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 such as 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. J.B. Pritzker that Google had acquired the state’s James R. Thompson Center with plans to renovate it.
She also secured a long-elusive casino for Chicago projected to generate nearly $180 million in annual tourism-related impact for the city and inked a three-year deal to bring NASCAR to the city.
And in a targeted economic boost for the poor, Lightfoot piloted a guaranteed basic income program for 5,000 residents out of 176,000 who applied for the benefit.
More broadly, the Chicago area has seen inflation drop every month since June. But unemployment in the region, at 4.4% at the end of November, puts Chicago behind several big-city rivals, including New York, Houston and Los Angeles.
“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.
Corporate HQ shuffle
Whenever Chicago goes to the bond market to borrow money, one of the advantages it touts to potential investors is 16 Fortune 500 and S&P 500 companies headquartered in the Chicago area.
In the past two years, several major companies, including Google, announced significant expansions in the city. But it’s also come as others have left the city behind, with 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.”
Homicides have 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, says crime in Chicago is the No. 1 issue confronting businesses.
“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 economic record.
“Chicago is a great destination for businesses,” Lightfoot said during Thursday night’s ABC7/League of Women Voters mayoral debate. “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.
Downtown struggles
The mayor has 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 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. 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.
The candidates all see the problem, but differ on solutions.
Activist Ja’Mal Green proposed revitalizing the corridor to be “a strip of experiences,” featuring Parisian-style cafes, a pedestrian bridge connected to Oak Street Beach and helicopter pads for airborne tours of the city.
Ald. Roderick Sawyer (6th) 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.
Ald. Sophia King (4th) criticized Lightfoot’s negotiation style as the main reason for the high-profile corporate exits.
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 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,” Lightfoot told WBEZ and the Chicago Sun-Times.
But the program has faced criticism for a lack of community engagement and taking credit for projects already underway before she took office.
Five rivals told WBEZ and the Sun-Times they would not continue INVEST South/West. U.S. Rep. Jesús “Chuy” García criticized the program as “the vestiges of the Emanuel administration with a Lightfoot brand on them.”
Lightfoot did, however, gain support from her opponents for a $31.5 million pilot guaranteed income program launched last year, with five of her opponents saying they would continue the program.
Basic economic problems persist in some Chicago neighborhoods, however, including 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.
“They’re taking TIF money, which is our tax money, and building things that they know aren’t going to be sustained,” said Ashley Johnson, the program manager for Re-Up, an economic upliftment program from the Resident Association of Greater Englewood. “And now, we’re kind of left with no grocery store.”
Johnson, who is not related to the county commissioner running for mayor, grew up seeing her large extended family slowly leave the place they once called home.
“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,” she said. “Which is sad.”
Dave McKinney covers Illinois politics and government for WBEZ. Tessa Weinberg covers city politics and government for WBEZ.
