Last June, the Civic Committee of the Commercial Club of Chicago, one of the city`s most prestigious business organizations, threw a party marking the birth of its Chicagoland Enterprise Center, a resource center for small businesses.
Predictably, members of the downtown business community swelled the crowd. But despite the importance of small businesses in creating jobs for the city, only two city officials attended the function–and they left after only a few minutes.
The next day, more than 200 representatives of city agencies and community organizations, calling themselves Chicago Works Together, met to organize a public relations program to improve the city`s image to the outside world and convey the message that Chicago is a good place to do business.
However, unlike the previous evening, no business people were to be found.
The two events illustrate the struggle of the Chicago business community to assume a greater role in addressing the serious social and economic problems that plague the city and the gap that continues to exist between business and city government despite some notable efforts on both sides to close it.
The cozy relationship that once existed between business leaders and the city has undergone drastic change since the death of Mayor Richard J. Daley, who frequently eased the way for business projects downtown, and cultivated business leaders to assist and tout his administration. As a result, Chicago`s business community over the last decade has been virtually invisible in helping shape the civic agenda.
This void stands in sharp contrast to cities such as Boston, Baltimore, Denver, Pittsburgh and New York where the business communities have played major roles in revitalization and development. However, there are signs the relationship is once again moving beyond obligatory cooperation and unproductive volunteerism.
”In many ways, we abrogated our responsibilities,” notes real estate developer Charles H. Shaw. ”In fact, until relatively recently, I felt that the private sector had done very little in exercising involvement and leadership–and that the whole region would suffer because of it.”
A number of factors explain the decline of the business community as a potent force in shaping the city`s response to revenue crunches, the quality of public education, urban renewal and other problems that affect the vitality of the city and threaten to undermine its position as a strong hub for regional growth and development.
The adoption of home rule powers in the 1970 Illinois constitution meant city officials no longer required business leaders` help to pass tax increases through referenda. In addition, the city`s access to letters of credit from foreign banks reduced the importance of the city`s major banks in city finance.
However, of even greater importance has been the internal, often wrenching changes, that have forced many of Chicago`s oldest companies to spend more time dealing with the issue of their own survival.
In many cases, economic recession and bad management have forced major corporate cutbacks and restructurings. At the same time, they have spawned the rise of a managerial class that possesses fewer ties, emotional and otherwise, to the city than did their predecessors, and who often view their Chicago jobs as stepping stones in their careers.
The list of companies thus affected is large. Over the last decade it has included Navistar International Corp. (formerly Harvester), Jewel Companies Inc., Harris Bankcorp., Continental Illinois Corp., First Chicago Corp., Marshall Field & Co., CitiCorp Savings (formerly First Federal Savings and Loan), Beatrice Companies Inc., Esmark, Sunbeam Corp., Montgomery Ward & Co., G.D. Searle & Co., Chemetron Corp. and virtually all of the city`s once mighty railroads.
”The change in the substantial number of companies that view Chicago as their headquarters makes this a different ball game,” observes Thomas Ayers, retired chairman of Commonwealth Edison Co. and one of a dozen or so businessmen who served as informal advisers to Mayor Daley.
”My feeling when I was active was that you could get a cadre of business people to do anything for the good of the city. It`s a good deal harder to do that today.”
Even the newer sectors of the city`s business community that have been growing and by many expectations should be assuming more prominant leadership roles in the city–namely the downtown real estate developers and the financial exchanges–have been relatively inactive.
Real estate developers conducted a noisy public relations and lobbying campaign last year against a lease tax, which caught them by surprise and which they believed would give suburban office space a marked advantage over Loop developments. Since beating back the measure, they have disappeared from public view, although a few developers remain involved.
But the lease-tax experience has shown the real estate community their need to get more active in helping the city to cope with its future revenue needs, says William D. Sanders, chairman of LaSalle Partners Inc.
Still, a good deal of animosity between the ”new guard” real estate developers and the more-established and traditional corporate leaders has fragmented an already split business community, making it more difficult for the business community to unite on issues and programs.
”There is always suspicion of the real estate people,” observes Donald Haider, a budget director under former Mayor Jane Byrne and now a professor at Northwestern University. The contention of developers that they care about long-term problems, not just quick deals, hasn`t been universally believed, he says.
”We have more insight into how the city works, what the city needs, how to raise capital and how to get things done than the old guard does,” said one influential member of the Downtown Property Council, a group of developers, who believes that differences in personal style also serve to keep the groups apart.
”We also know how to have fun,” he says. ”The old guard is stodgy. Their meetings are dry. We laugh hard.”
Civic activity by the security and commodity exchanges, whose titled officers serve at the pleasure of their fractious trading membership, has been limited largely to lobbying against imposition of a transaction tax that would produce revenue from every trade made on the floors of the Chicago Board of Trade, the Chicago Mercantile Exchange and the Midwest Stock Exchange.
Business` relationship with the mayor`s office also has changed drastically over the last decade, and not just with the advent of a black mayor.
”With Mayor Daley, the business community always had access in one way or another,” says Ormand J. Wade, president of Illinois Bell Telephone Co.
More Top Picks Inversion Tables
”But after Daley left the scene, we got lazy. We assumed things would always be like they were, and we didn`t think through what we needed to do work effectively. We`re only now starting to do that.”
”There was much more of a propensity of corporate leaders 20 years ago to be concerned about the city–largely as a response to the race issue and the Martin Luther King marches,” agrees George Ranney, a former senior executive of Inland Steel Co. who last March lost the Republican nomination for the U.S. Senate to State Rep. Judy Koehler.
”But it was clearer then what needed to be done. Today, the issues that face the city and the business community–things like job creation and retention–are much more complicated.”
The private-public sector relationship that prospered under Mayor Daley
(and later Michael Bilandic) all but disappeared under Mayor Byrne. Corporate executives are reluctant to speak for the record on that subject, but say that real estate developer Charles Swibel, who as her chief link to the business community built a reputation as a wheeler-dealer, was largely responsible.
”There were just too many hands out,” says one corporate leader.
Indeed, the animosity held by the business community for Byrne is such that most business leaders interviewed for this article said they expect to back Mayor Harold Washington for re-election should a one-on-one race develop between him and Byrne.
Two recent studies demonstrate the business community`s efforts to help set long-term goals for the city and metropolitan area.
The Commercial Club`s ”Make No Little Plans: Jobs for Metropolitan Chicago” created 14 separate task forces with missions to, among other things, get more federal money for economic development, assist small businesses, reform the real estate tax system, encourage labor-management cooperation, boost tourism and make Chicago a center for software development. Similarly, the Chicago Central Area Committee, working in conjunction with city officials, has proposed a number of programs designed to improve the quality of life in the city, including better access to the lakefront, a river walk, underground walkways and the use of staggered work schedules by central- area businesses. To engender public debate, the proposals were published as special newspaper supplements two months ago.
Nonetheless, relationships between the business community and the city administration have been somewhat slow to develop.
Robert Mier, the city`s director of economic development, criticizes downtown business leaders for their aloofness and inability to take action.
”They`ve dealt with city issues at a high level of abstraction,” says the former University of Illinois educator. ”They`re worse than any academics I ever worked with.”
Mier views the continuing talks on building a sports complex in Chicago as one of the few examples of concrete action by city business leaders. ”But the biggest problem hanging out there that we have only begun to scratch is education,” he says. ”We`ve got to get beyond symbolism on that one.”
Nor are business leaders entirely happy with City Hall. ”The issue of trust (with the Harold Washington administration) is a real one,”
acknowledges Illinois Bell`s Wade, ”but I wouldn`t say that there is none at all between the two sides. . . . We all have to realize that the levels of trust needed aren`t created overnight.”
”There`s no wall between the business community and City Hall,” asserts William Johnson, chairman of IC Industries Inc., who early on in the Washington administration called on fellow corporate chief executives to assume a greater role in civic affairs. ”People who say different don`t know what they`re talking about.”
The process of forging closer relationships has been hindered by Council Wars and Washington`s tenuous majority in City Council, with the business community to some extent paralyzed by its uncertainty as to where the real power in city government lies, and its unwillingness to choose sides.
”Washington`s constituency is not the business community, and he caters to his constituency,” says Frank A. Cizon, formerly chairman of Talman Savings and Loan Association and now president of TRUST Inc., an organization that serves as a catalyst to bring elements of the public and private sectors together to discuss civic issues. ”Neither side is entirely comfortable with the other yet.”
However, the two sides are getting to know each other better. Some business leaders for the first time are contributing their time and money to aldermanic campaigns as a means of influencing fiscal policymaking in City Hall.
About every six weeks over the last 2 1/2 years, Washington has met with city business leaders at unpublicized breakfast meetings at the M&M Club at the Merchandise Mart. The meetings were the brainchild of IC Industries`
Johnson and Larry Bidwell, a vice president of the Mart.
About 50 corporate chief executives are ”regulars” of the breakfast club, although a typical 2 1/2-hour session will have only 20 to 30 in attendance. ”Discussions are frank and freewheeling,” says Larry Levy, chairman of The Levy Organization. Topics have included the World`s Fair, the McCormick Place Annex, O`Hare Airport expansion and city revenue needs.
”It`s hard to say exactly what our influence has been through these meetings, but I think we`ve had an effect,” Levy says. ”It was through these breakfasts that it became very clear to the Mayor that the business community was sharply divided on the World`s Fair, and that certainly went into his thinking in opposing it.”
Levy also believes the breakfasts were instrumental in persuading Washington to divert about $1.5 million in the city budget from neighborhood festivals to a broader effort to promote tourism.
A more important milestone in the rapprochement between the business community and Washington is a year-long study of the city`s long-term financial situation. Washington approached the Commercial Club and Chicago United last November for help in analyzing the city`s revenue needs through 1992 in the face of federal cutbacks.
As a result, an independent committee called the Financial Planning Committee for the City of Chicago was set up under James F. Bere, chairman of Borg-Warner Corp., Barry F. Sullivan, chairman of First Chicago Corp. and Warren Bacon, president of Chicago United. More than 100 individuals have worked on the project. Their report is scheduled for release Nov. 19.
Members of the committee won`t discuss their recommendations, but promise they won`t be a ”Band-Aid.” It is believed, however, that the report will make a number of sensitive and controversial recommendations, including the need to privatize certain city services such as water and garbage collection, cutting pensions for city workers and having homeowners assume a greater proportional share of property taxes.
Business leaders say they will be disappointed if the administration allows the report to gather dust. If it does, it seems likely that the bridges built so far between the business community and the administration will crumble.
”This is a very important study effort,” says Illinois Bell`s Wade. ”I would be stunned if it just sits there. We designed the report so it will be actionable. It has the potential to have an effect on the fiscal life of the city for some time to come.”
Washington says he didn`t ask for the study to ignore it. ”I don`t have the intention of wasting these people`s time,” he says. ”That doesn`t mean I`ll sign off on every item, but because of the talent involved here, I have a bias in favor of it. There is a sense of urgency here that can`t be avoided.” He adds he is also counting on the business community to help sell the report`s recommendations to the public.
In another effort to better its participation in public affairs, the business community also is trying to see what it can do to cut down on the number of business-related organizations clamoring for attention, sometimes with conflicting viewpoints.
A recent study conducted by University of Chicago Professor Pastora San Juan Cafferty, sponsored by various businesses concerned with their ineffectiveness in the public sphere, identified 21 business groups in the downtown area alone concerned with business and economic development, another 56 in the city`s neighborhoods and 29 others that cut across neighborhood lines.
Cafferty`s report, released last month, came to the grim conclusion that effective public-private interaction is ”currently impossible” in Chicago because key participants ”do not understand, respect or trust each other.”
More Top Picks Best Under Desk Foot Hammocks
”After a while, you can only go to so many breakfasts and hear the same people talking about the same things,” says Art Velasquez, president of Azteca Corn Products, a Pillsbury subsidiary.
”People don`t want that anymore. They want to get things done.”