Crain's Chicago Business, July 15, 2024

Can Walgreens save itself?

Executives are scrambling to nd a pro table path forward for a pharmacy model deemed ‘not sustainable’

By Katherine Davis

e outlook for Walgreens Boots Alliance continued to darken as its chief executive recently presented investors with an uncertain future besieged by challenges, including a core pharmacy business that’s unsustainable in its current form.

e Deer eld-based company’s stock slid 25% on June 27 after disclosing disappointing third-quarter earnings and revealing the pharmacy giant intends to shrink its footprint, write down assets and try to narrow its focus on pro table parts of the business.

e poor performance comes amid a $1 billion cost-cutting plan and a strategic re-

view of the entire business, both of which were kick-started by CEO Tim Wentworth. e turnaround moves are intended to boost pro ts and investors’ condence, but so far, there’s little evidence the plan is working or will pay dividends anytime soon. Executives said headwinds, particularly in its largest segments, are expected to last into next year.

“ e question now is: Is the turnaround going to be slow or nonexistent?” said Erik Gordon, clinical professor at the University of Michigan’s Ross School of Business.

With lower-than-anticipated earnings

See WALGREENS on Page 24

Airlines navigate diversity commitments

Assaults

on airline equity efforts move into the legal realm, but supporters say they will keep trying to expand opportunities I PAGE 11

MICHAEL FASSNACHT

After 30-plus years of managing a successful career, former CEO of World Business Chicago shares advice. PAGE 2 RETAIL A

Tim Wentworth

Oscar Munoz

Theresa Claiborne

Doug Parker

Scott Kirby GETTY IMAGES

Looking forward to helping you navigate your own path

By Michael Fassnacht

Michael Fassnacht is former CEO of World Business Chicago and is now

chief growth officer at Clayco in Chicago.

After over 30 years of navigating a successful career across three continents, one of the most fulfilling experiences I’ve had recently is connecting with young professionals. Many are early in their career, looking for their own path, seeking advice on how to build a successful career over the long term, how to balance the pressure of high professional demands with one’s personal life, and how to pursue a purposeful life, both within the professional context and beyond. In these one-on-one conversations, I’ve shared numerous insights and advice to help kick-start or accelerate their careers.

Now, I aim to extend this support and encouragement to a wider audience of professionals embarking on and navigating their own paths. To do this, I’ve launched a new project: “Beyond the Status Quo — 50 Career Insights for Gen Z and Millennials.” Every Saturday on my LinkedIn platform, I’ll share a career observation, insight or piece of advice.  I invite you all to engage, share your thoughts, and contribute to the discussion.

Additionally, once a month, I will publish a column here at Crain’s Chicago Business. This column will serve as a digest, summarizing the most important and relevant career insights, or “career hacks,” if you prefer, from the most recent posts.

“After over 30 years of managing a successful career across three continents, one of the most fulfilling experiences I’ve had recently is connecting with young professionals.” This new monthly column is an extension of that journey.

My goal is not to provide onesided advice, but to engage in a dialogue and share what I’ve learned over the years, including my mistakes. I’m particularly interested in how this new generation of future leaders is redefining career success and potentially charting a different path. I hope this will be a mutual learning journey for all my readers here at Crain’s and on LinkedIn, and for myself as a 57-year-old executive who is still as curious about people, life and business as I was 30 years ago.

Today, I’m focusing on the first four foundational insights that are crucial for understanding yourself on the path to a successful professional career:

FDA approves Tempus’ AI-powered device that predicts heart rhythm

By Jon Asplund

Tempus AI is aiming an artificial intelligence device at patients’ hearts to identify those who may be at increased risk of “atrial fibrillation/flutter,” or AF.

The Chicago-based health tech company, which recently went public, said June 26 it received clearance from the U.S. Food & Drug Administration for its Tempus ECG-AF device.

The device will be the first to carry an AF indication in the category known as “cardiovascular machine learning-based notification software,” Tempus said in a press release.

FDA clearance “paves the way for physicians to use this innovative algorithm in the care of their patients,” the release said. The device will give doctors an AI-based clinical aid to find earlier indications of risk for cardiovascular disease and conditions, it said.

“We believe that there are too many patients who die from AFrelated causes unnecessarily due

to underdiagnosis or undertreatment,” Dr. Brandon Fornwalt, senior vice president of cardiology at Tempus, said in a statement.

“The clearance of Tempus ECGAF allows us to better support clinicians in potentially finding patients much earlier, when treatments can be more effective.”

AF is a common cause of stroke, but it can be challenging to diagnose, the release said.

The Tempus ECG-AF algorithm can analyze recordings of 12-lead electrocardiogram devices to detect signs associated with a patient experiencing AF within the next 12 months, the release said. It is for use on patients age 65 and older who do not have a known history of AF or other specified conditions, it said.

The ECG-AF is the first in a planned suite of diagnostics being developed by Tempus to identify risks of cardiovascular conditions, the release said.

Tempus stock was up 5% to about $26.51 the morning of the announcement.

1. Follow your North Star

Having strong moral guidelines is vital in your professional journey. Personally, I’ve lived by three simple guiding principles: Do great work. Do the right thing. Be your best self. While these principles have served me well, it’s essential that you formulate your own. Identify yours, test them in real life and stick to them steadfastly! We have all found ourselves in situations where we feel we have to make compromising decisions, like when we work on a project that we are morally conflicted about or experience a personnel decision that we disagree with. A personal guiding North Star will help you in these

challenging moments.

2. Identify your superpower

When meeting young talent for the first time, I like to ask, “What is your superpower?” This challenges them to identify a quality that makes them truly stand out, something that makes them one in a million. Everyone can have a superpower: identify, choose and develop it relentlessly. My superpower has been consistently combining two traditionally opposing leadership qualities: having a strategic long-term perspective while being operationally focused or being analytically minded while applying my own creativity to many business situations.

3. Harness the fear of failure

Too often, successful leaders highlight intrinsic motivations that drove them forward, like “Building something special” or “Changing the world for the better.” But there’s another powerful, often unspoken force: the fear of failure. I believe this fear can be an incredibly potent and positive catalyst for professional success. It drives individuals to push themselves, stay vigilant and cultivate humility, curiosity and a desire to challenge the status quo. Just remember to balance this fear with emotional well-being and let it motivate you to succeed.

4. Passion isn’t enough

Passion is important, but aligning your passion with your talents is equally crucial. If your passion for a field doesn’t align with your ability to excel in it, you won’t have long-term success. For example, you might be extremely passionate about playing soccer, but if you don’t have the ability to become a professional, then it’s time to pursue something more promising that can provide financial stability and long-term career promise. Find the right intersection of your passion and capability to truly stand out.

Every week, I meet talented, dedicated young professionals seeking guidance. These exchanges help me to learn something new about myself, too. I consistently gain better insights into how this next generation of leaders is redefining career success and will ultimately change our corporate world. I hope the career insights I share in this column can help them reflect on how to further improve their career trajectories and be part of a dialog between different generations of professionals.

Here’s what happened to

Dom’s

Kitchen & Market

In his first interview since the shutdown, a co-founder of the upscale grocer discusses what went wrong I By Ally

When Dom’s Kitchen & Market and its sister retailer Foxtrot closed its stores in April, Chicago customers were shocked. The closures felt abrupt. Perishable goods still sat on the shelves, and from their perspective, the businesses seemed to be thriving. But behind the scenes, company leaders had been working for months to find a way to keep the business afloat.

In his first interview since the shutdown, Dom’s co-founder Jay Owen told Crain’s that expected funding for parent company Outfox Hospitality fell through earlier this year. The company, which had formed in late 2023 when Dom’s and Foxtrot merged, needed that money to fuel growth and become profitable. Without it, the stores

See DOM’S on Page 26

Marotti

With more than a dozen show kitchens, the Lincoln Park store aimed to combine grocery shopping, restaurant dining and food delivery.

New chair of Winston & Strawn eyes expansion

Veteran litigator and Chicago native Steve D’Amore is ushering in a new era for the law firm at home and abroad

By Brandon Dupré

Winston & Strawn will have a new chief for the first time in more than 17 years.

Veteran litigator and Chicago native Steve D’Amore began his first day as chairman of the law firm June 17, ushering in new leadership with plans for expansion both domestically and in Europe, where the firm has two offices, one in Paris and London.

“I have a strong will that we do more internationally, both in terms of mindset about the way the firm operates and growth outside of the United States,” D’Amore told Crain’s in an exclusive interview. He also stressed Chicago has a place in his plan: “We are so proud to be a major employer in this great city, and we are betting big on Chicago.”

practices and governmental contract work.

The firm also has plans to grow in the area of infrastructure and energy, which has only become more important following the Inflation Reduction Act, says D’Amore, “turbocharging” those practice areas.

D’Amore has spent his entire career at the firm he will now helm. He began at Winston & Strawn in 1993 as a second-year law student and has led the litigation department going on 10 years. He said the firm’s leadership structure will look a little different during his tenure. D’Amore will head a chair group that will include four partners who will help manage different areas of the firm.

The Chicago-based firm joined the Florida rush in 2022, opening a Miami office that focuses on crypto and other digital assets, among other practice areas. While D’Amore didn’t share any immediate plans about opening new offices, he said he wants to expand upon the firm’s strengths, which are in big-ticket litigation and transaction law.

D’Amore, 54, leaning on the firm’s litigation expertise, identified a push into more regulatory practices in the nation’s capital as one area for potential growth.

“I would like to do more contentious regulatory and disputesoriented work,” he said, combining the firm’s various litigation

D’Amore replaces Tom Fitzgerald, who oversaw the firm for 17 years as it made huge strides in its corporate transactional capabilities, which now are only rivaled by the firm’s litigation practice. Under Fitzgerald, the firm doubled its revenue to more than $1 billion annually and expanded its domestic and global footprint.

Winston & Strawn is the city’s fifth-largest law firm by local lawyers, with 250 attorneys here, according to Crain’s research. The firm has about 900 attorneys in the U.S. and last year reported more than $1.1 billion in revenue.

The firm will move into a new building at 300 N. LaSalle St. next year, shedding roughly 100,000 square feet of space as it moves out of its longtime office at 35 W. Wacker Drive.

How Illinois plans to leap into semiconductors

With billions on the line for a national R&D center, the state is making a novel pitch to turn a weakness into a strength. Are the feds game?

By John Pletz

When it comes to semiconductors, Illinois has long wondered “what if?” As in, what would have happened if the chip industry had sprung up here rather than in Silicon Valley?

Nobel Prize-winning physicist John Bardeen helped invent the first transistor at Bell Labs a few years before he showed up at the University of Illinois in UrbanaChampaign in 1951. One of Bardeen’s grad students, Nick Holonyak, invented the LED. U of I has

been a top supplier of electrical engineers and materials scientists to the chip industry for decades.

When President Joe Biden signed the $53 billion CHIPS & Science Act nearly two years ago, it included $5 billion for something called the National Semiconductor Technology Center, a place to develop, test and scale up semiconductor technologies and the industry’s workforce. Illinois leaders saw an opportunity to get into the game. Since then, they’ve made an intensive

lobbying effort to land the center. The federal government hasn’t said exactly when or how it will award the project, but many expect it will happen before the presidential election in November. Landing the National Semiconductor Technology Center — or NSTC — would be a gamechanger in the state’s longtime ambitions to become more of a player in the tech industry and boost the broader fortunes of the Illinois economy.

Semiconductors are at the

Steve D’Amore

JACK GRIEVE

Insurance tech firm inks sublease for Mart office

Kin Insurance is validating the importance of having physical workspace downtown to tap into the pool of urban-dwelling talent, but its small new lease shows how remote work is pummeling the local market

By Danny Ecker

One of Chicago’s fastest-growing companies is moving to a new office in the Merchandise Mart, highlighting the value office users see in having a physical workspace downtown — even if it’s small.

Kin Insurance has inked a sublease deal for just more than 20,000 square feet on the ninth floor at the mammoth riverfront property from online consumer lender Avant, Kin CEO Sean Harper confirmed. The insurance tech company will relocate to the office later this year from a roughly 11,000-square-foot office it has subleased for the past couple of years on the building’s second floor.

The new deal validates the importance of downtown offices for companies that are growing and want access to Chicago’s pool of urban-dwelling talent. Yet it’s also a reminder that fast-growing tech companies in Chicago aren’t lifting the downtown office market like they used to.

Kin has seen its revenue grow by more than 9,500% over the past five years to nearly $105 million in 2023, making it the third-fastest growing company in Chicago, according to Crain’s most recent list of the area’s 50 fastest-growing businesses. Its headcount has surged from 60 people in 2019 to close to 800 today, about half of whom live in the Chicago area, Harper said. Prior to the pandemic and the rise of remote work, a company with that many people in the city might have leased offices closer to 100,000 square feet, or perhaps far more to accommodate expected future growth. Kin previously had a customer service call

center downtown in its offices, for example, jobs that are now done entirely from home.

Now, Kin employees use the company’s Chicago office sporadically for team meetings. “There are days when the office is completely empty, and days when everybody wants to be there,” Harper said.

The need for periodic space use and recent growth of its local team were enough to push Kin to sign on for slightly more square footage as an easily accessible space for local employees that want to convene.

“We wanted to have some extra space to do larger meetings, and to have working (spaces) when conference rooms are full

is pretty nice,” Harper said.

About one-quarter of Kin’s employees are based out of an office in the Tampa, Fla., metro area, while roughly another quarter of its staff lives and works remotely elsewhere, according to Harper.

“Kin is a remote-first company putting real investment behind in-person work with their new HQ, continuing a trend we are seeing with like-minded firms,” said CBRE Senior Vice President Tony Coglianese, who negotiated the lease on behalf of Kin.

Record-high vacancy

Fast-growing companies like Kin taking only small blocks of offices are part of the reason that of-

fice vacancy downtown has surged to a record high over the past few years. New leasing has barely made a dent in the dramatic space-shedding by larger companies embracing new work patterns, stripping downtown of a big chunk of regular foot traffic and threatening the vitality of the city’s urban core. The first three months of this year marked the second-worst quarter for downtown office demand in at least 16 years, according to data from brokerage CBRE.

Avant’s move to unload a quarter of the 80,000 square feet it leased at the Mart just two years ago showcases that pain. Avant at the time was belying the broader office sector by doubling its downtown office footprint. But

the sublease to Kin removes some of the shine off of what was one of the largest new leases at the Mart in years.

Avant Chief Administrative and Operating Officer Margaret Hermes said in a statement to Crain’s the company “designed the space intentionally to accommodate our new hybrid working environment with Chicago-based employees in the office three days a week. We have primarily used about 60,000 square feet of that space, and an opportunity recently arose to sublease our extra space to Kin Insurance, another fixture in the Chicago tech community.”

Terms of Kin’s sublease were not disclosed, but the company signed on to occupy the space for the roughly seven years remaining on Avant’s lease term, according to a source familiar with the agreement.

Founded in 2016, Kin’s business model was based on the premise that its back-office technology allows it to sell homeowners insurance at a lower cost than traditional insurers by not selling policies through agents, particularly in areas where it’s harder for residents to get reasonably priced insurance premiums.

The company, which is profitable and recently raised $15 million in new funding led by San Francisco-based Activate Capital, provides homeowners policies to about 150,000 customers across nine states, up from about 15,000 customers five years ago.

The company’s revenue grew by about 50% in 2023 and is on track to surpass that level of growth this year, Harper said.

CBRE brokers Brad Serot and Tyler Reaumond represented Avant in negotiating the sublease to Kin.

Focus Healthcare Partners raises $370 million for second fund

Firm says its latest funding round targets the “private pay” senior housing market

By Rachel Herzog

A Chicago investment firm that buys senior housing has raised about $370 million in new funding.

Focus Healthcare Partners said June 25 that it had closed its second fund targeting the “private pay” senior housing market, which includes independentand assisted-living complexes as well as memory care facilities.

The announcement comes amid a difficult environment for private equity, and at a time when many institutional investors are trying to reduce their

exposure to commercial real estate. But the wave of aging baby boomers and a tight commercial lending environment have created significant demand for senior housing, making the sector more appealing to investors.

“The boomer generation is finally turning 80, but also, more seniors, a relative ratio, are considering and moving into senior housing, so on the demand side it’s taken off dramatically,” Focus co-founder and Principal Curt Schaller said. “The supply side has plummeted. Supply growth right now is at a 15-year low, and that obviously is related to the lending crunch. . . .There’s a huge need for adding senior housing units, but it’s just not happening, so it’s a lot of things that are coming together to make it an incredibly interesting time to invest.”

Nationally, senior housing occupancy has climbed upward

over the last couple of years, and absorption, a measure of demand that counts the change

in the number of occupied units, was about 5,000 units across major metro areas, ac-

cording to data from the National Investment Center for Seniors Housing & Care.

The new fund is 20% larger than Focus’ previous vehicle, which had seven investors, according to the firm. The majority of first-round investors came into the second fund, and Focus brought in new investors to bring the total number to 15. The investors include university endowments, state and corporate pension funds, insurance companies, wealth managers, family offices and other institutional investors.

While the firm’s main priority is acquiring properties, Focus said it will also consider investing in development, distressed debt and preferred equity.

The firm has acquired about $1.2 billion worth of senior housing properties nationally since 2010.

Summit of Uptown, an assisted living facility Focus Healthcare Partners owns in Park Ridge. | COSTAR GROUP

Nearly 250 people attended Crain’s Fast 50 Awards celebration to recognize Chicago’s 50 fastest growing companies. In addition to the live reveal of the ranking order of the Fast 50 class of 2024, the event featured a keynote conversation with Kevin Willer, Partner, Chicago Ventures and Jim Kirk, Group Publisher and Executive Editor of Crain's Chicago Business about the state of venture capital.

Thank you to these Fast 50 companies who celebrated with us at the event:

Most agents in survey give thumbs-down on the NAR

It’s a small sample but suggests the turmoil at the organization and its handling of the commissions controversy has dinged its image

By Dennis Rodkin

About two-thirds of the real estate industry people in a recent survey said they’re not happy with the National Association of Realtors or its handling of the controversy over agent commissions.

It’s a small survey, but the lopsided results suggest the past year’s turmoil at the NAR and the settlement on commissions it announced in March have taken a toll on the image of the venerable trade association founded in Chicago 116 years ago.

With about 1.5 million members, the NAR is the biggest trade group in the nation.

“They got too comfortable,” said Mo Dadkhah, the brokerowner of Main Street Real Estate Group, based in Lincoln Park, “and then all this hap -

ern California, this week publicly released the survey, which it conducted in early May around the time of NAR’s midyear meetings in Washington, D.C.

Of 131 real estate professionals who participated, 82 said they either disapprove or strongly disapprove of the NAR’s overall performance. That is 62% of respondents. About 35% disapproved and 27% strongly disapproved.

Thirty-two percent approved or strongly approved.

On a separate question about the NAR’s handling of compensation lawsuits and the settlement, 62.5% did not approve. That’s about 30% saying they disapprove and 33% strongly disapproving.

Forty-two people approved or strongly approved. That’s 32%.

Of 131 real estate professionals who participated, 82 said they either disapprove or strongly disapprove of the NAR’s overall performance.

pened and it shook them up.” He did not participate in the survey.

Formerly an active volunteer for the Chicago branch of the association, Dadkhah said of the national group, “I can’t think of anything they’ve done in the past five years to help the industry evolve. It’s mostly selfserving.”

T3 Sixty, a real estate management consultancy based in South-

Jack Miller, president and CEO of T3 Sixty, told Crain’s the survey “should not be taken as comprehensive. It was a relatively small survey we did because of what people are talking about in the industry.”

The firm has not done a survey on these questions in the past, Miller said, so there’s no way to determine whether dissatisfaction is growing, shrinking or flat. It’s also not possible to ascertain whether anti-NAR sentiment is causing it to lose members, as the organization stopped publicly posting its membership tally earlier this year.

A National Association of Realtors spokesman said the organization would not comment on

A CHICAGOAN TO KNOW

Summer Thornton of Summer Thornton Design

Thornton, 41, is the founder of Chicago’s Summer Thornton Design, a luxury interior design studio, and author of “Wonderland: Adventures in Decorating.” Late last year, she and her husband, Josh, dipped a toe into the hospitality arena with Casa Rosada, an oceanside villa in Sayulita, Mexico, that she says “pairs the exclusivity of a private home with the amenities of a luxury resort.” Plans are afoot to add more properties and investors. They live in Lincoln Park with their daughter, 11, and son, 7. I

Tell us about Casa Rosada. Guests have 24/7 staff, including a “house host” who is part concierge, part butler. She arranges for personal chefs, babysitters, bartender and daily housekeeping and can recommend the best local activities. It’s like visiting your in-the-know friend’s vacation getaway when they are not on-site. No other guests.

How did your childhood affect you?

the survey.

Matt Laricy, an Americorp real estate agent in Chicago who did not participate in the survey, said “I’m a fan of NAR. I think we need NAR. But I think they handled the lawsuits and the settlements wrong. They let this bombshell go off, and really make (real estate agents) look like the ultimate scumbags.”

The commission lawsuits are based on the NAR’s long-held position that the agents for the seller and the buyer should split a commission paid by the seller. Although there is no specific split advised, it most often comes down to each party getting half of 5% or 6%.

Opponents, including attorneys who have filed class-action lawsuits, argue splitting commissions eliminates the possibility of a buyer’s agent competing for business by offering to take a smaller cut. They say the real estate industry essentially engages in price-fixing.

In October, the jury in a federal trial in Kansas City found the practice amounts to anti-competitive collusion.

A few months later, the NAR, a defendant in that case, announced a settlement agreement that includes the organization eliminating the commissionsharing arrangement.

Laricy believes the NAR “should have been a lot better about the crisis management PR. Go on the offensive, explain the verdict in terms people understand. I know sometimes in a (lawsuit) you can’t say much, but they said nothing and left agents looking like public enemy No. 1.”

I grew up in the country, near Bloomington-Normal, where I had a lot of freedom to roam and canoe down the creek. There wasn’t much beauty in the architecture, so I did a lot of escapist thinking, which sparked my imagination. That might not have happened if I had been surrounded by more interesting things.

You are known for your fearless use of colors and patterns. What inspired that?

I became very drawn to naturalist themes because of my environment. Nature is so wild, bold and colorful. It inspires me to dream.

Are you still a country girl at heart?

No! I’m a total city girl. I like to admire nature from inside, framing nature with architecture.

A professional challenge you faced?

When I opened my studio at 25, I found myself on a lot of job sites struggling to be heard and taken seriously by older male contractors and architects.

How did you overcome that?

My team and I ensured that we knew what we were talking about. Plus, I’m not easily intimated. My dad has a lot of moxie, and both my parents cultivated a lot of selfconfidence in me.

Worst job ever?

At 23, I briefly worked for a designer who was not paying vendors and contractors. People would show up demanding money, but she

By Laura Bianchi

wasn’t there. I thought I might be called to testify or, at worst, taken as ransom — ha! It was a lesson in what not to do.

Your secret fear?

I work on a lot of properties near the ocean, including the new resort, and I’m always afraid that a hurricane is going to damage one of those beautiful homes. Thankfully, it hasn’t happened, but we have insurance just in case.

On what do you splurge? Flowers. I was at a flower market recently — I always spend too much — and the vendor asked me what kind of party I was throwing. I told him, “I’m just having a peony party for myself.”

The National Association of Realtors building on Michigan Avenue. NEWSCOM

How to scale the glass cliff

Amid the shattered remnants of the proverbial glass ceiling lies a lesser-known but equally impactful phenomenon: the glass cliff. Professors Michelle Ryan and Alex Haslam originally coined the term in 2005 to describe the tendency for women, and later minority groups, to be appointed to leadership positions during times of crisis or downturn. Research suggests these leaders often inherit situations fraught with complexity and uncertainty and are expected to clean up the mess left by predecessors. Instead of the metaphorical ascent up the corporate ladder, these individuals often start out teetering precariously on the cliff's edge, facing insurmountable challenges.

Societal beliefs that women are better suited for nurturing and caretaking roles rather than positions of power and authority, and the lower stakes of a company in distress to "take the risk" of hiring a woman or minority candidate, can lead to appointments of professionals lacking requisite experience. These roles are less likely to yield a win, and these factors, in turn, can reinforce implicit bias against hiring these leaders later in higher-performing companies.

Kim Vender Moffat is an investor-inresidence at the Polsky Center for Entrepreneurship & Innovation at Chicago Booth. She founded Rosa Partners to advise growth companies, investment funds and family offices, and currently serves as a board member of the First Women’s Bank and the investment firm Impact Engine.

This creates a vicious cycle that undermines efforts to build more diverse leadership pipelines. While token hires without adequate experience most commonly fall off the cliff, merit-based hires of professionals with strong track

records also encounter it. Examples include Marissa Mayer's appointment as Yahoo's CEO, Theresa May's succession as the U.K.'s prime minister and, more recently, Teresa Gould's hire as commissioner of the PAC-12 sports conference. Each role embodies elements of the glass cliff: Mayer assumed her role amid turmoil, declining revenue and fierce competition; May inherited a deeply divided party and country, as well as overwhelming opposition to a Brexit deal; and Gould assumed her role after the exodus of 10 of the 12 participating schools. Each leader had relevant training and past success, but encountered many obstacles while enduring extensive criticism and blame for problems others created. The disproportionate threat of these roles to their professional credibility reflects a risk for anyone contemplating the cliff.

In spite of the inherent risk, there may be upside for someone considering leading a company in turmoil. While one should intensely scrutinize these opportunities, for some this may be their chance to demonstrate capabilities well suited for the challenge. And, if armed with the following strate-

gies, one can proactively avoid or successfully scale the cliff:

Cultivate strong networks and self-advocate to secure meritbased leadership roles.

Seek skill development and advancement opportunities rather than waiting for the call to serve in a precarious position.

Work for inclusive organizations that actively promote women and minorities into leadership roles under normal circumstances, rather than primarily as crisis managers. Get paid for the risk. Leading through a crisis is not a charitable act. Only consider opportu -

nities where compensation accounts for the professional and reputational risk.

Manage the narrative. If you're inclined to accept a crisisgenerated leadership role, invest upfront in internal and public messaging. This can help manage expectations and proactively define more realistic success metrics for the role.

By building supportive networks, applying diverse skills and assessing opportunities for not only professional, but personal growth, you will be better prepared to more securely approach, and ultimately scale, the glass cliff.

Advice for small businesses and entrepreneurs in partnership with the University of Chicago Booth School of Business.

EDITORIAL

Real strategy needed for city’s gun violence

Even for a city used to routine headlines on gun violence, a bloody Fourth of July weekend that saw more than 100 people shot and at least 17 killed, including two women and an 8-year-old boy, left Chicagoans shocked.

And even then, Mayor Brandon Johnson — who fully condemned the violence — couldn’t stop himself from blaming previous administrations for the straits Chicago finds itself in at this moment.

Politics 101 will tell you that no matter how right you may be when pointing fingers, once elected mayor of the city of Chicago, citizens demand answers and, more importantly, a strategy from you. And they want it now. This is especially true in neighborhoods that have seen this horror show repeat itself, long hot summer day after long hot summer day.

The blame game does not matter to the families in Grand Crossing or West Garfield Park who must think twice about whether to send their children out to play in what are essentially battlefields.

We are not overstating the simple fact that many choose to keep kids inside all summer, depriving them of the essential social need to play and interact.

They rightly view it as the only answer to keep their children alive.

No family, no child deserves to live this way, especially in a city with so much wealth and resources.

So while we wait for a comprehensive strategy that can’t come soon enough from the Fifth Floor at City Hall, we turn

PERSONAL VIEW

our attention to some news in the wake of Chicago’s horrible holiday weekend that holds a bit of promise.

Word came down July 10 that the business community and private donors had come together to reach a funding goal of $100 million toward an ambitious program to help stem the violence tidal wave in the city.

Called the Scaling Community Violence Intervention for a Safer Chicago, or SC2, the collaboration includes various government agencies along with wealthy families and civic groups. Much of the hard work is being led by the Public Safety Task Force created by the Civic Committee under the club’s president, Derek Douglas, along with BMO executive Eric Smith, who co-

chairs the Civic Committee’s task force with Hyatt Hotels CEO Mark Hoplamazian.

The list of donors is a who’s who of Chicago’s civic leadership, including the Crown family, the Pritzker family foundation, the Steans Family Foundation, McDonald’s Corp., and GCM Grosvenor led by Michael Sacks.

The plan, first announced in February, sets out to help grow existing neighborhood intervention programs over the next 10 years, with a goal of reducing gun violence by 75%.

To start with, five neighborhoods will see additional funding for violence intervention programs: North Lawndale, Austin, Garfield Park, Humboldt Park and Little Village.

More funding could, and should, follow.

Tackling one of the city’s most intractable issues — gun violence — has not always been on the top of the business community’s ticket. But that changed quickly back in late 2022 and early 2023 thanks to the late Jim Crown, who first led the task force, and Douglas soon after he was hired as president of the Civic Committee and after hearing from the civic and business communities that crime, and particularly gun crime, was a top concern.

Raising $100 million at the time seemed like a dream. Yet here we are.

"The business community is all in on public safety, which is priority number one," Smith said in announcing the plan.

“All in” are the key words.

Time and again we have seen what can be accomplished when the business community, foundations and private money are mobilized. And there is no better time for the business community to step up on an issue as important as the killing epidemic in Chicago.

The news of the investment comes just weeks before the world spotlight hits Chicago when the Democratic National Convention comes to town, and you can bet the recent spate of gun violence will do nothing to help improve the national narrative that Chicago is the violence capital, despite more positive overall crime trends lately. SC2, while not an overnight fix, is a start. The challenge will be making sure everyone in the business community stays all in on this crucial journey.

McDonald’s pushback on the $18 Big Mac meal raises questions

AMcDonald’s executive’s open letter about price increases forcefully staked out the company’s position even if it did little to cool the simmering debate about how much it charges for Big Macs and Quarter Pounders.

Expressing the company’s frustration, Joe Erlinger, president of McDonald’s USA, responded to “viral social posts and poorly sourced reports” about price hikes. If you hadn’t heard before about the $18 Big Mac Meal — at an interstate service plaza in Connecticut in 2023 — you probably did after May 29, 2024, when Erlinger’s letter was published. It was national news.

is part press release, part thought leadership. Like a release, the accompanying graphics package offers detailed, favorable historical price comparisons of popular menu items.

Yet it’s more personal than a release. It’s from a top executive and starts with an anecdote from his childhood. The piece is too self-serving to qualify strictly speaking as thought leadership, which is a demonstration of knowledge and skill.

saying he realized years later that his parents could count on the fast-food chain for a “convenient, affordable meal for the whole family.”

Perhaps Erlinger’s family wasn’t one of those who, in his words, today “are making tough calls about where to spend their hard-earned money.” Should the piece have started with a couple stories about serving current customers struggling to make ends meet? Or would that have rung hollow? That was a key choice Erlinger and his comms team made.

argument will likely be closely analyzed by the company’s comms team.

4. Empathy for the customers. While McDonald’s execs say prices haven’t risen as much as some claim, they have risen more than low-income customers can afford.

With $25.49 billion in revenue in 2023, the Chicago-based company is a marketing and public relations heavyweight. Last year, CEO Chris Kempczinski’s speech on what ails Chicago set the stage for the incumbent mayor’s defeat. That makes a letter like Erlinger’s worth studying by other communicators.

The company’s media relations team opened but did not respond to emails with detailed questions about the letter, according to an email monitoring tool. Here are five key issues Erlinger’s letter raises: 1. What is it? The nearly 550-word letter

On the other hand, who has more expertise on McDonald’s prices than Erlinger? He joined the company in 2002 and was made head of its U.S. operations in 2019. McDonald’s approach likely created more news media pickup than if the company had chosen one format or the other.

2. How to start. The anecdotal lede is true to the thought leadership format. The goal is to personalize the issue.

Erlinger, who is 50, according to Morningstar, mentions his excitement as a kid when his parents took him to McDonald’s. That would be a great opening to a letter about Happy Meals, but this letter is about price hikes. He tries to patch up this disconnect by

3. Use your data. Erlinger backs up his claims with graphics that compare 2019 and 2024 average prices for items, including the Egg McMuffin, Filet-O-Fish and 10-piece McNuggets.

Thought leadership is a terrific opportunity to use a company’s statistics. In a praiseworthy moment of candor, the company even tucked into the presentation that the average price of menu items is up about 40% since 2019, a disclosure reporters quickly seized upon.

Some headlines were neutral, such as ABC News’ report on May 30, 2024: “McDonald’s sets the numbers straight on exaggerated prices on social media.” Other headlines weren’t as friendly, such as this one by CNN on May 29, 2024: “McDonald’s: Our prices haven’t risen as much as you think.”

Whether McDonald’s disclosure won the

“Where you see the pressure with the U.S. consumer is that low-income consumer,” Kempczinski said during a conference call on Feb. 5, 2024, to discuss the company’s fourth-quarter’s earnings. “So call it, $45,000 and under. That consumer is pressured. From an industry standpoint, we actually saw that cohort decrease in the most recent quarter, particularly I think as eating at home has become more affordable. . . .If you think about middle income, high income, we’re not seeing any real change in behavior with those.”

McDonald’s executives should be saddened that, despite their efforts, their food is too expensive for a key group of customers. But there isn’t a hint of regret in the letter.

Instead, Erlinger blames the pandemic, rising wages, knotted supply chains and franchisees who set the prices at nearly all U.S. locations.

“For Joe Erlinger to push back on consumers comes across as a bit tone deaf,” Jerry Sheldon, vice president of technology at the market research firm IHL Group, told business news site Quartz.

Tom Corfman is a senior consultant with Ragan Consulting Group in Chicago and a former reporter and editor with Crain’s Chicago Business.

Carbon capture technology is key to a greener aviation sector

The aviation industry is vital to Illinois' economy, with airports generating $95.5 billion in economic activity each year and supporting 500,000 jobs. While it is important we continue to grow this industry, we must place special focus on efforts to decarbonize the aviation sector to ensure long-term sustainability and meet clean air goals.

One of the most promising ways for airlines to cut emissions is through the use of sustainable aviation fuel, an alternative jet fuel made from non-petroleum biomass such as corn. These renewable fuels have a much lower carbon footprint and can help drastically cut the greenhouse gas emissions generated by air transportation. As a leader in biomanufacturing, aviation and agriculture production, Illinois is uniquely poised to lead this energy revolution.

However, to scale up production of sustainable aviation fuel so it can be deployed widely enough to make a real impact, we must first invest in carbon capture and storage. Put simply, sustainable aviation fuel can't happen without carbon capture and storage. That's because current regulations require sustainable aviation fuels to have a carbon intensity score 50% below that of traditional aviation fuel. Carbon capture is the most viable tool to reduce the carbon intensity of biofuels to meet those requirements.

That's why we are encouraging lawmakers to pass House Bill 569, which would provide a regulatory framework to advance carbon capture and storage projects in Illinois. Sponsored by Sen. Bill Cunningham, D-Chicago, and Rep. Jay Hoffman, D-Swansea, the legislation builds upon existing federal incentives and regulations, recognizing the state's distinctive geology provides an extraordinary opportunity to work toward Illinois' goal of reducing greenhouse gases while also increasing economic development.

Importantly, the legislation contains some of the strongest property protection measures in the nation. This includes establishing pore space ownership that currently does not exist, restrictions on surface property access, requirements for pre-access notification and compensation for any damages caused by surface activities. The measure also creates a long-term legal and regulatory system for supervision and oversight of all carbon capture sites by the state of Illinois while preserving liability for damages that arise from noncompliant operations. It also requires additional consultation with environmental justice communities to address concerns regarding the storage of CO2 and creates a local first responders fund to pay for training and equipment.

As other states compete for investments, Illinois must seize the opportunity to provide clear

policies to allow for successful carbon capture project development. This will help bolster production of sustainable aviation fuel, which also presents immense opportunities for Illinois corn growers who stand ready to help the transportation sector cut carbon emissions. Indeed, U.S. corn production is growing at four times the rate of demand. Increasing investment in sustainable aviation fuel will drive up the demand for cornbased ethanol while helping the state and nation meet our clean

energy goals.  Illinois leaders have already shown they believe in the promise of sustainable aviation fuel, or SAF. In 2023, the state passed a key incentive to support SAF, creating a $1.50-per-gallon purchase tax credit to support the supply and use of SAF within the state. Illinois will give airlines operating in the state the ability to claim credit for fuel purchased if the fuel achieves a reduction of at least 50% lifecycle greenhouse gas emissions when compared to petroleum jet fuel.

We shouldn't stop there. We must use all the tools at our disposal to advance sustainable aviation fuel, which includes putting in place important regulations needed to advance carbon capture technology. Further delaying the deployment of carbon capture technology in Illinois will slow progress on greenhouse gas emissions reduction and risk the loss of millions of dollars in investment, including for our farmers.

That's a gamble we can't afford to make.

Jack Lavin is president and CEO of the Chicagoland Chamber of Commerce.

Rodney Weinzierl is executive director of the Illinois Corn Growers Association.

Airlines navigate the turbulence surrounding diversity commitments

Assaults on airline equity efforts move into the legal realm, but supporters say they will keep trying to expand opportunities |

Chicago is seeing the culture wars play out in the crew compartments and boardrooms of major airlines that have their hubs at O’Hare and Midway airports.

For the past five years or longer, the “big four” airlines — American, Delta, United and Southwest — have been striving to rectify the racial, ethnic and gender imbalances in the traditionally white, male bastion of aviation.

Women represent only 8.3% of U.S. aircraft pilots and flight engineers, while 3.6% are Black, according to the Bureau of Labor Statistics. Black women make up less than 1% of pilots. These statistics haven’t budged in years, prompting United Airlines CEO Scott Kirby to commit that half the class at its Aviate pilot training academy be women or people of color.

But when Kirby’s remarks from a 2021

interview were reposted earlier this year by a conservative media outlet, a torrent of vitriolic comments spooled on X, formerly known as Twitter. “Airline pilots should be selected based on merit,” wrote one critic. “Wanna die for the sake of hiring quotas? Welcome aboard United,” wrote another.

Never mind that United and other carriers employ no quotas. All pilots undergo the same regimen of training, which includes a foundation in math and physics, 1,500 hours of flight time and passing a series of certifications, including a medical exam. “I can’t think of a job that has more objective criteria than for pilots,” says Doug Parker, former CEO of American Airlines, who retired in 2022 and recently launched Breaking Down Barriers, a nonprofit to recruit students who can’t afford pilot training.

COMMITTED TO MAKING A DIFFERENCE

By Judith Crown

In the wake of such a polarized and charged political landscape, airlines are navigating how to hold to their diversity commitments while staying out of the social media maelstrom. Black, Hispanic and women’s groups are clamoring for more opportunities, while majoritywhite groups are trying to protect their long-established turf. Representatives for American and Southwest airlines declined comment. United says that it’s resolute in its commitment to diversity.

“We believe that we have a unique responsibility to provide transformative opportunities . . . that have been inaccessible to many of the people who live in the communities that we serve,” the company said in its 10-K filing earlier this year.

United’s outreach in recruiting was a

See AIRLINES on Page 12

Women represent only 8.3% of U.S. aircraft pilots and flight engineers, while 3.6% are Black, according to the Bureau of Labor Statistics. Black women make up less than 1% of pilots.

SPONSORS

BlOOMBERG, THERESA ClAIBORNE PHOTOS

Oscar Munoz, who was CEO of united Airlines from 2015 to 2020, says that united’s outreach in recruiting was a pragmatic business decision.

Theresa Claiborne, the first Black woman pilot in the u.S. Air Force, recently retired after a 34-year flying career at united.

Doug Parker, former CEO of American Airlines, recently launched Breaking Down Barriers, a nonprofit that offers financial aid to promising students who can’t afford pilot training.

Scott Kirby, CEO of united Airlines, has committed to having half the class at united’s Aviate pilot training academy be women or people of color.

AIRLINE DIVERSITY

AIRLINES

From Page 11

pragmatic business decision, says former CEO and Executive Chairman Oscar Munoz, who retired in 2021. “We needed pilots, where can we get them?” Munoz recalls. “We have a big population that happens to be diverse. Why wouldn’t we focus on some of those folks who have no idea that the possibility of a pilot career even exists for them? That fix has opened the pipeline to all sorts of people.”

For years, the debate over affirmative action has raged in the realm of education, peaking last year with the U.S. Supreme Court decision striking down the practice of race-conscious admissions at colleges. Conservatives have consistently argued that efforts to compensate African Americans, as the descendants of slavery, discriminate against white people.

Now a focus has shifted to the airlines, in part because they are so visible in the everyday life of consumers and because diversity has been championed from the C-suite.

“It’s a powder keg,” says Theresa Claiborne, the first Black woman pilot in the U.S. Air Force, who recently retired after a 34-year flying career at United. She notes that the pushback is not just from the political class, but also from airline colleagues. “I know some awesome Caucasian pilots, but I know there are many that don’t believe that this is a job for anybody but themselves.” (Claiborne stresses she is speaking for herself and not United Airlines.)

Absence of role models

It’s no surprise that piloting has been the realm of white men. Black, Hispanic and women students lacked role models they could follow into an aviation career. Students from low-income families don’t see pilots that look like them — their mothers and fathers don’t take them up for a spin in the sky as affluent families can do. Rarely is aviation presented as a career option, experts say. Flight training is expensive, too, costing $80,000 to $100,000 for key certifications. But there’s a big payoff. Pilots with seniority can earn up to $500,000 a year and get to travel the world.

“It’s about awareness and access,” says Dana Donati, CEO of Breaking Down Barriers and former CEO of the United Aviate Academy. At Aviate, recruiters brought aircraft simulators to inner-city organizations. “We were training (all groups), but how can we recruit from areas that aren’t aware of the opportunity?”

Even when women and people of color make it into the pilot ranks, they can be socially isolated. “Breaking Barriers for Women in Aviation,”a study for the Federal Aviation Administration by a women’s aviation advisory board, found that women faced a negative workplace culture: being overlooked for opportunities, being interrupted or having ideas dismissed, or being viewed as overly aggressive. The study cited research showing 71% of respondents had experienced some form of sexual harassment.

Amid social and legal pressures,

Diversity in the skies

Piloting

Source: Bureau of labor Statistics, 2023 data

airlines in recent years have expanded hiring and promotion practices. Southwest Airlines, for example, aims to double the percentage of racial diversity among its executives and increase gender diversity by next year. The airline also set goals for diversity in its senior management committee, according to its 2023 diversity, equity and inclusion report.

In 2022, American Airlines said it had become more intentional in DEI efforts, noting it increased Black representation at the director level and above by 50% compared to 2020, and retained 90% of the executives at the director level and above. American also focused on expanding its Cadet Academy to ensure prospective pilots, “particularly people of color and women, have access to the support needed to enter the profession.”

United said in its 2022 corporate responsibility report it exceeded its goal for 90% of candidate slates for management and administrative roles to be diverse. It also noted 80% of the first Aviate Academy graduating class were women and people of color. The company wasn’t as specific in its 2023 corporate responsibility report.

It’s good business to expand the pilot pipeline to Latinos, Blacks and women, Munoz says, because those constituencies are airline customers and employees. “Who doesn’t want to sell more to the people who are going to be loyal customers and those customers are increasingly more diverse.”

The Aviate Academy may be diverse, but its graduates have a way to go before becoming United pilots. Top certification requires 1,500 hours of flight time, which can take around three years. Graduates typically start their commercial flying careers at regional airlines, which is the stepping stone to a slot at one of the “big four” carriers. “When they start at Aviate, they are about four and a half to five years away from becoming a United pilot,” says Michael Bonner, managing director of Aviate and pilot strategy at United. A newly hired pilot at United typically

has about 3,000 hours of flying time, he adds. Because of the flying hours needed to advance, it will take several years for statistics to reflect increased diversity in the pilot ranks.

The Aviate program received a boost last month when JPMorgan Chase committed $1.2 million for scholarships through its Chase United Gateway credit card, building on earlier funding.

The Aviate Academy and United’s partnerships with some 30 colleges and flight schools are meant to prepare for a projected shortfall of pilots in the industry. A large number of baby boomer pilots will be leaving the flight deck at the mandatory retirement age of 65, and there are fewer pilots coming out of the military. The airline paused hiring earlier this year because of delays in the delivery of Boeing aircraft. But it expects to hire 1,600 pilots by the end of the year, Bonner says.

Despite the airline industry’s earnest public relations statements on diversity, a series of snafus served up red meat to conservatives. When a wheel fell off of a Delta Air Lines jet at Hartsfield-Jackson Atlanta International Airport in January, Donald Trump Jr. posted on X, “I’m sure this has nothing to do with mandated diversity, equity and inclusion practices in the airline industry!!!” Industrialist Elon Musk tied a nearly catastrophic incident at Alaska Airlines, where a panel blew off of a Boeing jet that same month, to diversity incentives at the manufacturer.

“It’s a non sequitur,” says Steven Durlauf, a professor at the University of Chicago Harris School of Public Policy. “These claims are evidence-free, made without any information. But these types of ugly claims resonate.”

The blowback isn’t limited to politicians. Not all pilots applaud airline DEI goals. It’s a close-knit fraternity, and some pilots strive to pass their jobs on to their children.

Claiborne says a number of her colleagues groused about their buddies not getting hired. “Some people have it in their head that they, or their friends, are not getting the jobs that they think that

nate against Americans based on immutable characteristics.”

AFL previously filed federal civil rights complaints with the U.S. Equal Employment Opportunity Commission, or EEOC, against the airlines, alleging racial and sex discrimination. Spokesmen for the EEOC and the Labor Department said they were unable to comment. Defenders of diversity initiatives say outreach and recruiting in previously untapped communities is meant to expand the universe of candidates. “It’s about getting the best possible talent from the widest possible pool,” says Rebecca Lutte, a professor at Embry-Riddle Embry-Riddle Aeronautical University (ERAU) College of Aviation Worldwide, and one of the authors of the “Breaking Barriers for Women in Aviation” study. FAA requirements are the same for all pilots, she adds. There’s no special treatment. “If you’re in the seat, you’ve earned it,” she says.

they deserve,” she says. “No. We’re all competing, and as long as I can fly an airplane like you can fly an airplane, I deserve an opportunity.”

A statement from the Air Line Pilots Association says: “Flying is the safest mode of transportation in the world thanks in large part to airline pilots, professionals that are all held to the highest training and qualification standards. There are real threats to aviation safety like efforts to replace pilots with automation or lower training and experience standards, but opening the doors of opportunity to ensure we have a robust supply of qualified aviators isn’t one of them.”

On the attack

The assault on airline diversity efforts moved into the legal realm earlier this year, when America First Legal, or AFL, the conservative public-interest organization headed by longtime Trump adviser Stephen Miller, filed complaints with federal agencies and requested investigations. With a hard line view on immigration, gender and race, AFL has filed more than 100 legal actions against organizations it considers too “woke.” Airlines are among the many Fortune 500 companies targeted for alleged discrimination against white men.

In a January letter to the U.S. Department of Labor’s Office of Federal Contract Compliance Programs, AFL alleged that the diversity programs of United, American and Southwest airlines are discriminatory. The complaint said the three carriers receive federal contracts and that DEI policies breach contractual obligations under federal contracting law.

“The American people should not have money taken out of their paychecks to facilitate racially discriminatory actions by federal contractors,” America First Legal Vice President Gene Hamilton said in a press release announcing the actions. “But that’s precisely what happens when federal contractors embrace policies that—as they openly admit on their websites and in other public materials—discrimi-

Still, civil rights advocates worry that the airlines will ratchet back initiatives, soften language for diversity goals and change the job titles of DEI managers. “It’s just not very clear to me that these programs have any way forward if the political power dynamics don’t change,” says Alvin Tillery, a political science professor at Northwestern University and founding director of the university’s Center for the Study of Diversity and Democracy. But others are undeterred. Parker, the retired CEO of American Airlines, is taking pilot recruitment a step farther with his Breaking Down Barriers nonprofit, which offers financial aid to promising students. He and his wife, Gwen Parker, funded the startup with $3 million. Unlike college tuition, there are no government grants for flight training. Students fund their own tuition at flight schools and many take out loans. There are some scholarships available.

Parker’s nonprofit is reaching out to educators in the Dallas area so students can learn that aviation is a career possibility. Applicants who demonstrate the aptitude will receive flight training and support. So far, Breaking Down Barriers has accepted a handful of students.

One member of the nonprofit’s board is Martin Nesbitt, founding partner and co-CEO of Chicagobased private investment firm Vistria Group. He’s urged Parker to expand the operation north.

“I would love to see similar programs come to Chicago, where we have so many young people who do not even know that working in the aviation sector is an option for them,” Nesbitt said in an emailed statement. “We have a whole generation of undiscovered talent in our city who need the mentorship and exposure to the world of opportunities available to them.”

Jackie Robinson joined the major leagues in 1947, but the first Black pilot for a commercial airline wasn’t hired until 1964, Parker notes. “There’s this history where people weren’t comfortable having a Black person fly their airplane and it was not that long ago,” he says. “We’ve got to do some heroic things to get that behind us.”

In sometimes unfriendly skies, a pioneering United pilot found ways to rise above gender, racial enmity

Theresa Claiborne reflects on gains made by women and Black pilots and the backlash against diversity initiatives I

After United Airlines Capt. Theresa Claiborne landed her final 787 flight from Lisbon, Portugal, a water cannon salute met her when she arrived in Newark. Claiborne retired in May after more than 34 years flying for the Chicago-based airline. She joined United as a flight officer in 1990 after serving in the U.S. Air Force, where she was the first Black woman pilot, flying the KC-135 tanker craft for midair refueling.

As a captain at United, Claiborne flew the 757, 767 and 787 Dreamliner. She’s a founding member and president of the nonprofit Sisters of the Skies, an organization that supports Black women aviators. She recently reflected on her career, the gains made by women and Black pilots, and the backlash against diversity initiatives. She stressed that she is speaking for herself and not for United Airlines.

CRAIN’S: When you joined United, there were only two Black women pilots. What was the transition like?

CLAIBORNE: I got the stares because people are wondering, “Who is she? There’s really no one else around here that looks like her. How did she get here?” Back then, the buzzword was affirmative action. People want to believe I was only there because I was a Black woman. When I was getting ready for my first flight, I overheard bits of a conversation between the captain and my flight instructor. I didn’t hear what the captain said, but I heard my instructor say, “She’s OK. She’s military.” That signifies that you’ve had really, really good training. But a lot of pilots get their training on the civilian side and they’re just as capable.

Do you think evaluators were harder on you?

I’ve had evaluators be really tough on me. Is it because I’m a woman or a Black woman? Or maybe because they didn’t like me. It’s hard to pinpoint why certain things go the way they do. We all have had to prove ourselves every step of the way more than others. Nobody questions whether the white male is qualified, but they question whether the Black pilot is qualified, whether the woman is qualified, and they question whether the Black woman is qualified.

Was there outright hostility from fellow pilots?

Were there people on the flight deck that made me feel like I didn’t belong there? Of course there were. I just did my job.

Did that manifest itself in awkward conversations during the flight?

There can be awkwardness, but that could be just because of an-

other pilot not knowing how to talk to people. And I’ve had flights where I’m thinking to myself, “I wish they’d shut up.” I’ve had flights where a fellow pilot talked to the others but not to me. Does it hurt your feelings? Yes. But I’m not there to be his friend, I’m there to fly an airplane.

Did flight talk include politics?

As a captain, I had a policy of no politics on the flight deck. I got that from a captain I’d flown with to China during the 2016 election. In the preflight briefing, the captain warned, “No talking about politics on the flight deck.” I had flown with him before, so I think he knew where I stood politically and where the other first officer stood. Eventually, the captain went to sleep, and it’s just me and this fellow. It was a Trump vs. Hillary Clinton conversation, and it got kind of ugly. The debate continued at breakfast the next morning, and we weren’t going to convince each other. Later, when I took the captain’s seat, I resolved that we’re not going to discuss politics.

Navigating the long distances and ever-present jet lag must have been tough on the body. Two of my favorite flights were from Newark to South Africa, to Cape Town and to Johannesburg. If you’re going to be in the air for 15-plus hours, you better learn how to sleep. (There are compartments off the flight deck for pilot naps.) Your circadian rhythms get totally screwed up. It’s nothing for me to wake up at 3 in the morning. I’m just now kind of starting to right the clock.

You’ve been president of Sisters of the Skies since 2017. How is that nonprofit making a difference?

We (member women pilots) work with young women between 10 and 18 to show them what’s possible. We bring them to a city airport and take them to the tower.  We rent airplanes and take them up. Our pilots are in uniform, full battle dress. If the girls can see it, they can be it.

What’s your reaction to the political backlash against DEI initiatives?

I can’t stand the noise. Listen, we all have the same evaluators. There’s not a set of evaluators for Black people and a set of evaluators for white people. There’s no conspiracy to let certain people get through. We’re all qualified. When you make it to a flight deck, you’re qualified.

This interview has been edited and condensed from two conversations.

By Judith Crown

Theresa Claiborne on her final round trip flight between Newark, N.J., and Lisbon, Portugal

Claiborne was the first Black woman pilot in the U.S. Air Force.

The nonprofit Sisters of the Skies — which Claiborne, middle, heads as president — recruits young Black women to aviation.

Tuskegee Next launches flight-related careers

Just think about what access did for you. It started with access to an opportunity that opened your imagination.

In 2015, my husband, Stephen Davis, was the chair of the DuPage Airport Authority board when he was asked what he wanted his legacy to be for his tenure. He recognized that mandatory retirement would leave thousands of aviation jobs unfilled over the next 10 years while many people of color historically did not have access to aviation opportunities. With the help of strategic partners such as The Chicago Chapter of Tuskegee Airmen, Organization of Black Aerospace Professionals, Aerostar, airlines, donors and community partners, our foundation, the William and Mary Davis Foundation launched Tuskegee Next.

Tanya Davis is president of the William and Mary Davis Foundation.

of the Tuskegee Airmen, get an opportunity to earn their private license and drone certification in an intense 8- to 10week residential program that's free.

As we know air training is expensive and a hinderance to access, the Illinois Aviation Academy provided a rate to train and prepare them for flight. It costs Tuskegee Next $30,000 to train cadets, as we call young people accepted into the program.

tion to repay."

The cadets who have graduated have done just that. The Tuskegee Next alumnae created the Cadet Ambassador Committee with the objective of giving back and volunteering their time to help the Tuskegee Next Foundation. One of their goals is to provide opportunities for kids to learn about aviation. We hold Aviation Day in various cities to introduce young kids to Tuskegee Next, because providing them access ignites imagination.

Tuskegee Next is based on the legacy of the Tuskegee Airmen, a group of African American military pilots and airmen who fought in World War II. Young adults between the ages of 18-21 years old, who have a passion for aviation and a desire to embrace the legacy

Tuskegee Next is now in its ninth year with eight cadets in the program for 2024. After the August 2024 graduation, 78 young adults will have completed the program and 73 will be licensed pilots, or will be pursuing other aviation careers. To date, our nationwide program has a 96% success rate and many of the cadets have graduated from college, work for airlines, joined the Air Force and Navy, and are working to become aeronautical engineers, flight trainers and corporate pilots.

My husband tells the cadets, “All we ask is that you pay it forward. You have a moral obliga -

On Aviation Day, young children are given an opportunity to go up in planes, with our graduating cadets and others who have volunteered their time. The kids learn about aviation careers, the history of the Tuskegee Airmen, drone flying and are taught the basics of flying, such as traffic patterns and airplane flight controls. I watch the graduating cadets, as they see the power of imagination being planted in the eyes of a child. They see themselves mirrored in the eyes of another.

Farilyn Hurt, a 2018 graduate of Tuskegee Next, is working the registration table. A 10-year-old girl sheepishly approaches the registration table and asks, “You fly planes?” Farilyn responds, “Yes, I

am a pilot.” The younger girl's eyes are full of wonder when she takes a flight with Farilyn. When they land, she says, “I want to be a pilot when I grow up." It was a beautiful moment.

Farilyn is now a certified flight instructor, certified flight instru -

The answer to the pilot shortage is waiting in the wings

There is a pressing and immediate pilot shortage that demands our attention.

The U.S. Air Force is offering bonuses of up to $35,000 a year for active-duty pilots who extend their stay in the branch. The bonus is needed because the Air Force has been unable to increase the number of pilots, which stands at 12,000 — 1,500 below what is needed.

Winston is director of aviation for Golden Eagle Aviation in Tuskegee, Ala., a co-founder of Legacy Flight Academy and an experienced pilot.

According to Boeing Co., the commercial side is not faring any better. Nearly 650,000 new pilots will be needed over the next two decades. Due to insufficient training, the aviation industry will face a significant pilot shortage in 2024 as the fleet of planes increases by 35%. Congress has set aside $240 million to help address the problem.

This news should signal that aviation is a hot career choice

for African Americans, but that has not been the case as African Americans represent only 2% of pilots in both military and commercial aviation. A career in aviation offers financial rewards and the opportunity to travel, work in a dynamic environment, and contribute to advancing technology and society. Despite promises and innovative programs to increase diversity in the industry, the numbers have remained pretty much the same since the 1920s, a time when pioneers like Bessie Coleman and James Herman Banning broke barriers and started flying in the U.S. The legacy of the 932 Black pilots trained by the United States Air Force at the segregated airbase in Tuskegee, Ala., known as Moton Field, is a stark reminder of the long-standing issue of diversity in aviation.

My maternal great-uncle was

a Tuskegee airman, a personal connection that fuels my passion for this cause. His stories of the challenges faced by Black officers, including not being allowed in the officers’ club, are a constant reminder of the need for change. The legacy of the Tuskegee Airmen inspired my father to enlist in the military and go on to

ing. I recollect getting in the backseat of the plane as they showed it off, performing twisted turns.

A few decades later, my grandfather and my maternal uncle were killed in a plane crash as they traveled from Jamaica. That tragedy took a toll on our family, but we turned tragedy into triumph.

When children get onto a plane and start flying, it is liberating. They see the world as smaller, instead of too big for them, and start dreaming. This is what we must do for them.

become a Topgun pilot. I was born on the Seymour Johnson Air Force Base in North Carolina. I recall walking into my father’s fighter jet, kissing him goodbye and waiting for him to return.

My maternal grandfather was a trained pilot, and I remember flying with him in his twinengine Cessna. My grandfather and father bonded through fly -

My father, Bill Winston, pastor of Living Word Christian Center in Forest Park, founded Golden Eagle Aviation, located at the historic Moton Field. I became manager of the fixed-based operation and, in 2012, co-founded the Legacy Flight Academy, a program dedicated to exposing youth from underrepresented communities to the world of avi -

ment instructor and multiengine instructor.

It’s hard to be what you can’t see. Don’t take those moments for granted when you introduce someone to something they have never experienced. That might be the moment they take flight.

ation. Highly skilled pilots convened at the airport to teach youth how to fly and pursue careers in aviation. Similar programs have been established by nonprofits and even airlines to increase the number of Black pilots, but those

Melody

Tuskegee Next is based on the legacy of the Tuskegee Airmen, a group of African American military pilots and airmen who fought in World War II.

programs have not been as impactful as we would have hoped by now.  We cannot sit idly by and miss this opportunity for Black Americans to become pilots. Flying is in my family’s bloodline. It is our legacy. This year, our vision is to expand the reach of the Legacy Flight Academy. When children get onto a plane and start flying, it is liberating. They see the world as smaller, instead of too big for them, and start dreaming. This is what we must do for them.

Leveling the playing field in airline hiring is smart business

The storied history of accomplished African Americans in aviation goes back many years. Individuals such as Bessie Coleman, the first African American woman to hold a pilot license; the Tuskegee Airmen; Capt. Dave Harris, the first African American airlines captain; Capt. Bill Norwood, the first African American captain for United Airlines; and Capt. Louis Freeman, the first African American chief pilot for any major U.S. airline, paved the way for people like me.

James T. Simons Jr. is a retired captain for United Airlines and a member of the Organization of Black Aerospace Professionals.

Without the sacrifices and successes of those pioneers, I would not have achieved what I did over a long career as an Air Force pilot and airline pilot for 31 years before becoming the chief pilot for United Airlines, managing more than 1,300 pilots and flight operations at Washington Dulles, Reagan National and Thurgood Marshall airports.

In 1963, Marlon Green, a former Air Force pilot, won a landmark U.S. Supreme Court case when it ruled that Continental Airlines had to comply with Colorado’s anti-discrimination laws, opening the door for Afri-

can Americans to be hired by commercial airlines. To say we still have a long way to go to obtain the equality the Supreme Court case tried to address would be an understatement.

According to the 2023 Bureau of Labor Statistics, 93% of current airline pilots are white and 3.6% are African American. Recent comments by Charlie Kirk and Elon Musk concerning unqualified African American pilots being hired by airlines are not only unjustified but ignorant of the facts. Scott Kirby, CEO of United Airlines, in discussing the goals of United’s Aviate Academy, which is helping the airline meet its requirement to increase its pool of pilots, did not say he wanted 50% of its graduates to be female or persons of color. His goal is that 50% of the classes would be female or persons of color. Skin color or gender plays no part in who graduates, only standards required by the FAA and the airline play a part in who graduates and gets hired.

DEI initiatives are foremost a business decision. Companies realize that a diverse workforce leads to more innovative and enterprise-leading ideas. The

Recent comments by Charlie Kirk and Elon Musk concerning unqualified African American pilots being hired by airlines are not only unjustified but ignorant of the facts.

elimination of group think is imperative for companies that wish to be industry leaders. The Organization of Black Aerospace Professionals, along with its industry partners, works to ensure that highly qualified minorities find a level playing field within their employment opportunities. The Federal Aviation Administration has rigorous standards to ensure the highest levels of safety in the aviation industry. All pilots are required to pass difficult simulator training sessions at their training centers twice a year, along with annual medical exams and random drug and alcohol tests. So the next time you fly, have no doubt your pilots, no matter their race or gender, are safe and highly qualified.

Bessie Coleman was the first African American woman to hold a pilot license. | GETTy IMAGES

CONSTRUCTION COMPANIES CRAIN’S LIST

CONSTRUCTION COMPANIES CRAIN’S LIST

The Belden Stratford;

Driehaus Museum; The Fields Studio; North Chicago School District

DeKalb Data Center; Shedd Aquarium; United Center; Fifth Third Arena expansion; Bally’s temporary casino; Hollywood Casino; St. Regis Chicago; Northwestern University decentralization; O’Hare International

Park District of Oak Park; AdventHealth NICU; The Hyatt Regency

CONSTRUCTION COMPANIES CRAIN’S

CRAIN’S LIST

CONSTRUCTION COMPANIES

Silver Cross Orland Park Medical Pavillion; Valent BioSciences; Raymond James; AMC River East; United Airlines; Encuentro Square; Southwest Airlines; Rush Cancer Center; DeVry University; Wintrust; Audi; Radio Flyer

Accenture; mHUB; United Airlines; McDonald's Corp., Molson Coors Beverage; Boston Consulting Group

Health at Webster Place; Rush North & Harlem; 6 Corners Lofts; Target; Little Village Plaza; Walmart, Joliet; Sam's Club

PhotoCredit:TomHarris

PhotoCredit:TomHarris

SUSTAINABILITY

Carbon futures: Reshaping the economic landscape

AS+GG CarbonLab’s mission to revolutionize sustainability in architecture

CHRISTOPHER DREW, PHD., CIWM, HK-BEAM Director of Sustainability

Adrian Smith + Gordon Gill Architecture

Chris Drew is a respected international environmental scientist and sustainability thought leader. Through 25 years of experience as an ecologist and sustainability manager, he seeks to understand the relationships between the built and natural environments, and urban ecosystems.

As the Director of Sustainability at Adrian Smith + Gordon Gill Architecture (AS+GG), Dr. Christopher Drew leads the AS+GG CarbonLab. The studio develops sustainable strategies for energy efficiency, energy generation, reduction of carbon emissions, waste management, water conservation, sustainable materials selection, resilience, climate change assessment, lifecycle cost assessment and other key performance indicators for AS+GG’s projects.

AS+GG CarbonLab understands that knowledge serving to better the environment should be shared, and therefore also provides consulting services to nations, cities, governments, national advocacy groups, developers, and a variety of architectural and technology-based companies. The practice operates at the forefront of reversing the built environment’s impact on climate change by designing low, zero and negative lifecycle carbon buildings. Chris’ leadership has contributed to AS+GG achieving a building energy performance savings of 72% compared to the US national average of 45%.

1 ADVOCACY OUTREACH RESEARCH

Advocacy and research are important parts of AS+GG’s workflow; being key drivers of change. We believe that architects hold the key to improving the built environment and we have successfully completed a number of multi-partnered research projects.

With 25 years of experience as an ecologist and sustainability leader in the construction industry, Chris studies the inter-relationships between the built and natural environments and urban ecosystems. He has been instrumental in driving all AS+GGs projects to be net-zero or net-positive in terms of water and energy while reducing their embodied carbon impacts by working in depth with structural, mechanical, electrical, plumbing and systems engineers to move past conventionality to establish new sustainability benchmarks.

Not content with individual building performance, Chris was the lead researcher for AS+GG’s publication Residensity: A Carbon Analysis of Residential Typologies, which evaluated several residential typologies commonly found in urban centers from single-family housing to highrise construction. The data compiled shows how the relative carbon impacts the various construction types and their implications on land use and the future of cities. In another AS+GG publication, Toward Zero Carbon: The Chicago Central Area DeCarbonization Plan, a sustainability roadmap for the

2 INTEGRATED DESIGN

We have adopted an integrated approach that ensures that environmental performance, health and wellness and social equity are considered throughout the design process on every project. We do not distinguish design from sustainable design.

Windy City, Chris demonstrated how to meet Chicago’s groundbreaking 2030 carbon reduction goals for The Loop by providing a new paradigm for thinking about energy, water, waste, mobility and urban space. One aspect of the built environment that continually hinders the world’s lowcarbon goals is the use of concrete. In 2022 alone, 4.1 billion tons of concrete was used globally. The carbon emissions, primarily from the manufacturing of Portland cement, totaled 1.6 billion tons making concrete the second most used material on earth, after water, and is used in applications that have no realistic alternative, like building foundations and bridges. Instead of replacing concrete, AS+GG CarbonLab is exploring ways to design concrete that supports a net-zero-carbon built environment. Chris said, “We all must work with cement and concrete manufacturers to decarbonize the industry, rather than assume that concrete can be replaced.”

In 2020, AS+GG CarbonLab, in collaboration with the National Ready Mix Concrete Association (NRMCA) and Ozinga Ready Mix Concrete Company, explored ways to produce

3 SUSTAINABILITY CONSULTING

We provide sustainability consulting services as a stand alone o ering to clients. We o er a range of services including supporting architects in the design process, strategic planning and developing road maps and as far as sustainability reporting and documentation.

concrete mixes of low-carbon, nearzero-carbon and carbon-negative concrete without changing existing construction systems. The results showed that low-carbon and even carbon-negative concrete is achievable today. By reducing the embodied carbon of the most common material in use, AS+GG CarbonLab has demonstrated that low embodied carbon concrete is achievable using currently available technology and without significant changes to construction practices.

“What limits us is not our imagination or even technology, it is our failure to see past what we have done to see what we could become,” said Chris. “We encourage those in the construction industry who would like to be part of this innovation to reach out to our team.”

4 ENVIRONMENTAL SOCIAL AND GOVERNANCE

We recognize our corporate sustainability responsibilities and are signatories to the United Nations Global Compact (UNGC) and share our Sustainable Development Goal achievements through an annual report published through the UNGC reporting mechanism.

SUSTAINABILITY

SCOT PEPPER

President Pepper Construction Company spepper@pepperconstruction.com

312-266-4700

Scot joined Pepper in 1989 and guides its mission and vision while allocating the resources required to achieve its goals.

JAKE PEPPER

President Pepper Energy jpepper@pepperconstruction.com

847-381-2760

Jake launched Pepper Energy to help o set the construction industry’s impact on the environment while creating real and lasting bene ts.

Building a sustainable future for our planet and our people

Pepper Construction is creating connections that bene t both

In just a few years, Pepper Construction will hit a monumental milestone – 100 years in business. While we take this opportunity to look back at our roots, our vision remains xed on the future of our industry.

Now in its third and fourth generations of family leadership, Pepper has been widely recognized for our work toward building a sustainable future for the environment, our operations and our people. We believe building performance impacts human performance and that the future of construction is sustainable, resilient and high-performing buildings. erefore, our company’s mission remains to continuously improve people’s quality of life through the built world. Nearly 40% of the world’s carbon emissions come from the built world through daily energy use and the manufacturing and transportation of building materials. at means the construction industry has a tremendous opportunity – and a responsibility – to positively impact people today and for generations to

come. is has led Pepper to act in three important areas.

For our projects, we incorporate the following ve scalable solutions through our Drawdown program, which we created in 2019 based on the work of editor and environmentalist Paul Hawken:

1. Low global warming potential refrigerants

2. Solar energy

3. Carbon-infused concrete

4. Optimal R-values

5. Water-saving technologies

Leveraging these solutions, Pepper is improving operational e ciency and reducing carbon on the projects we build. We have eliminated almost 1.8 million tons of CO2, impacting more than 309,100 people in the last ve years.

Jobsites are workplaces, too. We designed and built the industry’s rst operational Net Zero Jobsite Trailer.

Powered by 27 solar panels on the roof, this jobsite trailer is what the future of construction needs to be. If every US construction company converted just one jobsite trailer to net zero, 564 million tons of CO2 would be eliminated.

Within our company operations, we follow our own advice.

e Pepper team recently renovated a 112-year-old building to serve as a “living lab” o ce. In the process, we pushed the boundaries to achieve Net Zero, LEED Gold and WELL Silver certi cations – a rare accomplishment in a historic structure.

In 2022, we also entered the renewable energy market with the launch of Pepper Energy, which o ers engineering, procurement, and construction services as well as nance and development capabilities and self-perform expertise. Tied to regulated and deregulated electricity markets and legislative initiatives, one of its primary goals is to create equity within disadvantaged communities.

is connection to people is a critical component of building a company that is “sustainable” in every sense of the word. Just as in nature, integrating diversity, inclusivity and environmental sustainability in construction bene ts the greater good. Pepper is going beyond the metrics of diverse participation on jobsites to ensure that environmentally friendly construction and healthy spaces serve surrounding communities to promote growth and expand workforce opportunities.

Within our walls, Pepper strives to create a sense of belonging where everyone can thrive. is impacts everything from how we work to how we recruit new employees and partners on our jobsites. Ultimately, it is Pepper’s family culture, tethered to our values of dignity and respect, that keep us building toward a sustainable future for all.

Buildings have a profound effect on how we live, work and play.

At Pepper, we promise to ensure the choices we make today impact the future of our built environment to create a better quality of life for all.

Thank you to our people and partners who help bring our inspiring projects to life.

www.pepperconstruction.com

Unpacking the future of sustainable packaging

Executive Q&A with the Vice President of Sustainability at Berlin

BALAJI JAYASEELAN

Vice President of Sustainability

Berlin Packaging

Balaji Jayaseelan, Vice President of Sustainability at Berlin Packaging, has 15+ years of experience leading sustainability, ESG, and innovation efforts across startups and consumer brands.

From household names to agile, direct-to-consumer brands, refillable packaging is going mainstream. Refills come with multiple benefits, from lowered costs and reduced carbon emissions to improved user experience and brand loyalty. While there’s no one-size-fits-all solution, refills

Packaging SUSTAINABILITY

offer great potential to drive sustainable packaging solutions and accelerate the circular economy.

What key advantages are driving the rise of refill-at-home packaging?

Refill-at-home packaging delivers a powerful trifecta of environmental, economic and user experience benefits. Based on an Ellen MacArthur study, widespread refill adoption could slash demand for new plastic packaging by over 50%. This can greatly reduce packaging-related waste and carbon emissions. Economically, refill pouches offer cost savings for consumers while reducing long-term material and shipping costs. They also enable greater convenience and offer customization opportunities, making them a market differentiator that can drive brand loyalty.

Beyond these benefits, refill systems allow companies to gather increased consumer data while positioning themselves as innovative, sustainable leaders—an important differentiator as consumers increasingly prioritize conscious consumption. While upfront investment may be required,

this multitude of benefits propels mainstream adoption across brands.

What challenges are brands navigating with refillable packaging?

Safety is a primary consideration, with potential contamination risks and limited packaging material choices. Consumer adoption is also a hurdle, as refillable models require significant behavior changes. Brands may also face substantial investments in building their refill ecosystem, such as new filling lines and supply chain adaptations, making flexibility and agility key.

Not all products suit refill-at-home models. Products in beauty and personal care, home care and food markets are easier to adapt to than others. To determine fit, it’s vital that brands evaluate factors like product-packaging compatibility, target audience fit, market suitability, innovation potential, total cost of ownership and operational readiness.

How can companies successfully scale refill-at-home models and drive widespread adoption?

Brands can embrace reuse and refill as core to their identity. We’re seeing more companies get creative—offering refill-at-home through multiple channels like in-store, e-commerce and subscriptions across categories like personal care and home care. They’re also driving product and packaging innovation, offering refills as concentrates, tablets and more. Understanding the target consumer and tailoring the refill system is key to driving brand loyalty.

Consumers ultimately want unique, premium and convenient experiences. Enabling convenience through intuitive refill mechanisms is crucial to position refill as a more sustainable, convenient choice. Effective marketing campaigns using compelling metrics can communicate refill’s environmental benefits and help accelerate consumer adoption.

Looking ahead, what future trends will influence refillable packaging?

The rise of the conscious consumer, especially with Gen Z and Millennials, is a powerful trend. Refills provide

a clear way for brands to showcase sustainability commitments to this demographic, making effective consumer segmentation crucial to driving meaningful adoption.

Brands must evolve packaging systems to integrate convenient refillable options across multiple consumer channels. They need to determine their optimal packaging ecosystem— assessing what formats, materials, designs and economic models best fit their brand, consumer and sustainability goals. When done well, refills can enable market differentiation, consumer loyalty and greater product innovation.

PEOPLE ON THE MOVE

ACCOUNTING / CONSULTING

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

Victor Hernandez joined JKC in 2024 as an Associate, after completing a tax internship with the firm. Mr. Hernandez earned his Bachelor’s and Master’s Degrees of Science in Accounting at Governors State University. A Palos Heights resident, Mr. Hernandez also previously received an Associate of Applied Science Degree from Moraine Valley Community College. He will be applying his knowledge and experience through the firm’s auditing practice.

ARCHITECTURE / DESIGN

HKS, Chicago

Global design firm

HKS has announced

Jennifer McDermott as a Principal and Global Practice Director, Senior Living Interiors. She infuses hospitality elements with the comfort of residential design to create unique signature experiences for seniors. Jennifer immerses herself in the location and lifestyle of the residents that she is designing for and her work has won awards, and been featured in many Senior Living publications.

BANKING

First Bank Chicago, Northbrook

First Bank Chicago, one of the five largest privately held banks in Chicago, is pleased to welcome Merrilee Rojas as Senior Vice President, Managing Director of Franchise Finance. Merrilee is responsible for developing and managing a new franchise banking division focusing primarily on tier one concepts. Merrilee has over 25 years of expertise in the franchise finance industry while working directly with franchisees to accommodate all their financing and treasury management needs.

BANKING

Lakeside Bank, Chicago

Jill Hagan is back in Chicago … and joins Lakeside Bank as Senior Vice President, Treasury Management Sales. With over 25 years in the financial industry, Jill brings a wealth of knowledge and expertise. Jill’s Commercial Banking skills, specializing in Treasury Management Sales and Government Banking, will be invaluable as we continue to enhance offerings and support our clients’ growth. Jill and Lakeside Bank have your back!

CONSTRUCTION

W.E. O’Neil Construction, Chicago

W.E. O’Neil Construction welcomes Nick Ramirez as Director of Business Development. With a proven track record in the AEC industry Nick will be instrumental in cultivating new partnerships, identifying growth opportunities, and driving initiatives to enhance customer satisfaction. His strategic vision, coupled with a deep understanding of industry dynamics, positions us for continued success in the coming years.

CONSTRUCTION MANAGEMENT

RLE Project Management, Chicago

RLE Project Management welcomes Rachel Munkvold to their Chicago Headquarters as Project Executive and Interiors Lead. Rachel brings 25-years of construction and design experience with a diverse portfolio of legal, financial, tech, and non-profit clients. She has led several of the largest marquee interiors projects in Chicago, including highly complex HQs, restacks, and relocations. Rachel’s leadership will continue to elevate RLE’s reach and delivery of owner representation.

EDUCATION

Catherine Cook School, Chicago

Catherine Cook School welcomes Adam W. Fischer as Head of School. Mr. Fischer served as Head of The Rashi School (Greater Boston, MA; PK-8). Under his leadership, the school leapt forward with modernized, engaged academics and a historic $30M+ campaign to establish an endowment. He previously served Kent School (Kent, CT; 9-12) in a variety of roles. He earned a Bachelor’s in English from Columbia and Master’s in Independent School Leadership at Columbia’s Teachers College (Klingenstein).

Advertising Section

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

ENTERTAINMENT

Union League Club of Chicago, Chicago

Robert Ryan was elected the 135th President of the Union League Club of Chicago (ULCC) on Tuesday, June 4. Ryan is a managing director of Felix Global, a specialized consulting firm where he coaches and advises senior execs for career transition and leadership development. Rated the #1 City Club in the Midwest by Club Leaders Forum, the ULCC is a distinguished and inclusive club where members can embrace a more inspired life.

FINANCIAL SERVICES

Byline Bank, Chicago

Byline Bank welcomes two new members to its Wealth Management group. Doug Throneburg, CFP, CPA, CFA, CIPM has joined to lead the group as Executive Vice President, Head of Wealth Management.He brings over 30 years of experience in financial planning, investment management, tax strategy and estate planning, most recently as Managing Director – Wealth Advisory at First American Bank. Kurt Funderburg joins as Senior Vice President, Chief Investment Officer, to direct the team’s investment strategy and oversee client portfolio management. Kurt has provided investment advice and analysis to high-net-worth clients and institutional investors for over 30 years, previously at First American Bank, Harris Associates/Oakmark and Morningstar.

HEALTH CARE

City of Hope®, North Shore

City of Hope®, a leader in cancer treatment, recently expanded to the North Shore and is pleased to welcome Edward Kaplan, M.D. and Marlon Kleinman, M.D. to a team of 1600+ cancer specialists across the nation. Dr. Kaplan, a medical oncologist, and Dr. Kleinman, a hematologist oncologist, bring decades of experience in treating all types of cancer.

LAW FIRM

Holland & Knight LLP, Chicago

FINANCIAL SERVICES

Wintrust Financial Corporation, Rosemont

Wintrust Financial Corp., a financial services holding company based in Rosemont, Illinois, with more than 170 locations across Illinois, Indiana, Wisconsin, and Florida is pleased to announce two promotions. Jonathan Dawson was promoted to SVP, Investments at Wintrust Investments. Jonathan celebrated 14 years at Wintrust in July. Wendy Schenker was promoted to SVP, Marketing Programs at Wintrust Financial Corporation. Wendy joined Wintrust in 2005.

Kaplan Kleinman

Dr. Kaplan is also a prolific researcher and sought-after clinical presenter with a longstanding commitment to academic medicine.

Dr. Kleinman has lectured and served as clinical advisor on a wide range of research topics and is driven by a strong commitment to investigative medicine. For more about Drs. Kaplan and Kleinman or City of Hope’s Chicago-area locations, visit cityofhope.org.

HEALTH CARE

Optum, Chicago

Ben Shobert has joined Optum as their new Senior Vice President of Clinical Data Strategy. In this newly created role, he will be responsible for driving cross-company alignment on strategic clinical data investments and governance. This will include exploration of new business models and work with healthcare data standards organizations and national regulators.

LAW FIRM

Croke Fairchild Duarte & Beres LLC, Chicago

Croke Fairchild Duarte & Beres is pleased to welcome Alex Righi as a partner in the firm’s finance practice group. Alex focuses his practice on advising a broad spectrum of private investment funds, alternative asset managers, and other corporate borrowers on a variety of debt financing strategies, solutions, and transactions. Croke Fairchild also welcomes Randall (Randy) Kulat as counsel in the firm’s public finance practice group. With more than 40 years of experience in all types of complex financial transactions, Randy focuses his practice on all aspects of tax-exempt finance, banking, and secured lending matters.

Larry Kern is an attorney in Holland & Knight’s Chicago office and a member of the firm’s Private Wealth Services Group. Mr. Kern focuses his practice on tax and estate planning matters for ultra-high-net-worth individuals and families, closely held business owners, private equity and hedge fund principals, and charitable organizations. Mr. Kern has a wealth of experience advising clients in connection with the formation and operation of family offices and private trust companies.

NON-PROFIT

Hephzibah Children’s Association, Oak Park

Hephzibah Children’s Association, a visionary leader in child welfare since 1897, welcomes Jason Patenaude as CEO. Jason brings three decades of experience at both for-profit and nonprofit organizations, as well as a growthoriented mindset, and extensive financial, fundraising, and executive leadership experience to the position. He holds a B.A. from Bates College and an M.B.A. from the Tuck School of Business at Dartmouth College.

NON-PROFIT

Lions International, Oak Brook Fabrício Oliveira of Catolé do Rocha, Paraiba, Brazil, was elected as international president of Lions Clubs International in June 2024. Fabrício is a businessman with an MBA from Fundação Getúlio Vargas, a former director of the National Confederation of Shopkeepers in Brazil, and a Lion since 1985. As president, he will oversee global membership growth, support the Lions Club International Foundation and inspire clubs to serve their communities and a world in need.

RETAIL

Colony Display, Bartlett

Colony Display, a designer, manufacturer, and installer of highly customized fixtures, exhibits and displays, is growing its leadership team. Earlier this year, Craig Marton joined Colony as Chief Executive Officer, and the company recently welcomed Shawn Kahler as Chief Commercial Officer. Marton’s decades of extensive operational and strategic experience are an asset to Colony, where he leads a team of approximately 150 highly-skilled employees and is helping to strengthen the company’s position as an industry leader. Kahler brings more than 30 years of experience driving market expansion and profitable growth at both publicly traded and privately held companies, including most recently as Vice President of Vieler International LP.

Righi Kulat

Dawson Schenker

Funderburg

Kahler

Price cuts coming early for second-home sellers

It’s the result of sellers dampening price expectations inflamed by the fast-rising prices of the COVID-era boom

By Dennis Rodkin

In Chicago’s four major second-home destinations, sellers have been cutting their asking prices in numbers not usually seen until later in the prime selling season of summer.

At first glance, it might seem to be a sign that the prices buyers are willing to pay have dropped, but that’s not so.

Sale prices are either still rising or roughly even with recent years in the four markets — Lake Geneva and Door County in Wisconsin, Harbor Country in Southwest Michigan and Northwest Indiana, and Galena — according to data Crain’s compiled from Redfin’s data center.

Agents in these markets say sellers are cutting their prices early this year because their optimistic price expectations aren’t holding up in a market that is closer to normality than it’s been since the COVID pandemic set off a tidal wave of buying in second-home markets in summer

“We’re

North Real Estate based in Fish Creek, Wis. “I think there’s an aspirational component to it.”

In Galena, Damon Heim of Coldwell Banker Network Realty said many sellers “expect the market to continue to be on fire. They figure if the trend continues, they can get this high number. But if they meet resistance and have to (cut) the price, at least they gave it a shot.”

Some appealing second homes have taken price cuts recently. In New Buffalo, the price on a handsome, arts & crafts-inspired 1990s house on Mariner Ridge dropped by $100,000 on June 7, to just below $1.68 million. That house is seen in the photo with this story.

On June 11, a house on High Ridge Run in Galena, its design inspired by the work of Frank Lloyd Wright, also took a $100,000 cut, to just under $1.2 million.

None of this is to say sellers don’t have ammunition for their optimistic pricing. In early June,

not in a market anymore where you find out what your neighbor’s house sold for, add 10% to it, add 15% to it, and somebody drives by and pays your price.”

David Curry, an agent with Geneva Lakefront Realty in Lake Geneva

2020.

“There’s not the hysteria we had in the market,” said David Curry, an agent with Geneva Lakefront Realty in Lake Geneva. “We’re not in a market anymore where you find out what your neighbor’s house sold for, add 10% to it, add 15% to it, and somebody drives by and pays your price.”

Up in Door County, “there are sellers out there with pie-in-thesky numbers that are not necessarily realistic,” said Dan Mortier, a broker and partner at True

the median sale price of homes hit a record high in Walworth County, Wis., which contains the Lake Geneva area as well as second-home areas like Delavan and Elkhorn. The median price of $425,000 was up 30% from a year earlier.

That’s led by extreme upper-end sales, like a waterfront house in Fontana, Wis., that sold for nearly $12.8 million in February — higher than any home sold in the Chicago area for all of 2023 and to date in 2024. But the median is also rising because, as

Curry says, “the bottom has lifted way up.” Modest homes that would have gone for under $200,000 prior to the pandemic “start at $500,000 now,” he said. “It’s crazy, and we thought rising interest rates would stop it, but they haven’t.”

When sellers recognize that prices aren’t going nearly as vertical as they were a couple of years ago, they cut the price.

A seven-bedroom house on Solar Lane with 160 feet of Lake Geneva frontage that hit the market in November at almost $9.3 million took its third price cut on June 7, to just under $7 million. It’s one of many with price cuts in Walworth County. In the week ending June 9, 5.7% of Walworth County homes on the market were down from their original asking price, according to Redfin.

The only time during 2021-24 where the price-cut group was larger was October and November 2022, when fast-rising interest rates put the brakes on many housing markets.

In Door County, in northeast Wisconsin, 3.5% of properties

were offered at reduced prices in the week ending June 2. It dropped to 3.2% the next week, but even so, Redfin’s data shows no figures above 2% in any of the years 2021-2023.

In southwest Michigan’s Berrien County, the proportion of price cuts spiked to 6.2% in late May, a mark it didn’t reach until mid-July in 2023 and early November in 2022.

The largest proportion of price cuts is in Indiana’s Porter County, home to Beverly Shores, Ogden Dunes and other waterfront towns. Between mid-March and mid-June, the share of properties with price cuts nearly doubled, rising from 4.8% to 9.3%. In each of the past two years, the figure didn’t cross 9% until October.

The proportion also nearly doubled in that stretch of time in the county just to the east, LaPorte County, which contains Michigan City and Long Beach. Last year the figure didn’t go above 6% until September.

In Jo Daviess County, Ill., which contains Galena, price cuts hit 8.7% of all properties by

June 2. The figure never got that high in the years 2021-2023. Last year’s big increase in price cuts didn’t start until late July, and peaked at 6.7% in October.

For comparison: In Cook County, about 3% of homes on the market now have reduced prices. That’s approximately in line with the figures at this time in each of the past three years, ranging from 2.2% to 3.3%.

None of the distant counties is exclusively comprised of second homes. The data cover sales of all homes, whether they are the buyer’s primary address or a second home.

But sellers of second homes are big contributors to the runup in asking prices, the agents said. That’s in part because unlike with a primary home, with a getaway home “there may not be any need to sell right away,” Mortier of True North Real Estate said. “Their strategy is, ‘If somebody wants to come up to this price, we’ll sell. But if not, we don’t care. We’ll just have our Door County house for another summer.”

Ironworkers union opens new training facility

The new building will allow the union to simulate the pressurized work its members do

By Brandon Dupré

The ironworkers who helped build Chicago’s iconic skyline and brought the design of “The Bean” to life are getting a new training facility in Broadview.

Ironworkers Local 63, a union which represents Chicago’s architectural and ornamental ironworkers, opened a 12,000-square-foot glass building at 2525 Lexington St. that will allow the union to simulate the pressurized work its mem -

bers do, such as installing glass windows and frames and other structural metal work on some of the city’s most recognizable buildings.

“We are the beauty mark of Chicago,” says Paul Wende, the local union’s business manager. “We build everything that people come from all across the world to see, so our work has to be perfect.”

The new facility will include a pressurized testing chamber, a 5-ton bridge crane and an adapt-

able training structure to simulate what ironworkers would experience out in the field on a high-rise — all training features that are the first of their kind for any union in the country, according to Wende.

The new facility, which has been dubbed the “glass house,” was designed with the union’s work and history in mind, says Scott Hurst, design principal at Gensler, which designed the building for the union.

“As a combination of brains

and brawn, the design of the building is intended to capture the unique character and attitude of the Ironworkers Local 63 members,” Hurst said in a statement. “As trade unions look to continue recruiting the very best talent for this highly technical and important work, investing in these state-of-the-art facilities has become increasingly important.”

Wende also describes the new facility as a marketing piece to help grow the union’s ranks by

attracting younger workers with its hands-on learning and as a showpiece for contractors and other potential partners. It will also serve as the regional training center for the entire international union, bringing ironworkers from all of the country to Chicago for training.

The union, which represents more than 1,000 workers, has had its hands in constructing iconic Chicago structures, such as the the St. Regis Chicago, Cloud Gate in Millennium Park and Maggie Daley Park, to name a few.

This house on Mariner Ridge took a $100,000 price cut in recent weeks, to just under $1.68 million.

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WALGREENS

in the quarter, Walgreens cut its full-year earnings guidance, just after lowering the top end of its guidance last quarter.

Morningstar analyst Keonhee Kim said he’s expecting next quarter to be difficult, too.

“Cutting guidance by that much signifies more challenges to come,” he said.

Walgreens’ stock is down 60% in the last year, which tanked its market capitalization, too. The company is worth just $10.3 billion today, compared to around $28 billion a year ago.

is being challenged by several factors, but Wentworth said lower prescription demand and reimbursements are “materially weighing” on the company’s ability to serve patients profitably.

“We are at a point where the current pharmacy model is not sustainable and the challenges in our operating environment require we approach the market differently,” Wentworth said. His solutions include working with pharmacy benefit managers and payers to boost reimbursements.

even more pressure on them to make what they have profitable.”

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“It is a smaller business, as far as market cap is concerned,” Nathan Ray, a partner at Chicago consulting firm West Monroe, said. “Obviously, that is going to perpetuate certain changes and how they are thinking of and focusing on the business and its health.”

Laying out his plans, Wentworth told investors on June 27 that Walgreens will focus on optimizing its pharmacy store footprint while deprioritizing underperforming parts of the business.

“We’ve already stopped or will stop initiatives that distract from our focus and will grow in areas that create longer-term shareholder value,” Wentworth said.

He acknowledged the retail pharmacy business faces several challenges, which is why it’s necessary to close some locations, but he maintains that physical pharmacy stores are still the linchpin to the company’s success.

Walgreens did not disclose how many stores it plans to close, but Wentworth said the company identified that about 25% of its stores are underperforming. It plans to close a “significant” portion of those locations over the next three years. The “vast majority” of workers at closing locations will be deployed to other locations or company departments. Additional closures would be considered if performance doesn’t improve, Wentworth said.

Walgreens’ pharmacy segment

On the retail side of the business, Walgreens is challenged by consumers pulling back on spending in stores as inflation persists and shopping continues to shift online. To improve its retail offerings, Wentworth said Walgreens removed eight national brands and redeployed the space to its own brands and preferred partners in health and wellness categories. Walgreens is also working to expand its loyalty program.

“The retail pharmacy experience will be more important to the health care industry in the years ahead, but it will evolve,” Wentworth said. “The bottom line is that I’m confident (Walgreens) will be a leader in the future of health care with pharmacy and retail at its center.”

‘Grace period’

Even with Wentworth’s plan to double down on Walgreens’ pharmacy retail roots, it’s unclear whether he can boost the company to Wall Street’s expectations. The pressures on pharmacy retail companies have been snowballing for years. And unlike its biggest competitor, CVS Health, Walgreens doesn’t own other large health care-related assets, like an insurance company or a pharmacy benefit manager, which could potentially help it manage expenses and bring in revenue.

“(Walgreens is) not going to be able to spend billions of dollars diversifying their revenue streams the way CVS has,” Gordon said. “It’s too late for that. But it puts

Walgreens’ health care segment, which was championed under former CEO Roz Brewer, was intended to help diversify the business. Brewer poured billions of dollars into health care assets like primary care provider VillageMD, post-acute and home care firm CareCentrix and other businesses, but the segment was slow to reach profitability, which led to the closing of VillageMD locations and a $6 billion impairment charge on the asset. (Walgreens took a $431 million impairment charge on its Boots segment in June.)

Notably, Wentworth didn’t talk much about Walgreens’ health care segment being a key area of growth on a June 27 earnings call, despite the company’s investments. And according to a Wall Street Journal report, he said Walgreens intends to reduce its stake in VillageMD and will no longer be its majority owner. A Walgreens spokesman declined to confirm or comment on the report.

Wentworth didn’t mention that detail to investors on the earnings call, either, but he did say the company believes in the future of the VillageMD asset and that it intends to remain an investor and partner.

“We are collaborating with leadership toward an endpoint to rapidly unlock liquidity, enhance optionality and position them for additional growth,” he said.

Wentworth became CEO of Walgreens in October, following Brewer’s sudden departure. He was installed on the promise that his health insurance and pharmacy benefit manager experience would help improve Walgreens’ flailing business. But he has yet to show investors he can offer an effective solution to the company’s many challenges, Gordon said.

“Things don’t appear to be better in any way,” he said. “The new CEO gets a certain grace period to turn around the wreck, but the grace period doesn’t last forever.”

Why Quebec is suddenly capturing the attention of Illinois politicians

Jean-Francois Hould, the Canadian province’s delegate in Chicago, recently sat down with Crain’s to discuss all manner of trade issues

By H. Lee Murphy

In the past couple of months, Illinois politicians have been beating a path to the Canadian province of Quebec and, more specifically, Montreal amid a sharp rise in cross-border trade.

First, Chicago Mayor Brandon Johnson made his first international trip as mayor in May to meet with Montreal’s mayor, Valerie Plante, to discuss green development issues and sustainable transportation. The province has something to teach us: It gets virtually all of its electric power from hydroelectric sources, while its biggest corporate transplant within the past year, Lion Electric, has set up shop in Joliet as a leading maker of zero-emission heavy-duty trucks.

In June, Gov. J.B. Pritzker landed in Montreal to give a keynote address at the Conference of Montreal that was organized by the International Forum of the Americas while also leading a trade mission. The consequences are significant: Illinois ranks as one of Quebec’s

population of 8.6 million people speaks French at home compared with 11% who speak English. But almost half of the Quebec population can speak and understand English, which means that French has never been an obstacle for us. There are more than 400 American companies with a presence in Quebec, and we host trade missions all the time. French has been the official language of our province since 1977, but since then trade has continued to increase steadily. Companies doing business in Quebec find that translators are not necessary.

Nearly half of the Midwestern companies with offices in Quebec are from Illinois. What industries are they centered in?

Our trade relationship is very diversified and embraces a wide variety of sectors. However, we could say that the manufacturing sector — including life sciences, transportation, aerospace and agro-food — is certainly at the heart of our trading relationship.

In the race to unearth more minerals for electric vehicle batteries, Canada’s vast mining resources are suddenly sought after by battery makers everywhere, while Illinois companies like Deere and Caterpillar are key suppliers of mining equipment.

leading export markets, with some big gold buys propelling export to the state last year by nearly 80% to $5.5 billion, ranking Illinois ahead of China as a trade partner with the province.

In the race to unearth more minerals for electric vehicle batteries, Canada’s vast mining resources are suddenly sought after by battery makers everywhere, while Illinois companies like Deere and Caterpillar are key suppliers of mining equipment.

Jean-Francois Hould, a native of Quebec City who is serving as the Quebec delegate in Chicago, overseeing relations with a dozen states across the Midwest, sat with Crain’s recently to discuss all manner of trade issues. Excerpts follow.

Crain’s: Quebec is officially a French-speaking province. Is that an obstacle to doing business cross-border?

Hould: About 80% of the Quebec

Ontario, the Midwest and the Southeast. All of this is highly integrated and tariff-free thanks to the U.S.-Canada-Mexico Trade Agreement.

In the interest of quantum science, a new letter of intent was recently signed between the Chicago Quantum Exchange, the University of Chicago and the DistriQ Innovation Zone in Sherbrooke, part of a broader network of innovation zones in Quebec. This is exactly the type of international collaboration the province is looking for with cities like Chicago.

Commodities and natural resources are also at the core of our trade relationship. Quebec is the largest producer of aluminum in North America, with eight primary aluminum smelters producing aluminum with renewable energy. Quebec is a source of no less than 25 of the 40 minerals listed as critical and strategic by the United States. We are one of the rare jurisdictions in the world with all the minerals required to manufacture batteries, namely lithium, nickel, cobalt, graphite and manganese. Quebec is the only North American producer of the rare earth mineral scandium.

By combining its natural resources and its expertise, Quebec has the required tools to stand out at each stage of the battery supply chain. Major investments have been made in Becancour by automakers including GM and Ford. We can extract and process minerals in Quebec to feed into vehicle manufacturing lines in

Caterpillar, obviously, is very important to Quebec’s mining.

The Canadian mining company Nouveau Monde Graphite has signed an agreement with Caterpillar to develop and produce Cat zero-emission machines for its Matawinie graphite mine, allowing it to meet its goal of powering the site with zero-carbon renewable energy. Nouveau Monde is on track to provide its potential client base with high-quality, green and carbon-neutral battery anode material.

Imports of softwood lumber coming from Quebec have been down. Why?

The pandemic created an important rise in lumber prices, which reached unprecedented levels as demand rose for lumber used in construction and home renovations. Supply from domestic U.S. production cannot meet demand. I should note

that Americans are paying more than they should for softwood because of the unjustified tariffs on imports from Canada. It’s a lumber tax that, unfortunately, results in our softwood being less attractively priced.

People forget that as we argue about whether maple syrup from Vermont or Wisconsin tastes better, the vast majority of maple syrup comes from north of the U.S. border. And that number keeps growing.

There is nothing like maple syrup from Quebec. Some 72% of the world’s production of maple syrup is centered in Quebec, which accounts for 90% of all Canadian output and contributes roughly $1.1 billion Canadian to the nation’s GDP. About 85% of Quebec’s maple syrup is exported on to 60 countries, with the U.S. the largest market by far. Last year 239 million pounds were produced. The province will need 120 million more taps by 2080 to meet growing demand from the global market.

The Quebec separatist movement was very much in the news two and three decades ago. Referendums have failed, but the idea doesn’t seem to have gone away. Can this put a damper on international trade?

The last referendum was in 1995. There are two political parties in favor of Quebec’s separation today, representing just

16 of 125 seats in the Quebec parliament. The separation of Quebec from the rest of Canada is a political issue that I can’t be involved in. But the province has always been very internationally oriented — we have a network of 36 offices in 19 countries — and exports have played a very important role in the Quebec economy. I don’t think that will change.

Many Americans know about trade involving Quebec through the 2001 Robert De Niro film “The Score,” which was notable as Marlon Brando’s last movie. It was filmed in and around the old Montreal Custom House and involved the theft of a very valuable antique held in the building.

Such a great movie! The old Custom House was built more than 170 years ago. It is in Old Montreal and as a National Historic Site remains open to the public.  Over the years, Montreal and the province of Quebec have been home to many American productions. It’s a great place to shoot a movie thanks to its competitive and talented arts environment. Last year, Quebec welcomed more than 20 foreign film productions, generating more than half a billion in Canadian dollars.

This story appears in the ChicagoGlobal newsletter, a joint project of Crain’s Chicago Business and the Chicago Council on Global Affairs.

Jean-Francois Hould

could not stay open.

“If we felt like we had a different path, we would have taken it,” Owen said. “Literally days before we shut down, we were optimistic that we were going to find a way to fund the continued operation of the company.”

Dom’s opened its first store at 2730 N. Halsted St. in June 2021. With more than a dozen show kitchens, the Lincoln Park store aimed to combine grocery shopping, restaurant dining and food delivery. There were made-toorder pizzas, a coffee shop, a place where customers could design their own flower bouquets and more. The idea was to create an experience around shopping for a meal, whether it was already prepared or the customer planned to cook it at home.

It was the brainchild of a team that collectively had decades of experience in the grocery world. Owen is the great-grandson of the founder of now-defunct grocer Dominick’s. There was also coCEO Don Fitzgerald, a former senior executive at Dominick’s. Rounding out the founding team was Bob Mariano, founder of the namesake grocery chain Kroger now owns.

Investors had faith in Dom’s leadership and their vision. In its early days, Dom’s drew funding from big-name firms, such as those launched by former CEOs of McDonald’s and Walgreens. By the time it merged with Foxtrot late last year, Dom’s had raised about $46.4 million, according to deal tracker Crunchbase.

Dom’s executives were clear: They wanted to open 15 locations by 2025. The second location opened in November 2022 in Old Town. The company also announced plans to open stores in River North, Fulton Market and suburban Vernon Hills.

There were challenges. The business struggled with supply chain and labor issues that plagued many industries in the

TECHNOLOGY

From Page 3

Semiconductors are at the heart of computer technology, from smartphones to supercomputers. The COVID-19 pandemic was a wake-up call that the U.S. has let too much manufacturing capability move offshore and it’s at risk of losing its technology leadership. The CHIPS & Science Act was a response to those challenges.

Illinois is making a novel pitch for the NSTC, suggesting the feds put the headquarters here rather than in Silicon Valley, Arizona, upstate New York, Texas, or one of the other places that are home to chip-fabrication facilities.

“It should be in the center of the country, where you have a strong ecosystem, a place where not too much of the industry is driven by one or two companies,” says Rashid Bashir, dean of the Grainger College of Engineering

pandemic’s aftermath. On-again, off-again mask mandates and vaccine card requirements created headwinds for the new business, which was still working to acquire customers. Then inflation set in.

Grocery is a low-margin business, and inflation compressed Dom’s profit margins further, Owen said.

Still, their business model appeared to be working, he said.

Dom’s focus on prepared foods, which have higher profit margins, also helped differentiate the store from its competition. At the store level, Dom’s two locations were cash-flow positive, Owen said. It just wasn’t enough to support the corporate infrastructure and expansion. Leadership had a plan to get there, though, and it required opening more stores. For that, it needed funding.

Then the stock market shifted in 2022, and the lending paradigm changed. Investors were putting less money into fewer deals. There was suddenly less capital available for businesses that needed time to reach profitability.

“We felt as though the capital would be there along the way to support (our) growth,” Owen said.

“The reality was, it wasn’t.”

Meanwhile, Foxtrot, another Chicago-born company, was con-

at the U of I. He has led the state’s pitch for the NSTC alongside Gov. J.B. Pritzker and civic-tech partnership P33, as well as the University of Chicago, Northwestern University and others.

Bashir notes that the U of I has partnerships with chipmakers and designers, including AMD, Intel, IBM, LG, Micron, Samsung and TSMC.

Look to the future

The other part of Illinois’ pitch is that the feds should look beyond silicon when considering the future of semiconductors. Computer chips traditionally have been built on silicon wafers. But the industry has been bumping up against physical limitations for a while, as the chips and the wires between circuits get smaller and smaller.

“No one knows how we create the next generation of chips, moving beyond silicon,” Brad Henderson, CEO of P33, said last summer during a Lincoln Forum fireside

tending with the same reality. The upscale convenience store, which opened its first brick-and-mortar location in 2015, closed a $100 million funding round in January 2022. It planned to use the money to open 50 stores in two years. But those expansion plans turned out to be too ambitious as market whims shifted. Foxtrot conducted layoffs later in 2022. It peeled back expansion plans.

Quicker profitability

Then, late last November, Foxtrot and Dom’s announced they were combining in an all-stock merger. Financial details were not disclosed, but the companies said at the time that it was a merger of equals. The thought, Owen said, was that a combined company would reduce corporate overhead redundancies, saving money and allowing it to reach profitability quicker.

“We had a plan and model for how we were going to get the combined business to profitability in under 12 months,” Owen said. “It just required a certain amount of capital to get there.”

The new company took the name Outfox Hospitality. Leadership determined it needed $40 million in order to keep it going, Owen said. It raised $25 million that was closed

chat with Pritzker. “How do we position Illinois to be the place where the next 75 years of chips get built?”

Xlight, a Silicon Valley-based startup, is using Fermilab’s particle accelerator in suburban Batavia to develop a new type of light source to tackle the shrinking dimensions of semiconductors.

Many in the technology industry believe a radically different approach to computing will be required, such as using the laws of quantum mechanics, for the next big leap in capabilities. Illinois has emerged as a leader in quantum computing, with major research centers at UChicago, the U of I, and the two Chicagoarea national labs, Argonne and Fermi.

“Beyond silicon means a need for new materials and technology for conventional microelectronics,” says Harley Johnson, associate dean for research at Grainger College. “You’re ultimately going to shift to new types of computing

ranged from private-equity firms to grocers and other retailers. In April, leadership thought they had struck a deal. When that fell through, the board made the call: There were no other options. On April 23, Dom’s and Foxtrot closed their combined 35 stores.

The lending market has improved, and there are now more investors looking to put their money to work, said Joel Brock, retail partner at business management consulting firm West Monroe Capital. But those investors — particularly if they’re privateequity firms — want to invest in cash-flow positive businesses.

“If you’re not funding yourself and you’re looking for outside investment, that’s a lot harder to sell,” he said.

at the time of the merger. It had a term sheet for the remaining $15 million, but that was not closed. Owen and his co-founders became Outfox board members, and Liz Williams, who was Foxtrot’s CEO, took the top role.

However, Williams stepped down in January. Owen said the move spooked investors.

“When the CEO leaves, people sit back and say, ‘What are we missing?’ ” he said. “Putting the business in flux like that impaired our ability to basically close the funding round that we had left open from when we closed the merger.”

Williams, who is now CEO of restaurant chain El Pollo Loco, declined to comment through a company representative.

Additionally, some of the Foxtrot stores were missing forecasts, meaning the company was consuming more cash than initially predicted, Owen said. Combined with the loss of the $15 million, that created problems. Outfox brought in Rob Twyman, a former Whole Foods executive who took over as CEO in March. Meanwhile, leadership began a search for other sources of capital.

There were discussions with potential buyers, Owen said. Those

— such as quantum, neuromorphic or biological-based computing — physically replacing silicon with new materials and, in a larger sense, coming up with new types of computing.”

As intriguing as the state’s pitch is, it’s still a long shot, technology veterans say.

“It would be an uphill battle, given that Illinois hasn’t had anything in the semiconductor arena in terms of companies,” says Dennis Roberson, former chief technology officer at Motorola and former chairman of the Federal Communications Commission’s Technical Advisory Council. “The argument around quantum is a good argument. But you can’t completely ignore the (chip manufacturing). It’s too tightly integrated.”

And Chicago isn’t the only place that can lay claim to a central location.

“Where Illinois has an inherent advantage is air travel, as does Dallas-Fort Worth, but you’re still not touching the industry,” says

Even harder to sell is the prospect of a business reliant on grocer y delivery. Though that model has exploded since the pandemic, it is expensive, Brock said. “For that kind of a model to be profitable, you definitely need a lot more scale.”

Outfox filed for Chapter 7 bankruptcy in Delaware federal court in mid-May. That case is ongoing.  Foxtrot’s story has not ended. Its assets were auctioned off for $2.2 million, plus a 5% stake in the successor company. That sale was conducted by JPMorgan Chase, to which Foxtrot was a debtor. New York-based Further Point Enterprises placed the winning bid. It is working with Foxtrot founder Mike LaVitola to reopen about a dozen Foxtrot shops, all in previously existing locations and most in Chicago. LaVitola, who was not involved with Outfox after the merger, declined to comment. No bids were placed on the Dom’s assets in the JPMorgan sale. The sale did not include the real estate, which Dom’s leased. Crain’s reported last month that North Carolina-based The Fresh Market is gearing up to open a new store in Dom’s space in Lincoln Park. Owen, who is not affiliated with The Fresh Market, said the grocer is hiring former Dom’s employees.

“It’s as good an outcome as we could possibly ask,” he said.

Tom Stringer, who leads BDO’s national site-selection and incentives service and focuses on the semiconductor business.

The federal government hasn’t let on exactly what it’s looking for when it comes to the NSTC, which is the centerpiece of what’s expected to be $11 billion focused on R&D and prototyping.

“Is this something that’s going to be akin to a national lab? If that’s the case, it needs to be near the industry. If it’s just an HQ, that’s just people and office space,” Stringer says. “There could be a million more variables we’re just not aware of.”

Bashir recognizes the challenges, but he’s optimistic.

“People know the research and education piece that has come out of here,” he says. “There is a sales pitch involved to make the case for why Chicago and Illinois for the NSTC. People listen. They know what has come out of here. It’s about connecting the dots and projecting a vision forward.”

In late November, Foxtrot and Dom’s announced they were combining in an all-stock merger.

| JACK GRIEVE

Co-inventor of Siri is selling a top-floor condo at Jeanne Gang’s Aqua tower

The three-bedroom condo on the 81st floor, including one of the architect’s signature curving balconies at 92 feet long, went on the market at $5.25 million I

From a south-facing balcony

92 feet long on the top floor of the famed Aqua tower, the view is “half blue and half city,” Dag Kittlaus says of the expansive vista that takes in Lake Michigan and downtown Chicago.

“That's why we call it Cloud 9,” says Kittlaus, a co-inventor of Siri, Apple's digital assistant. “It's a private oasis in the sky.”

Kittlaus and his wife, Leslie, bought the condo in 2018 in part because, as he told Crain's at the time, he's an inveterate storm chaser and weather bug, and in a shift from suburban living to urban, he wanted to live as high above the city as possible.

ment the 14-foot ceilings.

“That changes the whole complexion of the space,” he says.

They also fitted out a formerly bland storage space as a 450bottle wine cellar.

It worked. “We watch the storms roll in from the south and southwest,” Kittlaus said. Gang's innovative design of the building's exterior, with undulating sides that make it appear to have been eroded by the wind, enhance the visual experience.

Now spending most of their time in Montana, the Kittlauses are putting the Aqua condo, a three-bedroom, 3,000-squarefooter on the 81st floor of the much-admired Jeanne Gang building, on the market June 26. It's represented by Carrie McCormick of @properties Christie's International Real Estate and priced at $5.25 million.

On her Instagram page, McCormick posted a video that showcases the views and the interior finishes.

The couple made some significant changes to the condo with help from interior designer Justin Amundson. Among them were replacing the original standardheight interior doors with taller versions in walnut that comple-

The Kittlauses paid $3.75 million for the unit in 2018, according to the Cook County clerk, and Dag Kittlaus estimates they've spent “at least $1.5 million” on improvements. If so, the asking price is roughly the same as their total investment in the home.

In 2007, Dag Kittlaus, a former Motorola engineer, and partners Adam Cheyer and Tom Gruber launched Siri at the Stanford Research Institute's International Artificial Intelligence Center in Menlo Park, Calif.

In 2010, Apple bought Siri for a reported $200 million, and Kittlaus stayed with the firm until 2011.

He then moved back to the Chicago area and, with the same partners, designed another digital assistant, Viv, which they sold to Samsung in 2016 for a reported $214 million.

After surviving pancreatic cancer, “the same cancer that killed my old boss, Steve Jobs,” he says, Kittlaus turned his focus to health care.

He now heads Riva Health, a digital cardiology platform “where you use your smartphone to monitor and manage the No. 1 health issue in the world, high blood pressure,” Kittlaus says.

The Kittlaus condo splits the 81st floor with another, a duplex down to the 80th floor that hit the market at $6 million in 2015 and eventually went off the market unsold. That condo was used as the filming location for a pivotal plot point in the Netflix series “Ozark.”

By Dennis Rodkin