Lori Lightfoot wants to change the way Chicago does
business. Now she needs to persuade business leaders.
Lori Lightfoot swept into office as mayor of Chicago on Tuesday,
promising to change the way the city does business, focusing more on
neighborhood investment and small companies than previous administrations.
But after eight years of Mayor Rahm Emanuel’s aggressively pro-business agenda
that included a soaring skyline, a growing tech sector and high-profile
corporate relocations, Chicago’s business community had a decidedly mixed
reaction to Lightfoot's victory.
“We’ve
been the top city for six years now for these corporate relocations,” said
Howard Tullman, the former CEO of 1871, the influential tech hub. “The thought
that all of that momentum would slow down or not be a priority is pretty scary
in terms of my sectors — business and technology.”
A former federal prosecutor and political
novice, Lightfoot handily won a runoff against Cook County Board
President Toni Preckwinkle, becoming the first
African-American woman and openly gay candidate elected mayor of Chicago.
Her grassroots campaign was built on a
platform of change and reform, a message that resonated with voters weary of
the so-called Chicago way.
Her economic plan reflected the same themes,
essentially characterizing Emanuel’s policies as a “false choice” between
investing in the downtown business district or in Chicago’s neighborhoods. She
pledged to continue the development downtown, but work “even harder” to bring
investment to struggling neighborhoods on the West and South sides by fostering
small business growth.
But business leaders including Tullman
questioned whether the city can afford to take its foot off the accelerator
when it comes to recruiting major companies and encouraging development
downtown.
Tullman said that if Lightfoot is any less
aggressive than Emanuel has been at wooing tech companies to Chicago, Atlanta
and other cities will be waiting in the wings to scoop them up.
“We’ve
got Facebook, Salesforce, LinkedIn and five or 10 other companies talking about
expanding and growing their businesses in Chicago,” Tullman said. “The tech
community and the business community don’t really wait at all.”
Lightfoot, though, said that the gains can be
more widely shared throughout the city. Last month, she spoke at the startup
hub TechNexus in the Loop about the importance of getting resources to
entrepreneurs wherever they are in the city.
“We need to create incubators for businesses
in our neighborhoods so we can add this kind of vibrancy, peer to peer contact,
mentorship, all the good things that come from incubators, we have got to do
them out in the neighborhoods, particularly south of Roosevelt and west of Ashland,”
she said.
Lightfoot also discussed getting rid of the
aldermanic prerogative that has made entrepreneurs feel as if they must “kiss
the ring of some alderman to do anything” in the city. She said that system has
stifled growth and innovation, and discouraged people from staying in Chicago
to do business.
Chicago’s diverse economy has helped it
through “a lot of ups and downs” in the past, Lightfoot said. But it’s critical
to understand where the economy is going and create a pipeline of talent to
fuel it. Lightfoot’s office did not respond to a request for comment on Wednesday.
When Emanuel was elected for his first term as
mayor in February 2011, the former congressman and White House chief of staff
under President Obama was a savvy political veteran with deep ties to Chicago’s
business community.
Throughout his tenure as mayor, he promoted
the city and his recruitment efforts tirelessly, convincing big name businesses
like McDonald’s and Conagra to relocate their headquarters to Chicago, while
missing on Amazon.
High-profile events such as the NFL Draft
showcased the city on a national stage, while Choose Chicago, Emanuel’s
revamped tourism bureau, helped push annual visitors past the 57-million mark
last year.
But beyond the gleaming downtown was a
economic dichotomy, where violence and poverty persisted in neighborhoods on
the South and West sides.
“The economic impact has and continues to be
devastating,” Lightfoot said in her economic plan.
That plan, which was published online, focuses
on small business growth in Chicago neighborhoods by streamlining access to
capital, eliminating red tape, decentralizing city agencies and other
mechanisms designed to encourage development in distressed communities.
Allen Sanderson, a University of Chicago
economics professor who criticized the city for giving away too much to lure
the NFL Draft, expressed some reservations over Lightfoot’s focus on small
business development.
“There’s nothing inherently good or bad about
big or small business,” Sanderson said. “It’s about which one can produce
better results.”
Sanderson said big businesses tend to be more
efficient than small businesses, which improves the likelihood of success, job
creation and retention.
“Small businesses create a lot of jobs, but
(they) also go out of business at a much higher rate,” he said. “There are some
strong advantages to being larger.”
While Sanderson acknowledged the inequality of
income across Chicago’s neighborhoods, he questioned whether allocating
resources from the city center to encourage peripheral development is the
answer.
Juliana Kerr, director of the global cities
program for the Chicago Council on Global Affairs, said the groundwork laid by
Lightfoot’s predecessors will enable her to focus more on neighborhood
development.
“She now has an opportunity to be able to
focus on the neighborhoods because the Riverwalk has been rebuilt, because of
Millennium Park, because of all those great initiatives that have helped make
the downtown core a thriving ecosystem for the city at large,” Kerr said.
Jack Lavin, president and CEO of the Chicagoland Chamber of
Commerce, believes Lightfoot will find the right balance between downtown and
neighborhood development, and supports her emphasis on small business.
The
Chamber of Commerce joined a long list of civic institutions that endorsed
Lightfoot over Preckwinkle during the runoff election.
“It’s very important to talk about small and
mid-sized businesses,” Lavin said. “That’s where the jobs are being created in
the economy right now.”
Nowhere is the pro-business environment under
Emanuel more evident than the skyscrapers and large-scale developments that
have sprouted up in downtown Chicago and its environs during his eight years in
office. Most recently, Emanuel helped win zoning approval for Sterling Bay’s
massive $6 billion Lincoln Yards development planned for the North Side.
Chicago developer Related Midwest also has a
number of ambitious projects in the pipeline, most notably The 78 – a planned
residential, retail and commercial development on a vacant South Loop site. A
proposed centerpiece is the Discovery Partners Institute, a public-private
technology research center envisioned as a way to train and retain top talent
by encouraging businesses to locate nearby.
“We’re in the planning stages,” Related
Midwest President Curt Bailey said Wednesday. “We could be
one announcement away from beginning some buildings there.”
Bailey said that while downtown development
“may change course a little bit” under the new administration, he is confident
growth will continue. If development moves out to the neighborhoods, Related
Midwest would be ready to take part.
“We are not only focused on large projects
like The 78 and market-rate developments, but we are extremely focused on
affordable housing,” Bailey said. “I think that this administration can lead us
to a renaissance of affordable housing development that we would like to be an
enormous part of.”
The 78 was also one of about 10 Chicago sites
offered up as a potential home for Amazon’s second headquarters. In November,
Amazon announced it would split its second headquarters between New York's Long
Island City and Arlington in northern Virginia, bypassing Chicago’s bid.
New York offered Amazon $3 billion in tax and
other incentives, enthusiastically backed by Mayor Bill de Blasio, who, like
Lightfoot, succeeded a pro-business mayor in 2014 on a progressive platform
focused on alleviating economic inequality and developing affordable housing.
In February, Amazon pulled the plug on its
proposed New York headquarters amid local political backlash over the incentive
package.
Tullman, who is now executive director of the
Ed Kaplan Family Institute for Innovation and Tech Entrepreneurship at the
Illinois Institute of Technology, said the shifting political winds in New York
are a cautionary tale for Chicago.
“Look at New York,” Tullman said. “You got a
few crazy politicians and Amazon walked. That was 25,000 jobs and who knows how
many hundreds of millions of dollars of benefit.”
Ally Marotti contributed
reporting.
Twitter @RobertChannick
