CCB 2024-11-11

Here’s how True Value went bankrupt

The retailer’s downfall began with a $229M infusion from private equity six years ago

By Ally Marotti

Six years ago, True Value was fresh o a $229 million private-equity infusion, with plans to open distribution centers and invest in its supply chain. But after product shortages zzled the pandemic home renovation craze, those plans went awry.  e Chicago-based home improvement company with almost 170 years of history led for Chapter 11 bankruptcy protection in mid-October. It is seeking to sell its business to Do It Best, a

hardware rival that o ered to pay $153 million in cash for its oundering competitor. True Value has warned that if that deal falls through and it fails to nd another buyer, it could lay o 900 employees.

ough most hardware companies have seen sales slow since the pandemic — Home Depot, a company with 10 times True Value’s revenue, has reported declining same-store sales for seven straight quarters — experts say True Value's problems likely began around the time it received

that capital infusion in 2018.

Long owned by a cooperative of retailers, True Value sold 70% of the company to Acon Investments, a private-equity rm with companies such as retailer Spirit

Halloween and cooler company Igloo in its portfolio. True Value used that money to invest in its supply chain and shift its business strategy toward wholesale.  e company built new distri-

bution centers and started using a centralized hub to more eciently ship products. It moved online shopping to the local level, to try to tailor the shopping experience.

But hardware stores can be a tricky business to supply. e weather triggers demand for many of the products — think snow shovels or garden spades — and the arrival of, say, the rst snowfall or springtime is hyperlocal and unpredictable. Success hinges on having those products in the stores at exactly the right moment. With big-box competitors like Lowe’s and Home Depot

GREG HINZ

Augie and Sylvia Emuwa near their new home in North Carolina

With D.C. clout gone, Chicago and Illinois are now entering a new era. So is the CTU.

TGreg Hinz

o call it a political earthquake would almost be an understatement. e results of last week’s election will roil Chicago in massive ways. ey suggest a rocky road ahead for Mayor Brandon Johnson, likely leave the city and state with an unprecedented lack of clout in Washington, raise questions about the future of U.S. Sen. Dick Durbin and Gov. JB Pritzker, and portend huge and, to some extent, con icting impacts on the area’s business community.

And that’s just the top line. Let's start local.

After a stretch in which the Chicago Teachers Union has appeared to all but own City Hall, the union nally had its wings clipped on Election Day. ough leaders tried to spin it di erently, the fact is that CTU-backed candidates lost six of the 10 seats that were up for election on the Board of Education, with indepen-

Tdents or those backed by charter school advocates capturing the majority.

At a minimum, that means in the short run the board will have some members who don’t owe their loyalty to the CTU or Johnson, a former CTU organizer who will appoint the other 11 members. And in the long run, it suggests races will be competitive when the entire board is up for election in 2026.

e sense that the clout of his biggest backer may have peaked will not be helpful to Johnson as he wrestles with trying to get City Council members to approve a proposed city budget that includes a $300 million property tax increase and as he prepares for a presumed re-election race that’s now just over two years away.

Also in the negative column for Johnson: the fact that Chicago and especially Latino-majority wards moved to the political right in the election, with Donald Trump getting roughly 22% of the vote in Chicago, up 7 percentage points from four years ago.

Meanwhile, Trump got roughly 30% in suburban Cook County and cut into Joe Biden's 2020 margins by

sometimes double-digit percentage points in the collar counties.

Speaking of clout, Illinois’ in uence on Capitol Hill and in the White House largely vanished on Election Day. at’s assuming the GOP retains control of the House, something that as of this writing appears likely but not yet certain.

In past tidal-wave elections, even blue-leaning Illinois always had enough friends on both sides of the aisle to get its needs attended to if not fully met — folks such as former GOP House speakers Bob Michel and Denny Hastert, or House Ways & Means Committee Chairman Dan Rostenkowski, a Democrat. Not now. So total has been the state’s tilt toward Democrats in recent cycles that only a handful of downstate congressmen have R behind their name, not one of whom is high-ranking.

Similarly, heavy campaign funders such as industrialist Ron Gidwitz and hedge fund mogul Ken Gri n have moved to Florida, while others, with the possible exception of big-giver Richard Uihlein, have retired. at means no Illinoisan is high up in GOP congressional circles, and none (possibly except-

ing the state’s GOP national committeeman, Richard Porter) is viewed as particularly tight with Trump.

e bottom line is that Illinois business largely will be on its own as the president-elect unrolls his government agenda.

e move to cut taxes and government regulations will be popular; Wall Street the day after the election certainly seemed to think so. But the electric vehicle business upon which Illinois has placed a big bet will be in for a hit if Trump is taken at his word. So may other industries that depend on big federal spending, such as biotech research.

Arguably in better shape is another emerging industry that Illinois has made a big move to lure here: quantum computing. But local government agencies that depend on federal largesse (i.e., public transit) could end up friendless, with federal aid programs on the cutting block.

Uncertain is what’s next for the state’s top two Democrats: Senate Judiciary Committee Chairman Durbin, and Pritzker.

Durbin, now 79, has been widely

e Bears’ brightest star this season doesn't

hey’re 4-4, with two straight dispiriting losses and nine games remaining, as of press time. Six of them are division games, and a seventh is against the defending NFC champions.

e Bears are not who we thought they were.

You there, the guy who writes this stu , the “sage” who forecast 10 wins — grab that dunce cap and go sit in the corner.

As a Bears season careens toward the intersection of Disappointing and Yet Again, a blast from the past is one of the few bright spots.

Whether it’s TV — he seems to be everywhere — or his weekly radio spots with Mully and Haugh on 670 e Score (WSCR-AM), Dave Wannstedt is not to be missed. e former Bears coach has become the football version of Ozzie Guillen, a studio analyst o ering real knowledge, un ltered passion and entertaining

Corrections

candor, delivered in pure Pittsburgh-ese that remains his language of choice even as his work has taken him all over the country.

To say “inimitable” Pittsburghese would be inaccurate. When I worked at the Tribune, every colleague in the sports department seemed to have a “Wanny” impersonation, some of them quite good. I was absorbed in a postgame monologue on TV one Sunday afternoon when I realized the volume was down and Joe Knowles was “doing” Wanny from his seat at the layout desk.

You can catch him on FOX, the Big Ten Network or Marquee Sports Network, but last week’s appearance on NBC 5 Chicago’s "Sports Sunday" broadcast was vintage Wannstedt. He was incredulous that Commanders receiver Noah Brown was left on his own in the end zone, free to catch the carom of the Hail Mary QB Jayden Daniels launched from 60 yards away to beat the Bears in a game they appeared to have in hand.

“You’ve got to box him out,” Wannstedt fumed, “box” coming out as “bawks” in high-dudgeon

◗ In Crain’s Notable Health Care Leaders section that published in the 11/4 issue, Theresa Forthofer’s name was misspelled in her profile.

◗ In Crain’s Notable Health Care Leaders section that published in the 11/4 issue, Guriqbal “Bal” Nandra’s name was misspelled in his profile.

Pittsburgh-ese. He then proceeded to stick his rump in host Mike Berman’s tummy and back him off as efficiently as Dennis Rodman might have bawksed out Karl Malone in a Bulls-Jazz

expected to retire after his current term is up in 2026. at timetable could be expedited as Durbin loses his Judiciary gig and will become a member of the Senate minority, never a desirable spot after years of waving the chairman’s gavel. If Durbin were to leave early, Pritzker would appoint an interim senator. at could be himself, even though Pritzker enjoys being a chief executive.

With Trump term-limited, many insiders expect Pritzker to almost immediately begin an uno cial run to succeed him in 2028. But there’s no unanimity on whether his prospects would improve if he ran for and won a third term as governor in 2026 or instead retired temporarily to private life.

In the short run, Pritzker has his own looming budget problems. Even though Republicans appear not to have cracked Democratic supermajorities in the state House or Senate, the state is short of cash to pay for all of its own needs much less spend more on transit and schools, as Johnson and others want.

Add that to the fallout from an election whose impact will resound in a way few others have.

even play for them

playoff game.

Channel 5 was so taken with the exchange that they used it in promos for the show all week.

Here he is one day after that takedown, just as blistering:

John Madden is best remembered for his exuberant sonic”boom” delivery — the old Raiders coach loved football and

See MCGRATH on Page 11

“Wintrust,

MARC SCHULMAN – PRESIDENT, ELI’S CHEESECAKE

DAN MCGRATH ON THE BUSINESS OF SPORTS

Dan McGrath

Middle Brow planning new Southwest Michigan outpost

The new location, outside of Sawyer, will roughly quadruple the Logan Square pizzeria’s winemaking capacity

I By Ally Marotti

On most restaurant wine lists, Midwestern selections are few and far between. Middle Brow is trying to change that.

e Logan Square brewery and sourdough pizzeria is planning to open a new location in Southwest Michigan. ere, on a 1-acre property along Red Arrow Highway outside of Sawyer, Middle Brow plans to open a facility that could quadruple its capacity to make wine, using mostly Michigan grapes.

It’s an undertaking that owner Pete Ternes hopes will do more than just expand Middle Brow’s customer base. He wants to lead the charge to in ltrate restaurant menus’ wine sections with local options.

“Everybody talks about local food, and beer is such a local thing,” he said. “It’s like the entire other side of the menu and revenue stream for every ne-dining restaurant, even middle-of-the-road restaurants in Chicago, is missing that local element.

“We want to support our farmers on the beverage side, too.”

In Fulton Market, a sign prices may be tipping downward

A recent sale suggests developers may not be willing to pay the eye-popping amounts they were before interest rates spiked and pre-pandemic

By Danny Ecker

Fulton Market District development sites are still some of the most expensive in the city. But a recent sale suggests they’re not as valuable as they were a few years ago.

A venture led by Sulo Development paid $29.9 million last month for the vacant property at 1325 W. Fulton St., according to Cook County property records. Sulo bought the 1.7-acre city block from Chicago developer Sterling Bay a few weeks after proposing a three-tower residential building on the site with as many as 243 condominium units — the largestever condo project pitched for the former meatpacking neighborhood.

e sale price nets a tidy pro t for Sterling Bay, which bought the property in a 2014 deal that valued the site at just $2.2 million, property records show. e corridor at the time was in the infancy of its evolution from a gritty industrial thoroughfare into a trendy hotbed of o ces, hotels and restaurants. But at about $400 per square foot, the deal also signals developers may not be willing to pay the eye-popping amounts they were before. Other nearby development sites in Fulton Market regularly traded for more than $500 or $600 per square foot before interest rates spiked, and prior to the COVID-19 pandemic when soaring rents for new o ce developments in the neighborhood justied such prices.

Sulo’s deal for one of the last large empty sites in Fulton Market shows land values have dropped o a bit as nancing challenges for new projects keep many de-

velopers on the sidelines.

“It’s probably more in line with where land values are due to interest rates, high construction costs, nancing (issues) and carrying (time) to get it entitled” with new zoning, said Scott Maesel, a broker with SVN Chicago Commercial who has sold a number of properties in Fulton Market but was not involved in the 1325 W. Fulton deal. “It’s just reality.”

Sulo’s deal for one of the last large empty sites in Fulton Market shows land values have dropped off a bit.

Oakbrook Terrace-based Sulo, which has developed other highend condo buildings nearby in the West Loop, still needs the City Council to sign o on its planned development at 1325 W. Fulton. e project on a site that is used today as a surface parking lot would include towers rising 538 feet, 438 feet and 301 feet, according to a zoning application.

e for-sale unit proposal stands out at a time when many developers are building apartments in Fulton Market to capitalize on strong rental demand. Sulo’s proposal is across the street from a property at 220 N. Ada St., where Chicago developer Shapack Partners broke ground earlier this year on a 29-story apartment building.

Sulo Principal Dominic Sulo, who is also a commercial

See FULTON on Page 21

Illinois to create health insurance exchange marketplace

The transition, which began last year, could help ll coverage gaps and lower plan costs for state residents starting in 2025

By Katherine Davis

e state of Illinois is in the midst of a transformative project to establish a state-based health insurance exchange marketplace that it says could help ll coverage gaps and lower plan costs for residents throughout the state.

e two-year transition, operated by the Illinois Department of Insurance, won’t change much about the enrollment process this season, which runs Nov. 1

through Jan. 15. Customers will still select and enroll in health plans through the federal government’s website, HealthCare.gov. But next year, once the federal government approves the full transition and the state takes over various marketplace functions and responsibilities, Illinoisans will enroll on the state’s new Get Covered Illinois website. For now, the Get Covered Illinois page redirects consumers to HealthCare. gov. e IDOI plans to hold public

informational sessions about the transition process in the coming months.

e transition, which began last year, re ects a nationwide shift. More states, including Georgia and Pennsylvania, have created their own marketplace exchanges in recent years in lieu of using the federal marketplace. As of August, 23 states had created their own exchanges or were

Middle Brow wine

Equinox inks deal for new Fulton Market location

It’s a milestone in the neighborhood’s next evolution into a broader, mixed-use district with a burgeoning population

By Danny Ecker

High-end tness chain Equinox is opening its rst location in the Fulton Market District, planting its ag in a trendy neighborhood set to welcome a rush of new residents.

e New York-based company has leased 40,000 square feet on the rst and second oors of the o ce building under construction at 919 W. Fulton St. where it plans to open its fth Chicago gym in 2026, according to a statement from Fulton Street Cos., the property's developer. e deal will bring a new luxury tness brand to the once-gritty meatpacking corridor as new apartment high-rises ood it with foot tra c from renters.

It's a milestone in the next evolution of Fulton Market from a domain of o ces, trendy restaurants and hotels into a broader, mixed-use district with a burgeoning population. More than 2,000 apartments are now being built or were recently completed in Fulton Market, according to data from appraisal and consulting rm Integra Realty Resources. Equinox's pending arrival to serve the people who will rent those units highlights Fulton Market's transition into a more

well-rounded neighborhood.

"With the number of apartments planned and already delivered, and an in ux of residents, it's the perfect time to introduce a facility that caters to their tness needs," Fulton Street Cos. CEO Alex Najem said in the statement. His rm is developing the 11-story building in partnership with Chicago-based JDL Development and investor Shanna Khan.

Fulton Market has limited tness o erings today, including the Soho House hotel and private club, the West Loop Athletic Club near the neighborhood's western edge and a mix of smaller tness studios.

Crain's rst reported Equinox's negotiations for the 919 W. Fulton location in May, noting the pivot from the company's long-standing plan to dive into Fulton Market with Related Midwest. e Chicago real estate developer — whose New Yorkbased parent company, Related Cos., is a majority investor in Equinox — has touted the gym operator for years as a key piece of a big planned development at 725 W. Randolph St., a few blocks from Fulton Street's project.

Equinox's involvement in that site dates back to 2015, when Related rst began publicly discuss-

ing a mixed-use project there with an Equinox Hotel and residential condominiums. e City Council approved a tweaked version in 2020 that eliminated condos but included apartments and o ce space.

en Related changed its plan during the COVID-19 pandemic with a new vision for a 41-story, 1 million-square-foot o ce building with a two-story Equinox Fitness Club & Spa.

Equinox's deal at 919 Fulton may be unsettling for Related, though the new location doesn't preclude Equinox from eventually having a presence at the Randolph Street tower. at project could still come together if the developer can prelease a portion of the building to land nancing.

A Related Midwest spokeswoman declined to comment.

In the meantime, Equinox is set to move into a building that's on track to be completed by March. An Equinox spokesman

did not respond to a request for comment.

Fulton Street, JDL and Khan broke ground last fall on the building running along the east side of Sangamon Street between Fulton and Lake streets. Private-equity rm Harrison Street Real Estate Capital previously inked a 100,000-square-foot lease to anchor the project, and Gibsons Restaurant Group is also set to open a location in the building.

Despite the remote work movement and record-high vacancy making it a di cult time to land nancial backing for new o ce buildings, the developers last year secured a $233 million debt package for the project led by Little Rock, Ark.-based lender Bank OZK. Toronto-based investment rm Manulife provided a mezzanine, or junior, portion of the debt.

Founded in 1991, Equinox has grown into a well-known luxury tness chain with 109 tness clubs around the world, accord-

ing to the Fulton Street statement. Equinox has four Chicago locations today, including one in the Loop, one in the Gold Coast and two in Lincoln Park.

Equinox announced in March that it had raised $1.8 billion in new capital to re nance maturing loans and help fuel expansion with new clubs. Investment rm Sixth Street and private-equity rm Silver Lake led the funding round, and principals of Related Cos. also put money into the capital raise, according to an Equinox statement announcing the new funds.

Equinox said in that statement that the company's revenue increased by 27% in 2023 and saw member engagement at a higher level than during any previous year on record.

Todd Siegel of CBRE negotiated the new lease on behalf of Equinox. Matt Pistorio, Adam Pines and Abby McFadyen of leasing agency Madison Rose represented the developers.

Retired Blackstone exec, JDL set to buy Old Town apartments

The pending purchase will mark the rst time Cobbler Square Lofts, owned by late billionaire Sam Zell, has changed hands in decades

By Rachel Herzog

A former Blackstone executive and a proli c Chicago development rm are teaming up to buy an Old Town apartment complex that was owned by the late billionaire investor Sam Zell.

A venture including local investor John Schreiber and JDL Development is under contract to buy Cobbler Square Lofts, a 292-unit apartment complex at 1350 N. Wells St., according to sources familiar with the pending deal. e price is said to be close to $90 million.

e transaction will mark the rst time the property has traded hands in decades, giving the new owners an opportunity to capitalize on strong rental demand in the popular North Side neighborhood.

Built in 1889 and serving as a

shoe factory and headquarters for Dr. Scholl’s, the property was converted to apartments in the 1980s, and property records show that entities tied to Zell, who died in 2023, have owned it since then.  JDL Development founder and CEO Jim Letchinger declined to comment. Schreiber didn’t respond to a voicemail seeking comment. A spokesperson for Zell’s former rm, Equity Group Investments, didn’t respond to a request for comment.

e pending deal is set to be the second time Schreiber and JDL will team up for an apartment acquisition this year. A venture including the investor and developer bought the Parker, a 227-unit luxury apartment building in Fulton Market, for about $93 million in September.

Schreiber retired as partner and co-founder of Blackstone Real Es-

tate Advisors in 2015 and is now president of his Lake Forest-based family o ce, Centaur Capital Partners. CoStar News rst reported that he was under contract to buy Cobbler Square Lofts.

JDL’s high-pro le projects include the massive One Chicago development in River North and the Gold Coast condo building at

9 W. Walton St. e rm is also co-leading the development of an 11-story o ce project at 919 W. Fulton St. in Fulton Market.

JDL intends to carry out a value-add renovation plan of Cobbler Square Lofts, according to sources. e property was renovated in 2009, and a marketing brochure touts a potential buyer’s

opportunity to upgrade the units to increase rents, as well as to build more units on top of an existing parking garage on the property. e apartments are 94% occupied, according to the yer.

In the North Lakefront submarket where Cobbler Square Lofts is located, rents rose by 3.3% year over year in the third quarter of 2024 with very few new apartment units under construction, according to data from real estate information company CoStar Group. Cobbler Square Lofts was offered for sale with the opportunity for the buyer to assume the seller’s mortgage on the property, a Fannie Mae loan that carries an interest rate of 3.8% — likely lower than what an investor would be able to get on a new loan today — and a 2034 maturity date. Details of how Schreiber and JDL’s pending acquisition of the property is set to be nanced weren’t clear.

Jones Lang LaSalle brokers Mark Stern, Kevin Girard and Zachary Kaufman have been marketing Cobbler Square Lofts for sale.

Cobbler Square Lofts | COSTAR GROUP

Karen Murphy of the Chicago Bears As Kuma’s Corner closes in Fulton Market, what’s next?

Murphy is chief operating of cer and executive vice president of stadium development for the Chicago Bears, overseeing the team's proposed $4.7 billion lakefront stadium campus. The plan calls for a domed stadium and 14 acres of public athletic elds and park space. Murphy lives in Wilmette with her daughter, 19, and son, 17. I

By Laura Bianchi

How do you feel about running point on the stadium project?

I am thrilled and honored. is will certainly be one of the most memorable projects of my career.

How did you get into sports?

I grew up in Sun Prairie, Wis., outside of Madison. It was a farm town of 12,000 people back then. ere wasn't much to do, so we made our own entertainment. For me and my family, that was sports. We watched professional teams, and as a Title IX bene ciary, I played on my high school's rst girls' soccer and varsity golf teams.

Your path to the Bears?

My second job was with Disney in Los Angeles, which owned ESPN+, the (MLB's) Angels and the (NHL's) Ducks. e rst week on the job, I begged management daily to work on the sports side of the organization, and it worked. But it was only a six-month job. Then what?

I loved what I was doing, so I sent out over 80 résumés to national teams and talked to every headhunter represent ing sports. I wouldn't take no for an answer. e Bears o ered me a job more than 25 years ago.

What sparked that drive?

I was raised by really powerful, brave women. My mom didn't work, but she was a leader at the church and an active volunteer in our community. My grandmother was asked to play on the All-American Girls Professional Baseball League, the rst and only of its kind, which launched in 1943.

What is it like working in a male-dominated eld?

During my rst 20 years here, I was almost always the only woman in the room. It motivated me to always garner respect and prove why I deserve to be at the table.

A funny moment?

When I was pregnant with my daughter, I asked for details about the Bears' maternity leave policy. ey said they didn't have one. I told them I would need 12 weeks o with pay and exible hours for day care pickups. ey had never heard of ex time. at experi ence inspired me to take on HR

and help shore up those policies. Worst job ever?

Weeding corn elds and detasseling corn. At the start of summer, I pulled weeds that could be as tall as I am, on my knees, for eight hours a day. Toward the end of summer, I spent eight hours on machines in full sun, pulling the tops o the stalks. I often took Advil at lunchtime for the headaches.

Why do such hard work?

It was the only place that would hire you at 14, and I had a limited clothing allowance.

Massive burgers and loud metal didn’t cut it there after seven years

By Brandon Dupré

Kuma’s Corner, the Chicago burger chain known for loud metal music and massive burgers, closed its Fulton Market District location on Oct. 31 after seven years in the trendy neighborhood.

A combination of soaring rents, decreased lunch tra c as workers went remote and changing sensibilities in the West Loop took its toll on Kuma’s, which offers craft beer and $20 burgers, at 852 W. Fulton Market.

“You have to sell steak and lobster to survive in the Fulton Market District these days,” said Ron Cain, owner of Kuma’s Corner. “In the end, you really can only charge so much for a burger.”

Cain said he now wants to focus on solidifying its three locations — the original on Belmont Avenue in Avondale, one in Schaumburg and another in Indianapolis — while rolling out some new o erings.

Kuma’s will now o er catering out of its Schaumburg location following the success of weddings and corporate catering from the Belmont location, which has so far drawn more than $300,000 in catering revenue this year, according to Cain. He said the Schaumburg location is already his best-performing location and the addition of catering could boost the margins.

Since the COVID-19 pandemic, restaurants have increasingly looked to catering o erings as a way to grow margins in an already tight industry. “Demand has only grown as public events and gatherings returned,” said Darren Tristano, CEO of research and consulting rm Foodservice Results.

Cain said the company has also rolled out a kids menu for the rst time, a bit of a departure for a brand built on anti-establishment bona des. “We got a little bit of pushback online, but the general response has been overwhelmingly positive,” he said.

“People evolve and get older and have children,” he said. “It’s an evolution of the brand.”

Earlier this year, parent company Kumas Holdings filed for

Chapter 11 bankruptcy. The bankruptcy filing shows $3.5 million in total liabilities.

Cain said the ling was primarily to restructure debt associated with the closing of Kuma's suburban Vernon Hills location in 2022, which he said was hard-hit by the pandemic. But he said the company isn't going anywhere. While his focus is on the three existing restaurants, Cain said there are some ideas the group is exploring, including another suburban location, a food truck and another out-of-state venture. “ ere are a lot of things on the table right now, but nothing we are actively pursuing yet, nothing concrete,” he said. "Right now we're really just focusing on delivering the excellent food we're known for at our three locations."

Chicago’s Economy: Local Insights to Guide the Year Ahead

Don't miss this new approach to economic research with exclusive data-driven insights for labor supply and consumer demand across greater Chicagoland, industry-specific productivity updates, and important opportunities and ideas to enhance growth.

Jeff Korzenik, Chief Economist Fifth Third Commercial Bank

BREAKFAST EVENT FOR BUSINESS EXECUTIVES FEATURING:

Gerald Cohen, Chief Economist UNC Kenan Institute of Private Enterprise

MODERATED BY: Wednesday, November 20 | 7:15 to 9:30 a.m. University Club of Chicago, 76 E. Monroe Street Cathedral Hall - 9th Floor

Jim Kirk, Group Publisher, Crain’s Chicago Business

Exterior of the now-closed Kuma’s Corner at 852 W. Fulton Market TONY SOLUR

e people who pay the bills scored some wins in the city’s school board election

The Chicago Teachers Union was one of the entities that pushed for the idea of elected school boards back in the day, seeing the ballot box as a lever to wield against 30 years of mayoral control over the Chicago Public Schools system.

e results of the city's rst-ever elections for seats on the Chicago Board of Education now appear to be proof of the old adage: Be careful what you wish for.

e outcome was a decidedly mixed bag for the CTU, which had bankrolled a slate of candidates sympathetic to the union's desire for more pay, for blocking school closures despite recent demographic trends that suggest we may have more schools than we need, and for pumping more money into neighborhood schools even if that means large-scale borrowing.

In the end, voters selected 10 people to serve on the city's partially elected, 21member school board. Of those, only four were backed by the CTU. ree are proschool-choice candidates, and three are independent candidates.

e winners will join 11 other members named by Mayor Brandon Johnson, the former teacher and CTU organizer who appointed a slate of board members in

PERSONAL VIEW

September after the previous board resigned en masse rather than cave to pressure from the mayor and his CTU allies to re Chicago Public Schools CEO Pedro Martinez. Among those hastily appointed board members was Mitchell Ikenna Johnson, who became board president only to

resign days later when his past antisemitic and misogynistic online comments surfaced — revealing what the mayor admitted to Crain's was a "gap" in the vetting process.

With 10 elected board members set to be sworn in, there are now questions over how

CHICAGO PUBLIC SCHOOLS

the mayor will ll the remaining 11 seats. As Chalkbeat Chicago points out, we may not know the answer for another month, because state law gives Johnson until Dec. 16 to make his appointments. It's possible some of his previous picks will remain. It's also possible he could appoint some of the CTU-friendly candidates who were defeated at the polls. Regardless, it has to be hoped he and his team will do a better job of scrutinizing the backgrounds and public utterances of any candidates before placing them in such an important role.

Going forward, the mayor will still hold signi cant control of the school system as it transitions away from three decades of the Fifth Floor's total control, with 11 appointments and four ideologically aligned elected members ready to follow their marching orders from the mayor and the CTU. at said, there's one silver lining in the latest election results: ere will now be at least some school board members who will represent taxpayers when setting school policy in Chicago. ey might not be great enough in number to prevail on every issue, but their voices will be heard — and it's possible they'll be joined by even more such voices when the board becomes fully elected by 2027.

To solve Illinois’ higher-ed challenges, look to our aging population

The highly educated workforce in Chicago and Illinois is an oft-cited factor in business location decisions. According to the Illinois Board of Higher Education, the state is home to a total of 71 public educational institutions, including 12 universities and 48 community colleges. Over 100 private colleges and universities call Illinois home as well.

Crain's Chicago Business recently reported that several public universities are seeing enrollment declines of 30% to 50%. Included in this are Northern, Northeastern, Southern and Western Illinois universities and Chicago State University.

on the state for 72% of their funding, while 28% was generated through tuition and fees. A decade later, state support accounted for 36% of funding, with tuition and fees making up the remaining 64% — a complete ip.

Community colleges experienced a similar trend. ese institutions receive substantial support from local property taxes, like K-12 school districts. So, when state aid drops, their options are either to raise tuition, raise property taxes or both.

While this is noble and necessary, the new formula only helps if enough state funding is made available, as the commission acknowledges in its report.

During the state budget impasse in 2015 between then-Gov. Bruce Rauner and then-House Speaker Michael Madigan, higher education funding was reduced by $1.2 billion. According to the state higher ed board, this was just 30% of what was provided in previous years.

O setting this negative trend are a 15% rise in enrollment at the state's agship institution, the University of Illinois UrbanaChampaign, and an 11% increase at the University of Illinois Chicago.

Except for the U of I and UIC, these publics are facing multimillion-dollar de cits. In the absence of extra support from the state, college administrators are left with three options: reducing faculty, eliminating academic programs or raising tuition. is becomes a vicious cycle, as fewer programs and higher tuition discourage student retention and demand.

In scal 2002, public universities relied

When tuition rises, it will disproportionately impact underprivileged students. is can sometimes preclude the pursuit of higher education altogether, thereby widening the knowledge and future earnings gaps between rich and poor in Illinois.

State and advocacy groups recognized this growing inequity, and the state higher ed board created the Illinois Commission on Equitable University Funding in 2022. e commission released its ndings and recommendations in March 2024.

Since then, legislation has been introduced that creates a new state funding formula in higher education, seeking to ameliorate this disparity. In short, higher funding levels will be allocated to universities with students at lower income levels.

e annual appropriation for higher education was approximately $2 billion before the impasse. During the stalemate, that number was less than $1 billion. e state has been playing catch-up ever since.

To his credit, Gov. JB Pritzker has worked to reverse this trend. In scal 2020, during his rst year in o ce, the state increased operating support to public higher-ed institutions by $186 million, or 18%, the largest increase since 1990. In 2024, the state appropriated $2.53 billion toward higher education. is represented an annual increase of $279 million, or 12%. ese increases have been consistent year over year since 2020.

Increases in capital funding and student aid have also been signi cantly increased under this governor.

Yet despite this infusion of cash, the state is still not keeping up with the budgetary impact of the accelerating decline in enrollment. is is certainly true for non- agship

institutions. But this trend is due to a major demographic shift, out of the state's control. e decline in the number of full-time higher-ed students in Illinois has gone from 373,000 to 278,000, a 25% drop, during the 10-year period of 2003 to 2023.  e U.S. Census Bureau recently reported an 11% decrease in the population of 5to 19-year-olds, the largest decline among all age groups.  ere is a clear need for the state to reconsider its education delivery model if the non- agship institutions are to remain viable.

While the picture painted in Crain's article is not pretty, all hope is not lost. If the state capitalizes on changing demographic trends, assets held by universities and technology, there is an opportunity to preserve and enhance the schools in question and the communities in which they are located. Countervailing the projected decrease in college-age students is an elderly population in Illinois, speci cally those age 65 and over, experiencing signi cant growth. Between 2010 and 2022, the number of Illinoisians 65 and older grew by 39%, surpassing all other age cohorts.

Said Paul Basta, the director of the Illinois Department on Aging, in the state's Plan on Aging covering 2022-24: " e fact is our population is living longer

See HIGHER-ED on Page 7

Michael D. Belsky is a former mayor of Highland Park and an expert in urban policy and public nance.

and fuller lives. Since 2000, Illinois' older population (60 years of age and older) has grown from 1.9 million to 2.8 million. It now represents 22% of the population in Illinois. By 2030, it is estimated that the 60 years of age and older population will increase to 3.6 million and will represent 25% of Illinois' population."

Recently, there has been a rise in on-campus education for this population. AARP reports over 100 senior housing facilities are located near or on university campuses. Examples include the University of Alabama, the University of Notre Dame, Stanford University and Duke University. Smaller institutions such as Oberlin College & Conservatory in Ohio; Purchase College in Purchase, N.Y.; and Lasell University in Newton, Mass., are also providing locations for seniors. In most cases, the housing is marketed to lifelong-learning alumni, but nothing precludes others from participating.

ere are numerous mutual bene ts. Elderly learners gain from intellectual stimulation and city-like amenities. College campuses o er access to lectures, cultural arts, sporting events and exercise facilities, among other quality life enhancements.

On-campus senior citizens could be a resource to universities as mentors, tutors and adjunct faculty. In some of the schools mentioned above, senior housing provides employment opportunities for students and in some cases a source for research purposes. For example, social workers and historians can interview these lifelong learners.

Real estate developers and senior living operators can partner with universities and colleges on joint ventures to convert dorms into senior living or construct new housing on campus. Among the 100 entities mentioned by AARP, there are fee sharing arrangements, land leases and outright sales. is provides institutions with a revenue source independent of tuition and state funding.

Considering this landscape, here are my recommendations to the governor, the General Assembly and the state Board of Higher Education.

Right-sizing higher education

In some areas of the state, community colleges should be the sole pathway to a four-year education. Vocational training should remain, but liberal arts and prerequisites for various disciplines should be bolstered. is will provide these institutions with more revenue and assure access and a ordability for lower-income students.

e universities should cater to juniors, seniors and graduate students. is right-sizing must be coupled with eliminating redundant academic programs housed at the non- agship institutions.

Each school should have a distinct pedagogical and research specialization at the undergraduate and graduate levels, for example business administration, engineering, education, arts, media

communications, writing, sciences, medicine, criminal justice and public service.

Technology, online education

Remote education has become the norm at many colleges and universities since the pandemic. According to the U.S. Bureau of Labor Statistics, 76% of students were enrolled in online education or distance learning during the pandemic years of 2019-20. Despite the anticipated decrease post-COVID, the current gure remains substantial, at approximately 50%.

Technology investments in schools during the pandemic have normalized remote class delivery.

Consequently, online junior, senior and graduate courses can be made available for any student who does not have the economic means or practical circumstances to physically attend an institution o ering their specialization.

Adaptive reuse of higher

education-owned real estate

Public universities possess real estate assets which can be monetized through sale, lease or entering public-private partnerships. Many campuses provide amenities like stadiums, music venues, theaters and health facilities.

Given the precipitous decline in enrollment, I am assuming many

campuses have excess capacity in residential housing. Rather than bear the cost of maintaining empty buildings, public institutions should be inventorying their real estate assets for the purpose of converting parts of their campuses into senior housing. By following this approach, they can leverage demographic trends, while simultaneously remaining viable institutions serving college students pursuing degrees and the community at large.

The time to act is now

e state Department on Aging and Board of Higher Education will need to invest both time and money in studying the feasibility of such

a proposal. It will be worth it. Exploring a modernized approach to education can prevent nancial losses, job cuts and the closure of institutions important to the state's economy and quality of life.  In today's ever-changing world of technology, the environment and global politics, higher education is imperative. is must be so in Chicago and all of Illinois if we are to have future generations that can solve intractable problems and provide for equitable and meaningful economic growth. e potential transformation I o er above hopefully helps preserve one of our state's greatest economic attractions: a highly educated workforce.

The State of the Midwest ECONOMY

Chicago M&A activity picks up in third quarter

The local market notched 60 transactions in the period, with Mars’ $36B acquisition of food company Kellanova leading the pack

By Mark Weinraub

Mergers and acquisition activity was up in the third quarter over last year but slowed compared to the rest of 2024 as corporate dealmakers paused to wait for the results of the upcoming U.S. election.

Data from Chicago-based audit, tax and advisory firm KPMG showed 558 U.S. acquisitions were made in the third quarter, down from 621 in the second quarter and 609 in the first quarter.

“What corporates and CEOs need to do deals is con dence,” Carole Streicher, deal advisory and strategy service group leader for KPMG, said in an interview. “Con dence in the economy and in their business, but also con dence in the political situation in the U.S. and the geopolitical situation overseas. When there is a lack of con dence, they are less likely to pull the trigger on a multibil-

lion-dollar transaction.”

Despite the pre-election slowdown, the sector was much more active than the comparable period of 2023 as easing inflation and a stable job market soothed fears about the economy tipping into a recession as many forecasters had predicted. In the third quarter of 2023, only 318 deals were done.

Locally, the data also was bullish, with 60 deals for Chicago companies made in the third quarter of 2024, the second highest of 16 cities surveyed by KPMG. A year ago, 31 deals for Chicago companies were made.

Deal value for Chicago companies also was up strongly, rising to a total of $38.5 billion in the third quarter from $5.9 billion a year earlier. The jump was largely due to Mars’ $36 billion acquisition of Kellanova, the maker of Pringles chips and Eggo waffles.

During the first three quar-

ters of the year, 150 deals for Chicago companies were made, with a total value of $43.1 billion.

The large amount of money sitting on the sidelines, both in the form of cash as well as high stock prices, which companies can use for acquisition currency, will spur a bump in dealmaking once uncertainty around the election is settled.

“There is pressure in the system due to the record amounts of dry powder that private equity has and the high levels of cash on the balance

Why Hightower’s Bob Oros is

The

CEO with a history of dealmaking still sees organic growth as the key to success

By Mark Weinraub

Wealth management rm Hightower's chairman and CEO, Bob Oros, remains cautious about mergers and acquisitions, despite a track record that says otherwise.

“I will never say it is the most cost-e ective way to grow, which is why our primary focus is on same-store sales growth,” Oros told Crain’s in an interview. “If your only growth is acquisitions, I think that is really expensive and I am not sure it ends well.”

e number of deals for registered investment advisers has accelerated in recent years, a trend Oros said is likely to continue due to fragmentation in the market. But discipline remains key before pulling the trigger on an investment.

“It is not doing deals just for the sake of doing deals,” Oros said. “We want businesses that have been proven to be able to grow, because doing acquisitions is just too expensive to buy a business that does not grow. I will never convince myself I can take

somebody who does not grow and turn them into a grower.”

And the growth Oros is looking for is predicated on new customer acquisition or rising investments from existing customers, not the total amount under a company’s control.

“Everybody feels like they are growing when the S&P is where it is at today,” Oros said. “ at is not the kind of growth we are taking about, because as we all know, the market giveth and the market taketh away.”

Despite the high standards Hightower sets for companies it acquires, the Chicago-based company has done nearly 60 deals during the six years Oros has been CEO.

Its latest deal, an investment in De Pere, Wis.-based Financial Planning & Information Services, is the fth Hightower has made in 2024. Financial terms were not disclosed.

Financial Planning & Information Services has $1.1 billion in assets under management, bringing Hightower’s total to nearly $260 billion, and 16 employees. It

sheets of corporates,” Streicher said. “Corporates need to transact for their strategic reasons and for their business models, and there is going to be a forced realignment which will result in valuation expectations coming closer together.”

Additionally, a recent cut in interest rates, with more expected from the U.S. Federal Reserve by the end of the year, will strengthen the appetite for deals.

“There is the desire to do deals, as well as pressure to do deals, and we now have the

right economic environment to do deals,” Streicher said. “There were a lot of headwinds to M&A last year, but in 2025 we are going to have stronger tailwinds.”

But borrowing costs are still much higher than they have been over much of the past decade, which will keep the M&A market from hitting new heights.

“Over the last 10 years we saw record volumes of dealmaking, where cash was cheap and easy to access,” Streicher said. “I do not believe that we will get back to that era.”

picky when it comes to M&A

deals

also gives Chicago-based Hightower, which is backed by private-equity rm THL Partners, its rst o ce in Wisconsin.

Hightower said Financial Planning & Information Services will retain its leadership and its brand.

“We really want them to have day-to-day operating control,” Oros said. “We try to come in and let them continue to do what

they do so well and then be a catalyst for more. We are not going to change how they serve their clients. We are there to really give them new capabilities they can leverage to serve existing clients and nd new ones.”

e company also recently bought a majority stake in Boston-based investment consulting rm NEPC.

But even as the market for dealmaking is forecast to improve with lower interest rates making borrowing costs less expensive, Hightower will not lower its standards for bringing on new partners, or change its priorities.

“Our pillar No. 1 is organic growth, and the pillar No. 2 is right- t M&A,” Oros said. “It is a nice one-two punch.”

Bob Oros HIGHTOWER

Columbia College puts president’s house up for sale

Amid nancial stress, the liberal arts school based in the South Loop is looking to sell a home on the Near North Side it has owned since 2000

By Dennis Rodkin

Columbia College Chicago, the liberal arts school based in the South Loop, is putting its president’s house on the Near North Side up for sale.

The college, whose officials told Crain’s reporter Brandon Dupré earlier last month that selling off real estate assets, including the president’s house, might be part of efforts to close a $34 million budget gap, is asking $2.7 million for the home.

Built in 1895, the five-bedroom house has 11-foot ceilings on the main floor, formal living and dining room, and soundproof windows, according to the listing agent, Meredith Beebe of Jameson Sotheby’s International Realty. That last is an asset on the busy corner of LaSalle Drive and Goethe Street.

e exterior is a Chicago classic, red brick with carved limestone lintels above doors and windows and ornamental details below the roof line. e inside, renovated by the college after it bought the property in 2000, “is modern and move-in ready,” Beebe said. Special features from its use as a mix of o cial residence and event space are a catering kitchen in the basement and an elevator.

left at the end of July after announcing in February he would resign. The Columbia Chronicle reported at the time that Kim’s announcement came a few days after he announced the college might have to cut academic programs and lay off full-time faculty to wrestle with the deficit.

A few months earlier, Columbia students and faculty staged a march from the campus to the president’s house to protest cuts in programs. While at the house, they called for it to be sold and for Kim to resign.

After Kim’s departure in late July, it does not appear interim President Jerry Tarrer moved in, as Lukidis conrmed the house has not been used since August.

Columbia bought the house for $1 million, according to news stories at the time. The school spent $2.6 million in renovations.

e neighborhood, Beebe said, is excellent, with a short walk to Lincoln Park, the lakefront and numerous restaurants, and proximity to the Latin School and Catherine Cook School, both private institutions.

From its location at the corner of LaSalle and Goethe streets, the president’s house is about 2.5 miles north of the college’s primary campus buildings. It has not been used since August, according to Columbia spokeswoman Lambrini Lukidis.

That is around the time KwangWu Kim left the presidency after about a decade in the role. Kim, who was also Columbia’s CEO,

“ e sale of the property is a strategic divestment as part of a comprehensive review of real estate holdings and overall asset management as we prepare Columbia College in the future,” said a prepared statement that Lukidis sent.

Columbia bought the house, which contained the Swedish Club of Chicago for at least four decades in the 20th century, in 2000 for $1 million, according to news stories at the time. The school spent $2.6 million in renovations, it reported in 2003. At the time, the college’s trustees had voted unanimously to put the house up for sale.

Distant from the campus, the house “did not serve my family needs or the needs of the school,”

Warrick Carter, Columbia’s president at the time, told the Chicago Tribune. “I thought it was time we looked for another space that was closer to our school.”

Carter took the presidency the same year the house was purchased, although it appears the deal was struck during the tenure of his predecessor, Mike Duff. Carter stayed at the helm of Columbia until he retired in 2013, but the college did not sell the LaSalle Drive house.

POSITIVE

Illinois program has safety nets testing care model like Oak Street’s

Two health centers in Chicago and a hospital system downstate are learning how to be both a provider and payor through PACE

By Jon Asplund

e rst thing patients and providers need to know about a new, all-inclusive health program for some seniors is: It isn't the suburban bus service.

PACE, the Program of All-Inclusive Care for the Elderly, is at work in three Illinois organizations trying to show that an intensive, hands-on team of providers and caregivers can improve seniors' outcomes and let not-for-pro t providers succeed while taking all the nancial risk for serving a vulnerable population.

e program o ers comprehensive health services for senior residents in certain ZIP codes who would otherwise qualify to live in a nursing facility, "allowing more seniors to continue living at home safely, for longer," according to the Illinois Department of Healthcare & Family Services.

PACE organizations must meet the needs of each participant across all care settings, 24 hours a day, every day of the year, HFS said of the program, which came online in Illinois in June 2023.

e participants are two Federally Quali ed Health Centers, Esperanza Health Centers on Chicago's South and Southwest sides and Lawndale Christian Health Center on the West Side, along with OSF HealthCare in a threecounty area in and near Peoria.

While qualifying Illinois residents over the age of 55 can sign on to PACE at any time, the Medicare open enrollment period that ends Dec. 7 this year is a good time to consider the option, said Jennifer Weiss, vice president of PACE with

Esperanza Health Centers.

For Medicaid recipients, PACE has no out-of-pocket costs, and most participants will be dually eligible for both Medicaid and Medicare.

Beyond traditional care

e program is both intensive and expansive. Teams of providers go beyond traditional levels of care to very hands-on, tightly coordinated care, including providing a dedicated senior health center, transportation and inhome services to keep patients out of the hospital and long-term care facilities. PACE also goes beyond traditional health care services, behavioral health, dental, eye care, dietitians, social workers and even home-repair services for conditions that constitute health hazards.

"For example, if a broken step at someone's house could cause a fall, we'll get someone out to x it," Weiss said. "It's a very high-touch model, where we often see patients two to three times a week, bringing them to our senior center, appointments or in their homes."

Esperanza has an 11-person team to manage participants' care, along with contracted specialists its network. Currently, the nascent program has 12 participants.

e program, established by the federal Centers for Medicare & Medicaid Services, awarded the three provider groups capitated risk contracts, in which the organizations get a lump sum per participant to be responsible for all their health needs.

PACE has a similar model as Oak Street Health, which serves dual

eligible elderly, takes on capitated risk, and has recently expanded its own home care strategy, with another CVS company, Signify.

However, the learning curve is steeper for not-for-pro t providers compared with for-pro ts owned by publicly traded giants like Oak Street, Weiss said.

PACE puts health centers and safety-net providers in a unique position as both health care providers and health plan payors, Weiss said.

Just like at a commercial health plan, for example, a provider will send in a claim and a PACE team processes an authorization, she said.

"But this is our team, we know what patients need, and in many cases we've already discussed it as a team."

e PACE program can act fast and go out of the way to keep patients cared for in the home, Weiss said, which can improve outcomes by keeping them out of any hospital or nursing home.

"At the same time, we can be a gate keeper, making sure that all the health care they receive is necessary care," she said.

e experience has been similar at Lawndale Christian Health Center, where a team is trying to build awareness of the plan for patients and providers, even though "it is a new program, and it's got the same name as a bus service, so there's de nitely been an education process with potential providers," said Andrew Koetz, external relations director at LCHC.

"But many of our providers have been able to catch the vision," he said.

LCHC's program, launched July 1, currently has 17 participants. Being both provider and payor, as well as approaching care with an interdisciplinary team that meets daily, "gives us a lot of exibility, creativity and immediacy," Koetz said.

"For example, if we've got a patient being discharged from a hospital, most frequently Mt. Sinai or St. Anthony hospitals, and they've been receiving in-patient physical therapy, we can get them the needed rehab services set up at home or at our senior center right away," he said. " e program lets the care team act quickly, rather than throwing up barriers to care and establishing arti cial thresholds."

Immediacy and exibility

Providers that have signed up for PACE appreciate that immediacy and exibility, as well as the small patient-provider ratios, he said.

When fully eshed out, Koetz said LCHC envisions a ratio of 70 participants per sta provider.

In working with consultants who have developed PACE over decades in 30 other states, he said, the Federally Quali ed Health Center’s goal is to get to a point within two years where the program will break even.

"We're focused on building the number of participants to have a sustainable census, being able to balance our risk a bit," he said.

"Accepting of all the risk isn't something that not a lot of Federally Quali ed Health Centers, or even a lot of safety-net hospitals, are familiar with," Koetz said.

"When they do accept risk, there

are usually a lot of carve-outs for expensive care, but in PACE, it is all on us."

"It is our hope that this would hit the dual bottom lines," of nancial sustainability and improved outcomes, he said. "We are always going to come at it from the public health perspective, but we always want it to be sustainable."

In Peoria, OSF HealthCare has 12 people enrolled in the program it launched June 1.

Unlike the two Chicago health centers, the OSF health system is familiar with building provider networks, but getting specialists' buy-in to participate in the intensive PACE program still requires provider education, said Nathan Pritzker, executive director of OSF PACE in Peoria, no direct relation to the family of Gov. JB Pritzker.   Like Koetz, Pritzker said the tight relationship with providers and intensively managing care is a big selling point.

"What's unique about this is that we're working with a small number of patients, but they're very high-complexity, high-need individuals," he said, "but while they might be a frail discharge from the hospital, we can keep them out of long-term care and in their homes."

And, the program provides much more continuity of care, which providers value, Pritzker said.

"We will go into the hospital for you, we will go to the nursing home to provide primary care," he said, because, on the hook for all costs of a participant's care, "our team does not just toss you over the fence."

Lincoln Square residents vote to end century-old booze ban

By Brandon Dupré

Residents living in a portion of Lincoln Square and Ravenswood voted to overturn a ban on alcohol sales that has been in place for more than 100 years.

Nearly 85% of voters from a sliver of the 9th Precinct of Chicago’s 47th Ward cast ballots against continuing the prohibition of alcohol sales in the neighborhood, according to election results. e measure appeared on the ballots of the less than 500 residents who live in the precinct’s three-block radius.

e ban stretched from Lincoln Avenue on the west to Damen Avenue on the east, and Sunnyside Avenue to the north and Montrose Avenue to the south. e area has been dry since 1907, more than a decade before Prohibition took hold of the country.

“Being able to lift this would allow our existing businesses to do better while incentivizing prospective businesses to give a closer look to this stretch,” said Ald. Matt Martin, 47th, before last week’s election. “It has the opportunity to really ll in some gaps.”

Local restaurants and businesses said the prohibition had hurt their bottom lines in an industry with ever-shrinking and tighter margins. XOchimilco, a restaurant at 2030 W. Montrose Ave., said selling alcoholic beverages — which typically yield higher profit margins in a restaurant than food — could also stave off price increases to menu items.

Small Cheval, a burger restaurant owned by Chicago-based Hogsalt Hospitality, is planning to open in the area that had been a ected by the ban.

loved talking about it just as much. Yet his just-folks persona also factored into his enduring popularity — if Madden happened to settle onto an adjoining barstool, you’d enjoy his company as well as his conversation.

Wannstedt projects a similar common-man vibe, particularly in his weekly radio chats with Mike Mulligan and David Haugh on WSCR. He’s a natural storyteller, and his easy rapport with the two former football writers — Mulligan for the Sun-Times, Haugh for the Tribune — produces fun and enlightening conversations.

Jimmy Johnson’s reputation for ruthlessness is not overstated — his former boss in Dallas and Miami once cut a kicker on the ight home from a road game “after about six Heinekens,” Wannstedt noted.

Last year, in the midst of the endless is-he-or-isn’t-he debate over Justin Fields, Mulligan noted that Babe Laufenberg had been dismissive of the young Bears quarterback on his Dallas radio show.

Wannstedt sco ed at the “expert” credentials of a quintessential journeyman QB; Laufenberg appeared on eight NFL rosters but only played for three teams, appearing in 16 games over four seasons.

“Wasn’t Babe Laufenberg here for a minute?” Mulligan asked.

“Naw,” Wannstedt said. “We had a lot of bad quarterbacks, but he wasn’t one of them.”

Bad quarterbacks were one reason among several for Wannstedt’s Bears tenure ending ingloriously after six seasons. He was on the spot succeeding the sainted Mike Ditka, for starters, front-o ce mismanagement was at its apex, and mistakes were made — Rashaan Salaam, Rick Mirer, etc.

He rejoined Jimmy Johnson with the Dolphins in Miami, took over when Johnson abruptly retired in 1999, and things were somehow better in the post-Dan Marino era until they weren’t.

e head coaching job at the

University of Pittsburgh, Wannstedt’s alma mater, seemed a perfect matchup of man and place and should have closed a satisfying circle. But a go-go athletic director decided that a 42-31 record and one bowl appearance over six seasons wasn’t good enough, and he was forced out.

Wannstedt won two Super Bowls with Johnson in Dallas and a national championship at the University of Miami, but his frequent use of “we” in Bears discussions is a clue to where his heart lies.

He has reinvented himself as a media star, and good for him.

In a world where the attribute isn’t always valued, Dave Wannstedt is a good man.

Sprinkles Cupcakes closes Gold Coast store, O’Hare ATMs

The popular company began in Beverly Hills and now operates about two dozen bakeries

By Jack Grieve

e popular Sprinkles Cupcakes chain has closed up shop in Chicago.

“ anks for many years of business,” read a sign posted in the window of the Gold Coast store. “We are permanently closed but do o er national shipping online.”

e 50 E. Walton St. location is no longer on Sprinkles’ website, nor are the company’s six 24/7 cupcake-dispensing ATM machines at O’Hare International Airport. Sprinkles did not immediately respond to Crain’s inquiry.

e Chicago location was hard to miss. A 40-foot art piece depicting the brand’s signature cupcake toppers scaled the facade of the building.

e Walton Street store is part of a broader portfolio owned by Acadia Realty Trust. CoStar reported streetwear brand Kith is set to take over the whole 50-54 E. Walton St. space.

Sprinkles opened in the Gold Coast in 2010. e company, which began in Beverly Hills, helped pioneer the cupcake craze that spread across the U.S. in the

mid-2000s. e Chicago store was the company’s sixth. It now operates about two dozen bakeries and two dozen ATMs.

“Can Candace and Charles Nelson, owners of Sprinkles, e Original Cupcake Bakery, prove the cupcake craze is here to stay?” Crain’s wrote when the bakery opened here. “ e former investment bankers and owners of the Beverly Hills bake shop are opening their rst Midwest retail location at 50 East Walton St. in May. But some wonder whether the cupcake craze will go the way of the dotcom and housing bubbles.”

The 3 Annual Illinois Clean Energy Champion Awards

Please join us as we celebrate private companies, nonprofit organizations, and governmental units from across Illinois that are making our state a leader in creating clean energy jobs.

These awards recognize the creation and retention of good-paying jobs, with a special eye toward equitable jobs in historically left behind communities.

The Illinois Clean Energy Champion Awards are a joint project of the Chicagoland Chamber of Commerce and the Illinois Clean Jobs Coalition, and this year we are proud to feature Crain’s Chicago Business as our media partner and Bank of America as our presenting sponsor.

Luncheon Details

Date: Time:

Location: Tuesday, December 10 12:00 pm Maggiano’s Banquets 111 W Grand Ave. Chicago, IL 60654 Get tickets at ilcleanjobs.org/who-we-are/awards/

at awards@ChicagolandChamber.org

Dave Wannstedt | NEWSCOM

Sprinkles Cupcakes, left, at 50 E. Walton St. | GOOGLE

Downtown apartment rents tick up as the supply wanes

But experts and building owners aren’t worried and see it as a sign that demand for living in the area is strong compared to other metros

By Rachel Herzog

Rents ticked up last quarter after a lukewarm year for the downtown apartment market, a sign that demand is strong as the supply pipeline begins to wane.

Net monthly rent at top-tier, or Class A, apartment buildings downtown was $3.61 per square foot in the third quarter, up 2.27% from the same time frame in 2023, according to the Chicago office of appraisal and consulting firm Integra Realty Resources.

That’s the largest year-overyear increase since the second quarter of 2023, following a year of lukewarm or flat rent growth. But experts and building owners haven’t been worried — they say the fact that downtown landlords have been able to see any amount of rent growth as an abundance of new buildings came online in 2024 is a sign that demand for downtown liv-

ing is strong, especially when comparing Chicago to other metro areas.

More than 3,200 new apartment units have been delivered so far this year, according to Integra. Still, occupancy was at 94.7% downtown. Absorption, a key measure of demand that tracks the change in the number of occupied units, is projected at 3,762 units for 2024, the highest since 2021.

“We saw a fair amount of deliveries over the last 12 to 18 months as we’ve come out of this supply boom downtown. So when that happens, it usually puts downward pressure on the luxury market,” Integra Senior Managing Director Ron DeVries said in an Oct. 30 presentation at an annual event hosted by the Chicagoland Apartment Association at the Union League Club in the Loop. “Occupancy has remained strong and we’ve had some rent growth.”

Factors keeping demand high

include elevated interest rates, which have moderated but still make it challenging for wouldbe homebuyers to leave the renter pool. Uncertainty about the broader state of the economy, including the ongoing possibility of a recession, is also causing people to hold off on homeownership, Integra said in its third-quarter report.

The report cited employment relocations to Chicago as buoying demand. It also helps that members of Gen Z, the generation now primarily entering the workforce, are continuing to

move to urban downtowns.

“ ey like to live in city centers. ey like to rent. ey live in apartments, and they have mom and dad to help them, potentially, as well,” Yelena Maleyev, senior economist at advisory rm KPMG, said in a presentation at the Chicagoland Apartment Association’s event.

With high occupancy and strong demand, Integra is predicting downtown rents to spike in 2025 and 2026 as the number of big apartment projects in the pipeline shrinks. e interest rate hikes over the past couple

of years have made it tough to get large development projects o the ground, meaning that very few new apartment units are expected to open up downtown in 2025 and 2026. Integra projects just 500 units, which it considers nominal, to be delivered in 2025.

“Hardly anything is going to come online and occupancy is at 94%,” DeVries said. “New construction is virtually shut down. . . .We’ll have to see what happens in 2025, but I don’t see a bunch of new buildings getting started probably for a year.”

Jean Banchet Awards are terri ed to name the best Chicago pizza

Judges have narrowed it down to four nalists, and that is as far as they’re willing to go

By Jack Grieve

e Banchet Awards for Culinary Excellence tried last year to introduce a new pizza-speci c category to their annual honors of Chicago-area restaurants. It did not go well.

“Friendships were ruined,” said Michael Muser, organizer of the awards. e judging panel, made up of food journalists and industry experts, was unrelentingly divided. “It was just the craziest thing. Everybody got frustrated.” ey decided to kick the can.

Now, Muser’s team is trying again. e Jean Banchet Awards on Oct. 28 released the nalists for this year’s honors, and included on the list are four nominees for the rst “best pizza” title.

e nalists are Pistores, a relatively upscale spot in River North serving Detroit-style and thin-crust pizza; Milly’s Pizza in the Pan, a pandemic-born

ghost-kitchen-turned-restaurant in Uptown serving deep-ish-dish pies; Spacca Napoli Pizzeria, a Neapolitan-style restaurant in Ravenswood; and Robert’s Pizza & Dough Co., a thin-crust sitdown spot on the waterfront.

While the judges picked a variety of pizza styles, Muser said it was not the panel’s intention. “ ey were just looking for really good pizza in all of its shapes and forms and facets.”

“I like to think of it as a snapshot for the year,” he said of the award’s ethos. “If we did it again, it’d probably change. But right now, this is where they think the re is in terms of pizza.”

e Jean Banchet crew made it further with the pizza award this year than they did last, but settling on four nalists is as far as they are willing to go. e judges will not be picking a winner.

Instead, Jean Banchet organizers decided the roughly 400

attendees of the award ceremony in January will vote to decide which of the four nalists takes home the hardware. It will be the rst time Jean Banchet has used a live audience vote to deter-

mine a winner.

“I don’t want to be responsible,” Muser said with a laugh.

“It’s scary, man. It’s super scary.”

“It’s Chicago!” he added. “You can’t bring up pizza without peo-

ple arguing. People get passionate about the style of pie they like.” He thinks it will add friendly debate to the night.

Muser decided to introduce the pizza award now because it is a bit more light-hearted than the other categories and also a popular topic for diners right now.

“ e Jean Banchet Awards want to be able to move and change with the way things are going,” he said. “We always longed to have this fun pop-up category, one that we could do for a year and then maybe swap it out and change it next year.” e awards brie y added a category for food trucks, for example, but retired it when that culinary trend zzled out.

To be sure, ranking the best pizza is a hot topic right now — particularly in Chicago. Yelp made headlines earlier this year when it announced the highestpraised pizza in the U.S. was here. Crain’s dining critic even got in on the action with a list of the city’s best thin-crust pizza places.

BLOO M BERG

A view of the second phase of the North Union apartment development in River North, which was delivered in July. COSTAR GROUP

The Great Migration — in reverse

Black residents who leave Chicago say it no longer offers what they and their families need I

Abullet landing in her neighbor’s Bronzeville kitchen confirmed to Sylvia Emuwa that it was time to leave Chicago. It wasn’t just the threat of violence. Emuwa and her husband, Augie, were growing tired of transporting their four children to different schools. When they lost their lease on a laundromat that showcased Emuwa’s green detergent product earlier this year, the family decided to pack up and move to North Carolina.

“We loved our house, but we  needed more space and, honestly, a safer city,” Emuwa says.

e Emuwa family is part of an epic outmigration of Black families from Chicago, reversing the decades-long Great Migration that saw families leave the Jim Crow South for industrial jobs in Chicago and other Northern cities. Now it’s job opportunities and the promise of a better quality of life that are drawing Black working- and middle-class families, professionals and retirees to Atlanta,

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Houston and Dallas, as well as the Chicago suburbs.

Since peaking at 1.2 million in 1980, the city’s Black population has dropped by a third, or nearly 400,000, to 787,551, according to the University of Illinois Chicago Institute for Research on Race & Public Policy and U.S. Census Bureau data. At the same time, Chicago's Hispanic population has nearly doubled to 819,518, exceeding the

See MIGRATION on Page 14

By Judith Crown

“We loved our house, but we needed more space and, honestly, a safer city.”

Sylvia Emuwa

Augie and Sylvia Emuwa near their new home in North Carolina

MIGRATION

number of African Americans and gaining more influence and political clout. The student population of Chicago Public Schools is now 47% Hispanic and 36% Black.

In the wake of this exodus, the city faces a variety of intractable problems: under-enrolled schools, blighted communities, abandoned homes and vacant lots.

"When there's population loss and low density, it creates a more vulnerable situation for people who remain, making them more likely to leave,” says William Scarborough, co-author of a 2022 Institute for Research on Race & Public Policy study on Chicago-area population trends. “So there’s this downward spiral.”

Delmarie Cobb, a veteran Chicago media and political consultant, says she runs into people on a regular basis who say they’re leaving. She says she was shocked when her longtime neighbor in Bronzeville recently picked up and moved to New Orleans. “I’ve been yelling re since about 2000, and I got really loud about it in 2008 to 2010,” she says.

Community and nonpro t leaders are trying a host of remedies to rejuvenate the South and West sides. Developers such as Lawndale Christian Development and Chicago Neighborhood Initiatives are building homes in order to repopulate neighborhoods and attract amenities such as supermarkets and restaurants. Other developers are using tax credits to build affordable apartments. One local initiative aims to build wealth and gain more local control by acquiring assets such as apartment buildings, thereby avoiding the scourge of predatory landlords. Others say a megaproject such as the south suburban airport is needed to create jobs on a big scale.

“If we don’t make the proper kinds of investments, we will never see an abatement of this flight,” says Audra Wilson, CEO of the Shriver Center on Poverty Law.

Dodging bullets

African Americans who are stuck in extreme poverty don’t have many choices. But middleclass families take off for a range of reasons: safer neighborhoods, better schools and amenities, a better bang for the buck and quality of life.

“From the folks I know that have moved South, it’s just an easier, less stressful life,” says Ja’Net Defell, CEO of Community Desk Chicago, a nonprofit that assists in neighborhood redevelopment and building wealth.

Augie Emuwa says the “Black tax,” the cost in time and money to access an amenity not available in the immediate neighborhood, was getting too high. One

Population trends for city of Chicago

The exodus for Black Chicagoans began in the 1980s with the loss of industrial jobs on the South Side. But community leaders say city policies accelerated the exodus.

example: “If you want to be in a running club, but there are none nearby on the South Side, what is the cost to get to the other side of town?” he says.

Augie Emuwa grew up in Chicago, while his wife is from Mississippi. e couple met at Jackson State, a historically Black university. His peers at Jackson State fanned out to jobs in Texas and Georgia. Sylvia Emuwa worked for a time as an internal auditor at a Houston energy company and then moved to Chicago. He returned to Chicago and started a career at Chicago Public Schools, where he served as a principal for three years. ey eventually started their own businesses: he in educational consulting, and she launched green detergent brand Dinobi.

But life was complicated ferrying four children around town.

“At best, we were able to have them at three schools,” Sylvia Emuwa says. “They're on different sides of town, and it got kind of exhausting after a while.” They lived in the historic Gap section

of Bronzeville, but “there were at least two times where I had to dive into my own house to avoid gunshots.”

“The second time, I had just left to pick up our eldest son from high school,” Augie Emuwa recalls. “Sylvia was gathering the dogs on the front lawn, and by the time she reached the top of our porch, a car pulled up and began shooting at people loitering directly across our narrow street. Bullets went through our neighbor’s home while she was on a Zoom call. There were several other notable shootings on our block. So much chaos.”

Another expatriate, Scott Madgett, gured his home mortgage brokerage would do better in Atlanta than Chicago, where business drops o during the cold winter months. After college at Alabama A&M University, he returned to his native Chicago and held jobs in landscaping, bartending and facilitating student loans. He found his way into mortgage lending, but at a certain point, he hit a wall.

fish in a smaller pond. Nesbitt practices real estate law and handles commercial deals. He teamed with Evanston affordable housing developer Brinshore Development to develop a 60-unit project north of Denver. “When I had our groundbreaking, I called (Gov. Jared Polis’) office, and they called back right away and said he would attend,” he recalled. “If I do that deal in Chicago, I don’t know if (Gov. JB) Pritzker is coming.”

He returns home to Chicago once or twice a year, but “you have to get your senses up a bit, be alert all the time,” he says.

Moving to suburban subdivisions

The exodus for Black Chicagoans began in the 1980s with the loss of industrial jobs on the South Side. But community leaders say city policies accelerated the exodus.

The Plan for Transformation, launched under former Mayor Richard M. Daley in 2000, demolished most of the public housing, displacing thousands of families. True, the housing was despised for being poorly managed and a haven for drugs and gang violence. But the Chicago Housing Authority fell short of replacing or repairing the housing as it had promised, leaving it with half the units it once had, according to a 2022 investigation by ProPublica.

“The destruction of public housing equated to the displacement of Black people,” says Rod Wilson, executive director of the Lugenia Burns Hope Center, a housing advocacy organization in Bronzeville. After the public housing disappeared, speculators moved in, acquiring buildings in South Shore and Woodlawn, he says. The rising rents forced tenants to look elsewhere.

“There’s not many Black mortgage lenders in America, and I found that the Black lenders in Chicago were fighting for the same business,” he says. He and his wife wondered if they could do better in another state.

The couple and their twin daughters moved in early 2020 to a suburb of Atlanta, where they live in a four-bedroom townhouse. “I’m president of the PTA at my kids' school, and I own my own mortgage company,” Madgett says. “I really have become more successful down here because of the sun.”

Attorney Eric Nesbitt wasn’t looking to leave Chicago in the mid-1990s, but a job opportunity at USA Basketball in Colorado Springs, Colo., convinced him to pull up stakes. He grew up on the South Side and had just purchased a home in Beverly.

Personally and professionally, Nesbitt says, the Denver area offers a better lifestyle. The Rockies are stunning. There’s a smaller network of Black professionals, and he was able to become a big

In many cases, the displaced CHA residents were given vouchers to nd alternative housing in the city. Many found their way to high-rise buildings in South Shore, Hyde Park and Greater Grand Crossing, says Cobb, the media and political consultant. at resulted in an incompatible mix of older, less educated residents from the projects and younger, college-educated professionals.

City planners didn’t make that critical distinction, she says. “‘You’re all Black people and you all belong together,’” Cobb says was the thinking at the time. “You don’t want to put disparate groups together without providing social services and safety nets.”

The people who could afford to leave picked up and relocated — the middle-class people a neighborhood would want to keep because they provide stability and have money for goods and services, Cobb points out. The people from the

Departing residents often head to cities in Sun Belt states

For Black Chicagoans with a college degree or more, Atlanta attracted 11.4% of movers, followed by Dallas at

By Judith Crown

When Black residents decide to move out of Chicago, Atlanta is the top city destination, while Texas is the most popular state, according to a study by the University of Illinois Chicago Institute for Research on Race & Public Policy.

While Chicago’s Black population has dropped by a third since 1980, the population of Black residents in the greater metro area has remained stable in the range of 1.5 million. In 1980, less than a quarter of Black area residents lived in the suburbs. But as of 2020, the number of suburbanites had doubled to about half of the Black metro area population, according to the study, which analyzed the region’s population trends, including the movement of white and Hispanic Chicagoans.

The study by William Scarborough, along with researchers Amanda Lewis and Ivan Arenas, tracked the movement of Chicagoans using data from the American Community Survey between 2012 and 2019. The survey includes a question to identify whether people moved in the previous year and asks where they moved from. The 2022 study was produced for the MacArthur Foundation.

Scarborough notes that nearly a quarter of Black residents who left the city in the ve-year period studied remained in Illinois, whether in the suburbs or down-

MIGRATION

From Page 14

didn’t have the means to relocate and were stuck.

Around this time, developers were building three- and fourbedroom homes in gated communities in the south suburbs such as Dynasty Lakes in Hazel Crest, says Chicago developer Leon Walker. “That was all the rage in the 2000s, and that’s why you see that huge acceleration, because now people had someplace to go,” he says.

The exodus accelerated in the first decade of the new millennium, which saw the Black population drop 17%, falling below the 1 million mark to 872,286. When results of the 2010 census were published, the enormity of the decade’s out-migration was a stunner. “People were like, ‘Oh my God, we’ve lost a huge number of Black residents,’ ” says Hal Woods, chief of policy at the nonprofit Kids First Chicago and a former CPS director.

The cost of closing schools

The empty space in many Chicago public schools has become

Where Black Chicagoans are moving

These are the 10 cities with the largest percentage of African Americans who moved from Chicago.

Source: UIC Institute on Race and Public Policy American Community Survey data (2012-2019)

state. But that left 75% who decided to head farther a eld, Scarborough says. Sun Belt states are popular, with Texas being the biggest draw for 9% of African Americans leaving Illinois. Among the metro areas in Texas, Houston was the most popular, attracting 4.1% of Black movers, followed by Dallas at 2.8%. e single most popular metro area was Atlanta, which drew 6.8% of Black movers. e Georgia

an emotionally charged political issue. Enrollment of 325,305 students for the 2024-25 school year is down by a third from a peak of 480,500 in 1980.

Some experts say it would be more efficient to close and combine schools, enabling them to offer more robust programs.

Mayor Brandon Johnson and the Chicago Teachers Union say closings have devastated Black communities and that neighborhood schools should be upgraded as a matter of equity.

In the 1990s, the district began curtailing art, music, sports and other programs in under-enrolled schools. “ ey just stripped out these programs because of low enrollment,” says Cobb. “For some kids, going to art or playing sports was the only thing they had that would make it possible to escape (the neighborhood) and get to college.”

But the real trauma occurred under Mayor Rahm Emanuel’s administration with the closing of 50 under-enrolled schools, mostly on the South and West sides. This is believed to be the single largest mass closure of schools. An estimated half of the buildings are vacant and dilapi -

capital has a strong community of entrepreneurs and professionals and is considered the birthplace of the civil rights movement.

“We found that the metro areas that (Black movers) go to tend to have lower levels of poverty and unemployment among their Black residents than is observed in Chicago,” Scarborough says. “Essentially, they’re moving to places where Black residents are doing better.”

dated, contributing to neighborhood decay and spurring more families to leave the city.

"I strongly believe that the cost of closing schools, in terms of the lost trust, the challenges of dealing with the facilities, and moving children . . . outweigh any benefits you get from it,"

CPS CEO Pedro Martinez told WBEZ last year on the 10-year anniversary of the closings.

That ordeal colors the current conversation over what to do about the underused buildings. One often cited example is Frederick Douglass Academy High School in Austin, which has about 35 students, well under the building capacity of 1,128.

Kids are not getting a good education when the schools are under-resourced, says Wilson of the Shriver Center. “As CEO of an organization that is trying to eliminate and eradicate poverty and build wealth, I want to make sure that we’re using the resources in the best way to help as many people as possible.”

Rebuilding neighborhoods

There’s no shortage of ideas and initiatives underway to

ford were among the top 10 destinations for white and Black movers.

Education in uences where expatriates land. For Black Chicagoans with a college degree or more, Atlanta attracted 11.4% of movers, followed by Dallas at 7.1% and Washington, D.C., at 6.3%. Also in the top 10 were Virginia Beach, Va., and Charlotte, N.C. African Americans without a college degree appeared to stay closer to home. Atlanta was still the favorite city, but only 6.6% of movers landed there. e next two most popular cities were Indianapolis and Minneapolis, followed by Houston and Las Vegas.

For white Chicagoans heading out, the single most popular metro area is Phoenix, drawing 4% of movers. at’s followed by Los Angeles, Denver and New York. Latino residents leaving Chicago headed most frequently to Houston, followed by Phoenix and the Florida cities of Tampa and Miami.

Chicagoans aren’t exclusively heading for the Sun Belt. Indianapolis, Minneapolis and Rock-

rejuvenate the South and West sides and bring back families. Developers and community organizations are trying to rebuild neighborhoods, one mixed-use project at a time.

In Morgan Park, for example, the Far South Community Development Corp. is redeveloping the site of a shuttered Jewel supermarket and envisions a mixed-use project to serve working- and middle-class residents. Small, meaningful and impactful investments can revitalize a neighborhood, says President Abraham Lacy. “You can have an affordable community with amenities that are typically found in a suburb.”

It's not just the lack of affordable housing, says Wilson of Lugenia Burns Hope Center. It’s that rents are unaffordable for people working minimum-wage jobs. He advocates for the state to reverse the ban on rent control, “so the government can do its job of providing services and protecting its constituents.”

Defell of Community Desk Chicago says residents need to gain ownership of commercial and residential real estate so they’re not at the mercy of pred -

The most popular metro area for white movers with a college degree was New York, followed by Phoenix and Los Angeles. Those without a degree headed first to Phoenix, followed by Rockford and Tampa. e researchers note that Black population growth in the suburbs hasn’t been evenly distributed. Whereas many white residents relocated to cities in Kendall and Will counties, Black residents mostly moved to suburbs in Cook County, such as South Holland and Calumet City, or in Lake County, Ind., such as Merrillville. Notably, they’re closer to the city of Chicago than the suburban municipalities that had the largest white population growth. Consequently, patterns of residential racial segregation have been reproduced on a broader scale, the report says.

atory landlords. Her young nonprofit explores avenues that will enable community members to gain that control.

“If you now can locally control and own these assets, you can get rid of the dollar stores,” she says. “You can get rid of the liquor stores, because, remember, in most cases, these assets are generally not controlled by people in the neighborhood, so it's a direct implication of quality of life.”

Cobb says that modest developments only contribute incremental job gains and that a megaproject such as the south suburban airport would be transformative. “An airport is an economic engine,” she says. “ ere are jobs at every skill level, direct and indirect.”

South Side communities have infrastructure of roads and transit, but they need more people with good-paying jobs that can buy homes, with appliances and furnishings.

African Americans need to feel more welcome in their city, says Lacy of Far South Community Development Corp. “If you want to stop the outflow of Black Chicagoans, we have to show them that they are a part of the city's economy.”

e South, not Chicago, rises — as a desirable place for Black businesses

Chicago remains a “Black business mecca.” e city has the sixth most Blackowned employer businesses in the U.S. When counting sole proprietorships, only New York has more Black-owned businesses. Nearly $170 million in venture capital is directed toward Black- or Latinxowned startups in Chicago, among the most in the nation. Despite what you may have heard, Chicago remains one of the best cities for Black businesses.

But the fact is that there is no city in the U.S. where Black businesses are treated equitably. For example, Black business owners nationally have a harder time accessing loans, a pattern exacerbated during the pandemic when federal PPP loans kept many small businesses a oat. Despite growth in recent years, in no city is the share of Black-owned businesses proportionate to the population of Black residents.

Chicago is not immune to these challenges facing Black businesses. And while Chicago remains one of the best places for Black businesses, other cities in the country have caught up. In a reversal of the Great Migration of the 20th century, Southern cities like Atlanta, Nashville, Houston, and Oklahoma City are now ranked among the best for Black and minority business owners.

How can Chicago be so ush with venture capital but still be

Amanda E. Lewis is director of the Institute for Research on Race and Public Policy and the College of Liberal Arts & Sciences Distinguished Professor of Black Studies and Sociology at the University of Illinois Chicago.

William Scarborough is a researcher with the Institute for Research on Race and Public Policy at the University of Illinois Chicago and an associate professor of sociology at the University of North Texas.

perceived as less desirable than Oklahoma City (of all places) for Black businesses? e answer, paradoxically, has less to do with what cities directly o er business owners and more with how they support working families who are the consumers, employees and entrepreneurs of new businesses.

Analyzing a century of data on population trends in Chicago, we found that the city overall thrived economically when it had stable

and abundant opportunities for working- and middle-class families. Decent jobs and a ordable housing attracted Black families to Chicago throughout most of the 20th century — a period when Chicago was one of the largest cities in the world. It was during this period that the city became known as a “Black business mecca.”

ings have changed considerably since Chicago’s heyday. In every decade since 1980, the city’s

Black population has declined, resulting in a total loss of nearly 400,000 Black residents by 2020, or 34% of the city’s Black population. In the past decade, only a quarter of those leaving Chicago are remaining in Illinois, mostly in the suburbs. e others are relocating out of state to places like Texas and Georgia — areas experiencing the most growth in opportunity for Black families and Black-led businesses.

Leading the out-migration are the city’s working- and middle-class Black residents. Of those who have left Chicago in the past decade, half were employed in blue-collar or service occupations, more than double the share of leavers employed in managerial or professional roles. ese departing families nd greater opportunities and affordability in the very Southern cities their parents or grandparents left years ago.

ese working- and middle-class families form the backbone of economic growth. ey are consumers, employees and small-business owners. Chicago’s economy was strongest when the city welcomed these families. Now they seek better opportunities in places like Atlanta and Houston, where jobs abound and homes are more a ordable.

e future of Chicago’s status as a “Black business mecca,” and for the city’s economic growth more broadly, depends on its ability to welcome and support workingand middle-class families. is requires public investments in neighborhoods on the South and West sides where population loss has been greatest. Preserving and expanding a ordable housing is crucial, as is improving public services, such as schools, parks and libraries. Chicago needs to reinvest in Black families and communities as they are the neglected cornerstone of Chicago’s once thriving economy.

South suburbs prime the pump for economic, population regrowth

For decades, the south suburbs have su ered population loss due to several factors — manufacturing decline, white ight, increasing tax burdens and, now, retir ing baby boomers. Popu lation loss creates unbal anced tax burdens, drives commercial decline and leads to under-resourced municipalities with insufcient funding to meet their needs or maintain existing infrastructure. e manufacturing development post-WWII was a major pull for Black Southerners to Chicagoland. is could easily become a push in a decade if we continue to price Black families out of the marketplace.

Bo Kemp is CEO of the Southland Development Authority, a nonpro t business organization designed to grow the economy of the south suburbs.

We are at an in ection point. But I’m con dent we can stem future Black out-migration. e 2030s and beyond will see signicant population growth in the southland region, due to climate migration and the attraction of our redeveloped infrastructure and diverse workforce.

Organizations such as the Southland Development Authority, a nongovernmental not-forpro t started in 2019, are dedicated to helping spur regional growth in the south suburbs. As such, the

SDA is fostering the development of fully functioning neighborhoods, highdensity nodes of populations along the Metra rail lines, and the building of both a ordable housing and housing that is a ordable at scale.

An increasing middleclass workforce is a lagging indicator of regional success, yet a declining one is a leading indicator of future regional woes. Without planning, this coming growth will have the unintended consequence of shrinking the ability for middle-class workers to live in proximity to the quantum computing and AI jobs, the restaurants and retail opportunities, and the advanced manufacturing positions anticipated to power the state in the coming decades. We risk pricing workers out of the region and possibly the state.

Attracting and maintaining the middle class requires building substantially more a ordable housing, both housing supported by government subsidy and housing that is a ordable yet not subsidized. e south suburbs of Chicago have land availability to support the development of both housing types and higher market-rate housing in large

quantities. In contrast, much of the western and northern suburbs are already priced out of range for this housing product. e SDA has begun to acquire blighted homes and vacant land to build as many as 1,000 homes within the decade. is future workforce deserves fully functioning neighborhoods with places to dine, shop and work. ey deserve entertainment ven-

ues, personal care services and access to staples such as hardware, medicine and fresh foods within a reasonable distance from their homes. To this end, the SDA is investing directly in essential neighborhood businesses, beginning with a supermarket in the Southland, a notable food desert. Finally, investments in transportation-oriented development

hubs of high-density living and working space around Metra stations in the south suburbs address many outstanding issues simultaneously. We can integrate both subsidized and a ordable housing in high-density, mixed-use buildings near train stations, such as the SDA-supported Hazel Crest Creative Arts District project, which will attract new residents and enough foot tra c to attract the businesses needed to create fully functioning neighborhoods. e Southland Development Authority is creating a $100 million fund to make these place-based investments to support this vision. We are using innovative nancial and development strategies to buy land and property with the help of the South Suburban Land Bank & Development Authority, which the SDA operates, to make direct investments in housing and growing businesses. e resulting increase in population will also address one of the major issues for south suburban municipalities — rebalancing the tax burden across a larger base of taxpayers.

Growth in the south suburbs will allow for a growing middle class to live and work in the Chicagoland region and support the state’s e orts to attract futureforward industries. As the south suburbs go, so goes Chicagoland and the state of Illinois.

LARGEST ACCOUNTING FIRMS IN THE CHICAGO AREA

Riverfront of ce tower owner hit with foreclosure suit

The lawsuit involving a Ludwig Mies van der Rohe-designed skyscraper is among the largest of its kind for a Chicago property

By Danny Ecker

e owner of a 52-story o ce tower along the Chicago River has been hit with one of the largest foreclosure lawsuits ever for a property in the city, another high-pro le example of the distress infecting the vacancy-plagued downtown o ce market.

A venture of Boston-based real estate rm Beacon Capital Partners defaulted on its $370 million mortgage backed by the o ce building at 330 N. Wabash Ave., according to a complaint led earlier this month in Cook County Circuit Court.

e lawsuit, led by lender Wells Fargo on behalf of bondholders in the loan, alleged the Beacon entity failed to pay the tower's most recent property tax bill and an interest payment on the mortgage that was due last month.

e 1.2 million-square-foot skyscraper designed by Ludwig Mies van der Rohe adds to the historic wave of distress that has swept across the central business district in recent years. e pandemicfueled rise of remote work and two years of spiking interest rates have dramatically depressed property values, leaving o ce landlords in a jam if they need to pay o maturing debt.

Other notable o ce properties mired in foreclosure in the central business district include the Civic Opera Building and 20 N. Wacker Drive, 70 W. Madison St., 161 N. Clark St. and 111 W. Jackson Blvd., among others. Many more o ce owners have sought to surrender their buildings to their lenders to avoid a lengthy foreclosure process, guring they have no equity left in their properties and that continuing to invest in them might be putting good money after bad.

Beacon signaled it wasn't going to give up on 330 N. Wabash earlier this year as it stared down a June maturity date, paying $5.9 million to get a one-year extension, according to a loan report published by real estate information company CoStar Group. e loan was packaged with other mortgages and sold o to commercial mortgage-backed securities investors, making loan and property nancial details publicly available. But a red ag went up over the summer when the mortgage was transferred to a special servicer, typically a signal that a borrower is in danger of defaulting on its loan. Beacon at the time had "expressed a potential that the August (loan) payment would not be made" and that it did not pay the building's $3.8 mil-

lion property tax bill that was due Aug. 1, the loan report said.

New York-based special servicer SitusAMC is overseeing the loan on behalf of bondholders and did not respond to a request for comment. Including the outstanding loan balance and other fees, the Beacon venture that owns the tower owes its lender nearly $372 million, according to the complaint.

Beacon in a statement to Crain's suggested it's not giving up on the property, calling the foreclosure action "premature and inappropriate."

"We have remained in active dis-

cussions with the lender regarding a restructuring of the loan," the statement said. "AMA Plaza is a great asset in a city we have conviction in and plan to continue to work with the lender to reach a productive outcome."

A big challenge Beacon has faced at the building is that the mortgage came with a variable rate. Rising interest rates in 2022 and 2023 jacked up Beacon's debt service payment on a loan it took out to re nance the property in 2021. e property's $27.4 million in 2023 net operating income was not enough to cover Beacon's $28.1 million debt service for the year, according to CoStar loan data.

Beacon's portion of the building is about 84% leased today, according to CoStar data. at's down from about 96% when Beacon acquired it, though Beacon recently notched a couple victories: Design rm Solomon Cordwell Buenz recently moved its headquarters to the tower's 25th oor, and the tower's largest tenant, the American Medical Association, inked a deal last year to extend its lease in the building through August 2035. e AMA slightly downsized its footprint with that move to 265,000 square feet from the 298,000 square it previously occupied.

Still, Beacon is now poised to see its equity in the property wiped out. But the rm was previously able to capitalize on the property's appreciation when it took out the current loan. e debt replaced a $304 million mortgage that the Beacon venture used to nance its nearly $468 million purchase of the building's o ce portion in 2016, according to Cook County property records. e 52-year-old tower also includes the separately owned Langham Chicago hotel on its lower 13 oors. e AMA Plaza foreclosure isn't the only big debt challenge Beacon is facing in Chicago. e rm is also facing an imminent deadline to pay o a $156 million mortgage from Bank of America backed by the o ce building at 303 E. Wacker Drive. Beacon recently hired brokers to seek a buyer for that 30-story building.

Despite the distress, Beacon recently showed its con dence in the future of the downtown o ce market when it paid $125 million in June for the 36-story o ce building at 333 W. Wacker Drive. at was a fraction of the $320 million the building traded for in 2015. Beacon's Chicago o ce portfolio also includes buildings at 231 S. LaSalle St., 190 S. LaSalle St., 515 N. State St. and 1 N. Dearborn St.

330 N. Wabash Ave. | COSTAR GROUP

PEOPLE ON THE MOVE

DESIGN

Of ce Revolution, Chicago

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CONSULTING

Husarchitecture, Chicago

Husarchitecture is proud to announce Bruce Weber as our new Director of Architecture. With over 25 years of experience, Bruce brings a wealth of expertise from the private sector and will lead our Architecture and Assessments division, focusing on project management and mentorship. Driven by his belief that empathy is essential for architecture to positively impact communities, Bruce’s leadership will help guide Husarchitecture’s next generation of sustainable architects in the public sector.

Husarchitecture, Chicago

Husarchitecture is proud to announce the promotions of Jan Concepcion & Mac Carroll to Architectural & Sustainability Leads. Jan is a USGBC LEED accredited professional with 6 years of experience in sustainable architecture services, managing the sustainability and architecture teams. With his strength in mentorship, Jan is critical in expanding Husarch’s workforce development training programs. Mac is a leader on Husarch’s facade team, championing a national Building Envelope Commissioning project. As a certi ed ICC accessibility inspector, Mac leads and coordinates assessment teams. Based on the East Coast, Mac is Husarch’s rst national employee, furthering the rm’s geographic expansion.

LAW FIRM

Laner Muchin, Chicago

Matt Ruder, recently joining Of ce Revolution as the newest Owner and Principal, brings a wealth of experience to the team. With a dynamic background in the contract furniture industry, Matt’s expertise spans both innovative strategy and hands-on execution in creating spaces that enhance workplace functionality and culture. Matt’s addition to the team is a strategic move that reinforces the company’s commitment to growth, customer value, and industry leadership.

FINANCIAL SERVICES

Wintrust Financial Corporation, Rosemont

Wintrust Financial Corp., a nancial services holding company based in Rosemont, Illinois, with more than 200 locations in the greater Chicago, southern Wisconsin, west Michigan, northwest Indiana, and southwest Florida market areas, is pleased to announce two promotions. Naomi Weitzel was promoted to EVP, Chicago Deferred Exchange Company, LLC. Naomi joined Wintrust in 2018. Robert Solem was appointed to SVP, CFO FIRST Insurance Funding. Robert joined Wintrust in 2024.

LAW FIRM

Levin Ginsburg, Chicago

Levin Ginsburg is pleased to announce that Caitlin Chenus joined the rm as an Associate Attorney. Ms. Chenus is a graduate of Loyola University Chicago School of Law and University of Iowa, magna cum laude. Catilin has extensive trial experience and is a skilled advisor. Caitlin will focus her practice on all areas of commercial law.

Laner Muchin is pleased to welcome Rachel Clark as Of Counsel. Rachel concentrates her practice on labor law matters, including grievance processing, labor arbitrations, collective bargaining and employee discipline, as well as administrative agency proceedings for both public and private employers.

NON-PROFIT

Laner Muchin is proud to welcome Megan Wilkes as Of Counsel. Megan focuses her practice on construction-related labor and bene ts issues, counseling clients on day-to-day labormanagement issues, employee bene t contribution compliance and interpreting and negotiating collective bargaining agreements. She is also experienced in defending employers in civil litigation matters.

Laner Muchin, Chicago

Laner Muchin is pleased to welcome Alex Levin as an Associate. Alex joins the Firm’s Employment Litigation Practice Group with a wealth of experience in numerous complex employment litigation issues, including claims based in Title VII, the Illinois Human Rights Act, ADA, ADEA and other federal and state statutes.

Laner Muchin is proud to welcome Edward “Clint” Shivers an incoming Associate. Clint initially joined the Firm as an extern before being promoted to student law clerk on a part-time basis. He earned his J.D. at the Chicago-Kent College of Law in May 2024, where he was a Dean’s Honor List Recipient and earned a Labor and Employment Law Certi cate.

LAW FIRM

Marshall, Gerstein & Borun LLP, Chicago

Marshall Gerstein is pleased to welcome Charles Morris as an Associate. Charles received his J.D. from Chicago-Kent College of Law, Illinois Institute of Technology in 2024. Prior to law school, Charles received his B.S., magna cum laude, in computer science from Valparaiso University. As an undergraduate, he received the CIS commit Award for his academic ability and his ongoing commitment to professional and technical excellence in computer science.

LEGAL

Morgan Lewis, Chicago

Morgan Lewis has expanded the rm’s leading technology, outsourcing, and commercial contracts practice with the arrival of partner Marina Aronchik in Chicago. Marina, who joins from Mayer Brown, advises multinational companies on critical technology and sourcing agreements. She focuses on data, digital services, outsourcing, and software transactions, with particular emphasis on structuring and negotiating agreements with digital services providers.

Hadley, Winnetka

Hadley, a recognized leader headquartered in Winnetka, has been serving people with vision loss for over 100 years. Johnjoe Farragher has been appointed President and CEO. Johnjoe has experience as founder of two successful education technology services for the K-12 marketplace, in addition to holding leadership roles at United Learning, Warner Bros/Discovery Communication, and De ned Learning. Johnjoe will lead Hadley to expand its reach and increase the number of members who use its programs.

PHILANTHROPY

Jewish United Fund, Chicago Wendy Abrams is the new chair of the Jewish United Fund/Jewish Federation of Chicago’s Board of Directors. Abrams has chaired numerous JUF committees: Overall Planning & Allocations; Community Outreach & Engagement; Scholarship; and TOV Volunteer Network. Abrams is past chair of National Women’s Philanthropy of Jewish Federations of North America, where she is an active board member, and is past president and campaign chair of Young Women’s Board and Women’s Board of JUF’s Women’s Philanthropy.

Intersect Illinois, Chicago

Intersect Illinois, the statewide economic development organization focused on bringing new businesses, jobs and investment to Illinois, welcomes Christy George as President and Chief Executive Of cer. George has a wealth of experience leading economic development initiatives, including as Governor Pritzker’s First Assistant Deputy Governor for Budget & Economy. She most recently served as Executive Director of the Chicago 2024 Host Committee for the Democratic National Convention.

STAFFING / RECRUITING

Kensington International, Elmhurst

J. James O’Malley joined Kensington International as Managing Director. Jim brings 30+ years of executive leadership experience and will serve as a senior member of the Business & Professional Services and Financial Services industry groups as well as support select private equity clients. Jim’s new role centers around senior level searches with a focus on ensuring leadership talent aligns with changing business needs across these organizations.

NON-PROFIT

TASC, Inc., Chicago

TASC (Treatment Alternatives for Safe Communities) is pleased to announce the addition of Matthew McFarland as Vice President of Strategic Partnerships and Community Relations. Matthew brings over 15 years of experience as a criminal justice reform advocate and non-pro t executive working with individuals affected by substance use and mental health disorders and those who are justice-involved. We are excited to welcome Matthew McFarland to TASC!

, an award-winning national design practice, announces the opening of its new Chicago Headquarters at the historic 330 North Wabash AMA Plaza building. The move marks a signi cant milestone for the 90+ year rm and re ects its standing as a national, industry-wide leader in architecture and design. The layout of the new headquarters places Chicago-based employees on one uni ed oor and is optimized to support activity-based work with exible meeting spaces, technology, and pinup boards.

Carroll

Wilkes

LAW FIRM

Shivers

Solem

MIDDLE BROW

Doing so will not be an easy lift. ough there are restaurants in Chicago that feature the occasional local wines on their menu — and a few that let them dominate their wine list — a Michigan wine can be a hard sell for the consumer. Many associate Michigan wine with sweetness. Others simply do not know enough about the varietals to risk spending $18 for a glass, particularly at a time when many continue to pinch pennies amid restaurant menu prices that are 30% higher than they were in 2019.

Middle Brow’s reputation and gravitas with its customers might help it push through some of the headwinds, Chicago wine experts say. If it succeeds, it could help more broadly propel Michigan — and Midwestern wine — out of the sweet stereotype and onto more menus.

“Certainly, it’ll make a di erence,” said Matt Sussman, owner of Table, Donkey & Stick and partner of Bar Parisette, restaurants that neighbor Bungalow by Middle Brow on Armitage Avenue. “A lot of people go to Middle Brow. Some people are going to want to drink wine there . . . .Some of them will like it and be turned on to it.”

Bar Parisette has selections on its menu from Buchanan, Mich.based Stranger Wine. at winery mainly uses European grape varietals — such as the familiar syrah, pinot noir and pinot gris. Middle Brow, which gets its grapes from a network of Michigan farmers, largely uses hybrid varieties. ose varieties — like Marquette, chambourcin and vidal blanc — are crosses between grapes native to America and grapes native to Europe. ey are heartier in cold

INSURANCE

in the process of establishing their own, according to the Centers for Medicare & Medicaid Services.

When states operate their own marketplace websites, they often have the opportunity to tailor them to the unique needs of residents, such as integrating enrollment in other state programs or extending the enrollment periods, according to research from the Commonwealth Fund, a New York-based nonpro t and independent health care research rm. State marketplaces also provide states detailed data about uninsured residents, which can be useful in addressing coverage gaps.

“ e value proposition of a state-based marketplace is to create local solutions for local challenges,” said Morgan Winters, director of Illinois’ state-based marketplace. “Once we have a state-based marketplace here in Illinois, that opens up a whole host of policy levers that we can pull as a state to be able to address our unique challenges here in Illinois.”

Winters said he’s eager to have more data about why roughly 800,000, or 7% of, Illinoisans are

winters and provide better disease resistance. e point? Michigan farmers grow both.

e state’s grape growing history dates back centuries, according to the wine tourism publication Michigan Wine Country. Detroit founder and French explorer Antoine de la Mothe Cadillac planted some in the early 1700s in the settlement that would become Detroit. e rst winery opened in 1868, and the industry grew until Michigan banned alcohol in 1918, in advance of Prohibition.

Some wineries stayed a oat during Prohibition selling juice to Welch’s. ey ramped up their wine production again after Prohibition, when tastes skewed sweeter. World War II veterans brought home a preference for drier, European wines, and many Michigan wineries went out of business. e industry started growing again in the 1980s.

Now, Michigan has almost 550 licensed winemakers, up from roughly 65 two decades ago, said Brian Lillie, president of the Michigan Wine Collaborative. It’s a growing industry, but most of those winemakers do not distribute to restaurants. Instead, they sell their wine in tasting rooms. at limits sales.

uninsured.

“One of the things that we're really looking forward to by being a state-based marketplace is to be able to have access to that direct data and be able to suss out what the barriers are, who has insurance, who doesn't (and) where we need to focus our work,” Winters said.

Affordability is a barrier

A ordability is often the primary barrier to enrolling in plans, the costs of which typically grow each year. is year, the median proposed premium increase among 324 plans o ered on the federal marketplace is about 7%, a similar jump to last year, according to an analysis by KFF, a San Franciscobased health policy research group. e jump stems from rising hospital prices and the growing use of GLP-1 drugs like Ozempic.

Once the marketplace is up and running, Winters said Illinois may issue tax credits to qualifying residents that could help o set the out-of-pocket plan costs, a decision that could become critical for residents if Congress allows federal subsidies to expire next year.

Establishing the marketplace is no small feat, however, especially on a two-year timeline. It’s required the state to hire new em-

goes for $15 a glass.

It’s not the rst Midwestern wine the restaurant has had on its menu. Daisies has sold Illinois Sparkling’s brut rose for years, and featured other Midwestern options, too. Servers are trained to o er tastes to consumers, to introduce them to the local options.

FULTON

From Page 3

property broker with real estate services firm Marcus & Millichap, did not respond to a request for comment.

“You do have to travel to experience most Michigan wines,” Lillie said.

Middle Brow has been making wine for about ve years, since it opened its Logan Square restaurant. It started with about 300 gallons, and doubled production every year since. is year, it’s on track to make 15,000 gallons of wine.

Middle Brow buys grapes from Michigan farmers and trucks them to Logan Square. e wine is made in the same facility as its beer, the product on which the business was founded in 2010. Middle Brow’s winemaking has outgrown its Logan Square restaurant. Already, the business makes more revenue from wine than beer.

“We serve 3,000 people a week,” Ternes said. “We can show them Michigan wine can be good and they can get excited about it.”

Over at Daisies, a pasta-focused restaurant on Milwaukee and Fullerton avenues, wine director Leah Matthews watches Ternes’ hypothesis unfold almost nightly. e restaurant, which strives to source its food and drinks locally, has had a Middle Brow wine on tap since earlier this year. Currently, it’s Quarry Stone, a sparkling blend of Marquette, cabernet franc and chambourcin that

ployees as it builds a team of 30 to run the new marketplace.

“ is is a big undertaking,” said Winters, who previously ran Minnesota’s state-based marketplace exchange. “ e only challenge is going to be making sure we stay on track and get everything done in time. As of now, we are very much doing that.”

Overall, it is estimated to cost Illinois nearly $30 million to implement the new system, and about $10.75 million of those funds will come from federal Medicaid matching funds, the IDOI said. After those initial investments, the IDOI expects the state-based marketplace to run o fees paid by participating health insurance companies.

Bringing the health insurance marketplace in-house could protect marketplace provisions of the A ordable Care Act, which was established under former President Barack Obama in 2010, should federal leaders ever roll back parts of the law, which could put plan availability or a ordability in jeopardy.

When Gov. JB Pritzker rst announced his support for legislation establishing a state-based marketplace, his o ce leaned into the politics of protecting the Affordable Care Act, pointing to the

“It’s always been a conversation that servers and bartenders are positioned to have because people are like, ‘Oh, the grapes are coming from Illinois? e grapes are coming from Michigan? Is that good?” Matthews said. “ at conversation doesn’t usually happen with Middle Brow. People are just excited to see what they’re doing.”

Middle Brow’s upcoming location outside Sawyer will aim to achieve the same sort of easygoing, natural vibe as its Logan Square pizza spot, just more pastoral. e bulk of the customer experience at the counter-service restaurant will be outdoors, Ternes said. Paths will weave between native plants and landscaping to cafe tables, gathering spots around re pits, and games for kids. It will seat roughly 100 people outside and 75 inside. e property looks over an old vineyard for juice grapes, and features good views of the Michigan sunset.

Ternes said the restaurant is looking for investors now. He hopes the outside portion will be open by next summer for pizza parties, and the inside portion and wine facility will be open by next winter.

Meanwhile, Ternes said Middle Brow is planning to increase distribution throughout Chicago this fall and winter.

“ ere’s really incredible wine to be made in Michigan,” he said. “Our customers trust us. When (they) . . . drink our wines, they’re not so scared and they’re more interested.”

fact that under former President Donald Trump’s administration, funding for enrollment navigators was diminished.

“Our marketplace will also be insulated from changes in federal policy by those who seek to undermine access to a ordable health care,” a Pritzker spokeswoman said at the time.

Under the new system, IDOI will continue to review and approve all plans each year, and plans will still need to meet federal and state standards. e number of plans o ered to Illinoisans on the state-based exchange won’t be known until closer to the transition’s completion, an IDOI spokesperson said.

Good for the bottom line

State-based marketplaces aren’t expected to make much of a di erence for private insurers that list their plans on these platforms because they are largely already following state-by-state insurance laws, said Benjamin Baenen, a health care and life sciences partner at Chicago consulting rm West Monroe. In fact, state exchanges might be good for the bottom line, Baenen said.

“ e exchanges are another way for them to grow their business,” Baenen said.

Sterling Bay floated plans for an office development at 1325 W. Fulton before the public health crisis upended the business of owning workspace, but never moved forward with the project. These days, the developer has been looking to cash out on a number of development sites it owns in the city, particularly in Fulton Market.

Sterling Bay earlier this year hired a broker to sell the site at 1200 W. Carroll Ave. and two smaller development parcels just north of that property. The developer is also trying to sell two other properties in the neighborhood at 345 N. Aberdeen St. and 370 N. Carpenter St., both of which have been rezoned by the City Council for Sterling Bay-proposed developments.

Selling Fulton Market sites instead of developing them is a change of direction for Sterling Bay, which helped transform the area into a corporate destination over the past decade by luring Google’s Chicago office and McDonald’s global headquarters there.

“ e sale of 1325 W. Fulton, in spite of the current market conditions, is a testament to the continued growth and demand in Fulton Market,” Sterling Bay Managing Principal Keating Crown said in a statement to Crain’s on the deal. “We take great pride in the progress of Fulton Market, and we remain focused on creating unique spaces that transform neighborhoods.”

Marketplace plans are proving to be a vital piece of Illinois’ insurance puzzle. e number of Illinoisans enrolled in a marketplace plan hit a new record last season, with nearly 400,000 plans selected, up 16% from the year before, according to the IDOI.

While the transition to a stateoperated marketplace is still underway, the IDOI’s Winters said the state has taken control of its “navigator” program, a network of nonpro t organizations that partner with the state to assist Illinoisans in plan enrollment.

“What we're ensuring is that help is more targeted, more cognizant of speci c needs for the state, and we're also making sure that we are holding those organizations accountable for meeting the goals of Illinois,” Winters said.

Illinois has contracted with California software company GetInsured, a vendor Winters has worked with directly in previous roles, to support the new marketplace. It is used by several other states for the same purpose, developing enrollment application systems and operating customer call centers.

“I know what they do well, and so I'm con dent that we're going to have a really great online experience for consumers,” he said.

From Page 3

Middle Brow is planning to increase distribution throughout Chicago this fall and winter. | MIDDLE BROW

year. It has also faced issues with its lender, according to court documents.

o ering quick delivery, consumers aren’t willing to wait or shop around.

“Customers want convenience,” said Jaime Katz, senior equity analyst at Morningstar. “Some people just want to go to one place and order it all.” ere was a spike in demand during the pandemic, as consumers invested their stimulus checks and unspent vacation funds on home improvement projects. But supply chain disruptions “made it di cult and more expensive” for True Value to source products, according to a Chapter 11 declaration dated Oct. 14 from True Value’s chief transformation o cer, Kunal Kamlani. e percentage of lled orders fell, and some store owners started seeking other wholesalers. True Value watched its market share decline. Management “swiftly took action,” but it wasn’t enough.

“Despite the company’s best efforts, some of its customers added a secondary supplier to maximize their ability to quickly meet end consumer demand,” according to the Chapter 11 declaration. “The company continues to struggle in winning back the business of those customers who added secondary suppliers.”

On top of that, demand for home improvement supplies was falling. After watching its revenue bump up 16.5% to almost $1.6 billion in 2020, it dropped 8% year over year in 2023 to less than $1.5 billion. A warm winter and wet spring this year led to slower retail traffic, according to the Chapter 11 declaration. Through the end of August, True Value’s revenue was down 14% year over

Very few companies that o er supply chain services have the scale to do it well, said Je Pehler, partner at business management consulting rm West Monroe. Building distribution centers creates high xed costs, and any hiccups that occur — such as poor inventory planning — jack costs up higher. e price of sending half-full trucks or overnighting freight, for example, adds up.

“If your planning isn’t under control, your costs are also going to be out of control,” he said.

True Value has been working to cut costs since 2023, according to the declaration. It negotiated with vendors, optimized delivery routes and plans to phase out two of its 12 distribution centers. The company hired a financial adviser to review options in May, and in July launched a marketing process to sell the business.

A True Value representative did not respond to a request for comment on this story, but CEO Chris Kempa said in an October news release that the company had determined selling the business would “maximize value and best serve our retail partners and other stakeholders into the future.”

Lawyers representing True Value also did not respond to requests for comment. e company has estimated liabilities between $500 million and $1 billion, and assets between $100 million and $500 million, according to the Chapter 11 ling.

Fort Wayne, Ind.-based Do It Best is the stalking horse bidder, which sets the low end of the bidding price. Do It Best issued a news release saying that

the two companies remain separate pending regulatory and court approvals. CEO Dan Starr said in the release that the company “stands ready, willing and able to meet” the needs of any retailer experiencing supply disruptions.

Experts say that if True Value’s costs were out of control, adding scale and consolidating the network by folding it into Do It Best’s business could help.

True Value’s roots trace back almost 170 years and through several mergers and acquisitions. The company got its start

True Value’s roots trace back almost 170 years and through several mergers and acquisitions. The company got its start in 1855 as Hibbard Spencer Bartlett.

in 1855 as Hibbard Spencer Bartlett. The True Value brand was introduced as a line of tools in 1932. A company called Cotter & Co. acquired Hibbard and its True Value tool line in 1963. Cotter merged with another company in 1997 and was renamed True Value about eight years later.

Now there are about 4,500 True Value stores, and 98% of the U.S. population lives in the trade area of at least one store, according to court documents. In the end, True Value’s efforts to supply those stores failed, Pehler said.

“They weren’t able to live up to the structure of what was needed to support them,” he said. “Especially when the tailwinds became headwinds.”

A company called Cotter & Co. acquired Hibbard and its True Value tool line in 1963. Cotter merged with another company in 1997 and was renamed True Value about eight years later. | CRAIN’S FILE PHOTO

This Gold Coast mansion is the new highest-priced home listing in Chicago

By Dennis Rodkin

A palatial Astor Street mansion built in 1914 for a lumber baron and last sold in 1988 went up for sale on Oct. 31 at $21 million, the highest asking price of any property now on the market in the Chicago area.

"It's a wonder," said Paul Episcope, the retired attorney who since 1998 has owned the 50-room mansion known as Astor Court and previously the Court of Golden Hands. A 25,000-square-foot Georgian Revival mansion, its L-shape framing a courtyard garden concealed from the street, the mansion is "like the manor houses you see in Europe," Episcope said. He moved in as a renter in about 1986, he said, when it was in the hands of a previous owner's estate, and later bought it.

e scope of the restoration the mansion needed "should have frightened me," he said, "but it didn't."

e property "was a wreck" at the time, Episcope said. "Bad shape isn't the word for it." In his restoration, he kept all the main rooms' layouts and trim but added color and additional materials to make them "more theatrical." e courtyard garden redesign incorporated ideas that the popular restaurant designer Jordan Mozer drew up for him, Episcope said.

Passersby may have glimpsed the courtyard through the wrought iron gates in front of the brick-lined porte-cochere that leads beneath the south end of the mansion.

In the main living spaces and bedroom suites, Episcope said, no walls were moved or layouts changed, to retain the impressive stature from the original design. e kitchen and some baths are in redesigned spaces, he said.

“It’s an unbelievable place,” said Natasha Motev, the Jameson Sotheby’s International Realty agent representing the property. “ ere’s really nothing else like it in the city, with the hidden gardens and (inside the house) spectacular plaster work, intricate millwork, grand high ceilings. It’s one of the last great Gold Coast mansions.”

Several other Gold Coast megamansions of the day were long ago carved into multiple units. Among them are the George Isham mansion on North State Parkway, later known as the Playboy mansion, and the Patterson-McCormick mansion on Astor Street.

Astor Court, designed by the noted architect Howard Van Doren Shaw, was originally the home of William O. Goodman, a founder of the Sawyer-Goodman Lumber Co., and his wife, Erna. eir son, aspiring playwright Lt. Kenneth Sawyer Goodman, died in the home, according to a historical Chicago Tribune article. In his memory, the Goodmans gave the seed money that started a theater company that is now one of Chicago's most esteemed.

According to the Cook County clerk, a trust that conceals the owners' name bought the home in 1988

for $1 million. at’s the equivalent of $2.66 million in 2024 dollars.

Episcope con rmed to Crain's he's the person behind the trust.

Episcope said he's selling now after 36 years of ownership because "I'm retired. It's 50 rooms, giant rooms. When somebody comes to visit, they can't believe all this, yet in Europe, this would be a manor house. You seem them everywhere."

Listing photos show an opulent interior with nishes including ceilings decorated with ornate plaster details or beams, a curving staircase and a primary bathroom with tall uted pillars, a tile mosaic in the middle of the oor and other ostentatious details that suggest it’s a modern design intended to mimic the grandeur of the home’s original era. e replaces — there are at least 17, Motev said — are original carved marble.

From the primary bedroom suite, there’s a sightline east between the two towers of 1350 N. Lake Shore

Drive to Lake Michigan.

Motev said the primarily residential space in the mansion is about 10,000 square feet, with six rental units “that are generating about $30,000 a month” making up the rest of the 25,000 square feet. Episcope said the apartments were all originally spaces for the Goodmans' servants and sta .

e footprint of the property — the mansion running lot line to lot line and its internal gardens — is nearly one-third of an acre.

is listing at $21.5 million comes in above the home of the late Jim Crown, which quietly listed recently at $17.5 million.

e Astor Court listing comes at a time when the upper end of the Chicago-area real estate market has been dynamic.

On Oct. 29, Crain’s reported the upper-priced echelon of the market is headed for its third-biggest year of sales, with 70 homes sold at $4 million or more by that time. Two days

later, the gure was 72. e tally will soon surpass 2023’s year-end total of 73, but isn’t likely to eclipse the 136 homes sold in 2022 or the 101 sold in 2021.

Properties that are under contract but have yet to close include Michael Jordan’s Highland Park estate priced at over $14.85 million, a Walton Street penthouse being sold by Ken Gri n with an asking price of $11 million and a condo on the 73rd oor of the new One Chicago Tower that has been under contract at an asking price of nearly $14 million since January 2023.

Nevertheless, if Astor Court sells for a gure close to its asking price, it will be only the third Chicago-area single property in the past ve years to sell for $20 million or more.

at tally is for single properties and doesn’t include the more than $39 million that Justin Ishbia spent to buy four lakefront properties, three of them contiguous, in Winnetka.