WBEZ | Business http://www.wbez.org/tags/business Latest from WBEZ Chicago Public Radio en IL exporters say it’s a struggle with no Export-Import Bank http://www.wbez.org/programs/morning-shift/2015-08-31/il-exporters-say-it%E2%80%99s-struggle-no-export-import-bank-112773 <img typeof="foaf:Image" src="http://llnw.wbez.org//main-images/exim bank.jpg" alt="" /><p><p>It&rsquo;s been two months since Congress failed to re-authorize the Export-Import Bank, which is the official export credit agency of the United States. As a result, thousands of small businesses around the country, including hundreds right here in Illinois, have lost a helping hand in exporting their products to other countries.</p><p>So, what does that mean for businesses in the Chicago area? Richard Paullin, executive director of the International Trade Association of Greater Chicago joins us with his take on how the closure of the bank is affecting local exporters.</p></p> Mon, 31 Aug 2015 11:02:00 -0500 http://www.wbez.org/programs/morning-shift/2015-08-31/il-exporters-say-it%E2%80%99s-struggle-no-export-import-bank-112773 Chicago’s hotels doing big business http://www.wbez.org/programs/morning-shift/2015-08-03/chicago%E2%80%99s-hotels-doing-big-business-112544 <img typeof="foaf:Image" src="http://llnw.wbez.org//main-images/Flickrsubbu arumugam.jpg" alt="" /><p><p>Lollapalooza saw almost 300,000 come in and out of Grant Park over the weekend. It&rsquo;s a safe bet that plenty of ticket holders came from out of town, and many of them stayed in hotels in or around downtown. It would be an additional boost to a business sector that has seen great numbers so far in 2015. Crain&rsquo;s Chicago Business Reporter Danny Ecker joins us with more on what the numbers mean for hotel owners, for travelers and for the city.</p></p> Mon, 03 Aug 2015 11:11:00 -0500 http://www.wbez.org/programs/morning-shift/2015-08-03/chicago%E2%80%99s-hotels-doing-big-business-112544 Black business' slow flight from Bronzeville http://www.wbez.org/series/curious-city/black-business-slow-flight-bronzeville-112524 <p><p>Bronzeville played a huge part in African-American history. When the Great Migration began a century ago, black Southerners flocked to the South Side neighborhood, which stretched between State Street and the lake, from 22nd Street to 63rd Street.</p><p>These migrants transformed the area into a black population center and a nexus of black culture. On the business side, a mass of black consumers supported black-owned restaurants, shops and other enterprises.</p><p>It&rsquo;s this commercial &nbsp;history that attracted the attention of Clare Butterfield, who lives on the north end of the neighborhood and sent along this question:</p><p style="text-align: center;"><em>I wondered where those shops went. &hellip; There&rsquo;s just not a lot of businesses there. And they&rsquo;re not black-owned for the most part. So that was question: Where did they go? What happened to them?</em></p><p>We found several reasons behind the dispersal of Bronzeville&rsquo;s black commercial might, from demographics to a changing business climate. But Clare herself touched on a possible explanation, too, one that&rsquo;s both common and controversial: Perhaps legalized segregation had an upside for black Chicagoans otherwise hurt by discrimination and, when that segregation ended, the business climate took a hit.</p><p><span style="font-size:22px;">Business in the heart of Bronzeville</span></p><p>The neighborhood&rsquo;s status as a vibrant commercial center is undeniable, according to <a href="http://www.thehistorymakers.com/sites/production/files/styles/bio_photo/public/Reed_Christopher_wm.png" target="_blank">Christopher Robert Reed</a>, an emeritus professor of history at Roosevelt University and one of <em>the</em>&nbsp;go-to scholars on black Chicago. (He also grew up in Bronzeville, his father owning a three-chair barber shop in the neighborhood until a fire destroyed it in the 1970s).</p><p>&ldquo;The State Street corridor was a commercial center for black Chicago,&rdquo; Reed says. &ldquo;It&rsquo;s been likened to a black Wall Street.&rdquo;</p><p>This activity happened in the context of persistent racial segregation in Chicago. The primary instruments that kept blacks in Bronzeville and the rest of Chicago&rsquo;s &ldquo;Black Belt&rdquo; were restrictive covenants, private legal agreements that barred whites from selling their homes to blacks. Until the covenants were ruled unconstitutional in 1948, discrimination crowded black families of all economic stripes into too few residential units. This created a critical density of black consumers and, the theory goes, one that kept black-owned businesses viable.</p><p>But there&rsquo;s danger in presenting life or business in Bronzeville as a happy Jim Crow fest: Segregation did breed business ingenuity, but it also bred discriminatory practices. That led to some surprises in the neighborhood&rsquo;s composition. For one, Chicago&rsquo;s whites kept blacks out of white neighborhoods, but that didn&rsquo;t stop whites from operating their own businesses within Bronzeville. <a>In</a>&nbsp;the seminal book <em><a href="http://press.uchicago.edu/ucp/books/book/chicago/B/bo3638645.html" target="_blank">Black Metropolis: </a><a href="http://press.uchicago.edu/ucp/books/book/chicago/B/bo3638645.html">A Study of Negro Life in a Northern City</a></em>&nbsp;authors St. Clair Drake and Horace Cayton found that, in 1938, Bronzeville blacks owned and operated 2,600 businesses while whites had 2,800.</p><p>And, there&rsquo;s more. The area&rsquo;s black businesses were smaller and older than their white counterparts, and they only received less than a tenth of all the money spent by black consumers within the area.</p><p>Business cycles, too, were unkind. Reed says from the 1920s on, blacks did own businesses on 35th Street, but these operations &ldquo;were hurt tremendously by the Great Depression that started in 1930.&rdquo;</p><p>Even after the worst of the Depression passed, segregation had put the black business community on unsure footing, as black owners couldn&rsquo;t compete with whites when it came to securing capital. Steven Rogers, who teaches black entrepreneurship at Harvard University, says there&rsquo;s always been a dearth of support by mainstream financial institutions.</p><p>&ldquo;In the 1940s when we saw blacks in the business world, the only support that black-owned businesses had was through guerrilla financing, that&rsquo;s self-financing, or family,&rdquo; he says. &ldquo;We didn&rsquo;t see that institutional support that we saw with white-owned companies. And the reality is when that happens, when that&rsquo;s in existence, you won&rsquo;t see the prosperous businesses as we see in the white communities.&rdquo;</p><p>And that left black businesses of the past last century much more vulnerable.</p><p><span style="font-size:22px;">Spread far and wide</span></p><p>There are no data that show clear pre- and post-1948 numbers of black-owned businesses, but it&rsquo;s clear that blacks began to disperse in the 1950s because of the lifting of covenants. At the same time &ldquo;urban renewal&rdquo; (often derided as &ldquo;Negro removal&rdquo;) was underway.</p><p>&ldquo;The expansion of Lake Meadows, Prairie Shores, Michael Reese Hospital, Mercy Hospital and the Illinois Institute of Technology led to the displacement of thousands of black families from State Street east over to the Lake from 26th Street south to about 35th,&rdquo; says Reed. &ldquo;This was a devastating blow to black demographic unity and it affected businesses operations adversely on 35th Street.&rdquo;</p><p>The bottom line, Reed says, is that &ldquo;the customers had moved away.&rdquo;</p><p>The erosion of a concentrated customer base plays into changes that took place in Scott&rsquo;s Blue <a>Book</a>, a black business directory that contained an array of listings &mdash; everything from sausage-makers to dentists. As desegregation continued, the tone of the books shifted from unabashedly pro-black to more race-neutral in the 1960s.<a name="presentation"></a></p><div class="image-insert-image " style="text-align: center;"><a href="http://wbez.is/1LRR1t5" target="_blank"><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/Blue%20Book%20Comparison%20presentation%20THUMB.png" style="width: 100%;" title="" /></a></div><p>And there was another transformation, one that gets to Clare&rsquo;s observation about Bronzeville&rsquo;s present-day businesses not being black-owned.</p><p>&ldquo;What happened to the businesses happened to a lot of businesses in America, once the economy was transformed by the global economy&rsquo;s dominance,&rdquo; Reed says.</p><p>35th Street faced competitive trends similar to those faced by other commercial strips in Chicago, to the point where, today, 35th Street includes multinational companies: McDonald&rsquo;s, Chase Bank, Subway and Popeye&rsquo;s, to name a few. (<a href="http://popeyes.com/franchise/international/areas-available.php" target="_blank">Yes, Popeye&rsquo;s is international!</a>)</p><p><span style="font-size:22px;">Survivors of segregation and then integration, too</span></p><p>The Depression, a global economy and urban renewal played their roles in undercutting or dispersing Bronzeville&rsquo;s black-owned businesses. As we&rsquo;re answering Clare&rsquo;s question about what happened to them, it&rsquo;s fair to point a brighter side: Some of these businesses stayed put.</p><p>Among the survivors are black-owned Seaway Bank and <a href="http://www.isfbank.com/">Illinois Service Federal</a>, a savings and loan that&rsquo;s been around since 1934. The latter issued home loans when commercial banks shunned black customers.</p><p>Illinois Service Federal chairman Norman Williams also happens to be president of <a href="http://www.unityfuneralparlors.com/" target="_blank">Unity Funeral Parlors</a>, a black-owned South Side business that started in 1937.</p><p>&ldquo;My father came to Chicago as an insurance executive,&rdquo; Williams says. &ldquo;This was an entrepreneurial idea that came to him that he hoped his family would be able to continue.&rdquo;</p><p>Williams&rsquo; father turned out to be right. For decades, few white funeral homes served blacks, and many of the funeral homes survived a more integrated era.</p><p><span style="font-size:22px;">Continuing legacy</span></p><p>Black businesses are no longer clustered in an area like the Black Belt, but that doesn&rsquo;t mean they don&rsquo;t exist. The basic pattern was that black businesses moved into the neighborhoods that black people moved into.</p><p>&ldquo;Black Chicago has always been recognized as the crown jewel of black-owned businesses throughout the country,&rdquo; says Harvard&rsquo;s Steven Rogers. &ldquo;The black business community in Chicago is responsible for some historic events in our country.&rdquo;</p><p>Historic events like &hellip; helping finance the elections of the city&rsquo;s first black mayor and the country&rsquo;s first black president.</p><p><span style="font-size:22px;">More about our questioner</span></p><p><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/preferredheadshot3.png" style="float: right; height: 322px; width: 290px; margin: 5px;" title="(Photo courtesy of Clare Butterfield)" />Clare Butterfield grew up in Central Illinois but has been in Chicago for 30 years, having lived on the North, West and South sides.</p><p>She&rsquo;s called Bronzeville home for the past 10 years, and, following our reporting, appreciates a reminder that urban renewal programs deeply affected her neighborhood.</p><p>&ldquo;I&#39;ve seen the memorial marker on State Street north of 35th that mentions that IIT displaced a row of black businesses there,&rdquo; she says. &ldquo;Some of the businesses got swept out along with the housing, and that should have been more obvious to me.&rdquo;</p><p>Clare is just one of many questioners who&rsquo;ve asked about some of the least comfortable parts of Chicago history.</p><p>&ldquo;It&#39;s hard for white people to ask these questions,&rdquo; she says, &ldquo;partly because we don&#39;t want to be interpreted as critical, when we mean to be sympathetic (however imperfectly), and partly because we&#39;re probably not going to like what we learn: more examples of injustice and the use of power by people like us, first to force people into a neighborhood and then to force them out of it.&rdquo;</p><p>The only way out, she says, is affirm that these things happened and, when we can, show, too, how &ldquo;some entrepreneurs persisted and thrived in spite of everything they had to navigate.&rdquo;</p><p><em><a href="http://www.wbez.org/users/nmoore-0" rel="author">Natalie Moore</a> is WBEZ&rsquo;s South Side Bureau reporter. <a href="mailto:nmoore@wbez.org">nmoore@wbez.org</a>.&nbsp;Follow Natalie on <a href="https://plus.google.com//104033432051539426343" rel="me">Google+</a>, &nbsp;<a href="https://twitter.com/natalieymoore">Twitter</a></em></p><p>&nbsp;</p><p>&nbsp;</p></p> Thu, 30 Jul 2015 15:29:00 -0500 http://www.wbez.org/series/curious-city/black-business-slow-flight-bronzeville-112524 Morning Shift: July 20, 2015 http://www.wbez.org/programs/morning-shift/2015-07-20/morning-shift-july-20-2015-112428 <p><p><iframe frameborder="no" height="166" scrolling="no" src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/215539596&amp;color=ff5500&amp;auto_play=false&amp;hide_related=false&amp;show_comments=true&amp;show_user=true&amp;show_reposts=false&amp;show_artwork=false" width="100%"></iframe></p><p><span style="color: rgb(51, 51, 51); font-family: Arial, sans-serif; font-size: 14px; line-height: 22px;">A shooting over the weekend breaks two weekends without shootings for Chicago&#39;s Englewood. We talk with members of a group called Mothers Against Senseless Killings, who have been patrolling some of the hot-spots in Englewood. We&rsquo;ll also learn more about a pretty sizable mobile sculpture that&rsquo;s emblazoned with the names of kids and teenagers killed by gun violence. Plus, we examine what Chicago needs to do to draw Chinese businesses and investors. And we take a look back at the Eastland disaster, which claimed the lives of more than 800 people 100 years ago Friday.</span></p></p> Mon, 20 Jul 2015 11:28:00 -0500 http://www.wbez.org/programs/morning-shift/2015-07-20/morning-shift-july-20-2015-112428 How Chicago can strengthen Chinese business ties http://www.wbez.org/programs/morning-shift/2015-07-20/how-chicago-can-strengthen-chinese-business-ties-112425 <img typeof="foaf:Image" src="http://llnw.wbez.org//main-images/shanghai Wilson Hui.jpg" alt="" /><p><p><iframe frameborder="no" height="166" scrolling="no" src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/215538320&amp;color=ff5500&amp;auto_play=false&amp;hide_related=false&amp;show_comments=true&amp;show_user=true&amp;show_reposts=false&amp;show_artwork=false" width="100%"></iframe></p><p><span style="color: rgb(51, 51, 51); font-family: Arial, sans-serif; font-size: 14px; line-height: 22px;">Since taking office, Mayor Emanuel has made a big push to lure Chinese companies and investors to Chicago &mdash; and to ramp up business ties between our city and cities like Beijing and Shanghai.</span></p><p><span style="color: rgb(51, 51, 51); font-family: Arial, sans-serif; font-size: 14px; line-height: 22px;">In fact, just this weekend, the delegation that Chicago sent on a trade mission to China for the second time on the mayor&rsquo;s watch has returned home. Here to talk about what Chicago needs to do to cater to Chinese businesses and to talk about the city&rsquo;s efforts when it comes to China is Tracy Xu, president of the Chicago-based China Executive Club. China Executive Club is a non-profit group that serves the needs of Chinese companies doing business in Chicago and the Midwest.</span></p></p> Mon, 20 Jul 2015 11:09:00 -0500 http://www.wbez.org/programs/morning-shift/2015-07-20/how-chicago-can-strengthen-chinese-business-ties-112425 Futures guru reflects on the end of open outcry trading in Chicago http://www.wbez.org/programs/morning-shift/2015-07-06/futures-guru-reflects-end-open-outcry-trading-chicago-112321 <img typeof="foaf:Image" src="http://llnw.wbez.org//main-images/mercweb_0.jpg" alt="" /><p><p><iframe frameborder="no" height="166" scrolling="no" src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/213498822&amp;color=ff5500&amp;auto_play=false&amp;hide_related=false&amp;show_comments=true&amp;show_user=true&amp;show_reposts=false&amp;show_user=true&amp;show_artwork=false" width="100%"></iframe></p><p><span style="color: rgb(51, 51, 51); font-family: Arial, sans-serif; font-size: 24px; line-height: 22px;">Futures guru reflects on the end of open outcry trading in Chicago</span></p><p><span style="color: rgb(51, 51, 51); font-family: Arial, sans-serif; font-size: 14px; line-height: 22px;">Monday July 6th is the last day of action for many of the trading pits at the Chicago Board of Trade. The S&amp;P futures and options pits will remain open, but the rest of the pits at the nation&rsquo;s oldest futures exchange are going dark as more trading moves online. Electronic trading has its benefits, but it will never match the sheer frenzy of a hundred traders in color-coordinated jackets flashing their hand signals and yelling to get a leg up on a competitor. Morning Shift talks with Leo Melamed, chairman emeritus of CME Group, formerly known as the Chicago Mercantile Exchange about his history with the pits.</span></p><p><span style="color: rgb(51, 51, 51); font-family: Arial, sans-serif; font-size: 14px; line-height: 22px;"><strong>Guest:</strong> <em><a href="http://www.leomelamed.com/">Leo Melamed</a> is chairman emeritus of CME Group.&nbsp;</em></span></p></p> Mon, 06 Jul 2015 10:45:00 -0500 http://www.wbez.org/programs/morning-shift/2015-07-06/futures-guru-reflects-end-open-outcry-trading-chicago-112321 An anthropological look at Chicago's trading pits http://www.wbez.org/programs/morning-shift/2015-07-06/anthropological-look-chicagos-trading-pits-112322 <img typeof="foaf:Image" src="http://llnw.wbez.org//main-images/mercweb_1.jpg" alt="" /><p><p><iframe frameborder="no" height="166" scrolling="no" src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/213497925&amp;color=ff5500&amp;auto_play=false&amp;hide_related=false&amp;show_comments=true&amp;show_user=true&amp;show_reposts=false&amp;show_artwork=false" width="100%"></iframe></p><p><span style="color: rgb(51, 51, 51); font-family: Arial, sans-serif; font-size: 24px; line-height: 22px;">An anthropological look at Chicago&#39;s trading pits</span></p><p><span style="color: rgb(51, 51, 51); font-family: Arial, sans-serif; font-size: 14px; line-height: 22px;">Monday July 6th is the last day of open outcry trading in many of the trading pits at the Chicago Board of Trade. In this interview with NYU cultural anthropologist Caitlin Zaloom, we take an anthropological look at the pits and ask the question: Why did Chicago come to define futures trading? Zaloom is Associate Professor of Social and Cultural Analysis at New York University.</span></p><p><span style="color: rgb(51, 51, 51); font-family: Arial, sans-serif; font-size: 14px; line-height: 22px;"><strong>Guest:</strong> <em><a href="https://twitter.com/caitlinzaloom">Caitlin Zaloom</a>, Associate Professor of Social and Cultural Analysis at New York University and author of </em><a href="http://www.amazon.com/Out-Pits-Traders-Technology-Chicago/dp/0226978141">Out of the Pits: Traders and Technology from Chicago to London</a><em>.&nbsp;</em></span></p></p> Mon, 06 Jul 2015 10:40:00 -0500 http://www.wbez.org/programs/morning-shift/2015-07-06/anthropological-look-chicagos-trading-pits-112322 Changes in taxi industry leave cab owners underwater http://www.wbez.org/news/changes-taxi-industry-leave-cab-owners-underwater-111920 <p><p>If you were looking for a good return on investment in the last few years, it was hard to beat a Chicago taxi medallion. Medallions, which are city-issued licenses to operate cabs, increased in value at least fivefold between 2006 and 2013. But now after huge shifts in the industry, many owners are deep underwater on their medallion loans, and some say they&rsquo;re nearly worthless.</p><p>&ldquo;I haven&rsquo;t written a new taxi loan in well over nine months? Ten months?&rdquo; said Charlie Goodbar, an attorney and taxi fleet owner. &ldquo;The access to capital&rsquo;s disappeared.&rdquo;</p><p>Chicago limits the number of medallions to roughly 7,000. Without those metal plates affixed to the hood, a taxi cannot operate in the city. Goodbar has facilitated hundreds of medallion sales over the years. But today, would-be buyers are finding it nearly impossible to find loans to purchase medallions.</p><p>&ldquo;I probably have put together at least 20-30 percent of all transfers, at some point probably more than half,&rdquo; said Goodbar. &ldquo;And as a market-maker, and as a license broker, and as an attorney, and someone who&rsquo;s in the lending business, how in good faith can I make a market when I can&rsquo;t value the asset or value cash flow?&rdquo;</p><p>Disruption in Chicago&rsquo;s taxi industry &mdash; both from the entry of competing rideshare services, and changes to city policies affecting medallion owners &mdash; have turned the business model on its head in just two years. At one time, investing or lending in a medallion purchase was a sound business decision, because cab owners could make a good living.</p><p>&ldquo;It was a way for an immigrant family to move up the social ladder and economic ladder through the use&nbsp; of leveraged financing in the taxi industry, and a lot of hard work,&rdquo; said Goodbar.</p><p>But today, Goodbar said it&rsquo;s nearly impossible to find a bank willing to lend money for a medallion purchase, and so the avenue that many immigrants once took is increasingly closed off.</p><div class="image-insert-image "><img alt="" class="image-original_image" height="233" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/Taxi%20medallions%202.0.jpg" style="float: left;" title="" width="350" /></div><p>You can tell by looking at the numbers. Between 2011 and 2013, when the market was robust, an average of 30-40 medallions changed hands monthly. But starting in February of 2014, that number dropped sharply, and never recovered. In 2015, only seven medallions were transferred in the first three months.</p><p>&ldquo;There&rsquo;s no buyer in the market,&rdquo; said Shyam Arora, a medallion owner. &ldquo;So it&rsquo;s a piece of garbage.&rdquo;</p><div id="responsive-embed-taximedallions">&nbsp;</div><script src="http://s3.amazonaws.com/wbez-dailygraphics/dailygraphics/graphics/taximedallions/js/lib/pym.js" type="text/javascript"></script><script type="text/javascript"> jQuery(document).ready(function(){ var pymParent = new pym.Parent( 'responsive-embed-taximedallions', 'http://s3.amazonaws.com/wbez-dailygraphics/dailygraphics/graphics/taximedallions/child.html', {} ); }); </script><p>Arora is one of those immigrants who found success in the taxi industry. He came from India in 2002 and bought a medallion a few years later. Today, he has three. He and his son drive two of the cabs during the day, and he leases the third. At one time, he had as many as four drivers for his small fleet &mdash; but those days seem long ago.</p><p>On a recent early morning, he took one of his cabs to a city-owned site on the South Side for an annual taxi inspection.</p><p>&ldquo;This inspection process is stressful, very stressful,&rdquo; he said.</p><p>This day, he was especially nervous. The car is a 2010 Toyota Prius with a whopping 313,000 miles on it. Arora knew inspectors would be looking for even the smallest flaw to take it out of operation.</p><p>&ldquo;Yesterday I spent $200 to the mechanic and the day before yesterday I paid $100 for detailing,&rdquo; he recounted.</p><p>He also got the engine cleaned, and drove an hour out to the suburbs just to pick up a small paint marker that he could use to cover minor exterior nicks. Altogether, he estimated spending $500 to get the car in tip-top shape &mdash; about three days&rsquo; earnings.</p><p>&ldquo;I&rsquo;m losing nowadays, every day, in my business,&rdquo; said Arora. Three months ago, he fell behind on his mortgage and medallion loan.</p><p>Arora explained that most of his income comes from leasing his taxis to other drivers, rather than driving his own cab. But amid a shortage of taxi drivers in Chicago, he&rsquo;s struggled to find people to use his taxis. That&rsquo;s meant his vehicles sit empty about one-third of the time, while he still foots the bill for their medallion loans, the car payments, taxi affiliation fees and other expenses.</p><p>Even when Arora does have drivers, he said it&rsquo;s gotten much more difficult for them to find passengers. He blamed rideshare companies like UberX, Lyft and Sidecar for stealing business.</p><p>&ldquo;When you don&rsquo;t get a customer for an hour, the [taxi] driver gets so frustrated, he goes to Starbucks or he goes home,&rdquo; explained Arora.</p><p>Arora would love to sell his medallions and be done with it. But he knows he won&rsquo;t find a buyer at a good price. Plus, he&rsquo;s facing the same dilemma that homeowners once did during the recent housing crisis. Many borrowed significant sums of money against their homes as housing values increased, only to find themselves underwater on those loans once the market settled.</p><p>Similarly, Arora and many other owners borrowed heavily against their medallions while they increased in value. Arora said that helped his family get through the recession.</p><p>&ldquo;Medallions were the source of feeding everybody &mdash; every expense we have,&rdquo; he explained.</p><p>But now, he owes $600,000 against his medallions, and he knows that nobody will buy them for anything close to that amount.</p><p>Arora believes his only way out may be a loan modification. Goodbar says medallion lenders have every reason to cooperate.</p><p>&ldquo;There will be shakeout in the market, the lenders will have to work with the borrowers,&rdquo; he said, &ldquo;because I think the last thing a large medallion lender wants is a bunch of medallions sitting in a drawer.&rdquo;</p><p>Arora hopes that&rsquo;ll be true in his case, because he wants to stay in the taxi business.&nbsp; Otherwise, he&rsquo;s looking at filing for bankruptcy.</p><p><em>Odette Yousef is WBEZ&rsquo;s North Side Bureau reporter. Follow her <a href="https://twitter.com/oyousef">@oyousef</a> and <a href="https://twitter.com/WBEZoutloud">@WBEZoutloud</a>.</em></p></p> Tue, 21 Apr 2015 19:06:00 -0500 http://www.wbez.org/news/changes-taxi-industry-leave-cab-owners-underwater-111920 Why we sign up for gym memberships but never go to the gym http://www.wbez.org/news/culture/why-we-sign-gym-memberships-never-go-gym-111312 <img typeof="foaf:Image" src="http://llnw.wbez.org//main-images/gym.jpg" alt="" /><p><p><strong>Gyms have built their business model around us not showing up.&nbsp;</strong></p><p>Gyms have way more members than they can actually accommodate. Low-priced gyms are the most extreme example of this. Planet Fitness, which charges between $10 and $20 per month, has, on average, 6,500 members per gym.</p><p>Most of its gyms can hold around 300 people. Planet Fitness can do this because it knows that members won&#39;t show up. After all, if everyone who had a gym membership showed up at the gym, it would be Thunderdome.</p><p>If you are not going to the gym, you are actually the gym&#39;s best customer.</p><p><strong>So gyms try to attract people who won&#39;t come.&nbsp;</strong></p><p>If you haven&#39;t been a &quot;gym person&quot; in the past, chances are good that paying for a gym membership won&#39;t change that. Gyms know this and do what they can to attract people who haven&#39;t traditionally been gym rats.</p><p>Instead of displaying challenging equipment like weight benches and climbing machines in plain view, gyms will often hide weight rooms and other equipment in the back. Many gyms now have lobbies that are designed to look like hotels and fancy restaurants.</p><p>&quot;For the longest time, the design was around the sweat,&quot; says Rudy Fabiano, an architect who designs gyms all over the world. &quot;Twenty-five years ago ... clubs could be very intimidating. Remember there were the baggy pants that everybody had and the bodybuilders would bring their own jug of water?&quot;</p><p>Once gyms started looking more like hotels, coffee shops and restaurants, people who weren&#39;t bodybuilders started feeling comfortable in gyms. The casual gymgoer was born.</p><p><strong>Our brains want to be locked into annual contracts with gyms.</strong></p><p>Normally, we hate being locked into long contracts (cellphones, cable packages), but gym memberships are an exception.</p><p>&quot;Joining a gym is an interesting form of what behavioral economists call pre-commitment,&quot; says Kevin Volpp, director of the Center for Health Incentives and Behavioral Economics at the Wharton School.</p><p>Volpp says we actually like the idea of being locked into a gym contract ... at first, anyway.</p><p>&quot;They&#39;re picturing the &#39;new me&#39; who&#39;s actually going to go to the gym three times a week and become a physical fitness machine.&quot;</p><p>We convince ourselves that since we have committed to putting down money for a year, we will make ourselves go to the gym. And then, of course, we don&#39;t.</p><p><strong>Just when we try to get out, they feed us, massage us and ply us with alcohol. </strong></p><p>Gyms have big issues with retention, and most lose around half their members every year.</p><p>Once we realize that we haven&#39;t been going to the gym, even $20 per month can feel like too much.</p><p>To try to combat this, gyms look for ways to offer value to customers who aren&#39;t necessarily into working out. Planet Fitness has bagel breakfasts once a month and pizza dinners. Those are its busiest times. It also has massage chairs.</p><p>Other gyms have mixers and movie nights and spa treatments.</p><p><strong>Without slackers like us, gyms would be a lot more expensive.&nbsp;</strong></p><p>The reason gyms can charge so little is that most members don&#39;t go.</p><p>People who don&#39;t go are subsidizing the membership of people who do. So, if you don&#39;t work out, you are making gyms affordable for everyone.</p><p>If you are one of the brave few who actually do go to the gym, you are getting an amazing deal.</p><p>&mdash; <em><a href="http://www.npr.org/blogs/money/2014/12/30/373996649/why-we-sign-up-for-gym-memberships-but-don-t-go-to-the-gym">via NPR</a></em></p></p> Tue, 30 Dec 2014 16:28:00 -0600 http://www.wbez.org/news/culture/why-we-sign-gym-memberships-never-go-gym-111312 Illinois begins accepting applications for marijuana businesses http://www.wbez.org/news/illinois-begins-accepting-applications-marijuana-businesses-110764 <img typeof="foaf:Image" src="http://llnw.wbez.org//main-images/medical-marijuana-2.jpg" alt="" /><p><p>Illinois officials are now accepting applications for people who want to open a medical marijuana dispensary or cultivation center. The number of licenses are quite limited &ndash; only 22 available for cultivation centers and 60 for dispensaries.</p><p>Michelle West is hoping to be awarded a license to open a cultivation center. She&rsquo;s a nurse who originally set out to research how legalization would affect her job, but instead she found a business opportunity.</p><p>&ldquo;It&rsquo;s not only a business opportunity for a person, but for economic development for a community, for a neighborhood,&rdquo; West said.</p><p>The Illinois Department of Agriculture will sift through the many applications that are expected to be submitted. Officials are looking at six specific areas: the proposed facility, staffing and operations, security, cultivation, product safety and labeling and business and financial disclosure.</p><p>West said she&rsquo;s been researching the industry for the past year. Her 300 plus page plan includes economic growth all the way down to different types of cannabis plants. Most applicants have brought on consultants from other states that have already legalized medical marijuana. West is no different.</p><p>&ldquo;A lot of the other people I met, they spent a ton of money on consultants. Consultants are important, yet I was hesitant. I found one because I have to know my plan, inside out,&rdquo; she said.</p><p>In addition to attending conferences, West hired a consultant from Colorado who&#39;s gotten underperforming cultivation centers back up to top production.</p><p>The competition to run dispensaries and cultivation centers in the Chicago market will be very tough. West lives in the city, but decided to look elsewhere to set up her cultivation center. She eventually found a rural town in Police District 6.</p><p>She presented her plans to the town&rsquo;s council members and that night they decided to support her. The town preferred she not disclose the name until a license is actually awarded.</p><p>&ldquo;It was amazing the support because people want jobs. Everyone in the town, all the jobs had left. So people have to drive 40 miles away, 50 miles away. Some are driving into Chicago and then they&rsquo;re driving back home,&rdquo; she said.</p><p>West visited other towns that had mixed views on the legalization of medical marijuana. For this particular community, the cultivation center looks like a path to economic recovery. That&rsquo;s part of the deal they have with West. Their decision to back her means their community members would get first dibs at the job openings.</p><p>&ldquo;The plan that I have, it includes not only hiring younger people, but there&rsquo;s been a lot of people over 50 that have been downsized or they couldn&rsquo;t find a job and they keep trying to find a job. If they&rsquo;re willing to be retrained or work within the facility, they&rsquo;re going to have a job, too,&rdquo; she said.</p><p>West has written an employee handbook that includes wages starting at around $12 an hour with benefits.</p><p>She found a potential property in the area. She&rsquo;s already crafted plans for year-round growing and plans to scale in the years following.</p><p><span style="font-size:22px;"><strong>Security Plan</strong></span></p><p>State officials are making security a high priority for all applications. They see the future cannabis facilities as major targets for crime, since they will deal with large amounts of cash and drugs.</p><p>Joel Brumlik works in law enforcement and he&rsquo;s been running his suburban security company, Tactical Security since 2007. He started researching how he could profit after the state legalized medical marijuana.</p><p>&ldquo;Right now, we have a significant investment in this. A lot of time, a lot of studying, a lot of resources expended. We&rsquo;ve been involved in two or three conferences. We&rsquo;re going to be in one in Las Vegas. These aren&rsquo;t cheap,&rdquo; he said.</p><p>Tactical Security has been training officers specifically for medical marijuana, everything from use of force to patient hospitality, even how to inspect a facility according to the state&rsquo;s rules and regulations.</p><p>Brumlik prides himself on the hefty 70 plus page security plan he&rsquo;s written up. He says he&rsquo;s fielded at least a dozen calls from potential medical marijuana businesses and already has a few signed contracts.</p><p>He says his competition seems to be based mostly on price.</p><p>&ldquo;Yes, our company may be charging you a higher price per hour, but what is your cost? And when I say &lsquo;what is your cost&rsquo;, what I&rsquo;m saying is, is that if you don&rsquo;t have the right people, the highly trained people, then your cost might be a lot higher than you believe if you&rsquo;re just going by the price,&rdquo; he said.</p><p>But some security experts say it isn&rsquo;t necessary to have such specific tailoring for the marijuana industry. Eugene Ferraro is a security consultant based in Colorado. He calls it a marketing ploy.</p><p>&ldquo;The tailoring that&rsquo;s necessary to provide services to a marijuana retailer have very small differences from other types of retailers or operations whether it&rsquo;s manufacturing or distribution operations,&rdquo; Ferraro said.</p><p>He says bigger security companies have been staying away from cannabis to avoid any potential legal issues. But he&rsquo;s definitely seen specialized companies gaining a lot of business.</p><p>&ldquo;The small operators, the mom and pop alarm companies, the mom and pop guard companies have some opportunity here,&rdquo; he said.</p><p>Ferraro says Illinois&rsquo; emphasis on security is overkill and that the cost will be passed down to the consumers, which might create another problem of pushing people to the black market.</p><p>Brumlik doesn&rsquo;t see it that way and says every dispensary he visited in Colorado had been broken into.</p><p>&ldquo;We&rsquo;re not interested in trying to compete on a level where we&rsquo;re just trying to put warm bodies in there,&rdquo; he said.</p><p><span style="font-size:22px;"><strong>Financing</strong></span></p><p>It&rsquo;s going to take anyone who&rsquo;s awarded a license a lot of money to open and operate the marijuana facility. For West, she needs to pay a $25,000 non-refundable application fee, and she also needs to show she has $500,000 in liquid assets. If she&rsquo;s awarded the license, she&rsquo;ll have to pay a $200,000 permit fee, not to mention the cost it takes to run any type of business.</p><p>Financing and banking has been tricky for business owners in states that are already well into their legalized marijuana programs. Illinois will be no different.</p><p>Even ancillary businesses are finding it difficult to find a bank just to make a simple deposit.</p><p>&ldquo;Difficult is such an understatement. It was the bane of my existence for 90 days,&rdquo; said venture capitalist David Friedman.</p><p>Recently, the Chicago businessman added another title to his resume; publisher. He started a news website called Marijuana Investor News.</p><p>&ldquo;I don&rsquo;t understand why Bloomberg can run stories about medical marijuana, but we can&rsquo;t. And I&rsquo;m sure, I understand now about the banking regulations and everyone&rsquo;s just very cautious about anything that has to do with it. We did ultimately find a bank because it&rsquo;s ridiculous that we shouldn&rsquo;t,&rdquo; he said.</p><p>Friedman is being approached by entrepreneurs for investments into their proposed dispensaries and cultivation centers. He says since the final rules were approved he hasn&rsquo;t slept much.</p><p>Troy Dayton is CEO of the Arcview Group, a California-based national investment and research firm focused on cannabis. A lot of accredited investors in the marijuana industry are members of the group, including David Friedman. It has some of the first angel investors in the sector.</p><p>Dayton said Illinois&rsquo; program might be more difficult to finance with all the restrictions and a possibility of the pilot program sunsetting in a few years.</p><p>&ldquo;[Business owners] had better have a lot of money in the bank because it may be a long ramp up before they can make their businesses profitable,&rdquo; he said.</p><p>According to Arcview&rsquo;s annual report, the industry is expected to grow to $2.6 billion in 2014.</p><p>&ldquo;That&rsquo;s a 68 percent growth in one year. Making it the fastest growing industry in America. &nbsp;And growing to 10.2 billion dollar industry by 2018,&rdquo; Dayton said.</p><p>Another challenge businesses are likely to face is a high tax rate. Marijuana is categorized as a Schedule 1 illegal substance, next to heroin and LSD. The Internal Revenue Service has a code to tax illegal drug income, up to 50 percent.</p><p>Dooma Wendschuh, CEO of Ebbu, a Colorado cannabis company said it takes a lot of work to keep your business completely above board in this federally illegal industry.</p><p>&ldquo;You&rsquo;re really limited in who you can raise that money from. You can&rsquo;t go to Sand Hill Road with a couple of baggies of your product and expect to raise your money. It just doesn&rsquo;t work like that,&rdquo; he said.</p><p>Sand Hill Road is an area in California with a lot venture capital companies.</p><p>But Wendschuh thinks the opportunity in marijuana is bigger than the Internet and tech boom if you&rsquo;re willing to take the risk.</p><p>He looks at it like alcohol after prohibition. Laws were left for states to determine individually. Some counties remain dry even today. It took companies some years after prohibition to feel comfortable enough to even promote their product.</p><p>Wendschuh says for the first several years after prohibition, bootlegging was big and the black market thrived.</p><p>&ldquo;Of course it was cheaper than buying alcohol at a licensed facility. But hey look right now. If you wanted to go buy bootleg alcohol could you even find it? I don&rsquo;t know where you would find it,&rdquo; he said.</p><p>He says eventually the alcohol industry became less taboo. People wanted to buy from a reputable source rather than a cheaper, criminal operation. Product pricing evened out and financing was easier.</p><p>Wendschuh believes the cannabis industry isn&rsquo;t far from seeing relaxation of federal regulations, and marijuana could follow the path of alcohol.</p><p><em>Susie An is WBEZ&rsquo;s business reporter. Follow her <a href="https://twitter.com/soosieon">@soosieon</a>.</em></p></p> Mon, 08 Sep 2014 07:40:00 -0500 http://www.wbez.org/news/illinois-begins-accepting-applications-marijuana-businesses-110764