Chicago is downplaying the threat of losing its biggest water customer — DuPage
Chicago will soon begin another round of high-stakes negotiations with the DuPage Water Commission in a bid to retain the city’s largest water customer, but the commission’s recent $80 million suburban land purchase adds bite to its threat to tap into Lake Michigan to bypass the city and become its own water supplier.
City o cials are downplaying the purchase, arguing that despite the outlay, the water commission’s best option is to remain a city customer under a new rate that will take e ect in 2030 rather than venturing on the “risky” path of building its
Chicago still grappling with Jim Crown’s death
A year on, his absence exposes a leadership vacuum not just within his family’s business empire, but also within a broader civic community
By Steven R. Strahler
A year after his passing, the void Jim Crown left behind has proved challenging to ll not just within his family’s multifaceted business empire but in a civic community where some worry the old expectations of leadership are fading.
Crown died in a racetrack accident on June 25, 2023, in Colorado on his 70th birthday, just weeks after the Civic Committee of the Commercial Club of Chicago unveiled a violencereduction program he championed, one that fell outside the group’s comfort-zone focus on transportation, education and
state nance.
His death cast a pall over Chicago’s civic community and renewed scrutiny of the city’s boardroom commitment to philanthropic causes against the backdrop of a corporate headquarters drain blamed in part on the city’s bleak homicide record.
Crown’s younger sister, Susan Crown, says the family’s collection of investment and operating companies dating to Material Service Corp., founded by her grandfather Henry and his brothers in 1919, was structured through Jim’s tenure like a patriarchy over three generations.
Don’t count on that setup continuing, she says. e next
generation is taking its place, but Crown’s death has paused succession planning.
“We’ve been rethinking family governance. How that ought to look like is something we’re sorting out. Between the suddenness, the trauma and the grief, we’re just not there yet.”
Multiple roles
Jim Crown possessed a combination of relationships and experience that underpinned his business, family and civic roles. His billionaire clan’s roots, of course, went deep into the city’s social fabric. His connection to corporate America and global politics ran through board seats that were
family sinecures at bank JPMorgan Chase and defense contractor General Dynamics. He chaired prestigious think tank the Aspen Institute and added to the
glitz as managing partner of the family-owned Aspen Skiing Co. At 6-foot-2, he could command
Tax revolt looms as Johnson ponders how much to give his CTU pals.
FINANCE
The
Jim Crown | THE CROWN FAMILY
Tax revolt looms as Brandon Johnson ponders how much to give his CTU pals
Chicago homeowners will receive the bad news in the next few days. Second-half property tax bills are in the mail and, as always, they’re higher than last year.
But bad as the news is, it soon could be markedly worse.
Keep an eye on the ongoing negotiations for a new contract between the Chicago Teachers Union and the Chicago Board of Education — the first negotiations since former CTU staffer Brandon Johnson became mayor, with the help of millions of dollars in campaign cash from the union and affiliated groups, and took control of the school board.
However much CTU ends up getting in the talks — it easily could cost $1 billion over four years, and potentially much more — it’s going to have to come from somewhere. For a variety of reasons, “somewhere” largely will be Chicago property owners, especially homeowners, whose collective Chicago Public Schools property tax bill has more than quadrupled since 1991 and is poised to go up more. How much more depends on how generous the Johnsonappointed CPS team is.
“There should be great concern, or at least great interest,” says Joe Ferguson, president of the watchdog Civic Federation. “There could be a substantial whack coming.”
Here’s the background.
The CTU is asking for the sun, the moon and a few stray planetoids in its initial bargaining demands. As CTU President Stacy Davis Gates only half joked, the full proposal would cost “$50 billion and three cents.” Included in the proposal are 9% annual pay hikes for all teachers, a 15% salary bump for any teachers who achieve national certification, a jump in paid sick days from the current 12 a year to as many as 30, and housing assistance for teachers who now make an average of more than $100,000 a year.
On the staffing side, the CTU wants each school, even those with just a few dozen students, to have a librarian, assistant librarian, restorative justice coordinator, reading specialist, newcomer liaison and more. Plus 2,500 new teacher’s assistants. Not to mention free transit passes for all teachers and students, funding for thousands of new affordable apartments and $2,000 stipends for each student asylum-seeker. Among other things.
Some of that — if affordable — makes some sense. A recent Crain’s Forum detailed how additional personnel hired with federal COVID-relief dollars helped boost student test scores, though those
scores still lag far behind national or Illinois levels. Beyond that, insiders suggest Davis Gates put a lot of stuff on the table to mollify extremists in her ranks and likely will settle for the same 4% to 5% pay hike other city unions have won. (Davis Gates declined to comment for this column.)
But adding personnel is a real issue. And those new bodies and that 4%-to-5% pay raise will have to be paid for somehow. But how?
The CTU could drop its objection to shutting virtually empty schools — dozens of schools now have less than 200 students — and consolidating staff in fewer locations. The union shows no sign of agreeing, even though CPS has shed roughly 80,000 students in the past decade, or 20% of the total. And those schools now have more staffers, with the number of full-time equivalent CPS workers rising from 38,037 in 2020 to 45,159 in the 2024 budget.
Johnson can and likely will come up with more money derived from surpluses in the city’s tax-increment financing accounts, as he did in his budgeting for 2024. But that source is limited, and Johnson recently took a big chunk off the table when he allotted revenues from retiring TIFs to pay off $1.2 billion in city development bonds.
The CTU would like more money from Springfield and covets every penny it can divert from charter schools and selective-enrollment CPS schools. But there will be fierce political resistance to all of that, and for good reason. For instance, stealing staff from Illinois’ top high school, Walter Payton College Prep, because it has “only” 62.4% minority enrollment would be staggeringly counterproductive.
That leaves the place where CPS usually gets its money. Though neither CPS officials nor Johnson want to talk about it, that’s the property tax. And more and more, that’s coming not from fat downtown office developers but ordinary
homeowners — and renters, who have to pay higher tax bills that are passed on by their landlords.
Consider, between 1991 and 2024, according to the Civic Federation, the total amount of property taxes received by CPS — or in the case of 2024, levied but not yet collected — soared from $842 million to $3.866 billion. That’s 359% more than it used to be when Richard M. Daley was mayor. With property tax revenue to the city rising significantly less despite recent increases to pay off old pension bills, CPS’ share of total property tax revenues raised by local governments in Chicago has risen from 45% in 1990 to 56% in 2022, the latest year for which
figures are available, according to the Civic Federation.
Property tax caps, which went into effect in 1994, were supposed to prevent huge increases. But CPS has rigorously levied to the cap — the lesser of inflation or 5% — almost every year, and captured revenues from new construction.
The bottom line is, while overall inflation in the metro Chicago area as measured by the federal government only roughly doubled between 1991 and 2024, CPS’ property tax take more than quadrupled.
A 2020 study by Cook County Treasurer Maria Pappas’ office found much the same thing. It reported that, between 2000 and
2019, annual property tax collections in Chicago, mostly for CPS, went from $3.25 billion to $6.50 billion, up 115%. But average wages in the county as a whole rose half as much, by 57%.
It gets worse. According to Cook County Assessor Fritz Kaegi’s office, the recent triennial reassessment of the south and west suburbs, after action by Kaegi and appeals to the Cook County Board of Review, ended up shifting the tax load more toward homeowners. With the value of many commercial properties still down after COVID, the share of the property tax bill paid by business declined from 32% to 29%; homeowners' share rose from 68% to 71%.
Kaegi and the board now are reassessing downtown Chicago. The office vacancy rate there is at a record level. That almost certainly will result in a further shift, hitting homeowners right in their wallets.
So, here you have a CPS that has been hemorrhaging students, even as it adds staff and keeps open dozens of near-empty school buildings. It's yet to close a $400 million hole in its budget for the upcoming school year. And then you have a CTU that shrugs all of that off, even though it knows that much of the bill will inevitably go to already-strapped middle-class homeowners and renters.
How generous will Mr. Johnson and his team end up being? How much more can Chicago homeowners pay before they turn as red as their bank balance?
Watch this one, Chicago. It will really count.
Greg Hinz
Stacy Davis Gates and Brandon Johnson | NEWSCOM
NASCAR says it can boost Chicago biz
The playbook ahead for scandal-scarred Guaranteed Rate
Stung by toxic workplace allegations in a recent investigation, the mortgage firm now must address underlying complaints — quickly
By Mark Weinraub
Chicago-based mortgage lender Guaranteed Rate will have to move quickly to calm a public relations crisis sparked by a news report alleging a toxic workplace culture.
“These types of situations are never one and done,” said Evan Nierman, founder and CEO of Red Banyan, a public relations firm that specializes in crisis management consulting. “Unfortunately for them, they are going to have to consistently invest in unwinding this narrative for the foreseeable future. It is going to have to be a consistent, sustained effort.”
The crisis at hand for Guaranteed Rate stems from an indepth investigation published June 15 in the Chicago Tribune. In it, former employees of the firm allege a pervasive culture of sexual harassment, misogyny, intimidation and gender-based discrimination.
bune’s investigation cites multiple women who describe working in a sexualized atmosphere where some male executives made sexually explicit remarks to female employees, came on to them at office or work events, or commented inappropriately on their appearance.
“Unfortunately for them, they are going to have to consistently invest in unwinding this narrative for the foreseeable future.”
Evan Nierman, founder and CEO of Red Banyan, a public relations firm that specializes in crisis management consulting
LGrieve
These South, Southwest Side businessmen are holding the racing company to it I By Jack
ongtime South and Southwest Side dining titans Victor Love and Mark Rand knew something was missing when they saw the culinary lineup at NASCAR’s Chicago Street Race last year.
The Florida-based stock car racing company had placed its food and beverage operations under the umbrella of Lettuce Entertain You, Chicago’s biggest restaurant group. And while that partnership proved fruitful — Lettuce served racegoers bites from some of its most beloved local restaurants, including RPM, Bub City, Sushi-san, Cafe Ba-Ba-Reeba
NASCAR on Page 19
“We wanted
the event to reflect the 77 communities that
represent the makeup of Chicago.”
Mark Rand, a Chicago hospitality industry veteran
Citing interviews with nearly 80 former employees and a review of court records, internal documents and text messages, the Tribune constructed a picture of a toxic work environment at one of Chicago’s most prominent financial services companies — one that has lent its name to the home of the Chicago White Sox since 2016.
Founded in 2000, North Centerbased Guaranteed Rate has grown to become one of the largest mortgage lenders based on loan volume. Despite earning plaudits in the Tribune and elsewhere as being a top workplace, the Tri-
Others allege opportunities for pay raises and promotions were held back based on their gender and appearance, the Tribune reports.
Founder Victor Ciardelli and the company deny the allegations outlined in the Tribune story, describing Guaranteed Rate as a positive workplace environment where women are supported. In response to questions submitted by the Tribune, Ciardelli and the company suggested the criticisms came from disgruntled employees who could not
Post-Dobbs, Illinois abortion providers feel the crunch
On the second anniversary of the u.S. Supreme Court decision, health care providers here see an influx of patients from other states with bans
By Katherine Davis
At a recent event before the City Club of Chicago, Chelsea Souder, co-owner of Hope Clinic for Women in downstate Illinois, laid out what her abortion practice is seeing since the U.S. Supreme Court struck down Roe v. Wade, the landmark decision that protected the right to end a pregnancy.
At the Granite City clinic — near the border of Missouri, where abortion is banned with limited exceptions — patient volumes have doubled within the last year, Souder said, with people
visiting from about 20 states that have tightly restricted or outright banned abortions.
“Many of them are coming from places where they’re afraid of criminalization,” Souder said at the June 20 event while speaking on a four-person panel before an audience of Chicago’s civic and business leaders.
Hope Clinic is just one of many abortion providers in the state that are seeing an influx of patients since the Dobbs v. Jackson decision came down on June 24, 2022, effectively overturning Roe and kick-starting the transformation of abortion
laws in many states.
On the two-year anniversary of the decision, Illinois is now among just 16 states with protective abortion policies, according to the Guttmacher Institute, a New York-based research and policy group advocating for the expansion of access to abortion and other reproductive rights. In 2019, Gov. J.B. Pritzker signed the Illinois Reproductive Health Act, which made abortions a fundamental right in Illinois, and he has since doubled down on that stance.
NinjaTrader CEO sees surge in futures trading
The brokerage’s platform has grown to 1.7 million users from 500,000 in just two years
By Mark Weinraub
Smartphones have lowered the high barriers to entry in the futures market, and Chicago-based NinjaTrader, a brokerage that has been focused on futures for more than 20 years, has positioned itself to take advantage of the trend.
“It is the access to markets through mobile applications,” NinjaTrader chief executive Martin Franchi said in an interview. “It is the general rise of nancial literacy. Consumers are thinking about this way earlier.”
e technology has sparked a revolution in futures trading, with individual investors boosting volumes in an asset class where business has historically been conducted on trading oors by brokers with decades of experience backed by well- nanced institutions.
He likened the futures boom to the growth of stock trading through early internet companies like E-Trade in the early 2000s and noted that the average age of NinjaTrader’s users has fallen to 38 from 48 in the past ve years.
“We needed to create really modern experiences,” Franchi said. “ e modern consumer who is learning about futures, they start looking for an app.
ey want to be up and running in ve minutes.”
Terry Du y, head of CME Group, the biggest U.S. futures exchange, also is noting the change and added that arti cial intelligence will provide individual users with the same data that has informed trades by huge brokerages.
“Institutional and retail are going to blur,” Du y said recently at an investor conference. “I do not
think you are going to be able to recognize the di erence between the two. And it’s going to be . . . because of technology. e younger generation wants to be in control of their own destiny.”
CME Group reported average daily volume of 26 million contracts across all its asset classes during May, a record for the month and 4% higher than May 2023.
NinjaTrader’s users tend to fo-
cus on assets they recognize when starting in on futures.
“Retail traders like to trade things they are familiar with,” Franchi said. “A retail trader understands the S&P. ey understand the Nasdaq. ey understand gold. ey understand what crude oil is, but they might be less interested in pork bellies. We see the demand coming signi cantly into the equity index complex, and then after that the
energies and metal complexes. After that it starts to get very sparse.”
Smaller contract sizes created by exchanges in recent years also helped drive interest from retail traders.
“You can start to dabble and learn to trade futures with far less money,” Franchi said. “ e risk is signi cantly lower.”
NinjaTrader helps boost the growth by providing free educational seminars and test trading environments to assist new users. e company had 1.7 million users on its platform during May, up from 500,000 just two years ago.
e next step is international. NinjaTrader has applied for a license to operate in South Korea and is eyeing ve to six other overseas markets for its next move.
“Our intent is to go global,” Franchi said. “We are nding out in most jurisdictions most consumers want to trade U.S. markets.”
As activity grows, competitors will likely try to carve out their own piece of the market, but Franchi thinks the platform NinjaTrader has been working on for more than a decade gives it a leg up.
“We were doing retail futures before it was cool.”
Suburban Northwestern hospital to end pediatric services
Palos joins a growing list of Chicago hospitals winding down care for children amid changing demographics
By Katherine Davis
Following the suspension of pediatric services in 2022, Northwestern Medicine’s Palos Hospital plans to permanently eliminate the service line as it faces an aging patient population and sta ng woes.
e discontinuation of pediatric services at the Palos Heights hospital would convert eight pediatric beds into medical and surgical beds for adults, according to an application recently led with the Illinois Health Facilities & Services Review Board, which has to approve the move. Palos expects to discontinue pediatric services immediately following state approval.
e hospital rst suspended inpatient pediatrics in November 2022 due to an inability to maintain adequate sta ng levels.
“Since that time, sta ng conditions have not improved leading to this request for approval for the permanent discontinuation,” the application reads.
Aside from sta ng issues, Palos also faces a shrinking pediatric population in its service area. Dened as those aged 14 years old and under, the pediatric population is projected to decrease from
209,280 in 2021 to 191,410 by 2026, according to the application.
Palos has felt the drop considerably. Since 2015, the hospital’s annual average daily census has been less than one pediatric patient per day.
Palos joins a growing list of
area hospitals seeking to wind down pediatric services, as well as birthing services, as demographics shift. A 2022 study published in Academic Pediatrics found Illinois hospitals reduced licensed pediatric beds by 27% from 2021 to 2017, with
33 hospitals cutting all pediatric beds at their facility.
From a nancial perspective, shutting down these niche and lagging services allows hospitals to reinvest resources into services that bring in more patients or revenue.
Despite Palos shuttering its pediatric division, the hospital argues the area’s children are well serviced by other providers, including Advocate Children’s Hospital, University of Chicago’s Comer Children’s Hospital and Ann & Robert H. Lurie Children’s Hospital of Chicago. Palos said in its application it has already been referring patients with complex medical needs to the aforementioned hospitals.
Once the service line closure is complete, Palos said its emergency department will continue to care for children but will stabilize and transfer those who need a higher level of care to nearby specialty children’s hospitals, such as Advocate Christ Hospital & Medical Center in Oak Lawn, which is seven miles away.
Palos is one of 11 hospitals owned and operated by Northwestern Medicine, the Chicago area’s second-largest hospital system by revenue, according to Crain’s research. e organization reported net patient revenue growing nearly 10% to more than $8 billion in scal year 2023, according to the application. at same year, Palos Hospital, which houses 425 beds, saw net patient revenue grow 8% to more than $423.5 million.
NinjaTrader CEO Martin Franchi
Gold Coast auction ends with high bid from a dark horse
By Dennis Rodkin
At the recent auction of a Jazz Age penthouse on Astor Street, a dark horse emerged with a bid nearly half a million dollars above the next-highest offer.
The property sold at the June 20 auction for $2.325 million, well above the $1.75 million that, as Crain's reported ahead of the auction, sat on the auction house's website as the highest offer until nearly the time of the sale.
Just ahead of the sale, a bidder upped the ante to $1.85 million, and on the day of the auction, another bidder "decided to make a strategic move to get the property," said Carolyn Wright, vice president of business development at Concierge Auctions, the New York firm that sold the Astor Street property, along with Chicago agents Dawn McKenna and Tori Rezin of Coldwell Banker.
At almost half a million above the next-highest bidder, the $2.325 million offer intimidated at least one other bidder who was going to go over $1.85 million, but then opted not to.
The buyer, whom Wright would not identify, also pays a 12% premium to the auction house, for a total of $2.65 million. The recorded real estate price is only the $2.325 million high bid.
Even at a higher close than expected, the sale of the penthouse still offers evidence that Gold Coast home values have dropped sharply in recent years, as it closed at less than 30% of the sellers originally hoped to get, when they put it on the market in 2019.
Despite being a David Adler interior sitting atop an Andrew Rebori building from the exuberant late-1920s, it's the latest deluxe Gold Coast property to sell at a steep discount, a phenomenon that stretches back several years at this point.
At an auction, Wright said, "the sellers learn what the property is worth in today's market."
The sale price is about 28% of the nearly $8 million that sellers Robert and Linda Mendelson were asking for the home when they first put it on the market in 2019.
Crain's could not reach the Mendelsons, who previously said they owned the penthouse for about 50 years.
"The Gold Coast market is really depressed," said Rick Levin, whose Chicago-based auction house, Rick Levin & Associates, auctioned a different Gold Coast property the same day as the Mendelson sale. "It's down 50% in some cases and people don't want to hear that, but an auction tells you what the market will pay."
At Levin's auction house, a three-bedroom unit in the gracious 1920s co-op building at 1540 N. Lake Shore Drive sold for $525,000.
There was no previous asking price, as the property had not been listed conventionally, Levin said. An estate was selling the property for deceased former owners. "They looked around and saw units sitting on the market for three, four years," Levin said, "even in this spectacular building on the Gold Coast, and they didn't want to do that."
With that sale done, Levin is now handling another unit in the building. Up for auction on Aug. 13 is a three-bedroom on the 13th floor. It's been on the market conventionally for two years, starting out at $1.175 million and subsequently taking $300,000 in price cuts, or more than 25%.
The suggested opening bid, according to Levin's website, is $650,000.
An auction, both Levin and Wright said, creates a deadline for the sale. That is, so long as the sellers are willing to swallow their optimistic price expectations — and their pride — and accept what the market tells them.
Some sellers get cold feet when the number comes in low, such as when bidders didn't go high enough at an Astor Street auction in 2020 or at one in Barrington Hills last year.
But there are also sellers who commit to accepting the message from the market, like the seller of a giant Naperville house who originally had the property listed conventionally at $15 million, but in a November auction, also run by Concierge, accepted a little over $8 million.
Wright said she hopes the Naperville and Astor Street sales will stand out as examples of successful auctions of high-end properties in Chicago, where failed home auctions by Michael Jordan and others gave this method of selling a bad name.
With these two successful auctions on the books, Wright said, "we think Chicago will open up more" to the concept.
Lightfoot to take on another higher education teaching role
By Jack Grieve
Former Chicago Mayor Lori Lightfoot is adding a second higher education teaching gig to her post-City Hall plans.
Lightfoot will join the faculty at the University of Michigan's Ford School of Public Policy as a visiting professor this fall, the school announced June 13.
The visiting professor role is something of a homecoming for Lightfoot. She earned her undergraduate degree from the Ann Arbor university in 1984.
Lightfoot will co-teach a strategic public policy consulting class with the school's associate dean for research and policy engagement, Jeffrey Morenoff.
"The course will pair graduate students with social impact notfor-profit organizations in Chicago and Michigan to solve challenges those groups are facing in the delivery of services in their respective communities," the announcement said.
Lightfoot launched a nonprofit of her own in January. Chicago Vibrant Neighborhoods Collective aims to supply community organizations in disinvested neighborhoods with tools, services and other resources. In addition, it offers partners technical assistance for budgeting, data analytics and fundraising support. The former mayor serves as the nonprofit’s board chair and senior adviser.
Last year, Lightfoot took a role as
a senior leadership fellow at Harvard University's T.H. Chan School of Public Health. There, she taught a “Health Policy & Leadership” course that drew on her experience leading Chicago during the COVID-19 pandemic.
The University of Michigan announcement is the latest look |at Lightfoot’s plans for postCity Hall life after being denied a second term following her thirdplace finish behind Mayor Brandon Johnson and Paul Vallas in the 2023 mayoral election.
Before becoming Chicago's mayor in 2019, Lightfoot worked as a prosecutor, corporate law partner at Mayer Brown and government official in the administration of former Mayor Richard M. Daley.
Lori Lightfoot at Brandon Johnson’s inauguration on May 15, 2023. BlOOMBERG
VHT STUDIOS
PHOTOS
The Astor Street condo is the top two floors of a stately 14-story building designed by Andrew Rebori and built in 1929. The unit’s interior was originally designed by eminent architect of the time, David Adler.
When the property was on the market in 2019, then-listing agent Nick Kluding of Baird & Warner said the sellers had diligently maintained the vintage look of the condo.
Wisconsin firm pays $48 million for Aurora apartments
Suburban Chicago’s consistent rent growth is drawing attention from investors
By Rachel Herzog
A Wisconsin real estate investor picked up a 272-unit apartment complex in the western suburbs for just over $48 million.
Brookfield-based MLG Capital bought the Orchard Village apartment complex at 1240 W. Indian Trail in Aurora from a venture of New York-based National Property REIT, a private real estate investment trust controlled by Prospect Capital, according to Kane County property records.
The property sold for approximately 40% more than its previous sale price. A joint venture of Chicago-based Stadt Group and Buffalo, N.Y.-based Sinatra & Co. Real Estate paid $34.5 million for it in 2015, with an equity investment from National Property REIT, according to a November 2015 press release.
While elevated interest rates have in some cases dampened sale prices for commercial property, apartment buildings in the suburbs have maintained their appeal to investors in recent months amid strong de -
mand for Chicago-area apartments.
“Orchard Village presents the exciting opportunity to acquire a quality multifamily asset in a supply constrained submarket of Chicago,” MLG Capital Senior Vice President Daniel Price said
in a statement. “We believe Orchard Village is well-positioned for future growth and to capture rental demand in the region.”
Net monthly rent at suburban Chicago apartments was up 4% year over year in the first quarter of 2024, rising to $2.06 per square foot, according to the latest data from the Chicago office of appraisal and consulting firm Integra Realty Resources. The suburbs’ consistent rent growth has drawn attention from investors. The Orchard
Village apartment complex got 15 offers, according to Newmark Senior Managing Director Chuck Johanns, who marketed the property for sale along with the brokerage’s Senior Managing Directors Liz Gagliardi and Susan Lawson.
“I think it’s just the ongoing strength of the underlying market,” Johanns said.
The Aurora property is MLG Capital’s ninth acquisition in the Chicago area, according to the firm. The investor now owns more than 1,700 units in Illinois.
The deal was part of a 1031 exchange, a tax benefit that allows real estate investors to avoid paying taxes on a property sale if they use proceeds from the sale to buy a similar property. MLG Capital didn't disclose which property the firm sold as part of the exchange but said it was another Chicago-area apartment building.
A phone number and email address for Stadt Group were out of service as of today. National Property REIT and Sinatra & Co. Real Estate didn’t respond to requests for comment.
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The Orchard Village apartment complex in Aurora | MlG CAPITAl
What’s at stake for Chicago in the Supreme Court’s ruling on political gifts
No matter how you feel about the wisdom of the Supreme Court's ruling in Snyder v. United States, one thing is certain: Chicago is ground zero for the type of corruption the statute at issue was meant to root out, and the justices' decision may only embolden local pols who see their role as doing good for themselves before doing good for the public at large.
The court on June 26 rejected the use of a federal bribery statute to prosecute gratuities accepted by state or local officials, even when the officials “corruptly” accept payments as a gratuity after the fact for services rendered.
The decision also holds implications for former Illinois House Speaker Michael Madigan, who is awaiting trial in federal court for alleged corruption that includes five counts based on the statute at issue, known as Section 666. The ruling may also affect sentencing for the “ComEd Four,” lobbyists and executives of the electric company convicted of providing gifts to Madigan. Their sentencing was delayed to await the outcome of the Supreme Court case.
“Section 666 does not supplement . . . state and local rules by subjecting 19 million state and local officials to up to 10 years in federal prison for accepting even commonplace gratuities,” Justice Brett Kavanaugh wrote for the majority in the 6-3 decision in Snyder v. United States. “Rath-
PERSONAL VIEW
er, Section 666 leaves it to state and local governments to regulate gratuities to state and local officials.”
The case involves the prosecution of former Portage, Ind., Mayor James Snyder, who received a $13,000 consulting fee from a contractor he'd picked to supply the city with new garbage trucks. Snyder was charged and convicted under a federal bribery statute and sentenced to 21 months in prison.
The Chicago-based U.S. Court of Ap-
peals for the 7th Circuit upheld his conviction, holding that the federal statute applies to gratuities as well as bribes, which involve a quid pro quo.
Snyder’s lawyers argued that the provision of the bribery statute used to prosecute over gratuities has become the “beast” of federal prosecutors because it does not require proof of a quid pro quo.
The lawyers noted that federal prosecutors had cited the 7th Circuit’s interpretation “a dozen times” in filings arguing
against dismissal of gratuity charges against Madigan.
The law applies not only to state and local officials, but also to employees of private organizations receiving at least $10,000 in federal funds. It applies when the amount at issue is $5,000 or more, though that applies not to the gratuity amount but to the total value of government services rendered. Those convicted under the law face a maximum of 10 years in prison, compared with a two-year maximum for federal officials who violate a separate law on gratuities.
Kavanaugh said Congress could change the law, but it has not done so since 1986, partly out of recognition that state and local governments “may and often do” regulate gratuities to state and local officials. So what's needed next is for Congress to do what Kavanaugh suggests and craft a constitutionally sound definition of what sorts of gifts to elected officials are fair game and which ones are not, and to apply a reasonable standard for punishment.
In Madigan's case, the ruling on this one statute may not materially affect his ultimate fate — Section 666 was just one facet of a multipronged indictment. But Chicagoans who hope to clean up local government have a lot at stake in this debate, too. Clearer rules will help everyone on both sides of the tip jar to understand what's a friendly thank-you and what is graft.
How to turbocharge growth in the Loop
What’s Chicago’s fastestgrowing neighborhood?
Here’s a hint: Its population spikes at 9 a.m. every weekday and declines at 5 p.m. Although it’s long been defined by its towering office blocks, people are rapidly making the Loop their 24/7 home. From 2020 to 2023, the Loop grew by 9% to 46,000. This is up from around 12,000 residents in 1990. More impressive yet: This makes Chicago’s downtown the fastestgrowing in the country.
public and private sectors should make downtown more walkable and lean into the benefits of its density.
Since March 2020, the Loop has been no stranger to negative press, with many lamenting high vacancies, rising crime and decline in foot traffic as the precipice of a doom loop that threatens to sink the whole city. However, a deeper analysis reveals a place ripe for a positive, residential-powered transformation. To capitalize on the Loop’s evolving potential, city leaders across the
The Loop’s neighborhoodification is not slowing down. Occupancy rates for residential units were at 95% in 2022 and the Chicago Loop Alliance, downtown’s chamber of commerce, projects that the neighborhood will grow a further 17% by 2028. For reference, from 2010 to 2020, both West Loop and River North grew by around 50% and South Loop grew by about 30%. This indicates that the Loop may be on the precipice of the dramatic growth that has redefined the rest of downtown.
If the Loop is becoming a true neighborhood, who are the neighbors? On average, high-earning young professionals. According to a survey conducted by the Chicago Loop Alliance, 63% of resi-
dents earn $100,000 or more a year, with 25% earning more than $200,000. Eightytwo percent have a bachelor’s degree and 42% hold a master's or doctorate. Most are also not from Chicago, with only 30% born in Illinois and 28% born outside the country. The Loop also leans young with a median age of 32.6.
Although this transformation has flown under the radar for many, businesses are taking note of the abundance of highly qualified talent at the city’s center. For instance, Google plans to bring 1,000 new employees to its new Thompson Center headquarters, partly driven by its desire to be near a growing center of highly-educated talent.
We hear a great deal about the Loop’s woes, with only 55% of workers returning to the office and 85% hotel occupancy compared to pre-pandemic. Luckily, the Loop’s growing residential population presents an opportunity to transform the neighborhood into somewhere that attracts workers, visitors and even more residents.
To spark this growth, the city should redesign the Loop to embrace what has appealed
to residents. Among residents, the most cited reason for living in the Loop is its walkability, followed by proximity to their place of work and various amenities. And 78% of residents cite walking as their primary mode of transportation. Perhaps more than any other neighborhood in the city, the Loop’s future is grounded in walkability.
The city should take several steps to accelerate this transformation. Introducing a congestion fee downtown would be a positive step towards creating more space for people. The city could also take inspiration from New York City’s Plaza Program, which has transformed once-busy streets in Manhattan into plazas.
These developments, such as Herald Square Plaza, have increased downtown vibrancy by creating spaces where people can be with each other. Establishing these plazas throughout Midtown Manhattan, the area saw an 11% increase in pedestrian volume and 74% of users reported that the project had improved the streets dramatically. These initiatives make these spaces more pleasant and there is little evidence
Ronan O’Callaghan is an analyst at the Miles Group and a member of Strong Towns Chicago, a nonprofit that advocates for urban planning changes that will make the city safer, more livable and resilient.
to suggest there is a trade-off in deterring commuters. In fact, New York has had a stronger postCOVID recovery, with a 72% return to office rate compared to Chicago’s 55%.
Another way to increase the Loop’s vibrancy is renovating underpopulated office buildings into mixed-use units. The city government is progressing on this front through the LaSalle Street Reimagined project. Already, around $200 million in TIF funding has been approved to convert 30 N. Lasalle St. and 79 W. Monroe St., once solely office buildings, into buildings that have apartments, shops and office spaces.
Increasing the number of people in the Loop every hour of the day will make it easier for retail locations to thrive. This is particularly pressing since almost a third of all retail locations in the Loop are vacant, exacerbating a sense of decline. Making it easier for experimental pop-up shops, such as art installations or test restaurants, to operate in these spaces would create an intermediate step between vacancy and establishing longterm tenets. The city government should make it easier for these sorts of initiatives to get leases.
Related to this, retailers should be allowed to establish amenities that appeal to a growing population. For instance, one of the most frequently cited amenities desired by residents are grocery stores, which are currently scarce. A lack of stores like these may be what is causing residents to discount the Loop as a long-term home, with 54% of residents saying they plan on moving out in within five years. Although this is not necessarily a bad thing, making the Loop somewhere people feel comfortable setting down roots will enhance its vitality in the long run.
Currently, the Loop leans young, with 47% of residents between age 20 and 35. Accordingly, only 15% of residents have children. If the Loop wants to retain its population, it will have to develop amenities that are useful for growing families.
Focus on amenities
Finally, the Loop should focus on placemaking strategies to create more dynamic streetscapes, green areas and culture. These amenities were highly cited as potential sources for improvement among Loop residents and would make the neighborhood more attractive to visitors as well. Towards this end, the Loop should utilize its pre-existing cultural institutions and iconic architecture.
Recently, Detroit was able to rejuvenate its downtown through a similar strategy. Major corporations, non-profit organizations, and the local government invested in several programs in and around the city’s downtown cultural centers. These included public art, events and festivals, and placemaking through enhancing public spaces. These initiatives have helped revitalize the city’s downtown, with the number of downtown apartments doubling since 2010.
The Chicago Loop Alliance’s summertime Sundays on State
are a strong example of how to engage citizens and give performers and small-business owners an opportunity to show the city what they have to offer. Chicagoans should think creatively about how to best leverage what already exists downtown and what sorts of events and infrastructure can bring people together the best. Beyond these occasional cultural productions, improving the Loop’s streets for day-to-day use would vastly increase their appeal.
For instance, in Montreal, the city recently installed public outdoor spaces with free Wi-Fi so office workers could take calls outdoors. This would especially appeal to
Loop residents, who are disproportionately likely to work whitecollar jobs. Even small touches, like establishing more trees or greenery and improving nighttime lighting, would go a long way in increasing livability.
The Loop’s eclectic collection of skyscrapers from different eras and architectural styles is a testament to its ability to reinvent itself following how society has transformed over the decades. The emergence of a residential Loop is another chapter in that story. Should city leaders capitalize on it fully, it promises to transform our city’s downtown into the most resilient it's ever been.
From
ENGINEERING FIRMS
PEOPLE ON THE MOVE
ACCOUNTING / CONSULTING
MichaelSilver, Deerfield
Quinn Harris, CPA, joined MichaelSilver as Partner bringing over 15 years of experience in high-level tax advisory and compliance expertise. His expertise spans ASC 740, cross-border taxation for multinational corporations. He excels in driving strategic growth and managing tax compliance for U.S. businesses expanding internationally. His strategic acumen ensures the successful delivery of comprehensive tax solutions aligning with broader organizational objectives.
CONSTRUCTION
Northern Builders, Inc, Schiller Park
Northern Builders, Inc. is pleased to announce the promotion of Mark A. Fordon to Executive Vice President of Construction Services. With over 30 years of experience in the construction industry, Mark’s leadership in directing all facets of construction has enabled Northern to consistently exceed our clients’ expectations for quality, timing, and performance. Mark has been an integral part of Northern’s executive team for over 11 years.
CONSTRUCTION
Redmond, Chicago
Brian Sanders joins Redmond as Project Executive of the firm’s Science and Technology Division. He brings more than 25 years of construction experience and an extensive portfolio of complex lab, cleanroom, R&D, and high bay projects. To date, he has overseen and managed more than $125 million of construction contracts, partnering with prestigious clients such as the University of Chicago, Northwestern University, Argonne National Laboratory, Rush University Medical Center, S&C Electric, and Labcorp.
FINANCIAL SERVICES
Wintrust Financial Corporation, Rosemont
LAW FIRM
Corboy & Demetrio, Chicago
LAW FIRM
Taft Law, Chicago
Ryanne Bush Dent joins Taft as a partner in the firm’s Litigation group. She has substantial experience advising commercial clients through complex construction and fiduciary litigation in both state and federal courts, working closely with architects, engineers, contractors, subcontractors, developers, owners, lenders, and title insurance underwriters. Ryanne also performs construction contract review, negotiation, and drafting.
LAW FIRM
Taft Law, Chicago
Taft welcomes former federal prosecutor and white-collar defense attorney Nancy DePodesta as a partner in the firm’s Litigation practice.
Nancy regularly defends clients in investigations conducted by the Department of Justice and other federal law enforcement and governmental agencies. She has extensive experience in a wide array of subject matters, including securities fraud, tax fraud, health care fraud, corporate fraud, bribery and corruption, and antitrust.
PROMOTE.
Why not?
LAW FIRM
Taft Law, Chicago
Taft welcomes Michael Pisano as a partner in its Litigation practice group. Michael focuses his practice on construction law and litigation, with extensive experience representing owners, design professionals, contractors, subcontractors, and sureties in construction and real estate matters. He also advises clients in business disputes, including breach of contract, breach of fiduciary duty, fraud, and post-closing indemnity disputes.
Wintrust Financial Corp., a financial services holding company based in Rosemont, Illinois, with more than 170 locations across Illinois, Indiana, Wisconsin, and Florida is pleased to announce two promotions. Timothy Treacy was promoted to SVP, Investments at Wintrust Investments. Timothy celebrated 17 years at Wintrust in June. Kristin Heskett was promoted to SVP, Chief Credit Officer, Commercial Banking at Schaumburg Bank & Trust Company, N.A. Kristin joined Wintrust in 2014.
Treacy Heskett
LAW FIRM
Taft Law, Chicago
Eric Singer has joined Taft as a partner in the firm’s Litigation practice, concentrating on construction law, mechanics liens, litigation, and dispute resolution. He counsels commercial construction clients through contracts, insurance, and construction and design projects, as well as disputes related to real estate, construction, mechanics liens, mortgages, title insurance, easements, and injunctions.
NON-PROFIT
IFF, Chicago
Rodrigo Vela has joined IFF’s senior leadership team as CFO. A seasoned executive with a proven record of financial management, Vela will oversee IFF’s accounting and internal controls, risk management, investor relations, and capital raising. Vela previously served as CFO for Raza Development Fund, a CDFI in Phoenix, where he grew its balance sheet from $90 million to more than $300 million, tripled the size of its net assets, and negotiated or renewed over $700 million in enterprise debt.
Chad D. Kasdin, a former partner at a large defense law firm, has joined Corboy & Demetrio, bringing with him nearly 24 years of litigation experience in the areas of professional liability, including medical malpractice defense, business and commercial litigation, and premises liability. Chad obtained a J.D. from Washington University in St. Louis in 2000 and a B.A. from Skidmore College in 1997.
LAW FIRM
Taft Law, Chicago
Joseph Walker has joined Taft as of counsel in the Intellectual Property practice, focusing on patent prosecution. He works closely with clients to draft and prosecute patent applications through the USPTO and internationally in a broad range of technologies, including the mechanical, chemical, medical device, and computer technology fields.
PUBLIC RELATIONS
Aileron Communications, Inc., Chicago
Aileron Communications, a leader in public affairs and community engagement for the clean energy industry, has promoted Kyla Donato to Account Manager. Kyla joined Aileron in 2021. Her expertise helps renewable energy clients advance clean energy through creative, integrated campaigns. Her work supports several gigawatts of renewable energy and advanced manufacturing projects across North America. Kyla is a Clean Energy Leadership Institute Fellow and a graduate of Northwestern University.
Illinois’ ban on ‘bump stocks’ remains in place despite the U.S. Supreme Court’s latest decision
SCOTUS is also expected to announce whether it will hear an appeal of the state’s assault weapon ban
By Peter Hancock, Capitol News Illinois
SPRINGFIELD — An Illinois law banning the sale and use of “bump stocks” and other devices that increase the firing power of semiautomatic weapons remains in place, at least for now, despite a U.S. Supreme Court decision on June 14 striking down a federal ban on such items.
“Illinois law is not affected by the decision,” a spokesperson for Attorney General Kwame Raoul said in an email statement on June 14.
Meanwhile, however, advocates on both sides of the gun control debate in the United States are anxiously waiting to learn whether the high court will hear a broader constitutional challenge to the state’s 2023 assault weapons ban, which includes the state-level ban on bump stocks. An announcement on that appeal could come at any time in the next several days.
Bump stocks are devices that attach to a semiautomatic weapon that enable it to fire multiple shots in rapid succession with a single pull of the trigger, effectively enabling the weapon to function like a fully automatic weapon.
Those devices became the focus of gun control debate following a 2017 mass shooting at a music festival in Las Vegas, Nevada. A gunman used weapons equipped with bump stocks to fire more than 1,000 rounds into a crowd in a matter of minutes, killing 60 people and injuring more than 400.
Although public ownership of “machine guns” had long been banned under the National Firearms Act, a 1934 law originally written in response to gangland violence of that era, that law had never been interpreted to in-
clude the use of bump stocks. Public outrage over the Las Vegas massacre prompted the Bureau of Alcohol, Tobacco, Firearms and Explosives to adopt a new regulation imposing a federal ban on bump stocks.
Exceeded authority
In a 6-3 ruling on June 14, the U.S. Supreme Court struck down that regulation, saying ATF exceeded its authority in issuing a rule that classifies bump stocks as machine guns. The majority did not, however, say a ban on bump stocks per se would violate the Second Amendment right to keep and bear arms.
“The Supreme Court decision, as you know, is not a Second Amendment decision,” Gov. JB Pritzker said at an unrelated news conference, just hours after the decision was released. “It was
a decision about whether the ATF has the authority to issue the rules that they put out back then. … I do think it’s going to spur action at the state level as well as the federal level to try to once again ban bump stocks. Here in Illinois, we’ve already done that.”
The Illinois bump stock ban was enacted as part of the state’s overall ban on assault-style weapons, which came in response to another mass shooting, this one at a Fourth of July parade in Highland Park in 2022.
The law bans a long list of firearms defined as “assault weapons,” as well as large-capacity magazines and various kinds of attachments. Those include attachments that “increase the rate of fire of a semiautomatic firearm above the standard rate of fire” for a weapon not equipped with such a device.
That law was passed during a special lame duck session of the General Assembly in January 2023, just six months after the Highland Park shooting. Pritzker signed it into law within hours of its final passage, making Illinois the ninth state in the nation at the time to enact such a ban. Washington became the 10th state a few months later.
Legal challenges to the Illinois law moved swiftly through both state and federal courts. In August, the Illinois Supreme Court ruled 4-3 the law did not violate a narrow provision of the Illinois Constitution that prohibits the passage of “special legislation,” or laws that apply only to certain classes of individuals.
At the federal level, however, decisions so far have been mixed.
Two separate district court judges in the Northern District of Illi-
nois rejected constitutional challenges to the law and refused to block enforcement of either the state ban or local bans enacted in Naperville and Chicago.
But in April, a judge in the Southern District of Illinois granted a preliminary injunction blocking enforcement of the law on the grounds that it likely violates the Second Amendment.
Those three cases were later consolidated at the Seventh Circuit Court of Appeals, where a three-judge panel ruled Nov. 3 that the law could remain in force while challenges to it are being considered.
That is the decision now pending before the U.S. Supreme Court, which so far has declined to issue its own preliminary injunction to block enforcement of the law while the cases are being heard.
Legal challenges are also pending against assault weapon bans in other states, but a spokesperson for the National Association for Gun Rights, one of the leading organizations challenging those laws, said on June 17 the Illinois case is the only one currently poised to be taken up by the Supreme Court.
If the court agrees to take the case, oral arguments would be scheduled for the term that begins in October. A decision against hearing the appeal would leave the Seventh Circuit’s decision from November in place.
Capitol News Illinois is a nonprofit, nonpartisan news service covering state government. It is distributed to hundreds of newspapers, radio and TV stations statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation, along with major contributions from the Illinois Broadcasters Foundation and Southern Illinois Editorial Association.
SEC fines R.R. Donnelley $2.1M related to ransomware attack
The incident occurred in late 2021 as the printing and communications company was in buyout talks
By John Pletz
R.R. Donnelley & Sons has agreed to pay a $2.1 million fine to the U.S. Securities & Exchange Commission in connection with a ransomware attack in 2021.
The Chicago-based company provides printed and digital communication services for clients, including most of the Fortune 100.
The SEC says a ransomware attacker broke into Donnelley’s computer network between Nov. 29 and Dec. 23, 2021, taking 70 gigabytes of data belonging to 29 of its 22,000 clients.
Although Donnelley’s network-security equipment detected some signs of activity and issued alerts, the company didn’t actively respond to the intrusion until another company with shared access to its network alerted Donnelley’s top cybersecurity officer about suspicious activity, according to the SEC.
Donnelley relied on a vendor to monitor network-intrusion alerts and notify the company when warranted.
“RRD’s controls for elevating cybersecurity incidents to its management and protecting company assets from cyberat-
tacks were insufficient,” Jorge Tenreiro, acting chief of the SEC’s crypto assets and cyber unit, said in a statement. “RRD did, however, cooperate with our investigation in a meaningful way, and that is reflected in the terms of this settlement.”
Under those terms, Donnelley did not admit or deny the SEC’s findings.
At the time of the incident, Donnelley, which was then a publicly traded company, was in negotiations to be acquired by a private-equity firm. Chatham Asset Management took Donnelley private on Feb. 25, 2022, in a $900 million deal.
Cannabis prices show widening fault lines across the U.S.
Quality of product, state-level
By Adam Jackson, Green Market Report
The price of cannabis in the U.S. is anything but uniform.
An analysis of nationwide data shows that consumers can expect to pay anywhere from around $200 to nearly $600 for an ounce of high-quality marijuana, depending on where they live. The national average, corrected for outliers, lately stood at $318.72 per ounce.
Quality of product also has a significant impact on the overall price. The average national price for “medium-quality” cannabis
policies and market conditions all play a significant role in shaping the economics of the drug
conditions play in shaping the economics of the drug.
States such as Colorado, Oregon, and Washington, which overall have taken a more permissive approach and also allow recreational use, boast some of the lowest prices in the country. Consumers in Oregon enjoy the cheapest access, with an average price of $210.75 per ounce, followed by Washington at $232.90, and Colorado at $241.74.
Many states fall within a relatively narrow price band, with 15 states averaging between $330 and $350 per ounce.
fell nearly 20% to $256.08 per ounce, according to the global price index site priceofweed.com.
The findings, drawn from figures reported by priceofweed.com, point to the significant role that state-level policies and market
These states have also suffered from severe oversupply in recent years—which can also be attributed in part to the permissive regulatory framework in those states— which has also driven down prices. For example, Oregon has issued a series of moratoriums and administrative halts on new licenses in recent years as it wrestled with how to control market expansion. When cannabis was legalized, the market did not have any caps on the number of licenses and fees were comparatively low.
States with stricter laws and
Intersect Illinois appoints members to new ‘CEO-centered’ board
Intersect Illinois, the statewide economic development organization, has made several changes to its board.
The organization announced three new appointments to its board of directors. Michael Sacks, chairman and CEO of GCM Grosvenor; Smita Shah, president and CEO of SPAAN Tech; and Kevin Warren, president and CEO of the Chicago Bears, were all named to the board to "help advance Intersect Illinois’ mission to attract new jobs and investment to Illinois," the organization said in a press release.
"In recent years, Illinois has built up tremendous momentum as a great place to do business, which is validated by its ranking as No. 2 in the nation for corporate expansions and relocation for the second year in a row,” Intersect Illinois Chairman John Atkinson said in a state -
more limited access on the other hand have much steeper prices. Washington, D.C., which has legalized possession and home cultivation but not sales, tops the list at $590.27 per ounce.
Regional trends also emerged, with many of the lowest-priced states clustered in the West, where most of the mature markets are located. The highest prices are concentrated in the Northeast and Mid-Atlantic, which have come online much more recently.
Despite notable outliers, such as Washington, D.C., many states fall within a relatively narrow price band, with 15 states averaging between $330 and $350 per ounce.
Experts say the disparities reflect the complex interplay of factors that influence pricing in each state, from the number of licensed businesses to the maturity of local markets.
A key reason for the price differences is “the length of time (in years) with a functioning competitive wholesale and retail market,” Rosalie Pacula, an economics researcher and cannabis policy expert at the University of Southern California, told Newsweek.
States with newly legalized markets typically see prices decline over time as competition rises and the industry matures, a pattern observed in early-adopter states like Colorado and Washington. Wholesale prices also play a key role, and regulations around sales at that level vary widely as well. For example, according to Cannabis Benchmarks, “prepackaged” flower has become more
common at the wholesale level —and the price for that version of product can be significantly higher than bulk alternatives.
“Due to the labor associated with weighing out and packaging flower ahead of sales, a higher price is often obtained for the prepackaged goods,” the data firm said.
Adam Jackson writes for Crain’s sister publication Green Market Report.
ment. “Key to building upon that momentum is enlisting our best and brightest business and civic leaders to help us lead this work, and adding Michael Sacks, Smita Shah and Kevin Warren to our board will provide invaluable leverage as we compete to bring new business and jobs to Illinois.”
The appointments are a part of Intersect Illinois' goal to restructure its board to be more "CEOcentered" by featuring all CEOlevel members. Intersect Illinois said current board members who are not on the CEO level will become part of its newly created executive advisory council, which it said will bring in more appointments.
A seven-member executive committee was also introduced as part of the updates, along with marketing and communications, audit, site readiness and board development committees to create more engagement from board members.
By Corli Jay
From left: Michael Sacks, Smita Shah and Kevin Warren
VW’s lifeline to Rivian could help Illinois hang onto jobs
The German auto giant’s money could help jump-start the EV maker’s idled plans for a factory in Georgia
By John Pletz
Volkswagen is throwing Rivian a $5 billion lifeline, a badly needed vote of confidence in the startup automaker that employs more than 8,000 people at a factory in downstate Normal.
The German auto giant said it will invest $5 billion in a joint venture with Rivian, including an initial $1 billion infusion and another $1 billion in each of the next two years.
Rivian shares jumped 50% in after-hours trading on June 25 to $17.93 per share, their highest level since Jan. 12.
“This is a game-changer for Rivian and a huge vote of confidence for the Street. It helps the capital structure situation for Rivian at a key time,” says Dan Ives, an analyst at Wedbush Securities.
The details of the joint venture aren’t totally clear. VW will leverage Rivian’s software and EV expertise for future vehicles. But Rivian CEO R.J. Scaringe says VW’s financial backing will help the company restart work on its long-planned Georgia factory, which was idled as money got tight.
That’s not all bad news for Illinois, which benefited this year when Rivian shifted its Georgia expansion into neutral and instead decided to start making a new small SUV at its existing factory in Normal, adding more than 500 jobs along the way.
“Importantly, this partnership will provide capital needed for the R2 ramp and Georgia plant R2/R3 midsize platform,” Ives wrote in a note to clients this morning.
The simple fact is that it’s not a zero-sum game. Illinois needs Rivian to be successful to hang onto thousands of jobs well into the future. Illinois took a chance on Rivian when it didn’t even have a vehicle. The gamble paid off brilliantly when the company’s electric truck and SUV
proved to be a hit.
‘Production hell’
But Rivian is entering the valley of death, or what Elon Musk famously called “production hell.” At the end of March, Rivian had $7.9 billion in cash and securities, down 16% or $1.5 billion from year-end.
The company will make about 57,000 vehicles this year, all of them in Normal. Tesla, meanwhile, is expected to produce about 1.8 million.
The wheels nearly came off Tesla as it struggled to ramp up production of its lower-priced Model 3. It was producing about 100,000 vehicles a year at the time.
“The investment and JV with VW will give Rivian improved negotiating ability with suppliers, in our view. CEO R.J. Scaringe has recently discussed the first generation of vehicles on the R1 platform utilizing components and materials from contracts which were negotiated as
early as 2018, when Rivian had to pay a ‘startup premium’ and received less-favorable terms. This agreement will improve Rivian’s access to vehicle hardware at superior terms, in our view,” Ben Kallo, an analyst at RW Baird, wrote in a note to clients.
The journey through the valley of death could be even longer than Scaringe hoped, with signs that mass-market demand for EVs isn’t as strong as initially expected. But Rivian has to make it to the other side.
Even as Rivian was negotiating an incentive package to start building the new R2 SUV in Illinois, he told the Altanta JournalConstitution: “We will be back. We will be building because that’s where we get the volume we need for these vehicles.”
VW’s largesse alone likely won’t be enough to carry Rivian through. It will need more money from investors as well as paying customers. VW’s move, like Amazon’s before it — when the e-commerce giant inked a deal with Rivian to produce thousands of electric delivery vans — gives investors reason to believe in Scaringe.
A deeper partnership with VW is welcome news in Illinois for another reason. VW is the largest investor in Gotion High-Tech, the company that’s building a plant in Manteno to produce EV batteries. Gotion also is a Rivian supplier.
A more financially healthy Rivian is good for everyone.
CME and Google to build new facility to move trading into the cloud
Construction to start this year and transition will happen in phases
By Katherine Doherty and Isis Almeida, Bloomberg
Alphabet Inc.’s Google will work with CME Group Inc. to build a new cloud-computing network that will enable the exchange operator to shift its futures and options trading into the cloud.
The two firms will develop cloud and colocation facilities — space rented to clients for their own IT equipment — next to CME’s existing data center in Aurora, executives said June 26. Construction will start later this year and the transition will happen in phases, they said.
CME and Google began a 10year alliance in 2021 to migrate data, clearing services and eventually trading into the cloud. As part of the agreement, Google made a $1 billion equity investment in the derivatives exchange.
“This is a significant step forward in our partnership,” CME Chief Executive Officer Terry Duffy said in a statement.
The decision to keep the data center in the Chicago area comes after market makers and highspeed trading firms opposed a move elsewhere, according to people familiar with the matter. It highlights how difficult it would be for the exchange to move away from the region, which has seen a number of high-profile corporate departures in recent years including Ken Griffin’s Citadel, Boeing Co., and Caterpillar Inc.
Slim advantage
Traders like to have infrastructure near or in the data center to ensure information travels faster, giving them a slim advantage over others that aren’t nearby. Building out infrastructure elsewhere would take time and result in costs for firms, said the people, who asked not to be identified because the discussions are private. Talks between the exchange and traders included a potential move to Google data centers in Virginia and Ohio, the people said.
“We decided to build the new facility in Aurora to ensure minimal disruption for our clients,” CME’s Duffy said.
“This will maximize the opportunity for market participants to
leverage a combination of specialized cloud services and existing investments in the area to drive differentiation and efficiencies,” said Rohit Bhat, managing director of capital markets, exchanges and digital assets at Google Cloud.
CME said it will provide its clients with 18 months’ notice before the markets move to the new platform. The company’s cash markets will continue to operate in their current facilities, not moving to the cloud, it said. Firms that migrate trading to
the new facility will also have access to Google’s cloud services including artificial intelligence tools and data analytics, CME and Google said. The matching engine, which links buyers and sellers in a trade, will move to the cloud.
Testing in Dallas
CME customers will be able to test cloud-based trading in the Dallas Google Cloud facility, which will eventually become a disaster-recovery center, the firms said.
Exchanges have long professed a goal of moving to cloud-based platforms as a way to reduce costs, but technology challenges mean the shift has been gradual. Modern trading of stocks, Treasuries, futures and other assets is incredibly fast — with the pace sometimes measured in nanoseconds, or billionths of a second — and exchanges try to ensure that all market players get price updates and other vital data at the same time.
Nasdaq Inc. partnered with Amazon.com Inc. to migrate its North American markets to the cloud from 2022, starting with one of its options exchanges and later an additional options and bond exchange. The two groups developed a cloud platform inside Nasdaq’s primary data center in Carteret, New Jersey. Chicago-based Cboe Global Markets Inc. launched its own cloud-based market data streaming service in 2021, aiming to increase distribution of real-time information globally. It later partnered with Snowflake Inc., a cloud-based data management company, to focus on enhancing Cboe’s internal data and analytics capabilities, but not trading through the cloud.
Rivian models fresh out of the electric vehicle maker’s plant in downstate Normal. lAURENCE lIFF
Ex-employee sues National Association of Realtors
By Dennis Rodkin
A former employee of the National Association of Realtors is suing the Chicago-based trade association, claiming that after she was fired over complaining of workplace discrimination, a retaliation campaign ensued, including cyberstalking her and attempting to ruin her career.
Roshani Sheth claims that after the NAR fired her on the heels of her internal complaint about sexual harassment — including men in the workplace ogling her breasts and commenting about her body — the organization declined to even confirm her prior employment at the association when potential future employers checked her references.
Sheth also claims the NAR “allow(ed) or encourage(ed) its employees to stalk” her with text messages that “included shorthand for ‘kill yourself’ and ‘rat.’ ”
Sheth, who worked for the NAR from May 2014 until October 2019 and whose claims of inappropriate behavior by co-workers were a key part of last year’s New York Times investigation of an alleged culture of permissiveness toward sexual harassment at the organization, filed the suit June 18 in the U.S. District Court for the Northern District of Illinois.
Sheth, who is now a principal at the Lincoln Square residential bro-
kerage Real Estate Legacy, did not respond to a request for comment.
She is representing herself in the suit, with no attorneys.
The association issued a statement saying it “is committed to fostering a diverse, equitable and inclusive workplace. We don’t comment on matters of employment.”
The NAR, the nation’s largest trade association with about 1.5 million members, has been beset with two strings of controversy in recent months.
One, in which Sheth’s lawsuit is the latest chapter, is the staff and volunteer turmoil related to the Times investigation, which has resulted in two consecutive presidents, a CEO and other staffers leaving since August.
The other is the massive jury settlement against the NAR and real estate brokerages over the industry’s longtime commissionsharing standards.
The powerful NAR, which spent more than $53 million lobbying on behalf of its industry in 2023, second only to the U.S. Chamber of Commerce, “is no ordinary employer,” Sheth says in her lawsuit.
She alleges the organization’s “management staff made several attempts to ruin (her career) to cause her economical and reputational harm.” She claims that she has examples of reaching advanced stages in applications for work at potential employers, only to have the NAR’s “influence cause (her) to lose out of these opportu-
nities.” The suit does not include details.
In her suit, which asks for a jury trial, damages of more than $60,000 and punitive damages of at least $1 million, Sheth alleges the NAR’s treatment of her after her firing on Oct. 2, 2019, has caused her “emotional distress and mental anguish, loss of income” and the prolonged inability to land a new job in the field.
Beginning in May 2014, Sheth was a product manager at Realtors Information Network, an NAR subsidiary. In 2019, she filed an internal complaint with the organization claiming, as The New York Times would report in 2023, “male superiors stared at her breasts, referred to her career ambition as ‘unattractive’ and made inappropriate comments about her body and marital status.”
The acts of discrimination during her tenure at the organization, Sheth’s lawsuit claims, included “sexual harassment, unequal terms and conditions of employment and failure to promote.”
In her lawsuit, Sheth claims the NAR fired her “based on discrimination and in retaliation” for filing a complaint sometime around June 2019. She filed the complaint with Senior Vice President Donna Gland, Talent Director Linda Russell and Chief Legal Counsel Katie Johnson. Sheth was fired in October 2019,
and then in December, according to her suit, she and the NAR reached a settlement agreement. The suit does not disclose any financial terms of the settlement, but it says the NAR agreed to keep the agreement confidential and to “provide (Sheth’s) prospective employers with a neutral reference of her employment status with (the NAR).”
Instead, the NAR “fail(ed) or refus(ed) to provide any response or neutral reference to (Sheth’s) prospective employers,” the suit says, “nor even confirm she had worked for (the NAR).”
Sheth also alleges NAR staff “created an internal campaign to ruin her reputation to those (she) previously worked with to deprive her of references” from her past coworkers at the association.
Four years after Sheth was fired, Gland and Johnson, two of the people she filed her complaint with, were among the NAR staff leadership targeted by a letter from employees calling for dismissal of top staffers who had allegedly allowed a “culture of fear” to permeate the ranks.
“Our leadership has failed us,” the letter said. “We are tired of watching our talented teammates walk out the door.”
Gland retired in November. Russell and Johnson appear to still work at the NAR.
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Driehaus Museum unveils $8 million renovation of ornate Murphy Auditorium
Built in 1926 to memorialize a pioneering Chicago physician, the opulent building doubles the size of the decorative arts museum
By Dennis Rodkin
The Murphy Auditorium on Erie Street, built in 1926 as an opulent copy of a church in Paris, reopened after an $8 million renovation by the Richard H. Driehaus Museum, the nextdoor neighbor that purchased it in 2022.
With an exterior of tall stone pillars and carved bronze doors beneath a Greek temple’s roof and an interior whose walls and domed ceiling are richly ornamented with plaster and stained glass, the John B. Murphy Auditorium exemplifies the late philanthropist Richard Driehaus’ fondness for architecture, said Zachary Lazar, president of the museum’s board.
“Good architecture brings pleasure,” Lazar said, directly quoting a years-ago speech by Driehaus, the investment manager and architecture preservationist who died shortly before his namesake museum bought the Murphy. “It makes people feel comfortable in their greater home, this great city, Chicago.”
The addition of the Murphy Auditorium doubles the size of the Driehaus Museum, said Lisa Key, the museum’s executive director. The museum, which focuses on the decorative arts of the 19th century, opened in 2008 in the former Nickerson Mansion, built in 1884. Key said the Murphy adds space for events and a film series, in its grand auditorium, and added studio and program space on the floors above it.
The cost of the yearlong renovation of the Murphy by architecture firm Antunovich Associates and construction firm Bulley & Andrews was $8 million, Key said.
When the museum announced it was buying the Murphy building three years ago, neither party disclosed a price. The sale closed in early 2022, but Cook County public records do not show a price. Key declined to provide a figure.
Rich details preserved
Among the rich details preserved in the auditorium are a row of throne-like carved wood chairs where eminent surgeons and officers of the American College of Surgeons would have sat in positions of honor when the ACS operated the auditorium. There’s also a stained glass panel in the rear wall above the stage, plaster garlands and medallions by the score, and a pair of bronze front doors by Tiffany.
The building was designed by Benjamin Marshall and Charles Fox, who copied the exterior of the Chapelle Notre-Dame-de-Consolation in Paris.
The monumental Murphy Auditorium building is named for
John B. Murphy, a pioneering Chicago physician of the late 19th and early 20th centuries. Murphy’s primary work was in abdominal surgery, relatively new at the time, and along with developing materials and techniques that became widely used, he operated on Teddy Roosevelt in 1912 after the former president was shot on his way to make a speech in Milwaukee. Murphy died in 1916 and his widow, Jeanette Plamondon Murphy, led the effort to get a memorial to him built. A decade later, the building opened as a teaching and assembly center of the American College of Surgeons.
The ACS was headquartered next door in the former Nickerson mansion. The two remained
in the surgeons group’s hands even after the group moved to a Streeterville high-rise in 1989.
In 2003, Driehaus restored both buildings in a deal that ended with him taking ownership of the Nickerson mansion. Then in 2019, the surgeons group put the Murphy building on the market, resulting in the sale to the Driehaus organization in 2022.
The two buildings and a third, the stately stone Ransom Cable mansion kitty-corner from them at Wabash and Erie, where Driehaus Capital Management is housed, make up a campus of finely restored historical remnants that speak of the late benefactor’s stewardship of Chicago’s historical architecture, Lazar said.
PHOTOS B y DENNIS RODKIN
own system.
In May, DuPage bought the former Green Acres Country Club for $80 million, catching Chicago officials and the village of Northbrook, where the land resides, by surprise. Buying the 127-acre site, which lies roughly three miles west of Lake Michigan, could be home to a water treatment facility and was the first significant step in an ambitious plan to spend billions more to build its own water supply system.
A month after the purchase, Chicago Chief Financial Officer Jill Jaworski said the Johnson administration is still confident the city will ink a long-term deal with DuPage to replace a relatively short 17-year extension, signed in February, of the commission’s existing contract.
“While it was somewhat surprising to us, the size of the purchase, we fully understand that they are looking at their own interests and making sure that if they don’t come to an agreement with us, they have another option,” she said. “We do expect that we will come to an agreement with them; we’re very confident about that.”
Jaworski said negotiations will begin in earnest again soon. If talks between the two sour and the suburban water commission builds its own supply system, Chicago would lose out on over $100 million annually. And the two entities could become competitors as communities farther west look to Lake Michigan as their own aquifers dry up over the coming decades.
The purchase came months after the DuPage Water Commission agreed to extend its original 40year deal to buy water from Chicago. The 17-year extension is relatively short for a water contract and stretches a few years longer than the estimated 12- to 15-year timeline for the commission to build its own system.
DuPage has been signaling it could leave the city for years, and Chicago’s 100-year agreement to sell water to Joliet exacerbated their frustrations. Chicago currently charges DuPage and its other suburban customers $4.70 per thousand gallons, but will charge Joliet less than that based on an American Water Works Association formula that takes into account the costs associated with supplying the water and how efficiently it’s consumed.
ABORTION
From Page 3
The other 34 states, however, have implemented abortion restrictions or outright bans since the Dobbs decision, including nearby states like Wisconsin and Indiana.
The latest data from Illinois officials shows abortions performed in the state soared to more than 56,000 in 2022 as the number of out-ofstate patients seeking the procedure in Illinois grew 50% year over year to 16,849 patients.
Abortion providers in Illinois are averaging a monthly increase of more than 1,100 abortions since the Dobbs ruling, according to an analysis published last year by the Cen-
Although Chicago has said it will move all customers to the same formula in 2030 when the Joliet deal kicks in, the city has not put it in writing.
Jaworski said the new Johnson administration “didn’t have sufficient time to negotiate all the complexities of a long-term water agreement” after taking office, but she’s confident a new deal will be reached. That new cost-of-service rate would “absolutely be part of the contract with DuPage” and every contract negotiated with all of the city’s customers going forward, Jaworski said.
Paul May, executive director of the DuPage Water Commission, said the land in Northbrook was too good to pass up.
“This particular site is extraordinarily unique in its favorable location to all of the assets that are important for us to be able to make connections to, in a reasonable and cost-efficient way,” May said.
Beyond its proximity to Lake Michigan, the site is in “pristine condition” and has access to nearby power sources, as well as highway and railway corridors that would make it easier to build a water supply system without disturbances to the communities in its path, he said.
May stressed, “We are interested in continuing negotiating with the city of Chicago . . . but we’re not waiting.”
Building a new supply system, starting with an intake in Glencoe before extending west to the Northbrook site and eventually south to the commission’s Elmhurst pumping station, could cost $2 billion — with billions more in associated interest costs — and would take over a decade to complete.
“We can always stop if we have a more favorable arrangement with the city of Chicago, but at the same time, if that never materializes, we’re advancing a project for the best interests of the region,” May said.
The two sides are also negotiating the ongoing costs to maintain and improve Chicago’s Lexington Pumping Station on the West Side that is used to supply water to the commission. The city expects DuPage’s cost-of-service rate to reflect the costs associated with maintaining the station.
“Under a cost-of-service model, improvements to Lexington will largely get charged to DuPage,” Jaworski said. “Despite that fact,
ter for Interdisciplinary Inquiry & Innovation in Sexual & Reproductive Health, or Ci3, at the University of Chicago.
That tracks with recent data published last month by Planned Parenthood of Illinois, the state’s largest abortion provider, which said it has seen a 47% increase in abortion care patients since Dobbs and that a quarter of total patients are from other states.
The Chicago Abortion Fund, a nonprofit organization helping pregnant people secure money, transportation and lodging support associated with traveling for abortion care, has similarly seen an increase in demand for its services.
Since the Dobbs decision, the fund spent nearly $7 million on
DuPage’s water rate is going to go down very significantly.”
What the loss would cost Chicago
Losing its largest customer would cause pain for Chicago. The $114 million the DuPage Water Commission paid the city in 2022 represented roughly 15% of the city’s total water sale revenue, which is kept in a special fund used to maintain the city’s own massive supply system. That number is expected to rise to $122 million this year, according to the commission.
Jaworski conceded Chicago could not “readily replace” the revenue, but said the 17-year length of the current contract gives the city time to adjust.
“We have a significant amount of time to deal with the ramifications and to make sure that we’re managing, both from a revenue and an expense point of view,” she said.
Beyond the potential revenue loss, losing the system’s largest customer could raise the costs of continuing to improve the city’s water infrastructure by lowering the credit rating of the bonds the city issues for capital improvements.
Fitch upgraded the city’s water revenue bond rating to A+ in 2023. Kristen Reifsnyder, director at Fitch, said the purchase in Northbrook would not have an “immediate impact” on those bonds, but she is looking for the city’s plan if the commission ultimately leaves.
“We would look at it more from the city’s response and what their plans are, and what they think the ultimate impact is on the revenues and how they’re planning to address that,” Reifsnyder said.
DuPage’s plans
Even if DuPage decides it must build its own system, political obstacles may arise that drive up costs.
The village of Northbrook wasn’t aware the commission was buying the land until after the sale was announced. The village has long wanted to attract development to the site and last year reached a pre-development agreement with the previous owners to build a data center, while a portion of the site would be ceded to Northbrook to build a new fire station and administrative building.
Northbrook Village Manager Cara Pavlicek said, “We still have more questions than answers”
patient assistance, up from just $200,000 in 2019, Megan Jeyifo, executive director of the Chicago Abortion Fund, said at the City Club event. Back then, the fund helped fewer than 200 people a year. It’s now up to 200 to 300 people per week, totaling more than 12,000 patients a year from across 40 states, Jeyifo said. Through donations and grants, the Chicago Abortion Fund has been able to support 100% of its callers since July 2019.
“Abortion funds are holding up the safety net,” Jeyifo said.
Dr. Jonah Fleisher, an OB-GYN at UI Health who also sat on the City Club panel, said in order to meet abortion demand, his practice has hired more staff and added more appointments, and works closely
about the purchase.
Days after the purchase, Northbrook hired Michael Kasper, a politically connected attorney who for years represented former Illinois House Speaker Michael Madigan as he held tight control over the state Democratic party. Pavlicek would only say the village hired Kasper’s firm to provide “lobbying services.”
If Northbrook and DuPage aren’t able to reach an agreement on the land that satisfies both, Kasper’s Springfield expertise could potentially help stifle DuPage as the commission seeks approval for the various state and local permits they’d need to build the system. If DuPage seeks state grants to help fund the project, Kasper could also try to convince legislators to oppose the money.
May said DuPage had to move quickly to secure the site, but he’s now speaking with Northbrook officials and intends “to work with them to make sure that the project and the site is developed in a way that understands and cooperates with their intentions for their community.”
The $80 million purchase also caught the eye of state officials and regional water policy experts. May said DuPage is not looking to “disrupt” the regional water supply, but partnering with additional communities would make building a system more likely because the commission would be able to share the costs.
Losing its largest customer would force Chicago to seek new ones, and discussions with potential customers are ongoing, Jaworski said.
DuPage purchases water from Chicago, but the commission sells water to its own growing customer base, including to Naperville. The commission received $142 million in water sale revenue by charging its own customers $5.18 per thousand gallons and distributing 26.8 billion gallons of water across the region in 2023, according to its most recent financial report.
The commission recently reached an agreement with Oswego, Yorkville and Montgomery to build a 30-mile pipeline to serve those communities and expand its reach farther west. Preliminary talks with Illinois’ second-largest city, Aurora, have taken place, but no deal is imminent, May said.
“We would be in a position to serve other communities west of us, including Aurora and other
with organizations like the Chicago Abortion Fund.
“As an abortion provider in a hospital setting, my job has changed dramatically,” Fleisher said.
Although Illinois has provided an abortion safety net of sorts for Americans seeking the procedure, Hope Clinic’s Souder argues access is not equal among different racial and economic groups.
“The reality is folks who have the means and the money, especially affluent white folks, are going to be able to get abortions in this country no matter what,” Souder said. “The folks who are the most marginalized are the ones who are being most affected by the restrictions.”
Barriers to access also mean
parts of the Fox Valley, should they choose at some point to connect,” May said.
Farther communities
Illinois is a signatory to the Great Lakes Compact that restricts water from the Great Lakes from being allocated to communities outside the lakes’ watershed. But Illinois is unique because it can send Lake Michigan water across the state, well beyond the lake’s watershed, thanks to a 1967 U.S. Supreme Court decision that settled decades of legal entanglements stemming from the reversal of the Chicago River.
As communities farther west seek water from Lake Michigan, they must receive a permit from the Illinois Department of Natural Resources, which keeps an eye on the state’s total allocation to ensure compliance with the Supreme Court consent decree.
“We’ve been getting inquiries from other communities up and down the (Fox River),” said Stephen Altman, manager of the Department of Natural Resources’ division of water resource management.
If new communities qualify for Lake Michigan water by showing there’s no other viable source and they can efficiently consume it without losing water through leaky pipes, the department is agnostic whether they receive it from Chicago, DuPage or any other commission pulling from the lake, Altman said.
Ryan Wilson, a water policy expert at the Metropolitan Planning Council, said water should be treated as a public good, and “competition across water systems is likely to result in many communities being left behind” and forced to pay for infrastructure costs they can’t afford.
The agency has called for a regional approach to water delivery, which would get rid of “a lot of redundancy” where many municipalities are building their own intake and supply systems, Wilson said.
“If the city of Chicago loses revenue, the cost to wholesalers is likely to go up to pay for the cost of service, and communities like Robbins, Harvey and others in the south suburbs, who’ve seen disinvestment over decades, are likely to bear the burden of this competition across water systems,” he said.
some people are pregnant for longer before reaching care, which can complicate abortion procedures. Souder says Hope Clinic is seeing more patients who are over 20 weeks of pregnancy.
In a pitch to the audience, Sarah Garza Resnick, president and CEO of pro-abortion political action committee Personal PAC, asked “pro-choice” voters to “get creative” on methods to support those traveling to Illinois for abortion care.
“Who do you know in the airline industry?” she asked. “Who do you know who knows something about trains? Who do you know that controls a lot of hotels? … This is an allhands-on-deck emergency. We’re in the midst of a public health crisis that is only going to get worse.”
attention. Through it all, he relied on his father, Lester, now 99, and mother, Renee, 95, for advice and inspiration.
Crown’s presence on local nonprofit boards like the Lyric Opera of Chicago, the Chicago Symphony Orchestra and the Museum of Science and Industry resembled a rite of passage for a member of Chicago’s donor class, but his tenure as a University of Chicago trustee left its mark: As board chair he guided the recruitment in the mid-2000s of a transformative president, Robert Zimmer, whom the current board chair, Carlyle Group’s David Rubenstein, lionized at Zimmer’s memorial service last fall in Hyde Park.
“I don’t think Jim Crown is replaceable, period,” says Motorola CEO and Civic Committee member Greg Brown, guessing what happens next: “I think it’s going to be a series of efforts with various people involved.” With former headquarters recruits Boeing and Caterpillar leaving and hedge fund Citadel’s Ken Griffin blasting the crime scene on his way out of town, Hedy Ratner, co-founder of the Women’s Business Development Center, wonders, “Where are these people? We’ve lost the high-profile corporate leaders. Now that I’m retired, I can say that.”
Family ties
At Henry Crown & Co., the mantle for now has fallen to Jim Crown’s older brother, Steven, a general partner, and their cousin William Crown, CEO of the firm’s manufacturing arm, CC Industries, whose holdings range from truck trailer maker Great Dane to a pizza company and a distiller. Susan Crown says Steven turns 73 this year and is semiretired, while the 60-something William lives in California. Her husband, William Kunkler, is a vice president at Henry Crown and an executive vice president of CC Industries, which has an estimated $2.7 billion in annual revenue. Earlier this year, it participated in a $65 million investment in lithium-ion battery maker NanoGraf, which is starting up a West Side factory.
Two of Jim Crown’s four children, Andrew and Torie, are working in private equity at Henry Crown. (Their firm, Four More Capital, is a nod to their generational place, Susan Crown says. Andrew sits on the boards of two portfolio companies, Chicagobased DxTx Pain & Spine and CognitOps of Austin, Texas, according to PitchBook.) Andrew Crown, 32, has followed his father’s footsteps in gun-violence intervention work, according to Susan Crown, describing him as “one of the closest and most zealous advocates” of his dad’s initial work on the subject with the Civic Committee. The family’s charitable arm, Crown Family Philanthropies, also was an influencer, making gun-violence reduction, starting in North Lawndale, one of its core missions.
Arne Duncan, the former U.S. education secretary involved in his own project to curb shootings through job opportunities, says Andrew Crown has been crucial in fundraising and getting younger CEOs involved in the Civic Committee’s plan. “I was worried the business community would walk away from it” after Jim Crown’s death, Duncan says. “Instead, it doubled down.”
Susan Crown, 66, says it’s too soon to say how much of a factor Andrew will be at the family firm, which has about 350 employees. “Fortunately, a lot of things are on autopilot. A lot of people are doing a lot of work until it gets sorted out. A lot of things have not been modernized. I’m working hard to create a model that will take us well into the 21st century,” she says.
Susan Crown carved out her own career, running a fund that invests in women-owned and other firms and overseeing a philanthropy, the Susan Crown Exchange, seeking to improve literacy and digital skills among
younger people. At Henry Crown, she had managed the family’s charitable work but left more than a decade ago, aiming to do things “my way, without the bureaucracy.”
Focus on crime
The Civic Committee named two executives to succeed Jim Crown in leading its Public Safety Task Force: Mark Hoplamazian, CEO of Hyatt Hotels, and Eric Smith, vice chairman of BMO Bank. They volunteered after chairing two of the task force’s five units, one promoting investing in ravaged communities and another hiring residents from those places. The overall goal is to cut city homicides to fewer than 400 annually within five years and halve that figure within a decade, compared with a recent peak of 804 in 2021. This year, homicides are running about 15% below the pace of last year, when 617 Chicagoans were murdered. Crown was blunt when he took on the job. “We think the business community has a lot to bring to this conversation, and we’ve been largely absent,” he told Crain’s then.
broader community of leaders in Chicago.” Crown’s death also is forcing another deferred decision on the family. It holds significant stakes dating to midcentury in General Dynamics and Chase, giving the family a seat at the boardroom tables. But those seats have gone unoccupied by a Crown since Jim Crown’s death. One factor: Being a director confers insider status, which limits flexibility to trade shares in those companies, and that restriction can complicate family succession issues and estate planning.
“There are arguments on both sides,” Susan Crown says. “That’s not a choice we’ve had in the past.” (Chase earlier this year named Mark Weinberger, former CEO of Big Four accounting firm EY, to its board. General Dynamics hasn’t added any directors since two joined the board shortly before Crown’s death. Share prices in each company have risen by more than a third over the last year, with the war in Ukraine driving demand for General Dynamics’ munitions and other weaponry.)
Jim Crown’s legacy in targeting gun violence is indirectly reflected in still another program, Bright Star Community Outreach, run by a South Side church, whose pastor, Christopher Harris, cites a 17% reduction in shootings and a 14% reduction in robberies in greater Bronzeville since 2015. Bright Star’s connection to Crown is the support it gets from the University of Chicago’s Crown Family School of Social Work, Policy & Practice, the beneficiary of a $75 million gift three years ago from Crown and his wife, Paula.
“My goal is to scale and replicate this model,” Harris says, looking farther south, to the Roseland and West Pullman neighborhoods, and then to the West Side and beyond. “They understand research. We help them understand the community. We’ve clearly done much with little. Imagine what we can do with more resources.”
Education and the arts
Elsewhere at the University of Chicago, Crown’s portrait as a former board of trustees chair stands out among others in Hutchinson Commons. While bigger than most, its distinction owes more to its contemporary style. Artist David Klamen says he normally doesn’t do portraits but did so in this case because the Crown family is a collector of his work and because of a joint relationship with Richard Gray Gallery in Chicago. While applying layers of varnish common for a traditional portrait, Klamen also employed the bold contrasts of chiaroscuro, with the silver-haired Crown beaming out against a background void.
Now, foundation and business leaders say they are close to the $100 million private fundraising target (aside from another $100 million in public funding they hope to get) for a violence-intervention program to train job recruits in five to seven neighborhoods. Graduates are beginning to join firms headed by Commercial Club members, with a goal of 2,000 placements a year by 2028.
“No one had come together to galvanize the business community. That would not have happened without Jim. He just didn’t read some reports — he was in the weeds, meeting the people involved in trying to intervene in gun violence,” says Brian Fabes, managing director of the Corporate Coalition of Chicago, whose 47 members are committed to hiring employees despite criminal records in addressing racial and economic disparities as one of the causes of gun violence.
“It’s not like a basketball team with five players and Michael Jordan leaves,” adds Kelly Welsh, a former Civic Committee president. “It’s different than that. It’s a
With an open book to suggest “his interest in a wide range of scholarship,” the painting also incorporates Yves Klein’s sculpture Victoire de Samothrace, itself a rendering in Klein’s trademark ultramarine blue of the classic Greek sculpture Winged Victory of Samothrace. The university says the sculpture’s inclusion is intended to represent Crown’s commitment to the arts and humanities.
“Everywhere I go, I realize how large Jim’s wingspan was,” says his sister. “I called him Dr. Spock when we were growing up. We were huge ‘Star Trek’ fans. He was so logical and a nerd.” Years later, while awaiting the birth of Andrew, she recalls, Jim ripped open a package of obstetrical supplies awaiting the medical staff, so great was his hunger to “know what everything was for.”
Naturally, “he wasn’t always right about everything,” she continues (regarding what, she won’t say), and the “huge vacuum” he left will, in fact, be filled. “It’ll never be the same as it was in the past. It’s not the same CEO club as it once was.” But tech and other younger execs will move up, so, “I’m not terribly worried. Chicago needs to tolerate that change and embrace it.”
She says of her own extended family: “It’s not our style to put up a monument. We’re all doing things in our own little way. He would want us to continue making the world better.”
Susan Crown speaks at Crain’s Women of Note luncheon on March 6. STEPHEN J. SERIO
From left: Daniel Crown, Paula Crown, Jim Crown, Lester Crown and Andrew Crown at the Aspen Institute’s 2017 winter ball. ASPEN INSTITUTE
David Klamen’s portrait of Jim Crown, 2012. | DAVID KlAMEN
and more — it did not fully reflect the diversity of Chicago’s dining offerings. Lettuce’s Chicago-area restaurants are primarily downtown, on the North Side and in the suburbs, not in the city’s predominantly Black and Hispanic neighborhoods on the South and West sides.
“When we looked at that blueprint, we realized that it wasn’t really a full representation of what Chicago is,” said Love, the owner of Josephine’s Southern Cooking in Chatham.
Instead of dwelling on last year’s shortcomings, though, Love paired with Rand to present race organizers with a different approach for year two.
“We saw that as an opportunity,” said Rand, a 30-year Chicago hospitality veteran who oversees operations of six restaurants at Midway International Airport. “We wanted the event to reflect the 77 communities that represent the makeup of Chicago.”
The duo met with Chicago Street Race President Julie Giese to make their pitch for a more diverse race weekend dining model. “This could really showcase the minority participation and inclusion of all communities of Chicago,” Love recalled telling Giese.
The prospect of partnering with
SCANDAL
From Page 3
succeed in a demanding work environment within a challenging industry, the Tribune reports.
The game plan
Guaranteed Rate told Crain’s in an emailed statement from their PR firm Broadsheet Communications that the Tribune story was a “hit piece written to tarnish our company’s reputation” and believes it to be inaccurate.
“Even though we disagree with what was written, we want to be better and continue to improve,” the company added. “As such, we will lean into what more we can do to make the company even greater than it is today.”
Outside experts tell Crain’s the public relations battle starts now.
The situation Guaranteed Rate and Ciardelli now face is exacerbated by the tough mortgage environment, where a combination of high interest rates and strong home prices have slowed dealings and likely spooked outside investors in the privately held company.
“This is kind of a pressure cooker environment,” said Chris Varones, principal at Aesop Communications Group, a Chicago-based communications consultancy. “The industry is languishing. The worst enemy of Guaranteed Rate right now is maybe the bad industry. Issues like this rise to the surface, and they raise outsized attention. Every problem is felt more deeply.”
Lingering lawsuits by former disgruntled employees highlighted in the Tribune story provide the potential for a persistent drum-
two Black Chicagoans eager to inject their vision of the city into the race weekend experience was welcomed by Giese and the Chicago Street Race team. NASCAR came to Chicago, in part, because it wanted to diversify the historically white stock car sport, and Love and Rand were presenting on a silver platter a means to do that.
“We want to be part of all 77 neighborhoods, all 50 wards, and be authentic about it,” Giese told Crain’s in an interview from Dayton Beach, Fla., home of NASCAR’s headquarters, in February.
Love and Rand initially sought a dominant race presence across Grant Park, but NASCAR had already re-signed Lettuce to return in 2024 as the official food and beverage partner (ancillary on-
course partnerships include Lexington Betty Smokehouse and Bronzeville Winery). So the Chicago Street Race team presented an alternative: Love and Rand, along with the Chicago Loop Alliance, could oversee the culinary creations at Butler Field, which race organizers have dubbed “NASCAR Village,” adjacent to the track.
Inclusive experience
Entry into Butler Field during race weekend is free to the public and does not require a ticket, which Love and Rand said makes it the ideal area for them to craft an inclusive experience.
As Giese described it in a statement, “NASCAR Village at Butler Field is an opportunity for all Chicagoans to learn more about
beat of negative narratives about Guaranteed Rate.
“I would be telling them to move to settle as many of those things as quickly as you possibly can,” said Nick Kalm, CEO of Reputation Partners in Chicago. “This stuff playing out over months or years is going to cost them a ton of money. Every time every one of those things comes to trial or there is a judgment, they are going to get more negative headlines.”
And court-related headlines could hurt employee recruiting and retention efforts, further weakening the company.
On that front, Guaranteed Rate should dial back the tough guy act presented by Ciardelli in the drive for profits, Kalm advises.
“I always kind of wince when I read about any culture where they are proudly talking about how they are tough on their people and that this is not for everybody, and say things like, ‘We put them through their paces,’” Kalm said.
NASCAR, enjoy local vendors, and take part in the excitement of the Chicago Street Race Weekend, even without a ticket.”
As for what Love and Rand have in store for folks at the northeast end of the park, expect dining options from Harold’s Chicken on East 35th Street, Tacotlan in Hermosa, Freddie’s in Bridgeport, Soul Veg City in Chatham and more.
Each of those businesses has the potential to benefit from increased exposure at the event. NASCAR admitted nearly 50,000 attendees last year, all of whom will be able to get a taste of these local Chicago restaurants.
“We want to make sure that the vendors participating in NASCAR with us get to bring some awareness back to their businesses,” Rand said.
And while the lineup for this year’s race — slated for July 6-7 — is already set, Giese encouraged other local businesses interested in partnering with NASCAR next year to reach out to the Chicago Street Race team.
“Each brand has different goals and objectives. We take a lot of pride in modeling partnerships based on what those goals and objectives are, if it’s brand awareness or moving sales of certain products,” Giese told Crain’s. “There’s a lot of amazing people and a lot of amazing stories, and we have an opportunity to be an additional platform to help tell that story.”
tion lawsuit, undermining much of their efforts to counter the negative story.
“Any time you threaten legal action, it makes you look like you are either trying to silence someone or you are taking a heavyhanded approach,” Nierman added.
The bottom line
Of course, even if only a portion of the allegations against the company prove true, any company facing this much negative press has work to do to assure current employees that the company values their work and respects them as individuals.
“Is that really the way you want go in 2024? I’m not even sure that was the way you wanted to go in 2004.”
The company needs to be as vocal as it can about any good news, such as industry awards they have won or community outreach projects. Their early steps, which included providing positive employee testimonials and workplace survey results to the Tribune, shows Guaranteed Rate is willing and able to do this.
“It is clear to me that Guaranteed Rate was taking this story extremely seriously,” Red Banyan’s Nierman said. “I saw lots of evidence that they were highly engaged in trying to mitigate some of the allegations. They clearly invested tremendous resources, time and energy into impacting the final version of that piece.”
But they went too far by threatening the Tribune with a defama-
At a public company, allegations like the ones made against Ciardelli would likely be a death knell for top executives, but Guaranteed Rate’s structure as a private company buys him some time to change the conversation.
But in the end, Guaranteed Rate’s board members must insist an investigation be conducted to ascertain if the allegations are true or not, according to one seasoned corporate governance expert.
“You still have a legal obligation, a fiduciary obligation to all shareholders, not just him,” said Charles Elson, founding director of the Weinberg Center for Corporate Governance at the University of Delaware. “As a director of the company, you are going to have to ask those tough questions.”
Private-equity firm THL Partners, which acquired a minority stake in Guaranteed Rate in 2018, did not respond to requests for comment.
Victor Ciardelli | AP IMAGES
NASCAR featured an array of local partnerships at its inaugural Chicago Street Race last year, but they did not reflect the whole city. JACK GRIEVE
