Crain's Chicago Business by crainschicago

LIGHTFOOT: As the mayor’s national profile rises, so do the online attacks. PAGE 23

REAL ESTATE: Here are the homes Chicago architects love. PAGE 17

CHICAGOBUSINESS.COM | JULY 6, 2020 | $3.50

THE PRICE OF POLICING Chicago spends more than most big cities

BY A.D. QUIG

GETTY IMAGES

BETWEEN A LOOMING BUDGET GAP in Chicago and a nationwide debate over “defunding police,” the Chicago Police Department’s spending practices are likely to come under renewed scrutiny. On paper, CPD appears beefier than most other large police departments, deploying more officers per capita than any big city in the country: According to 2018 FBI data, Chicago has 48 cops per 10,000 residents, compared to New York City’s 42, Philadelphia’s 41 and just 24 in Los Angeles. Chicago also spends more per resident on policing than eight of the 10 largest cities, according to a U.S. News & World Report analysis of 2020 budgets. Chicago’s $660 per capita police spending trails only New York’s $671. Further down the line are Philadelphia ($488), Los Angeles ($436) and Houston ($403). Like any big organization, CPD spends most of its money—94 percent in recent years—on personnel. Cutting CPD’s $1.7 billion budget down to match L.A.’s per capita spending for last year, for example, would save the city $500 million— but whether Chicago could reach that level depends on where and See POLICING on Page 19

Homebuying season shifts to summer

Facebook boycott slow to click here

People who sat out the market during spring’s stay-home orders are listing and buying now in big numbers June and July usually bring a lull in the housing market, as the peak activity of spring eases up. But 2020 is no ordinary year. In the wake of 10 weeks of stay-home orders, “the spring market got shifted into summer,” says Sharial Howard, an @properties agent. That’s in part because during the shutdown, although home sales qualified as an essential business, many buyers and sellers decided it wasn’t essential for them and put off entering the market.

As reopening began at the end of May, “everybody who waited was getting busy,” Howard says. That showed up in a rush of buyers’ contracts and sellers’ listings, which have continued their upward trajectory week after week, during a season when they’re typically headed down. In each full week of June, the number of homes in the Chicago area that went under contract to buyers rose, according to weekly reports from Midwest Real Estate Data. The swell turned into a surge: In the first week of June,

BY STEVE DANIELS JOHN R. BOEHM

BY DENNIS RODKIN

Why have local consumer-facing brands been so reticent to join the effort? There are theories.

Annie Bauer, an @properties agent, is among those seeing a rush of pent-up activity. contracts were up 18 percent from the same time a year earlier; in the fourth week, they were up 33 percent. See HOMEBUYING on Page 19

Well over 300 companies in the U.S. and around the world have joined a growing campaign to boycott advertising on Facebook, as pressure builds on the social-media giant to better police hate speech and misinformation on its platform. Corporate Chicago, however, is only now just starting to join in. The lack of Chicago-area corporations on the expanding list of firms saying they will stop or

pause advertising on Facebook prompted Crain’s to contact 10 local consumer-facing companies to see where they stand on the issue. Three—Walgreens, BMO Harris Bank and Conagra Brands—told Crain’s they’re joining the effort and will stop advertising on Facebook and Instagram, which Facebook owns. Conagra is halting ads for the remainder of 2020, going beyond most U.S. companies, which typically are halting See FACEBOOK on Page 20

HEALTH CARE

OPINION

Cook County’s public health system faces a financial reckoning due to COVID-19. PAGE 3

For companies wanting meaningful change, community-building projects are more beneficial than one-off volunteer campaigns. PAGE 10

Interim CEO Debra Carey

2 JULY 6, 2020 • CRAIN’S CHICAGO BUSINESS

Another broken cog in law enforcement machinery cuse? I asked City Hall to provide some specific examples of justice gone wrong, and I’ve spent better than a week going from agency to agency to get the details. I discovered that while the mayor has a point, even these cases have their ambiguities, with differing details of who did what coming from police, prosecutors, jailers and others. One case involves an 18-yearold man who, despite his age, already has quite a record. I’m not naming him because been unable to THE CRIMINAL JUSTICE SYSTEM LETS I’ve reach his attorney, TOO MANY VIOLENT FELONS BACK ON an assistant public defender. THE STREET TOO QUICKLY. According to police records, in February he was arrested after pointing a gun system, one that lets too many at a man cleaning his car in front violent felons back on the street of his house, telling the owner to too quickly even when they are move away, and driving away with arrested. Like every mayor within his vehicle. Despite that, he only my memory, Lori Lightfoot has was charged with a misdemeanor, pointed to that as a prime cause, criminal trespass to vehicle, and demanding that prosecutors and released on a $10,000 bond, of judges get tough. which he had to post only $1,000. Is that real, or mostly an exWhole books can and have been written about the causes of the street violence that has returned this already too hot Chicago summer. Poverty and lack of opportunity, discrimination and poor schools, distrust between neighborhoods and the police, lack of help for released convicts and sheer evil. All are part of the mix. One cause that keeps getting mentioned, though, is an underperforming criminal justice

The charge quickly was dismissed. State’s Attorney Kim Foxx’s office says it doesn’t know why and notes that, as per office policy, all records of such misdemeanor charges are destroyed within 30 days. In March, the same person was arrested again after, according to police, he pulled a gun on a woman stuck in traffic and demanded her purse—including the PIN for her bank card. He was charged with armed robbery, aggravated unlawful restraint and aggravated fleeing from police. He was released on a $5,000 bond but was required to wear an electronic monitor, something that Sheriff Tom Dart has been complaining is increasingly used on those accused of violent felonies. The judge who released him did not return my call. Despite the monitor, the same man was arrested again in June after an incident involving an off-duty Chicago police officer. Charged with unlawful use of a weapon and being a habitual criminal with a firearm, he now

GREG HINZ ON POLITICS

is being held in Cook County Jail. He faces upcoming court hearings on the March and June matters. Example No. 2 involves a 27-year-old man, also represented by the public defender’s office. Records indicate he was first convicted of armed robbery, aggravated unlawful restraint and aggravated carjacking, and sentenced to 14 years in 2013. Records I got from different sources somewhat conflict, but it appears he was released from prison in 2018 after serving just a third of that sentence. In April of this year, he was charged with unlawful use of a weapon after being a participant in a drug deal gone bad, according to police. He was released on a $10,000 bond with an electronic

monitor. In June, he was arrested again, this time after shooting at someone on the West Side. Charged with unlawful use of a weapon and being an armed habitual criminal, he’s being held in jail for violating terms of his bail in the April case. I’ve been offered more examples by the city of alleged poor performance by the justice system and may take a look at them. But first, I’d like to find out more about these cases and why committing a violent crime does not appear to pose many limits on releasing someone after they allegedly commit another. Clearly, though, something is not right. The system isn’t working, and I suspect criminals know that. More later.

AG still thinking of reform—even through a COVID haze Illinois Attorney General Kwame Raoul has had a stressful few years. He battled and then beat prostate cancer (which killed his father and his maternal grandfather) and then went on to win a contentious and sometimes bitter 2018 primary and general election for attorney general. He got married, and then his mom died in 2019. Raoul was barely a year in office when the COVID-19 pandemic shut down the world. And then in mid-June, he tested positive for the virus. I talked to Raoul on June 30, his first day back in his Chicago office. He sounded tired, but he

throughout his home stay. George Floyd’s murder convinced him to revive his proposal from when he was in the state Senate to license police officers. The idea came from thenSen. Tim Bivins, a Republican and former Lee County sheriff. Sheriffs and police chiefs often complain that even when they do try to remove an officer from duty, union contracts and arbitrators often wind up forcing them to put the officers back on the public payroll. Licensing could solve that problem by making bad cops ineligible for police work statewide. The idea has some support among police leaders, but the Fraternal Order of Police hates it. GEORGE FLOYD’S MURDER Whether organized CONVINCED RAOUL TO REVIVE HIS labor as a whole will go along with overruling loPROPOSAL TO LICENSE POLICE. cal collective bargaining agreements remains to be seen. The Chicago Federation was still mentally sharp. of Teachers has been all about He said he wasn’t as worried the “defund the police” movewhen he tested positive for the ment, and teachers are already coronavirus as he was when licensed in Illinois. And while he was diagnosed with cancer the FOP is not a member of the because the same cancer had Illinois AFL-CIO, it does have its already taken two family memdefenders in the trades. bers. Still, he said, he did worry As Raoul and others work about passing the virus along to through the sausage-making his family. process, I wondered aloud Raoul said tiredness was, and whether proponents may be remains, his main symptom. missing the moment. Hot issues When he was still quarantined always fade in time, and the in his bedroom for two weeks, General Assembly is not schedin order to avoid infecting his uled to return to Springfield unfamily, even the simple act of til after the November election. reading a legal brief wore him Raoul said he agreed the out so much that he’d have to moment may pass. “The sustaintake a nap for a couple of hours. ability of it is a legitimate quesHe’s moved past that now, but tion,” he said. But, he added, he’s not yet his old self. “there is something very, very The attorney general contindifferent” going on now in the ued his work on police reforms

wake of Floyd’s death under the knee of that Minneapolis police officer. “Now, let’s face it, we’ve had several of these incidents that make people pop up and say, ‘Hey, we’ve got to do something.’ But there is something really different here. Part of it was just the depravity” of the eight-minute video of a man dying. Laquan McDonald was killed by 16 shots, “but it was a quick 16 shots. This is like a slow, ‘I don’t

RICH MILLER ON SPRINGFIELD

care, I can do this.’ ” But, Raoul said, it’s the leaders of law enforcement who could prove to be the ally that pushes this idea across the finish line, even several months from now.

We’ll see. In the meantime, get well soon, general. Crain’s contributor Rich Miller publishes Capitol Fax and CapitolFax.com.

We’re still with you And, we will be in the weeks and months to come. We’re all experiencing these uncertain times together. As Chicago’s Bank®, we’re prepared to continue supporting local companies now and on the other side of this. Know that we’re standing by you in solidarity, with strength and pride for our city. We’re Chicago: we’ll get through this together.

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County health cash crunch

The Shuman office building in west suburban Naperville

Pandemic compounds pre-existing pressures BY STEPHANIE GOLDBERG

HOW COVID IS CREATING OPPORTUNITY IN THE BURBS Far-flung office parks are suddenly looking more attractive—or so building owners hope IF EVER THERE WERE A MOMENT for suburban office landlords to get the attention of companies in the city, it’s the reopening of the local economy from the COVID-19 pandemic. Businesses based downtown are suddenly grappling with many employees afraid to use public transportation to commute. The prospect of long waits for office tower elevators could dissuade workers from returning to the city in full force. And in the backdrop, millennials—the talent group

companies moved downtown to attract in one of the tightest labor markets on record—appear to be buying suburban homes at a faster pace, some having proven they can be just as productive working remotely as in the office. The confluence of challenges to the urban workplace is shaping the best opportunity many suburban office owners have had in years to generate

BY DANNY ECKER

“SUBURBIA IS GETTING A FRESH LOOK.” Ralph Zucker, CEO, Somerset Development

See SUBURBS on Page 21

JOHN R. BOEHM

ller, etto

CRAIN’S CHICAGO BUSINESS • JULY 6, 2020 3

Cook County’s public health system faces a financial reckoning as COVID-19 drives up costs and drains revenue. Two-hospital Cook County Health was under pressure before the pandemic to cut spending and address a rising burden of uncompensated care without a permanent leader. Now $30 million behind budget, the system is grappling with increased costs like employee overtime and shrinking revenues due to fewer nonemergency surgeries and routine appointments. A plan is underway to bring down the projected $61 million deficit for fiscal year 2020, with officials late last month eliminating 70 positions through a mix of layoffs and cutting vacant jobs. If costs and patient volumes don’t improve, and federal funds stop flowing, the system could end up with a $187 million deficit next fiscal year. “We are basically projecting what we believe to be the worstcase scenario,” interim CEO Debra Carey says. “We are definitely seeing the loss of certain revenues coming in, and the county has its own challenges because of COVID, so it’s not able to step in.” At stake is the future of the county’s health care safety net, which provides far more free care to low-income patients than any See COUNTY HEALTH on Page 21

Financial rollup hits roadblock amid fierce competition Loop-based advisory firm Hightower’s plan is to sell itself as a bundler BY LYNNE MAREK Hightower is one of the biggest U.S. financial advisory firms buying up small wealth managers and aiming to sell itself as a bundler at top dollar. But a feeding frenzy for deals and the COVID-19 crisis are frustrating the Chicago firm’s plans. In February, before the pandemic hit, Hightower CEO Bob Oros forecast that Hightower might acquire as many as 15 registered investment advisers, or RIAs, this year, but so far the Loop-based company has made just two investments. The coronavirus slowed U.S. mergers-and-acquisitions ac-

tivity generally, but less so in this arena, where some of Hightower’s most aggressive rivals are still snapping up firms. The hiccup at Hightower, which pioneered the buyout strategy, won’t help its private-equity owner, Thomas H. Lee Partners, advance its build-and-sell playbook. In the meantime, it’s ceding an edge to rivals that keep cobbling together ever-larger wealth-management firms with tens of billions of dollars in assets. “From a buyer’s perspective, (firms) need to be active because there is a lot of competition,” says Mark Bruno, a managing director at Echelon

Partners, an investment banking boutique focused on the industry. “A few years ago there were not many firms in a category with Hightower.” Hightower, with $76.8 billion in assets under administration as of the end of last year, “has a strong M&A pipeline despite the pandemic,” Patty Buchanan, a spokeswoman for the company, says by email. She declines to provide an updated asset figure. Thomas H. Lee Partners declines to comment on Hightower. About a dozen firms, including Hightower, are chasing RIA acquisitions in the $6 trillion See HIGHTOWER on Page 22

 MONEY MERGERS Acquisitions in the registered investment adviser arena have been mounting for years, pushing up prices for the targets. Despite a COVID-19 lull, bankers say the transactions are likely to keep climbing. RIA M&A DEAL VOLUME 60% 50 40 30 20 10 0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2014 2015 2016 2017 2018 2019 ’20 Source: Echelon Partners

4 JULY 6, 2020 • CRAIN’S CHICAGO BUSINESS

JOE JOECAHILL CAHILL ON ONBUSINESS BUSINESS

A rough six months for equities has been brutal for Chicago-area stocks. Bloomberg’s index of Illinois-based companies plunged 17.2 percent from January through June as COVID-19-related shutdowns sent the economy into freefall. That’s more than four times the 4.0 percent first-half decline in the S&P 500. The main reasons why local stocks have suffered more than most are simple. We have a major presence in industries hit hardest by the sharpest economic contraction in modern memory, such as aviation, manufacturing, finance and retail. And we’re not well represented in sectors that have soared above the wreckage, like tech. The top local performer among Chicago’s large-capitalization companies—those with a market value exceeding $10 billion—was drugmaker AbbVie, which saw its shares rise 10.9 percent. Pharmaceuticals have done well during the pandemic, with a group of big drug stocks tracked by Bloomberg climbing 3.8 percent. The same goes for medical device makers such as Abbott Laboratories and Baxter International,

WE HAVE A MAJOR PRESENCE IN INDUSTRIES HIT HARDEST. which have seen strong demand for some of their products. Abbott’s shares rose 5.3 percent and Baxter’s were up 3.0 percent, both trailing an increase of 9.1 percent for medical device stocks generally. Also bucking the downturn was the area’s biggest publicly traded tech company, Paylocity. Shares of the web-based payroll services provider jumped 20.8 percent, outpacing a 16.1 percent gain for S&P’s software and services index. With air travel hitting record lows on coronavirus fears, Chicago’s cluster of aviation companies suffered more than most. The worst-performing local large-cap stock was United Airlines, down 60.7 percent. Jetmaker Boeing, bedeviled by slumping orders and the grounding of its mainstay 737 Max airliner after two fatal crashes, saw its shares tumble 43.7 percent. Aircraft parts and maintenance specialist AAR and onboard Wi-Fi provider Gogo both lost just over 50 percent of their stock market value. Collapsing demand for travelrelated stocks also hit Hyatt Hotels, which fell 44 percent. Steep declines hit financial shares, too. Lenders face myriad threats, from slackening economic activity to historically low interest rates, a potential rise in loan defaults and dividend caps. Northern Trust fell 25.3 percent, Wintrust Financial 38.5 percent, Discover Financial 41 percent and First Midwest Bancorp 42.1 percent.

A wide range of manufacturing stocks tumbled as shrinking demand in various sectors sent the S&P 500 industrial index down 15.5 percent. The biggest local manufacturers fared slightly better than the sector as a whole, with heavy-equipment giant Caterpillar off 14.3 percent, agricultural equipment maker Deere down 9.3 percent and diversified manufacturer Illinois Tool Works falling 2.7 percent. Traditional brick-and-mortar retailers were hit hard as stay-home orders drove shoppers to their laptops. Ulta Beauty, a top-performing retail stock in recent years, fell 19.6 percent. Drugstore chain Walgreens dropped 28 percent, after a sharp decline in sales followed an initial surge from customers stocking up ahead of lockdowns. Restaurant stocks sank when states banned dine-in service. Sub sandwich chain Potbelly, which sells a lot of salami to workers on lunch break, plummeted 46 percent. Even McDonald’s, which does most of its business at driveup windows that remained open, saw its shares drop 6.7 percent as a decline in commuting hurt breakfast sales. Restaurant supplier US Foods suffered along with its customers, dropping 52.9 percent. A notable exception among retailers was recreational vehicle seller Camping World, with an 84.3 percent rise. RV demand is up from customers looking to hit the road without breaking quarantine. Local foodmakers, like their industry as a whole, got little credit from investors for a sharp sales increase. The S&P 500 packagedfoods index sank 5 percent even as some companies posted growth of 30 percent or more. Kraft Heinz, maker of comfort-food staples such as American cheese and ketchup, edged down 0.8 percent, while Oreo cookie maker Mondelez International dropped 7.2 percent. Conagra, with a varied lineup including Orville Redenbacher popcorn, Birds Eye frozen vegetables and Slim Jims, managed a 2.7 percent rise. If there’s any good news on local stocks, it’s their recovery from March lows. The Bloomberg Illinois Index is up 35.4 percent since bottoming out on March 23, trailing a 38.6 rise for the S&P 500. Where Chicago-area shares go from here depends in large part on the future course of the pandemic and its economic aftershocks. Recent stock market gains came as COVID-19 ebbed in initial hot spots and more states started reopening their economies. But a sudden resurgence of the virus in new areas rattled investors, underscoring the continuing vulnerability of equities to an illness for which there is no vaccine or cure.

Real estate agents cancel the ‘master’ bedroom

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Why Chicago stocks have a bad case of COVID blues

Some brokers are coming to see the term as having racist and sexist undertones BY DENNIS RODKIN The tradition of calling a home’s largest, nicest bedroom the “master” is quickly dimming in Chicago, as more real estate people come to see it as having racist and sexist undertones that are no longer acceptable to some homebuyers. Last week alone: The principals of the area’s biggest real estate brokerage recommended their agents abandon the term. A veteran homebuilder said that he will find a neutral substitute to use in promotional materials for all future developments. The president of a historic association of Black Chicago real estate professionals said his group will begin advocating for putting the term into the dustbin. While the terms “master bedroom” and “master suite” likely did not start out as references to the brutal slave-and-master system of pre-Civil War Southern states, in recent years the terms have come under fire for their suggestion of that racist system. It’s also seen as sexist, because only a man can be a master, while many households are headed by women. “People say it’s just language, but this language can be hurtful,” says Holly Connors, an @properties agent whose three-agent team in Arlington Heights, called GetBurbed, started changing the language in all of its 50 or so property listings June 26 and publicly announced the change June 29. GetBurbed was the first Chicago group to make the change official, as far as Crain’s could determine. “We want to use language that’s inclusive,” Connors says. More than a symbolic change, it’s a shift that she says would signal to potential buyers of all races that their concerns can be met. “Everyone

should feel welcomed,” she says. The local flurry of changes was inspired in part by the Houston Association of Realtors’ June 25 announcement that it will replace the term “master” with “primary” in its listings. Agents can still describe a room as the master bedroom in their writeup of a property, but the bullet points in the database will identify a “primary” bedroom or a “primary” bathroom. The question of whether “master” is an obsolete term has been around for several years, but in the current season of businesses and institutions coming to terms with racially exclusive overtones—such as Princeton University removing the name of President Woodrow Wilson from its school of public policy—the change in real estate terminology has taken on new urgency. “We feel as real estate agents we have the opportunity to be leaders in a world that needs to be changed,” says Connors, who has been selling real estate for 20 years.

PROPOSAL

Courtney Jones, president of Dearborn Realtists, a Chicago association of Black agents founded in 1941 to fight racially exclusionary housing policies, says he and other members are drafting a proposal for the multiple-listing service to drop the use of “master.” The proposal will go before the Realtist board at its July 14 meeting. Members are taking the term out of their listings, says Jones, who is also a partner in Chicago Homes Realty Group. “We want to get everybody on board, through changing what the listings service does.” On June 29, @properties co-principals Mike Golden and Thad Wong emailed the more than 2,500 agents in their firm to

say the Houston move convinced them to phase out the terminology. “What is important is not the origin of the term,” the two wrote in their email, which Crain’s obtained, “but rather the fact that it is offensive to some on the basis of race and sex. Therefore, there is no reason to continue using it in our business. We encourage all @properties agents to follow this recommendation.” Agents are independent contractors. They can choose whether to make the change, but corporate materials from @properties will not use “master.” The shift at @properties may tip the industry in Chicago toward formalizing the change in listings, because @properties is by far the biggest brokerage in the region, with $9.6 billion in home sales in 2019. The second-biggest brokerage sold $7.3 billion worth of homes during the year. Jeff Benach, principal of Lexington Homes, which has built dozens of residential units in Bridgeport, Avondale, Des Plaines and elsewhere, says the distaste for the term “master bedroom” “had never occurred to me, to be honest,” but that when discussion of the Houston move showed up in real estate publications, “I understood. I don’t want to use it anymore.” Benach says that while he doesn’t plan to reprint existing sales materials, he will find a new term to use for all future developments. The hurdle to get over, Benach says, is that terms like “main bedroom” and “primary bedroom,” the most used replacements now, “are vanilla,” and marketing for new homes needs sizzle. Until it got weighed down by negative historical associations, “master bedroom” set the best bedroom apart from the others.

“WE OPP IN A CHA

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When it comes to investing $3.4 billion in cash, Sam Zell still isnâ&#x20AC;&#x2122;t ready to rule out much. Equity Commonwealth, a Chicago real estate company led by the billionaire investor, has that much money sitting on its balance sheet and is looking for ways to put it to work. The choices are increasing with the economy in recession and commercial property markets facing a bust that many believe could eclipse the global financial crisis of 2008-09. But it could be another three or four months before Equity Commonwealth cuts a deal, Zell said last week in a Zoom interview with Anthony Scaramucci, founder and co-managing partner of SkyBridge Capital, a New Yorkbased hedge fund manager. And the only sector the firm is likely to avoid is retail real estate, a market that is â&#x20AC;&#x153;still very much of a falling knife,â&#x20AC;? he said. â&#x20AC;&#x153;We donâ&#x20AC;&#x2122;t buy markets, we buy deals,â&#x20AC;? said Zell, chairman of Equity Commonwealth, a real estate investment trust that owns office buildings. â&#x20AC;&#x153;The capital is going to be used to respond to specific situations.â&#x20AC;?

DISTRESSED DEALS

After Zell led a takeover of the REIT six years ago and moved its headquarters to Chicago from Newton, Mass., the company began unloading its buildings. After selling off more than 150 properties, including the Groupon headquarters at 600 W. Chicago Ave., Equity Commonwealth owns just four now. It put much of the sale proceeds into the bank and wants to spend it on the kind of distressed real estate deal that made

couraging developers to add too Zell famous. â&#x20AC;&#x153;I expect we will begin to spend much space to the market. Zell identified Chicago as one the capital as we deal with other landlords and other owners of real market suffering from an office estate who, in one form or anoth- glut. â&#x20AC;&#x153;We have four or five new office er, survive this far, maybe through buildings, theyâ&#x20AC;&#x2122;ve emptied out pretend and extend,â&#x20AC;? Zell said. After the global financial crisis, the old buildings, and we donâ&#x20AC;&#x2122;t many lenders were willing to give have tenants for those old buildproperty owners more time to ings,â&#x20AC;? he said. â&#x20AC;&#x153;So I think the office pay off distressed loans, a process space business is likely to suffer called â&#x20AC;&#x153;extend and pretendâ&#x20AC;? by from oversupply, but an oversupcritics. Lenders bet that the bad ply kind of similar to previous peloans would resolve themselves riods of oversupply, as opposed to over time, but the practice limit- something dramatic, like everyed opportunities for investors to one working from home.â&#x20AC;? In addition to Equity Comscoop up distressed properties at low prices. Zell expects less of monwealth, Zell also serves as that in the current crisis. â&#x20AC;&#x153;I think the â&#x20AC;&#x153;I THINK THERE ARE GOING TO BE A LOT lending comOF FORECLOSURES AND OPPORTUNITIES.â&#x20AC;? munity this time around very much Sam Zell wants to quote â&#x20AC;&#x2DC;clean the books,â&#x20AC;&#x2122; and I think there chairman of two other REITs he are going to be a lot of foreclo- founded in the 1990s: Equity Ressures and opportunities,â&#x20AC;? he said. idential, which owns apartments, Though Equity Commonwealth and Equity LifeStyle Properties, has been selling office buildings, which owns mobile-home and RV Zell doesnâ&#x20AC;&#x2122;t see the current work- parks. Zell sounded more optimistic from-home trend, prompted by the coronavirus pandemic, as about the nationâ&#x20AC;&#x2122;s economic prosa long-term threat to the office pects than he did at the beginning of May. Though the economy is market. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re social animals. We want in a recession, he said he expects to work together. Nobodyâ&#x20AC;&#x2122;s figured â&#x20AC;&#x153;some significant recoveryâ&#x20AC;? by the out a way to motivate by modem,â&#x20AC;? end of the year. â&#x20AC;&#x153;I donâ&#x20AC;&#x2122;t think itâ&#x20AC;&#x2122;s going to be Zell told Scaramucci. â&#x20AC;&#x153;When itâ&#x20AC;&#x2122;s all said and done, if you want to anywhere as deep as a lot of the run a business, if you want to be savants have suggested,â&#x20AC;? Zell said. successful, you need to create â&#x20AC;&#x153;I think just what you have seen contact between the people, and in the last few weeks since thereâ&#x20AC;&#x2122;s thatâ&#x20AC;&#x2122;s what office space provides.â&#x20AC;? been some partial openings of Yet the U.S. office market is various places around the counoverbuilt right now, Zell said. He try, people have been willing to singled out WeWork, the strug- spend and in fact seem to be very gling shared office-space pro- excited about the opportunity to vider, as one culprit, by inflating get back into the commerce side demand for office space and en- of the world.â&#x20AC;?

CRAIN’S CHICAGO BUSINESS • JULY 6, 2020 7

Local construction industry fell further in May Financing for new projects became extremely hard to come by after the coronavirus arrived The local construction industry took another big step backward in May as developers held off on new projects due to the coronavirus pandemic. The total value of construction projects started in the Chicago area plunged to $1.10 billion last month, down 42 percent compared with May 2019, according to research firm Dodge Data & Analytics. That followed a 41 percent drop in construction starts in April. Developers and contractors were relieved in March, when Gov. J.B. Pritzker designated construction an essential business under his stay-at-home order to

up, most developers have one option: Delay construction and hope it comes back. After the big drops in April and May, local construction starts totaled $4.18 billion in the first five months of 2020, down 18 percent from the same period last year, according to Dodge. Non-residential building fell 2 percent, to $2.63 billion, while residential construction plunged 35 percent, to $1.55 billion.

OPTIMISM

But some optimism is returning to the downtown apartment market, arguably the hottest sector for developers until the pandemic hit Chicago. After sitting on the sidelines, construction lenders are starting to new apartment “THE SECOND HALF OF 2020 WILL BE evaluate developments, said Ron senior managA SLOG AND GAINS WILL BE MODEST DeVries, ing director in the Chicago office of Integra OVER THE SHORT TERM.” Realty Resources, a conRichard Branch, chief economist, sulting and appraisal Dodge Data & Analytics firm. Integra is getting more slow the spread of COVID-19. calls from lenders seeking apThey were able to continue proj- praisals on proposed apartment ects already underway, keeping projects, DeVries said. thousands of workers in the con“Things are opening up a little struction trades, from plumbers bit,” he said. to electricians, on the job. DeVries predicts the panBut financing for new develop- demic will merely delay many ments became extremely scarce, apartment projects, not kill them as financial markets crashed, the entirely. Last year, he forecast deeconomy fell into a recession velopers would complete 3,000 and lenders and investors pulled apartments in downtown Chicaback. And when financing dries go in 2021, many of them started

GETTY IMAGES

BY ALBY GALLUN

The total value of construction projects started in the Chicago area in May plunged 42 percent compared with May 2019, according to Dodge Data & Analytics. this year. Now, he forecasts they will complete just 1,800. “They may not be starting up again in the next 30 days,” DeVries said. “We basically pushed out the pipeline nine months or so.” If he’s right, 2022 could be the biggest year for downtown multifamily development in at least two decades, with as many as 4,800 apartments completed. Though construction has

dropped drastically in Chicago, some developers have launched big projects in the middle of the pandemic. Houston-based Hines Interests began construction of Salesforce Tower, a 60-story office building on Wolf Point, in April. And Onni Group of Vancouver recently began work on a 373-unit apartment tower in the Fulton River District, according to Dodge. Nationally, construction starts

fell 12 percent through the end of May compared with the year-earlier period, according to Dodge. “While the overall economy most likely hit bottom in May, the recovery will be slow since nearly 20 million jobs have been lost since February,” Richard Branch, Dodge’s chief economist, said in a statement. “The second half of 2020 will be a slog and gains will be modest over the short term.”

WeWork CEO weighs in on future of offices, co-working BY DANNY ECKER WeWork will rely more on big corporate clients and reduce its number of locations as it hunts for profitability next year, according to its new chief executive. As the embattled co-working giant looks to recover from a botched attempt to go public last fall and a tumultuous leadership change, CEO Sandeep Mathrani expects large-company users of its flexible office space could account for as much as 70 percent of its membership in the near future, up from about 45 percent today. Mathrani, a retail real estate veteran who took the reins at WeWork in February after a run with mall owner GGP and Brookfield Properties, shared his vision for the company’s future and how it’s adjusting to life amid the COVID-19 pandemic during a Crain’s Real Estate Forum webinar June 29. Among other predictions, he expects the share of entrepreneurs and small and midsize

business users on which the company built its reputation to fall as larger corporations turn to WeWork and its competitors for flexible, low-risk office space that can be leased for shorter terms.

‘FULLY BAKED SOLUTION’

WeWork has already “de-densified” its locations to allow members to comply with social distancing. Mathrani foresees his company being a short-term solution for many companies to get people working in person again while they reassess their permanent office needs and layouts. “We’re a fully baked solution, because you move into an environment that’s fully built out,” Mathrani said. He took over after a turbulent several months for WeWork that included the ouster of co-founder and CEO Adam Neumann and a company valuation that had fallen to a fraction of the $47 billion that its largest backer, Japanese software conglomerate SoftBank, pegged it at leading up to the at-

tempted initial public offering. The IPO was pulled in September, and SoftBank disclosed last month that WeWork’s valuation had fallen to $2.9 billion as of March 31. Mathrani said the widespread economic shutdowns caused by the coronavirus crisis gave WeWork a chance to re-evaluate its strategy to “right the ship.” The company, he said, has collected rent from between 70 and 75 percent of its members and paid rent to its landlords at 85 percent of its locations—”we’ve decided to take the high road,” he noted. WeWork continues to try to renegotiate lease terms with landlords and has more leverage than some may realize, Mathrani said: Landlords collectively owe the company about $1 billion in tenant allowances, or cash normally used to build out office space, that can be used to offset some of what WeWork owes. Those tenant allowances are “a huge percentage of the rents we’re not paying,” Mathrani said, noting that some of the 15 per-

BLOOMBERG

Sandeep Mathrani spoke in a Crain’s Real Estate Forum webinar about his vision for the embattled shared office provider and his plan to make it profitable

WeWork CEO Sandeep Mathrani says shared offices can be a short-term solution for many companies to get people working in person again while they reassess their permanent office needs. cent of properties with unpaid rent are going through “more strenuous” negotiations. “Reputationally, all you have is you. I’ve always done the right thing, and I will continue to do the right thing,” he said of the rent payments. Mathrani said the company is looking to reduce its portfolio of

828 locations, though it plans to continue building out some new spaces in markets and locations it believes will be profitable. That includes two more Chicago locations slated to open next year, bringing WeWork’s local downtown footprint to 14 locations and more than 1 million square feet.

8 JULY 6, 2020 • CRAIN’S CHICAGO BUSINESS

Downtown apartment market slumps, but it could be worse Rents, occupancies have fallen, but ‘it looks like we’re not going to get into a big wreck,’ a consultant says For downtown apartment landlords, the coronavirus arrived in Chicago at possibly the worst time, right at the start of the spring leasing season. Who would go apartment hunting in the middle of a pandemic? With so many people losing their jobs, how many of them would be able to afford an apartment anyway? More than one might think. It has been a rough three months for landlords in the central business district—they’ve been forced to cut rents as occupancies have fallen—but not the catastrophe that some expected. “It kind of looked like the car was headed off to the ditch,” says DeVries, senior managing director at Integra Realty Resources, a Chicago-based appraisal and consulting firm. “We hit the brakes, and it looks like we’re not going to get into a big wreck.” First, the bad news: The downtown apartment boom is over. The average net rent at top-tier, or Class A, downtown apartment buildings fell to $3.01 per square foot by mid-May, down 7.7 percent from first-quarter 2019, according to Integra. That was the biggest quarterly drop since at least 2001, even bigger than the declines during the last recession. Integra’s 2020 data runs through mid-May because the firm was unable to collect data after the end of the first quarter because of the coronavirus. The downtown Class A occupancy rate dropped to 91.8 percent in the period, down from 94.3 percent a year earlier and the lowest rate since the end of 2017, according to Integra. Another ugly data point: A key measure of demand, absorption— or the change in the number of occupied apartments—totaled just 325 units. That’s the lowest first-quarter number since 2012, and it’s inflated because it covers 4½ months. It would be even lower if it covered just three. But many apartment landlords have reason to feel lucky, especially compared with owners of local

hotels and retail properties, which have both been devastated by government restrictions to slow the spread of the virus. With Gov. J.B. Pritzker’s reopening plan entering Phase 4, DeVries expects that apartment leasing will pick up as more people venture out. Another positive: Though the number of tenants not paying their rent has risen over the past three months, rent delinquencies downtown generally are not high enough to be a major concern. Downtown high-rise apartment dwellers tend to be employed, higher-income, white-collar workers who are not struggling to pay their bills. COSTAR GROUP

BY ALBY GALLUN

Wolf Point East

FORCED TO ADAPT

“These are not people who have lost their jobs,” says Aaron Galvin, co-founder and CEO of Luxury Living Chicago Realty, an apartment leasing firm. “These are people who have been able to work remotely.” But the coronavirus forced businesses like Galvin’s to adapt. They courted prospective tenants with remote video tours, rather than onsite walk-throughs. Of the roughly 1,400 apartment showings Luxury Living hosted from mid-March through the end of May, it conducted 91 percent virtually. “I am just as surprised as others at how willing people were to lease without seeing an apartment” in person, Galvin says. The pandemic arrived at an especially bad time for one of Galvin’s buildings: Wolf Point East, a 60-story riverside tower just west of the Merchandise Mart. Developed jointly by Houston-based Hines Interests and the Kennedy family, the luxury high-rise opened to residents in January, a couple of months before Pritzker issued his stay-at-home order. Hired to lease the building’s 698 apartments, a tough task in a normal market, Luxury Living faced the extra-daunting challenge of doing it during a major health and economic crisis. Surprisingly, leasing volume is on pace with the developers’ forecast, and rents are actually a little

higher than projected, Galvin says. He expects to have half the units leased in “the near term,” he says, declining to be more specific. Average asking rents for an apartment at Wolf Point East range from $2,207 per month for a studio to $9,250 for a three-bedroom unit. From mid-March through the end of May, the average rent for a new lease, not a renewal, dropped 4.6 percent at Luxury Living’s Chicago buildings from the year-earlier period. The number of leases in one key category, renters moving to Chicago from other places, fell 22 percent. Developers and landlords will need the relocation segment to bounce back to salvage the year. That’s no sure thing given the horrible economy, but Galvin is optimistic relocations will pick up in the second half of the year, citing traffic from out-of-towners on his firm’s website. The market was slightly disrupted,” he says. “It was not derailed.” Tony Rossi Sr. isn’t so sure. Rossi, who leads companies that develop, own and manage apartments, is “reasonably nervous” about the future, citing uncertainty over the direction of the job market and the country’s ability to contain the coronavirus.

He worries that many young 1,800 apartments downtown next professionals who moved back year, down from an earlier prohome with their parents in recent jection of more than 3,000. That months won’t return and renew would be good for owners of existtheir leases in downtown building buildings, by limiting competiings. One multifamily tower in tion, and reduce the odds of a glut which Rossi is an investor, at 73 E. next year. But the investors and lenders Lake St., has a meaningful number of graduate students, many from that finance projects are showing an interest in getting back into overseas. “You have to say, ‘Are they com- the game, DeVries says. His firm ing back?’ ” says Rossi, president of M&R “I AM JUST AS SURPRISED AS OTHERS AT Development, an apartment develop- HOW WILLING PEOPLE WERE TO LEASE er, and chairman of RMK Management. WITHOUT SEEING AN APARTMENT” IN “We did OK in PERSON. May, we did OK in June,” he says. “But I Aaron Galvin, CEO of Luxury Living Chicago Realty just don’t like where is receiving more inquiries from we’re headed.” Yet downtown renters who still construction lenders who need have a job and are in the market for appraisals and other pre-developa new apartment should be happy. ment work for downtown apartAfter nearly a decade of rising rents, ment developments. The upshot: He expects developers to complete it could be a tenants’ market again. Meanwhile, the animal spirits as many as 4,800 downtown apartare stirring again. Apartment de- ments in 2022, the most built there velopers, who flourished during in a year in at least two decades. “The lenders are going to want a historic building boom over the past decade, have delayed projects to see the rents come back, but they planned to start this year, un- there are lenders talking to develable to secure equity and debt fi- opers again,” he says. “Everything we thought was going to deliver nancing to pay for them. As a result, DeVries forecasts in 2021 is getting pushed out to that developers will complete just 2022.”

Amazon facility in Kenosha sells for a record $176 million The price KKR paid for the fulfillment center is the most ever for an industrial property in the Chicago area BY ALBY GALLUN Private-equity firm KKR has paid $176 million for a massive Amazon fulfillment center in Kenosha, the highest price ever paid for a single industrial property in the Chicago area. KKR acquired the two Amazon warehouses totaling 1.5 million square feet along Interstate 94

from Prologis, a San Francisco real estate investment trust that owns industrial properties, according to documents filed with the state of Wisconsin. New York-based KKR announced the deal July 1, along with another large acquisition in the Charlotte, N.C., area, but it did not disclose the location of the properties or their tenants. Though the coronavirus has hit some sectors of the commercial real estate market hard, it has generally spared industrial properties, and even lifted the prospects of some. With millions of Americans hunkered down in their homes, the pandemic has increased the coun-

try’s reliance on e-commerce, fueling demand for warehouse space to store all the products bought online. No firm is gobbling up more space in the Chicago area than Amazon, which last month announced plans to open two fulfillment centers in Markham and Matteson that will employ 2,000 people. Real estate investors like KKR are willing to pay up for property leased to an economic powerhouse like Amazon. “We are excited to increase our footprint in these major distribution markets with the addition of two high-quality, stable assets,”

Roger Morales, KKR partner and head of commercial real estate acquisitions in the Americas, says in a statement. “We believe that the current environment will lead to continued acceleration of e-commerce penetration which drives demand for large modern distribution centers like the ones we are acquiring. Logistics real estate represents a growth opportunity as more and more U.S. consumers migrate to shopping online.” A KKR spokeswoman did not respond to requests for comment. KKR paid $119.2 million for a 1 million-square-foot building leased to Amazon at 3501 120th

Ave., about 8 miles north of the Illinois state line, Wisconsin state records show. The firm also paid $56.8 million for a 500,000-squarefoot warehouse next door, at 11211 Burlington Road. At $176 million, it is the highest price by far ever paid for one industrial property in the Chicago market, according to New York-based research firm Real Capital Analytics. Though Kenosha is in Wisconsin, brokers, developers and tenants consider it part of the Chicago industrial market. The Milwaukee Business Journal first reported the news of the Kenosha sale.

CRAIN’S CHICAGO BUSINESS • JULY 6, 2020 9

Weed Street will live up to its name Windy City Cannabis opens the city’s second new recreational marijuana shop

ROBERT M. STEINER

BY JOHN PLETZ Legal weed has come to Weed Street. Windy City Cannabis opened a marijuana shop July 1 at 923 W. Weed St. in Lincoln Park. It’s the second new cannabis store to open in the city since Illinois legalized recreational marijuana Jan. 1. “This is a dream come true,” says CEO Steve Weisman, who launched Windy City Cannabis in 2014. “I grew up playing basketball across the street.” The 1,100-square-foot store is the fifth location for Windy City Cannabis, which has dispensaries in Homewood, Justice, Worth and Posen. The Weed Street site was one of five approved by the city’s Zoning Board of Appeals. Because the state doesn’t allow pot shops to open within 1,500 feet of each other, it appears a location proposed by MedMen about 350 feet away at 1001 W. North Ave., which also received ZBA approval, will not open. Opening a marijuana shop in Chicago requires both city zoning approval and a state license. Neither the state nor MedMen responded to a request for comment.

Cresco Labs opened the city’s first new location at 436 N. Clark St. in River North in May. To the surprise of many, the Illinois Department of Financial & Professional Regulation gave approval to both Cresco and MOCA Modern Cannabis at 214-232 W. Ohio St., which are within 1,500 feet of each other. A surge of new marijuana shops in Chicago was expected to follow legalization, but a slow permitting process, bogged down further by the coronavirus, has resulted in just two new stores in the city in the year since recreational use was signed into law. Windy City Cannabis got state approval June 15. Weisman says it was a challenge to get the Weed

Street store built during the coronavirus outbreak. “We’re really excited about the location,” Weisman says. “There’s a burgeoning retail corridor nearby, anchored by Whole Foods. Weed on Weed Street. Could there be a better location than that?” Weisman says he didn’t have the street in mind when Windy City Cannabis got one of the coveted slots in the city’s lottery in November. “It was just a happy coincidence.” Demand for weed still exceeds supply, especially for buds, but the situation is getting better, Weisman says. Most shops encourage customers to pre-order online.

The Rothschild Investment Corporation Family mourns the passing of ROBERT M. STEINER, our friend and partner for over 26 years. Bob was the founder and General Partner of Thomas Paine Investors L.P. Bob will be sorely missed and our heartfelt sympathy is extended to the entire Steiner family.

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10 JULY 6, 2020 • CRAIN’S CHICAGO BUSINESS

EDITORIAL

It’s time for police to embrace reform

In the post-George Floyd moment, many new ideas are coming forth that could improve life for ordinary Chicagoans and for the officers dedicated to maintaining law and order—and hopefully be more effective at curbing crime than the tactics we’ve used until now. On Page 2 of this issue, Illinois Attorney General Kwame Raoul discusses with political columnist Rich Miller his ideas for licensing police. Others have proposed shifting

YOU CAN’T SAY YOU FEEL DISRESPECTED AND UNSUPPORTED IF YOU’RE NOT WILLING TO COME TO THE TABLE AND WORK OUT SOLUTIONS WITH OTHERS.

NEWSCOM

n a subject as fraught as policing in Chicago, there isn’t much room for consensus—except, perhaps, for this one point: The status quo isn’t working. As political reporter A.D. Quig notes in this week’s issue, Chicago certainly isn’t underspending on policing. We spend more per resident on policing than eight of the 10 largest cities. Chicago’s $660 per capita police spending trails only New York’s $671. And yet, our crime problem persists. Too many people on the West and South sides of Chicago live in fear of gun violence and gang intimidation. Each summer weekend generates a fresh roster of the fallen, victims young and old—and even children—caught in the crossfire. Meanwhile, residents and the police who are paid to serve and protect them coexist in a climate of mutual distrust. The community feels more policed than protected, living under suspicion, worried that any wrong move could draw attention from law enforcement—attention that could turn lethal in a heartbeat. Black elders teach their children from early in life how to behave during encounters with police, knowing these unwritten rules could spell the difference between life and death. And like a steady drumbeat, social media regularly delivers fresh images, pulled from cellphone videos or surveillance cameras, of policing gone wrong. Frustration over decades of bad blood between people of color and police has boiled over into demonstrations in cities large and small throughout the country, including here in Chicago. It’s a moment that calls for deep reflection on the many ways we have all contributed to a situation that has become so dysfunctional. Unfortunately, as happened in the wake of the Laquan McDonald shooting in 2014, one of the key constituencies in this dra-

ma—the police force itself—seems unwilling to engage in that sort of reflection. The defensive crouch is understandable, to a degree. Cops put their lives on the line every day, and feel under attack. But if the situation is ever going to change, if we’re ever going to achieve something like real community-police cooperation in this town, then the police need to be willing partners in that change. Resorting to the coded language of the “blue flu” every time anyone raises the prospect of reform only ensures nothing will change. So it was disheartening to see John Catanzara, president of the Fraternal Order of

Police, quoted in the Chicago Sun-Times on July 1 blaming morale problems for the steep rise in murders during the month of June. “I’m not telling them not to do police work,” Catanzara said of his members. “But I hope they just slow down and decide ‘Is this necessary?’ before they do it.” If Catanzara was encouraging his members to stop and think before using deadly force, then we might be getting somewhere. But what he actually seemed to be saying, in a tone familiar to anyone who has observed Chicago’s police culture, is that if you don’t like the way we police, then maybe we won’t police at all.

money now poured into policing toward other sorts of interventions—social workers, counselors, community liaisons, educators—to reduce the burden on police to be all those things in the neediest neighborhoods. But such talk raises the union’s hackles and, in the past, that’s been enough to stymie lasting change. Chicago can’t afford to let that happen again. The police can’t have it both ways. You can’t say you feel disrespected and unsupported if you’re not willing to come to the table and work out solutions with the others who have a stake in fixing this city’s obvious crime problem: local residents, business owners, landlords, church leaders, police brass, aldermen and the mayor. To do anything less is to signal you believe the status quo is just fine with you. And given how miserable the police seem to be, we know that’s not true.

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YOUR VIEW

A road map for companies wanting to help usher in meaningful change

Pastor Corey Brooks is founder of the New Beginnings Church in Woodlawn and Executive Director of Project H.O.O.D (Helping Others Obtain Destiny).

ecent police brutality incidents have sharpened our collective focus on the need for real solutions and systemic change. Corporations, too, have begun asking how they can play a role and be a deeper part of the solution and help usher in meaningful change. As a pastor on the South Side of Chicago, I have worked with dozens of corporations—from the small to the Fortune 500—as they conduct programs to improve our neighborhoods. I have witnessed all forms of approaches, with some companies offering one-off volunteer campaigns while others foster long-term relationships through community-building projects. The latter are almost always more successful. Here

are guidelines for companies seeking to become more inclusive, and to help be the bridge to an America with racial healing. Choose local impact over nation-

al brands. It is tempting for corporations to write checks to big-name national organizations (the NAACP and Urban League, for example), but if corporations want to make a difference in their own communities, look at grassroots programs, local NGOs and even churches that are addressing local needs.

Don’t write off blighted areas as hopeless. Make strategic investments in the NGOs and churches that are committed to working and

producing in blighted communities. There is nothing more demoralizing than the idea that something is beyond hope. If we want to infuse Black communities with hope, nothing— and no one—should be written off as a hopeless case. The South Side of Chicago, Baltimore and Detroit can be redeemed, and corporations can help lead the way. Skip the “do-good” tourism. It has become increasingly common for companies with good intentions to identify single-day opportunities to invest in Black neighborhoods. Oneday food banks or volunteer opportunities are appreciated, but they fail to make the transformative change we need. Far better are the corporate ini-

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.

tiatives that develop real roots in our communities. Invest in startups in the Black

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community. Startups by Black entrepreneurs suffer from a lack of capital and an almost insurmountable barrier to gaining access to investors. For those who want to make a lasting impact, consider hosting competitions for minorities to pitch business proposals to investors, or advertise in our communities the grant programs and other funding avenues available. Make it a priority to fund startups that will directly benefit our communities. Mentor Black students. Black stu-

dents today are the Black employees

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

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CRAIN’S CHICAGO BUSINESS • JULY 6, 2020 11

YOUR VIEW Continued of tomorrow. If we are ever going to close the employment gap at major companies, Black students need to understand the academic paths that lead to certain careers, and they will benefit from mentorships and internships. In many ways, Black students need the mentoring and internship opportunities even more than their white counterparts, as Black students are often attempting to enter into career paths where they may not know a single person in their own community who has pursued such a path.

borhoods is the gift of a strategic partnership. When corporations come into our neighborhoods with the partner mindset, anything is possible. At Project H.O.O.D., a ministry program my church runs to help former gang members turn their lives around, we have been blessed with corporate partnerships that provide everything from jobs training to work boots for their new jobs. These are the kinds of life-changing partnerships that transform individuals’ lives and, in the process, transform our community.

Form strategic partnerships in the

Share your talented people with us.

community. The best long-term investment a company can make in our neigh-

KC Crain Mary Kramer Jim Kirk Kate Van Etten

President Group publisher Publisher/executive editor Associate publisher

*** Editor Ann Dwyer Creative director Thomas J. Linden Assistant managing editor Jan Parr Assistant managing editor/digital Ann R. Weiler Deputy digital editor Todd J. Behme Digital design editor Jason McGregor Senior art director Karen Freese Zane Copy chief Danielle Narcissé Deputy digital editor/ Sarah Zimmerman audience and social media Columnist/contributing editor Joe Cahill Political columnist Greg Hinz Senior reporters Steve Daniels Alby Gallun Lynne Marek John Pletz Reporters Danny Ecker Stephanie Goldberg A.D. Quig Dennis Rodkin Steven R. Strahler Copy editor Scott Williams Contributing photographer John R. Boehm Researcher Kasey Hariman *** Director of digital strategy Frank Sennett Director of custom media Sarah Chow Associate director, Jaimee Holway events and marketing *** Production manager David Adair Account executives Aileen Elliott Claudia Hippel Christine Rozmanich Bridget Sevcik Laura Warren Courtney Rush Amy Skarnulis People on the Move manager Debora Stein Sales assistant Lauren Jackson Project manager Joanna Metzger Event planner Katie Robinson Event manager Tenille Johnson Digital designer Christine Balch Crain Communications Inc. Keith E. Crain Chairman KC Crain President Lexie Crain Armstrong Secretary Veebha Mehta

Mary Kay Crain Vice chairman Chris Crain Senior executive vice president

Adopt a small business for mentoring

or additional training. Small businesses in the Black community would benefit from additional corporate mentoring and training. Corporations that want to make an immediate impact could consider adopting a Black-owned small business for mentoring and additional training.

Give generously of your “four T’s.” One message I deliver to prospective corporate sponsors of our programs is that we need “the four T’s”—your time, your

thinking, your talents and your treasure. Creating a new corporate culture will require creativity, sweat equity and concentrated time. There is no way to achieve great results with superficial investments of any of the four T’s. We have much work to do to achieve racial equality, but we also have a strong foundation in the United States. Corporations can lead the way forward by drawing on what all Americans share in common. We are blessed to live in a nation that has an incredible entrepreneurial and innovative spirit—and that innovation is the key for ensuring a more inclusive corporate America.

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12 JULY 6, 2020 • CRAIN’S CHICAGO BUSINESS

Interest in voting by mail explodes in city

‘No but says

BY GREG HINZ In what you might call a sign of the times with special meaning, just over 105,000 Chicagoans already have applied to vote by mail in the fall general election, even though they won’t get their ballots until late September, cast them in October and have them counted in November. The explosion in remote voting is only expected to continue, driven by long-term trends and voters’ reluctance to mingle in crowds amid the COVID-19 pandemic. According to Lance Gough, executive director of the Chicago Board of Elections, more than

500,000 city residents will likely apply to vote by mail by early October. Anything close to that would swamp the 118,000 mail applications the board received for the March primary election. In the 2016 general election, about 93,000 city voters cast their ballots by mail.

VOTING IN ADVANCE

Combined with early voting sites the board is promising to maintain in each ward, the latest figures indicate a majority of ballots may be cast many days and even weeks before the actual election occurs. City turnout for the 2016 presidential race was 1.12 million voters.

GETTY IMAGES

The city Board of Elections expects more than 500,000 residents to apply for the remote vote. Look for the impact on campaigning—and on election night returns.

The new figures help explain why political activity is occurring earlier and earlier this cycle. For instance, groups opposing and favoring Gov. J.B. Pritzker’s proposed graduated income tax amendment, which will be on the Nov. 3 ballot, have been running TV ads for months now, with only a small break after the primary. The shift to mail balloting

will make election night itself less definitive. With mail ballots trickling in for as long as a week after Election Day, the outcome of many close races may not be known until well into the month. Every active registered voter in the state automatically will get a mail-ballot application in the mail in late July, instead of having to secure one themselves, un-

der a bill recently signed into law by Pritzker. Those interested in voting by mail can wait for their application or apply at the city Board of Elections site. The board says it will notify voters by email when their application is processed, when the ballot is mailed and when it is returned to and counted by the board.

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Northwestern tuition hike draws protest The university plans to hike fees this fall even though it anticipates a significant amount of remote instruction

argues an increase is not merited, given the changes the university Northwestern University’s plan is making, such as remote instructo increase tuition and fees for un- tion, in response to the COVID-19 dergraduates this fall is rankling outbreak. The petition has about 500 signatures so far. some parents. “We accept the changes that The university said that it’s targeting a 3.5 percent increase in tu- have been made out of necessity,” ition and other fees to $76,317 for Boyd says in a letter for the petition on-campus students. The promi- posted on Change.org. “Undoubtnent Evanston school also said that edly, as a result of these changes, it expects to increase financial aid the academic and campus experifor the coming year by more than 5 ence of each student will be compercent to $245 million, with more promised. We will not pay more for than 60 percent of undergraduates a lesser experience.” The battle over the costs comes getting aid, according to the June 25 statement posted to its website. in the wake of the pandemic forcBut that’s not appeasing some ing universities nationwide to send students’ families, who have students home last spring and refund part of their room and board as classes shifted “UNDOUBTEDLY . . . THE ACADEMIC online. The upheaval led to say that it AND CAMPUS EXPERIENCE OF EACH Northwestern expects a $90 million defiSTUDENT WILL BE COMPROMISED. cit this year that forced it to furlough 250 employees WE WILL NOT PAY MORE FOR A ahead of asking another 250 to voluntarily take buyLESSER EXPERIENCE.” out packages. While many universities, Jean Boyd, parent of NU student including Northwestern, signed a petition pushing back are targeting a return of students against the price hike. Jean Boyd, to campus this fall, they’re making the parent of a rising sophomore a wide range of changes for a safer at the university, started an online approach in light of the remaining campaign against the increase on threat posed by the coronavirus. June 28 and is urging the school to For instance, Northwestern is sugreverse the increase and instead gesting single-room occupancy at maintain last year’s tuition, room no extra charge unless students and board, and other fees. She choose to live with a roommate,

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BY LYNNE MAREK

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and encouraging local students to consider living off-campus.

REMOTE COURSES

In her petition, Boyd notes that in a recently posted university FAQ, the school says it “anticipates that the vast majority of courses will be taught remotely or have a remote component.” Northwestern spokesman Jon Yates says that’s accurate, but notes that “those decisions have not yet been made” on what percentage of courses will be offered

remotely. The university is still “committed to offering in-person curricular and co-curricular experiences as well.” “The remote learning experience is different from a face-toface class, but the course objectives, credit hours, and instructors are the same,” Yates says in an emailed statement. “Northwestern has dedicated time and support to increase trainings and resources that help faculty in designing and delivering remote classes that are as engaging and

rigorous as they would be if delivered face-to-face.” Across town, rival University of Chicago froze tuition for the coming year amid a similar protest over the fees, despite its arguably worse financial situation, with that school expecting a $220 million deficit this year. Northwestern and the University of Chicago’s undergraduate programs both rank among the nation’s best, with U.S. News & World Report ranking them No. 9 and No. 6, respectively, last year.

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CRAIN’S CHICAGO BUSINESS • JULY 6, 2020 13

Lawsuit blames Boeing for Dreamliner woes ‘Boeing’s guiding principle in developing the Max was not safety, but, rather, speeding the Max to market and generating profits,’ the complaint says. ‘Boeing engaged in similar conduct in connection with the 787.’

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Norwegian Air Shuttle is going to court here to try to force Boeing to compensate it for alleged “shoddy manufacturing” related not only to the grounded 737 Max but also the 787 Dreamliner. The 79-page lawsuit filed June 29 in Cook County Circuit Court accuses Boeing of fraud, breach of contract and gross negligence. Norwegian also announced it was canceling orders worth billions of dollars for 92 737 Max models and five wide-body 787 Dreamliners. The complaint threatens to

fatal crashes. “We are not going to comment on commercial discussions with our customers,” a Boeing spokesman writes in a statement to Crain’s. “Norwegian Air Shuttle is a long-standing Boeing customer. As with many operators dealing with a very challenging time, we are working on a path forward.”

‘MAJOR PROBLEM’

Litigation over the 787’s performance is rare, compared with the 737 Max, where “Boeing has been dealing with similar complaints, settling them one by one. It has already been a major problem for Boeing,” THE 79-PAGE LAWSUIT FILED JUNE 29 says industry analyst Richard Aboulafia of IN COOK COUNTY CIRCUIT COURT Teal Group in Fairfax, Va. ACCUSES BOEING OF FRAUD, BREACH The complaint OF CONTRACT AND GROSS NEGLIGENCE. says Norwegian has had to replace 787 engines made by compound Boeing’s potential Rolls-Royce Holdings “hundreds legal and financial vulnerabili- of times,” forcing the airline to ty as a global pandemic crushes lease substitute planes and costair travel and plane orders. The ing it plenty. Rolls was not named 737 Max only recently began test as a defendant. “Norwegian paid top dollar for flights after being grounded for more than a year following two a fleet of 787s, but they have been

BLOOMBERG

GETTY IMAGES

BY STEVEN R. STRAHLER

an operational disaster and have failed to bring any of the cost benefits or competitive advantages that Boeing promised,” says the complaint, filed by the Chicago-based litigation firm DiCello Levitt Gutzler and international firm Hogan Lovells, both of which represent Norwegian.

“Boeing’s guiding principle in developing the Max was not safety, but, rather, speeding the Max to market and generating profits,” the complaint says. “Boeing engaged in similar conduct in connection with the 787. Boeing promised that the 787 would be a revolutionary plane that would offer Norwe-

gian substantial operational and cost savings and the ability to offer passengers a premium flying experience. Norwegian paid top dollar for a fleet of 787s, but they have been an operational disaster and have failed to bring any of the cost benefits or competitive advantages that Boeing promised.”

Wine industry pioneer Anthony Terlato dies at 86 The retailer, importer, distributor and winery owner introduced Americans to pinot grigio. He was also an author and a host of lunches ‘as prized as a table at Taillevent’

ERIC FREDERICKS/FLICKR

BY H. LEE MURPHY Anthony “Tony” Terlato, a titan in the wine industry who mastered all facets of the business—a retailer, importer, distributor and winery owner on several continents— from the unlikely headquarters of the North Shore of Chicago, died in his sleep June 29 of natural causes. He was 86. His death was confirmed by his son William Terlato, president and CEO of Lake Bluff-based Terlato Wine Group, where Tony Terlato held the title of chairman and continued to work most weekdays in the office until last month. “He was in love with his work right up to the end, always pushing the rest of us in the family to be better,” William Terlato says. He explains that his father, who had a history of diabetes and a pacemaker implanted in his heart, played golf on the Saturday and Sunday before his death and had dinner and stayed up playing cards with the family that Sunday night. There was hardly a familiar face in the world of fine wine whom Tony Terlato didn’t know. His circle of friends and business acquaintances extended to such names as Napa Valley’s Robert Mondavi

(a mentor, according to William Terlato), Wine Spectator publisher Marvin Shanken, pioneering winemaker Alexis Lichine and wine writer Frank Schoonmaker, as well as the Rothschild family in France’s Bordeaux region.

FAMOUS CHEFS

An accomplished cook at home, Terlato also befriended a long line of famous chefs and food personalities, from Julia Child to Charlie Trotter and Jean Joho of Chicago’s Everest Room. Many of these notables were regular guests for lunch at the Terlato family’s baronial corporate headquarters in the former Armour mansion in Lake Bluff, where dining would often begin at 1 p.m. or so and then stretch on through multiple courses, a rotation of new wines and then after-meal espresso and brandies and, by late in the afternoon, Terlato’s ever-present cigars. On some days, most of the important business to be transacted at Terlato had to be accomplished before noon. “Some of our company lunches would go on to 10 p.m. and include dinner, with Tony doing the cooking,” his son recalls. Tom Matthews, executive editor of Wine Spectator magazine, says Terlato’s “invita-

tions to lunch were as prized as a table at Taillevent,” referring to the famous three-star Paris restaurant. Terlato, who grew up in Brooklyn and graduated with a business degree from St. Francis College in the same New York borough, began his career working at Leading Liquor Marts on Chicago’s North Side in 1955. A short time later, he joined his father-in-law’s wine bottling firm, Pacific Wine, and within a short time he was distributing wines from France. Later he expanded his portfolio to include wines from Italy and elsewhere, hitting upon the idea in the late 1970s of introducing an unfamiliar Italian varietal, pinot grigio, through a brand, Santa Margherita, that he virtually created for the U.S. market. It went on to become a bestseller. In the 1980s and ’90s, Terlato, by then accompanied in the executive ranks by both his sons, William and John (today vice chairman of the company), expanded into winemaking, buying such California wineries as Rutherford Hill, Chimney Rock and Sanford while acquiring interests in M. Chapoutier in the Rhone Valley of France and a joint venture between the two in Australia. Today Terlato Wines owns 1,000 acres in vineyards overall and 14

Anthony Terlato brands, including such recent successes as Federalist, which has grown to sales of 300,000 12-bottle cases annually from its start less than five years ago. Terlato’s revenue overall last year was estimated by William Terlato at nearly $400 million. Over the years Terlato was much decorated. He was granted the Italian equivalent of knighthood, the Cavaliere Ufficiale, Motu Proprio, in 1984. In 2003 Wine Enthusiast magazine named him “Man of the Year.” In 2006 he was named a lifetime member of the Horatio Alger Association of Distinguished Americans, joining a list that included Dwight Eisenhower, George Halas and Ronald Rea-

gan. As a passionate supporter of the arts, he was a longtime board member of Chicago’s Lyric Opera and a governing member of the Orchestral Association of the Chicago Symphony Orchestra. As a bantamweight 5-foot-7 athlete, Terlato was the Illinois state handball champion in the mid-1960s and an accomplished golfer who once boasted an 8 handicap. He had homes in Lake Forest, Napa Valley, Palm Springs, Calif., and Lake Geneva, Wis. He had golf memberships at such clubs as Bob O’Link in Highland Park and Conway Farms in Lake Forest, Lake Geneva Country Club and the Vintage Club in Indian Wells, Calif. In 2009, Terlato penned a memoir, “Taste: A Life in Wine,” in which, as Chicago Tribune reviewer Bill Daley put it, Terlato often revealed as much by what he didn’t write as by what he did. “You sense the inner steel and discipline that made him a success in a competitive business,” Daley wrote. Terlato leaves as survivors his wife of 65 years, Josephine, and his sons William, 60, and John, 59, along with six grandchildren and two great-grandchildren, most of whom work for the family company. A private service was held. A “celebration of life” is planned with friends at a date to be determined, according to William Terlato.

ARCHITECTURE / DESIGN

Lamar Johnson Collaborative, Chicago Lindsay Webb is a newly appointed Associate at Lamar Johnson Collaborative, a leading design and architecture firm with offices in Chicago and St. Louis. She utilizes her background in architecture and interiors to thoughtfully approach projects of various scales. Her ability to collaborate helps her create consistent and responsive design solutions. She is a hands-on designer whose attention to detail and ability to see the big picture facilitate a seamless project process and successful outcomes. ARCHITECTURE / DESIGN

Lamar Johnson Collaborative, Chicago Mitch Heiar is a newly appointed Associate at Lamar Johnson Collaborative, a leading design and architecture firm with offices in Chicago and St. Louis. Mitch is a Professional Landscape Architect and brings his passion for how thoughtful design can invoke a visceral experience with the natural environment. With roots in horticulture, Mitch also provides skill in planting design. He has an eye for the details in outdoor spaces that seamlessly integrate into their surroundings. ARCHITECTURE / DESIGN

Lamar Johnson Collaborative, Chicago Richie Hands is a newly appointed Associate at Lamar Johnson Collaborative, a leading design and architecture firm with offices in Chicago and St. Louis. Richie is LEED AP BD + C accredited and has a multidisciplinary background in design, having worked on large and small interior and exterior projects across the globe. He is passionate about mentoring and was recently selected to join AIA Chicago’s Bridge Mentorship program; meanwhile he is also the national co-chair of NOMA Project Pipeline. CONSTRUCTION

Clune Construction, Chicago Clune Construction has named Jay Bradarich Vice President, Senior Project Manager. Jay has 11 years of experience in the construction industry managing many high-profile interior buildouts. He has helped expand Clune’s airport construction capabilities in the Chicago area. He holds a Bachelor of Science Degree in Industrial Technology and Construction Management from Illinois State University.

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 CONSTRUCTION

EDUCATION

MANUFACTURING

Clune Construction, Chicago

Rustandy Center at Chicago Booth, Chicago

Plastics Engineering Company (Plenco), Sheboygan

Caroline Grossman is the new Executive Director of the Rustandy Center for Social Sector Innovation at the University of Chicago Booth School of Business, succeeding Christina Hachikian, who is moving to teach full time at Booth. Grossman, a Booth MBA graduate, experienced educator and business leader, joined the Rustandy Center five years ago. She’s served as Director of Programs & Global Initiatives, led social impact research partnerships and developed relationships across the social sector.

Plenco announces the appointment of Len Nunnery as Director of Marketing, Sales & Tech Service. Nunnery will be responsible for leading Plenco’s commercial and tech service organizations while driving new growth initiatives. He brings a unique depth of knowledge and experience in development, production and commercialization of customized thermosets. Nunnery held leadership positions at Bulk Molding Compounds, Citadel Plastics, A. Schulman, and was most recently VP of Sales & Marketing for Minnesota Rubber. “We are excited to announce the hire of Len Nunnery. Len brings Plenco a proven history of successful sales & marketing leadership and a wealth of technical thermoset experience.” Mike Brotz, President/CEO.

Clune Construction is happy to announce that Mike Symons has been promoted to Vice President, Senior Superintendent. He has 34 years of experience in the construction industry, overseeing many major construction projects in various parts of the U.S. Mike is one of Clune’s most respected field leaders, known for his forwardthinking, client focused approach to leading projects. In addition to his construction experience, Mike spent 10 years as a firefighter with the Batavia Fire Department.

CONSTRUCTION

HEALTH CARE

MANUFACTURING

Clune Construction, Chicago

Gorman Health Group, Chicago

Tuthill Corporation, Burr Ridge

Clune Construction is pleased to announce that Andy Holub has been promoted to Vice President, Pre-Construction/ Special Services. With 23-years of experience in the construction industry, Andy is responsible for all aspects of the pre-construction process and he oversees the Clune Self-Perform Group, making it one of the most respected in Chicago. He earned his Bachelor’s Degree in Architectural Studies from the University of Illinois and holds an OSHA 30-Hour Certification.

Kate Rollins, MSN, RN, has been named GHG’s Senior Vice President of Population Health & Clinical Innovations, where she will lead efforts to help clients improve clinical outcomes & quality while lowering costs. Kate is a Clinical Nurse Specialist with expertise in oncology, infectious diseases & a focus on caring for vulnerable populations. She has 20+ years of experience in clinical strategy development, program development, implementation, operations & performance management/evaluation.

Tuthill Corporation, a privately held manufacturer of industrial goods, would like to announce the following promotion. Traci Louvier was named Vice President, Corporate Marketing and Branding guiding Tuthill’s strategic vision and digital transformation for all Tuthill locations. Louvier leads Tuthill’s customer experience project, streamlining Tuthill’s marketing and CRM processes, along with implementing Product Information Management and eCommerce platforms.

LAW FIRM

PUBLIC AFFAIRS

Chuhak & Tecson, P.C., Chicago

Conlon Public Strategies, Chicago

CONSTRUCTION

Clune Construction, Chicago Mike Themanson, CHST was recently promoted to Vice President, Safety at Clune Construction. He has over 20 years of construction safety experience, conducting audits and inspections to ensure OSHA compliance. At Clune he oversees employee safety for all projects nationally. Mike has a Bachelor of Science degree in Occupational Safety and Health from Illinois State. He is also a certified CHST, CRIS, and an OSHA Authorized Construction Trainer.

Michael Debre has been elevated to principal. Mike represents financial institutions on a national basis in matters of loan enforcement, insolvency, fraud, breach of contract, replevin, conversion, mortgage foreclosures and appeals. He helps businesses with construction liability and other disputes, assessing risks and costs while providing sound analysis and counsel. Being a former senior vice president of a Chicago commercial bank attunes Mike to the requirements and pressures facing lenders.

Conlon Public Strategies welcomes Barbara A. Lumpkin as Executive Vice President. Barbara is a transformational leader whose record of accomplishments spans nonprofits, financial services and government. Previously, Barbara served as interim president and CEO of the Chicago Urban League and in several prominent roles in financial services and city government, including the first woman appointed as City Comptroller and the first African American woman to serve as City Treasurer.

REAL ESTATE

Darwin Realty/CORFAC International, Elmhurst Jeffrey Provenza has been promoted to Senior Vice President. He specializes in tenant/ owner representation, acquisition/disposition, build-to-suit, and investment sales. He has completed over 8.5 million SF in transactions totaling over $200M during his 10-year career at Darwin. Notably, he brokered a 48-acre land sale in the O’Hare submarket for the development of Bridgepoint Franklin Park, a 754,103 SF award winning project. Jeff earned his finance degree from the University of Illinois.

REAL ESTATE

Darwin Realty/CORFAC International, Elmhurst Darwin has hired two new associates. Frank Damato IV is a recent graduate of DePaul University and will focus on tenant/buyer/owner Damato representation, build-to-suit, sale/leasebacks, and investment acquisitions and dispositions in the western and far western suburban Lepore industrial submarkets. He will work with Brendan J. Sheahan, vice president, focusing in the I-88 Corridor and Fox Valley industrial market. Sam Lepore is a recent graduate of Indiana University and will focus on the West Cook and I-55 North industrial submarkets. He is working with Jeff Provenza, senior vice president, offering brokerage services including tenant/buyer/ owner representation and sale/ leasebacks. Sam was a Chick Evans Scholar and interned at NAI Hiffman.

TECHNOLOGY

HERE Technologies, Chicago Stephen Patak has been promoted to SVP and GM of the Americas region at HERE Technologies. HERE is the world’s largest location platform that helps people, businesses and cities drive innovation with location data. Stephen will be responsible for driving growth as well as helping customers and partners leverage the HERE platform to create impactful change.

CRAIN’S CHICAGO BUSINESS • JULY 6, 2020 15

Ford aims to be carbon neutral by 2050 The automaker says it will run its Chicago plant and others on renewable power sources by 2035

per vehicle produced. But that’s just a start: Three-quarters of the company’s overall carbon Ford Motor is pledging to be footprint is attributed to vehicle carbon neutral by midcentury emissions. while renewing its 2035 goal to Ford had no immediate compower its plants, including two ment on how close it is today to in Chicago, with locally provided hitting its 2035 goal. renewable energy. The company has said it Last year Ford poured $1 bilwould introduce zero-emission lion into its Torrence Avenue asversions of the Mustang, F-150 sembly plant—which builds the pickup and Transit CommerFord Explorer—and its Chicago cial truck by investing more Heights stamping plant, while than $11.5 billion through 2022. boosting employment here by Among other automakers, it has 500, to 6,500. resisted White House attempts to unwind FORD SAID IT AIMS TO CUT THE tightened emission standards issued by the AMOUNT OF CARBON DIOXIDE Obama administration. EMITTED BY ITS FACILITIES BY 18 A plan to jointly develop an electric vehiPERCENT BETWEEN 2019 AND 2023. cle with Rivian out of a plant in central Illinois was scrapped because of the On the way to its 2035 goal, the pandemic. automaker wants renewable enThe Chicago plant in Hegeergy to account for 32 percent of wisch on the Far South Side is its facility power needs by 2023, Ford’s oldest continually opit said in a sustainability report erating manufacturing facility, released June 24. according to the company. It Ford said it aims to cut the opened in 1924 with Model T amount of carbon dioxide emitproduction and assembled its 5 ted by its facilities by 18 percent millionth vehicle in 1972. It later between 2019 and 2023 after a switched to SUV models. 30 percent reduction in 2017

BLOOMBERG

BY STEVEN R. STRAHLER

The Chicago plant in Hegewisch on the Far South Side is Ford’s oldest continually operating manufacturing facility, according to the company. Last year’s rushed rollout of a new Explorer caused the company headaches, however. Deliver-

ies were delayed and thousands of vehicles, instead of heading directly to dealers, had to be shipped

to Michigan for repairs. The plant also has attracted notoriety from sexual harassment claims.

Crain’s takes home journalism awards

rain’s Chicago Business brought home a pack of accolades during this year’s journalism award season for its work in 2019, with its Crain’s Forum series leading the way. In the 65-year-old national Jesse H. Neal Awards contest for business media, Crain’s won the top honor for its yearlong Forum series, an effort begun in 2019 to examine intractable problems facing the city and the state of Illinois, from their ticking timebomb pensions to a high-stakes bet on the legalization of cannabis sales to vexing 21st-century urban planning challenges. The Forum also gathered up perspectives on potential solutions for those troubles from business, civic and nonprofit leaders as well as elected officials. In the national Society for Advancing Business Editing & Writing’s Best in Business competition, columnist Joe Cahill, who has written his On Business column and blog since 2011, won in the commentary/opinion category for holding Chicago companies accountable, such as in asking how snackmaker Mondelez International could disregard shareholders’ over-

whelming vote against a huge payday for CEO Dirk Van de Put. A Forum team that included digital design editor Jason McGregor, editor Hugh Dellios, reporter Claire Bushey, photographer Stephen J. Serio and photographer/videographer Pat Nabong won a SABEW innovation award for their work on series features “Shift change,” about the changing nature of what constitutes a “good job,” “Treading water,” about the future of the city’s precious resource, and “The moment is now,” on gun violence. SABEW, affiliated with the Walter Cronkite School of Journalism & Mass Communication at Arizona State University, is a nonprofit that aims to encourage comprehensive reporting of economic events without fear or favoritism and to increase members’ skills and knowledge through continuous education. In the Alliance of Area Business Publishers editorial excellence awards, Crain’s nabbed five gold awards, including for the full staff in the best newspaper category; in the best feature layout category for art director Karen Freese Zane’s layout of the 20 In Their 20s feature; in

the best overall design as well as best photography/illustrations categories for work by Zane and creative director Thomas J. Linden and McGregor; and to a six-member Forum team, including those named above and freelancer Steve Hendershot, for best use of multimedia related to six different issues that captured stunning visuals, like lapping Lake Michigan in “Treading water.” AABP silver awards went to the entire CCB staff in the best website category and, in the best feature category, for the Forum series; to Cahill for best bylined commentary; and to Linden, McGregor and Brian Stauffer in the best front page category for the Forum edition that covered

gun violence. A bronze award was picked up by health care reporters Stephanie Goldberg and Jon Asplund for their work on Health Pulse, which was honored in the best specialty

e-newsletter category. In the Chicago Headline Club’s Peter Lisagor Awards contest, Crain’s won four honors, including for the staff in the best use of digital technology category for the Forum series. Editor Ann Dwyer also won for best editorial writing, including for an editorial that questioned whether Chicago’s reform-minded mayor is living up to her image or falling back into the city’s penchant for patronage. Cahill landed a Lisagor Award for best news column or commentary, and McGregor was singled out for best design related to the Forum series. In addition, the publication and its staff were finalists in another 15 Lisagor categories.

16 JULY 6, 2020 • CRAIN’S CHICAGO BUSINESS

Noted midcentury architect’s 1955 penthouse for sale BY DENNIS RODKIN The widow of noted midcentury modern architect Milton Schwartz is selling the glass-wrapped penthouse he designed for them atop his mid-1950s concrete-ribbed tower in Lakeview. Audrey Schwartz is asking $1.25 million for the three-bedroom, 3,000-square-foot condo on the 21st floor at 320 W. Oakdale Ave. Listed with Alexandra Van Ginkel of Premier Relocation, the condominium came on the market June 23. The unit, with exterior walls of glass and interior walls of walnut in the main living space, opens onto a large terrace with views east to the lake and south to the skyline. Schwartz, who could not be reached for comment, in 2012 told Chicago magazine that her late husband “had a vision of air and lightness, and he designed his buildings to emphasize that.” The Oakdale building, she said then, “is as contemporary as it was 60 years ago, and as contemporary as anything is today.” Milton Schwartz, who died in 2007, designed and built the Oak-

dale building, completed in 1955. Its stacked profile of glass walls and 3-foot concrete ledges or ribs drew praise from U.S. and French architectural journals. Among his other Chicago buildings are the Constellation on North Avenue in the Gold Coast, 5601 N. Sheridan Road in Edgewater and the Executive House Hotel (now the Royal Sonesta) on Wacker Drive.

PHILLY TO VEGAS

Schwartz also designed buildings in Philadelphia, Peoria and, most fabulously, Las Vegas, where he designed the Dunes Hotel, with a similarly ribbed exterior. Schwartz once said he designed a restaurant interior at the Dunes expressly to provide proper lighting for the strippers the hotel owner hired to keep male patrons coming in to gamble. Long a landmark of the Las Vegas Strip, the hotel was demolished in the 1990s amid a new construction boom. (Another architect, also named Milton Schwartz, designed numerous North Shore houses in the midcentury modern style.) On Oakdale, Schwartz was the architect, contractor and builder,

creating what was advertised at the time as “Chicago’s first completely air-conditioned all glass multi-story apartment building. In summer you will have a haven of coolness in your own apartment.” According to local architecture writer Lee Bey, Schwartz initially designed the building to be round but had to make it rectilinear to land financing. This was several years before construction got underway in 1960 at the round Marina City towers. Schwartz designed the 21st floor with two units, one for his family and a smaller one next door for his in-laws, although they decided not to move in. That condo, two bedrooms and 1,800 square feet, sold in November for $705,500. Van Ginkel says that in the condo Audrey Schwartz is selling, “you get sunsets in all the bedrooms, and you get downtown views in the living room and den.” The unit has some built-in cabinets that Schwartz designed, and vintage finishes including a mirrored bathroom vanity and sinks in pink, yellow and green.

VHT STUDIOS PHOTOS

Milton Schwartz’s widow, Audrey, is selling the 21st-floor condo he designed for them, complete with walnut walls, custom built-ins and vintage bathroom fixtures

MORE PHOTOS ONLINE: ChicagoBusiness.com/residential-real-estate

1970s Lincoln Park house for sale for first time

Now one of the city’s most eminent architects, Larry Booth was in his 30s when he designed the home for a pair of real estate figures A modern house of glass, brick and wood on a triangular corner in Lincoln Park is on the market for the first time since Larry Booth, now one of Chicago’s most eminent architects, designed it in the early 1970s. The house, on the corner of Cleveland, Lincoln and Dickens avenues, is being put up for auction by the family of its original owners, veteran developer George Thrush and his late wife, fellow real estate executive Mary Thrush. The couple commissioned Booth to design the house when he was 35 years old and both he and they were active in their generation’s revitalization of the Lincoln Park neighborhood. The house was finished in 1976.

ONE OF THE CHICAGO SEVEN

Since 1980, Booth’s firm, Booth Hansen, has designed numerous projects in and around Chicago, including the rehab of the old Palmolive/Playboy building into condos, the Joffrey Tower on State Street and the Hayden West Loop, a hot-selling condo development. When designing the Thrushes’ house, Booth was a young architect who would soon become known as one of the Chicago Seven, who rejected the austerity of the modernist style epitomized by Mies van der Rohe’s buildings. For the Thushes, Booth designed a four-bedroom house

with two stories of glass in the main living room along Cleveland, a central staircase with white pipe handrails like those on an ocean liner and a master bedroom window on the point of the building that frames a downtown skyline view. The rectilinear modern structure is a departure from the historical red brick houses and rowhouses on Cleveland, which include one designed in 1884 by Louis Sullivan. “My parents always loved the house,” says Blair Thrush Lele, the couple’s daughter, a real estate agent at Engel & Volkers who is managing the sale for her family. The arrangement of solid walls and windows “has all this light coming inside from these tall windows and connection to the outdoors, but you still have privacy,” she says. The entry is at sidewalk level, but the main living floor is one flight up, and on that level are two terraces, one off the library and another off the kitchen. There is also a ground-level yard, tucked between the house and its neighbor on Cleveland. The house goes up for auction Aug. 11 through Chicago firm Rick Levin & Associates, with a minimum bid of $1.25 million. The auction has an unpublished reserve, meaning there’s a minimum price below which the sellers don’t plan to go, but they aren’t divulging it. Even so, Levin says, “I have a great deal of confi-

dence that they’ll sell to the highest bidder.” George Thrush’s development firm, Thrush, was active in Lincoln Park, where in the 1980s it made headlines in the Chicago Tribune with half-million-dollar homes in the neighborhood, in River North and in other redeveloping neighborhoods. Now in his 90s, he moved out of the house recently, according to his daughter. Mary Thrush died last year. The house has no landmark status. A buyer could replace it with a condominium building or other new structure. The sidewalk level of the southern end of the house, nearest the intersection, is an apartment that Lele Thrush says rents for about $950 a month.

PHOTOS BY DENIS RODKIN

BY DENNIS RODKIN

CRAIN’S CHICAGO BUSINESS • JULY 6, 2020 17

Campaign strategist selling Evanston Victorian Pete Giangreco is selling the home where he and his political activist wife, Laura Tucker, have raised three kids and a lot of dollars for Democrats The first time he saw his wife stand in this wood-wrapped foyer, with daylight streaming through the leaded glass windows over the landing, and turn around 360 degrees to take it all in, “I knew we were buying this house,” Pete Giangreco recalls 13 years later. Giangreco, a noted political strategist, and his wife, Laura Tucker, a political activist and nonprofit leader, did tour the rest of the house that day, though buying it was something of a foregone conclusion. At the time, in 2007, it had recently undergone a full renovation that unearthed historical wood beneath layers of paint and created a suite of family room and other informal spaces behind formal originals. They were also taken with the house’s location, on Hinman Street with downtown shops and transit stations a few blocks west, Clark Street Beach a little more than a block east, and Northwestern University to the north. Their three kids “could get anywhere on their own,” Tucker says. “They didn’t need me

to drive them to the orthodontist.” The house, Tucker says, “is very nice, but it isn’t a museum—it’s a house to live in where you can flop down on a couch.” And to throw parties in. The couple have entertained dozens of family members at Thanksgiving, and even more politically active people, who come for political fundraisers where Sen. Tammy Duckworth, Rep. Jan Schakowsky and many others have spoken, often addressing guests from the landing beneath the leaded glass windows.

decades, the house has been a University Club hall, a rooming house and a private home. “They don’t make houses that look like this anymore,” Tucker says. “It’s an original. I see people stop, look up and take pictures of the house all the time.” With their three kids grown, Tucker and Giangreco plan to downsize out of the 6,100-squarefoot house. They listed it July 1 at just under $2.3 million. The home is represented by Sally Mabadi of Berkshire Hathaway HomeServices Chicago.

CANDIDATES

A partner with Strategy Group, a campaign management and direct-mail firm for Democratic candidates, Giangreco has worked on campaigns for Senator and later President Barack Obama; U.S. Reps. Mike Quigley, Danny Davis and Bobby Rush; Minnesota Senator and former presidential candidate Amy Klobuchar; and many others. Built in 1894, the house was designed by J.T.W. Jennings, the architect of several buildings at the University of Wisconsin. Over the

LARRY MALVIN PHOTOGRAPHY

BY DENNIS RODKIN

See the homes Chicago architects love BY DENNIS RODKIN A North Side house near the Southport el station that celebrates its location with a broad window for viewing trains and a country house in Wisconsin designed to minimize its intrusion on a natural landscape are two of Chicago architects’ favorite houses this year. The houses received awards from the American Institute of Architects Chicago chapter June 25 in an online event that replaced the organization’s annual in-person spring party celebrating the best of what it calls “small projects”— works that aren’t done on the skyscraper and institutional scale that it features in the fall. AIA Chicago jurors gave a citation of merit, a second-level award, to each of five other residential designs, most notably the rehab of an Old Town house designed in 1972 by the late Bruce Graham, architect of the Inland Steel and John Hancock towers, among many others. A jury of three architects selected 10 designs for small-project awards. They included a contemporary bowling alley, a coffeehouse and a performing arts center. Here’s a look at the three standout residential designs: Rehabbing an existing house on Newport Avenue 75 feet from the CTA Brown Line tracks, Vladimir Radutny Architects opened up the side of the house with a wide pic-

ture window, where the picture is trains clattering in and out of the nearby Southport station. “It’s close to a station, so you don’t hear trains accelerating,” says Radutny, who in May was named to a list of the world’s most cutting-edge architects. “What you hear is the announcements, which is charming.”

‘AN ASTONISHING REHAB’

In converting the old two-flat into a modern single-family home, Radutny kept the historical front facade, added a modern metal-clad wall on the back and created a bright, sleek interior with a sculptural staircase whose side wall turns into a bench. One of the jurors describes it as “an astonishing rehab done with a touch so light, you can’t tell from the exterior,” according to notes provided by AIA Chicago. For a client who’s restoring about 20 acres near Lake Geneva to prairie, Chicago architecture firm Collective Office designed a low-slung house that “doesn’t dominate the landscape,” says principal Jeff Klymson. The connected modules of the house have peaked roofs whose standing-seam metal cladding runs down the side, with other sides covered in hardy Alaskan yellow cedar shingles. The peaked roofs make possible taller spaces inside than the single-story design the clients

initially asked for, while sticking to the concept of not being too big. From every room, there are double doors out to the landscape, Klymson says, so that “the experience inside is always oriented toward the prairie,” which the homeowners have planted right up to the edges of the house. The interiors are minimally detailed with sharp lines, such as a white oak linen closet with deep black seams between compartments. “The project has beautiful, simple forms, but the details are handled elegantly,” the jurors’ notes say. When dSpace Studio’s client bought a house on Willow Street in Old Town a few years ago, it was both already stunning and in need of updating. It was designed by architectural giant Bruce Graham in 1972 for a friend who held onto it for 44 years, until her death. “The house had really great bones, from Bruce Graham,” says Kevin Toukoumidis, principal at dSpace. But its wood facade was worn out, and some changes inside could make the interior even lighter than it was. They included replacing drywall railings on the walkway around the central atrium with glass and moving a tall fireplace and chimney off the glass rear wall, where it broke up the view of the enclosed rear garden, to a side wall. In the rehab, the fireplace and some walls were covered in marble slabs—a reference, says Toukou-

MIKE SCHWARTZ

A Wisconsin country house set into a restored prairie and a sleek rehab of a historical two-flat into a single-family home: These are among the top home designs of the year, according to the local American Institute of Architects chapter

A Wisconsin house, top, and a Lakeview rehab midis, to the work of another great Chicago architect, Ludwig Mies van der Rohe, a longtime friend of Graham’s. Outside, the street front of the house is wrapped in wood as it originally was, but the architects worked with landmarks officials to get approval for a more contemporary black finish, and enhanced privacy with a row of trees. A juror says the result was “a remarkably sensitive renovation.” Toukoumidis’ firm also received

a citation of merit for the handsome design of a Lincoln Park penthouse, which was for sale in 2019 at $6.75 million but later went off the market unsold. Also receiving citations were Radutny’s design for the interior of a condo in Mies buildings on North Lake Shore Drive, the renovation of a 1996 house in the Catskill Mountains in New York by the firm DAAM and renovations and an addition to a pre-Chicago Fire house by CamesGibson.

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CRAIN’S CHICAGO BUSINESS • JULY 6, 2020 19

Chicago spends more per resident on policing than other large cities POLICING from Page 1 how the city can save money without endangering public safety or ongoing efforts to reform policing. “I think we’ve not had hard conversations about what we need in a police department,” says Cara Hendrickson, executive director of Business & Professional People for the Public Interest, or BPI. “It is long past time for the department to look at its operations from a comprehensive perspective.” It’s an issue several big city leaders are grappling with as they face massive budget shortfalls and calls to defund. New York Mayor Bill de Blasio has proposed shifting $1 billion from NYPD’s $11 billion, 36,113-officer budget to various social programs, a move that would cancel a recruiting class of 1,163 and curtail overtime spending by $296 million. Los Angeles plans to cut $150 million from its $1.86 billion police budget by slashing hiring to bring the headcount below 10,000 and eliminating $97 million in planned overtime. Chicago Mayor Lori Lightfoot, a veteran of CPD’s Office of Professional Standards and the Chicago Police Board, has not publicly supported cuts to the department. “The consequences of defunding the police when we’ve got 94 percent of that budget as personnel, it means cutting police. Every time I talk to a local elected official or somebody else, I say, ‘Do you literally mean cutting the police—do you really want to remove police officers from your neighborhood? From your ward?’ And the answer always, is, ‘No no no, that’s not what I meant, mayor,’ ” she said June 29. But with a $700 million budget gap to fill for 2020 and a likely billion-dollar shortfall in 2021, Lightfoot needs to find cuts somewhere. CPD’s 37 percent share of Chicago’s $4.4 billion corporate fund (15 percent of the city’s overall budget) and its relatively high per capita outlays make the department an inviting target for budget-cutters and defunding advocates alike. And it’s not clear that Chicago’s higher per capita police spending makes the city safer. Some cities that spend considerably less have lower crime rates than Chicago.

Also unclear is why Chicago spends more on police than similar cities. Staffing levels at police departments reflect crime, population and politics. While LAPD gets some help from county police, and New York police carry more homeland security responsibilities, critics say CPD has never been forced to think hard about its footprint. Its numbers have grown even as overall crime and the city’s population have fallen. Aldermen and the police union have pressed for more officers, and the City Council has largely rubber-stamped CPD budgets, including a two-year hiring spree that added 970 positions after unusually high violence in 2016. Police department spending has increased 31 percent since 2012, as the total number of officers rose 6.7 percent to nearly 13,000. CPD would not provide staffing studies to justify its current levels. Lightfoot has said cutting personnel amid this summer’s recent deadly shootings would be “daunting.” Trimming staff also could undermine the mayor’s goal of diversifying the force. The police union contract requires that any layoffs start with newer officers, a more diverse group.

OLD STANDBYS

Finding cuts that won’t reduce the number of cops on the street would be a challenge. Among floated ideas: using more civilians for administrative work, moving response to “social work” calls like domestic violence or mental health out of the department, rethinking the $5 million Juvenile Intervention & Support Center program, closing vacant positions or halting new cadet graduations. Lightfoot has instead opted to go after the old standbys: overtime and misconduct liabilities, which together cost the city about $200 million last year. “From 2011 to 2016, CPD’s actual spending on overtime increased from $42.2 million to $146.0 million,” in part due to loose internal controls, Chicago Inspector General Joe Ferguson wrote in a 2017 audit. Over that period, Ferguson found $225.5 million in OT entries that had “either blank or generic reason

POLICE PRESENCE Chicago deploys more officers per capita than other large cities, some of which have lower crime rates. Violent crimes

Property crimes

Police officers

Per 10,000 people

Houston

102.6

Houston

Chicago

100.6

Phoenix

Philadelphia

90.9

42.4 41.4

Philadelphia

309.7

Los Angeles

Philadelphia

Phoenix

73.3

Los Angeles New York

251.3 150.2

48.3

New York

318.2

74.8

54.1

349.2

Chicago

Los Angeles

New York

401.0

Houston Phoenix

24.8 22.3 17.7

Source: 2018 FBI Uniform Crime Reporting

codes,” making it tough to know if the hours were warranted. The city spent roughly $130 million on overtime in 2018 and 2019, according to the Sun-Times. CPD spokesman Luis Agostini says overtime costs are down 14 percent through May of this year, but the $27.3 million spent so far in 2020 does not include the cost of response to June protests. Settlement and outside counsel costs related to the Police Department have cost the city an average of $67.5 million annually since 2011. Lightfoot budgeted $153 million on settlements overall—police and otherwise—in 2020. She also brought on a chief risk officer, Tamika Puckett, to help eliminate waste. Lightfoot says she’s focusing on accountability in upcoming contract negotiations with the Fraternal Order of Police.

CIVILIANIZING JOBS

Chicago uses sworn officers for many back-office jobs that could be performed by lower-paid civilians. A 2013 audit from Ferguson found civilianizing 292 positions could save up to $16 million. CPD says it has civilianized 300 positions since 2016 and hopes to move 160 police to the streets when the city launches a consolidated Office of Public Safety Administration. But those moves wouldn’t save money because overall headcount wouldn’t decline. The “defund” definition varies widely among groups here. The #LetUsBreathe Collective, for example, is calling for a 75 percent cut to CPD’s budget; for officers to exit

Chicago Public Schools, the CTA and other public institutions; and a stop to construction on the new police and fire training academy. “For me, it really is reallocation,” Ald. Andre Vasquez, 40th, says. “I’m looking at it saying, if this is 40 percent of our operating fund, if it keeps increasing year over year and we’re not solving the problem, those funds are much better allocated in Housing, (Family and Support Services) or Public Health (departments).” James Burch, president of the National Police Foundation, worries “uninformed” cuts will result in “double tragedy”—pulling money from the Police Department but under-resourcing its replacement. “Not only are you damaging the agency that you’re taking money from, but you’re setting the agency the money is going to up for failure as well.” Burch, BPI’s Hendrickson and Ferguson say across-the-board cuts would be ill-advised, especially as the city works to comply with consent decree requirements. Instead, CPD should focus on its core competencies and mission, and cut unrelated activities, Ferguson and his public safety deputy, Deborah Witzburg, say. That might mean beefing up the detectives unit and community policing to improve the department’s homicide clearance rate. It might also mean spending money upfront to buy out older officers who aren’t committed to that mission. “The last thing anyone would

COST DRIVERS Mayor Lori Lightfoot has pledged to attack costly line items directly related to Chicago police: overtime and the cost of misconduct, including settlements and costs for outside attorneys. Misconduct

Overtime

$150 million

100

’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19

Sources: Chicago Reporter, city of Chicago, Chicago Inspector General

want to advocate for is the kind of decontextualized budget cutting, just taking dollars away,” Witzburg says. “If that is putting in peril efforts that are underway or might soon be underway to meaningfully reform the department, then we’re moving in the wrong direction.”

It may be July, but it feels like spring in Chicago-area residential real estate HOMEBUYING from Page 1 Buyers were voracious when they came out of their hidy-holes. “They want it,” Howard says. “They want to get this done.” Annie Bauer, an @properties agent, says the summer 2020 buyer “is different from what we were seeing in 2018 and 2019.” In those years, in hot neighborhoods like those she covers on the North Side, good-looking listings often attracted multiple interested parties quickly, but “if they saw it was going to be a multiple-offer situation, they’d back away,” Bauer says. “Now, they’ll get into the multiple offer if it’s the place they want,” she says. That’s been particularly true with homes with nice

outdoor spaces. People who spent the shutdown weeks with nowhere outdoors to go, including the lakefront, “are willing to pay to get that space now,” Bauer says. She’s not only represented properties with outdoor spaces, she bought one herself, after whiling away the stay-home order indoors at her apartment. New listings haven’t grown as fast as contracts, possibly because sellers are still hesitant to open their homes to possibly infected strangers, even with real estate agents maintaining social distancing and sanitation procedures. Also possibly keeping some people on the sidelines is the fear that with tens of millions unemployed and other wreckage

in the economy, this isn’t a good time to put a house on the market. With job losses quickly mounting into the millions and the nation’s economy seemingly teetering on the edge, some people who had been prepping their homes for the spring market “sat down to wait it out,” says Jeff Lowe, one of the top-producing agents in Chicago.

STEADY RATE

New listings came on the market at a steady rate of about 7,800 a week during June. In an ordinary June, each week there are fewer new listings than the week before. The downward line for 2019 should drop below the flat line for 2020 in early July data; they were even with each other in

the June 29 data. Some agents say they’re already at that point. Lowe says his team of agents at Compass put five new listings on the market in June 2019; he put 24 on in June 2020. The figure would be higher, he says, if he included listings paused during the shutdown that came back on the market in June. In a typical year, Lowe says, “you put most of your listings on in March, April and May. But this year there’s no rulebook.” These agents all say they anticipate the market becoming even busier over the next several weeks, as long as Illinois doesn’t have to pull back from its reopening plans, as Arizona, Texas and others did because of increases in new

COVID-19 infections. “Every day people feel a little more confident that it’s going to be OK,” Howard says, and ease up on any reluctance to entering strangers’ homes or letting strangers into theirs. Rich Aronson, a Berkshire Hathaway HomeServices agent, says a key factor that suppressed listings and sales was “the perception that it wasn’t safe, even though we were all taking precautions.” Typically, the housing market gets sleepy in August because of vacations, but Lowe says he expects to be busy right up to and beyond Labor Day. “People aren’t getting on planes and going on vacations this year,” he says. “They’ll have time to buy a home.”

20 JULY 6, 2020 • CRAIN’S CHICAGO BUSINESS

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Corporate Chicago not a leader in Facebook boycotts FACEBOOK from Page 1 advertising for this month to see how Facebook responds. Corporate heavyweights in other parts of the country haven’t been so cautious. Coca-Cola, based in Atlanta, was an early supporter and gave the movement launched by the North Face, a company known for its progressive activism, some traditional corporate heft. Seattle-based Starbucks and Minneapolis-based Target, which together spent about $142 million on Facebook last year, have halted advertising for now. It’s not entirely clear why corporate Chicago has been so reticent until very recently. But there are theories. One is that industries that tend to take on more of an activist bent— technology, outdoors brands, and travel and hospitality—aren’t heavily represented here, offers Brayden King, a professor of management and organizations at Northwestern University’s Kellogg School of Management who studies how social activists influence corporate social responsibility efforts, organizational change and legislative policymaking. The Chicago-based companies that are in the latter group—United Airlines and Hyatt Hotels—are among the worst-hit by the economic contraction associated with the pandemic and may not be advertising like they used to anyway, he notes. Another important factor is Facebook’s size and scale. For some companies, halting advertising there could hurt their businesses. “Facebook is just such a powerful platform on which to advertise,” King says. “There are few platforms that have the reach Facebook does.”

EMPLOYEES IN MIND

Find your next corporate tenant or leaser. Connect with Claudia Hippel at claudia.hippel@crain.com for more information.

Research has shown, King adds, that oftentimes corporations joining boycotts or similar campaigns have their employees more in mind than they do their customers. He isn’t surprised that Coca-Cola, for example, was an early sign-up because Atlanta, where many of its employees live, has been a focal point of the Black Lives Matter movement. And at a time when worker-employer relations are fraught anyway, due to the severity of the recession

and the uncertainty over when normal economic activity will resume, a company aligning its values with its workforce’s in a way that goes beyond issuing a press release or statement is a smart way to improve employee loyalty. “It’s hard to imagine them giving a lot of pay increases to employees right now,” he says. The Chicago-area companies that have opted recently to join the boycott say they’re looking for stronger measures than Facebook has outlined so far. “We stand by our company values including broadmindedness and integrity, and believe there is no place for hate, intolerance and racism in the world or on social media,” says Conagra, which owns many wellknown food brands like Birds Eye and Hunt’s. Says BMO Harris in an email: “BMO will pause its advertising on Facebook and Instagram during the month of July, while we continue our ongoing dialogue with Facebook on changes they can make to their platforms to reduce the spread of hate speech. At BMO, we are committed to zero barriers to inclusion.” Walgreens: “WBA’s brands are withdrawing paid advertising from Facebook and Instagram across the U.K. and U.S. for the month of July 2020. During this pause, we will examine our marketing strategy, to ensure that our advertising spend goes toward platforms with a commitment to address misinformation and hate speech.” Two others, Molson Coors and Constellation Brands, owner of the Corona and Modelo beer brands, among others, issued recent statements saying they’re halting Facebook ads for July to see how the platform responds to demands that it do more to stop divisive and often inaccurate messaging. The campaign gathered steam with the momentum behind addressing racial inequality in the U.S. once and for all following the shocking killing of George Floyd at the hands of a Minneapolis police officer. Otherwise, companies that responded to Crain’s say they’re sympathetic to the aims of the boycott movement but are monitoring the situation for now. They include Kraft and State Farm. Northern Trust says

it doesn’t advertise on Facebook.

‘BRAND SAFETY’

Mondelez International (maker of Oreo cookies and Ritz crackers, among many other food and candy brands) says in a statement that it’s focused on ensuring its ads aren’t shown alongside offensive content. “Brand safety is crucially important to us and we are in continuous dialogue with our partners, including Facebook, on the measures they are taking to ensure our ads appear in the right contexts in all media,” Mondelez says. Says State Farm, which is monitoring: “We believe in a world where everyone is treated fairly and with civility. We are concerned with the current discourse and we’re hopeful dialogue can occur that will yield a more civil tone.” Not responding to requests for comment were pharmaceutical company AbbVie and McDonald’s. BMO Harris’ move to join the boycott follows CEO David Casper’s decision last month to join a commission launched by the treasurers of the state of Illinois and city of Chicago to address systemic racism and its negative effect on financial opportunities for African Americans in Chicago. BMO Harris is the second-largest local bank by deposits. Casper was joined by five other local bank CEOs or regional presidents, including Michael O’Grady, CEO of Northern Trust. For his part, Facebook CEO Mark Zuckerberg has said the company is taking the complaints about content on the platform seriously. He’s outlined some actions in recent days, including further restrictions on ads that denigrate people based on their ethnicity, sexual orientation, immigration status and other identifiers. But organizations like the NAACP say the actions don’t go far enough. It remains to be seen how much Chicago corporations end up participating in the boycott. The list is growing seemingly every day. But in terms of gaining credit from consumers who support the pressure tactics on Facebook, as well as the campaign for racial justice, the value to companies diminishes the longer they wait to join, King says. “If you’re the 100th company to join, you get far less ‘credit’ than if you’re among the first five.”

CRAIN’S CHICAGO BUSINESS • JULY 6, 2020 21

How COVID is creating opportunity for suburban Chicago office landlords demand after a decade of companies fleeing big suburban office parks for downtown. And many are getting aggressive to seize the moment. “Suburbia is getting a fresh look,” says Ralph Zucker, president of Holmdel, N.J.-based Somerset Development, which is turning the 150acre vacant former AT&T campus in Hoffman Estates into a $200 million mixed-use destination anchored by 1.2 million square feet of offices. Real estate brokers say it’s too soon to know whether companies will embrace suburban offices en masse. If they do, it would be a stark departure from the long-running trend of businesses consolidating their Chicago-area offices into the city to reduce costs and focus on hiring young workers. Many businesses still have years of lease commitments downtown and won’t be eager to spend money on an office relocation in the face of an intimidating recession. But tenant reps say many downtown clients are increasingly exploring the option of splitting their space between downtown and the suburbs to help promote collaboration among employees who can’t easily get downtown.

INQUIRIES

At the newly named Bell Works Chicagoland, Zucker says he’s been fielding inquiries from city-centric companies looking for a suburban satellite office. He’s trying to get them in the door by offering prebuilt space and a simple four-page lease that allows companies to sign on for as little as a few months. “It’s easier

than leasing a car,” he says. Chicago-based developer GlenStar, which has invested heavily in large suburban office properties in recent years, is pushing movein-ready office suites up to 20,000 square feet that can be rented for just six months. The firm last month inked a deal with a downtown-based company for 2,500 square feet at its north suburban Bannockburn Lakes campus, according to Managing Principal Michael Klein. “We want to tackle the immediate concern” for companies with a big presence in the city but many employees who live in the suburbs, Klein says. “Those employees are getting tired of working from home, but on the other hand the idea of hopping on the train and coming downtown may be something they don’t want to do right away.” Laying out cash to build office suites on speculation has been hard for many suburban landlords to justify amid dwindling demand in recent years, leaving many properties outdated and watering down suburban rents. But companies’ interest in turnkey space to weather the coronavirus crisis is pushing some to build move-in ready offices on their own dime, says veteran leasing broker Kevin Clifton of Cushman & Wakefield. “There is definitely a belief that spaces built out with furniture that are ready for easy occupancy will get their disproportionate share of activity,” he says. Another potential boost for the suburbs is its affordability amid a recession. Talent recruitment and many other reasons why companies

last year paid a 75 percent premium on average for downtown office rents compared with the suburbs “won’t hold water anymore,” says tenant rep Don Wenig. “I think business owners are going to be hardpressed to justify paying for that real estate when they have geographic flexibility.”

MARKETING CAMPAIGNS

Some suburbs were already betting on a suburban office revival before the pandemic set in. The economic development arm of west suburban Naperville—home to the long-standing busiest Metra train station in the metropolitan area—was about to roll out a new marketing campaign early this year highlighting its value as a satellite office option for Chicago-based companies. “Balance is the new hustle,” the tagline reads. Now it’s getting even more aggressive, offering to sign off on things like fire and electrical inspections in advance so that prospective tenants won’t have to wait to get the city’s approval. “We have a lot of spaces that could be occupied very quickly,” Naperville Development Partnership President Christine Jeffries says. Whether the owners of those spaces will convert short-term users into long-term tenants is a separate challenge. And companies may find it difficult to find space that is geographically convenient for the people who need to meet in person, says WeWork CEO Sandeep Mathrani. The co-working space provider was recently asked by a financial services firm in New York City to ex-

JOHN R. BOEHM

SUBURBS from Page 3

Naperville Development Partnership President Christine Jeffries, left, is trying to help landlords like Franklin Partners’ Ray Warner attract new tenants to buildings like the Shuman, which the real estate investor recently redeveloped. plore opening suburban locations to allow employees in Connecticut and Long Island to avoid taking trains into its Manhattan office. But “their teams were not living in the same micro-market,” Mathrani says, “and if you don’t live in the same micro-market, you going there on your own without having your team there is sort of self-defeating.” Splitting up teams among multiple offices also raises concerns about an erosion of company culture and collaboration. But there are ways to make it work, says Bobby Goodman, a former Jones Lang LaSalle tenant rep and co-founder of online office space search platform Truss. Before the pandemic, his company had certain teams of

employees meeting at its Evanston headquarters or its River North satellite office. “If we can get 80 percent of the way there with digital tools, does that mean we can have different departments come in one or two days per week to be in person and capture that final 20 percent of ingenuity and innovation? I think so,” says Goodman, who predicts more downtown companies will open “touch-down” space in the suburbs based on where their employees live. “People are starting to realize that work can be done anywhere at any time,” he says. “You just need to provide space for people to have idea-sharing sessions.”

Cook County Health grappling with increased costs and shrinking revenues COUNTY HEALTH from Page 3 other hospital in the area. Further cuts could mean dropping planned capital projects, consolidating service lines or closing some community health centers. In addition to the impact on patient care, any erosion of services would drive Cook County Health patients to private hospitals that—to varying degrees— also are dealing with the financial fallout from the coronavirus. As one of the largest public health networks in the nation—with a $2.8 billion annual budget—the system covers Stroger Hospital on the Near West Side, Provident Hospital on the South Side, a network of clinics, an insurance company and medical services for detainees at the Cook County Department of Corrections, as well as the county’s Department of Public Health. “The ability of a public health system to adjust to a reduced revenue stream quickly is very difficult,” says Duane Fitch, a Plante Moran partner who specializes in health care. “Health care systems have a lot of fixed costs.” Coronavirus precautions forced Cook County Health to reduce a range of nonemergency services in March, and revenue-generating activities continue to be 40 percent lower than normal, officials said last month. At the same time, the system

expects to spend up to $32 million on employee overtime, personal protective equipment and other costs related to treating COVID-19 patients. While some public systems rely more heavily on sales taxes and other local government funding, Cook County Heath primarily runs on payments for providing medical care. Since 2013, its tax allocation from the county has decreased by more than $130 million. The county is providing $83 million in fiscal 2020 for public health and correctional health operations, but doesn’t give the health system money for traditional medical services.

SHORTFALL

Thanks to a total of $122 million in federal CARES Act provider relief funding, the health system hasn’t yet needed to seek more funds from the county, Carey says. County government has its own challenges. Its general fund faces a projected shortfall of $219.7 million in fiscal 2020, with sales taxes and other revenues down, officials said last month. It plans to address the gap “through a combination of expenditure control measures, federal reimbursements and our own reserves,” Cook County Chief Financial Officer Ammar Rizki says in an email, noting that officials don’t anticipate looking to taxpayers to fill gaps in the general fund or the

health fund. But all bets are off when it comes to a gap of up to $409 million, including the projected health fund shortfall, for fiscal 2021. “Everything is on the table,” Cook County Board President Toni Preckwinkle said last month. “Everything falls on the taxpayers eventually,” says Laurence Msall, president of the Civic Federation of Chicago, a fiscal watchdog. “What is not known is the level of assistance from the federal government. Will it be sufficient to spare traumatic increases in Illinois and Cook County taxpayers’ obligations?” Even before COVID-19 started spreading in the U.S., the health system was under intense financial pressure from the rising cost of uncompensated care, which includes unpaid bills and free care. From fiscal 2015 to 2019, Cook County Health saw annual charity care alone increase 23 percent to $327 million. In 2018, Stroger Hospital spent $324.6 million, or 54 percent of its revenue, on charity care. By contrast, Northwestern Memorial Hospital in Streeterville spent $23.2 million, or 1 percent of its revenue. Based on lower patient volumes, Cook County Health predicts charity care could drop to roughly $269 million for fiscal 2020. The dip also might be the result of other hospitals

stepping up to care for uninsured COVID patients, given the potential for reimbursement from the federal government during the pandemic.

CEO SEARCH

Meanwhile, in the midst of the gravest public health crisis in generations, Cook County Health is searching for a permanent CEO. Carey, who previously served as deputy CEO of operations, took the helm on an interim basis in January after John Jay Shannon’s contract was not renewed by the health system’s independent board. Carey says the search for a permanent leader is underway, but she declines to comment further. The system also could get a boost from its Medicaid managed care plan, which expects enrollment to increase as more people lose their jobs and qualify for government-funded health insurance. CountyCare, which operates only in Cook County, has 326,000 members and accounts for 15 percent of the Medicaid managed care market in Illinois. Like other insurers, CountyCare has had to pay fewer claims amid COVID-19 as hospitals tabled nonemergency procedures and many outpatient visits. But the health plan isn’t gearing up for a windfall. “We know that, eventually, individuals will still need to get care,”

Carey says. “It’s truly just a delay. It’s not a savings in any way.” However, with fewer new claims coming in, the pandemic gives CountyCare an opportunity to catch up on its backlog, which prompted an inquiry from the federal Centers for Medicare & Medicaid Services earlier this year. As of June 7, the health plan had about $175 million in unpaid claims, down from about $350 million on Feb. 9. Carey says CountyCare submitted a corrective action plan to CMS in April and has taken the appropriate steps to address the agency’s concerns. In the meantime, revenues are slowly recovering as nonemergency procedures resume. But many unknowns remain, including whether a second wave of COVID-19 could hit, forcing hospitals to buy up even more personal protective equipment and suspend nonemergency care once again. In addition to the steps Cook County Health is taking to address the potential deficit, Carey says other hospitals in the area also will play a critical role in the system’s future. “It’s so important that we have others help in terms of charity care and the uninsured,” Carey says. “If we start cutting back services because we just do not have the resources,” she warns, “it will impact every other health system in this county.”

22 JULY 6, 2020 • CRAIN’S CHICAGO BUSINESS

Feeding frenzy for deals and the COVID-19 crisis are frustrating Hightower’s plans HIGHTOWER from Page 3 industry, with annual purchases having climbed steadily for six years to a high of 203 last year, up 12 percent from 181 in 2018. While action slowed in the second quarter of this year, about 80 deals still got done in the first half, outpacing 2016, according to Echelon data. All that activity has driven up prices, creating a seller’s market, despite a pause when RIA asset values dropped with the March stock market swoon. “There are a lot of professional buyers and they’re competing pretty heavily right now,” Bruno says. “Valuations have held pretty steady.” RIA valuations reached an alltime high in the second quarter,

visors, says prices are still going up now despite a March-April lull. “We’re swamped, and our clients are experiencing bidding wars,” Levitt says.

EXPECTATIONS

A bulge of retirement-ready RIA firm owners is feeding their inclination to cash out by selling all or part of their businesses. Hightower and the pack of potential industry buyers, and private-equity firms, are attracted to the consistent wealth management fee revenue the businesses deliver, and expect increased profits with economies of scale. Private-equity firms loathe steep price appreciation when they’re angling for acquisitions because it adds expense and undercuts future returns. That can prolong ownership of “THERE ARE A LOT OF PROFESSIONAL companies they typically aim to sell in three to BUYERS AND THEY’RE COMPETING six years. Time is money when it comes to delivPRETTY HEAVILY RIGHT NOW.” ering returns for clients Mark Bruno, Echelon Partners in their 10-year investment funds. Thomas H. Lee Partners bought but buyers aren’t being forced to put down as much as 80 per- an unspecified stake in Hightower cent in cash at closing like they in 2017, and changes followed, with were last year, according to San Hightower founder Elliot WeissbluFrancisco-based M&A consultant th ceding the CEO post to Oros and Weissbluth becoming chairman. DeVoe. Another investment banker in The company’s strategy also segthe arena, Steve Levitt, founder of ued to targeting RIAs, as opposed to New York-based Park Sutton Ad- raiding wealth managers looking to

leave big New York banks. This year, Hightower, which had four acquisitions last year, has invested in smaller shops such as Cincinnati-based Osborn Williams & Donohoe and Wellspring Associates, which has offices in Atlanta and Arlington, Texas. But Hightower didn’t call them “acquisitions.” Buchanan says by email that Hightower is interested in RIAs that are successful, have strong management and are looking “to develop their next generation of leaders,” but it’s not interested in “buying distressed firms or those where the principal is looking to sell, retire and leave the business.” Weissbluth’s longtime dream of taking the company public was dashed during his tenure as CEO, but Thomas H. Lee Partners reportedly contemplated putting Hightower on the sales block earlier this year, according to Reuters, which cited sources familiar with the plans. Buchanan declines to comment on that possibility. In the dogfight for acquisitions, Hightower is dwarfed by New Yorkbased and publicly traded Focus Financial Partners, which has accumulated about $200 billion in client assets. It’s made seven acquisitions so far this year. Other milestone deals were the Goldman Sachs acquisition of United Capital last year for $750 million and Chicago private-equity firm GT-

Caption Chris Boehm is a co-founder of Cresset Asset Management CR’s minority investment this year in Captrust Financial Advisors, which valued that wealth manager at $1.25 billion.

PRICES CLIMB

Those types of big buys are fueling froth in the market, says Stewart Mather, who leads Chicago-based Mather Group, a smaller RIA buyer that’s done three deals this year, including two last month. Mather estimates prices have climbed 30 percent over the past two years. Chicago-based Cresset Asset Management has also gotten into the act, led by private-equity veterans Eric Becker and Avy Stein. Last month, it made a big move with the acquisition of Reston, Va.-

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based PagnatoKarp, a firm with $2.3 billion in assets that abandoned Hightower in 2016. Cresset, now with $9.5 billion in client assets, also absorbed San Francisco-based Cypress Wealth Advisors and local RIA Evanston Advisors last year. Cresset co-founder Chris Boehm expects the industry to keep consolidating and wishfully eyes a tempering of prices. “High-quality firms are going to be on the radar not of just us,” Boehm says. “But by the same token, there are not 50 firms knocking on their door, either.” Hightower is going to be a bigger bite to swallow, but Bruno expects that purchase will ultimately be made, too.

CRAIN’S CHICAGO BUSINESS • JULY 6, 2020 23

A BLACK MAYOR. A MARRIED LESBIAN. A TRUMP ANTAGONIST. A CENTRIST DEMOCRAT:

HOW LORI LIGHTFOOT EARNED THE IRE OF TWITTER As the Chicago mayor’s national profile rises, so do the online attacks from both ends of the political spectrum—and some are downright chilling BY A.D. QUIG

PUSHBACK

The mayor personally mostly stays away from social media—her communications teams craft messages and posts, sometimes with sign-off from the mayor. She’s also brought on a well-regarded pro as her chief marketing officer—Michael Fassnacht— who is helping craft the city’s COVID messaging. City officials say many of the city’s media teams have been centralized to help move COVID messaging faster, to be more responsive to public needs. But those close to Lightfoot say they believe the pushback might be a permutation of coordinated #MAGA attacks Hillary Clinton saw ahead of the 2016 elections that have stretched to include others seen as figureheads for the Democratic Party. In turn, big, blue cities like Chicago have also become a frequent subject for conservative websites and Twitter pundits. Lightfoot is also a target of progressives, particularly as seen during the Chicago Teachers Union strike, her first budget and in the ongoing discussion of Chicago Police Department oversight, reform and funding. On May 17, CTU tweeted

an image of Lightfoot disguised as a CPD officer being unmasked by Scooby Doo’s gang. Lightfoot called the meme, in which she was tied up with rope, “clearly racist.” CTU’s vice president, Stacy Davis Gates, tweeted that ire shouldn’t be directed at the meme, but over police abuse, coerced confessions and murder. The union deleted the tweet the following day.

MORE FOLLOWERS

The mayor is largely shielded by her digital teams. Dave Mellet, her political director, manages but doesn’t actively police @LoriLightfoot. “It would be a full-time job in itself,” he says, since the follower count has doubled in recent months. Between March, when COVID began taking hold in the U.S., and mid-June, Lightfoot has gained 100,000 Facebook followers (double her previous number) and more than quintupled her Twitter following @ chicagosmayor (to about 180,000). The mayor’s office says across measurable digital platforms they’ve seen an 800 percent increase in positive sentiment—alongside a 500 percent increase in negative sentiment. That includes threats, of which the mayor’s office estimates dozens have been flagged as credible for Lightfoot’s security team to review. Amid ongoing protests, one account tweeted, “Remember looters, Lori Lightfoot does NOT use guns, and you know where she lives.” The account was launched in May and has since tweeted more than 2,000 times, including about QAnon, a conspiracy about a “deep state” seeking to undermine Trump. Another said: “We’re coming for you dear. Best get your security.” Others refer to her race and sexuality disparagingly. “It used to be you’d tweet something, and the replies would be pretty steady and constant. Now we tweet something and almost immediately, within seconds or minutes, there’s dozens of responses, all negative, often from people who aren’t from Chicago,” Mellet says, suggesting some could be bots. The replies sometimes include “reductive” insults. Beginning in late April, hundreds of Twitter users began referring to Lightfoot as “Beetlejuice” and sharing photoshopped images of her. Though debunked by both the AP and Reuters, cropped videos continue to widely circulate of the mayor speaking with the Chicago Tribune’s editorial board and Fox 32 suggesting she was supportive of a “New World Order,” a plan from the world’s wealthy and powerful to bring about a global authoritarian government. In full-length interviews, she was describing a changing City Hall culture around aldermanic prerogative; in the latter, she was talking about a new contract with police rank and file. Many also suggest she’s a puppet of liberal megadonor George Soros. Han Nguyen, Lightfoot’s digital director on the government side, says mentions of the mayor “can be in the tens of

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NEWSCOM

n a certain corner of the internet, you might believe Mayor Lori Lightfoot is “a disgusting excuse for a human being,” a loyalist to a global authoritarian regime or a “Corrupt DemoRat.” The mayor has gained national prominence in the media in recent months—from the battle against COVID-19 (including early days of jabbing at President Donald Trump’s response) to her handling of citywide protests, looting and the national discussion of race and policing. Her team even harnessed memes of her stern gaze to cajole people into following stay-at-home orders. But along with it, a wave of insults, conspiracies and threats has been unleashed. Critics on social media are a constant— the mayor has been a focus on the left for what they see as her lack of progressive commitment. But the volume, vitriol and engagement is a new phenomenon of the COVID era, Lightfoot’s advisers say. Lightfoot is far from the only public official facing down trolls. Gov. J.B. Pritzker’s spokeswoman says “hateful rhetoric” has increased online in recent months. That includes protest signs comparing Pritzker—from one of the country’s most prominent Jewish families and chair of the Illinois Holocaust Museum—to Adolf Hitler. Some have photoshopped mustaches on his face, others call him a “coronazi.” Public health officials across the country have also resigned because of politicized opposition to the COVID response. But it’s likely the mayor is among public officials facing some of the worst of it—a 2017 study from Amnesty International analyzing tweets directed at female politicians and journalists found Black women were “84 percent more likely than white women to be mentioned in abusive or problematic tweets.”

Mayor Lori Lightfoot

thousands” some days. While he can’t say what exact percentage is from the #MAGA crowd, much of the criticism of the mayor for “overreach” in her stay-at-home orders originates there, he says, and the private messages are often uglier. “We know this stuff happens, particularly around a presidential election year,” says Nguyen, who worked on Clinton’s 2016 campaign, Obama for America and for the Democratic National Committee. The trolling “seems very familiar” to the leadup to the 2016 election and seems to be spreading to local Democratic leaders who have gained national prominence, he says. While social media is far from the real world (mid-May polling from Global Strategy Group shows Lightfoot’s favorability being at least 70 percent among Chicagoans), online misinformation and disinformation can sow discord at an unprecedented time.

‘MISINFORMATION HAS PROLIFERATED’

Social media use has exploded since COVID took hold in the U.S., says Darren Linvill, an associate professor in the department of communication at Clemson University who has studied misinformation and disinformation online. But given the rise in engagement, it’s hard to know if troll activity has picked up as a result, especially in the wake of protests over the death of George Floyd. “It’s definitely true that misinformation has proliferated,” Linvill says. “People want information, they want it quickly, both regarding protests and COVID. There’s been a dearth of reliable, verified information. They look to Alex Jones or just people spreading rumors. A lot of the misinformation isn’t nation states, it’s

people trying to make a buck or that are part of already existing sort of conspiracy theorist communities.” Still, Lightfoot emerging as a target “totally makes sense,” Linvill says. “She’s a focal point of a lot of different conversations. A lot of different people who are angry about different things—whether it is sexual orientation, race, COVID—she sits at the center of those things. She’s also the mayor of a major U.S. city. That makes her a public figure, and she’s justifiably been outspoken on all of these things.”

Vol. 43, No. 27–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 2020 by Crain Communications Inc. All rights reserved.

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