Crain's Chicago Business, June 3, 2024

Craft brewers say new hemp rules could threaten THC drinks

Illinois beer makers recently dove into production of hemp-derived, THC-infused beverages and say sales are soaring |

After watching sales of their new THC-infused beverages explode in recent months, Illinois’ craft beer makers are worried proposed regulation could zap their newfound revenue stream.

The state’s craft beer industry struggled following the pandemic. Ten percent of the state’s breweries permanently closed throughout 2022 and 2023, as taproom traffic failed to return to pre-pandemic norms and consumer drinking habits shifted away from craft beer. Survivors began looking to THC-infused drinks as a lifeline.

By Ally Marotti

Illinois has about 280 craft breweries, and roughly 30 of them are selling THC-infused beverages.

Assessments prove Kaegi’s optimism

Newly released West Loop data offers clues about how the Cook County assessor sees the health of the office sector

By Danny Ecker

Cook County Assessor Fritz Kaegi has issued the first batch of numbers showing what he thinks has happened to downtown office building values over the past three years.

Like most of his previous work, the data isn't sitting well with landlords.

A Crain's analysis of newly released assessments for more than two dozen prominent West Loop office buildings showed that recent valuations dropped by an average of just under 16% compared with Kaegi's final estimates in 2021, the last time his office assessed all of downtown.

The figures from the reassessment of West Chicago Township — which includes a big chunk of downtown west of the Chicago River — signal Kaegi's broader opinion on how rising interest rates and weak demand for downtown

office and retail space have impacted property values. Those numbers ultimately play a key role in determining the property tax bills owners will be on the hook for next year.

The West Loop dataset captures only a narrow slice of the central business district, with the rest of the city's urban core slated to be reassessed later this year. But the numbers are troubling for office owners, many of whom argue the value of their properties has fallen by far more than Kaegi suggests. The rise of remote work has pushed vacancy rates to an alltime high, and spikes in borrowing costs over the past two years have battered property values so severely that many aren't sure how they'll be able to pay off maturing debt. A wave of foreclosure lawsuits has already pushed the amount of distressed downtown office

How Oberweis Dairy wound up in bankruptcy court

By Ally Marotti

Over the course of a century and four generations, Oberweis Dairy grew from a horse-drawn milk delivery operation into a $116 million company with 40 ice cream shops, up to 1,500 employees and delivery routes in several states. But by October 2023, the company was losing money and shareholders were done watching it hemorrhage. After a failed attempt to sell itself late last year, the North Auro-

ra-based dairy maker filed for Chapter 11 bankruptcy protection in April. Court documents indicate the intent was to keep the company operational and sell it through the bankruptcy proceedings.

On May 29, the investment arm of Winnetka-based private-equity firm Hoffmann Family of Cos. placed the winning bid for Oberweis Dairy in the company’s bankruptcy auction. It plans to keep the name of the storied dairy maker. The court must still ap-

prove the sale at a hearing scheduled for early June.

Experts say despite consumers’ relatively newfound love of plantbased milk alternatives, it is still possible to make a profit selling milk and ice cream. And Oberweis, throughout its 109 years in the business, created a brand people associate with premium products in which the bidders still see value. But the company stretched

POLITICS

Shootings in Chicago are concentrated in the summer, yes. That’s only part of the story.

Oberweis traces its roots to Aurora dairy farmer Peter Oberweis, who started selling milk to his neighbors out of his wagon in 1915. | OBERWEIS

Samantha Lee is co-founder of Hopewell Brewing, which has developed a line of THC-infused drinks.

JOHN R. BOEHM

See KAEGI on Page 19

The Bears and Sox may have come up empty in Springfield — but the game

Both teams are mulling ways to tweak their pitches for taxpayer money to finance their new-stadium ambitions — and there’s reason to believe they may get a more favorable hearing come autumn |

By Greg Hinz

The Chicago Bears and White Sox insist they’re sticking with their pitches for billions of dollars in public stadium subsidies despite coming up empty in the just-completed spring legislative session in Springfield. And there’s reason to believe they may get a more favorable hearing come autumn.

But behind the scenes, signs are emerging that both may be willing to tweak their plans in hopes of winning backing from state lawmakers, perhaps as soon as the General Assembly’s fall veto session. The question is how big those tweaks may be — and whether any changes will be sufficient to lure officials leery of seeming to throw taxpayer money into the pockets of wealthy team owners.

Among the other big questions worth watching now:

Will principal Sox owner Jerry Reinsdorf finally go public with an offer to contribute a rumored $500 million toward the new stadium he wants on The 78 property at Clark and Roosevelt?

Will the Bears make nice with Reinsdorf instead of competing against him for public dollars and public support, and bump up the $2.3 billion they’ve anted toward their proposed home on the lakefront?

Will the Bears take another look at the former Michael Reese Hospital property just west of Soldier Field that some — though not the Bears — assert is a better location than a legally entangled lakefront site?

Will a new home for the Chicago Red Stars women’s soccer team creep into the mix? That would cost some relatively minor money but potentially appeal to progressive lawmakers who otherwise might balk at just helping the boys and the organized labor groups that are already panting at the prospect of tens of thousands of construction jobs the twin arenas would create.

Officially, both teams say it’s full speed ahead and that a lack of interest in spring doesn’t mean a sure defeat in Springfield during the fall or winter.

“We continue to have productive conversations since we unveiled our vision to invest more than $2 billion of private money to a new, publicly owned enclosed stadium which will create 43,000 construction jobs and more than 4,000 permanent jobs,” the Bears said in a written statement to Crain’s. “We look forward to continuing to meet.”

Said the White Sox: “We only have one plan. We are part of Related Midwest’s larger development, and we will work alongside them as they showcase the incredible economic impact The 78 will have on Chicago. . . .With distrac-

tions behind us, we are eager to discuss the once-in-a-generation opportunity this project presents.”

But the Springfield reality remains challenging.

Gov. J.B. Pritzker, who has described the Bears’ proposal as “a non-starter,” has not changed that position. “There’s no Plan B that’s going to come from us,” says Pritzker spokeswoman Jordan Abudayyeh. To work, any revised plan requires “substantial benefit to taxpayers,” she said.

Illinois Senate President Don Harmon now is adopting a similar stance.

In an interview, the Oak Park Democrat said comments he made earlier this spring urging the two teams to work together were misread as a sign he would bless any deal they jointly pitch. “My overall observation would be that the two are fighting over the same pot of (subsidy) money that neither is entitled to,” Harmon said. “I have yet to hear a compelling argument as to why taxpayer money should be put into the hands of wealthy sports franchises.”

Notably, though, neither Pritzker nor Harmon hammered the door shut. Neither does another official who’s much more positive about prospects for an eventual stadiums deal.

‘Tremendous projects’

At their core, the two proposals would deliver “tremendous projects for the city,” said state Rep. Brad Stephens, the point person for Illinois House Republicans on stadium issues and, in his day job, the mayor of Rosemont. “Chicago is a world-class city. Name a world-class city that doesn’t have a first-class (sports) facility.”

What’s needed, he said, is to figure out how much in revenue realistically can be produced by the existing 2% tax on Chicago hotel rooms

— which goes to the Illinois Sports Facilities Authority — divvy that revenue up among claims from the Bears, Sox and Red Stars, and then have government leaders “work out” the remainder of the cost. That likely would require the Bears to come up with more than their pledged $2.3 billion and Reinsdorf to commit to at least $500 million. Doing so also would require those involved to step up their sales job on the related housing, tax, commercial development and other benefits that would come with the stadiums, Stephens noted, an argument echoed by

others close to the issue.

‘Skin in the game’ Reinsdorf indeed needs to “put skin in the game” as discussion of sports facilities issues continues in Springfield, said Jason Lee, a senior aide to Mayor Brandon Johnson, who has been the main political backer of the Bears stadium but appears to have cooled on the Sox plan.

In an interview, Lee said the Johnson administration never counted on legislative approval of the Bears’ proposal for $1.5 billion in state subsides this spring. The

Bears put a plan on the table and “we still believe in the principles of the deal,” he said. But that doesn’t mean some “tweaks,” as he put it, might not be needed. That includes more clarity on public benefits that having a domed stadium would bring, Lee said. Or finding a way to supplement the tax revenues that would flow to the state treasury. Or asking the Bears to foot a greater share of the cost of a project that, with ancillary infrastructure work, would cost a projected $6 billion. The latter “depends” on the overall state of negotiations, Lee said.  Lee said the city has looked at and agrees with the Bears that the Reese site, located to the west of DuSable Lake Shore Drive and Metra Electra tracks, is too small and costly. But though Reese developer Scott Goodman declined to comment to Crain’s, he and his team have continued to argue the site is large enough and would offer huge benefits to park advocates and the adjoining McCormick Place if the convention hall’s truck marshalling yard was decked over as part of the project.

None of this will go to Springfield again until at least November, when the veto session occurs. With lawmakers no longer focused on re-election, officials there might be more inclined to listen to revised proposals.

Right now, neither the Sox nor the Bears appear to be making much headway. But the game isn’t over — not yet.

Architects’ renderings of the Chicago Bears stadium proposal, left, and the White Sox plan.

The doctor will see you now, and

the robot is listening

The prospect of AI freeing physicians and nurses from the need to manually document everything has clinical executives at uChicago and Rush envisioning a return to ‘real-time’ patient care |

Two Chicago health systems will soon test artificial intelligence tools that promise to make patient visit documentation much less burdensome and more patient-focused.

“I remember as a child going to a doctor who would look you in the eyes and ask you how you were doing,” said Dr. Bina Desai, chief medical informatics officer at Rush. “But for the last 10 years or so, the majority of us are typing away on a laptop while talking to patients. It’s almost like there’s this wall” between the patient and the doctor or advanced practice nurse.

See AI on Page 17

By Jon Asplund

AI can “help bring us back to that earlier time, when the full attention is on you.”

Dr. Bina Desai, chief medical informatics officer at Rush

Johnson hires liaison to progressives

Kennedy Bartley, executive director of the united Working Families party, is joining the administration

By Justin Laurence

Looking to shore up his relationship with the movement that elevated him to City Hall, Mayor Brandon Johnson is hiring the head of the progressive political party central to the left’s electoral organizing in Chicago for the last decade.

Kennedy Bartley, who took over as executive director of United Working Families in July after previously serving as the party’s legislative director, is joining the mayor’s office as a liaison to progressive elected officials, unions and community groups.

The hire comes after Johnson’s first year in office, but has been in the works for months, according to sources familiar with the matter. It also comes as some of the mayor’s allies on the City Council have grown concerned their longtime agenda is in peril after the Bring Chicago Home referendum failed, denying the movement a win they had pushed for nearly a decade.

Bartley is a mainstay at City Hall and already had regular meetings with Johnson senior adviser Jason Lee and chief of staff Cristina Pacione-Zayas, as well as a reserved spot in the City Council gallery for major meetings, granting the larger progressive movement the inside access to the fifth floor that they’ve long been at odds with.

Bartley told Crain’s joining the administration as managing dep-

uty for external relations is a “natural evolution for a person who’s been a part of the campaigns and the fights that have created this movement to go to the place responsible for delivering on those fights.”

The appointment continues a shift by Johnson to dance with those who helped him into office.

“We’ve evolved beyond being these permanent outside agitators to having significantly more power, including executive power and a formidable block of progressives and legislators,” Bartley said.

The appointment continues a shift by Johnson to dance with those who helped him into office. After the retirement of former chief of staff Rich Guidice, a City Hall veteran since the administration of former Mayor Richard M. Daley, Johnson elevated Pacione-Zayas, who had been his deputy chief of staff, to the top spot.

Joe Cavello, a former staffer to Pennsylvania Sen. John Fetterman, was brought on as chief strategy officer.

Bartley said the moves were

Shootings in Chicago are concentrated in the summer

A new analysis from the university of Chicago’s Crime Lab pinpoints where and when violent crime primarily occurs in the city

By Leigh Giangreco

For most Chicagoans, Memorial Day weekend ushers in a summer of live music, barbecues and sunny days on the lake. But for the small percentage of residents who bear the brunt of the city’s shootings, summer marks the beginning of the grimmest period of violence all year.

A new analysis from the University of Chicago’s Crime Lab found that more than a third of annual shootings in Chicago happened in the summer, with July alone accounting for 12% of the year’s incidents. Those shoot-

ings are not only concentrated in the summer months, they overwhelmingly impact a small geographic region of the city.

Experts at the Crime Lab hope this data, which pinpoints where and when violence occurs in Chicago, will help inform where violence interrupters, law enforcement and the business community should direct their often limited resources.

“We have a lot of data that points us to the specific places that are most likely to experience high rates of gun violence, and we should use that data to inform decision-making, poli -

cymaking (and) investment decisions,” said Kim Smith, director of programs at the Crime Lab. “So we produced this tool to do just that, so that philanthropy, the business community, the public sector (and) nonprofits can all look at the same data and come together to make decisions.”

The analysis looks at two types of crime — shootings and robberies — between the beginning of 2019 and the end of 2023. Analysts defined “summer” as the period between

See JOHNSON on Page 18

A new analysis from the University of Chicago’s Crime Lab found that more than a third of annual shootings in Chicago happened in the summer.

Highdive gets ‘significant’ private-equity investment

Svoboda Capital will help the Chicago ad agency explore expansion in PR, media and AI

By Ewan Larkin, Ad Age

Svoboda Capital, a Chicagobased private equity firm, has made a “significant” investment in independent advertising agency Highdive. Both parties confirmed the investment but declined to share specific financial terms.

Highdive will retain its independence. CEO Megan Lally, co-Chief Creative Officers Chad Broude and Mark Gross, along with Partner and Group Director Kaley Lambeth will maintain an undisclosed ownership stake in the business, Highdive said.

Svoboda Capital and Highdive began discussing a potential deal in December, after being introduced to one another by advisory firm Spring Advisors.

Highdive, which is also based in Chicago, was impressed with the firm given its expertise in partnering with agencies and service-based businesses, Lally said. Svoboda Capital’s portfolio also includes North Carolina shop The Variable, public affairs agency Bully Pulpit Inter-

national and full-service advertising agency Marcus Thomas.

Highdive doesn’t yet have definitive plans for the investment, but Lally noted “opportunities” to grow in areas including media planning, PR, production and AI. She said that national and international expansion are also “on the table.”

“Anything we do won’t be for the sake of just adding revenue,” she said. “We’re going to look for what makes sense for our team and our clients.”

Many mid-sized independent agencies have recently been seeking growth through mergers or partnerships with other shops to better compete with holding companies. Highdive “didn’t really” explore merging with another shop or being acquired by a holding company as the agency greatly values its independence, Lally said. In working with Svoboda Capital, “there are no expectations” to acquire or merge with other agencies, she added.

“We make a significant investment, but we let the companies continue to run the business,” said John Svoboda, a managing director at Svoboda Capital. Svoboda highlighted Highdive’s “superb track record” as one of core reasons the private equity firm partnered with the agency.

This marks the latest in a se -

ries of private equity investments in ad agencies. Last year, Burrell Communications was acquired by a consortium led by Black-owned private equity firm FVLCRUM Partners and Channing Johnson, a Los Angeles attorney at Loeb & Loeb,

through his investment company View Park Capital. In March, Chicago-based private equity firm Keystone Capital took a “slight majority” in the recently formed BarkleyOKRP. Ewan Larkin writes for Crain’s sister site Ad Age.

Cook County plans $12 million in factory-built homes

The inexpensive modular houses that have popped up in several city neighborhoods will soon make their way to the suburbs

By Dennis Rodkin

The inexpensive modular homes that have popped up in several Chicago neighborhoods in the past couple of years will jump the border into the suburbs as part of a $12 million affordable housing plan the Cook County Board of Commissioners approved last month.

“We are woefully short on the supply of affordable housing countywide,” said Susan Campbell, director of the Cook County Department of Planning & Development.

Going with modular homes, where most construction is done in a factory and then the built modules are trucked to a site to be completed, “affords us the speed” that’s needed to fill the gap, Campbell said.

Of a planned 120 to 150 units, the first will go up in the city’s Humboldt Park neighborhood — where there are already some modular homes — and suburban Chicago Heights by the end of the summer, said Karl Bradley, deputy director of housing and strategic finance. By fall, units should be underway in Maywood, Bellwood and Broadview, Bradley said.

On May 16, the Cook County Board approved the $12 million project, funded by American Relief Plan Act, or ARPA, along with a separate $3 million down payment assistance program.

The two initiatives “will help provide quality single-family homes to Cook County residents who need help the most,” Cook County Board President Toni Preckwinkle said in a statement released that day.

‘Consistency of quality’

The asking prices for the three-bedroom, 1,450-squarefoot houses have not been finalized, Bradley said, but “will be below $300,000. How far below $300,000 we can get them is the challenge.” That figure does not take into account grants and other financial incentives that might come with the buyers, whose household income must qualify them for affordable housing.

The homes, which will go on Cook County Land Bank sites, will be built by Inherent Homes, which already has similar projects underway in Woodlawn, North Lawndale, Roseland and other city neighborhoods.

Tim Swanson, the architect

who founded Inherent Homes a few years ago in a North Lawndale factory, confirmed the suburban component of Cook County’s order will be the first to go up outside Chicago.

It’s also “our largest order to date,” Swanson said in an email. Cook County’s modular hous-

es will be ready for occupancy about six to eight weeks after arriving, compared to about seven months for traditional stick-built homes.

Aside from speed, modular construction offers “consistency of quality (because it’s) produced in a manufacturing site,

and it allows us to continue the program year-round despite climate restrictions,” Campbell said.

‘A new direction’

Bradley said about 30 homes are planned for south suburban Chicago Heights, clustered in the area around Lincoln Highway and Fifth Avenue. The first 10 will go up this year, he said, and the full 30 should be complete within two years.

“If we’re successful, we can grow to 100 or 150 homes in that area,” Bradley said.

In the three western suburbs, Maywood, Bellwood and Broadview, Bradley said the homes will be in clusters of about eight, dictated by what sites the land bank has available.

Some later units in those towns may be done as attached townhouses rather than detached single-family homes, he said. That would bring the sale prices down.

While Cook County has a portfolio of affordable rentals specifically for seniors, people with disabilities, veterans and other special-needs groups, building new single-family homes for sale “takes us in a new direction,” Campbell said.

The aim is to provide “new housing supply in places that have been disinvested for so long,” she said.

A North Lawndale modular project called Home Sweet Homan IFF

Highdive’s 2023 Annual Party | HIGHDIVE

Overdose prevention shifts into high gear for summer

The city’s health commissioner says Chicago and Cook County have seen spikes in opioid overdoses in recent weeks

By Jon Asplund

City health officials are warning summer in the city may be rife with opioid overdoses, with the Chicago Public Health Department telling a City Council committee it is “doubling down” on outreach to prevent ODs.

Despite national news in May that overall opioid overdose deaths were down throughout the U.S. in 2023, CDPH Commissioner Dr. Olusimbo Ige told the council’s Health & Human Relations Committee the city and Cook County have seen spikes in opioid overdoses in recent weeks.

overdose deaths from 2022. And in Illinois, there was a nearly 9% drop, from 3,863 reported fatalities in 2022 to 3,518 fatal opioid overdoses in 2023.

But the epidemic of overdoses is still an unnecessary tragedy, Ige said.

In 2022, the 1,397 opioid-related overdose deaths in Chicago outnumbered homicides and traffic crash fatalities combined, Ige told the committee. Among those 2022 fatalities, 65% were among Black people, 78% of whom were men, she said.

dose surges with resources to prevent overdose deaths.

The problem is citywide, CDPH said in the statement, but concentrated in the West Side community areas of Austin, Humboldt Park, North Lawndale, East Garfield Park and West Garfield Park. Those areas saw 34% of the city’s overall fatal and non-fatal opioidrelated overdose EMS responses in 2023.

“This is totally unacceptable, and it’s preventable,” Ige said in the statement.

In 2022, the 1,397 opioid-related overdose deaths in Chicago outnumbered homicides and traffic crash fatalities combined.

It is typical to see a summertime surge, the CDPH said in a statement, and “during one recent 24-hour period, there were 50 suspected opioid-related overdoses in the city.”

Opioid overdoses actually fell statewide and nationwide in 2023.

On May 14, the U.S. Centers for Disease Control & Prevention reported provisional data showing 2023 saw a 3.1% drop in opioid

“We have tools to help prevent fatal overdoses,” she said in the statement. “With greater awareness and understanding of the increase in opioid overdose deaths, as well as ready access to overdose reversal and treatment medications, everybody can play a role in preventing fatal overdoses.”

The plan, CDPH said, will be to flood areas that are seeing over-

Health department and community organizations will take a “hyperlocal” approach, giving out harm-reduction supplies like the overdose reversal medication Narcan and fentanyl test strips for drug users to check their drug for the presence of the powerful, often deadly, synthetic opioid.

Areas of high activity

Community education on overdose prevention will target areas of high overdose activity using heat-mapping based on EMS response data.

And health care workers will get drug users connected with treatment for opioid use disorder, including same-day access to medication treatment through the Medication Assisted Recovery NOW program. The program is run in partnership with the Illinois Department of Human Services’ Division of Substance

Use Prevention & Recovery and Family Guidance Centers.

Through Medication Assisted Recovery, drug users are provided FDA-approved medications that reduce the risk of drug overdose and death, and reduce withdrawal symptoms and support care engagement over time, CDPH said in its statement.

Also, last year, CDPH launched a pilot program to place public health vending machines in five locations in the city. The plan is to expand on the program, which provides opioid harm-reduction tools, like Narcan, as well as hygiene kits.

The health department and the Chicago Police Department are also piloting the Narcotics Arrest Diversion program, in

which some people arrested for drug possession can opt for a substance use assessment with on-site clinicians.

Ige noted to the City Council committee that opioid-related overdose deaths are one of the primary drivers in the life-expectancy gap between Black and non-Black Chicagoans, the statement said. Along with deaths from chronic diseases like heart disease and diabetes, as well as gun-related homicide, overdose deaths contribute to the gap in life expectancy, which in 2017 was 8.8 years; it widened to 10 years pre-pandemic and then, due largely to disparities in COVID-19 outcomes, to 12.7 years in 2021, CDPH said in the statement.

Pace of Chicago’s population loss slowed last year

As COVID recedes, the city’s declines now more closely mirror the metro area. The performance is better than New York but lags Los Angeles.

By John Pletz

Chicago’s population continued to shrink last year, but the pace of decline slowed significantly.

The number of residents in the nation’s third-largest city dipped 0.3% in 2023 to 2.66 million from 2.67 million the year before, according to Census Bureau estimates. That’s an improvement from 2022 and 2021, when the population slid 1.2% and 1.4%, respectively.

Chicago’s population decline last year was slightly smaller than the 0.5% drop in Cook County but in line with the overall metro area, which dropped 0.2% to 9.26 million, according to the Census Bureau. In 2021 and 2022, the city was declining faster than the metro area.

“The losses have slowed down,” says Kenneth Johnson, senior demographer at the University of New Hampshire’s Carsey School of Public Policy. “I think it’s primarily

because domestic-migration losses are less and immigration has picked up. . . .Natural increase has picked up a little because COVID deaths diminished in the past year.”

The latest numbers are only estimates, which often get revised and are seen by demographers as less reliable than data collected during the decennial census. Unlike county- and state-level estimates, figures at the city level also don’t include data on migration, immigration, and births and deaths, so it’s harder to pinpoint the particular changes at the city level. But the broad trends are clear.

“The three things that affect population are migration, fertility and mortality,” says Christine Percheski, a Northwestern University associate professor of sociology. “We saw changes in all three of those factors across the country between 2020 and 2022. There was less international immigration and record-low rates of

migration during the lockdown. Interesting things happened with fertility.”

How others stack up Chicago’s performance is mixed compared with its peers. Los Angeles’ population was essentially flat at 3.82 million, compared with a 0.3% drop in 2022. New York, the nation’s biggest city with 8.26 million residents, decreased 0.9%, compared with a

1.5% drop in 2022.

The population of Houston, the nation’s fourth-largest city, grew 0.5% to 2.31 million, reflecting the continued strength of the Sun Belt in attracting residents and jobs. Houston continued to close the gap with Chicago and now trails by 350,295 residents.

Phoenix, which rounds out the top five, posted a 0.4% increase.

The fastest-growing big cities are in the Sun Belt, led by Fort

Worth, Texas, which grew 2.2% to 978,468, and Charlotte, N.C., where the population rose 1.7%.

Some big industrial centers in the Northeast and Midwest, such as Philadelphia and Milwaukee, continued to decline. Detroit, however, reversed two years of losses to record a 0.3% increase in residents to 633,218. Overall, however, Midwest cities eked out 0.1% growth last year, the Census Bureau says.

Health department and community organizations will be giving out harm-reduction supplies like the overdose reversal medication Narcan and fentanyl test strips for drug users to check their drug for the presence of the powerful, often deadly, synthetic opioid.

Chicago-area home prices have doubled since 2000

By Dennis Rodkin

Robust increases in Chicagoarea home prices this year lifted the region's housing market past a threshold that other cites crossed years ago. Home prices here are now two times what they were as the year 2000 dawned.

That's according to the latest data from the S&P CoreLogic Case-Shiller Indices. Released on May 28, the data covers March. That month, the index for Chicago crossed 200 for the first time, to 201.46. The index uses January 2000 as 100. Thus, hitting 200 means, generally, home prices are twice what they were then.

Chicago is late to the line, which the nation's home prices crossed six years earlier, in April 2018, and some very strong markets crossed even earlier.

San Francisco, for example, crossed the 200 mark in January 2015, a little more than nine years before Chicago did, and that was its second time doing so. The index for San Francisco also crossed above 200 in May 2005, amid the city's tech boom, but prices drooped back below the line in the housing bust of 2008 and the years that followed. Phoenix also crossed the 200 line in 2005, only to cross it again

in January 2020.

Nationwide, home prices have more than tripled since early 2000. The nationwide index for March is 315, according to the May 28 S&P CoreLogic CaseShiller Indices release. In San Francisco, the index is at 355.

San Diego's prices have grown the most so far in this century; its index in March was 438, meaning prices have quadrupled since early 2000. The index is above 400 for Los Angeles and Miami as well.

Among the 20 major U.S. cities the index tracks, only two have

not yet seen prices double since 2000. They are Cleveland, indexed at 185, and Detroit, indexed at 181.

In Chicago, the index was up 8.7% in March compared to a year earlier. Boston had the same figure, and four cities had higher-rising prices. San Diego was up 11.1%, followed by New York (9.2%) and Los Angeles and Cleveland (both 8.8%). Nationwide, home prices were up 6.5% in March, according to the index.

March was the fourth consecutive month with increases of 8% or more in Chicago, after rising from September's home price growth of 4.4% to November's 7%.

New record high

The median price of homes sold in the Chicago metropolitan area hit a new record high in April, even surpassing the usual hot months of summer when prices are at their highest.

In the city, the median price matched a record set two years earlier in the final days of the COVID-era housing boom before rising interest rates put a cramp in the market.

High-rising home prices are the result of a severe shortage of

inventory on the market at a time when demand has stayed strong.

The median price of all homes sold in April in the nine-county metropolitan area was $350,000, according to data released May 22 by Illinois Realtors, a statewide professional group.

That's a pinch higher than the record set last June when the median price of homes sold during the month was $349,990. Home prices cycle lower in the cold months. In December, for example, the median price was $306,000.

In Chicago, the median price of homes sold in April was $370,000, tying the record set precisely two years earlier, in April 2022.

The Illinois Realtors data stretches back to January 2008.

April's median home sale price was up 9.4% in the ninecounty metro. Although that's a healthy increase, it's the lowest in the past four months. Home price growth was more than 10% in January and February from the corresponding months a year ago.

In Chicago, home prices rose 8.8% in April from a year ago. It was the biggest increase since November 2021, when prices were up 10.8% amid a raging

housing boom fueled by low interest rates.

The number of homes sold metrowide in April was low compared to most other Aprils. Even so, it showed a significant improvement over last year, when April sales volumes were at multiyear lows as the market adjusted to the shock of interest rate increases.

Lowest April sales since 2012

In the city, April 2023 was the lowest-selling April since 2012 in the metro area. That is besides April 2020, when the housing market and particularly the condo market paused in the early days of the pandemic.

In 2024, April sales were up 5.5% from that trough but still low for the month.

In the nine-county metro area, the April 2023 sales volume was even lower than the figure for April 2020, because the COVID shutdowns didn't hit the suburban housing market, which has fewer condos, as hard.

In 2024, sales were up 5% from a year ago but still well below the overall norm. Prior to the pandemic, the metro sales figure was typically over 10,000 in April, compared to just over 8,000 this year.

This house on Forest Avenue in River Forest sold for $787,000 in April.

EDITORIAL

Who’s Robin Hood in this Springfield scenario?

Sometimes it’s good to be first. But Illinois is about to find out being first isn’t always best.

A first-in-the-nation measure affecting fees charged to retailers for the use of credit and debit cards passed the Illinois General Assembly in the late hours of the just-completed spring legislative session. While the measure will give a welcome break to retailers, it strikes a blow to one of the Chicago region’s biggest industries — airlines — and also undercuts another major local employer, Discover Financial Services. Here’s how.

Gov. J.B. Pritzker’s original spending plan for fiscal year 2025 contemplated generating $100 million in revenue by capping the so-called retailers’ discount, a reimbursement that retailers have long received for calculating and collecting sales taxes on behalf of the state. Previously, retailers were allowed to keep 1.75% of the sales taxes they collected. Pritzker proposed capping that amount at $1,000 per month, creating that $100 million new revenue stream he envisioned for the state.

To make that cap more palatable to the Illinois Retail Merchants Association, an eleventh hour provision was slipped into the final legislation. Pritzker gets his $1,000-amonth cap as well as the sales tax revenue that remains — but as a sweetener, the retail merchants get something they wanted: Credit card companies and other financial institutions cannot charge fees to a merchant on the sales tax or gratuity portion of electronic sales beginning in July 2025.

“We were trying to think of ways to help

PERSONAL VIEW

offset some of that loss for the retailer,” Rob Karr, CEO of the merchants association, told Crain’s in the aftermath. “We could have said, ‘Take (the fee) off everything,’ but that would not have been fair.”

While the deal may have struck Karr’s constituents as fair, it struck airlines and credit card companies differently. In fact, both industries rushed to try to block the merchants-backed provision, but were too late: The revenue bill passed with the Interchange Fee Prohibition Act embedded deep within.

Dave Grossman, a credit industry analyst and founder of the website Your Best Credit Cards, explained to Crain’s one reason why the airlines, credit card issuers and other big businesses were out of joint about the last-minute tweak to the legislation: Credit card companies could lose about 30% of their interchange fees with

the loss of tax and gratuity.

“It’s a bit of a Robin Hood move,” Grossman said. “You’re shifting the burden of the processing from the small business or the large business — it could be Olive Garden — to the processor.”

Another concern: By omitting transaction fees related to sales taxes and gratuities, Illinois becomes a global outlier, a move that would require creating an entirely new system for processing payments in this state, a move that could threaten consumer privacy through the creation of new databases to manage Illinois’ new fee requirements, and a move which also could hit air travelers in particular by threatening something they cherish most: air miles.

“These new requirements put at risk customer benefits such as airline miles, cash back, and travel points,” representatives of

United, American and Southwest airlines wrote to Pritzker in the waning hours of the session. “Those cards rely on a system that operates on standardization with mere milliseconds to process transactions. Customers and merchants benefit from a fast, safe and secure payment system that promotes customer choice and reliably speeds payments to sellers.” Goodman, the credit expert, explained the potential effect on customer rewards a bit further: “It’s a win for retailers. It’s neutral for consumers unless it causes a change in credit card rewards because you can see the sum of money loss being big enough for the credit card companies to want to reduce rewards accordingly,” he said. “So right now it’s neutral. But if that happens, then it’s a definite negative for the consumer.”

Illinois lawmakers — assuming they were paying attention at all — seem to have made a bet that creating a new fee regime for Illinois retailers was smart politics, sweetening the pot for merchants, who tend to be small, to be local, and to vote, at the expense of mega-companies like United and Discover, who are apparently the evil Normans in Goodman’s Robin Hood scenario. But United and Discover — and American and Southwest — employ tens of thousands of Illinoisans, and they serve countless more who like to use their credit cards and enjoy racking up benefits like airline upgrades and cash-back bonuses. Their representatives should have had a seat at the table before the state granted an odd carve-out putting Illinois out of step with the rest of the nation.

Times are tough for startups. Here’s how to survive a VC drought.

The recent article “Startup investment perked up in first quarter” (April 11) showed an increase in investment in Q1 2024 after several quarters of decline. But the number of Chicago deals is well below the recent average.

Across the country, venturecapital fundraising activity decreased, according to PitchBook. Over the past 18 months, founders have consistently complained there is no money and VCs are no longer making investments.

The new reality is that fundraising is hard.

CodaPet, a marketplace helping pet owners find in-home end-oflife care for their pets. I invested my own initial capital, and we have been focused on generating revenue from day one. Bootstrapping required my co-founders and I to forgo taking salaries, make personal sacrifices and operate with lean resources. While this approach doesn’t come with the hype and press of raising a venture round, it creates a focus and incentive to understand our customers and grow revenue quickly.

take higher risks than traditional venture capitalists and can offer valuable mentorship and connections in addition to our capital investments. Oftentimes, angel investors are ex-founders, so they offer very relevant perspectives. To attract angel investors, startup founders need to have a compelling story, a clear customer value proposition and a clear go-to-market plan. For first-time founders who don’t know any angel investors, it might be beneficial to build an advisory board that can make introductions to potential angel investors.

After record-high valuations and venturecapital investments in 2021 and 2022 in a record-low interest rate environment, the fundraising climate has simply returned to . . . normal: It is hard to raise capital. It can be disheartening and demotivating for founders to struggle to secure VC investment for their startups. Chicago’s startup scene has gained momentum over the past two decades. If it is going to continue, founders will have to get creative and find alternative ways to fund their companies: Bootstrapping: One of the most common ways for startup founders to raise capital is by using personal savings, funds from friends and family and/or revenue generated by customers. I bootstrapped my startup,

Ultimately this makes founders more creative and resourceful in problem-solving, and it creates a relentless focus on building what customers want. The long-tail benefit is letting founders be the captains of their ship, allowing them to retain full control over their businesses and avoid significant dilution. If you prove enough growth along your journey, VC investment is always on the table in the future, similar to companies like software maker Relativity.

Angel investors: Like a lot of founders, I’m also a startup investor, averaging a deal a month for the past seven years. Angel investors are individuals who provide capital to startups in exchange for ownership equity, convertible debt or safe notes. As early believers in big ideas, we are often willing to

Accelerators, incubators and venture studios: Joining an accelerator, incubator or venture studio can provide startup founders with access to funding, mentorship, resources and networking opportunities. These programs typically involve intensive training and support over a fixed period of time in exchange for equity in the company. Accelerators such as Techstars Chicago have helped launch successful startups, including parking app SpotHero, by providing guidance on product development, fundraising strategies and customer acquisition. I was an investor in a venture studio called Roniin, which created Chicago-based Paro, an online marketplace for freelance accounting and finance professionals.

Crowdfunding: Platforms like Kickstarter and Indiegogo have become popu-

lar options for startup founders looking to raise capital from a large number of individual backers. By presenting their product or idea on these platforms, founders can attract pre-orders or donations from supporters who believe in their vision. Crowdfunding not only provides funding but also serves as a marketing tool by generating buzz and validating market demand. I have not personally been involved with a crowdfunding capital raise, but my investments in Mode Mobile and KingsCrowd have had meaningful success; both companies have raised millions of dollars from crowdfunding. In 2021 and 2022, VC funds raised a record amount of money. Traditionally, they have four- to five-year deployment periods, so they will eventually be putting their funds to work.  In 2024, the new reality is that valuations are lower, checks are smaller, due diligence is longer and startups need more product and customer traction. By exploring alternative sources of capital such as bootstrapping, angel investors, accelerator programs and crowdfunding, founders can hit some significant milestones and maximize ownership in advance of approaching venture capital.

Times are tough now, but VCs are going to start writing checks again. They have to. Entrepreneurs who persevere now will be in position to capitalize when they do.

Eddie Lou is an active angel investor and co-founder of CodaPet.

A call for Mondelez to clean up its act

From world-famous rappers to deep-dish pizza, Chicago is the beloved hometown of many global phenomena. What some may not realize is that the maker of another international export, Oreo — those childhood favorite sandwich cookies — also calls Chicago home.

Mondelez International, Oreo’s parent company, hosted its annual shareholder meeting last month at its headquarters in the West Loop, but the decisions made there have a global impact. That’s why a group of local concerned climate and human rights advocates were joined by other national civil society groups to call on the company to clean up its act.

Giant consumer goods companies like Mondelez have farreaching supply chains to produce the various products lining our grocery store shelves. The environmental toll exacted by the consumer goods sector is extremely troubling, particularly the deforestation driven by the demand for commodities such as palm oil. Mondelez’s reliance on these raw materials connects the company to tropical deforestation and human rights abuses and contributes to ecological degradation, loss of biodiversity, and the adverse impacts of climate change.

This is a global problem, as deforestation accounts for upward of 20% of total carbon emissions, more than the world’s entire transportation sector. Agricultural expansion for “forest-risk” commodities like palm oil is responsible for 90% of that deforestation, and according to recent reports, palm oil contributes more to tropical deforestation than any other commodity consumed by Americans. The global existential crisis of climate collapse requires all of us to do our part in stopping the rampant destruction of the world’s forests.

Most major brands have made public promises that should ensure that their sourcing includes “No Deforestation, Peatland (development), and Exploitation” — the leading purchasing policy in the industry known as NDPE — which also means that companies must cut ties with bad actors if those suppliers are found to be connected to deforestation and human rights abuses. Alarmingly, many major brands, including Mondelez, recently received failing grades in the annual Keep Forests Standing Scorecard. This report evaluates 10 of the largest brands behind the deforestation and human rights crises, and the results are not pretty, to say the least.

Investors of not only Mondelez but other major brands would be wise to heed a broader message highlighted by the activists who traveled to Chicago last month: that brands’ failure to fulfill their “no deforestation” pledges is not just a moral and environmental issue, but poses a financial danger to their investors as well. Growing consumer outcry and the imminent implementation of industry-disrupting

regulations — including the recently adopted European Union Deforestation Regulation (EUDR) — highlight the threat.

The EUDR requires all companies that import forest-risk commodities into the EU — including cocoa, soy, palm oil, or wood products, among others — to trace the commodities used in their products back to the plot of land where they were produced. Companies caught sourcing products from deforested land are liable to be fined up to 4% of their annual revenue. While the

regulations are designed to allow corporations until roughly 2025 to achieve full compliance, the data presented in the Scorecard report demonstrates that major global brands are not on track to meet these new requirements, exposing their investors and financiers to real material risk.

Unfortunately, there is little evidence to indicate that the systemic problems in the implementation of brands’ existing commitments will be resolved anytime soon, certainly not by the deadline established by the EUDR. This is why

climate advocates gathered from around the country to deliver a direct message to Mondelez’s investors that the company must stop buying from its destructive suppliers and deliver on its promises to protect forests and respect the rights of communities around the world.

Daniel Carrillo is forest campaign director at Rainforest Action Network, an environmental organization based in San Francisco.

As a faith-based, not-for-pro t health care system, we believe all patients deserve access to high-quality care. That’s why we put patients’ health and their well-being rst. Why won’t UnitedHealthcare do the same?

PEOPLE ON THE MOVE

ACCOUNTING

Cohen & Company, Chicago

Cohen & Company welcomes Brian Riordan, CPA, MST as a managing director, tax. With 25 years of experience focused on the real estate industry, he serves private equity investors, multi-tiered real estate funds, joint ventures, Qualified Opportunity Zone Funds and Real Estate Investment Trusts (REITs). His specialized focus on REITs allows him to assist with due diligence, structuring and planning in connection with tax efficient acquisitions/dispositions, REIT qualification testing and tax compliance.

CONSTRUCTION

Ventana, Chicago

Ventana welcomes Brian Travis as Project Director working out of the company’s Chicago office. Brian brings nearly 20 years of lead ership and expertise in the construction and glazing industry. In his new role, Brian will be responsible for strategic planning, team leadership, and fostering client relationships to deliver high-quality results.

ARCHITECTURE / DESIGN

Lamar Johnson Collaborative Chicago

Lamar Johnson Collaborative (LJC) has promoted JeanMarie Joassin AIA, NOMA, LEED AP BD+C to Associate Principal. Jean-Marie provides unique and analytical insights derived from his extensive project management experience across education, residential, and commercial markets. His contributions consistently result in tailored solutions that drive successful outcomes for clients.

Jean-Marie holds a Master of Architecture from the University of Michigan.

CONSTRUCTION

Executive Construction, Chicago

Executive Construction is excited to announce that Luke Heerema has joined the firm as Director of Business Development. In this leadership role, Luke will support the firm’s growth and leverage his 15+ year background in architecture and real estate to foster trusted relationships and cultivate new partnership opportunities. Luke’s innovative and collaborative expertise will expand their reach in the new construction and interior markets.

FINANCIAL SERVICES

Wintrust Financial Corporation Rosemont

Wintrust Financial Corp., a financial services holding company based in Rosemont, Illinois, with more than 170 locations across Illinois, Indiana, and Wisconsin, is pleased to announce two promotions.

Ben Johnson was promoted to SVP, Senior Relationship Manager, Business Banking at Libertyville Bank & Trust Company, N.A. Ben will celebrate 20 years at Wintrust this June.

ENGINEERING / CONSTRUCTION

V3 Companies, Woodridge

Gayle Roberts, P.E. has been named V3 Company’s new Board Chair. Having served on the Board since 2019, her vast AEC industry experience, insightful perspectives, and deep understanding of V3’s culture will support the firm’s ambitious strategic growth goals. Gayle brings 44 years of engineering and consulting expertise to the role. She previously served as Stanley Consultants’ Chair, CEO, and President, and continues to provide leadership, vision, and opportunity for the next generation.

Day

Jackie Day was promoted to SVP, Group Leader, Wintrust Receivables Finance at Wintrust Bank, N.A. Jackie joined Wintrust in 2010.

LAW

Holland & Knight LLP, Chicago

John Saran joined Holland & Knight’s Chicago office as a partner. He will be a key member of the firm’s nationwide Healthcare Transactions Team, which is part of Holland & Knight’s nationally recognized healthcare practice. His practice focuses on healthcare transactional and regulatory matters. He regularly advises healthcare companies and private equity investors on mergers and acquisitions (M&A) and other strategic transactions. He joins the firm from Ropes & Gray LLP.

LANDSCAPE ARCHITECTURE

Hitchcock Design Group Naperville

Congratulations to Doug Fair on his promotion to Principal at Hitchcock Design Group! A 17-year veteran in the industry, Doug is heavily involved in all aspects of our business from design and management of small neighborhood parks to full system comprehensive planning. He is active with team operations and corporate initiatives bringing thoughtful leadership to every situation. We have yet to talk to a client who isn’t a “Doug Fan” and he brings a fun but focused culture to our company!

NON-PROFIT

Nourishing Hope, Chicago Drew Moran is now chief development officer for Nourishing Hope, formerly known as Lakeview Pantry. For about 11 years, Drew’s worked in various roles for Nourishing Hope, most recently as the director of institutional partnerships. He’s a talented fundraiser and dynamic LGBTQ+ leader who cares deeply about providing food and social services to people in need. Moran was honored as one of Chicago Scholars’ 35 Under 35 awardees in 2019 and as one of Windy City Times 30 Under 30 awardees in 2015.

LANDSCAPE ARCHITECTURE

Hitchcock Design Group Naperville

As Hitchcock’s newest Corporate Controller & Business Manager, Katie Skibbe brings invaluable leadership to our Finance division. Katie comes to us with 20 years of finance, accounting, and human resources knowledge and experience. She has a strong academic background in Accounting and an MBA with a Real Estate Finance concentration from DePaul University. Most recently, Katie came from Glenview Park District as their Deputy Executive Director. Our team is excited to have her on board!

LAW FIRM

Corboy & Demetrio, Chicago

Attorney Michael D. Ditore has been named Partner at the Chicago law firm of Corboy & Demetrio. Mike is a trial lawyer who joined the firm in 2018. In just six years, he’s attained an extraordinary record of success, with multiple seven- and eight-figure verdicts and settlements. Mike has had particular significant successes in plaintiff’s medical malpractice and police chase cases. He is a graduate of Loyola University Chicago School of Law and Illinois State University.

SPORTS

Chicago Cubs, Chicago World Business Chicago announces the appointment of Tom Ricketts, Chairman of the Chicago Cubs, to its distinguished board of directors, which includes leaders from the top 100 companies in Chicagoland. World Business Chicago is committed to fostering inclusive and equitable economic development through business growth, workforce development, and community impact while promoting the city and region as a premier global hub for business and innovation.

LanzaJet secures $20M as its green jet fuel prepares for takeoff

French airport operator Groupe ADP joins Southwest as a backer of the Deerfield startup

By John Pletz

LanzaJet, a startup focused on making jet fuel more environmentally friendly, has landed another sizable investment.

The Deerfield-based company raised $20 million from Groupe ADP, an airport operator based in France. It comes on the heels of a $30 million investment from Southwest Airlines.

LanzaJet is in the midst of raising about $100 million as it begins to produce sustainable aviation fuel in large amounts. The company, which has about 135 employees, spun out of Skokie-based clean-tech pioneer LanzaTech, which developed a way to harness bacteria to create ethanol from carbon pollution.

LanzaJet’s first biorefinery, in Soperton, Ga., is scheduled to begin producing renewable jet fuel in the second quarter. It has other projects underway around the globe.

The company produces ethanol from plants, which it converts to a synthetic form of jet fuel that is blended with traditional kerosenebased jet fuel to create what’s known as sustainable aviation fuel, or SAF.

Airlines such as United have been rushing to sign deals with SAF makers so they can begin reducing the emissions from jet aircraft to meet worldwide pollutionreduction goals.

The industry is in its infancy. U.S. producers made about 16 million gallons of SAF last year. Production is expected to more than

double this year, but it’s still a drop in the bucket when compared with the nation’s goal of 3 billion gallons by 2030.

“Our technology will be a bit of a turning point for the industry,” says LanzaJet CEO Jimmy Samartzis.

Most current SAF production in the U.S. relies on cooking oil or animal fat. LanzaJet uses ethanol, which can be made from a variety of sources, such as wood pulp or corn. It’s one of several companies pursuing what’s called “alcoholto-jet” technology.

“LanzaJet is the farthest along,” says Joshua Heyne, co-director of the Bioproducts Institute in Richland, Wash., operated by Washington State University and Pacific Northwest National Laboratory.

“The demo facility in Soperton is really important in terms of doing something at scale. It’s the first large-scale ethanol-to-jet facility.”

FCB Chicago lays off staff after losing Pfizer account

By E.J. Schultz and Lindsay Rittenhouse, Ad Age

FCB Chicago has laid off 9% of its staff as a result of losing the Pfizer creative account, Ad Age has learned. The Windy City office employs more than 800 people.

“As a result of a recent decision impacting creative assignments, we have had to make some changes to align better with client work,” a spokesperson for the Interpublic Group of Cos. agency said in a statement. “This was a tough decision and equates to approximately 9% of our people in Chicago. Our focus now is on supporting everyone through this transition and winning new business to replace the lost revenue.”

The layoffs come about two months after Pfizer moved the majority of its creative brand duties from IPG to Publicis Groupe. It was an abrupt move that came less than a year after IPG was named

Pfizer’s lead creative partner.

Publicis had already been established as the pharmaceutical giant’s “integrated global engine” during the initial review and the French holding company worked on Pfizer’s 2024 Super Bowl ad, which showcased the company’s 175 years of commitment to science.

FCB Chicago’s existing clients include Clorox, Kimberly-Clark and Cox Communications. FCB also recently won creative work from Kenvue, although that account is led from New York.

E.J. Schultz and Lindsay Rittenhouse write for Crain’s sister publication Ad Age.

Sponsored By Powered By

Jimmy Samartzis ALYCe HenSOn FCB

Lurie out of the woods after recent cyberattack

The hospital said it is no longer addressing an ‘active cybersecurity matter’

By Katherine Davis

After nearly four months, Ann & Robert H. Lurie Children’s Hospital has survived a cyberattack that took down its phone lines, patient records and other services.

The Streeterville hospital said in a May 20 message on its website it is no longer addressing an “active cybersecurity matter” and has reactivated patient communication platforms like text messaging.

However, MyChart, which was reactivated in March following the late January cyberattack, is still missing some information, Lurie said. Available services include online scheduling, e-check in, provider messaging, medication refill requests and bill pay.

“Thank you to our patient-families and community for their ongoing support and patience as we have responded to this incident,” Lurie said in the statement. “We look forward to continuing to care

for our patient-families, accelerate cutting edge research discoveries and work with community partners to advance health equity for youth and their families, just as we have always done.”

Cybersecurity news outlet The Record previously reported ransomware group Rhysida sold data stolen from Lurie’s for $3.4 million. Lurie says on its website its investigation into the incident is ongoing and it could not provide a timeline for when it will be complete. The

hospital worked with law enforcement, including the FBI, to investigate the perpetrators.

If patients have immediate

needs, Lurie encourages them to contact the hospital’s health information management office at (312) 227-5220.

Tech that lets you knows about a crash ahead of time

A Chicago-headquartered startup plays a role in road safety by curbing accidents between drivers and emergency vehicles

A Chicago-headquartered startup plays a big role in Michigan road safety by curbing accidents between drivers and emergency vehicles. One of the founders even credits the state of Michigan for helping get the startup off the ground.

HAAS Alert, founded in Chicago in 2015 by Cory Hohs, Jigar Patel and Noah Levens, recently opened an office in Newlab at Michigan Central in Detroit and is partnering with communities both locally and internationally, including more than 50 Michigan towns and cities.

The Safety Cloud software allows first responder agencies to send alerts to drivers that signal there is an accident, construction or other incident impacting traffic on their route. These appear as yellow warning triangles or an illustration depicting a collision in certain GPS navigation systems that partner with HAAS Alert.

In 2018, HAAS Alert’s Safety Cloud integrated into the Waze app, a navigation app that is a subsidiary of Google. In 2022, it launched in all Stellantis vehicles that have been released since 2018, including Jeep, Dodge, Ram and Chrysler. Also in 2022, it integrated into “one of the largest navigation app providers,” Hohs said. Multiple news outlets have reported that Safety Cloud has been integrated into Apple Maps.

Its latest Michigan customer is the Troy Fire Department, which joined the program in March, with plans to further expand in the Detroit area.

Getting emergency vehicles to talk to cars

The idea for HAAS Alert formed when Hohs was riding a motorcycle through Chicago and was nearly struck by an ambulance. The experience led him to brainstorm ways that he could get emergency

vehicles to speak to cars.

Though the company’s road to safety still had its fair share of potholes.

“We first started and went on the path for almost three years using acoustics where we thought the car would be able to listen for sirens,” Hohs, co-founder and CEO, said. “And then tow truck drivers started calling saying, ‘Well, we get struck and killed every five and a half days. Can we use your service?’ Utility truck operators in construction zones? Well, they don’t use sirens.”

Hohs said first responders told them their biggest risk of death or injury on the job is getting hit by cars.

“First responders were telling us … ‘We’re not getting hit when our lights and sirens are on. People crash into us when we’re stopped at a scene,’” Hohs said.

In order to make Safety Cloud by HAAS Alert effective, members of the company had to knock on the doors of every agency in every municipality, due to the

different technology and services that different areas offer.

“It was literally that — just going around driving around the country, looking for key early adopters like and just knocking on the door at the fire stations, like it was a brute force sort of effort,” Hohs said.

In the years since its founding, HAAS Alert has partnered with emergency vehicle manufacturers so that Safety Cloud comes standard on most new fire apparatus and can easily expand to the rest of their fleet. The company has also launched integrations with a wide array of telematics, connectivity, and fleet management solutions like Cradlepoint, Samsara, Geotab, and others so that agencies can activate Safety Cloud on those platforms instead of having to purchase and install physical units.

A Michigan history, but Chicago headquarters

HAAS Alert opened its Detroit

office in Newlab in March, which offered it a prime location for connecting with automotive manufacturers and its Michigan customers. All research and development and automotive-related work is located in the Newlab at Michigan Central space.

Eight of the company’s 50 employees are located in Detroit, with about 20 in Chicago and the rest located throughout the U.S. and internationally, in countries such as Japan, Germany, the U.K. and more.

“Grand Rapids was our first customer that let us pilot and help us develop the technology,” Hohs said. “We also did some acoustic testing in Michigan at MCity at the University of Michigan’s autonomous track. ... The MEDC gave us a grant because Grand Rapids was our first department and that helped us get this thing off the ground. Being in Chicago, we just have these like deep roots, but this was all really developed and born in Michigan.”

HAAS Alert has more than 3,500 customers worldwide, with 50 within the state of Michigan, including dual-fleet deployments like Grand Rapids Fire and Police Departments, statewide fleets like the Michigan State Police and individual fire departments in cities including Troy, Rochester Hills, and Hastings, and private towing and EMS fleets across the state as well.

“The main business model is on the broadcasting side. It’s a subscription service,” Hohs said. “If I’m a department, I pay a subscription, and so now they’re broadcasting into Safety Cloud and then we have to run around with the automakers and then get them to integrate these types of notifications into the deal. Our cost is about $1 dollar a day. It’s probably the lowest cost item they’ll install on the truck … Avoiding one collision pays for the service like 100 times over.”

In 2016, HAAS Alert joined the 2016 class of TechStars Detroit, which backed them in their first funding round.

HAAS Alert closed its Series A round in December, but declined to share how much it received in funding. The round was led by Boston-based Volition Capital and DC-area-based Blu Venture Partners.

“It’s about safety, and it’s about protecting folks on the road so that’s why we’re a little shy about broadcasting (those numbers),” Hohs said. “The way we started the company was as a safety company from my experience and then hearing from first responders that one of their biggest deaths and injury rates was getting struck by cars … We came at this from, there’s a problem that needs to be solved, let’s go figure out how to solve the problem and the technology will evolve on its own. So we just solved it backwards. That luckily was part of the kind of superpower that we came to market with.”

By Anna Fifelski, Crain’s Detroit Business

A Safety Cloud alert | COURTESY OF HAAS ALERT

Ann & Robert H. Lurie Children’s Hospital | WIKIMEDIA COMMONS

Overhaul of shopping center could include 500-unit apartment tower

CRM Properties has unveiled preliminary plans to demolish and replace much of the existing retail space at Clybourn Place in Lincoln Park

By Rachel Herzog

A local developer is proposing an overhaul of a mostly vacant North Side shopping center that could include building an up to 500-unit apartment tower.

Deerfield-based CRM Properties Group has unveiled preliminary plans to demolish most of Clybourn Place in Lincoln Park and build a new mixed-use center that would include 70,875 square feet of upscale retail space as well as a residential high-rise on the 3-acre site at the intersection of Clybourn Avenue, Sheffield Avenue and Willow Street.

While the proposed 42-story, 520-foot-tall luxury apartment building would eclipse many of the lower-slung retail properties in the immediate area, it’s not the only high-rise in the pipeline for Clybourn Corridor, a shopping district that in recent years has drawn interest from residential developers seeking to capitalize on strong rental demand.

CRM noted the trend in the

brochure for its project, positing that the former industrial district turned retail hub is “beginning its next transformation.”

‘Mecca for residential development’

“Due to its underlying zoning, the strong retail core, its proximity to other affluent neighborhoods, and its prime access, the area has become a mecca for residential development,” the brochure states.

Jeffrey Malk, principal at CRM, said the firm is “in a unique position” to redevelop an underutilized site that it’s owned since 1993.

“We hope to build something very special here, with a focus on a comfortable and inviting retail experience,” Malk said in an email.

Clybourn Corridor is faring better than many other shopping districts in Chicago, with retail vacancy just under 14% at the end of 2022, according to Stone Real Estate, compared to

around 30% along the Magnificent Mile and State Street. Still, Clybourn Place saw the departure of tenants Bed, Bath & Beyond, Patagonia and the original Goose Island brewpub in recent years.

CRM’s plans would rebrand the shopping center as the Willow Street District. The redeveloped center would include areas for community events, green space, water features and pedestrian walkways, as well as 447 surface and enclosed parking spaces, according to the preliminary plans. Malk declined to share a cost estimate for the development. He said CRM is in conversations with a handful of potential retail tenants for the site, but hasn’t inked any leases yet.

Focused on retail first

Malk said the developer is focused on the first phase of the project, which will include 62,715 square feet of retail across four buildings. The second phase is the residential tower, which would have 8,160 square feet of

ground-floor retail space.

“While we believe the site can certainly handle a 500-unit tower, we respect the community, and we intend to get their feedback before pursuing the residential phase,” he said.

Other residential high-rises proposed nearby include those within Lincoln Yards, which has zoning approval for buildings up to 595 feet high, and on two sites

on Marcey Street also owned by developer Sterling Bay. The proposal would require a zoning change and City Council approval. CRM has met with the city’s Department of Planning & Development, which is reviewing the plans, a department spokesman confirmed.

CoStar News first reported on CRM’s redevelopment plans for Clybourn Place.

A rendering of CRM Properties Group’s preliminary plans for an overhaul of the Clybourn Place shopping center in Lincoln Park | CRM PROPeRTIeS GROuP AnD LAMAR JOHnSOn COLLABORATIVe

Take a look at the new concourse coming to O’Hare

The city of Chicago has unveiled the first significant upgrade of passenger facilities at the airport in decades

By John Pletz

The city of Chicago is offering a glimpse of the first new concourse that will be built as part of the long-awaited terminal overhaul at O’Hare International Airport.

New renderings reveal a threestory passenger facility that will soar 67 feet, featuring a wideopen, light-filled space to accommodate international and domestic travelers. It will take three years to build the satellite concourse off Terminal 1, which is home to United and its partner airlines. When finished, it will provide room to park up to 19 aircraft.

“We designed the new satellite concourse to create a frictionless experience for travelers, on par with the best airports in the world,” Scott Duncan, a design partner at Chicago-based SOM, said in a statement. “The gate lounges feature column-free expanses for easy wayfinding, high ceilings to optimize views and a daylighting strategy to help align the body’s natural rhythms — all to make the experience of air travel more pleasurable.”

It’s one piece of a $6.1 billion project that provides the first significant upgrade of the passenger facilities at O’Hare in decades. The long-overdue facelift and expansion comes as O’Hare’s major competitors around the country are beefing up their facilities.

Now that he has reached an agreement with airlines to move ahead with the project, Chicago Mayor Brandon Johnson is offering the first peek at what Satellite 1 might look like since a team of architects led by Skidmore, Owings & Merrill was chosen to design it in 2019. The design by SOM, Ross Barney Architects, Juan Gabriel Moreno Architects and Arup is 60% complete.

The final design will be ready by the end of next year, with construction completed in 2028, a year later than recently expected.

The city expects to bid out

construction contracts for the satellite concourse later this year, starting with excavation that will include a tunnel needed to connect travelers to the new global terminal that will replace Terminal 2.

The satellite construction alone is expected to generate more than 3,800 jobs, the city says. The Aecom Hunt Clayco Bowa joint venture has been chosen to manage this phase of the project.

Once the satellite is complete, the city Department of Aviation will focus on the centerpiece of the project, a replacement for Terminal 2 that will allow incoming International passengers on United, American and their partner airlines to connect directly to domestic terminals 1 and 3. The new global terminal is being designed by a team led by Chicago architect Jeanne Gang.

As part of the agreement between Johnson and the airlines, the new global terminal will be built before the second satellite concourse. United and American are eager to get the new global terminal built because international travel is driving more of the aviation industry’s growth and profits than before the COVID pandemic, when the O’Hare project was conceived.

The city says it expects the global terminal will be 30% designed by the end of the year.

The original plan called for the overall project to be completed in 2026, but a lengthy federal review and the pandemic soon pushed the date to 2032. The city has hired design and engineering experts to review the revised construction plan, and it expects to update the timeline for the remaining pieces of the project over the next six to 12 months.

The Chicago Department of Aviation is under tight budget parameters. Airlines have signaled they won’t accept budget creep beyond the inflation escalator already built into the project.

“We designed the new satellite concourse to create a frictionless experience for travelers, on par with the best airports in the world.”

Scott Duncan, a design partner at Chicago-based SOM

Medical waste disposal firm Stericycle is exploring a sale

Retired United exec lists lakefront Winnetka home for $11.75 million

This is the second big-money sale for the seller — the previous house they built on the Lake Michigan shoreline sold for $12 million in 2018

By Dennis Rodkin

A retired top executive at United Airlines put the lakefront mansion he and his wife built in Winnetka up for sale at $11.75 million, a quarter of a million less than they got for their previous house on the same shoreline.

Mike Bonds, who retired in 2017 as United’s executive vice president of human resources and labor relations, and Cynthia Bonds are selling a six-bedroom, nearly 12,700-square-foot house on Sheridan Road. The length of the Lake Michigan frontage is not specified in the listing from Jena Radnay of @properties Christie’s International Real Estate, but from the dimensions of the lot it appears to be a little more than 90 feet.   Radnay didn’t immediately respond to a request for comment, and Crain’s could not reach the sellers, as listed phone numbers for them do not answer. The property went on the market May 21. If the home sells for something close to the asking price, it will come in above the highest sale price of the year so far. That’s $9.3

million, which buyers paid for a Gold Coast condo in January.

But the property is not likely to set a record for Winnetka unless it sells for more than the asking price. Four homes in Winnetka have sold for $12 million or more in the recent past, two of them in 2023 and two in 2022.

Using a legal entity that conceals their names in public records, the Bondses bought the site, three-quarters of an acre, in 2018 for $4 million. In 2021 they completed construction of the house, whose Cape Cod-inspired exterior is wrapped in gray shingles, with white pillars and some rounded feature windows. Two stories tall on its street side, the house has a third level below the main two in the rear, facing the lake.

The interior is breezy, with big windows and glass doors opening to the view, crisp white trim and wood floors. In the dining room are a pair of glass-walled wine storage cases, and in the basement there’s a golf simulator. Public records do not indicate the cost of construction.

The Bannockburn-based company is working with a financial adviser as it weighs options

By Liana Baker and Ryan Gould, Bloomberg

Stericycle Inc. is considering a potential sale after receiving takeover interest, people with knowledge of the matter said.

The Bannockburn-based medical waste disposal company is working with a financial adviser as it weighs options, according to the people, who asked not to be identified discussing confidential information.

Stericycle’s shares lodged their biggest gains in more than four years. After rising as much as 21% on May 24, the shares closed up 15% to $51.65 in New York, giving the company a market value of about $4.8 billion.

The company could attract oth-

er medical waste management providers, as well as infrastructure funds, the people said.

Deliberations are ongoing and Stericycle could decide against pursuing a sale, the people said. A representative for Stericycle didn’t immediately provide a comment.

Stericycle works to remove sensitive and hazardous waste material from hospitals, care centers and veterinary clinics across the U.S., according to its website. It also provides services to air and seaports, funeral homes and governments and the military, among others.

First-quarter revenue at Stericycle fell 2.8% year-over-year to $664.9 million, figures for the period show. The company said the slip was primarily due to divestitures.

Mike Bonds receives the tax bill at this address, according to the Cook County treasurer.

In 2018, the couple sold a house half a mile north on Sheridan Road. They got $12 million for that one, a five-bedroom, 5,500-square-footer on half an acre. They bought the site, whose Lake Michigan shoreline length was also not specified in the listing, in 2014 for $3.8 million and had the architecture firm Morgante Wilson design a new house for it.

Because Crain’s couldn’t speak to the sellers or Radnay, it’s hard to determine why the 2018 sale captured $12 million for a house about half the size and on a smaller lot than the one the couple now have on the market at $11.9 million.

The value of lakefront property in Winnetka has only gone up since 2018, as evidenced by two buyers paying over $12 million for homes they planned to demolish, as well as Justin Ishbia paying $33.3 million for a row of three mansions, all torn down to make way for a giant new mansion he’s spending at least $44 million to build.

Stericycle works to remove sensitive and hazardous waste material from hospitals, care centers and veterinary clinics across the U.S.

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Food dye rules create headache for snack company Kellanova

The maker of Pop-Tarts is working to replace artificial additives in some of its products after the dye in them was banned by one U.S. state

By Deena Shanker and Leslie Patton, Bloomberg

Froot Loops will keep their artificially brightened colors. Some Pop-Tarts will lose them. Welcome to the ongoing experiment that is the American breakfast.

The two companies formed after Kellogg Co. split last year are now facing new regulations on the use of artificial food dyes, leaving them to chart their own courses in a controversial area for highly processed foods, especially those designed for kids.

Snack company Kellanova, which makes Pop-Tarts and Rice Krispies Treats, is working to replace artificial additives in some of its products with natural alternatives after the dye in them was banned by one state. But breakfast-cereal maker WK Kellogg Co. is keeping its dyes because they haven’t yet run afoul of new legal restrictions, even though the company found a way to do without these colorings for essentially the same products sold in Canada.

Kellanova’s actions may be a harbinger of what’s to come as food companies navigate legislation on the use of the dyes.

More bans proposed

Last year, California banned certain chemicals used in foods and candy as of 2027, after saying they caused health problems. Among those was food coloring Red No. 3, which is already prohibited from most uses in Europe. This year, a proposed bill in the state would ban seven more dyes, including Red No. 40, Yellow No. 5 and Blue Nos. 1 and 2, from its public schools because they have been linked to cancer, neurobehavioral issues and hyperactivity. Other states are now consid -

ering bans of their own. Every major food manufacturer will have to figure out what these bans mean for them, said Sarah Gallo, vice president of product policy at Consumer Brands Association, an industry trade group. The industry opposes a “patchwork” approach where each state makes its own laws, Gallo said, and prefers that they all operate under federal Food and Drug Administration regulations, which says the dyes “are safe when used properly.” The group is in touch with California lawmakers to share that perspective, she said. “Food safety is the No. 1 priority for our member companies,” she said.

WK Kellogg maintains that more than 80% of its cereal sales come from products that don’t contain the dyes at issue. But it has continued to use them in kid-targeted breakfast food, including limited-edition options like glitter-covered Caticorn and brightly colored Baby Shark cereals, and the still available blue and red ICEE Cereal.

“It’s one thing to test preferences with existing cereals, but an entirely different set of unethical principles to create brand new cereals with dyes right from the getgo,” said Vani Hari, an activist and author known as Food Babe, who is working with a coalition to pressure WK Kellogg to remove the dyes.

to remove artificial dyes from its recipes, Kraft said it would take them out of its iconic macaroni and cheese and General Mills said it would take them out of cereals. The following year, Mars said it would remove “all artificial colors from its human food products.”

Lone success

Macaroni and cheese was the lone success story: Kraft Heinz announced in 2016 that it hadn’t been using the dyes for months, replacing them with spices like turmeric and paprika, and consumers were none the wiser.

But Kellogg, General Mills and Mars had no such luck. Dyes came back to Trix cereal in 2017. By 2021, Skittles maker Mars had thrown in the towel as well, saying consumers wanted “the current vibrant palette” that only artificial dyes could offer.

Last year, California banned certain chemicals used in foods and candy as of 2027, after saying they caused health problems.

Mars found that consumer expectations “differ widely across markets,” so it was using “locally tailored” approaches, a spokesperson told Bloomberg. General Mills didn’t respond to a request for comment.

The bans didn’t appear out of thin air — questions about food-dye safety have swirled around the industry for years. Nearly 10 years ago, companies said they’d take them out, not out of safety concerns but to align with consumer preferences. In 2015, Kellogg said it hoped

Calley Means, co-founder of medical-costs advisory group Truemed and another coalition member pressuring WK Kellogg to remove the dyes, said the fight wouldn’t end there. “We are focused on Kellogg,” he said, “and then we’ll move on to the next one.”

itself too thin. It made too many bets on low-margin ventures — like a delivery fleet that trucked milk to far-flung locales, opening pizza and burger joints and a dead-end attempt to enter Asian markets. It was left without money to right those wrongs.

“It’s not something where it’s a doomed market,” said Jeff Pehler, partner at business management consulting firm West Monroe. “If they would’ve stuck to their roots they would not be in this position.”

Oberweis traces its roots to Aurora dairy farmer Peter Oberweis, who started selling milk to his neighbors out of his wagon in 1915. His son dropped out of high school during the Great Depression to help him, and later opened the first Dairy Store in Aurora in 1951. He began developing some of the ice cream recipes that are still used today, according to a Chapter 11 declaration dated April 15 from Oberweis’ current president, Adam Kraber.

The next generation entered the business in the 1960s, when Peter’s grandson John Oberweis began working there. John’s brother Jim Oberweis, perennial GOP candidate, bought the business along with his wife and began positioning it for growth. The company opened its second store in 1991 and grew from there, getting into grocery sales and launching home delivery.

Jim’s son Joe Oberweis took over in 2007 and oversaw the rollout of burger and pizza restaurants, and the expansion of home delivery to Virginia and North Carolina. With him at the helm, revenue climbed from $63 million to an all-time high of $116 million in 2020, but the seeds for financial distress had been sown, according to the Chapter 11 declaration.

Oberweis tried to capitalize on the shift to home delivery during the pandemic and started selling tomahawk steaks, seafood and other non-dairy items. It opened delivery routes in Texas and “spent aggressively” to rope in new customers. It also bought a fleet of delivery trucks, opened a new production line and bought thousands of milk crates and bottles.

The company stretched itself too thin with those spending decisions, experts said. The delivery routes — which involved trucking milk from Oberweis’ North Aurora production facility down to Texas, then hauling used bottles back up — were not profitable, according to the filing. Not enough people signed up for delivery, the trucks were underutilized and about $100,000 worth of new quart-size milk bottles still sit unused.

“Management underestimated the costs and logistical hurdles involved in transporting milk and empty bottles between Texas and Illinois,” the declaration states.

In a world of next-day delivery, a

AI tool “can just put time back in our day and allow me to turn my chair back toward the patient.”

With an accurate record of the visit translated into an electronic health record, or EHR, AI can “help bring us back to that earlier time, when the full attention is on you,” she said.

Rush University System for Health has already been working with the ambient AI product Dax Copilot from Nuance Communications, one of the most established players in the sector, and will soon add a pilot program with voice AI documentation software from a company called Suki. At the University of Chicago, a small group of physicians will launch a study of documentation technology from Abridge.

Dr. Sachin Shah, chief medical information officer at UChicago Medicine, wants a doctor-led development of these AI tools that capture clinician-patient interactions to fix the problems caused by the EHR.

“There wasn’t a lot of provider input at the advent of the EHR era, and it causes a lot of problems,” Shah said. “So this time we need to be on the ground floor.”

“Documentation burden is one of the biggest parts of burnout among clinicians,” Shah said. An

Both Desai and Shah referred to how hours of writing up EHR documentation, referring to incomplete notes and memories, wears on doctors and nurses, adding it often ends up being done long after the patient has been seen, during “pajama time.”

Ambient AI works through doctor-patient conversations recorded on devices or smartphones, which are then run through generative AI to produce a transcript of the visit.

Far from perfect

As Crain’s sister site Modern Healthcare points out, so far ambient AI is far from perfect. Kaiser Permanente and Permanente Medical Group researchers, for example, were unable to verify edits the AI made to the doctor-patient conversation such as when it omitted parts of the conversation that the model deemed unrelated to patient care.

It is also not available for all specialties and languages, Modern Healthcare reported.

At Rush and UChicago, the AI systems would work to write up documentation for EHR systems from electronic records leader Epic.

$100 million dairy company would be hard pressed to make a profit off its own delivery fleet, said West Monroe’s Pehler. It is also unlikely a company of that size would have the budget to spend on market research to understand how to make a delivery route profitable. Oberweis was likely “shooting from the hip” when it tried to expand over the last several years, he said.

“It’s very unlikely they’re making financial decisions versus hypothetical ‘what if’ decisions,” he said. “When you place all those bets, it’s hard to then manage it.”

Multiple generations

Such is the peril of running a longstanding family business: When a company is passed down multiple generations, it can start to stray from its core. Bankruptcy law experts say they often see a desire from rising generations to go their own direction, which can cause financial distress and lead to infighting.

“I’ve seen families get into huge disputes over things that unaffiliated business people would not,” said

Even though physicians must review and edit the recorded and transcribed patient visits, the technology can revolutionize what the EHR can be, Shah said.

It lets doctors see details that could be lost in the conversation, helps with decision support and can help better capture a natural doctor-patient discussion of the determinants of health the patient experiences, UChicago’s Shah said. And with those full conversations treated like a dataset, clinicians can analyze them more efficiently and in more detail, he said.

At Rush, once systems are vetted and an AI vendor is chosen, Desai says the plan would be to offer it to all clinicians who see patients regularly, “especially our learners.” She hopes the technology can be standard by the time a new medical student is through with residency.

Eventually, Desai envisions generative AI technology will be available and effective throughout a health system, in nursing stations, in-patient settings, even the operating room.

Before that happens, she said, hospital informatics experts need to work on two things: privacy concerns and cost.

“This isn’t going to be cheap,” she said. “It’s not free. Although a lot of people think, ‘I’ve got it on

from Oberweis did not return a request for comment, nor did attorneys representing the company.

Bidders started circling. The stalking horse bid, which sets the low end of the bidding price, was from Brian Boomsma, co-owner of Dutch Farms. The Pullman-based, family-run egg, dairy and deli products producer is listed as one of the creditors in Oberweis’ April 12 bankruptcy filing.

The second bid, which came in hours after the first, was from Osprey Capital, the investment arm of Hoffmann Family of Cos. — a Winnetka private-equity firm launched by David Hoffmann, founder of Chicago executive search firm DHR International.

Bruce Markell, professor of bankruptcy law and practice at Northwestern Pritzker School of Law.

Joe Oberweis resigned as CEO in May 2023. That summer, the company tried to cut operating costs. It sold underused trucks, increased prices, trimmed its product portfolio and eliminated a chunk of its delivery routes. Shareholders also contributed. The company freed up millions in “sorely needed working capital,” according to the Chapter 11 declaration. It wasn’t enough.

“By October 2023, it became apparent to all involved that (Oberweis) was unsustainable in its current form,” the filing said. Oberweis “simply could not operate at a profit and would require regular and substantial capital contributions from shareholders merely to survive, with no end in sight.”

A deal with a buyer fell through, and the company filed for bankruptcy. Court documents show it owes $14.2 million in secured loans and another $3.7 million in outstanding debt owed to those other than the bank. A representative

my phone for free,’ the health care system will use something very different.”

Affordability challenge

The challenge will be to figure out how to make it affordable at scale, Desai said, and to have it make sense to install.

Health systems’ AI must be very protected, both secure and private in a way that makes patients and doctors comfortable around it, she said.

Patients, and some clinicians, will be skeptical of their conversations being recorded, Desai said, so this will be another outlet that providers have to be extremely careful about and educate the patient and themselves.

“It is going to be up to us in health care to be out in front on this, fully vetting these systems,” Shah said. The process must be transparent, patient consent forms need to be clear and patients need to understand that “recordings will be kept, and used, only as long as the note is finalized, then deleted.”

Patient privacy concerns often involve regulations like the federal privacy law HIPAA and Business Associate Agreements among health care providers and their third-party vendors.

However in recent months, a

Hoffman Family of Cos. ultimately prevailed, submitting the winning bid at auction May 29, according to a spokesperson for the firm. The spokesperson declined to disclose the winning bid price, and court documents with that information have not yet been filed. The court must still approve the sale.

Hoffmann Family of Cos. often buys multigenerational family businesses like Oberweis, said CEO Geoff Hoffmann. It typically targets stabilized companies and helps them transition to the next generation, but Oberweis’ legacy was tantalizing, he said.

The company will devise a specific management plan if the court approves the sale, but Geoff Hoffmann sees opportunity in home delivery, retail and grocery. He also said he’s excited about the milk products, ice cream and Oberweis’ stores.

“There are just tremendous avenues for growth. If we didn’t think so, we wouldn’t be involved,” Hoffmann said. “Dairy is still an enormous industry across the country and across the world. There’s still a lot of people drinking milk and eating dairy-based ice cream.”

new priority, cybersecurity, has gained urgency, following cyberattacks like those recently experienced by health care companies and providers such as Change Healthcare, Lurie Children’s Hospital and Ascension.

While privacy regulations “continue to be critical priorities, the cyberattacks on (health care providers) in 2023 call into focus a different priority: ensuring access to care and availability of systems in the face of cyberattacks,” according to a recent white paper on cybersecurity and health care by Zip Security and Ambience Healthcare.

Zip Security is a venture-backed cyber startup, and Ambience Healthcare is a company that provides an AI operating system for health care.

“We are seeing the benefit in both quality and efficiency of delivering care through the utilization of third-party technologies — particularly in the space of generative AI, and how this can improve (physicians’) workflows,” the white paper said. “These applications and technologies are contributing to the general increase of hosted services by vendors. While their impact and benefit are overall very positive, they do pose an additional consideration in the cybersecurity conversation.”

Over the course of a century and four generations, Oberweis Dairy grew from a horse-drawn milk delivery operation into a $116 million company with 40 ice cream shops, up to 1,500 employees and delivery routes in several states. | CRAIn’S FILe PHOTO

indicative of making the “necessary changes to bring about the most amount of good and the most amount of follow-through on campaign promises.”

“My work is to make sure that we are cohering our movement towards making sure that people are demanding more from their government and making sure that, while we have the power to transform government, we are staying focused on that endeavor,” she said.

United Working Families has previously taken stances to the left of what Johnson has promoted as mayor, including advocating for former Mayor Lori Lightfoot to reallocate funding from the Chicago Police Department to other spending initiatives and urging their endorsed City Council members to vote against budgets that increased the department’s spending.

Johnson’s first budget in -

BREWERIES

From Page 1

The brewers knew it was a risky move. The drinks are not part of the state’s recreational marijuana economy because the THC added to them does not come from weed. It is extracted from hemp, which is less regulated in Illinois than its more potent cousin. For guidance, brewers looked to a 2018 federal law that made it legal to farm hemp around the country and sell it between states. Under that law, hemp is legal if the plant’s THC content is less than 0.3% when it is dry. Processors can create potent THC distillate by extracting from a larger volume of hemp plants.

Now, an effort to regulate hemp is gaining steam in the Illinois Legislature, and it has craft brewers concerned. One bill the Senate passed in the recent legislative session, for example, sought to establish a similar framework to how the state regulates marijuana. It would have established licenses for businesses that sell products derived from hemp. It would cost $5,000 to apply, and the state deadline to issue such licenses would be July 1, 2026. Though the House did not take up the bill for vote before the end of the session, the craft breweries that make hemp-derived, THC-infused beverages are still worried about

SHOOTINGS

From Page 3

Memorial Day and Labor Day, which varied by year. In order to identify exactly where those crimes occurred, the Crime Lab breaks down a map of Chicago into 6,942 grid “cells” that measure 1,000 feet by 1,000 feet.

Of those nearly 7,000 grid cells mapped across the city, 10% of them accounted for 58% of annual shooting incidents across the five-year period. Those numbers worsened when examining summer shooting incidents, with

creased the department’s spending, and the contract he negotiated with the largest police union all but ensures increases will continue during his term.

“There are things that are inherent to this seat and those things present a number of contradictions for our movement,” Bartley said of the increased police budget, while arguing Johnson has begun to deliver on oth -

being regulated out of existence.

Illinois craft brewers say if regulations like the bill floated during the recent legislative session were to become law, sales of such beverages — which are showing potential — would be crushed.

It would “completely lock out breweries, because there’s no way they’d be able to comply with running like a dispensary,” said Ray Stout, executive director of the Illinois Craft Brewers Guild. “Additionally, people who want to do that wouldn’t be able to do it until 2026, effectively killing this marketplace.”

Illinois’ cannabis industry has been pushing for more regulation surrounding hemp products for some time. Of particular concern are the intoxicating products sold at gas stations and convenience stores that imitate packaged foods.

Sen. Kim Lightford, D-Maywood, was the main sponsor of the bill that had the craft beer industry concerned. She said in an emailed statement in May that filing the bill is just one step toward getting it over the finish line.

“Negotiations with the hemp and cannabis industry continue to take place almost daily,” she said.

“We are working diligently to put forth a final bill that all sides can agree upon while ensuring our common goal to have a fair, just and safe industry remains.”

10% of the cells accounting for 64% of those shootings. Neighborhoods in the South and West sides accounted for the highest share of shootings.

Researchers also dug into the time of day, or rather night, when most of the shootings occurred. Their analysis found that more than half of summer shootings happened between 8 p.m. and 3 a.m.

“As you’re thinking about dynamic violence prevention planning, you might want to think about how to create surge support during those summer months for violence prevention,” Smith said. “Because if we are funding or deploying re-

ture at the hands of a crew of police officers led by notorious former Chicago Police Cmdr. Jon Burge.

The Waukegan native helmed the party that has grown its power within the City Council in the last decade. Often having to settle for pushing the conversation to the left by opposing past mayors’ budget priorities, the election of Johnson and 12 members of the City Council endorsed by the party in 2023 changed the dynamic.

er commitments to public safety.

Additional investments

While he increased the police budget, Bartley said, Johnson also made investments in alternate police responses, reopening mental health clinics and securing funding for the Chicago Torture Justice Memorial, where Bartley previously worked, to honor the survivors of police tor-

Vital revenue stream

Illinois has about 280 craft breweries, and roughly 30 of them are selling THC-infused beverages, Stout said. Another 40 or so are in various stages of research and development on the products. It’s a testament to how vital a new revenue stream has been to craft breweries, he said.

“We were having breweries close every single day in this state up until the point where people started making these beverages,” Stout said. “We’re at a point in our life cycle as an industry that every revenue stream matters. I’m not saying there’s a direct causation between the two, but there certainly is correlation.”

Such concern over proposed legislation can be expected, said Bryna Dahlin, partner and chair of the cannabis industry group at law firm Benesch. Pushback is one of the difficulties states face when trying to retroactively regulate an operating industry.

“These companies found a new revenue stream, created legally under federal law,” Dahlin said in an email. “This is the kind of backlash we can expect when the state tries to put the genie back in the bottle.”

Hopewell Brewing in the Logan Square neighborhood rolled out THC-infused sparkling beverages less than three months ago, and

sources at equal amounts throughout the year, that’s not going to line up with when violence is actually happening.”

Robbery data

An analysis of robbery data reflected similar trends, where a small portion of Chicago accounted for nearly a majority of the robberies. However, where those robberies occurred differed from where shootings happened. While 10% of the cells accounted for 53% of summer robberies, the majority of robberies hit downtown and the West Side during those months.

While Bring Chicago Home failed at the ballot box, other priorities of the party have advanced, even if they’ve not been fully implemented due to budget constraints, including the socalled Treatment Not Trauma plan to reopen public mental health clinics and respond to some 911 calls for mental health emergencies with crisis professionals and not Chicago police officers.

The local United Working Families party was created in 2014 by two fiercely progressive unions,

they already comprise 4% of the eight-year-old brewery’s sales.

“That’s pretty significant, given that we’ve only had sales for two months,” said co-founder Samantha Lee. “If things pace the way they are and people get more familiarity with hemp-based THC beverages, I think this is something that could easily become 25% of our business this year.”

Hopewell’s THC beverage is called Choom, and the 8-ounce cans have 10 milligrams of THC. Hopewell also sells Choom Lite, with 3 milligrams of THC in the same size of can. Both drinks are nonalcoholic, have real juice and just a few calories.

Mitigating risks

Like other breweries, Hopewell took measures to mitigate the risks of operating in an unregulated market. It put a QR code on the Choom cans that links to a hemp analysis, and trained its employees on how to spot customers that have had too much. It also worked with brewers who sell hemp-derived THC beverages in Minnesota, where such products are more regulated.

Brewery owners have been hoping for some type of regulation around their new products, so they didn’t have to tread through such murky waters. Stout said they would like to see regulation around product testing standards and tax-

Smith emphasized that the Crime Lab’s interactive map, which includes the locations of Chicago Public Schools and libraries, is meant to spur solutions to violence.

“If there’s a school building in this grid cell, what trauma supports are being deployed so that young people who are exposed to violence that was happening in that area are receiving the support that they need?” she said.

That information could help violence prevention groups figure out which school buildings or libraries might be suitable for

the Chicago Teachers Union and SEIU Healthcare of Illinois & Indiana, and aligned community groups in an effort to build electoral power in Chicago. The alliance helped push former Mayor Rahm Emanuel into a runoff in 2015 by backing then-Cook County Commissioner Jesus “Chuy” Garcia for mayor.

The party is still closely aligned with the unions, sharing a headquarters with SEIU in Pilsen. Stacy Davis Gates, president of the CTU, is the chair of the UWF executive board.

In 2019, the party backed nine candidates that were elected to the City Council. In 2023, the party not only won the fifth floor by helping organize Johnson’s upstart campaign but saw 12 endorsed candidates seated in the City Council.

Members of the City Council declined to comment on Bartley’s appointment until it becomes official. She will be an exempt appointee in the mayor’s office and does not require City Council approval.

ing, for example. He’d like to see licensing, but the licenses need to be attainable for small businesses, particularly those that are struggling financially.

In recent years, many consumers have switched away from craft beer, turning to wine, spirits and readyto-drink canned cocktails, or drinking less altogether and opting for nonalcoholic options.  Worsening matters for breweries is the massive debt load many carry, taken on to survive the pandemic’s darkest days. Others expanded just before the pandemic hit and must grow to reach that increased capacity.

The almost 10-year-old Noon Whistle tripled the size of its Lombard brewery in 2019 and opened a second location in Naperville. The brewery leans on new revenue streams, such as its recently launched hemp-derived THC-infused beverages, to help fill its added capacity and draw in customers. Noon Whistle has started to “significantly” invest in those products, said co-owner Mike Condon. He also has several brewery employees devoted to the THC beverages. If the regulations were to pass, he’s worried about whether he could find another role for them.

“It would be quite the blow,” he said. “You’ve been putting money into something that next week you just can’t sell. It’s dollars down the drain.”

youth employment or other activities, according to Smith. A recent report from the University of Illinois Chicago’s Great Cities Institute connected soaring youth unemployment among Latino and Black Chicago teens with crime rates that spiked at the beginning of the pandemic. Mayor Brandon Johnson has touted summer youth job programs as his administration’s north star in its campaign against violence. It’s a pivot the mayor often makes when asked about public safety and a talking point he has used to try to charm the business community.

Kennedy Bartley

property to historic levels, and a handful of buildings that traded over the past year did so at staggering discounts to what they were worth a decade or more earlier.

“Chicago’s office buildings continue to grapple with an unprecedented crisis, with bank foreclosures and distressed sales frequently in the news,” Chicago Building Owners & Managers Association Executive Director Farzin Parang said in a statement to Crain’s after reviewing the West Loop office data. Parang recently pointed to a handful of downtown office sales from the past year that reflected losses ranging from 50% to 89% compared with pre-pandemic values.

“We urge the assessor to acknowledge this reality and refrain from subjectively adding challenges to an industry that is essential to our entire city’s revitalization, economic growth, and job creation,” the statement said.

Kaegi’s assessments shape the zero-sum world of Cook County property taxes. The assessed value of each property determines each owner’s share of the property tax pie, and Kaegi has increased his estimated values of commercial properties more so than residential properties since he was first elected in 2018.

Commercial landlords have accused him of trying to curry favor with voters and argued he’s scaring real estate investors away from Chicago. Kaegi has repeatedly said his assessments made up for unfair or inaccurate valuations by his predecessor. His new assessments show he acknowledges some pain in the office sector, but that it’s not as bad as most people think.

In four cases among the 26 West Loop and Fulton Market District properties reviewed by Crain’s — those at 111 N. Canal St., the Old Post Office, 525 W. Van Buren St. and 500 W. Madison St. — Kaegi’s new estimate was higher than he assessed in 2021.

Buildings at 550 W. Washington St., 555 W. Adams St. and 525 W. Monroe St. all saw drops of less than 10% compared with Kaegi’s estimates from three years ago.

Those numbers will likely change through appeals to Kaegi’s office, during which landlords typically share more information about vacancy and other circumstances. Values could fall even further from appeals to the Cook County Board of Review. The three-member panel has proven to be landlords’ tax savior in the Kaegi era, though two of its members were new as of last year.

The initial estimates are still jarring for owners, who frequently gripe about the costly appeals process they must go through to bring them down. But they aren’t surprising, based on the way Kaegi has publicly discussed his views on the com -

mercial property sector.

Speaking to a wide range of commercial real estate stakeholders in April during an event his office staged to discuss 2024 assessments, Kaegi drew a line between struggling mid- and lower-tier office buildings — known as Class B and C properties — and the Class A and socalled trophy buildings that are generally faring better as companies seek out workspace that encourages employees to show up.

Outdated is out

Outdated buildings are seeing the worst of the pain, he said, but landlords that are investing in their properties to compete for tenants are “definitely taking less of a hit,” he said during the April 24 event. The West Loop office dataset compiled by Crain’s is more heavily skewed toward Class A buildings, and office properties in the West Loop and Fulton Market District have generally outperformed other downtown submarkets since the onset of the pandemic.

The dataset also shows more severe valuation drops among Class B buildings. Such properties at 550 W. Van Buren St. and 600 W. Fulton St. saw their assessments reduced by more than 25% from Kaegi’s 2021 figures. Assessments of Class B buildings at 2 N. Riverside Plaza and 222 S. Riverside Plaza each dropped by more than 35%.

Still, some of the properties show big gaps between Kaegi’s new numbers and where the Board of Review pegged values last year.

The assessor’s office estimated the building at 300 S. Riverside Plaza was worth $305.3 million this year, roughly $70 million more than the board’s 2023 number. Kaegi assessed the building at 120 S. Riverside Plaza at more than $201 million, a whopping $107 million more than its final 2023 amount.

The Board of Review may ultimately knock those values down

in a big way. The board awarded so many big reductions after the 2021 assessments that the overall property tax burden in 2022 shifted slightly in favor of commercial landlords and against homeowners, even though Kaegi’s initial assessments signaled the opposite would happen. Some of the disconnect between Kaegi and the board comes from different methods each uses in valuations and how they weigh key factors. A valuation worksheet released last month by Kaegi showing assumptions used for each property’s assessment revealed a 15% vacancy rate applied to Class A office buildings. His office also applied a 7% capitalization rate for most top-tier office buildings, a number that indicates the expected first-year net operating income return after it is purchased. Those may be substantially different from the approach used by the Board of Review.

The unpredictability between where assessments start and finish has been a major pain point for local landlords, many of whom will now prepare their appeals and watch anxiously to see how the rest of the city assessments pan out. Kaegi said at his investor event in April that it’s too soon to guess how the valuation swings will impact all property tax bills next year. Stronger commercial property types, such as data centers and industrial buildings, could help offset weakness in downtown office and retail, he said.

The assessor also downplayed the impact that lower office valuations might have on residential and other tax bills because downtown offices account for less than 20% of Chicago’s total tax base, with Class B and C office buildings making up less than 5%. Many downtown office buildings are also in tax-increment financing districts, he stressed, areas where property tax revenue above a certain level goes into a fund that is separate

from what goes to taxing bodies such as schools and parks.

Shock absorbers

Those TIF districts “are going to act like shock absorbers for a downshift in office values in this reassessment cycle,” Kaegi told investors at the event, insulating the impact that lower assessments will have on other taxpayers’ bills.

The strain on TIFs, however, could create headaches for Mayor Brandon Johnson, who used downtown TIF proceeds to balance the city’s 2024 budget. Rising assessments at downtown apartments, where Kaegi has also said he sees strength, could lead to property tax sticker shock for landlords and higher rents for tenants in a city already grappling with an affordable housing shortage.

Kaegi also said single-family home assessments overall will be up this year across all eight Chicago townships. Unless commercial properties also increase or the tax rate substantially drops, that could mean property tax hikes for homeowners when bills come out next year.

Residential assessments in Rogers Park Township on the city’s North Side — the first area Kaegi reassessed this year — rose by 26% from final 2023 figures, Kaegi announced in March.

Some property tax analysts have warned that homeowners will pick up a substantially larger share of Chicago’s roughly $8 billion property tax tab because of a significant drop-off in the value of office properties.

A recent analysis by the Mansueto Institute for Urban Innovation and the Center for Municipal Finance at the University of Chicago estimated that if the final tax value of downtown office buildings drops by 20% compared to previous valuations, the bill for the typical Chicago home would rise from $5,244 to $5,424, assuming taxing bodies don’t change their gross levy. With a 40% decline, the average residential bill would go up almost 10%, to $5,723, according to the study.

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Cook County Assessor Fritz Kaegi recently released his assessments for West Chicago Township, which includes the West Loop and the Fulton Market District. | CuRT WALTZ/AeRIALSCAPeS.COM