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ABBOTT LABS: Baby formula loses market share to rivals amid plant closure. PAGE 3

GREG HINZ: Searching for a middle ground on gun control. PAGE 2

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Can Mike Reschke save the Loop?

COMMUNITY DEVELOPMENT

A ‘leap of faith’ in Auburn Gresham

BY DANNY ECKER

Torrey Barrett, in front of the Kleo Art Residences that he developed in Washington Park, is planning two apartment buildings in Auburn Gresham.

JOHN R. BOEHM

After years of neglect, the community gets an infusion of much-needed capital investment and development I PAGE 15

Hope for a downtown real estate revival rests on the veteran developer’s shoulders After nearly four decades developing Chicago real estate, Mike Reschke sits in a private dining room at his Residence Inn hotel on LaSalle Street and declares how he plans to end his career.

“Keel over suddenly at my desk,” the 66-year-old CEO of Chicago-based Prime Group says in his baritone voice over a glass of Hall cabernet sauvignon. “I would never retire, especially with the opportunities that COVID has brought. This is like, ‘Oh, my God, now that the hurricane is over, it’s time to buy the waterfront property.’ ” For Reschke, the waterfront property See RESCHKE on Page 29

THE PARTY’S OVER FOR

TECH STARTUPS AFTER YEARS OF EASY MONEY, Chicago’s fledgling technology firms face a funding crunch.

Venture capitalists are warning startups to cut spending and conserve cash to survive a recession that looks more likely by the day and what’s shaping up as the worst

downturn in tech stocks in two decades.

“Every VC is telling their portfolio companies to cut back,” says Ira Weiss, a partner at Chicago venture fund Hyde Park See TECH STARTUPS on Page 28

Ira Weiss is a partner at Hyde Park Venture Partners

NEWSPAPER l VOL. 45, NO. 27 l COPYRIGHT 2022 CRAIN COMMUNICATIONS INC. l ALL RIGHTS RESERVED

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JOHN R. BOEHM

As venture capital pulls back, companies conserve cash, cut staff and aim for profitability I BY JOHN PLETZ

TECH TAKEAWAY

CRAIN’S LIST

Meet the 24-year-old behind Tech Chicago Week.

PAGE 6

Our roundup of the area’s largest out-oftown employers.

PAGE 21

7/8/22 3:26 PM

2 July 11, 2022 • CRAIN’S CHICAGO BUSINESS

Searching for a middle ground on guns

I

n this era of hyper-polarization, it’s tough to try to hold down a spot in the broad political middle. Yet, some still try, because it’s in the middle (or even, in my case, somewhat to the left of middle) that most things get done if they’re to get done at all. That doesn’t make it easy.

The fight over abortion rights is one example.

If things continue the way they’re going, America soon will be divided into two nations as surely as it was after Fort Sumter.

In one of those nations, abortion even via a pill the morning after will become a jailable offense. In the other, no consideration will be given to anything other than personal choice. And woe be to those who don’t get with the program.

Yet, the country as a whole is in between those extremes. Most people don’t believe that preventing an eight-cell protoplasm from implanting in a woman’s

uterus is wrong. And most start to feel a little creeped out at the idea of aborting a third-trimester fetus that looks awfully like a little human being—though the instances of that happening are extremely rare. There’s a middle ground to be found. But hardly anyone is looking anymore.

I fear the fight over gun regulations after Highland Park will continue to go the same way.

Everyone will scream and yell, play to the base and otherwise take comfort from sticking with their tribe. But nothing really will happen. Until the next mass shooting, when Groundhog Day returns.

How do we move forward?

How do we end killings that are too numerous to remember?

To those of you on the political right: Grow up already, and quit acting like a zonked-out stoner babbling about your rights. Join a world in which we all owe some deference to the public good, in

which we all have to make some compromises.

In particular, you gun fans, deal with your kooks. Like Fox News’ Tucker Carlson, who last week told millions of viewers that shooters like Robert Crimo are prompted by “government-endorsed weed . . . (and) the endless psychotropic drugs handed at every school in the country . . . (and) the authorities in their lives, mostly women, (who) never stop lecturing them about privilege: You’re male, you’re privileged.”

Didn’t conservatives once believe in personal responsibility?

Or firebrand U.S. Rep. Marjorie Taylor Greene. How come the shooting happened in “a rich white suburb” in “MAGA month,” aka July, instead of, say, a gay pride parade in June, Greene asked in an internet posting, not mentioning the murder of 49 people at an LGBTQ nightclub in Florida just six years ago. “It almost sounds like it’s designed

GREG HINZ ON POLITICS

to convince Republicans to go along with more gun control,” she concluded. Nobody whines better than Greene.

On the other hand, the Carlsons and Greenes are playing into the reality that millions of people now are deathly scared of crime and convinced that local prosecutors—hello, Kim Foxx—are more about social reform than law enforcement. People who are scared for their safety tend not to focus much on social justice; instead, they buy guns.

Beyond that, consider what we’ve learned about what actually went down in Highland Park: A young man who was reported to police for threatening his family,

had more than a dozen knives and a sword seized from his closet, tried to commit suicide and had an internet avatar as an advocate of mass murder was allowed to acquire multiple firearms—with his father’s permission.

That situation ranks right up there with Carlson’s and Greene’s ravings on the whack-a-doo scale. It underlines that conservatives have a point when they say much societal dysfunction starts in the family.

My point here is not to equate the sides in this debate. It is to say that both sides have legitimate concerns that must be dealt with if we’re to get anything done. Is that still possible in today’s America? I honestly don’t know anymore.

What’s driving the Big Ten mashup? Come on.

M

an, just when those Rutgers-­Nebraska matchups were morphing into a rivalry to inspire painted-­ face delirium, along comes Northwestern-­UCLA to make college sports seem ever more brazenly and bizarrely ambitious.

Welcome to the Big Sixteen, where the desire to keep pace in the college sports arms race has rendered the history (and geography) of what was once proudly known as the Big Ten Conference all but unrecognizable.

With Thursday’s stunning disclosure that the University of Southern California and UCLA are Big Ten-bound in 2024, the Pac-12, a storied institution Bill Walton grandly refers to as the “Conference of Champions,” has lost its football and basketball anchors.

The similarly jilted Big 12 has known the feeling since Texas and Oklahoma decided to elope to the mighty Southeastern Conference, which had already pilfered Texas A&M and Missouri.

Thus, the Power Five fault line on which big-time college sports has been teetering is about to become the Power Three. The Pac-12 without USC and UCLA? The Big 12 without Texas and Oklahoma?

Think of the American League without the Yankees or the NFL without the Bears.

Bulky and inefficient at 15 teams, the Atlantic Coast Conference is the least powerful of the remaining three, and that’s fitting in a way because it was the ACC that escalated this relocation frenzy when it raided the Big East for Boston College, Miami, Syracuse and Pittsburgh.

Geographic rivalries? Tradition?

Hang them in the closet next to your raccoon coat. It’s all about TV sets, baby. TV sets that translate into ratings, and ratings into cash money.

Jim Delany, who became college sports’ ultimate power broker while running the Big 10/12/14 as its commissioner, saw a “survival of the fittest” mentality taking over college sports and was determined to keep his group relevant by expanding its footprint. He grew tired of waiting for Notre Dame and Texas, but Penn State made sense as a football powerhouse from an adjoining state, as did Nebraska for much the same reason.

But Rutgers? Maryland? Delany was candid about his intentions: He wanted in on the New York and Washington TV markets . . . even though most people in New York don’t know where or what Rutgers is.

Had he known USC and UCLA might one day be available, you think Delany might have asked for a do-over on Rutgers and Maryland? Flashy new members aside, the Big Sixteen looks like a sloppily overstuffed chair, unwieldy and not especially comfortable.

But a football roster of Ohio State, Michigan, USC, Penn State, Iowa, Wisconsin, UCLA, Michigan State, Purdue and Nebraska should provide plenty of good games. Kevin Warren, who succeeded Delany in 2019, has outdone him as a driver of manifest destiny. And 10 teams— what a concept! Somebody ought to start a league!

Notre Dame would be a terrific fit in this mix, but the Irish made a deal that commits them to five

yawner-heavy ACC games annually in exchange for full conference membership for other ND sports.

Sometimes the smartest guys outthink themselves.

Let us pause to remember the Rose Bowl, which has pretty much been without its Big Ten-Pac-10 ­cachet since the Bowl Championship Series took over college football’s postseason. Now it’s probably gone for good, and that’s sad.

To us numb Midwesterners hunkered down in search of warmth each frigid New Year’s Day, the Rose Bowl meant bright skies, shirtsleeved crowds, the beauty of the San Gabriel Mountains, the allure

DAN McGRATH

ON THE BUSINESS OF SPORTS of sunny California and quite often a blowout win by a Pac-10 team that had discovered this gimmick called the forward pass . . .

Despite that history, in my years out West, the Rose Bowl was the one event I tried to see in person each year, even though the result was usually predictable and occasionally amusing. After USC held a powerful but plodding Michigan team to 10

points in the 1979 game, the L.A. Times’ Jim Murray wrote that the Wolverines “were so committed to the ground they went back to Ann Arbor by bus.”

It was a simpler time.

Crain’s contributing columnist Dan McGrath is president of Leo High School in Chicago and a former Chicago Tribune sports editor.

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W I N T R U ST W E A LT H .C O M / T R U ST E X P E RT S

CORRECTIONS In the June 27 Notable Leaders in Sustainability feature: The profile of Tom Decker was inadvertently omitted.

The profiles of Paul Hunter and Elise Zelechowski contained errors.

Correct versions of these profiles can be seen at ChicagoBusiness.com/ sustainability2022

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7/8/22 2:39 PM

CRAIN’S CHICAGO BUSINESS • July 11, 2022 3

How long will million-dollar homes stay hot?

2022 could leave a record-setting 2021 in the dust.

Here’s what agents expect for the rest of the year.

BLOOMBERG

BY DENNIS RODKIN

Abbott Labs’ formula woes spell opportunity for rivals With its main plant closed and its products off the shelves, the longtime industry leader can only watch as perennial No. 2 Mead Johnson zooms past I BY KATHERINE DAVIS

A

bbott Laboratories is losing its lead in the U.S. baby formula market as the shutdown of an important manufacturing plant drags on.

Contamination concerns forced the North Chicago-­based company to close its main formula plant in Sturgis, Mich., five months ago, sparking nationwide shortages and creating opportunities for Abbott’s competitors.

Since Abbott’s formula has been off the market, longtime No. 2 Mead Johnson says its share of U.S. sales has jumped to 54%. Mead Johnson, which is owned by London consumer goods company Reckitt Benckiser Group, had just 20% of the

market before the crisis, well behind Abbott’s market-leading 50%, according to 2020 data from Los Angeles market research firm IBISWorld, the most recent figures available.

“Reckitt has been the main beneficiary from the Abbott site closure, albeit with Nestlé and Private Label also seeing share gains,” Deutsche Bank analysts wrote in a recent report.

Regaining lost ground will be a challenge for Abbott. The prolonged absence of its Similac brand allows Chicago-based Mead Johnson’s Enfamil and other rivals to forge deeper ties with See ABBOTT on Page 30

Rivian has transformed Bloomington-Normal Six years ago, the downstate community took a gamble—and won big

BY JOHN PLETZ Jim Fruin listed a house for a client in Normal on a Friday for just under $150,000. After 30 showings during that weekend, it sold for 10% over the list price.

It’s just one example of the Rivian effect on this downstate community, which gambled six years ago on the startup electric-­ vehicle maker and won big. The company more than tripled its workforce in the past year to almost 6,000 employees as it began making trucks at the former

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Mitsubishi auto plant, adding about 100 people a week. Rivian plans to add another 1,000 jobs, says Gov. J.B. Pritzker. The company declines to comment on future hiring plans.

It’s by far the biggest boost in decades for the central Illinois economy from a single project, says Mark Denzler, CEO of the Illinois Manufacturers Association.

“You can feel it in restaurants and shopping: More than 5,000 good-paying jobs that rippled throughout the community,” adds Patrick Hoban, who leads

the Bloomington-Normal Economic Development Council.

Susan Goeckner, owner of Ivy Lane Bakery, got an order from Rivian around the holidays last year for 7,000 cookies for an employee and family appreciation event. It was the largest order she’d ever received since opening the business five years ago.

“They’ve been amazing,” she says.

Rivian has drawn people from across the country and across the state, who came to this See RIVIAN on Page 13

There was stiff competition among house hunters when a Bucktown home created from a former funeral parlor went up for sale in April.

After 20 showings in four days, the two-flat—with architectural details like stained-glass windows and a barrel-arched ceiling in the chapel turned living room—went under contract to a buyer. The sale closed in early June at the seller’s full asking price: $1.45 million.

Homes like this one, priced at $1 million and up, “were red hot in the first half of the year,” said Carrie McCormick, the @properties Christie’s International Real Estate agent who represented the onetime funeral home.

In the first six months of 2022, there were 2,571 homes sold at $1 million or more in the six-county metro area, according to Midwest Real Estate Data. That’s an increase of nearly 8.7% from first-half 2021, which went on to be a record-setting year for luxury home sales, with a year-end total of 3,480 sales.

The first-half increase in luxury sales was bigger metrowide than in the city, where there were 1,126 sales at $1 million or more, up 4.6% from the same time last year.

That’s in large part because of the difficulties in the downtown condo market, including crime and a slower-than-expected return of workers downtown.

Elsewhere in the city, the $1 million-and-up-market “was crazy in the first half of the year,” said Brad Lippitz, a Compass agent who represented a house on Balmoral Avenue in Lakewood Balmoral that also sold fast and at its full asking price, just under $2.5 million. Demand from buyers, he said, “was huge.”

If fact, the sales tally for just the first six months this year is bigger than the full-year total in three of the five years before the pandemic.

RENTALS

Another factor contributing to the current boom: the fast-rising cost of luxurious rentals, said ­Janet Owen, a Berkshire Hathaway HomeServices Chicago agent. In recent years, snowbirds and other owners of multiple homes have often chosen to rent in Chicago, but recently “those who want to stay in the city have been stunned by high rental prices, so they are buying,” Owen said in an email.

That’s a byproduct of flat or slow-growing for-sale prices in the Gold Coast and other downtown neighborhoods.

If pace of luxury home sales keeps up, 2022 will end with

2021’s record in the dust.

But staying on pace is far from certain. With interest rates rising sharply in response to the Federal Reserve’s effort to curb inflation, and with recession clouds on the horizon, many agents say they expect sales to cool off.

An increase of 1 percentage point on a 30-year loan of $1 million boosts the monthly payment on the loan by about $550. Interest rates have gone up more than 2 percentage points so far this year and are expected to go higher.

“It makes a big enough difference in the payment,” said Joe Wright, a City & Field Real Estate agent. Since interest rates started their climb, he said, “I’ve had a few clients in that price point who’ve bowed out.”

HOUSE HUNTS

Others have accelerated their house hunt, hoping to land one before interest rates go even higher.

In early April, “right on the cusp of the interest rate increases,” Wright said, a five-bedroom house on Evergreen Street in Elmhurst came on the market at just under $1.28 million. Clients he was working with, who had been looking at homes for a while, “felt a little more pressure with rates going up” and put the house under contract three days after it went up for sale.

The transaction closed in June at the full asking price.

Pam MacPherson, an @properties Christie’s International Real Estate agent based in Winnetka, represented clients who bought a house in Glenview that wasn’t even in the million-dollar category until a bidding war broke out.

The five-bedroom house on Vantage Lane went up for sale April 28 with an asking price of $999,500. Her clients put it under contract four days later and bought the house June 30 for $1.12 million. They paid 12% more than the asking price.

MacPherson declined to comment on these particular buyers but said that in general, people shopping in the $1 million range “are being aggressive because they want to get in now, when they can go a little over budget, versus after rates go higher and the monthly payment is so much bigger.”

Wright, MacPherson and McCormick all said they expect the second half of the year to be slower in the luxury market as economic clouds gather—but to be clear, none of them said they expect it to be slow.

“Normal is what we expect,” MacPherson said. “It will look more like a normal market.”

7/8/22 3:34 PM

4 July 11, 2022 • CRAIN’S CHICAGO BUSINESS

Gun-rights shift proves it: The times are changing at Kirkland & Ellis The decision to drop Second Amendment cases reflects—and intensifies—a long-running cultural transformation at the Chicago-based legal giant

BY STEVEN R. STRAHLER It was only a matter of weeks after the stupefying mass shootings in Buffalo, N.Y., and Uvalde, Texas, in May that law firm Kirkland & Ellis announced it was dropping gun-rights cases, triggering an abrupt exit of two appellate lawyers fresh off a U.S. Supreme Court victory.

The reckoning for the firm, however, was longer in the making and reflects its steady transformation from a litigation-heavy bruiser reveling in its iconoclasm to one more attuned to its corporate clientele and battalions of younger lawyers in the liberal big cities where Kirkland has offices.

Kirkland, the top-grossing law firm, still retains controversial clients like e-cigarette maker Juul Labs, but over the past several decades it has focused more on deal-making transactional work that requires a more diplomatic approach.

Some 70% of Kirkland’s nearly 3,000 attorneys are junior lawyers, or “associates,” who are front and center sooner and in bigger numbers on deals than they are in major trials, and they increasingly have a say in where the firm goes and in its ability to recruit clients and colleagues. Nearly half of the firm’s associates are women, who comprise fewer than a third of Kirkland’s partners.

“The associates may be employees, but they don’t mind being very vocal in their opinion about the kinds of cases the firm takes on,” says Keith Wetmore, a legal recruiter who once ran law firm

Morrison & Foerster in California.

“Big-firm lawyers skew left, and they skew anti-gun.”

A senior Kirkland lawyer says opposition to working with clients like the National Rifle Association was particularly intense in the New York office, which has grown to 650 lawyers, rivaling the Chicago office as the firm’s biggest and reflecting a focus on private equity and other Wall Street clients.

ANGER IN NEW YORK

Kirkland’s representation of the NRA in a friend-of-the-court brief in the wake of the 2014 Sandy Hook school massacre hit close to home for New York lawyers. The senior Kirkland lawyer says anger abated with time but then erupted amid the Buffalo and Uvalde slaughters, as the firm represented an NRA affiliate in a successful challenge to a New York law limiting concealed-carry permits.

The lawyers on the case, Paul Clement and Erin Murphy, said the firm gave them an ultimatum to drop their Second Amendment clients or quit.

In a Wall Street Journal op-ed on June 23 titled, “The Law Firm that Got Tired of Winning,” they wrote: “We couldn’t abandon our clients simply because their positions are unpopular in some circles.

This isn’t the first time we have left a firm to stick by a client. What makes this circumstance different is that the firm approved our representation of these clients years ago, and dropping them would cost the clients years of institutional memory.”

In an example of the broader

blowback on Kirkland, the newspaper’s editorial page linked the affair to the culture wars. “Kirkland’s invertebrate abdication illustrates how progressive ideology dominates the commanding heights of American law, business and culture,” it proclaimed.

A little over a week later, at least seven people were killed and two dozen injured in the July 4 Highland Park massacre.

The NRA did not return messages seeking comment.

Another change that probably factored into Kirkland’s decision to forgo its Second Amendment work was the ascension of Jon Ballis, 53, who became chairman of the firm in 2020.

Ballis hasn’t put the brakes on Kirkland’s industry-leading performance, but he’s tried to take the hard edges off the firm’s reputation as a demanding employer that makes associates earn their $215,000 beginning salaries. His relationship with Jon Gray, president of asset manager Blackstone Group, a key Kirkland client, goes back to their days as basketball teammates at Highland Park High School.

Last year, Kirkland’s revenue of $6 billion led all law firms, comfortably ahead of Latham & Watkins’ and almost double No. 3 DLA Piper’s. Kirkland’s profit per equity partner was $7.4 million, a 19% increase, trailing only the more narrowly focused Wall Street firm Wachtell, Lipton, Rosen & Katz.

Much of Kirkland’s bonanza has been achieved by the highly leveraged nature of transactional work.

“They throw an army at each

Jon Ballis, left, and Paul Clement deal. They do have a really good due diligence process for how they get through it. But it is all young people,” says the CEO of a private-equity-owned Kirkland client. A lawyer who left Kirkland in 2019 estimates that transactional matters now account for about two times the revenue of litigation-related assignments.

In comparison, Supreme Court appellate work is prestigious but not populated with lots of lawyers and therefore not lucrative and perhaps not even profitable for a firm like Kirkland.

GOP LINKS

Long identified with Republican interests, Kirkland was well-represented in the Trump administration, having employed Bill Barr, former attorney general, former White House counsel Pat Cipollone and Alexander Acosta, who was labor secretary. Clement was solicitor general under President George W. Bush.

Another Kirkland alum is Jeffrey Clark, the Justice Department lawyer who pleaded the Fifth Amendment against self-incrimination before the Jan. 6 committee inves-

tigating the Capitol riot and efforts by then-President Trump to overturn results of the 2020 election, which included an alleged scheme to make Clark do his bidding as acting attorney general.

Kirkland acquired Clement’s boutique law firm and its gun-advocate clients in 2016.

“Clearly, Kirkland got comfortable with him doing (gun rights) cases at the outset,” says Wetmore, the legal recruiter, at Major, Lindsey & Africa.

But times—and Kirkland’s management and makeup—have changed.

“It doesn’t take a lot to read the room,” says Adam Skaggs, chief counsel for the gun-control advocate Giffords Law Center. “The public is really fed up with the ongoing gun-violence epidemic.”

Ballis, who did not return a call seeking comment, took the high road in a firm-issued statement: “Paul and Erin have been valued colleagues,” he said. “We wish them the best of luck in the future and we look forward to collaborating with them in the future in matters not involving the Second Amendment.”

Lightfoot’s Museum Campus group releases lakefront plan Lots of greenery, some transit improvements and maybe a Soldier Field dome—those are some of the ideas included in a new Museum Campus report

BY GREG HINZ Mayor Lori Lightfoot last week released the report of her Museum Campus Working Group, and it recommends the city consider putting a dome atop Soldier Field, but doesn’t say how the $1 billion-or-more cost would be funded or whether the move would be enough to keep the Chicago Bears in town.

Most of the report focuses on broad themes of better knitting together the Field Museum, Shedd Aquarium, Adler Planetarium, the former Meigs Field site and the aging football stadium in a more pedestrian-friendly

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and ecologically sensitive manner.

Among other things, the group proposes closing the music pavilion at the north end of Northerly Island and relocating it, possibly to the lawn between Soldier Field and the Field Museum. It also urges construction of a new pedestrian bridge to make access easier to Northerly Island, where Meigs used to be.

It also urges “adaptive reuse” of McCormick Place’s Lakeside Center without specifying a particular use; improved Chicago Transit Authority bus service to See SOLDIER FIELD on Page 7

A rendering of what Solidarity Drive would look like under a plan to redo Chicago’s Museum Campus.

7/8/22 2:38 PM

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6 July 11, 2022 • CRAIN’S CHICAGO BUSINESS

TECH TAKEAWAY

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What’s exciting at P33 now?

I’m living and breathing Tech Chicago Week, July 12 to 14. It’s my baby. I have always dreamed of Chicago having its own version of Austin’s South by Southwest. We will have inspirational speakers and exciting after-parties.

What was it like growing up in Haiti?

My parents are pastors and missionaries. Materially, we didn’t have much, but my brother and I had unconditional love, which has made me a very secure adult.

I played a lot of soccer and spent hours outside on the beach.

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Who’s on the program?

Naithan Jones, head of growth at Royal in Austin.

David Simas, former White House political director and president of the Obama Foundation, and Kristi Ross of Tastytrade, among others.

For the after-parties, we booked rapper Pusha T, DJ ­Commando and DJ Mike P.

Why did your parents move to Deerfield?

They had scholarships from their church to get their master’s degrees in theology.

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Cimeus, 24, a native of Haiti, recently was named director of platform for Chicago’s P33, a high-profile nonprofit launched in 2018 by Penny Pritzker and entrepreneur Chris Gladwin to boost Chicago’s reputation as a tech hub. He lives in the Northwest suburbs. By Laura Bianchi

Why did you choose tech?

I was always interested to learn how complex things are built. I was part of Haiti’s national robotics team when I was in fifth grade. It also felt like the industry was where I could make the most money the quickest.

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The documentary “Beyond the Glory—The Mark Cuban Story” truly changed everything for me. This guy went from lower-middle class to being a billionaire. That was a new concept for me, coming from Haiti, where people have no upward mobility.

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I told them I was inspired by their work and was looking to break into tech. Could we get together for coffee?

A guilty secret?

I’m a Chipotle addict. I spend between $200 and $300 a month there.

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CRAIN’S CHICAGO BUSINESS • July 11, 2022 7

Aon hack exposes personal data of nearly 146,000

BY STEVE DANIELS Aon is facing at least two lawsuits after disclosing a data breach that lasted well over a year and potentially exposed sensitive information affecting nearly 146,000 North American customers.

The world’s second-largest commercial insurance brokerage and a major human resources vendor filed notice in late May that 145,889 people were affected after hackers penetrated Aon systems “at various times” from Dec. 29, 2020, to Feb. 26, 2022.

The company—based in London but still with substantial operations in Chicago, where it used to be headquartered and whose name adorns one of the city’s tallest buildings—first disclosed the breach in a terse Securities & Exchange Commission filing in February. The more detailed notification came three months later on May 27.

Personal information exposed included driver’s license numbers, Social Security numbers and “in a small number of cases, benefits enrollment information,” Aon told affected individuals in letters sent after May 27.

“Aon has taken steps to confirm that the unauthorized third party no longer has access to the data

and Aon has no indication the unauthorized third party further copied, retained or shared any of the data,” the letters stated. “We have no reason to suspect your information has or will be misused.”

Aon offered those affected 24 months’ membership with a firm specializing in identity protection.

Those reassurances didn’t keep plaintiffs from filing lawsuits. Two complaints seeking class-action status were filed in recent days in federal court in Chicago.

One, filed by Florida resident Misty Williams, emphasized the irony that Aon is a specialist in cybersecurity insurance and protection for business clients. “Despite Aon’s proclaimed expertise in the area of cybersecurity and its acknowledgement of the risk that companies like itself and its clients face, Aon failed to detect an unauthorized intrusion into its systems for over a year,” according to the complaint filed June 29.

Read the complaint below.

SETTLEMENTS

Handling the lawsuit is Chicago attorney Gary Klinger, who specializes in class-action claims pertaining to data privacy. Among the settlements he’s negotiated is one this year with Chicago-based insurer Kemper for $17.6 million.

BLOOMBERG

The commercial insurance brokerage giant calls itself the ‘go-to cyber response team.’ But hackers breached its systems for well over a year.

“In addition to defendant’s failure to prevent the data breach, after discovering the breach, defendant waited several months to report it to affected individuals,” according to the complaint. “As a result of this delayed response, plaintiffs and class members had no idea their (personally identifiable information) had been compromised, and that they were, and continue to be, at significant risk of identity theft and various other forms of personal, social and financial harm. The risk will remain for their respective lifetimes.”

An Aon spokeswoman said the company doesn’t comment on pending litigation.

She said in an emailed statement that Aon hired an outside firm to do an investigation and promptly informed the FBI after learning of the breach.

“Our investigation is complete and we have concluded the pro-

cess of notifying those clients and individuals whose personal information was temporarily obtained,” spokeswoman Nadine Youssef said in the email. “The third-party investigation found no evidence that the information has been or will be misused.

Since the event occurred, we’ve implemented a series of controls designed to further strengthen existing safeguards and provided complimentary credit monitoring services for those individuals who have received notice.”

She added that the company wasn’t a ransomware victim and never lost control of its systems or paid to have them restored.

That’s in contrast to another major local insurance company that fell victim to computer hackers.

Chicago-based business insurer CNA Financial paid $40 million in March 2021 to regain access to its computer systems. About 75,000 clients had data exposed.

The number of companies around the country whose computers are hacked and have to report exposures of customer data is growing every day, but it’s arguably more embarrassing for firms whose core business includes insuring against such breaches or advising clients on how to protect themselves.

Aon is in the latter category.

“According to its website, Aon is the ‘go-to cyber response team,’ ” Williams’ complaint states. “Aon represents its extensive experience and preparedness in data security practices. (Quoting Aon’s website,) ‘We have been the go-to firm for organizations and their law firms in investigating 90% of the highest profile breaches in the last decade. This experience, together with our advanced threat intelligence capabilities, means we know the latest attack vectors, how cyberattacks are perpetrated, and how to stop them.’ ”

SOLDIER FIELD from Page 4 the campus; and restoring a trolley or mini-bus for internal circulation, as well as increased use of an improved Cermak Road to get visitors to the campus.

However, there is no proposal for rail access of the type that developer Bob Dunn has pitched for his proposed One Central development nearby, though the report says internal busways could be converted to a higher-capacity system later and that a pedestrian bridge should be built over Metra tracks.

In one proposal that could ruffle some feathers, the report urges creating a centralized governance group for the campus.

That could irk institutions that are used to running their own affairs.

At Soldier Field, the report recommends major investments in improved seating, concourses and support facilities such as rest­rooms.

And, it says, “To better utilize

P007_CCB_20220711.indd 7

Soldier Field year-round, the city should also explore the feasibility of enclosing the stadium.”

There is one wording change from a previously reported draft report, which suggested there is no way a dome would pay for itself and that it would have to be subsidized by taxpayers. Instead, says the report’s final version: “Although enclosing Soldier Field would incuPersonal data of nearly 146,000 exposed in Aon hackr significant investment, further analysis is required to fully understand the specific costs, the potential direct and indirect economic impacts, and the full range of potential funding sources available to determine options that are respectful to Chicago taxpayers.”

In a statement, Lightfoot gave no specifics on when and how these suggestions might be implemented but said the report “has provided us with a useful framework to guide that work, as well as to enhance the campus overall.”

BLOOMBERG

Museum Campus plan envisions lots of greenery, some transit improvements

The proposal includes relocating the music pavilion from the north end of Northerly Island and building a pedestrian bridge to the island.

7/8/22 2:41 PM

8 July 11, 2022 • CRAIN’S CHICAGO BUSINESS

In vitro fertilization providers wary of shifting abortion laws

BY JON ASPLUND When the U.S. Supreme Court overturned Roe v. Wade last month, it didn’t affect only people who might want to terminate a pregnancy. It also has those who are trying to have a child through in vitro fertilization, or IVF, fearing that states might regulate their efforts and their eggs.

Through IVF, some of a woman’s eggs are surgically removed from the ovary and mixed with sperm outside the body.

“After about 40 hours, the eggs are examined to see if they have become fertilized by the sperm and are dividing into cells,” the Society for Assistive Reproductive Technology explains. “These fertilized eggs (embryos) are then placed in the women’s uterus, thus bypassing the fallopian tubes.”

The legal status of the fertilized eggs, many of which are not immediately implanted in a patient, is what’s called into question with the overturning of Roe.

PATIENT CONCERNS

Since early May, after a leaked draft of the high court’s abortion opinion came out, IVF provider Kindbody has fielded numerous calls from patients who are concerned with how they should proceed, “particularly with embryos they already had frozen,” said Dr. Angeline Beltsos, CEO, Clinical, of Kindbody. Beltsos was founder

and chief medical officer of Chicago-based network Vios Fertility Institute, which Kindbody acquired in early 2022.

“Let’s say we have a family, and this hypothetical family has five embryos,” she said. “Once they have, say, two children, what do they do with the remaining embryos?”

She said that right now, families freeze them, donate them, offer them up for use in research or quality control, or they have them discarded.

“But as anti-abortion laws begin to touch on IVF,” Beltsos said, “the question becomes what is your obligation to those eggs?”

“If embryo destruction is outlawed, this will have tremendous ramifications for not only the tens of thousands of embryos—and the families who have created those embryos through careful decision-making between the physician and patient—but importantly will have ramifications for the future practice of IVF and the hundreds of thousands of Americans who rely on this technology to build their families,” Dr. Kara Goldman, medical director of fertility preservation at Northwestern Medicine said in a statement June 29.

“Right now, there’s a lot of confusion and panic, but current legal language, in most states, is very clearly about abortions, and exclusive of IVF,” said Judith Daar, the Ambassador Patricia L. Her-

bold dean and professor of law at Northern Kentucky University.

Daar spoke recently at an American Society for Reproductive Medicine town hall discussion on the court decision.

But people are right to be concerned about regulations on fertilization and statutes, such as Oklahoma’s recently passed HB4327.

The Oklahoma law is worded to make abortion illegal “from the moment of conception,” stating that life begins at fertilization.

“It is not inconceivable that a prosecutor would pursue criminal charges for damage to a fertilized egg that has been harmed and has legal personhood,” Daar said.

“It’s the issue of personhood that puts IVF clearly into focus,” says ASRM President Dr. Marcelle Cedars, an IVF doctor in San Francisco. “The legal status of fertilized eggs made in the lab touches directly on IVF work, she said.

ASRM on June 29 published a report on the impact of state trigger laws on fertility treatment.

Personhood, Daar explained, would be established by a state statute that conveys full rights to a fertilized egg, so that, “therefore, anyone involved in creating a fertilized egg through IVF could be subject to penalty if harm comes to that egg. Freezing would likely be considered harm.”

At Kindbody, which has clinics both in Chicago and in many states that have outlawed, or are

GETTY IMAGES

Will ‘personhood’ also apply to eggs fertilized outside of the womb?

likely to outlaw, abortion, “we’re going to be asking ourselves, ‘what is the liability we face under these new laws?’ “ Beltsos said. “So, we will have to be respectful and follow the laws. But it’s terrifying for a provider that they could be put into harm’s way by a new law.”

ADDED BURDENS

The costs will also be real, not just emotional, she said. The time providers spend on legal considerations will increase dramatically, Beltsos said. And prospective parents in many states will have an increased burden, as Beltsos expects to see a lot more out-ofstate patients.

It is not inconceivable that laws will require the costly movement of eggs, sperm and embryos, and people will also have to travel across state lines to get the care they need and deserve, she said.

“We take our responsibility very seriously,” Beltsos said. “You don’t get into this job lightly. And I don’t need this law to remind me of it.”

Should neighboring states enact regulations on IVF, Daar

agreed that Illinois will certainly see fertility tourism, both because its laws are unlikely to target IVF and because it has always been an IVF-friendly state. For example, Illinois requires health insurers to cover fertility treatments for residents of the state.

The ASRM trigger law report looks at 13 states that have “trigger laws” that would ban abortion. The report touches on two states that border Illinois: Missouri and Kentucky.

Missouri’s Right to Life of the Unborn Child Act does not appear to be applicable to IVF, the report said, as it deals with “everything after the moment of conception” but defines abortion as the act of prescribing or using any means with the intent of destroying the life of an embryo or fetus in its mother’s womb.

Kentucky’s statute doesn’t seem to affect IVF, particularly because its Human Life Protection Act “only criminalizes activities performed upon a pregnant woman with the specific intent of causing or abetting the termination.”

For states, abortion law becomes ‘an unpainted canvas’

BY JON ASPLUND

The legislative and legal battleground that is abortion has changed dramatically with the recent U.S. Supreme Court decision that handed back issues of reproductive rights to the 50 states.

With Illinois poised to become an island where abortion is legal, surrounded by anti-abortion states, the issue of cross-border abortions will quickly come to the fore, said Peter Breen, vice president and senior counsel at the Thomas More Society, a Chicago-based law firm that takes up religious issues.

“Red states,” those that will immediately outlaw most abortions, “will consider unborn children to be residents of their state,” Breen said. “The immediate question will become. ‘How do we protect young Missourians, young Iowans, from being taken over the border to Illinois and being killed?’ ” Travel bans are already being considered. Earlier this year, Missouri state legislators introduced, then dropped, a clause in legislation that restricted women’s abil-

P008_CCB_20220711.indd 8

ity to end a pregnancy in another state.

The issue is sure to generate a lot of legislation and litigation, Breen said, predicting it will be similar to adoption laws, in which states of origin have something to say about a child taken out of state to be adopted.

After a 50-year hiatus in major state-level abortion lawmaking, the decision creates “a whole new area of law,” Breen said.

For Thomas More lawyers, a shift will be made from the federal level, mostly representing abortion protesters with First Amendment claims, to being more active on the state level, Breen said.

“We get a lot more familiar with 50 states’ legislatures, constitutions and laws,” he said. “And for a time, we’ll be much more involved in advising state legislators. It’s an unpainted canvas.”

“It’s going to take folks in the legal community and the public a little while to change their way of thinking about the status of unborn children,” Breen said. “For 50 years we’ve thought about (abor-

tion) as a constitutional right and a medical procedure. Now we’ve moved in just one day to where, in some states, abortion will be akin to murder.”

‘PERSONHOOD’

Along with a host of “proposals we haven’t really thought of yet,” the issue of fetal personhood, which could be used to outlaw terminating a fetus, will also be legislated and litigated.

“Personhood of unborn children is a logical step in the progression,” said Harry Mihet, chief litigation counsel with Florida-based conservative Christian law firm Liberty Counsel. “It remains to be seen in future litigation whether or not an unborn child is a legal person and whether or not an abortion doctor has a right to kill. Illinois, with its pro-abortion policy, will be out on the front lines of this.”

From inside Illinois, on the proabortion-rights side, nothing immediately changes, said Ameri Klafeta, director of the women’s and reproductive rights project at the ACLU of Illinois.

“Abortion is legal. We prepared Illinois for this, and we’re going to

BLOOMBERG

Travel bans are already being considered in some

fight to keep it legal and accessible,” she said.

Klafeta said she knows the anti-abortion playbook will be to try to restrict women’s right to travel for an abortion and that in-state providers may be targeted by outof-state laws, although “ordinarily, you’ve got a right to travel to another state.”

“Even Justice Kavanaugh recognized you have a right to move out of state,” Klafeta said, referring to Supreme Court Justice Brett Kavanaugh’s concurring opinion, in which he said he doesn’t believe

the decision limits a person’s right to travel to get an abortion.

However, she called it “ridiculous and cruel if Kavanaugh’s point was “an attempt to excuse banning abortion in one state, because you can travel to another.”

Illinois Right to Life Executive Director Amy Gehrke also expects little to change on the day-to-day front, except there will be more abortions in Illinois.

“Illinois has a pro-choice supermajority, so at this moment the pro-life movement is very much on the defense,” Gehrke said.

7/8/22 2:42 PM

CRAIN’S CHICAGO BUSINESS • July 11, 2022 9

Physicians Immediate Care acquired by Illinois rival The company, one of Chicago’s most recognizable urgent care brands, has been purchased by WellNow Urgent Care, a division of Chicago-based TAG—The Aspen Group One of Chicago’s most recognizable urgent care brands is being scooped up by a local competitor in a move that they say will make them among the largest independent urgent care providers in the area.

Rosemont-based Physicians Immediate Care has been acquired by WellNow Urgent Care, a division of Chicago-based TAG— The Aspen Group. The deal, which closed July 1, brings the combined companies’ footprint to 183 centers across New York, Illinois, Ohio, Indiana, Michigan and Wisconsin, says WellNow President Dr. John Radford. He declined to disclose the purchase price.

Physicians Immediate Care, which has operated in the Chicago area since 1987, had 55 locations throughout Illinois, Indiana and Wisconsin, about 45 of which are in Illinois. Like WellNow, Physicians Immediate Care provides care for common illnesses like COVID-19, strep throat and the flu.

“Over the years, they’ve built

quite a brand and quite a following in the Illinois area, doing a lot of occupational medicine and urgent care,” Radford says.

HIRING PLANS

Combined, the companies will employ 3,850 people. Radford says there are no plans for layoffs as result of the merger—and is planning to hire more. The company is focused on filling open roles as the health care labor shortage drags on. WellNow is looking for nursing and physician talent, Radford says.

WellNow opened its first urgent care center in Big Flats, N.Y., in 2012 before being acquired

by TAG in 2016. Since then, it’s opened new centers, targeting rural areas, but has also expanded through several acquisitions. In 2018, WellNow purchased Mash Urgent Care, and later acquired Hometown Urgent Care & Occupational Health in 2020 and Primary Urgent Care this year.

WellNow accepts most major insurances, including Medicare and Medicaid. The company also has a partnership with Sezzle, a Min-

GOOGLE

BY KATHERINE DAVIS

neapolis fintech company offering payment installations for self-pay patients. Sezzle will be offered at Physicians Immediate Care locations now, too, Radford says.

The companies’ parent company, TAG, operates other health care brands, such as Aspen Dental, ClearChoice Dental Implant Centers and Chapter Aesthetic

Studio. Combined, the brands serve more than 35,000 patients a day and more than 8 million patients each year.

RISING REVENUE

Founder, CEO and Chairman Bob Fontana told Crain’s this year that TAG saw revenue double to $3 billion in 2021 and was gearing

up to open 100 more locations in 2022. TAG has taken private-equity investment from the likes of Ares Management, Leonard Green & Partners and American Securities.

In 2017, TAG moved its headquarters to Chicago and now has a 200,000-square-foot office in Fulton Market.

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7/8/22 2:43 PM

10 July 11, 2022 • CRAIN’S CHICAGO BUSINESS

EDITORIAL

Lakefront plan has merit—but not for the Bears

DAVID BURK

I

t’s possible to look at the Lightfoot administration’s proposal to revamp the Museum Campus via two separate lenses. Through one lens, it’s too little, too late. Though another, it’s a promising set of ideas that could create new, greener public space that’s more accessible for the entire city.

As for the first lens: If the plan is designed to keep the Chicago Bears from abandoning their longtime lakefront home in favor of a shiny new stadium in Arlington Heights, then it appears to be a few yards short of a touchdown.

Mayor Lori Lightfoot’s Museum Campus Working Group on July 7 unveiled recommendations that include putting a dome atop Soldier Field, likely a $1 billion-or-more endeavor, though the group offered no details about how such a structure would be funded. The report also observed that seating, concourses, restrooms and other amenities at the stadium are in line for some major upgrades. “To better utilize Soldier Field year-round,” the report stated, “the city should also explore the feasibility of enclosing the stadium.”

As Crain’s Greg Hinz noted, there was one wording change from the previously reported draft of the group’s recommendations, which suggested there is no way a dome would pay for itself and that it would have to be subsidized by taxpayers. Instead, says the report’s final version: “Although enclosing Soldier Field would incur significant investment, further analysis is required to fully understand the specific costs, the potential direct and indirect economic impacts, and

the full range of potential funding sources available to determine options that are respectful to Chicago taxpayers.”

A few hours after the group’s final recommendations were released, the Bears issued a cautious, carefully crafted statement: “The only potential project the Chicago Bears are exploring for new stadium development is Arlington Park. As part of our mutual agreement with the seller of that property, we are not pursuing alternative stadium deals or sites, including renovations to Soldier Field while we are under contract. We have informed the city of Chicago that we intend to honor our contractual commitments as we continue our due diligence and predevel-

opment activities on the Arlington Heights property.”

As formal statements go, this one seems to offer very little hope that the Bears would finagle their way out of their Arlington Park deal even if they wanted to. So it’s probably safe to say any Soldier Field redo is a nonstarter for the Bears—and, if that’s the case, there’s little reason to erect a costly dome over a gussied-up Soldier Field. If the Bears could have been persuaded to stay, Lightfoot seems to have missed her chance. Spending money on a dome now would be throwing good money after bad.

There is, however, another way to look at her working group’s broader vision for the

Museum Campus. Setting the Bears aside, the ideas being floated for the rest of the lakefront space have merit—though the administration will have to answer some tough questions about how to pay for it all. Among other things, the working group proposes “rewilding” Northerly Island, where Meigs Field used to be, by relocating the music pavilion on the island’s north end, possibly to the lawn between Soldier Field and the Field Museum. The report also suggests construction of a new pedestrian bridge to ease access to Northerly Island which, if reshaped as the working group imagines it, could become a rare space along Chicago’s downtown lakefront where one could sit and enjoy some native greenery and waterfront vistas without the roar of Lake Shore Drive in the background.

Other interesting ideas in the report: improving bike paths, restoring a trolley or mini-bus for internal circulation, creating a Great Lakes Climate Lab to be centered on Northerly Island and expanding water taxi service to the area. The report also calls for “adaptive reuse” of Lakeside Center at McCormick Place, though few details of what that means are on offer just yet.

All in all, what Lightfoot & Co. have put on the table is a promising set of proposals that are worth exploring even if the Bears won’t be at the middle of it all. Would these ideas have made a difference to the Bears if they had come up sooner? Probably not. But that doesn’t mean the rest of us can’t benefit from some of the proposals to create a greener, easier-to-access and livelier Museum Campus.

Chicago firms not ready for pay transparency laws

P

sistency are key. Too often, employers wait until the moment pay disclosure laws go into effect to begin the hard work of assessing ranges and gaps. They are unprepared for the reverse domino effect that comes with mandated pay transparency and the inevitable questions that will arise from their current workforce who see these newly disclosed pay ranges.

What can employers do now to meet the challenge of greater transparency?

Be proactive. Getting pay right is complex and cannot be achieved overnight.

The sooner you start, the better. Ensure your pay practices and salary ranges are consistent internally. Run a comprehensive pay analysis now that will help you identify pay gaps and what is causing them and fix them. It’s one of the most cost-effective ways to show you value your employees and are serious about creating a strong company culture. According to research from Gartner, not closing pay gaps increases the costs by as much as $500,000 a year for the average employer.

Get ready on your pay scale. Employers must use a mix of market data and their own internal pay policies to determine the

Write us: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited. Send letters to Crain’s Chicago Business, 130 E. Randolph St., Suite 3200, Chicago, IL 60601, or email us at letters@chicagobusiness.com.

Please include your full name, the city from which you’re writing and a phone number for fact-checking purposes.

P010-P011_CCB_20220711.indd 10

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YOUR VIEW

country. But some experts think ay transparency laws are that since starting pay is the sinone of the biggest trends gle most significant factor in any across the country, and pay equity analysis, if passed, Chicago could be next. Alds. this ordinance could help preGilbert Villegas, 36th, and Danvent pay gaps before they start. iel La Spata, 1st, proposed an Chicago employers are not ordinance that would require facing this trend alone. Six jucity employers to include a salrisdictions now require that emary scale in their job postings or ployers include the pay range face a fine of $500 to $1,000.

Maria Colacurcio is in job postings, similar to the The ordinance is currently in CEO of Syndio, a committee and there’s no up- maker of software proposed Chicago ordinance.

These laws cover major cities date on when it’ll be voted on. to determine pay including New York, Denver and Regardless, this is a rapidly ac- and opportunity Seattle. States including Califorcelerating trend fueled by leg- equity within a nia and Massachusetts are also islators, employees and institu- company. considering similar legislation. tional investors. Pay scale laws are passing this year at a rate of one law In addition, eight jurisdictions already reper month, employees are publicly shar- quire that employers provide pay scale ining pay information with each other, and formation at some point in the hiring prolast month Microsoft announced, to much cess or at the applicant’s request.

So, from our vantage point, working with fanfare, that it is taking steps to publicly disclose salary ranges in all internal and employers across the country who are already neck deep in complying with these external job postings across the U.S. I fear many Chicago employers are woe- rules: If you are a Chicago employer, do fully unprepared for this monumental not wait. Prepare now.

When it comes to getting pay transparchange. The city currently has a $12,000 gender pay gap, among the highest in the ency right, preparation, planning and con-

Er re an a tio 25 th sa Li pa

accurate pay range for each position and make sure it’s right on every applicable job posting.

Look closely at your internal communications strategy. Given the direct link between pay transparency and employee retention, it is extremely risky to start posting salary ranges without establishing fair and equitable pay in your workforce. Current employees will be able to see what new employees are making. If you’re not paying your current employees equitably, you will face major blowback and risk losing talent. If incumbent employees ask questions about their placement in the ranges after seeing a job posting for a similar position on the internet, managers must be prepared to answer. It is critical that employers use this time to prepare internally.

An ambitious pay transparency strategy should be on every employer’s 2022 roadmap—even more so for Chicago employers who may soon face a mandate of transparency. The risk of getting this wrong could be enormous in recruiting and retention costs, as well as potential fines. If you haven’t started assessing pay internally, there’s no time to waste.

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.

7/8/22 2:49 PM

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CRAIN’S CHICAGO BUSINESS • July 11, 2022 11

YOUR VIEW

Lawmakers, pass this bill so Illinois is ready in a post-Roe world

Eric Bergman is a registered nurse and speaker. He is a leader in a coalition of more than 25 organizations that support passage of the Nurse Licensure Compact in Illinois.

Thanks to the foresight and planning of the Democratic Party in Illinois and the leadership of many prochoice organizations, Illinois will now be a haven for reproductive health care surrounded by states with restrictive laws. But as Gov. J.B. Pritzker pointed out recently, “We’re going to need to expand capacity in our state.

We’re going to need to make sure that we have the health care personnel” to manage the influx of patients.

It has already been widely reported that there is likely to be a threefold increase in travel to Illinois by women seeking safe, legal reproductive services. Planned Parenthood, Pritzker

and others are rightly concerned that Illinois’ reproductive health providers might be overwhelmed.

Fortunately, one important solution is already positioned in the Legislature. HB4269, the Nurse Licensure Compact, could be rapidly passed and signed by the governor in a matter of weeks. Every state bordering Illinois is already a compact state. Illinois should join the compact during the expected special legislative session. Then nurses who are currently providing services in bordering states could seamlessly begin to practice in Illinois by traveling for temporary assignments to support

Illinois clinics as their clinics are closed.

The Nurse Licensure Compact is not some hastily composed stop gap, but rather a tested and effective program to improve the movement and regulation of nurses across state lines. It is already in place in 38 states and has proven effective in supporting safe, well-regulated movement and care by nurses across state lines.

The nurses’ licenses would be like licenses allowing drivers in any state to drive in all other states on the strength of their home state license.

Similarly, the Nurse License Compact sets strict standards and creates

cross-border reporting. Only properly licensed and fit nurses can practice nursing in the compact states.

Unlike emergency orders waiving sensible rules about licensing and regulation, the compact will maintain protection, such as required background checks and reporting of violations to maintain public safety.

During the upcoming special session, the legislators should act to pass HB4269 and get it to the governor’s desk so Illinois can guarantee safe, effective legal guidelines for rapidly increasing the available nurses for our reproductive health providers.

CRAIN’S CHICAGO BUSINESS

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12 July 11, 2022 • CRAIN’S CHICAGO BUSINESS

BMO Tower developer plans West Loop apartment building

BY DANNY ECKER After completing an office skyscraper next to Union Station, John O’Donnell is joining the crowd of real estate developers planning apartment buildings in the West Loop.

The CEO of Chicago-based Riverside Investment & Development is teaming with Chicago-­ based Blue Star Properties to co-develop a 14-story, 198-unit apartment building at 566 W. Van Buren St., according to a public notice from downtown Ald. Brendan Reilly, 42nd. The project is slated for the northeast corner of Van Buren and Jefferson streets, which is currently home to a surface parking lot and a pair of two-story retail buildings.

The plan adds to a wild run of apartment projects proposed in the West Loop. Amid an onslaught of demand that has pushed rents to record highs, developers are planning more than 9,000 apartments in the West

Loop, or more than the total for all other downtown neighborhoods combined. The apartment sector has been one of the few bright spots of the downtown commercial real estate market during the COVID-19 pandemic, while offices, hotels and retail properties have mostly struggled to recover.

IN THE NEIGHBORHOOD

Riverside, which is best known for glassy office towers, is coming to the residential party with a site one block west of BMO Tower, the recently completed 50-story building at 320 S. Canal St. It’s also just two blocks from the redeveloped Old Post Office, which in recent years anchored a renaissance of the historically sleepy southwest corner of the Loop.

“Right now, the product of the moment is residential,” said O’Donnell, who estimates there could be daily traffic of around 22,000 people inside BMO Tower and the Old Post Office com-

bined when they are full. He is still in the process of securing construction financing for the $80 million to $90 million project, but he aims to break ground late this year with a plan to complete it by early 2024.

Riverside and Blue Star Properties, which is led by local commercial real estate veteran Craig Golden, can move forward with their project without Reilly’s formal approval because the building is allowed under the site’s existing zoning rights, the alderman said in the notice.

The project is being designed by architecture firm Antunovich Associates and will include 2,500 square feet of ground-floor retail space, 76 accessory parking spaces, 99 bicycle parking spaces, a private dog run and a rooftop pool deck, according to Reilly’s notice.

O’Donnell said he thinks it will be difficult to build office buildings for the next few years—”certainly not the kind that we would

ANTUNOVICH ASSOCIATES

Riverside teaming with Blue Star to add to the pile of residential projects being planned in the neighborhood as apartment rents hit record highs

A rendering of the apartment building planned at 566 W. Van Buren St. normally want to do”—amid the current soft leasing landscape and with financing getting more expensive. But he remains bullish on Chicago and is planning to dive deeper into residential development while demand remains strong. The firm previously developed a 112-unit apartment building at 847 Chicago Ave. in Evanston.

OTHER PROJECTS

BMO Tower was Riverside’s third major downtown office skyscraper in recent years. The firm also co-developed the office tower at 110 N. Wacker Drive— which was recently sold to a ven-

ture led by investor Tim Callahan in a deal that valued the property at more than $1 billion—and completed the office tower at 150 N. Riverside Plaza in 2017.

Blue Star has invested heavily in the southwest corner of the Loop and owns the office building at 328 S. Jefferson St., across the street from the proposed apartment site. Golden is also co-founder of 16” on Center, the group that recently opened a new food hall inside the Old Post Office. Golden’s group is also teaming with Chicago developer R2 to build the Salt Shed, a music and performance venue in the former Morton Salt warehouse.

Recovery underway for city’s biggest parking garage But it’s far from complete for Millennium Garages

After being crushed by the COVID-19 pandemic in 2020, the biggest parking garage in Chicago bounced back last year, but it still lost nearly $11 million.

Millennium Garages, the international venture that controls the garages under Millennium, Maggie Daley and Grant parks, generated revenue of $22.0 million last year, up 35% from 2020, according to an annual report filed with the city. Parking revenue rebounded as more tourists and other visitors drove downtown, a trend that has continued this year, said Millennium Garages CEO Rick West.

“We’re actually feeling very good,” he said. “Every quarter is better.”

Business couldn’t get any worse than it was in spring 2020, when the garages emptied out as office workers and tourists stayed home in the early months of the pandemic. It got so bad that the investors in the venture—Toronto-based Northleaf Capital Partners and AMP Capital of Sydney, Australia—injected $16.7 million in the property in 2020 and 2021 to shore up its balance sheet.

Revenue plunged 53%, to $16.2 million.

Though the garages stabilized in 2021, they didn’t come close to recovering what they lost during the pandemic. Millennium Garages reported a net loss of $10.8

P012_CCB_20220711.indd 12

million last year, versus a $15.3 million loss in 2020. The venture reported small losses in 2019 and 2018 and a slim profit in 2017.

Encompassing 3.8 million square feet and 9,176 parking spaces, Millennium Garages is the largest underground parking system in North America. The city of Chicago owns the garages, but the Northleaf-AMP venture controls them through a concession with the city.

Filling up all those spaces was a struggle even before the pandemic, with more people using ride-hailing services like Uber to get around town. But parking volume fell almost as low as 1,000 cars per day in 2020 as commuters worked from home and tourism evaporated.

BIG EVENTS

The garages have been profitable in recent months, lifted primarily by big downtown events, West said. Some events bring in as many as 6,000 cars per day, while others, like the Bank of America Shamrock Shuffle in March, have drawn more than 8,000, West said.

The problem is that many downtown professionals continue to work remote or hybrid schedules. Workers who might have parked in the garages five days a week before the pandemic drive in to the office only two or three days now.

“It’s still the commuter that

STEPHEN J. SERIO

BY ALBY GALLUN

Filling up all those spaces was a struggle even before the pandemic, with more people using ride-hailing services like Uber to get around town. we’re missing,” West said. “The leisure and tourist part is back.”

West also cautioned that the garages’ recent revenues look bigger than they actually were because they include an extra parking tax that the state imposed in early 2020. Millennium Garages reported revenue of $34.8 million in 2019; including the tax, revenue would have totaled $36.7 million, he said.

Because the garages burned through so much cash during the pandemic, Northleaf and AMP arranged an additional $8.7 million

equity investment to pay the bills and cover debt payments in 2020, followed by another $8 million cash infusion in 2021. With the garages on firmer financial footing today, the venture is generating enough operating cash flow that it hasn’t needed to tap into the second $8 million, West said.

“We’re building cash,” West said.

CHALLENGES

Making money on the lakefront garages has been a challenge since 2006, when the city

sold the concession for them for $563 million to an investor group led by Morgan Stanley. The venture defaulted on the debt used to finance the transaction and a lender took over the garages in 2014. It sold the concession for $370 million in 2016 to Northleaf and AMP, which financed the deal with $205 million in debt.

But the garages have had just one year in the black since the city sold the concession: in 2017, when the Northleaf-AMP venture reported net income of $806.2 million.

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CRAIN’S CHICAGO BUSINESS • July 11, 2022 13

Rivian has transformed Bloomington-Normal into an Illinois boomtown college town about 130 miles south of Chicago for jobs on the cutting edge of auto manufacturing and needed places to live.

“Rivian caught the Bloomington-­ Normal housing market by surprise,” says Fruin, of Coldwell Banker Real Estate Group. The number of homes available is about 70, compared with about 700 in a normal market.

Rivian, which had fewer than 1,000 employees in the area 18 months ago, has since become its second-largest employer, after Bloomington-based insurer State Farm.

As a result of Rivian’s growth, Bloomington-Normal was the first metro area in the state to rebound to its pre-pandemic employment levels, says Sarah Crane, senior economist at Moody’s Analytics.

From February through March, Bloomington-Normal had the fastest job growth in Illinois.

She notices the new license plates. “Before you would see some from Texas or Arizona because of State Farm. Now they’re from California and Canada.”

Builders are scrambling to meet demand for housing. The number of construction permits for new homes issued in Bloomington through May this year rose to 49 from 26 during the same period a year earlier. Apartments in downtown Bloomington have filled up, says Goeckner, the bakery owner.

“There are a lot of fresh faces, new people stopping in.”

“It’s a good thing for us,” says Lynn Fulton, president of OSF’s St. Joseph Medical Center in Bloomington. “It’s bringing new people to town, rejuvenating economic development, which is hard to do downstate.”

She sees the impact in her own neighborhood: “Two houses recently went up for sale. Both sold within 48 hours. “When I moved here 4½ years ago, there were lots of houses to look at.”

Businesses are raising wages to compete for workers. Rivian starts off manufacturing workers at $20 an hour, more than most other similar employers nearby.

“You always hear, ‘We just lost another one to Rivian,’” says Bill Montes, a vice president at staffing firm Talent Management Professionals. “They’re losing them from every industry, not just light industrial. It’s good and bad.”

A TIMELY LIFT

Bloomington-Normal, the seventh-largest metro area in the state, had been struggling prior to the pandemic. Employment in the area peaked at 96,400 jobs in May 2015 before Mitsubishi closed. The plant, opened in 1988, once employed about 3,100 employees. It was down to about 1,100 workers when it closed. State Farm also began shedding jobs.

The insurer is hiring again, and candy maker Ferrero is adding 200 jobs over the next four years at its factory in Bloomington. But all eyes have been on Rivian, which paid $16 million for the 2.6 million-square-foot factory and has

P013_CCB_20220711.indd 13

BLOOMBERG

RIVIAN from Page 3

A Rivian R1T electric pickup truck moves through the company’s manufacturing facility in Normal. been expanding it.

“Initially they said they’d be happy to fill one-third of the plant,” says Hoban of the Bloomington-Normal Economic Development Council.

A developer is doubling a long-underutilized warehouse to 1 million square feet for Rivian.

The company has created about 2,000 construction jobs in addition to the 6,000 jobs at its manufacturing plant, Hoban estimates. Suppliers now are looking for space, too, though none has announced plans and Hoban declines to identify prospects he’s talked to. “You’ll see suppliers opening their doors this year that will add 5,000 jobs,” he says.

The state has its eye on an even bigger prize: A new plant to make batteries for electric vehicles.

Pritzker says the state is still in the hunt for a major battery manufacturing facility.

New jobs are the best hope to reverse a 3% population decline since 2013 to 186,230 last year. The outflow of people already shows signs of slowing, based on credit-card data, Crane of Moody’s Analytics says.

Bloomington-Normal is best known as a college town because it’s home to Illinois State and Illinois Wesleyan universities. But manufacturing is an important part of the economy, too. An automaker seems an unlikely economic savior in an area that has been suffering manufacturing job losses for decades. “(Rivian) is good news for central Illinois, which has really suffered from years of population losses, decline in manufacturing and the state’s fiscal problems,” Crane says.

“To have a high-tech, high-value-added employer coming in will put it on a stronger trajectory.

The labor force is recovering more quickly than the rest of the state.

The labor market is really tight.”

The growth was hard to see,

at first, even as Rivian employee shuttle buses showed up at hotels around town. The hiring didn’t show up in the data until the Bureau of Labor Statistics revised its jobs count in March.

Heartland Community College created an EV manufacturing-training and apprenticeship program involving maintenance of high-volt-

age batteries that launched a year ago. The apprenticeship program, which has about 25 students, is expected to double enrollment.

Rivian is now building another plant in Georgia that’s expected to employ 7,500 workers. The company is getting an estimated $1.5 billion in tax breaks to build the new factory. That makes the

Normal deal looks like a bargain: Illinois offered Rivian $50 million in incentives, while local governments gave up just $2.4 million in property taxes in a deal that ended last year.

“The plant was within two days of being sold for scrap metal,” says state Rep. Dan Brady, R-Bloomington.

7/8/22 3:33 PM

14 July 11, 2022 • CRAIN’S CHICAGO BUSINESS

Edward-Elmhurst Health forms single medical group Some 650 health care providers come under one umbrella Edward-Elmhurst Health has formed a single medical group with more that 650 clinicians, bringing together physicians, advanced practice providers, social workers, dietitians and other providers under one name, Edward-­ Elmhurst Medical Group, or EEMG. The medical group, made up of numerous doctors’ practices that have been affiliated with Edward Hospital in Naperville and Elmhurst Hospital, will now market itself as one entity, making it one of the larger medical groups in the Chicago area.

One of the larger groups of employed physicians that make up the new medical group is the former Elmhurst Clinic, which became part of EEMG on July 1. Elmhurst Clinic, made up of 108 physicians and 15 advanced practice providers began with six physicians in 1952, a statement from Edward-Elmhurst Health said.

“The message to our patients is that while our name is chang-

EDWARD-ELMHURST HEALTH

BH JON ASPLUND

Edward Hospital in Naperville, left, and Elmhurst Hospital. ing, the same high-quality, exceptional care they have come to expect will not change,” Dr. ­Daniel Sullivan, co-chief physician executive at NorthShore— Edward-Elmhurst Health said in a press release. “We are extremely proud of the care this collective group provides to our communities each day. That includes providing preventive care by our primary care providers, acute inpatient care from our hospitalists and specialized care for the sickest of patients.”

Altogether, the medical group will have nearly 400 physicians in 50 locations in Cook, DuPage,

DeKalb, Kane, Kendall and Will counties.

COMMON GOAL

The DuPage County-based ­Edward-Elmhurst Health merged in January with Evanston-based NorthShore University Health System. The system is composed of north, NorthShore-based and south, Edward-Elmhurst-based regions. The components of the system, however, have their own medical groups, Sullivan said in an emailed statement.

“While Edward-­Elmhurst Health, NorthShore Legacy, Northwest Community Health-

care and Swedish Hospital maintain separate medical groups, strategic and operational leadership teams from the four entities are working toward alignment of a common platform and strategy,” Sullivan said in the statement. “There is a desire by all of us to move in the same direction with the same purpose to achieve success across the medical groups.”

In Crain’s ranking of largest physician groups of 2021, Edward-Elmhurst Medical Groups all combined had net revenue of $221.2 million in fiscal year 2021 and 411 physicians, rank-

ing 13th on the list. The top five physician groups were Downers Grove-based Advocate Medical Group with net revenue of $1,505 million and 1,752 doctors; Downers Grove-based Duly Health & Care, formerly DuPage Medical Group, with $1,400 million in revenue and 1,020 physicians; Northwestern Medical Group with $1,206.2 million in revenue and 1,874 physicians; NorthShore’s own medical group with $707.9 million in net revenue and 1,008 physicians; and Loyola Medical Group with $363.6 in net revenue and 788 doctors.

Honor the Heritage,

EMBRACE THE FUTURE

Join us as we work to make Chicago a more equitable and just place for people to live.

MPC Annual Event September 21, 2022 5:00 - 7:00 p.m. (CT) Morgan Manufacturing 401 N. Morgan St, Chicago MPC Event Co-Chairs Invite You to Benefit From an Event Sponsorship VISIT: WWW.METROPLANNING.ORG/MPC2022 MPC Event Co-Chairs: MPC's Champion Fighter Award Honorees: DR. HELENE GAYLE & THE CHICAGO COMMUNITY TRUST

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Scott Swanson President PNC, Illinois

Gil C. Quiniones Chief Executive Officer ComEd

7/8/22 3:30 PM

CRAIN’S CHICAGO BUSINESS • July 11, 2022 15

FINALLY ON TRACK: Metra station will be a lifeline for Auburn Gresham. PAGE 18 ACTION IN AUSTIN: Community pushing forward with Invest South/West projects. PAGE 19

CRAIN’S CHICAGO BUSINESS COMMUNITY DEVELOPMENT

PEOPLE POWER: Auburn Gresham residents are driving development. PAGE 20

JOHN R. BOEHM

Erika Allen stands on her Green Era campus, where tanks for converting food waste to compost are going up.

A ‘leap of faith’ in Auburn Gresham T After years of neglect, the community gets an infusion of much-needed capital investment and development.

But can it attract more businesses by growing its population of young singles and families? | BY JUDITH CROWN

he shuttered terra cotta furniture showroom near 79th and Halsted streets had sat vacant for decades. Twenty-five graduating classes at Leo High School next door came and went. The building sat almost unnoticed, a persistent sign of disinvestment in the South Side neighborhood.

But Carlos Nelson, CEO of the Greater Auburn-­ Gresham Development Corp., or GAGDC, got the keys to the building in 2017 after tracking down the owner in Hyde Park and arranging some “creative financing” to spur redevelopment. This month Nelson and his team will cut the ribbon on the $20 million Healthy Lifestyle Hub that includes a clinic and pharmacy and will create an estimated 150 jobs.

Across the street, developer Torrey Barrett is preparing to build the first of two apartment buildings, part of the city’s Invest South/West initiative. Less than a mile south, entrepreneur Erika Allen and her partners are launching an anaerobic digester that will convert food waste to renewable energy and compost for farming. And Metra is starting construction of a $30 million station at 79th Street on the Rock Island Line. Overall more than $130 million is being invested in the beleaguered community.

Local leaders hope the activity will attract private capital and ultimately revitalize Auburn Gresham with updated housing, jobs and amenities. “What See FAITH on Page 16

SPONSORS

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16 July 11, 2022 • CRAIN’S CHICAGO BUSINESS

CRAIN’S CHICAGO BUSINESS

FAITH

COMMUNITY DEVELOPMENT

Continued from Page 15

guished as the city and private investors lavished attention downtown and in the West Loop.

The population fell nearly 20% to 44,878 between 2000 and 2020, while the city’s population fell by 5% and the region gained 5%, according to U.S. Census Bureau data. Median income is only $34,296, compared with $58,247 for the city, and a quarter of the population is under the federal poverty level, according to the Chicago Metropolitan Agency for Planning.

For the five years preceding the pandemic, unemployment of 16% was double the citywide rate of 8%.

But Auburn Gresham has assets: About 40% of its housing units are single family and almost 30% are small buildings with two to four units. The Rev. Michael Pfleger put St. Sabina on the map with his fiery social justice advocacy. And lush Auburn Park boasts three lagoons, bridges and walking trails.

When Mayor Lori Lightfoot launched the Invest South/West program in 2019 to repair the city’s most disenfranchised communities, Auburn Gresham was among the first of three neighborhoods to win projects, along with Austin and Englewood. The Healthy Lifestyle Hub and renewable energy project already were underway.

Allen and Nelson had teamed as the Always Growing, Auburn Gresham partners to win the first $10 million Chicago Prize from the Pritzker Traubert Foundation in 2020. Those funds helped complete the hub and enabled ­GAGDC to provide venture capital to Allen’s Green Era environmental digester. About $2 million is being reserved to develop a community education center at the campus.

The progress of the health center encouraged the city to issue a request for proposals to develop a city-owned vacant lot directly RESIDENTS PUSH BACK Nine miles south of downtown, across 79th Street. While other Auburn Gresham prospered in Invest South/West communithe first half of the 20th century. It ties have attracted three to six was an Irish Catholic and Dutch proposals, only one surfaced for neighborhood marked by sturdy Auburn Gresham. The $19.4 milArts and Crafts-inspired bunga- lion plan from a venture of the Imagine Group and Real Estate, “WE’VE GOTTEN THE PRIVATE SECTOR Evergreen along with Ross Barney and Nia architects, was INTERESTED IN AN AREA THEY HAD a five-story mixed-use NO INTEREST IN A YEAR OR TWO AGO.” building. It included 62 affordable apartments, Maurice Cox, city planning commissioner ground-floor retail lows and two-flats. The mostly space and gardens.

Imagine Group’s Barrett in 2019 Catholic population was served by five parishes, including St. Leo developed the Kleo Art Residences in Washington Park, named for and St. Sabina.

Like other South and West Side his late sister, who was a victim neighborhoods, Auburn Gresh- of domestic violence. He plans to am saw an exodus of white resi- bring to Auburn Gresham a verdents. It flipped from 95% Irish to sion of his supper club in the Kleo 95% African American today. The Residences.

Despite the restaurant, private closing of industrial sites and outsourcing of jobs devastated the gardens and other amenities, the neighborhood. It and other South community pushed back hard. and West Side communities lan- A lot of the seniors who live on

if people could walk to work, walk to a coffee shop?” Nelson says.

“Maybe they’re making good money working at the health center or the digester that will enable them to buy a home.”

Even with the kind of money the neighborhood hasn’t seen in decades, it will be an uphill climb. Auburn Gresham suffers from population loss, crime and neglect. The commercial corridors are half-vacant. The 79th and Halsted intersection is saddled with shuttered stores—a onetime CVS, Bank of America and Sav A Lot. The neighborhood was dealt a discouraging setback last month with the closing of the Aldi supermarket on Ashland Avenue south of 76th Street.

Just because buildings are going up doesn’t mean Chicagoans will choose Auburn Gresham over other neighborhoods such as South Shore or Bronzeville.

“Is there a clear vision of what we’re trying to achieve?” asks Victoria Lakes-Battle, Chicago executive director of nonprofit lender IFF, which helped fund the digester project. Community development is like spreading peanut butter, she says, adding, “If it gets spread too thin, folks don’t get enough of what they need to be made whole.”

And while leaders share a vision on what success could look like, they don’t always agree on the best tactics of getting there. Residents objected to the city-sponsored housing plan at rancorous meetings last year, with worries about density and a lack of parking, shops and other amenities.

But there’s no question that things are happening. “Investors can see cranes and scaffolding,” says Maurice Cox, the city’s commissioner of planning and development. “We’ve gotten the private sector interested in an area they simply had no interest in a year or two ago.”

P015-P020_CCB_20220711.indd 16

Torrey Barrett is preparing to build two apartment buildings in Auburn Gresham, part of the city’s Invest South/West initiative.

sibly from Ho proje need ty an adds and and them Ad nity it’s m time trust

Looking down 79th Street, which cuts through the heart of Auburn Gresham. ­eoria, Green and Sangamon P don’t like the project because they worry about congestion and parking, says 25-year resident ­Lillie Howell. “Where are the new residents going to shop? All the stores have closed.”

Imagine Evergreen subsequently split the project into two parts: a three-story, 28-unit building at the original site, and a five-story, 30-unit building on a

vacant city-owned lot two blocks to the east. That nearly doubled the cost of the project to almost $40 million, including the city’s contribution of TIF dollars and tax credits—resources that won’t be available for other city projects. “If this is what it took for the community to believe in it, it’s a success story,” Cox says.

Nelson says, “I tip my cap to the city for listening and making

adjustments.”

Not that the project solves all needs. GAGDC would have liked to have seen condos or townhomes to boost homeownership and a push to upgrade vacant or run-down homes to attract buyers. Development of the housing complex on a site that might have been used for clinic parking means the hub has to find a creative solution for parking, pos-

7/8/22 3:11 PM

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CRAIN’S CHICAGO BUSINESS • July 11, 2022 17

AUBURN GRESHAM: A DEMOGRAPHIC SNAPSHOT Auburn Gresham

City of Chicago

CMAP Region

Total population 2020

Total households 2020 8.6 million 3.3 million

44,878

18,071

1.1 million

2.7 million

Percentage change in population, 2010-20 -7.9% 1.9%

PHOTOS BY JOHN R. BOEHM

A Healthy Lifestyle Hub will soon open in the shuttered furniture showroom near Leo High School on 79th Street.

sibly shuttling customers to and from their cars.

Howell says she’s OK with the project going ahead, “because we need new things in the community and financial stability. But, she adds, “I want it to be good. I hope and pray there are good residents and they screen and monitor them.”

Adds Lakes-Battle: “Community engagement is hard, and it’s messy. Sometimes there are time pressures. You have to build trust.”

A FUTURE IN CLEAN ENERGY?

Auburn Gresham needs jobs, updated housing and amenities.

But how does that get done, and in what order?

The neighborhood must stem its population decline in order to attract substantial retailers, Cox says. Grocers won’t open if people are leaving, and adding apartments is a robust way to grow the population as compared to filling vacant single-family homes, he says. But the city envisions “infill” housing and plans to issue a request for proposals to develop row houses on vacant city land near one of the lagoons. “We can expand housing options for folks who want to live by a body of water,” Cox adds.

Citing the loss of national retailers, Ald. David Moore, 17th, says the city needs to invest in people to run their own stores, adding, “We don’t have to beg people to come to our communities.” The city has allocated $1.5 million in Neighborhood Opportunity Fund

P015-P020_CCB_20220711.indd 17

grants to fund eight new and established businesses, including a dentist plus hardware, beauty and coffee shops. And $11.2 million will be used to widen streets and add lighting and benches.

The question remains: What is special about Auburn Gresham that would attract singles and young families? Lakes-Battle points to the distinctive Puerto Rican community in Humboldt Park that’s anchored by a sixblock stretch known as Paseo Boricua, or Puerto Rican Promenade. The entrances are marked by distinctive metal Puerto Rican flags, and the restaurants and grocers offer food from the island.

“You know you’re entering a place informed by Puerto Rican culture,” she says. “The small businesses are complementary.”

Government can help direct industry to particular neighborhoods that can evolve into industrial or business hubs. The city intentionally recruited business to the West Loop, Lakes-Battle says. The enhanced transit and pedestrian-­friendly streetscape complemented the business environment. Similarly, south suburban communities are fashioning themselves as hubs for food and metals manufacturing.

Can Auburn Gresham take on an identity as a food-to-energy hub?

Erika Allen would like to see that happen. Her career has focused on urban agriculture, and her nonprofit Urban Growers Collective operates eight farms on 11 acres of land, mostly on the South Side.

More than 10 years ago, Allen and partner Jason Feldman envisioned a business that would recycle food waste—diverting it from landfills and capturing the methane that contributes to global warming. Digester tanks could convert the waste into gas, and compost could be channeled to urban gardening where soils are depleted. Profits from the business could be used to rebuild the community.

The pair found a 9-acre brownfield site in Auburn Gresham that could be purchased from the city for $1 but required a $1.6 million cleanup. It had been owned by International Harvester and its successor company Navistar and

later became a city lot for impounded cars.

Raising $34 million was a trial.

“I had never talked to so many bankers,” Allen says. “That’s not part of my experience. If I don’t have collateral, I can’t get this capital. That puts me so far behind.”

While it was hardly a conventional project, Lakes-Battle saw the appeal. “With sustainability at the top of everyone’s list, we thought it was pretty interesting,” she says. “We needed to learn how does it throw off cash to pay us back, create jobs and deliver on its promises?”

By 2020 Allen and her team were able to assemble a $34 million capital stack that included loans from IFF and three other community development financial institutions, New Market Tax Credits and funding through the Chicago Prize. A $2 million state grant was the first under Gov. J.B. Pritzker’s Shovel Ready Infrastructure Capital program. State and federal grants supplied funds for the cleanup.

Revenue will be generated by acquiring food waste from companies and municipalities—­Allen expects McCormick Place to be a customer. The end product, renewable natural gas, will be injected to the Peoples Gas pipeline and traded by BP. Allen also plans other activities for the Green Era campus, including an urban farm, green grocer and education center providing culinary training.

Back at the Healthy Lifestyle Hub, workers are adding finishing touches, building out exam rooms for the UI Health clinic.

There’s office space for Heartland Alliance and Big Brothers Big Sisters. GAGDC is preparing to relocate its headquarters to the fourth floor, offering a panoramic view of the community.

The coming years will test whether Auburn Gresham can rise from the ashes. Will these first investments serve as catalysts for additional projects with private capital? Will properties change hands and merchants find a market on 79th Street? Cox says, “We want to grab people’s attention and get them to take a leap of faith with us.”

1.7%

Percentage change in population, 2000-20 -19.8% -5.2%

5.3%

Educational attainment, 2015-19

Highest degree or level of school completed by an individual. For population 25 and older.

31.2% 29.5% 30% 25 20 15

15.9% 8.6%

10

9.5% 5.2%

5 0

Less than high school diploma

High school diploma or equivalent

Some college, no degree

Associate degree

Bachelor’s degree

Graduate or professional degree

Household income, 2015-19 40%

39.0%

30

25.7%

20 15.1% 8.4%

10

9.0% 2.9%

0

Less than $25,000

$25,000 to $49,999

$50,000 to $74,999

$75,000 to $99,999

$100,000 to $149,999

$150,000 or more

Employment status, 2015-19

Doesn’t include employed population in the Armed Forces.

83.9% 91.9% 93.7%

Employed

Unemployed

Not in the labor force

16.1% 8.1% 6.0% 45.1% 33.1% 32.7%

Sources: Chicago Metropolitan Agency for Planning, U.S. Census Bureau

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18 July 11, 2022 • CRAIN’S CHICAGO BUSINESS

CRAIN’S CHICAGO BUSINESS

COMMUNITY DEVELOPMENT

O

TRANSPORTATION

Metra station marks a ‘turning point’ A

Jacqueline Collins is an Illinois state senator, representing the 16th District.

fter nearly two decades of advocacy, negotiations and delays, I am happy to see that our neighbors in Auburn Gresham will have improved access to public transit with a new Metra station in Auburn Park. Communities on the South Side have long suffered from disinvestment and unequal access to basic amenities like public transportation. This means a lack of access to jobs and opportunity for working families who were already struggling here. While the groundbreaking of the Auburn Park station is good news, the implementation of the project comes far too late for so many.

I first met with Metra representatives on this project in 2005. Then, they pledged their support for a new 79th Street station to serve our community.

The project was repeatedly delayed— for 16 years—while already wealthy communities saw expedited improvements to their public infrastructure.

Towns like Oak Park and Evanston, communities with established wealth and economic activity, were given priority for Metra improvements, which further catalyzed transit-­ oriented economic development there. Auburn Gresham was left waiting for 16 years while we languished, eagerly hoping for empty promises to be kept.

The delays in this project were not only examples of systemic disinvestment in neighborhoods of color, but reflected a willful disregard to transit planning. Running from the lakefront

Chicago and state officials break ground for a new Metra station in Auburn Park. to Chicago’s western limits, the city’s 79th Street bus is the busiest line in Chicago. Metra’s Rock Island train line, which intersects the 79th Street bus line, has no direct connection. This means that residents of Auburn Gresham who need to travel to the Loop must commute at least one hour via bus or rely on expensive ride-sharing options.

A direct connection to the Rock Island line would reduce commutes to about

15 minutes.

For nearly two decades, our community was deprived of more efficient commutes for working people and the economic boons that come with reliable public transportation—deprived of what was promised all the way back in 2005. That is unacceptable to me and all who call Auburn Gresham home.

Make no mistake, the long-awaited Auburn Park station is good news and

will deliver tangible results for those who live here. The construction of the project, however, will still take time, an estimated 30 months. That leaves more than two years for our neighbors to see those results, more than two years of impossibly long commutes and a total of 18 years of waiting for investment to take root.

The good news is that our community has finally seen the investment that it so desperately needs and deserves.

The $35 million project will create jobs, connect our neighbors to opportunity throughout the region and forge a path to success for so many. Participation in the project for minority-owned firms is set at 12%.

The Auburn Park station will include a large plaza with bike racks for commuters, green spaces for us to enjoy, storefronts for new businesses and road improvements in the surrounding area. It will connect our neighborhoods to opportunities throughout Chicago and allow us to build a more equitable Chicagoland.

I am proud of the tireless advocacy that we put into making this a reality and grateful to have secured state funding in this year’s budget to make this investment. I am eager to see the positive outcomes once construction is completed.

This will bring jobs to our area. This will create tangible improvements in the lives of our neighbors. This is a turning point in the renewal of Chicago’s South Side.

SOUTH/WEST SIDES

Innovative partnerships are powering neighbor businesses

F Manuel Flores is president and CEO of SomerCor, a nonprofit lender to small businesses that administers Chicago’s Small Business Improvement Fund and Neighborhood Opportunity Fund grants.

rom a dentistry practice in Auburn Gresham to a restaurant and wine bar in Bronzeville and a business incubator in Humboldt Park, new minority-owned businesses are being created across Chicago. But what most people don’t see, before the ribbon-cuttings and press releases, is a new level of local collaboration that is growing investment and economic development on Chicago’s South and West sides through minority entrepreneurial support and expansion.

According to the U.S. Small Business Administration, there are more than 32 million small businesses nationwide, employing more than 61 million workers driving 44% of all economic activity. Black and Latino businesses, however, are not on equal footing with non-minority businesses. As vibrant as our small-business landscape is, only 2% of businesses with more than one employee are Black-owned and only 6% are Latino-owned, although Blacks and Latinos make up 14% and 18% of the U.S. population, respectively.

Minority-owned businesses have fewer funding sources and a harder time borrowing money from banks, smaller business networks and less access to technical assistance and profes-

P015-P020_CCB_20220711.indd 18

sional services. These obstacles inhibit business scalability, investment and long-term growth, which, in turn, negatively impacts the economic viability and quality of life of the neighborhoods these businesses serve. Chicago has experienced this firsthand where once-thriving minority neighborhoods have suffered spiraling economic decline and disinvestment in large part because of fewer neighborhood businesses and weak small-­business support systems.

In response, there have been notable efforts in Chicago by a variety of stakeholders to develop innovative partnerships to strengthen the city’s small-business ecosystem, especially in Black and Latino neighborhoods.

The city of Chicago’s Department of Planning & Development and the Department of Business Affairs & Consumer Protection play a leading role in policymaking, providing financial support and economic incentives, along with convening private-sector business leaders and developers to bring new investment to Chicago’s South and West Side neighborhoods through the Invest South/West initiative. A focal point of this economic development plan is to catalyze minority busi-

ness capacity-building and expansion. ing responsible but more accommoWe are also seeing nonprofit lenders, dating underwriting standards to help philanthropic organizations, economic minority-owned small businesses that development groups, banks and local may be creditworthy but do not meet government coming together to devel- traditional “credit box” criteria.

Along these lines, there is also an op strategies and combine resources to help grow minority-owned business- opportunity to develop new private es. Three such initiatives include the and government loan programs, grants Chicago Inclusive Growth Coalition, and procurement policies to create the Chicagoland Opportunity Zone more growth opportunities for minoriConsortium and the World Business ty entrepreneurs. Lastly, it is important Chicago Black and Latino Excellence for these partnerships to develop into Investment Summit. These partner- lasting programmatic initiatives that ships provide capital and expertise in transcend leadership changes in govthe areas of finance, business technical ernment and the private sector to enassistance and commercial real-estate development. The A NEW LEVEL OF LOCAL COLLABORATION combined resources these groups offer, with a strate- IS GROWING INVESTMENT ON CHICAGO’S gic and focused approach, SOUTH AND WEST SIDES. can bring about a faster and more transformative impact to level the sure continuity and long-term efficacy.

At SomerCor, we have reason to be field for minority-­owned businesses.

While these partnerships are a step inspired by the commitment and work in the right direction, we are not done. to revitalize Chicago’s South and West More institutional lenders and inves- sides. SomerCor is proud to contribtors are needed to join these initiatives ute and participate. We also know that to provide additional capital sources creating more and stronger minoriand help support technical assistance ty-owned businesses will take comprograms. There is an opportunity for mitted and innovative private- and banks and other lenders to innovate public-sector partnerships to make it through these partnerships by design- happen.

7/8/22 3:11 PM

A st bus

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On the redevelopment side, Austin makes strides A stretch of Chicago Avenue sparks opportunities for businesses, housing to revitalize a disinvested community

BY JUDITH CROWN Plans for renovation of the historic Laramie State Bank building in Austin are taking shape. Nearly 20 small businesses are planning to remodel or open on the stretch of Chicago Avenue that calls itself the Soul City Corridor. And Shawnie Jones’ year-old Chicago Eats Sports Bar is enjoying robust demand for catering and special events.

Austin is one of 10 neighborhoods receiving an economic boost under the city’s Invest South/West initiative, which aims to revitalize Chicago’s most disinvested communities. Since the program’s launch in 2019, the city has awarded 10 projects valued at around $400 million. About half are expected to break ground this year. Overall, the broad program has attracted $1.5 billion in public, private and philanthropic investment commitments.

Chicago awarded its first three projects in March 2021 to the Austin, Auburn Gresham and Engle-

wood neighborhoods. In Austin, a partnership of Heartland Housing and the Oak Park Regional Housing Center, or OPRHC, bested competing proposals with a plan to redevelop the art deco bank building at Chicago and Laramie avenues and construct affordable housing next door.

OPRHC Executive Director Athena Williams expects to close on its financing in the fall, with most construction to take place in the first half of next year. Supply chain delays have raised the cost of the project to about $55 million from $38 million previously projected, she says.

The Invest South/West projects have stirred some animosity in the community. Critics said the project shouldn’t have been awarded to an Oak Park organization.

“I took some abuse,” Williams says, adding that the criticism was unfounded because the Oak Park nonprofit has served Austin for years and that she lives in the West Side neighborhood. Residents also objected to a mural that the city

WIKIMEDIA COMMONS

hose f the e, an more o see rs of total nt to

CRAIN’S CHICAGO BUSINESS • July 11, 2022 19

Laramie State Bank on Chicago Avenue put up on the side of a building at Chicago and Mayfield avenues.

“It’s about process,” says Malcolm Crawford, president of the nonprofit Austin African American Business Networking Association and manager for the Chicago Avenue corridor. People in the community are used to fighting, with an “it’s me against the world” mentality, he says. Now that resources are coming, “we have to figure out how to make it happen.”

The Chicago Avenue corridor is seeing an influx of new business-

es, some funded with city Neighborhood Opportunity Fund grants, others with private capital. Jones, a longtime entrepreneur who opened Chicago Eats Sports Bar last year at Chicago and Laramie, says the business has taken off with events such as baby showers and retirement parties. Catering demand from local schools and hospitals has helped. The city is spending $21 million to improve the streetscape with lights, benches and elements to build on the Soul City theme.

Developer Lennox Jackson plans

a 20-unit residential building with market-rate apartments, hoping to attract more affluent tenants who don’t qualify for subsidies but can’t afford the higher rents of downtown or neighborhoods like Bucktown. “If you increase discretionary income of residents, that helps to attract retail tenants,” Jackson says.

Jackson says his building could provide convenient access to the Bally’s casino planned at Halsted Street and Chicago Avenue. “There will be a lot of job opportunities, and workers can get on the (Chicago Avenue) bus. It’s a straight shot,” he added.

Not all the action is on Chicago Avenue. Nonprofits Austin Coming Together and Westside Health Authority are teaming to develop the Aspire Center at Madison Street and Central Avenue that includes housing, workforce training and early childhood programs.

Despite the tensions rising from the influx of investment, community leaders say they are optimistic. “This project is bringing opportunity for the community at large,” Williams says. “We have to go beyond our corner. It represents all of Austin.”

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7/8/22 3:11 PM

20 July 11, 2022 • CRAIN’S CHICAGO BUSINESS

CRAIN’S CHICAGO BUSINESS

COMMUNITY DEVELOPMENT

CIVIC ENGAGEMENT

Meghan Harte is executive director of LISC Chicago.

uburn Gresham is experiencing a renaissance, leveraging existing assets and utilizing the talents and commitment of residents. As partners on Auburn-Gresham’s Quality-of Life plans, in 2005 and again in 2016, we at LISC Chicago have witnessed the shifts within the neighborhood, driven by local residents’ considered input and feedback, and believe the area continues to be ripe for opportunity.

Auburn Gresham has a rich history with parallels to many other Chicago neighborhoods, growing out of a desire for people and families to relieve overcrowding elsewhere in the city.

Designated Chicago’s 71st community area in 1930, the first families to move to Auburn Gresham came from nearby neighborhoods. Many residents were employees from the stockyards, city and other government entities, and railroad and construction workers drawn by the proximity to their work sites. Gradually, the demographics of the community shifted from 99% white in 1960 to 99% Black in 1990.

Some consider Auburn Gresham as challenged with economic insecurity among its residents, a paucity of education and employment options (including for youth) and general negative perceptions of the broader South Side. Auburn Gresham sees its community as home to rich assets and hidden gems. This is how everyone should view it.

At a time when affordable housing is a major flash point in Chicago and other cities across the country, most of Auburn Gresham’s side streets have

JOHN R. BOEHM

Residents drive community investment A

a full complement of well-maintained bungalows, two-flats and apartment buildings. The neighborhood is connected to other Chicago communities via bus, CTA bus and rail and Metra commuter line, with an Auburn Park station expected to be completed in 2024. The historic homes along a chain of lagoons on the Winneconna Parkway deliver a picturesque experience unlike any other neighborhood.

Moreover, Auburn Gresham boasts strong institutions and community organizations, including the Greater Auburn-Gresham Development Corp.—our partner in the Quality-­ of-Life plan—thriving religious communities at St. Sabina and the Nation of Islam, and well-regarded schools including Leo Catholic High School.

Most importantly, a community of in-

volved citizens and families who have made this community their home have organized to drive continued investment in the neighborhood.

Quality-of-Life plans are asset- and strength-based visions for a community’s future created and owned by the community, and they have served as a guide for investments and follow-on efforts to improve and redevelop those community areas. The collaborative process inherent in creating a QLP empowers neighborhoods by building capacity in existing community organizations and providing a framework through which they can assess and build on unique human, institutional and physical assets while identifying and addressing specific challenges. Neighborhoods across the city have embarked on this pro-

cess, with community organizations leading and LISC Chicago as a trusted partner and facilitator in 27 QLPs so far, generating more than $900 million in new investments aligned with community visions and goals.

The steering committee for the 2016 Auburn Gresham Quality-of-Life plan included over a thousand residents, municipal representatives, aldermen, district police officers and an elementary-­school principal, who drew on the expertise of an expansive task force including a special Brave Youth Leaders representation from the next generation. The resultant document, “Auburn Gresham: Your Voice Matters,” combines material strategies to respond to resident needs and desires for their community and a deep love of that community.

Auburn Gresham partners have been working for decades building on community assets and creating programs to support people and places in the neighborhood. So much tangible work has resulted in creating a pipeline of homegrown educators; support for homeowners and local businesses; strengthening business corridors; and drawing catalytic investments like the new Metra station on 79th Street and the Healthy Lifestyles Hub, a new commercial building focused on health access and an urban farm and renewable energy campus.

Institutional and organizational partnerships are expanding and new relationships are being formed through Auburn Gresham’s collaborative planning process. With all of these efforts, we know Auburn Gresham is a place to invest, to live and to thrive.

DEVELOPMENT

Malcolm ­Crawford is executive director of the Austin African American Business Networking Association.

have memories of standing on Chicago Avenue in Austin and looking at the downtown skyline. From where I was, downtown seemed like such a beautiful place.

Every blue moon, my friends and I would take the Chicago Avenue bus for a trip to Navy Pier. At the end of the line would be beautiful mature trees.

The sidewalks were not broken. Police officers were everywhere and many would speak to us. Sometimes, we’d go to Grant Park for a concert. Then we’d walk down State Street to gaze into the windows and dream about what it must be like to have enough money to be able to buy anything in those windows. It seemed as though there wasn’t a lot of crime. We didn’t see bars on the windows, and construction cranes were everywhere. A crane meant more development, another shiny new building added to the already beautiful Chicago skyline. It was evident that those in authority cared about downtown. That at all costs, a strong, safe, thriving business district was vital to continue driving development.

Back in the Austin community where I lived, it was different. No ma-

P015-P020_CCB_20220711.indd 20

ture trees. The sidewalks were not just broken but dangerous. We had police officers, but you didn’t make eye contact because at any moment you could be picked up and thrown in the back of the police car and taken for a ride. Most store windows had security bars.

For years Austin has been neglected.

By that, I mean no trash cans on the business corridors, rusted light poles that you can see through. Not a single sit-down restaurant. The neighborhood seemed like a vast wasteland of broken promises.

The people in Austin and, I suspect, in other parts of the city where there have been years of disinvestment have had to fight for what they believe they deserve. Fight for better schools, equal justice, safe streets, a seat at the table, resources for their nonprofit organizations. Fighting against a racially unjust system put in place long before we were born.

Now, I can honestly say that Austin is changing—for the better. I no longer look toward downtown to see development. The Soul City Corridor— along Chicago Avenue—will bring

CHICAGO.GOV

Growth opportunities finally reach Austin I

development of underutilized land by promoting Black culture, arts and entertainment as it seeks economic development, job creation and other developments that serve neighborhood residents. Mayor Lori Lightfoot’s Invest South/West program has laid the groundwork to bring this much-needed development to Austin. We will soon have a fitness center and a sit-down restaurant. A full-service grocery store

is in the works. New streetscapes have been installed, with more to come.

The challenge now is getting past the natural reaction to fight. To come together and make Austin an economic and cultural driver.

Residents are seeing housing values going up. New construction is happening and properties are being sold pre-construction. The City of Chicago Corridor Managers program has given community stakeholders a direct connection to the Department of Planning, making sure that their voices and needs are included in the development of our community. Beautiful artwork is going up on buildings. We have a new public outdoor plaza, POP Court, where the community can gather in an attractive outdoor space free of violence.

What is finally happening in many disinvested communities now is growth. Growth comes with challenges. We are being challenged to not fight but to address the system that has allowed us to be under-resourced for so many years. This is about creating a new system that lets all of Chicago thrive.

7/8/22 3:11 PM

CRAIN’S CHICAGO BUSINESS • JULY 11, 2022 21

CRAIN'S LIST OUT-OF-TOWN EMPLOYERS Ranked by full-time local employment as of 12/31/2021. e = Crain's estimate (in gray).

2021 RANK

COMPANY

TOP CHICAGO EXECUTIVE

FULL-TIME LOCAL EMPLOYEES 12/31/2021; 1-YEAR CHANGE

FULL-TIME WORLDWIDE EMPLOYEES 12/31/2021; 1-YEAR CHANGE

GLOBAL HEADQUARTERS; % OF EMPLOYEES IN CHICAGO AREA

PRIMARY INDUSTRY

1

1

U.S. GOVERNMENT 230 S. Dearborn St., 35th Floor, Chicago 60604 Chicago.FEB.gov

Jonlee Anderle Chair, Chicago Federal Executive Board

52,316 -0.1%

2,779,128 -0.5%

Washington, D.C. 1.9%

Federal government

2

2

AMAZON.COM INC. 227 W. Monroe St., Chicago 60606 Amazon.com

Andy Jassy CEO

27,050 e 1 43.8% e

1,608,000 2 23.9%

Seattle, Wash.

1.7%

E-commerce, tech and telecom

3

3

WALMART INC. 8430 W. Bryn Mawr Ave., Chicago 60631 Walmart.com

Jarred Crabtree Vice president, regional general manager

17,100 1.2%

2,300,000 3 4.5%

Bentonville, Ark. 0.7%

Retail marketplace

4

5

JPMORGAN CHASE & CO. 10 S. Dearborn St., Chicago 60603 JPMorganChase.com

Tony Maggiore President, Midwest middle market banking

14,583 6.1%

271,025 6.1%

New York, N.Y. 5.4%

Banking and financial services

5

4

STATE OF ILLINOIS 555 W. Monroe, 16th Floor, Chicago 60661 Illinois.gov

J.B. Pritzker Governor

12,243 -12.1%

44,857 -2.2%

Springfield, Ill. 27.3%

State government

6

6

JEWEL-OSCO 150 Pierce Road, Suite 400, Itasca 60143 JewelOsco.com

Mike K. Withers President

10,892 8.6%

10,892 1.3%

Boise, Idaho 4 100.0%

Grocery retailer

7

7

AMERICAN AIRLINES GROUP INC. O'Hare International Airport, Terminal 3, Chicago 60666 AA.com

Rich Ashlin Vice president of ORD operations

10,000 3.1%

123,400 20.2%

Fort Worth, Texas 8.1%

Airline

8

8

AT&T INC. 225 W. Randolph St., Chicago 60606 ATT.com

Eileen M. Mitchell President, AT&T Illinois and AT&T Great Lakes states

9,191 e -1.6% e

202,600 3 -12.2%

Dallas, Texas 4.5%

Tech and telecommunications

9

9

UNITED PARCEL SERVICE INC. 1500 S. Jefferson St., Chicago 60607 UPS.com

Darren Jones President, UPS Central Plains district

7,285 e -11.7% e

267,890 5 -16.8%

Atlanta, Ga. 2.7%

Logistics

10

10

FORD MOTOR CO. 12600 S. Torrence Ave., Chicago 60633 Ford.com

Salih Ahmad Manager, Chicago Stamping Plant

7,100 e 3 0.0% e

183,000 3 -1.6%

Dearborn, Mich.

3.9%

Automaker

11

12

TARGET CORP. 1 S. State St., Chicago 60603 Target.com

Brian Cornell Chairman, CEO

7,000 0.0%

450,000 3 10.0%

Minneapolis, Minn.

1.6%

Retail marketplace

12

11

HOME DEPOT INC. 2665 N. Halsted St., Chicago 60614 HomeDepot.com

Craig Menear Chairman, CEO

6,957 e -1.9% e

490,600 -1.9%

Atlanta, Ga. 1.4%

Home improvement retailer

13

13

BMO HARRIS BANK NA 6 111 W. Monroe St., Second Floor, Chicago 60603 BMOHarris.com

David R. Casper U.S. CEO, BMO Financial Group

6,593 -2.0%

56,101 4.9%

Montreal, Canada 11.8%

Banking

14

15

ACCENTURE LTD. 161 N. Clark St., Chicago 60601 Accenture.com

Jim Coleman Office managing director, Chicago

6,400 3.2%

674,000 24.9%

Dublin, Ireland 0.9%

Management consulting, technology services

15

17

DELOITTE 7 111 S. Wacker Drive, Chicago 60606 Deloitte.com

Kathy Scherer Central Region market leader, managing partner

6,304 8.6%

121,693 7.4%

New York, N.Y. 5.2%

Audit, consulting, tax and advisory services

16

16

BANK OF AMERICA 110 N. Wacker Drive, Chicago 60606 BankofAmerica.com

Rita Sola Cook President, Bank of America Chicago

6,000 0.0%

212,796 -0.1%

Charlotte, N.C. 2.8%

Financial services

16

14

CVS HEALTH CORP. 2211 Sanders Road, Northbrook 60062 CVSHealth.com

Andy Arland Region director, CVS Health

6,000 8 -3.9% e

216,000 5 1.4%

Woonsocket, R.I. 2.8%

Retail health care

18

19

AON PLC 200 E. Randolph St., Chicago 60601 Aon.com

Gregory C. Case CEO

5,900 e 18.0% e

49,126 3 1.2%

London, England 12.0%

Professional services

19

18

COMCAST CORP. 1500 McConnor Parkway, Schaumburg 60173 Chicago.Comcast.com

John Crowley Regional senior vice president

5,800 0.0%

190,000 0.0%

Philadelphia, Pa. 3.1%

Telecommunications

20

19

SOUTHWEST AIRLINES Chicago Midway International Airport, Chicago 60638 Southwest.com

David Harvey Vice president, Southwest Business

5,430 8.6%

54,000 -6.9%

Dallas, Texas 10.1%

Airline

21

21

UNITEDHEALTHCARE 200 E. Randolph St., Suite 5300, Chicago 60601 UHC.com

Tom Kunst CEO

5,000 6.4%

340,000 0.0%

Minnetonka, Minn.

1.5%

Health insurance and health care

22

38

PEPSICO 433 W. Van Buren St., Suite 3, Chicago 60607 PepsiCo.com

Neil Pryor President, beverages North America, central division

4,491 220.8%

290,000 0.0%

Purchase, N.Y. 1.5%

Beverage and food processing

23

23

ERNST & YOUNG LLP 155 N. Wacker Drive, Chicago 60606 EY.com

Judson Snyder Chicago managing partner

4,236 7.2%

300,000 0.3%

New York, N.Y. 1.4%

Assurance, tax, transaction and advisory services

24

25

PRICEWATERHOUSECOOPERS LLP 1 N. Wacker Drive, Chicago 60606 PWC.com

James P. Kolar Central market managing partner

4,200 e 17.6% e

295,371 3.9%

London, England 1.4%

Audit, assurance, consulting and tax services

25

22

CLEVELAND-CLIFFS 1 S. Dearborn St., Chicago 60603 ClevelandCliffs.com

Wendell Carter Executive vice president, operations west

3,833 -7.7%

26,500 4.1%

Cleveland, Ohio 14.5%

Steel and mining

Research by Sophie Rodgers (sophie.rodgers@crain.com) | Includes large employers with primary headquarters outside Cook, Kane, Lake, DuPage, Will, and McHenry counties in Illinois and Lake county in Indiana. Crain’s estimates are

in gray; figures estimated by Crain’s are derived from a variety of sources. The list is built using data submitted by companies, Crain’s estimates and information reported elsewhere when available, but it is not a complete list of all large employers with headquarters outside the Chicago area. Local addresses and top Chicago-area executives are included when available, but some addresses and executives outside the Chicago area are included. In cases where we’ve published a full-time local employment figure alongside a worldwide figure that also includes part-time employees, the figures in the column listing the percentage of employees in Chicago should be taken as rough approximations. NA: Not available. NOTES: e. Crain's estimate. 1.

Includes estimated distribution center employment figures from MWPVL International. Includes Whole Foods employees. 2. Includes part-time employees. Includes Whole Foods employees. 3. Includes part-time employees. 4. Reflects headquarters of parent company, Albertsons. 5. Calculated from SEC filings. 6. Includes figures for BMO Harris Bank NA and BMO Harris Central NA. 7. Includes subsidiaries of Deloitte LLP. 8. Company estimate.

Want 49 companies in Excel format? Become a Data Member: ChicagoBusiness.com/Data-Lists

P021_CCB_20220711.indd 21

7/8/22 12:29 PM

22 July 11, 2022 • CRAIN’S CHICAGO BUSINESS

How sellers are enticing hesitant homebuyers As interest rates climb, homeowners are using some tried-and-true and complicated legal tactics to close the deal In their way out of a Glencoe house that’s on the market at a little under $3.6 million, potential buyers at a late June open house received a goody bag that included a Nestlé Crunch bar.

That’s for when they’re crunching the numbers on whether to pick up the sellers’ assumable loan, whose interest rate is 2.875%, well below last week’s 5.3%.

“There are a million reasons to buy our house,” said Randi Brill, who with her husband, Bob Zieserl, is selling the six-bedroom home on Maple Hill Road, which is listed with Marlene Rubenstein of Baird & Warner. Among those reasons: The half-acre property has a swimming pool and is a few blocks’ walk to either Glencoe’s gorgeous municipal beach or its charming downtown and Metra station.

But with interest rates rising fast, Brill said, “we think having an assumable loan where they can get in at the old interest rates is a differentiator.”

An assumable loan is a complicated thing, and any buyer considering going that route to purchase the Glencoe home would need to get professional advice.

Even so, the couple’s offering is indicative of the rate-beating steps some sellers are taking now to keep the interest of buyers who might be cooling their jets because of the rising cost of buying a home.

Most popular, says Joel Schaub, a vice president of mortgage lending at Guaranteed Rate, is the seller offering to pay all or part of the buyer’s closing costs.

The appeal to this time-honored

tool is that buyers, who may have struggled to put together their down payment, might appreciate the help on “bringing all this other cash to closing,’ ” Schaub said.

Closing costs may include loan origination fees, transfer taxes and other one-time costs associated with a sale.

Wiping out their closing costs doesn’t change the fact that their monthly payment on a mortgage is costlier than it would have been earlier this year before the rate spike, Schaub said, but “when they’re feeling that pinch, any help is good.”

This is a tool that’s been around for a long time but “has come back strong this spring,” Schaub said. It’s something many sellers can readily afford to offer, because the value of the property they’re selling has gone up so much in the recent boom that they feel they can afford to be generous to get the deal done.

BUYING POINTS

Another rate-beater that Schaub says is getting traction is an interest rate buy-down, done by the seller on the buyer’s behalf. Also known as buying points, this is where the seller kicks in enough cash to bring down the buyer’s interest rate. Buying points has a greater impact than cutting the price. Schaub explains that a seller kicking in $10,000 on a $500,000 sale can reduce the buyer’s monthly payment by about $220 a month, while a $10,000 price cut would reduce the monthly payment by about $50.

Buying points also preserves a higher sale price for the comps, which the sellers’ neighbors will appreciate when it’s their turn to sell.

VHT STUDIOS

BY DENNIS RODKIN

This Glencoe house comes with not only a pool but an assumable mortgage whose rate is well below the prevailing interest rate.

This is all coming too soon, says Anne DuBray, a Coldwell Banker agent based in Glenview, where the stampede to buy homes has barely cooled.

“I don’t think sellers need to be offering to help buyers in this

Real estate developers, who have more units to move than an individual homeowner does, may have been faster to pick up rate-beaters.

“We haven’t seen interest rates make people cancel deals,”

REAL ESTATE DEVELOPERS, WHO HAVE MORE UNITS TO MOVE THAN AN INDIVIDUAL HOMEOWNER DOES, MAY HAVE BEEN FASTER TO PICK UP RATE-BEATERS. market,” DuBray said. “There’s demand for houses, and I’m still seeing multiple offers. It might be different later when rates get higher, but I don’t think any sellers need to be worrying now.”

said David Wolf, whose Chicago-based Wolf Development Strategies markets new-construction homes. “But we’ve seen them make renters reluctant to buy because of the initial shock”

of how much rising interest rates knock off what a buyer can afford.

Wolf’s client Lendlease, which has both rental and forsale homes under construction downtown, rolled out a rent-toown program in 2021. It allowed renters in a Lendlease apartment to dedicate some of their monthly rent toward a later buy of a Lendlease condo, up to 2.5% of the purchase price.

Now there’s another option, Wolf said: putting the money toward an interest rate buy-down.

“We wanted an incentive so people wouldn’t think, ‘well, rates went up so I’m going to stay renting,’ ” Wolf said.

Suburban rents are soaring. Are they sustainable?

BY ALBY GALLUN If you’re hunting for an apartment in suburban Chicago today, brace yourself. Landlords have pricing power, and haven’t been shy about using it.

The median net suburban apartment rent rose to a record $1.87 per square foot in the first quarter, up 17% from a year earlier, according to the Chicago office of Integra Realty Resources, a consulting and appraisal firm. After cruising through the COVID-19 pandemic, the suburban apartment market is as strong as it has ever been, giving landlords the upper hand over tenants.

“Sustainability is a big question,” said Ron DeVries, senior managing director at Integra.

“How many people are going to be able to pay these big rent increases?”

P022_CCB_20220711.indd 22

They seem to be willing to absorb them so far. The suburban multifamily occupancy rate rose to 98.1% in the first quarter, up from 96.1% a year earlier and the highest rate since at least 2003, the earliest year for which Integra has data.

DeVries himself admits to being surprised by the big recent rent hikes. He cites the strong local job market as a big reason.

Hiring boosts demand for apartments as more out-of-towners move here for work and as younger workers living with their parents finally make enough money rent their own place.

RISING DEMAND

High home prices could also be boosting demand for apartments by making it harder for renters to move out and buy a home. Rising interest rates could further tilt the housing

market in favor of apartments.

“It’s just making (homeownership) less affordable,” DeVries said.

Renting is a lot less affordable, too. The median net suburban apartment rent has risen 23.4% over the past two years, according to Integra. The median rent for a two-bedroom apartment was $1,837 per month in the first quarter, up from $1,453 at the beginning of 2020.

The suburban apartment boom is part of a broader national trend that has also lifted rents and occupancies in downtown Chicago after a brief but severe drop in the early months of the pandemic. DeVries predicts the suburban market will remain strong, forecasting rent growth of 15% to 20% for the full year.

But he cautions that an economic slowdown or recession would hurt demand for apartments.

COSTAR GROUP

Apartment landlords have pricing power and haven’t been shy about using it. The question is, who will be able to pay those higher rents?

Preserve at Woodfield apartments in Rolling Meadows “With the (Federal Reserve) trying to slow down the economy, the question is what’s going to happen to the job market,”

DeVries said. If hiring slows or companies start cutting jobs, “that could put downward pressure on the market, for sure.”

7/8/22 2:53 PM

PEOPLE ON THE MOVE

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

ACCOUNTING / CONSULTING

BANKING

LAW

MARKETING

NON-PROFIT

John Kasperek Co., Inc., Mokena/Calumet City

First Bank Chicago, Northbrook

Ice Miller LLP, Chicago

Scorpion, Chicago

First Bank Chicago, one of the top five privately held banks in Chicagoland, is pleased to announce the promotion of Nicole DiVito to VP, DiVito Talent Management.

She is responsible for supporting our growth and expansion strategy through recruitment, intern programs, employee training and engagement as well as employee relations. Nicole has Roan 15+ years of human resources expertise and joined the team in 2013. First Bank Chicago is pleased to welcome Randal Roan to our team as VP, Controller. He is responsible for defining accounting policies and procedures, maintaining an adequate system of accounting records and internal control, while overseeing financial and regulatory reporting. Randy brings 25+ years of financial expertise.

Ice Miller LLP is pleased to announce that Caitlin Podbielski has joined the firm as a partner in its Tax-Exempt Practice Group. She will be based in the firm’s Chicago office. Podbielski has a robust practice serving as outside general counsel for a variety of tax exempt organizations, with a particular focus on trade and professional associations.

Bridgette Moore has been named Chief People Officer for Scorpion, the leading provider of technology and services that help local businesses thrive.

Moore will lead Scorpion’s people strategy and help promote a supportive, performance-oriented, and inclusive environment as the company experiences tremendous growth. Prior to joining Scorpion, Moore led The Pharm, a WBA / WPP agency, as its Global Chief People Officer, and Allstate Insurance, as Vice President of HR.

United Way of Metro Chicago, Chicago

Al Vaughn has joined John Kasperek Co., Inc. as the Scheduling Coordinator for the firm’s audit and consulting teams. Before arriving at JKC, she worked as a Technical Editor at a global accounting firm where she proofread financial reports and checked for accuracy and consistency. Ms. Vaughn is an expert organizer, writer and editor having developed a wide variety of processes and B2B and B2C copy throughout her career. She earned her Bachelor of Arts Degree at Columbia College in 2015.

ARCHITECTURE Eckenhoff Saunders, Chicago Eckenhoff Saunders, a Chicago-based architecture, planning, and interior design firm, is proud to announce the promotions of Jacob Wahler, AIA, NCARB, to Principal and Tracey Wahler Pieczonka, NCARB, LEED AP, to Associate Principal. Jacob has led the design, planning, and construction of complex developerdriven projects in the West Loop and beyond.

Tracey manages our Pieczonka growing interiors team and contributes valued experience in our healthcare and commercial markets.

ARCHITECTURE / LIGHTING Chelsea Lighting, Chicago / New York Michael Toolis has stepped into a new role as Chief Executive Officer with Chelsea Lighting, a leader in lighting and lighting control technologies and a portfolio company of Kinzie Capital Partners. As CEO, Toolis will direct the company while continuing to maintain his Chelsea board seat and serve as an Operating Partner at Kinzie. As founder of VOA Associates, an architect and entrepreneur, Michael brings decades of experience in design and business development to this new role.

BANKING Huntington Bank, Chicago Saul R. Boscan joins Huntington Bank as SVP, Regional Head of Marketing & Communications. His experience spans 20 years, including work at PNC Bank, BMO Harris, Associated Bank and 5/3 Bank. In his new role at Huntington Bank, Saul will be providing Regional President, Chris Sweetland, and his team with strategic “marcom” support as the company intensifies branding efforts in Illinois and Wisconsin. He received bachelor’s degree and MBA from Universidad del Zulia and University of Pennsylvania.

P023_CCB_20220711_v1.indd 1

LAW Levenfeld Pearlstein, LLC, Chicago Kevin Burch joins LP as a partner in the firm’s Labor & Employment Group.

Kevin focuses on advising clients with a wide range of employee benefits and executive compensation issues. Additionally, he advises clients on employee benefit plans with spin-offs, M&A transactions, and he also counsels fiduciaries on ERISA obligations and risk mitigation. Kevin also advises clients on all tax-qualified retirement plans, including ESOPs. LP is happy to have Kevin join the team.

FINANCIAL TECHNOLOGY LAW

Tracy Monson was promoted to Chief Product Officer at Onbe and will oversee Onbe’s product team and product roadmap. Most recently Senior Vice President of Product, she has spent two decades as a leader and executive in the fintech industry. Tracy is a thought leader and contributor to the advancement of women in tech at Onbe and throughout the industry, most notably by designing and modeling flexible work-life balance policies, and by mentoring women in fintech and students at her alma mater.

Taft Law, Chicago Azra Naqvi has joined Taft as an attorney in the firm’s Real Estate practice. She has experience in traditional real estate transactions, as well as those financed by the New Markets Tax Credit (NMTC) and low-income housing tax credits (LIHTC).

LAW Taft Law, Chicago LAW Honigman LLP, Chicago Thomas Gaughan has joined Honigman as chief operating officer and a member of the senior management team. As COO, Gaughan is based in Chicago and oversees the firm’s business, financial and administrative operations. Gaughan has over 30 years of leadership experience in business development, talent management, information technology, practice support, and operations services. Honigman’s attorneys serve and counsel clients at all levels in numerous areas of complex legal practice.

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

NON-PROFIT United Way of Metro Chicago, Chicago

NON-PROFIT

Onbe, Chicago

Paul Yovanic has joined Taft as an attorney in the firm’s Litigation practice focusing on employment law, privacy, and information security. He has extensive experience representing and counseling clients on compliance and litigation relating to the Illinois Biometric Information Privacy Act.

Chinese American Service League, Chicago The Chinese American Service League (CASL) welcomes Eileen Chin, President of R.M. Chin & Associates, Inc. and Kevin Hall, Associate Director of Architecture Chin and Construction Services at the Illinois Housing Development Authority, to our Board of Directors. Ms. Chin has been in a leading role with R.M. Chin & Associates for over 18 years, managing Hall corporate operations, finance, administration, strategic planning, business development, corporate communications, and client relations. Mr. Hall is an accomplished architect who brings his expertise in sustainable design, healthcare design, and public buildings. He is a long-time committee member at CASL.

NON-PROFIT Chinese American Service League, Chicago

LAW Taft Law, Chicago Taft is pleased to announce that associate attorney Allison Lovell has joined the firm in the Litigation practice. She focuses on a wide range of civil litigation matters and has experience in all aspects of litigation, including discovery, substantive motions and briefs, oral advocacy, and settlement negotiations.

Allison has defended clients in transportation, construction, premises liability, and commercial matters.

United Way of Metro Chicago is pleased to announce the promotion of Jackie Grimes to Vice President, Marketing and Communications. She joined United Way as the Director of Marketing in 2015 and now leads the organization’s marketing, communications and digital engagement strategy. Prior to United Way, Jackie held roles in marketing and communications at the Museum of Science and Industry, Shedd Aquarium and Chicago advertising agencies, working on brands such as MillerCoors, Jim Beam and Maytag.

The Chinese American Service League (CASL) welcomes Jed Lam, Senior Vice President at Edelman Data & Intelligence (Dxl), Lam and Paul Ngai, Vice President of Digital Products at Underwriters Laboratories, to our Board of Directors.

Mr. Lam has been with Dxl for 3 years and has over 20 years of senior consultant experience in research and marketing Ngai communications.

Mr. Ngai has been with UL for 16 years. He brings expertise in management consulting, business process improvement, and business strategy.

United Way of Metro Chicago welcomes Chris Preston as Chief Development Officer, leading fundraising and donor engagement efforts for the organization. With 20 years of experience in Preston the United Way network, Chris previously led the corporate relations team for United Way Worldwide and served in senior leadership roles at local United Ways in Philadelphia and Washington, D.C. Maver United Way of Metro Chicago also welcomes Kate Maver as Regional Director of Development, North-Northwest, leading the implementation of United Way’s strategic priorities in the north and northwest suburbs of Chicago. Kate is a veteran fundraiser with experience in increasing financial capacity in a wide variety of nonprofit agencies.

REAL ESTATE Clear Height Properties, Oak Brook Rick Nevarez has been promoted to Director of Acquisitions and Joe Young to Managing Director, Asset Management and Acquisitions. Nevarez Nevarez will focus on fostering relationships with CRE brokers in Chicagoland and on developing new broker relationships throughout the Midwest.

He is a graduate of DePaul University’s Driehaus College of Business. Joe Young will Young oversee and manage the asset management department and holds a master’s in accounting and a BBA from the University of Michigan’s Ross School of Business. “Both Rick and Joe are seasoned veterans, and both are an integral part of our team and future plans,” says Gary Rose, COO and President. “I’m proud to work alongside them and am excited to see them continue to thrive in their new roles.”

7/6/22 9:54 AM

24 July 11, 2022 • CRAIN’S CHICAGO BUSINESS

Could these plans revive LaSalle Street?

A city-commissioned panel lays out ideas to breathe new life into the outmoded downtown corridor

Painted asphalt, compelling light displays, closing off blocks for pedestrians, and even a street-­ sheltering glass canopy are among the ideas that could help revive vacancy-ridden LaSalle Street and boost the Loop’s ­ post-pandemic comeback, according to a city-­ commissioned panel.

In a 36-page report, a group convened by the Urban Land Institute recommended an overhaul for the historic thoroughfare to dramatically break from its past as a hub of financial giants.

The main conclusion: LaSalle Street needs to become all about foot traffic.

Achieving that goal, the panel said, will take a concerted effort of city officials and property owners on the stretch of LaSalle between the Chicago River and Jackson Boulevard. After decades as La­Salle Street staples, several big banks and trading firms are leaving that corridor for newer buildings elsewhere downtown and pushing the owners of some LaSalle Street landlords into foreclosure.

A concept sketch of a clear canopy structure that could be added to the south end of LaSalle Street to help add a “visual focal point” to the corridor and entice more foot traffic.

GOETTSCH PARTNERS

BY DANNY ECKER

P024_CCB_20220711.indd 24

LUMA8

GOETTSCH PARTNERS

INCLUSION

At the heart of the recommendation is the creation of the “LaSalle Landmarks Innovation District,” a distinct neighborhood that would come with a framework plan to help the street become “a true mixed-use district inclusive of residents at different income levels and businesses of all sizes,” the report said.

That will mean repurposing much of the street’s outmoded office space to cater to entrepreneurs and small- and medium-­ size businesses, as well as boosting residential uses on the street.

More service-oriented tenants such as schools, grocery stories, medical offices, cafes and restaurants should be prioritized, as well as visitor attractions like art galleries and space for performance and immersive experiences, the report said.

The panel proposed splitting up LaSalle Street into three separate zones: a northern section closer to Wacker Drive that would add to its landscaped median and signage to direct people into the heart of LaSalle; a middle zone with wider sidewalks, more streetside seating and less on-street parking; and a southern section on the two blocks north of the Board of Trade Building that would be closed off to vehicular traffic and feature a new public plaza.

The plaza could be developed in phases, the report said, beginning with catenary lighting strung between light posts, seasonally changed murals on the street surface and in alleys, evening light displays projected on the surrounding buildings, and areas to sit and eat. A subsequent phase could include owners of the buildings along the two-block stretch opening up portions of

An illustration of a potential lighting display on the Board of Trade Building. their ground floors to the public with new dining options, the panel recommended, suggesting a master lease for the area with a single food and beverage operator to coordinate the offerings. The plaza could ultimately include features that would make it a destination even when the weather is bad, such as the creation of a glass canopy-like structure sheltering the street.

“Members of the (panel) believe that the bold move of ­ pedestrianization is necessary to deliver a much-needed jolt to reenergize LaSalle Street and ­reshape its image as a truly desirable environment for office ­workers, residents, and visitors,” the report said.

The ULI panel included local developers, architects and urban planners, and was tapped for its recommendation by the Chicago Department of Planning & De-

A concept sketch of an open-air plaza at the southern end of LaSalle Street. velopment and the Chicago Loop Alliance. The task was to recommend ways to draw new types of users to LaSalle and assess what role financial incentives might play in bringing that vision to life.

The panel in March issued its initial findings from brainstorming sessions it held this year.

INCENTIVES

Financing any of the ideas could be the biggest challenge.

The report said financial incentives from the city would be crucial to getting private investors to buy into the vision, especially if any of the properties are to include affordable housing.

Cook County’s Class L tax designation, federal historic preservation tax credits, low-income housing tax credits and Illinois’ recently passed affordable housing property tax incentive should all be leveraged to help

revive older buildings, the panel said.

The report also pointed to interest from some developers in revitalizing older properties, such as developer Mike Reschke’s plan to redevelop the James R. Thompson Center. Reschke is also planning to purchase the tower at 115 S. LaSalle St. that BMO Harris Bank is vacating and leaving mostly empty.

Funding improvements on the street itself will rely on the city unfreezing the LaSalle/Central tax-increment financing district, allowing money from that TIF to be spent for its original purpose of reviving a part of the city with severely outmoded buildings.

Former Mayor Rahm Emanuel made a strategic political move in 2015 when he effectively blocked new TIF spending in the central area of the city. Downtown was thriving during his administra-

tion, and the money was to be directed toward helping resolve unfunded pension costs for the city and Chicago Public Schools.

That has continued thus far under Mayor Lori Lightfoot.

The panel also stressed its support for a proposed bill in Springfield that would allow the formation of business improvement districts, which apply special taxes on property owners to fund street improvements, programming or services like security. The concept is similar to the commonly used special service area taxing districts in the city, but with building owners having more say over how properties within the district are assessed for purposes of the special tax.

Building owners would also initiate the creation of such districts, whereas proposed SSAs are only blocked when enough property owners oppose them.

7/8/22 2:50 PM

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FAMILY LAW

HOW THE PANDEMIC HAS SHAPED COURT CASES AND DOMESTIC DIFFICULTIES Navigating family law issues can often be challenging, and since 2020, that’s been even truer as families, attorneys and judges contend with differing medical opinions, safety precautions and an increased use of technology. Three Chicago-area family law attorneys share their insights on these issues and more with Crain’s Content Studio.

1. With the easing of COVID restrictions, are courts now fully open again? Are some appearances and depositions still happening by video call?

Jonathan Merel: While courtrooms are slowly opening again, the impact of COVID on the court system will be felt perhaps forever. While counties such as DuPage and Will County seem to be back in full swing, Cook County has been a bit slower to open the doors of its courtrooms, taking more of a judge-by-judge approach.

However, nearly all counties now offer a Zoom component to their daily court calls, often giving lawyers and litigants the option for a virtual court appearance, depending on the type of proceeding. While many judges will insist on in-person court appearances for hearings or trials, routine court dates will likely continue to be via Zoom if the litigants or attorneys prefer to appear remotely.

James Quigley: Depending upon the county, there continues to be a range of full-open courthouses and others with very restricted in-person activity. To some degree, the

while some judges will only allow in-person matters if both parties agree. Depositions largely continue to be via Zoom, as courts have been reluctant to compel people to appear in person.

2. When conducting appearances and depositions by video, how do you as an attorney change how you approach and prepare to present your cases?

Quigley: The first and most critical part of preparation is the efficient use of technology.

Knowing how to quickly pull up evidentiary documents and being able to highlight on screen relevant portions of documents quickly and efficiently, is critical to a smooth trial. Surprisingly, many attorneys have not been able to make the adjustment from hardcopy exhibits to digital exhibits, and as a result, their examination is disjointed and loses its flow and cadence.

I have seen countless witness examinations interrupted because of dropped internet connections or other technical glitches. Aside from the technical aspects, preparing for trial over Zoom is no different than preparing for an in-person trial — know your case inside and out, prepare your

“ILLINOIS COURTS NO LONGER NEED TO WASTE THEIR TIME ASSESSING WHY THE MARRIAGE FAILED AND WHO WAS AT FAULT IN THE DIVORCE. INSTEAD COURTS ARE BETTER SERVED ASSESSING THE FINANCIAL CIRCUMSTANCES OF THE PARTIES AND EQUITABLY DIVIDING THE MARITAL ESTATE.”

JONATHAN MEREL

JAMES QUIGLEY

Founder & Managing Principal Law Offices of Jonathan Merel jmerel@merelfamilylaw.com 312-408-7000

JONATHAN STANDEFORD

Divorce and Family Law Equity Partner Beermann LLP jmquigley@beermannlaw.com 312-621-1225

document to everyone involved in the matter, without confusion about what the document being presented represents. This does change the approach for preparing as it requires attorneys to be aware of the functions of Zoom, how to

screen share, and how to do it in an effective manner to not disrupt the flow of the argument in court or questioning in the deposition.

3. How has the pandemic and COVID concerns

Associate Attorney Birnbaum Gelfman Sharma & Arnoux LLC j.standeford@bgsafamlaw.com 312-863-2800

changed interactions with clients during and following representation?

Quigley: For a period of time, the COVID restrictions literally resulted in me representing

Your Family in Family Law A Leading Divorce and Family Law Firm in the Chicagoland Area

— JONATHAN MEREL, LAW OFFICES OF JONATHAN MEREL population density within any given jurisdiction, and perhaps cynically, the politics of that particular jurisdiction largely drive the decision as to which courthouses are open for business.

Most courthouses have at least begun to hear some in-person matters, typically contested trials,

P025_P027_CCB_20220711.indd 25

witness examinations and know how to properly admit critical documents into evidence.

Jonathan Standeford: With the ability to review documents in real time through video calling, this allows for a seamless presentation of the same

With Offices in Downtown Chicago, Skokie & Highland Park ChicagoDivorce.com

Call 312.487.2795 Today for a Consultation

7/6/22 10:20 AM

FAMILY LAW people I never met from the start of a divorce until its conclusion.

Divorce is such an emotional and personal process and not being able to work with people inperson made it difficult at times to convey the importance of certain aspects of the process or simply to be able to express concern, care, and empathy for my clients the way that you can in person.

Standeford: Prior to COVID, attorneys were able to have more in-person interactions between being in court, meetings at offices, at various stages of the litigation such as depositions. Now with COVID, there are fewer in person interactions, but thankfully the face time has not diminished as we have access to video calling.

4. Can you talk about how the pandemic has impacted divorces? Have you seen the cause of divorce change in recent years?

Merel: At the outset of the pandemic, it was clear the quarantine created anxiety and high-tension environments for families which led to difficulties in many marriages. Whether it was the uncertainty of the economy, the impact on jobs or

the increased risk for domestic violence, COVID created an unprecedented environment that created obstacles that tested the traditional family structure.

As the pandemic progressed, couples also found themselves on different sides of the fence in regard to vaccinating their children, sending children to school in-person and the use of masks on themselves and their children. Differing views on these issues between parents led to more stress in many homes and unfortunately led to the failure of many relationships.

and is, oftentimes, contentious.

Having interpersonal relationships with other lawyers, and even with judges, there’s a personal accountability and even camaraderie that all but disappeared during the pandemic. I attribute that in large part to the lack of in-person interaction between lawyers and judges, but also layered with added levels of stress everyone

set support?

Merel: Not only can fault not be considered by the court adjudicating the divorce, but testimony or evidence regarding the actions of either party as it relates to the breakdown of the marriage (such as infidelity) will often be deemed irrelevant by a court at trial, unless the evidence is relevant to a financial issue

“THE NUMBER ONE PANDEMIC DISPUTE HAS BEEN OVER THE ISSUE OF VACCINATING CHILDREN. WITH THE PUSH TO VACCINATE CHILDREN UNDER THE AGE OF FIVE, THIS DISPUTE WILL CONTINUE TO BE AT THE FOREFRONT OF LITIGANTS.”

Standeford: The pandemic has been hard on many people and may have caused a slight uptick in the amount of dissolution proceedings. The reasons for many divorces, though, have remained the same despite the pandemic. As an example, money concerns and issues may be the cause for the divorce which may have been brought on by the furloughs and layoffs as a result of the pandemic, but the issue which has brought the parties to divorce was the money issues.

was going through such as having to deal with isolation or new child-related issues because kids could not be in daycare or in school. Many of my colleagues enjoyed not having to commute to and from an office, however my team returned to the office very early on. This made for a much more tolerable practice, exchange of ideas, and teamwork.

such as dissipation (spending marital money for a non-marital purpose). Illinois courts no longer need to waste their time assessing why the marriage failed and who was at fault in the divorce. Instead courts are better served assessing the financial circumstances of the parties and equitably dividing the marital estate.

Quigley: The pandemic impacted the divorce process in a profoundly negative way. Divorce is always filled with emotion

5. Can the court consider the reason the marriage failed when determining how to divide assets and

Standeford: Judges are not supposed to consider the basis for the divorce other than irreconcilable differences. However, it is not lost on attorneys or the litigants that the events which caused the dissolution of marriage, or how each party conducts themselves prior to and during the litigation, will impact how a judge will consider dividing assets and set support. In Illinois, there are guidelines for child support and maintenance (formerly known as alimony) which help remove any influence the judge may have on events surrounding the divorce in setting support.

However, a court may look at other factors they deem necessary to potentially deviate from the guidelines, so long as the necessary findings and determinations are met.

— JAMES M. QUIGLEY, BEERMANN LLP

6. How has the pandemic changed how much litigants are concerned about things such as children participating in extracurriculars and education? What about medical decision making?

Standeford: The pandemic has in part shifted some litigant’s focus to request final or sole decision-making in the areas of extracurriculars, education

P025_P027_CCB_20220711.indd 26

and medical decision-making.

Each of these areas of significant decision-making require the parent to look beyond simply registration, scheduling and what is necessary for the child to attend. Now, they must also consider the COVID procedures put forth by various governing bodies of extracurriculars, educational requirements for vaccinations and masking, and

ultimately, whether or not to get the COVID vaccination.

Quigley: The number one pandemic dispute has been over the issue of vaccinating children.

With the push to vaccinate children under the age of five, this dispute will continue to be at the forefront of litigants. It became critical to understand the practices of certain judges and even individuals who represent children in divorce, such as guardians ad litem or child representatives, in order to be able to advise clients about their options and whether there is any real likelihood of success in their position.

7. How have positive COVID tests or concerns over potential exposure changed how parenting time is approached or considered in writing an allocation judgment?

Standeford: Much of how this is handled is based on the litigants, the vaccination status of everyone involved, the age of the children, and whether make-up parenting time can be scheduled for the parent who has received a positive test or exposure. For example, if everyone is vaccinated, and the parents are amicable and understanding about the circumstances, many times we can modify parenting time by agreement to avoid unnecessary exposure until a negative test is achieved and schedule make-up parenting time. However, there are instances where the litigation is more contentious, and this is not as easily achieved.

Quigley: Positive COVID tests, and the reality of them moving forward into the foreseeable

7/6/22 10:21 AM

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future, has not resulted in any real dramatic shift in the language we use in an allocation judgment. Early on, we saw litigants weaponizing COVID testing, for example, by trying to keep the other parent from having parenting time. Generally speaking, we treated a positive COVID test legally between parents the way we would any other medical issue where parents have joint decisionmaking. Most litigants we worked with understood that if their child had symptoms, bouncing back-and-forth from one parent to the other wasn’t a good idea.

8. How is the amount of child support impacted by who the children reside with and when? Will a court ever set a cap on child support or spousal support once the payor’s income reaches a certain level?

Quigley: Illinois law uses a formula to calculate child support, which does take into consideration the respective incomes of both parents, as well as the number of overnight visits each parent has throughout the course of the year. Even if a parent has a 50-50 schedule, one parent could still be legally obligated to pay child support to the other. Conversely, a parent who, historically, might have sought less parenting time, is now incentivized to seek more overnight parenting time to trigger the reduction in support, based upon the formula.

Fighting for the proverbial 50-50 has become much more

reduction in child support is not beneficial to the child.

Standeford: The guidelines in Illinois provide child support modifies most significantly when there is a party who either has fewer than 146 overnights annually of parenting time versus a party who has or is in excess of 146 overnights annually. If the litigant has fewer than 146 overnights annually, the child support will be an increased amount, however, if that parent receives 146 overnights or more annually either as a result of a parenting order or a modification to a parenting order, then child support will be a decreased amount. The courts in any child support proceeding continue to have the authority to deviate from the guidelines. As for a cap on child support or spousal support, it can be agreed to for a cap to be set on maintenance, but child support should not have a cap. The guidelines only apply to litigants whose incomes are less than $500,000.

Once the litigant’s combined income increases beyond that amount, the guidelines for child support and maintenance become suggestions rather than mandates to prevent a windfall for a litigant.

Merel: In Illinois, child support is generally calculated pursuant to an “income sharing” formula that considers the incomes of both parents and the parenting schedule (how many overnights the child spends with each parent). In essence, the closer the incomes

ABOUT THE PANELISTS JONATHAN MEREL is founder and managing principal of the Law Offices of Jonathan Merel, a divorce and family law firm with offices in Chicago, Highland Park and Skokie. He enjoys helping high-conflict couples find the right path to a productive future.

He has experience representing clients in contested child custody suits, high-networth divorces and suits involving multimillion-dollar marital estates. Merel takes a modern-family approach to divorce, seeking long-term solutions to a happier family, not just quick legal fixes.

JAMES M. QUIGLEY is a divorce and family law equity partner at Beermann LLP. He is the 2021-2022 president of the American Academy of Matrimonial Lawyers, Illinois Chapter and is board certified by the National Board of Trial Advocacy. Quigley, who has represented many high-profile clients in his near 30-year career, is a regular lecturer for the Lake County Bar Association and the Illinois Institute for Continuing Legal Education. He also provides legal commentary for many local and national media outlets.

JONATHAN STANDEFORD is an associate attorney at the family law firm of Birnbaum Gelfman Sharma & Arnoux LLC based in Chicago. Prior to joining the firm, Standeford practiced family law and served as 711 Licensed StudentAttorney with the UIC Family Law and Domestic Violence Clinic where he learned the intricacies of representing victims of domestic violence. Standeford’s broad experience and knowledge includes court orders of protection, maintenance, child support, allocations for parental responsibilities and even adjudicated pet custody.

sharing formula. Attorneys representing individuals with high incomes will often seek the imposition of “cap” on the income of the client for purposes of determining child support

to provide some limitation on the support obligation.

Additionally, individuals with a support obligation who are set to experience a windfall financial event (i.e. the sale

of a business) will often try to limit the support obligation by preemptively seeking a support cap.

“PRIOR TO COVID, ATTORNEYS WERE ABLE TO HAVE MORE IN-PERSON INTERACTIONS BETWEEN BEING IN COURT, MEETINGS AT OFFICES, AT VARIOUS STAGES OF THE LITIGATION SUCH AS DEPOSITIONS. NOW WITH COVID, THERE ARE FEWER IN PERSON INTERACTIONS, BUT THANKFULLY THE FACE TIME HAS NOT DIMINISHED AS WE HAVE ACCESS TO VIDEO CALLING.” — JONATHAN STANDEFORD, BIRNBAUM GELFMAN SHARMA & ARNOUX LLC prevalent since the statutory changes. This is good in some instances where both parents are looking to step up and be more present for the children, but in other instances, it is actually harmful to children. Having parents that aren’t really focused on parenting, but rather on a

P025_P027_CCB_20220711.indd 27

of the parents and the closer to a 50/50 parenting schedule, the less child support. However, when the primary breadwinner earns a substantial income, courts will exercise discretion in determining the amount of child support and will not be required to apply the income-

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Venture Partners. “It feels like it’s very quickly going to become the toughest venture environment we’ve seen for a long time. My guess is people are going to start cutting jobs.”

A pullback in tech hiring and spending would end a 12-year run of startup investing that culminated last year in record levels of capital outlays locally and nationally. Fewer companies will get funded, and those that do will get less money and give investors more equity in return. Locally, the funding squeeze presents a hurdle in the Chicago tech sector’s effort to catch up with coastal hubs and threatens job growth in an industry that’s been a badly needed source of well-paid jobs in the Chicago area.

Venture-capital investing in the first quarter fell 26% from the fourth quarter of 2020, nationally and in Chicago, but remained well above the pace from 2018 to 2020, according to PitchBook. Venture funding totals often are a lagging indicator because of the lead times involved in negotiating deals.

Tech job cuts began last year in Silicon Valley but didn’t reach Chicago until May 4, when Cameo, a high-flying startup, announced it would lay off nearly 25% of its staff. A month later, Hologram, a wireless-­technology provider, said it would lay off 40% of its employees.

It’s not just startups. PayPal, which bought Chicago-based Braintree in 2013, recently laid off workers here. The company did not respond to a request for comment on the number of jobs cut.

“We’re telling companies to be mindful of any new hires,” says Stuart Larkins, a partner at Chicago Ventures, although he says a number of its investment companies are ahead of forecasts and still growing fast.

MAKING ADJUSTMENTS

Venture capitalists are worried about how their companies will do if customers cut back spending on products because of rising interest rates and other costs, or if a broader recession takes hold. But they’re also worried about a rapid change in the funding environment.

“Until recently the cost of capital was effectively zero,” says Molly

Bonakdarpour, a partner at Drive Capital in Columbus, Ohio, which has invested in several Chicago startups. “When you see the cost of capital go up, the calculus changes.

Every entrepreneur, every board is having conversations about how to adjust to an environment when capital is more expensive.”

Venture firms are reviewing budgets with management teams, looking for ways to cut costs, preserve cash and get to profitability faster. Some have circulated playbooks with how-to guides on handling layoffs, tracking cashflow weekly instead of monthly, cutting outside consultants and renegotiating deals with vendors for wireless or cloud-computing services.

“As a management team, we are spending a lot of time talking about what it will take to achieve profitability in a sustainable way . . . which is a departure from where all of us were at just six months ago,” says David Rabie, CEO of Chicago-based Tovala, which sells high-tech countertop ovens and meals that go in them.

DROPPING VALUATIONS

It’s not just the possibility of a recession that worries investors.

Valuations of venture-backed companies, which largely track public markets, had been soaring for years. But with a pullback in tech stocks of about 25% this year, and worse in specific sectors, those valuations are dropping fast.

The drop in tech stocks reduces opportunities for VCs to cash out of existing deals, dimming the likelihood of initial public offerings and reducing the value of mergers and acquisitions, making them less attractive. The number of exits dropped 42% in the first quarter from the fourth quarter, and the value of those deals fell 79%, according to PitchBook.

More mature private companies, which have raised larger amounts than early-stage startups, are seen as particularly challenged. An influx of cash by free-spending giants such as Tiger Global and SoftBank, resulted in a flurry of $100 million-plus financings that drove up valuations last year.

The pace of $100 million-plus deals in Chicago has slowed sharply, with three transactions through the first half of this year, down from a record 17 in 2021, ac-

cording to PitchBook.

Companies that raised money at high valuations in late 2020 and 2021 will have difficulty raising more at similar prices. Some will be forced to accept lower valuations, a “down round,” giving up more stock in exchange for less money than previous investors paid—something companies are loath to do.

“We’re telling our companies that a flat round is a win, an up round is a home run,” Larkins says.

Amount, a Chicago financial-technology company that was valued at $1 billion in 2021, turned heads recently when it raised new money at an equal valuation. It later cut 18% of its jobs, or about 100 positions.

Travel-software startup Journera closed a $10 million round of financing in April. CEO Jeff Katz says “valuations of software companies were crushed, and we felt that,” though he declined to disclose the valuation. Chicago-­ based Journera is benefiting from the post-COVID travel recovery and is hiring. But it won’t hire as aggressively as previously planned.

“We want to keep our costs as low as we can,” says Katz, who founded Orbitz after the dot-com crash. “Everybody’s talking about more runway and ­ profitability rather than growth as the key ­metric.”

The irony is ­ venture-capital funds are sitting on record amounts of cash. They raised $129 billion last year, more than double the previous high, according to PitchBook. Firms have pulled in another $100 billion this year.

Companies at earlier stages will also feel the impact of shrinking valuations. PitchBook says valuations for early-stage deals are down more than 50%. And that’s for companies that can get investors’ attention. As venture funds worry about their existing investments, they’re less interested in new deals.

Jim Dugan, managing partner at Chicago-based OCA Ventures, says he was at a conference with hundreds of venture capitalists in California before Memorial Day. “Most VCs are internally focused, not looking at new deals, triaging their portfolios,” he says. “Everyone’s going through this.”

7/8/22 3:27 PM

CRAIN’S CHICAGO BUSINESS • JULY 11, 2022 29

Mike Reschke makes megawager on Loop revival with high-profile projects

P029_CCB_20220711.indd 29

Mike Reschke

Developer Mike Reschke is poised to buy the James R. Thompson Center and office buildings that BMO Harris Bank is vacating after completing a luxury hotel farther south on LaSalle Street, part of a megawager that the Central Loop is poised for a post-COVID boom.

The Thompson Center

CLARK

WASHINGTON

MONROE ADAMS

MO

E

MICHIGAN

MADISON

115 S. LaSalle St./111 W. Monroe St.

WABASH

LASALLE

RANDOLPH

STATE

One potential game-changer for the project—and the entire Loop— is that Google is also said to be eyeing new offices on LaSalle Street.

That could include an eventual purchase of the Thompson Center itself, though Reschke denies he has had any discussions with the company about such a deal.

Down the street, Prime Group is in talks to buy the BMO properties for a fraction of the $191 million loan on the buildings and will have a couple more years of lease payments from the bank to help buy time for the office market to recover.

Reschke’s investment thesis counts on the city getting a handle on both the reality and perception of violent crime downtown. He implores public officials to beef up security on CTA trains to help people feel more comfortable with public transportation, one of the Loop’s most important strategic advantages.

Reschke also expects the trend of companies shedding office space as more employees work from home to reverse eventually.

Even as downtown office vacancies reach record highs, he predicts the most talented workers will still want their own workspace in office buildings. “Just because they only come to work three days

 RESCHKE’S BIG BET

DEARBORN

THE GOOGLE FACTOR

a week doesn’t mean there’s less demand for office space,” he says.

He’ll have to convince financial backers to share that vision at a time when many lenders are taking huge losses on downtown properties with severely depleted values. The developer himself is feeling the pain: Lender Midland Life Insurance last year filed a $50 million foreclosure suit alleging a Prime Group venture defaulted on its loan tied to a five-floor block of offices above the JW Marriott Chicago hotel at 208 S. LaSalle St., an allegation Reschke vehemently denies. A Cook County judge recently allowed the receiver on the property to begin marketing it to other investors.

Yet Reschke, who rose to prominence by building a multibilliondollar portfolio of properties in the 1980s, has escaped trouble before. Like the way he refinanced properties through public securities markets after that highly leveraged portfolio saw its value plummet as the economy tanked in the early 1990s. Or when he refinanced the Residence Inn on LaSalle in February 2021—11 months into a crisis that all but froze travel demand—with $141 million in new debt. Name a development incentive program, and it’s likely Prime Group has used it.

“I don’t think anybody’s found more creative financing sources than Mike Reschke,” says veteran developer Steve Fifield. He and others in the real estate community are “holding their breath” to see if Reschke can pull off his Thompson Center redevelopment. “Until he gets his capital put together and closes on it, he’s going to keep those plans to himself. But he clearly has a couple ideas up his sleeve.”

Few are willing to speak publicly about Reschke’s development track record, but more than a dozen prominent players in local commercial real estate describe

WELLS

creative risk mitigation strategies.

For example, if Reschke sticks to his budget to overhaul the dilapidated 1.2 million-square-foot Thompson Center and sell back a portion to the state of Illinois, Illinois taxpayers will have paid his firm close to $76 million to build the state new office space and assume the risk of finding office and retail tenants for the nearly 800,000 square feet of remaining space. Reschke says he is scheduled to close on his acquisition of the property this summer and expects the project to be completed by early 2025.

FRANKLIN

is Chicago’s traditional downtown office market, where the workfrom-home trend spawned by COVID-19 has emptied out buildings and left landlords scrambling to cover their mortgage payments.

While many real estate investors have fled the Loop and environs, Reschke is betting heavily on a downtown rebound.

He struck deals last year to buy and redevelop the James R. Thompson Center and build a new luxury hotel just off the Magnificent Mile. Now he’s close to purchasing a pair of outmoded office towers that BMO Harris Bank is leaving mostly empty on LaSalle Street, one block north of where he opened a high-end boutique hotel. His next target: The shuttered Conrad Chicago hotel just steps from Michigan Avenue, where he says he is discussing a joint venture with the distressed property’s owner.

In taking on a collection of high-profile projects totaling around 3 million square feet, Reschke shoulders an outsize share of responsibility for reviving commercial real estate in the city’s urban core. The seasoned developer has a knack for revitalizing old properties, but also a track record of tussling with lenders and investors, and overspending on projects that take years to come together.

If he succeeds in turning tired properties into compelling destinations, other developers might follow him and fast-forward downtown’s recovery. If he struggles, it could be a red flag that deters others and postpones the city’s post-COVID comeback.

Many in Chicago’s real estate community who are rooting for him to help save the Loop also worry about his ability to bring his bold visions to life amid rising interest rates, rampant inflation, nagging supply chain problems and weak office demand, all while commercial property taxes jump and the threat of a recession looms. But none of that seems to faze the veteran dealmaker, who argues the city overreacted to COVID-19, half-jokingly says he knows more about architecture than most architects and calls the opportunity to change the perception of downtown “the most exciting I’ve had in my life.”

“In 40 years, the values I’m seeing for LaSalle Street (properties) are at a record low,” he says.

“It doesn’t take a rocket scientist to understand the math. It’s very simple. It just takes someone who has confidence that the city is just clearly on a rebound.”

Almost nobody is making such a gutsy megawager on the Loop, as big banks and other companies defect for newer buildings and more trendy locales like the West Loop and the Fulton Market District.

Reschke plans to spend more than a billion dollars on projects downtown, a massive gamble hedged only by the steep discounts he’s getting and some

JOHN R. BOEHM

RESCHKE from Page 1

208 S. LaSalle

Source: Crain’s reporting

a mixed reputation: Several call him a numbers savant and oldschool dealmaker whose projects are of exceptional quality and aesthetically distinguished. But many also point to undisciplined spending and a habit of sewing together complex webs of partners and incentives that can unravel.

PASSION FOR DESIGN

Reschke acknowledges his tendency to “spend more than I should,” a proclivity that may stem from a passion for design he picked up from the late architect Ricardo Bofill. The two worked together on big Prime Group projects at 77 W. Wacker Drive and 131 S. Dearborn St., now known as Citadel Center.

He blames “black swan” economic downturns for setbacks that sometimes forced him to give up promising development sites.

Prime Group owned properties at 150 N. Riverside Plaza, 300 N. LaSalle St. and 71 S. Wacker Drive before selling them to other de-

velopers that built skyscrapers on them, deals he says he struck when he needed cash.

“If you’re sailing a ship, you don’t like rough seas, but sometimes you have no choice. You have to navigate through the rough seas and you don’t want to sink the boat. Our boat is still afloat after 42 years, and we rode through a lot of rough seas,” Reschke says.

The Arlington Heights native, who worked as a union tile setter in his late teens and later spent three years as an attorney before moving into real estate, hopes an economic upturn will help his downtown projects. But he says he’s “100% confident” in his ability to finance and follow through with all of them even if a recession deals another blow to downtown.

“Otherwise we wouldn’t be making this (bet)—let alone at this stage in my life—that Chicago is fine and is going to thrive,” Reschke says. “And if I’m wrong, I’m wrong. But at least I’ll leave Chicago with some beautiful buildings.”

7/8/22 3:27 PM

30 July 11, 2022 • CRAIN’S CHICAGO BUSINESS

Abbott’s baby formula loses market share to competitors amid plant closure ABBOTT from Page 3 customers, who now associate Abbott’s brands with shortages and quality problems. At the same time, the formula crisis has prompted lawmakers and regulators to rethink rules that helped Abbott amass such a large share of the formula market.

That, in turn, raises questions about the future of the baby formula business in Abbott’s portfolio, where it has always been an outlier amid an array of medical products.

Abbott briefly reopened its Sturgis plant at the beginning of June before shutting it down again less than two weeks later due to storm damage. It hopes to reopen the plant in July. Only when it reopens can Abbott start trying to recapture customers.

According to a recent Numerator survey, 40% of consumers are likely to stay with the formula brand they switched to during the shortage if it works for their child, suggesting Abbott could lose some customers for good.

Also contributing to parents’ reluctance to switch back to Abbott formula could be the brand damage it suffered as the formula crisis intensified over the last several months. In congressional testimony in May, U.S. Food & Drug Administration Chief

Dr. Robert Califf said his agency found “egregiously unsanitary conditions” at the Sturgis plant.

Abbott did not respond to requests for comment.

As consumers try out competing formula brands, government officials are taking a closer look at why the market has become so concentrated that the closure of a single plant triggered a nationwide shortage. The Federal Trade Commission in May launched an investigation into the formula shortage “to shed light on the factors that have led to concentration in the infant formula market and the fragility of the supply chains for these crucial products.”

CHANGES LOOM

Abbott could face more competition from other brands if changes are made to the Special Supplemental Nutrition Program for Women, Infants & Children, otherwise known as WIC, which provides formulas at discounted prices to low-income families.

The program drives a large share of formula sales and has fostered market concentration in many U.S. states.

Deutsche Bank analysts predict that modest reforms will likely be made to the WIC program, and that there will be greater regulatory oversight of the formula

market broadly.

Morningstar analyst Debbie Wang agrees, saying it’s “definitely a possibility” that more WIC contracts would go to other formula brands in coming years as state governments look to reduce the risk of future shortages by diversifying their supply sources.

“This might give (other companies) a little bit of an opening where maybe they can pick off a new state or two new states,” Wang says.

Abbott will also see increased competition from abroad. During the shortage, the FDA loosened regulations on imported formula to help meet demand. On July 6, the FDA said it is developing a new framework to allow foreign brands to continue selling products in the U.S. permanently.

Intensifying competition, and the pricing pressure it often triggers, could slow growth and squeeze profit margins in Abbott’s baby formula business. Such a scenario might cause executives to consider selling the unit, which has performed inconsistently over the last several years. But there are hurdles to a sale in the short term. Antitrust enforcers would likely object to a sale to another formula company amid monopoly concerns, and other potential buyers may be reluctant to buy such a troubled brand.

SHIFTING MARKET SHARE Abbott Laboratories long led the infant formula market before this year. Now, as the shutdown of an important manufacturing plant drags on, opportunities are being created for its competitors such as longtime rival Mead Johnson, which has taken the lead.

Abbott Laboratories

Mead Johnson

2020

Other 2022 16.0%

20.6%

29.9% 54.0% 30.0% 49.5%

Note: Abbott’s 2022 market share figure is an analyst estimate.

Sources: IBISWorld, Infant Formula Manufacturing, Mead Johnson and Deutsche Bank

Baby formula generated $4.3 billion of Abbott’s $43 billion in sales last year, U.S. Securities & Exchange filings show. The business has long been a drag on Abbott’s overall nutrition division, the company’s third-largest unit that also encompasses adult and elder products.

Before this year, nutrition sales were growing, increasing 7.7% in 2021 and 4.7% in 2020, led by double-digit growth in the adult nutrition lines. But pediatric nutrition sales grew just 3.3% last year and 0.3% in 2020.

With the plant shutdown, pediatric nutrition sales declined 20.6% to $847 million in the first quarter, contributing to a 7% sales decline to $1.9 billion for the nutrition segment.

Abbott’s stock has dropped about 22% since the beginning of the year.

“I would not expect to see much more improvement until the tail end of third quarter,” Wang says. “It’s going to take a while to get shelves fully stocked and people buying all of that formula again.”

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CRAIN’S CHICAGO BUSINESS • July 11, 2022 31

The gardens of Versailles? No, a Glencoe estate.

Take a photo tour of the property coming on the market at just over $7.5 million I BY DENNIS RODKIN

C

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@PROPERTIES

oming on the market quietly at over $7.5 million is a Glencoe estate whose clipped-hedge formal gardens look like something from the Versailles palace grounds.

The property, just under half an acre on Forest Avenue, has two primary buildings: the six-bedroom mansion and a guest house with a tile-bottomed swimming pool beneath a glass roof. Since 1993, it’s been the home of Randy and Petra Rissman, according to the Cook County clerk.

Randy Rissman is one of three family members who in 1978 founded Vernon Hills company Tiger Electronics, which made handheld games, including the popular Giga Pets. He was CEO of the toy company until Hasbro acquired it for $335 million in 1998. Under Hasbro, Tiger launched Furby, the “it” toy of 1998. Rissman now heads a venture-capital fund based in Northbrook.

The Rissmans could not be reached for comment. All phone numbers listed for them have been disconnected or are not in service. Their listing agent, Susan Maman of @properties Christie’s International Real Estate, declined to comment.

The Forest Avenue property is listed on an agents-only network and Maman’s website, marked “coming soon.”

Few details of the property are posted with the photos.

If the Rissmans sell for something close to their asking price, theirs will be the second-highest-priced recent home sale in Glencoe, behind a lakefront mansion that sold in December for almost $8.7 million.

Vol. 45, No. 27 – Crain’s Chicago Business (ISSN 0149-6956) is published weekly, except for the first week of July and the last week of December, at 130 E. Randolph St., Suite 3200, Chicago, IL 60601. $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 2022 by Crain Communications Inc. All rights reserved.

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