Some Big Cities Need to Get a Grip on Crime
Or they're going to
become small cities. In Chicago, the daily havoc is ruining downtown businesses
and prompting some companies to leave town. "Progressive" policing
isn't helping.
BY HOWARD
TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH
INVESTORS@TULLMAN
Anyone who's been paying
attention knows that you'd have to be a confirmed masochist to try to open a
business or a new store in the central business districts in a number of the
largest cities in the United States. Ground Zero these days for urban unrest
and the constant dashing of good intentions is undoubtedly San Francisco, where
even foolishly optimistic corporations like Whole Foods have basically given up
fighting against the continued assaults on their people, non-stop and largely
tolerated shoplifting and overt thefts, open-air drug markets and mentally ill
homeless wandering the streets.
Only weeks after Whole
Foods shuttered a nearly brand-new store in San Fran, Nordstroms, a
longtime and legendary retailer, announced that it is closing two downtown
locations as well. Seattle and Portland, Oregon don't even pretend any longer.
Their streets, sidewalks and parks are virtual war zones and no one
running any kind of business there thinks they're going to be able to survive
much longer. Street crime and drugs are rampant and basically ignored by the
progressive municipal administrators; and the disease is spreading.
We're seeing the same
kinds of issues and problems in Chicago, and we've also got insane levels of
carjackings by armed groups of 13-year-old kids. In addition to the
retail marketplace collapsing in downtown and commercial real values plummeting, we're
seeing a growing exodus of major corporations, which has even worse
implications for the city's long-term health and viability. Having just elected
a new mayor who has absolutely zero business, management, or
operational experience to follow in the footsteps of the last
angry, nasty and grossly incompetent occupant of that office, we're seeing
firms reducing their presence or leaving town, most recently Guggenheim
Partners.
This should be a warning
to the incoming mayor, Brandon Johnson, as well as to other
"progressive" mayors across the country that the tech and business
community's exodus to greener and safer pastures is moving forward at
lightspeed. In fairness to Johnson, the rush to the exits started with Mayor
Lori Lightfoot, who abruptly and aggressively turned her back on the business
community and largely ignored the needs of the downtown business district whose
stores, restaurants, hotels and theatres are among the largest drivers of the
city's economic success. Companies are voting with their feet as they seek out
safer, more corporate-friendly and better-managed communities.
Someone needs to reach
out in a hurry to stem this tide or there won't be much of a CBD or an economy
left in Chicago. To date, if anything, the confused and hostile messaging --
largely leftover threats and promises from the campaign -- which the
mayor-elect has promoted has done exactly the opposite. Sadly, the more that
these progressive and inexperienced novices pontificate about their grand
visions and future (albeit undetailed) programs, the more difficult it becomes
for any rational business leader to make forward-looking plans that include
Chicago and cities like it in the equation. You can't build a solid business on
a foundation of fast talk and fantasies.
The COVID-19 pandemic
and the largely irrevocable behavioral changes it precipitated have provided an
amazingly convenient excuse for two or three different kinds of corporate
action that in earlier times were simply not viable alternatives given the
likely civic and political blowback they risked. Shrinking or entirely
abandoning substantial downtown office spaces in the name of a newly liberated
workforce that wants to work from home is one example. Which means that
threatening to tax those commuters who were planning to return to the city for
work is a stupid start if the goal is to rebuild a thriving downtown.
Not bothering to rehire
entire middle-level tiers of white-collar workers - especially of a certain age - is
another ongoing corporate process because the tasks those workers performed
have been outsourced, compressed by new A.I.-driven tools like ChatGPT, or
eliminated by automation. That turns out to be very convenient cover for
headcount shrinkage as well as the conversion of large segments of the
workforce from fixed infrastructure costs into variable and often outsourced
expenses -- conversions that have direct and highly attractive impacts on the
bottom line. The insane idea in this kind of environment of reinstituting an
employee head tax, as Mayor-elect Johnson suggested, is exactly the worst kind
of disincentive to encourage new entrants and retain the few big businesses we
still have.
So are the convenient
knee-jerk rationalizations for constant shoplifting and the wanton weekend
trashing of city buses and police cars as well as looting of downtown stores.
Apparently, we don't want to run the risk of "demonizing" any
of the little darlings who simply have no other way or place to express
themselves. This is simply an invitation to a summer full of mischief and
mayhem, which will also help to make sure that our downtown restaurants and
hotels continue to suffer from the tourist drought that has threatened their
very existences for the last several years.
When the small stores,
shops and food outlets in the Loop close their doors at 3 or 4 in the afternoon
and thereby forfeit what little homebound commuter traffic there might have
been to avoid the risks of staying open, the message should be clear to even the
most oblivious observers. Chicago is simply not the place to be after dark.
When big store operators like Walmart, which just announced the closure of four
Chicagoland stores, and Target start to determine whether it even makes sense
to stay open in certain parts of the city, we know that we are on the cusp of
even more challenging times.
But, to return to the
ongoing departure of major firms in the city and the direct and
indirect ways that they are hollowing out their offices, warehouses and other activities,
there's an even bigger and far more impactful problem with their disappearance.
Many of these firms are the very organizations, enterprises, and entities that
funded, supported, supplied manpower to, and otherwise encouraged the very
essential civic, charitable, and philanthropic activities designed to serve the
underserved populations that the new mayor says are so critically in need of
assistance.
As these companies,
their people and their attention shifts elsewhere, Chicago and every other major
urban city that doesn't respond effectively to these problems will be much the
worse for their leaving, in ways that simple headcount and revenue numbers
can't begin to calculate.