Crain's Chicago Business

NOTABLE HEALTH CARE HEROES: Profiles of individuals and teams on the front lines. PAGE 11

EMANUEL: The former mayor is on tech firm GoHealth’s board. PAGE 6

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NOW WE KNOW WHAT MILES ARE WORTH United lifts veil on crown jewel

BY JOHN PLETZ

UNITED AIRLINES IS PULLING BACK the curtain on one of the industry’s most closely guarded secrets: the economics of frequent-flyer programs.

“I’ve never in my 36 years of doing this seen a public disclosure providing that level of detail,” says Jay Sorensen, president of IdeaWorks, a company in Shorewood, Wis., that advises airlines on loyalty programs and ancillary revenue. “This is the type of info you only would have seen at an internal meeting.”

United was forced to reveal for the first time key details of its Mileage Plus frequent-flyer program because the airline is borrowing $6.8 billion against it in an effort to raise cash to survive a global pandemic that has wiped out 80 percent of travel demand.

An investor presentation for the financing shows why the frequent-flyer program is United’s crown jewel: Mileage Plus generates about 25 percent of its annual operating profit and provides a critical marketing conduit to the airline’s most loyal customers. It’s also a dependable financial lifeline that helps United navigate the turbulence GETTY IMAGES

See UNITED on Page 35

Signs that Aon staffers’ pain may just be starting Workers watch and wait on two fronts: Near-term pay and longer-term jobs Aon made waves with its U.S. employees when it imposed a 20 percent salary cut on about 70 percent of them at the beginning of May. The rationale CEO Greg Case gave at the time, which was when COVID-19 cases and deaths were approaching their peak in big cities like New York and Chicago, was that there was no precedent for the job losses occurring. “If

it were simply a case of marginal revenue declines, we could counter with further expense discipline,” he wrote to Aon workers April 27, when the salary cuts were announced.

Fast-forward nearly two months.

While the pandemic continues to bedevil the country, the business of insurance brokers like Aon, which advise companies on their risk-protection needs and place them with insurers, appears stable.

Aon’s expected revenue decline

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this year does indeed appear to be marginal. Consensus Wall Street projections peg its 2020 revenue at $10.9 billion, down only about $100 million from $11 billion in 2019.

Aon hasn’t offered a projected savings figure for the salary cuts, but analysts estimate they will save between $200 million and $250 million. Most of that savings is coming out of the paychecks of

BLOOMBERG

BY STEVE DANIELS

See AON on Page 35

HCSC

OP-ED

The local Blues plan parent isn’t following rivals in issuing customer rebates and premium credits. PAGE 3

7 steps to a better and fairer Chicago: The time demands that we deliver concrete, sustainable results. PAGE 8

2 JUNE 29, 2020 • CRAIN’S CHICAGO BUSINESS

GREG HINZ ON POLITICS

Odds improve for Lightfoot’s casino, but . . .

Americans want to travel, be entertained and gamble. And, as my colleague Steve Strahler pointed out in a piece in August, the new high-end casino in Boston was doing spectacularly well even with more and more competition for the gambling dollar every year.

The question of “who” is a little murkier. Industry sources tell me Neil Bluhm, who operates the Rivers Casino in Des Plaines and quietly helped Lightfoot pass her bill, might be interested. Sources also point to MGM Entertainment, one of the few large casino companies not to have a property in the Illinois market, or one of the Native American tribes or Genting Casinos, which has considerable interests in Britain and Asia and has been expanding in America.

“Where” remains the hardest question, as Lightfoot learned when aldermen last year loudly objected to examining proposed sites in their wards. That may explain why a city spokeswoman now says any final decision will occur only after discussions with “a broad group of elected officials, stakeholders, community and business leaders.”

There’s also the related question of whether to locate in the central area to maximize tax revenues or in an outlying, probably minority neighborhood as a catalyst to spur and other THE CASINO COULD PRODUCE entertainment related development. $100 MILLION TO $150 MILLION Though Navy Pier still is mentioned as a possibility A YEAR. by some—local Ald. Brendan Reilly, 42nd, is vehemently opposed—I hear more tant concluded that the original talk about housing the casino in bill authorizing the Chicago the aging, outmoded lakefront casino got greedy, setting the building on the east side of the tax rates on revenues so high McCormick Place complex. It’s as to likely drive away any close enough to downtown to prospective operator. The new draw tourists, but also near jobbill reverses that, dropping short African American neighthe effective tax rate from 70 borhoods. And the east building percent of adjusted gross revhas 2,000 underground parking enues to 40 percent, according places and the big floor plans to the Illinois Commission on casinos like. But the building is Government Forecasting & Acin such bad shape, I’m told it countability, the Legislature’s needs $500 million in repairs— fiscal research unit. perhaps so much it would be That’s still on the high side, cheaper to build a new structure says Dan Wasiolek, a senior anelsewhere. Interestingly, the loalyst who covers the gambling cal alderman, Sophia King, 4th, industry at Morningstar here is not closing the door. “I’d have in town, but it’s low enough to look at it in context,” she says. to spur “a little more interAll that suggests Lightfoot is est” from potential operators. going to need a good hand to Those operators will need to win this one, but she won’t have take a long-term view, he adds, to fill an inside straight. Casino but even at this point in the politics could get really interestpandemic there are increasing ing here in months to come. signs that, just as after 9/11, So much has happened since May that we’ve almost forgotten, but Mayor Lori Lightfoot won an enormously important legislative victory last month when the General Assembly passed her plan to revamp the tax structure on the proposed Chicago casino.

The key word is “proposed.” If the pandemic finally ends and the casino actually gets built, it easily could produce $100 million to $150 million a year to shore up badly underfunded city police and fire pension systems. But what are the odds?

Lightfoot’s office isn’t tipping its hand, saying little except that it is “committed to this project and will maintain the creation of a Chicago casino as one of its top priorities in the coming year.” In other words, Lightfoot and Samir Mayekar, her deputy mayor for economic development, have their hands full with COVID-19 and will get to this later.

Still, I have at least partial answers to three key questions: Is the Chicago facility now economically viable, who might build and operate it, and where will it go?

The answer to the first is easiest: Assuming the pandemic eases, the casino, envisioned for decades, is closer than ever to becoming real.

If you’ll recall, a state consul-

Allstate undercuts agents with lower online auto rates Meanwhile the insurer is pressuring its sales force to source more new business

BY STEVE DANIELS Allstate quietly is instituting a 7 percent discount for those who buy car insurance online or over the phone rather than through an agent.

The Northbrook-based insurer is making the change via filings in individual states, answering a question agents have had since Allstate announced late last year it was eliminating its Esurance brand and selling car insurance online as Allstate. The Allstate brand until now has mainly been associated with its 10,500 agents around the country.

Allstate has laid out its pricing plans so far in filings in Michigan, Pennsylvania and Indiana. The filing in Michigan was finalized June 19; the ones in Indiana and Pennsylvania on June 10. The new rate structure “target(s) a 7 percent premium reduction to reflect these differences in incurred expenses between agency-bound business and direct-bound business,” the company said in all the filings.

A spokesman didn’t respond to a request for comment.

For agents, this is yet another blow in a series of them leveled

by Northbrook. The commissions they get when their policyholders renew were chopped 10 percent at the beginning of the year. CEO Tom Wilson has said he wants agents spending more time drumming up new customers rather than relying so much on preserving their existing ones for their revenue.

To incentivize the agents, the company increased commissions for new customers. But many agents, particularly the largest in the country, have said they can’t possibly bring in enough new busi-

ness to make up for the loss of revenue on existing customers.

Now, the discount available at Allstate Direct, as Esurance soon will be called, will make it that much harder for agents to source new business. Effectively, drivers insuring with Allstate can get a 7 percent rate cut by calling an 800 number or buying online—and then get service from an agent if they so choose.

Allstate managers informally have told agents that the company doesn’t intend to advertise that consumers can get policies cheaper by buying direct, he says. The company’s message to agents also has been that those who buy direct aren’t the types of consumers who will go to an agent in the first place.

A car-insurance price war may be in the offing, triggered by Bloomington-based State Farm’s recent moves to cut policy rates by 11 percent on SMALLER COMMISSIONS Consumers who buy direct are average nationwide. If State Farm’s asked if they’d like to be assigned extraordinarily deep rate cut is sucto an agent. If they say yes, Allstate cessful in winning more market chooses one for them, and that share, Allstate could well be temptagent is paid just 3.5 percent of the ed to market the more price-compremium annually to handle that petitive option to consumers.

As the largest U.S. auto insurer, customer’s servicing needs, according to the National Association of State Farm is well capitalized and Professional Allstate Agents, an or- able to heavily advertise its rate cut, ganization representing agents that which it is already doing, at least on the internet. frequently has Allstate Diconfronted Allstate about A CAR-INSURANCE PRICE WAR rect’s cheaper pricing also ensuch issues in MAY BE IN THE OFFING. ables the comthe past. That’s pany to better versus 9 percent agents get to service customers compete with Geico, which sells direct exclusively and markets itself as they source themselves.

The rate relief Allstate drivers can cheaper than major insurers selling get from buying direct “puts agents through commissioned agents.

To this day, agents are responin a quandary,” says Ted Paris, execsible for the vast bulk of Allstate’s utive director of NAPAA. Agents now must decide how to auto business, which is by far the respond to prospects who ask about insurer’s largest source of premicheaper alternatives to whatever ums. From the end of 2012, a year quote they offer. Some might argue after Allstate acquired Esurance, to that, ethically, an agent in that posi- the end of 2019, auto policies grew 7 tion should inform the prospect they percent at the company overall, acwill get a cheaper rate if they com- cording to disclosures to investors.

In 2012, agents produced 92 percent plete the purchase on their own.

“Allstate Direct exposes agents in of those policies. Seven years later terms of answering the question, ‘Is after the addition of Esurance was there any way I can get it cheaper?’ ” supposed to boost growth? Agents were responsible for 91 percent.

Paris says.

We’re still with you And, we will be in the weeks and months to come. We’re all experiencing these uncertain times together. As Chicago’s Bank®, we’re prepared to continue supporting local companies now and on the other side of this.

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CORRECTION For Cook County overall, total property taxes billed rose to $15.6 billion this year, up 4 percent from 2019. The year used for comparison was wrong in a June 22 story.

Banking products provided by Wintrust Financial Corp. banks.

CRAIN’S CHICAGO BUSINESS • JUNE 29, 2020 3

HCSC says no dice to customer rebates

Morningstar CEO Kunal Kapoor

Health insurer keeps COVID-related savings while rivals share

BY STEPHANIE GOLDBERG

With some of Morningstar’s old-line segments languishing, the acquisitions may ultimately be a benefit, but profits have been on the decline over the past year.

“Joe always thought of Morningstar as a global business, even when we were only a U.S. business,” says Scott Cooley, a former Morningstar chief financial officer now teaching occasionally at the University of Chicago. “He always said, ‘Only 5 percent of the world’s population is here, so most of the opportunity is somewhere else.’ ”

Some health insurers benefiting from a COVID-fueled decline in nonemergency medical care are offering customers billions of dollars in financial relief. Blue Cross & Blue Shield of Illinois’ parent isn’t one of them.

Insurance companies are paying fewer medical claims during the pandemic, with hospitals tabling pricey elective procedures like open-heart surgery to focus on treating coronavirus cases.

Even now as states reopen, doctors are seeing fewer patients as they stagger appointments and some people avoid care for fear of infection.

Companies like Anthem and UnitedHealth Group have pledged to give customers—and doctors in some cases—a share of the savings through premium credits and other discounts.

But Chicago-based Health Care Service Corp., the dominant health insurer in Illinois and the sixth-largest nationwide, is hanging on to the windfall for now.

Insurers, including HCSC, acknowledge they’re paying fewer claims for medical services, but they have yet to quantify the savings. Pocketing any extra cash could mean issuing big rebates next year if HCSC—which also owns Blue Cross & Blue Shield plans in Texas, Montana, Oklahoma and New Mexico—doesn’t spend enough on claims to satisfy an Affordable Care Act rule. Not to mention the reputational risk, as customers wonder why other

See MORNINGSTAR on Page 38

See HCSC on Page 36

BRANCHING OUT MORNINGSTAR FOUNDER JOE MANSUETO built the financial information juggernaut over 36 years mainly in Chicago, but lately his CEO successor, Kunal Kapoor, has been on a global buying spree, seeking fortunes elsewhere.

In the past three years, Morningstar has invested aggressively in PitchBook, a Seattle-based private-equity data business it acquired in 2016, nearly doubling its West Coast ranks. Last year, it made its biggest acquisition ever, taking over Toronto-based credit ratings firm DBRS. And this April, it said it will buy Amsterdam-based Sustainalytics, an environmental, social and governance ratings and research firm.

JOHN R. BOEHM

Morningstar’s CEO is taking on larger risks than his predecessor, betting acquisitions will boost profits BY LYNNE MAREK

Hotel owners push public officials to give them some room Hard cap of 50 people fails to account for size of ballrooms, operators say

BY DANNY ECKER Illinois officials are starting to see the payoff of their strict lockdown approach to taming the COVID-19 outbreak. Now hotel owners are pleading with them to help keep their properties healthy, too.

While the fourth phase of Gov. J.B. Pritzker’s plan to restore the economy injects optimism about an eventual return to normalcy, it also comes with one rule that many hoteliers fear could put

them out of business: a hard cap of 50 people gathering in a room at any indoor event.

It’s a restriction that public health officials deem crucial to keeping the pandemic at bay but overlooks a revenue source some hotels say they need to stave off imminent financial collapse. Weddings, reunions and corporate meetings and events that bring hundreds of people at once to hotels generate as much as half of the annual revenue for some properties, according to

the Illinois Hotel & Lodging Association. But events of that size aren’t slated for clearance until the state’s final phase, which

on a percentage of their ballroom and banquet hall capacities rather than a single number.

A room that can normally hold 1,000 people, they argue, can surely enforce social distancing with more than 50.

“WE THINK THERE’S A MIDDLE GROUND TO BE HAD.” Michael Jacobson, Illinois Hotel & Lodging Association

requires a coronavirus vaccine, an effective treatment or for the number of local cases to be nearly vanquished. That’s why hotel operators are imploring local officials to limit gatherings based

“We’re not trying to rip the Band-Aid off or go back to massive gatherings packing people into a ballroom,” says IHLA CEO Michael Jacobson. “But we think there’s a middle ground to

be had.”

The issue spotlights the tension between the business community and public health officials over how to reopen the state as the pandemic subsides.

While Pritzker and Chicago Mayor Lori Lightfoot take cautious steps to restore economic activity, many businesses—especially those tied to the hospitality sector—are desperate for cash after being stifled by a statewide stayhome order.

The bleeding is especially bad for local hotels, which have See HOTELS on Page 37



4 JUNE 29, 2020 • CRAIN’S CHICAGO BUSINESS

JOE CAHILL ON BUSINESS

Real property tax relief must come from Springfield news to homeowners accustomed to larger hikes, it does nothing to reduce their already-heavy property tax burdens. Illinoisans pay the second-highest property taxes in the country.

And you can’t blame assessments for that. Assessments determine how the property tax burden is allocated among property owners, not the overall burden. The real driver of property taxes is the levy, or the total dollar amount local governments need to pay for public services ranging from education to police and fire protection.

That number continues to rise.

Total property taxes billed in the area reassessed last year rose 5.2 percent to $4.8 billion. With residential properties representing most of the tax base, homeowners won’t get a real break as long as municipalities need to generate that kind of money from property taxes. On the contrary, residential bills could well start climbing at higher rates again after the onetime impact of Kaegi’s assessment shift plays out.

Only state lawmakers can change a system that forces local governments to fund such THE DRIVER OF PROPERTY TAXES a large share of basic public services through IS THE LEVY. property taxes. And they’d better get to work on it now, if they hope to rescue Illinois’ property values and discourage battered economy. investment in Cook County real Even before COVID-19 trigestate. Owners of apartments and gered a steep recession, high office buildings will pass along at property taxes were dragging least some of the rising tax tab to tenants through rent hikes, driving down Illinois property values and souring investors on local the steep costs of living and doing real estate. Kaegi, to his credit, business here even higher. More residents and business owners will has reduced assessed valuations to reflect the impact of the have more reason to flee Illinois. downturn. But that won’t help Commercial property owners homeowners or businesses if blame Kaegi for going too far in tax levies keep rising. Tax bills shifting the property tax burden that property owners strained from homeowners to businesses. to cover in the past can become Kaegi, who succeeded Joe Berrios in 2018, argues that he’s correcting unaffordable during a recession.

With nearly a million unemhistoric inequities that undervalployed in Illinois, and businessued commercial properties and bringing more accuracy and trans- es fighting for survival across the state, property taxes could parency to assessments. There’s trigger foreclosures and banksome merit to both arguments.

Kaegi’s initial assessment increase ruptcies.

Yet Illinois policymakers of 77 percent for commercial and continue to ignore the long-term industrial properties in northern economic effects of excessive Cook was reduced to 25 percent property taxes. A legislative task by the county’s Board of Review, force appointed late last year to which hears assessment appeals.

Berrios, meanwhile, was criticized study alternative funding sources for local government services for assessments that appeared to accomplished nothing, lending favor wealthier neighborhoods credence to skepticism that the and prime office buildings at the group was mere window-dressing expense of homes and business for Pritzker’s graduated income properties in less affluent areas. tax proposal.

Lost in the back-and-forth Sure, it’s hard to undertake over assessments is a basic probfundamental fiscal reforms amid lem illustrated by something unprecedented health and ecothat didn’t happen: Residential nomic crises. But short-term surproperty taxes in northern Cook vival strategies will count for little didn’t go down. In fact, they edged up 1.1 percent on average. if the property tax virus continues ravaging Illinois.

While that might come as good A body blow to north suburban commercial landlords, the property tax bills now landing in mailboxes should be a wake-up call to Gov. J.B. Pritzker and state legislators.

My colleague Alby Gallun reports that commercial and industrial property tax bills in northern Cook County rose 15.8 percent on average, an alarming figure underscoring the need to end Illinois’ overreliance on property taxes before it suffocates our economy. Northern Cook was the first section reassessed

by County Assessor Fritz Kaegi, and property owners in that area are the first to receive bills based on higher assessments resulting from his new valuation methods.

Similar increases likely are coming for commercial properties elsewhere in Cook County as Kaegi completes triennial reassessments over the next couple of years.

The tax hikes will devastate Cook County businesses, which already stagger under unsustainable property tax loads. Soaring property taxes will push some commercial landlords into the red, which in turn will drive down

Plans call for a former Skokie bank branch to become the pot shop shown in this rendering.

Why this weed company is settling for a buyout deal If Grassroots shareholders approve the new terms offered by acquirer Curaleaf, the deal will create the largest grower and seller of marijuana in the U.S.

BY JOHN PLETZ Grassroots, one of several large marijuana companies based in Chicago, will get all stock in its acquisition by Curaleaf, trading a guaranteed $75 million cash payout for more equity in a deal that’s already 18 percent smaller than when it was announced nearly a year ago.

Under new terms announced last week, Grassroots agrees to take additional Curaleaf shares valued at $50 million in lieu of the cash. The total value of the transaction stands at $715 million, down from $875 million when it was announced July 17.

“Curaleaf indicated the discussions with Grassroots to amend the transaction had been ongoing for some time,” says Rob Fagan, an analyst at Stifel in Canada. “Grassroots’ leadership was ultimately amenable to reduce the transaction’s cash component, given a stronger balance sheet for the resulting company would likely be a beneficial factor for valuation, and thus a positive for Grassroots as an eventual large shareholder.”

Grassroots declines to comment. Its shareholders still have to approve the deal. They will have about 119 million shares, or 18 percent of Curaleaf’s stock, or

about 1 percentage point more PharmaCann, fell apart as stock ownership than under previ- prices of the acquirers declined ous terms. At the current stock and once free-flowing capital price, the 119 million shares of markets tightened up.

Curaleaf are worth about $715 million.

FUNDING OBSTACLES If they greenlight the new Because marijuana remains terms, Grassroots shareholders federally illegal in the U.S., will be giving up about $25 mil- traditional sources of funding lion to get a deal done that will are not available. U.S. compacreate the largest grower and nies such as Curaleaf, which is seller of marijuana in the U.S., based in Waltham, Mass., went with more than 135 dispensary public in Canada. But Canadian licenses and 22 cultivation sites. marijuana stocks took a hit last The companies say the deal is on year amid a rocky rollout of rectarget to close in the next several weeks.

The deal was an- THE DEAL WAS ANNOUNCED WHEN nounced when canCANNABIS STOCKS WERE NEAR THEIR nabis stocks were near their peak. PEAK. SINCE THEN, PRICES HAVE Since then, prices have fluctuated FLUCTUATED WILDLY AND CAPITAL wildly and capital markets have tight- MARKETS HAVE TIGHTENED. ened dramatically, even before the COVID-19 out- reational cannabis use in that break. Curaleaf’s stock peaked at country. $8.11 per share about two weeks The $75 million in cash that after the deal was announced Grassroots is giving up will come but fell below $5 by November. in handy for Curaleaf as it builds Shares bottomed at $2.64 March out dispensaries in markets such 19, during the worst of the mar- as Pennsylvania and Illinois. The ket’s reaction to the coronavirus, companies also says that Grassand have recovered to about $6 roots will have to sell assets, such per share. as dispensaries, in Illinois and Two acquisitions of large Chi- other states. But it did not discago-based marijuana com- close which assets the company panies, Verano Holdings and will sell.

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6 JUNE 29, 2020 • CRAIN’S CHICAGO BUSINESS

Rahm Emanuel on the board of IPO-bound GoHealth

BY JOHN PLETZ Former Chicago Mayor Rahm Emanuel, who joined a boutique investment-banking firm a year ago, is a director of GoHealth, a Chicago tech company that filed to go public June 19.

GoHealth, an online health insurance marketplace, was acquired last year by a private-equity firm. It filed with the U.S. Securities & Exchange Commission to raise up to $100 million in an initial public offering, according to a preliminary prospectus.

It’s the first Chicago tech company to test the IPO market since software maker Sprout Social went public in December. The company has yet to determine a share price.

It’s familiar territory for Emanuel, who served as an investment banker at Wasserstein Perella two decades ago after leaving the Clinton White House. He joined Centerview Partners after leaving the mayor’s office.

GoHealth matches customers with health plans and has enrolled millions in Medicare and individual and family plans.The company had the largest reported increase in revenue from 2018 to 2019 in Crain’s latest list of Chicago’s largest privately held companies. Its reported 2019 revenue was $550 million, up 120 percent from $250 million the prior year.

GoHealth’s prospectus says Emanuel joined the board this year. It doesn’t say how much he

NEWSCOM

As mayor, Emanuel made appearances with company executives to make job announcements in 2013

Former Mayor Rahm Emanuel and other directors will be paid.

As mayor, Emanuel made appearances with GoHealth executives to make job announcements

in 2013, as he frequently did with tech companies that were growing. GoHealth co-founders Clint Jones and Brandon Cruz each

Amazon hiring 2,000 in south suburbs

The company plans fulfillment centers in Matteson and Markham

Ulta’s CEO getting her salary again

BY STEVEN R. STRAHLER

BY ALBY GALLUN Amazon is expanding in south suburban Chicago, with plans to open two fulfillment centers in Matteson and Markham that will employ a total of 2,000 people.

The two warehouses will be the newest additions to Amazon’s sprawling Chicago-area distribution network, which already encompasses 11 sorting and fulfillment centers, according to a statement from the company, Gov. J.B. Pritzker and Cook County President Toni Preckwinkle, who held a news conference last week about the expansion.

The projects will add to the Seattle-based e-commerce giant’s workforce in Illinois, currently encompassing more than 11,000 people.

Amazon’s new fulfillment centers, at 7001 Vollmer Road

made the maximum individual contribution of $5,300 to Emanuel’s re-election campaign in 2014.

A rendering of an Amazon fulfillment center slated for 7001 Vollmer Road in Matteson.

“As a global leader of the rapidly growing distribution industry Amazon will now have access to our exceptional regional workforce, THE PROJECTS AND AMAZON’S HIRING a very vibrant business climate PLANS OFFER GOOD NEWS FOR A LOCAL and our continuing commitment ECONOMY STILL REELING FROM THE to attract diverse IMPACT OF THE CORONAVIRUS PANDEMIC. forms of economic development,” in Matteson and 15924 Western Matteson Village President Sheila Ave. in Markham, will use the Chalmers-Currin says in a statecompany’s robotics technology ment. “This particular project is to pick, pack and ship products, clearly an economic engine that will attract hundreds of jobs to our according to the company.

town.”

Amazon will own its warehouse in Matteson, which is being developed by Atlanta-based Seefried Industrial Properties, according to an Amazon spokesman. It will lease the building in Markham, which was developed

by Indianapolis-based Scannell Properties.

BRIGHT SPOTS

The projects and Amazon’s hiring plans offer good news for a local economy still reeling from the impact of the coronavirus pandemic. With the growth

of e-commerce accelerating due to the virus, the logistics and warehouse businesses are rare bright spots in an otherwise gloomy commercial real estate market.

“Amazon’s two new fulfillment centers in Matteson and Markham will serve as an economic engine for Cook County’s Southland,” Preckwinkle says in the statement. “I am pleased to welcome these state-of-the-art facilities to Cook County and am grateful for the much-needed job opportunities it will bring to the region.”

Ulta Beauty says it resumed paying CEO Mary Dillon’s base salary June 14 after she had opted in early April to forgo it as the company announced thousands of furloughs because of the COVID-19 pandemic.

Dillon’s salary rose about 3 percent last year to $1.9 million.

Salary typically is a minority share of overall comp ensation for executives at high-performing public companies. Dillon’s toMary Dillon tal compensation in 2018 was more than $14 million.

Last year her total compensation dropped by half, to $7.1 million, mainly because of a plunge in the value of stock awards, to $2.4 million.

In April, Ulta’s proxy statement said she had been awarded a one-time benefit in March 2018 to induce her to remain CEO for another three years and to “create an intense focus on share price appreciation.”

In an SEC filing June 22, the Bolingbrook-based company also said it expected to have “substantially all stores reopened in some capacity by the end of June.” About two-thirds of the 1,254 stores are open, and 93 percent offer curbside pickup, it said.

CRAIN’S CHICAGO BUSINESS • JUNE 29, 2020 7

Northwestern plans more cuts with buyout offer They would be in addition to the recent furlough of 250

BY LYNNE MAREK Northwestern University expects to cut 150 to 200 employees as a result of a buyout program it has offered several thousand employees because of ongoing financial pain due to the COVID-19 pandemic.

The cuts would be in addition to 250 workers the university recently furloughed.

About 4,000 staff members are eligible for the program, NU spokesman Bob Rowley says via email. Faculty are not being offered the buyout.

In the email, Rowley emphasizes that the figure of 150 to 200 is an estimate. The school will not know how many employees apply for the program until the end of the month and will not know how many buyouts are approved until mid-July, he says.

Northwestern will reserve the right to accept or reject an employee’s wish to participate in the separation plan.

The June 8 offer was made to certain full- and part-time employees who have worked for the school for at least two years and were eligible for benefits during that period.

“We have made this decision because, despite signs of renewed economic activity, we still anticipate reduced revenues and additional expenses next fiscal year related to the pandemic,” Rowley says. “In this context, a voluntary separation plan supplements the cost-containment measures we have taken already, allows us to manage staffing levels to match our outlook and reduces the possibility of potential actions such as further furloughs or involuntary layoffs.”

The current voluntary separation program is in addition to the university’s May move to furlough 250 staffers whose workloads were reduced or eliminated when the university sent students home in March in an effort to protect them as the virus spread. At that time, Northwestern said it also suspended contributions to employee retirement plans, reduced university leaders’ pay and temporarily increased drawing money from its billion-dollar endowment in light of a projected $90 million budget shortfall for the current 2020 fiscal year.

If 200 employees were to take the buyouts, recent reductions, including the May furloughs, would

amount to about 7 percent of the university’s staff, which is approximately 6,500 full- and part-time employees, according to its website.

Separately, the university has about 3,300 faculty members, the site says.

Earlier in the month, the university was planning to offer the buyouts to 5,150 employees, according to a June 2 Northwestern document obtained by Crain’s, but Rowley says that number was

later reduced mainly because the school decided to exclude employees with less than two years of service.

The buyouts were “intended to increase financial capacity in FY 2021, offer schools and units the flexibility to reorganize locally, and reduce the scope and reputational impact of any potential involuntary layoffs,” the document said. It also noted the voluntary

package would be “more generous than what would be offered for an involuntary separation.”

The school said this month that it’s planning to reopen its main Evanston campus this fall, convening about a week earlier than usual, with students expected to meet certain requirements related to mask-wearing, hand-washing and social distancing, among other things.

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8 JUNE 29, 2020 • CRAIN’S CHICAGO BUSINESS

EDITORIAL

n a year that brought us a killer pandemic, the worst unemployment crisis since the Great Depression, demonstrations (some peaceful, some not) in every major city in the nation, a flirtation with war against Iran (remember that?), Australian bush fires, the death of Kobe Bryant, an impeachment trial, historic stock swings, murder hornets, Megxit, and now, incredibly, a giant Sahara dust plume that promises to shroud the eastern half of the United States, few things sound better than fun at the old ballpark, Harry Caraystyle: An ice-cold Old Style would be nice, and maybe a lukewarm hot dog adorned with mustard freshly squeezed from a tiny plastic packet.

So it was understandable that we all felt a surge of excitement when Chicago Cubs exec Crane Kenney raised the prospect not only of baseball at the Friendly Confines but also of fans occupying the stands during games.

“We’re fortunate to have some of the best medical professionals in our city helping us, both from Advocate and Northwestern, and I’ll give credit to the city and the city’s health department as well,” Kenney told 670 AM the Score’s Dan Bernstein on June 25. “And we’re working with the city, having great conversations with the mayor’s staff on this topic. We know our fans, if safe and if it can be done with the right precautions, would love to come back to the ballpark, and so we do see that happening this year.”

The trouble is, it may have been too much to hope for—like wishing Netflix

myself—but we’ve got to do it at a time when we know that’s appropriate under the public health guidance, and we’re not there yet.”

Of course, Lightfoot is more likely to be seen taking in a game at Guaranteed Rate Field, White Sox fan that she is. But the South Siders are striking a more Lightfoot-like tone than their crosstown rivals, telling Crain’s it’s too early to make any calls. “We certainly have been in almost constant contact with both the governor

NO MATTER HOW MUCH WE MIGHT WANT TO RETURN TO THE BALLPARK, WE AREN’T SURE WE CAN DO IT SAFELY—YET.

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I

We’ll take a rain check

would hurry up and give us the fourth season of “The Crown” already.

Even though Gov. J.B. Pritzker said he will permit attendance of up to 20 percent capacity at outdoor venues during the fourth phase of economic reopening—at Wrigley Field, that translates to roughly 8,300 fans—Mayor Lori Lightfoot promptly rained on that parade.

Asked about whether fans will be in

the stands soon, Lightfoot told reporters it’s “a discussion we have not had in that level of specificity.” The floated 8,000 fans number “exceeds city and state caps” on venues and capacity, she noted. “Fundamentally, whether it’s 8,000, 800 or 80, there’s got to be a plan for safety,” said Lightfoot. “Obviously there’s no bigger sports fan than me—I want to be able to enjoy live sports in the stands

and mayor’s offices, but any speculation about hosting fans at this point would be just that . . . speculation,” team spokesman Scott Reifert wrote in an email.

Painful as it may be to admit, the White Sox organization’s view, no doubt hardened by years of frustration on the field, is probably the right one at the moment.

It’s tough to imagine how 8,000-some people could safely maintain social distance, especially when intoxicants and potentially middling baseball are part of the mix.

We may have to settle for watching games on TV. And that will still be a most welcome distraction—at least until “The Crown” returns in November.

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YOUR VIEW

7 steps to a better and fairer Chicago Solutions, a staffing firm primariOne of the many hopeful outly focused on low-income youth.) comes of the inspirational protests of recent weeks has been Contract with African American an increasing awareness of white vendors and professional firms Americans for the need to look to provide goods and services to inward, to ask: What can I/we do your business. to make things better in America Invest your money, personal for our Black and Brown citizens? as well as business, with African As business leaders, we must American money managers. (I do more than donate money. I do Michael Alter is have been investing for years not, for a moment, want to min- president of with Ariel Investments and Heard imize or in any way belittle the Alter, a corpoCapital.) absolute importance of business rate real estate Invest in and mentor businessleaders supporting these efforts: development es founded and led by African They are an essential part of any firm, and princi- Americans. (For the past five “solution.” pal owner of the years I have committed to priToo often, though, financial Chicago Sky. marily investing only in womenphilanthropy becomes a substiand black-owned companies.) tute or an excuse to resist the harder, more Create a diverse board of directors/adimportant work of change. We can and must visers to accelerate change and hold us do more! Here are some ideas for more fun- accountable. damental, structural, long-term actions: Volunteer and mentor to advise African American entrepreneurs and small-busi Commit to hiring, developing, mentoring and promoting African American em- ness owners. ployees as a core principle, at all levels. “Redistribute” your PPP loan. (Minority(I recently launched Purpose Workforce owned firms, despite their dramatically

greater need for funds, received far less than their fair share from the stimulus program. Countless minority-owned firms, lacking access to credit, living off of small margins at the best of times, received nothing. The impact was devastating. I have granted an amount of money equal to the PPP loan I received to 12 small minorityowned businesses and nonprofits on the South and West sides.)

I realize that over the years, many businesses have made efforts to increase minority hiring or to contract with minority firms. It is time now to move beyond only aspirational goals. The time demands that we deliver concrete, sustainable results.

There are many reasons why those of us in business have been successful. One of the biggest reasons is that we are outstanding problem solvers; put an obstacle in our way, and we will figure out how to get around it, over it or through it. We must apply this same degree of focus, will and intentionality to this issue.

Undoubtedly, your head of HR will tell you she can’t find qualified candidates,

Write us: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited. Send letters to Crain’s Chicago Business, 150 N. Michigan Ave., Chicago, IL 60601, or email us at letters@chicagobusiness.com. Please include your full name, the city from which you’re writing and a phone number for fact-checking purposes.

or your general counsel will advise you that it’s unwise to change law firms and, anyhow, he doesn’t know any minorityowned firms with the same capabilities.

And you will wonder: “How can I possibly identify minority-owned businesses in Englewood, North Lawndale or Chatham that could benefit from PPP funds? I’m not familiar with those neighborhoods, nor is anyone in my network.” You will also have realistic and legitimate concerns about short-term costs, disruptions to your corporate culture and impact on your ROI. These may seem like reasonable and understandable objections (and trust me, there will be many more!). Yet all of them are solvable: Focus on it, prioritize it, measure it and reward it. Just as you do other essential priorities in your business.

The short-term setbacks and even potential financial loses are a small sacrifice toward creating a path to a more perfect world for our children and grandchildren and, just as important, for all Americans of all races.

Sound off: Send a column for the Opinion page to editor@ chicagobusiness.com. Please include a phone number for verification purposes, and limit submissions to 425 words or fewer.

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CRAIN’S CHICAGO BUSINESS • JUNE 29, 2020 9

LETTER TO THE EDITOR

Black education matters, too The pain of George Floyd’s murder has sent shock waves through our nation, including right here in Chicago. It was vicious and shocking but, sadly, not surprising.

We are right to worry that recent events will too easily pigeonhole the sweeping tragedy of racism in America into merely a matter of police conduct, as critically important an issue that is.

The murder of young Black men at the hands of police is one of the many terrible consequences of systemic and nonsystemic racism that exists in America.

But police brutality is not the problem

KC Crain Mary Kramer Jim Kirk Kate Van Etten

President Group publisher Publisher/executive editor Associate publisher

*** Editor Ann Dwyer Creative director Thomas J. Linden Assistant managing editor Jan Parr Assistant managing editor/digital Ann R. Weiler Deputy digital editor Todd J. Behme Digital design editor Jason McGregor Senior art director Karen Freese Zane Copy chief Danielle NarcissĂŠ Deputy digital editor/ Sarah Zimmerman audience and social media Columnist/contributing editor Joe Cahill Political columnist Greg Hinz Senior reporters Steve Daniels Alby Gallun Lynne Marek John Pletz Reporters Danny Ecker Stephanie Goldberg A.D. Quig Dennis Rodkin Steven R. Strahler Copy editor Scott Williams Contributing photographer John R. Boehm Researcher Kasey Hariman *** Director of digital strategy Frank Sennett Director of custom media Sarah Chow Associate director, Jaimee Holway events and marketing *** Production manager David Adair Account executives Christine Bowman Aileen Elliott Claudia Hippel Christine Rozmanich Bridget Sevcik Laura Warren Courtney Rush Amy Skarnulis People on the Move manager Debora Stein Sales assistant Lauren Jackson Project manager Joanna Metzger Event planner Katie Robinson Event manager Tenille Johnson Digital designer Christine Balch

itself—it’s a horrifying and agonizing symptom.

We must all push back on any implication that if we were to somehow solve police misconduct that the issue of Black disenfranchisement will be solved.

Black Lives Matter, absolutely. But Black Well-Being Matters, too. Black Economic Enfranchisement Matters.

Black Health Care Matters. Black Education Matters.

I’ve worked my whole life encouraging Black youth on Chicago’s West Side to pursue postsecondary education as the first step to claiming what is rightfully

theirs: economic opportunity in this, the wealthiest nation on earth.

It is hard work. It starts by inspiring our youth to broaden their imagination of what their future can hold and setting aside their understandable intuition that the deck is stacked impossibly against them. It requires navigating a complicated testing, applications and admissions process. It requires swimming upstream against a postsecondary education landscape that favors the financially well-off.

But success is not only possible, we see it every day at Introspect Youth Services.

We have placed more than 40,000 young

people into colleges and professional training programs since 1977. We’ve done a lot, but there is so much more we should do as a society.

This is an important moment in the long conversation over racial justice.

We must use this energy and passion to address abject violence against African Americans. But we also must use this moment to fortify our efforts to bring opportunity to Black youth.

BERNARD CLAY Executive director Introspect Youth Services

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CRAIN’S CHICAGO BUSINESS • JUNE 29, 2020 11

Reminders of the COVID crisis are everywhere: the ubiquitous masks, social distancing rules and shortages of flour and toilet paper. Yet out of plain sight are the doctors, nurses, EMTs, home health care providers and janitors on the front lines. They work long hours and put their own health on the line to help others. They’re away from their families for extended periods and when they do arrive home, they self-isolate and refrain from hugging their spouses and children.

These health care heroes share harrowing stories of patients who didn’t make it as well as uplifting examples of patients who recovered after days or weeks on a ventilator. Their heroics take so many forms. Since patients’ family members aren’t allowed to visit, some health care workers facilitated phone conversations or video chats.

Others sourced personal protective equipment or initiated testing programs. Social service workers sought out homeless people and helped them find shelter and testing. This feature includes profiles of 53 individuals and 32 health care teams—you will find their stories moving and inspiring.

METHODOLOGY: The honorees did not pay to be included. Their profiles were drawn from the nomination materials submitted. This list is not comprehensive. It includes only individuals for whom nominations were submitted and accepted after a review by editors. To qualify for the list, an honoree must be working on the front lines of the COVID-19 crisis, making an impact and saving lives. Roles considered were doctors, nurses, physician assistants, aides, emergency medical technicians, and maintenance and janitorial workers, among others.

ADVOCATE HEALTH CARE

AMITA HEALTH

N. SEEMA AHMED

LUKE NORTHERN

Infectious disease specialist Amita Health St. Alexius Medical Center

Anesthesiologist Amita Health Alexian Brothers Medical Center

Dr. N. Seema Ahmed was involved in treating Amita’s first two COVID-19 patients. The first was admitted Jan. 20 after returning home from visiting her sick father in Wuhan, China. She was the second person diagnosed in the U.S., and eight days later, the hospital admitted her husband. Ahmed consulted with the Centers for Disease Control & Prevention, and representatives came to the Hoffman Estates hospital and stayed on-site for four weeks. Ahmed helped shape early guidelines and recommendations. The next cases came in early March and were more severe than the first two.

Dr. Luke Northern volunteered to work at a COVID hospital in New York during April. He left his wife and three children behind to care for the most gravely ill at the height of the crisis. He brought back knowledge and shared his experiences with staff and senior leadership informally and in formal presentations. That helped Alexian Brothers in Elk Grove Village and the Amita system manage the crisis.

MARY FLINK Respiratory therapist Amita Health Holy Family Medical Center

After working at Holy Family in Des Plaines for about 40 years, Mary Flink was taking time to travel. After the crisis hit, Flink made herself available to take as many shifts as needed, overseeing the weaning of patients from ventilators.

She sits with patients who are alone and frightened, holds their hand and tells them stories to help lessen anxiety.

MOLLY KEEVIL RN, staff nurse Amita Health St. Joseph Hospital

When the Chicago hospital received its first COVID patient, Molly Keevil was one of the first to raise her hand. She may be in full personal protective equipment in a room for two hours making sure she has done everything she can for her patient’s physical, mental and emotional well-being. Patients leave voicemails and write letters naming Keevil as a bright light in an otherwise dark time.

AMAR CHADAGA Associate program director, internal medicine, and hospitalist

When the crisis hit, and through the peak and plateau, Dr. Amar Chadaga volunteered to see patients at Advocate Christ Medical Center in Oak Lawn. He was de facto in charge of attending-physician staffing for two non-ICU COVID units. Chadaga wrote in his journal that the hard work “took a toll on me physically, mentally and emotionally but has made me more resilient and a more empathetic physician.”

STEPHANIE NISIC RN, night nurse Amita Health Adventist Medical Center

Stephanie Nisic was a night-shift nurse at the Hinsdale hospital just three months out of orientation when the pandemic hit. Her floor became a COVID unit, and she was among the first nightshift nurses to care for afflicted patients. Since visitors are restricted, Nisic uses technology to enable patients to speak with family. She became an expert in personal protective equipment and educated colleagues on how to don and remove it.

ARNON RUBIN Critical care pulmonologist Amita Health Adventist Medical Center

When the pandemic started, the consensus was that if a patient went on a ventilator and some of their organs started to fail, they weren’t going to survive. At Amita Health Adventist Medical Center in Bolingbrook, Dr. Arnon Rubin fostered a team approach, focusing on details and opening communication across the Amita system and beyond. There were a few patients the hospital feared would not survive and were later discharged home—due to Rubin’s care. He treated a 39-year-old single mother with five children who was on a ventilator for 2½ weeks. Her heart was failing, and Rubin didn’t think she would survive. But she pulled through. It’s the good days and the positive outcomes like this that keep him going.

FRANK SCHNEIDER Nurse manager, Critical Care units Amita Health Sts. Mary & Elizabeth Medical Center

At the Northwest Side hospitals, Frank Schneider manages units that are housing COVID patients, including the ICU. He coordinated staff that was stretched thin as the hospitals geared up to care for an influx of critically ill patients. He used his technical and leadership skills to facilitate the expansion of the hospital’s ICU and COVID capacity by more than 50 percent.

JUSTIN YEE Medical director, Emergency Department, and chairman of emergency medicine Amita Health St. Francis Hospital

Since the pandemic began, Dr. Justin Yee worked to create separate emergency areas at the Evanston hospital for patients with serious respiratory complaints and patients with other illnesses and injuries.

He also led efforts to set up two outdoor tents—one for treating and testing patients with mild to moderate respiratory complaints so they didn’t have to enter the hospital, and the other for drive-thru testing for Amita patients and staff. The separations reduced exposure for patients and clinicians.

12 JUNE 29, 2020 • CRAIN’S CHICAGO BUSINESS

ANN & ROBERT H. LURIE CHILDREN’S HOSPITAL

LARRY K. KOCIOLEK Medical director of infection prevention and control

Dr. Larry K. Kociolek is a pediatric infectious disease physician and assistant professor of pediatrics at Northwestern University Feinberg School of Medicine. Lurie’s High Consequence Infectious Diseases team was born from Kociolek’s previous efforts responding to the Ebola virus in 2014, which prepared him to lead the response to COVID-19. Kociolek proactively identifies areas of risk for health care workers and pediatric patients. He provided a consistent voice of confidence and reassurance that health care worker safety would not be compromised. To hospital stakeholders, he communicates areas of success and responses to new challenges. His weekly town hall messages provide the health care workforce and community pediatric health care partners with knowledge, skills and confidence. And his media appearances have educated patients, families and the public about the pandemic.

BONE & JOINT SPECIALISTS

ALEX CHRZAN Physician assistant

Alex Chrzan volunteered to serve at the Billie Jean King National Tennis Center in New York, which was converted into a temporary hospital to handle coronavirus cases. Chrzan has worked as a physician assistant at Bone & Joint Specialists in Crown Point, Ind., since 2018.

He left his family for nearly three weeks and quarantined for two weeks on his return.

DUPAGE MEDICAL GROUP

MIA TAORMINA Chair, Infectious Disease Department

BEST HOME HEALTHCARE

HOME HEALTH CARE CLINICIANS The services of Chicago-based Best Home Healthcare, which provides short-term in-home rehabilitation under physician supervision, have been in demand during the COVID-19 crisis. The company has a surplus of disposable personal protective equipment, such as isolation gowns and surgical masks, which keeps clinicians and patients safe. Nurses, physical therapists and occupational therapists visit COVID patients at home after they are discharged from a hospital. They often leave medical devices such as blood pressure cuffs at patient homes so they can monitor their progress. The agency also connects low-income patients to social service organizations that can help supply food and household goods. Some of the firm’s younger clinicians learned how to function in a pandemic from colleagues who are veterans of the AIDS crisis.

EDWARD-ELMHURST HEALTH

HEALTH INFECTION CONTROL & PREVENTION As the outbreak grew, the team worked collaboratively with stakeholders at Elmhurst Memorial Hospital and Edward Hospital in Naperville to address personal protective equipment shortages, entry screening and contact tracing. The team helped develop clinical guidelines, infection-prevention strategies and workflows. The challenges have been long hours, sleepless nights and patients lost. But there have been uplifting moments as well. The team joined hospital staff in celebrating a young patient’s discharge from Elmhurst Memorial after 45 days. The team participated in the inauguration of the EEH Daffodil project—the installation of daffodil lawn ornaments at both hospitals to acknowledge each COVID-19 inpatient discharged.

Team members gathered on a sunny afternoon in April to “plant” bright yellow reminders of survival.

Top row, from left: Dr. Jonathan Pinsky, Mary Anderson, Deb Diamond and Kate Pruiett. Bottom row: Dr. David Beezhold, Annemarie Schmocker, Denise Ferris and Sara Czechowicz.

Infectious disease physician Dr. Mia Taormina leads the medical group’s COVID-19 team, managing the organization’s response and preparedness strategies.

In addition to caring for COVID patients at four suburban hospitals, she sends updates with guidance to providers and leadership.

Taormina has been a weekly guest on WBEZ’s “Reset” program, where she shares her advice on COVID-19 and answers questions from listeners.

Heroes for Humanity Our sincere thanks to all of our brave physicians, nurses, caregivers and associates, working on the front lines and behind the scenes, to stop the spread of COVID-19.

Congratulations to the following AMITA Health physicians and associates — honorees of the Crain’s Chicago Business Notable Healthcare Heroes list: N. Seema Ahmed, MD; St. Alexius Medical Center Hoffman Estates Mary Flink, RCP; Holy Family Medical Center Des Plaines Molly Keevil, RN; Saint Joseph Hospital Chicago Stephanie Nisic, RN; Adventist Medical Center Hinsdale Luke Northern, MD; Alexian Brothers Medical Center Elk Grove Village Arnon Rubin, MD; Adventist Medical Center Bolingbrook Frank Schneider, RN; Saints Mary and Elizabeth Medical Center Chicago Justin Yee, MD; Saint Francis Hospital Evanston

We are grateful for everyone’s courage, compassion and continued commitment.

Learn more about how you can help our heroes at

AMITAhealth.org/InItTogether

Help them

by doing your part Wear a Face Covering

Wash Your Hands

Practice Social Distancing

AMITAhealth.org

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14 JUNE 29, 2020 • CRAIN’S CHICAGO BUSINESS

FAMILY CHRISTIAN HEALTH CENTER

LISA GREEN Chief executive officer

Top row, from left: David Clark, Teri Clifton and Martha Glynn. Middle row: Sylvia Ibarra, Sarah Larson and Nicole Markovich. Bottom row: Jean Reidy, Debbie Sontag and Karelle Webb.

ERIE FAMILY HEALTH CENTERS

COVID RESPONSE TEAM Erie formed a response team of five providers and four RNs to deliver testing and support to the highest-risk COVID-exposed and COVID-positive patients. Erie operates 13 community health centers and serves areas disproportionately hit by the crisis. Teams relay federal home care guidelines and the bilingual members provide Spanish-speaking patients with information and support, which increases the likelihood that they will follow health guidance to aid their recovery and help keep their families safe. In addition to care instructions, the team distributes to high-risk patients “COVID care packages” containing a portable pulse oximeter, thermometer and surgical masks for the household.

At the health center serving Harvey and other Southland communities, Dr. Lisa Green wondered why African American women were dying at a higher rate than white women. She formed a committee to communicate with hospital officials and hosted a Facebook Live event.

Green has worked to supply blood pressure cuffs to the homes of expectant moms. To encourage healthy eating, she hosted events that distributed 3,500 boxes of fresh fruit and vegetables.

HEARTLAND ALLIANCE HEALTH

HOMELESS OUTREACH TEAM The outreach team has connected with hundreds of individuals, in person and over the phone, since mid-March. More than 100 have been linked into the city’s coordinated entry system that helps homeless people find shelter. Another 150 have been connected with vital health care services including COVID-19 testing. At least 80 individuals were assisted with obtaining stimulus checks, even without an address or bank account. The COVID crisis has spotlighted the homeless population, estimated at 80,000 in the city, because it’s harder to double up in someone else’s home. The Heartland team reaches individuals at encampments and homeless shelters, under viaducts and on Lower Wacker Drive. Team members provide testing, personal protective equipment, food, connections to housing and clinics, and human contact at a time when homeless people are isolated.

Congratulations to our COVID-19 Response Team, named one of Crain’s Healthcare Heroes Teams.

We’re celebrating the entire NorthShore University HealthSystem COVID-19 Response Team. Their tireless efforts led to quickly converting a large community hospital into a dedicated COVID-19 facility, securing PPE for our entire staff, developing significant phone and e-consult resources for our communities and much more. All to ensure the safety of our patients, visitors, staff and the communities we serve.

northshore.org/COVID19

‌ And the home of the brave!

Thank you to everyone on our team who has bravely helped patients and each other. Thank you to our office staff for providing support to our visiting clinicians. And thank you to the clinicians who have been bravely making home visits to COVID-19 positive patients, and non-COVID-19 positive patients.

You all helped make history. But there is so much more history to make!

Iqbal Shariff, CEO

Angelica Avilez, Vice President

Thank you to the clinicians who directly cared for COVID-19 positive patients.

Thank you to the clinicians who took care of our non-COVID-19 patients.

Thank you to our great office and support staff, who made it all possible.

Abdul-Mannan Shamsuddin Aisha Noah Caitlin Grimwood Christine Skelton Frances Shaw Ifefikayo Oyelami Janique Bata Jaquetta Johnson Jazmin Jordan Jelian Steward Jelisa Scott Joanne Hill Jorie Curry Julia Padron Lookman Muhammed Marsha Green Michah Brinez-Cenzon Michelle Tan Mohamed Ibrahim Tiffany Green Victoria Nichelson

Allan Santos Alonso Avina Anwar Adams Bayan Abuzir Carly Decker Courtney Britton Danielle Walker Frank Ramirez Joseph Estrella Kim Muhammad-El Mary Marcano Maureen Huston Mervat Samra Queen Osaremwinda Ralph Vincent Cenzon Schuyler Johnson Theresa Andrews-Singleton

Angelica Avilez Feras Abdelrahman Florence (Swarnalatha) Gadwala Joanna Delgado Katrina Woods Iqbal Shariff Shirley Johnson Yewande Awoyemi

1300 South Wabash, Suite 200 Chicago, Illinois, 60605 312.461.1700

bhhcare.com

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16 JUNE 29, 2020 • CRAIN’S CHICAGO BUSINESS

HOWARD BROWN HEALTH

MATEO BETANZOS Assistant site medical director, Thresholds South

Mateo Betanzos has supported community testing at Project Vida in the Little Village neighborhood. As a Spanish-English speaker, and with clinical practice in infectious disease, Betanzos’ experience and expertise has been critical in assisting leadership with implementing a community-focused response. Betanzos helped test and diagnose hundreds of individuals with COVID-19 and connected them to care and resources.

ROBIN GAY Dental director

MAYA GREEN Regional clinical director, South and West sides

When the COVID-19 pandemic hit, Dr. Maya Green was the architect of Howard Brown’s testing in tents outside clinics in Englewood and Hyde Park.

Green led the organization to join with Project Vida for testing in Little Village, located in the ZIP code with the state’s highest concentration of COVID-19 cases. She also spearheaded partnerships for testing in Austin and other high-need communities using a mobile unit.

Dr. Rahul Khare INNOVATIVE EXPRESS CARE

CARE TEAM When the virus hit Chicago, the Innovative team tested hundreds of patients in the facility’s outdoor medical tent.

The team performed more than 5,000 COVID-19 tests and provided follow-up care. Innovative was among the first clinics in Chicago to offer antibody testing, using the Abbott SARS-CoV-2 test, and has tested 8,000 patients. CEO Dr. Rahul Khare expanded the clinic’s daily schedule to 16 hours and expanded the team by 40 percent. Members of the remote telemedicine team see patients online. Clinic physicians travel to area businesses to perform virus swab testing on employees before they return to work. Khare and team members also counsel business owners on best practices. Children have decorated pictures and messages of hope for the clinic’s windows, and neighbors sent treats to the team.

JOHN H. STROGER JR. HOSPITAL OF COOK COUNTY

LAKE FOREST HEARING

WEN-HO YANG

RESHMA MOHIUDDIN

LORI HALVORSON

Clinical lead, La Casa Norte

Primary care physician

President

After the COVID-19 outbreak hit, Dr. Wen-ho Yang supported community testing at Project Vida sites and on Howard Brown’s mobile unit in partnership with Mobile Care Chicago.

Yang’s work contributed to more than 4,725 tests provided on the mobile unit and in West Side communities—60 percent of Howard Brown’s total COVID-19 tests as of late May. Fluency in Spanish and Mandarin facilitated communication with affected families.

Dr. Reshma Mohiuddin supports inpatient COVID units as well as outpatient COVID testing. Taking care of a jailed COVID patient at Cermak Health Services, a veteran with PTSD, was a heartbreaking experience for Mohiuddin.

She learned that his estranged stepmom wanted to be there for him, but the rules did not allow it. Mohiuddin was able to arrange a FaceTime call, and he was able to say goodbye.

Dr. Lori Halvorson fought to get permission to enter nursing homes and hospitals to fit, fix and adjust hearing aids so patients who were isolated from their families could hear them on the phone or in online conversations. Halvorson says it was particularly rewarding to fit a blind patient with hearing aids so he could hear when people came into his room in the nursing home.

LAWNDALE CHRISTIAN HEALTH CENTER

CLINIC TEAM The West Side clinic developed free walk-up and driveup testing. Clinicians complete more than 400 telehealth visits daily and offer follow-up COVID monitoring, ongoing medical care and prescription assistance.

The center has performed more than 1,700 COVID-19 tests for community members, identifying more than 500 positive diagnoses. As part of a community-driven pandemic response for homeless people, the center cares for older at-risk adults. They have been moved to isolation care in a former downtown hotel, where they receive medical support, daily meals and help finding permanent housing. For many, it’s the first time in years they have received reliable access to medications and consistent mental, medical and spiritual support, as well as stable, quality individual housing.

JOHN R. BOEHM

With Howard Brown’s dental clinics closed during the outbreak of the coronavirus, Dr. Robin Gay and her team mobilized to source personal protective equipment for front-line providers. She also helped develop and implement procedures for ensuring staff were in sanitized scrubs every day. And she assisted in the development of a video detailing safe and secure ways to wear and dispose of the equipment.

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LOYOLA UNIVERSITY MEDICAL CENTER

MARK CICHON Professor and chair, Department of Emergency Medicine

In the early stages of the COVID crisis in Illinois, Dr. Mark Cichon had an idea to help protect his team.

He worked with Windy City Plastics to design an acrylic box that could protect physicians when intubating patients. The Physician’s Protection Box has been made available to hospitals around the Chicago area and the rest of the nation.

RICHARD “RICKY” FRANCISCO Nurse

JOHN R. BOEHM

are

CRAIN’S CHICAGO BUSINESS • JUNE 29, 2020 17

Ricky Francisco is a nurse in the surgical intensive care unit, which continues to see a steady influx of the most critical patients. He and other nurses mastered the technique of placing patients in a prone position to improve breathing and trained a team to assist other units. While Francisco cared for COVID patients, his mother and brother were hospitalized with the virus.

MCCORMICK PLACE COVID-19 ALTERNATE CARE FACILITY

DANIEL HAZLETT Project manager

In late March, Daniel Hazlett was granted administrative leave from his job at Discover to assist the state and city in launching and operating the McCormick Place COVID-19 Alternate Care Facility, which was designed to alleviate pressure on Chicago’s health care facilities. Hazlett, who is also a student at the Kellogg School of Management, was part of the team that had 14 days to convert the convention center into a hospital.

MEDEX AMBULANCE SERVICE

MEDEX RESPONSE TEAM When the pandemic hit, MedEx leadership initiated a daily, worldwide search for personal protective equipment. The Response Team adapted to treat and transport hundreds of COVID-positive patients as the pandemic progressed: some patients with mild symptoms and many with more urgent medical needs. MedEx employs more than 250 emergency medical technicians and paramedics. Treating and transporting a barrage of patients in isolation required new practices, skills and inner strength. Overcoming fear for self and family became a way of life for team members who interact with COVID-19 patients every day. New challenges, such as the endless search for PPE, emerge daily. And despite best efforts to keep team members infection-free, a few needed to be quarantined.

MEDICAL HOME NETWORK

MATTIE KENNEDY Transitional care nurse

Mattie Kennedy manages the transition of care for Medicaid patients discharged from the hospital. The nonprofit Medical Home Network, which is digitally connected to 30 hospitals as well as 400 primary care medical homes and behavioral health and community-based organizations, serves 320,000 patients in Cook County. Kennedy speaks with patients in person or by phone, listens to their concerns and explains the steps they’ll need to take to protect themselves and others. For a patient discharged after a two-week hospital stay, Kennedy made sure that she could self-quarantine and had someone to help her. Kennedy was able to have masks and other safety supplies delivered to the patient’s home so her son could visit and be around his mother from a safe distance.

MERCY HOSPITAL & MEDICAL CENTER

MICHAEL MARKOS Chief of medical staff

Dr. Michael Markos runs two COVID-19 units at Mercy Hospital, caring for vulnerable populations that have been disproportionately affected by the virus. The challenging part of treating critically ill patients is that they don’t have family and friends surrounding them during the most difficult times of their lives, Markos says.

The nursing team and respiratory therapists stepped in as family.

“I’ve held the hands of dying patients, I have prayed over the heads of patients at their request,” he says. One uplifting moment was seeing a patient who had been intubated for 40-plus days get discharged to rehabilitation.

On a personal level, he says, it is trying to have to come home to a daily decontamination ritual in the garage and isolate himself from his wife and three daughters.

NE HEALTHCARE SERVICES

DIANA SOTO Director of nursing/clinical manager

Diana Soto cares for more than 70 COVID-19 patients referred to the Chicago provider of home health care services by area safetynet hospitals. Soto educates patients on how to manage their illness, monitor their temperature and oxygen levels, and avoid spreading the virus to others in their home. Her knowledge of sign language and fluency in Spanish enhance communication. For patients in self-quarantine, Soto may be the only person they see.

18 JUNE 29, 2020 • CRAIN’S CHICAGO BUSINESS

THE NIGHT MINISTRY NORTHWESTERN MEDICINE

STEPHAN KORUBA Senior nurse practitioner

As a member of the ministry’s street medicine team, Stephan Koruba provides health care to individuals living on the streets and supervises other nurse practitioners. Koruba has spearheaded initiatives to attend to the challenges faced by Chicago’s homeless. He established connections at the CTA that allowed the team to provide screenings and food to the increased numbers of individuals who were riding the trains at night because they were afraid of contracting the virus in a shelter.

Koruba recalls that the first week that the shelter-in-place order was in effect, “we were the only service providers out on the street. Our clients were anxious and scared. Sitting there and talking with them, it was obvious that we were filling a role no one else was filling.”

RAINA LEON RN, labor and delivery Northwestern Memorial Hospital

METRO PARAMEDIC SERVICES

PARAMEDICS AND EMERGENCY MEDICAL TECHNICIANS Employees of Metro Paramedic Services who operate advanced life support ambulances and provide emergency medical services are integrated into fire departments throughout the Chicago suburbs. They have provided service throughout the pandemic, often putting themselves and their families at risk of contracting the virus. At the onset of the pandemic, employees were challenged by the nationwide shortage of personal protective equipment.

Paramedic crews sometimes were required to reuse the equipment until they could become resupplied by the hospitals. They take extra measures to decontaminate themselves before returning home to their families.

When the virus hit, Raina Leon’s unit in labor and delivery at Prentice Women’s Hospital asked for volunteers to treat COVID patients. Laboring patients can easily aerosolize the virus, creating a highrisk environment for the staff. Leon had to tell patients that if they tested positive, they might have to be separated from their newborns. She spent time with the laboring moms, watching wedding videos or singing ballads to distract them from epidurals.

PATRICE ROSENBERG Registered nurse Northwestern Memorial Hospital

With eight years of experience working in the medical ICU and emergency room, Patrice Rosenberg has been working four or five 12-hour shifts per week in a COVID-19 unit. She stepped up to become a regular charge nurse of a unit, and she has been responsible for training nurses with less experience who have transferred over to help during the crisis. Rosenberg was interviewed by several area TV stations.

NORTHSHORE UNIVERSITY HEALTHSYSTEM

KAREN KAUL Clinical chair, Department of Pathology & Laboratory Medicine

COVID-19 RESPONSE TEAMS NorthShore leaders established Glenbrook Hospital as the system’s COVID hospital, expanding the ICU, emergency department and an inpatient unit. The system established four immediate care COVID supersites and a drive-thru testing site.

The teams completed 75,000 COVID tests, including more than 8,800 drive-thru tests. Team members handled 26,000 immediate care visits and 21,000 e-visits.

They answered more than 33,000 calls on the system’s health hotline and also reached out to patients recovering at home. The hospital cared for 800 patients, and team members went to great lengths to ease their difficulties. After a critically ill patient spelled “rosary,” her nurse drove home after a 12-hour shift to get her one.

Another nurse held a patient’s hands while a physician arranged a video conversation with family.

Under the direction of Dr. Karen Kaul, NorthShore implemented its own fully validated, in-house COVID-19 test based on published CDC lab data. NorthShore worked with the Illinois Department of Public Health to ensure its test performed identically to the state’s. The hospital system began testing on March 12 at a rate of 400 patients per day and subsequently expanded capacity to test up to 1,500 patients daily. It has conducted more than 100,000 tests.

MELISSA SIMON

DAVID ZICH

Vice chair of clinical research, Department of Obstetrics & Gynecology Northwestern University Feinberg School of Medicine

Emergency medicine specialist Northwestern Medicine

In addition to caring for COVID-19 patients, Dr. Melissa Simon has raised awareness of how the pandemic has deepened health inequities. She is part of the mayor’s COVID-19 Recovery Task Force and the Illinois Department of Public Health COVID-19 Equity Team.

She’s hosted public conversations on topics such as mental health and gun violence. A practicing physician, teaching professor and researcher, Simon also is faculty director of Northwestern’s Center for Health Equity Transformation.

Dr. David Zich has treated patients in the COVID unit at Northwestern Memorial Hospital. To inform and enable his patients to understand the facets and risks of the pandemic, he began publishing an email letter explaining the complex topics in understandable language. He has appeared on Fox 32 to answer viewer questions about the pandemic.

Staying abreast of the onslaught of information and misinformation has been a challenge, he says.

CRAIN’S CHICAGO BUSINESS • JUNE 29, 2020 19

NORTHWESTERN UNIVERSITY KELLOGG SCHOOL OF MANAGEMENT

SMITHA AREKAPUDI Anesthesiologist and student

12 WEST FEINBERG Northwestern Memorial Hospital

When Northwestern started converting nursing units to care for COVID-19 patients, 12 West was the second surgical floor to shift. Led by manager Sarah A. Cummins, the team includes a staff educator, clinical coordinators, secretaries, suppliers, X-ray techs, nurses, and respiratory, physical and occupational therapists, as well as staffers in housekeeping, transportation and EKG. In late March and early April there was tension. Patients would rapidly change for the worse in minutes. The staff would take a mindfulness break together for two minutes every shift. They have supported one another through stressful days and gathered to “clap someone home.” The staff danced for a patient as she left on her birthday. They dimmed the lights at the station, turned on a disco ball and sang as she went home with tears of joy.

As a student in Kellogg’s Executive MBA program, Dr. Smitha Arekapudi saw an opportunity to leverage her experience as a physician and student to address the shortage of personal protective equipment. She organized her class cohort and the Kellogg alumni network to create an initiative: Every Hero Needs a Shield. The program donated face shields and intubation barrier boxes to health care workers at hospitals caring for underserved groups.

PROJECT VIDA

JEROME MONTGOMERY Executive director

Since the outbreak, Jerome Montgomery’s focus shifted from HIV/AIDS to testing for COVID-19 in partnership with Howard Brown Health.

He mobilized Project Vida as a testing hub in Little Village, offering more than 500 tests in the first week when tests were difficult to obtain. With more than 50 percent of clients screening positive, and 80 percent living without insurance, the decisive action helped the community better understand the virus and its impact.

Congratulations to

Larry K. Kociolek, MD, MSCI Attending Physician, Division of Infectious Diseases Medical Director, Infection Prevention and Control Ann & Robert H. Lurie Children’s Hospital of Chicago Assistant Professor of Pediatrics Northwestern University Feinberg School of Medicine Irene Heinz Given and John La Porte Given Professorship in Pediatrics

for being selected as one of Crain’s Chicago Business

2020 Notable Health Care Heroes.

All the leadership. All the heroes. All, for your one.®

luriechildrens.org

HOSPITAL WORKERS ARE MAKING THOUSANDS OF DIFFERENCES For the past several months, our hospital workers have dedicated their lives to battling COVID-19 — both on the frontlines and in support roles, working together to provide exceptional patient care. Our doctors, nurses, technicians, transporters, pharmacists, and other team members — all supported by our information technology and supply chain personnel — have consistently risen to the occasion to tend to our most vulnerable patients.

From everyone at UChicago Medicine and Ingalls Memorial — THANK YOU — for the sacrifices you make every day. Your dedication, commitment and courage deserve our deepest gratitude and admiration.

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Special thanks to UChicago Medicine’s Crain’s Healthcare Heroes: » Adult Emergency Department » Clinical laboratories » COVID-19 cohort unit » Environmental Services team » Infection Control team » COVID-19 call center and swabbing team at Ingalls Memorial » Resident Inpatient/ICU COVID-19 unit » Spiritual care » Teletriage nurses » And all of the other countless teams who serve patients every day.

UChicagoMedicine.org

20cb0294b.pdf

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Color: 4/C

22 JUNE 29, 2020 • CRAIN’S CHICAGO BUSINESS

RUSH UNIVERSITY MEDICAL CENTER

PULMONARY CONSULTANTS

NASSER ZAKIEH

KATHRYN DUDZIK

Pulmonologist, critical care specialist

Critical care registered nurse Rush University Medical Center

As the ICU director at OSF Little Company of Mary Medical Center in Evergreen Park, Dr. Nasser Zakieh treats critically ill COVID patients who have life-threatening complications. Zakieh and his team saw the number of patients on ventilators triple as the virus spread. Many at Little Company of Mary didn’t see family for two weeks. One patient with severe COVID pneumonia told Zakieh, “Please stay safe. We need you.”

Kathryn Dudzik works in the COVID ICU, assisting in the treatment and care of patients while also helping nurses from other units get acquainted in order to assist on the unit. She picked up additional shifts to help the team when there was a spike in the number of patients. On her days off, she prepared snacks for her team.

COMMAND CENTER LEADERSHIP Rush University Medical Center

ROSELAND COMMUNITY HOSPITAL

Drs. Omar Lateef and Richa Gupta led Rush’s response to the crisis, serving as CEO and chair of the Command Center, respectively. Through their efforts, the Rush system was able to play a key role in flattening the curve in Chicago, while also caring for the state’s most severe COVID cases. The hospital was physically changed to provide more beds and increase staff. The team moved to clear needed space and shut down elective surgery. In three weeks, facilities and operations were transformed in ways that would have taken years under typical circumstances.

Around the eighth week, the hospital was able to successfully remove its 100th patient from a ventilator. Lateef and Gupta used the milestone to rally staff and renew a sense of purpose.

MEGAN GAYESKI PIRAJNO

Chief executive officer

Internal medicine hospitalist Rush Oak Park Hospital

Recognizing that the state had no initial plans to offer COVID-19 testing on the Far South Side, Tim Egan opened up the front of Roseland Community Hospital for nasal swab and antibody testing. The hospital, which serves an African American community, was one of the first to offer public testing. At the start, Roseland was testing 500 people a day, and cars were lined up for several blocks. It has performed more than 15,000 tests, including for Chicago police officers, firefighters, CTA bus drivers and first responders. After an employee in the kitchen at Roseland tested positive for COVID-19, the staff went into quarantine, and the kitchen was closed. Faced with feeding patients and staff, Egan tapped his personal network to ensure hot meals arrived every day.

At Rush Oak Park, Dr. Megan Gayeski Pirajno started the Illinois Medical Collective on Facebook. It is made up of more than 2,600 health care and emergency services workers across the state who share resources and source personal protective equipment.

Gayeski Pirajno helped arrange the donation of 66,000 N95 masks and 1,400 P95 masks to 60 hospitals and 80 private clinics, nursing homes and home health agencies. “At the beginning, it was scary to know how many places didn’t have access to PPE to take care of COVID-19 patients,” she says.

Through the collective, she was put in touch with private donors who wanted to make anonymous donations of PPE to hospitals. Gayeski Pirajno also works in COVID-19 units at Rush Oak Park.

TIM EGAN

Aney Abraham, from left, Jessica Margwarth, Kimberly Whitecotton, Mary Ellen Close and Sarah Saladino.

7 NORTH ATRIUM GENERAL MEDICINE (COVID-19 UNIT) Rush University Medical Center

7N was charged with transforming the unit to accommodate COVID patients within 48 hours. The nurses and nurse leaders mobilized a plan to meet the environmental, educational and safety needs of patients and staff. 7N leaders collaborated with acute and intensive care teams that had been caring for these patients since Rush’s first COVID admission in March. A particularly special moment occurred when a 7N staff nurse advocated for a COVID-positive patient whose sister was in the ICU. When the condition of the sister in the ICU worsened, the nurse won support to arrange for the siblings to have a bedside visit. At other times, the team came together in down moments to sing and dance, and they celebrated when a patient weaned from oxygen was sent home.

RUSH COVID CLINIC Rush University Medical Center

In early March, Rush established the COVID clinic, an area outside of the emergency department where patients suspected of carrying the virus could be tested without risk of infecting others. The clinic provided COVID-19 testing for Rush employees, first responders and other members of the community experiencing symptoms.

CRAIN’S CHICAGO BUSINESS • JUNE 29, 2020 23

KATHRYN “KATIE” GERSTER RN care coordinator Rush Oak Park Hospital

Katie Gerster was instrumental in establishing the Rush drive-thru testing clinic at Rush Oak Park. She stepped up to train staff, prepare the site and begin testing. She worked outside, sometimes in the cold and rain, providing results in 20 minutes or less.

Gerster provided the latest information on COVID so the patients, who were often worried and sick, could monitor their symptoms.

PAMELA KATZ

KEVIN KING

Nurse Rush University Medical Center

Radiation oncology resident Rush University

Oncology nurse Pamela Katz switched to caring for COVID patients when Rush saw a spike in cases.

She worked in and outside the ICU, bringing sensitivity and compassion from her experience helping cancer patients. Nursing is the second career for Katz, who spent 20 years in marketing and ran her own digital media agency, Charlotte’s Web Marketing.

When the outbreak hit, the residents of the radiation oncology team were assigned to front-line roles, and Dr. Kevin King was moved to a unit to treat patients stricken with cancer and COVID-19. King was there for patients through bad times and worse, often in their final moments.

He worked with family members to set up video calls with their loved ones in the hospital.

DEBORAH MALLERS Psychiatric liaison nurse Rush University Medical Center

Since the pandemic, Deborah Maller’s focus has expanded to help medical and support staff deal with the unprecedented and unpredictable stress of work as well as additional pressures of home, home schooling, family health and other concerns. She’s worked with psychiatrists and doctors to help front-line staff who have lost family or experienced anxiety or PTSD. Many will need her more than ever after this prolonged stressful time.

TYLER WEISS Respiratory therapist Rush University Medical Center

During the crisis, Tyler Weiss helped develop the prone-positioning process that helps patients get off a ventilator. He also is involved in placing patients who are not on the ventilator in the prone position to reduce their need for mechanical ventilation. Flipping patients to lie on their stomachs opens airways in lungs that are compressed by fluid and inflammation.

Weiss trained other team members in the technique and has contributed to manuals and protocols.

MASTER’S STUDENTS, RESPIRATORY THERAPY Rush University

Rush students weren’t asked to volunteer for clinical work during the pandemic, but an exception was made for the respiratory care program because of the extraordinary need and the students’ advanced learning. These students, who work under the supervision of respiratory therapists, assess how a patient is responding to the ventilator’s flow of air, monitor minute-by-minute details and report any notable changes.

They also routinely reposition patients and suction away excess saliva. The students act as an extension of the respiratory staff, allowing the therapists to attend to the most acutely ill COVID patients.

Top row, from left: Janet Shlaes, Ed Pietrzak, Susan Chubinskaya and Althea A. Billins. Second row: Lakshmi Venugopal, Jay Goodrich, Rebecca Benfakir and Katie Oczkowski. Third row: Jennifer Comerford, Linda Fitzgerald and Mary Grantner.

CENTER FOR INNOVATIVE & LIFELONG LEARNING Rush University Medical Center

When COVID hit in March, the program that provides continuing education for physicians, nurses and pharmacists had to cancel live events and regroup. By the end of April, the program had transferred to a virtual platform and succeeded in reaching 1,300 individuals. The team produces virtual programs for attendees from multiple disciplines who earn continuing medical education or continuing nursing education credits. Team members work with Rush health care providers and their colleagues from other institutions to provide specialty-focused webinars, panels and recorded lectures.

The team curated a variety of COVID-19-related resources and produced micro-learnings to support learners at Rush and beyond.

SUPPLY CHAIN OPERATIONS TEAM Rush University Medical Center

The team’s primary goal was to make sure Rush employees had the proper personal protective equipment to care for COVID patients. Team members quickly responded to the rapid increase in demand by sourcing and procuring goods through multiple channels, building and rolling out additional supply rooms, and providing 24/7 coverage. Changes to processes and inventory levels were put in place to ensure critical provisions were available through the peak of the crisis. Team members also developed a process to receive donated goods. They coordinated with Rush Copley Medical Center and Rush Oak Park Hospital to ensure that the system was supplied. And they worked with other health systems in the Chicago area to source PPE when there were shortages.

24 JUNE 29, 2020 • CRAIN’S CHICAGO BUSINESS

A SAFE HAVEN FOUNDATION

NELI VAZQUEZ ROWLAND President and co-founder

Concerned about the vulnerability of homeless people, Neli Vazquez Rowland collaborated with Rush University Medical Center and the city of Chicago to add a COVID-19-positive isolation space to the foundation’s West Side shelter.

The 100-bed space houses people who have symptoms or who have tested positive. She is a founding member of the Chicago Homelessness & Health Response Group for Equity, which represents health and homeless organizations that worked together to respond to COVID-19.

SHIRLEY RYAN ABILITYLAB

COVID CARE UNIT The unit serves patients recovering from COVID-19. That recovery can require extensive rehabilitation, with many patients having trouble swallowing, talking and walking. They may have poor endurance and dexterity, kidney problems and cognitive issues. Researchers developed and deployed a wearable device to continuously track COVID-like symptoms in patients and clinicians. The clinical team leveraged technology to coordinate discharges and prepare patients to return to their homes and communities. The team was particularly moved by the story of a couple married for 40 years, Gladys and Clifton Wilson. Stricken by the virus, they were both on ventilators for weeks, and Gladys fell into a coma. Thankfully, the parents of three and grandparents of six survived and were reunited for rehab at the AbilityLab.

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CRAIN’S CHICAGO BUSINESS • JUNE 29, 2020 25

SINAI HEALTH SYSTEM

SUNITA MOHAPATRA Division chief, Section of Infectious Diseases Sinai Health System

SIMPLE LABS

RICHARD LARIOSA Medical technologist

SILVER CROSS HOSPITAL

6TH FLOOR NURSING UNITS As the pandemic reached Silver Cross Hospital in mid-March, the New Lenox facility converted its sixth-floor nursing units into COVID-dedicated areas to isolate and care for these ill patients. The floor became the COVID epicenter.

Early on, the nurses assumed added responsibilities to conserve personal protective equipment and limit the number of staff entering isolation rooms.

With visitor restrictions in place, they facilitated patient-family communications with worried loved ones, delivering positive news and heartbreaking goodbyes. They expanded their nursing skills, becoming experts in assessing respiratory function, critical lab values and heart rhythms, as well as in proning patients to improve oxygenation and avoid mechanical ventilation. Initial doubts were replaced by certainty that they can master new skills, operate in a crisis and adapt to any situation.

Before COVID-19, Richard Lariosa was handling general lab testing for infectious diseases and had just passed the U.S. medical licensing examination. He now serves as the lead COVID-19 technologist, testing samples from hospitals, nursing homes, outpatient clinics, community health centers and drivethru testing sites. Demand for testing grew so rapidly that Lariosa and his team worked nights and weekends to keep up.

A specialist in the treatment of infectious diseases, Dr. Sunita Mohapatra has been on the front lines, caring for COVID patients. She led Sinai’s response, developing the hospital’s surge plans, planning for PPE needs and developing infection control procedures to protect current and future patients as well as her fellow caregivers. She recalls asking a patient to breathe so she could listen to the patient’s lungs. The patient responded, “Sorry, doctor, I just can’t breathe.” Mohapatra has had former patients call in to check on her. “It’s interesting the way the tables have been turned to take care of the caregivers,” she says. When she comes home at night, she stays away from her family until she has showered and changed her clothes.

KENDALL MOSBY-THOMPSON Nurse Mount Sinai Medical Center

Before COVID, Kendall Mosby-Thompson was tending to victims of accidents and gunshots. He subsequently pivoted to caring for patients with the virus, many of whom had underlying conditions. He was shaken by one patient—a young pregnant woman who was COVID-positive and couldn’t see her family. Fortunately, she was treated and released.

Mosby-Thompson struggles with the risks to himself and his family but feels responsible for his patients.

Congratulations to Dr. Karen Kaul, named one of Crain’s Healthcare Heroes.

We’re celebrating Dr. Karen Kaul, Clinical Chair, Department of Pathology and Laboratory Medicine at NorthShore. She led the NorthShore Lab Team in developing the first independent COVID-19 test in the State of Illinois. Since March, we have conducted over 100,000 tests to date—a groundbreaking accomplishment in the fight against this global pandemic. Thank you, Dr. Kaul.

northshore.org/COVID19

26 JUNE 29, 2020 • CRAIN’S CHICAGO BUSINESS

SUPERIOR AMBULANCE

SWEDISH HOSPITAL

SPECIAL RESPONSE TEAM

INTERMEDIATE CARE UNIT STAFF

The Special Response Team was deployed to New York for two months to support emergency medical services during the pandemic. The team is called upon when there is an emergency in the region such as a hurricane. They can set up field hospitals, provide 911 response, assist search and rescue teams or aid in evacuations. The New York deployment involved 26 team members and eight ambulances: five crews from Illinois, two crews from Indiana and one from Michigan. They were used to run 911 and interfacility transports. Superior rotated crew members during March and April, with everyone doing a two-week-minimum stint—some stayed longer. Everyone went to work knowing the risks of exposure.

This unit became the hospital’s COVID Critical Care facility, housing critically ill patients.

The unit was short-staffed as some co-workers had contracted the virus and were at home.

The team members learned on the job and adjusted to evolving recommendations on COVID-19 management. On one day, the 16-bed unit was full, with every patient on a ventilator and multiple intravenous medications. Many patients needed proning, the process in which the patient is flipped onto his or her stomach to open up airways and make it easier to breathe. Young nurses learned how to administer paralytic drugs and provide appropriate monitoring. And team members learned how to troubleshoot the ventilators as the respiratory therapists often were busy. They’ve been performing nonstop since mid-March.

MEDICAL HOME NETWORK celebrates our very own

Mattie Kennedy Transitional Care Nurse RN BSN

One of Crain’s 2020 Notable Health Care Heroes See Mattie’s story www.medicalhomenetwork.org

We would like to extend our gratitude

to Mattie, our Transitions of Care team and all frontline workers who have gone above and beyond for the Chicago area during the COVID-19 crisis.

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CRAIN’S CHICAGO BUSINESS • JUNE 29, 2020 27

THREE CROWNS PARK

GERALD “GERRY�

FARINAS Director of life enrichment

At the Evanston retirement home, Gerry Farinas pivoted to engage one-onone with residents who are sheltering in their apartments and cannot participate in group activities or see visitors. When a resident was diagnosed with COVID early in the pandemic, Farinas donned personal protective equipment to visit, make him laugh and connect him with family members.

THRESHOLDS

HOMELESS OUTREACH PROJECT During the outbreak, team members stepped up interactions with homeless people. Of the estimated 80,000 people in Chicago experiencing housing instability or homelessness, about a third suffer from severe mental illnesses, the group says. Many homeless people were shut out of the public places they normally go for water and to get out of the weather, such as fast-food restaurants and libraries. They are vulnerable to disease and infection due to their lack of access to health care, safe places to stay and places to wash. Thresholds staff worked to keep homeless people out of the hospital by teaching them about wearing masks, social distancing and hygiene. The team was able to get several street homeless people housed and connect them to health care.

Saluting our Silver Cross Heroes

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28 JUNE 29, 2020 • CRAIN’S CHICAGO BUSINESS

UCHICAGO MEDICINE

ENVIRONMENTAL SERVICES UChicago Medicine

UChicago Medicine’s Environmental Services staff played key roles on the front lines. EVS workers volunteered to work on the COVID-only floors at UChicago hospitals, putting aside personal concerns to ensure patient safety. The members sanitize every room daily and work as a team to clear trash and linens to give each patient the best chance of recovery. EVS teams focus on guaranteeing a safe, quick turnaround of rooms after patients are discharged. The switch to disposable food service trays meant a significant increase in the volume of refuse that EVS handled during the crisis. The 120 EVS team members working in COVID areas endure hours of wearing sometimes-constraining PPE as they decontaminate high-risk areas and surfaces to protect patients and their clinical colleagues.

Sarah Wheeler, from left, Jessie Jeudy and Elana Postawa.

CLINICAL LABORATORIES UChicago Medicine

The staff in three clinical laboratories worked together to support widespread COVID testing, particularly for residents in underserved South Side communities. In addition to performing COVID-19 testing of UChicago Medicine’s patients and at drive-thru swab collection sites, the team supported testing for community hospitals, clinics and skilled nursing facilities. Without this help, these organizations would have had to rely on outside labs where results could take days. UChicago Medicine provides swabs for specimen collection by community providers. Those specimens are sent back to UChicago Medicine’s lab, where results are reported within 24 hours. Skilled nursing facilities were among the first community providers to be supported by this outreach effort. After receiving positive results, these facilities were able to collaborate with infectious disease specialists on care plans for infected patients.

ADULT EMERGENCY DEPARTMENT UChicago Medicine

COVID COHORT UNIT UChicago Medicine

As the pandemic set in, nursing leaders pivoted to prepare COVID-positive units at the flagship hospital. Team members went beyond their normal roles, even absorbing ancillary services, such as nutrition support and conserving personal protective equipment. While their clinical skills helped get the vast majority of patients healthy and discharged, their care for patients’ emotional well-being made a lasting impact. Nurses used tablets and smartphones to connect patients with loved ones at home. In some cases, staff members provided a virtual face-to-face connection during an ill person’s last moments. Thank-you notes from former patients boosted staff morale. “We’ve had people calling and saying, ‘You saved my life. I wouldn’t be here without your nurses,’ ” says Stephenie Blossomgame, clinical director, general medicine service line/procedure cart services.

When fears of a pandemic grew, the 250-person team knew their ER would be among the first places sick people would turn. But it wouldn’t just be coronavirus patients. Life-threatening injuries still needed trauma care. The team quickly pivoted to build two separate but equally busy ERs under one roof—a “hot zone” for those with COVID symptoms and a “cold zone” for others.

To expand capacity, the team modified the ambulance bay to become a patient care space and added 80 chairs for low-acuity patients in an unused space. When physicians pushed to try an unusual technique—high-flow nasal cannulas—to avoid intubating patients struggling to breathe, engineers also worked to build anterooms to protect staff from aerosolized droplets the devices create.

CALL CENTER AND SWABBING TEAM UChicago Medicine Ingalls Memorial

At the hospital in south suburban Harvey, the team formed in March to assemble and coordinate an efficient process for screening and testing. A multidisciplinary group mobilized to establish a triage call center and three curbside testing sites. One site handles 170 tests a day, and the call center fields between 200 and 300 calls daily. The team schedules testing appointments, calls individuals with test results and ensures the swabbing stations have supplies. Team members have helped local and state leaders understand the extent of positive cases in the community. Call center staff made a difference by listening to concerns, answering questions and coordinating care. The team overcame challenges of bad weather, learning new roles and, in some cases, caring for sick family members at home.

Stephanie Welsh

SPIRITUAL CARE UChicago Medicine

The Spiritual Care team offers emotional, mental and spiritual support to patients and their families. The group of eight chaplains has a 24/7 presence at UChicago Medicine and Comer Children’s. Families and friends aren’t able to physically comfort and advocate for their loved ones like they normally would, so chaplains have been a bridge of support, especially during end-of-life care. The team also started the practice of checking in on the well-being of family members. Chaplain Stephanie Welsh described the time a patient with a grim prognosis was being intubated. Welsh worked with their nurse to set up a FaceTime call with family. Fortunately, the patient recovered and was discharged but says the call brought peace to a family expecting the worst.

Rush University Medical Center congratulates all our Crainâ&#x20AC;&#x2122;s Notable Heroes in Healthcare

When COVID-19 arrived in Chicago, Rush took a lead role in treating the most difficult cases and flattening the curve. As one of the most infectious diseaseready hospitals in the country, the entire Rush community demonstrated calm and preparedness, maintaining a safe environment to provide the highest quality of care.

Making rounds, you could see preparedness in the eyes of every member of the Rush University Medical Center team.

From the Command Center to our teachers and patient facing staff and supply procurement, these Rush honorees represent all who set aside personal concerns to save lives.

You are all heroes!

Excellence is just the beginning.

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30 JUNE 29, 2020 • CRAIN’S CHICAGO BUSINESS

UCHICAGO MEDICINE

Dr. Emily Landon

TELETRIAGE NURSES

INFECTION CONTROL TEAM

RESIDENT INPATIENT/ICU COVID UNIT

UChicago Medicine

UChicago Medicine

UChicago Medicine

Teletriage nurses hail from different areas of the organization, putting their regular roles on hold to support COVID-19 efforts. They field about 600 calls a day from patients and members of the public concerned about their symptoms. The team screens each patient, schedules testing if warranted and also saves patients from unnecessary ER visits. They provide care for people in underserved South Side communities who may not have a regular health care provider. The team recalls a mother of four who called the triage line, worried she was ill. She was exhausted, scared and stressed as the sole provider for her family. The nurses set her up with a drive-up testing appointment and connected her to social work support to help her through the difficult time.

The 11-person team led by Dr. Emily Landon guided the implementation of dozens of new policies covering what kinds of donated meals could be accepted (no buffet-style food), end-of-life family visits and how to care for women with COVID-19 who were giving birth. They regularly held town halls with work units, created public service announcements and compiled handouts explaining proper PPE usage, when it was safe to return after an illness, or how to keep family members safe at home. The group worked closely on contact tracing efforts within the medical center and established a process for curbside COVID-19 testing in multiple Chicago-area locations. The team determined that reusing PPE increased exposure risk for health care workers and instead instituted early social distancing policies and universal cloth masking.

Internal medicine residents have provided 24-hour care on inpatient floors and ICUs dedicated to COVID patients, designing service to provide better care. For instance, residents realized they needed to align their shifts with when tests came back, so they implemented a bridge shift to relieve pressure on the night team. When testing became available quickly, residents shifted their coverage to match the influx of new patients. Since the COVID units opened in March, 86 residents have treated 551 ICU and floor patients, 65 percent of all COVID patients at UChicago. The residents use a buddy system to support each other and check in on personal well-being. They developed shared resources for child care and lodging and organized donations of PPE and other materials.

CONGRATULATIONS We warmly congratulate Smitha Arekapudi and Daniel Hazlett for taking quick and thoughtful action to help others in response to the COVID-19 crisis.

We are proud of you both for exemplifying the kind of leaders we develop at the Kellogg School of Management, those who create impact and trust across cultures and communities.

SMITHA AREKAPUDI Executive MBA student

Today’s changing marketplace will continue to challenge the way we think and do business. It’s causing us all to reflect on our purpose and how we show up in life.

Kellogg’s Executive and Evening & Weekend MBA programs can help you meet these changes head-on by investing in your personal and professional growth with real-time returns.

DANIEL HAZLETT Evening & Weekend MBA student

Learn more: kell.gg/mba-programs

CRAIN’S CHICAGO BUSINESS • JUNE 29, 2020 31

UNIVERSITY OF ILLINOIS AT CHICAGO

DONNA CALVIN Family nurse practitioner University of Illinois Hospital

DEPARTMENT OF ANESTHESIOLOGY University of Illinois Hospital

The anesthesiology team created an airway group that was in the hospital and available for all COVID intubations 24/7. The members put themselves at risk to ensure these patients had a fighting chance. There are many instances where the airway team members were the only people in the room with a patient and were able to ensure the patient was stabilized. They have to work quickly and flawlessly in personal protective equipment that can hinder communication in challenging situations. The team arranged weekly emails in which the department chair provided updated hospital and national information to the team. The group also organized a small team of faculty to review and disseminate the latest literature, as the medical field was learning quickly.

After retiring from teaching nursing students last year, Donna Calvin continued to see patients a few hours a week, but she also spent time traveling with her husband.

When the pandemic set in, Calvin responded to an urgent call

by UIC for volunteers to perform testing in high-risk living areas such as homeless shelters and nursing homes. She has been volunteering two days a week.

CHRISTOPHER COLBERT

MARINA DEL RIOS

Assistant emergency medicine residency director University of Illinois College of Medicine

Associate professor of clinical emergency medicine University of Illinois College of Medicine

Dr. Christopher Colbert, who is also chair of continuing medical education for the American College of Osteopathic Emergency physicians, organized the first virtual national emergency conference, a three-day program focusing on COVID-19 topics. More than 1,000 physicians registered for the April conference.

Dr. Marina Del Rios has advocated for the Latino community. The infection rate for Latinos is five times greater than that of white people in Illinois. Del Rios cared for Latino patients who arrived at the ER with advanced cases. Many were reluctant to seek care because they lacked insurance or were worried about their immigration status or losing their job, she notes.

We’re proud of our Intermediate Care Unit, one of Crain’s Healthcare Heroes Teams.

Congratulations to the Intermediate Care Unit (IMCU) team at Swedish Hospital. Faced with the coronavirus, they converted the IMCU into our COVID-19 Critical Care Unit, taking on the most critically ill COVID patients. They have worked tirelessly, providing outstanding care for their patients—and compassion for family members, often updating them on the phone or through Facetime.

Thank you for exemplifying teamwork and passion for healthcare.

swedishcovenant.org/COVID

32 JUNE 29, 2020 • CRAIN’S CHICAGO BUSINESS

UNIVERSITY OF ILLINOIS AT CHICAGO

EVELYN FIGUEROA Professor of clinical family medicine University of Illinois College of Medicine

In addition to her responsibilities as professor and program director of the UIC Family Medicine Residency Program, Dr. Evelyn Figueroa serves as the volunteer medical director of the Pacific Garden Mission, the Midwest’s largest homeless shelter.

To mitigate the COVID-19 outbreak at the shelter, Figueroa created and directed a COVID isolation unit.

Her work led to the screening of hundreds of patients at high risk for infection, and she oversaw care for more than 200 homeless people with COVID-19. By devising Chicago’s largest isolation unit for the homeless, Figueroa provided safe care to one of the most vulnerable populations in Chicago while preventing community spread and relieving the demand on nearby Stroger, Mercy and U of I hospitals.

She self-isolated from her family for several weeks.

MEGAN TRESS Clinical instructor, Department of Biobehavioral Nursing Science UIC College of Nursing

Megan Tress founded a nonprofit, the Charger Squad, to equip hospital beds with cellphone chargers. Patients may have phones but no charger with them and be unable to keep in touch with family. Hearing a loved one’s voice helps the patient heal and motivates them to get well, Tress says. Charger Squad distributed chargers to more than 25 hospitals and was working with a distributor to design a device with three charger types on a single cord.

CARISSA TYO Interim director of emergency department operations University of Illinois Hospital

Before the pandemic, Dr. Carissa Tyo took over emergency department operations, adding to physician and educator responsibilities. Over the next three months, she restructured processes, erected additional rooms in a COVID tent and reassigned and trained providers into new roles. She provided daily updates to a team of 200. Tyo moved to a nearby hotel in order to be closer to the base of operations and missed time with her family as she self-isolated.

WEST SUBURBAN HOSPITAL

COVID + SUB-ACUTE REHABILITATION UNIT The team created a safe environment for COVID-positive patients who needed rehab services after discharge from acute care. The therapists help patients regain lost function from their illness and from extended hospitalization. Establishing the sub-acute rehab unit enabled patients to be transitioned from acute status, which opened up beds and enabled admission of new patients. It was uplifting for the team to discharge the unit’s first patent to her home at the functional level she had when she arrived at the hospital. Dr. Meghan Bisping, director of rehabilitation services, says that physical therapists who were initially unsure of working with COVID-positive patients are now “slightly offended” if they aren’t assigned to the unit.

Notable programs

to honor any deserving colleague

PRIVATE EQUITY ADVISORS & INVESTORS NOMINATION DEADLINE: JULY 10 PUBLICATION DATE: AUGUST 17

NOMINATION DEADLINE: JULY 17 PUBLICATION DATE: SEPTEMBER 7

Crain’s Notable Private Equity Advisers and Investors will profile accomplished private equity advisers and investors in the Chicago area with at least 10 years of experience who lead transformative growth and have proven to enhance portfolio companies.

Crain’s Notable Women in Law feature will identify women who have a track record of setting legal precedents, winning big cases for their clients and mentoring the next wave of women in law – all while finding ways to give back to their communities.

Crain’s Notable Executives in Marketing will recognize some of the top brand marketers responsible for storytelling some of the most iconic brands in Chicago.

NOMINATION DEADLINE: AUGUST 7 PUBLICATION DATE: SEPTEMBER 28

Nominate at ChicagoBusiness.com/NotableNoms

CRAIN’S CHICAGO BUSINESS • JUNE 29, 2020 33

Nobu Hotel Chicago set to open after years of drama The Fulton Market property, backed by Robert De Niro, will make its long-delayed debut July 1

BY DANNY ECKER After a series of development plot twists and big legal tension, a Fulton Market hotel backed by Robert De Niro is ready for its dramatic climax: opening amid a pandemic.

While many downtown hotels reel from the COVID-19 crisis and some temporarily shuttered ones face the possibility of never reopening, the Nobu Hotel Chicago will make its long-delayed debut July 1, the property’s managers announced.

The bold move will cap off more than four years of development issues for the 12-story building at 846-854 W. Randolph St. with the challenge of drawing in guests while business and leisure travel have been all but sapped by the outbreak.

But after an ownership change, a lawsuit against a contractor and recent riots and looting that shut down work, leadership at the 115room luxury hotel is counting on the story having a happy ending.

“We’re not making any money closed,” says Michael Chin, the hotel’s general manager and regional

director at Nobu Hospitality, the brand backed by De Niro and California chef Nobu Matsuhisa. “We want to be a part of turning the corner from pandemic to safe practicing and the new normal of how people are gonna travel and how people are gonna resume somewhat of a new style of being able to live life.”

Not that Chin didn’t have concerns about opening the doors before the fall, even as recently as a few weeks ago.

Hotel occupancy in the central business district had been below 20 percent for months. Some of the hotel’s furniture vendors had shut down manufacturing plants. Plus, Chin had an entirely new staff to train on safety protocols with little visibility into what guests will expect. And civil unrest downtown threatened to keep people away from city hotels for a while.

“It was this perfect storm of everything that could go wrong, did go wrong,” he says. “I wanted to take bushels of sage and just burn it around the building.”

But Illinois’ impending move to the next phase of Gov. J.B. Pritz-

The Nobu Hotel’s ribbon-cutting was originally supposed to be in late 2017. ker’s reopening plan has started to generate some leisure travel demand, which made it the right time to open the doors and start marketing the Nobu, Chin says. Even if that meant setting aside its initial plan to cater to corporate business from Fulton Market companies like Google and McDonald’s.

Some of the hotel’s amenities also won’t be open to start, including the pool and signature Nobu restaurant and bar. Chin is focused on making sure guests and hotel staff feel comfortable with the basics of food service and cleaning rooms before taking next steps.

For now, “we want to cater to the guest coming from the suburbs that has been stuck in their house and just wanted a break in

the routine,” he says. “They can stay in a hotel and walk around the city instead of being stuck in their backyard.”

Chin says room rates at the Nobu start at $299, a level it hopes to maintain despite lower demand to sustain the “integrity” of the luxury brand.

The Nobu’s ribbon-cutting was originally supposed to be in late 2017 after its original developer, M Development, held a groundbreaking ceremony in June 2016 with De Niro and then-Mayor Rahm Emanuel on hand. But M Development, owned by developer Mark Hunt, didn’t begin work on the foundation until spring 2017.

Six months later, Chicago-based

contractor Centaur Construction stopped work on the project as M development scrambled to finalize a $52.5 million construction loan for the nearly $73 million project. That halted progress until Hunt’s venture sold the property in January 2018 for $15.2 million to a venture of luxury hotel owner and operator RCD Resorts, according to Cook County property records.

RCD aimed to open the Nobu last year, but pushed that back after its own legal spat with Centaur. RCD sued the contractor in September, alleging its executives embezzled money for the project and failed to finish the job despite being paid for the work. That case is pending in federal court.

Ultra-luxe Lake Forest apartments sell for $54 million With wealthy renters, Kelmscott Park offers a stability that appeals to investors during a turbulent time

BY ALBY GALLUN A Chicago developer has cashed out of a new ultra-luxury Lake Forest apartment project for $54 million, a rare big deal in a real estate market turned upside down by the coronavirus.

Focus sold Kelmscott Park Apartments, a 111-unit development in downtown Lake Forest that the developer completed in 2018, to Intercontinental Real Estate, a Boston-based investment firm, says Focus CEO Tim Anderson.

Intercontinental paid $53.8 million for the property at 145 Morris Lane, according to a deed filed with the Lake County recorder. That works out to about $484,000 per apartment, a record per-unit price for the Chicago suburbs, according to Real Capital Analytics, a New York-based research firm.

Record-setting or not, big real estate deals of every kind aren’t happening as much as they were just four months ago, before the coronavirus pandemic swept into the Chicago area. With the economy in a severe recession, a lot of investors are holding off on big financial commitments as they try to assess how long the downturn will last and

how it will affect rents, occupancies and property values.

Many owners of retail property and hotels already are grappling with an existential crisis. Apartment landlords aren’t suffering as much, but with so many of their tenants out of work, plenty are having a hard time collecting rent.

That’s not a worry at Kelmscott Park, which sits in one of Chicago’s wealthiest suburbs and is well-insulated from the recent economic havoc. Sixty-six percent of its tenants are over 50, and many are renters by choice, with an average annual household income of about $320,000, according to a marketing brochure from Jones Lang LaSalle, which brokered the sale.

“Rent as a percentage of their income is so small that you get real strong collections, and you don’t have turnover even in a really bad economic downturn,” Anderson says. “They’re sticky tenants.”

The property’s wealthy clientele offer a stability that appeals to investors in a turbulent time. But Kelmscott Park is an outlier, so its sale may not say much about the state of the broader apartment investment market.

Intercontinental, which signed

Kelmscott Park Apartments in downtown Lake Forest. a contract to buy the property in March, before Gov. J.B. Pritzker’s stay-at-home order, did not respond to a request for comment.

The firm owns several other properties in the Chicago area, including an office building in the Fulton Market District and apartment buildings in the South Loop and Near North Side.

Focus developed Kelmscott Park Apartments in a joint venture with Castlelake, a Minneapolis-based investment firm. Anderson declines to say how much the project cost to build or disclose financial details about the deal but says “it worked out well.”

“The sale price was a very good

price from an excellent buyer that understood the long-term value of such a unique investment,” he writes in an email.

The apartments—the first built in Lake Forest in more than three decades, according to Anderson— are part of a larger residential development on a 10.5-acre site in the suburb that once was home to the village’s municipal services building. The project includes a dozen single-family homes priced at $1.3 million—seven are complete—and two condominium buildings totaling 42 units with an average price of about $800,000. Focus has completed one of the condo buildings.

Kelmscott Park Apartments in-

clude about a dozen units set aside as affordable for people who meet certain income threshold. The market-rate apartments at Kelmscott Park rent for $2,251 per month for a one-bedroom unit to $4,719 for a three-bedroom, according to Focus. The average market-rate unit rents for $2.60 per square foot.

Though developers continue construction of projects started before the pandemic, only a few are breaking ground on new buildings.

Wary of the uncertainty, few equity investors and lenders are financing new developments for the time being.

But Focus isn’t idle. The firm is putting the pieces in place for more projects in Lake and DuPage counties and in Chicago’s River North neighborhood, and it has three development sites under contract, Anderson says. The firm also is developing an office building underway in Fulton Market in a joint venture with Chicago-based Shapack Partners.

While he’s optimistic the market will come back, Anderson doesn’t pretend to know what it will look like when it does. He sees promise in the suburbs as more young families move out of the city. But like his peers in the business, he has never operated in a pandemic.

“You’re not sure where it’s all going to go right now,” Anderson says.

34 JUNE 29, 2020 • CRAIN’S CHICAGO BUSINESS

PEOPLE ON THE MOVE

Advertising Section

REAL ESTATE

CRG, Chicago

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

CRG, the real estate development and investment arm of Clayco, announced a pair of strategic hires. Jeff Lanaghan joins as Senior Vice Lanaghan President, Partner and Midwest industrial leader. He comes to CRG after 28 years at IDI Logistics, where he was the market leader for the Chicago region. He Robertson will lead all aspects of regional industrial activity, including capital development, leasing and asset management.

CRG has also added Struan Robertson as Vice President of Investments for its rapidlygrowing residential business.

He will lead financing and underwriting for CRG’s national multifamily projects. His role will include procuring capital partners, overseeing investment underwriting, deal due diligence and transactions and asset management.

CONSTRUCTION

HEALTH CARE

LAW

NON-PROFIT

Walsh Investment Group, Chicago

National Headache Foundation, Chicago

Chuhak & Tecson, P.C., Chicago

Greg Ciambrone has been named president of Walsh Investment Group, the investment and development arm of The Walsh Group. As president, Greg is responsible for leading the company’s investment activities on a wide variety of transactions, both in the more traditional real estate and the public-private partnership (P3) spaces across North America. Greg has also joined The Walsh Group Executive Committee to drive strategy, monitor performance and set policy across The Walsh Group.

Konrad Kothmann, COO & CFO of Diamond Headache Clinic, Managing Director of Cephalgia Services Management Group, Treasurer of Diamond Headache Clinic Research and Educational Foundation, has joined the National Headache Foundation (NHF) Board. NHF is a national non-profit raising awareness headache and migraine as legitimate neurobiological diseases. Kothmann will educate healthcare professionals to destigmatize headache and migraine helping the 40+ million people affected by this disease.

Becker Friedman Institute for Economics at the University of Chicago, Chicago

DESIGN / CONSTRUCTION

INTERIOR DESIGN

LAW

NON-PROFIT

TECHNOLOGY SERVICES

PREMIER Design + Build Group, Itasca

Mary Cook Associates, Chicago

Roetzel & Andress, Chicago

Ignite, Chicago

Chris McDonough, AIA, LEED AP, recently joined Mary Cook Associates (MCA) as chief design officer. Chris brings 25 years of interior design and hospitality industry experience to the role. “Chris may be an architect by training, but he has always been more focused on commercial interiors.

He will be a tremendous asset to our clients, especially as more multifamily projects are blurring the lines into the hospidential category,” said Mary Cook, founder and president of MCA.

Roetzel & Andress is pleased to announce Donna F. Hartl has joined the firm as a shareholder in the Corporate, Tax and Transactional Group. A licensed CPA, Ms. Hartl focuses her practice on tax planning, tax dispute work, estate planning, probate, trust administration and guardianships. She creates effective resolutions of corporate and individual federal, state and local tax planning issues and achieves thoughtful and realistic resolutions in tax controversy work at all levels.

Stephanie Piccirilli was announced as Ignite’s new CEO. Ignite is the leading nonprofit dedicated to breaking the cycle of homelessness and poverty for youth in Chicago.

Stephanie has led teams in the areas of housing, youth, workforce development, social enterprise, and support services for over 20 years. She served for three years as Ignite’s vice president of mission engagement and innovation, driving the organization’s communications and fundraising initiatives.

Meridian Group International, Deerfield

Steven Gabbert has been named Principal at PREMIER Design + Build Group.

The move marks an expansion of the firm’s leadership team following a sustained period of rapid growth. PREMIER now has offices in Illinois, New Jersey, Florida, and California where Gabbert serves as Southwest Market Leader. PREMIER provides design + construction services for a wide variety of project types including commercial, industrial, interiors, multifamily residential, recreation, retail, and adaptive reuse.

Evan Blewett, a transactional attorney and litigator, has been elevated to principal.

His practice focuses on secured lending, real estate transactions, commercial litigation, contract law and corporate compliance. Evan’s experience with governmentguaranteed loans establishes him as one of a few nationwide attorneys primarily representing local, regional, and national lenders and loan servicers who make, package and service U.S. Small Business Administration and Department of Agriculture loans.

The Becker Friedman Institute for Economics (BFI) at the University of Chicago is pleased to announce the appointment of Jorge Andrés Saieh Guzmán to its Advisory Council. Saieh Guzmán, who received his Masters in Economics and his MBA from the University of Chicago, is the Chairman of the Board of Directors for several companies, including Corpgroup Holdings, Banco Itaú Corpbanca, GrupoCopesa Media Company, and Vivocorp Real Estate Company. For more, visit bfi.uchicago.edu.

Meridian Group International, a leading global information technology services and equipment leasing company, announced the appointment of Jeff Murray as the company’s Chief Executive Officer. Jeff will lead the company’s global strategy in helping customers gain greater value from their technology investments by helping them diversify, transform, stabilize, and innovatively finance these investments across their lifecycles.

WEALTH MANAGEMENT LAW HEALTH CARE

Heartland Health Centers, Chicago The Heartland Health Centers board is proud to announce Nicole Willis has been appointed interim CEO. Willis, who has led daily operations for the organization since January 2018, helped standardize health operations across 7 community clinics. She brings 20 years of expertise in organizational management, with clinical and operations experience in both large academic and community-based organizations, including at Northwestern Medical Center.

She replaces Gwenn Rausch, who is retiring.

IT MANAGED SERVICES

MNJ Technologies, Buffalo Grove MNJ Technologies, a midmarket-focused IT solution services provider, has hired Nazrin Sadikhova as Sales Manager to enable clients to consume next generation technologies to advance their business objectives. Sadikhova previously worked as a Field Account Executive at SYNNEX Distribution for the last 4 years where she enabled technology partners like MNJ to stand up a profitable Cisco practice.

FNBC Bank & Trust, LaGrange

DRI, Chicago

NON-PROFIT

The Executive Committee of DRI – The Voice of the Defense Bar has unanimously appointed Dean Martinez as the organization’s new Chief Executive Officer. Martinez most recently served as General Counsel and Chief Operating Officer for APICS/ASCM, the largest supply chain association in the world. In previous positions over the past two decades, Martinez led wide-ranging association activities and highvisibility government initiatives.

Chinese American Service League (CASL), Chicago The Chinese American Service League congratulates Michael Cleavenger on his acceptance onto our Advisory Board. Mr. Cleavenger is Of Counsel to Cendrowski Corporate Advisors and Nike B. Whitcomb Associates. Over his 20+ year career he raised more than $150 million in major gifts and capital and endowment campaigns. His experience includes senior management and development at Chicago History Museum, Episcopal Charities and Community Services, La Rabida, and Rehabilitation Institute of Chicago.

Libby Koziarz was promoted to Senior Vice President and Trust Officer in the Wealth Management division of FNBC Bank & Trust. Libby creates integrated wealth management solutions by working with clients, their attorneys and accountants to form teams that will provide her clients with the best possible estate planning and financial advice. A graduate of the University of Illinois, Libby is a member of the Chicago Estate Planning Council and on the board of directors for The LeaderShop in LaGrange.

CRAIN’S CHICAGO BUSINESS • JUNE 29, 2020 35

Financing forces United to reveal lucrative details of Mileage Plus program ◗ MILEAGE MONEY

UNITED from Page 1

PROFITS PILE UP

The frequent-flyer program raked in $5.3 billion selling mileage last year. About $3.8 billion came from more than 100 outside partners, such as Chase and hotels, rental car companies and other merchants.

United pays a little more than 1 cent per mile, and outside partners typically pay 2 cents. It costs United about 1 cent per mile when travelers redeem frequent flyer mileage for tickets.

Profits pile up quickly. Mileage Plus posted a $1.8 billion profit last year, for a 34 percent margin, compared to 16 percent for the airline overall.

It helps that people accrue more miles than they can use. United says the number of miles issued grew at 6 percent a year between

United’s Mileage Plus frequent-flyer program generated more than a quarter of United’s overall profit last year.

MILEAGE PLUS PROGRAM’S PERCENTAGE OF TOTAL PROFIT* 30% 30% 25 20 15

25

26% 20 15

26% 2014 2015 2016 2017 2018 2019

2014 2015 2016 2017 2018 2019

MILEAGE PLUS TOOK IN $5.3 BILLION SELLING MILES IN 2019

BLOOMBERG

of a highly cyclical industry.

“This is the golden goose,” says Morningstar analyst Burk Huey.

“This is the reason why (big) U.S. carriers have 50 percent of global profit and 20 percent of global capacity. This is the thing I would want if I was thinking about giving capital to an airline.”

United’s presentation reveals that Mileage Plus membership exceeds 100 million, without providing a specific headcount. Industry analysts believe only fellow airline giants Delta and American also have more than 100 million members in their frequent-flyer programs.

The presentation shows not only how much United makes but how money flows through the program: from the “miles” sold to credit card partner JPMorgan Chase and other companies that use them as customer incentives, to those purchased by the airline itself, which doles out miles when Mileage Plus members fly United.

Airline executives say the biggest value of a frequent-flyer program is the direct connection it provides to the most lucrative customers. the figure for nonmembers.

About half of those members live in cities where United has airport hubs. New York tops the list at 13 percent, followed by San Francisco at 7 percent and Chicago and Houston at 6 percent each.

During previous travel slumps, United raised cash by selling miles in advance. Chase bought $600 million “THE CHALLENGE IS KEEPING THESE worth of miles in 2008 to help United through HIGH-SPENDING PEOPLE ENGAGED the Great Recession.

But that approach EVEN THOUGH THEY’RE NOT FLYING.” sacrifices future revBurk Huey, analyst, Morningstar enue. According to United’s presentation, advance mileage sales in previous been building since 1981.

United says 65 percent of Mile- years reduced 2017 Mileage Plus age Plus members make more revenue by $865 million, or 19 than $100,000 a year, and the percent. This time, United is using amount they spend per mile to fly, the loyalty program as collateral to a key airline profitability metric, is borrow cash, preserving future revmore than 50 percent higher than enues.

2017 and 2019, while redemptions grew an average of 4 percent.

Executives from United and other airlines have long said the biggest value of a frequent-flyer program is the direct connection it provides to the most lucrative customers. The program’s key asset is the customer list that United has

Frequent-flyer programs act as a buffer during recessions. Even if people travel less, most keep using their credit cards. In the first quarter, before the full impact of the coronavirus hit, the miles issued by the airline dropped 19 percent, but its partners issued just 2 percent fewer miles. During the 2008-09 recession, Mileage Plus revenue fell 2 percent, compared with a 19 percent overall drop in United revenue.

REBOUND

Air travel has started to rebound, albeit to just 20 to 25 percent of normal levels. Business travel, a key component of CEO Scott Kirby’s long-term strategy for United, remains all but dead. “The challenge is keeping these high-spending people engaged even though they’re not flying,” Morningstar’s Huey says. “I don’t know how they figure this out.”

71% came from third parties (credit card companies, hotels, car rental companies and other partners) 29% came from the airline, which provides miles to travelers based on their ticket and flight purchases *Earnings before interest, taxes, depreciation, amortization and aircraft rent Source: United presentation

The challenge potentially extends into coach. There’s a good chance, as Kirby recently acknowledged, a “full recovery doesn’t happen until we get a vaccine.” The longer people go without flying, the less attractive credit cards that offer frequent-flyer miles become.

“The frequent-flyer program is only as good as the airline,” IdeaWorks’ Sorensen says. “If the program is healthy, the airline is healthy. If the airline is healthy, the program is healthy. If you don’t want to fly, it reflects on the attractiveness of the program. It’s a tough environment for a frequent-flyer program.”

Salary cuts may be just the beginning of pain for Aon’s U.S. employees AON from Page 1 U.S. employees, since workers in Europe must agree to have their salaries reduced under labor rules there. Aon employs about 50,000 globally, with about 5,000 of those in the Chicago area, where the company was founded and headquartered until moving its base to London in 2012 for tax reasons.

So when will Case restore the salaries? He described the cuts as temporary in the April 27 letter but offered no prediction on when they would be reversed.

A clue came nearly a month later, not from Case, but as part of a form Aon made available to some workers offering relief from the salary cut to those who could prove “hardship.” At the end of the form, which requires workers to provide detailed information about their monthly expenses and savings, Aon’s human resources department wrote that the reductions would run, “at the latest, until Dec. 31, 2020.”

In addition, Aon spokesman Jason Gertzen says a “frequently asked questions” document issued

Meanwhile, workers at Aon and Willis Towers Watson are bracing for substantial layoffs next year.

That’s when the two London-based commercial insurance brokerages and consultancies are expected to complete their combination—a deal that was announced March 9, just before the coronavirus pandemic resulted in widespread business closures and economic fear and uncertainty for both companies and workers.

In filings in Europe, Aon detailed an ex“IT SEEMS TRENDS AREN’T AS BAD AS pected $800 million in cost cuts to take place THAT DRACONIAN SCENARIO.” after the acquisition David Styblo, analyst, Jefferies is consummated. But Wall Street expects us most,” Aon says in a statement. more than that. “In communica“That decision was based on the tions we’ve had with investors, we best available data and designed to feel like there’s a growing expectaprotect our firm against all econom- tion that the initial cost-cutting proic scenarios at a time of significant jections are conservative,” says Phil uncertainty. We regularly review Stefano, an analyst in New York at our broad-based operational flexi- Deutsche Bank Securities.

Indeed, Aon’s history of dealmakbility plan with colleagues, including temporary salary reductions, ing suggests the job losses will be and will be sharing our monthly up- more substantial. The $800 million represents about 5 percent of the date with them soon.” to workers on April 27, the date of Case’s letter, said the salary cuts would run no longer than this calendar year. He declines to share the document with Crain’s.

Those are the only mentions Aon has made to its workforce, or anyone else, of a definitive end date to the reductions.

“We took decisive action in April to protect our 50,000 colleagues and preserve our ability to best serve clients at a time when they need

combined expenses of Willis and Aon. About two-thirds of their expenses are pay and benefits.

“We believe Aon’s $800 million cost savings target is conservative based on 1) benchmarking savings against other transactions; and 2) Aon’s history of achieving run-rate savings in excess of its initial target for key acquisitions and divestitures,” David Styblo, a Nashville, Tenn.-based analyst at Jefferies, wrote in a June 25 report. “We think $1.2 billion of savings is achievable.”

Echoing Case’s alarm in his April 27 letter to Aon workers, Styblo wrote that he, too, initially thought the economic blow to Aon would be significant. “However, it seems trends aren’t as bad as that draconian scenario,” he wrote.

He projects Aon’s 2020 revenue will be $10.7 billion, $200 million less than the Wall Street consensus and $300 million, or 3 percent, below last year. He believes the company can resume buying back shares, which it’s halted for the remainder of 2020, next year.

Aon, the second-largest insurance brokerage in the world, has

had Willis, the world’s third largest, in its sights for nearly two years.

A merger attempt was derailed in March 2019 when word of it leaked.

Case approached Willis CEO John Haley about another try just two months later, according to the proxy detailing how the transaction came together. For nine months, Case tried without success to entice Haley and Willis’ board into agreeing to a “merger of equals,” which would require the payment of no premium to Willis’ stock price.

Finally, in February, as the awful scale of the coronavirus pandemic was becoming clear, Case agreed to most of Haley’s terms. They agreed on a 19 percent premium to Willis’ stock price, and Haley won a lucrative job at the merged company as executive chairman focused on innovation. Willis also won a concession barring Aon from backing out of the deal due to worse-than-anticipated fallout from the pandemic.

Now, workers at Aon watch and wait on two fronts: near term, what their monthly paycheck is going to be, and, longer term, whether they’ll remain employed.

36 JUNE 29, 2020 â&#x20AC;˘ CRAINâ&#x20AC;&#x2122;S CHICAGO BUSINESS

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HCSC hasnâ&#x20AC;&#x2122;t joined other insurers that are giving customers a share of their savings from a decline in medical procedures.

Health insurer

Financial relief

What it includes*

UnitedHealth Group

$1.5 billion

Premium credits ranging from 5% to 20% this month for fully insured members

Anthem

$2.5 billion

A premium credit in July ranging from 10% to 15% for fully insured employer customers and members enrolled in select individual plans

Blue Cross Blue Shield of More than $100 million Michigan/Blue Care Network

A 30% premium credit in July for fully insured small group customers with 50 or fewer employees and a one-time rebate for individual health plan members

CareFirst

Premium credits for fully insured customers in August and more than $80 million in rebates already owed

More than $100 million

Blue Cross & Blue Shield of Kansas City

Nearly $18 million

Financial relief for eligible employers that will include credits of certain health care premiums

Premera Blue Cross

$65 million

Premium relief worth up to $25 million for some customers and $40 million in rebates already owed

Priority Health

Not available

Plans to offer premium credits and waive cost sharing for its most heavily impacted populations

Harvard Pilgrim Health Care

$32 million

A 15% premium credit in September for fully insured employer groups and a 15% credit in September for Medicare Supplement members

Health Alliance Plan

5 percent

Decreases in monthly premiums through the end of the year for individual members

UCare

20 percent

Reduction in premiums by 20% in July and August for 146,000 commercial and Medicare members

*Not a comprehensive list of discounts Source: Americaâ&#x20AC;&#x2122;s Health Insurance Plans

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HCSC isnâ&#x20AC;&#x2122;t sharing its COVID-related savings HCSC from Page 3 companies are offering discounts but HCSC isnâ&#x20AC;&#x2122;t. â&#x20AC;&#x153;My guess is that the places where you seeâ&#x20AC;? insurers proactively returning revenues to customers are â&#x20AC;&#x153;where consumers are making the most noise,â&#x20AC;? says Amanda Starc, an associate professor at Northwestern Universityâ&#x20AC;&#x2122;s Kellogg School of Management. â&#x20AC;&#x153;It might be that the Anthems of the world face more pressure from their consumers relative to an HCSC.â&#x20AC;?

While HCSC has launched initiatives to support consumers, including covering certain patientsâ&#x20AC;&#x2122; out-of-pocket costs for treatment related to COVID-19, the insurer has not publicly announced relief in the form of premium credits or rebates. â&#x20AC;&#x153;We are making a long-term commitment, like we always have, to support our customers,â&#x20AC;? HCSC spokesman Greg Thompson says in an email. â&#x20AC;&#x153;These are extraordinary times and we are actively working with them on a one-toone basis to identify solutions that will provide short-term relief.â&#x20AC;?

Thompson says stay-at-home orders and widespread cancellations of elective procedures came too late to affect the companyâ&#x20AC;&#x2122;s first-quarter financial results.

However, HCSCâ&#x20AC;&#x2122;s publicly traded rivals cited declines in claims as a factor that contributed to higher-than-expected first-quarter profits.

FEELING PRESSURE

Find your next corporate tenant or leaser.

Connect with Claudia Hippel at claudia.hippel@crain.com for more information.

An insurer like Anthem could be feeling more pressure to dole out excess revenues than privately held HCSC since â&#x20AC;&#x153;publicly traded companies face significant headline risks when they report second-quarter results in July and August,â&#x20AC;? Morningstar analyst Julie Utterback says.

Their earnings reports are due out just before health insurers

start issuing medical-loss ratio rebates, the mechanism that limits profits by requiring insurers to spend a certain percentage of premium dollars on medical care and quality improvement. This yearâ&#x20AC;&#x2122;s rebates are based on financial data from before COVID-19.

UnitedHealth Group, the parent of the nationâ&#x20AC;&#x2122;s largest insurer, in May said it would provide customers with $1.5 billion in financial support, including premium credits ranging from 5 to 20 percent this month for its fully insured customers. Anthem followed suit in June, saying it would provide support worth $2.5 billion, including a premium credit in July ranging from 10 to 15 percent for fully insured employer customers and members enrolled in select individual plans.

SMALLER INSURERS

But itâ&#x20AC;&#x2122;s not just publicly traded companies. Smaller insurers are also offering premium relief and rebates. Blue Cross & Blue Shield of Michigan is returning around $100 million in medical, dental and vision premiums to some fully insured customers. Premera Blue Cross is giving some customers up to $25 million in premium relief and accelerating nearly $40 million in rebates already owed under Obamacare rules.

HCSC isnâ&#x20AC;&#x2122;t the only holdout.

While Humana and Cigna have launched other initiatives to support customers, like waiving outof-pocket costs for COVID-19 testing, they have not announced health care premium credits or rebates. â&#x20AC;&#x153;The great irony is that insurance companies are really risk averse, so you could easily see an insurance company whoâ&#x20AC;&#x2122;s seeing that volumes and utilization in second quarter are down, but concerned about whatâ&#x20AC;&#x2122;s going to happen for the rest of year and wanting to keep that (cash) for a

rainy day,â&#x20AC;? Starc says. â&#x20AC;&#x153;And then if the (medical-loss ratio) kicks in, the (medical-loss ratio) kicks in.â&#x20AC;?

With so much uncertainty, including how quickly patient volumes will bounce back when COVID-19 ebbs, insurers that arenâ&#x20AC;&#x2122;t getting pressure from customers or regulators likely will wait to return excess revenues.

The hospital industry says patient volumes this month are still far below pre-pandemic levels.

And according to an April analysis from the Illinois Health & Hospital Association, inpatient revenues were down 30 to 50 percent and outpatient revenues were down 50 to 70 percent.

Itâ&#x20AC;&#x2122;s not just the cost of medical claims that insurers are focused on amid COVID-19. As millions of Americans lose their jobsâ&#x20AC;&#x201D;and their employer-provided health insuranceâ&#x20AC;&#x201D;insurers like HCSC could see membership drop, hurting revenue.

In fact, enrollment declined slightly in HCSCâ&#x20AC;&#x2122;s group health business as a result of worker layoffs, Thompson says, noting that there could be a â&#x20AC;&#x153;recession-related shift to different types of plans,â&#x20AC;? like Medicaid.

If customers donâ&#x20AC;&#x2122;t press insurers like HCSC to share the wealth, regulators might. Some state insurance commissioners have asked health insurers to consider offering rate reductions and other discounts. â&#x20AC;&#x153;This is one where I think insurers have a real moral responsibility,â&#x20AC;? Mike Kreidler, the insurance commissioner for Washington state, told the Wall Street Journal earlier this month.

In an emailed statement, Illinois Department of Insurance Director Robert Muriel notes that state law doesnâ&#x20AC;&#x2122;t require premium relief, but said the department â&#x20AC;&#x153;is in communication with health insurance companies about how to assist Illinois consumers during the ongoing COVID-19 pandemic.â&#x20AC;?

CRAIN’S CHICAGO BUSINESS • JUNE 29, 2020 37

HOTELS from Page 3 already lost demand from nearly 100 major convention and trade show cancellations at McCormick Place. And with leisure travel decimated, occupancy at downtown hotels was still stuck below 20 percent as of mid-June, down 80 percent from the same period last year, according to hotel research firm STR. Small and midsize events scheduled for the second half of the year could help many properties stem their losses, but they’re now jeopardized by the 50-person cap, hotel owners say. The same goes for future business: Most events are booked months in advance but can’t be locked in without local leaders signaling they’ll sufficiently loosen the rules.

“Even if the coronavirus isn’t a thing in a year, we’re still going to be paying the (economic) price because of the messaging right now,” Jacobson says.

An IHLA survey this month of just 50 hotels statewide revealed some 1,300 events—mostly with more than 50 attendees but fewer than 300—scheduled between now and the end of March. “That shows you what’s at risk here.”

The plea for relief hasn’t yet convinced city and state public health leaders, who have numbers on their side when it comes to reopening at a slower pace.

While several Sun Belt states that were quicker to reopen are now mired with record-setting COVID-19 case numbers, the more deliberate approach in Chicago and in Illinois has considerably slowed the outbreak: The number of daily new cases is just a tenth of what it was at the peak both in the city and state.

City officials say the gathering limit is crucial because there’s a 15 percent chance that at least one person is infected in a group of 50 Chicagoans. The state has a similar outlook, though it’s open to relaxing the rules even more if case numbers keep improving.

“The administration has and will continue to work with the hospitality industry on their plans as we learn more about the virus and continue monitoring the health metrics,” Pritzker spokeswoman Jordan Abudayyeh says in a statement. “As the science evolves, so will our plans.”

But some hotel investors can’t wait for science to rescue them from default. The owners of downtown hotels including the Palmer House Hilton, JW Marriott and Hotel Felix have missed one or more mortgage payments since April, according to Bloomberg data tied to the loans, which were packaged with others and sold off as bonds. All were recently transferred to special servicers, normally a red flag to investors that the borrower is in danger of default.

Other hotel owners are scrambling for capital to stay afloat.

Chicago-based Watermark Lodging Trust, which owns the 560-room Renaissance Chicago Downtown, is soliciting investors for a $200 million infusion and says it may have to sell some of its 32 properties at a discount to weather the coronavirus storm.

Without a policy change on gatherings, “the ramifications are going to be far graver than they are now,” says Roger Hill, CEO of hospitality design and development company Gettys Group and an investor in the Hotel Felix. He deems the cap a

TODD WINTERS

Hoteliers fear 50-person cap on gatherings could put them out of business

Event planners Megan Estrada, left, and Juan Teague say Chicago hotels could lose some group business for good as a result of the 50-person cap on large gatherings. double standard, since state limits for religious group gatherings are based on room capacity of up to 100 people.

$12 MILLION A MONTH

Applying that same maximum to hotels could move the needle: The 40 downtown properties with event rooms that fit between 50 and 100 people could collectively generate $12 million in revenue per month from events held in those spaces, according to an estimate from Chicago-based hotel real estate advisory firm Hunden Strategic Partners.

Hotels and event organizers are also well-equipped for contact tracing when cases arise, says event planner and former hotel catering manager Megan Estrada, who has had 17 weddings canceled or postponed by the state’s lockdown rules.

Estrada says she’ll be 50 percent short of her budgeted revenue for the year and predicts long-term erosion to corporate event demand because of the city’s tight restrictions. Most organizers bid out events to multiple cities, “and once they lock in, they’re less motivated to move it around” after building routines

with local vendors.

But not everything about the gathering policy may be bad for hotel owners. While most despise it, some may ultimately rely on the 50-person cap to get relief from lenders if they fall short on mortgage payments. In a ruling that could have far-reaching implications for the hospitality industry, an Illinois bankruptcy court judge this month found that a force majeure clause in a South Loop restaurant’s lease excused it from paying its full rent while Illinois’ stay-home order blocked it from serving patrons on-site.

ing in during July.

The buildings operated as the Duncan YMCA/YWCA until 1976, when the Y closed and the Salvation Army moved in. The Salvation Army sold the structures to Cedar Street in 2015 for an undisclosed amount. Crain’s could not find the sale price in public records. After buying the 3.1-acre site, Cedar Street sold a portion along Ashland to another developer, Michigan Avenue,

which plans a new-construction rental building.

Keeping the buildings standing rather than replacing them with new construction “is good news for the great, historic West Side, which has lost so many of its buildings in clearance after the 1968 riots, clearance to build the (Eisenhower) Expressway, clearance to build the United Center,” says Ward Miller, executive director of Preservation Chicago.

Historical YMCA/YWCA buildings to reopen as West Loop apartments

BY DENNIS RODKIN A set of red brick buildings that over the course of a century held first a YMCA/YWCA and later the Salvation Army is set to reopen as apartments for the hot West Loop market. The first renters move in July 1.

Wrapping the southeast corner of Monroe Street and Ashland Avenue at the western edge of the West Loop, the connected structures, built between 1907 and 1928 and in differing styles, will have 260 units, all studios and one-bedrooms, positioned as a lower-priced alternative to the increasingly luxury-priced housing options in the West Loop. In that, they’re true to the site’s heritage: In the early decades of the 20th century, newcomers to Chicago often stayed at the Y while looking for a job and housing.

The studios start at $1,146 a month and one-bedrooms at $1,430.

Turning the old dormitory-style buildings into apartments “is an authentic use for these structures, and I feel great about that,” says Mark Heffron, managing partner and chief development officer of Cedar Street, the development firm behind the revamp.

Cedar Street has previously converted several vintage buildings into apartments, including an Uptown synagogue and the palatial Bush Temple of Music on Chicago Avenue.

The buildings at Monroe and Ashland will be christened the Duncan, evoking the old name Duncan YMCA/YWCA, which honored a financial endowment for the Y provided by Joseph Duncan, the inventor of the Addressograph labeling machine.

It had previously been called the West Side YMCA/YWCA. The rehab preserves one of the old Y gymnasiums, swimming pool and a sports yard in the back, all to be used as tenant amenities. The Duncan will also have a large lobby that doubles as a social area, coffeehouse and a bar. Those last two will be open to the public.

The second gymnasium was converted into apartments, some of which still have the old-fashioned hardwood basketball floor.

Not all amenities will open in July, because construction is being staged extra carefully during the pandemic. The eastern portion of the project is cordoned off from the western to keep construction and residents completely apart, Heffron says.

About 40 of the Duncan’s 260 units are rented, Heffron says, with most of those tenants mov-

CEDAR STREET COMPANIES

The 260 units, all studios and one-bedrooms, are positioned as a lower-priced alternative to the increasingly luxury-priced housing options in the neighborhood

38 JUNE 29, 2020 â&#x20AC;˘ CRAINâ&#x20AC;&#x2122;S CHICAGO BUSINESS

Morningstarâ&#x20AC;&#x2122;s CEO betting on acquisitions to boost profits That purchase valued PitchBook at $225 million.

PitchBookâ&#x20AC;&#x2122;s annual revenue Thatâ&#x20AC;&#x2122;s a fact understood well by Kapoor, a native of Kolkata, India, has more than doubled since whoâ&#x20AC;&#x2122;s been running Morningstar then to $148.4 million last year operations since 2017, though on burgeoning demand for the he and Mansueto, who is execu- data it provides on private comtive chairman, still talk regularly panies, which have proliferated in the past two decades relative about strategic decisions.

The stock has been on a tear to public counterparts. â&#x20AC;&#x153;Our single largest area of insince Kapoor took over three years ago, more than dou- vestment, during my tenure as bling over the period to a high CEO, has been in PitchBook,â&#x20AC;? of $165.72 in February before says Kapoor. â&#x20AC;&#x153;We have been inCOVID-19 undercut financial vesting meaningfully and agmarkets. The stock price declined gressively in that area, including 6 percent during the month to to build out a public equities database, because we see this close June 25 at $143.89. really meaningful trend happening between the â&#x20AC;&#x153;OUR SINGLE LARGEST AREA OF convergence of public and INVESTMENT, DURING MY TENURE private markets.â&#x20AC;?

PitchBook packages AS CEO, HAS BEEN IN PITCHBOOK.â&#x20AC;? private and public data sets together to try to lure Kunal Kapoor, CEO, Morningstar more client business from public data rivals, like S&P Whereas the company dabbled Capital IQ, Kapoor says. Mansuein small acquisitions in the past, to, 63, has long eyed taking on big competitors like Bloomberg, too.

Kapoor has taken on larger risks.

Kapoor, 45, shepherded Morningstarâ&#x20AC;&#x2122;s 2009 minority investLEGACY BUSINESSES ment in PitchBook, becoming a While PitchBook annual revePitchBook board member in 2012 nue jumped 49 percent last year before Morningstar scooped up over 2018, two slightly larger the rest of the company in 2016. legacy Morningstar businesses

NEW STREAMS Morningstarâ&#x20AC;&#x2122;s biggest sources of revenue are changing as it makes acquisitions all over the world.

TOP MORNINGSTAR REVENUE STREAMS (IN MILLIONS) 2017

MORNINGSTAR from Page 3

2018

$166.1

Morningstar Data Morningstar Direct software analytics

$124.4

PitchBook private data plus

$63.6

Credit ratings operation*

$31.4

Morningstar Investment Management

$101.0

$196.8

$137.9

$148.6

$99.6 $36.3 $111.2

Source: Morningstar SEC filings

$148.4 $127.6 $115.9 *Includes DBRS acquisition for the second half of 2019

for data and investment analysis grew less than 8 percent. More important, the companyâ&#x20AC;&#x2122;s annual net income declined 17 percent to $152 million despite revenue rising 16 percent to $1.18 billion.

PitchBookâ&#x20AC;&#x2122;s Seattle headcount has nearly doubled to about 470 employees since it was purchased, while Morningstarâ&#x20AC;&#x2122;s Chicago ranks grew just 25 percentâ&#x20AC;&#x201D; and dropped by 50 employees this year to about 1,700. Overall, the local workforce grew at half the rate of the company since 2016.

Morningstar declines to say exactly how much itâ&#x20AC;&#x2122;s invested in PitchBook, though itâ&#x20AC;&#x2122;s likely a significant portion of $150 million across global data and research products in the past five years. In India, where Morning-

CRAINâ&#x20AC;&#x2122;S CHICAGO BUSINESS 2020

2019

$185.2

star has operations that support PitchBook, as well as other units, the workforce has tripled to 1,800 employees.

The company acknowledges that PitchBookâ&#x20AC;&#x2122;s profit margin is lower than its overall margin but says the operation makes a â&#x20AC;&#x153;positive underlying contribution. Over time, we believe PitchBook will reach a similar operating margin profile as the rest of Morningstar,â&#x20AC;? it says in an emailed statement.

Nonetheless, the downward profit trend continued in this yearâ&#x20AC;&#x2122;s first quarter, with net income 28 percent lower than last year, even as DBRS kicked in as one of the companyâ&#x20AC;&#x2122;s biggest revenue generators. Compensation expense at PitchBook, among other things, ate into

overall profit.

The $669 million DBRS acquisition added the worldâ&#x20AC;&#x2122;s fourth-largest credit ratings agency to Morningstar, and it came in handy as a new overseer for Morningstarâ&#x20AC;&#x2122;s legacy New York-based credit ratings operation when it was slapped this year with a $3.5 million Securities & Exchange Commission penalty related to conflicts of interest.

As for Morningstarâ&#x20AC;&#x2122;s mainstay Chicago business, Kapoor wonâ&#x20AC;&#x2122;t comment directly on the headcount decline but notes there are 41 job openings there. â&#x20AC;&#x153;This is our home and nerve center, and our intent is to keep growing here,â&#x20AC;? he says. â&#x20AC;&#x153;There will be puts and takes between different locations in any given year as we grow.â&#x20AC;?

Be on Crainâ&#x20AC;&#x2122;s Fast 50 list

Due to the COVID-19 outbreak, we have postponed our annual Fast 50 feature. That means we have reopened applications to additional submitters, with a deadline of July 24. If your company has at least $15 million in 2019 revenue, apply today.

Finalists will be announced in Crainâ&#x20AC;&#x2122;s Sept. 7 issue and the final list will be published on Oct. 5.

Application deadline extended to July 24

Apply today at ChicagoBusiness.com/Fast50apply

/PUF 5IJT DIBOHF EPFT OPU BÇ&#x;FDU UIF TUBUVT PG FYJTUJOH BQQMJDBUJPOT /P OFFE UP SFBQQMZ *G ZPVS DPNQBOZ JT POF PG PVS UPQ Ç OBMJTUT BGUFS UIF TVNNFS BQQMJDBUJPO QFSJPE XFnMM DPOOFDU XJUI ZPV BOE SFRVFTU Ç OBODJBM EPDVNFOUT GSPN ZPVS DPNQBOZ JO FBSMZ "VHVTU

CRAIN’S CHICAGO BUSINESS • JUNE 29, 2020 39

Mansion sells for Naperville’s highest price since 2008 The residence, nearly 17,500 square feet, has six bedrooms, 10 baths and garage space for nine cars A Naperville megamansion has sold for $4.75 million, the highest price paid for a home in the town since 2008.

The home on Perkins Court is nearly 17,500 square feet on 3 acres. The sale price was 54 percent of the original asking price, $8.75 million.

It’s the second-highest-priced sale in the Chicago suburbs so far this year, after the $8.75 million sale of a Winnetka mansion that took 11 years to sell. For the metro area overall, including the city, it’s the year’s sixth-highest sale price.

The sellers of the Naperville home are Tim and Sara Reifsteck, according to Will County tax records. Tim Reifsteck is head of Restoration Authority, a Naperville-based firm that remediates property damage from storms, fire or mold. He has also been a partner in Aftermath, a crime scene cleanup firm founded in 1995; Crain’s has not determined whether he is still with that firm, now based in Oswego.

The Reifstecks bought the Perkins Court site in 2008 for $755,000, according to property records. The records do not indicate what they spent to build the Tudor-style mansion, which has six bedrooms,

10 bathrooms, seven fireplaces, garage space for nine cars, an elevator and an in-home movie theater. Michael La Fido, the @properties agent who represented the property, described it in his listing as having “one-of-a-kind flooring, lighting and fixtures that resemble fine jewelry.”

The couple first listed the home in June 2015. It has been on the market most of the time since then, but went off in July 2019, priced at $5.69 million. It came back on in late May, priced at $5.4 million, and was under contract to a buyer two weeks later. The sale closed June 23.

The buyers, who are not yet identified in public records, were represented by Katherine Karvelas of @properties.

The only Naperville home on record selling for more is a 15,000-square-footer on Hobson Road that sold for $4.95 million in September 2008. Others may have sold for more privately, without appearing on the multiple-listing service.

One Naperville home is listed at $4 million or more, a 12,600-square-foot mansion on Donwood Drive. It came on the market in August 2019 at $7.25 million, a price that hasn’t yet changed.

PHOTOS BY @PROPERTIES

BY DENNIS RODKIN

Kenilworth mansion hits market at nearly $3.7 million

BY DENNIS RODKIN Margo Georgiadis, who has held high-level posts at Google, Groupon and Discover Financial Services, has listed her 17-room Kenilworth mansion for sale.

Georgiadis, who also had been CEO of Mattel and now leads Ancestry, is asking just under $3.7 million for the 10,900-squarefoot mansion on Sheridan Road, which she owns with her husband, Pete Georgiadis, CEO of Chicago venture-capital firm Synetro. They bought the home for $2.25 million in 1998, according to the Cook County recorder of deeds.

The homeowners did not immediately respond to a message left at their listed home phone number. Their listing agent, Jena

Radnay of @properties, also did not immediately respond to a request for comment. Since May 2018, Margo Georgiadis has been CEO of Ancestry, which is based in San Francisco and Utah and is best known for its family-tree research site Ancestry.com. Along with the website, Ancestry has a digitized collection of more than 10 billion historical records and sells DNA kits.

Built in 1929, the house, listed June 22, was designed by Mayo & Mayo, the architects of many mansions, clubs and hotels in Chicago and the North Shore. It has a stone facade with classical detailing, and inside are grand historical rooms including a walnut-paneled study with bookcases set inside gothic arches, a dining room ceiling with plaster

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PHOTOS BY VHT STUDIOS

Executive Margo Georgiadis has owned the home since 1998 with her venture capitalist husband

MORE PHOTOS ONLINE: ChicagoBusiness.com/residential-real-estate details in gold leaf and a broad living room with French doors on three sides and plaster ornamentation on the ceiling.

On the third floor, a room that is 47 feet long and 27 feet wide,

most likely built as a ballroom, has been redone into a basketball court. Radnay’s listing asks, “Where else can you shoot hoops overlooking Lake Michigan,” which is a block east of the house.

Five Kenilworth homes are on the market in the $3.5 million to $4 million range. There’s been one sale in the price range in the suburb in the past two years, according to Midwest Real Estate Data.

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