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IN-DEMAND JOBS: Here are the 10 hottest well-paying careers in Illinois. PAGE 12

CONVENTIONS: What Chicago must do to win them back. PAGE 3

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As the ‘engine of the economy’ heats up again, tech advances are accelerating ahead of a lagging labor force. PAGE 15

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Herd immunity: A moving target

How Chicago became the Silicon Valley of pot

Call Chicago the capital of Big Weed.

The city is home to three of the five biggest public companies in the United States that grow and sell marijuana: Green Thumb Industries, Cresco Labs and Verano Holdings.

“Chicago in a sense is Silicon Valley” for the pot business, says

Threshold for stopping COVID is higher in some areas

BY STEPHANIE GOLDBERG

Cresco CEO Charlie Bachtell and its stock has increased 650 percent in the past 12 months.

For the first time in a generation, Chicago is the early See WEED on Page 29

As COVID-19 inoculations accelerate, a weary public waits anxiously for vaccines to reach 70 percent of the population, a level widely associated with “herd immunity.”

It’s not that simple. To neutralize a virus that has killed nearly 5,000 Chicagoans and sickened 250,000, immunity must spread across each of the city’s neighborhoods—with a higher concen-

MINDING THE GAP: Why so many health care workers are still unvaccinated. PAGE 3 tration in areas that have been hit harder during the pandemic.

In other words, vaccinating any mix of 1.9 million residents won’t necessarily stop COVID-19.

“Even if the overall average is showing we’re at 70 or 80 percent, See HERD on Page 23

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JOE CAHILL

REAL ESTATE

CEOs aren’t always sharing investors’ COVID pain.

An Arts & Crafts home that stands out among showpieces.

PAGE 4

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3/19/21 2:43 PM

CREDIT

BY JOHN PLETZ

Kayvan Khalatbari, a cannabis consultant from Denver who advised Cresco on its original license application.

In the six years since Illinois issued its first licenses to grow and sell marijuana for medical use, GTI, Cresco, Verano and privately held PharmaCann have emerged as industry giants, winning or acquiring licenses across the country as legalization took off. Fueled in part by the launch of recreational marijuana sales in Illinois last year, the Chicago-based companies have seen their fortunes soar. GTI’s revenue rose 151 percent last year,

JOHN R. BOEHM

Early obstacles helped turn local marijuana companies into giants

2 MARCH 22, 2021 • CRAIN’S CHICAGO BUSINESS

New coalition wants lawmakers to ride herd on ComEd

BY STEVE DANIELS Two consumer groups and a prominent environmental organization are joining forces to clamp down on utility practices that resulted in favorable legislation raising delivery rates for consumers and padding profits of Commonwealth Edison and downstate power company Ameren Illinois.

AARP Illinois, Illinois PIRG and the Environmental Law & Policy Center have formed the “Take Our Power Back” coalition. It’s advocating that ComEd reimburse consumers for the profits it gained through a nearly decadelong bribery scheme aimed at winning support from then-House Speaker Michael Madigan, the most powerful politician in the state at the time.

ComEd admitted to the scheme in a deferred-prosecution agreement with federal prosecutors in July.

The investigation thus far has resulted in criminal charges against former ComEd CEO Anne Pramaggiore, former lobbyist Michael McClain and two others. Madigan, though a target of the probe, hasn’t been charged and says he’s done nothing wrong.

The coalition also wants to “restore oversight” of ComEd. Illinois PIRG has called for an audit of ComEd’s billions in capital spending enabled by the 2011 smart-grid law that was at the heart of the federal government’s investigation of ComEd’s relationship with Madigan’s political operation. ComEd’s delivery rates increased 37 percent thanks to the law, which allowed the utility to change its rates every year via a formula that took away much of the discretion state utility regulators had over rate-setting.

And it wants to end some of the levers ComEd has employed to win

favor in Springfield, including utility donations to state politicians’ campaigns and ratepayer funding of utilities’ contributions to charities. ComEd in the past has called on nonprofits it’s helped finance to advocate on its behalf when it’s lobbied for lucrative laws in the state capital.

CUB MISSING

Notably missing from the coalition is the state’s most high-profile consumer advocate on utility issues, the Citizens Utility Board.

CUB is part of the Illinois Clean Jobs Coalition, which has called for an end to annual formula rates for ComEd and Ameren but also has a far broader agenda aimed at overhauling the state’s power-generation industry.

“We view it as a complementary effort, and our focus is on passing the Clean Energy Jobs Act,” says David Kolata, executive director

GETTY IMAGES

The groups are seeking an end to utility donations to political campaigns and ratepayer-financed charitable contributions, among other things

of CUB. He notes that some of the provisions the new coalition wants are in the bill CUB is supporting.

The coalition hopes AARP in particular might add some heft to its influence. Seniors vote at higher rates than other demographics. Utilities have run roughshod over consumer groups in past negotiations over wide-ranging energy bills, but that was before ComEd’s admissions of influence-peddling and bribery.

“On behalf of our members, and all Illinoisans 50-plus, we stand fervently against this corruption that has hurt everyday Illinoisans and implore the General Assembly to support this agenda and put

consumers first once and for all,” AARP Illinois Director Bob Gallo says in a release.

ComEd’s formula rate-making authority expires at the end of next year, and it’s attempting to take advantage this year and next. ComEd has budgeted nearly $4 billion in spending on the local grid through 2022—investments that will lead to higher rates.

Gov. J.B. Pritzker has called on state lawmakers to pass comprehensive energy legislation this spring that would put Illinois on course for a carbon-free power-generation industry. But, as is typical in energy politics, various interests are vying for support, and it’s unclear if that goal will be met.

In the past, utility clout made parties at loggerheads come to the table and get what favorable policies they could from the process. The dynamic is different now thanks to ComEd’s disgrace, and even people involved in the talks on a regular basis are struggling to predict the outcome.

Exelon CEO’s pay: As if the ComEd scandal never happened With 2020 comp of more than $15 million, Chris Crane paid no financial price for ComEd’s admissions of bribery and the $200 million fine Exelon shareholders paid

BY STEVE DANIELS It’s as if the Commonwealth Edison scandal last year never happened.

Exelon CEO Chris Crane, along with other top executives, paid no price in terms of their 2020 compensation for the breathtaking corruption confessed by the company’s largest utility subsidiary, according to the company proxy, filed March 17 with the Securities & Exchange Commission.

Crane received $15.2 million in cash, stock and other benefits, down slightly from $15.3 million the year before. His $1.9 million in cash incentive pay—the primary reflection of the company’s performance last year—was down slightly from $2.1 million the year before.

Barely a mention was made in the proxy of ComEd’s admissions to a nearly decadelong campaign of bribery and influence peddling aimed at winning the favor of thenHouse Speaker Michael Madigan. Former ComEd CEO Anne Pramaggiore has been charged in the scheme, which so far hasn’t resulted in charges against Madigan.

Three affiliated lobbyists also were charged, and one former ComEd exec pleaded guilty to conspiracy.

Pramaggiore and the three lobbyists have pleaded not guilty.

The scheme largely occurred under Crane’s watch, yet he and other Exelon senior executives have pinned the blame on Pramaggiore and the others while professing no knowledge of how ComEd was winning legislative triumphs in Spring-

GREG HINZ

IS ON VACATION

field from 2011 to 2016, resulting in hundreds of millions of dollars of additional revenues annually.

“Exelon was not made a party to the deferred prosecution agreement and no charges were brought against it,” reads the only substantive statement in the proxy on the matter.

FINE EXCLUDED

Adding to the mix is that Exelon ignored the $200 million fine ComEd paid the federal government as part of its deal with prosecutors. The $200 million was excluded from the “adjusted operating earnings” on which Crane and other executives were judged in determining their bonuses. Had the 20 cents-per-share loss from the fine been included, Exelon’s earnings wouldn’t have reached even the threshold on which Crane and the others were paid the bonus.

In an email, a company spokesman says, “Chris Crane’s 2020 compensation appropriately reflects the company’s strong financial and operational performance against goals the board set. The deferred prosecution agreement this year ended the U.S. Attorney’s investigation into ComEd and Exelon, and we concluded that the conduct at issue was orchestrated by a small number of senior ComEd employees and outside consultants that no longer work for the company.

Although the DPA contained no allegations of wrongdoing by Exelon, the company moved aggressively to implement comprehensive ethics and compliance reforms across the

entire business to ensure that nothing like it ever happens again.”

In addition, there are questions as to whether the cash bonuses Crane and other senior executives are paid at this time next year will take into account the company’s poor and costly performance during the extreme winter weather in Texas last month. Exelon owns three large natural gas-fired power plants in Texas, and they failed to operate during the disaster. The company

projected a cost of up to $950 million before taxes due to that week.

Exelon correspondingly reduced its adjusted operating earnings forecast for 2021 to a range of $2.60 per share to $3 per share. That’s down from $3.22 per share in 2020.

“The guidance for 2021 is lower than the adjusted operating EPS results for 2020 as a result of the impacts of the severe weather event in Texas, lower realized energy prices, and lower capacity revenues, partially offset by opportunities and growth at the utilities,” the company says in the proxy.

Cash bonuses for Crane and oth-

er Exelon execs will depend on how the company performs within that range. A spokesman said those targets for Crane and the others were set in January—before the Texas effect was known—and happened to fall within the revised earnings range provided to investors in late February, after Texas. The company doesn’t disclose ahead of time what that target range is.

Exelon forecast in February that Texas would reduce earnings per share by 20 cents, and that’s only assuming the company finds hundreds of millions in cost offsets to help blunt the impact.

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A COVID mystery: Vaccination rates in health care Knowing the number and identities of unvaccinated medical workers would help in fight against coronavirus

If they haven’t lined up a new home or an Airbnb, sellers are writing rent-back deals into contracts BY DENNIS RODKIN BECAUSE THEY HAD BEEN WATCHING the real estate

market, Lisa and Joe Krogman had a feeling their house in Hawthorn Woods in Lake County would sell fast. It sold in a single day, which was “much quicker than I imagined,” Lisa Krogman says.

Fortunately they had been looking for temporary housing, so the Krogmans were able to put their house under contract to a seller without anxiety about where they’d go next, a concern that grips many sellers in this year’s fast-moving housing market.

When the sale of their house on Governors Way closed March 3, the Krogmans, both engineers, moved their family of five into an Airbnb rental in

P003_CCB_20210322.indd 3

Mundelein and their furniture into storage.

With the inventory of homes for sale super-tight and affordability high thanks to low interest rates, many homes in the Chicago area are landing buyers within a few days of hitting the market.

There’s no official count of quick sales, but so far in 2021, dozens of homes have sold in less than a week, Crain’s found by watching sale records. Two among many examples: In Logan Square, a house on Bernard Street came on the market Feb. 2 asking $695,000 and went under contract six days later. The sale closed March 12 at 5 percent over the See RENT-BACKS on Page 29

Illinois had an estimated 540,000 health care workers when the vaccine rollout began. cinated workers to COVID wards, potentially furthering viral spread.

Public health agencies can’t target vaccine promotion efforts to the unvaccinated and learn whether workers are hesitant to get shots, or just having a hard time scheduling vaccination appointments. And patients can’t evaluate the level of risk in various health care settings.

See VACCINATIONS on Page 23

The battle to bring back convention biz Our traditional advantages —size and the city—may not win the day now

BY DANNY ECKER Gov. J.B. Pritzker this month answered the long-standing question about when McCormick Place might resume hosting events.

Whether the convention center ever generates its pre-COVID-19 economic impact again, however, is still in doubt.

While they cling to a desperately needed glimmer of hope that meetings and trade shows will come back with limited capacity this summer, anxious hospitality industry stakeholders have few clues about what those events will look like when they do—or how they may change for good. The pandemic has in some ways reinforced the bedrock of the convention industry—that people need to meet faceto-face to do business—yet also proved what can be accomplished virtually, and for a lot cheaper.

The bottom line, meetings ex-

DANNY ECKER

Your house sold in a few days. Now what?

CRAIN’S ILLUSTRATION / GETTY IMAGES

More than three months into a massive COVID-19 vaccination campaign that started with people who work in hospitals, clinics and nursing homes, local officials don’t know how many health care workers have been inoculated.

Although anecdotal evidence suggests more than 160,000 across the state might still be unvaccinated, the actual number is unknown. A related unknown: Which members of the health care workforce haven’t been vaccinated.

Knowing the number and identities of unvaccinated health care workers is “essential” to understanding our vulnerability to COVID, says Dr. Emily Landon, the executive medical director for infection prevention and control at the University of Chicago Medicine. “It’s hard for humanity to get back to normal without knowing who’s vaccinated.”

That information gap impedes the COVID fight in important ways.

Though hospitals and clinics maintain strict COVID protocols, they might unwittingly assign unvac-

JOHN R. BOEHM

BY A.D. QUIG

McCormick Place has burnished its image for decades as a top destination for conventions. perts say: Some of Chicago’s historical advantages in an industry whose canceled events cost the city an estimated $3 billion in local spending over the past year are now cloudier. Having the biggest convention center on the continent may no longer be as crucial if some events shrink with more people participating online. Even See CONVENTIONS on Page 28

3/19/21 2:42 PM

4 MARCH 22, 2021 • CRAIN’S CHICAGO BUSINESS

JOE CAHILL

CHICAGO COMES BACK

ON BUSINESS

set “prior to the time the Compensation and Leadership Performance Committee could have known or anticipated the impacts of the COVID-19 pandemic.”

Motorola Solutions also paid executive bonuses despite missing performance targets. Instead of the goose eggs they earned under established metrics, top executives got bonuses at 50 to 65 percent of the targeted amounts. The switch was worth $1.4 million to CEO Greg Brown. Motorola shares rose 6 percent last year while the broader market climbed 16 percent.

Explaining the move, a company filing says, “the pandemic represented an extraordinary event outside of management’s control,” crediting execs with “an admirable job supporting key public safety and other essential customers” during the year.

One big local company hammered by COVID took a different approach. Aircraft maker Boeing posted a $12 billion loss as sales fell 32 percent to $58 billion on plunging air travel demand. Boeing stock fell 34 percent. Newly appointed CEO David Calhoun took no salary after March 2020 and received no annual bonus. He SOME BOARDS ARE TINKERING did receive long-term equity awards worth about $21 milWITH PERFORMANCE METRICS. lion, most of which are subject to performance-based vesting criteria over a period of years. have devastated some industries, Credit Boeing for declining to sending revenues, profits and lower the bar retroactively. Adshare prices plunging. Shareholdjusting performance metrics after ers of those companies are in a the fact insulates executives from world of hurt. external events deemed beyond CEOs? Performance metrics their control. Shareholders get no under many compensation plans would dictate that some executives such protection.

Companies tend to stick with receive no bonuses for 2020, a established metrics when external multimillion-dollar blow in many cases. But boards of directors often forces have the opposite effect.

Executive pay soars during good have discretion to override pre-estimes, even though CEOs have no tablished performance metrics and protect execs against the worst control over the events boosting company performance. outcome.

COVID may cast a spotlight on Some local boards are doing just that inconsistency, as companies that. At Deerfield-based drugstore helped by the pandemic disclose chain Walgreens Boots Alliance, executive pay. Packaged foods for example, COVID’s impact on companies like Kraft Heinz and store traffic and expenses crushed Mondelez have soared on demand a profitability figure used to deterfrom consumers forced to eat mine executive bonuses. Under that metric, three senior executives more meals at home. Will their brass take the full compensation didn’t qualify for an annual bonus payable under performance metfor 2020. rics boosted by that demand?

Not to worry. Walgreens’ board For one local company, the tinkered with the metrics, using answer is yes. Chicago-based food original standards for half the year and new criteria for the six months company Conagra boosted CEO affected by COVID. Presto: Co-CO- Sean Connolly’s annual bonus 63 Os Ornella Barra and Alex Gourlay, percent to $2.6 million as operatalong with CFO James Kehoe, each ing income and cash flows blew past targets. got an annual bonus of about $1 I don’t fault Conagra for sticking million. Their total pay for fiscal to its metrics. But criteria that 2020 rose between 26 percent are good enough for good times and 34 percent to a range of $8.7 should be good enough for hard million to $11 million, as profit fell times, too. Boards that drop met89 percent and Walgreens shares rics to prop up executive compendropped 26 percent. sation are paying for something Walgreens’ proxy notes that original performance metrics were other than performance.

Corporate proxy statements will make interesting reading this year.

No, really. This year’s annual filings will show how the economic fallout of COVID-19 affected executive compensation at America’s biggest companies. Between the lines, proxies will speak volumes about those companies’ commitment to the principle that pay should reflect performance.

Corporate boards like to trumpet their fealty to the concept, and most have structured elaborate compensation programs designed to link the pay of CEOs and other top brass to the results they deliver for shareholders.

Pay-for-performance pays off handsomely when a booming economy lifts profits, shareholder returns and other metrics that drive pay under today’s executive compensation programs.

Pay-for-performance can turn painful when external conditions sour, pushing compensation metrics down.

The most disruptive event to hit American business since World War II will show how much pain executives are willing to take.

COVID-19 and related lockdowns

GETTY IMAGES

COVID tests boards on executive pay

What it takes to rebuild with more women in leadership The COVID crisis illuminated more crises, especially relating to gender. Here’s how we can find a way forward that includes underrepresented voices as decision-makers.

BY EMILY DRAKE AND TODD CONNOR Chicago Comes Back is a weekly series on ChicagoBusiness.com providing leadership insights to help your business move forward, written by leadership consultants Emily Drake and Todd Connor.

Drake and Connor facilitate Crain’s Leadership Academy. Drake is a licensed therapist, owner of the Collective Academy and a leadership coach. Connor is the founder of Bunker Labs and the Collective Academy and is also a leadership consultant.

Check out previous installments at ChicagoBusiness.com/comesback.

TODD CONNOR: Sometimes I feel like talking about structural change shuts people down—and I get it. It’s human nature to do what’s comfortable, or stay in the discomfort we know. International Women’s Day and marking the one-year anniversary of the World Health Organization determining COVID-19 to be a pandemic all took place the same week. The city is opening up.

For those of us who are more than two weeks out from our second vaccine, we have new guidelines from the CDC. In all that, I’ve been feeling tempered hope. While anniversaries and months or days that honor a moment or progress matter, I’m watchful for the seduction that we’ve “arrived” vs. the acknowledgment of the progress and the commitment to continuing the fight. Is that too gloomy for spring’s arrival?

EMILY DRAKE: Not at all. It sounds like a leadership skill I’ve been cultivating: bounded optimism.

And I think as the seasons go on, we’ll be able to be truly optimistic.

But you’re right: Leadership isn’t about milestones, it’s about the long game. The crisis of COVID illuminated more crises, especially as it relates to gender: the crisis of women leaving the workforce, and it’s disproportionate effect on Black and Brown women, the insanity of the slowness of progress in gender pay parity, and the list goes on. Everyone should read, share and take action outlined in the Crain’s op-ed last month about how to ensure a recovery from the “shecession.”

Even as a woman, I was appalled to learn that among startups that have gone public since 2013, only

about 20 were founded and led by women. We can agree that’s unacceptable. But I’m nervous we’ll stay there and not move forward, with the intention to advance women because it’s simply the right thing to do—not because it “plays well.”

TC: I know you’ve been going through your own process with that, getting clear on your motivation for the actions you’ve taken as a leader, whether it’s for external affirmation, or like you said, because it’s right, full stop. The latter is harder. I get distracted by my own pursuits, too. But I’ll say this: As a man, I now overlay that instinct with the question, “Is this my time to lead?”

Even with women making progress in accessing the C-suite, or starting companies, it’s nowhere near where it should be.

And while women represent 70 percent of the global health workforce, they have also lost jobs at twice the rate of men. Here in Chicago, though, as well as abroad, many have noted the unique impact of women in political leadership and the impact on a COVID recovery in countries like Denmark, Germany and New Zealand.

ED: And that’s just one measure of progress. We’ve had the great privilege of working with organizations to design programming for female leaders, especially in male-dominated industries like technology and manufacturing. I’m grateful to do the work, but at the rate we’re going, pay parity isn’t happening for another 40 years. That’s unacceptable to me. We need more companies to take Adobe’s lead:

making statistics, statements and commitments available as a model for how we can get there much faster. And as an entrepreneur myself, we need more female venture-capitalist decision-makers.

TC: So, transparency, listening, curating vs. creating—these are roles dominant culture can play, because it’s the right thing to do. I couldn’t agree more. A recent McKinsey report on leading through crisis shared a powerful truth: “A crisis is when it is most important for leaders to uphold a vital aspect of their role—making a positive difference in people’s lives.” Whether it’s mentoring—through a formal program or just doing it because it’s the right thing to do—I’d ask all leaders to evaluate where they are showing up for service. Do you have women on your personal advisory board? Do you center women in conversations about changes to culture, strategy and hiring? Do they have a seat at the table? Are they in the succession plan?

ED: You often say, “If you want to be on Crain’s list of Best Places to Work, then be a great place to work.” Simple, not easy. It reminds me of our tendency to overcomplicate how structures are dismantled and new ones are built. And no one loves and honors the complexity of human beings more than me, but the simple truth is, our systems aren’t working, we need to fix them, to make amends for what we didn’t know before, and to create a way forward that centers underrepresented voices to make decisions.

This column has been about Chicago coming back, and we are, but what it isn’t about is an outcome.

TC: Right. If readers haven’t noticed, we’re in the midst of a journey. COVID illuminated what we either didn’t know, or probably more honestly, that we ignored. A pivot from self to other is how I’d like to lead going forward. I know you do, too.

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Debt troubles cloud future of another suburban mall

BY ALBY GALLUN Debt woes are mounting for another local shopping mall: the Lincolnwood Town Center.

The owner of the 423,000-squarefoot mall, Washington Prime Group, is on bankruptcy watch and missed its January payment on the property’s $47.3 million mortgage. Complicating matters further, the mortgage matures April 1, and it’s unclear how Washington Prime will come up with the money to pay it off—or if it will even try.

Malls like Lincolnwood Town Center have suffered greatly during the coronavirus pandemic, which has merely compounded the problems they already were facing as online shopping ate into the brickand-mortar retail market.

With many stores closed in the early days of the pandemic, shoppers shifted even more purchases online. Some retailers simply stopped paying their rent. What was a slow decline in the sector quickly turned into a crisis for many landlords. Big local properties like Gurn-

ee Mills, Yorktown Center, the Arboretum of South Barrington and the North Riverside Park Mall all have faced debt problems of varying degrees over the past year.

Washington Prime, a real estate investment trust, was able to negotiate a so-called forbearance agreement last year over the mortgage on the Lincolnwood Town Center, a mall at the corner of Touhy Avenue and McCormick Boulevard. Under a forbearance agreement, lenders agree not to take legal action, like filing a foreclosure suit, against a property owner that has defaulted on a loan, and the borrower often agrees to some kind of payment plan in return.

The pact allowed Washington Prime to suspend monthly payments on Lincolnwood Town Center’s mortgage from May through October of last year, according to securities filings. Payments resumed in November, but Washington Prime defaulted on the debt when it missed its January payment, according to its 2020 annual report.

Lincolnwood Town Center suf-

fered a big setback in 2018 when Carson’s, its biggest tenant, closed its department store there.

The property bounced back in 2019 when furniture retailer the RoomPlace leased the Carson’s space. But the mall is just 77.3 percent occupied now, according to the annual report, and it was not generating enough cash flow to cover its debt payments even in 2019.

It’s unclear what comes next for the property. Its mortgage comes due April 1, but it’s just one of many problems facing Washington Prime, which confirmed March 16 that it may try to restructure its debt in Chapter 11 bankruptcy protection.

The REIT, which was spun off in 2014 from Indianapolis-based Simon Property Group, owns about 100 shopping centers in the U.S., including properties in Waukegan, Orland Park and Countryside.

Washington Prime could include Lincolnwood Town Center as part of a broader restructuring, or it could just decide to give up the property, avoiding a foreclosure fight. It’s also possible, though not likely, that the

COSTAR GROUP

Owner of Lincolnwood Town Center defaults on $47.3M mortgage, contemplates restructuring

Lincolnwood Town Center REIT could refinance the shopping center with a new loan. Mall values have declined so much and lenders are so leery of the sector that it’s become extremely hard to refinance the properties.

It’s most definitely a lot harder than it was in 2014, when newly independent Washington Prime took out the loan on Lincolnwood Town Center. The debt then was packaged with other loans and sold to bond investors in a commercial mortgage-backed securities offering. At the time, the mall was appraised at $89.1 million.

A special servicer, or firm hired to oversee troubled CMBS loans, is now in charge of the mortgage on the Lincolnwood mall.

The Washington Prime venture that owns the property “has initiated discussions with the special

servicer of the non-recourse loan and is considering various options,” Washington Prime said in its annual report.

A Washington Prime executive declines to comment. A representative of the special servicer, New York-based Torchlight Investors, did not return a call.

The shopping mall industry was flourishing when Lincolnwood Town Center celebrated its grand opening in 1990. The festivities included “Wheel of Fortune” star Vanna White, who signed autographs.

But the mall’s fortunes have faded in recent years. Its revenue fell to $8.7 million in 2019, down 29 percent from 2016, according to Bloomberg data. Its net operating income fell 40 percent over the same period, to $3.3 million. Data for 2020 is not yet available.

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CRAIN’S CHICAGO BUSINESS • MARCH 22, 2021 7

PepsiCo inks LeBron James to big endorsement deal

BY E.J. SCHULTZ It’s official: PepsiCo has poached LeBron James from Coca-Cola Co. The basketball megastar will be the face of the new Mtn Dew Rise Energy drink—a product of PepsiCo’s Chicago-based Gatorade division—as part of a larger endorsement deal that will include other brands across PepsiCo’s food and beverage lineup, as well as social justice endeavors, the company confirmed last week.

Coca-Cola Co. said in January that it had parted ways with James, ending a relationship that began in 2003 when he was 18 years old.

Pepsi had declined to comment on reports that it landed the star, until March 17, when it outlined the relationship. The company did not disclose financial terms of the multiyear deal, but James is known to command top dollar.

He ranks No. 3 on the list of the “world’s 50 most marketable athletes” compiled late last year by Nielsen, trailing only international soccer stars Lionel Messi and Cristiano Ronaldo.

Pepsi is inking James as it seeks a bigger slice of the energy drink market, which grew 7% by dollar sales in 2020, according to Beverage Digest. Monster and Red Bull continue to dominate, with 33% and 24% share by volume respectively, according to Beverage Digest. But Coca-Cola Co. and PepsiCo have spent more money on marketing and product development in recent years in hopes of gaining ground. Coca-Cola introduced Coke Energy last year— with roughly three times the caffeine of regular Coke—and backed it with a Super Bowl ad.

For PepsiCo, Mtn Dew Rise is “a big bet for them and with a big bet you want a big personality to help sell that to consumers—and that is what they are doing with LeBron,” says Beverage Digest Editor and Publisher Duane Stanford.

Rise is positioned as a morning drink. It has 180 mg of caffeine, vitamins A and C, as well as fruit juice and Citicoline, a dietary supplement that has been used to improve brain function. Flavors include Pomegranate Blue Burst, Orange Breeze, Strawberry Melon Spark, Tropical Sunrise, Berry Blitz and Peach Mango Dawn.

Cans feature a lion—described

by PepsiCo as “a king with a fierce inner spirit”—as part of a visual identity created by PepsiCo’s inhouse design team. The brand released a promotional video showing James’ face emerging from the lion image. A larger brand campaign is expected later this year from Mtn Dew agency TBWA\Chiat\Day New York.

“As energy beverages evolve to provide even more functional benefits, we’re excited to introduce the new Mtn Dew Rise Energy for those looking for a morning boost with enhanced mental clarity and immune support that helps you conquer the morning to

conquer the day,” Fabiola Torres, PepsiCo’s chief marketing officer and senior VP for its energy category, said in a statement. “LeBron is the epitome of motivation and has achieved legendary status by seizing every morning. He not only continues to excel on and off the court but has dedicated his life to help others rise as well.”

PepsiCo also seems poised to use LeBron’s standing in the sports world and beyond to boost its com-

MTN DEW

The hoops star and cultural icon is backing a new beverage that’s part of the Chicago-based Gatorade division

munity service efforts, especially those related to diversity. In its press release announcing the signing of James, PepsiCo stated the deal will “touch on numerous aspects of James’ wide-ranging work,” while referencing the company’s pledge

last year to invest more than $400 million over five years in Blackowned businesses and in Black communities as well as to “increase Black representation at PepsiCo.” “LeBron is arguably the most influential celebrity in the galaxy right now. He dominates on the court, has a thriving enterprise, puts his family first, and is committed to social change and making a positive impact on communities,” Adam Harter, PepsiCo’s senior VP for media, sports and entertainment, said in a statement. “He is not only going to be an incredible brand partner to

Mtn Dew Rise Energy, but we also look forward to the collective impact we can make on the people we serve through education, social justice and community initiatives.”

James in a statement said: “It’s important to me that I believe in the brands and products where I invest my time. When I first learned about the message behind the drink—the fact that every day is a chance to rise for all of us—that really resonated with me.”

E.J. Schultz writes for Crain’s sister publication AdAge.

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8 MARCH 22, 2021 • CRAIN’S CHICAGO BUSINESS

Rule would slow Emmett Till, Muddy Waters museums Ald. Sophia King shepherds a proposal to require zoning approval for turning historic houses into museums for any house museum, similar to what a proposed high-rise needs if At a time when at least four its developers aim to go taller than South Side homes are in the pro- “by right” zoning would permit. cess of being turned into muse- The chair of the committee, Ald. ums honoring their Black former Tom Tunney, 44th, held the proresidents, one alderman aims to posal for consideration at the comrequire more input from neighbors mittee’s March 23 meeting.

If enacted, the ordinance could on projects like them.

Ald. Sophia King, 4th, found that slow development of several projowners of these homes can turn ects that are on the boards, all them into museums “by right,” honoring history in Chicago. The meaning they do not require any former homes of both civil rights icon Emmett Till, in West Woodzoning change.

That means “you can come into lawn, and blues great Muddy a neighborhood and basically just Waters, in North Kenwood, are in turn your house into a museum the early stages of conversion to without any other consideration,” museums. Also being discussed King said at a Feb. 24 meeting of is a museum or nonprofit use for the Chicago City Council’s com- a Washington Park greystone that mittee on zoning, landmarks and was a settlement house for Black building standards. King said that women coming up from the South in the Great Migration. long-vacant former “I THINK THIS IS A WAY TO BASICALLY The home of Black community leaders Lu and Jorja SHUT DOWN OUR EFFORTS TO English Palmer at 3654 PRESERVE THIS BLACK LEGACY.” S. King Drive is under contract to a purchaser Chandra Cooper, a great-granddaughter that additionally wants of Muddy Waters to turn it into a museum and library.

Ward Miller, executive director of her research came as a surprise to city staffers when she presented it Preservation Chicago, says there is also a museum proposed in a Kento them several months ago.

King is proposing an ordinance wood home that would honor Elithat would require a zoning change jah Muhammad, the late leader of

BY DENNIS RODKIN

The former home of blues great Muddy Waters, at 4339 S. Lake Park Ave., is at the center of this photo. the Nation of Islam, but Crain’s was not able to confirm.

“I’m disheartened by what Ald. King is doing,” says Chandra Cooper, a great-granddaughter of McKinley Morganfield, whose stage name was Muddy Waters.

Cooper is leading the effort to turn Muddy Waters’ former home at 4339 S. Lake Park Ave. into a museum, an effort that got a $50,000 grant from the National Trust for Historic Preservation in July.

“I think this is a way to basically shut down our efforts to preserve this Black legacy,” Cooper tells Crain’s. The house has been in derelict condition for years, but Cooper says a new roof will go on next week, thanks to the National Trust grant, and rehab will follow.

King said that a house museum might gobble up street parking and in other ways impact people in neighboring houses, and that the community currently has

no means to influence the changes.

“It’s an attraction,” King said in the meeting. “You’re bringing people into the neighborhood. There are no considerations for quality of life in the neighborhood. I’m just asking that there be a community process, that aldermen are involved.”

King did not respond to Crain’s multiple requests for comment.

Cooper says she has worked with King and her office on details of the Muddy Waters project and “she never mentioned that this zoning rule was something she was going to do. Why not tell us? It feels like she pulled the rug out from under us.”

Naomi Davis, whose group Blacks in Green owns the former home of Emmett Till and his mother, Mamie Till-Mobley, on South Saint Lawrence, tells Crain’s that King’s ordinance “is using a sledge-

hammer instead of a scalpel” to resolve problems like excess parking.

Davis says her group would gladly work with neighbors to devise a parking solution that works for everyone but that adding a new layer of aldermanic control isn’t necessary to accomplish that.

Given the dire economic conditions in West Englewood, Davis says, she feels confident the neighbors would put developing projects that bring new vitality to the block over arguments about parking.

“We can have economic development of our Black neighborhoods without sacrificing the benefits of living in a peaceful neighborhood,” Davis says.

Preservation Chicago posted a petition against King’s ordinance at Change.org. As of 11 a.m. March 18, it had more than 2,900 signatures. The group plans to present the petition at the zoning committee’s March 23 meeting.

Port of Chicago ready to court industrial developers Move could attract e-commerce and logistics companies and result in hundreds of jobs

BY ALBY GALLUN E-commerce and logistics companies seeking warehouse space on Chicago’s Southeast Side may soon have another place to set up shop.

The Port of Chicago is getting ready to offer about 90 acres along the Bishop Ford Freeway for industrial development, land that could attract interest from businesses in the expanding transportation, distribution and logistics industries. A big development there could bring hundreds of jobs to an area still trying to fill the economic void created by the slow decline of the steel industry.

The location, sandwiched between the Bishop Ford and Lake Calumet north of 130th Street, could be especially appealing to companies that need last-mile warehouse space to store products for delivery directly to consumers in the city, says David Doig, president of Chicago Neighborhood Initiatives, a nonprofit

developer with an industrial park just up the road, in Pullman.

“It’s got great freeway access, and you’ve got great proximity to the population center,” says Doig, who plans to submit a proposal for the parcel.

The board of the Illinois International Port District, which runs the Port of Chicago, was expected to consider a measure to seek proposals from developers for the property. A developer would likely control the land through a long-term lease, rather than buying it from the port, Doig says.

The decision to develop the land is part of a larger master planning process by the board to reposition the port and bring in new uses. The port district board, whose members are appointed by the governor of Illinois and mayor of Chicago, has faced criticism over the years for poor management and stagnant shipping volumes. The Civic Federation, a Chicago fiscal watchdog group, has called for

the district to be dissolved.

The board considered a proposal to privatize the district but rejected the idea in 2019. The board also is searching for a new executive director after its previous one resigned in October.

Port Chairman Ivan Solis did not return a call.

The port, which covers 1,790 acres, already includes the Harborside International Golf Center, and CNI has proposed building a casino there. An industrial development could generate some income for the district and turn a long-fallow stretch of land into something useful. Doig estimates the site could accommodate industrial buildings totaling about a million square feet.

CNI is on the hunt for more land as it wraps up a major development on the former Ryerson Steel property in Pullman, on the west side of the Bishop Ford. And Doig sees his project in Pullman as a model for the port site. CNI has developed most of the 170-acre

The Port of Chicago plans to seek development proposals for about 90 acres, at left, along the east side of the Bishop Ford Freeway. site into Pullman Park, an industrial park that includes a Method soap factory and distribution centers for Whole Foods Market, SC Johnson and Amazon. About 800 people work in the park today.

Even though Amazon already has a warehouse in Pullman, another one on the port site isn’t

out of the question, according to Doig. The e-commerce giant isn’t tapped out on industrial space in the city, with plans for new distribution centers in Bridgeport and Gage Park.

“I think Amazon, given their appetite, would be a possibility,” he says.

CRAIN’S CHICAGO BUSINESS • MARCH 22, 2021 9

New York investor makes big Fulton Market bet

BY DANNY ECKER Hymie Mishan is betting there’s a lot more room for the Fulton Market District to grow on the other side of the COVID-19 pandemic.

His New York-based real estate firm Vista Property Group paid nearly $32 million in a pair of transactions this month for properties at 400 and 401 N. Morgan St., one block north of Google’s Midwest headquarters in the trendy former meatpacking corridor.

In the larger of the two deals, Mishan confirms that Vista paid almost $25 million for the property anchored by event space Morgan Manufacturing covering a full city block bounded by Morgan, Kinzie and Sangamon streets and the Metra tracks running through the neighborhood. Separately, Vista paid $7 million for a vacant 7,000-squarefoot building across the street on 17,000 square feet of land at 400 N. Morgan.

The purchases plant a high-profile stake in Fulton Market for Vista and complete a lucrative cash-out for the seller on both properties, Chicago restaurateur and real estate entrepreneur Marc Bushala’s MAB Capital Management.

MAB bought the 88,000-squarefoot industrial property at 401 N. Morgan from electrical safety equipment maker Salisbury by Honeywell in December 2012 for $1.2 million, according to Cook County property records. That was six months before Google announced it would move its Chicago office to Fulton Market, which set off a transformation of the gritty neighborhood into what is now a trendy corporate destination and home to some of the city’s most expensive commercial property.

Bushala said at the time that he planned to spend between $7 million and $8 million turning the building into an event and office space, eventually completing the redeveloped Morgan Manufacturing property in 2014. After filling up the balance of the building with office tenants, MAB capitalized on skyrocketing Fulton Market property values in 2017, when it refinanced the property with an $18 million loan, property records show.

Across the street, MAB paid just under $2 million for 400 N. Morgan in December 2013. The vacant property previously was the Pagoda Red Asian furniture store and an office for T-shirt company Threadless.

Now Vista has paid a premium for

the fully leased Morgan Manufacturing property—in which restaurant group Alinea and reservation platform company Tock have offices—and a site across the street that it could redevelop down the road. It’s a wager Mishan says he is making with the comfort of long-term tenants in one property and the potential to cash in later on the other.

“We believe that in less than three years, these corridors—Morgan, Kinzie and Carroll (Avenue)—will see multiple additional projects breaking ground, and existing projects will stabilize and bring traffic to the area,” Mishan says, citing new buildings already underway like developer Trammell Crow’s Fulton Labs life sciences hub two blocks away at 400 N. Aberdeen St. Among other projects proposed nearby, developer Sterling Bay plans to add office buildings at 1000 W. Carroll Ave. and 345 N. Morgan St. that were slated to be part of a massive Google expansion before the pandemic set in.

“There’s just so much to look forward to, and we have the luxury of being able to operate a fully leased building,” Mishan says.

Mishan declines to share lease terms at 401 N. Morgan but says

GREENSTONE PARTNERS

Vista Property Group is planting a high-profile stake in the now-trendy former meatpacking district while investor Marc Bushala completes a lucrative cash-out

401 and 400 N. Morgan St., lower left, run along the northern edge of the Fulton Market District.

Morgan Manufacturing will continue to operate the event space and plans to open a new restaurant this

fall in the space previously occupied

by Bushala’s shuttered Brass Monkey Brasserie restaurant.

Mishan says Vista will market the 400 N. Morgan property to new commercial tenants and has no immediate plans to redevelop it with something larger. But that could change, especially now that 27th Ward Ald. Walter Burnett is allowing residential development in Fulton Market north of Lake Street. Burnett lifted his long-standing ban on that use early in the pandemic to try to stoke new projects.

Danny Spitz of Chicago-based brokerage Greenstone Partners represented Vista Property Group in the Morgan Street deals.

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10 MARCH 22, 2021 • CRAIN’S CHICAGO BUSINESS

Q EDITORIAL

Time for Pritzker to deliver on ‘fair maps’ promise

CRAIN’S ILLUSTRATION

I

llinois lawmakers on March 17 began the once-in-a-decade task of redrawing the lines that make up congressional and state legislative districts.

This year, however, the process is unlike recent remaps, for a variety of reasons—some that are outside local officials’ control, others that are squarely in their wheelhouse.

In the outside-our-control category is the COVID-sparked delay of the census data that mapmakers typically rely on, and as Crain’s political reporter A.D. Quig pointed out in her coverage of the mapmaking kickoff, that means it’s still unclear whether Illinois will lose one or two seats in Congress, on top of the looming question of how lawmakers will balance the drop in Illinois’ Black population against the rise in Latino population—not to mention how, or whether, the Democrats who control the Statehouse, the Senate and the governor’s mansion will yet again wield the remap as a weapon against their Republican counterparts to hold onto power.

This last notion is the cynical reader’s cue to smirk. But there are a few more factors to consider before pausing to roll one’s eyes: For one thing, the master manipulator of Illinois’ political machinery, Michael Madigan, is no longer in power. Second, our governor, J.B. Pritzker, campaigned for office on a promise to end the political gerrymandering that has made so many elected officials in this state comfortable to the point of being utterly unaccountable to anyone but their friends and donors. The

political mapmaking process in decades past has allowed Illinois politicians to pick their voters, not the other way around. Our governor has promised an end to that era.

Just how badly gerrymandered are Illinois’ maps? As Crain’s columnist and Better Government Association President David Greising points out, more than 95 percent of incumbents seeking re-election were returned to office in the elections held

since the maps were last drawn in 2011.

From 2012 to 2016, more than half the incumbents in the General Assembly faced no general election contest at all. That’s the result of maps twisted to maximize Democratic control of as many districts in the state as possible—as Greising terms it, “a Rube Goldberg perpetual re-election machine.”

The redistricting committees now ac-

tive in the House and taking shape in the Senate have a few short months to draw up a plan. “We are acutely aware of the constitutional deadline of June 30,” Senate President Don Harmon tells Crain’s, but he’s “confident we’ll get our work done,” including getting public input from all 102 of Illinois’ counties.

The ideal solution would be to pass and sign a bill to establish an independent, nonpartisan public commission to draw the maps. Short of that, lawmakers should at least commit that districts will be drawn without regard to where incumbents live, as the BGA suggests would be one way to short-circuit the incumbents-first approach that has distorted past maps.

Similarly, Crain’s columnist and Change Illinois Executive Director Madeleine Doubek argues that if legislators choose to draw maps without waiting for new census data, they should commit, by law, to revisiting and revising the maps once the new census figures are distributed. With new census data, the people deserve a chance to provide input again.

As a candidate, Pritzker repeatedly and loudly declared that he understood how corrosive Illinois’ mapmaking dynamic has been to the state’s politics as well as its economy. He pledged to undo it. And now everyone reading this must put pressure on his legislative counterparts to deliver a fair map to his desk—and then hold the governor to his oft-repeated promise that he would approve no map unless it was fair to all Illinoisans.

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YOUR VIEW

Ensuring post-pandemic growth is equitable

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service organizations, which focus ooking at the empty, boardon helping and training founders ed-up storefronts across and small-business owners across Chicago’s neighborhoods, the city’s neighborhoods. Investing it is hard to believe the projecin these programs, making them tions that the American economy widely available and complementwill return to its pre-pandemic ing current offerings with targeted size by the middle of this year, seed-stage financing for the most as the Congressional Budget Ofpromising ideas can help direct the fice has projected. The pandemic nature of Chicago’s post-pandemic has widened the equity gap in edgrowth. The city’s philanthropic ucation, employment and venture Maija Renko is a community, socially responsible capital, and the projected growth professor at Deback is unlikely to be equitable. Paul University’s corporations and city government The same Congressional Budget Driehaus College can invest in these programs for diverse entrepreneurs to impact Office report also predicts the of Business. the direction of economic recovery number of employed Americans will not return to its pre-pandemic levels and to make it more equitable.

Many such entrepreneur training prountil 2024. Chicago’s underserved neighborhoods and Mayor Lori Lightfoot’s Invest grams already exist, so what should be the nature of further investment in them? Our South/West strategy cannot wait that long.

New business startup rates have shown recent research points out some needs.

First, the pandemic has shown the impact a surprising upward trend in the pandemic, and once consumer demand in services of the digital divide on business success. and retail rebounds, entrepreneurial activity Many small and young brick-and-mortar can pick up even more. What entrepreneurs businesses have been able to pivot to online need to successfully launch and grow their sales, but many have not. Post-pandemic, businesses is no mystery: knowledge, capital customers will continue to shop online, and and networks. All of these are being delivered entrepreneurs will have to make their prodin dozens of programs by Chicago’s business ucts and services available accordingly.

Yet the business service organizations that train and help entrepreneurs in underserved neighborhoods do not have systematic access to technological tools that they can introduce to entrepreneurs. This is an area where the technology entrepreneurship ecosystem of downtown Chicago, and the major corporations that have long invested in technology assets, could have a significant and positive impact on equitable growth.

By partnering with entrepreneurship training programs run by business service organizations, they could help bridge the divide that can otherwise hold back the recovery of underserved neighborhoods.

Second, while the existing entrepreneur training programs deliver widely needed financial management and marketing content, there is an additional need to help entrepreneurs ensure the long-term competitiveness of their businesses. This may not be the first thing on an entrepreneur’s mind when they look to start a business, but adopting a longer-term mindset does not mean creating lofty goals and unrealistic visions without regard to realities.

Neighborhood entrepreneurs can be encouraged to use their available means as the starting point for identifying new opportu-

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.

nities. In this area, business service organizations could be encouraged to collaborate with each other, as well as other educational partners, to create programming around innovation and service development that builds on the entrepreneurs’ and neighborhoods’ assets, while responding to trends.

Finally, entrepreneurs need capital. The training programs we studied across Chicago refer business owners to lenders that can help them build their credit and access loans.

However, what could really boost a neighborhood entrepreneur’s success is a business development grant. A grant of $5,000 was mentioned by many of our study’s business service organization representatives as a number that could make a difference for many of the early-stage entrepreneurs they work with. The city’s business service organizations could channel philanthropic and government funding to business owners who need the funds to launch and grow.

To be sure, neighborhood entrepreneurs alone are not able to bring back the jobs and opportunities lost to the pandemic. However, without an investment in them, the recovery of Chicago risks further contributing to inequity between neighborhoods that prosper and those that fall further behind.

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 • MARCH 22, 2021 11

LETTER TO THE EDITOR

Questions we should ask about ComEd’s grid investment

I

n a recent article about ComEd’s grid investment plans, Crain’s reports ComEd was granted the customer rate decreases it requested the last three years in a row (“ComEd says it’s powering toward a record profit,” March 8). It also points out ComEd profits have fallen in some years and when they’ve increased, increases have generally been small.

That’s all true. But the article doesn’t address a couple of the most important questions that many people are, and should be, asking.

First, what is the condition of the power grid today, and what do we need to do to make it more resilient? This question is on everyone’s minds in the aftermath of the catastrophic grid failures in California and Texas over the last

Chief executive officer KC Crain Group publisher/executive editor Jim Kirk

Associate publisher Kate Van Etten *** Editor Ann Dwyer

nine months. Second, how do we keep bills affordable in the face of needed investments in clean and renewable energy, energy storage, electric vehicle charging infrastructure and a grid that supports it all?

The grid is in good shape. ComEd has consistently delivered fewer and shorter outages, resulting in best-ever customer satisfaction.

ComEd stands by the investments it has made the last 10 years—investments the Illinois Commerce Commission reviewed annually under three different governors. In this and past articles, Crain’s has mischaracterized the ICC’s oversight as lax. However, the ICC spends eight months each year carefully reviewing every penny of maintenance and

smart-grid investment we make to ensure it benefits customers.

Without those investments, our grid would have failed to deliver needed reliability during a brutal polar vortex in 2019 and the historic derecho last August that unleashed 110 mph winds and spawned 15 tornadoes, a destructive storm that caused some neighbors in Iowa to lose power for three solid weeks.

To the second question: There are costs that come with making the grid resilient to more intense storms and able to charge fleets of electric vehicles, integrate more renewable energy and maintain reliability for millions of families and businesses as we add many more energy sources that operate only when the sun

is out or the wind is blowing. The engineering and economic challenges are great, and it’s important to understand that investments in the system will be needed. The cost of doing nothing, however, is greater.

We believe we can meet these challenges, affordably. By investing in clean energy resources that provide the power customers need at the times they need it, creating incentives that support adoption of electric vehicles, and building on investments to strengthen the grid, we can keep energy reliable and resilient, and reduce air pollution.

JOE DOMINGUEZ CEO, COMED

MY BENESCH

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12 MARCH 22, 2021 • CRAIN’S CHICAGO BUSINESS

THE

HOTTEST HOTTESTJOBS 10

We talked to recruiters, hiring companies and employers to identify the 10 hottest well-paying jobs in Illinois in 2021 BY DANIELLE BRAFF THE PANDEMIC WREAKED HAVOC on jobs, leaving some employees working from home, some furloughed and some without jobs altogether. What were once promising careers (we’re looking at you, small-business owners, health care workers and those in the arts) are now those with diminishing returns.

Prevailing jobs pre-pandemic, such as real estate property managers, retail bankers and office managers, are no longer in demand, as companies went remote and consumers stayed home, says Michelle Reisdorf, Chicago regional vice president at Robert Half, a staffing and recruiting agency.

Illinois had its worst year for jobs on record, according to the Illinois Policy Institute. The state lost about 7 percent— or 420,000 jobs—from December 2019 to December 2020. Hardest hit were hospitality and leisure jobs, which were down 32 percent. With the exception of construction employment, every single sector in the state’s economy declined, according to the institute.

Still, it’s not all bad news.

Fifty-one percent of companies plan to hire in 2021, according to Robert Half.

“For many companies, how they work may be different, but the volume of work continues, often with an even faster pace because the environment is shifting constantly,” Reisdorf says.

An overall trend has been the spike in contract hiring. In an uncertain economy, firms often rely more on contract professionals.

“They may feel cautious about hiring, but at the same time, they don’t want to be understaffed and have work that must get done.”

There are also jobs that are in demand now that weren’t before the pandemic, so companies are struggling to fill those positions with talent. These include relatively well-paying jobs, such as loan processing, grant administration and mortgage industry roles, Reisdorf says.

Crain’s spoke with recruiters, hiring companies and employers to identify the 10 hottest well-paying (over $50,000) jobs in Illinois in 2021. Note that the number of job openings is a national number, based on Glassdoor’s Best Jobs in America 2021 study.

SOFTWARE DEVELOPER/JAVA DEVELOPER Number of job openings: 10,100 | Median base salary: $90,800 Overall, demand in the IT industry has remained steady, with software developers in the most covetable position, according to ManPower Group, a staffing and recruitment company. This career jumped in demand in late 2020, as businesses began attempting to return to normal—and needed data analytics and software builders to give them a competitive advantage, according to the Dice Q3 Tech Job Report. There’s been a 25 percent increase in volume in January 2021 compared with the same time last year.

DATA SCIENTIST Number of job openings: 6,000 | Median base salary: $114,000 Data collection is a growing project for IT, explains Reisdorf at Robert Half. Organizations need professionals who have the expertise to collect, report and analyze large amounts of company data, she says. From 2019-2029, data science positions are expected to grow 15 percent (the average rate of growth for all occupations is 4 percent), from 32,700 positions to 37,700 positions, according to the Bureau of Labor Statistics.

Data science experts will be expected to analyze and predict how 2020 data will impact 2021 projects and beyond. For example, they will look at whether new movies should go to theaters or simply be screened.

As data ecosystems increase in their complexity, data scientists will be needed to help companies expand their intelligent automation implementation, according to Robert Half.

CLOUD ENGINEER

SOFTWARE ENGINEER

A

Number of job openings: 5,500 | Median base salary: $105,600

Number of job openings: 40,600 | Median base salary: $110,245

N M

Demand is high for software engineers and software developers because most companies need applications and websites to be built and managed. There are also an increasing number of products that use software, Reisdorf says. Ultimately, the high demand for custom-built websites and mobile apps will continue to drive the need for software engineers, she says.

W m g a ra v fi c p b to

Every business is moving to the cloud, and there are many companies supporting that industry (beyond the big cloud providers, who are Amazon, Google and Microsoft), says Jeff Hyman, CEO of Recruit Rockstars and professor at Northwestern University’s Kellogg School of Management. Since there are so many remote workers, the security of those employees who are bringing their work home is based on the cloud being effective. The cloud is not new, however, so Hyman expects the growth rate in this industry to decline within the next few years. But Reisdorf thinks it’ll last for a while.

“Firms continue to invest in cybersecurity and cloud functions to safeguard information and streamline processes,” she says.

t

t

CRAIN’S CHICAGO BUSINESS • MARCH 22, 2021 13

HR SPECIALIST Number of job openings: Not available | Median base salary: $50,300 As more time-strapped managers realize that wooing great job candidates can take significant time and effort, many organizations are adding human resources professionals to help with the recruiting process, Reisdorf says. Human resource specialists also support onboarding and talent management programs. They may also take responsibility for employee engagement, creating wellness initiatives and developing training and team-building programs.

Because of the pandemic, many companies have to completely change how their human capital operates, Hyman points out: Are we going to sell the office and go virtual? How do we transition everyone smoothly from remote work and back? HR reps are in strong demand because there have been so many changes over the past year, ranging from testing and safety protocol to everything that goes with remote work. But that’s not all they do. “They make recommendations for wireless network optimizations, additions and upgrades to meet business requirements, and they also document network infrastructure and design,” she says. According to the Bureau of Labor Statistics, this field is projected to grow 7 percent through 2029.

MOBILE ENGINEER Number of job openings: 4,600 | Median base salary: $94,300 These professionals help research, design and implement wireless networks, Reisdorf says. The demand for their services increased after the pandemic forced many to work remotely. They make recommendations for wireless network optimization, additions and upgrades to meet business requirements, and they also document network infrastructure and design. Apple just rolled out its 5G phones, so many of the networks are racing to put up 5G towers, Hyman says. “That has a two-to-three-year bloom cycle,” he says. “Everyone will need a new phone, so there are tower installation folks, the chipmakers and the marketing and advertising people who are driving the change.” Hyman expects this to be the biggest cycle since the smartphone was introduced.

TELEHEALTH Number of job openings: Varies by sector | Median base salary: Varies by sector This industry is booming, thanks to the pandemic, and may stick around well after. “If you have a minor issue or don’t have to go to the office, this is a safer option, and the technology is improving,” Hyman says. It’s also less expensive for the health care system.

According to a 2019 survey by First Stop Health, 91 percent of employers expected to offer telemedicine by 2020. There are telehealth jobs for everyone from physicians to pharmacists—and there are also telehealth positions for Java developers, user interface designers, quality assurance engineers and iOS developers.

ACCOUNTANT

INFORMATION/NETWORK SECURITY ENGINEER

SALES MANAGER

Number of job openings: 8,800 | Median base salary: $67,000

Number of job openings: 5,600 | Median base salary: $110,000

Number of job openings: 16,500 | Median base salary: $72,600

With all the financial challenges of 2020, more people are looking for someone good to do their books. “Companies across all sectors, ranging from corporations to small businesses, need the various services provided by a qualified financial professional,” Reisdorf says. Accountants manage bookkeeping efforts, prepare financial statements and analyze balance sheets and income statements to keep businesses operating optimally.

This field “is booming because of hacks, fraud, Bitcoin and phishing,” Hyman says. These engineers orchestrate a company’s security measures, including overseeing the creation of IT security infrastructure, implementing policies and best practices, managing security audits and vulnerability and threat assessments, and preventing and detecting intrusion, Reisdorf says. They’re also tasked with creating and executing strategies to improve the reliability and security of IT projects, such as software development. Organizations need network security professionals to keep sensitive data and systems safe from malicious hackers, to defend an ever-expanding security perimeter and to comply with stringent regulatory mandates related to data security and privacy, Reisdorf says.

A new study by Career Cloud, an online resource to help with everything career-related, found that retail sales are the No. 1 most common and competitive job in America, accounting for about 1,400 jobs per 100,000 people. And this arena should become even more competitive in the upcoming months, as the country climbs out of its economic crisis and businesses begin to reopen.

CRAIN’S ILLUSTRATION/GETTY IMAGES

14 MARCH 22, 2021 • CRAIN’S CHICAGO BUSINESS

CHA contract clears way for $51 million multiunit housing deal

BY ALBY GALLUN A $51 million plan to turn around a run-down low-income housing complex in University Village took a big step forward last week, when the Chicago Housing Authority board approved a contract to subsidize as many as 160 of the property’s 272 apartments.

The CHA reached the agreement with Jonathan Rose Cos., a New York affordable-housing investor that plans to take over and renovate Barbara Jean Wright Court, a 27-building complex at 1354 S. Morgan St. Jonathan Rose plans a major makeover that will include new roofs and HVAC sys-

erty in 1999. Jonathan Rose has agreed to take over the complex but still needs to line up financing to complete the transaction, which should happen by this fall, says Jonathan Rose partner Nathan Taft. With a CHA contract in place, the landlord can now focus on the financing.

“It’s a huge vote of confidence in this, and an acknowledgment that the property needs attention,” Taft says.

MAJOR MAKEOVER

The change in ownership would bring stability to the property and preserve affordable housing, a constant challenge for a city with a perennial gap between the housBUILT IN 1972, BARBARA JEAN WRIGHT ing that’s available and what residents COURTS HAS DETERIORATED BADLY can afford.

“We’ve lived with UNDER ITS CURRENT OWNER. bad conditions for a tems and new kitchens and bath- long time and the uncertainty has rooms in the apartments. been difficult, so yes, we are reBuilt in 1972, Barbara Jean lieved to know that the buildings Wright Courts has deteriorated will be improved and that we’ll be badly under its current owner, able to stay in them,” Jessie JohnChicago Community Develop- son, president of the Barbara Jean ment, which acquired the prop- Wright Court Tenant Council, says

COSTAR GROUP

New York investor Jonathan Rose plans to take over and renovate the decades-old Barbara Jean Wright Court apartment complex in University Village

Barbara Jean Wright Court is a 27-building complex at 1354 S. Morgan St. in a statement from Jonathan Rose.

At a meeting March 16, the CHA Board of Commissioners approved a 15-year contract to provide housing vouchers that would subsidize rent for as many as 160 tenants at the property. The U.S. Department of Housing & Urban Development also provides Section 8 subsidies to tenants at the complex, an agreement Jonathan Rose aims to renew, Taft says.

Jonathan Rose, which entered the Chicago market in 2012, owns or is under contract to own eight buildings totaling 1,500 units here.

Its Chicago properties include Belmont Tower, a 277-unit building in

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The recently operating public parking garage is now closed and is part of a 3-unit commercial condo association where the other two units are a hotel and office building. Ideal for continuing as a parking garage, vehicle storage, museum, or other creative reuse. 5 floors of indoor parking.

Previously Valued Over $12,000,000 Suggested Opening Bid $3,850,000 On-site inspections Noon to 2 pm, April 13, 21, 27, May 5 and by appointment

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P014_CCB_20210322.indd 14

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Lakeview, and 2101 S. Michigan, a 250-unit tower near McCormick Place. It also has a deal to buy Archer Courts, a 146-unit building in Chinatown.

The firm would pay $1 to take over Barbara Jean Wright Court, pay off a $16 million HUD loan on the property and spend an additional $35 million, or about $130,000 per unit, on the renovation, Taft says.

Jonathan Rose would finance the project through a combination of Low Income Housing Tax Credits and debt, he says.

“Rose’s plan both ensures affordability for existing tenants and provides the kind of exten-

sive renovation that will improve the look of BJ Wright and the quality of life for all of its residents,” Ald. Byron Sigcho-Lopez, 25th, who represents the neighborhood, says in the Jonathan Rose statement.

The vote also pleased Anthony Fusco Jr., president of Chicago Community Development. The property needs to be recapitalized, but at 73 years old, he says he’s not the one to do it.

“I’ve been trying to find a suitable purchaser because it needs a capital infusion,” Fusco says. “I’m in the process of trying to get out of the business.”

REAL ESTATE AUCTION•MAY 13, 2021 UNIQUE REAL ESTATE OPPORTUNITY CHICAGO, ILLINOIS

16 Old Town neighborhood condos spread across numerous different properties in newer modern buildings in excellent condition to be sold in bulk.

PROJECTED BULK VALUE 17 YEARS FROM NOW OVER $10,000,000 PROJECTED VALUE OF COMPARABLE UNITS TODAY APPROXIMATELY $6,000,000 • SUGGESTED OPENING BID $1,000,000 You are essentially purchasing 16 condos that have market values today of up to $450,000 each for approximately $65,000 each at the suggested opening bid. This is a great inflation hedge that should accomplish the goal of asset preservation while giving the owner a strong opportunity for oversized returns. A clever diversification for your portfolio. Think of this as you might an annuity or a zero coupon bond, and discuss with your accountant or financial planner the estate planning and wealth transfer implications that could benefit a purchaser.

KER BRO OP O C - ED T INVI

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If you have a long term strategy, are bullish on Chicago’s future, are a family office, a college endowment, or a savvy investor who knows a tremendous opportunity when they see it, please contact us for more details.

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CRAIN’S CHICAGO BUSINESS • MARCH 22, 2021 15

AUTOMATED SOLUTIONS: More factories turn to robotic labor to speed production and reduce human error. PAGE 16 PANDEMIC SURPRISE: Some areas of manufacturing saw a rebound despite the global lockdown. PAGE 17

MANUFACTURING

EFFICIENCIES: Digitizing, while not the same as automating, is another way to remake manufacturing. PAGE 18

Bison Gear & Engineering

FACTORIES

ZAC OSGOOD

FORWARD As the ‘engine of the economy’ heats up again, tech advances are accelerating ahead of a lagging labor force BY H. LEE MURPHY THE PANDEMIC LOCKDOWN last spring is now looking like the shortest manufacturing recession in memory. Many factories around Chicago, in fact, are struggling to hire enough workers—even amid elevated unemployment levels—as orders pour in again and business rebounds to pre-COVID-19 levels and beyond.

But as workforces continue to shrink, companies are investing in automated equipment, as modern production plants evolve beyond their smoky and dirty origins to the clean, quiet hum of the latest hands-free machines.

The swiftness of the recovery caught nearly everybody by surprise. A year ago, Bison Gear & Engineering in St. Charles cut back from three shifts to two at the 115,000-square-foot plant where it employs 300 people. Orders in the spring and early summer nose-dived 50 percent and more before ticking back up by

fall. Then came a surge that allowed the year to end respectably, with revenues down a mere 10 percent from the 2019 total of nearly $100 million.

In late January, Bison, a maker of motors that power everything from railway gates to restaurant beverage dispensers, brought back its third shift amid strong order activity. Now CEO John Burch is feeling rejuvenated. “Our growth is running up 10 percent and better over a year ago at this point. It looks like our sales this year will go beyond 2019,” he said a month later. “The current trend appears to be sustainable for a while.”

And yet Burch can’t find skilled workers.

He has installed a robot-like machine that punches a hole in the middle of raw steel bars as they are machined into gears. The cost was more than $100,000 for the robot, but it replaces the labor of two people—and it runs

around the clock effortlessly. “We are looking for still more places where we can automate to boost our capacity. If our growth continues, we need to look at ways to combine our hourly workers with machines,” he says.

That goal has become easier to achieve as robots themselves have been downsized, Burch adds. “Ten years ago, most robots were so big that they required their own fencedin work areas. Now they have gotten small enough that they can function on a production line side by side with human operators,” Burch says.

The U.S. unemployment rate peaked at nearly 15 percent in April 2020 and is still at 6.2 percent, well above the historic lows registered pre-pandemic. But local manufacturing executives like Burch observe a troubling See FACTORIES on Page 20

MORE FORUM ONLINE See Crain’s in-depth stories, interactives and guest columns on Manufacturing and these previous topics:

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16 MARCH 22, 2021 • CRAIN’S CHICAGO BUSINESS

Automation takes center stage on factory floor

Re

From meatpacking plants to pharmaceutical packaging lines, robots are changing the nature of work while speeding up production

W into dow stock tion prim part

BY H. LEE MURPHY

AUTOMATION IS NOT JUST ALL ABOUT ROBOTS. significantly,” says Paul Sternlieb, president of JBT’s food protein technology division, noting that the DSI replaces as many as a dozen people per shift. He adds, “These are machines that can actually cut and process much more precisely than a human and just as fast. Even preCOVID, the labor supply had been a big issue with food processors for years. The pandemic only accelerated that concern.”

Jerry Murphy, a consultant in manufacturing and distribution

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JOHN R. BOEHM

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Pat Phillips is president and CEO of Haumiller Engineering in South Elgin. services with Naperville-based accounting firm Sikich, observes that rising wages in China and elsewhere in Asia as well as bottlenecked shipping lanes up and down the West Coast and higher tariffs have refocused attention on making Midwest manufacturing competitive. To become fully competitive, he believes, automation is expected to take center stage.

“The cost of automation is continuously coming down,” Murphy says. “Many factory owners once thought it was extremely expensive and not available to them. There is more and more opportunity as you see machinery like robotic welders being introduced that can replace workers doing dangerous and repetitive tasks.”

Those same factory owners, however, keep a close eye on their return on investment. Most equipment, Murphy confirms, must pay for itself—typically in the replacement of wage-earning employees—within two to four years. But there is a further worry beyond just the dollars and cents.

“There is always the concern that the product you are making with automated machinery will be changed and become different in a few years’ time. That could render your automated equipment obsolete,” Murphy says.

Automation is not just all about robots.

A few years ago, the pharmaceutical giant Eli Lilly came to Hau-

ZAC OSGOOD

Nearly a year ago, as the COVID-19 pandemic deepened and grocery shelves began to go empty, some of the most dire stories came from big meatpacking plants around the Midwest. Workers wielding knives on animal carcasses were contracting the virus from fellow employees toiling a few feet away. The process of cutting meat by hand suddenly seemed dangerous.

John Bean Technologies had an automated solution. The Chicago-based maker of food processing equipment stepped up promotion of its DSI X-ray guided portioning system. The machine replaces humans on a processing line by employing X-rays to study, say, pork ribs entering the line to identify the outlines of each rib, then direct an adjacent robot to use ultra-high-pressure jets of water (yes, mere water instead of saws) to cut precisely around the ribs, then send them on to a robotic harvester that studies the weight and size of the product with automated cameras (that can also detect bone fragments and even glass contaminants) before packaging.

The DSI is the size of a car and can cost a million dollars, but for a coronavirus-infected factory, it represents a crucial technology for the future. JBT, whose stock has nearly tripled off its low last year, also has developed poultry processing machines that can debone chickens and turkeys without human intervention. Elsewhere, the company has developed automated industrial guide vehicles that move pallets and products around a refrigerated factory floor, capable of lifting heavy loads 30 feet into the air for storage.

No human driver required behind the wheel.

“The interest from customers during a period like the pandemic in products like these increased

miller Engineering in South Elgin with a plea to make the production of its diabetes drug Trulicity more efficient. The drug itself was being packaged into vials that had to be wedded to a delivery mechanism that looked like an EpiPen requiring components and subassemblies.

Haumiller designed cam-driven mechanical machines with computer controls requiring virtually no operator intervention that doubled the production line output to 185 units a minute. Two machines priced at upward of $5 million each were delivered to Ireland for European distribution and several more, even more expensive, have been delivered to plants in suburban Buffalo Grove and North Carolina.

If the investment sounds steep, it should be noted that Trulicity goes for roughly $800 a dose.

Atlanta-based Newell Rubbermaid, today called Newell Brands,

was the owner of Sharpie pens a few years ago when it needed faster output. Haumiller designed a machine that took the existing production runs via a German-made machine of 120 pens a minute to 450 a minute—exceeding 500,000 a day—at a plant in Tennessee. The German-made machine cost $500,000, while the Haumiller rival was more than $2 million. But Newell Rubbermaid upgraded to the faster machines with the expectation the payback would come within two years.

“Our products aren’t usually robotic, where the limit is about 60 parts per minute in most circumstances,” says Pat Phillips, president and CEO of Haumiller, which is employee-owned. “We produce the sort of automation that allows the assembly of piece parts at extremely high volume.”

Automation isn’t coming just on the factory floor.

At consultancy Ashling Partners in Chicago, much of the focus is on so-called intelligent automation that involves software able to program robots and a lot more. The firm has devised systems that automate the ordering of raw materials prior to the start of production, then later on automate bills of lading and invoices, all the while analyzing the performance of every piece of production.

The latest software is amazingly intuitive: For gaining flexibility in sourcing, for instance, computers can study the pricing and terms and even home-country politics involving multiple suppliers. For the robotic arm on the factory floor, it can anticipate when a breakdown is coming and head it off with necessary maintenance.

“The assembly line itself has become pretty automated at many companies,” says Donald Sweeney, managing director of Ashling.

“Now the next step for automation is in the supply chain—gathering massive amounts of data and engaging in predictive analytics. We have intelligence now that tells us where every item in a supply chain is. Parts can be automatically ordered for exactly when they will be needed. Software programs are now able to organize by computer the whole cycle of sales and marketing and customer service and financial planning. Companies have already moved away from manual labor.

Now the goal is moving away from any kind of manual data entry.”

JIM KIRK PUBLISHER • ANN DWYER EDITOR • CASSANDRA WEST FORUM EDITOR • THOMAS J. LINDEN CREATIVE DIRECTOR • JASON McGREGOR DIGITAL DESIGN DIRECTOR • KAREN FREESE ZANE SENIOR ART DIRECTOR • SCOTT WILLIAMS COPY CHIEF

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CRAIN’S CHICAGO BUSINESS • MARCH 22, 2021 17

r

Rebound in manufacturing turned out to be a pandemic surprise

BY H. LEE MURPHY

CRAIN’S: What was your thinking about the manufacturing space early on in 2020, before the pandemic hit?

DE MARIA: Some industrial markets could have been doing better.

Agricultural equipment was waiting for a liftoff, which wasn’t there in part because commodity farm prices were not at a good level.

Other markets were cycling down.

Truck production was expected to fall off in 2020. And at the end of January a year ago, Caterpillar reported fourth-quarter results

with earnings down and its backlog of orders down.

And then in March the pandemic hit.

We were coming to the holistic conclusion that COVID would shut down the global economy and that things were going to get worse before they got better. I put out a report later in March that reduced my estimates on the companies I cover across the board. Supply chains were strained, and production was halted in some places. Then it became clear that many plants were going to be able to stay open and were managing their downside with reduced production and, in some cases, government help. In the second quarter, we saw sales down hugely, but it then seemed that that was the bottom of the cycle, and we saw signs of sequential monthly improvements.

A good call, obviously. Deere ended the year above $270. It helped that futures prices for corn and soybeans rallied during the year.

In ag, I look at farmer sentiment.

By June, farmers were getting more optimistic. The last peak in the ag market was 2013, and much of the

fleet acquired back then was getting old and expensive to maintain.

Farmers were thinking about replacing where they could. It helps that the latest tractors and other equipment have been modernized with technology that allows farmers to reduce inputs, like fertilizer, while increasing their yields. Deere raised prices on large equipment a few months ago by 8 percent, which is about as big a price increase as I’ve seen. The company now has lead times stretching to December.

The recovery for some manufacturers, including Caterpillar, has been more uneven.

Caterpillar has a big exposure to oil and gas, which still hasn’t bounced back. Energy prices have been weak, and there has been a secular move away from hydrocarbons.

That has weighed on Caterpillar. However, the company will benefit as there is a pickup in home construction and remodeling, and mining is recovering. An infrastructure bill would be a big bonus.

Navistar, which is being acquired, saw its stock up by more than 50 percent last year.

Commercial vehicles were excep-

tionally weak in most of 2020. It looks like recent production can’t keep up with demand, in fact, as there have been supply constraints of semiconductor chips and other components. Steel has gotten expensive across markets, and freight costs have also increased. But that hasn’t reduced demand for many manufactured products yet. Pricing will be up this year, yet not so much that it will be an impediment to buyers in need of new equipment.

Navistar stock, of course, has also benefited because it is being acquired by Traton (a subsidiary of Volkswagen).

Restaurants have been under pressure. How is Middleby, a maker of restaurant equipment, doing?

Like most industries, commercial food service bottomed in the spring, and has been improving sequentially ever since. Some segments such as quick-service restaurants, grocery, convenience stores and pizza have done well. While that industry is the most important for Middleby, it has diversified to food processing and high-end residential equipment, which has fared much better because of remodeling activity.

JOHN R. BOEHM

When the U.S. economy went into the COVID-19-induced lockdown a year ago and investors fled stocks, the commonly held assumption was that old-line industries, primarily in manufacturing, were particularly vulnerable. Health care would do fine, maybe even flourish, and people eating and drinking at home would still need their consumer staples, the thinking went. Stock Lawrence De Maria pickers looked to reposition their portfolios accordingly.

It turned out that many of the safest assumptions were upended in short order as the feared recession came and went in an eyeblink and consumers who could not travel redirected their unspent entertainment dollars to durable goods like cars and leisure equipment, surprising manufacturers of farm and construction equipment, who saw a potent demand for their products.

One of the keenest observers of this unfolding trend has been Lawrence De Maria, an analyst at William Blair in Chicago who oversees global industrial infrastructure, particularly agriculture, mining, construction, industrial technology and capital goods.

De Maria follows most major Midwest manufacturers, including Caterpillar (up 25 percent in 2020), Deere (up 54 percent) and Elgin-based Middleby (up 20 percent despite the fact that its customers are mostly restaurants).

The following excerpts from a recent conversation have been edited for clarity:

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18 MARCH 22, 2021 • CRAIN’S CHICAGO BUSINESS

SOFTWARE AND SENSORS

Digitizing will lead to more jobs, less waste M

the past to anticipate a future xD’s mission is to help problem. Data scientists or softU.S. manufacturers go ware engineers develop algodigital. rithms based on how a machine Digitizing a factory is not the performs when it’s healthy. same thing as automating a When the machine begins to “get factory. sick”—meaning it performs outIt rarely leads to job losses. side of the parameters set by the It’s akin to an auction house algorithm—the software triggers like Sotheby’s launching a an alarm. website and allowing pre-qualiIt’s like going to the doctor fied buyers to place bids online.

Chandra Brown and learning your cholesterol is Sotheby’s has to hire people to is CEO of Chicaway too high, thereby preventing build and manage the website, go-based MxD, and it has to pay for software to the nation’s digital a debilitating heart attack that puts you in the hospital. Such maintain it. manufacturing warnings can lead companies to These are new jobs but with institute, and order replacement parts ahead of one catch. Most of them don’t former deputy asa failure or perform a tuneup at require any expertise in art or art sistant secretary of an ideal time, reducing machine history. manufacturing at Inside a factory, going digital the U.S. Commerce downtime.

Another application is to immeans embedding production Department. prove the visibility and reliability lines with software and many difof your supply chain. Tiny radio frequency ferent kinds of sensors, and then connectchips, called smart tags, can be embedded ing those sensors to the internet so they can in parts or finished products, enabling comsend and receive data. panies to locate items with a few touches on This costs money, but the process is a keypad. straightforward. The greater challenge is Another way to go digital is to use augfiguring out what to do with the enormous mented reality. MxD member Light Guide amount of data now flying off the machines.

Systems installs a combination of projectors This requires factories to hire cyberseand sensors at workbenches—a system that curity experts to secure the data and data can guide workers to the next step in an scientists to analyze it, or to pay consultants assembly using instructions projected on to do all of that for them. Just like at Sothethe work surface. The sensors can set off an by’s, there’s a catch. These jobs often require alert if the worker has picked up a wrong a college degree or advanced training; the part or not properly installed it. required skills are very different from those Such augmented-reality systems are often of a machinist. used for training. They get new workers Here are some ways factories are digitizonto the factory floor faster and working ing—again, all ways that create jobs. with fewer mistakes. They also allow for One of the most common digital upeasy instruction in any language—most grades is predictive maintenance, or using

of the instructions are delivered without words—so you can employ a more diverse workforce.

Still, human error remains a leading cause of machine downtime in factories. In manufacturing, 23 percent of unplanned downtime is due to user error, compared with as little as 9 percent in other industries.

In factories of the near future, these sensors and companion algorithms will not only predict a problem. They’ll make a decision to adjust the machine’s operations, without human intervention, to prevent one. In that way, every part can be made better than the last.

This requires an enormous amount of

data It’s a In with socia tists, engi Th

3.5 percent to as much as $45.06 an hour.

Additionally, as the nation increasingly relies on technology across almost every industry, salaries for SAP app developers and data scientists, for instance, are expected to increase by nearly 2 percent, to highs of

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TACKLE THE TALENT SHORTAGE

Workforce investment is essential for maintaining industry momentum

E

pandemic, and studies predict 42 ven as hundreds of thoupercent of the jobs lost during the sands of Chicagoans are pandemic may never return. At looking for work nearly the same time, such a bifurcated one year after the onset of the economic recovery has allowed virus, businesses across countsome industries to not only less industries in the region are weather the financial storm but in desperate need of talent. This actually thrive in the new working talent shortage, which has been environment. driven by sectors experiencing In fact, despite operating in one rapid growth amid the pandemic, of the most fiscally challenging has underscored the critical need Karen Fichuk environments our economy has for business leaders to invest in is the CEO of ever experienced, several indusstrong re-skilling initiatives and Randstad North tries are experiencing a surge in competitive compensation packAmerica and demand for workers as a result of ages to redeploy talent where it is an executive needed most. board member of the growing reliance on technology and a shift in consumer behavIt is now widely recognized that Randstad N.V. ior toward e-commerce during our nation is experiencing a tale the pandemic. This demand is driving of two workforces. Low-wage jobs were the highest upticks in compensation and being lost at nearly eight times the rate of benefits for technology, warehousing and high-wage jobs during the height of the

P015-P021_CCB_20210322.indd 18

logistics roles, and employers will need to meet these expectations to secure talent in a labor market that is continuing to recover from the COVID-19 pandemic.

According to an annual salary survey released by Randstad US, some businesses in industries hiring for these in-demand jobs will need to increase salaries by up to 3.5 percent in order to compete for key hires, even as the pandemic and job losses persist.

In other words, employees are holding businesses to higher standards—even during the pandemic—and aligning with the rest of the industry will no longer be enough to set competitive companies apart.

This trend is especially true for job roles related to manufacturing and logistics, as U.S. factory activity recently hit its highest level in nearly 2.5 years. Consider a job like a warehouse manager, for example, where employees are anticipating an increase of

3/19/21 2:23 PM

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A PATH TO RECOVERY

Chicago leads a fourth Industrial Revolution

T

data and computing power to do quickly.

It’s a job a human could never do.

Instead, the factory has to hire workers with digital skills we don’t normally associate with manufacturing: data scientists, cybersecurity experts and software engineers.

This factory of the future is a more effi-

cient factory that’s always humming with little to no excess inventory. It’s a factory that wastes less money and materials. It’s a factory that always delivers products to its customers on time.

As a result, it’s a factory that wins more business. And what do all growing companies do? They hire more people.

$163,576 and $164,157, respectively.

Yet while compensation increases are good news for the state of the labor market in Chicago, we will not collectively reap the benefits if we fail to focus on matching those left out of the economy with these

in-demand roles. More than 50 percent of business executives believe more than half of their workforce will need to be re-skilled in the next three years, and that need has only become more immediate with a transitioning workforce amid COVID-19.

In other words, as business leaders race for top talent in thriving industries, they have an immediate opportunity—and a responsibility—to support displaced workers through skilling initiatives that can ultimately contribute to a fair and even economic recovery. Large companies like Amazon and JPMorgan have already expressed their commitment to skilling workers, and Randstad has pledged to skill 40,000 workers by the end of 2021.

With a huge pool of displaced workers and extreme talent shortages, it’s a win-win situation.

Investing in our workforce through competitive compensation and ambitious skilling programs will not only help to speed up the region’s economic recovery, but it will ensure that it accounts for everyone. As business leaders continue to navigate this new working environment, they should take advantage of an opportunity to attract and retain top talent and play an integral role in quickly getting Chicago’s economy back on track.

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ble events with industry CEOs to he pandemic didn’t only understand how to capitalize on bring us new challenges, it new shifts in market demand in highlighted existing ones. order to be sustainable during the In response to the pandemic, pandemic and in the future. In Mayor Lori Lightfoot convened meeting with the heads of Chicathe COVID-19 Recovery Task go manufacturers, the common Force whose objective was to refrain was the need to strengthen create the most inclusive and education, improve career pathequitable recovery of any large ways and develop the workforce. city in the U.S. and thereby As we look back at the last become a role model for urban Michael year, the pandemic has highcenters around the world. The Fassnacht is lighted the importance of U.S. task force, which was comprised chief marketing manufacturing and has shown of a diverse and dynamic group officer for the city how innovation and technolof academic, business, comof Chicago and ogy in Chicago are reframing munity and civic leaders and interim pre sident the future of the industry. For policy experts, issued strategic and CEO of World example: recommendations for a path Business Chicago. forward that not only addressed w mHub, comprising over 350 startups, economic recovery across all 77 neighborsupported by a deep talent pool of product hoods but also identified healing opportudesigners and developers, entrepreneurs, nities from historic disinvestments in our engineers and manufacturers, corporate Black and Brown communities. leaders, industry experts, mentors and Building on Chicago’s historic strengths in a number of key sectors, including man- investors. ufacturing, was among the recommenw MxD (Manufacturing x Digital), where dations. Even after decades of business innovative manufacturers go to forge expansion across the globe for lower-cost their futures, works in partnership with manufacturing, Chicago’s status as North the Department of Defense to equip U.S. America’s leading manufacturing hub factories with the digital tools and experremains unchallenged. This is supported tise they need to begin building every part by the second-highest count of manufacbetter than the last. turing business establishments in the U.S., coming in at 11,968. w Argonne National Lab. With an annual Chicago has major competitive advan$830 million budget to support 16 unique tages, such as world-class universities and research divisions, many focused on the a diversified industry base. Our geographaccelerated development and adoption ical location also allows us to be leaders in of new materials for manufacturing, transportation and logistics as the capital researchers here are developing scalable of the Midwest economy. While the Chicaprocesses for advanced materials and go region represents 2.9 percent of the U.S. manufacturing, offering a very promising population, it accounts for 3.3 percent of view as to how new materials can go to manufacturing employment, with manumarket faster. facturing jobs in the Chicago area totaling over 420,000. World Business Chicago estiChicago is primed to overcome the mates that there are currently over 10,000 disruption caused by the pandemic and open manufacturing jobs in the broader well positioned to be a driving force in this Chicago region. As a result, we need to fourth industrial revolution. focus on workforce development programs We have a lot of work ahead of us, that train, place and support talent in but the opportunity is enormous. This Chicago’s manufacturing ecosystem for moment requires three key pillars for an today, tomorrow and the future. Fortunateequitable recovery: a strong collaboration ly, Chicago has an incredible resource in among our private, public, academic and the Chicago Cook Workforce Partnership, research sectors; a workforce that has the the largest public workforce development tools to succeed in the jobs of today and system in the nation, providing hands-on are equally trained and well positioned for manufacturing training programs with the the jobs of tomorrow, as well as continued goal of increasing our skilled labor pool available to Chicago-region manufacturers. acceleration in innovation and investment in our local manufacturing ecosystem Last year, Mayor Lightfoot tasked World across our diverse city.

Business Chicago with convening roundta-

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20 MARCH 22, 2021 • CRAIN’S CHICAGO BUSINESS

FACTORIES paradox in those numbers as they struggle to find skilled labor to operate factory-floor machines. Middle-class, $50,000-a-year jobs are going begging. And the shortage of talent is the one aspect of business that keeps company owners, who worry less about the coronavirus every day, awake at night.

They may be able to find out-ofwork waiters and bartenders, but trained operators of computer numerical control instruments are worth their weight in gold.

At Custom Aluminum Products in South Elgin, Shane Tredup knows the frustration. His company extrudes and fabricates all kinds of aluminum. It employs 450 people split between a 500,000-square-foot plant in South Elgin and a smaller facility nearby in Genoa. Tredup says that orders last March and April “dried up” for a time but began to reappear by May and June. It helped that his metals were going into critical medical gear including ventilators and other breathing machines as well as hospital carts.

By the end of the year, sales were down only 5 percent.

In January and February this year, volumes were 10 percent ahead of a year ago. “There is real pent-up demand coming out of the recession,” he says. Yet he has 40 unfilled jobs requiring skills such as CNC, painting and forklift driving, despite a big 20 percent boost in wages around the plant in November. Tredup has invested in robots and other automation where he can, but nevertheless admits that “we could do 10 to 20 percent more in sales volume here if we only had the people. We’ve had to turn away some orders, and push the lead times out on others.

This isn’t just a problem for us.

Our competitors are faced with the same thing. Business is that good right now.”

Custom Aluminum has steadily automated every year. Extruded metal that was once grabbed by workers and manually stretched is now grabbed by a robot that does the same work in less time, resulting in a 20 percent gain in capacity. Elsewhere, machines that used to turn out a part in two minutes are being replaced and upgraded to make the same part in 1½ minutes. “In the past decade, our factory floor has taken on a very different look,” Tredup says.

MAKING THE PIVOT

Executive orders issued last year

by Gov. J.B. Pritzker that deemed most manufacturing companies essential businesses helped buoy the sector, allowing them to operate amid the pandemic.

Mark Denzler, CEO of the Oak Brook-based Illinois Manufacturers’ Association, observes that some sectors have fared better than others. “The auto sector was down for a while, and aerospace has suffered, too,” he says. “Food manufacturers and makers of

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Continued from Page 15

THE STATE OF MANUFACTURING Manufacturers in Illinois account for 12.54 percent of the total output in the state and employ 9.58 percent of the workforce.

ILLINOIS MANUFACTURING OUTPUT (IN BILLIONS) $120

100

80

$108.43 60

40

20

0

’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18

Source: National Association of Manufacturers

chemicals for cleaning and sanitizing have all done well.”

More agile companies quickly pivoted. Richards-Wilcox, a 130-year-old maker of shelving in Aurora, retooled to make hospital beds. An old Hart Schaffner & Marx men’s suit plant in Des Plaines started making hospital gowns and face masks.

In all, Denzler reports that IMA membership actually grew last year. Yet total employment in the state’s manufacturing sector is still down, from 592,000 a year ago to a current total of 556,000.

Some analysts believe that in the first blush of recession, manufacturers cut too many workers, and more recently have not been able to hire them back. So the scramble for talent and toward automation has shifted into a higher gear. “If anything, the pandemic has taught us the importance of a strong manufacturing sector,” Denzler says. “Going forward, you’ll see many industries reshoring operations from overseas back to the U.S. as we set a goal to be less reliant on foreign suppliers.”

Ed Youdell, the president and CEO of the Fabricators & Manufacturers Association International in Elgin, believes that many manufacturers overreacted in cutting their staffing early in the pandemic crisis. They were recalling lessons learned, he believes, in the depths of the 2009 recession, when business fell off by as much as 40 percent and remained at depressed levels for years afterward.

“The downturn ended up being very brief this time around,”

Anton Peddinghaus, CEO of Peddinghaus Corp., a maker of structural steel fabricating machinery, hopes Congress will pass an infrastructure bill this year.

“MA HAM CLE

120

100

Bill I

80

60

40

20

0

Jeff Adams, president of Laser Precision in Libertyville, is hiring again and keeping an eye on inflation.

Bill Isa

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CRAIN’S CHICAGO BUSINESS • MARCH 22, 2021 21

PHOTOS BY JOHN R. BOEHM

At Bison Gear & Engineering in St. Charles, CEO John Burch says growth is up 10 percent and better over a year ago.

r.

“MANUFACTURING WORK ISN’T LIKE POUNDING WITH HAMMERS IN A BLACKSMITH SHOP ANYMORE. IT’S ALL CLEAN AND COMPUTERIZED.” Bill Isaac, MC Machinery Systems

Bill Isaac is senior vice president of sales at MC Machinery Systems in Elk Grove Village.

P015-P021_CCB_20210322.indd 21

Youdell says. Many association members are growing, with their biggest constraint to growth being finding qualified workers.

While Laser Precision in Libertyville is hiring again, Jeff Adams, president, has other worries. As steelmakers’ supply chains have become scrambled, the prices of certain commodities have soared.

Flat-rolled carbon steel, priced at $450 a ton last August, shot up to $1,200 in late February on spot markets as steel mills’ capacity remained reduced.

Those increases have been costly and disruptive for his company, Adams says. And he’s concerned about inflation. “Somebody is going to have to pay for these increases,” he says.

For other manufacturers, the recovery seems confusingly uneven.

Peddinghaus Corp. in Bradley makes machines to drill, cut and saw the sort of steel that supports high-rise buildings in big cities like Chicago and New York. Anton Peddinghaus, the fourth-generation CEO and owner, has enjoyed decent growth over the years, from $20 million in annual sales in the 2000s to around $100 million today.

Sales were down just 4 percent overall in 2020. The order sheet has been quiet recently and with retail stores and offices emptying out over the past year, CEO Peddinghaus worries that big construction projects might slow to a crawl.

“There may not be too many office buildings being built again anytime soon. Then again, hospitals may get built, and that would be a boon to us,” Peddinghaus says. His big hopes are that Congress this year passes a new infrastructure bill and that exchange rates remain favorable for his export business. “The infrastructure bill would be huge for us and a lot of manufacturers,” he says, with visions of new bridges and train tunnels requiring heavy steel input. The structural steel required

for more green energy, including wind turbines and solar panels, could also give his firm a boost, he adds.

MANAGING GROWTH

Some evidence suggests that workers may be easier to recruit in the more urban environs of Chicago. Laystrom Manufacturing in Logan Square, a metal fabricator and stamper, has succeeded in expanding its workforce by more than 50 percent in the past four years to 72 people. That’s been necessary as sales zoomed 60 percent in the three-year period ending in 2019 to approach $10 million, landing the company on the Inc. 5000 list of fastest-growing American companies. Laystrom grew another 10 percent last year through the pandemic.

To keep up with the growth, Laystrom’s president, Colin Cosgrove, has installed lasers and robots around the factory floor. He increasingly needs more technology-talented workers to run them, leaning heavily on support groups like Jane Addams Resource Corp., Richard J. Daley College and the UIC Great Cities Institute for both ideas and worker training.

Still, Cosgrove isn’t satisfied with this pipeline of talent. “The National Association of Manufacturers is forecasting that we will have a shortfall of 2.5 million workers in manufacturing by 2028,” he says.

Cosgrove cites a study by UIC two years ago that found there were 58,000 unfilled manufacturing positions in the Chicago area at that time. “I still believe in the future of manufacturing,” he says.

“It should be clear that manufacturing is the engine of the economy. But we have to convince more young people of that.”

The growing sophistication and immaculately clean image of the latest factory equipment are likely to eventually attract interest from tech-minded young people.

Mitsubishi-owned MC Machin-

ery Systems in Elk Grove Village, for instance, has showrooms promoting electrical discharge machining equipment capable of cutting and grinding metal to a tolerance of one ten-thousandth of an inch. “A human hair is 100 times bigger than that,” says Bill Isaac, senior vice president of sales. “Manufacturing work isn’t like pounding with hammers in a blacksmith shop anymore. It’s all clean and computerized.”

Maybe it’s a little bit of everything.

At MxD on Goose Island, one of 16 manufacturing institutes around the U.S. that displays a factory of the future, some of the latest digital machines are displayed next to the manual drill presses common in factories of the 1950s.

MxD CEO Chandra Brown knows both sides of the coin, having worked previously at old-school Oregon Iron Works and United Streetcar.

Brown looks around Chicago and sees many machinists still toiling away on World War II-era equipment. Elsewhere she sees manufacturing techniques as modern as anything to be found in Silicon Valley. She believes that as the demand for local manufacturing continues to grow, companies will need to be more resilient while stepping up to invest in technology. “Some factory owners who come by to look at our display here are wowed,” she says. “Others are overwhelmed. They tell us they don’t have millions to retrofit their operations.”

Yet in a time when customer orders are on the rise just as the workforce seems to be shrinking, she advises manufacturers to stand ready at the least to compromise with small, step-by-step investments. “Try something, even if it’s just a sensor that tells you when your welding machine has gotten hot,” Brown says. “The manufacturers of tomorrow are going to have to figure out how they can be better.”

3/19/21 2:39 PM

ACCOUNTING Weiss & Company LLP, Glenview Glenview-based accounting firm Weiss & Company LLP is pleased to announce the promotion of senior managers Eve Fugiel and Lisa Hahm to partners. Fugiel has Fugiel been with Weiss since graduating from UIC and is a key member of the firm’s accounting services and tax departments, working with small and mid-sized businesses in a wide range of industries as well as investment entities related to high-net-worth Hahm individuals and families.

Hahm came to Weiss after working as a tax analyst and tax supervisor for larger accounting firms, and as a top performer in our tax department provides accounting and tax services to closely held businesses, family office clients and consolidated corporations.

ACCOUNTING / ADVISORY CONSULTING Riveron, Chicago / Dallas Riveron, a national business advisory firm specializing in accounting, finance, technology, and operations, recently announced Julie Howard as its new chief executive officer. Julie brings more than 30 years of professional services experience in dynamic leadership positions where she was responsible for creating and executing growth strategies, including in her role as former chairman and chief executive officer of Navigant Consulting.

ARCHITECTURE / DESIGN Kahler Slater, Chicago / Milwaukee Kahler Slater is pleased to announce two new Principals to our Leadership Team, Aaron Ebent and Joseph Sinnett. As Principals, Ebent and Sinnett are Ebent recognized for their strong leadership within the firm, proven design creativity, and exemplary service to the communities and clients they serve. Ebent, an award-winning Designer, has been with the firm since 2006 serving Sinnett Kahler Slater’s Corporate and Hospitality markets with projects in Wisconsin and across the country.

As a Team Leader for Kahler Slater’s Corporate, Residential, and Hospitality markets, Sinnett brings over 15 years of market experience in directing complex projects including a proposed net zero source energy multifamily project in metropolitan Chicago.

PEOPLE ON THE MOVE

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

ARCHITECTURE / DESIGN

ARCHITECTURE / ENGINEERING

LAW

Wight & Company, Chicago

Infrastructure Engineering Inc., Chicago

Benesch Law, Chicago

Wight & Company has promoted Lisa Schmidt to Principal, Interior Architecture, and Wendy Watts to Principal, Education Design. Schmidt is Schmidt committed to the design and execution of interior architecture of the highest quality across corporate office, hospitality, federal, library, justice, and educational markets.

Her expertise ensures cohesive and holistic Watts interior design and the continuous improvement of quality in design and construction.

Watts designs inspirational spaces that shape the learning experience, resulting in environments where students can achieve their full potential. She draws upon user behavior insights to inform design strategy. This approach results in unique solutions for today’s evolving world of teaching and learning.

ARCHITECTURE / ENGINEERING Eriksson Engineering Associates, Ltd., Grayslake Tara Horan has been promoted to Accounting Manager at Eriksson Engineering Associates, Ltd. (EEA). In this key role, Tara will be responsible for the management of EEA’s accounting and human resources operations as well as financial reporting, growth forecasting, and strategic business analytics. Tara received a Bachelor of Arts in Accounting and Finance from Carthage College and has been with EEA since 2017.

CREATIVE Laughlin Constable, Chicago Laughlin Constable (LC) today announced the promotion of Rome Seifert to chief operating officer (COO).

Seifert has served as LC’s CFO for the last six years where he applied 20 years of accounting experience and helped the agency grow in an impactful way, establishing LC as a leading independent creative agency in the Midwest. Seifert’s expanded new role includes project management and digital delivery, overseeing all agency operations and more.

DESIGN / BUILD

BANKING / FINANCE

Clayco, Chicago

Prairie Capital Advisors, Inc., Chicago

Carly Bashioum has joined Clayco as Public Relations Manager. Carly has over 10 years of experience in marketing and communications for professional services firms. In her new role, she will be responsible for accelerating Clayco’s external communication efforts and increasing brand awareness. Carly holds an MS in communication from Northwestern University and a BA from Illinois Wesleyan University.

Prairie Capital Advisors, Inc., a leading corporate advisory and investment banking firm, has expanded its Investment Banking Group with the hiring of John Waller as Managing Director. With nearly 25 years of investment banking experience, Mr. Waller provides mergers and acquisitions (M&A) services to private companies, large corporations and private equity firms. Mr. Waller will lead and co-lead transaction teams and develop business for the firm.

Advertising Section

Ken Smorynski, PE, SE, has been promoted to Vice President and Chicago Office Operations Leader at Infrastructure Engineering Inc. He will oversee staff, operations, and strategic development. Since 2013, Ken has been a vital part of the Chicago office’s explosive growth formerly serving as the Design Group Manager.

Ken has more than 27 years of industry experience and holds master’s degrees in both civil engineering and business administration from the University of Illinois, Urbana-Champaign.

Martin Sinclair has joined Benesch as a Partner in the firm’s Litigation Practice Group. He has represented public and private companies and individuals in regulatory, administrative, antitrust, and transactional matters including advising on corporate governance, complex disputes in the mergers and acquisitions context, class action lawsuits, shareholder derivative litigation, fraudulent transfers, and commercial contracts.

MANUFACTURING PRIMEdge Inc., Chicago PRIMEdge Inc. announced the appointment of Alexander Cozzini to the role of president, succeeding his father, Ivo Cozzini, who assumes the role of chief executive officer. Founded in 1905, Cozzini PRIMEdge is a Chicagobased company with additional manufacturing and distribution facilities in Brazil, Denmark, France, Germany, Spain, and Sweden. Alexander has worked at various levels not only at the Chicago Cozzini headquarters, but also their European headquarters in France and their primary blade manufacturing facility in Germany.

This exposure allowed him to gain knowledge in many facets of the business including administration, sales, and manufacturing. PRIMEdge specializes in cutting edges and sharpening technologies for the meat and food industry.

LAW CONSTRUCTION Development Solutions Inc., Oak Brook Development Solutions Inc. is thrilled to announce the promotion of Jim Karcz to Chief Financial Officer, as a reflection of his outstanding performance and contributions to the financial, accounting and human resource management aspects of the company over the past 5 years.

In this new role, Jim will provide senior leadership for the planning, implementation, and management of all financial activities for the company as well as continuing to oversee human resources.

Burke, Warren, MacKay, & Serritella, P.C., Chicago Burke, Warren, MacKay & Serritella, P.C. welcomes Frank J. Emmons, a veteran tax attorney with deep knowledge and experience. Emmons helps clients buy and sell businesses, where he provides transactional and long-term planning and structuring as well as high-level tax due diligence. Frank’s practice also includes handling tax controversies at all levels, as well as income tax reporting issues, both domestic and international. Frank joins BWMS as the Chair of the Tax Department.

PHARMACEUTICAL Clarus Therapeutics Inc., Northbrook Clarus Therapeutics Inc. has appointed Richard ‘Ric’ Peterson chief financial officer (CFO).

Peterson brings to Clarus a wealth of financial leadership experience from his 25-year career in the pharmaceutical industry, where he served as CFO of public and private companies. Peterson’s deep financial expertise, including extensive experience in capital markets, position him to help lead the company’s efforts to expand its product portfolio and build on its existing commercial opportunities.

EDUCATION

LAW

North Lawndale College Prep High School, Chicago

Miller, Canfield, Paddock and Stone, Chicago

Orphazyme US, Inc., Chicago

North Lawndale College Prep is pleased to announce that NLCP alum and University of Missouri alum Chauncey Rice is joining the board of NLCP. He currently serves as Director of Intergovernmental Affairs and Public Engagement for the Office of City Clerk Anna M. Valencia, where he is responsible for relationship management and community engagement strategy.

He previously served as a Chicago Mayor’s Office Staffer for Government Affairs and Aide to 24th Ward Alderman Michael Scott Jr.

Real estate attorney LaVon M. Johns has joined Miller Canfield’s Real Estate Group in the firm’s Chicago office. Johns will be a key member of Miller Canfield’s P3 (public-private partnerships) team. Her practice focuses on real estate and finance transactions, MBE/WBE (minority business enterprise/women’s business enterprise) certification and nonprofit law. Johns joins Miller Canfield from Quintairos, Prieto, Wood & Boyer.

She is the Vice Chair of the IICLE.

Daniel Gallo joined Orphazyme as U.S. Head of Medical Affairs as the company prepares to launch its first rare disease treatment. Gallo has a PhD in cell and molecular biology and biochemistry from Northwestern University and has expertise in all aspects of medical affairs, with experience supporting launches across multiple therapeutic areas. Orphazyme is a late-stage biopharmaceutical company with its U.S. headquarters in Chicago and its global offices in Copenhagen, Denmark.

LOGISTICS

TECHNOLOGY

Prologis, Chicago

CCC Information Services Inc., Chicago

PHARMACEUTICAL

HEALTH CARE Academy of General Dentistry, Chicago The Academy of General Dentistry has named Colleen Lawler, CAE, IOM, as its new executive director.

She is an experienced executive and visionary leader with strong experience in healthcare associations and membership organizations spanning over 25 years. Lawler was the executive director of the Society of Cardiovascular Anesthesiologists.

She also held leadership roles at American Medical Association.

Carter Andrus has been promoted to president of Prologis’ Central region.

He is responsible for development, acquisitions and operations across ten markets: Chicago, Dallas, Houston, Cincinnati, Columbus, Indianapolis, Louisville, Nashville, Austin and San Antonio. Previously, he was managing director of Capital Deployment for the Central Region. He’s a former president and executive board member of NAIOP’s Chicago Chapter and has a Bachelor of Arts in economics from the University of Michigan.

Shivani Govil has been named Chief Product Officer at CCC Information Services Inc., a leading SaaS platform for the P&C insurance economy. Govil will lead the company’s product strategy, product management, and marketing functions and advance the company’s strategic vision of delivering AI, IoT, customer experience, and network management solutions. CCC’s Cloud connects 30,000 businesses including insurers, automakers, collision repairers, lenders, and more.

CRAIN’S CHICAGO BUSINESS • MARCH 22, 2021 23

Why herd immunity is a moving target HERD from Page 1 or we’re getting close to that in a particular subset, that doesn’t mean we have herd immunity that is really going to be protecting the entire population,” says Dr. Rachel Rubin, who co-leads the Cook County Department of Public Health. “You have to look at it within the context of the disease and within the context of certain demographic characteristics related to who is immune and who isn’t.”

Reaching that 70 percent threshold statewide or even citywide isn’t a guarantee against future outbreaks. If vaccination rates lag in some areas, the virus could continue to circulate and mutate, generating new variants impervious to vaccines and making the entire region vulnerable again.

With a mutating virus, it becomes “much harder to get to herd immunity, and it requires a different public health response than what we typically think of for measles or some other childhood vaccine-preventable diseases,” says Dr. Marielle Fricchione, a medical director at the Chicago Department of Public Health.

The concept of herd immunity is simple: Once a certain percentage of the population becomes immune— either through vaccination or prior infection—viruses are less likely to infect new people. The more easily a pathogen spreads, the higher that percentage needs to be. Experts estimate that the immunity threshold for the coronavirus is somewhere between 70 and 90 percent.

But in communities where physical distancing at home or at work is more difficult, the threshold is

higher than in areas where people can easily isolate and get testing and treatment. For a number of reasons, such as limited access to online scheduling systems and transportation barriers, communities that need to reach higher levels tend to have the hardest time getting vaccinated.

For example, 4.4 percent of the population that resides in ZIP code 60621—which includes Englewood, one of 15 high-need communities identified by Chicago’s COVID vulnerability index—had been fully vaccinated as of March 17. But the area has one of the highest mortality rates per 100,000 people in the city. Meanwhile, 14.1 percent of Lincoln Park residents in ZIP code 60614—where the mortality rate per 100,000 people is much lower—have been fully vaccinated.

STILL AT RISK

Communities that have suffered more are also the ones that are still at risk for ongoing transmission, says Dr. David Dowdy, an infectious disease epidemiologist at Johns Hopkins Bloomberg School of Public Health. “So it’s not just about doing what’s fair, although that’s part of it,” he says. “It’s also about doing what’s going to get transmission rates down the fastest.”

Without enough vaccine to inoculate everyone at once, local public health departments have focused on getting early doses to communities with high rates of infection and death.

The city of Chicago got about 65,000 first doses the week of March 15, according to data from the Centers for Disease Control & Prevention.

“A limiting factor for us is how

many vaccines we have,” Fricchione says. “No matter how effective they are, if we don’t have enough, we have to really put them in the right place to break chains of transmission.”

That’s one reason the city and other jurisdictions have prioritized seniors in their vaccination campaigns. Regardless of underlying medical conditions, vaccinating older adults has the biggest impact on preventing COVID-19 deaths, according to the Chicago Department of Public Health.

Based on Chicago data, the city prevents one COVID-19 death by vaccinating 49 people who are 80 and older, compared with preventing one COVID-19 death by vaccinating 17,000 people age 18 to 29.

“You have to think about, if any one person—an average person in your community—gets COVID, how many other people are they going to transmit the disease to before they themselves get better,” Dowdy says.

In addition to targeting communities with high rates of infection and death, health officials are focused on reaching communities with large numbers of essential workers and crowded housing, among other indicators of social vulnerability, Fricchione says.

“Those are the communities where one dose of vaccine has a much bigger impact on the chain of transmission,” Fricchione says.

Adding another layer of complexity is the fact that herd immunity is not a steady state—particularly not in the case of COVID-19, since the exact duration of immunity conferred by vaccination and natural infection is still unknown.

“We only have a small window of known strong immunity—that’s

PERCENTAGE OF POPULATION FULLY VACCINATED 0% 5% 10% 15%

While they do require reporting on age, race and ZIP code, federal and state authorities have not required vaccinators to gather employment information from people who get vaccines. Some national data exists distinguishing between resident and staff vaccinations at nursing homes, but neither Walgreens nor CVS (which are managing those campaigns in Illinois) collects that information.

Crain’s asked Chicago’s largest hospital systems about their staff vaccination rates. The average for those that responded was just under 70 percent. That’s short of the 81 percent of health care workers who got flu shots during the 20182019 season, according to the federal Centers for Disease Control & Prevention.

At the beginning of the vaccine rollout, the state estimated that Illinois had 540,000 health care workers, ranging from physicians, nurses and dentists to lab, dietary and security workers. If 70 percent have been inoculated, 162,000 remain unvaccinated. Not knowing who or where those unvaccinated workers are makes it difficult to connect them with vaccine appointments, which are still difficult to come by

P023_CCB_20210322.indd 23

as eligibility has expanded to more people.

“My personal opinion is that we need to figure out where the vaccines haven’t been given: in health care, in neighborhoods, among older people, in nursing homes, in every setting where it’s important, every high-risk or front-facing community,” Landon says.

The picture is even murkier at independent medical and dental practices where workers and patients still face high risk, says Dr. Vineet Arora, the CEO and co-founder of Illinois Medical Professionals Action Collaborative Team, or IMPACT. “When I take my daughter to the dentist, no one at that practice has been vaccinated. I went to an eye doctor recently. None of the front desk clerks have been vaccinated yet,” Arora says.

PRIVACY

While hospitals are tracking overall staff vaccination data internally, they face sticky privacy pitfalls. Hospital workers are required as a condition of work to get their flu shots, but because the COVID-19 vaccine was approved under emergency use by the U.S. Food & Drug Administration, it isn’t similarly mandated. Despite

the vaccine’s proven efficacy, the emergency use authorization “creates uncertainty for anybody getting the vaccine, and legal uncertainty as to an employer’s liability,” says professor Michael LeRoy, who teaches labor and employment relations at the University of Illinois College of Law. Federal health privacy law bars management from seeing staff vaccination records in some workplaces. Disclosure is also a hot button for unions, which have objected to mandatory flu shots in the past.

“There’s not a clear answer about whether it’s OK to track whether an individual has their vaccine,” Landon says. “Many hospitals have avoided even having people wear stickers that say they’ve been vaccinated, because they don’t want to make unvaccinated people feel bad, they don’t want to have any coercion or make people feel they’re somehow different.”

“To protect our employees’ privacy, we do not share individual or small-group COVID-19 vaccination information,” a UChicago Medicine spokesperson says. “Instead, we analyze our institution’s overall vaccination rate as well as broad, department-level statistics to better identify certain work areas that may need additional support.”

25% 30%

Vaccination rates vary widely across Chicago’s neighborhoods, often running lower in areas hit harder

by COVID-19. The herd immunity threshold is higher in those areas.

Source: City of Chicago

basically a three-month window to get as many vaccines into the highest-risk people as we can to try to prevent a third wave of this disease because we know it’s mutating and we know there are variants,” Fricchione says.

Undetected, asymptomatic cases of COVID make it impossible to know the exact percentage of any given population that has some level of immunity. And not all individuals will mount the same immune response, which means some people will be better protected than others.

Even in the case of the highly con-

The number of unvaccinated health care workers is unknown VACCINATIONS from Page 3

20%

CHASING THE HERD

As of March 11, 72 percent of UChicago Medicine’s 14,800 employees have either received at least one dose of vaccine or scheduled a vaccination appointment.

The hospital hosted town halls and smaller work unit huddles to try to boost rates further.

Dr. Vishnu Chundi, a senior partner at Metro Infectious Disease Consultants and the chair of the Chicago Medical Society’s COVID task force, says his practice is considering asking unvaccinated workers to double mask or wear N95s going forward if they’ve chosen not to be vaccinated. But moving unvaccinated workers to lower-risk tasks is difficult, he says.

“It’s not like there’s a ton of people who know how to do neurosurgery or anesthesia.”

Rush University Medical Center reported one of the highest vaccination rates. As of March 9, 80 percent of clinical staff and 77 percent of all employees had received shots. “At the outset, we didn’t have a specific target besides getting as close to 100 percent as we can, understanding we’d likely land closer to between 60 and 80 percent,” says Dr. Paul Casey, Rush’s chief medical officer. The hospital is tracking who has been vaccinated, telling the unvaccinated how they can get a shot,

tagious measles virus, the risk of which remains low in the U.S. due to high rates of immunity, outbreaks have sparked in recent years with the virus penetrating undervaccinated communities.

“Getting vaccine first to the highest risk settings has the biggest impact in driving down case rates,” Chicago Department of Public Health Commissioner Dr. Allison Arwady said during a March 17 press briefing. “It helps protect every one of us from the emergence of variants, and it moves us closer to reopening and getting back to normal.”

WHO’S BEEN VACCINATED AT CHICAGO-AREA HOSPITALS? Rush: As of March 9, 77 percent of its roughly 15,000 staff Lurie Children’s Hospital: As of March 10, 80 percent of its roughly 8,000 staff Advocate Aurora: As of March 11, nearly 70 percent of physicians, physician assistants and nurses Edward-Elmhurst Health: As of March 17, 69 percent of its 8,852 staff University of Chicago: As of March 11, 72 percent of roughly 14,800 staff Amita: Close to 60 percent of roughly 17,300 employees Cook County Health: As of March 1, 56 percent of employees No Response: Northwestern, Loyola, NorthShore and UI Health Source: Crain’s reporting

and offering to address any questions or concerns.

The city also asked Rush to vaccinate about 3,000 health care workers. By March 9, the hospital had vaccinated or scheduled 2,300 of those people. But Casey says Rush has no way to know how many of the 700 who haven’t responded might’ve gotten vaccinated elsewhere.

3/19/21 2:42 PM

DIVERSITY IN RECRUITING AND HIRING

ATTRACTING A BROAD RANGE OF TALENT

As organizations commit to their workforce diversity, equality and inclusion (DEI) initiatives, recruiting and hiring more women, people of color and other underrepresented groups has become a critical piece of the puzzle. Four business leaders shared their insights with Crain’s Content Studio on the value of inclusion and how companies can attract and hire a broader range of talent while eliminating bias and improving diversity.

Why is DEI important to your organization—and to your industry?

Holly Rudnick: Our commitment to DEI helps us attract a wider array of talent and a broader range of perspectives and skills. This is crucial for ensuring a variety of things—from engagement and retention to making certain that our workforce is best suited to communicate, collaborate, innovate and ultimately execute our strategic goals. We also know we must reflect the diversity of the markets we work in and the clients we serve.

By having that diversity in house, we’re better poised to support those we work with. We feel it’s imperative to commit to DEI, which is why we’ve not only made it a key strategic initiative, but have woven it into every facet of our business and culture. We

understand that it’s multifaceted and ongoing and requires trust, humility and commitment at all levels of our organization.

Otto Nichols III: As a developer and design builder, we’ve long recognized that having a diverse and inclusive employee base provides tremendous value in our ability to deliver creative solutions for our clients and to perform successfully in all parts of the country. That value directly affects our bottom line. The diversity in our teams reinforces our culture of curiosity and open mindedness that we seek as an enterprise. We operate in such a wide range of communities and manage such a diverse construction workforce that a commitment to DEI is a requirement to remain effective.

Tauhidah Shakir: We want employees to feel welcomed, respected, safe and encouraged to bring their whole selves to work.

A commitment to DEI is critical to cultivating a culture and work experience that we’re proud of—one where every employee has a voice.

Ashley Price: Diverse teams enable us to understand and meet the expectations of our clients and associates. DEI programs are not only essential to building a more engaged and productive workforce, but research shows that organizations with more diversity tend to outperform by having higher customer growth and sales revenue.

In an industry where there’s a lack of diversity, it’s important that our workforce reflect the communities that we live in and serve. A diverse

Together We Build Opportunity For Everyone RISE TOGETHER.

claycorising.com

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CLAYCO RISING compiles 25 years of diversity and inclusion initiatives together to enhance commitment to drive lasting, equitable change and challenge the industry standard. We will rise above to bring positive transformation within our industry by building a diverse, respectful and safe workplace for all.

By working together, there’s no limit to how high you can rise with Clayco.

workforce brings more creativity and new ideas that allow us to better understand different segments of the population, anticipate their needs and deliver on them.

What’s the number one challenge you’ve experienced in attracting and hiring diverse candidates, and how did you deal with it?

Nichols: Our largest and ongoing challenge is simply attracting the best talent to the construction industry.

Unfortunately, there aren’t many schools with programs that funnel students into construction, and the ones that do typically have very few women and minority students.

There’s a need to introduce high school students to construction and generate excitement for the many different career opportunities in the industry before they’ve decided which colleges to apply for. We’ve found it

actively support their efforts and source potential candidates. We also use job boards targeted toward groups of diverse talent. As part of our commitment to DEI, we’ve also invested in a manager of talent to facilitate these efforts and support our strategic recruiting initiatives.

Price: Awareness is our biggest challenge, and we’ve been creative in the ways we work to increase awareness about Baird and the opportunities available within the financial services industry. We’re currently expanding the number of partnerships we have with diverse organizations and universities to ensure that we’re getting our name and the available careers paths in front of underrepresented groups.

Attracting the next generation of talent is very important. If they don’t know what opportunities are available in the industry, how will they know to consider them when declaring a major or choosing a career path to

“OUR COMMITMENT TO DEI HELPS US ATTRACT A WIDER ARRAY OF TALENT AND A BROADER RANGE OF PERSPECTIVES AND SKILLS.” —HOLLY RUDNICK, LEOPARDO COMPANIES

helpful to partner with established community and labor organizations that share our goal. Out of necessity, we’ve also started the Construction Career Development Initiative to help mentor and guide students who have shown interest in the construction industry.

Rudnick: The construction industry has been facing a widespread talent shortage for some time now, and the talent pool that is available is statistically limited in diversity.

Given that reality, it’s important that we have a proactive recruiting strategy that begins long before we have a position to fill, and includes outreach and mentoring within the community and at the college level.

We build relationships and partner with organizations ranging from nonprofits to local coalitions and certified women- and minorityowned business enterprises to

pursue after college? By getting in front of that talent early, we hope to increase visibility to the industry and knowledge about the opportunities available.

Shakir: The number one challenge I’ve experienced is conveying that where we’re at today is not the finish line to attracting and hiring diverse candidates. We’ve made great strides, but recognize that there’s so much to do to bring our DEI vision to life.

Any thoughtful plan takes time and attention to formulate—diversity recruiting plans are no different.

Finding the right milestones and metrics, and communicating your intentions is key for the organization and candidates.

In what ways has your organization’s interview process become more inclusive?

3/16/21 9:09 AM

SPONSORED CONTENT

Shakir: We focus on developing diverse internal leaders to create stronger employee engagement and retention. Internal programs focused on developing underrepresented employee groups are essential to promoting diverse growth at the leadership level.

OTTO NICHOLS III

EVP, Shareholder Clayco nicholso@claycorp.com 314-753-8070

Price: We partner with our hiring managers to create a structured interview process that’s consistent for every candidate. This includes focusing on competencies that are specific to the role and utilizing interview scorecards to gather feedback on candidates. We’re also implementing diverse interview panels which allow candidates to see a diverse representation of associates offering different perspectives during the interview process. Training is also a priority, as we want to ensure that all hiring managers and associates included in the interview process are cognizant of their biases and know how to manage them.

Shakir: Not only do we provide hiring managers with diverse candidate slates, but we also train our talent acquisition team and hiring managers about the importance of DEI in the recruiting process and how to reduce unconscious bias.

We stress the importance of using

ASHLEY PRICE

Private Wealth Management Diversity Talent Advisor Baird aprice@rwbaird.com 312-332-5600

of where, how and when interviews take place, utilizing a diverse group of interview panelists, as well as inclusivity training for all those involved in conducting interviews.

Nichols: We do significant outreach to ensure that interviews and opportunities are inclusive. For example, we attend many “college day” programs to interview diverse groups of students right on campus. We’ll hold intern positions open for schools with career fairs late in the hiring season, and move toward hiring for open positions only after a diverse group of candidates has been identified. To be successful, we think outside the box and recruit in non-traditional capacities. Once we’ve identified a pool of candidates, we’ll fly all of them to our office and let them speak to a range of employees during the interview. After the interviews, we’ll all gather and objectively rank students based on the attributes that will make them successful in their careers.

HOLLY RUDNICK

VP - Human Resources Leopardo Companies hmrudnick@leopardo.com 847-783-3460

TAUHIDAH SHAKIR

VP - Human Resources, Chief Diversity Officer Paylocity tshakir@paylocity.com 224-242-4063

Shakir: It’s important to be transparent about your organization’s demographics by sharing them internally and externally. You can do this by providing leaders with diversity dashboards that give them on-demand visibility to their department data. At Paylocity, our applicant tracking system allows recruiting teams to track, collect and analyze candidate demographic data.

or biases that may have otherwise gone unnoticed. Frequently, just the knowledge of bias or unbalanced demographics is enough for our teams to initiate change. However, training to facilitate that change is also important; we recently hosted implicit bias training for the entire company and it’s now a standard course that all new hires are required to take. We also create content for our website and social media to attract diverse candidates and promote the DEI initiatives we have in place.

Nichols: Companies have access to more data and analytical tools than they did 20 years ago, and they’re extremely helpful in revealing trends

After recruiting and hiring, what role does retention, development and promotion play in your DEI strategy?

Association Test are helpful in identifying those.

Price: We recently added councils in all areas across the firm to plan and execute department-specific initiatives such as continuing education, mentorship/sponsorship and leadership development programs to further advance efforts to retain, promote and develop diverse talent. Our associate resource groups also play an integral role in helping to provide diverse associates with the support, resources and opportunities needed for professional growth and development.

Rudnick: We’re focused on creating a work environment where everyone knows they belong, that they’re valued for their unique backgrounds and perspectives, and that the work they do is meaningful. Mike Leopardo, our president and CEO, regularly has conversations with employees to make sure that he understands what’s important to them. This includes an array of topics directly impacting the employee experience, ranging from career development to ensuring that our total rewards offerings reflect the needs of our workforce. While we’re regularly reviewing our benefits offerings, what better way to ensure they’re meaningful than encouraging employees to bring forward their

Discover the power in partnership

“WE PARTNER WITH OUR HIRING MANAGERS TO CREATE A STRUCTURED INTERVIEW PROCESS THAT’S CONSISTENT FOR EVERY CANDIDATE.” —ASHLEY PRICE, BAIRD interview guides during the hiring process with questions that are skillsfocused and rooted in our core values.

Additionally, we strive to have diverse interview panels, and we continue to partner with diverse job boards and posting sites. We continuously monitor and review our candidate diversity data so that our hiring process remains inclusive.

Rudnick: We’re committed to making sure our entire interview process is fair, positive and consistent.

Our approach begins well before we get to the interview stage and includes ensuring that our job postings are written in a way that’s inclusive.

We’re focused on a variety of other approaches, including being mindful

P024_027_CCB_20210322.indd 25

What types of technologies and tools can help reduce bias?

Price: Structured interviews, diverse hiring panels, interview training and inclusive job descriptions help create consistency so that all candidates are evaluated fairly and objectively. There are platforms available to help write inclusive job descriptions that appeal to diverse audiences; these also are key to reducing bias and attracting a diverse talent pool. On the job, employees need to recognize their specific biases—we all have them—so they can take the appropriate steps to mitigate them.

Tools like Harvard’s Implicit

One person alone can have an enormous impact on her community. But when passionate people – with diverse backgrounds, experiences and perspectives – work together, there’s no limit to what we can accomplish.

Learn more about Baird’s commitment to helping women achieve their personal financial and professional goals at WomenAtBaird.com.

PRIVATE WEALTH MANAGEMENT ASSET MANAGEMENT INVESTMENT BANKING/CAPITAL MARKETS PRIVATE EQUITY

©2021 Robert W. Baird & Co. Incorporated. Member SIPC. MC-559656.

3/16/21 9:09 AM

DIVERSITY IN RECRUITING AND HIRING

ATTRACTING A BROAD RANGE OF TALENT ideas about how the company can support them. We’ve also overhauled our talent management strategy that’s focused on career development at all levels of the organization.

other parts of the company. We’re aware of the difficulty and challenges that diverse employees encounter and we provide mentors, resources and support as needed.

Nichols: We work hard to maintain a fun and collaborative culture that encourages employees to be creative and entrepreneurial. By eliminating the rigidity found in some companies, employees have the flexibility to resolve the issues that may otherwise affect their retention. When I hired in at Clayco over 16 years ago I was told that, if I worked hard and performed well, I could go as high as I wanted in the company. That turned out to be a true statement, as we pride ourselves in promoting those who aggressively perform regardless of their background, race or gender.

We provide business resource groups to employees so that they have a support network available as they continue their careers. We’ve also worked hard to establish a nonlinear communication structure, encouraging employees to make connections with other departments, managers and executives—providing among other benefits, alternate avenues for employees to learn about

How can organizations foster a work environment where people with different backgrounds feel valued for their differences?

Price: By leveraging and celebrating differences and looking at them as strengths, we can create an environment where employees feel empowered and comfortable being their authentic selves. A key element is being intentional about increasing our cultural competence and working with people that are different from us.

Baird is committed to providing these opportunities through education and development, such as mentorship, to allow associates to listen and learn from one another.

Nichols: Executives should encourage employees to collaborate and work with each other. Openly communicating and spending time together should be a top priority. We reimburse employee teams that go out

to lunch together. We’ve also created business resource groups to provide support to employees. For example, we have a Black employees resources group and also a network of women, known as Clayco NOW. We’re not hiding our differences, but celebrating them.

Shakir: Organizations should communicate clearly and often that they not only are accepting but are actively seeking diversity of thought, experiences, background, gender, sexual orientation and more. DEI language needs to be

messages. Organizations can also create employee resource groups and/ or listening sessions where employees and leaders can share experiences and learn from each other. It’s also beneficial to have your DEI leader or someone from HR partner with a liaison from each department to ensure that programs, policies and business initiatives are looked at through a DEI lens.

Rudnick: Every employee has an important role in creating an inclusive culture. We all need to know that we’re an important piece of the

“ . . . OUR APPLICANT TRACKING SYSTEM ALLOWS RECRUITING TEAMS TO TRACK, COLLECT AND ANALYZE CANDIDATE DEMOGRAPHIC DATA.” — TAUHIDAH SHAKIR, PAYLOCITY woven throughout every employee touchpoint to reinforce the message and the commitment to it. This can be done verbally through DEI statements, internal posts and

puzzle—that our thoughts, ideas and perspectives matter, and that we have continued opportunities to develop and participate in meaningful work.

We must also feel safe bringing our full, authentic selves to the table. You lead by example by consciously choosing inclusive behaviors like remaining curious, assuming positive intent, getting to know others, being open to feedback and showing humility.

You must also ensure that employees feel safe to speak up when they see something that goes against company values and commitment to DEI. How are you educating your employees about DEI? Rudnick: This past year, we made some significant investments in our commitment to employee development, which includes a robust learning platform, as well as a new performance management process that empowers employees to use their unique skills and talents while their mangers provide coaching and support. We launched a DEI steering committee that consists of a cross-functional team that’s a critical component to creating a meaningful and inclusive culture. We’re also redesigning our mentorship program, both internally and externally, as well as creating new employee resource groups. Little will be accomplished if employees first and foremost don’t understand what DEI means and that every interaction is an opportunity to continue learning and developing.

Nichols: Executives and managers have the largest roles in showing, instead of telling, employees how

P024_027_CCB_20210322.indd 26

business should be done with DEI as a value; I believe this makes the largest impact. Clayco clearly outlines the best practices to incorporate DEI into company strategy and business execution processes and reinforces DEI by tracking metrics and incorporating them into employee evaluations. In addition, our executive chairman releases companywide updates addressing DEI, and also hosts smaller fireside chats.

Shakir: We use various resources such as trainings, micro learnings, speakers, fireside chats and docuseries to educate our employees about DEI. Price: Our longstanding commitment to inclusion and diversity deepened meaningfully over the past year. Following the tragic death of George Floyd, we hosted listening sessions for our associates to have important conversations around race, privilege and inequality.

It allowed them to not only learn and understand the experiences of others but to reflect on how they can play a part in driving change. We also listened to recommendations from our associates on the type of DEI training they needed and wanted to see within the firm and have provided resources to help aid them in their DEI journey. Some examples of how we’ve educated associates include offering trainings on cultural awareness, unconscious bias, microaggressions, and inclusive leadership. We’ve also hosted book clubs to spark dialogue about topics related to race.

As an employer, how do you showcase your diverse and inclusive culture?

Shakir: Internally, we post our DEI initiatives on our website and employee handbook and provide frequent updates through community posts, DEI statements and town halls.

Externally, we showcase it through recruitment communications, social media posts and client webinars and podcasts.

Price: Our careers and corporate websites include stories from a diverse group of associates who share their experiences and why they enjoy working at Baird. Our associate resource groups are another way that we showcase this. They’re led and run by associates across the organization and include more than 1,000 active members. Through the work they’re doing internally and within the community, we showcase how our associates are coming together to drive change.

3/16/21 9:09 AM

SPONSORED CONTENT

ABOUT THE PANELISTS OTTO NICHOLS III is an executive vice president and shareholder at Clayco, which specializes in the “art and science of building” with fast track, efficient solutions for industrial, commercial, institutional and residential projects across the U.S. Since joining the company in 2004, he has led large construction projects totaling more than $1.25 billion, including aviation, office, health care, laboratory and financial facilities nationwide. He holds a master’s degree in construction management from Washington University and a bachelor’s degree in civil engineering from the University of Missouri.

Nichols: Internally, we praise positive performance during project reviews and employee performance reviews. Externally, we showcase strategic initiatives on our company websites and highlight daily wins on our social media pages. The best showcase, however, is encouraging our subcontractors and employees to publicly highlight their own experiences. There’s no better way to validate the effort we put into DEI than to have our employees and project partners share their experiences working with Clayco.

Rudnick: For Leopardo, it’s about letting our actions speak for themselves. Our commitments to DEI are not motivated by anything other than truly wanting to be a remarkable place for all to work and for our customers to partner with. We recognize that companies are feeling increasing pressure to speak out publicly on social issues—especially those rooted in DEI. To truly demonstrate and encourage progress you must be fully committed to doing the work behind the scenes. That’s where our focus has been and we showcase our diverse and inclusive culture through the progress we’ve been making.

ASHLEY PRICE is the diversity talent advisor for the private wealth management business at Baird, a multinational independent investment bank and financial services company.

She is responsible for planning, developing, coordinating and executing recruitment strategies and initiatives to attract candidates from a wide range of backgrounds to increase and improve diversity within the business and at Baird. She holds a master’s degree in human resources and a bachelor’s degree in economics—both from Marquette University—and a professional certification from the Society for Human Resources Management.

HOLLY RUDNICK is vice president of human resources at Leopardo Companies, a 44-year-old construction company with offices in Hoffman Estates and Chicago. She leads the company’s strategic human resources department, advancing its people and culture infrastructure. She has nearly 20 years of strategic human resources experience across a wide range of industries, including construction, health care, retail and manufacturing. She holds a bachelor’s degree in human services and psychology from Kendall College and professional certifications from the Human Resources Certification Institute and the Society for Human Resources Management.

disingenuous to recruit and hire people under the guise of DEI but not truly embrace the concept. Those efforts must be made a priority and pushed from the very top of the organization. For example, Bob Clark, our executive chairman and founder, personally reinforces how important our DEI initiatives are and how we want the company to be seen in the community. Lastly, engage and listen to your employees. Younger employees will communicate their expectations more openly, but the more mature employees can more easily ensure that the efforts integrate within the company culture.

Shakir: Make sure you have dedicated resources focused on your DEI initiatives. Create a DEI program that has ongoing initiatives, such as an internship program and list of diversity suppliers that support your local community. I also recommend providing leaders and employees with a set curriculum and training and creating milestones that can be tracked throughout the year.

Rudnick: DEI cannot be exclusively owned by human resources. Every employee has a responsibility to understand the company’s commitment to DEI and

humility and curiosity, as well as a growth mindset. Be prepared for some uncomfortable and candid conversations about where you are as an organization and where you should be. Also, never underestimate the power of storytelling. I’m a firm believer that everyone has a story to tell and that we learn much more when we’re actively listening to what people have to say.

TAUHIDAH SHAKIR is vice president of human resources and chief diversity officer at Paylocity, a Schaumburg-based provider of cloudbased HR and payroll software solutions, where she develops strategies and programs that foster a diverse and equitable workplace.

She has more than 20 years of experience providing strategic HR support, developing DEI programs and coaching leaders across all areas of the organization. She holds a bachelor’s degree in organization behavior from the University of North Texas, and certifications from the Human Resources Certification Institute and the Fowler School of Business and Executive Coaching.

Price: Talk to your employees.

It’s important to understand their experiences and any challenges they may be facing. Then look for trends, especially within different demographic groups. Once you hear from your employees and identify areas of improvement, take action and measure progress along the way.

Show them that you’re committed to addressing their concerns and listening to their solutions to create

an environment where employees feel heard, seen and valued.

Additionally, every organization should analyze their recruitment, selection, promotion, compensation, development and training processes, which will bring to light any systematic issues that need to be addressed internally.

Focus on what matters most.

Your People.

The HR and payroll partner you deserve.

“WE’RE AWARE OF THE DIFFICULTY AND CHALLENGES THAT DIVERSE EMPLOYEES ENCOUNTER AND WE PROVIDE MENTORS, RESOURCES AND SUPPORT AS NEEDED.” —OTTO NICHOLS III, CLAYCO What advice do you have for organizations looking to step up their DEI efforts?

Nichols: The first step is to confirm that your efforts are genuine. It’s

P024_027_CCB_20210322.indd 27

do their part to incorporate inclusive behaviors into how they show up and interact with their peers, customers and their communities. DEI is not an event, but rather an ongoing process that requires commitment,

Scan to learn more about our all-in-one platform. or visit paylocity.com/crains

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McCormick Place is preparing to host meetings again with social distancing.

What Chicago must do to win back conventions CONVENTIONS from Page 3 downtown’s dynamic dining and entertainment options—key to helping boost attendance at many events—have been badly stung by a crisis that has hammered restaurants, hotels and downtown’s famous shopping corridors.

And with other cities forging ahead with plans to expand their convention centers despite the headwinds created by the pandemic, one of the only certainties is that city and McCormick Place officials will need to bolster recruitment and retention strategies to reignite one of the state’s most important economic engines.

“We know the market has been competitive and is going to get more so,” says Heywood Sanders, a professor of public administration at the University of Texas at San Antonio who studies the financial performance of convention centers.

McCormick Place has plenty of inertia on its side to compete for post-COVID business. It has burnished its image for decades as a top destination for conventions and trade shows with its physical size, the allure of the city to attendees and how easy it is to get to Chicago through one of the world’s busiest airports.

The venue has also been a leader in health-focused updates to its halls, earning a gold-standard accreditation for cleaning and disinfecting facilities. And event consultants say its calendar may be buttressed for the first couple post-pandemic years by events that were forced to cancel in 2020 but rescheduled for future dates to avoid cancellation penalties.

But the threat of Chicago’s events business eroding is real. COVID is likely to accelerate a long-running trend of fewer, smaller events at McCormick Place and other large convention centers, Sanders says.

The Near South Side venue hosted 50 conventions and trade shows that collectively drew about 825,000 attendees in 2019, roughly two-thirds of the totals two decades ago, according to his research.

That dilution was caused mostly by emerging meeting sites like Nashville, Tenn., Columbus, Ohio, and Austin, Texas, developing and expanding convention centers and picking off events from well-estab-

lished hosts. Indianapolis recently lured the National Confectioners Association’s annual Sweets & Snacks Expo out of Chicago because of the pandemic for the first time ever this summer, though it’s scheduled to return to McCormick Place next year.

The longer it waits to bring back conventions at full strength, the more risk Chicago faces in losing events it may have a hard time getting back, says Don Welsh, who spent five years leading city tourism bureau Choose Chicago before becoming CEO of Destinations International, an association for convention and visitors bureaus.

‘BE READY AND OPEN’

“The first thing Chicago has to do to get back in the game is be ready and open for business. With every day it’s delayed, it’s giving another destination an opportunity,” he says. “I don’t think customers want to leave, but they can’t afford not to look at other options.”

Kate Campbell, senior director at event planning firm HelmsBriscoe, says she thinks Chicago’s events industry will recover as well as that of any other city, though some early signs suggest otherwise. One of her clients that historically brought about 1,200 attendees to its annual event at McCormick Place recently asked her to explore other markets out of worry that attendees may be wary of going to Chicago.

She argues larger events like major trade shows will come back strong—“people miss those,” she says—lifting McCormick Place as one of the only convention centers in the country big enough to host some of them. But smaller and midsize meetings and conventions will be more likely to include bigger virtual components. That could hurt Chicago and McCormick Place, which justified using taxpayer dollars to build 10,000-seat Wintrust Arena on the convention center campus a few years ago as a key to competing for smaller events.

More competition for events likely means offering more incentives, reducing rent or finding other ways to save event organizers money, potentially adding more red ink to the budget of a convention authority that needs all the revenue it can get to offset growing operating losses at the convention center itself. Relying more on its hotel business to fund

operations over the past few years, the Metropolitan Pier & Exposition Authority reported a record high $51.4 million in operating losses for its McCormick Place unit during its 2019 fiscal year.

MPEA, which owns and operates McCormick Place, has asked state lawmakers to restart a previously used $15 million annual fund for the next five years that could subsidize event organizers’ rent and other COVID-related costs.

MPEA CEO Larita Clark cited ramped up incentives from competitors like Orlando, Fla., which has hosted almost 50 events at its convention center during the pandemic, and Fort Lauderdale, Fla., which is offering $10 million in free rent.

The agency “must be realistic,” Clark told legislators during a March 18 virtual meeting. “The meeting and events industry is more competitive than ever.”

For now, MPEA is making new investments to try to adapt to what could be post-COVID norms. It has spent the past couple of months building a production studio at the Arie Crown Theater in the venue’s Lakeside Center building that event organizers will be able to use to broadcast virtual portions of their meetings.

That might help them retain business as event organizers look for help staging both in-person and virtual events. But it also comes with the concession that fewer people may be coming to the city to support the local hospitality sector, says George Fenich, a professor in the school of hospitality leadership at East Carolina University who does consulting work for convention centers and city visitors bureaus. Attendees at conventions and trade shows typically account for about 20 percent of all hotel rooms rented downtown each year, according to recent Choose Chicago estimates.

“Municipalities put resources into convention centers to draw people who will spend money and stay in hotels and eat,” Fenich says. He admits it’s still unclear whether the rise of virtual events will cannibalize some in-person attendance or supplement it, “but to whatever degree a convention has a virtual component, the people doing it virtually aren’t spending money in the community. That’s a real issue moving forward.”

3/19/21 2:42 PM

CRAIN’S CHICAGO BUSINESS • MARCH 22, 2021 29

How Chicago became the capital of the pot business WEED from Page 1 leader in a fast-growing new industry that’s generating jobs and wealth. GTI, Cresco and Verano each is expected to do more than $800 million in sales this year.

Each employs more than 2,000 workers, with hundreds of them in Illinois. Investors and employees have made millions, and they could make even more if shares of these companies become listed on major U.S. exchanges, as appears increasingly likely.

Keeping the lead will be a challenge. Because marijuana is illegal under federal law and has rolled out state by state, the companies enjoy well-protected markets.

National legalization—or the industry’s sheer growth potential— could draw in giant consumer products companies and institutional investors, triggering a wave of mergers and acquisitions that could swallow up Chicago’s industry leaders.

For now, they’re on top, thanks to timing and luck, both good and bad, that propelled several early winners of licenses here to become major players in the industry. Although West Coast compa-

figuratively a bridge between all the capital on the East Coast and the legacy (cannabis industry) on the West Coast. To succeed in this industry, you have to understand what’s going on on the East Coast and on the West Coast.”

Illinois is an unlikely hotbed for weed. But in 2013, it was among the first states to legalize medical marijuana in what became known as Marijuana 2.0, which relied on strict regulations and a limited number of licenses.

“We wrote a very tight bill,” says Bill Haine, a former state senator and prosecutor from downstate Alton, who played a key role in writing the Illinois legislation.

“There was a lot of opposition from law enforcement and people who were suspicious of the whole idea of marijuana.”

RESTRICTIONS

Police and prosecutors didn’t want the sort of loose qualifications to get medical-marijuana cards that were seen in California and Colorado. Restrictions in Illinois required a doctor’s recommendation and fingerprinting by police.

Applicants, meanwhile, were required to submit detailed applications, in“PEOPLE NEEDED MONEY TO MEET ALL cluding three years of returns from their THE REQUIREMENTS. THAT REQUIRED tax investors. They delivCAPITAL. THE MONEY IS IN CHICAGO, ered thousands of pages in bankers’ boxes to NOT DOWNSTATE.” Springfield. “We filled up a small U-Haul Bill Haine, former state senator truck with boxes,” recalls Dina Rollman, senies dominated the early days of nior vice president for government the industry, those in Illinois have and regulatory affairs at GTI. flourished in the more heavily regInadvertently, the application ulated and capital-intensive phase process became another road that followed. Medical marijuana leading to Chicago, Haine says. is legal in 36 states, and recreation- “People needed money to meet all al use is allowed in 15. the requirements. That required “Chicago has been at the cen- capital. The money is in Chicago, ter of the cannabis industry,” says not downstate.”

Alan Brochstein, founder of HousBecause marijuana is illegal unton-based 420 Investor, which der federal law, companies had covers cannabis companies. “It’s to rely on private investors, rather

w THE CAPITAL OF BIG WEED Chicago is home to more of the biggest publicly traded marijuana companies, measured by annual revenue or market value, than any other U.S. city.

2021 REVENUE ESTIMATE

MARKET CAPITALIZATION

Curaleaf

Curaleaf

$1.26 billion Wakefield, Mass.

$10.97 billion

Wakefield, Mass.

Verano

$857 million

Chicago

Green Thumb Industries

Green Thumb Industries

$834 million

Chicago

Trulieve

$6.86 billion

Tallahassee, Fla.

Trulieve

$810 million

Tallahassee, Fla.

Verano

$6.72 billion

Chicago

Cresco

$805 million

Chicago

Cresco

Columbia Care

$490 million

New York

Harvest Health & Wellness

$378 million

Tempe, Ariz.

Ayr Wellness

$377 million

New York

$216 million

Boca Raton, Fla.

Acreage Holdings

$216 million

New York

Chicago

$5.22 billion Chicago

Ayr Wellness

$2.29 billion

New York

Columbia Care

$2.15 billion

New York

Jushi

Jushi

$7.93 billion

Planet 13 4Front Ventures

$1.69 billion $1.30 billion $793 million

Boca Raton, Fla. Las Vegas Phoenix

Sources: Yahoo Finance, Crain’s reporting

than traditional sources. GTI, Cresco, Verano and PharmaCann were adept at raising money from family offices, many of them in their backyard. They also were good at writing license applications. Both were critical to success.

Two important things happened next. Under Gov. Bruce Rauner, who opposed legalized cannabis but inherited the medical-marijuana program, the Illinois market grew slowly. Illinois pot entrepreneurs had to look elsewhere for growth.

“The Illinois program didn’t get off to a good start,” says Cresco Labs CEO Charlie Bachtell. “While the idea of creating something that went outside the state of Illinois initially sounded interesting, it became a necessity. We were thinking: This might not work. We have to diversify the company and get into other markets. Illinois could fail.”

Cresco and its peers quickly won or acquired licenses in other states, which patterned their medical-marijuana programs on Illinois’.

“We were able to immediately go to New York and apply and get a license, and then Maryland,” says Jeremy Unruh, senior vice president for public and regulatory affairs at PharmaCann. “After New York, we realized there was a land grab going on.”

After winning licenses, Chicago-based companies raised even more cash to fuel expansion. In 2018, GTI and Cresco were among the first U.S. companies to go public in Canada. Verano joined early this year. A fourth company, led by former Cresco co-founder Joe Caltabiano, Choice Consolidation, raised $172 million in Canada to acquire U.S. cannabis companies.

It also helped that Illinois companies were led by entrepreneurs who came from traditional Chicago industries, such as real estate, restaurants, pharmaceuticals, law, lending, hedge funds and trading. That corporate and financial experience came in handy.

“Once the licenses were awarded, the expectations put on operators by regulators were higher,” Khalatbari says. “Illinois didn’t create new agencies, unlike other states. That lends itself to companies being professional and innovative.”

RECRUITING

Marijuana companies in Chicago have begun recruiting senior talent from big consumer packaged goods companies in the food and beverage industries.

“The Midwest has a ton of CPG, beverage and liquor companies,” says Chad Bronstein, CEO of Fyllo, a Chicago software startup with about 130 employees that serves

cannabis companies, as well as advertisers and marketers in other industries, and provides them with consumer data. “The industries want to understand each other.”

The marijuana business is still in its infancy. The regulated fiefdoms of individual states, which have sheltered fledgling companies from global giants, could be undone if the federal government legalizes marijuana nationally.

Experts say outright legalization seems unlikely anytime soon, given the closely divided U.S. Senate, but they expect a wave of consolidation that will reshape the industry is coming.

Booze giant Constellation Brands already made a big investment in Canadian weed company Canopy Growth. Others are expected to follow as restrictions ease and the $20 billion U.S. market grows.

“There will be tremendous consolidation,” says Andy Grossman, head of investor relations for GTI. “Hopefully, we have enough time to build out a sustainable platform that can compete with these companies because they will come.”

Pam Althoff, executive director of the trade group Cannabis Business Association of Illinois, adds, “This industry is going to change drastically over the next five to seven years. I would like to hope Chicago is still a center of the industry.”

Rent-back deals become common in fast-moving Chicago housing market RENT-BACKS from Page 3 asking price. In Fox River Grove, a house on Bridle Path Lane went up for sale Feb. 2 at $525,000, got a buyer’s contract three days later and sold in March at 2.5 percent over the asking price.

A quick sale makes some sellers “apprehensive because they’re afraid they won’t be able to find a place to go by the time the sale closes,” says Deb Julson, the Keller Williams Success Realty agent who represented the Krogmans’ house, which sold at the full $575,000 asking price.

Agents in the city and suburbs say the swift pace of sales means their sellers often aren’t prepared to jump to the next home right away, so they’re using half-steps.

These include Airbnb and rentbacks, where the sellers add a pro-

P029_CCB_20210322.indd 29

vision to the contract that lets them stay in the house as renters for a specified time after the sale closes.

In Wilmette, @properties agent Laura Fitzpatrick represented clients who planned to sell a six-bedroom house on Elmwood Avenue.

They wanted to strike while the market is hot, but also hoped to stay in the home until the end of the school year.

Fitzpatrick put the house on the market Feb. 11, priced at just under $1.5 million and with a note to agents that the sellers would want a rent-back agreement.

“No problem,” Fitzpatrick says.

“We got seven offers, and all seven buyers were OK with those terms.” The house went under contact in five days, and the sale closed March 11 at 5 percent over the asking price. Fitzpatrick says her clients will be in the house

for a few months but declines to put them in touch with a reporter.

She’s had two other sellers require rent-backs from the buyers so far this year.

Real estate attorneys usually advise buyers against rent-backs, largely because of the liability involved. But “when things are happening this fast and you feel like you won’t have anywhere to go, people are doing it,” says Mario Greco, a Berkshire Hathaway HomeServices Chicago agent. His clients who did a rent-back this spring request that he withhold the details.

CUTTING STRESS

The least anxious way to prepare for a quick sale, of course, is to have another home lined up.

Patti Michels, a Baird & Warner agent in Downers Grove, has cli-

ents who were so unsettled by how fast buyers were interested in their house last fall that they pulled it off the market. Once they had bought their downsizing condo, they put their house on Saratoga Avenue back on the market in late January. It went under contract in three days and sold March 15 for $940,000, which was $1,000 above their asking price.

Michels had another listing, on Lee Avenue, that also hooked a buyer in three days. That kind of speed “is exhausting for the agent,” she says, and as word gets out to potential home sellers, “it scares some of them, and they don’t want to put their house on the market.”

Julson, the listing agent on the one-day sale in Hawthorn Woods, was the one who encouraged her clients, the Krogmans, to look for an Airbnb. That was in part so

they’d have somewhere to land and in part as a strategy for the purchase of their next home.

The Krogmans had lost bidding wars on two homes by putting in their offer a home-sale contingency, which gives the buyers time to sell their current home. “In this market, less than 2 percent of contracts go to buyers with home-sale contingencies,” Julson says, citing statistics that Midwest Real Estate Data compiles on MLSConnect for agents. She says she thought that if the Krogmans closed their sale and could thus make an all-cash offer, they’d get the house they wanted.

And they did, Lisa Krogman says.

Shortly after they moved into their Airbnb townhouse, they put a cash offer on a house in Kildeer. The strategy worked: They’re scheduled to close on that purchase at the end of March.

3/19/21 2:35 PM

30 MARCH 22, 2021 • CRAIN’S CHICAGO BUSINESS

Morgan Park house steeped in local lore up for sale

BY DENNIS RODKIN A house for sale in Morgan Park comes with a few puzzles that date to the time it was owned by a man with links to the bloody 1919 race riots and the Capone-era mob.

The four-bedroom house, built in 1915 on Seeley Avenue, was listed March 10, priced at $650,000 and represented by Laura Michicich of Berkshire Hathaway HomeServices Chicago. Her parents-in-law, Marino and Jacquelynn Michicich, bought the house in 1977, and their son Mark is now selling it.

The puzzles in the house are relics from the years when it was owned by James Ragen, a publisher of racing news who died in 1946. Ragen allegedly died of mercury poisoning while he was hospitalized after being shot during a gun battle between his bodyguards and would-be assassins at State Street and Pershing Road. Events that led up to the gun battle included Ragen allegedly trying to talk to the FBI about the mob’s influence in gambling.

Decades earlier, Ragen and his brother Frank were leaders

of Ragen’s Athletic & Benevolent Association, also known as Ragen’s Colts. The group was strongly implicated in the race riots of 1919, where 38 people died and at least 1,000 Black families lost their homes. According to the government-sponsored postmortem of the riots, “The Negro in Chicago,” “Ragen’s Colts were frequently identified with lawlessness and specific clashes before and during the riot. They are typical of the gangs and ‘athletic clubs’ which were responsible for much disorder, including attacks upon Negroes.”

Ragen’s Colts got into bootlegging during Prohibition and was eventually subsumed into the Chicago outfit.

UNEARTHING SECRETS

It’s not clear from public records when James Ragen bought the house from its original owners, but he lived there for the 1940 census, and his family sold it in 1955, nine years after he died. The family who bought it sold the house to the Michiciches in 1977 and told them, according to Mark Michicich, that they had never managed to open the Ragens’ two wall safes.

Those safes remain locked to this day, 66 years after the Ragens sold the house.

A second potential for unearthing secrets is behind a bolted-on wall panel in a bathroom.

Michicich says the family was told there’s a tiny room behind it, where a table and chair were screwed to the floor to prevent someone hiding inside from inadvertently moving the furniture and revealing their whereabouts.

Despite owning the home for 44 years, “we haven’t checked to see what’s back there,” Michicich says.

One relic of the old days that isn’t hidden is a pair of miniature delivery chutes the size of a liquor bottle on the exterior of the house, where someone could surreptitiously put a bottle “and it would end up inside,” Michicich says.

Aside from these intriguing features, there are also handsome architectural touches in the house, which was designed by Frank O. DeMoney. The exterior is red brick with a green tile roof and an arched entryway on the front porch. Inside are large formal rooms, stained-glass windows and a staircase whose beautiful carved wood banister and spindles were

BERKSHIRE HATHAWAY HOMESERVICES CHICAGO

Two wall safes in the home on Seeley Avenue haven’t been opened since it was owned by the family of a man linked to the 1919 race riots and midcentury mob violence

The puzzles in the Morgan Park house are relics from the years when it was owned by James Ragen, a publisher of racing news who died in 1946. The four-bedroom house was listed March 10. meticulously scraped of layers of paint by Mark Michicich’s grandmother, Peg Mungovan.

DeMoney designed dozens of houses in Oak Park’s Gunderson Historic District, Logan Square, East Garfield Park and elsewhere in the city. According to his obituary, DeMoney also designed the Hiawatha train and several funeral chapels.

Behind the house is the garage.

Originally built for carriages, it still

has a hayloft, Michicich says.

It’s from that garage that James Ragen drove his car in April 1946, only to be pursued at 50 mph down the residential street by two men in another car. He later told a reporter: “This was an attempt to kill me. The syndicate wants to take over (my business). Last week someone telephoned my wife that, if I didn’t quit business, I’d be in a coffin.” Two months later was the gun battle that preceded his death.

CRAIN’S CHICAGO BUSINESS • MARCH 22, 2021 31

Arts & Crafts home stands out in historic district EVEN ON A STREET where virtually every house was built to be a showpiece, Cece and Greg Browne’s house stands out, with an Arts & Crafts facade that features double porches, downstairs and upstairs.

Built in 1906, the Brownes’ house is one of a dozen on Hawthorne Place, a short street in Lakeview between Lake Shore Drive and Broadway. It’s a landmark district built mostly in the late 19th and early 20th century.

Twenty-one years ago, when the couple “WE FOCUSED had one child and more on the way, they ON RETURNING bought this house from a longtime owner and launched a complete rehab of the interiIT TO ITS GLORY.” or, retaining period details like stained glass windows and columns that frame entrances Greg Browne to rooms and complementing them with new finishes that evoke the home’s original style.

“We focused on returning it to its glory,” says Greg Browne, who’s in banking. Cece Browne is in commercial real estate. “We loved it as an old-style house that we could modernize.”

Now, after raising three kids in the five-bedroom home, the Brownes plan to downsize. They’ll put the home on the market April 1, with an asking price of just under $2.15 million and represented by Kim Kerbis of @properties.

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

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

CLASSIFIED . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312-659-0076 REPRINTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212-210-0707 editor@chicagobusiness.com

VHT STUDIOS PHOTOS

Built in 1906 on Hawthorne Place in Lakeview, this house retains the charm of its original era after a 21st-century rehab BY DENNIS RODKIN

Vol. 44, No. 12 – Crain’s Chicago Business (ISSN 0149-6956) is published weekly, except for the last week in December, at 150 N. Michigan Ave., Chicago, IL 60601-3806. $3.50 a copy, $169 a year. Outside the United States, add $50 a year for surface mail. Periodicals postage paid at Chicago, Ill. Postmaster: Send address changes to Crain’s Chicago Business, PO Box 433282, Palm Coast, FL 32143-9688. Four weeks’ notice required for change of address. © Entire contents copyright 2021 by Crain Communications Inc. All rights reserved.

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