From vacant storefronts on Michigan Avenue to high-profile departures of some corporate headquarters to the shuttering of neighborhood grocery stores, Chicago’s economy has been challenged by both the pandemic and crime.
As Mayor Lori Lightfoot now seeks a second term in office, her rivals are putting the blame on her for the city’s economic obstacles.
Lightfoot has described herself in this campaign as a “pro-Chicago business” kind of mayor. But on her watch, corporate heavy hitters like Boeing and Citadel have left town at a time when one prominent CEO characterized Chicago as a crime-ridden city “in crisis.”
Exhibit A of that argument is Chicago’s prized North Michigan Avenue, the world-famous shopping district now pocked by multiplying empty storefronts and surges in carjackings, retail thefts and robberies.
Among Lightfoot’s accomplishments, Chicago has continued to be a growing hub for tech start-ups. And last July, she announced with Gov. JB Pritzker that Google had acquired the state’s James R. Thompson Center with plans to renovate it.
And Lightfoot piloted a guaranteed basic income program for 5,000 residents out of 176,000 who applied for the benefit — the majority of whom live below the poverty line.
More broadly, the Chicago metro area over which the city dominates has seen inflation drop every month since June, with its 5.5% year-over-year increase in December less than inflationary jumps in New York, Miami and Philadelphia.
But unemployment in the region stood at 4.4% at the end of November, putting Chicago behind several big-city rivals like New York, Houston and Los Angeles, though still representing an improvement from the 5.1% rate at the beginning of 2022.
“We’re not back to where we were pre-COVID. And we really need to have (an) understanding of Chicago being a safe and prosperous place for people to do business,” Laurence Msall, president of the Civic Federation said, later adding: “We have not seen the level of growth that some of the large cities have seen.”
As Lightfoot seeks reelection, she and her eight rivals diverge on how to revive the economy and restore downtown, and most of her opponents would nix her signature neighborhood development program, INVEST South/West.
Corporate HQ shuffle
Whenever Chicago goes to the bond market to borrow money, one of the things it touts to potential investors is the number of Fortune 500 and S&P 500 companies headquartered in the Chicago area. Sixteen of those firms are located in the city.
In 2021 and 2022, the Kimberly-Clark Corporation, Discover Financial Services, the Kellogg Company and Google all announced significant expansions in the city. Lightfoot has heralded 114 corporate expansions and 45 relocations in 2022.
But those victories came along with blemishes to Lightfoot’s economic record as some large companies announced their departure from Chicago, with the city’s crime being a factor in at least some of the movement.
Last May, Boeing Company announced it was moving its Chicago headquarters to Virginia.
A month later, the Citadel hedge fund and its trading company, Citadel Securities, revealed it would move its Chicago headquarters to Miami after the firms’ billionaire owner, Kenneth Griffin, derided the city as “Afghanistan on a good day” because of its street violence. Much of Griffin’s public ire was directed at Democratic Illinois Gov. JB Pritzker, not Lightfoot.
And in September, McDonald’s President and CEO Chris Kempczinski delivered a stinging assessment of the city’s inability to control crime as violence played out over and over, including in the company’s own dining rooms.
Last year alone, McDonald’s locations on the Near North Side, Southwest Side and Far South Side were the sites of fatal shootings.“Everywhere I go, I’m confronted by the same question these days: What’s going on in Chicago?” Kempczinski said. “While it may wound our civic pride to hear it, there is a general sense out there that our city is in crisis.”
Lightfoot publicly lambasted the comments, pointing to statistical reductions in crime.
“What would have been helpful is for the McDonald’s CEO to educate himself before he spoke,” she said in response to Kempczinski’s comment.
Homicides actually dropped in 2022 citywide by 14% from a year earlier, according to Chicago Police data.
But Jack Lavin, president and CEO of the Chicagoland Chamber of Commerce, credited Griffin and Kempczinski for identifying the “crisis” arising from crime in Chicago and how it’s the No. 1 issue right now confronting business.
“I think that’s going to be the biggest challenge for the future of our economy and the next mayor,” Lavin said.
For her part, Lightfoot vouches for her steps in cutting crime and sees only positives surrounding her record on business retention and jobs.
“Chicago is a great destination for businesses,” Lightfoot said during Thursday night’s ABC7/League of Women Voters mayoral debate.
“This is a great place to come because we’ve got great workers. We’ve got a very diverse economy, and people know that they’ve got me as a mayor who is pro-Chicago business,” she said.
Crime, pandemic-related store closures and surging online consumer demand have tarnished what for decades has been one of the city’s gaudiest economic jewels.
But rather than confront those issues facing Michigan Avenue, Lightfoot instead has pointed to what she regards as other economic successes downtown.
The mayor secured a casino to be built on the site of the Chicago Tribune’s River West printing center and a deal to bring NASCAR racing to Grant Park — initiatives the city believes could pump hundreds of millions of dollars into the local economy.
But for now, retail vacancies on Michigan Avenue stood at more than 30% at the end of 2022, according to data compiled by Cushman & Wakefield, a Chicago-based commercial real estate services firm.
That vacancy rate has more than doubled since 2019, when Lightfoot took office, and it’s more than eight times worse than what it was in 2016, according to the same data.
One of the biggest blows to the commercial corridor came in 2021 when Macy’s closed its flagship department store at Water Tower Place. Compounding things, the mall’s owner, Brookfield Properties, surrendered the Magnificent Mile’s retail centerpiece to its lender.
Mayoral candidate Paul Vallas bemoaned the stunning news.
“Brookfield sees what everyone else is feeling and living,” Vallas wrote on his Facebook page. “A city in crisis. A city in chaos. A city losing hope. A city that has lost its charm.”
And as retailers and property owners pulled up stakes, crime around that area soared.At the end of 2022, the Chicago Police Department documented double-digit percentage increases year over year in murders, criminal sexual assaults, burglaries, thefts and motor vehicle theft within District 18, the area that covers parts of the city’s Near North Side, including the Magnificent Mile.
That loss came after the retail corridor was ransacked in August 2020 by looters angered by the police shooting of a man in Englewood. The mayor answered by imposing curfews and raising bridges along the Chicago River, just as she did during an earlier round of rioting in May 2020.
State Rep. Kam Buckner laid blame directly on the mayor for North Michigan Avenue’s troubles.
“I represent the Magnificent Mile in the General Assembly, and the mayor told the shop owners there that it was their fault that what happened to them in 2020 happened,” he said at Thursday night’s debate. “Listen, many of us thought that this administration would raise the bar. But all we’ve seen is raised bridges, an attempt to raise taxes and raise the murder rate. We have to do better.”
Sixth Ward Ald. Roderick Sawyer said residents’ anxieties about crime mean they’re not frequenting restaurants and theaters, and he pointed to shoring up investments in the city’s hospitality industries “that are really the backbone of our economy.”
Cook County Commissioner Brandon Johnson said for downtown to adapt to a post-pandemic landscape, office and commercial spaces can be converted to residential ones instead — something Lightfoot’s administration is incentivizing for the LaSalle Street corridor in the Loop.
Fourth Ward Ald. Sophia King criticized Lightfoot’s negotiation style as the main reason for the high-profile corporate exits.
Activist Ja’Mal Green said he would increase aldermen’s discretionary funds to help hire private security for their business corridors and give small businesses their first business license for free “to show them that we appreciate them for creating opportunities.”
Businessman Willie Wilson chalked up the problem to young people crying out for “economic empowerment” in the city.
“A lot of people won’t be on the street if they had something that they love to do,” he said.
Investing in neighborhoods
But the economic struggles weathered downtown have been felt across the city.
Lightfoot has made community development in disinvested neighborhoods a cornerstone of her administration through her INVEST South/West program that she boasts has driven $2.2 billion in public and private investments in the South and West sides.
“It has supported good-paying union construction jobs, generated new opportunities for small businesses and created new affordable housing for working families. I could not be prouder of what this initiative has accomplished,” Lightfoot told WBEZ and the Chicago Sun-Times.
But the program, which has faced criticism for a lack of community engagement and taking credit for projects already underway before she took office, is one that a majority of her opponents say they’ll leave behind.
Five rivals told WBEZ and the Sun-Times they would not continue INVEST South/West. Other than Lightfoot, only Sawyer and Buckner said they would keep the program — with Buckner saying while he supported it in concept, “in its current form, it’s a glorified PR campaign that needs real teeth and investment.”
U.S. Rep. Jesús “Chuy” García said he would not roll back investments already made under the program, but would work to expand opportunities. At a forum earlier this month, he said INVEST South/West is “really the vestiges of the Emanuel administration with a Lightfoot brand on them.”
Lightfoot shot back at García at the same forum: “Two-point-five billion dollars is not warmed over hash, congressman.”Lightfoot did, however, gain praise from her opponents for a $31.5 million pilot guaranteed income program launched last year. Five of her opponents told WBEZ and the Sun-Times they would set aside funds in the city’s budget to continue the program — even as Lightfoot, who noted the city is working with University of Chicago researchers to evaluate the program’s effectiveness, did not commit to funding the program permanently.
King was part of a trio of aldermen that proposed the pilot program, and Green said he wanted to expand the idea.
Wilson said he would not continue the pilot program that he said “is based on chance.” Sawyer pointed to a reparations program as a more effective route to address inequities and Vallas said he would roll back fees and fines for low-income families.
Basic economic problems persist in some Chicago neighborhoods, however, like a dearth of grocery stores.
In November, Whole Foods closed its Englewood grocery store after the city used tax increment financing dollars to lure the grocer to 63rd and Halsted streets six years ago. In late 2022, the city allocated $13.5 million in TIF money to a Black-owned firm to renovate six Save-A-Lot grocery stores on the South and West sides — a move that frustrated some residents who said they deserve higher-quality options.
Ashley Johnson is the program manager for Re-Up, an economic upliftment program from the Resident Association of Greater Englewood that works to increase home ownership and support Black-owned businesses.
She is frustrated at the city’s use of tax increment financing money on projects like the now-shuttered Whole Foods.
“They’re taking TIF money, which is our tax money, and building things that they know aren’t going to be sustained, such as the Whole Foods,” Johnson said. “And then, Whole Foods gets all this money, and then they just leave. And now, we’re kind of left with no grocery store.”
But she is no stranger to departures from the neighborhood. Johnson grew up seeing her large extended family slowly leave the place they once called home.
“We were a really close-knit family, but today my father is the only one who still lives in Englewood,” Johnson said. “And it’s because a lot of them didn’t want to raise their families in a community that they did not feel like they would be able to reach adulthood or to get a proper education, which is sad.”
When deciding a neighborhood’s economic future, the city’s next mayor could start by listening to those who already call it home, Johnson said, rather than imposing edicts from the fifth floor of City Hall.
“Politics in Chicago is always just gonna be politics in Chicago,” Johnson said, later adding: “As a leader, you have your own ideas. But a leader’s job is to serve.”
Read the candidates’ plans
Candidates are listed in the order in which they will appear on the Feb. 28 ballot. Click on their names to learn more about their plans. Sophia King has not yet released an individual economics plan.
Create a city-owned public bank that would prioritize affordable housing, home ownership, new development, and small business lending.
Give small businesses their first business license for free, which can range from hundreds to thousands of dollars.
To revitalize the Magnificent Mile, add Parisian-style cafes, a bridge connecting Oak Street Beach to the Magnificent Mile and helicopter pads for tours.
Establish a Chicago CEO Council to advise on business issues citywide to prioritize growth and investment.
Work with state lawmakers to eliminate or reconfigure the commercial vacancy tax credit.
Create a “Main Streets Plan” for the city’s historic commercial corridors.
Prioritize lead pipe replacement to create jobs.
Roll back taxes, like annual property tax increases and the city’s bag tax.
Secure vacant lots and buildings and turn that land into industrial zones for commercial activity and manufacturing and tech jobs.
Include greater workforce development and vocational training in schools.
Adapt downtown to a post-COVID landscape by converting commercial spaces to residential ones.
Reinstate a “Big Business Head Tax” on companies who perform 50% or more of their work in Chicago at a rate of $4 per employee.
Create an independent Community Development Authority made up of community-based contractors and organizations to renovate homes, finance small businesses and more.
Establish a City Land Trust to support the development of closed industrial sites, shuttered business corridors and vacant properties.
Require agreements for major neighborhood economic development projects that take into account environmental impacts and commit funds to social service infrastructure.
Secured a Moody’s investment grade upgrade for the city in addition to upgraded bond ratings.
Contributed $242 million as an advanced pension payment to the city’s four pension funds.
Launched a program to provide over $10 million in federally funded grants to help businesses impacted by the pandemic.
Overhaul the tax increment financing program to focus on small, residential TIFs that serve blighted areas.
Spur downtown development by streamlining the permitting process. Implement a “concierge” permitting process that would charge companies a premium price for an expedited timeline and generate additional revenue.
Create a low-cost or no-cost loan program to help purchase and redevelop vacant lots.
Provide incentives for businesses that hire returning citizens, formerly incarcerated workers and local residents.
Support entrepreneurship by creating an incubator and accelerator program for community-based organizations and nonprofits.
Convene a “Chicago Council of Corporate and Community Leaders” to advise on downtown’s revitalization.
Read more of WBEZ’s coverage of Chicago Elections 2023.