Crain's Chicago Business, August 5, 2024

MEGADEVELOPMENTS

The South Works and United Center projects could set the stage for more action in investment-starved neighborhoods I By

For years, Chicago planning o cials have labored to kick-start real estate development in disinvested South and West Side neighborhoods, chipping away at one publicly subsidized apartment building, one retail project, one community center at a time. Now, two massive proposals and billions of dollars in new investment stand to supercharge their e ort. e challenge is making sure they have the ripple e ect the city needs.

Along a once-gritty stretch of Lake Michigan, the

Danny Ecker

newly announced Illinois Quantum & Microelectronics Park stands to turn the long-dormant U.S. Steel South Works property into a cutting-edge 128acre campus for quantum computing research. Palo Alto, Calif.-based startup PsiQuantum will anchor the project with a commitment to invest $1 billion into it and bring scores of jobs to the area as it vies to build the world’s largest quantum computer in South Chicago.

See PROJECTS on Page 22

Chicago’s business community unveils new PAC

Obama and Emanuel administration veterans are teaming up to fund candidates, advocate for policies favored by local civic and biz industries

By Justin Laurence

When Mayor Brandon Johnson rode a wave of progressive support into City Hall last year he brought along enough City Council allies to quickly rack up legislative victories favoring workers that were opposed by the business community.

Now, with over two years be-

fore the next municipal election, a group of veteran politicos with ties to former Mayor Rahm Emanuel and Chicago’s civic institutions are launching a political action committee and a liated nonpro t advocacy group they hope will give them a head start on fundraising to advance the policy goals of Chicago’s business community.

e political action committee, dubbed One Future Illinois, could play a role as soon as this fall when Chicago begins voting for a newly elected school board. Between elections, the group plans to have the resources to push the city and state to focus on its policy priorities, including

See PAC on Page 22

The economy’s in great shape?

Don’t tell city renters. PAGE 2

ENTERTAINMENT

How Lollapalooza picked Chicago, thanks to a mundane park district budget meeting. PAGE 3

BLOOMBERG

A rendering of the Illinois Quantum & Microelectronics Park, a 128-acre campus planned for the long-dormant South Works property along Lake Michigan.

An aerial rendering of the 1901 Project

The economy’s in great shape? Don’t tell Chicago renters.

Higher inflation erodes purchasing power, but the inflation surprise of the past few years created more winners than losers. So perhaps it should come as no surprise that the U.S. economy has been able to withstand higher-forlonger interest rates and that most Americans are better off today than they were before the pandemic.

demic and the decline in the real value of their interest payments.

On the other hand, renters didn’t fare so well. Since May 2021, wages rose 3.7% but rents increased 24% in the Chicago area.

Nearly everyone who wants a job is working and the share of prime working-age Americans with a job is at the highest level since May 2001. Besides a brief period in 2022, inflation-adjusted disposable income and wealth have been on the rise.

But not everyone was a big winner.

Homeowners and landlords — especially those who were highly leveraged — benefited from the astronomical rise in home values during the pan -

DAN MCGRATH

And if you had invested roughly $50,000 in the S&P 500, your investment would be worth roughly $64,000 in today’s dollars. Conversely, had you chosen to use the same $50,000 on a down payment for a typical Chicago metro area home, you might have foregone the additional $14,000 but your monthly mortgage payment would have remained flat at $907, and the value of your home would have increased a whopping $51,000.

Choosing to buy in 2021 was by far the better deal. The average 30-year fixed-rate mortgage bottomed at roughly 2.6% in January 2021. If you already owned your home or bought in 2021, you would have secured a low 30-year fixed mortgage payment while witnessing the value of your house soar into the record books. According to Zillow data,

THE BUSINESS OF SPORTS

the typical home value in the Chicago metropolitan area was roughly $321,000 last month, up from $270,000 in May 2021 — a 19% increase in just three years, which is more than three times the average pace of appreciation for any three-year period before the pandemic.

At the same time, higher inflation reduces the real value of interest payments to lenders, making borrowers better off as the real cost of their repayments decreases.

Sadly, those who delayed homeownership, who couldn’t secure a down payment, had little or no credit history or were simply outbid during the pandemic housing boom, they got left behind.

Renters tend to be younger and more likely minorities. Less than half of Black households or Hispanic households own their home compared to 74% of white non-Hispanic households, partly because non-white mortgage applicants have historically been more likely to be denied a mortgage.

Data from the Home Mortgage Disclosure Act shows almost 1 in 7

Black mortgage applicants and roughly 1 in 10 Hispanic applicants were denied a mortgage, compared to just 5% of nonHispanic whites. Compared to whites, the top reason for higher denials was a lack of a credit history, not the lack of employment or even insufficient cash.

As mortgage rates rise, a higher down payment is needed to keep your monthly payments affordable. But while the size of the down payment has grown into a huge hurdle in the past two years, uneven access to credit remains among the largest contributing factors to persisting racial wealth and income gaps.

Minorities are more likely to be denied credit, pay higher rates, be charged higher fees and face longer turnaround times compared to similar non-minority borrowers. But access to credit improves economic mobility and reduces income inequality.

In 2022, nearly half — 45% — of all Chicago renter households were cost burdened, meaning they were paying more than 30% of their income on

Who’s to blame for our waning interest in the

“You’re on vacation,” I’m reminded, “and you’re supposed to relax,” but severely limited access to Olympics coverage has me jumpy.

I’m a follower, and have been at least since Rafer Johnson was declared the world’s greatest athlete for winning the decathlon at Rome in 1960. But even without my eyeballs for a week, the ratings will tell an interesting story. The Games always make for fabulous late-summer television, but it’s worth wondering whether people have inadvertently lost interest.

The Olympics, see, and the sports that constitute them have been collateral damage in the decline of American newspapers. Even the glamour sports — track and field, gymnastics, swimming — are nearly impossible to follow in non-Olympic years because mainstream coverage has all but evaporated.

The world’s fastest human?

With Usain Bolt aging out of the 100-meter picture, you’d be quicker to identify the Bears’

backup left tackle. Katie Ledecky’s fame endures, as much because of longevity as her phenomenal swimming ability.

The Chicago Tribune, if memory serves, sent eight writers, an editor, two photographers and a photo editor to Sydney in 2000, nearly as many to Athens in 2004 and Beijing in 2008. Money well spent, in my estimation. The material they produced was a perfect complement to the TV coverage, and in many cases exceeded it.

Tommy Lasorda could be a phony and a blowhard, but when the Hall of Fame manager described leading a discountbin U.S. team to a gold medal over fearsome Cuba at Sydney in 2000 as his greatest baseball accomplishment, you had to believe him.

Basketball, of course, is doing just fine because it’s “our” game, and because of David Stern’s decision to involve the NBA and WNBA in globalized hoops to an extent no one could have foreseen. It will never touch soccer as the world’s game, but fans have come to love basketball the world over, and some countries have developed enough NBA-caliber talent to challenge U.S. supremacy.

But the other sports could be

headed the way of horse racing, the Games a quadrennial equivalent of racing’s Triple Crown. A lot of history would go with them. There might be more vivid and enduring symbols of the civil rights movement than Tommie Smith and John Carlos’

medal-stand protest at Mexico City in 1968, but not many.

The legend of Muhammad Ali began as Cassius Clay at Rome in 1960, and from Montreal 16 years later came Sugar Ray Leonard and the Spinks brothers.

Would gymnastics have become the thing it is if Olga

“Their

rent. Since then, Chicago rents continued to increase at a shocking pace. Last month, single-family rents were up 7% and apartment rents were up nearly 5% compared to a year ago. Meanwhile, this year’s growth in average hourly earnings in Chicago was anemic, even slightly negative.

But even if the typical Chicago household could come up with the $96,000 down payment they would need to keep monthly housing costs affordable, they would be entering a housing market where homes that sell go pending in just seven days, and inventory is 53% lower than it was before the pandemic. A lack of housing supply means potential buyers have very little bargaining power and the Chicago area remains a strong seller’s market.

The struggle continues for renters. At the very least, their rent payments should count toward building credit. Renters who pay on Zillow can have their on-time payments reported to a major credit bureau at no cost to them. That’s a step in the right direction.

Olympics?

Korbut and then Nadia Com ă neci hadn’t dazzled us with their artistic defiance of the laws of gravity? Simone Biles is their rightful heiress.   With apparel contracts, shoe deals, appearance fees and

Jason Bone VP of Sales, Bone Roofing Supply,

ON

See MCGRATH on Page 14

What businesses can learn from the CrowdStrike failure

A tool used to protect computer networks turned out to be the Achilles’ heel for many

By John Pletz

Ed Kipp thought he was playing it safe.

e chief information o cer for SDI Presence, a Chicago-based technology outsourcing provider to government and private businesses, didn’t want to be too dependent on one technology company.

when the threat is the actual tool used for protection,” says Ron Guerrier, a veteran technology executive who was chief information o cer for the state of Illinois and HP, and now is chief technology o cer for Save the Children U.S.

“Imagine your bodyguard turns around and slaps you, unexpectedly causing dizziness and fainting. You’ll recover, but that unexpected and least likely threat will now always make you cautious.”

How Lollapalooza picked Chicago

When it came to security software to detect threats and protect devices connected to his network, he used CrowdStrike on his servers and computers running Windows. “We don’t protect Microsoft with Microsoft,” he says. “We went with CrowdStrike because it had a reputation for being the best in the industry.”

One of the hottest events in music had gone quiet, and the speakers might have never turned back on if not for a mundane budget meeting of the Chicago Park District. From 1998 to 2003, Lollapalooza was all but dead. What started in 1991 as a wildly popular multicity summer tour for alternative rock had lost its mojo. e festival had tried to go mainstream, but that cost it its cool factor. Ticket sales faltered and Lollapalooza stopped being held.

See LOLLA on Page 23

Grieve

The music fest was all but dead, and it might have stayed that way were it not for a mundane Chicago Park District budget meeting I By Jack

“Lolla is de nitely a mainstay for

Chicago at this point.”

Chance the Rapper

Until last month, when the Austin, Texas-based company pushed out an overnight update containing a bug that instantly crippled computers and servers running Windows software, resulting in what some experts say is the most widespread computer outage in history, a ecting more than 8 million machines. It caused airlines such as United to cancel more than twice the number of ights as usual. Hospitals, including Rush and Ascension, also were hard hit.

e irony that a tool used to protect computer networks turned out to be the Achilles’ heel for many isn’t lost on technology executives.

“We plan for every threat vector to our ecosystem, but it is nearly impossible to mitigate

The CrowdStrike outage also is a reminder of our collective dependence on a relatively few software systems.

e CrowdStrike outage also is a reminder of our collective dependence on a relatively few software systems that, by their nature, create uncomfortably large vulnerabilities that can’t easily be xed with age-old strategies such as redundant systems.

“I’ve never seen every single Windows server go down,” Kipp says.

At 2 a.m. Friday, July 19, he pulled out his personal laptop, which didn’t have CrowdStrike, and got to work alongside his

WeatherTech owner tests private-equity buyout interest

Bolingbrook-based MacNeil Automotive makes most of its accessories, ranging from heavy-duty oor mats to cup holders, in the United States

By Sarah Kominek, Plastics News

MacNeil Automotive Products is in the early stages of reviewing interest from potential buyers, including some private-equity rms, according to a report by PE Hub.

e Bolingbrook-based company, owned by billionaire CEO David MacNeil, recently began soliciting buyout interest from PE rms via sell-side adviser JPMorgan Securities, sources familiar with the matter told PE Hub.

Representatives for MacNeil Automotive, which does business as WeatherTech, did not immediately respond to re-

quests for comment.

Two of PE Hub’s anonymous sources said MacNeil Automotive could sell at a multiple in the range of 10 to 12 times its $220 million of earnings before taxes, interest and other costs. e third source said the company generated such earnings closer to $200 million.

MacNeil Automotive makes most of its automotive accessories, ranging from heavy-duty oor mats to cup holders, in the United States. e company highlights its domestic plastics manufacturing in TV and print ads. But when David MacNeil started the business in 1989, he imported rubber oor mats made in England.

In a 2011 speech to a plastics in-

dustry group, MacNeil highlighted his devotion to American manufacturing. He showed the audience views of the factory oor in Bolingbrook.

“ is is the way factories should look in America, right here,” MacNeil said. “Lit. Clean. Air conditioned. E cient. You know, if you invest in modern machinery, and you have con dence in the American worker, you can compete anywhere, any time in this world. With anybody.”

U.S. manufacturing could make the company an appealing acquisition target, one source told PE Hub, because of the company’s large market share and strong operating margin.

David MacNeil | STEPHEN J. SERIO

Ascension selling most of its Illinois hospitals

the deal with a California-based chain would put some of Chicago’s biggest hospitals under new ownership

By Katherine Davis

Following a recent 100-person layoff and controversial outsourcing moves, Ascension Illinois is selling nine hospitals and four other care sites to Prime Healthcare, a California-based chain known for turning around struggling hospitals.

The proposed deal, which has been in the works for two years, would put some of Chicago’s biggest hospitals under new ownership and significantly downsize St. Louis-based Ascension’s footprint in Illinois as it continues to sell off hospitals in several other states, including Alabama, Michigan and New York.

Ascension, a Catholic health system with 140 hospitals across the country, currently operates 14 hospitals in Illinois, 10 of which are in the Chicago area. But with the proposed deal, Ascension’s number of Illinois hospitals would shrink to just five.

Prime, the fifth-largest for-profit health system in the U.S. with 44 hospitals and 300 outpatient locations, says it has “preserved quality health care” in 14 states for more than 600 communities and provided more than $12 billion in community benefit and charity care. In an unusual management structure, about 14 of Prime’s hospitals are operated as nonprofits under the Prime Healthcare Foundation.

The health care systems declined to disclose the purchase price to Crain’s but said Prime will pay for the hospitals in cash and not add any debt to the facilities.

The deal, which is subject to Federal Trade Commission review and has to be approved by Illinois’ Health Facilities & Services Review Board, is expected to close in the first quarter of 2025. If approved, it would be the largest deal ever completed by Prime, which provides more than 2.6 million patient visits a year across states like New York, California, Indiana and Missouri.

Ascension Illinois CEO Polly Davenport and Prime President and Chief Medical Officer Dr. Sunny Bhatia declined interview requests from Crain’s.

In a statement, Davenport said

the deal will ensure “the greater Chicago area has sustainable, quality health care access long into the future.”

“We are confident that Prime will continue its record of excellence and look forward to working in partnership through the sale close process,” she continued.

Ascension plans to offload Ascension Resurrection, Ascension Saint Mary and Saint Elizabeth hospitals in Chicago; Ascension Holy Family in Des Plaines; Ascension Mercy in Aurora; Ascension Saint Francis in Evanston; Ascension Saint Joseph in Joliet and Elgin; and Ascension Saint Mary in Kankakee. The transaction also includes selling postacute and senior living facilities currently operated by Ascension Living, including Fox Knoll Village in Aurora, Villa Franciscan Place in Joliet, Heritage Village and Heritage Lodge in Kankakee, and Resurrection Place in Park Ridge.

Ascension will continue to operate Ascension Alexian Brothers and Ascension Alexian Brothers Rehabilitation hospitals in Elk Grove, Ascension Saint Alexius and Alexian Brothers Behavioral Health hospitals in Hoffman Estates, and Ascension Saint Joseph in Chicago, as well as several other living communities.

Prime says it will “preserve the legacy and mission” of Ascension Illinois and invest $250 million into local facility upgrades, capital improvements and technology. Prime also claims it will expand services based on community needs and continue Ascension’s mission of providing charity care to uninsured and low-income patients.

“Like Ascension, Prime Healthcare has a strong tradition of ensuring health equity and social responsibility,” Bhatia said in a statement. “This transaction will enable a continuation of this tradition and expand our dedication to compassionate care, clinical excellence, and service to patients and the greater Chicago community.”

Prime, which has nearly 45,000 employees and affiliated physicians, said in a statement it plans to make offers of employment to all hospital and care facility staff, as well as “substantially all (Ascension Illinois) associates.”

Turbulence within

Ascension Illinois’ hospitals have gone through various transitions as hospital operators have merged, split and consolidated in recent years. In 2015, Ascension and AdventHealth formed a joint venture, called Amita Health. In 2018, Amita absorbed Presence

Health, boosting its total portfolio of hospitals to 19. Later in 2021, Amita, the largest health system in Chicago at the time, decided to split up, creating the Ascension Illinois that exists today.

Ascension’s decision to sell nine hospitals now comes amid a rocky period for the local network. In recent weeks, Ascension Illinois laid off 100 employees of its more than 14,000-person workforce, the organization confirmed to Crain’s. And earlier this year, it outsourced more than 110 doctors and other providers at all 10 of its Chicago-area hospitals, turning them over to a staffing firm backed by private equity. The move led to at least a third of those hospitals leaving the health system.

Hospitalists who spoke to Crain’s at the time were overwhelmingly concerned about the staffing firm’s private-equity influence and how profit-motivated owners may look to grow hospital revenues by increasing patient caseloads for clinicians, a move they argued would put patient safety at risk.

U.S. Sen. Chuck Grassley, R-Iowa, the Illinois Nurses Association and the Chicago Medical Society were among those speaking out with concerns about the outsourcing deal.

But the new agreement with

Prime could help explain why Ascension Illinois decided to outsource staff. As Crain’s previously reported, the move was intended to cut costs for the health system, and companies across industries often seek cost-cutting strategies ahead of a sale as they try to make themselves appear profitable to prospective buyers.

Financial figures for Ascension’s Illinois operations are unavailable, but across the entire health system, Ascension reported an operating loss of $237.8 million on $22.4 billion in operating revenue in the nine months ended March 31, according to its financial records.

Among the hospitals being sold is Saint Joseph Medical Center in Joliet, where Ascension has struggled with severe labor tension among unionized nurses, who went on three strikes within a year over understaffing and low pay. The Illinois Nurses Association and Ascension management recently ratified a new contract, but nurses and union representatives have told Crain’s Saint Joseph Medical Center appears to be slowly closing care units and downsizing service lines. Meanwhile, Prime has also struggled with labor tension. Roughly 1,500 hospital workers at four of its hospitals in Los Angeles went on a five-day strike last year to protest what they described as dangerous working conditions and unfair labor practices by Prime management.

As a privately held company, Prime is not required to disclose financial performance and the health system declined to provide 2023 revenue or income figures to Crain’s. However, a May Fitch Ratings report gave the health system a stable outlook and said Prime is expected to see organic revenue grow by 2% to 3% between 2024 and 2026, driven by single-digit patient volume growth.

Prime also has a history of litigation liabilities. In 2018, it agreed to pay $65 million to the U.S. Department of Justice to settle allegations that 14 Prime hospitals in California knowingly submitted false claims to Medicare.

CTA’s Red Line extension gets new financial help

By Greg Hinz

The Biden administration is giving a major financial boost to plans by the Chicago Transit Authority to extend its Red Line train service to the south city limits.

According to U.S. Rep. Mike Quigley, D-Chicago, the Federal Transit Administration has decided to speed up funding for the 5.6mile extension, providing a projected $1.973 billion over seven years rather than 10.

That means the feds will pro-

vide twice as much as was expected in the first year of construction: $746 million. That in turn will reduce local financing costs by more than $200 million, since more of the cash needed for the project will be available upfront, rather than having to be financed locally, mostly by a transit tax-increment financing tax on real estate.

The CTA hopes to begin construction next year, with the line open by 2027. The agency projects the line eventually will carry

38,000 riders a day, cutting about half out of the time it now takes to travel by bus from 130th Street north to the Red Line’s current terminus at 95th Street.

The early grant “will speed up and simplify things,” Quigley said in an interview. And “it should assure the work gets done,” even if a new president is elected in November, he added.

Quigley is in a key position to push funding as a member of the U.S. House Appropriations Committee.

A formal contract, known as a full-funding grant agreement, is expected to be signed later this year.

In a statement, the state’s two U.S. senators, Dick Durbin and Tammy Duckworth, also praised the FTA’s decision.

“This is the tangible impact of the ($1 trillion) Bipartisan Infrastructure Law and a testament to our commitment to improving transit across Illinois,” said Durbin.

Said Duckworth: “No matter their zip code, Chicagoans deserve

easier access to public transit to get to school, get to work and move more easily around the city.”

Quigley also gave some credit for the early funding decision to the CTA. Its president, Dorval Carter, has been under pressure over agency performance, with most aldermen signing a resolution urging he be replaced. Carter in turn has responded by pointing at his ability to get capital funding out of Washington, including for the Red Line extension.

Your goals are important. With Erica® , you’ve got a virtual financial assistant to help you reach them. And our team of local advisors across Chicago are here to help you along the way.

Rita Sola Cook President, Bank of

A touch of glass in a Mies building on Lake Shore Drive

A couple who spent two years rehabbing a unit in the Ludwig Mies van der Rohe-designed co-op after buying it from its longtime owners are asking $749,900 for the three-bedroom condo I By

Dennis Rodkin

Adozen years ago, when Ilene and Bruce Duhan moved from New York to Chicago to be near their grandchildren, the shift of locales also brought them closer to someone they had long admired, Ludwig Mies van der Rohe.

Both had appreciated the architect’s work for decades, since they were students in design programs at Pratt Institute in Brooklyn. So when “we saw the opportunity to live in a Mies building in Chicago,” says Bruce Duhan, a retired advertising executive, “that was special for us.”

In 2012, the Duhans bought a three-bedroom unit at 860 N. Lake Shore Drive that had been in the same family’s hands since 1951, when 860 and 880, Mies’ pioneering twin black-and-glass towers, opened.

With Chicago architect Vlad Radutny, the Duhans gutted and rebuilt the dated interior, creating a contemporary space whose glass walls, porcelain tile floors and other components echo the architect’s minimalist modern style.

It’s also Ilene Duhan’s style. “I don’t want anything out,” says Ilene, a human resources executive. A pure minimalist, she’s against lamp cords, kitchen tools left on countertops and other distractions.

Now planning to move out to the northwest suburbs to shorten the drive time when babysitting their grandchildren, the Duhans are putting their three-bedroom condo on the market Aug. 5. The asking price is $749,900 and the listing agent is Carol Collins of Jameson Sotheby’s International Realty. Valet parking is included.

A glass wall between the living room and the media room provides separation while at the same time lightening both spaces. It’s an extension of Mies’ innovative use of floor-to-ceiling windows in a residential setting.

The porcelain tile for the floors was hand-cut to precise dimensions that align with the original Miesian grid that characterizes both 860-880 and their later-built neighbors, 900 and 910.

The Duhans’ architect, Radutny, is an acclaimed designer who used to live in the Mies buildings. He told Crain’s he has designed about a dozen rehabs in them, including this one and another in the same building.

The dining room faces west into the neighborhood, with city lights filling the view at dinnertime.

Mies’ design, bold for the era in breaking away from historical precedents in architecture, “was ahead of its time,” Bruce Duhan says, “but the electrical system wasn’t.”   Because the home had been in one family’s hands for six decades, electrical and other infrastructure hadn’t been updated. The electrical system wouldn’t allow a microwave oven or a dishwasher, for example.

The Duhans undertook a twoyear rehab, for most of which they

remained in New York. “We did everything,” Ilene Duhan says. “There’s nothing original inside.”

The kitchen, nearly all white and with no pulls or handles visible, reflects Ilene Duhan’s minimalist style. There’s nothing out on the countertops, and “that’s not staging for photos,” she says.

“That’s the way we live.”

Radutny’s design gives the simple style depth, with long, slim reveals between drawers and beneath countertops. Before the rehab, the kitchen had alternating red and white tiles in a sort of bistro style, the archived 2012 listing shows. One of

later to the Duhans for $250,000.

The large, open living room receives abundant natural light from Mies’ tall windows on two sides, south and west. But that can change at the push of a button.

Remote-controlled blinds roll down to cover the windows in a cool silver gray that matches the floor. Radutny used concealed fixtures around the top perimeter to wash them with light.

Closing the blinds gives the space the mood of an art gallery, the Duhans say, something that suits their entertaining style. But the blinds also do a job when closed. They’re heavily insulated, which mitigates the heat loss through the windows, Bruce Duhan says.

In the primary bedroom, another design flourish also serves double duty. The bed, cantilevered to look like it’s floating, is surrounded by a wall of wood panels. They warm the space visually, but they also conceal clothing storage. Designing in the middle of the 20th century, Mies didn’t include closets with the capacity we need today, “and I have a lot of clothes,” Ilene Duhan says. “We needed more room” to keep her wardrobe in, and Radutny delivered.

In a bathroom, one shower wall is tiled with crushed marble — that’s the one on the left — and the other with a smaller cut of the gray porcelain tile used for flooring throughout the unit.

The small angled shelf is a compromise Radutny devised to satisfy Ilene Duhan’s minimalism. She wouldn’t have niches where shampoo bottles or soap would linger, but there’s always a need to have something within reach when showering. This was the solution.

“We’re both interested in how light is used,” Bruce Duhan says. In this image, light is used in several ways. There’s a strip of it built into the door frame, and a blue stripe of it on the left. The color of the stripe, which he fabricated, can be changed with a remote.

Light is also passing through the glass walls of a bedroom.

The view out the south windows encompasses the water near Ohio Street Beach, also known as the Playpen, and Navy Pier. Being able to see the water “is what clinched it for us,” Bruce Duhan says. “In New York, you wouldn’t get a view at this price, but in Chicago we did.”

Navy Pier’s twice-weekly fireworks have played an important role in the grandparenting the couple moved from New York to take part in. It’s always pretty, but one time in particular they made it magical.

the bathrooms had the same.

The Duhans use the third bedroom as a music room.

The unit had previously been owned since 1951 by the Pucci family, well known clothiers on Michigan Avenue for decades. Lawrence Pucci died in 2009, and his estate sold the unit a few years

The Duhans’ young grandson had spent the day with them going to downtown museums, and around bedtime, they took him into the bedroom, where the blinds covered the windows. On cue at the start of the fireworks, they opened the blinds, thrilling the grandson, who excitedly asked how they did it.

Galena, developer ask judge to reverse decision blocking resort

While the issue before the court gets into fine-point details of laws governing public meetings procedures, a larger question hangs over it

By Dennis Rodkin

The city of Galena and a developer who proposed an 80-acre resort of short-term rentals and a vineyard are hoping that next month a judge will agree to take a second look at his January decision shutting down the controversial project.

While the issue before the court gets into fine-point details of the laws governing public meetings procedures, a larger question hangs over it. That is whether the judge will reopen plans for the biggest development Galena has seen in decades, one whose design intentionally breaks with the town’s more conventional hospitality offerings.

John Hay, an associate judge for Jo Daviess County in the 15th Judicial Circuit of Illinois, is expected to rule by Aug. 12 on motions by Galena and the developer, True North Quality Homes, asking him to reconsider his January ruling blocking the project.

A little less than a mile southeast of the historic main street of the northwest Illinois city, True North Quality Homes wants to build the Parker. The development would include 120 cottages,

a below-ground social space built in a historical stone-lined water tank with a new glass dome on top, and three luxury suites in a fully restored hospital built in 1859 but vacant for an unknown number of years. True North’s Wheaton-based principal, Dave Hooten, has previously described it to Crain’s as being inspired by resorts like Montage Healsdburg in Northern California’s Sonoma County wine country.

Galena, about 160 miles northwest of Chicago, is a popular tourist destination for Chicagoans. The Parker would likely attract much of its business from the city and suburbs.

Local opposition

Some nearby residents have opposed the Parker based largely on concerns about traffic and density coming to a parcel that’s now mostly open land. Wendy Clark, the owner of a property next to the site, sued to stop it.

In January, Hay ruled Galena officials used a flawed process to approve the development. Thus, all zoning changes Galena approved in 2022 to allow the project “are void,” Hay wrote in his decision.

The Morton Arboretum thanks the corporate partners who help us

In separate motions to reconsider, True North and Galena asked the court to take another look at the complicated notion of cross-examination of witnesses, a right Clark’s attorneys said Galena’s zoning board denied her during its meetings on the project.

The motions to reconsider argue Clark had the right to crossexamine but that zoning officials “weren’t required to invite her to do it, to say here is your time to cross-examine,” said David Hyde, the Chicago-based zoning attorney representing True North.

“The court focused on whether (Galena officials) explicitly invited her,” Hyde said, “but the plaintiff and others got hours and hours to comment” in public meetings on the project.

Crain’s could not reach Clark for comment, and her attorney, Darron Burke of the Rockford firm Barrick Switzer Long Balsley & Van Evera, was not available for comment.

The group Park the Parker, which opposes the development, says on its website that the motions to reconsider are part of “a common theme” in the two-year approval process for the project.

“A lot of people suggested they

slow down the process and take more time to examine the proposal and its consequences, both intended and unintended,” a letter on the website says. “But the city didn’t — because they said they didn’t have to.”

The Park the Parker website includes no names or contact information other than an email address. Crain’s emails to that address have received no replies.

Hooten, the Parker’s developer, said the legal tussle has delayed the project schedule by about a year. Half the vineyard had already been planted and is starting to produce grapes, he said.

The rest of the planting has been postponed until the legal outcome is known, Hooten said, but “we’re very committed to this project going forward.”

Renderings of the winery and vineyard proposed for the Parker (above) and what a cottage at the site would look like (below). | BARANsKI HAMMER MOREttA & sHEEHY ARCHItECts

Budget challenge will show whether Johnson has the stomach to say no

With pandemic-era federal funding to local governments running out — and soon — Chicago Mayor Brandon Johnson is about to face the toughest test of his administration so far.

The mayor disclosed Aug. 1 that he is racing to meet an end-of-the-year deadline to allocate $1.88 billion in pandemic relief funding under the American Rescue Plan Act, or ARPA. Anything not spent by 2026 disappears. That's not so much where the tension lies, however: After all, there's nothing most politicians enjoy more than spending a big slug of cash.

No, the problem is the way Johnson is spending it — and the worry that such spending won't be sustainable once the federal spigot dries up.

Johnson has obligated 90% of Chicago's slice of federal stimulus money so far, according to his administration's Aug. 1 disclosure. After a slow ramp-up, 83% of that money is now spent. Much of it has been dedicated to "community initiatives" such as the guaranteed minimum income program — which gives $500 in monthly cash to some low-income households — as well as money to boost youth employment programs, and support for artists and cultural organizations.

Programs like these have been and will no doubt continue to be popular in many neighborhoods around Chicago. The concern is whether Johnson and his progres-

PERSONAL VIEW

sive allies will have the stomach to cut such programs when the federal money dries up or will instead look to raise taxes on an already overburdened populace in order to keep these programs going.

“We could have adjusted this so all of this money would have been deemed revenue replacement instead of trying to allocate it to programs. We could have used this money in a way that would have offset costs. In the last round of funding for the migrant

crisis — the last $70 million — we could have and should have used ARPA money. . . .We passed on the ability to do that, which was foolish,” as Ald. Bill Conway, 34th, put it to the Chicago Sun-Times, noting that Johnson used $95 million in ARPA funds for the migrant crisis response in 2023. “Chicago faces a financial reckoning and everything we can do to try and make that less painful — we should do that,” Conway added.

The temptation to use one-time federal

money to cover long-term operational costs has also come into play in the debate over financing Chicago Public Schools. In the run-up to the Chicago Board of Education's July 25 passage of a controversial $9.9 billion budget that administrators acknowledged is incomplete at best, the mayor repeated the mantra in Springfield and elsewhere that the state owes Chicago schools $1.1 billion — an assertion thoroughly debunked by Capitol Fax columnist Rich Miller and other observers.

As Miller pointed out in a July 19 column, CPS made the huge mistake of putting a ton of temporary federal pandemic aid into its permanent spending base for years. When Miller queried Gov. J.B. Pritzker about Johnson's $1.1 billion mantra, the governor responded: "I don't think that that's the job of Springfield, to rescue the school districts that might have been irresponsible with the one-time money they received. . . .One-time money shouldn't be spent for ongoing operations."

Amen to that. But with the mayor's allies in the Chicago Teachers Union prepping their list of demands for the next round of contract negotiations — not to mention the fiscal reckoning that's coming as the city's share of federal ARPA money dwindles to a trickle, we are about to learn whether Johnson has the willpower to say no to the people who got him to the Fifth Floor to begin with. The honeymoon, as they say, is most definitely over.

Growing the Quantum Prairie will take water-smart strategy

Illinois’ quest to lead the nation and the world in quantum computing got a big boost last month, with the announcement of PsiQuantum’s multibillion-dollar anchor investment in Chicago’s South Side Microelectronics Campus and ambition to build the world’s first utility-scale quantum computer. Others will follow.

Perched at the edge of the Great Lakes, we are a strategic center for our nation’s quantum and semiconductor ambitions because these technologies make heavy demands on water and energy. Our access to 20% of the world’s fresh surface water makes Chicago an enticing and resilient choice to locate the companies that will power the next industrial revolution.

Alaina

Harkness is CEO of Current, a nonprofit water innovation hub in Chicago, and CEO and principal investigator of Great Lakes ReNEW, a National Science Foundationsupported Great Lakes Water Innovation Engine.

But if we are not intentional about using this moment to drive a sea change in the ways we use our water, we risk depleting the oasis that sustains our industry and our communi-

ties. The status quo reuses too little and wastes too much. Now is the time to elevate the industry leaders who are stewarding our water wisely and well, and to deepen our resolve to use our growing dominance in quantum computing to drive breakthroughs in resource management.

A new wave of massive industrial investment in the Great Lakes is already underway. At $20 billion and spanning nearly 1,000 acres, Intel’s new Ohio One campus is the largest single private-sector investment in Ohio history. And in May, Microsoft announced a $3.3 billion investment to build an AI-powered data hub in southeast Wisconsin.  Here in the Great Lakes, our water abundance and relatively low cost of access has led us to use fresh water for cooling and other industrial purposes. But growing water scarcity elsewhere will eventually increase

demand and cost. To safeguard this resource for generations to come, we must develop strategies and standards now to waste less and reuse more.

We have the leadership and the knowhow right here. Our region was awarded funding from the National Science Foundation’s Regional Innovation Engines program because of the strategic significance of the Great Lakes to our nation’s competitive industrial ambitions. Current and our nearly 60 coalition partners in Great Lakes ReNEW bring expertise, from research on sewage thermal energy use to selective separation, sensing and process technologies that will enable water reuse and resource recovery. Current’s Industry Consortium is anchored by corporate leaders with strong commitments to innovation and sustainability, and will be a driver of ever better practices.

Our region’s climate and quantum centers of excellence have significant complementarities that strengthen our competitive advantage. Quantum computing will accelerate solutions to many of our biggest societal and planetary

challenges, including breakthroughs in the ways we manage water, energy, and other resources, by speeding discovery of new materials and chemicals.  There are strong synergies in education workforce development, too, with quantum and water technologies both depending on strong STEM fundamentals and a combination of industrial, manufacturing, engineering, and basic science skills.

Chicago and Illinois’ freshwater access has always been a strategic advantage. It anchored the diversified industrial economy of our past, and it will be key to the industrial economy of our future. We must work with these new industries to drive the leading edge of sustainable water use and inclusive growth, if we want to deliver on the promise to our communities and residents and preserve the strategic value of our most precious natural resource for generations to come.

The PsiQuantum investment is a firstof-its-kind milestone, but it won’t be the last time a transformational company looks to Chicago for our water and climate resilience. Let’s get it right, right now — and be ready for more.

Here’s why Chicago’s art scene is

Arguably, one of the most famous (and beloved) portrayals of a profound experience of art takes place not in Europe, New York or even Los Angeles, but in Chicago. “Ferris Bueller’s Day Off” was released in 1986: A jersey-clad teenager stands, struck, before Georges Seurat’s “A Sunday Afternoon on the Island of La Grande Jatte” at the Art Institute of Chicago.

Joe Stanfield is director and a senior specialist in fine art for the Rago-Wright network of independent auction houses.

In the nearly four decades since this scene, Chicago has steadily continued its trajectory as a premier art hub, defined by the growing presence of high-profile artists, past and present; prestigious exhibitions and events; growing monetary interest; and robust community support. The mosaic of influences weaving through Chicago’s past has greatly contributed to its present place in the art limelight.

Prestigious art auctions and events

Headlines like “The Chicago Gallery Scene Is Often Overlooked — It Shouldn’t Be” and “Inside Chicago’s booming art scene” are evidence of how the art media’s watchful eye has recently turned toward Chicago. The city’s stalwart institutions have done much to attract talent and build the foundations for today’s vibrant contemporary art milieu.

Dubbed a success by many, Expo Chicago’s 11th year was its first under the umbrella of Frieze, a partnership itself testifying to expanding art status. Boasting 170 galleries from 29 countries, Expo drew more than 35,000 visitors and exhibitors reported strong sales. Notably, Expo Chicago emerged from Art Chicago, which was founded in 1980 and was among the first international art fairs to follow Art Basel, and the first such fair in North America. Art Chicago and Expo were influential early trendsetters.

Art leading to economic development

Beyond Expo, the cultural sector is significant to Chicago’s larger financial picture. The latest data gathered by Arts Alliance Illinois with Arts & Economic Prosperity 5 estimated that in 2015, Chicago arts and culture generated $3.2 billion in revenue, contributed $336.5 million to local and state government revenue and created 85,000 jobs. Compare this to the findings in the 2010 Arts & Economic Prosperity 4 report: $2.2 billion in economic activity, $213.9 million in government revenue and 60,500 jobs. Registering the need for more textured arts data, Chicago’s Artists’ Cooperative Residency & Exhibitions initiated the Chicago Arts Census in 2021. Reflecting the growing dollar power of the arts statewide, Arts Alliance

Illinois noted that the state’s fiscal 2025 budget increases the Illinois Arts Council budget 53.5% and its grant-making capacity 75%.

Growing presence of high-profile artists

High-profile artists appear to increasingly choose Chicago: In 2018, Wrightwood 659 hosted Ai Weiwei’s “Trace,” a monumental installation in which the artist represented individuals aligned with political activism using Legos. That same year, Chicago received its

first Yayoi Kusama Infinity Room. The market also shows new interest in non-living artists whose careers were nurtured in Chicago. These include Gertrude Abercrombie, Richard Hunt and Miyoko Ito, all of whom studied at the Art Institute. In 2018, the Elmhurst Art Museum presented “Gertrude Abercrombie: Portrait of the artist as a landscape.” Most of these works were then shown at New York’s Karma, introducing the then-littleknown Abercrombie to the world.

In the 2020s, Abercrombie paint-

ings have consistently realized auction sales in the six figures, and nine of the top 10 world auction results are held by Chicago-based auction houses. The consignors of these works are not uniformly tied to Chicago, meaning collectors in New York and Los Angeles are turning to the Second City to achieve maximum profit.

The future of art and Chicago

Amid a burgeoning Chicago moment, it feels critical to recognize how our city’s steady support

of artists has laid the groundwork for growing cultural momentum. Such momentum offers exciting prospects for sustained economic growth through continued investments in cultural infrastructure, and corresponding benefits for hospitality and tourism. As a new generation of artists, gallerists and collectors discover what the city has to offer, and the ways that it beneficially differs from New York or L.A., one thing stays the same: Art and artists can not only survive in Chicago, but thrive over time.

LARGEST FOUNDATIONS IN THE CHICAGO AREA CRAIN’S

1

2

S. Dearborn St.,Suite 1200,Chicago60603; MacFound.org

4

30 S. Wells St.,Chicago60606;JUF.org

R. MCCORMICK FOUNDATION

N. Michigan Ave.,Suite 4300,Chicago60601; McCormickFoundation.org

5 ROTARY INTERNATIONAL 1560 Sherman Ave.,Evanston60201;Rotary.org

N. Clark St.,Suite 1500,Chicago60654; JoyceFdn.org

e. Crain'sestimate. 1. Foundation'slargestdiscretionarygrant. 2. WHOandUNICEFarethetwolargestbeneficiariesfromthisprogram. 3. JulieMoritawillserveaspresidentandCEOstartingOct.1. 4. Eachbeneficiaryreceivedthegrantamount. 5. ThefoundationdeclinedCrain'srequestsforinformation. 6. In2023,TheBrinsonFoundationgrewduetoaone-timelegacygiftastheresultofamatured estateplanningvehicle.Lastyear,$100millionwasgiftedtotheCaliforniaInstituteofTechnologytoestablishtheBrinsonExplorationHub.Thebalanceofthematuredunitrustflowedtothefoundation, resulting in assets increasing from $126 million to $223 million.

new era. new solutions.

THE DANIEL BURNHAM FELLOWSHIP IS LEADERSHIP GREATER CHICAGO’S PREMIER CIVIC LEADERSHIP

ACCELERATOR DESIGNED TO IMPACT CHICAGO’S WORKFORCE AND CREATE ECONOMIC STRENGTH. WE PROUDLY PRESENT THE 2024 COHORT OF THE DANIEL BURNHAM FELLOWSHIP FOR EXECUTIVES: ERIN AMICO President and CEO, PEGGY NOTEBAERT NATURE MUSEUM OF THE CHICAGO ACADEMY OF SCIENCES | KAYCE ATAIYERO Chief External Affairs Officer, THE JOYCE FOUNDATION | NANCY L. BERARDINELLI-KRANTZ Senior Vice President and Chief Legal Officer, W.W. GRAINGER, INC. | HARDIK BHATT CEO, SDI PRESENCE, LLC | SUSAN V. BOOTH Artistic Director, GOODMAN THEATRE | GARRY COOPER, JR., PhD CEO & Co-Founder, RHEAPLY | ROBERTO CURCI, PhD Vice Provost and Dean, DOMINICAN UNIVERSITY’S BRENNAN SCHOOL OF BUSINESS | KRISTA CURELL, E sq , BSN, RN Executive Vice President, Health System, Chief Operating Officer, UNIVERSITY OF CHICAGO HEALTH SYSTEM | NOSA EHIMWENMAN President and CEO, BOWA CONSTRUCTION | JESSICA GARASCIA Senior Vice President, General Counsel and Chief Administrative Officer, AAR CORP | SYLVIA I. GARCIA Chief Operating Officer, THE CHICAGO COMMUNITY TRUST | VERONICA HERRERO Executive Vice Chancellor, Chief of Staff and Chief Institutional Advancement Officer, CITY COLLEGES OF CHICAGO; President, CITY COLLEGES OF CHICAGO FOUNDATION | ERIN INMAN, P.E. President & CEO, PRIMERA ENGINEERS LTD. | ARIELLE JOHNSON, MPA CEO, BUSINESS LEADERSHIP COUNCIL | TIFFANY HAMEL JOHNSON President and CEO, CHICAGO UNITED | LUCY C. KIM Chief Advancement Officer, CHICAGO PUBLIC MEDIA | JILL KOSKI, President and CEO, THE MORTON ARBORETUM | JOSHUA S. LEVIN Senior Vice President, Chief Financial Officer and Treasurer, C omEd | KENYA K. MERRITT Deputy Mayor of Business, Economic and Neighborhood Development, CITY OF CHICAGO | SANDEEP NAIN President & CEO SNtial TECHNOLOGIES, INC. | RAHUL NALGIRKAR CFO of BMO US and Group CFO of BMO North American Commercial Banking, BMO FINANCIAL GROUP | LINDA NOLAN Group Managing Director, NORTHERN TRUST | STEPHANIE PICCIRILLI President and CEO, IGNITE | MARK C. REED , E d D, MBA President, LOYOLA UNIVERSITY CHICAGO | MARIANA SOUTO-MANNING, PhD President, ERIKSON INSTITUTE | CAROLE C. WOOD, CFRE President and CEO, NORTHWESTERN UNIVERSITY SETTLEMENT HOUSE we are leaders transforming the chicago region

LARGEST FOUNDATIONS IN THE CHICAGO AREA

200 W. Madison St.,Chicago60606; WeAreMichaelReese.org

Jorie Blvd.,Suite 301,Oak Brook60523;

3000 Woodcreek Drive,Suite 310,Downers Grove 60515;DuPageFoundation.org

430,Chicago60631;

111 W. Downer Place,Suite 312,Aurora60506; CFFRV.org

2024. 2. Each beneficiary received the grant amount.

Executives in the Chicagoland area raised almost $500,000 for The Leukemia & Lymphoma Society (LLS) through the Executive and Emerging Leaders Challenges in 2023. The leaders below each

to the Illinois Region Winner:

• Je rey Stern – Houlihan Lokey

• Jen Wahl – Sun Life

• Eric Seip – Ingredion

• Patrick Shields – JLL

• Rachel Howard – Bristol Myers Squibb

• Jason Ruger – Motorola

• Monica Mulvihill – Marex North America

• Patrick Fitzgerald – Burke Beverage

• Michelle Samaniego – Walgreens

• Kevin Hughes – JLL

• Judy Teske – Bristol Myers Squibb

• Robert Mead – Big Red Rooster Flow

• Ross Lissuzzo – CIBC US

• Kristen Hill – Motorola Solutions

• Brad Weddell – Sevan Multi-Site Solutions

• Jim Adler – NAI Hi man

Marilyn Nolte – Walgreens

$71,950 Raised

• Brian Korda – Walgreens

• Benjamin Settler – Aon PLC

• Noelle DeLuca – Goldman Sachs Group

• Rebecca Bean – Karyopharm Therapeutics

• Shaun Guild – Mace Group

• Sam Langley – Marmon Group

• Charlotte Yungblut – Walgreens

• Antonio Romero – Walgreens

• Samantha Heckert – Morguard

• Tim Riordan – Zink Foodservice

• Matthew Mangold – Walgreens

• Bill Sieczkowski, Jr. – R. Carlson & Sons, Inc

• Samantha Braun – Morguard

• Rhonte Davis

Byron Trott gives top colleges $150M for rural recruitment

By Janet Lorin, Bloomberg

Byron Trott, who grew up in a small Missouri town and became one of the world’s top bankers, will spend $150 million over 10 years to help more private colleges and public universities recruit rural students.

e new donation builds on a $20 million initiative his family foundation started last year with schools such as Yale, Ohio State and the University of Chicago, his alma mater. e “Stars” program will now double the number of schools to 32, including Stanford, Amherst College and the Georgia Institute of Technology.

Trott Family Philanthropies will also boost funding to help prepare high school students for college.

e latest gift from Trott Family Philanthropies will also add more support for high school students to learn about college options,nancial aid and potential career paths, in part through an organization called the Rooted Alliance.

Trott, 65, the son of a telephoneline repairman and dress-shop owner, started Chicago-based BDT in 2009 and went on to merge it with Michael Dell’s MSD Partners early last year. Previously, Trott had spent almost three decades at Goldman Sachs Group Inc., where he worked with clients including Warren Bu ett and the Pritzker, Walton and Koch families.

• Vincent DeSantis

“Stars and its a liated programs are opening doors in higher education for high-achieving rural students they might not have found otherwise,” Trott, the billionaire chairman and co-chief executive o cer of merchant bank BDT & MSD Partners, said in a statement. “And the students, campuses and our economy will all be the better for it.”

Rural students lag behind the rest of the country in college attendance, and Trott is working to bridge that gap. His pitch is nding an increasingly receptive audience as selective private schools seek to expand geographic and socioeconomic diversity, especially after last year’s Supreme Court ruling that race can’t be used in admissions.

His initiative to boost rural students started at the University of Chicago, where he worked with Vice President for Enrollment Jim Nondorf and o ered funding to attract more kids from small towns. Rural students make up about 10% of this year’s freshman class of about 1,700, Nondorf said. Trott’s funding for Stars, which is formally known as the Small Town and Rural Students College Network, goes directly to the schools and helps admissions o ces hire dedicated sta ers to focus on rural recruiting. In the program’s rst year, college representatives toured parts of the country jointly and as individuals, visiting 1,100 high schools in 49 states.

“ at’s exponential beyond what any of us could have done on our own,” said Marjie Betley, Chicago’s deputy director of admissions and executive director of Stars.

Legislators keep up pressure on pharmaceutical middlemen

Federal and state scrutiny is ramping up as industry revenues soar

findings in an ongoing antitrust probe of PBMs.

State legislators resumed a series of hearings last month to scrutinize pharmacy benefit managers — a highly concentrated industry that critics say drives up the cost and limits availability of prescription drugs.

PBMs, which have also faced scrutiny from the federal government, act as third-party “middlemen” who negotiate which drugs health insurance companies and pharmacies can purchase. By creating formularies, or catalogs of the specific drugs a given employer insurance plan must cover, PBMs can ultimately dictate what drugs are available to patients and pharmacies alike.

In Illinois, Rep. Natalie Manley, D-Joliet, who chairs the House Health Care Availability and Access Committee, said she hoped the hearings presented a chance for the legislature to learn more from PBM executives — though only lobbyists from the trade association representing major PBMs have spoken before the committee.

Two weeks before the state committee met for its most recent hearing, the Federal Trade Commission released an interim report detailing the agency’s

The report solidified what people across Illinois’ health care industry have told the committee: corporate consolidation of PBMs results in fewer pharmacies that can afford to stay open and fewer options for patients in need of medication.

It found that PBMs are a highly concentrated market, with the top six PBMs processing 94 percent of the country’s drugs dispensed by U.S. pharmacies.

A joint statement led by FTC Chair Lina Khan said increased concentration and vertical integration “have given PBMs significant power over prescription drug access and prices.”

Manley said her constituents have been affected by pharmacy closures.

“Independent pharmacies have borne the brunt of this, because people in my own town — in Joliet — have been moved to the big box or mail order,” she said. “Pharmacies that they’re used to dealing with are no longer able to compete.”

The report indicated PBMs have engaged in “delay tactics” over the past two years in failing to give the FTC the records it ordered them to provide. CNBC and the Wall Street Journal have reported that the Federal Trade

Commission is preparing to sue PBMs to obtain the documents the agency requested over two years ago as part of the antitrust probe.

Antonio Ciaccia, an advocate for restructuring prescription drug pricing, told the Illinois committee on July 23 that the best interests of PBMs relate to money, not consumer health.

“PBMs are not inherently rotten, and vertical integration is not inherently rotten,” Ciaccia said. “But it creates inherent conflicts of interest that work against the interests of the end payer.”

Chad Worz, executive director of the American Society of Consultant Pharmacists, said PBMs have used their position as middlemen to exploit pricing while selling the same drug to various buyers.

“Just like every other layer of the drug supply chain, they are in the business of making more money today than they made yesterday,” Worz said.

The FTC report found “evidence indicating that PBMs are overcharging for two case study cancer drugs (generic Gleevec and Zytiga) and reimbursing their affiliated pharmacies at significantly higher rates than unaffiliated pharmacies for these same drugs.”

It also found that the four PBMs that are part of health care conglomerates (CVS Health Corporation, The Cigna Group, UnitedHealth Group and Humana) have more than doubled their collective revenue in the past decade.

“Today, their combined revenue exceeds $1 trillion and equals 22 percent of national health expenditures,” the report found. “In 2016, the combined revenue of these four conglomerates totaled $456 billion and equaled 14 percent of national health expenditures.”

Rep. William Hauter, R-Morton, who is an anesthesiologist, told the committee the hearings have educated him about complexities within the health care industry.

“There’s so much unfairness in this market,” Hauter said. “There’s just so many inequities.”

Connor Rose, a lobbyist for the Pharmaceutical Care Management Association, a trade

association representing various PBMs, pushed back against the idea that top PBMs possess too much power over the industry.

“This is a competitive environment, there is a lid for every pot,” Rose told the committee. “If one PBM is not going to do something for an employer or a union or the state of Illinois, there’s another PBM that will fill its place.”

He said the FTC should complete a more thorough analysis of PBMs, though in its report, the FTC noted PBMs have not been compliant with its probe.

Capitol News Illinois is a nonprofit, nonpartisan news service covering state government. It is distributed to hundreds of newspapers, radio and TV stations statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation, along with major contributions from the Illinois Broadcasters Foundation and Southern Illinois Editorial Association.

gold medal in the 100-meter breaststroke.

training subsidies, a good number of Olympians have been pros for half a century, and so what if the “amateur ideal” died with the pompous hypocrite Avery Brundage and the grifters who succeeded him at the International Olympic Committee? Occasionally, though, there’s a reminder of how things were, or maybe should be.

The U.S. Dream Team was the headline act at Barcelona in 1992, so effortlessly dominant that coach Chuck Daly did not call a single timeout during the two-week tournament. Carl Lewis, a coach told me, was hand-timed in 8.9 seconds for the anchor leg of a 4-by-100relay team that obliterated the world record in a gold-medal effort that bested runner-up Cuba by four seconds.

Oscar De La Hoya turned the only U.S. boxing gold medal into a long and lucrative pro career. Nelson Diebel, a Princeton sophomore with a rough-andtumble background more suited to NASCAR, came out of nowhere to snatch a swimming

Then there was the 3,000meter steeplechase. Three Kenyans literally ran away from the field, and as they glided down the home stretch, they settled into a finishing order that clearly had been pre-arranged: Matthew Birir first, Patrick Sang second, William Mutwol third. Gold, silver and bronze.

Afterward, reporters — many of them raised-on-competition Americans — were incredulous that Sang and Mutwol would so willingly concede this chance at Olympic gold, even to a countryman. The sweet-natured Kenyans were just as incredulous that anyone would ask about it.

“Matthew is a good man,” Sang said, “and he is our friend.” What a simple, eloquently pure explanation. I’m reminded of it when a pitcher threatens not to pitch for a new team without a contract extension or a Super Bowl wide receiver demands a trade because the $14 million he’s guaranteed isn’t enough.

We Americans might be great at sports, but we don’t always get them.

By Dilpreet Raju, Capitol News Illinois

Illinois Rep. Natalie Manley, D-Joliet | CAPItOL NEWS ILLINOIS

In the suburbs, proposed water rate hikes spark outrage

the average monthly bill for residential customers of Illinois American Water would go up by nearly $30

By Andrew Adams, Capitol News Illinois

BOLINGBROOK — Residents of Chicago’s southwest suburbs, alongside local and state elected officials, shared their anger over a proposed water rate increase this week, describing it as “outrageous” and “ridiculous.”

At issue was a proposed rate increase that would drive the average monthly bill for residential customers of Illinois American Water up by nearly $30. Illinois American, which serves about 1.3 million people across the entire state, is one of two privately held water utilities seeking rate increases before state regulators.

The July 22 hearing in Bolingbrook, attended by well over 300 people, was the second in a series of three public forums on proposed water rate increases held by the Illinois Commerce Commission — the state body responsible for reviewing and either approving, modifying or denying utility rate changes. It followed hearings in Jerseyville and Champaign, which drew smaller crowds of about two dozen at each.

In its January request to in-

crease rates, Illinois American said it was needed to pay for infrastructure investments.

“Rate increases are never popular and we understand that,” Illinois American Water President Rebecca Losli said July 22. “But we cannot ignore the infrastructure needs of our water and wastewater systems.”

Losli said the $557 million in infrastructure spending outlined in the rate increase would go to projects like lead pipe replacement and upgrading the pump stations that move water throughout its system.

In a “report card” published early last year, the American Society of Civil Engineers gave Illinois a “C-” grade for its drinking water infrastructure, citing challenges related to replacing lead service lines. The group gave Illinois’ wastewater systems a “D+,” pointing to aging facilities that manage waste.

Decision expected at year-end

The ICC is expected to issue a decision in the Illinois American Water case by the end of the year, with new water rates going into effect shortly after.

A spokesperson for the regulatory body said that the ICC com-

missioners, in practice, take the number and general tenor of public comments like those gathered at the recent hearings into consideration, but are barred from using them to resolve factual disputes.

At the July 22 hearing, area residents lodged often passionate complaints, with all but one speaker opposing the request.

Pat Smith, a nearby resident, said her family installed new insulation and upgraded windows to reduce energy costs, but struggled to reduce its water bill.

“We only bathe or shower twice a week now. We do dishes — a week and a half. I combine clothes for laundry and do it every two weeks. We don’t water outside,” Smith said. “I’m not sure what else I can do to reduce water consumption.”

Cindy Zacharias, a registered nurse from Bolingbrook, noted the number of people, particularly older people on fixed incomes, who spoke before her and described struggling to pay their water bills.

“To have somebody say they can’t flush their toilet to save water?” Zacharias said, pointing to Illinois American executives at the hearing. “That they have to make a

LUXURY HOME SPOTLIGHT

decision to pay a bill and not buy food is shame on all of you.”

Affordability concerns for those on fixed incomes is part of why AARP Illinois, a group that advocates for the interests of those over age 55, became involved in the cases. While they aren’t challenging the proposals formally, they did request the public hearings.

Bill Malcolm, AARP’s national government affairs director, was in Champaign on Tuesday, where he noted the group’s opposition to the proposal’s increased fixed monthly charges — the portion of the water bill that is charged regardless of how much water is used. Under Illinois American Water’s proposal, those would rise from $17.98 to $26.12, according to AARP.

“When you have a high fixed charge like that, it makes controlling your water bill more difficult,” he said.

Additionally, Malcolm noted his group’s objection to several “riders” in the Illinois American Water proposal. These are separate agreements outside of the normal rate request system that would allow the utility to modify its rates or guarantee portions of future requests would be granted.

Illinois American Water’s request includes riders that would allow them to automatically adjust rates to pay for costs associated with regulatory compliance with a low-income discount program, according to Malcolm.

“256!” one person called out.   “300, if I don’t water my grass,” another said.

“Mine’s $350 a month,” NeitzkeTroike said.

Homer Glen has a long history with Illinois American Water. The village was part of a yearslong legal battle to control the pipeline that brings water from Lake Michigan to the area. The complicated agreements between the water utility and individual municipalities along that pipeline contribute to higher-than-average water prices in the region.

“Residents are in an uproar,” Neitzke-Troike said in a follow-up interview.

Despite the vocal opposition, she worries that it won’t translate to action from regulators.

“Unfortunately, honestly,” Neitzke-Troike said. “I don’t think things are going to change.”

This attitude has led some to call for more radical changes to curb further increases to water prices in the area.

Randy Juras, of Homer Glen, told the ICC on July 22 that the water utility needed to be “legislated against.”

“The end result has to be coming from Springfield. Somebody has to put the reins on you guys,” Juras said, referring to Illinois American Water executives in attendance.

Pending legislation

After the hearing, Malcolm said that American Water, the Illinois utility’s parent company, had filed similar rate requests through subsidiaries in Pennsylvania, Missouri, Kentucky, Indiana and Iowa.

Other consumer advocates, like those at the Citizens Utility Board, are formally involved in the rate cases as “intervenors,” meaning they can submit legal briefs challenging the utility’s claims and provide evidence that ICC commissioners might consider when making their ruling.

CUB’s main legal argument against the increase is that the requested profit rate from the company — 10.75 percent, up from 9.78 percent — is excessive and out of line with industry standards. CUB also argues that the company — not customers — should cover the costs for certain bonuses tied to reaching financial goals.

“Those bonuses don’t benefit customers and yet they want them to pay for it for no reason than profit earners — the shareholders — don’t want to give up any part of the profit,” Laura Loyd, a lawyer with CUB, said in an interview.

Anna Kubas, a spokesperson for Illinois American Water, said July 23 that the bonus structure reflected “market rates” for executives and employees.

Homer Glen Mayor Christina Neitzke-Troike was at the July 22 hearing, where she railed against the company. During her public comment, she asked some audience members how much they pay in monthly water bills.

Pending legislation in Springfield would strengthen oversight on water utility spending and make it more difficult for water companies to purchase publicly-owned water systems — a contributing factor to increasing water rates.

Sen. Rachel Ventura, D-Joliet, and Rep. Dagmara Avelar, DRomeoville, were both in attendance on July 22 and spoke out against the rate increase.

Both lawmakers support those changes, with Avelar introducing one of the bills that would end a program that allows utilities to increase rates for infrastructure spending without prior oversight.

While none of those proposals gained traction in the legislative session that concluded in May, neither did a proposal that would have hastened the process of utilities privatizing public water systems.

In a separate proceeding, Aqua Illinois, which serves 273,000 people, is seeking a $19.2 million increase. That would bring with it $29.91 in bill increases, according to CUB. Two hearings on the Aqua Illinois case were scheduled for July 29 at McHenry County College in Crystal Lake and for Aug. 1 at Olivet Nazarene University in Bourbonnais. Capitol News Illinois is a nonprofit, nonpartisan news service covering state government. It is distributed to hundreds of print and broadcast outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation, along with major contributions from the Illinois Broadcasters Foundation and Southern Illinois Editorial Association.

GE HealthCare, Amazon team up for advanced AI imaging

the partnership leverages AWS technologies to enhance medical diagnostics, patient care and clinical workflows

By Jon Asplund

A new strategic collaboration with Amazon Web Services focusing on generative AI and foundation models promises to significantly accelerate GE HealthCare’s already strong artificial intelligence capabilities, the Chicagobased medical imaging giant’s head of AI said July 25.

GE HealthCare has been working with AWS for years, but the new collaboration will use several of the Amazon company’s applications to fast-track tools that will help clinicians improve medical diagnostics, patient care and their own demanding workflows, said Parminder Bhatia, GE HealthCare’s chief AI officer.

AWS’ technologies “are truly multimodal, and health care is multimodal,” Bhatia said. “The foundation models can allow us to build (AI) with less data, faster.”

The collaboration will put generative AI models to work across the imaging solutions GE HealthCare manufactures: CT, MRI, ultrasound and X-ray, he said.

“Thirty percent of all data is health care data, and some 97% of that data is not used” because it is unstructured, Bhatia said.

AI can put that data to work, he added.

Recently, GE HealthCare’s foundation model work included an advanced ultrasound image segmentation tool that isolated and identified anatomical structures with over 90% accuracy, requiring little human input, the company said in a press release.

Bhatia said the AI segmentation tool worked with “anatomies it has never even seen before,” analyzing anatomical

structures like fetal heads and breast lesions despite those not being part of the foundation model’s initial training set.

In accelerating the use of AI, the clinician “stays in the loop” and is in charge of, for example, taking sonographs, he said, but the device is better able to guide the clinician toward good imaging. The result is a faster, better path to diagnostic-quality images with potentially fewer images taken, he said.

GE HealthCare already leads the way in use of AI, as for the third year in a row it has been first in the U.S. Food & Drug Administration’s list of AI-enabled device authorizations.

GE HealthCare said in the press release it will use Amazon Bedrock, a managed service that provides secure access to the industry’s leading foundation models. And internal developers at GE HealthCare will work with Amazon Q Developer, a genera -

tive AI–powered assistant to accelerate software development by generating real-time code suggestions and securely completing tasks.

“The company also expects to use Amazon Q Business to explore the intersection of multimodal clinical and operational data with an aim of reducing the cognitive burden on physicians, enabling personalized care and increasing efficiency,” the press release said.

AWS’ capacity is complementary to GE HealthCare’s needs, Bhatia said, providing selection, scale and security to its efforts to customize and accelerate AI use.

He said the deep solutions and easy-to-navigate choices available from AWS are “enterprise-grade,” allowing GE HealthCare to scale up AI tools throughout the company and across numerous clinical applications.

“Our work with AWS is a big step towards helping clinicians make medical care simpler, more efficient and deeply personalized. It’s about advancing the way we care for people everywhere, one innovative solution at a time,” GE HealthCare Global Chief Science and Technology Officer Dr. Taha Kass-Hout said in the release.

PEOPLE ON THE MOVE

BANKING

Lakeside Bank, Chicago Commercial & Industrial Banking done right ... with Lakeside Bank and Brett Denker! Lakeside is proud to announce Brett has joined us as Senior Vice President and Group Lead, Commercial Lending. If you’re running a family business, you know many banks don’t understand your needs. It takes the right people, the right time and the right bank to create the right partnership. Brett’s experience and wisdom is just the right addition to the Lakeside team. We’re glad you’re here, Brett.

BANKING

LAW

REAL ESTATE

REAL ESTATE

BANKING

Lakeside Bank, Chicago

John Eilering knows banking. And you should know John has joined Lakeside Bank as Senior Vice President, Market Manager. A long time Mount Prospect resident, John has decades of experience working closely with businesses throughout the NW suburbs. John’s client-first attitude and get-it-done philosophy makes him a great fit for Lakeside. To know John is to know your business is in good hands. Welcome to Lakeside, John!

BANKING

Lakeside Bank, Chicago

Bryan Orton joins Lakeside Bank as Senior Vice President, Commercial Lending. In a perfect world, Commercial & Industrial banking would be perfectly easy. It’s often not. Now it is, with Bryan Orton and the Lakeside team. Bryan is a skilled practitioner of middle market banking arts and promises a perfectly seamless, efficiency driven, and cost saving experience. Lakeside Bank and Bryan Orton are indeed the perfect combination. Welcome aboard, Bryan!

Republic Bank, Oak Brook Republic Bank, serving Chicagoland since 1964, is pleased to welcome Joseph Haugh as Executive Vice President and Director of Commercial Lending. Joe brings 30 years of in-depth Chicago banking experience to Republic’s leadership team, which positions him for success as he builds out a team dedicated to serving small and mid-sized organizations, aligning with the Bank’s long-standing commitment to privately held businesses and entrepreneurs. Further, Joe understands the integral role a bank plays in not only serving its clients but also its communities while serving as Board Chair at DePaul College Prep and on the Chairman’s Advisory Council at The Big Shoulders Fund.

Miller, Canfield, Paddock and Stone, PLC, Chicago

Mark Huddle brings extensive experience in public finance and governmental matters to Miller Canfield. He serves as bond, disclosure, underwriter’s and issuer’s counsel for public and private issuers. He represents school districts, municipalities, airport authorities and manufacturers in Illinois and elsewhere. Mark counsels public, private and nonprofit entities in the P3 space, economic development and tax incentive programs, contract procurement, zoning and land use and regulatory matters.

LAW

COMMERCIAL REAL ESTATE

NAI Hiffman, Oakbrook Terrace

NAI Hiffman is proud to announce industrial broker Packy Doyle’s promotion to Executive Vice President. Packy specializes in assisting tenants and owners –both private and institutional – in the leasing, acquisition, disposition, and development of industrial buildings and land assets in the Chicagoland area. His efforts are focused along the I-55 corridor from the City of Chicago out to Will County. He is also experienced in multi-market transactions around Chicagoland and the Midwest.

Clear Height Properties, Oak Brook

Clear Height Properties is proud to announce that Robin Stolberg has been promoted to the leadership team as Executive Director of Acquisitions. Robin will continue to lead all acquisition efforts at Clear Height, a function formerly managed by co-founder and CEO Dominic A. Sergi. Robin brings deep experience in the industrial sector, with a special interest in industrial service facilities (ISFs). He has been involved in more than 750 sale and lease transactions across the United States.

Clear Height Properties, Oak Brook

Clear Height Properties is proud to announce that Lauren Posey has been appointed to the leadership team as Executive Director of Property Operations. In 2020, Lauren created a property operations department to bridge management and accounting. The department is now a key asset in assuring efficiency and consistency across Clear Height. Along with her continued oversight of property OPs, Lauren will also guide the company’s property management and project and development services divisions.

COMMERCIAL REAL ESTATE

NAI Hiffman, Oakbrook Terrace

NAI Hiffman is pleased to announce that Alex Sutterer has been elevated to the role of Executive Vice President. With more than 10 years of experience in the CRE industry, Alex focuses on advising private companies, financial institutions, investors and developers in the acquisition, disposition and leasing of industrial real estate assets, land and investment throughout the greater Chicagoland markets. His primary markets include Chicago, South & Southwest suburbs, and I-55/I-80 corridors.

Miller, Canfield, Paddock and Stone, PLC, Chicago

Shelly Scinto is an attorney in Miller Canfield’s Public Finance Group, where she frequently serves as bond counsel for municipal issuers throughout Illinois. Her practice includes assisting school districts, park districts, counties, cities, villages, and various other entities with their public finance transactions.

REAL ESTATE

Clear Height Properties, Oak Brook

Clear Height Properties is proud to announce that Madison Forster has been promoted to Managing Director of Property Management. Madison assures excellence in tenant relations, renovations and maintenance, investor reporting, and risk management. She works closely with accounting, finance, asset management, operations, and leasing to develop and execute efficient, growth-focused strategies. Madison sits on the BOMA Suburban Membership Committee and is deeply involved in the CRE community.

REAL ESTATE

Clear Height Properties, Oak Brook

Clear Height Properties is proud to announce that Kevin Bufalino has been promoted to Managing Director of Asset Management. Kevin collaborates with our executive and property operations teams to develop business plans that maximize value and efficiency throughout each asset’s lifecycle. He actively monitors market trends and industry developments, enabling Clear Height to leverage innovative strategies that drive tremendous performance and profitability.

LAW FIRM

Taft Law, Chicago

Taft welcomes Landon Raiford as a partner in the firm’s Bankruptcy and Restructuring practice group. Landon represents parties, from debtors to lenders to trustees to committees, in all aspects of the bankruptcy process. He has worked with clients over a wide range of industries, in a variety of situations, including financial distress caused by supply chain disruption, macroeconomic factors, poor product sales, regulatory headwinds, and alleged criminal behavior.

needsprofessionals: ExpertinSnowflake,Tableau,SQL,MSAccess/ ExcelVBA,ETL,ELT,PowerAutomate& PowerBI.

Req.–Masters+1yr.Comp.sal,Relocateto unanticipatedsite.NoNational/International travel.PleasemailresumetoRef:CEO,4320 WinfieldRoad,Ste200,Warrenville,IL,60555

Duties:Thisroleisresponsiblefordesigningscalable,resilient,andfastmobileand webapplications.RequiresaBachdegreeorequivinAppliedCompScience,CompScience,or CompEngand5yrsrelated(progressive,post-baccalaureate)experienceworkingwithdistributed softwaredesignanddevelopmentworkingwithMobileSolutionTechnologies.Toapplygoto https://careers.usbank.comoremailrecruiting.excellence@usbank.com, includejobreq.#2024-0016029insubjectline.

EnhnceRSMUS'sabltytodlvrcmprhnsiv,valueadded,&efficntTaxsrvcs.Maywrkremtethru’tUS.

Bach’s(orfrgnequiv)inCmptrInfoSystmsorrltd +5yrsofexpasa TchniclCnsltnt,Dvlpr,Assoc,orrltd.Emplyrwillacptanycmbntionofedction,exp,ortraining.Email resumetoclaudine.volkening@rsmus.com,Ref:5718.

By Ally Marotti

Rosebud on Randolph is transitioning from a white tablecloth Italian restaurant into a casual Mexican joint. Management is hoping the new, more affordable menu will help drive business.

At Rosebud, which opened three years ago, a plate of pasta hovers around $25, said Nick Lombardo, chief operating officer of Rosebud Restaurant Group. At the new Mexican-inspired version of the restaurant, which will be called Esta Loca, $25 will cover three tacos and a margarita.

“The people that came down there I think were a little intimidated by our pricing. So, it’s more casual pricing, Mexican street food,” Lombardo said. “It’s volume, more than anything, for us. Being able to reach a larger audience is what we’re looking to do.”

The switch is telling for the Loop restaurant scene, which has dealt with a massive business shift since the pandemic. Restaurants that once thrived on business lunches or happy hours paid for on corporate cards must contend with a flow of customers that is sporadic at best. The adoption of remote work — particularly on Mondays and Fridays — means Loop restaurants have had to get creative to drive revenues and pay the bills. The week of July 24, Chicago’s average office occupancy was 56.6% of what it was pre-pandemic, according to data from real estate technology firm Kastle Systems.

The restaurant that preceded Rosebud in the space near the high-traffic intersection of Randolph Street and Michigan Avenue was called Tavern at the Park. With its rooftop terrace overlooking Millennium Park, the restaurant was a pre-pandemic go-to spot for business lunches, and it appealed to tourists. In contrast, private events are driving roughly 40% of Rosebud’s revenue, Lombardo

said. Happy hour is also strong, but lunch and dinner are not corralling enough business.

“We can’t bring in the volume from tourists and people in that area,” he said. “It makes more sense for us to do a little more casual-themed Mexican.”

When Rosebud on Randolph opened in late 2021, pasta seemed like a promising prospect. Rosebud Restaurant Group was in the midst of transitioning another one of its restaurants from a steakhouse into an Italian joint, in part because inflation was driving the costs of beef so high, consumers could no longer stomach it. Pasta provided higher profit margins in an inherently low-margin business.

Fast-forward, and inflation has slowed, but it has also compounded. The cost of eating out is up 30% since 2019, according to an analysis of consumer price index data.

Thinking about margins

Switching to a casual Mexican concept makes sense, said Darren Tristano, CEO of research and consulting firm Foodservice Results. The frequency of fine dining is declining among middle-class consumers. And as food prices continue to rise, restaurant operators must also continue to think about their margins.

“Ultimately, customers are not going to pay a lot for pasta. They’re smart enough to know they can make it at home and it’s not very expensive,” he said. “We’re probably at a good point with Mexican that it rivals Italian in terms of the craveability and the demand by consumers.”

Indeed, data from market research firm Technomic shows that although Italian is the most appealing global flavor across all generations, Mexican cuisine is the top appealing flavor among millennials and Gen Zers.

“As they represent the present and future of frequent foodservice usage, seems as though Rosebud

is simply allowing consumer preferences to lead where they go,” said Robert Bryne, a senior director of consumer research at Technomic, in an email.

Esta Loca will be Rosebud Restaurant Group’s first Mexican concept. Leading the kitchen will be Mauricio Gomez, who started with the group as a dishwasher in 1991. He worked his way up to corporate chef for all of Rosebud’s restaurants. The menu will feature items such as burritos, tacos and taco salad bowls. The restaurant started offering Esta Loca menu items for carryout on July 29, but will continue serving Rosebud’s Italian menu until all three floors are fully switched over.

The renovation, which Lombardo said will cost “a couple hundred thousand” dollars, will happen in three phases, the first of which has already begun. The downstairs floor will be very casual and colorful, Lombardo said. Every wall is a different color — orange, pink and green. The main dining room upstairs will be more upscale but still comfortable.

Lombardo said he doesn’t want tourists coming in and feeling like they must go back to their hotel and change clothes. The rooftop will also be casual, serving folks looking for cocktails with a view. The menu will be the same on all three floors, and the restaurant will stay open during renovation.

Lombardo expects the restaurant to be serving Esta Loca’s food to dine-in customers by the end of August and to have all three floors renovated by mid-September.

“Once we switch over, it’ll go from Italian to Mexican food in a day,” he said.

Rosebud Restaurant Group operates eight restaurants. It is currently renovating a ninth spot, Carmine’s in the Gold Coast. Renovations there are expected to be complete in March. The group is also planning to renovate its Naperville location in August.

Exterior view of Esta Loca ROSEBUD REStAURANt GROUP

Ready-to-drink cocktail company Hoste plans bar and event space in Pilsen

the move signifies a coming-of-age for the canned cocktail, which has boomed in the years following the pandemic

By Ally Marotti

A Chicago company that makes ready-to-drink cocktails is opening a new production facility in Pilsen, along with a bar and event space, this fall.

The bar at Hoste’s new space will serve coffee during the day and made-to-order craft cocktails at evening events, but it will also pour the company’s premade old-fashioned, martini and other drinks.

The move signifies a coming of age for the ready-to-drink cocktail, which has seen sales explode in the years following the pandemic. When COVID-19 forced bars and restaurants to close, consumers drank at home instead. Premade, canned cocktail sales soared.

Four years after the pandemic’s darkest days, sales of readyto-drink beverages continue to grow, while wine and beer sales decline. Ready-to-drink beverage sales are up 4.2% year over year, according to data from market research firm NielsenIQ. In contrast, beer and spirit sales are each down 0.9% and wine sales are down 3.3%.

Those sales figures help explain why Hoste needed a bigger production space for its premade cocktail products.

Hoste launched its first product, the Gold Fashioned, in October 2021. Co-founders Jordan Tepper and Robby Haynes were already running a company called Apologue Liqueur, which launched in 2017 and made liqueurs that were marketed mostly to bartenders and mixologists. Hoste was a way to diversify the portfolio and create a product for consumers to have at home.

Hoste products are sold at Binny’s Beverage Depot and independent liquor stores, and shipped to consumers in 46 states, Tepper said. He declined to disclose revenue figures, but said Hoste needed more production space. The company has

been distilling its Apologue liqueurs — which are distributed in 15 states — at Thornton Distilling in Thornton for seven years. With its growth and the addition of Hoste cocktails, it outgrew the space.

The new facility in Pilsen, at

1857 W. 16th St., will have 10,000 to 12,000 square feet of production space. The event and bar space will be about 3,500 square feet, Tepper said. It is set to open this fall.

At first, evenings at Hoste’s new space will be for private events and programming, as opposed to a bar that’s open to the public. Haynes said he expects customers will come work from the space during the daytime, sipping on coffee and low-ABV cocktails. In the evenings, the space will pour craft cocktails made behind the bar, as well as the premade Hoste products.

“We’re really excited about the opportunities that the Hoste space allows for us behind the bar,” said Haynes, who worked previously at cocktail bars such as The Violet Hour. “In some ways, we kind of get to come full circle.”

Though the model feels almost counterintuitive — selling premade cocktails at a cocktail bar — it’s a great way to test the market, said Jon Berg, vice president of beverage alcohol at NielsenIQ. People are more open to trying new products when they’re out at bars, restaurants or events. And if people like something they try at a bar or restaurant, they’re much more likely to buy it for home.

“They’re getting a really good trial,” Berg said. “If you’re in their location, you’re going to be trialing their product.”

Cook County gets relatively high marks in home-based care survey

But more than 5.9 million people in the u s who are homebound or challenged to leave their homes still aren’t receiving HBMC

By Jon Asplund

Cook County and, to a lesser extent, the state of Illinois are among the leading parts of the nation to provide home-based medical care to frail patients, but they're still just scratching the surface, according to a new study by a national nonprofit.

The vast majority of America's more than 7 million frail patients — those who are homebound or challenged to leave their homes — need home-based medical care, or HBMC, but aren't receiving it, according to an inaugural snapshot by the Home Centered Care Institute.

More than 5.9 million people in the U.S. cannot access needed “modern day house calls” from physicians, nurse practitioners and physician assistants, primarily due to a work-

force shortage and the need for payment reform, the report says.

In a state-by-state comparison, Illinois had the ninth-lowest percentage of frail patients who lacked home-based care. Still, the analysis showed 80.7% of Illinoisans who need HBMC aren't getting it.

The best proportion of residents receiving care, the institute said, was in Nevada, where 28.4% of frail patients needing HBMC were getting it.

The worst states on the list were West Virginia and South Dakota, which provided HBMC to a mere 5.3% and 5.4% of their frail patients, respectively. Fourteen states should be considered HBMC “deserts” because more than 90% of those states’ frail residents need care but are not receiving it, said Aaron Yao, the Home Centered Care Institute's

director of research and analytics, in a press release.

In Illinois, Cook County led the way as the best county for serving frail patients, with 29.2%

of those patients getting the home-based medical care they need, the analysis shows.

Not surprisingly, the analysis found the largest home care

programs, those serving 500plus patients, were concentrated in urban areas. Chicago and the collar counties, Rockford and Peoria had the only communities with more providers who serve more than 500 patients.

“Very clearly the national map indicates that frail patients living in rural and in underpopulated regions of the country are suffering the most,” Yao said in the release. “It is the concentrated urban areas such as Tampa, Chicago and New York that provide greater, albeit, limited access to HBMC.”

The survey, called the Snapshot of the Unmet Need for Home-based Medical Care in the U.S., used current data from the Centers for Medicare & Medicaid Services’ 2023 Traditional Medicare Claims, the institute said.

The institute estimates at least 9,000 additional providers are needed, but there are currently only about 3,000 homebased care providers throughout the country.

PROJECTS

News of that development came just two days after the owners of the United Center revealed their vision to spend $7 billion building up 55 acres around the venue as part of the 1901 Project, which could turn the area into a mixeduse campus over the next decade and help link the rapid growth of the West Loop to investment-starved neighborhoods on the West Side.

The plans come at a time when Chicago is hungry for them. The city is trying to shed its reputation among major real estate investors that it’s an unattractive place to put their money, mired with real and perceived issues with violent crime, high taxes and political instability. Beyond those hurdles, debilitating population loss in low-income South and West Side neighborhoods has made it an even longer shot for economic development to happen in the areas that need it the most.

The quantum and United Center projects — which have their own anchor users lined up, unlike other planned megadevelopments in the city — set the stage for more real estate investors to follow into neighborhoods they don’t frequent. But the proposals also put pressure on city officials to ensure they are properly leveraged as a launching pad.

“They shouldn’t just be seen as little dots on the map, and that’s the only planning that happens,” said city Planning Department veteran Eleanor Gorski, who is now CEO of the Chicago Architecture Center. “These are dots with ripples, and the city needs to step up and produce the ripples.”

The Invest South/West initiative launched by former Mayor Lori Lightfoot’s administration has been the city’s most comprehensive approach to catalyzing investment in vacancy-riddled South and West Side commercial corridors. The program channeled public resources into a range of developments meant to be neighborhood anchors that help draw in other private investment. But many of those proj-

ects remain in planning stages, set back by challenges with approvals and financing.

Gorski said the two newly proposed megaprojects on the Near West Side and in South Chicago give the city an opportunity to focus its resources and attention on the neighborhoods around them rather than trying to create new anchor projects themselves. One example: using Neighborhood Opportunity Fund grants — money from developers that paid to build more dense downtown projects — to help revive vacant cityowned lots or boost entrepreneurs in the vicinity of both sites rather than spreading money more thinly across the city.

“It’s picking out select areas and commercial streets, doubling down on providing city assistance and being proactive, not just stepping back and saying these are (resources) that are here,” she said.

The quantum research park that could open in 2027 stands to dramatically change the heavily residential South Chicago neighborhood to its west, a once-bustling community during the decades the U.S. Steel mill was operating. The challenge will be making sure the

take a look at all the candidates.”

Ruemmler is seeking feedback from business and civic leaders to flesh out the group’s agenda.

public safety, budget priorities, education and transportation, through a nonprofit 501(c)(4) that can advocate for policies but not directly contribute to candidates.

In a call with Crain’s, the group’s leaders wouldn’t disclose how much they expect to raise, but the money should start flowing soon and is expected to be at least seven figures.

The group will “be involved” in the mayor’s race and next City Council election, said Michael Ruemmler, a former adviser to both Emanuel and President Barack Obama. He wouldn’t disclose if they’d take on Johnson.

Asked if the PAC will spend money opposing elected school board candidates supported by the Chicago Teachers Union, Ruemmler would only say, “We’ll

“As the agenda comes together, we’re not going to hide what that is,” said Derek Douglas, president of both the Civic Committee and the Commercial Club. If “elected officials are down with what we’re trying to do, we’ll be down to collaborate and support them. . . .People can align and get on board with that.”

Steve Koch, a former deputy mayor under Emanuel focused on economic development, said as long as he’s “been interested in Chicago and state affairs” the business community has talked about launching such a group.

“Maybe we should have done this years ago, and that’s probably true,” he said. “Any time is a great time to get involved, and it happens to be in a moment where there’s lots of people who care a

change improves the quality of life and builds wealth for existing residents in the area, said Dave Doig, whose Chicago Neighborhood Initiatives has led development of high-impact projects that have revitalized the Pullman neighborhood over the past decade.

“It’s going to take some intentionality. It’s not just going to happen,” he said. “The fear is that this just becomes an island — people go there to work and then leave, and nobody benefits — so I think there’s going to have to be some real planning and intentionality around making sure that those linkages (are made) with residential, retail, jobs. . . .I’m sure there are hundreds of city-owned vacant lots that dot this area.”

2,000 vacant lots

There are more than 2,000 vacant lots in the 7th Ward that borders the northern portion of the South Works site, according to Ald. Greg Mitchell. “Today, those properties just became a little more valuable,” he said after an event last month announcing the quantum research park.

The quantum project could help encourage developers to build on

lot about Chicago . . . and feel strongly about a series of issues.”

Ruemmler will serve as president of both the nonprofit and PAC and said it will be his fulltime job. He’s previously lobbied on behalf of corporate clients and ran the Get Stuff Done PAC that had a mixed track record in the 2023 municipal election.

While Get Stuff Done helped elect, or re-elect, 14 members of the City Council, it spent heavily on an unsuccessful effort against two Democratic Socialists: incumbent Pilsen Ald. Byron Sigcho- L opez, 25th, and freshman Ald. Angela Clay, 46th. Johnson was hoping to install Sigho- L opez as chair of the City Council Zoning Committee by the end of last month.

Get Stuff Done was funded with $1 million from GCM Grosvenor CEO Michal Sacks and $100,000 donations each from members of the Crown

The shop has served up sandwiches and other food only on weekends because of a lack of foot traffic in the area the rest of the week, but plans to add more hours to its schedule as the PsiQuantum project comes together.

“Retail only works if you have people,” Perez said. “This is an engine that creates people coming in.” Mayor Brandon Johnson announced the city’s first financial commitment to the quantum project itself: $5 million from the bond funding plan that the mayor called his “signature initiative to invest in and develop our neighborhoods to achieve equity and prosperity for all of our people.” The money comes from proceeds of bond sales backed by expiring tax-increment financing districts, and $5 million is the maximum grant that can be given without City Council approval.

many of those lots, Mitchell said, and could boost homeownership in a neighborhood where the median income is less than half of the Chicago average and most residents rent.

For Leon Walker, whose DL3 Realty development firm has been investing in and near the neighborhood for years, the public-private investment in the quantum park “confirms the faith we had in the future of the South Side.” DL3 is expected to finalize a redevelopment agreement with the city for public funding this fall to begin construction on Thrive Exchange, a proposal born out of the Invest South/ West program that stands to add more than three dozen apartments a few blocks west of South Works.

“We hope it will be home to many talented quantum campus workers,” Walker said.

City officials need to use the quantum investment as a springboard for other investments that will repopulate the area, said Jorge Perez, a longtime resident who opened Chico’s Oven walk-up window in 2021 in a former grocery store and bakery his family has owned at 83rd Street and Houston Avenue since the 1970s.

family. A more moderate trade union, LIUNA Chicago Laborers, gave $300,000.

Ruemmler wouldn’t disclose who he’s hit up for money for the new PAC, but said, “We’ve had some pledges . . . and hope to raise as much as we can.”

“Whether it’s (Sacks) or anyone else who has been politically active . . . a lot of those people want to have a vehicle where they can act collectively,” Koch said.

Douglas argued the nonprofit that will advocate on behalf of the business community between elections is just as important as the political spending.

“The main purpose is to create some infrastructure that can support the business and civic agenda,” Douglas said. “The Civic Committee has been very active in pushing those issues forward from a policy standpoint, but there has not been a political complement to those things.”

Speaking about the United Center project last month, Chicago Department of Planning & Development Commissioner Ciere Boatright said the private investment will “create a new mixed-use economy for the Near West Side.” Other real estate proposals that come as a result of the development will allow the city to showcase its “Cut the Tape” initiative meant to expedite approvals for real estate projects, she said. While it’s unclear how public resources will play a role in the broader plan, Vice Mayor and 27th Ward Ald. Walter Burnett said the city may consider an extension of at least a portion of the Central West TIF District that surrounds the United Center to help with infrastructure and public aspects of the development. Among other improvements, the owners of the Chicago Bulls and Blackhawks proposed a new CTA Pink Line station to service what could be a far more heavily populated area around the arena in the years ahead.

“To all the developers out there, all the people looking to invest in (Chicago): Invest west,” Burnett said during a news conference for the 1901 Project. “There’s a lot of great properties over here, there’s a lot of opportunities over here for us to continue to help the city to grow.”

Douglas helped lead the civic community’s $100 million investment in community violence intervention efforts. At the press conference announcing the fundraising amount, Gov. J.B. Pritzker said it was incumbent on the government to maintain funding for the initiatives over the long haul.

One Future Illinois could “continue to create pressure to make sure that there’s sustained public funding to support” the work over the next five to 10 years, Douglas said. “To impress upon the people who vote on this stuff, the Legislature and the City Council, the county to make sure that the resources are there.”

Joining Douglas and Koch on the nonprofit board will be Topography CEO Liam Krehbiel; Carol Portman, former president of the Taxpayers Federation of Illinois; and The Vistria Group general counsel Jesse Ruiz.

Gov. J.B. Pritzker announces the new Illinois Quantum & Microelectronics Park at South Works. DANNY ECKER

What was cool at the start of the century: Austin City Limits, Bonnaroo and Coachella. Austin City Limits, in particular, saw so much success in the early 2000s, the event’s organizers wanted to expand the annual Texas music festival to a second market, so they called up Lollapalooza founder Perry Farrell with a pitch for rebirth.

Farrell liked what he saw from the Austin City Limits team and bought into their model for a single-city Lollapalooza revival. The only question: where?

Almost by accident, they quickly struck gold. Charlie Jones, cofounder of Lolla organizer C3 Presents, recalled, “Some staff in the office came to me and were like, ‘Hey, the Chicago Park District is having their annual budget meeting tonight, and on the agenda states the creation of a new event to raise $250,000 for programs that were cut throughout the Park District.’”

“Light bulb,” Jones said. “This was like a carpe diem moment.”

With no time to waste, they sent their most charismatic representative to catch the next flight to Chicago. At that 2004 meeting, she told city officials her Austin-based team could double the money the Park District was seeking, and the iconic downtown festival was born in 2005.

The story of Grant Park falling into the lap of Lollapalooza is one of many firsthand accounts of the festival’s early days retold in “Lolla: The Story of Lollapalooza,” a new three-part documentary series on Paramount+.

“This city is very protective of Grant Park, one of the most hal-

CROWDSTRIKE

From Page 3

team of a half-dozen people who support 500 users. They dispatched people to an offsite server room to reboot equipment and handled others remotely. They figured out a process to fix more than 100 affected computers and set to work. “It took us about 12 hours to fix,” he says.

United Airlines worked through the weekend to fix more than 26,000 computers and devices at call centers and 365 airports around the world, CEO Scott Kirby told employees in a note.

Grant Ho, an assistant professor of computer science at the University of Chicago who specializes in enterprise security, is among those dumbfounded but dismayed by the glitch.

“This kind of bug is something you’d expect to be caught before you deploy it,” says Ho, who experienced the ripple effect of the CrowdStrike outage firsthand over that weekend while at a hotel where keycards didn’t work. “These are basic software practices that should have been used. This isn’t something you can blame on the intern. How did this happen?”

lowed grounds in the city, and the fact they could come together on a deal was not a foregone conclusion,” executive producer James Lee Hernandez told Crain’s after the show’s release. “It took a lot to make it happen.”

Art and commerce

The series, directed by Michael John Warren, blends historic footage of 1990s Lollapalooza performances from bands such as Metallica and the Pixies with in-depth interviews with festival organizers three decades later. It unpacks the complicated relationship between art and commerce. It traces financial hardships nearly killing an event that now injects north of $400 million into the city’s economy each year.

Quintessential Chicago is on full display in the series. Chance the

A more painful question emerges about how widespread our technology vulnerabilities are.

Vulnerabilities

“We always thought about the utilities (cloud-service providers) as a risk,” says Michael Flanagan, CEO of BDI Global, a cybersecurity-insurance startup in Chicago. “But dependent software is something we’re beginning to see more often.”

He points to the recent cyberattack involving CDK Global, a software company based in Hoffman Estates, which impacted auto dealers nationwide.

“No one would have thought 15,000 of 19,000 car dealers in the U.S. had the same software,” Flanagan says. “The interdependence is way bigger than we thought.”

Ho says one problem is that highly regulated industries, such as transportation, finance and health care, tend to standardize technology. “So if they have an issue or a compromise, it causes widespread problems across industries.”

There’s also contagion risk. Save the Children U.S. wasn’t a CrowdStrike customer, but several key vendors were. “We were operationally affected by the

years later. “It’s a big deal for Chicagoans, and we all know when it’s coming. You know the traffic is going to be fucked up, all these tourists are coming in, but your ass is going to end up there.”

Since the documentary’s May release, it has been well received by Lollapalooza aficionados and those who lived the festival’s history. A Vulture writer praised the series because it “refuses to whitewash the festival’s history, giving credit to the Black artists who helped establish Lollapalooza and alternative rock as a whole.” Chicago Sun-Times film critic Richard Roeper described it as “a solid video history document for younger fans of Lolla, and a trip down altrock memory lane for those of us who attended some of the very first shows.” Farrell told Variety magazine the documentary “gave me some credibility.”

Rapper, former Mayor Lori Lightfoot and “Mancow’s Morning Madhouse” have cameos in this retelling of a massive downtown event navigating City Hall’s Fifth Floor bureaucracy and addressing concerns about traffic.

“It is definitely part of the DNA of who we are as a city,” Lightfoot says in the show, “and businesses benefit from having this iconic music festival here in Chicago.” The former mayor was partly responsible for inking a 2022 deal with Lolla to remain in Grant Park for the next 10 summers, and potentially more.

“Lolla is definitely a mainstay for Chicago at this point,” Chance the Rapper adds. The final episode in the series tells the story of the young Chicago musician hopping fences to sneak into the festival, only to headline the event a few

CrowdStrike incident despite not being a direct customer. Many of our service providers or data sources were down.”

The vulnerability that comes from widely used software is made worse by fragile operations that rely upon them. Airlines have been devastated by computer problems, especially when they strike the industry’s weak spot: scheduling software. Airlines depend on having planes and personnel in particular locations at specific times. Once they’re out of position, delays ripple across the network in a cascading effect.

Delta Air Lines canceled more flights than rivals American or United. Its CEO, Ed Bastian, told customers, “One of our crew tracking-related tools was affected and unable to effectively process the unprecedented number of changes triggered by the system shutdown.”

Analysts predict the problems could cost the Atlanta-based carrier hundreds of millions. The U.S. Department of Transportation is investigating why the airline was hit so hard by this outage. Southwest Airlines had a similar problem during a winter storm in 2022 made worse by troubles with its crew-scheduling technology, delaying or strand-

“This is like 30 years of footage and storytelling condensed into three hour-long episodes,” Brian Lazarte, another executive producer, told Crain’s. Lazarte and Hernandez also produced the popular “McMillions” docuseries for HBO. “Hopefully people still walk away feeling like — even though we didn’t talk to every artist, there’s no way we could have — so satisfied with the experience going on this journey with all the different artists that have shared their personal story, and Perry and seeing the festival evolve over these years.”

Lollapalooza was scheduled for Aug. 1-4 with headliners including SZA, Blink 182, Megan Thee Stallion, The Killers, Future, Metro Boomin, Hozier, Stray Kids, Melanie Martinez and Skrillex. The three-part series from MTV Entertainment Studios and FunMeter is available in full on Paramount+.

ing nearly 2 million passengers.

Beyond the havoc caused by a widespread technology failure was the nature of the particular system that failed in the case of CrowdStrike. “It’s a classic IT problem that could have been any third-party software,” says Eric Harmon, CEO of Trustwave, a Chicago-based cybersecurity firm. “It can happen anywhere, but a security tool makes the risk greater.”

A hack of SolarWinds, which makes software used to manage corporate IT systems, was particularly devastating.

The problems don’t end with a reboot. “What’s going to happen is huge exploitation . . . by threat actors,” Harmon says, warning that cybercriminals will take advantage of the chaos to launch phishing campaigns. “You have to be proactive to tell your employees what to do to avoid being compromised.”

The outage is unlikely to lead to widespread defections from CrowdStrike, Ho says. “There will be some shuffling, but the switching costs are fairly high.”

At SDI Presence, Kipp is planning to stay the course. “We don’t feel the need to change because of one issue,” he says. “My hope is CrowdStrike learns a very valuable lesson. You’ve got to trust they will react the right way.”

Senior

The story of Grant Park falling in the lap of Lollapalooza is just one of many firsthand accounts of the festival’s early days retold in a new three-part docuseries. | NAtHAN ZuCKER