Crain's Chicago Business

THE TAKEAWAY: Fortune smiled on this commercial real estate developer. PAGE 6

TECH JOBS: Why remote work makes recruiting even harder. PAGE 3

CHICAGOBUSINESS.COM | JANUARY 11, 2021 | $3.50

Behind the long wait for COVID vaccinations

Danielle Tillman, managing principal at Chicago-based bKL Architecture

Getting enough vaccine is only one challenge

BY STEPHANIE GOLDBERG

With the exit of Macy’s and other retailers, the Mag Mile needs to be reinvented BY ALLY MAROTTI THE MAGNIFICENT MILE has long been one of Chicago’s biggest tourists draws, and a hot spot for retail flagships that build brands and win over customers.

For the last few years, however, storefronts on the renowned shopping district have been emptying out, and the pandemic has been an accelerant.

Late last year, 10.5 percent of the more than 3.3 million square feet of retail space on the Mag Mile was vacant, up from 7.4 percent in 2019 and 6.5 percent in 2018, according to brokerage CBRE. Upcoming exits from Macy’s and Gap will push that rate

even higher, to at least 16.5 percent.

That doesn’t mean it is time to write the Mag Mile’s obituary, experts say. But it is time to reinvent the strip. To get its mojo back post-pandemic, Michigan Avenue needs to become an experience that extends beyond shopping, eating and sightseeing.

As shopping shifted online in the past decade, retailers realized brick-and-mortar stores need to give customers something they can’t get online.

See MAG MILE on Page 21

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JOHN R. BOEHM

‘If Michigan Avenue is dead, Chicago is dead’

Illinois Gov. J.B. Pritzker blames skimpy supplies for the slow pace of COVID-19 vaccinations in Illinois.

So far, Illinois has received 737,125 doses of vaccine, which is coming in at a rate of about 175,000 per week. At that pace, it would take about two years to vaccinate the 10 million residents needed to achieve herd immunity and neutralize a virus that has killed 17,000 and sickened 1 million in Illinois.

“We’re waiting for more vaccine to arrive,” Pritzker said during a Jan. 6 briefing. “That’s really the

biggest holdup to getting through the entire thing.”

But getting vaccines is only a start. To confer immunity, they have to be injected into people’s arms. That’s up to the states under the federal government’s immunization program. According to the Centers for Disease Control, Illinois has administered only 213,045 shots, or 29 percent of the vaccines it has received.

Nationally, about 27 percent of the 21 million doses distributed have been administered.

“Everyone hoped for a faster distribution,” says Katherine See VACCINATIONS on Page 19

Obama Center hits a turning point With most hurdles cleared, presidential center must fulfill its promises

BY A.D. QUIG The Obama Presidential Center was supposed to open its doors in 2021. But after more than five years of unsuccessful court challenges and the impending conclusion of a series of federal government reviews, supporters hope this will be the year shovels hit the ground in Jackson Park on Chicago’s South Side. That’s when the steep climb begins.

Among the lofty goals: raising hundreds of millions to build and

operate the center, attracting an estimated 625,000 to 760,000 annual visitors, and delivering ambitious economic benefits to nearby neighborhoods that have been starved of investment for decades.

See OBAMA CENTER on Page 18

REAL ESTATE

CHICAGO COMES BACK

Check out a Naperville mansion meant to evoke the kind of estate that would ‘fit in Europe.’ PAGE 23

One thing hasn’t changed: Chicago is a great place to launch a business, says a veteran entrepreneur. PAGE 4

1/8/21 4:42 PM

2 JANUARY 11, 2021 • CRAIN’S CHICAGO BUSINESS

The cavalry is coming—but it won’t be enough

Y

financial woods. After the defeat of Pritzker’s proposed graduated income tax amendment, the state still has something in the order of a $3 billion annual structural budget deficit to fill, and how it gets filled (or somehow kicked down the road) is going to be quite a trick as Pritzker prepares for his 2022 re-election and the House struggles with selecting a speaker.

There are a couple of bright notes.

For one, Illinois Comptroller Susana Mendoza shrewdly used much of the federal borrowing to pay old Medicaid bills, an action that triggered ONE MIRACLE WON’T GET ILLINOIS an additional $1.5 billion in matching federal payOUT OF THE FINANCIAL WOODS. ments to the state. For another, the Commission on Government Forecasting & receipts that have dried up amid Accountability, the Legislature’s the pandemic. Even the prosfiscal research unit, says income pect of federal aid helped boost tax revenues have risen more Illinois debt on secondary bond than $1.45 billion above budmarkets in recent days. geted levels in the first months One miracle, however, is inof fiscal 2021. Though most of sufficient to get Illinois out of the ou could almost hear them cheering in the governor’s budget office in Springfield when news broke that Democrats apparently have won both seats up for grabs in Georgia and have seized control of the U.S. Senate.

The development dramatically ups the odds that Illinois will be getting billions in COVID financial assistance from Washington in coming weeks. Man, does Gov. J.B. Pritzker need the dough— enough of it, he hopes, to at least pay back the $3.2 billion the state so far has borrowed from the Federal Reserve to replace regular tax

that was due to a one-time delay in payments intended to help people through the pandemic, personal income taxes in December rose 8.2 percent above those in December 2019, corporate income taxes were up 13.8 percent and sales taxes 5.2 percent.

That’s good, real money. But by no means enough. So what now?

Specifically, how does the state make up for the more than $3 billion in graduated income taxes that now won’t be arriving?

Rep. Tom Demmer, the House Republican point person on budget matters, applauds Pritzker for unveiling $700 million in budget cuts, but he wants to see more of them and isn’t sure all of the $700 million is real. “I think we can avoid a tax hike” to fill the remainder of the hole, Demmer adds.

But neither Demmer nor any other Republican lays out any specific additional cuts they’re prepared to back. Pritzker clearly would like them to lead on this, or at least share the pain, but after all he and the Democrats

GREG HINZ ON POLITICS

do constitute the majority in Springfield.

Deputy Gov. Dan Hynes, the Pritzker administration budget policy chief, isn’t yet tipping the governor’s hand as his February budget speech approaches.

In an interview, Hynes asserted that the state actually had turned a corner from the Bruce Rauner years before COVID struck, with numbers starting to improve.

Now, he said Pritzker will keep looking for more budget efficiencies (hopefully with GOP help), but Hynes wouldn’t go into revenue options. Just about everyone in Springfield, though, expects that given past comments by the governor—combined with the state’s real need for help— Pritzker will end up proposing

an increase in the state’s current flat-rate income tax.

I’d like to report that something is coming to reduce the state’s yawning pension liability, up another $7.2 billion in the year ended June 30 to $144 billion, according to COGFA. But Hynes left me with no impression that even a partial pension fix of consequence is on the way. Which means that it could be a good decade until the problem fixes itself, as older pensioners who get more generous benefits than those hired after 2011 die off.

That leaves some true fiscal juggling to come. How well this governor does with that process will help determine if he glides to a second term or has a real problem.

Enough is enough: Time to act on Madigan

M

ichael Madigan says he did nothing wrong, and he has not been charged with any crime.

How many times last year did we read those words or something close? That token of fairness to the embattled speaker of the Illinois House, who is a target of a sprawling federal corruption investigation, has become commonplace.

Many who read that sentence doubt Madigan’s protestations of innocence. To them, the federal charges against four political associates in a bribery and influence-peddling scheme have the ring of truth.

They argue Madigan is not fit to continue serving as speaker. He has a right to a day in court, but the allegations alone are enough to deny him the privilege of leading our state government. Chicago Mayor Lori Lightfoot has called for him to step down, and Gov. J.B. Pritzker has come close.

Madigan wants to remain speaker, though, and he still has a shot at keeping the job. House members of the Legislative Black Caucus and the Latino caucus have endorsed him.

The speaker’s backers say Madigan is the essential leader of the Illinois General Assembly. His track record of legislation, over most of the past 38 years, shows he can get the people’s business done. Besides, no one else is ready to replace him.

Let’s take that argument on its face. Forget Madigan’s legal limbo, look only at Madigan’s legislation track record, and there’s ample reason he should not retain the speaker’s gavel.

Governors have come and gone since Madigan first became speaker in 1983. Except for two years, Madigan’s leadership of the House has been the lone constant. As leader of the state Democratic party since 1998—with control over campaign

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war chests that topped $14 million last fall—he can impose political costs on members who don’t vote with him on the House floor.

The net result of Madigan’s stewardship over that long tenure yields lots of loss for Illinois residents.

Illinois has the second-highest debt of any state, and its unfunded pension liability is second worst, too. Illinois’ consistent record of population loss over the last decade is topped only by West Virginia’s. Its credit rating is lowest among the states.

Illinois’ gerrymandered electoral map is considered among the most distorted in the country, and Madigan has controlled map drawing after each of the last three decennial censuses. House Democrats may like this—gerrymandering protects their jobs—but bad maps disenfranchise Illinois voters.

The public corruption investigation focuses on allegations Madigan got no-work jobs for political allies with Commonwealth Edison.

Jobs for cronies isn’t new for Madigan: A 2014 investigation by the Chicago Tribune found 400 current or retired government employees with political ties to Madigan.

A Crain’s investigation found that between 2005 and 2010, Madigan blocked five bond refinancing bills for McCormick Place. One reason, Crain’s found, was that the McCormick Place CEO had fired one of Madigan’s friends. Madigan sought jobs for cronies at the Metra transit agency, too.

Leaders like Madigan are judged by actions they take, and also by their inactions.

Take a look at the Black Caucus’ criminal-justice reform agenda. The group’s comprehensive bill would eliminate cash bail, bring an end to “prison gerrymandering” that disadvantages Black communities,

and give municipalities the power to include discipline provisions in contracts with police unions.

The list goes on, and the question arises: If Madigan were such a Black Caucus ally over the years, why does it take a sprawling, fourpronged equity agenda to fix the problems of structural racism in Illinois?

One overlooked group may yet levy a political cost on Madigan: women in the statehouse. In 2019, Madigan’s longtime chief of staff, Tim Mapes, had to resign his political and government jobs after a

DAVID GREISING ON GOVERNMENT

harassment scandal. Madigan publicly apologized for lax oversight.

Of the 19 Democrats who publicly have said they won’t back Madigan for speaker, 13 are women. At least three women have acknowledged plans to challenge Madigan for the speaker’s job.

Never mind Madigan’s legal

troubles. His track record alone should be enough to get him moved out of the speaker’s chair.

Crain’s contributor David Greising is president of the investigative watchdog Better Government Association.

At Wintrust, your banker knows you.

Someone puts you first.

You made us feel that we were the only account you were working on.

– Cheryl Obermeyer, Chicago History Museum

Start the conversation at wintrust.com/meetus.

Banking products provided by Wintrust Financial Corp. banks.

1/8/21 4:17 PM

CRAIN’S CHICAGO BUSINESS • JANUARY 11, 2021 3

That heap of trash could heat your home

Onni Group hopes to revive the outdated office tower at 225 W. Randolph St.

Nicor aims to harness methane from dumps and farms, but there’s pushback

BY STEVE DANIELS

JOHN R. BOEHM

LEVERAGING THE LOOP

Landfills, agriculture and foodwaste operations generate methane emissions that contribute to the warming of the planet. Nicor Gas wants to capture those emissions and use them to heat the homes of much of suburban Chicago.

The state’s largest natural gas utility, serving more than 2 million customers, late last year filed with the Illinois Commerce Commission to launch a pilot program in which ratepayers would finance the hookup of so-called renewable gas facilities to its pipe system. In so doing, Nicor is asking Illinois utility regulators to join the growing number of states seeking to turn this trash into treasure.

The initiative is attractive in theory, but consumer advocates and some environmental groups are opposed. They say the long-term future of natural gas as a primary source of heat is in question, and the costs of supporting “trash gas” are substantially higher than with traditional natural gas.

There may be a future in Illinois for capturing and using waste gas, but producers and utilities should look to big industrial users to support it rather than consumers, opponents say.

By itself, the pilot program Nicor is proposing would be modest. It’s asking to spend no more than $20 million to hook up a few producers to its network. The annual cost for the average household in its

Can this obscure tax incentive convince investors to keep pouring money into aging downtown properties? BY DANNY ECKER CANADIAN DEVELOPER Onni Group is willing to bet almost $350 million that Chicago’s pandemic-stung downtown office market has a bright future—thanks to a tool meant to preserve the city’s past.

The real estate firm is slated to go before the City Council this month with a plan to revive the outdated, soon-to-be empty Loop office tower at 225 W. Randolph St. and refill it with

tenants, a major downtown investment during a COVID-19 crisis that has virtually paralyzed the city’s urban core. But whether Onni moves forward with the project hinges on a key step: the city naming the 30-story New Formalist-style building a landmark and approving a lucrative property tax break that comes with it.

See LOOP on Page 19

“IT SETS THE TABLE TO CREATE THIS GORGEOUS OPPORTUNITY FOR A TENANT.” Jack O’Brien, principal, Telos Group

See METHANE on Page 21

Borderless recruiting roils technology sector Rise of remote work helps coastal poachers woo techies from local firms

BY JOHN PLETZ The work-from-anywhere trend has toppled geographic barriers to hiring, and now tech companies from the coasts are driving up the price of talent here.

Chicago has one of the largest pools of tech workers, and it’s among the most affordable, compared with San Francisco, Seattle, Boston or New York.

Tech companies from the coasts have long recruited here. But for the most part, workers had to leave town for the jobs, unless the companies had opened local offices. Even then, many jobs re-

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mained on the coasts. That’s no longer true, thanks to the COVID pandemic, which turned most techies into remote workers.

“Gone are the days of Chicago tech companies duking it out with one another,” says Brian Scannell, head of recruiting at Chicago-based Jellyvision, an employee-benefits software company with about 300 workers. “We’re now pitted against the coasts and the tycoons who reside there: Amazon, Google, Apple, Facebook, etc. The landscape has now very much shifted into David vs. Goliath for Jellyvision and others like us.

Goliath has deep pockets and now an even longer reach.”

The shift means local companies must pay more for talent, the lifeblood of the tech industry. Shelling out more in salaries could limit their growth or consume precious capital. But those unable or unwilling to match Silicon Valley pay risk losing access to the skills they need to thrive in an intensely competitive business.

But for local tech workers— especially the most talented— the trend offers the best of both See TECH JOBS on Page 22

 HOW DEEP IS YOUR TALENT POOL? These are the top labor markets in North America for tech workers, ranked by size.

NUMBER OF TECH WORKERS 389,670

San Francisco 268,530

New York

263,670

Washington, D.C.

250,000

Toronto Dallas-Fort Worth

179,570

Chicago

179,500

Boston Seattle Atlanta Montreal

170,500 155,330 146,720 141,600

Source: CBRE

1/8/21 4:40 PM

4 JANUARY 11, 2021 • CRAIN’S CHICAGO BUSINESS

JOE CAHILL

CHICAGO COMES BACK

ON BUSINESS

Unlike bailout money for floundering industries, or stimulus checks to keep the unemployed afloat, infrastructure spending generates long-term economic growth. That—along with the numerous jobs such projects create—is why Biden probably can expect substantial Republican support for his infrastructure plan.

There’s plenty of precedent for big, bipartisan infrastructure bills. Government-funded infrastructure projects have been firing up the U.S. economy ever since the state of New York paid for the Erie Canal connecting the Eastern Seaboard and the Great Lakes in the 1820s. Illinois followed suit a decade later with the Illinois & Michigan Canal linking Lake Michigan to the Mississippi River and the Gulf of Mexico. Congress commissioned transcontinental railroads later in the 19th century. In the 1950s, federal dollars knitted the country together with the interstate highway system.

Time has never been riper for an equally ambitious infrastructure project for the 21st century. In the THE TRUTH IS, EVERYBODY WINS latest infrastructure WHEN INFRASTRUCTURE IMPROVES. report card from the American Society of Civil Engineers, American field-based construction equiproads, drinking water inframent maker Caterpillar rose Jan. structure and aviation systems 6 on expectations that the Georall earned D grades, while gia outcome will boost the prosbridges got a C+. Our railroads pects of an infrastructure bill. are congested and plagued by Other likely local beneficiaries delays, and our electrical grid is span a gamut from steelmakers vulnerable to cyberattack. in northwest Indiana to railroad The engineering society equipment makers like Freightestimates the cost of improvcar America, and roadbuilders ing American infrastructure at such as Walsh Group. A flood of $4.6 trillion over five years, a new orders and contracts would huge price tag that far exceeds spark a wave of hiring at these Biden’s planned ask. But living companies. with decaying, outmoded infraAlso in line for badly needed structure costs money, too. capital infusions are local public Potholed roads damage transit systems so essential to vehicles, driving up repair costs our economy. The Chicago for personal and commercial Transit Authority, Metra and vehicles. Highway and rail Pace need billions of dollars to maintain and improve service for backups slow delivery of goods and extend commuting times. area workers who ride trains and Productivity declines as drivers buses to their jobs every day. sit in traffic jams or wait at rail On the freight side, Chicacrossings. Idling cars and trucks go remains a chokepoint for burn countless gallons of fuel cross-country rail cargo shipunnecessarily, fouling the air ments. The CREATE program, and wasting money. a joint federal-state-industry Fixing these flaws and modproject aimed at untangling ernizing infrastructure would the bottlenecks, is less than produce big economic benefits half finished after 17 years. at a time of high unemployAnother $3 billion would fund ment. Smoothing and speeding the remaining work, helping to up the flow of traffic would preserve Chicago’s preeminent reduce costs across the board. role in an industry responsible As capacity expands, output for 50,000 local jobs, according rises, generating efficiencies to CREATE. that boost profits and demand The truth is, everybody wins for labor. when infrastructure improves.

That’s a winning formula for It’s hard to think of a better the country and Chicago. way to spend taxpayer dollars.

Looking for a ray of hope amid the chaos and gloom of recent weeks and months?

Here’s one: Chances of major federal investment in transportation and other infrastructure improved greatly when Democrats won two U.S. Senate races in Georgia on Jan. 5. The Georgia victories mean Democrats will control both houses of Congress when Democrat Joe Biden replaces Republican Donald Trump as president later this month. And that will make it easier for Biden to deliver on his promise to pump $2 trillion into infrastructure projects ranging from roads and bridges to public transit systems and the electrical grid.

Good news for a nation beset by crumbling highways and clogged railroads, infrastructure investment is even better for metropolitan Chicago. As the country’s transportation hub, our region stands to gain more than most when those networks get bigger and more efficient.

Many local companies benefit directly from infrastructure spending. Shares of Deer-

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Mark Tebbe

How startups factor into the recovery

CRAIN’S FILE PHOTO

Something to celebrate during dark days

One thing the pandemic hasn’t changed: Chicago is a great place to launch a business, says veteran entrepreneur and investor Mark Tebbe

BY EMILY DRAKE AND TODD CONNOR Chicago Comes Back is a weekly series on ChicagoBusiness.com providing leadership insights to help your business move forward, written by leadership consultants Emily Drake and Todd Connor.

Drake and Connor facilitate Crain’s Leadership Academy. Drake is a licensed therapist, owner of the Collective Academy and a leadership coach. Connor is the founder of Bunker Labs and the Collective Academy and is also a leadership consultant.

Check out previous installments at ChicagoBusiness.com/comesback.

TODD CONNOR: We’ve been talking about Chicago’s economic recovery and wanted to take a closer look at Chicago’s startup scene. Who better to talk to than Mark Tebbe, founder of two Nasdaq-listed tech companies, active investor, University of Chicago Booth adjunct professor in entrepreneurship and chair of ChicagoNext, which manages a portfolio of programs to drive growth and opportunity in the city’s tech economy. Mark, thanks for joining us. I’ll just come out and ask it: What’s the forecast?

MARK TEBBE: Look, I’m an optimist. When you look at Chicago, so many of the fundamentals are in place to make this such an attractive place to start and grow a business. We have the largest collection of diverse college-level talent in the world, with more Big Ten graduates than in any other city in the world. Our diverse collection of industries that call Chicago home creates ample hunting grounds for tech companies, in particular b-to-b opportunities.

Our transportation infrastructure is second to none, which is attractive both for the livability of employees as well as for the consideration for corporate or distributed headquarters. Not to mention the culture, the neighborhoods and the people that make Chicago so special. I could go on. But those things are not changing and they will continue to be important.

EMILY DRAKE: I get excited listening to you, Mark, as it reminds all of us why we choose to call Chicago home. You’ve also talked about the challenges of ensuring that opportunities are equally distributed for historically excluded entrepreneurs. What feels different this time?

MT: Chicago, like many large cities, is hampered by intergenerational poverty and widespread economic hardship. Particularly now, we need to address these legacy traumas and consciously prioritize change that makes a meaningful impact on the economic impact for the most disenfranchised individuals and businesses. This includes reducing the cost of being poor, using a racial equity lens to assess how those costs manifest, as well as ensuring a strong social safety net. This moment creates a unique opportunity to come back differently, better, more inclusive.

TC: And what are some of those opportunities, as you see it? We’re hearing about the “stampede” of unicorns that may look at going public. How do you see Chicago fitting into that narrative?

MT: The first thing I remind people of, and investors in particular, is that PitchBook points out that Chicago startups offer the best VC return on investment in the country, beating New York

and San Francisco. Our universities, both here in Chicago as well as across Illinois, constitute the second-largest producers of STEM talent in the country. We have world-class innovation hubs like 1871, mHub and Matter, and are home to the second-largest concentration of Fortune 500 headquarters. We are a tight-knit community—and that isn’t just something that sounds good, but it allows for transactions and opportunities to emerge. This density of connection that we have here, from our talent pipelines, through innovation hubs, across universities, to the investor community, and of course for the entrepreneurs, is unique. Chicago has been, and remains, a great place to start a business.

ED: Speaking of entrepreneurs, any advice you would offer them at this time?

MT: My belief is that disruptions create opportunity. I’m advising startups and tech companies that have made some very creative, and strategic, pivots in this time.

Whether it’s accelerating digital access to government, leveraging quickly changing megatrends—as we’ve just experienced during this pandemic—or building solutions that help large corporates accelerate their strategic pivots, there are opportunities all around us. We have had to pivot at ChicagoNext, as well, whether it’s delaying our in-person Chicago Venture Summit and instead focusing on building Startup Chicago, which is a database of now over 100 venture-ready startups, or making additional investments in under-represented entrepreneurs.

We will work hard to make the most of this moment. I continue to be excited—and yes, optimistic—about Chicago’s future.

1/8/21 4:17 PM

GOLUB WOULD LIKE TO GIVE SPECIAL THANKS TO THE FOLLOWING COMMERCIAL BROKERS FOR A PHENOMENAL YEAR. WE LOOK FORWARD TO WORKING TOGETHER IN 2021!

ADAM SHARRIN

JAMES OTTO

ProActive Advisors

CRAIG NADBORNE

CBRE

Colliers International

JAMES RAISHER

MICHAEL HEANEY

Colliers International

Cresa

PAIGE KRUEGER

KEVIN DUCKLER

CTK Chicago Partners

Newmark

JON SPRINGER

BOB PALFFY

CBRE

TenantBase

STEVEN JOSEPH CBIZ Gibraltar Real Estate Services, LLC

21cb0009.pdf

Transwestern

DAN ARENDS

HARVEY CAMINS CTK Chicago Partners

CHRIS TARZON

DAN PERSA

Savills

CBRE

RICHARD BATISTA

Bespoke Commercial Real Estate

STEVE AARONSON

LARRY SEROTA

Colliers International

VICTOR SANMIGUEL

CBRE

Colliers International

ALISA CUTRO

CBRE

THOMAS VOLINI

TOM BERADUCCI

Cushman & Wakefield

JUSTIN HUCEK

Cushman & Wakefield

PHIL PALMER Newmark

Corporate Real Estate Solutions, Inc.

ANDY HEYMANN

DALE NISHIMURA

CBRE

PATRICK HEWITT

Bradford Allen Realty Services

GEOFFREY EUSTON

CBRE

DRU GARCIA

JJ Nate Real Estate & Mgmt

BRAD SEROT CBRE

ERIC GALANTI

CBIZ Gibraltar Real Estate Services, LLC

BEN COOPER

CBIZ Gibraltar Real Estate Services, LLC

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6 JANUARY 11, 2021 • CRAIN’S CHICAGO BUSINESS

THE TAKEAWAY

David Baum In early 2019, a venture of Chicago-based Baum Realty Group bought a 243,000-square-foot building in Norwood, Mass., next door to a research facility for a newly public company named Moderna Therapeutics. A few months later, the fast-growing drugmaker expanded by leasing Baum’s entire building for 15 years. Then came COVID-19, and Moderna was thrust into the global spotlight as it sprinted to develop a vaccine. In August, Baum sold the building to a real estate investment trust for $120 million— almost five times what it paid just 18 months before. CEO David Baum, 54, and his wife live in Highland Park and have four children: a 23-year-old who lives in Chicago and triplets in college. By Danny Ecker

>

FORTY

CRAIN’S CHICAGO BUSINESS 2021

You or someone you know could be in the next Crain’s 40 Under 40 class

ChicagoBusiness.com/40snoms

MODERNA THERAPEUTICS

2021 NOMINATIONS OPEN:

UNDER

You’re known for office and retail buildings. Had you ever bought a life sciences property before the Moderna deal?

That was our first one at that level. COVID happened, and they became the leader in developing a vaccine. We never anticipated it. When we bought it, Moderna was a wholly different company.

> Is it awkward that you had such a windfall in part because of a global pandemic?

We feel guilty about it. So many people are suffering because of this, and here we did really well. But we’ve learned a lot in this space. We think we’re good partners to tenants, and we’d certainly like to do more deals in the life sciences space.

> What about your work in the retail sector? Where do you see bright spots moving forward?

We like things that are walkable and experiential. Post-COVID there will be a pent-up demand for people to connect. We’re all sort of in this lonely place in the world, and we’re going to have another round of Roaring ’20s once this thing is behind us.

>

INDUSTRY ACHIEVERS ADVANCING THEIR CAREERS Recognize them in Crain’s

You’ve worked in Chicago real estate for almost 30 years.

What stands out as a way the city has changed?

Up until a couple months ago, the big difference was that Chicago was the place that people wanted to move to as opposed to move away from. You’ve seen over this decade people moving to the city and companies following because they want that talent.

That’s very different now than when I started.

> That seems to be reversing again with many millennials leaving the city because of the pandemic.

It’s really bad right now, but I would hope and expect that it will be a blip. I think 18 months from now we’ll pick up. A lot of people from the top schools around the Midwest find their way to Chicago, and I expect that will be the case again.

>

For listing opportunities, contact Debora Stein at dstein@crain.com or submit directly to

WTTW NEWS

CHICAGOBUSINESS.COM/PEOPLEMOVES What do you do for fun these days?

A lot of gardening and walking.

I’m at the Botanic Garden three or four times a week. I love to be in nature.

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1/8/21 4:16 PM

NorthShore welcomes Northwest Community to the family.

Northwest Community Healthcare is now part of NorthShore University HealthSystem. Together, we are harnessing the unique strengths of two organizations, expanding the exceptional care of two leading physician networks and building on our teams’ expertise to provide patients throughout the northwest suburbs with better healthcare. With our shared resources, we provide innovative, personalized care close to home. And through our ongoing commitment to the communities we serve, we are ensuring a healthier and stronger future for us all.

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8 JANUARY 11, 2021 • CRAIN’S CHICAGO BUSINESS

Home shoppers find slimmest pickings in 13 years

At the end of December, enough homes were on the local market to fuel 1.8 months of sales at the current pace, the lowest since at least January 2008

sodes.

“It’s kind of a tale of two cities,” says Jenny Ames, a partner in the Engel & Volkers Chicago brokerage. “The market is definitely tighter on single-family homes outside downtown, where you see a lot of inventory and longer market times.”

NATIONWIDE ISSUE

The dearth of homes for sale isn’t isolated in the Chicago area; it’s nearly nationwide. The available inventory of homes is down from a year ago in 48 out of 50 U.S. metropolitan areas, according to a report released Jan. 7 by Realtor.com. In Chicago, there were about 34 percent fewer homes on the market in late December than at the same time a year ago, according to the report. Inventory is down more than 50 percent in several metros, including Denver; Dallas; Austin, Texas; and Charlotte, N.C. The only two metro areas with more properties listed now than a year ago are San Francisco and San Jose, Calif.

Chicago-area sellers clearly are in the catbird seat, but Maman cautions that they should “look carefully at how willing to sell

GAGLIARDO REALTY ASSOCIATES

agent based in Glencoe. “Some of us have never seen a market like Amid a booming real estate this.” Inventory was in the range market, the inventory of homes of three to seven months from for sale in the Chicago area has January 2013 through October dipped to the lowest point on re- 2020, when the year’s booming market cut the stock of homes on cord.

At the end of December, the market to 2.8 months.

With the holidays and cold enough homes were on the market to fuel 1.8 months of sales at weather, the end of the year is typthe current pace, according to fig- ically a low-inventory time, but to ures compiled for Crain’s by Mid- be clear: The 1.8-month figure for west Real Estate Data. That’s the December compares to inventory lowest since at least January 2008, of at least three months in each of the four prior Decembers and inthe earliest data that MRED has.

Usually an inventory of four ventory over four months in each to six months is considered a of the three Decembers before healthy, balanced market. Inven- that.

Ten years ago, the Chicago-artory was at its peak, 16 months, in December 2009, during the ea real estate market closed out 2009 with 11.6 months of invenpost-housing crash recession. tory available.

The 1.8-month in“THE ONLY HOMES THAT AREN’T ventory figure is areaand papers over SELLING ARE OVERPRICED OR QUIRKY wide such slow-moving PLACES WITH A LIMITED AUDIENCE.” pieces of the region as the Loop. In DecemSusan Maman, @properties agent ber, Crain’s reported that the condo market The market is so tight now that in the heart of the city had a log“the only homes that aren’t sell- jam: 24 months’ worth of unsold ing are overpriced or quirky plac- condos in a place that has been es with a limited audience,” says nearly emptied out by COVID reSusan Maman, an @properties strictions and 2020’s looting epi-

BY DENNIS RODKIN

This Tudor on Forest Avenue in River Forest is on the market at $999,000. they are” at current prices, which even with the 2020 run-up have not yet caught up with the 2006 peak.

Buyers, Maman says, should “do whatever they can to accommodate the seller.” That means putting no contingencies into the offer contract and being pre-approved for a mortgage.

One way to curry favor, particularly in multiple-offer scenarios, is to ask the sellers when they want to close, Maman says. Offering them that flexibility on their

own move can cast the buyers in a positive light.

Ames says that while “a lot of consumers think they can do it all themselves on the internet,” one thing they can’t do is unearth the pocket listings that connected agents like her know about. Private listing networks, agents’ lists of clients who plan to sell sometime later but not right now and other tools for accessing unseen inventory become particularly useful in a low-inventory market, she says.

Weed investors are seeing green as Dems take Senate Local marijuana companies including GTI and Cresco could benefit from shift in power after Georgia runoffs In a Democratic-controlled Congress, weed could come out a big winner.

Until now, the Republican-controlled Senate has held up legislation that would have allowed banks to provide lending and other services to cannabis companies without fear of reprisal because marijuana remains illegal under federal law. A Congress run by Democrats could also pave the way for broader changes, ranging from decriminalizing marijuana to full legalization.

Marijuana stocks rose on the results of the Senate runoffs in Georgia, including shares of Chicago-based companies Green Thumb Industries, up 10 percent, and Cresco Labs, up 7 percent.

decriminalization, which could have an immediate impact on expungement, lessening the burden on the U.S. justice system, and the passage of meaningful banking legislation like the SAFE Act would allow cannabis businesses to operate with the same access to capital and financial services as everyone else, accelerating industry growth and creating hundreds of thousands of good paying jobs and tax revenue.”

BABY STEPS?

Analysts say targeted changes, such as banking and financial legislation, are more likely than broader legalization, which likely would require Democrats to eliminate the filibuster to gain enough support. While incoming Vice President Kamala Harris has said she’s in favor of “THE AMERICAN CONSUMER HAS decriminalization and expunging the records of SPOKEN. THE AMERICAN CONSUMER people convicted of past WANTS CANNABIS FOR WELL-BEING, marijuana offenses, it’s not clear how much poAND IT LOOKS LIKE REGULATIONS litical capital the Biden administration is willing ARE SLOWLY CATCHING UP.” to spend on weed.

“The investment deDina Rollman, senior vice president, GTI bate now is more about “This is another big win for the priority cannabis reform will cannabis,” says Cresco CEO Char- take over perhaps other more lie Bachtell. “With a Democrat- pressing matters for the Biden Adic majority in the Senate we’re ministration, and on what types likely to see support for cannabis of reforms will the VP-elect Harris

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BLOOMBERG

BY JOHN PLETZ

tie-breaker vote be used,” Pablo Zuanic, an analyst at Cantor Fitzgerald wrote in a note to clients.

Still, the marijuana industry could see some huge benefits even from the passage of banking reform, called the SAFE Act, which has twice passed in the House of Representatives.

Cowen analysts say banking reform could include provisions such as allowing marijuana companies to deduct normal corporate expenses, which would lower their taxes and significantly boost profit and cash flow.

Legislation also could open cap-

ital markets, allowing companies such as Cresco and GTI, which are public in Canada, to borrow from traditional banks, raise from institutional investors and perhaps list on U.S. exchanges. Such a move would dramatically increase the market value of the companies, boosting share prices and providing access to capital necessary to build out facilities in new markets, such as New Jersey, which recently voted to allow recreational marijuana.

The industry could also see a victory with the passage of the STATES Act, which would require

the federal government to formally recognize marijuana legalization by states such as Illinois.

“We’ve been well positioned regardless of what happens legislatively at the federal level,” says Dina Rollman, senior vice president of government and regulatory affairs at GTI. “We have a massive opportunity without federal legalization.

The runoff result is a continuation of the green wave that we saw in the November election. The American consumer has spoken. The American consumer wants cannabis for well-being, and it looks like regulations are slowly catching up.”

1/8/21 4:15 PM

SPONSORED CONTENT

CRAIN’S CHICAGO BUSINESS • JANUARY 11, 2021 9

CRAIN’S EVENT RECAP

TRANSPORTATION SERIES

Airport Infrastructure and Its Economic Impact

What follows is a sponsored recap of an event moderated by Crain’s Chicago Business Political Columnist, Greg Hinz

T

hough the pandemic has had a dramatic impact on the airline industry, aviation will continue to be a critical economic engine driving growth in the Chicago area.

To understand the outlook on this fundamental resource, Crain’s recently held a webcast: Airport Infrastructure and Its Economic Impact. Crain’s Politics reporter Greg Hinz led the discussion on infrastructure spending around airports, and what it means for economic development and connectivity for the local region.

Webcast panelists included former U.S. Transportation Secretary Ray LaHood; former Chicago Aviation Commissioner Rosemarie Andolino; and DePaul Professor and transportation planning expert Joe Schwieterman.

The event was sponsored by H.W. Lochner, a national transportation and engineering firm based in Chicago. The webcast is part of Crain’s Transportation Event Series, exploring topics related to transportation and infrastructure in the region and state.

Hinz kicked off the discussion. He asked about the safety of flying during the pandemic.

The airlines have done what they can to improve safety, the panelists agreed. Airlines require masks and have improved sanitation practices. Some carriers keep middle seats empty. “It’s been a huge cost to the airlines and traffic is low,” Andolino said.

COVID-19 testing at airports could boost travel. “It’s not a bad idea,” LaHood said. Travelers are already required to undergo various checks to get on an airplane and a COVID-19 test could be one more condition.

Rapid, lower cost tests could be available in January which would help, according to Schwieterman.

“What about the shape of the industry down the road?” Hinz asked.

With the introduction of a vaccine, Schwieterman expects air travel to stay at about 75 percent of pre-pandemic levels for several years, bouncing back by 2024. “It

could be a painful transition,” he said. Business travel may be down as much as 20 percent in the long term, as some in-person meetings are permanently replaced by video conferences.

“The vaccine is a game-changer,” Andolino said. She thinks people will be traveling again which in turn will boost business at hotels and restaurants.

Meanwhile, cargo flights and shipping prices are up, the result of a big increase in online shopping. Chicago airports and the nearby regional airports in Gary and Rockford are benefitting as companies such as UPS and Amazon add to their aircraft inventory. “The cargo business is buzzing,” Andolino said.

O’Hare modernization Hinz asked whether the $8.5 billion O’Hare modernization plan should go forward amid concerns about project funding.

New runways are already built, and reconstruction of the international terminal is under way. Three new concourses and a new global terminal are part of the original plan.

LaHood noted that the O’Hare modernization program is not only about providing the next level of service for passengers and the airlines, but also a jobs program. “It’s a win-win,” he said.

ROSEMARIE ANDOLINO Former commissioner Chicago Department of Aviation

primarily as a logistics hub for cargo. The warehouse business is growing in the area which is becoming a focal point for express deliveries. Schwieterman thought a new airport would have to be privately funded.

President-Elect Biden will make infrastructure spending a priority, according to LaHood. A big initiative would jumpstart the economy and put a lot of people to work. “I think it will happen quickly,” he said, adding that an infrastructure program should be funded by a gas tax increase.

The panel discussed infrastructure improvements for rail and mass

RAY LaHOOD Former U.S. Secretary of Transportation

JOE SCHWIETERMAN Director, Chaddick Institute DePaul Univeristy

transit. They agreed that it will take leadership from the U.S. Congress and creative thinking.

“Transit systems need to reinvent themselves,” Schwieterman said.

New approaches might include agreements with ride sharing companies, flexible schedules and perhaps different equipment such as trains with fewer cars.

Public-private partnerships will play a role. “Government can’t do it alone,” Andolino said.

But, she added, infrastructure improvements should include a mix of rail services, roads and bus networks to support connection points where there is high demand. “We need an infrastructure system that works for everyone,” she said.

The pandemic has highlighted the need to reassess mass transit service going forward. Other cities are rethinking their approaches.

Downtown Chicago will come back as a business hub, the panelists agreed, but it could look different in terms of how often and when workers commute.

Serving Chicagoland Since 1944

The timing of the expansion could be favorable, Andolino suggested.

Air traffic is down, resulting in less disruption to operations during construction.

Schwieterman noted that the bond agencies issuing the debt will play a big role considering the impact of the pandemic on traffic and revenue. “We have to move forward at a pace the bond agencies think is reasonable,” he said. (Note: After the webcast, Congress passed a COVID relief bill. Hinz reported that both O’Hare and the airlines will receive help. O’Hare is expected to get one of the biggest slices of $2 billion designated for airports and airport concessionaires.)

Mile Long Bridge Reconstruction

Morgan Street Elevated Station

“As a transportation consulting firm, we are proud of our Chicago heritage and our involvement in supporting the mobility of the City as it has grown and evolved.”

- Jeanne Cormier, President and Chief Executive Officer

The panelists didn’t think O’Hare was being overemphasized at the expense of Midway Airport.

They agreed that O’Hare needs to be modernized to have Chicago compete with other gateway cities.

A long-discussed south suburban airport could still take shape, but

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PANELISTS

North-South Wacker Viaduct Reconstruction and Congress Parkway Interchange Improvement Program Management

Learn more at hwlochner.com/chicago OR Follow us on

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10 JANUARY 11, 2021 • CRAIN’S CHICAGO BUSINESS

EDITORIAL

hicago, once famous as a stacker of wheat, player with railroads— you probably don’t need us to recite the entire Carl Sandburg poem—has sadly become better known in more recent years for crime as well as the seemingly endless strife between its police force and the residents its officers are sworn to serve and protect.

So it was beyond discouraging to see the leader of the union representing Chicago’s police officers seeming to endorse lawlessness and mayhem. And yet, that’s precisely what happened when John Catanzara, president of the Fraternal Order of Police lodge that speaks for more than 12,000 active officers of the Chicago Police Department, publicly expressed sympathy for the rioters who broke into our nation’s Capitol, terrorized lawmakers and staffers within, destroyed public property, disrupted the people’s business and, if emerging news reports are to be believed, seemed intent on taking hostages, including perhaps the vice president of the United States.

“It was a bunch of pissed-off people that feel an election was stolen, somehow, some way,” Catanzara said in an interview with WBEZ-FM’s Chip Mitchell. “Again, they were voicing frustration. They’re entitled to voice their frustration.”

If that mob had merely voiced its frustration on that fateful day in Washington, then Catanzara may have had a point. But of course, as anyone with a functioning television knows by now, the throng did far more than speak out. They committed a litany of federal crimes and, in the process, they desecrated the Capitol itself, a place that’s come to be a globally recognized symbol of representative government, something that’s proved fragile indeed around the world in recent times. In the process, people died—

summer long in Democratic-ran cities and nobody had a problem with that.”

Actually, a lot of people had a problem with that, including many of the organizers of last summer’s demonstrations. And that gets us back to what’s most disturbing, on a local level, about Catanzara’s statements to Mitchell—statements he attempted to retract the next day. It’s this: Chicago has significant policing challenges, challenges that necessitate a rebuilding of trust between police on the street and the people

John Catanzara

CATANZARA SHOULD DO MORE THAN APOLOGIZE. HE SHOULD RESIGN.

AP IMAGES

C

Time for this union chief to go

five, as of this writing, including a member of the Capitol Police. Countless others were injured, many of them Capitol Police.

Whether the rioters’ grievances had merit is a matter a civilized society aims to settle in courts of law—and, after local elections officials in a wide swath of jurisdictions investigated, recounted and certified vote tallies, a procession of courts across the nation have already had their say about claims of widespread voter fraud.

And yet, Catanzara’s sympathies seemed to lie not with the law enforcement officers whose leadership left them ill-prepared to contain a demonstration planned and

publicly anticipated for weeks in advance.

His heart instead seemed to be with those who would wantonly threaten their fellow Americans with violence and defile the people’s house.

Like many who should know better, Catanzara likened the Capitol Hill riot to the lawlessness that broke out on the fringes of otherwise peaceful demonstrations for racial justice during the summer of 2020.

“They pushed past security and made their way to the Senate chamber,” Catanzara told Mitchell. “Did they destroy anything when they were there? No. Very different than what happened all across this country all

who live and work in this town. Years-long efforts to reform the police department, to make our streets safer, to treat Black and Brown people with respect, and to ensure equal justice for all have been halting at best, and that’s a charitable description.

To say that these sentiments, expressed by a man who quite literally speaks for thousands of Chicago police officers, are not helpful—well, it’s an almost ridiculous understatement.

Catanzara should do more than apologize. He should resign. And those who stand to elect his replacement should take this opportunity to reflect on what sort of person they want speaking for them in the future. It should be someone who respects the rule of law. Period.

“For my friends, everything; for my enemies, the law.” That’s a famous quotation that’s been attributed and misattributed to a variety of dictators over the years. It shouldn’t be something we could easily imagine a representative of Chicago’s police force saying.

YOUR VIEW

Why defining antisemitism is critical

“I

t was not that antisemitic.” “At least nobody got hurt.” These are phrases often heard when speaking with some in the Jewish community who never report hate crimes or likely hate crimes. According to the American Jewish Committee “State of Antisemitism in America” report for 2020, 76 percent of those who experienced antisemitic incidents over the last five years did not report them. AJC’s study also concluded that 46 percent of the general U.S. population either never heard the term “antisemitism” or did not know what it means, even if they were familiar with the word.

Year after year, according to FBI Hate Crimes Statistics reports, Jews are the most targeted in the country when it comes to religiously motivated hate crimes, despite making up only 2 percent of the American population. Jews

Rory Hoskins is the mayor of Forest Park.

Laurence Bolotin is the director of the American Jewish Committee Chicago region.

comprise only 4 percent of Chicago’s population but were targets of 81 percent of religiously motivated hate crimes in 2019. This is an increase of 70 percent over 2018, according to Chicago Police Department data. The numbers may be

higher as victims of hate crimes, including instances of antisemitism, do not report because they reasonably doubt that anything will be done.

We recently learned that in many cases, suburban police departments do not accurately record instances of hate crimes due in large part to a lack of awareness and training. For example, the repeated defacement of a pro-immigration mural was coded by suburban police as criminal destruction of property. The same coding was used by this police department in response to swastikas being drawn on buildings and parked cars in late 2020.

Condemning antisemitism and hate is something that people should do without hesitation. Civic leaders have a responsibility to confront antisemitism and hate through education and advocacy. Recently, AJC took this message to

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.

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Chicago’s suburbs in an effort with local councils to confront virulent hate, specifically Holocaust denial and rising antisemitism. These discussions resulted in the village boards of Forest Park and Lincolnwood unanimously endorsing the International Holocaust Remembrance Alliance Working Definition of Antisemitism.

First adopted in 2016 by the alliance’s 31 member states, this definition is widely considered the global standard.

It has been adopted by countries and organizations around the world and is now gaining traction in the United States. Defining antisemitism is integral to educating officials, including law enforcement and other community leaders, so that evaluating incidents of antisemitism leads to proper classification of them as hate crimes. A consensus definition allows civic society to build

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.

1/8/21 4:20 PM

CRAIN’S CHICAGO BUSINESS • JANUARY 11, 2021 11

YOUR VIEW Continued understanding about antisemitism, how it manifests itself, how to identify it and how to counter it and other forms of hate through education and dialogue.

When Forest Park detected antisemitism through multiple graffiti incidents, it intentionally adopted the IHRA working definition, becoming the first town in Illinois to do so. The groundwork for this official action had already been laid by a community organization, Forest Park Against Racism, that formed during the summer of 2020. Forest Park continues to look at ways of bringing more positive awareness to the history of the local Jewish community. Weeks later, the village of Lincolnwood unanimously adopted the

Chief executive officer KC Crain Group publisher/executive editor Jim Kirk

Associate publisher Kate Van Etten *** Editor Ann Dwyer

definition. In both towns, there had been recent instances of antisemitism that were not accurately reported, largely due to a lack of training.

A STANDARD TOOL

Adoption of the IHRA Working Definition of Antisemitism provides local municipalities, including police departments as well as civic leaders and school administrators, a standard tool for identifying this hatred in all its form targeting Jews.

Of course, the Jewish community is not the only one that continues to fall victim to hate. Any community feeling marginalized or targeted through graf-

2021

Creative director Thomas J. Linden

allows civic society to build understanding about antisemitism, how it manifests itself, how to identify it and how to counter it and other forms of hate through education

and dialogue.

NOMINATE NOW! Deadline is Jan. 15

Assistant managing editor/ Joe Cahill columnist Deputy digital editor Todd J. Behme

A consensus definition

LAST CHANCE TO NOMINATE!

Assistant managing editor Jan Parr

Assistant managing editor/digital Ann R. Weiler

fiti and other hate crimes should advocate for similar action, because hatred of any single religious or other racial minority is very likely to be replicated through targeting of similarly situated groups. Violence against Jews is not limited to Jews. This hatred invites violence against Blacks or Latinos or others. It is a societal problem.

We urge Illinois municipalities to consider adopting the IHRA Working Definition of Antisemitism or to at least review their police department’s policies with respect to hate crime reporting. With the cooperation of our city and state leaders, we can make an impact in combating hatred.

HEALTH CARE HEROES

Digital design editor Jason McGregor Senior art director Karen Freese Zane Copy chief Scott Williams Deputy digital editor/ Sarah Zimmerman audience and social media Forum editor Cassandra West Political columnist Greg Hinz Senior reporters Steve Daniels Alby Gallun John Pletz Reporters Danny Ecker Stephanie Goldberg Wendell Hutson Ally Marotti A.D. Quig Dennis Rodkin Steven R. Strahler Contributing photographer John R. Boehm *** 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 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 Digital designer Christine Balch Crain Communications Inc. Keith E. Crain Chairman KC Crain Chief executive officer Lexie Crain Armstrong Secretary Veebha Mehta

Mary Kay Crain Vice chairman Chris Crain Senior executive vice president Robert Recchia Chief financial officer Chief marketing officer

***

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Crain’s 2021 Notable Health Care Heroes feature will honor both individuals and teams who have been on the front lines of the COVID-19 pandemic. We will recognize health care workers who are selflessly caring for others and making a significant impact during this time of crisis.

Nominate at ChicagoBusiness.com/HealthCareHeroes Nomination deadline is Friday, Jan. 15. Section publishes Mar. 8.

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1/8/21 4:20 PM

12 JANUARY 11, 2021 • CRAIN’S CHICAGO BUSINESS

Illinois’ population drop is more complicated than it looks An examination of the data indicates it’s about far more than taxes—like the fact that we’re still in the Rust Belt Political spinners enjoyed a first-class feast over the holidays after the U.S. Census Bureau released new estimates showing that, for the seventh year in a row, Illinois lost population in the year ended June 30.

“Illinoisans are leaving—a message (Gov. J.B.) Pritzker and state lawmakers ignore at everyone’s peril,” said the Illinois Policy Institute, a libertarian research group.

“Instead of looking for more in taxes, they should fix the state’s finances,” particularly underfunded government pension plans.

The estimated decline of roughly 250,000 over this decade, or about 2 percent, obviously is not good news. And the state clearly has not solved its staggering pen-

quires some context.

Let’s start with the facts.

The most prominent is that the same census estimates that show Illinois losing people also show that none of our Rust Belt neighbors in the industrial Midwest are doing particularly well, either.

AROUND THE NEIGHBORHOOD

Michigan and Ohio—like Illinois, big industrial states with major cities—have seen their populations rise only about 1 percent this decade. Wisconsin has lost about 54,000 people. And for all the bragging in Indiana, the Hoosier State has gained only about 3 percent, or 271,000 people, in the past decade.

Collectively those are pretty small variations, in the scheme of things. And the Midwest leader in growth is “high MinnesoILLINOIS’ DECLINE IS FOCUSED DOWNSTATE, tax” ta, which has WHERE AT LEAST 90 PERCENT OF COUNTIES gained an estimated 354,000 people, better HAVE LOST PEOPLE, ACCORDING TO than 6 percent.

DEMOGRAPHER ROB PARAL. Still, Illinois seems to be dision woes, with $144 billion in un- verging some from the slow-growfunded liability at last count. But ing Midwest. How come?

Part of the reason is the dehaving now had a chance to take a look at the numbers, and talk with cline in international immigrademographers and other officials tion during the Trump presidenwho deal with the figures, it’s clear cy, something that hurt Illinois that reversing the state’s popu- more than its neighbors. Orphe lation loss will require lots more Divounguy, chief economist at the Illinois Policy Institute, sets than a tax cut.

Put a different way, there’s lots the loss at perhaps 20,000 people of things going on at the same a year. Demographer Rob Paral time, and understanding them re- pegs it higher, perhaps 40,000 a

GETTY IMAGES

BY GREG HINZ

None of our neighbors in the industrial Midwest are doing particularly well: Wisconsin has lost people—an estimated 54,000 over the last 10 years. year. Either way, it’s added up.

Paral makes another point that has gotten lost in much of the recent debate: While metropolitan Chicago isn’t gaining much, it’s no worse than about flat in the decade. Where the population loss is focused is downstate, where, according to data he’s crunched, at least 90 percent of counties have lost people. If those areas arguably lack the talent draws that metropolitan Chicago has, they may be more susceptible to economic pressures, such as the impact of the new federal cap on deducting state

and local income taxes.

Another source who’s tracked the data, Metropolitan Planning Council Research Director Dan Cooper, says all of the factors listed above have an impact, but the most striking to him is the demographic impact of inequality—the cost in lost jobs and investment due to Chicago’s national reputation as a place with high crime, lagging schools and tax uncertainty.

What’s changed in the past decade is that population growth in the metro area, which had been carrying the rest of the state, has

trailed off into stagnancy, Cooper says. While “it’s complicated,” he concludes, “inequality is our No. 1 problem.”

He also points to data suggesting that, while tech and other high-education fields still are attracting educated people to the state, those fields attract relatively few Blacks and Latinos, at least so far.

Hard data, rather than estimates, should be available later this year from the census. That may provide more definitive answers to what’s behind Illinois’ population drop.

Where are those moving vans headed? Away from Illinois.

Studies from two national van line companies show that about two-thirds of their interstate moves in Illinois are outbound mainland U.S. locations (49 states and Washington, D.C.) for Two-thirds of moving van book- inbound moves by do-it-yourings in Illinois were outbound last selfers.

Estimates from the U.S. Census year, according to surveys released last week by two van line compa- Bureau indicate that Illinois lost nies, underscoring the state’s sev- almost 79,500 people in the year ended July 1. It was the seventh enth year of population loss.

United Van Lines, in its 44th consecutive year of population annual report on traffic, says 66.4 shrinkage in the state and left Illipercent of the 2020 interstate nois down more than a quarter of a million people since the census.

THE PROPORTION OF OUTBOUND 2010 Illinois had the sevMOVES CHANGED LITTLE LAST YEAR enth-highest proportion of outbound moves in the FROM ANY OF THE PREVIOUS FIVE U.S. in United’s study and the second-highest in AtYEARS IN EITHER FIRM’S REPORT. las’ study.

The year covered by the moves it handled in Illinois were data, 2020, was of course marked outbound. Competitor Atlas Van by the spread of COVID-19 and Lines reports in its study that lockdowns of businesses. Thus, it’s slightly under 63 percent of the not surprising that Atlas reportinterstate moves it handled in Illi- ed a lower number of interstate moves. Atlas reported that its Illinois were outbound.

A third study, from U-Haul, nois interstate moves, whether inranked Illinois 49th among 50 bound or outbound, totaled 4,009

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SUNNYDAYSTARRYNIGHT/FLICKR

BY DENNIS RODKIN

in 2020, down 16 percent from 4,776 in 2019.

Industry leader United, which has about twice the fleet of trucks Atlas has, did not provide a number of moves, only the percentages

inbound or outbound.

Even with the reduced Atlas moves, the proportion outbound from Illinois changed little last year from any of the previous five years in either firm’s report.

Chicagoans looking to move outside the area have been eyeing South Bend, Ind., of late. A report from Redfin showed we also search often in Austin, Texas, and Cape Coral, Fla.

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14 JANUARY 11, 2021 • CRAIN’S CHICAGO BUSINESS

Titanic survivor’s Lincoln Park mansion becomes pair of condos

BY DENNIS RODKIN The Lincoln Park mansion built for a wealthy Chicagoan who survived the sinking of the Titanic has been extensively rehabbed and now is being offered as a pair of condos. The first of the two was listed Jan. 5 at $5.65 million.

When developer Bob Berg’s firm, Foster Design Build, bought the dilapidated 16,000-square-foot former Emily Ryerson mansion in 2017, he said the rehab would wind up as either a single-family home or three condos. No single-family buyer materialized, so the rehab proceeded as condos.

Wendy Berg, the Baird & Warner agent who represents the condos, says making three turned out not to be appealing, as the third would have no view of Lincoln Park and few historical details, so they revised the plan to make two condos. Now on the market is the upper condo, on the home’s third and fourth floors. The lower condo, which will be larger and have the most historical details, will be completed in the spring and likely priced at about $7.6

million, she says.

The upper condo benefits from the L shape of the building’s lower two floors. The developer built a new window-wrapped room that opens onto the roof of that piece, giving the upper condo an 800-square-foot rooftop terrace with views east to the park and west down a street lined with trees and vintage buildings.

SOCIETY ARCHITECTS

The condo is 5,200 square feet inside, with four bedrooms. It has a two-car garage, as will the other one. Historical details of the interior include a curving staircase with a wrought-iron handrail and wall paneling. New finishes fill the rest of the space. Among them: wood floors in an oversized herringbone pattern and thick-slab marble countertops in the kitchen.

Because the condo begins on the third floor, its east-facing rooms and some that face south have views over the trees into the park.

The mansion was built in 1917 for Emily Ryerson and her three children, five years after they es-

caped the sinking Titanic in lifeboats. Her husband, Arthur, a member of the Ryerson steel family, went down with the ship.

Society architects David Adler and Henry Dangler designed Ryerson’s house and an attached row of townhouses that stretched north from it along Lakeview Avenue. Some of their original details still intact on the lower floors are carved plaster busts over door frames and ornamental columns in the foyer.

When Berg’s firm bought the mansion, it hadn’t been used as a residence since 1946, and most of its interior had been chopped up, the original features replaced or allowed to deteriorate. Thresholds, an addiction recovery and mental health facility, was housed in the building from 1975 until 2015, when Thresholds sold it to a developer for $2.8 million. That developer did not undertake a rehab and sold the building to Foster Design Build’s investors.

Another Chicago house associated with Titanic survivors is on the market. The four-bedroom

VHT STUDIOS PHOTOS

Built in 1917 for Emily Ryerson, the property hasn’t been a residence since the 1940s but is being rehabbed into two units, with one just listed

house on East Circle Avenue in Norwood Park, which was the home of Ida and Jean Hippach before the mother and daughter

survived the sensational disaster, was listed in October at just over $1 million. Its asking price has been reduced to $999,000.

Turning your ideas into reality.

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CRAIN’S CHICAGO BUSINESS • JANUARY 11, 2021 15

Black home value gap biggest in Chicago among top cities

BY DENNIS RODKIN The gap between the value of Black-owned homes and the value of the region’s homes overall is bigger in Chicago than in any of the other 10-largest U.S. metropolitan areas, according to a new report.

Among the implications of the gap is one that is playing out right now, as Chicago-area home values are rising faster than they have in years. Black homeowners in lower-valued homes “aren’t as able to capture the benefits of the increase from these good times in the housing market” as other homeowners, says Cheryl Young, senior economist at Zillow, which issued the report.

Typical Black-owned homes in the Chicago area are worth about 37 percent less than typical homes in the market overall, according to a report released Jan. 5 by Zillow, an online real estate marketplace.

That’s by far the widest gap in any of the nation’s largest cities: The second-widest gap is in Philadelphia, where Black-owned homes are worth about 23 percent less than the overall market.

Nationwide, typical Black-

owned homes are worth 16 percent less than the overall market. Chicago’s gap is more than twice that.

Much of the gap can be attributed to Chicago’s well-known history of segregation, Young says.

“Redlining and these other factors behind where communities of color are, and especially where Black communities are, left a legacy,” she says.

LOCATION, LOCATION, LOCATION

The legacy is visible in the city today, says Deborah Moore, director of neighborhood strategy and planning for Neighborhood Housing Services of Chicago, a nonprofit agency that works to improve the city’s neighborhoods through homeownership.

The value gap, Moore says in an email to Crain’s, is “based on location, location, location. (Black) neighborhoods are still lacking quality amenities, retail, walkability and public infrastructure.”

In a sense, it’s a self-perpetuating cycle, Young and Moore both say. In the early and mid-20th century, white households abandoned areas where Blacks lived, which cut into home values, and those low home values contribut-

ed to the justification for disinvestment in those areas that in turn further undercut home values.

Mayor Lori Lightfoot’s Invest South/West initiative, designed to direct development toward those parts of the city, “is a great start,” Moore says, but “to increase property values we need a more holistic approach to the amenities gap.” She indicates that would entail a package of improvements to schools, commercial strips and the vast and destabilizing tracts of vacant land, and better health care access.

Although fair housing laws and lending standards are in place, Black households continue to suffer financially from the impact of disinvestment. A 2020 report on the State of Housing in Black America, or SHIBA, showed that the growth in Black-owned homes’ value consistently lagged behind white-owned homes’ value between 1998 and 2018.

The implications for household wealth are considerable: White households generally have about 10 times the wealth that Black households do.

“That 37 percent difference might mean (a white household)

ERIC ALLIX ROGERS/FLICKR

Some of the disparity derives from the city’s age-old pattern of segregation, disinvestment and redlining, but present-day factors contribute as well

Black households in Chicago continue to suffer financially from the impact of disinvestment. is seeing their equity grow, so they can put somebody through college on it,” says Sarah Ware, who heads Pilsen-based Ware Realty Group.

For a Black household, she says, “they might be just holding on.”

Young concurs with Ware. She says Black and Latino homeowners typically have a larger share of their household wealth tied up in their home than white and Asian homeowners do.

For Latino homeowners in the Chicago area, typical homes are

valued at more than 16 percent below the overall market, Zillow says. That compares to a 10 percent gap nationwide.

Chicago-area homes owned by non-Hispanic whites are typically worth 8 percent more than the market overall. Nationwide, they’re worth about 3 percent more.

Asian-owned homes here are worth about 11 percent more than the general market, compared to 3.7 percent nationwide.

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PEOPLE ON THE MOVE

Advertising Section

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

ACCOUNTING / ADVISORY CONSULTING

CONSTRUCTION SERVICES

FINANCIAL SERVICES

LAW

NON-PROFIT

MGO LLP, Chicago

Pepper Construction, Chicago

Benesch, Chicago

MGO LLP, one of the fastest growing CPA and Advisory Services firms in the US, welcomes Kevin O’Brien as Supervisor and a core team member of its new Chicago office, which is leading the firm’s Midwest expansion. Kevin leads tax advisory operations and delivers creative tax technical solutions to clients in a variety of industries, including financial services, banking, consumer lending, insurance brokerage, private equity, broker/dealers, and cannabis.

Pepper Construction has announced the promotion of Jeff Johnson to President of Pepper Construction Wisconsin, as a reflection of Pepper’s continued growth in this market.

Jeff is a seasoned leader with more than 30 years of construction experience predominately in the Wisconsin market. Jeff has expertise in operations, financial and risk management, Lean construction delivery, technical services, human resources and business development.

Hunken Ewing Financial Group, Chicago

Ada S. McKinley Community Services, Inc., Chicago

HEFG is excited to announce that Arthur Agunloye, CLU® has joined the firm as the new Managing Director effective January 1, 2021. Arthur is a highly experienced leader in the financial services industry. He spent the last 20 years with Prudential’s Chicagoland agency, where he focused on recruiting new talent to the industry and building diverse, inclusive teams. He won many awards in the span of his career including rookie of the year, Million Dollar Round Table and multiple management citations.

Benesch is pleased to announce that Jason W. Griffith has been promoted to partner in the Corporate & Securities and Private Equity Practice Groups.

Jason has experience representing companies and private equity funds in connection with a variety of matters, including mergers, acquisitions, dispositions, joint ventures, minority investments, restructurings, employment arrangements (including incentive compensation), and other day to day general corporate matters.

Ada S. McKinley named Nakita Burrell as its Chief Financial and Administrative Officer. Burrell will provide leadership and oversight in matters pertaining to continuing the financial sustainability of the 101-year-old agency. This includes directing activities related to financial strategy, reporting, planning and forecasting.

Burrell has over twenty years of experience in financial planning and analysis and accounting which includes a strong background in nonprofit fiscal management.

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INVESTMENT ARCHITECTURE / DESIGN

Solomon Cordwell Buenz (SCB), Chicago Scott Seyer, AIA, LEED AP has joined SCB as a Principal and design leader in the firm’s commercial office practice, working across the country with SCB’s Chicago, San Francisco, and Seattle offices. Seyer joins SCB from Goettsch Partners, where he served as design principal for several notable commissions, including the recently completed office tower at 110 N. Wacker in Chicago and Park Tower in San Francisco, completed with SCB as Associate Architect, and now home to Facebook.

CONSTRUCTION SERVICES

Pepper Construction, Chicago Pepper Construction welcomes John Ross as Vice President of Business Development.

As a key player in the company’s growth, John will specialize in identifying and developing relationships and opportunities with an emphasis on increasing Pepper Construction’s market share in the healthcare and higher education markets. Prior to joining Pepper, John has spent 19 years in the Design and Construction industry leading business development efforts.

Salo, Chicago / Minneapolis

Wintrust Money Service Exchange Group, Chicago Wintrust is pleased to add Carol Ann Killian. As senior vice president of Wintrust Money Service Exchange Group, she will be responsible for developing relationships within the money service exchange commercial banking (MSX) business line, which focuses on treasury management, lending, and capital markets of money service exchange businesses in the U.S. With 26 years of industry experience, she will look to make Wintrust the leading provider of financial services to the money services industry.

Bard Associates Inc., an SEC-registered Investment Advisor and pioneer in micro-cap investing, is pleased to promote Michael Demaray, CFA, to Vice President. Michael will continue to contribute to Bard’s unique, nearly 40-year history of successful investment in small, publicly-traded companies. He will also work with clients to create investment portfolios that fit their individual risk profiles. Michael has 22+ years of investment and business experience and joined Bard in May 2020.

Rosa Tumialán joins Burke Warren as a Partner in the firm’s Litigation, Class Action, Appellate practices.

An accomplished defense attorney with 20 years of insurance coverage expertise, Ms. Tumialán represents insurers in complex coverage disputes relating to personal and commercial lines, third party claims, surplus lines and claims handling practices. She has extensive experience defending class actions under TCPA and BIPA and handling appellate matters in state and federal courts nationwide.

REAL ESTATE

Cresa, Chicago Gregg Witt has joined Cresa, the world’s largest commercial real estate firm focused solely on occupiers, as a Principal with the Chicago office.

The city’s foremost expert on nonprofit real estate issues, Witt will lead the firm’s local Nonprofit Practice Group and participate as a member of its national team.

LAW

Benesch, Chicago

FINANCIAL CONSULTING

BANKING / FINANCE

Bard Associates, Inc., Chicago

Burke, Warren, MacKay, & Serritella, P.C., Chicago

Loralee Wick, managing director, finance, in Minneapolis, has been promoted to senior managing director, finance with responsibility for both Minneapolis and Chicago. Loralee’s deep industry knowledge and expertise has helped lead Salo’s Minneapolis Finance business to new levels. She will be focused on uniting the finance business units and driving continued growth.

To order frames or plaques of profiles contact Lauren Melesio at lmelesio@crain.com or 212-210-0707

Benesch is pleased to announce that Leah Beitner has been promoted to partner in the Tax Practice Group.

Leah counsels clients from a broad range of industries on the tax aspects of a variety of transactions. She has experience representing public and private corporations, fund managers and institutional investors in connection with mergers, acquisitions, divestitures, joint ventures, and real estate transactions.

LAW

Benesch, Chicago Benesch is pleased to announce that Mark S. Eisen has been promoted to partner in the Litigation Practice Group. Mark’s practice focuses on defending companies against class and individual actions brought under state and federal privacy and consumer protection statutes, including the Telephone Consumer Protection Act, the Fair Credit Reporting Act, the Fair and Accurate Credit Transactions Act and the Biometric Information Privacy Act.

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Mercer Oak, Chicago Founding partners, Princeton friends, and award-winning attorneys T.J. Dammrich and John Haarlow launched Mercer Oak, a values-driven law firm Dammrich helping clients navigate the intersection of business and legal.

With over 30 years of business and legal experience, Mercer Oak provides litigation expertise covering Haarlow breach of contract, fraud, insurance coverage, indemnification, product liability, and class action cases, as well as transactional services with litigators’ perspectives for commercial contracts, product launches, and corporate formation and maintenance. The firm’s experience encompasses closely held companies, food and beverage, hedge funds, private equity, real estate, among other industries.

More at merceroaklaw.com.

STRATEGIC ADVISORY

Culloton + Bauer Luce, Chicago Anel Ruiz has joined Culloton + Bauer Luce as our new Senior Vice President. Anel comes to CBL after serving as Chicago Mayor Lori Lightfoot’s press secretary. On the 5th floor, Anel honed her already-extensive issues and crisis management skills guiding the city through crisis after crisis. We’re confident our clients will benefit greatly from Anel’s strategic counsel, particularly in issue spotting as we continue to focus on targeting audiences directly in a digital-first environment.

CRAIN’S CHICAGO BUSINESS • JANUARY 11, 2021 17

Guaranteed Rate deals its way into top 10 of mortgage lenders A pending acquisition also brings in Blackstone—and implications for the future

BY STEVE DANIELS Guaranteed Rate has a deal to acquire a Texas-based mortgage lender that will vault the Chicago-based company into the ranks of the nation’s top 10 home lenders.

But at what price to local control of Guaranteed Rate?

Privately held and majority-owned by founder and CEO Victor Ciardelli, Guaranteed Rate, best known for its name stamped on the White Sox stadium, announced Jan. 5 that it has a definitive agreement to acquire Stearns Holdings, based in suburban Dallas. Stearns, which originated about $20 billion in mortgages last year, is owned

by New York-based financial giant Blackstone.

Terms of the transaction aren’t being disclosed. But a press release said Blackstone would “have an interest� in Guaranteed Rate once the deal closes. Presumably, that means Guaranteed Rate is paying at least some of the undisclosed price in stock.

Guaranteed Rate sold a minority stake in 2018 to Boston-based private-equity firm Thomas H. Lee Partners.

A Guaranteed Rate spokeswoman wouldn’t comment when asked whether Blackstone’s stake would make Ciardelli, 54, a minority owner or whether Blackstone would get any board seats. “Guaranteed Rate is not commenting on terms of the deal,� she said.

In the release, Blackstone Senior Managing Director Nadim El Gabbani said, “We are fully behind Victor Ciardelli and the entire Guaranteed Rate team. This combination creates a powerful player in the mortgage industry, and one that we believe is exceptionally well positioned for success over the long term.�

Guaranteed Rate was the nation’s 11th-largest mortgage lender as measured by originations through the first nine months of 2020, according to Inside Mortgage Finance. It would have been the seventh-largest if Stearns’ production had been added, just ahead of Minneapolis-based U.S. Bank, says Andras Malatinszky, the publication’s director of data services.

While much of the economy suffered through a year of pandemic, 2020 was a bonanza for mortgage lenders, as ultra-low interest rates

fueled a wave of refinancing. Home sales also were strong.

Guaranteed Rate enjoyed the biggest year in its 20-year history, originating what the spokeswoman said was $73 billion in new loans. It employs 9,000 people in hundreds of offices around the country.

In addition to bringing one of the country’s most sophisticated investors into the fold, the deal will get Guaranteed Rate into the business of making loans through outside mortgage brokers. Until now, Ciardelli has avoided that side of the business, preferring to employ his own army of lenders.

About 30 percent of Stearns’ loans are through outside brokers, the Guaranteed Rate spokeswoman said. Stearns, which operates in all 50 states, will retain its brand name in that wholesale business while the loans it makes directly to consumers will be branded as Guaranteed Rate.

In the release, Guaranteed Rate said the deal would allow it “to enter the wholesale channel to complement the company’s multichannel distribution vision.� Guaranteed Rate also touted Stearns’ partnerships with companies such as online lender SoFi. Stearns CEO David

Schneider will continue to run the wholesale and partnership operations.

Blackstone’s sale of Stearns to Guaranteed Rate, with at least some of the proceeds in the form of stock, will raise more questions about the Chicago company’s future owner-

ship. Guaranteed Rate now has two institutional investors that surely will want to cash out at some point in the not-too-distant future. Will that be through an initial public offering? A sale?

Ciardelli’s ambitions remain the same—to grow faster than rivals.

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18 JANUARY 11, 2021 • CRAIN’S CHICAGO BUSINESS

The governor is the first in decades to appoint someone from one of Illinois’ big two—Allstate and State Farm—to serve as insurance director Gov. J.B. Pritzker has done something no other Illinois governor in decades has. He’s plucked someone from one of the state’s two 800-pound insurance gorillas to regulate the industry.

Pritzker last week announced the appointment of Dana Popish Severinghaus as his new insurance director. She comes from Northbrook-based Allstate, where she had been Midwest regional counsel for the insurance giant for three years.

She is the first leader of the state

Department of Insurance in memory to come directly from Allstate or Bloomington-based State Farm, according to insurance industry observers. The two heavyweights are highly influential in Springfield along with Blue Cross & Blue Shield of Illinois, at which she also has worked. The department is the chief regulator of all those companies.

Severinghaus replaces Pritzker’s initial pick for the job, Robert Muriel, who stepped down from the post last month. She will be subject to state Senate confirmation.

In between her roles at Blue Cross

Why 2021 looks like a key year for the Obama Center OBAMA CENTER from Page 1 A federal review of the OPC’s impact on public parkland and the environment remains to be completed, and legal threats from groups seeking to protect Jackson Park are pending. But the National Environmental Policy Act review is expected to conclude in the coming weeks. The Obama Foundation declines to comment on plans for the year ahead for fear of jeopardizing the final signoff.

“We won’t have the all-clear until everything is complete, but I know people are excited,” local Ald. Leslie Hairston, 5th, says. “Especially after the whole pandemic, they’re looking forward to investments being made in the community.”

For the most part, presidential libraries haven’t been catalysts for economic development, says Anthony Clark, a former congressional staffer who wrote a book on the history and politics of presidential libraries.

“The only presidential library that I’m aware of that’s shown a positive, sustaining economic impact on the local community is the Clinton Presidential Center in Little Rock, specifically because it was one of the stated goals,” he says.

Clinton’s center and park—costing $165 million and covering approximately 30 acres—was built in a warehouse district near downtown Little Rock, Ark., in 2004. An analysis from the local chamber of commerce found it accelerated downtown investment to the tune of $2.46 billion, and had a total economic impact of $3.3 billion during its first 10 years. The analysis credited the center with sparking the revitalization of a nature trail along the Arkansas River, the construction of six new hotels and expansions at other nearby attractions like the Little Rock Zoo and public library.

The OPC projects $3.1 billion in economic impact “during the construction period and first ten years of operations for Chicago, with $675 million resulting from the construction phase and an annual impact of $246 million after the Center is open.” In Cook County, the assess-

P018_CCB_20210111.indd 18

ment predicts that the construction of the OPC will support 4,945 direct, indirect and induced jobs created during the construction phase and 2,536 direct, indirect and induced jobs after the center is open.

In the construction phase, the Obama Foundation has pledged to partner with job training and job retention programs and award 50 percent or more of its subcontracts to suppliers owned by minorities, women, veterans, individuals with disabilities, and LGBTQ individuals. Fifty percent of hours will be worked by city residents, the foundation says, with 7.5 percent of hours worked by locals in the surrounding area. A joint venture of construction companies, including minority-owned firms, the Lakeside Alliance, will build the center.

Community engagement will be key, says Ald. Jeanette Taylor of the neighboring 20th Ward, who has worked closely with organizers seeking a community benefits agreement with the foundation.

Proponents of the agreement are worried about gentrification and displacement from rising property values in the area. Taylor and Hairston both say job promises and traffic snarl will be top concerns.

“It’s a whole bag of worms we’re going to have to deal with,” Taylor says. While a housing agreement cemented last year to protect current residents is a good first step, and she wants to see the neighborhood lifted up, “I want development with the community. . . .If that means fighting with (the city’s planning department) and the Obama Center, I’m OK with it. I’m up for a good fight.”

EXPERTS ADDED

The Obama Foundation recently brought on two experts in local politics and planning: Barack Obama’s former adviser Valerie Jarrett as interim president and former Metropolitan Pier & Exposition Authority chief Lori Healey to manage construction.

While the area near the planned center is largely residential, Hairston says there are opportunities to reinvigorate retail corridors on

and Allstate, Severinghaus served in state government. She was senior policy adviser at the Department of Central Management Services, the state’s primary procurement agency, from October 2016 until January 2018, when she left for Allstate.

Before the state government job, she was head of government relations at Blue Cross & Blue Shield of Illinois for nearly four years.

“Dana Popish Severinghaus is an experienced attorney who has extensive knowledge of the insurance industry and previous experience serving in state government,”

Gov. J.B. Pritzker quarters of State Farm and Allstate.

State Farm is the largest U.S. insurer of cars and homes; Allstate is the fourth-largest car insurer and the second-largest home insurer.

GETTING CLOSER Construction of the Obama Presidential Center could start in 2021, the year planners once hoped it would open.

February: The Chicago Park District authorizes a land transfer of Washington or Jackson Park for Obama’s library.

2015

A rendering of the Obama Presidential Center June: OPC chooses the architects to jointly lead the design and engineering of the center.

May: OPC designs unveiled.

2016

2017

May: A lawsuit led by Protect Our Parks is filed seeking a court order to “bar the Park District and the City from approving the building of the Presidential Center.”

OPC passes the Chicago Plan Commission. The City Council follows on May 22.

October: The Obama Foundation unveils refined OPC designs.

Michelle Obama defends the foundation’s plans for Jackson Park at its annual summit.

2018

2019

May: Obama selects Chicago as site of his presidential library.

July: Jackson Park selected as the site of the OPC.

Source: Crain’s reporting

STEPHEN J. SERIO

BY STEVE DANIELS

Pritzker spokeswoman Jordan Abudayyeh said in an email.

“Directors of state agencies report to the governor’s office and are tasked with carrying out the goals of this administration. The governor believes health care is a right, not a privilege, and under his leadership the Department of Insurance is charged with regulating the insurance industry to ensure consumers have access to the health care they need.”

Insurers are regulated by states, not the federal government. The state in which an insurer is domiciled serves as its chief regulator. So Illinois plays an important national role in bird-dogging the industry, given that it’s home to the head-

GETTY IMAGES

Pritzker taps Allstater to regulate insurance industry

Jackson Park

Stony Island Avenue and 67th and 71st streets. A 2013 study commissioned by the University of Chicago pointed to nearby plots owned by the university and along 63rd Street as potential prime destinations for development. Having locals like Jarrett and former first lady Michelle Obama at the table will be a boon, Hairston says.

But development can only follow demand. The OPC hopes for roughly 700,000 annual visitors—a number no other presidential library has regularly attracted, nor hit in peak years, Clark says.

The Eisenhower Library in Abilene, Kan., came close in 1970, with 630,779 attendees, according to a 2015 Chicago Tribune analysis.

That was driven by visitors to Eisenhower’s gravesite the year after he died.

The biggest visitor count to a presidential library in the last five years, according to the National Archives, was at President Ronald Reagan’s in 2016, when 432,308 people passed through. It wasn’t driven by a presidential exhibit, but for “Vatican Splendors: A Journey Through Faith and Art.” But the OPC is counting on Obama’s appeal to Black visitors,

citing the popularity of the National Museum of African American History & Culture in Washington, D.C., and the National Civil Rights Museum in Memphis, Tenn. Backers also note the popularity of Barack and Michelle Obama themselves, and a museum demographic that is trending younger and more diverse.

The foundation estimates the center’s construction will cost $500 million and take four years. Previous architects have estimated it would need an endowment of $1.5 billion for ongoing operations, a number the foundation did not confirm.

In tax filings, the foundation has reported raising $550 million between 2015 and 2019. It claimed $430 million in net assets for the 2019 tax year, including receiving $141 million in contributions and spending $52 million alone on pre-construction costs for the OPC. Its $1 million-plus donor list already includes top Chicago names: the Bluhm family, James Crane and Whitney Wheeler Crane, the Crown family, Fred Eychaner, Ken Griffin, Michael and Kari Sacks, the Pritzker Traubert Foundation, Mellody Hobson and George Lucas’ foundation, Oprah Winfrey, Victoria and

August: Federal appeals court effectively ends Protect Our Parks’ suit against OPC, affirming a judge’s 2019 ruling. POP expresses plans to appeal to the Supreme Court.

July: City officials and Woodlawn advocates reach an agreement to preserve affordable housing near the OPC site.

2020 December: Federal officials finalize a memorandum of agreement of the Section 106 federal review, one of the longest challenges to the OPC.

John Rogers, companies like Boeing and Exelon, plus the city’s major foundations.

Key to the center’s plans are infrastructure changes in Jackson Park, estimated to cost taxpayers $174 million. City and state officials say that money—approved in the state’s 2018 budget—is not threatened by the current fiscal challenges facing both governments. The undertaking has been compared to the reshaping of Lake Shore Drive around Soldier Field in the mid-1990s. It will involve closing several roads, including Cornell Drive from 59th Street to Hayes Drive and its northbound lanes from 67th to 65th streets. There are also plans to widen the 59th Street bridge and add a third southbound lane to Lake Shore to accommodate diverted traffic.

Plans also include the construction of underpasses, sidewalks and bike lanes, and a series of changes to historic aspects of Jackson Park that spurred so many court challenges to begin with. Plus, OPC promises to build a 5,000-squarefoot Chicago Public Library branch.

Hairston says she and local chambers of commerce are ready. “You look at all the years of disinvestment and I think we’re about due.”

1/8/21 4:35 PM

CRAIN’S CHICAGO BUSINESS • JANUARY 11, 2021 19

Here’s why you might not get your COVID vaccination as soon as you had hoped

ENLISTING PROVIDERS

Illinois and local health departments are working to enlist more providers to administer the shots, including federally funded clinics and retail pharmacies, to improve capacity and ensure an equitable distribution.

The Cook County Department of Public Health is partnering with

3,500

3,000

Per 100,000 people as of Jan. 6.

2,500

1ST DOSE OF VACCINE ADMINISTERED 2,000

had to discard roughly 570 vaccines in Wisconsin after a pharmacy employee allegedly intentionally left the doses unrefrigerated. In Ohio, Walgreens had about 35 doses expire when a long-term care facility ordered too many vaccines. Walgreens is among retail pharmacies administering shots in long-term care facilities under the federal government’s pharmacy program.

And while adverse reactions to the shots are uncommon, facilities are hesitant to inoculate too many workers at once as a precaution.

“Up until now, the vaccine has only been offered to specific locations in staggered proportions because hospitals and nursing homes have been concerned about too many of their staff receiving the vaccine on any given shift,” Pritzker said, noting that only about one-third of health care workers outside Chicago have received the vaccine.

More than 43,000 doses had been administered to Chicago residents as of Jan. 6, but that doesn’t include shots given to Chicago health care workers that reside in other areas.

Arwady recently said 42 percent of doses distributed to Chicago institutions are going to people who don’t live in the city.

1,500

Baicker, dean of the University of Chicago Harris School of Public Policy. “What remains to be seen is whether it’s just a slow first couple weeks but we’re on an accelerating trajectory and soon we’ll be up and running, or whether this is the steady pace and then we’re in real trouble.”

To come anywhere near meeting the widespread expectation that most people would be vaccinated by midyear, Illinois needs to get a lot more vaccines and administer them a lot faster. For example, Illinois would need to give nearly 800,000 shots per week starting now to achieve herd immunity by June 30.

Pritzker said Jan. 6 that the state is getting about 120,000 doses per week. On Jan. 5, Chicago Department of Public Health Commissioner Dr. Allison Arwady said the current weekly total received by the city was about 32,000 first doses and 23,400 second doses. Those figures add up to a statewide weekly pace of roughly 175,000 doses received.

Supply is expected to increase substantially under the Biden administration, which has pledged to invoke the Defense Production Act to boost manufacturing. The number of available doses will further increase as additional vaccines get federal authorization.

Meanwhile, Pritzker recently called on the federal government to immediately distribute vaccines that he and seven other governors say are being erroneously reserved.

“We’d like to see half a million per week, and we’re hopeful we can

get to that point,” Pritzker said. “It’s hard for me to predict exactly when we would get there, or exactly how many will be delivered, but my expectation is it will be a lot more delivered to the state of Illinois once the Defense Production Act is invoked.”

To make sure the state is ready when the time comes, Pritzker said the Illinois National Guard will open mass vaccination sites using arenas and other large locations.

He also expanded the next phase of Illinois’ vaccine rollout to include people age 65 and older, down from seniors 75 and older.

Like much of the U.S. pandemic response, the federal government has left immunization efforts to the states, which have relied heavily on public health departments and private hospitals to push out vaccines.

“Too much reliance was placed on the capacity of local health care providers and local governments to manage an incredibly complex distribution chain, and that’s why we’re seeing such patchwork success,” Baicker says. “We’re asking more of (hospitals) than they have the resources to accomplish.”

With 73 percent of the 21 million total vaccines distributed nationwide yet to be administered, there’s a concern that some doses could expire before long. Thawed Moderna vaccines may be stored in a refrigerator for up to 30 days, and Pfizer vaccines can last for up to six months in an ultracold freezer, stored for 30 days in the shipping container if dry ice is routinely replaced, or five days in a refrigerator.

Advocate Aurora Health recently

1,000

VACCINATIONS from Page 1

Note: Providers have 72 hours to report administered vaccines, which may cause a delay.

Source: CDC

Jewel-Osco to inoculate health care workers in suburban Cook County.

That partnership and others, including a new deal with Sam’s Club and Walmart, will expand in coming weeks.

Hospitals are also working to expand their capacity.

NorthShore University HealthSystem has inoculated more than 10,000 health care workers, including its staff and other local providers. With vaccination clinics at two of its hospitals, Evanston and Glenbrook, the health system can give about 1,500 shots a day, which is on par with the number of vaccines it gets from the state, says Jeff Thiel, assistant vice president of pharmacy services at the six-hospital chain.

“We’re actively having conversations now internally about, how do

we continue to grow and support the broader community and different phases,” Thiel says.

For example, hospital-operated drive-thru testing sites could become vaccination drive-thrus.

That’s something Thiel says NorthShore is considering.

A lack of funding has presented another roadblock for states, but a new pot of $3 billion in federal funds, announced by the U.S. Department of Health & Human Services on Jan. 6, should help. Illinois is getting $90 million, and the city of Chicago, which is responsible for its own rollout, is getting $24 million.

Pritzker said it will be several weeks before Illinois moves into the next phase of the rollout, which includes essential workers like first responders and teachers, as well as individuals 65 and older.

This tax incentive could help developers navigate the post-COVID office market swath of outmoded buildings in the Loop and a pandemic that may waThat incentive, known as a Class ter down demand for urban workL designation, has been around for space for good, the incentive could more than two decades in Cook play a big role in convincing develCounty, fueling face-lifts for prop- opers to reshape many downtown erties like the Wrigley Building, the properties.

“It’s incredibly powerful in helpformer IBM Building and Chicago Athletic Association hotel, among ing a project come together from others. But Onni’s plan for it follows acquisition to tenants signing a an increasingly popular blueprint in lease,” says Jack O’Brien, principal a central business district rife with at Telos Group, which oversees leasold, architecturally significant office ing at both the Old Post Office and buildings: using the tax savings as a the Marshall Field Building at 24 E. leasing advantage to undercut the Washington St. “It sets the table to rest of the market with cheaper rents. create this gorgeous opportunity for It’s the same strategy used re- a tenant.”

Developers have looked to the cently at the Old Post Office, where New York-based developer 601W Class L designation more frequently turned a dilapidated behemoth into in recent years. Of the 49 Class L rena modern office building and leased ovation projects downtown passed by the City Council since “IT’S INCREDIBLY POWERFUL IN HELPING the incentive’s A PROJECT COME TOGETHER FROM 1997 creation, percent were ACQUISITION TO TENANTS SIGNING A LEASE.” 39 approved since 2014, planning Jack O’Brien, principal, Telos Group department up more than three-quarters of the data shows. If Onni gets the incenproperty before it opened its doors tive for its plan to buy the 55-yearin 2019. The firm now turning the old Illinois Bell Building for $188 upper floors of the Marshall Field million and pour an additional $154 Building into 630,000 square feet of million into rehabbing it, the three offices is taking the same tack with largest Class L renovation projects its Class L status. And in the face of downtown to date will have been rising commercial property taxes, approved in the past three years.

Part of the uptick comes from the growing downtown office vacancy, a LOOP from Page 3

P019_CCB_20210111.indd 19

passage of time. More properties are becoming eligible for landmark status, which is typically reserved for buildings that are at least 50 years old, according to the Department of Planning & Development.

But developers are increasingly motivated by the potency of the tax sweetener. With the incentive, an office property is taxed at 10 percent of its assessed value—down from the standard 25 percent—over the first 10 years after the renovation is completed, then 15 percent in year 11 and 20 percent in year 12 before returning to the standard assessment.

‘MATERIAL SAVINGS’

Office landlords typically pass those costs along to their tenants, with taxes often accounting for more than 20 percent of a company’s annual occupancy cost, brokers say. A building with Class L status could save a tenant with 100,000 square feet more than $3 million over the course of a decade at top-tier buildings.

“It’s material savings to a tenant,” says Steven Bauer, managing director in the Chicago office of brokerage Cushman & Wakefield. “And these are also buildings that tenants like being in because they’re going through massive, ground-up renovations. Looking at a state-of-theart building in a fantastic location where you’re saving a few dollars

per square foot versus your contemporaries, that’s meaningful.”

Class L could prove even more popular among older properties in the Loop as new buildings in the West Loop and Fulton Market District lure tenants away from them.

Art Deco buildings on LaSalle Street staring down big, imminent vacancies could be prime targets for the incentive. The planning department says it “conservatively” estimates more than 100 buildings in the Loop alone could be eligible for landmark status and the Class L designation.

Yet it’s no cinch to qualify for the incentive. A building must first carry historical significance to merit landmark status. It also requires a lot of capital, as the applicant must commit to spending at least half of the building’s market value on a city-approved rehabilitation project.

And the work must address major building infrastructure, not just new finishes and amenities.

The question for the city—which is raising property taxes to address COVID-worsened budget woes— as it considers more Class L applications is similar to that of any tax incentive: Whether to forgo shortterm tax revenue in hopes it will lead to more jobs and economic activity in the long run.

Deputy Mayor Samir Mayekar sees Class L playing an increasingly

important role in the central area of the city to ensure real estate investors keep buildings competitive.

“Part of the challenge is coming out of the pandemic you might see more of a flight to quality, so a lot of the (new buildings) might benefit . . . at the expense of LaSalle Street,” he says. “We’re having a serious conversation about the future of some of the older buildings, and that’s why Class L can be so important.”

Just as important is whether city officials think developers won’t breathe new life into older buildings without the tax break, says former Cook County Assessor and Chicago Landmarks Commissioner James Houlihan, who helped craft the incentive.

Convincing developers to pour money into renovating downtown buildings may not have been a concern when the economy was booming a year ago. But the potential rise in remote work coming out of the pandemic could leave downtown with far less daily foot traffic, something the city will need to combat to keep its central business district strong.

“What will be the driving force for revitalizing the Loop after COVID? We don’t know yet,” Houlihan says.

“But some of it certainly will be a greater use of an incentive program that makes development attractive.”

1/8/21 4:37 PM

20 JANUARY 11, 2021 • CRAIN’S CHICAGO BUSINESS

CLASSIFIEDS

æ`ÛiÀÌ Ã } -iVÌ

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To place your listing, contact Claudia Hippel at 312-659-0076 or email claudia.hippel@crain.com www.chicagobusiness.com/classifieds

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570 Lake Cook Road in Deerfield

Chicago firm makes another suburban bet

Bradford Allen Realty Services bought a Deerfield office building in its second local purchase outside the city since September and fifth over the past two years

BY DANNY ECKER A Chicago real estate firm has purchased its second suburban office building since September and its fifth in the past two years, making it one of the biggest local bettors that workplaces outside the city will thrive coming out of the COVID-19 pandemic.

A venture of Chicago-based Bradford Allen Realty Services paid $16 million last month for the five-story building at 570 Lake Cook Road in Deerfield, according to Lake County property records. The deal comes more than a year and a half after the seller, American Realty Advisors, put the north suburban property on the market.

ARA was initially seeking around $20 million for the 137,000-square-foot building before COVID upended the economy and raised questions about the future of office demand. But it eventually found a buyer in Bradford Allen, which has shown confidence in the suburban market’s future even after nine months of many companies adjusting to life with mostly remote workers.

A Bradford Allen venture paid $44 million in September for the nine-story Finley Point office building in west suburban Downers Grove. The firm also bought office properties in 2019 in Elmhurst, Arlington Heights and Warrenville, adding to a portfolio that includes the 560,000-square-foot Tri-State International Office Center in Lincolnshire.

The more recent purchases came during an otherwise slow

year for commercial property ties as a leasing advantage. sales and despite the suburban ofBrokerage HFF (which was fice vacancy rate sitting at 25 per- later acquired by JLL) said in cent—a 10-year high, according to marketing materials last year brokerage Jones Lang LaSalle. for 570 Lake Cook Road that Some investors see a bright Lake County property taxes were future for suburban offices, with about $2.50 per square foot less more downtown companies than the average for Cook Counpotentially looking to the sub- ty. That was before Kaegi’s 2019 urbs for satellite space to give reassessment, which boosted the employees workplace flexibil- total assessed value of all comity. But that narrative has yet to mercial and industrial real estate show up in market data.

Net absorption, which measures the amount of SOME INVESTORS SEE A BRIGHT space leased and occupied compared with the FUTURE FOR SUBURBAN OFFICES. prior period, was down by more than 730,000 square feet in north suburban Cook County in the Chicago suburbs during by 74.4 percent from the year bethe third quarter of 2020, accord- fore, according to a Crain’s analing to JLL. That was the biggest ysis. single-quarter drop since the The Lake Cook Road property third quarter of 2017. was 84 percent leased when it Spokesmen for Glendale, Ca- went up for sale last year, accordlif.-based ARA and Bradford Al- ing to marketing materials. HFF len, which is led by Chicago real at the time framed the building estate investors Larry Elbaum as an opportunity for a buyer and Jeff Bernstein, couldn’t be to renovate the lobby, corridors reached. and restrooms and add a fitness center to command higher rents.

JLL Senior Director Pat Shields TAX BURDEN One common thread among and the brokerage’s capital marBradford Allen’s recent subur- kets team marketed the property ban Chicago purchases is that for ARA. ARA bought the building in most are outside Cook County.

Commercial property brokers 2007 and also owns an office have played that up as an advan- building in Oak Brook but has tage for collar counties as Cook focused its Chicago investments County Assessor Fritz Kaegi’s ap- downtown in recent years. The proach to valuing properties puts firm paid $305 million in 2016 more of the county’s property tax for 1K Fulton—home of Google’s burden on commercial landlords Midwest headquarters in Fulrather than homeowners. Office ton Market—and is also part of a landlords typically pass those joint venture that paid $358 miltax costs along to tenants, which lion the same year for the 35-stois why brokers have highlighted ry office building at 321 N. Clark taxes in Lake and DuPage coun- St. in River North.

1/8/21 4:11 PM

CRAIN’S CHICAGO BUSINESS • JANUARY 11, 2021 21

MAG MILE from Page 1 Starbucks’ and Apple’s flagships on the Mag Mile exemplify that shift toward experience. But the boulevard itself—and the spaces along it—needs to give visitors more, says Danielle Tillman, managing principal at Chicago-based bKL Architecture, which recently worked on two Michigan Avenue buildings.

Indoor and outdoor spaces alike should be filled with galleries or unconventional art installations. Family-friendly programs could draw new consumers to the corridor, and “maybe even create a different type of energy,” she says.

Imagine: Theaters stage live performances; jugglers entertain on a side street. Retailers might find ways to engage customers outside their stores as well as inside, and restaurant patios could expand. A Chicago Riverwalk-like energy would draw people in to sit and hang out, instead of coming to buy and leave.

A Times Square-like approach could work, too, with more pedestrian spaces and live performance spots, says Thad Wong, co-founder of brokerage firm @properties. He envisions a Topgolf or indoor-skydiving venue taking over Macy’s soon-to-be vacant 170,000-squarefoot space.

The city, retailers and developers will need to get creative to figure out the best use of space and ensure the corridor recovers fully post-pandemic, says Paul O’Connor, an urban strategist and consultant who was founding executive director of World Business Chicago.

One place to start: Let Macy’s— and retailers like it—disappear into the rearview.

Macy’s struggles reach deeper than its Water Tower Place location and were not caused solely by the pandemic. It announced in

February 2020 that it would close 125 stores over three years. Macy’s State Street store has sold off upper floors to be converted to commercial use. The shift to online shopping has hit large department stores particularly hard.

Gap, which plans to permanently close its 3,700-square-foot Water Tower Place kids’ store and 28,200-square-foot Mag Mile spot, is also facing a reduction in footprint as it works to slim down and focus on e-commerce revenue.

“If the answer is retail, we may be in trouble,” O’Connor says. “But if the answer is making Michigan Avenue one of the coolest urban experiences in the United States of America, that’s a game we can play. But it’s attitude, it’s juice, it’s bravado.”

The Starbucks Reserve Roastery Chicago, which occupies a 43,000-square-foot-space previously home to Crate & Barrel, has that in spades, experts say.

The four-story building was the largest Starbucks in the world when it opened in late 2019. Besides its three coffee bars, there’s a cocktail bar, a pastry cafe and a liquid nitrogen gelato bar.

MAKING AN IMPRESSION

Retailers have long eyed high-traffic retail corridors like Fifth Avenue in New York and Rodeo Drive in Los Angeles for their flagships, and Michigan Avenue was no different, says Amanda Lai, manager at McMillanDoolittle. Big, flashy stores there made an impression on consumers, and high rents were a small price to pay for the marketing gravitas.

In recent years, though, such sites have been approached with more finesse, Lai says. The shift to online shopping caused many retailers to reduce footprints. Maybe it no longer makes sense to put massive

stores on high-rent shopping strips.

Now, the flagship must do everything it did before and more. Maybe it’s Apple’s sleek glass store along the Chicago River or immersive installations, like Gucci’s current showcase of The North Face by Gucci collection. Visitors use QR codes to hear nature sounds.

“Retailers are thinking about, how do they holistically interact with consumers and what does that interaction look like?” says Todd Siegel, senior vice president at CBRE. “Selling a product isn’t just a function of thinking about it in a lens of wholesale or online, but . . . what does the direct brick-andmortar experience look like?”

The pandemic has pushed more shoppers online than ever before.

U.S. holiday shoppers spent $188.2 billion online in November and December, up 32.2 percent year over year, according to Adobe Analytics.

People are more frequently buying online and picking up in-store, too, and some retailers restructured supply chains to accommodate.

It remains to be seen what the long-term effects of the pandemic will mean for Mag Mile stores, but experts do not expect online sales to recede. Some retailers, including men’s apparel store Untuckit on Michigan Avenue, are using brick-and-mortar shops as distribution centers.

Spaces as large as the one Macy’s will leave behind in Water Tower Place could be divvied up between multiple brands. Two flagships have moved into the Mag Mile space Forever 21 occupied at 540 N. Michigan Ave., Siegel says.

Chris Pine, executive vice president of anchor and box leasing at Brookfield Property Partners, the Bermuda-based owner of Water Tower Place, said in a statement that the company has a “proven track

ZAC OSGOOD

Can Chicago’s Magnificent Mile be reinvented?

The Starbucks Reserve Roastery Chicago occupies the space previously home to Crate & Barrel. record” of repurposing department store spaces.

“Macy’s departure from Water Tower Place presents us with an opportunity to repurpose a significant amount of square footage with a rebalanced mix of retail, dining, entertainment, grocery, fitness, medical and office space,” he said in the statement. “To fulfill this opportunity and deliver a new vision for Water Tower Place, we will need significant support and collaboration from our partners at the mayor’s office, alderman’s office, tax assessor’s office, the Mag Mile Association and the local community.”

Many observers remain bullish on Michigan Avenue. Stores have continued to move in, such as luxury consignment shop The RealReal Chicago, which opened at 980 N. Michigan Ave. in October.

Kimberly Bares, president and CEO of the Magnificent Mile Association, says positive consumer sentiment is returning after looting left some windows boarded up for months last summer.

And in some ways, that shift to make Michigan Avenue a destination for experiences beyond shopping is already underway, she says.

The association has more than a dozen events planned that would highlight the arts and Chicago’s

communities—Bares wouldn’t say more—but the city isn’t issuing permits for public events due to the pandemic.

Additionally, some ideas that might work elsewhere aren’t possible on Michigan Avenue, like expanding sidewalk cafes into the street, because of bus routes and nearby hospital traffic.

There will be ground to make up once capacity limits lift on Illinois retailers, and people become comfortable shopping in stores again.

Bares says she is expecting pent-up demand.

Pedestrian counts captured through electronic sensors show almost 6.1 million people passed by 401 N. Michigan Ave. in 2019, according to data Bares provided.

The 2020 count was more than 3.6 million. The Mag Mile Association estimates that on Black Friday alone, foot traffic was down 70 to 80 percent.

The corridor has taken “serious body blows” during the pandemic, says O’Connor. Strength remains, but its future hinges on a reinvention.

“The issue is, if Michigan Avenue is dead, the city of Chicago is dead,” says O’Connor. “Michigan Avenue as an experience has to be regenerated.”

Green groups trash idea for heating your home METHANE from Page 3

METHANE from Page 3 service territory would be about a dollar, Nicor says in an ICC filing.

Opponents say this is just a way to get the “camel’s nose inside the tent.” For support of that notion, look no further than Commonwealth Edison’s move to install smart meters throughout its territory. That began as a pilot project, approved by the ICC. It later was enacted into law as part of the 2011 Energy Infrastructure Modernization Act that included a highly controversial annual system of setting rates via a formula.

Biogas “has a place in the really big tool box we’re going to have to use to address climate change,” says J.C. Kibbey, Illinois clean-energy advocate for the Natural Resources Defense Council. “What it isn’t is the future of heating buildings.”

Nationally, methane from these sources could displace at most only 7 percent of the natural gas now consumed, he says. Nicor says the potential resource in Illinois is enough to provide 14 to 35 percent of the gas Nicor now delivers.

The company allows, though, that its program would provide

P021_CCB_20210111.indd 21

connection services only to producers in its service territory, which makes up most of Chicago’s suburbs outside the North Shore.

Nicor doesn’t have an estimate for how much trash gas is potentially recoverable just in its service territory.

So far, Nicor has fielded inquiries from 10 producers in its service territory. Six of those have asked about participating in the pilot program, the company says.

Two are in active discussions.

Nicor argues that capturing waste gas will help the environment. Atlanta-based Southern, Nicor’s parent, is aggressively pursuing similar projects in other states where it owns utilities.

“With all of the environmental improvements coming from our ongoing pipe replacement program and by adding RNG to our annual gas supply, Nicor Gas can continue to reduce its greenhouse gas footprint from operations in support of reaching net zero emissions,” emails Robin Lanier, Southern’s director of renewable natural gas. “Also, it’s important to note that each cubic foot of natural gas is made available to our customers, it replaces a cubic foot of geologic

natural gas from traditional supply sources making our gas supply less carbon intensive.”

But at what cost? Waste gas costs three to 15 times more than conventional natural gas, NRDC’s Kibbey says. Nicor didn’t respond to a question about the cost differential.

Gas from landfills and farms is best thought of as a limited resource good for fueling industrial processes and long-distance transportation—sectors of the economy that are unlikely to find replacements for fossil fuels in the foreseeable future, he says.

NRDC and the Citizens Utility Board, a consumer advocate, plan to file their opposition to the pilot program with the ICC in coming weeks.

Asked why NRDC is opposing a test program when it’s relatively small, Kibbey says the point of a pilot is to demonstrate the feasibility of something that can be scaled up. The resource, he says, “isn’t enough to meet our needs.”

For environmentalists, there is another agenda playing a role here, too. Many of them advocate for electrification of heating as a dramatic way to reduce green-

A methane flare burns in Chicago. house emissions. For them, large capital investments in gas infrastructure will just create more recoverable utility costs that ratepayers will have to bear after the fact once gas loses its dominance in home heating.

The gas industry is full speed ahead despite the skepticism of the greens. Southern isn’t the only big player with big ambitions in the sector. Richmond, Va.-based Dominion Energy and Charlotte, N.C.-based Duke Energy are among the giants also pursuing biogas.

Southern recently announced a goal of being a net-zero contributor of carbon to the atmosphere by 2050. Though, as its name suggests, Southern’s utilities are concentrated in the South, Nicor is its single largest gas utility. Landfills, farms and similar operations contribute about 30 percent of the country’s methane emissions, according to the U.S. Environmental Protection Agency.

Says Southern’s Lanier, “RNG is another critical piece of the puzzle to support methane reductions in the state of Illinois.”

1/8/21 4:39 PM

22 JANUARY 11, 2021 • CRAIN’S CHICAGO BUSINESS

Rise of remote work roils local tech recruiting here. “It’s a no-brainer for them.�

TECH JOBS from Page 3 Software programmers and deworlds: higher pay from more pres- velopers in Chicago were paid an tigious companies without having average of $101,000 in 2019, according to federal data compiled by real to pull up stakes. “Calls people wouldn’t have tak- estate firm CBRE. That compares en because their kids are in school with $141,785 in San Francisco, and the opportunity would require $127,067 in Seattle and $112,959 in a move—they’re having those con- Boston.

Ira Weiss, a partner at Hyde Park versations now, from the C-suite all the way down,� says Rona Borre, Venture Partners, says one of its CEO of Instant Alliance, a recruiting Chicago portfolio companies lost a product manager to a West Coast and staffing firm in Chicago.

Many tech companies, from Am- tech company that doubled the azon to Zoom, have been turbo- worker’s salary. In other cases, salcharged by the pandemic. Trading ary arbitrage can result in raises firms and hedge funds, which hire of 20 to 30 percent. Recruiters and large numbers of tech workers at companies say superstars and sepremium wages, also have flour- nior-level hires are getting signing ished. The gap between coastal sal- bonuses of up to one year’s salary. “People recognize that work can aries and the going rate in Chicago is so large that these companies of- happen from anywhere,� says Lindten can save money on talent while say Verstegen, chief people officer at ShopRunner, an e-commerce comstill offering substantial raises here. “We’re seeing coastal firms pay- pany based in Chicago. “Companies are doing what they can get talent. They are willing “PEOPLE RECOGNIZE THAT WORK to to throw money at it to get CAN HAPPEN FROM ANYWHERE.� people to make that leap.�

Among those in the highLindsay Verstegen, chief people officer, est demand are software deShopRunner velopers, product managers and data scientists. Recruiting well above what we typically ers and CEOs say pay for software see in Chicago but probably paying developers, especially in hot areas less than they’d pay in their home such as e-commerce, is up 10 permarkets,� says Kevin Krumm, chief cent to 20 percent in the past year.

West Coast companies that have operating officer of Objective Paradigm, a technology recruiter based been active in Chicago include Dis-

ney’s video-streaming unit, Disney Plus, and Zoom. Disney and Zoom decline to comment.

The talent war is about to get even hotter, predicts Chicago tech recruiter Carlton Gates, director of talent acquisition for Yum Brands’ digital and technology group. “You’ll see a spike starting in February.

People wait to get their bonuses.

They’re talking to recruiters now.�

Employers, meanwhile, “have survived corona, see a vaccine on the horizon and see their competitors hiring.�

Many companies that resisted remote work before the pandemic have come to accept it as a permanent change that will outlast the coronavirus. Facebook CEO Mark Zuckerberg said last spring that half the workers at the tech giant would likely be working remotely within five to 10 years. While Facebook has a large sales office in Chicago, most of its tech jobs have been at its sprawling headquarters in Silicon Valley or offices in Seattle, New York and Boston. “The pandemic has encouraged us to broaden our recruiting strategy,� the company says.

As coastal competitors squeeze an already tight tech-labor market, Chicago companies are spending more and looking elsewhere for talent. Clearcover, an online provider of car insurance, recently increased its recruiting budget, says CEO Kyle

� BARGAIN HUNTING Chicago is one of the least-expensive markets in the country when it comes to tech wages. Here’s how we stack up.

AVERAGE TECH WAGE $136,060

San Francisco

$119,170

Seattle

$113,771

Washington, D.C. New York

$110,591

Boston

$109,395

San Diego

$109,053

Newark, N.J.

$108,602 $108,218

Baltimore

$105,066

Denver

$103,677

Los Angeles Houston

$100,229

Minneapolis

$98,620

Raleigh-Durham

$98,326

Charlotte

$97,051

Atlanta

$96,674

Chicago

$96,591

Austin, Texas

$95,416

Source: CBRE

Nakatsuji. “We’re not going to win on cash, so it comes down to selling (recruits) on the problem you’re solving as a company and offering equity.�

SpotHero has hired about a dozen tech workers from Milwaukee, Toronto, Pittsburgh and other cities, says CEO Mark Lawrence. Six of Jellyvision’s last 10 hires were from out of state, Scannell says.

Borderless recruiting will change the economics of tech hiring. “This idea of regionally prorated pay is starting to break down,� says Mark Muro, a senior fellow at the Brookings Institution in Washington, D.C. “My sense is we’ll move to a nationalized job market for some in-demand occupations. There are real renegotiations of the big tech map and the talent map going on.�

When small businesses want to do big things, they turn to Crain’s.

We’ve advertised in Crain’s for almost 30 years because it works. We know we are in front of the right buyers for hard-to-value commercial and high-end UHVLGHQWLDO SURSHUWLHV :H NQRZ RXU HÎ?RUWV DUH working because potential buyers tell us they saw WKH DG LQ &UDLQȇV DQG WKH\ȇUH TXDOLČ´HG - Rick Levin President, Rick Levin & Associates, Inc ΖQ IURQW RI &KLFDJRȇV ROG 86 3RVW 2É?FH DXFWLRQHG DQG VROG LQ

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1/8/21 4:39 PM

CRAIN’S CHICAGO BUSINESS • JANUARY 11, 2021 23

Look inside a Naperville mansion on market for $10.5M The home is meant to evoke the kind of estate that would ‘fit in Europe,’ owner says It was while she was training for her first marathon that Brenda Harter found the second one.

On a training run in Naperville when she was getting ready to run her first Chicago Marathon at age 60, Harter passed by a pretty parcel of land for sale across the road from Egermann Woods Forest Preserve. With her husband, Tom, Harter had recently decided to build a new house instead of remodeling their home of more than 20 years, recalling that she thought “‘if we’re going to build, this would be the place to do it.’”

Running the first marathon took Harter a few hours. The second, designing and building a 19,000-square-foot house with indoor and outdoor pools, took more than 4½ years.

An interior designer, Harter worked with Bruce George at Charles Vincent George Architects to create something that she felt would “fit in Europe,” she says, a turreted brick-andstone manor with a formal presence but a warm, relaxing atmosphere.

The seven-bedroom house on Shamrock Court, completed in mid-2017, has a great room with a 30-foot ceiling, details in wrought iron, leaded glass and cut stone made by local experts in their crafts, and an entertainment level that includes wine-tasting and billiards rooms and a movie theater. Harter picked the chandeliers, wood panels and even the slates that tile the home’s vast roof.

The Harters are both retired—Tom Harter sold a company he started and now is an investor—and their children and grandchildren live in other parts of the country. They plan to move permanently to their home in Florida, after living in Naperville since 1979. They put the Shamrock Court mansion and its 2.5-acre grounds on the market last week, asking $10.5 million. It’s represented by @propeties agent Michael LaFido, of the Marketing Luxury Group.

In June, another of LaFido’s listings sold for $4.75 million, the highest home price in Naperville since 2008. A difference with the Harters’ property is the location: The home is set amid several other multimillion-dollar homes and is closer to the town’s usually busy downtown.

MARKETING LUXURY GROUP PHOTOS

BY DENNIS RODKIN

MORE PHOTOS ONLINE: ChicagoBusiness.com/residential-real-estate

HOW TO CONTACT CRAIN’S CHICAGO BUSINESS EDITORIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312-649-5200 CUSTOMER SERVICE . . . . . . . . . . . . . . . . . . 877-812-1590 ADVERTISING . . . . . . . . . . . . . . . . . . . . . . . . . 312-649-5492

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CLASSIFIED . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312-659-0076 REPRINTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212-210-0707 editor@chicagobusiness.com

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1/8/21 4:11 PM

WE CAN PRINT WHATEVER YOU DREAM UP For all the new things at work, we'll help you print it all.

Our Print Team is here to help Chicago businesses attract more customers and #KeepBusinessGoing.

Build demand – and your brand – with our custom printing solutions: Custom Signs, Posters & Banners

Floor & Window Decals

Menus, Flyers & Brochures

Plus, we're proud to partner with anva

Business Cards

Promotional Products

to bring you 1,000s of high-impact design templates.

NEED IT FAST?

FREE IN-STORE & CURBSIDE PICKUP

Many options are available SAME DAY* when you order by 2PM. (Bulk orders aren't available for same-day pickup) *Available in store and online for in-store pick up at officedepot.com/sameday.

Order by 2:00 PM local time and request Same-Day Service. Quantity limitations apply. See officedepot.com/sameday for details.

when you order online at least 2 hours before store closing.

Visit officedepot.com/pickup for details.

Curbside available in most stores** **Subject to state and local regulations, our stores are open for business.

Please call your local store for updated hours and information.

Office Depot® is a trademark of The Office Club, Inc. OfficeMax® is a trademark of OMX, Inc. ©2020 Office Depot, LLC. All rights reserved.

RU101220

20cb0663.pdf

RunDate 12/21/20

FULL PAGE

Color: 4/C