Crain's Chicago Business, October 21, 2024

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Three insights on thriving in a new organization

By Michael Fassnacht

Over the last three months, Crain’s published three installments from my series, "50 Career Insights for Gen Z and Millennials," as part of my project, "Beyond the Status Quo."

Michael Fassnacht is former CEO of World Business Chicago and is now chief growth o cer at Clayco in Chicago.

Initially, the focus was on the importance of self-awareness and developing a deep understanding of one’s professional identity. In this next series, I will share insights on thriving in various organizational contexts that are often an unfamiliar and daunting territory for many young professionals.

To begin, I will highlight three key learnings that are vital for beginners navigating the corporate world:

1. Corporations are both abstract and living organisms

rough my experience in various organizations, I've come to see that corporations embody a tension between two seemingly contradictory truths: On one hand, they are cold, abstract entities governed by legal frameworks. On the other, they are dynamic, living organisms with their own genesis, growth phases, slowdowns and evolving health.

Mastering the art of navigating this contradiction is not just a skill but a necessity. e rst step is to accept and embrace this duality. Recognize when the corporation is functioning as a lifeless legal entity and when it's behaving like an ever-changing life form. When building a team, navigating o ce politics or aiming to stand out, treat the organization as a living entity. Conversely, when negotiating a promotion, considering legal implications or

adhering to corporate policies, approach it as an abstract legal construct.

2. Learn the corporate lingo

Many of us have learned a new language at some point, and we remember the challenges: grappling with unfamiliar grammar, memorizing new words, perfecting pronunciation and adapting to a di erent rhythm. Navigating a new organization bears striking similarities to this linguistic endeavor.

Each company has its own linguistic ecosystem, lled with acronyms, jargon and insider terms. Beyond simply learning vocabulary, each corporation has its own lexicon of power words and taboo terms.

Power words are often used in meetings to convey authority or demonstrate expertise. Consider phrases like "Let’s all doubleclick on this," which signals a deeper dive into the discussion, or "Let us review all the relevant options," subtly implying that others have missed something and encouraging more strategic thinking.

On the other hand, taboo words represent concepts that con ict with the organization’s core values. For instance, one company might reject terms like "mission" or "purpose," while preferring "strategy" or "executional pillars."

Another might have di erent preferences altogether. Understanding these linguistic nuances is essential to communicating e ectively within the organization, much like learning the native language of a foreign country.

3. A corporation’s actions speak louder than words

As any parent knows, actions often speak louder than words. is is as true for corporations as it is for individuals. While organizations may ll their websites with inspirational mission statements and promote diversity initiatives, their true values are revealed through their leaders’ actions.

Cannabis sales revenue drops for the rst time

Unit volume is still growing, but more slowly, in a sign of softening demand in a maturing market

By John Pletz

Statewide marijuana sales revenue dropped 2% in September, the first year-over-year decline since recreational cannabis became legal four years ago.

A corporation’s ethical compass becomes clearest during moments of crisis or pivotal decisionmaking. It’s in these moments that the choice between taking the easy path — acquiescing to unreasonable demands from senior leaders or clients — or making the right moral decision becomes starkly evident. True character is shown when leaders prioritize the long-term well-being of the organization and its employees over short-term appeasement.

Entering the corporate world can feel overwhelming, especially early in one’s career. However, a key factor in achieving long-term success is approaching this environment with an inquisitive yet skeptical mind. Every world has its own set of rules, language and rituals, and the corporate world is no exception.

Sales totaled $136.5 million last month, down from $139.5 million a year ago and $147.4 million in August, according to state figures. August was unusually strong because it had five weekends, including one that led into Labor Day.

Sales volume continues to increase, but at a slower rate. The number of products sold in September was up 9% year over year, which is about half the growth rate in recent months and the lowest in more than a year. Volume was under 4 million units for the first time since February.

The figures are an indication of softening demand for recreational cannabis as the market begins to mature, even as the state continues to expand the number of retail outlets. There are now 232 dispensaries open, more than double the amount two years ago. More than 100 conditional retail licenses have been awarded for stores that have yet to open.

Falling prices make it tougher

for companies in the business of selling cannabis, but consumers get more weed for their buck. Illinois traditionally has had some of the highest retail prices and taxes for marijuana of any state in the country.

The data also reflects broader trends. Cannabis sales are under pressure nationwide as prices fall amid steep competition among legalized marijuana sellers and growers, as well as the illicit market and unregulated hemp-derived Delta 8 products.

In Michigan, where it is far easier to get a license to grow or sell marijuana, recreational cannabis sales fell 1% in September to $265.9 million. The state has lower prices and lower taxes on marijuana than Illinois.

“It’s a combination of things," says Laura Jaramillo Bernal, chief operating officer of NuEra Cannabis, which operates seven stores across Illinois. "The hemp-derived cannabinoids and flower continue to grow as a challenge to the industry. Michigan continues to be a big challenge. People are driving to Michigan to purchase. We’re seeing price compression as there are more operators open here. We’re all competing for a smaller piece of the pie.”

“It’s the partnership that matters.”

BART VITTORI – CHIEF FINANCIAL OFFICER | MEATS BY LINZ

Inside the rise of Eat Well Hospitality

Walgreens closes stores, but CEO insists it’s hitting long-term marks

Tim Wentworth also said he’s focused on ‘reorienting’ the company back to its legacy business as a ‘retail pharmacy-led’ chain

By Katherine Davis

Despite posting $3 billion in losses and announcing a plan to close 14% of its stores, Walgreens Boots Alliance CEO Tim Wentworth said the struggling pharmacy chain is meeting its goals to cut costs and refocus on its pharmacy retail roots.

Wentworth, who has now been in the top role for nearly a year, told investors that under his leadership, Walgreens has successfully built a new management team, conducted a strategic review of the entire business and cut costs by more than $1 billion.

Even still, the business is still bleeding considerably as it reported $3 billion in losses in the fourth quarter. Those losses are related to tax charges on opioid liabilities and a writedown of an investment in a Chinese pharmacy company.

Walgreens now projects earnings per share in the range of $1.40 to $1.80 in fiscal year 2025, guidance that met Wall Street estimates.

While the company's stock is down 62% year to date, “(Walgreens) finished its (fiscal year 2024) on a relative high note,” Evercore ISI analyst Elizabeth Anderson wrote in a report on Oct. 15.

Anew restaurant group in Chicago is making waves — and doing things a little bit di erently.

Eat Well Hospitality just opened its much-anticipated third restaurant, Mano a Mano, following the successes of modern Greek restaurant Andros Taverna and Asador Bastian, the Basqueinspired restaurant that's now ranking among the best steakhouses in Chicago, as well as the country.

Yet while successful restaurant groups such as Lettuce Entertain

By Brandon Dupré

The restaurant group has opened some of the city’s latest hot spots — but as its reputation grows, its eateries are shrinking. The husband-and-wife team at the helm explain why. |

“It was important for us to just kind of double down on quality and not size.”

Hsing Chen

So far, cost-cutting initiatives, which included closing stores and laying off employees, have contributed to positive cash flow for the full fiscal year ended Aug. 31. Moving forward, Walgreens is focused on optimizing its store footprint and controlling operating costs. Wentworth also said he’s focused on “reorienting” Walgreens to its legacy business as a “retail pharmacy-led” company.

“It has been quite a year,” Wentworth said. “We've, in that year, built a brand-new team here, with six new leaders, all based in Chicago, sitting around the table every day thinking about how to serve our patients better and, at the same time, grow our business.”

The renewed focus on the pharmacy retail business will require Walgreens to right-size its footprint to a profitable place. Of Walgreens’ about 8,000 stores, only 6,000 are profitable, a fact that’s led to the decision to close about 1,200 over the next three years. Wentworth said the remaining 800 are still being evaluated. Walgreens will close stores with negative cash flow, that are underperforming and on property owned by the pharmacy chain — or have leases expiring in fiscal year 2025. Savings from store closures will be used to invest and improve the profitable closing stores to

Hyzon revs up new hydrogen fuel cells in Bolingbrook

Hyzon, a small clean-tech company that came to Bolingbrook three years ago, is about to nd out whether its big bet on hydrogen-powered trucks is going to pay o before it runs out of cash.

e company is set to begin commercial production of new, larger fuel cells that turn hydrogen into electrical power for semitrucks. Hyzon developed a 200kilowatt fuel cell to replace a 110-kilowatt model, giving it an edge. e company says the new fuel cells are 30% lighter and smaller and 25% more cost-e cient than using two smaller systems.

e trucking industry is looking for a more eco-friendly, durable alternative to diesel power. But the transition is far behind passenger vehicles. More than 1 million passenger electric vehicles are expected to be sold in the U.S. this year.

ere are perhaps 100 heavy trucks using hydrogen fuel cells on the road today in North America, mostly in trials, according to researcher Frost & Sullivan, which predicts the number will grow to about 336,000 by 2035.

While lithium-ion battery technology works for passenger cars, so far it’s not the answer for semis.

Hyzon CEO Parker Meeks says 25 customers, mostly owners of

large trucking eets, have been testing Hyzon trucks with the new 200-kilowatt fuel cells. e fuel cells will be assembled at its Bolingbrook plant, which is one of the largest facilities of its kind in the U.S. A manufacturing partner in Charlotte, N.C., will assemble the trucks.

Hyzon employs more than 100 workers in Bolingbrook. e plant has capacity to produce about 700 fuel cells per year. It’s seeking federal funding to expand the plant.

But rst the company needs orders.

“ e key next announcement

By John Pletz

Doug Psaltis and Hsing Chen, the husband-and-wife chefs behind the Eat Well Hospitality restaurant group. | EAT WELL HOSPITALITY

The company has a new product for semis. But it faces a familiar problem that other green-tech manufacturers have faced: having enough cash to survive. | HYZON

See EAT WELL on Page 27

See WALGREENS on Page 27

Minnesota investor buys discounted prominent of ce complex near O’Hare

Presidents Plaza is poised to sell for less than half of what it traded for in 2018

By Danny Ecker

A high-net-worth Minnesota investor is set to buy a prominent o ce complex near O'Hare International Airport for less than half of what it sold for 6½ years ago, a deal that would showcase the pain ailing o ce landlords while putting the property back in position to compete for new tenants.

A venture led by Wayzata, Minn.-based Patrick Halloran is under contract to buy the Presidents Plaza o ce complex at 8600-8700 W. Bryn Mawr Ave. on the city's Northwest Side, according to sources familiar with the matter. e pending purchase price was not immediately clear, but the Halloran entity is said to be paying more than $60 million for the two-building, 831,442square-foot property along the Kennedy Expressway as part of a newly formed joint venture with Chicago real estate rm Glenstar. at price pales in comparison to the $147 million that a joint venture of New York-based TPG Angelo Gordon and Glenstar paid for the complex in 2018, a loss in line with other o ce properties that have seen their values pummeled by the rise of remote work and higher interest rates.

e pending sale would not only wipe out the sellers' equity, but would complete a big nancial haircut for Bank of America, the lender that provided a $147.5 million loan when the property was re nanced in 2021.

e deal would stand as anoth-

er harsh data point for o ce building owners as they grapple with a trend of companies embracing new post-COVID work patterns and shrinking their o ce footprints. e space-shedding movement has fueled record-high vacancy and put owners with maturing debt in dire straits because borrowing costs have spiked over the past couple years.

TPG Angelo Gordon and Glenstar still had about two years to pay o their mortgage when Presidents Plaza went up for sale over the summer. But with the property's value decimated, B of A directed the sale in hopes of recovering as much as it could on the balance of the loan. While some lenders have sought to seize troubled o ce properties through foreclosure, others have opted to seek buyers for them instead to avoid owning o ce space amid dark days for landlords.

Spokesmen for B of A, Glenstar and TPG Angelo Gordon declined to comment.

Halloran, a longtime executive with private-equity rm Wayzata Investment Partners, is betting that brighter days are ahead for Presidents Plaza as companies gravitate to the most updated and best located o ce properties to help encourage employees to work in-person.

TPG Angelo Gordon and Glenstar spent nearly $34 million on upgrades to the property in recent years to help lure new tenants, according to a marketing yer from Cushman & Wake eld. Renovations included lobby transforma-

tions in each building, an overhaul of the property's tness center and other renovated spaces that are "comparable to a vestar hotel or new construction apartment complex," the yer said.

ose improvements, paired with fresh capital from Halloran, could help the property land new tenants. At a time when many landlords are hesitant to commit new capital to leasing e orts — some guring they may be on track to lose their properties to their lenders anyway — owners that have purchased properties at steep discounts and can plow new money into leasing commissions and tenant concessions are proving to get prospective tenants' attention.

Halloran could not be reached

for comment on the pending deal.

Mitigating the loss for TPG Angelo Gordon and Glenstar is that the duo was able to capitalize on their improvements to the property before interest rates started to spike. After using a $112.3 million loan from Bank of America to nance the 2018 purchase, the owners amended the loan in 2021 to increase the balance to $147.5 million, according to Cook County property records.

e complex is 63% leased today, below the record-low 69% average for suburban o ce buildings and down from 92% when TPG Angelo Gordon and Glenstar bought it in 2018. Hardware retailer True Value is headquartered at the complex and is the largest tenant, according to real estate in-

formation company CoStar Group.

Most of the property's 44 tenants are small, however, with an average size of 10,410 square feet, according to Cushman. e complex has a weighted average lease term of 5.3 years, the brokerage's yer said, a measure of tenants' remaining lease commitments to the property.

Glenstar, which is said to be retaining an ownership stake in the property, has ties to Presidents Plaza dating back to 2006. e rm teamed with PGIM Real Estate at the time to buy the property for $129 million, then retained a minority stake with the 2018 sale.

Cushman & Wake eld brokers Dan Deuter, Tom Sitz and Cody Hundertmark have been marketing Presidents Plaza for sale.

Crypto unit hit with SEC charges over $2 billion in trades

The federal enforcement agency alleges Cumberland DRW acted as an unregistered dealer by buying and selling cryptocurrency assets as securities since at least 2018

By Mark Weinraub

e U.S. Securities & Exchange Commission on Oct. 10 charged Cumberland DRW LLC, a unit of Don Wilson’s trading rm, with operating as an unregistered cryptocurrency dealer.

e SEC said Cumberland has acted as an unregistered dealer since at least 2018, buying and selling more than $2 billion in the alternative currencies as securities for its own accounts as part of its regular business.

Cumberland, established as a DRW unit in 2014, proudly touts its crypto o erings on its website.

“We and others in the crypto industry have repeatedly sought clarity from regulators on the

appropriate application of securities laws in the cryptoasset space,” Cumberland said in a statement. “For the SEC to meet these good-faith e orts with a legal action is an incredibly frustrating and disappointing development, although not surprising given the enforcement- rst approach we have seen in recent years from the SEC.”

e SEC said the crypto industry has been trying to get around registering as dealers by treating their assets as commodities rather than securities.

“Despite frequent protestations by the industry that sales of crypto assets are all akin to sales of commodities, our complaint alleges that Cumberland, the respective issuers, and ob-

jective investors treated the o er and sale of the crypto assets at issue in this case as investments in securities, and Cumberland pro ted from its dealer activity in these assets without providing investors and the market with the important protections a orded by registration,” Jorge Tenreiro, acting chief of the SEC’s Crypto Assets and Cyber Unit, said in a statement.

e SEC has been wary of crypto trading, highlighting the risks to investors in the market. Earlier this year, it approved a spot bitcoin exchange-traded fund after a decadelong ght with the industry.

“Investors should remain cautious about the myriad risks associated with bitcoin and prod-

ucts whose value is tied to crypto,” SEC Chairman Gary Gensler said after the approval in January.

e SEC said it is seeking permanent injunctive relief, disgorgement of ill-gotten gains, prejudgment interest and civil penalties from Cumberland.

Cumberland said it has been working for years to understand the SEC’s rules and regulations regarding crypto trading. It added it had been prohibited from using its now-dormant registered broker-dealer for crypto trading.

“We have proven before our rm’s willingness to defend ourselves against overzealous regulators wielding their power in ways that harm rather than ben-

e t the market,” Cumberland said. “It seems to us that is again happening here, with the SEC leadership intentionally perpetuating this confusion, something we view as antithetical to its mission of creating fair, orderly and e cient markets.”

Don Wilson | BLOOMBERG

Presidents Plaza | COSTAR GROUP

Now you can rent a historic log cabin, the only lodging within Indiana Dunes

The Cypress House was

By Jan Parr

Now you can stay overnight in a log home built for the 1933 Century of Progress in Chicago — and the only accommodation within the Indiana Dunes National Park.

e Cypress House, built entirely of cypress logs, was dismantled and moved after the fair via truck to Beverly Shores, one of ve of the fair’s homes moved as a marketing gimmick by the developer of the small lakefront town.

In recent years, the Cypress House has been leased to a family under a long-term agreement with the park and Indiana Landmarks until about a year ago. A new company, In e Dunes, has partnered with the park and Indiana Landmarks to manage the property and o er it for short-term rentals.

e Cypress House has exposed log walls, a nonoperable stone replace and a movie theater. It sleeps 12 in three bedrooms and is across the street from Lake Michigan with unobstructed views of the water.

Sleeping in a piece of history doesn’t come cheap: Five days in November will run you $859 a night; $2,016 and more a night on weekends in June; and $2,400 a night for July weekend nights.

“ e National Park and Indiana Landmarks have talked about need for lodging in the park,” said Todd Zeiger, director of Indiana Landmarks. “ ere is no place in the park that you can stay, which is unusual for a national park. So this is a way to address that need.”

In e Dunes is a subsidiary of NW Indiana Development Group based in Michigan City. It runs Beachwalk and other vacation rentals in Michigan City near the lake.

Interior photos of the house will be on the booking website in about a week, said Rob Harte, president of NW Indiana Development Group.

Most of the rental income will go to the national park, with some going to the management company and to the lessee of the home as part of the buyout of their lease, Zeiger said.

“NW Indiana Development checks a lot of the boxes that need to be checked,” Zeiger said. “ ey are preservation-minded, they have the capital to do these projects, and they are committed for the long term. We are thrilled with the partnership.”

Meanwhile, across the street, another Century of Progress home, the Florida House, is available for long-term sublease, and the pioneering House of Tomorrow, next door to the Cypress House, is undergoing a $4 million renovation. It’s possible those houses could become vacation rentals in the future, Zeiger said.

dismantled and moved

as a marketing gimmick after the 1933 World’s Fair to Beverly Shores

IN T HE DUNES

The home as displayed at the 1933 World’s Fair in Chicago. | IN THE DUNES

Make critical decisions now for when your business takes o later

Winning your rst big account is an exciting moment for an entrepreneur. It’s also a high-pressure turning point, where you have to convert the sales win into a revenue-generating account.

Early on, your infrastructure can make or break this moment.

At my latest startup, Reserv, we grew from 17 employees to 250 in the past year. is was made relatively painless by a few early, critical decisions: choosing software as a service infrastructure, HR, IT and nance vendors whose approach to building products aligned with our values of working fast while staying lean.

My goal is to help you be prepared: You can’t control when the stars align, but you can control being able to seize the moment when it comes.

The groundwork for landing the client

Our rst step to a quick launch was building out the most modern infrastructure for, in our case, a claims processing company. We purchased software as a service, or SaaS, subscriptions to the Snapsheet claim system, Vitesse payment platform and oropass for

items like System and Organization Controls compliance. ese names may not be relevant to you, but with our lightweight engineering team and this cadre of modern tools, we were able to launch a scalable service quickly — in less than three months — in the U.S. and U.K. that already eclipsed the industry’s existing capability. Every industry has SaaS tools that are attempting to gain scale with incumbents that are ripe for use by the next new service startup looking to scale quickly. Use them.

An impossible task during our rst pivotal moment

After con guring our operational infrastructure and then landing our rst big client, we had to nd, hire, train, equip and license 75 people in 60 days. We had zero IT or HR professionals in the organization.

at’s a task of Everest proportions. But our team was prepared. Early in the company’s life, one of our founding employees had reached out to an alum of the startup accelerator Y Combinator to ask for advice on how one person could do the job of 10 for the entire back o ce. His peer oated Rippling, a workforce management

platform that we learned was designed to provide massive operational leverage to lean teams.

When the melt-up moment came, Rippling enabled Reserv to automate payroll, hardware and software provisioning, licensing, hiring, onboarding, reams of documentation and bene ts with one employee — Matthew Lu — all on top of his primary day-today responsibilities. Rippling was critical to our success, but there are also other services available. Again, don’t be afraid to use the tools that are out there.

Three generalized takeaways from our experience

First, be thoughtful about systems that seem boring. Reserv was

intentional about infrastructure.

We didn’t know when we’d land a big win, but we knew that when we did, our infrastructure had to be ready to work 10 times faster overnight. So, don’t sleepwalk through this decision.

Second, vendors that share a commitment to running lean are the ones that can help you scale. Matthew told me, “Rippling runs globally on Rippling with a hyper-lean team.” If Rippling runs lean on their own platform, then Rippling understands what a lean operator needs. If you nd value alignment with your vendor, you’ve found your scale enabler.

ird, everyone worries about downside scenarios, but you must also worry about upside scenarios. “What if the dog catches the

News | Analysis | Events

CJ Przybyl is an associate adjunct professor of entrepreneurship at the University of Chicago’s Booth School of Business, entrepreneur-in-residence at the school’s Polsky Center for Entrepreneurship & Innovation, and co-founder and CEO of Reserv.

car?” Ask: What critical infrastructure needs to scale up alongside you when the big moment comes? Every entrepreneur wants their business to be successful. If you take the time to think through your back-end infrastructure before your moment comes, you will be positioned to truly take your business to the next level.

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

Architects design next-generation two- ats, row houses and bungalows

The designs, unveiled by the city’s architecture center, update some classic Chicago housing types to suit more modern lifestyles I By

Asked to design the next generation of Chicago home types, reasonably priced and good-looking like the bungalows, two- ats and row houses of yore, the city’s architects delivered.

A six-flat that looks a bit like the classic courtyard building turned sideways to maximize interior daylight and a bungalow-size house with an up-tilted metal roof are two of the designs that the Chicago Architecture Center rolled out on Oct. 10 as the top choices in a design contest that began in 2022.

Why not simply build many more bungalows and six- ats?

“Families have changed; our needs at home have changed from the 20th century,” said Eleanor Esser Gorski, CEO of the Chicago Architecture Center. e death of the dining room, the rise of at-home work and the desire for more energy e ciency are among the changes that often make 20th-century houses a poor t for a 21st-century household.

e aim of the contest was to develop “housing typologies that improve on the traditional ones,” said Michael Wood, the architecture center’s chief curator, to nd “what could make them more e cient, (structures) that could be built from othe-shelf parts.”

e contest uses the popular term “missing middle housing,” or homes that meet the desires and budget of middle-income families. e name comes in part from the fact that there’s ample housing built on both ends, new a ordable housing bankrolled with public funds and upper-bracket new homes built by developers for a uent households, but little in the middle.

In recent decades, Chicago has “lost a lot of middle-income families," Gorski said. e notion behind the contest, she said, is “what is the housing that middle-income folks would want built in the city that would spur them” to come back from the suburbs or other locations?

In 2022, the contest was a joint e ort of the architecture center and the Department of Planning & Development under then-Mayor Lori Lightfoot. But because of “a discontinuation in the administration,” Gorski said, referring to the election of Mayor Brandon Johnson a year later, it’s now strictly an e ort of the architecture center.

General guidelines

One stumbling block the split created is that the winning entries come with no speci c costs to build. Michael Wood, the center’s senior curator, said general guidance from the department has been that the single-family homes should be built to sell for under $300,000, two- ats for under $550,000 and six- ats for $1.35 million to $1.65 million.

Wood also said that the architects who entered the contest “were working on affordability and e ciency from the get-go.”

When announcing the contest two years ago, Maurice Cox, who was Lightfoot’s commissioner of planning and development, said the homes should be a ordable not only for the buyers, largely work-

Dennis Rodkin

ing- and middle-class people, but "also for emerging local developers to build. e program will help strengthen the capacity of minority developers already working in the South and West Side communities they love.”

Filling the ‘missing middle’

At the architecture center, a ve-person jury made up of three architects, an architecture scholar and a developer shortlisted 32 designs they believe could help ll the missing middle.

e jury’s picks for the single-best entry in each of four categories, announced on Oct. 10, are:

A six- at design that the architects at Park Fowler dubbed "the courtyard shift” because it rotates the U-shaped front around to one side.

e result is a more protected, perhaps more social outdoor space than the front steps of a historical six- at. But there’s more to it, according to Brad Fowler, a principal at the rm.

e shift increases the natural light coming into the units, “creating a better overall quality of life for each resident,” Fowler said in prepared comments provided with the winning entries.

Dirk Denison Architects designed a contemporary successor to the venerable Chicago two- at. While its brick weave balconies depart from the classic look, the building contains the same possibilities as its ancestor: Its owners can live in one part and generate rental income with the other or occupy the whole thing.

e rm calls it a "switch- at" because it can switch back and forth “without requiring construction,” said Justin DeGro , Denison’s managing director.

With its snug story-and-a-half construction, row of front windows, overhanging roof and other charming design features, the bungalow may be the most huggable Chicago housing type.

Vladimir Radutny Architecture did a very 2024 take on the bungalow, a metalclad house with a glassy front that stretches up to an o -kilter roof peak. ere’s still a front stoop and an entrance on the side.

Designed to “enrich the lives of those who inhabit the spaces,” Radutny said in the prepared comments, the home increases natural light indoors and has fewer steps, an aid for aging in place.

While Philadelphia and Baltimore are better known for their seemingly endless supply of row houses, Chicago also has a good share of attached historical homes. ink of Pullman or the neighborhood near DePaul University. It's an e cient way to build, with shared walls that both make construction less expensive and help the interior hold heat.

Future Firm proposes an update called the "readymade row." Metal-clad and perforated on top with skylights, “our design reimagines an industrial structural building system as a way to quickly and a ordably build new housing,” Ann Lui, a Future Firm partner, said in the prepared comments.

e interior layout includes a doubleheight central space “for natural light and family gatherings,” Lui said.

The Courtyard Shift | PARKFOWLER PLUS

Chicago Switch-Flat | DIRK DENISON ARCHITECTS

r_Home | VLADIMIR RADUTNY ARCHITECTS

Readymade Row | FUTURE FIRM

How the NHL is marketing some of its Gen Z superstars to address stereotypes

By Jon Springer, Ad Age

e NHL has sent a group of its young stars to address Gen Z workplace stereotypes— and check them into the boards.

A sextet of skaters is featured in the NHL’s season-opening ad, the latest spot in its “ e Next Golden Era is Now,” campaign highlighting the speed of the modern hockey game and its class of exciting young stars. “Gen Z,” from Chicago ad agency Highdive, features Connor McDavid of the Edmonton Oilers, Jack Hughes of the New Jersey Devils, Nick Suzuki of the Montreal Canadiens, Auston Matthews of the Toronto Maple Leafs, Jack Eichel of the Vegas Golden Knights and Connor Bedard of the Chicago Blackhawks, the league’s latest rookie of the year.

e ad comes as the NHL looks to follow up a year of record attendance and ratings triumphs. e league is also promoting its stars with a six-part documentary-style series called “Faceo : Inside the NHL” that debuted Oct. 4 on Prime Video. It is co-produced by NHL Productions and Box To Box, the rm behind the popular “Formula 1: Drive to Survive” series on Netix.

“Across all the major metrics of which you judge a professional sports leagues, our health is very good,” Casey Hall, senior VP of marketing for the NHL, said in an interview. “As much as I would love [for marketing] to take credit for all the success, I’m not that foolish. We’ve got a very compelling product, and it’s driven by the format and the structure of the game, as well as generational talents of Auston Matthews, Connor McDavid and many others.”

While playfully upending assumptions of how the generation works—and plays—“Gen Z” succeeds because there is truth behind it, said Hall. anks in part to a series of rule changes enacted by the league, the game is faster and higher-scoring than it was a few years ago and Highdive’s spots have helped to tell that story. e agency has worked with the league since 2020 and on the “Golden Era” campaign for three years.

“Gen Z” begins with a shot of the babyfaced Bedard, 19, who disputes the idea that Gen Z doesn’t work hard by furiously working out. Matthews, 27, is celebrated for his sartorial style, spoo ng the notion that Gen Z dresses inappropriately. Members of Gen Z were born between 1997 and 2012 (Eichel, though, was born in 1996).

Sidney Crosby, the 37-year-old Penguins sensation once known as “Sid the Kid,” delivers the “Kids these days” kicker.

“We liked the idea of how it was able to talk about the attributes of

today’s NHL and today’s game, inclusive of the excitement, the scoring, the speed, the energy and the youthful exuberance of the game,” Hall said. “It allowed us to feature this young generation of stars who are really driving change and excitement, adoption and growth in the sport.”

e “Golden Era” has proven a versatile platform, Hall said, allowing the league to remark on culture as it did with AI in last year’s “Are ese Guys for Real?” ad, or hit on nostalgia as it did with the “Cheat Codes” ad of 2023.

Chad Broude, co-chief creative o cer of Highdive, said the key to keeping the NHL voice relevant is a team that knows the game, describing himself, along with writers, editors and art directors on the account, as “diehard” hockey fans.

“In any sports advertising, the minute you use bad cliches, or jargon or do things that feel dated, you lose your audience immediately,” Broude said. “So we built a team of fans who are also great creatives. And I don’t think it would work any other way, because I think the audience could sni it out if it feels inauthentic.”

Hall, who has been with the NHL for more than 16 years, describes a comfortable and collaborative relationship between the league and its agency.

“We just really liked how open they were. We liked how they are willing to come to us with ideas that, at least back in my day on the agency side, you would never show, you’d always re ne it until it was perfect and then present it,” he said. “ is is a much more collaborative process, every step and stage of the way. at’s been refreshing, because we have pretty strong opinions on where we want work to go and what we want to do and what we want to say.”

e NHL season began Oct. 4 in Prague, when the New Jersey Devils notched the rst of two victories over the Bu alo Sabres. In North America, opening night was Oct. 8, with a tripleheader on ESPN that began with the St. Louis Blues at Seattle Kraken, Boston Bruins at Florida Panthers and Chicago Blackhawks at Utah Hockey Club).

e NHL has a series scheduled in November in Finland, and in February will halt its schedule for the Four Nations Cup, a contest between national teams from the U.S., Canada, Finland and Sweden to be contested in Boston and Montreal.

“I think you can expect us to get much more aggressive in our marketing e orts, both on the brand side as well as getting behind some of the major initiatives that the league is pushing forward in the content space,” such as “Faceo ,” Hall said.

Jon Springer writes for Crain's sister brand Ad Age.

Connor Bedard of the Chicago Blackhawks NHL

Jack Eichel of the Vegas Golden Nights | NHL

Jack Hughes of the New Jersey Devils is featured in the NHL’s “Gen Z” ad from Highdive. NHL

Reinventing LaSalle Street will require exibility — and nancial incentives

Since its founding, Chicago's reason for being has been business. Springing up where the Chicago River connects to the southern tip of the Great Lakes, the tiny hub of fur trading evolved into a jumping-o point for merchants moving goods from the East Coast to points west — rst via canals, later via the network of train lines fanning out from here, and later still via air.

Along the way, Chicago became the business capital of Middle America, home to companies with global reach. e core of that capital was the Loop and, in particular, LaSalle Street, once touted as the Wall Street of the Midwest.

With the COVID pandemic now receding into memory, Chicagoans nd that LaSalle Street, despite the beauty of its architecture, its historic signi cance, and its location at the epicenter of civic power represented by City Hall and the Daley Center nearby, is a shadow of what it once was. To be sure, LaSalle Street's supremacy was already deteriorating well before COVID hit, as newly minted o ce towers and modern, rehabbed loft spaces began luring tenants to Wacker Drive and Fulton Market well before 2020. But the pandemic intensi ed the downward trajectory, with fewer o ce workers coming downtown every day, fewer stores and restaurants open to serve them, and fewer investors willing and able to plow money into retro tting aging buildings to suit 21st-century needs.

Against that backdrop, four prominent voices — Quintin Primo of Capri Investment Group, Keith Lord of Lord Cos., Mary Ludgin

PERSONAL VIEW

of Heitman, and 34th Ward Ald. Bill Conway — shared the stage at Crain's Oct. 17 Fall Real Estate Breakfast and weighed questions that strike at the heart of the central business district's historic reason for being. ough, as Primo was quick to point out, the very notion of all-o ce business districts that become lonely streetscapes after 5 p.m. is an antiquated one. e city of the future contains walkable neighborhoods that feature places where people can live in close proximity to their workplaces, with an abundance of nightlife and shopping options nearby.

All the panelists seemed to agree this multiuse vision for LaSalle Street is the right goal to push for. e question is how to get there. Some observers might argue that private market forces will inevitably remake LaSalle into a mix of residential, retail and o ce space over time as investors see opportunity to buy up and rehab buildings at a discount. e panelists correctly pointed out, however, that government has a role to play in sparking this development and speeding its progress.

And not all of those government interventions need to be expensive. As Lord

argued, there are targeted strategies City Hall should embrace now to smooth the path for developers who want to bring new life to a strip that really needs it. e ideas Lord tossed out include expediting the permit process for investors who want to put money into a very targeted stretch of LaSalle, and doing a spot review of building codes for that same very speci c area to eliminate those that are unnecessary and burdensome. None of which would cost the city much to implement. But the truth is that public investment will also likely be necessary to bring vibrancy back to LaSalle Street and make it a round-the-clock neighborhood. Making strategic use of funds from the existing LaSalle Street TIF has got to be part of the equation, as well as smart land-use policy, exible zoning and codes, and nancial incentives to catalyze investment and prevent further tenant loss.

With major, transformative projects already underway — most notably the rebirth of the ompson Center as a new regional headquarters for Google, under Primo's watch — the Johnson administration has wind at its back if it truly wants to revivify LaSalle Street. Plans to create housing that's more a ordable to more Chicagoans were already in the works before Brandon Johnson became mayor and could go a long way to creating the kind of foot tra c and energy required to build a real, live neighborhood. e next moves for City Hall should mainly involve incentivizing new investment — and then doing whatever it can to get out of the way.

Before City Hall launches this $1.5B bond issue, stop and think

Just because the city of Chicago can borrow more money doesn’t mean it should.

e City Council is expected to vote on a $1.5 billion bond issue originally designed to re nance $980 million worth of debt.  at has now expanded to $1.5 billion and the projected savings city o cials are promising have grown from $70 million to $90 million.

City Council members should wait until Mayor Brandon Johnson’s administration shows them and Chicago taxpayers the math explaining how the growing bond issue will save city taxpayers $90 million and what exactly the full $1.5 billion will be spent on.

Better yet, the City Council should limit its bond issuance to the renancing of the original $980 million, assuming they can in fact prove that their projected savings are real, and forgo bonding out a penny more.   e parking meter sell-o and

other risky deals over the years in which aldermen were asked to trust the mayor’s o ce teach us it’s better to demand the details up front.

e state of Illinois is in the process of securing an estimated $115 million in savings from re nancing $1.088 billion in bond debt.

e other $600 million newly issued sale proceeds will be for capital and pension acceleration needs and not for any state operating expenses.

e city’s re nancing may likewise turn out to be a good deal that I, as the state’s chief nancial o cer, could support. I’ve worked hard with legislators and the governor to stabilize the state’snances and am proud to have helped lead our state to nine credit upgrades on my watch, the rst in over 20 years.

Just like with the state’s nances, responsible scal discipline and transparency are critical to restoring stability and predictability

to the city’s nances.

In 2017, I traveled the state talking to civic groups and editorial boards, including Crain’s, about the wisdom of re nancing a portion of the state’s debt.

We were paying 12% annual interest on much of the $16.7 billion pile of unpaid bills former Gov. Bruce Rauner had run up. e General Assembly authorized renancing $6 billion of that debt at a lower rate.

Having learned from watching Gov. Rod Blagojevich squander bond money on pet projects, my o ce made sure legislators wrote right into the legislation and bond covenants that the money could only be used to retire old debts incurred before July 2017. And that’s exactly what I planned to do.

But Rauner was refusing to issue the bonds.

So I explained to the civic groups and editorial boards: If you could re nance your mortgage down from

12% to 5%, you’d do it, right? Eventually, we brought enough pressure to force the then-governor to agree to the re nancing. We got a rate of 3.5%. I targeted Medicaid bills that gave us a 50-cents-on-the-dollar federal match, so I paid o $9 billion in debt with those $6 billion of bonds. We saved state taxpayers $4 billion to $6 billion in interest fees. It was a great deal for taxpayers.   e moral is: Get it in writing.

How exactly will the re nancing save city taxpayers $90 million? Show the rates and how you get there. If the deal is as good as the administration says it is, they should be very proud to show their math.   Is there a dedicated revenue stream to pay back the bonds beyond sales taxes and the General Revenue Fund? If so, what is it?

Recognizing that the bond rating agencies frown upon adding to your debt load, something that could lead to a credit downgrade, why bond out an additional $520

million and what speci cally will it be spent on? What is the plan for paying it back?

Chicago City Council members justi ably concerned about the city’s precarious nancial position stood up for taxpayers by forcing an amendment stipulating that this money could not be spent on operating expenses. Unfortunately, a “master indenture” that’s being offered with the bond deal appears to allow the mayor and CFO to determine under certain conditions that they could use some of the money for operating expenses. In other words, the amendment is like Swiss cheese — full of holes.   e better solution to ensure they protect taxpayers from taking on too much debt would be to introduce a substitute ordinance that deals only with the cost-saving re nancing component, free from additional borrowing.

Taking on an additional half a billion dollars of debt to cover op-

Ae city’s $1.5 billion bond re nancing plan is a no-brainer

Crain’s op-ed by Comptroller Susana Mendoza, “Before City Hall launches this $1.5B bond issue, stop and think,” regarding the contemplated $1.5 billion bond re nancing, is lled with regrettable errors and patently false claims. e re nancing ordinance currently up for consideration by the City Council is a standard part of responsible debt management for Chicago that will save the city money and reduce our debt load.

Mendoza’s entire argument against the re nancing rests upon an egregiously repeated false claim that there is some kind of shadowy “additional borrowing” outside of the “cost-saving re nancing component.” Mendoza’s op-ed repeats misinformation, stating that the bond o ering would “create a slush fund for operating expenses.”

In fact, the authorizing ordinance speci cally stipulates that the entire $1.5 billion transaction can only be legally used for cost-saving renancing purposes. Any other use of proceeds from the sale of the bonds would require another amendment passed by the City Council. Mendoza’s op-ed seems to have been written without any consultation or understanding of the ordinance in question.

e actual plan of nance outlined in the ordinance and presented to the City Council is this: $850 million of the city’s general obligation bonds will be currently callable (i.e., eligible to be renanced) on Jan. 1, 2025. In addition, the city plans to use a tender process to purchase approximately $500 million of other general obligation and Sales Tax Securitization Corp. bonds and re nance those bonds for savings. Any unused authorization can only be used for a

erating expenses is scally irresponsible. Using bond proceeds for operating expenses is like putting your groceries on your credit card. I've often said, if you can’t a ord the car, don’t buy it. And de nitely never put it on your credit card.    As Fort Sheridan Advisors Managing Partner Stuart Loren recently wrote, “Debt is not a solution to structural de cit problems.” He is right.

e bond rating agencies are watching. A provably good renancing for speci ed needs that saves taxpayers money is defensible. But borrowing more than we need just because we can to create a slush fund for operating expenses could invite downgrades and should be avoided.

As state comptroller, I’ve always taken pride in protecting Illinoisans' hard-earned tax dollars. It’s their money, not mine. e same is true for Chicago City Council members. ey have an opportunity right now to stand up for Chicago taxpayers by asking the tough questions, demanding full transparency and passing only what is demonstrably cost-saving and nothing more.

future cost-saving re nancing.

A “tender” means the city will make an o er on the open market to purchase and cancel its own debt, thereby realizing more savings. e point of a tender is to take advantage of favorable market conditions to realize savings that might not otherwise be attainable through targeting only currently callable debt. is is not an unusual or untested nancing approach. In 2023, the city realized $65 million in savings after tendering $440 million of outstanding bonds. at transaction not only saved the

city money but was awarded “Deal of the Year” by the municipal market publication e Bond Buyer, which described it as “a model for other nancings.”

e City Debt Policy states that a bond re nancing is a “good deal” if the present value savings generated by re nancing are greater than 3% of the principal being re nanced. Under current market conditions, the re nancing will signi cantly exceed that target and generate approximately $110 million in present value savings, with considerable additional upside depending on the response to

our o er to tender bonds. is bond deal lowers our debtservice costs, reduces our total debt load and helps us responsibly manage our costs.

Despite the claims of Mendoza and her quoted source on X, the city has provided Finance Committee members details of the transaction and has responded in writing to all of the questions posed by our city elected o cials. What this bond deal does not do is irresponsibly take on an additional half-a-billion dollars of debt to cover operating expenses; use bond proceeds for operating

expenses like putting your groceries on your credit card; or invite a bond-rating downgrade. By any metric, this is a good deal for the city that will reduce debt load and see cash ow savings in 2024 and 2025. We will replace outstanding debt that carries an average interest rate of 5.62% with new debt and with a much lower cost in the range of 3.75%. As city employees, we have a duciary responsibility to do what is right for the city, and this re nancing is a no-brainer.

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Jill Jaworski is chief nancial o cer of the city of Chicago.

Susana A. Mendoza is Illinois state comptroller.

Bronzeville residents to weigh developer pitches for visible gateway along Oakwood Boulevard

As the neighborhood around Mandrake Park has been revitalized, 30 city-owned lots that have sat vacant are now gaining attention

By Dennis Rodkin

As the neighborhood around Mandrake Park has been revitalized, 30 city-owned lots have remained vacant. Now, they’re moving toward becoming another piece of the neighborhood’s renaissance. Bronzeville residents got a chance to evaluate developers’ preliminary ideas for mostly residential development on a cluster of vacant lots that make up a visible gateway to the neighborhood along Oakwood Boulevard.

As the area around Mandrake Park in the Oakland neighborhood has been revitalized over the past two decades with a mix of new and rehabbed historical homes, the 30 cityowned lots, in six chunks around the intersection of Oakwood Boulevard and Lake Park Avenue, have remained vacant — a negative counterpoint to all the improvement and a magnet for litter.

“It’s right off the lakefront. I don’t know how it didn’t get built,” said Sabha Abour, chief of staff for Ald. Lamont Robinson, 4th. Robinson was scheduled to host a meeting about the sites on Oct. 10 at Martin Luther King College Prep, 4455 S. Drexel Boulevard.

Responding to a request for proposals, or RFP, issued in April, ve development groups have

crafted early-stage proposals for portions of the cluster, which were to be presented at the meeting. Abour emphasized they're all preliminary, ahead of “ nding out what the community wants for these lots.”

e developers’ ideas released ahead of the meeting were generally early drafts that o ered few speci cs.

As is, zoning would allow around 800 new residential units on the combined sites, including a building 300 feet tall, or about 30 stories, on the north side of Oakwood Boulvard and lower multistory buildings on at least three other groups of lots.

But it’s possible residents of the neighborhood will argue against the density and height that would entail. That’s in part because of fears of gentrification.

“It’s important that this gets done right,” said Shannon Bennett, executive director of the Kenwood Oakland Community Organization, a civic group that has been involved in the area since the mid-1960s. Neither KOCO nor Bennett is part of the development e ort on the sites, but Bennett lives a few blocks away.

“In an area like this, so close to the lakefront, we have to be sure that low-income and working families aren’t excluded,” Bennett said. “My biggest concern is

that we should build housing there for working people and seniors.”

Bennett is not opposed to attracting more a uent people like those who have bought homes facing Mandrake Park and along Ellis Avenue and Drexel Boulevard, “but we can coexist in the space,” he said. Bennett plans to attend the meeting to vet the proposals’ merits on that basis.

The RFP emphasized that “generating a mix of housing units is paramount,” but also suggested retail and food venues might work on Oakwood Boulevard, presumably only at ground level. Retail and food would complement the walk-

ing, biking and other flow that already exists at Mandrake Park and the lakefront park east of the tracks and DuSable Lake Shore Drive.

Revival in the area began in the 1990s, with the creation of the park, and accelerated in the early 2000s as the Chicago Housing Authority’s Plan for Transformation took down hundreds of public housing units in the Oakwood Shores area.

New single-family homes near the park began selling for prices as high as $1.5 million, although after the 2007-08 housing crash, they dropped into the $700,000 range. In 2022, a group of 10 townhouses nearby sold in the upper-$600,000s to the mid-

$700,000s. ey are just north of the spot marked No. 1 in the image at the top of this story. e changes in the immediate neighborhood are part of the transformation in Bronzeville in recent years, one of the most sustained growth trajectories in Chicago residential real estate, rivaling growth in the West Loop and the Milwaukee Avenue corridor.

Abour, of Ald. Robinson’s ofce, said “ultimately our job is to support what our residents say they want” for the lots that are now under discussion. Whatever that turns out to be, she said, “we’re excited” to see these blank spots take their place in the renaissance of Bronzeville.

Oak Street Health expansion to continue amid CVS review

By Caroline Hudson, Modern Healthcare

CVS Health is moving ahead with expansion plans for Oak Street Health, even as the company reportedly considers a restructuring in the coming months.

CVS is conducting a strategic review, according to media reports citing people familiar with the matter, and is weighing options for separating some of the company’s businesses, which include its retail pharmacy, insurance arm Aetna, pharmacy bene t manager CVS Caremark and Chicago-based primary care provider Oak Street.

A spokesperson said CVS is sticking with its previously announced expansion plan for Oak Street but did not respond to questions about how many clinics it has opened this year. As of August, Oak Street had opened 16 clinics in 10 states since December, with aggressive plans to open another 38 or so clinics by the end of the year.

CVS continues to struggle with declining pro ts on the retail side and higher costs in its insurance unit.

Despite the challenges, some analysts and consultants say keeping to the overarching strategy for Oak Street, which CVS acquired in May 2023 for $10.6 billion, may be the right move. Oak Street was founded in 2012 and employs a value-based care model to o er primary care services to older adults on Medicare.

Separating the embattled retail store operations, not Oak Street, may be the way to go. e integration of insurance, pharmacy bene t management and healthcare services could still work as a strategy, said Julie Utterback, senior equity analyst at Morningstar.

“Removing Oak Street from the CVS equation may be shortsighted,” Utterback said. “Investors have typically viewed the combination of medical insurance, pharmacy bene t management and caregiving services ... as extremely successful and

worthy of imitation.”

ere may be other, less drastic options.

Pausing the Oak Street expansion could be a way for CVS to avoid burning more cash, said Brian Tanquilut, managing director of healthcare services equity research at Je eries. e company reportedly has been working with nancial advisers this year to nd a private equity partner that would help fund Oak Street's growth.

With an expansion on pause, Oak Street’s newer clinics would have time to turn a pro t, Tanquilut said. Retail clinics often take a few years to become profitable because of the required upfront investments into infrastructure and sta ng before a patient base is established.

“If you have a clinic that’s on year two or year three, waiting an extra year to get that to pro tability when you invested so much already on the front end, like why not,” he said. “As long as you’re seeing the same dynamics, I think Oak Street will make sense

from a nancial perspective.”

However, the negative e ects from the retail pharmacy chain’s companywide issues may already be set in motion, even if CVS doesn’t make changes to Oak Street.

Oak Street could start losing doctors to other provider groups and struggle to keep its reputation for quality care, said Je Goldsmith, president of consultancy Healthcare Futures. Meanwhile, CVS has not an-

nounced any new private equity partnerships to fund Oak Street.

“I think there was a lot of ‘want to be’ in this strategy,” Goldsmith said, referring to CVS’ e orts to combine multiple healthcare businesses into one company.

“If it’s not good enough for CVS to put its own money into, why would a [private equity] person want to invest in it?”

Caroline Hudson writes for Crain's sister brand Modern Healthcare.

The map shows the cluster of sites along Oakwood Boulevard just west of the rail tracks and DuSable Lake Shore Drive.

Unlocking value in commercial contracts

Prioritizing strong practices will fortify the backbone of any organization

When you joined Thompson Hine after being a general counsel, why did you choose to focus on commercial contracts versus other legal practice areas?

As a general counsel, I handled matters in multiple practice areas, including employment law, intellectual property, corporate mergers and acquisitions, privacy law and commercial contracts. While ea of these areas is critical, I realized that commercial contracts truly tou every facet of an organization and are closely tied to innovation and growth. From contributing to cash ow processes to specifying how vendors provide services or products to determining how internal teams are structured and sta ed to meet customer commitments, ea commercial contract, and ea provision within a contract, has a direct impact on the business.

Explain the impact commercial contracts can have on other legal practice areas.

Commercial contracting practices can strongly impact litigation outcomes. For instance, a carefully dra ed limitation of liability clause can restrict a litigant’s ability to obtain signi cant damages unless they can meet a contractually agreed-upon higher standard. Well-dra ed indemni cation provisions can require counterparties to cover litigation costs and resulting damages in the negotiated covered scenarios. A detailed statement of work can provide signi cant bene ts with respect to litigation: carefully de ning agreed-upon tasks, deliverables, assumptions and pricing structures at the beginning of the relationship leaves less room for interpretation later.

Julie Honor has a robust commercial contracting practice, where she advises clients on all types of agreements and business processes. She also counsels companies on the development and use of AI, including advising on building and training AI software models, as well as drafting internal policies.

Honor explains how she chose this area of law and how leveraging commercial contracts can drive growth, add value, and strengthen your business. Often overlooked, commercial contracts are fundamental to every company. This informative Q&A explores the steps you can take to unlock their value.

e provisions in a commercial contract can also dramatically impact the risk pro le and complexity of a merger or acquisition during the due diligence process. For example, multiple customer contracts containing broad uncapped liability and indemni cation obligations present a higher ance of risk for the buying organization if those contracts are assumed through the transaction.

Commercial contracts can also a ect integration e orts, especially on the vendor/supply side, where including exibility in the commercial relationship generally — or triggered upon an M&A event — can help avoid duplicate expenses and overlapping vendor relationships.

How can companies get more strategic value out of their commercial contracts?

A company’s standard terms and conditions and playbooks are at the core of successful commercial contracting.

A diligent practice ensures that the organization’s standard terms and conditions evolve with business operations and the company’s risk pro le. Contract templates should be regularly reviewed (at least annually) and updated to re ect innovation that results in new or revised products, services, business strategies, risks, anging marketplaces, and legislation.

In addition to robust templates, maintaining a commercial contracting playbook (for customer and vendor relationships) provides exibility to qui ly negotiate standard terms and conditions and/ or to work o a counterparty’s paper while mitigating risk.

Strong templates, playbooks and contracting processes will enable

companies to reduce time to close revenue-generating contracts while maintaining appropriate risk protections for the organization.

Once contracts are signed, establish clear procedures for storing them and assign responsibility for monitoring obligations and deadlines. Although this sounds simple, it is an o en-overlooked area that, when well executed, can drive process e ciencies, mitigate risks and provide cost savings. (It is quite common to discover multiple contracts with the same vendor that specify di erent pricing or terms.)

Also, in my experience, identifying contracts that deviate “just this time” helps prevent accumulating unfavorable terms and guides decisions to mitigate risk beyond contracts, su as securing appropriate insurance programs or developing new commercial processes.

How can a contract dispute affect the commercial contracting practice?

While businesses and lawyers strive to cover as many nuances as possible in negotiations, not all

scenarios can be foreseen. Soured customer or vendor relationships can lead to disputes, and it’s critical to analyze whether provisions in templates or positions in playbooks need to be added, strengthened, loosened or removed to prevent similar future disputes. Additionally, disputes can reveal drafting and business process improvements needed to mitigate against future issues.

Real-world experiences enable companies to continuously re ne their contracting practices. As companies navigate negotiations and consider contract interpretation questions, the templates, playbooks and processes must evolve to incorporate lessons learned.

If readers walk away with one key message, what would it be?

Commercial contracts can make or break a business. While parties aim to sign a contract and never reference it again, issues can arise in any relationship. Prioritizing strong commercial contracting practices will fortify the ba bone of any organization. Structuring contracts that support growth and innovation, align with the company’s risk pro le and protect against potential disputes will yield signi cant returns on investment.

Progress Fueled By Innovation

INNOVATIVE THESE COMPANIES ARE CHICAGO’S MOST

1. The Fynder Group

What

◗

e miracle microbe discovered in Yellowstone National Park keeps turning up in new places, most recently on a fashion show runway in Paris.

A model showed o a Stella McCartney handbag made with a new leather substitute from e Fynder Group, a Chicago-based company best known for a fermented protein used to make its Nature’s Fynd dairyfree yogurt and meatless breakfast patties.

“ is is where innovation can take you,” says CEO omas Jonas. “We found this microbe in the volcanic springs of Yellowstone. Now it’s on the shelf at Whole Foods and in space and on the runway. It’s like 'Where’s Waldo?' It’s fun.”

It’s also a very real business.

e company’s rst food products launched three years ago and now are on more than 1,000 store shelves, including Whole Foods Market. It plans to launch

another food product next year, Jonas says.

Roughly one-third of the Chicago-based company’s 150 employees work in R&D. Since it was founded in 2012, Fynder Group has been awarded 43 U.S. patents and was inducted into the Space Foundation’s technology hall of fame.

e microbe at the heart of it all was discovered as part of a NASA-funded research project to nd organisms that thrive in extreme environments, providing clues in the search for life on other planets. e fermentation technology the company developed to grow its fungi-derived

By John Pletz

Chicago companies are never at a loss for innovation, whether it’s health care, food, fashion, shopping or technology.

Our annual list of the Most Innovative Companies includes members of the Fortune 500, such as AbbVie and Baxter International; privately held companies, such as Elkay Manufacturing, Hollister and RTC; and venture-backed startups, such as The Fynder Group.

How do we come up with the list? It’s based on an evaluation of the patents awarded to Chicago companies in 2023 performed by Ocean Tomo, an advisory, investment banking and consulting rm specializing in intellectual property.

Ocean Tomo, which is part of J.S. Held, averages the scores of the individual patents received by each company. To qualify, a company must have been awarded at least three patents.

The 25 Most Innovative companies

1. The Fynder Group

2. Isco International

3. Elkay Manufacturing

4. Raise Marketplace

5. Sage Products

6. AbbVie

7. RTC

8. Hollister

9. MemoryWeb

10. Fairlife 11. PerfTech 12. Medline Industries 13. CTS 14. CDW 15. Nielsen Consumer

Sennco Solutions 17. Baxter International 18. Chamberlain Group 19. Acco Brands

20. Phenix Real Time Solutions

21. Grubhub

22. Weber

23. PureCircle

24. AptarGroup

25. CME Group

protein was sent to the International Space Station in a shoebox-sized bioreactor to determine whether it could be used by astronauts to grow food during long space travel.

e company spent four years developing the leather alternative made by its HydeFy unit, a nod to Fy, the name of the nutritional protein in Nature's Fynd foods. e Fynder Group is talking with other fashion designers and is exploring the automotive and furniture industries, Jonas says.

“Leather is a question mark,” he says. “Fashion companies worry that leather is going to go

the way of fur.”

McCartney is an outspoken advocate for sustainability in fashion and has taken up the cause of banishing leather.

“ ere’s a generational change in attitudes: Gen Z is much more interested in the impact of their consumer choices on the planet,” Jonas says. “Our process is very e cient. It uses a fraction of resources needed to grow a cow.”

Leather substitutes are just one new potential market for the technology. Jonas sees more opportunities in food, as well as in pharmaceuticals and cosmetics.

“I’m excited about what the platform could become,” he says.

Thomas Jonas

2. Isco International

What it makes: Wireless software Patents last year: 20

◗ As militaries are discovering on battle elds around the world, wireless networks are key lifelines, which makes them inviting targets.

“For $200, someone can buy a jammer at eBay or Amazon,” says Gordon Reichard, CEO of Isco International.

at’s an opportunity for the 35-year-old Schaumburg company, whose technology helps wireless carriers eliminate interference — deliberate or not — on their networks.

“We’re seeing a lot of demand for anti-jamming products,” says Reichard, whose company has been selling such equipment for more than a decade.

One of the rst users was a wireless carrier that had to deal with an overzealous pastor who bought a jammer to prevent his congregation from paying more attention to their phones than his preaching.

“It’s been a known problem,” Reichard says. “Now it’s growing in importance.”

Technological convenience can quickly become a liability. At home, in the o ce or on the battleeld, things that used to require a wired network, from crunching data to streaming video, are being done wirelessly. Police in Los Angeles and New Jersey have warned that some sophisticated burglars have taken to jamming Wi-Fi and

3. Elkay Manufacturing

What it makes: Plumbing products

Patents last year: 4

◗ Elkay Manufacturing has long been synonymous with drinking fountains and sinks.

at was before personal water bottles. e Downers Grove-based company added automatic bottle llers in 2010 and they’re now the biggest part of its business.

“Drinking fountains were overlooked,” says Jason Silverstein, the company’s director of design and insights. “ e only people who actively thought about them were building-maintenance people.

“ ings were changing. People were becoming more serious about hydration and drinking water versus other stu . ey weren’t really using the drinking fountains.”

Once Elkay added automatic bottle llers, users began demanding them. e company sold 1 million EZH2O stations in a little more than a decade.

“ ey ultimately became table stakes. . . .It changed the trajectory of Elkay,” Silverstein says. “If you focus equally on the end user as you do on the owner or operator, then you’re going to unlock some opportunity.”

Elkay recently added wireless connectivity that enables remote monitoring and maintenance, such as ushing the systems when schools aren’t in session. “We’re trying to save labor hours for the

5. Sage Products

What it makes: Medical products  Patents last year: 11

◗ Sage Products spends a lot of time thinking about how to help caregivers work with bedridden patients in hospitals, nursing facilities and private homes.

cellular signals to disable security systems or phone signals in highend homes.

e military had enemies jamming in mind when it built dedicated radio networks. “Cellular systems have never been designed

with malicious jamming in mind,” says Igor Goodman, Isco's vice president of engineering.

Isco’s patents show a product line that’s constantly evolving. One recent innovation involves adapting software algorithms to account for the shape and position of an antenna to help reduce interference.

Wireless technology has evolved dramatically in the past decade, and carriers are following computer companies in taking a cloud-based approach to operating networks with more opensourced technology. at means Isco won’t have to worry about building hardware deployed at individual cell sites, Reichard says.

“We’ll make our patents and software licensable and embed them in (open-access network) devices,” he says.

4. Raise Marketplace

What it makes: Mobile commerce technology

Patents last year: 4

◗ In the early days of operating its online gift-card exchange, Raise Marketplace had to develop more sophisticated software to detect fraud. Now it’s about to begin offering some of that technology to other companies.

“We were super early in thinking about how you can use blockchain to stop fraud,” says CEO George Bousis, who founded the company in 2013. “ e problems that existed then are the problems that exist today. ey’re just bigger because the gift-card space has exploded. Almost a trillion dollars in gift cards will be issued this year.”

maintenance people,” Silverstein says.

It also sells a home version of the bottle ller.

The 104-year-old company got its start in Chicago in 1920 making stainless-steel sinks. It’s still innovating there, too. Elkay recently was awarded a patent for an all-in-one sink and cabinet that incorporates a faucet with filtered-water capability built in, as well drawers with cutouts shaped to fit around the plumbing stack.

Elkay, which merged with Milwaukee-based Zurn Water Solutions two years ago, has more than 25 designers, engineers and R&D experts. But hundreds are involved in coming up with new products.

“Our approach to innovation is, there’s the technical invention or idea,” Silverstein says. “But we don’t really consider it innovation until we have gured out a way that’s pro table for us to mass produce and have it accessible and a ordable to big chunks of the market.

“ at’s sometimes the trickier part. e innovation goes beyond the R&D department. What do we have to do to our factories or with our supply-chain partners to gure out how to make this new thing?”

e 53-year-old company has come up with a sheet with specialized handles to make it easier for caregivers to safely turn over patients, such as people who've had spinal surgery, according to a

patent awarded last year.

It's the latest in a line of Sage products for moving and turning patients. e company also has come up with products to prevent and relieve pressure sores, such as devices to protect patients’ heels.

Sage, which became part of medical equipment giant Stryker in 2016, is tackling a growing market that’s only going to get larger as baby boomers get older.

The number of people age 80 to 84 in the U.S. increased 17% between 2012 and 2022, roughly

double the growth of the overall population, according to Census Bureau estimates. The median age for people entering nursing homes is 84, according to research by Dr. Kenneth Lam at the University of Colorado School of Medicine.

Sage, based in suburban Cary, has developed a wide variety of products to improve patient safety and hygiene, such as pre-surgery wipes and waterless bathing products. Stryker has said the business is growing in

Raise built an online market for buying and selling gift cards with about 6 million users and 2,000 retail partners.

It also has a b-to-b o ering called Raise for Business, used by companies with loyalty and gift-card programs that have a combined user base of about 80 million participants. Bousis says Citibank’s Shop Your Way program uses Raise, giving members using the Citibank app the ability to convert points they earn with the bank into digital gift cards with other retailers.

Last year the company was awarded patents for fraud-detection technology, as well as technology to monitor transactions to detect purchase patterns across various retailers that can be used to better target promotions to customers’ buying habits.

Bousis got his start in tech as a teenage professional gamer who raised nearly $200 million from a high-pro le list of venture-capital backers. Today the Chicago-based company has 67 employees, does nine gures in annual revenue and is pro table, he says.

e blockchain technology that ultimately resulted in patents for fraud detection and more targeted marketing is about to become a stand-alone business. Raise plans to license technology to companies to better run their giftcard programs.

“We’re rebuilding the gift-card program from the ground up,” Bousis says. “We think we’ve built an end-to-end solution for brands to have a better and more impactful digital gift-card program.”

the high single digits and is one of the company’s faster-growing business lines, says analyst Jeff Johnson, who follows the company for Robert W. Baird.

“They’re a well-known brand,” adds Morningstar analyst Debbie Wang. “If you spend some time in a hospital and watch what happens, you begin to see how there are a lot of unsolved problems like waterless grooming, where I feel like you can see opportunity. That’s where Sage’s products come in.”

6. AbbVie

What it makes: Pharmaceuticals Patents last year: 27

◗ e patent clock is ticking on new drugs before they get to market.

Few companies know this as well as AbbVie. e patents on Humira, a groundbreaking drug that became one of the best-sellers in history, expired last year.

One of the ways to extend the life of a blockbuster is with patents related to manufacturing the drug, which has many of its own unique challenges.

AbbVie received several patents last year related to Rinvoq, one of two big successors to Humira. Like Humira, Rinvoq was developed as a biologic immunology drug for arthritis, but it’s

7. RTC

also been approved to treat eczema, colitis and Crohn’s disease. e company says in recent patent lings that it unexpectedly discovered ways to better control the release of the key compound in Rinvoq.

Pharma companies like AbbVie are an important part of Chicago’s innovation economy, employing armies of highly trained scientists. It’s one of a handful of U.S. cities with major pharmaceutical companies. AbbVie spun o in 2013 from Abbott Laboratories, which developed the antibiotic erythromycin, the anesthetic Pentothal and the rst blood test to detect HIV.

What it makes: Retail shelving-management systems Patents last year: 5

◗ Richard Nathan is always thinking about store shelves: making them easier to stock, easier to shop and less inviting to wouldbe thieves.

More than 20 years after introducing RTC’s rst shelf-management system, Nathan is back in the health and beauty aisle. It’s one of the most frequently rearranged areas of grocery and drug stores. It’s also one of the most di cult, because manufacturers like to use bottles and packages with unique sizes and shapes as marketing tools.

Containers with wide tops or bottoms are the enemy of standardization that makes a shelf easy to re ll or rearrange. RTC has made the trays in its Pro t Pusher shelving displays more customizable to match varying widths of products.

“If you’ve got to take everything o the shelf, it’s really a pain in the neck for the retailer,” Nathan says.

One of RTC’s early innovations was a spring-loaded display that pushes products to the front of the shelf automatically, rather than requiring employees to adjust or “re-face” them manually.

8. Hollister

What it makes: Medical products Patents last year: 33

◗ Hollister has never been afraid to try new things.

e 103-year-old company got its start printing birth certi cates and patient ID bracelets and moved into medical products, becoming a leading seller of catheters and ostomy and wound-care products and an innovator in specialized, skin-friendly adhesives.

Now Hollister is moving into wireless digital health care, incorporating sensors into its products to give patients a warning if there’s a leak in an ostomy pouch. e sensors provide alerts to a pa-

tient’s phone and incorporate a tiny haptic device that can vibrate if the phone is out of reach.

e company has added wearables talent with expertise in micro- uidics and wireless technologies, says Seamus Fitzpatrick, vice president of research and development. It also partnered with outside experts.

“ is is one of those technologies where you have to learn how to crawl before you walk and run,” he adds.

Digital tech also opens the door to new opportunities and new

challenges. “It gives us information we didn’t have before about the life of a (user),” he says. “We can use that information for other innovation. We also have to be concerned about the privacy of the data.” e shift into new technology spurred an uptick in patent activity by the Libertyville-based company, which is owned by its employees and has long been a believer in the power of intellectual property. Hollister nearly tripled its annual patent lings to 50 last year, says Adam Airhart, chief IP counsel.

9. MemoryWeb

What it makes: Digital photo software Patents last year: 4

It counts 15 of the nation's 20 largest retailers as customers.

With labor costs rising and workers harder to nd, retailers are always on the lookout for ways to increase productivity. RTC’s newest products allow an employee to change out a shelf in two to three minutes, a task that otherwise takes 15 to 20 minutes.

“Retailers are so dialed in on productivity because margins are being squeezed,” says Nathan, the second-generation CEO of privately held RTC, based in Rolling Meadows. “ e challenge of more expensive labor is hitting retail as much as any category.”

RTC, which was founded near Pilsen in 1950 as Round Tubes & Cores to make cardboard innards for electrical transformers, has a long history of innovation. Its next target is theft. One recent patent involves a shelving system that limits the ability of thieves to empty a wide swath of products with a sweep of their arms.

“Retail theft is a large, persistent industry problem,” he says.

◗ Innovation is often about cooking up new ideas for existing businesses.

MemoryWeb co-founder Nancy Desmond was making Christmas cookies when she got the idea for a new stand-alone app. She happened across a recipe card her son had scribbled long ago as a 3-yearold.

It was a perfect use for a popular photo- ipping feature in MemoryWeb’s software, which allows users to digitally tag and categorize photos. e core prod-

10. Fairlife

What it makes: Dairy products Patents last year: 5

◗ Fairlife brought new life to a centuries-old product when it developed a way to lter out much of the sugar that naturally occurs in milk and boost the protein.

ere’s more to dairy than milk and protein shakes, and the Chicago-based company is always looking for ways to cause a stir.

It has dabbled in yogurt, brie y test-marketing a product last year

uct has long been popular with genealogists, and users had asked for a way to share the photo- ipping feature with people outside the MemoryWeb platform.

“It’s always one of the features people love the most,” Desmond says.

PhotoFlipz launched in August at a cost of 99 cents a month or $9.99 a year, compared with the full MemoryWeb suite, which sells for $9.99 a month or $99 a year. So far it’s been popular with tness enthusiasts and trainers

as a way to show o the before-and-after e ects of training programs.

“When you connect the two images, it’s like a big reveal,” she says.

MemoryWeb is a very small company that’s big on patents. It has received 17 so far, including four last year. Before launching MemoryWeb with her husband, Chris, and their friend Michael Taylor, Desmond worked for intellectual property technology rm ktMine.

before deciding not to pull the trigger on a launch. e company’s research and development teams also received a patent in 2023 for a way to create yogurt that would not require refrigeration, like conventional products, but also not kill o the bacteria that are bene cial.

Fairlife launched in 2012 and now is fully owned by its onetime

joint-venture partner, Coca-Cola. It has nearly 200 employees in Chicago, where its R&D team is based, along with CEO Tim Doelman, one of the founders of its ultra- ltration technology.

NEIGHBORHOOD SCHOOLS VS. CHOICE

Behind the recent drama at Chicago Public Schools — the resignation of the school board, Mayor Brandon Johnson’s quest to oust the CEO, and his demand that the district borrow to fund operations — is a longer-term but fundamental question: Should neighborhood schools take priority over choice?

e problem pits the mayor and the Chicago Teachers Union against proponents who say the current system that gives families a choice of selective enrollment, magnet, charter or neighborhood schools attracts and keeps middle- and upper-income families in the city. Johnson and the union that backs him say lifting up neighborhood schools will help break the cycle of poverty in disinvested South and West Side communities.

Who gets to choose your child’s school?

While the mayor seeks to center neighborhood schools, parents weigh options they see as best for their kids I By Judith Crown

It’s a central issue in elections next month when the school board transitions from seven mayoral-appointed members to 21 members, with 10 elected by the districts and 11 appointed by Johnson. e contest is largely viewed as a showdown between two well-funded interests: the CTU and the charter schools, which attract students from neighborhood schools.

e outcome could either pave the way for the mayor to reshape the school system or back re and leave him politically isolated.

“It would be great if every single student could wake up and go to their neighborhood school that is an excellent school,” says Hal Woods, chief of

SPONSORS

policy at the nonpro t Kids First Chicago and a former CPS director. “But that is just not where we are as a city.” Johnson, a former teacher and CTU organizer, ran his mayoral campaign on rebalancing the inequities that have starved schools in strapped communities. Late last year his school board issued a resolution that called for a new vision, from a model that emphasizes choice to one that “prioritizes communities most impacted by past and ongoing racial and economic inequity.” at pronouncement set o alarm bells. What would that mean for the rest of the city? Would the top-rated selective enrollment schools wither from benign neglect? Would charter schools be

Chicago Mayor Brandon Johnson

closed? Magnet schools revamped?

“People felt that a very large decision was being taken away from them when they were on the precipice of an elected school board,” says Illinois state Rep. Margaret Croke, whose North Side district includes Lincoln Park and Lakeview, and who introduced a bill to forestall any changes until a fully elected board is seated. ( e bill was passed in the Illinois House but held in the Senate after Johnson agreed not to enact certain changes.)

Magnet and selective enrollment schools are proven to be successful, says Nataliya Manina, a parent and secretary of the Local School Council at Skinner North Classical School in Old Town, a top-ranked selective enrollment elementary school. “Selective enrollment schools worked for Michelle Obama (who graduated from Whitney Young) and a lot of other great leaders," Manina says. “Why take resources from those schools?”

In the district’s ve-year strategic plan adopted late last month, CEO Pedro Martinez threaded the needle by directing more resources toward neighborhood schools in disinvested communities without meddling with the basic infrastructure of selective enrollment, magnet and charter schools. Selective enrollment and magnet schools have tighter budgets this year, Martinez said in an interview the day after the plan was adopted by the board. “But they were able to maintain their programming.” e CTU wasn’t impressed. “You really have to de-emphasize choice in some way to really make the neighborhood schools rise,” CTU Vice President Jackson Potter said in an interview.

At a press conference earlier this month following the school board members’ resignations, Johnson was vehement in defending his vision for transforming CPS. “I’m making sure that every single school has a social worker, a counselor and a nurse,” he said. “I’m making sure that every school has a library and a librarian.”

The quest for diversity

Chicago Public Schools doesn’t have enough local and state resources to serve the large number of high-needs students and is only at 75% of adequate funding, according to the Illinois State Board of Education. Segregated neighborhoods resulted in wide disparities between the wealthier North Side schools and lower-income South and West sides. In 1980, the Chicago Board of Education settled a long battle over desegregation with the U.S. Justice Department and agreed to a consent decree.

e solution was busing students to a roster of magnet and selective enrollment schools, “with an explicit system of racial quotas,” says Richard Kahlenberg, a consultant who worked with CPS in the 2009 transition to be free of court supervision.

CPS operates 32 magnet elementary schools and 14 selective enrollment elementary schools. Five of the 11 selective high schools are nationally ranked: Payton College Preparatory High School, Northside College Preparatory High School, Whitney Young Magnet High

24

Source: Chicago Public Schools

School, Jones College Preparatory High School and Lane Technical High School. ese schools serve about 10% of elementary and 16% of high school students, respectively. ere are more than 125 charter schools and a total of 623 schools in the district.

Following court decisions against the use of racial quotas, Kahlenberg worked with district administrators to devise a model using socioeconomic metrics to promote racial and economic diversity. At this juncture, white students made up less than 10% of CPS' enrollment. Instead of relying only on test scores for admission to the selective enrollment schools, the district created four geographical tiers, determined by factors such as median income, the percentage of owner-occupied homes and the number of single-parent households. e rst 30% of seats at the selective enrollment schools now go to the top scorers citywide on an admissions test. e remaining seats are held for the top scorers in each of the four tiers, with the understanding that their scores could be below those of the top citywide test takers.

e city’s top ve selective enrollment high schools are not as diverse as the district as a whole, but they’re more diverse than many neighborhood high schools. ey also are more diverse than top-ranked high schools in New York and other large cities. Whitney Young, for example, is 28.5% Hispanic, 24.7% Asian, 24.1% white and 17.9% Black.

However, Black enrollment at the top selective enrollment high schools has declined over the past 10 years, which Potter of the CTU attributes to the end of federal monitoring under the consent decree. “Once that was eliminated, it really destroyed some of the equity we saw in selective enrollment schools,” he says.

at’s not the only reason. Many families aren’t familiar with the testing process to gain admission to selective elementary schools.

Parents of students entering kindergarten can have their children tested by signing up for an exam date at Illinois Institute of Technology.

A student’s elementary school is

Percentage

a key predictor of acceptance into a selective high school, according to recent research by WBEZ. Only 1% of eighth graders from  neighborhood elementary schools in low-income and Black neighborhoods were o ered a seat at one of Chicago’s top ve selective enrollment schools over the last three years, WBEZ found.

“I didn’t know that was an option for elementary school,” says Julissa Muriel, a CPS parent in Humboldt Park who has four children in neighborhood schools. “I would have tested all of them, even if they didn’t go.”

In 2022, CPS began testing all eighth graders for high school admissions. Previously, families interested in selective high schools registered for an o -site exam.

Schools CEO Martinez said it’s imperative to upgrade local high schools because the top ve high schools have a limited number of seats. “ ey are not going to serve the needs of 20,000 eighth graders,” he said. e promise, he said, is in schools such as Taft, Kenwood, Solorio, Curie and Benito Juarez, his alma mater. “If you look at their trajectory over the last decade, they are now some of the strongest schools we have,” he said.

e lack of adequate neighborhood schools has resulted in travel times taking a chunk of a student’s day. A number of students commute across the city not just for selective enrollment schools but for magnets and a variety of specialized programs. Travel times can be more than 30 minutes each way.

“Not every neighborhood school may be able to o er the programs families might be looking for,” says Woods of Kids First Chicago. He notes some families want an International Baccalaureate, or IB, program, dual-language education, ne and performing arts, or technical programs. “It would take signi cant time and investment to ensure that every neighborhood school could provide the full array of o erings families are used to receiving in the current choice system,” he adds.

For the most recent school year, 43% of elementary school students and three-quarters of all high schoolers attended a school other than their zoned neighbor-

hood location. In the South Side neighborhood of South Shore, for example, 20% of students spend more than 45 minutes commuting each way and it takes 9% of the students an hour or more.

Still, families seem to want choice. Half of Chicagoans, including modest majorities of Asian, Black and Latino residents, believe students should be able to attend any school, even if neighborhood schools languish, according to a survey conducted earlier this year by Public Agenda and NORC (National Opinion Research Center) at the University of Chicago, with support from the Joyce Foundation. At the same time, two-thirds of city residents say the district should prioritize improving neighborhood schools over choice.

Budget process boosting neighborhood schools

CPS overhauled its budgeting process this year, allocating more funds to schools with high needs. Previously, funding was based on enrollment, which penalized schools with small or dwindling populations. Declining enrollment has left many buildings vastly underutilized.

“Much of our funding for neighborhood schools went up, and most of those schools tended to be those that didn't have what we call their foundational resources,”

Martinez said. “For example, as a minimum, every school now has three elective teachers at the elementary level.”

Mather High School on the Far North Side has gained some additional teachers and security guards, says Abigail Vences, chair of the Local School Council, who has two children at the high school and another at Swift Elementary. e school saw a large enrollment of Venezuelan immigrants. “We got new uniforms for some teams because they were outdated,” Vences says. “And they updated the classrooms because before we only had a few smart boards.”

Darlene O’Banner, co-chair of the Englewood Community Action Council, who is active on the Local School Councils at Earle STEM Elementary and Englewood STEM High School for her greatgrandchildren, says her schools are well resourced. She supports the push to better fund neighborhood schools but says parents should have the right to choose where their kids attend.

“If I have an opportunity to send my child to Lindblom (a selective enrollment high school in Englewood), I’m not going to trade that for the school across the street that has nothing,” O’Banner says. “You’d be crazy.”

Darlene O’Banner, who is active on the Local School Councils at Earle STEM Elementary and Englewood STEM High School for her great-grandchildren, says she supports the push to better fund neighborhood schools but that parents should have the right to choose. | ALYCE HENSON

SCHOOLS

From Page 19

Meanwhile, a number of selective enrollment, magnet and IB schools saw cuts. Magnet schools, which o er unique programs such as ne arts or foreign languages, lost some of the additional funding that made these programs possible, Woods says.

Decatur Classical Elementary School, a top-ranked school on the Far North Side, lost funding for three of ve elective classes, says Alisa Wartick, a parent with two children at the school. “ e principal was able to restore two of the positions, but one of those is temporary. ere’s no indication that any of that funding is coming back.”

Because the district suspended busing for all but students with disabilities (due to a national shortage of drivers), selective schools like Decatur could become less diverse. Wartick notes that one of her daughter’s classmates didn’t re-enroll this year because there was no more bus service. Indeed, the suspension of busing could naturally result in more students attending their neighborhood schools.

But as long as CPS keeps the current system of choice, some schools will fall to the bottom of

the popularity list. Because of the district’s long-term decline in enrollment (although the district population recently has shown a modest uptick), those schools will be candidates for closing. Some experts contend that the district would be better o consolidating schools to o er more varied programs.

But painful memories of 50 school closings under former Mayor Rahm Emanuel linger. Johnson vows there won’t be closings or cuts that hurt Black and Brown students and teachers. And the union is suspicious of any hint of closings that could eliminate teacher positions.

At a special meeting on Sept. 26, the board voted not to close any district-managed school at least until 2027. Notably, that moratorium doesn’t extend to charter schools.

An emboldened Johnson and his new board could begin to re-engineer the current infrastructure. e board could modify admissions criteria for selective enrollment schools. For magnet schools, it could alter admissions policies or change the specialties that di erentiate their curricula.

Critics note a strict adherence to neighborhood schools results in less diversity, re ecting the city’s already segregated housing patterns. And it could provoke a major

SCHOOLS VS. CHOICE

backlash. Voters in San Francisco in 2022 forced out three school board members who pushed a progressive agenda that included abolishing traditional testing requirements for the top high school. e long-term risk is that tinker-

ing with the current structure will drive out higher-income families — whether to the suburbs or private schools. And it could discourage others from moving in. Families want stability and want to know whether their kids’ school

will continue to exist tomorrow, says Manina, the Skinner North parent. “If selective enrollment schools close or the quality of education declines, moving out of Chicago, and even out of the state, is certainly on my mind,” she says.

Magnet and selective enrollment schools are proven to be successful, says Nataliya Manina, a parent and secretary of the Local School Council at Skinner North Classical School in Old Town. | ALYCE HENSON

CPS’ soon-to-be-elected school board can’t be allowed to fail

The Nov. 5 ballot

marks a historic shift to an elected board for our public schools. While it is the norm for districts nationwide, it will be a rst for Chicago. And while the size and struc ture of our school board is causing warranted con cerns, what’s done is done. As Chicagoans, it is now our challenge — and our opportunity — to ensure this new governance model works for students and taxpayers.

Janice K. Jackson is a graduate of Chicago Public Schools and served the district for more than 20 years, including as CEO. She is now CEO of Hope Chicago.

Let’s be real, this will not go smoothly. It certainly hasn’t gotten o to a smooth start. But CPS is a resilient system. Hundreds of thousands of students and educators are making real progress despite the hurdles they face. Every side of every public argument sees the potential in our students. We are in this together. So let's cut the absurdity and get to work.

According to Public Agenda, just 37% of Chicagoans are aware the school board election

is happening and even fewer (34%) for Black and Latino residents. We have to do better to live up to the promise of a democratic process. Spread the word, do your homework and VOTE for those aligned with your values. Ask your friends and colleagues whether they plan to vote, too.

This board is intended to be representative, but several elements of its design make it harder for parents and everyday Chicagoans to participate. The role is unpaid despite the immense responsibility. Getting on the ballot is confusing and expensive. Undocumented parents are excluded from running or even voting. Policymakers should revisit these restrictions so Chicagoans with the right skills and experience can have real access to participate. And we need to ask hard questions on how a 21-member board

is productive, or perhaps even functional. Such an unwieldy group will make attracting and keeping a talented leader in the CEO role hard. And what mechanisms can hold a dysfunctional board’s feet to the re? e public needs resources and data to keep the board accountable, most of all, for student outcomes.

Getting this right, or if you prefer, making lemonade, could not be more important for our residents and for our economy. e business community has as big a stake as anyone in our education system. Students and families are your current and future workforce and customers. And great schools can drive economic growth.

According to the To& rough Project, only 30% of the roughly 26,000 CPS ninth graders this year will earn a college degree within 10 years, if current rates hold. at means about 17,000 young people enter our economy each year with no education beyond high school. We have to do better, and we can.

At Hope Chicago, where I am currently CEO, an economist projected that our model to close the

CPS parents have had enough with the surprises and chaos

The recent resignation of every member of Chicago’s Board of Education, three weeks after CPS unveiled its new ve-year strategic plan, underscores the challenges that many Chicago parents face when navigating their child’s public school education. A strategic plan should provide an agreed-upon path to reach goals that the majority of stakeholders believe in. Such stability has been hard to nd in Chicago schools, and parents are concerned.

In conversations I have with parents across the city, whose children attend all types of schools, they are concerned about the instability of the district. Among other concerns, the new ve-year plan has ramped up parents’ conversations about selective enrollment schools, magnet schools and charters. Although parents agree with providing greater support to neighborhood schools, particularly those in underserved communities, many wonder if that priority will result in disinvestment of schools that are currently thriving.

Fears over the future of selective enrollment, magnet and charter schools may be unfounded. After all, the CPS ve-year strategic plan doesn’t explicitly call for eliminating them. However, in a system that is lled with surprises, parents look for clues about what comes next, and they see warning signs. ey point to the ongoing lack of busing for magnet schools, the new funding formula tied to CPS' Opportunity Index and Mayor Brandon Johnson’s strong focus on bolstering neighborhood schools. To some parents navigating the current erratic environment, these signals suggest that selective enrollment and magnet schools may indeed be at risk. Overall, the ve-year plan has been overshadowed by other troubles. Unfortunately, it may seem pointless to worry about the strategic plan when the people who approved it have all resigned. Parents are ba ed by this development and embarrassed to see it in the national news. ey wonder how it will impact the city and

racial wealth gap through postsecondary education is likely to return half a billion dollars in scal and social impacts to Chicago communities. And Hope Chicago supports just 4% to 5% of CPS high school graduates. As CPS continues to be a venue for political battles in the coming months, it may be tempting to look away. Do the opposite. Our city’s students, teachers and sta continue to show up every day and get their jobs done. It is our job to navigate this rocky road and come out stronger.

their children’s education. Adding to parents' unease is Mayor Johnson’s proposal for a massive loan. Parents are worried about CPS' ability to repay it, leaving the future of their kids' education in even more uncertainty.

Parents understand that disruptions happen occasionally. Many say that their frustrations with the district are small compared to the quality of their child’s education. at has been my experience as well. Still, I wonder, do parents have the stamina to keep hanging on amid so much uncertainty? I’ve gritted my teeth through dozens of smaller unknowns over the years. I’ve waited for preschool o ers, entertained my kids during two teacher strikes, plodded through dire budget scenarios at Local School Council meetings, fretted over the cleanliness of schools when those services were contracted out, watched my kids languish during online learning and listened to mayors make promises about public education that they would not keep. I’ve talked with parents who were prepping for IEP meetings, adjusting 504 plans and waiting for services, all hoping for the best, never knowing what was next. It’s possible to have a great experience in CPS, but it’s lled

with quandaries big and small. e new ve-year strategic plan lays out CPS’ priorities clearly, although parents are concerned about exactly how CPS will implement them. Unfortunately, the plan is overshadowed by the lack of funds to execute it and the upheaval of the Board of Education.

Mayor Johnson seems to feel that he needs to shake up CPS

by creating chaos. I want Mayor Johnson to know that many parents voted for him because they thought that along with positive change, he would bring stability to the district. Unfortunately, right now we have chaos. Mayor Johnson needs to nd a way to implement his vision without embracing so much disarray. To truly support families, he needs to calm this storm.

Amy Johnson is a CPS parent and executive director of the Neighborhood Parents Network.

A group of residents disrupted a news conference as Chicago Mayor Brandon Johnson introduced six of his nominees to the Chicago Board of Education on Oct. 7. | AP IMAGES

SCHOOLS VS. CHOICE

Fix what’s broken. Don’t break

what’s working.

By William Johnson

If you are a Chicago parent, you are probably familiar with the concept of “selective enrollment” high schools and their highly competitive admissions process. In recent months, debate over these schools has intensi ed, as some local leaders have argued that the city should shift resources they receive to neighborhood schools.

ere are 11 selective enrollment high schools across Chicago, and they are some of the city’s highestperforming public schools. Selective enrollment schools o er the city’s academically advanced students a challenging college preparatory experience, according to the public school system’s website. Admissions are highly competitive: Roughly 20,000 eighth graders apply for spots at the top ve high schools.

Michelle Obama is an alumna of the selective enrollment Whitney Young Magnet High School. Whitney Young boasts a 95% four-year graduation rate. e public school system’s overall four-year graduation rate, by contrast, was 84% last year.

Overall, parents support this focus on academic rigor. A slight majority of city parents (51%) with a school-aged child (under the age of 18) think academically rigorous programs are an important part of a well-rounded education, according to a recent Harris Poll survey, and 48% would enroll their child in a selective enrollment program if given the choice.

Families who apply for one of the selective enrollment schools may be skeptical of the quality of the education at their neighborhood school. Two in 5 (38%) parents living in the Chicago metropolitan area with a school-aged child are concerned about their area’s public education system. Furthermore, a quarter (27%) think the public education system (grades K-12) is worse in their area compared to other places in the country.

Last month, selective enrollment schools re-entered the spotlight as the Chicago Board of Education, with the support of Mayor Brandon Johnson, passed a controversial ve-year plan that aims to increase the percentage of students who attend neighborhood schools. Since school resource allocation is directly tied to enrollment numbers, Mayor Johnson argues that neighborhood schools are harmed when students enroll in selective enrollment schools.

Families may be sympathetic to Mayor Johnson’s concern for underserved neighborhood schools: Most city parents with a school-aged child (60%) think all Chicago-area students should have equal access to educational resources. Furthermore, many parents recognize the discrepancies in resource allocation among local schools, with more than 2 in 5 (44%) agreeing that resources allocated for Chicago-area public schools are not distributed fairly and 36% saying public schools in their area don’t receive

William Johnson is CEO of e Harris Poll, a global public opinion polling, market research and strategy rm.

Selective enrollment

Which of the following statements do you agree with?

All Chicagoland students should have equal access to educational resources. 60%

Charter school proponents and the CTU have staked out their positions

By Judith Crown

Given the choice, I would enroll my child in a selective enrollment program. 48%

Source: The Harris Poll, October 2024

enough support from local leaders.

While Chicago parents clearly have a heart for public school funding, however, they do not support defunding selective enrollment programs in favor of the neighborhood schools. ey want to x what’s broken but not at the cost of breaking what’s working. Only 1 in 10 (11%) would support a plan to defund or discontinue selective enrollment high school programs. Four times as many parents (41%) oppose such an idea.

While local leaders can be applauded for their interest in improving neighborhood schools, Chicagoans clearly do not want to do so at the expense of the well-regarded selective enrollment programs. e Chicago Board of Education seems to be listening: In late September, it passed a two-year moratorium on closing any public schools in Chicago.

Until these restrictions lift at the end of the 2026-27 school year, selective enrollment schools are safe from closure. At that point, local leaders should look for opportunities to expand resources at neighborhood schools without taking them from selective enrollment schools. Chicago parents have made it clear they want to retain that potential option for their children.

Next month’s Chicago school board elections will pit the Chicago Teachers Union against a coalition including the charter school community, and both sides are spending big to in uence the future course of city schools.

e election has become a referendum on the vision advocated by Mayor Brandon Johnson and the CTU, which includes borrowing funds for a new teachers contract, limiting school choice and moving away from traditional metrics and rankings.

e upcoming contest for 10 seats will convert the sevenmember appointed board to a 21-member hybrid panel. Johnson will appoint the remaining 11 members, retaining control until a fully elected board takes over in 2027.

As of early October, $557,000 had been spent by a committee of the Illinois Network of Charter Schools, or INCS, putting the charter advocacy group at the top of special interest groups spending in Chicago’s rst school board elections. is is more than double the $238,000 spent by the political action committees of the CTU and its coalition of community organizations, according to Chalkbeat Chicago. e INCS has raised funds from billionaires Helen Zell, wife of the late real estate mogul Sam Zell; Net ix cofounder and Chairman Reed Hastings; and private investor Craig Duchossois.

“ ere’s a burgeoning coalition to push back against single-party control,” INCS President Andrew Broy said in an interview. Indeed, the group

opposing the mayor includes unlikely bedfellows, with the self-described “center left” INCS forming common cause along with the right-leaning Illinois Policy Institute and former mayoral candidate Paul Vallas, who was Chicago Public Schools’ rst CEO.

e rivalry is playing out in the 10 school board districts. In South Side District 9, which includes disinvested communities such as Englewood, residents, in theory, should be aligned with the CTU stance on favoring neighborhood schools. CTU-endorsed candidate Lanetta omas, a South Side community activist, agrees to a point.

“My main position is to make sure that we have sustainable neighborhood schools,” omas says. “Selective enrollment and charter schools often have access to better funding and resources, and they leave neighborhood schools struggling.”

But she favors a middle ground that supports neighborhood schools while maintaining options for families, including charters.

One opponent in the district stresses that parents want choice. Miguel Lewis, acting director of the Cook County Juvenile Probation & Court Services Department and board chair of the Noble Network of Charter Schools, who is endorsed by the INCS, says parents want the right to select the education that’s right for their child. “ ere is a need to invest in our neighborhood schools,” he says. “I just don't know that it has to be at the expense of selective enrollment or magnet or charter schools.”

Also in the District 9 race is erese Boyle, a school psy-

chologist and former candidate for CTU president, and La’Mont Raymond Williams, chief of sta and general counsel for Cook County Commissioner Bill Lowry. Generally, both want to improve neighborhood schools while preserving choice.

e charter school community is on edge since the board in late September adopted a resolution saying it wouldn’t close, consolidate or phase out any district-managed schools before the fully elected school board is seated in January 2027. Notably, the board didn’t extend that protection to charter schools.

“Having strong charters is another great way to keep our families in our district. Our charters have always had a very steady enrollment,” CPS CEO Pedro Martinez said in an interview last month. “At the same time, we also know we have capacity in the district and within the charters, and so we want to be nancially responsible to our taxpayers.”

e charter community rankles at criticism from the mayor and the CTU and worries that charters won’t be renewed and schools will be closed. Constance Jones, CEO of Noble Schools, points out that 20 of the 50 top city high schools as ranked by Chicago Magazine are charters.

“We’re serving kids from Auburn Gresham, from Englewood and Grand Crossing,” Jones says. “We're producing thousands of graduates (who are) getting hundreds of millions of dollars to go to these incredible universities across the country and being the rst in their family to do so. Why would you not support that?”

Members of the Noble Network of Charter Schools speak during a Jan. 25 Chicago Board of Education meeting. | CHALKBEAT

Charter school was the right choice for this student

As Chicago approaches a consequential election for a new school board, the future of school choice in Chicago Public Schools hangs in the balance. While the future of students is being discussed, we are often not invited to the conversation. I am excited to join that conversation here because this election affects the future of those who come after me and the kinds of resources that Chicago students will have to enhance their journey to college.

Mayor Brandon Johnson's proposal to move away from school choice in favor of neighborhood schools has left many parents concerned about losing control over their children's education. While this decision is yet to be made, my experience at a public charter school could provide some insight into how a CPS shift toward eliminating school choice might harm the academic success of students.

School choice is about o ering

the option for students to attend di erent types of educational institutions — ones that best t their needs, even if the school is located beyond their neighborhoods. Having multiple choices allows for parents to decide the type of education their children receive.

Mayor Johnson has pushed to end the choice model, saying that it has created a “Hunger Games” environment bene ting selective enrollment schools and charter schools while leaving behind those who attend neighborhood schools. While I believe that every student deserves to have a quality education, my experience at a Noble charter school has allowed me to thrive in a STEM-focused environment, something I would not have had in a neighborhood school.

e way I see it, public charter schools are a middle option between selective enrollment and neighborhood public schools. I didn’t have to take a test to get accepted, which is required for selective enrollment schools. But based on conversations with friends at

other schools, I know that I have a similar level of academic rigor, which is college preparatory focused, accompanied by strong disciplinary policies.

One of the best opportunities I received through Noble was participating in Summer of a Lifetime (SOL), a free college visit program that is o ered to every rising junior in the Noble Network, which allowed me to study political science and stay for two weeks at UW-Madison and to make friends from all over the country. Attending SOL inspired me to continue my journey to being the rst person in my family to attend college.

On the other hand, if I were to attend my neighborhood school, I probably wouldn't have the same level of di culty as I do in my AP classes and teachers who do care whether we understand the work and who mentor us on issues we face in life.

e elimination of school choice would eliminate the ability of students like me and others to have those options. If the mayor and school board decide to eliminate school choice, they should ensure that students continue having the same level of class di culty and

opportunities that are o ered at Noble schools.

As my English teacher told me, “it's good to have multiple options.”

Attending a STEM school has prepared me for my application to the Naval Academy, whereas in a neighborhood school that opportunity would have been less likely.

CPS should focus on improving the quality of its neighborhood schools but allow school choice to remain an option for those who seek personalized learning experiences. e upcoming election is important for these reasons. e outcome will set the course for Chicago schools for years to come.

Jesus Medina is a senior at ITW David Speer Academy, part of the Noble Network of Charter Schools in Chicago.

PEOPLE ON THE MOVE

ACCOUNTING / CONSULTING

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

Aidan Raftery, a resident of Oak Lawn, recently joined John Kasperek Co., Inc. as an Associate. Aidan comes to JKC from a Chicago-based accounting rm where he managed and executed comprehensive nancial audits and tax compliance for clients, among other responsibilities. He will apply his knowledgebase and skills to JKC’s audit practice. Aidan earned his Bachelor of Science Degree in Economics from the University of Alabama, followed by a Master of Science in Accountancy from the University of Illinois UrbanaChampaign. He also is nearing successful completion of his Certi ed Public Accounting (CPA) Exam licensure.

ARCHITECTURE / DESIGN

HKS, Chicago

Global design rm HKS announced Joe Cliggott as a Principal and Of ce Director at HKS Chicago. He helps to develop teams that push, grow and achieve beyond expectations. He is passionate about designing the culture of the Chicago of ce and is eager to connect to the rm’s deep research and sustainability initiatives. With a focus on people, projects and the Chicago community, Joe strongly believes in the power of design and architecture to in uence communities in positive ways.

EDUCATION

ARCHITECTURE

Wight & Company, Darien

Leanne Meyer-Smith, AIA, NCARB, LEED AP, BD+C rejoins Wight & Company as a Principal, focusing on client relationships and business growth. Her collaborative approach enhances consensus-building and strategic planning, guiding clients from capital program inception to project completion. With expertise in PK-12 Education, Leanne will support the launch of AmplifyED Studio, a design collective dedicated to creating empowering learning environments that positively impact communities and future generations.

FINANCIAL SERVICES

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

/

HEALTH CARE

Wintrust Financial Corporation, Rosemont

Wintrust Financial Corp., a nancial services holding company based in Rosemont, Illinois, with more than 200 locations across Illinois, Wisconsin, Michigan, Indiana, and Florida is pleased to announce two promotions.

Noble Schools, Chicago

Dr. Nikita Johnson-White has been named Chief Financial Of cer at Noble Schools. She has held various roles, including Assistant Superintendent for Finance & Operations, CFO, and served as the Chief Education Of cer at AHS Passages Charter School. She graduated from the University of Illinois at UrbanaChampaign and later became a Certi ed Public Accountant, received an MBA from DePaul University, and a Doctorate of Educational Leadership from National Louis University.

EDUCATION

Darren Brandt was promoted to Senior Vice President, Senior Director, Real Estate Services at Wintrust Financial Corporation. Darren joined Wintrust in 2009. Janet Koranda was promoted to Senior Vice President, Chief Credit Of cer, Commercial Real Estate at Wintrust Bank, N.A. Janet joined Wintrust in 2011.

FINANCIAL SERVICES

Wintrust Financial Corporation, Rosemont

City of Hope® Cancer Center, Zion

Teja Poosarla, M.D., recently joined City of Hope Cancer Center as director of medical oncology for the breast program, where she collaborates with each breast cancer patient’s multidisciplinary care team to craft a personalized treatment plan. Board certi ed in medical oncology and internal medicine, she is an experienced researcher who has been involved with multiple clinical trials, published in peer-reviewed journals and presented at events across the country. Learn more at cityofhope.org.

LEGAL

Benesch, Chicago

Patrick Beisell has joined Benesch as a Senior Managing Associate in the rm’s Litigation Practice Group. He is an experienced dispute resolution litigator adept at building, working in, and leading highfunctioning teams in a fast-paced environment. Joan Meyer has joined Benesch as Of Counsel in the rm’s Litigation Practice Group. She has more than 30 years’ experience handling complex criminal and civil litigation, primarily domestic and international whitecollar defense for companies involving anti-corruption, nancial frauds, government contracting, false claims, securities and commodities violations, and trade compliance matters.

Meyer

Noble Schools, Chicago

Carrie Spitz has been named Chief People Of cer at Noble Schools. She began her career with Teach for America in West Englewood and then joined Pritzker College Prep, a Noble School. She steadily took on greater levels of responsibility, culminating in her leadership as principal of Pritzker for nearly a decade, and was named INCS Principal of the Year in 2023. She holds a BA from the University of Wisconsin-Madison, a MA in Teaching from Dominican, and an Ed.S from National Louis University.

Wintrust Financial Corp., a nancial services holding company based in Rosemont, Illinois, with more than 200 locations across Illinois, Wisconsin, Michigan, Indiana, and Florida is pleased to announce two promotions. Mallory Mathews was promoted to Senior Vice President, Digital Product Team Manager at Wintrust Financial Corporation. Mallory joined Wintrust in 2016. Josh Sopczak was promoted to Senior Relationship Manager, Business Banking at Town Bank, N.A. Josh joined Wintrust in 2019.

LAW

Hahn Loeser & Parks, Chicago

The Firm welcomed Associate Jerome Crabtree to its Trusts & Estates team. Crabtree has a variety of estate and business succession planning experience, including revocable and charitable trusts, grantor retained annuity trusts, supplemental needs trusts and irrevocable life insurance trusts. Named a 2024 Rising Star by Illinois Super Lawyers, he counsels clients on entity formation, corporate structure and corporate governance matters. Crabtree earned a J.D. from Loyola and a B.A. from Iowa.

Hogan Marren Babbo & Rose, Ltd., Chicago

Hogan Marren Babbo & Rose, Ltd. would like to announce the addition of Emily Bothfeld as a Partner of the Firm.

Emily brings a wide range of experience and knowledge of Title IX and civil rights compliance, and she also counsels educational institutions in areas including board governance, student discipline, free speech and expression, campus safety, student disability rights, and data privacy and security.

Thomas DaMario has joined Benesch as a Senior Managing Associate in the Intellectual Property Practice Group. He focuses his practice on complex IP litigation and transactions, with a particular focus on patent infringement and trademark cases across district courts, the International Trade Commission, and the Patent Trial and Appeal Board.

Ruddy Abam has joined Benesch as a Managing Associate in the Litigation Practice Group. Her practice encompasses complex commercial, business, and nancial services litigation in both federal and state courts, as well as alternative dispute resolution and arbitration. She represents major consumer-facing corporations, debt buyers, and primary servicers.

LEGAL

Benesch, Chicago

Olivia Paxinos has joined Benesch as an Associate in the Litigation Practice Group. She focuses her practice on complex commercial litigation for corporate clients. She has extensive experience researching intricate legal issues and drafting pleadings, motions (both dispositive and nondispositive), briefs and written discovery responses.

Carlton Hemphill has joined Benesch as an Associate in the Intellectual Property Practice Group. Carlton represents clients in complex IP litigation matters, including proceedings before federal district courts, the TTAB, and the PTAB. His experience spans a wide range of industries and technologies, including surgical implants, aircraft systems and components, mechanical and medical devices, and arti cial intelligence.

Sopczak

Brandt Koranda

Hemphill

Benesch, Chicago

LEGAL

Abam

Motorola Solutions antes up for top execs

With its stock reaching a new record and pushing toward $500 per share, the company’s board of directors is in a generous mood — and that’s good news for a trio of senior leaders as well as CEO Greg Brown

By John Pletz

With its stock reaching a new record and pushing toward $500 per share, Motorola Solutions’ board of directors is in a generous mood.

The board approved $12 million stock grants aimed at retaining three top executives: Jason Winkler, chief financial officer; John “Jack” Molloy, chief operating officer; and Mahesh Saptharishi, chief technology officer.

e retention grants are nearly three times the stock and option grants that each of the executives received last year.

All three are seen as potential successors to Greg Brown, 64, who has been CEO since 2008, before the company spun off its mobile-phone and wirelessnetworking businesses.

Brown has given no indication that he’s planning to leave anytime soon. The board also increased his potential longterm incentive award next year by 20% to $27.4 million.

“ e Compensation and Lead-

ership Committee and the Board of Directors believe Mr. Brown’s ability to generate shareholder returns, to make strategic invest-

ments that strengthen the company’s portfolio and continue to successfully execute the company’s long-term strategy is critical

to the company’s path forward and that it is in the best interest of the company’s shareholders to retain Mr. Brown as CEO,” the

company said in a regulatory ling on Oct. 9.

Motorola’s stock is flying high. It hit a record $467.89 the day before. Shares are up 49% for the year, more than double the gain of the S&P 500.

The maker of police radios and dispatch equipment has benefited from strong spending on public safety equipment, as well as a move into video security hardware and software. Wall Street analysts expect the company’s full-year revenue to increase 8% to $10.2 billion.

“I think the awards are an effort by MSI to keep the executive team together,” says Keith Housum, an analyst at Northcoast Research. “Collectively, they have driven an incredible amount of shareholder value, and MSI’s board wants to keep the momentum going. The reality is other companies probably realize that, and in order to keep them from jumping ship, they have to increase what those guys are getting while they continue to deliver.”

Greg Brown

CAREER OPPORTUNITIES

ADMINISTRATIVE ASSISTANT IV (VETERAN’S ASSISTANCE COMMISSION)

Provide complex administrative support for the Bureau/Department staff and leadership. Function as a technical administrative resource in matters requiring extensive knowledge of the rules, regulations, objectives, and protocols of the Bureau/Department. Act as a point of contact or liaison to bridge issues of common concern between department staff, management, and support operations. Oversee confidential records, assist in the formulation and interpretation of policy, set procedure, and manage itineraries, schedules, and agendas. Full job requirements and responsibilites available at jobs.chicagobusiness.com

CAREER OPPORTUNITIES

Healthcare Compliance

Associate Director

e Associate Director for our healthcare analytics practice requires a highly motivated problem solver with strong analytical ability, solid organizational skills, and a desire to advance within the organization. is role involves the execution of engagement work streams that will primarily involve employing certi ed coding skills to audit provider claims and provider clinical documentation with a particular focus on government paid programs such as Medicare, Medicaid, Federal Employees Program, and TriCare.

Florida rm nears discount deal for State Street of ce building

The property could trade for 84% less than what it was worth in 2016 and includes a formidable leasing challenge as 13 of 16 stories are highly vacant

By Danny Ecker

A Florida real estate rm is closing in on a deal to buy a State Street o ce building for a small fraction of what it traded for eight years ago, another staggering case of lost value as remote work's assault on ofce demand continues.

Valued Well in Excess of $20,000,000

Suggested Opening Bid $14,500,000

On-site inspections from noon to 2pm on Nov. 7, 12 and 21 and by appointment.

Full Job Description and Job Responsibilites are available at jobs.chicagobusiness.com

Tamarac, Fla.-based Triple Double Real Estate is in talks to purchase the 16-story o ce building at 1 N. State St., according to people familiar with the negotiations. No deal has been nalized and the discussions could fall apart at a precarious time to land nancing for o ce acquisitions. But sources said Triple Double is expected to pay close to $13 million for the 560,735-square-foot property at the northeast corner of State and Madison streets.

at price is 84% less than the nearly $80 million that a venture of San Francisco-based Shorenstein Properties paid for the building in 2016, according to Cook County property records. e steep discount would be in line with other downtown o ce properties that have changed hands over the past year amid record-high vacancy and elevated interest rates. e COVID-19 pandemic-fueled trend of companies shrinking their o ce footprints has made many investors leery of owning o ce buildings in the city with large blocks of vacancy, dramatically weighing down property values.

Among other deals, o ce buildings at 230 W. Monroe St., 150 N. Michigan Ave., 300 W. Adams St., 216 W. Jackson Blvd., 105 W. Adams St. and 19 S. LaSalle St. have all sold over the past 13 months at massive discounts compared to their pre-COVID values.

If Triple Double completes its purchase, it would be taking on a

formidable leasing challenge at 1 N. State. e 13 stories of o ces — which are separately owned from the retail space on the building's rst two oors — are just 41% leased, according to a marketing yer from Jones Lang LaSalle. at's a far cry from the roughly 80%-leased gure Shorenstein achieved before the pandemic, boosted by deals with software maker Showpad and online review aggregator ReviewTrackers. Shorenstein invested heavily in the property to win over new users, spending $36.5 million during its ownership tenure on tenant improvements, new amenities such as a rooftop deck and a tness center with a climbing wall, building operations and move-in-ready o ce space, according to the yer.

Triple Double's low purchase price signals the substantial capital it will need to dedicate to leasing e orts at the building. Led by CEO Andrew "Avi" Greenbaum, the rm operates and manages commercial and residential real estate throughout the country, according to its website.

Greenbaum declined to comment about 1 N. State, but said his rm is an "active buyer in the Chicago market."

"We see lots of opportunity. We have a full team dedicated to the city, and we think that Chicago is going to come back in a strong way," said Greenbaum, whose rm owns 30 o ce properties today across 14 states and recently acquired two more in Texas despite headwinds for the o ce sector.

"We're not afraid — we like the o ce market at the right price," he said. "We believe people are going back to the o ce everywhere, and we believe in the growth of the economy and the Chicago market."

Injecting new life into the

112-year-old building could be a boost for State Street, which has endured major retail losses over the past few years. An Urban Land Institute panel commissioned last year by the city's Department of Planning & Development recommended ways to revive the corridor such as reducing its reliance on brick-and-mortar retailers and closing o streets to vehicle tra c to encourage people to linger. A sale at less than $25 per square foot would not only wipe out a massive chunk of equity in the State Street building for Shorenstein, but it would also deal a nancial blow to U.S. Bank, which provided a $68.2 million mortgage to nance Shorenstein's 2016 purchase.

e lender recouped some of that loan last year when Shorenstein paid down the outstanding principal to just under $35.8 million, according to Cook County property records. at paydown — at a time when many landlords have surrendered distressed properties to their lenders — signaled Shorenstein had a strong incentive to try to buy time for the building to recover.

Spokesmen for Shorenstein and U.S. Bank declined to comment. e o ce portion of the building comes with 4.1 years of weighted average lease term, according to JLL, a measure of tenants' remaining lease commitments to the property. e retail portion of the building is owned separately by New York investors that were hit late last year with a $50 million foreclosure lawsuit over the property.

JLL capital markets brokers Jaime Fink, Bruce Miller, Patrick Shields, Sam DiFrancesca and John Mason are marketing the State Street building for sale.

HYZON

From Page 3

will be contracts on the backs of these large trials,” says Meeks. “Taking a technology like this to market is a decade-pluslong endeavor. The technology is great . . . but contracts are king.”

Hyzon was ned $25 million by the Securities & Exchange Commission for falsely reporting it had sold 87 fuel-cell vehicles when it went public three years ago in a merger with a specialpurpose acquisition company.

Hyzon also makes fuel cells for garbage trucks and buses. It delivered 19 vehicles last year and signed a contract with Performance Food Group for 50 hydrogen-powered semis.

Cash squeeze tightening

Like many startup automotive companies, Hyzon is in a desperate race to prove its products in the market before it runs out of cash. It has $55 million in cash and short-term investments, but

WALGREENS

From Page 3

other stores or in other parts of the corporate division.

It’s unclear exactly where Walgreens plans to shutter pharmacies. Megan Boyd, a spokeswoman for the company, declined to share speci c closure details.

Closing pharmacies, often an essential health care resource in communities, can be controversial. Walgreens has previously taken heat for closing stores in low-income or in majorityBlack and -Latino communities, where it sometimes is the only local pharmacy option.

So-called pharmacy deserts can contribute to poorer health outcomes as residents in those areas are forced to travel farther for vital medications, vaccinations or, in Walgreens’ case, even primary care o ered through its VillageMD clinics.

In a statement to Crain’s, Boyd said Walgreens will take equity

it burned through $56.7 million in cash in the first half of the year.

“If the company fails to raise additional funding in time or in a sufficient amount to meet its requirements, the company may be required or compelled to pursue additional restructuring initiatives to preserve cash, working capital and optionality, including pursuing bankruptcy protection or other in-court relief,” Hyzon said in a recent securities filing.

“The company has concluded that at the time of this filing, substantial doubt exists about its ability to continue as a going concern as the company believes that its financial resources, existing cash resources, and additional sources of liquidity are insufficient to support planned operations beyond the next 12 months. We are also continuing to evaluate the need to pursue bankruptcy protection or other in-court relief if our financing efforts or other strategic alternatives are not successful.”

Hyzon recently completed a

and access into consideration as it chooses which stores to close.

“We know that our stores are important to the communities that we serve, and therefore do everything possible to improve the store performance,” she said. “When closures are necessary, we will work in partnership with community stakeholders to minimize customer disruptions.”

Improving merchandise

Wentworth said he is also focused on improving the merchandise lineup o ered in stores.

e company is being more selective with national brands and expanding its own, with a focus on health and wellness products and women’s health items, he said.

Walgreens launched 300 new in-house brand items this year and plans to launch another 300 in fiscal year 2025, Wentworth said.

On the pharmacy side of the

Fulton Market or the West Loop, the duo, who both come from fine-dining backgrounds, have looked in other neighborhoods.

1-for-50 reverse stock split to get its share price above the $1 threshold to avoid delisting from the Nasdaq market. The stock is trading at $2.18 per share.

It's hardly alone in its stock market struggles: EV maker Rivian trades at about $10 per share, down from its $78 IPO price and a short-lived peak of $179 that soon followed. It recently lined up $5 billion in financing from customer VW. Tesla nearly ran out of cash when it was ramping up production of its Model 3 several years ago, requiring Elon Musk to raise billions in fresh capital, CNBC wrote.

Meeks has been trying to complete a strategic capital raise for about a year.

Hyzon faces competition from startup Nikola, which is selling fuel cell-powered trucks, as well as Hyundai. Truck maker Daimler recently began customer trials. Paccar and Toyota also are collaborating on fuel-cell trucks.

Promising technology

Hyzon’s long-term goal is to supply its fuel cells to a large

business, Wentworth said Walgreens is getting more aggressive in a multiyear process to “reframe” its relationship with pharmacy benefit managers, which act as middlemen between drug manufacturers and pharmacies that largely set drug prices for consumers.

Pricing pressure from PBMs has long taken its toll on Walgreens’ earnings, but Wentworth said the company has worked with some PBMs to bring more stability and predictability to its reimbursement while also maintaining broad network access.

“We are changing the dialogue to ensure we both procure drugs at a fair price and that we are paid fairly for the value that we provide,” Wentworth said. “However, going forward, Walgreens will make difficult decisions if a PBM will not provide reasonable reimbursement for our services.”

As for Walgreens’ health care unit, the company previously

truck maker. It recently filed paperwork that would authorize $50 million in new shares.

Anna Stefanopoulou, a professor of mechanical engineering at the University of Michigan, says what Hyzon is attempting with its larger 200-kilowatt systems is noteworthy.

“There are a few companies that are doing commercial production with systems in the neighborhood of 100 killowatts,” she says. “For the size of fuel cells these trucks need, there aren’t too many systems around.”

If the industry begins to standardize on a type or size of fuel cell, it could go a long way to reducing the costs of ancillary parts that are required.

“Fifty percent of the cost is the system: the compressor and valves and other components,” Stefanopoulou says. “All of them are custom made.”

She says equipment makers are focused on “optimizing and tailoring the technology . . . balancing longevity, durability and cost. Everybody’s trying to work that out.”

disclosed intentions to offload all or part of its majority stake in VillageMD. But on Oct. 15, Wentworth did not provide investors with any specific timeline or plan for that goal. He did, however, say that potential sale proceeds would help further shore up Walgreens’ balance sheet.

“While our plans with this investment may take several different forms, in all scenarios related to VillageMD, we are committed to redeploying any proceeds to reduce our net debt,” Wentworth said.

Walgreens continues to feel the pain of declining valuations on its health care assets. The company took a $6 billion writedown on VillageMD earlier this year and reported on Oct. 15 it took an additional $332 million impairment charge related to CareCentrix, the home health benefit management company Walgreens paid about $700 million for across two separate deals.

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CUSTOMER

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You Enterprises or Boka Restaurant Group have eyed big projects in coveted locations in the Fulton Market District, Doug Psaltis and Hsing Chen — the husband-andwife chefs behind Eat Well Hospitality — are bucking that trend.

“Each of our restaurants have gotten a little bit smaller than the last and more intentional,” Psaltis said. “It was important for us to just kind of double down on quality and not size.”

Chen said the two have already turned down business proposals that may seem too big or simply weren’t the right fit for the Eat Well Hospitality team. “The growth is very calculated right now,” she said.

As larger Chicago restaurant groups have focused on dotting

Eat Well instead decided to bet big on Logan Square, opening their third spot — and second location in the neighborhood — along Milwaukee Avenue, right next door to Andros Taverna. Asador Bastian is located in River North, where the couple have lived for more than a decade.

The ethos behind the Eat Well Hospitality brand is a focus on sourcing the highest-quality ingredients to create food that makes people feel good, Chen said. “I always say there’s nothing more intimate than feeding people, and there’s a huge responsibility behind that and we really care about what it is that we are feeding people,” she said.

e couple opened their rst restaurant, Andros Taverna, in

2021, which spawned the Eat Well Hospitality restaurant group when they decided they wanted their employees to feel like part of a larger team.

One of the top steakhouses

The team then opened Asador Bastian in March 2023, which has since been named one of the top steakhouses in Chicago. The “World’s 101 Best Steak Restaurants” ranked it as the best in the city and 14th overall worldwide. Asador Bastian focuses on thick cuts of grilled rib steak cooked on a charcoal grill at the center of the dining room, which is located in the historic Flair House townhouse that dates back to the 1880s at 214 W. Erie St. Following the success of their previous two restaurants, Eat Well Hospitality opened Italian spot Mano a Mano earlier this year. e restaurant, which shares

parts of its kitchen with neighboring Andros Taverna, focuses on fresh pastas, vegetable-centric side dishes, Italian house wines and Chen’s desserts.

The two said there are no current plans for a new location. For now, they are focused on their newest restaurant and setting their fall menus.

Psaltis is a Michelin-starred chef and restaurateur who was a partner in several Lettuce Entertain You restaurants in Chicago. Chen is an Emmy Awardwinning journalist and pastry chef who has worked in many fine-dining restaurants, including The French Laundry in California.

“We’re really just the two of us and a great little team just trying to do a few things,” Psaltis said. “We don’t really think of ourselves amongst (the large) restaurant groups in Chicago.”

Developing a smart corporate AI policy

Benesch AI Commission attorneys and in-house counsels provide their guidance on steps every company should take to establish and maintain clear and relevant governance of arti cial intelligence in the workplace

Benesch AI Commission Chair & Senior Managing Associate, IP

Kris Chandler is Chair of Benesch’s AI Commission and Senior Managing Associate in the rm’s Intellectual Property Practice Group. He specializes in data privacy, cybersecurity, and complex IP transactions. Kris advises clients on compliance with global data protection regulations and helps develop comprehensive corporate AI policies.

Partner, Data Protection Group Lead

Ryan Sulkin is a Partner in the Intellectual Property Practice Group. He focuses on technology transactions, data privacy, and cybersecurity. Ryan provides actionable legal counsel on SaaS, cloud services, and compliance with regulations like GDPR and CCPA.

Alison Evans is a Partner in the Intellectual Property Practice Group. She counsels clients on high-value IP and technology transactions, data security, and global privacy compliance. Alison advises on technology procurement, licenses, and business process outsourcing.

Aslam Rawoof is a Partner in the Corporate & Securities Practice Group. He advises on capital markets transactions, corporate governance, and complex securities matters, including IPOs and debt offerings. Aslam also provides strategic counsel on AI-related corporate governance issues.

OPENLANE VP, IP & Technology Counsel, Chief Privacy Of cer

Michelle oversees OPENLANE’s privacy strategies and regulatory compliance in the rapidly evolving, data-driven landscape and leads the protection of the company’s intellectual property. A certi ed privacy expert (CIPP/US), she previously worked in private practice, focusing on IP, privacy and data security with multinational apparel brands and automobile and nancial services companies.

Executive Principal & Associate General Counsel at The Options Clearing Corporation

Rebecca has experience counseling companies on cybersecurity, operational resiliency, data, privacy and technology matters. Prior to joining The Options Clearing Corporation, Rebecca worked at Kraft Heinz, where she advised on data privacy, negotiated contracts involving security and privacy terms, and implemented global privacy compliance.

Kris Chandler

Ryan Sulkin

Aslam Rawoof Partner, Corporate

Alison Evans Partner, IP

Michelle Kaiser Bray

Rebecca Riegert

By Seka Palikuca | Crain’s Content Studio

The Arti cial Intelligence revolution is here to stay, and so is the need for establishing a corporate policy on the use of AI in the workplace. For business leaders, there are a range of considerations to address when crafting guidance — from practical implementation to oversight to risk management and more.

With these vast implications in mind, Benesch Law and Crain’s Content Studio gathered a panel of experts at the forefront of AI, including some members of Benesch’s multidisciplinary AI Commission and two in-house guests, for a discussion on topics ranging from a basic de nition of AI to its legal implications and rami cations going forward.

From enthusiasm to caution, this group of experts laid out some of the groundwork for how companies can move forward with their corporate governance of AI to ensure that security, privacy and innovation all thrive.

Getting in front of the AI wave

It has been less than two years since generative AI (gen AI) exploded onto the scene — and its early adoption has since spanned the globe. A McKinsey Global Survey published in May shows that 65% of respondents report that their organizations are regularly using gen AI, which is nearly double the percentage from their previous survey just 10 months prior.

“The No. 1 reason to develop a corporate AI policy is that your employees are probably using it already, with or without your guidance,” said Benesch’s Aslam Rawoof of the rm’s Corporate & Securities practice. “Knowing that and not creating an AI policy signals that your policy is one of indifference, that AI is not important to the company and that employees can use AI however they wish.”

Jim Kirk, center, leads a discussion on AI and its legal implications and rami cations with panelists, clockwise from left, Ryan Sulkin, Alison Evans, Michelle Kaiser Bray, Aslam Rawoof, Kris Chandler and Rebecca Riegert.

In an extreme scenario, where a lawsuit may be brought against your company for improper AI usage, the rst thing to be scrutinized would be your lack of an AI policy, Rawoof said. For these reasons, it’s important to have an AI policy, even if it’s short and quick but updated regularly.

The panel weighed in on what they believe to be essential aspects of developing a viable AI policy in the workplace:

Start with a de nition of AI: When creating a corporate AI policy, you should begin with the basics, Rawoof said, and that involves a de nition of what AI is. This includes generative AI (a model where you provide the prompt, the model understands the prompt, and then produces written output) and algorithmic AI (the model uses machine learning to analyze a data set and then provide an analysis).

Understand variations in use cases: Understanding use cases is also important when developing policy, because something being used behind the scenes for back-of ce purposes may require a different level of scrutiny than a customer-facing product, for example, said Benesch IP Partner Ryan Sulkin. The cases will also vary depending on the type of company or industry. For example, a pharmaceutical company may have a policy focused on priorities that are very different from an industrial manufacturer.

A three-tiered approach: When crafting a policy, it’s helpful to consider three separate buckets, said Kris Chandler, Chair of Benesch’s AI Commission. The rst bucket is for the internal use of AI. The second is for developing your own AI, and the third is for your procurement of third-party AI tools.

“Whether you have these components in three separate policies or one comprehensive one, this approach will help expedite different aspects of doing business,” Chandler said. “Such as the procurement process with a new vendor who uses an AI tool in its software, or a data scientist within your company who wants to develop a new algorithm.”

Don’t strive for perfection: “Don’t let the perfect be the enemy of the good,” Rawoof said. “If you want to set up a grand commission of 20 people and have a committee draft a policy, it could take a year to do that. And then your policy is obsolete the moment it comes out.” Instead create something short, quick and comprehensible that you review quarterly.

Learn from the experience of peers:

Join industry groups. Leverage your third-party vendors, like lawyers and consultants. If you have a line of communication, reach out to your competitors. They see what others are doing in the space, and you can learn from them.

Know your legislation: Stay current on legislation and case law and what peers are doing, Sulkin said. Try to join working groups wherever possible. Then, balance that with what the business is looking to achieve with AI.

Overseeing your corporate AI policy

New AI developments are in the news nearly every day. Moderator Jim Kirk asked the panel how companies can ensure their policies are adaptable as AI technology evolves and who should have ownership of those policies.

While most companies review their corporate policies annually, that won’t work for AI, because the technology is changing so rapidly, Chandler said. Within ve years, virtually every company will have some type of AI capability built in — whether it relates to product ef ciencies or simply automating simple tasks — and your corporate AI policy needs to adapt accordingly. That’s why Chandler advises clients to develop a more frequent review cadence that is quarterly at the least and continuous at its best.

Aslam Rawoof, Partner, Corporate at Benesch

Ryan Sulkin, Partner, Data Protection Group Lead at Benesch

It should be a living document that requires buy-in from a cross-section of internal stakeholders, from the C-suite down to the management level. This ensures that everyone recognizes that AI is here to stay and so are its legal, technological and ef ciency implications.

“For the sake of innovation and maintaining the excitement for enabling the technology, you can’t lead with compliance,” OPENLANE’s Michelle Kaiser Bray said, “or you’ll die an early death. Instead, embrace cooperation and collaboration as you architect the complexities of the AI program. I don’t think it’s a one-person job. It’s a team sport.”

With that in mind, it’s crucial to appoint someone to lead AI — an AI Czar, if you will, Chandler said.

Rebecca Riegert, Executive Principal and Associate GC at The Options Clearing Corporation, believes it’s important to have someone be the “face of AI” for the company frontline, educating employees on your company’s AI stance and sharing your priorities while helping bake that into the culture of the business.

It’s also important to make sure messaging is not just coming from compliance or risk, Benesch IP Partner Alison Evans added. “You need those business and technical stakeholders to buy into what you’re doing so this wonderful policy that you’ve enacted is actually implemented in your organization and not just sitting on a piece of paper in a drawer somewhere.”

Whether you have one person or a group of people at the top, their role should be to keep abreast of AI developments and understand what’s happening with the technology and

the law, then making sure the policy is re ective of that. To that end, the panel agreed that it’s important to not just add this role to a General Counsel’s portfolio of duties but rather make it a separate and distinct role from existing counsel.

Chandler advises a two-tiered approach to AI governance. That means having someone oversee the day-to-day work of running the business, enabling

them to make more nimble decisions on things like whether you can use a particular AI tool, such as Copilot, for drafting emails but not for writing code. Then, anything that requires heightened scrutiny should go up to a higher tier of governance, such as the C-suite or a committee-level approach.

Greater scrutiny might be needed when you’re dealing with use cases around hiring or ring decisions, or you want to use an AI tool to automate something or deploy a tool that is impacting safety or health or human rights.

“What you’re trying to juggle is legal compliance with best practices, business implications and AI for process improvement,” Chandler said.

One of the challenges a lot of companies are experiencing is nding the right person with the knowledge and expertise to lead the day-to-day AI function.

‘We’ve had many conversations with clients where an in-house attorney has suddenly been tasked with leading arti cial intelligence and their No. 1 question is, ‘what is AI?’” Evans said. “So, it can be really challenging to get the right person in that role. That’s where you need to either up-skill your existing employees or go into the market and nd someone who has the quali cations to do the job properly.”

Rawoof advises many smaller clients and emerging growth companies that are newly public and may not have the full C-suite to be able to set up an AI commission or team. That’s where the role usually falls on the general counsel, he said. “In those cases, a law rm like ours can be a resource to help support people, and there are also a lot of great consultants in the eld that we often work with.”

Alison Evans, Partner, IP at Benesch

Michelle Kaiser Bray, OPENLANE VP, IP & Technology Counsel, Chief Privacy Of cer

Government regulation of AI

There are only a handful of states that have decided to tackle AI so far, but Benesch’s AI Commission speculates that in ve years, there will be either a federal omnibus regulation over AI use or there will be state-by-state mandates similar to how privacy laws are dictated. This means that any company that hasn’t already created an AI policy will then be mandated to do so for compliance purposes.

To date, there have been a few pieces of federal guidance on AI issued. Last October, the Biden-Harris Administration issued an executive order directing the Department of Homeland Security to lead responsible development of AI. The order promotes the safe, secure and trustworthy development and use of AI to protect Americans’ privacy, secure consumer and worker rights and promote innovation.

In March, the federal government’s Of ce of Management and Budget (OMB) released Memorandum M-24-10 (Advancing Governance, Innovation and Risk Management for Agency Use of Arti cial Intelligence). The memo directs agencies “to advance AI governance and innovation while managing risks from the use of AI in the federal government.”

While not law, both of these have been owing through federal agencies, Chandler said, and they have implications for the private sector, as well.

“The federal government is the largest consumer of technological goods and products in the U.S., and this guidance is indicating what they view as important with AI governance,” Chandler said. “So, I’m counseling clients to keep an eye on this federal guidance because that is most likely what private sector regulation will look like. It may not be binding on your business, but it’s directionally important to understand.”

Rebecca Riegert, Executive Principal & Associate General Counsel at The Options Clearing Corporation

While the delay in federal laws and guidance on AI — and the subsequent patchwork of guidance — can be sti ing to innovation, it also can be a handicap in the highly regulated industries, Riegert noted.

“We don’t want people to not use AI, but we want them to use it in a safe and transparent way,” she said. “That’s why having some federal guidance to follow would make it easier for a company to go about creating a policy without then having regulators come in and deem them out of compliance.”

It’s also possible that the U.S. may issue industry speci c guidance on AI before it enacts a federal law, Evans said. “I would venture to guess that the development of AI law is going to probably follow what we saw with the development of privacy laws. In that case, as now, the European Union led the way before the U.S. followed.”

In March, the EU nalized the AI Act, which became the rst-ever legal framework on AI. Its goal is to regulate the ethical use of AI, and it may in uence future U.S. law on matters such as transparency, data quality, human oversight and accountability.

Before any U.S. law goes into effect, the Federal Trade Commission (FTC) may step in as well, Sulkin said. They may use their Unfairness and Deceptive Acts or Practices authority to enforce privacy and security matters in the AI space.

Real world implementation and ethics

When you’re using AI for decision-making, you must be mindful that the output and information you’re getting from these tools is only as good as the information that’s going in. “There is a real risk of bias, there’s a risk of hallucination, false and misleading information,” Evans said. “This means you have to be thoughtful of that reality when you’re drafting your policies.”

AI tools can produce many ef ciencies and opportunities, but they have limits. “When you’re drafting AI policies, you can’t think of these tools as a substitute for the human expertise that is needed to ensure ethics and compliance,“ Evans said.

When implementing AI at OPENLANE, Bray and her team began by acclimating the new guidelines with their company culture. One of those enterprises is developing an AI training video that brings back “Fields,” an animated computer character who rst appeared in OPENLANE’s Privacy Pam® privacy training tutorials. The other practical component of their AI integration is an ongoing Zoom call once a week, where anyone can show up and join the AI task force for 30 minutes. It’s an opportunity to present ideas and get guidance on how to navigate the process within the company.

“It seems to be working pretty well,” Bray said. “We’ve had some hiccups, for sure, but we’re learning from those.”

In the nancial services industry that Riegert works and advises in, she suggests two rst steps when embarking on creating an AI policy. The rst is

assessing your organization’s risk appetite, and the second is to start talking to your regulators to ensure that your policy will pass muster.

She likens the process to the cloud migrations and other large tech initiatives nancial services companies, such as the Options Clearing Corporation, undertook in the past that required an ongoing dialogue with regulators.

Riegert thinks that while the nancial services industry won’t be early adopters of AI due to regulatory oversight, they’ll slowly get there. The path forward involves looking at very speci c use cases, making sure there’s comfort with where the policy sits and how they’ve structured it. They will start small in a lower-risk area of their business and expand slowly, making sure to communicate with regulators along the way.

“For nancial services rms, it’s important to understand why you made the decisions you made. What are your risk management practices? What are you doing from a privacy and cybersecurity perspective to make sure you’re comfortable with implementing said use case and AI.”

Potential pitfalls of AI

The panel was asked by Kirk to share some of the most common AI pitfalls. The participants highlighted the various risks and precautions that companies should consider when developing AI guidelines or policies:

• Contractual clarity and limitations of liability are critical when integrating AI tools into business operations.

• Vetted and approved AI tools ensure cybersecurity standards are met. AI introduces new cyber risks that demand heightened security efforts.

• Regular security and privacy assessments are mandatory to mitigate vulnerabilities in AI environments.

• Human oversight and backup plans are necessary to manage AI tool failures effectively.

• Deep fake technology poses signi cant phishing risks that require advanced security protocols.

Compliance and enforcement

Finally, the panelists addressed the question of how companies can ensure compliance with both internal AI guidelines and external regulations.

It’s crucial to train people to use the technology because if they don’t understand it, they’re not going to be able to comply with it. “Employees come at AI from varying levels of background, so you must assume that no one has prior knowledge, or maybe their knowledge is incorrect,” said Rawoof. There should also be an acknowledgement form or a box to click to ensure people have read the policy, he explained. Then, follow up with surveys or focus groups to see how people

are using AI, whether they understand the policy and whether they’re complying.

One of the best ways to get the buy-in is to celebrate the technology and innovation and bene ts it can bring to the company, Chandler said. A couple of his clients rolled out their policy with monthly or quarterly meetings to talk about AI and introduce employees to the tools. The vendor demos focus on what you can do with the technology, not what you can’t do with it.

Create an AI sandbox where teams can experiment with the new technology in a safe environment. It allows employees to get involved at the front end and champion it. That will help enable and facilitate the use of AI toward the business’ strategic goal, which is the end-product.

“Get it out in the open, so people don’t have to hide their use case and because it’s then easier to map and track,” Chandler said. “It is easier to enforce an AI governance policy if you know what everyone is doing with the technology.”

Harnessing the Bene ts of AI

The development of a smart corporate AI policy is crucial for businesses aiming to effectively navigate the rapid evolution of AI technology. As highlighted by the experts of Benesch Law’s AI Commission and their guests, companies must be proactive in creating adaptable policies that ensure responsible AI usage while balancing innovation and compliance.

Corporate AI policies should be regularly reviewed, comprehensive in scope and supported by cross-functional stakeholder involvement. By prioritizing a exible approach, continuous education and strategic governance, businesses can harness the bene ts of AI while mitigating potential risks. Ultimately, this will foster a culture of secure, ethical and innovative AI adoption.

Kris Chandler, Benesch AI Commission Chair & Senior Managing Associate, IP

Benesch’s AI Commission: Helping You Navigate the Future of AI with Confidence

As AI technologies revolutionize industries worldwide, Benesch is at the forefront, guiding clients in identifying issues, addressing AI risks, leveraging opportunities and resolving disputes. Benesch’s multidisciplinary AI Commission combines deep legal knowledge, tech know-how and incisive strategic business solutions to empower clients to safely and effectively deploy AI tools, enhance operations, drive growth and optimize customer experiences. With our nger on the pulse of proposed laws, evolving regulations and emerging trends, we ensure you’re positioned for success in the rapidly changing AI landscape.

Benesch AI Commission Focus Area Leaders

Daniel Marks Intellectual Property (Ownership & Litigation) Regulatory

Lidia Mowad Intellectual Property (Ownership & Litigation)

Alison Evans Governance Contracting

Ryan Sulkin Contracting Data Privacy & Cybersecurity

Kris Chandler Data Privacy & Cybersecurity

Aslam Rawoof Corporate

Katie Berens Litigation

Juan Andres Mata Litigation

Kelly Noll Real Estate

Rick Hepp

Vince Nardone Healthcare