, students, staff and leadership—will send a clear message: “We all belong here.”

PASSAGES

Wounds of the past and present still need to be healed

W

Cheryl Mensah is a first-year medical student at Northwestern Feinberg School of Medicine from Chantilly, Va.

hen I first started medical school, I was amazed by the number of my peers who had one or both parents who were doctors.

According to the American Medical Association Journal of Ethics, 1 in 5 medical students has a parent who is a physician. A colossal amount of privilege is lodged in that statistic, which further punctuates how generational wealth and social capital often play an uncanny role in gatekeeping medicine.

In my class of 160, I am one of 12 Black medical students. While I am fortunate to attend a school that places such high value on student feedback, it is evident that the institution of medicine was not made for me. Every diagram teaches me disease processes in the context of white skin, and most modern medical models (body mass index, atherosclerotic cardiovascular disease risk models, most genetic tests, etc.) are based on data collected from predominantly white/European populations, failing to account for social influencers of health, which frequently lead to disparities in outcomes for Black patients.

P027-P031_CCB_20211220.indd 30

Furthermore, there are many unspoken rules in medicine that can be hard to navigate when you are different. I live in constant fear of how I will be viewed by some of my preceptors. Will they find me too loud? Too bold? Will my hair be viewed as a political statement, or the pins on my white coat I wear for solidarity with my patients from marginalized identities? Will my hair even fit in the scrub caps? I have heard much about the bias involved in Alpha Omega Alpha selection (a highly valued medical honor society) and often wonder how much harder I am going to have to work to prove myself here.

In these moments, I often find the most support in the Black front desk staff and Starbucks employees I talk to on my way to and in between classes.

They tell me every day how proud they are of me. That is why, despite everything I knew about the lack of diversity in the field of medicine, I am here.

My friends and I sit in the front row to combat our imposter syndrome and reinforce to ourselves and others that we belong. I feel further validated when

likely to work in underserved commuI speak to patients, and my loud laugh, personability and vulnerability become nities.

Progress to diversify medical schools strengths. I am training to become a physician-activist because I feel it is my has been very slow.

In 2021, the national matriculating duty to position myself in this system class was 11.3% Black/African Amerito advocate for populations that often slip through the cracks and hold my col- can, up from 9.5% in 2020. I am, howleagues accountable for doing the same. ever, curious to see what proportion of these matriculating students are Black In 2018, only 5.4% of physicians in American descendants of the U.S. the United States were Black. Beyond enslavement system versus first- and the socioeconomic barriers to medsecond-generation immigrants from icine, structural racism has played a Africa. Yes, our experiences overlap, major role in this. In 1910, the Flexner report transformed medical education by defining the HISTORICAL DISPARITIES CONTINUE TO ethos of what it meant to be a “modern physician,” conseBE LEFT UNADDRESSED. quently leading to the closure but there are historical disparities of medical schools at 13 historically Black colleges and universities. If they that continue to be left unaddressed (a story for another day). I would like had remained open, these schools to see the creation and expansion of would have trained over 35,000 more Black physicians. Black doctors matter. pipeline programs catered specifically for marginalized students. The focus A plethora of data shows patient trust cannot solely be on numbers and increases due to cultural awareness diversity. Our efforts must expand to and increased connection, new perinclusion and empowerment within spectives on research and diagnostic the profession. tools. Black doctors are also more

12/17/21 1:45 PM

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CRAIN’S CHICAGO BUSINESS • DECEMBER 20, 2021 31

SOLUTIONS

How do we close Chicago’s health equity gap?

GETTY IMAGES

C Dr. Cheryl Rucker-Whitaker is CEO of Complete Care Management Partners.

hicago’s 900,000 South Side residents have experienced staggering health disparities for decades compared with North Siders, with a 10 times higher risk of infant mortality and four times the rate of death from diabetes. But to handle its far greater health burden, the South Side has inadequate and deteriorating health care facilities, medical services and infrastructure— including a dangerous shortage of primary care physicians and obstetricians.

More than 50% of South Siders are forced to seek health care outside their communities. Continuing to feed the same system that produced these disparities will net us no measurable progress. Equally troubling is that Chicago has one of the nation’s largest income inequality gaps, a poverty rate of over 60% in some neighborhoods and a huge gun violence issue. Chicago also has the country’s widest racial gap in life expectancy given all these issues—30.1 years between white Streeterville and Black Englewood.

While I am a public health physician, it doesn’t take a doctor to see that the disparity in health outcomes and quality of life is senseless, saddening and unacceptable. And the lack of access to

ions age of dents, lear

innovation dollars creates a maddening gap.

The evidence is undeniable: Where you live affects your health. This has been proven by abundant research like the Centers for Disease Control & Prevention’s 500 Cities Project, which uses health data from over 100 million people.

Failure to invest in our neighborhoods and address the social determinants of health is a kind of violence—not gun violence, but just as deadly. To be transformative, we need a significant infusion of strategic capital to create unique ecosystems, especially health care innovation hubs that are economically and intellectually inclusive.

Health innovation pays dividends, both in dollars and cents and community well-being: Every $1 of research in life sciences solutions increases business activity by $2.43. Every $1 spent in the industry generates an additional $1.27 in output throughout the rest of the economy. Each life sciences job creates an added 3.57 supporting positions. Best of all, new health care ventures bring consistent, well-paying, accessible work; 40% of such ventures

employ workers with high school or GED-level qualifications.

Chicago already has a strong foundation in life sciences and health innovation. Its growing life sciences resources earned it a top 10 ranking across the nation for biopharma activity. It also has a vibrant mix of health, technology and science enterprises, and major hospitals and health care systems.

But we need more development in underserved areas where vanguard health care businesses can have the most economic impact. Most development of this nature has taken place, or is slated to be built, in thriving, socioeconomically upscale parts of the North Side or the West or South Loop.

That’s why Bronzeville Lakefront on the site of the former Michael Reese Hospital & Medical Center is so important. This 100-acre planned development on the South Side is designed to create a sustainable and healthy community, and its anchor—the Chicago ARC Innovation Center—will be a game-changer.

As a joint venture between local partners and Israel-based Sheba Medical Center, the ARC has the potential to spur monumental progress on the

health equity front. The center will foster collaboration and give local and global companies a U.S. foothold. These companies will be able to develop health care solutions to alleviate disparities, incubate health innovation startups, partner on health care-focused data science initiatives and more.

The South Side will have a healthy ecosystem that can generate billions in economic impact and create over 30,000 full-time jobs after the development is built. It also will attract new businesses and spur entrepreneurship from diverse sources and tap into the many STEM students who earn their degrees in Chicago but leave for jobs elsewhere.

Massive, thoughtfully conceived and economically inclusive projects like Bronzeville Lakefront can offer South Side residents secure housing, gainful work, robust transportation and premier health care. More significantly for future growth and demographic diversity, the community is designed to attract and sustain minority entrepreneurs to participate economically and intellectually not only in the initial “build” but permanently. That’s true health equity.

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To place your listing, contact Claudia Hippel at 312-659-0076 or email claudia.hippel@crain.com www.chicagobusiness.com/classifieds CAREER OPPORTUNITIES

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Getting to know the Thompson Center’s buyer RESCHKE from Page 4 saw its value plummet as the economy tanked in the early 1990s. But Reschke found ways to refinance properties through public securities markets and renegotiate with lenders, a practice he has seemingly mastered in the three decades since.

Some of his most impressive moves to escape financial distress on properties came in the wake of the Great Financial Crisis. After Prime Group bought the 35-story building at 11 S. LaSalle St., it struggled to move forward with the luxury hotel conversion and was set back further when the market crashed in 2009.

The firm was hit with a $50 million foreclosure complaint in 2012 alleging it defaulted on a loan tied to the building, but eventually resolved the dispute when he landed a $68 million construction loan to convert it into an upscale Residence Inn. As an encore performance, Reschke bucked the rest of the Chicago hotel landscape this year when he landed $141 million of new debt on the hotel to pay off the construction loan and put the property on solid financial footing, while many hotel owners face the possibility of losing control of their properties.

The threat of foreclosure reared its head again this year on a small Reschke office property at 208 S. LaSalle St. above the JW Marriott hotel, where lender Midland National Life Insurance alleged Reschke defaulted on his loan by commingling funds between the office property and a boutique hotel is he developing on the floors above it. Reschke vehemently denied the allegation and filed a response, alleging that Midland broke the loan terms by hoarding revenue from the property to make it appear that Reschke’s venture has defaulted on its loan.

Reschke told Crain’s last year he has weathered what he dubs five “black swan” events, ranging from the savings and loan crisis to the Great Recession of 2009, and that the COVID-19 pandemic was “worse than those five all put together because of the unknown

factor.” But so far the public health crisis hasn’t halted his ongoing projects, and the Thompson Center deal is a signal of his seemingly unflappable confidence in the city’s future.

3. He’s recently been focused on hotels, which could come into play at the Thompson Center.

Reschke aims to open the fivefloor hotel, dubbed the LaSalle Hotel, above the JW Marriott Chicago early next year, a project on which he has forged ahead despite severe pain for the hotel market downtown. The JW Marriott itself is one of a handful of major downtown hotels facing foreclosure as demand inches back up from devastating early-crisis lows.

Meanwhile, Reschke this year was hired by Spanish luxury hotel owner RIU Hotels & Resorts to develop a nearly $200 million, 388-room hotel at 150 E. Ontario St. in Streeterville. If that and

the Thompson Center deal move forward, Reschke could have his name on two of the highest-profile construction projects in the city over the next few years.

Reschke said last week he is considering converting the upper floors of the Thompson Center into a hotel, pointing to other complementary assets in the building, like a 500-seat auditorium and the potential to build a new ballroom and central conference center off of the building’s striking atrium.

Reschke told Crain’s in early 2021 that he projected the downtown hotel market to reach “near full recovery” by the middle of 2022.

“I think the people that are having problems today are maybe the hotels that are average performers or even weak performers,” he said in February after landing the new loan for the Residence Inn. “I think assets that really were stellar preCOVID are still desirable investment vehicles for institutions.”

12/17/21 12:36 PM

CRAIN’S CHICAGO BUSINESS • DECEMBER 20, 2021 33

Grocers turning to fulfillment centers as labor costs soar, customers shop online regular grocery stores. Store employees fill the orders, jostling with shoppers as they hustle through the aisles. The labor-intensive system makes online order fulfillment more costly than traditional store operations, a big problem in the low-margin grocery business.

Experts say automated microfulfillment centers could transform the cost-efficiency of online orders. But building such an operation takes a minimum investment of about $4 million and can cost as much as $100 million.

“The math right now doesn’t make sense for everybody,” said Rob Wilson, partner and managing director at LEK Consulting.

“You might over-invest and take a sledgehammer to a tack nail if you’ve got low penetration. But once you reach a certain threshold, it makes all the sense in the world.”

Jewel-Osco spent $7.6 million on its Westmont center, which can process 1,000 orders for pickup and delivery a day, 10 times more than the adjacent grocery store can handle. Getting to that level will depend in part on customers’ willingness to drive farther to pick up groceries or to spring for third-party delivery. The fulfillment center is built to serve customers within a 20-mile radius, almost five times the store’s 4.5-mile market area.

The 20,000-square-foot facility uses technology from Massachusetts-based Takeoff Technologies.

Containers of groceries are shuttled automatically through conveyer belts and elevators to an employee who sorts the goods. Robots scuttle along the floor, lights flashing green, moving completed orders to a staging area. Another employee takes the bags to delivery drivers or to waiting customers

who ordered for pickup.

There are labor savings, but the capacity increase was the main motivator for Jewel, says Aimee Constantine, senior director of e-commerce fulfillment optimization. Another benefit: Online orders don’t have to be filled from store shelves.

“We’re able to move most of that picking to the back room,” Constantine says.

Jewel parent Albertsons opened its first micro-fulfillment center in Northern California in 2019. The Westmont location is the company’s fourth and its first at a Jewel.

PANDEMIC SHIFT

Customers flocked to online grocery shopping over the course of the pandemic, and grocery retailers that didn’t already offer the service scrambled to catch up. In August 2019, 1.8% of U.S. grocery spending—or $2 billion—was online, according to analytics firm Brick Meets Click. This October, 12.1% of U.S. grocery spending originated online, amounting to $8.1 billion.

As more orders go online, that means more of a grocery store’s volume is being shopped by its employees instead of the customer. That cost pressure is motivating retailers to invest in automation, says David Bishop, partner at Brick Meets Click.

Grocery operators are saying to themselves, “’OK, we ran out there, we got online, we’re getting the sales, that’s great’” Bishop says. “’But now we’re losing money on those orders. Now we have to address that issue.’”

Reducing additional costs associated with online fulfillment is critical in the grocery business, where operating profit margins typically range from 4% to 8%, according to a case study from Foley Retail Consulting. Major grocers are working

JOHN R. BOEHM

GROCERIES from Page 3

Jewel-Osco employee Lavar Boykins assembles online grocery orders in the company’s new micro-fulfillment center at its store in Westmont. to eliminate the cost difference between filling online orders and serving customers in stores.

“We’ve seen the (micro-fulfillment centers) getting to a point where the cost to pick becomes about the same as the labor cost that we have for an order in store,” Albertsons CEO Vivek Sankaran told analysts during the company’s October earnings call. “When that converges, this thing opens up in a big way for us.”

Grocers also face competitive pressure to up their online game. E-commerce giant Amazon gained ground in grocery during the pandemic as many consum-

ers got over their reluctance to let somebody else pick out their avocados. Venture capitalists also noticed and are plowing money into grocery delivery services.

LOCAL STARTUPS

Turkish grocery delivery service Getir launched in Chicago in November, fueled by $1.1 billion in funding. Getir promises 10-minute delivery from “dark stores” operating as fulfillment centers.

Fresh Street, a Chicago-based grocer that caters entirely to online shopping, recently raised $4 million and is also planning to open next year. Its first warehouse will

be in Lincolnwood, and customers won’t be allowed to shop its aisles, either. It will be pickup only.

Not every grocery store operator buys into the microfulfillment center or dark store model. Foxtrot and Go Grocer fill delivery orders from their Chicago-area stores. Go Grocer co-founder Gregory Stellatos says the 16-store Chicago chain’s customers aren’t keen on getting produce from a building they’re not allowed to enter.

“There is a lot of apprehension for individuals to purchase fresh product from a place they are not familiar with,” he says.

Colder weather, delays with opening new stores slow cannabis sales in Illinois There’s no telling when the lawsuits will be resolved. The CEO of who tracks the industry at Whitney Planet 13, a Las Vegas-based cannabis retailer that’s in line for a Economics in Portland, Ore. An extended period of flat or de- license with a local partner, told clining sales would threaten the tax analysts recently he expects to revenue, jobs and other economic receive it by mid-2022.

Illinois unexpectedly plunged benefits that Illinois officials hoped into legal marijuana in 2019, with for when they legalized pot.

“It means you’re pushing out promises of creating jobs, generatthat job growth because you’re not ing tax revenue and righting social opening more stores, and you’re wrongs. But no one knew quite what to expect from an industry that’s been legal for “THE FOOT IS COMING OFF THE GAS less than a decade. Sales A LITTLE BIT IN SOME OF THESE have lurched along in fits starts, first as the exMARKETS. THEY’RE STILL GROWING, and isting medical-cannabis growers boosted proBUT IT’S NOT AT THE SAME RATE.” duction, then opened Jamie Schau, insights lead, Brightfield Group additional stores. Now seasonal factors, such as not going to see as much tax rev- Chicago’s tourism patterns, are in enue,” Whitney says. “Once stores the mix.

State regulators and cannabis get open, there will be an increase companies say they’re not worin jobs, tax revenue and sales.”

Illinois has 110 marijuana stores, ried about the 2% drop in stateup from just 55 when recreational wide sales between October and sales began in January 2020. An November to $120.7 million, the additional 185 store licenses are in lowest since June.

“Like any market, there will be limbo, pending legal challenges.

MARIJUANA from Page 1

P033_CCB_20211220.indd 33

fluctuations in consumer activity,” says a spokeswoman for Gov. J.B. Pritzker.

Jason Erkes, a spokesman for Cresco Labs, one of the largest marijuana companies in Illinois, notes that “November is typically a slower month with only four weekends and retail being closed on Thanksgiving—we see that all across the country.”

He adds, “With the number of operational stores in Illinois frozen right now, I think we’ll see consistency month to month but not a big bump until more doors get opened.”

Analysts say the industry is coming down from a high caused

by COVID, when widespread lockdowns kept people at home where they could use cannabis more freely. During lockdowns that forced some retailers to close, marijuana shops were allowed to stay open as “essential businesses” in Illinois and most other states where weed is legal.

“We saw cannabis markets globally boom in Canada and the U.S.,” says Jamie Schau, who heads

up research at Chicago-based Brightfield Group, which tracks the industry. “The foot is coming off the gas a little bit in some of these markets. They’re still growing, but it’s not at the same rate. People were staying inside and using it more early in the pandemic.”

SEASONAL TRENDS

In Colorado, the most mature weed market in the U.S., year-overyear growth in weed sales doubled to about 30% starting last May but has been negative since June, according to data compiled by the state.

With the gradual return of some workers to offices, Whitney says “demand is returning to a normal growth pattern.”

Normal growth in the cannabis industry is seasonal. Weather and tourism affect weed use. Smokable marijuana is still the most widely consumed product, so usage takes a hit when cold weather forces people indoors. That’s one reason Illinois sales peaked in July, jumping 11% in a month when Independence Day fell on a weekend and

Lollapalooza was in Grant Park.

“It’s a fairly consistent pattern: You tend to see highest revenue in July, August and September, then it tapers off,” says John Kagia, chief knowledge officer at New Frontier Data, an industry research firm in Washington, D.C. “It’s the end of tourism season and people are heading back indoors. The cannabis industry is cyclical. There are a lot of factors that drive it.”

Illinois could catch a tailwind next year, if the traditional seasonal trends coincide with opening of new stores, which are critical to the industry’s long-term growth.

“I would expect coming out of the colder months, we’ll see an uptick, and I’m fully expecting an uptick as more stores open and open in different regions of the state,” says Schau, who predicts the Illinois market will roughly double again to about $3 billion in annual sales by 2026. “A lot of the initial growth (in cannabis) comes in transferring people from the legacy illicit market and not new consumers. To get new consumers, you need more stores.”

12/17/21 3:29 PM

34 DECEMBER 20, 2021 • CRAIN’S CHICAGO BUSINESS

The retailer’s parent company has hired a broker to sell its sprawling campus, its nerve center since 1992

BY ALBY GALLUN The parent company of Sears plans to sell its headquarters in Hoffman Estates, the department store chain’s home for nearly three decades.

Sears’ parent company, Transformco, has told Hoffman Estates village officials that it plans to put its corporate campus and surrounding 120 acres up for sale early next year, confirmed Village Manager Eric Palm. The property could be a candidate for a major redevelopment, including housing, commercial space and possibly even data centers.

The decision may have seemed inevitable to many observers, considering Sears has been shrinking for years, reducing the need for a big office campus. Sears has occupied the property since moving there from its namesake tower in downtown Chicago in 1992, part of a broader corporate migration from the city to the suburbs at the time.

But the trend reversed several

years ago, and companies including Motorola, AT&T and McDonald’s have left the suburbs or shrunk their presence there, leaving behind big properties to be redeveloped. Amid the pandemic, many companies also have been shedding office space needs as more employees work remotely or on hybrid schedules. The departed could soon include Allstate, which recently agreed to sell its Northbrook headquarters for $232 million to an industrial developer.

The Daily Herald first reported Transformco’s plans to sell the property. Transformco is a holding company led by longtime Sears owner Eddie Lampert that acquired Sears’ assets out of bankruptcy a couple years ago. The retailer recently closed its last store in the state, just down the road at Woodfield Mall.

“As we provide all our valued associates with safe and productive work environments under a mix of in-office, remote and hybrid arrangements, we are exploring de-

velopment opportunities for the Hoffman Estates property that enhance its value for both associates based there and the broader Hoffman Estates community,” Transformco said in a statement.

The statement did not say whether Transformco would leave Hoffman Estates entirely or continue to occupy some of its campus, leasing back office space from a new owner.

OCCUPANCY

The sprawling 126-acre campus at 3333 Beverly Road includes seven interconnected low-rise office buildings totaling 2.4 million square feet. It’s unclear how much space Transformco currently occupies there. The company has listed 478,000 square feet as available for lease, according to real estate information provider CoStar Group.

Transformco has hired a team led by Jason Simon, principal at Colliers International, to market the Hoffman Estates property for sale, Palm said. He said he didn’t know what price it would fetch. Simon did not immediately return a phone call.

The Sears campus offers multiple possibilities for a developer, includ-

COSTAR GROUP

Sears’ Hoffman Estates HQ going up for sale

The complex includes seven interconnected low-rise office buildings totaling 2.4 million square feet. ing refashioning it with residential and data center space, Palm said.

A major redevelopment would require months, if not years, of planning and negotiations with the village before getting underway.

“At this point, we’re looking for a development partner that’s willing to have a discussion,” Palm said.

He sees a role for some office space as well, though demand for big chunks of office space space in the suburbs is low, with more companies allowing their employees to work from home. The suburban office vacancy rate hit a record high of 26.5% in the third quarter, according to Chicago-based real estate firm Jones Lang LaSalle.

“The village is mindful that there

probably isn’t a 2-million-squarefoot office user” to take over the property, Palm said.

An industrial development could be another option. Demand for warehouse space is soaring as retailers, e-commerce and logistics firms expand their supply chains.

But many communities have reservations about big industrial developments, concerned about increased truck traffic and emissions.

“We’re not going to close the door on anything, but at the same time, we’re not looking for the I-55 million-square-foot double-dock warehouse,” Palm said. “That intense of a use would not necessarily be compatible with what’s already there.”

2022

MINORITY EXECUTIVES IN HEALTH CARE

NOMINATE NOW! Deadline is Jan. 7

Crain’s 2022 Notable Minority Executives in Health Care will recognize accomplished minority executives within Chicago’s health care industry.

Nominate at ChicagoBusiness.com/NotableMinorityExecsHC Nomination deadline is Friday, Jan. 7. Section publishes Mar. 7, 2022.

To view Crain’s Notable Executives nomination programs, visit chicagobusiness.com/notablenoms.

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12/17/21 11:56 AM

CRAIN’S CHICAGO BUSINESS • DECEMBER 20, 2021 35

CASINOS from Page 3 from Rivers Philly have fluctuated since 2012, from a high in 2013 of $151 million down to $106 million the following year, but have averaged around $117 million annually. The city has netted $110 million in gambling taxes since the casino opened in 2010, according to Rivers. The Philadelphia casino, which employed just under 1,600 people pre-COVID, has benefited from, and contributed to, the transformation of Fishtown into a mecca for young professionals.

Rivers Des Plaines is Illinois’ highest-grossing casino, and the only one to see growth in adjusted gross receipts, which were up 7.3% between the 2013 and 2019 fiscal years, according to state records. Illinois has netted an average of $166 million in annual tax revenue from the casino in that span, topping out at $174 million in 2019. Employment at Rivers Des Plaines has also stayed constant at around 1,400 employees.

In Schenectady, Rivers built a casino on an abandoned 60acre former locomotive manufacturing site on the Mohawk River. Alongside the casino and hotel, the local economic development agency spearheaded a planned community development, Mohawk Harbor, with a

hotel, apartments, retail and a new marina. Though the casino initially saw high turnover, Rivers says employment has held steady there at roughly 1,100 workers each year since opening in 2017.

That’s 100 workers short of what it promised during the bidding process.

HARD ROCK

Hard Rock runs 14 casinos in the U.S., including locations that opened this year in Gary and Rockford. While its name appears on big-city hotels across the world, the company does not have any urban casino locations in a city as large as Chicago.

The company’s crown jewels are the two Hard Rock-branded Florida casinos near Hollywood and Tampa. Each has roughly 3,000 slots and 200 table games—a similar number to what it’s proposing in Chicago.

Pre-COVID, the Hollywood location employed roughly 3,200 people.

Hard Rock is owned by the Seminole Tribe and does not disclose per-casino revenues in Florida. The tribe’s six Florida casinos have historically paid a combined $350 million annually to the state. Their fortunes were set to improve even more after Gov. Ron DeSantis agreed to a gaming compact in which

the state would receive $2.5 billion over five years. In exchange, the tribe would have exclusive control over online and fantasy sports betting across Florida, expanded gaming offerings and new casino locations. A federal judge invalidated that compact in late November, however.

Hard Rock completed a $500 million rehab of the old Trump Taj Mahal in Atlantic City in 2018.

By the end of 2019, Hard Rock had a 12% share of the Atlantic City casino market, second only to the Borgata of the city’s nine casinos, according to the New Jersey Casino Control Commission’s annual report. It had the third-highest total gaming revenues that year—$350 million— behind Borgata and Golden Nugget, according to the same report.

On Dec. 14, the company also announced plans to acquire The Mirage Hotel and Casino in Las Vegas for more than $1 billion.

Hard Rock’s Gary casino led the state of Indiana with $32 million in slot and table revenues in October, according to the Post-Tribune. Its Rockford location opened in November, too recently to gauge its revenues.

BALLY’S

Providence, R.I.-based Bally’s has focused on acquisitions, not building new casinos. Along with

PHOTOS PROVIDED BY CASINOS

Chicago casino bidders have to show they can deliver expected benefits

Casino operators Rivers, Hard Rock and Bally’s are bidding to open a location in Chicago. several casinos in smaller markets around the country, Bally’s has acquired two fabled names in gambling: the Tropicana in Las Vegas in April of this year (with 1,000 gaming positions) and the former Caesars in Atlantic City in 2020.

These acquisitions are so recent, it’s hard to evaluate their track record. Bally’s pledged at least $100 million in renovations

to the Atlantic City property.

The casino locations it has controlled the longest are in Rhode Island, where Bally’s is based. It operates the Twin River Lincoln casino (since 2013) and Tiverton since 2018. Neither is comparable in size or urban location to what a Chicago casino would become, perhaps explaining why the company says Chicago would become its “flagship.”

Why the city’s tourism agency, Choose Chicago, can’t find a chief executive CHOOSE CHICAGO from Page 3 the way today’s tourism industry leaders view the complex challenge of marketing a city grappling with both real and perceived crime issues, as well as the precarious financial resources Choose Chicago has at its disposal. It also raises questions about how motivated top travel pros are to take a role intricately tangled with Chicago politics, which has questionable autonomy from the mayor’s office and which comes with little clarity about the city’s future leadership as the 2023 mayoral election approaches.

And at a time Chicago can ill afford it, a growing sense that the job of the city’s top tourism advocate is one no one might want could have ugly ramifications for the city’s hotels and restaurants, its convention business and the hundreds of millions of dollars in tax revenue they generate for the local economy.

“It’s concerning,” says John Curran, senior vice president and general manager of double-decker tour bus operator Big Bus Tours and a former Choose Chicago executive. Between a marketing budget that has historically been smaller than those of peer cities and the

political baggage that comes with the job, “I don’t think (the Choose board) has the correct package to offer to get the right person,” he says.

A Choose Chicago spokeswoman declined to share details about the candidates the agency targeted in recent months.

Interim CEO Jim Meyer told Choose members in a letter this month that “it became clear that we did not find the best fit” for the position. Multiple sources familiar with the search process, however, said two finalists withdrew from the running or couldn’t come to an agreement in late-stage discussions with Choose Chicago and city officials.

One factor said to be a point of tension is Choose’s precarious funding. The agency, which relies heavily on COVIDdrained hotel tax proceeds, saw its budget slashed by almost half to roughly $16 million this year and its headcount cut at a similar scale.

Choose Chicago’s board of directors this month approved a $26 million budget for 2022 and plans to fill more than a dozen vacant roles next year. But the outlook for the recovery of hotel tax revenue on which it relies remains cloudy. Average revenue per available room at downtown

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hotels in October was just 60% of the average in October 2019, according to hospitality data and analytics company STR, illustrating the slow recovery for a key performance metric that accounts for both room rates and occupancy.

PRIZED JOB

Still, the role of Choose Chicago CEO has been a prized gig since the agency was created in July 2012 as a combination of the Chicago Convention & Tourism Bureau and the city’s office of tourism. Former CEO Don Welsh and recently departed top executive David Whitaker were considered rising stars in the industry when they started their respective five-year contracts.

Yet both encountered heavy political turbulence that may be casting a harsh light on the role today. After unsuccessfully lobbying city and state officials to beef up Choose’s financial backing, Welsh’s budget took a hit when it got caught in the crosshairs of a two-year stalemate in Springfield over the state budget.

More recently, as Whitaker worked to steady the agency during the pandemic, he watched Mayor Lori Lightfoot bring in advertising agency veteran Michael Fassnacht as the city’s chief marketing officer,

muddying the role of the city’s tourism bureau.

The Choose CEO role “is a wonderful job, but (the city) can’t let politics and budget constraints get in the way,” says David DuBois, president and CEO of the International Association of Exhibitions & Events and former head of the convention and visitors bureau in Fort Worth, Texas.

The agency’s protracted search isn’t necessarily stopping today’s trade show and convention organizers from wanting to book events in the city, DuBois says, but the top tourism role in Chicago is known in the industry for its challenges.

“If you want to attract the right lady or gentleman, you have to build the right employment mousetrap for them to say, ‘I want the Chicago job,’ ” he says.

“Right now in the marketplace, that’s not the sentiment.”

Choose Chicago board Chairman Glenn Eden says in a statement that nothing should be made of the length of time it is taking to find a CEO, and the board “will not sacrifice quality for speed.”

“To assume that because the process is taking longer than anticipated because there is not interest in the position is not accurate,” the statement says. “There

has been significant interest from some of the top markets in the U.S. as well as globally, but our search process isn’t focused on an arbitrary timeline, it’s focused on finding the right future leader.”

A Lightfoot spokeswoman said in a statement that Choose Chicago “does vital work by way of bolstering Chicago tourism” and the city supports “their due diligence in finding the best person for the job.”

But those who bank on city tourism can hardly wait. Wendella Tours & Cruises Chief of Operations Andrew Sargis says he feels good about the industry veterans still at Choose Chicago that have continued working with city attractions like his throughout the pandemic. But having top executives in place to coordinate marketing across the city will be crucial during what he expects to be a strong comeback in nationwide leisure travel in 2022.

“There’s a legitimacy stamp if there is someone there saying, ‘This is what we’re doing,’ and there’s not a cloud hovering over (the agency) that a strategy or initiative may change next year,” Sargis says. “For the long-term health of Choose Chicago and its members, someone needs to be in that role.”

Vol. 44, No. 51 – Crain’s Chicago Business (ISSN 0149-6956) is published weekly, except for the last week in December, at 150 N. Michigan Ave., Chicago, IL 60601-3806. $3.50 a copy, $169 a year. Outside the United States, add $50 a year for surface mail. Periodicals postage paid at Chicago, Ill. Postmaster: Send address changes to Crain’s Chicago Business, PO Box 433282, Palm Coast, FL 32143-9688. Four weeks’ notice required for change of address. © Entire contents copyright 2021 by Crain Communications Inc. All rights reserved.

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