| Chicago vs The Bay Area… Swimming downstream Posted: 08 May 2007 12:33 PM CDT I’ve thought a lot about the tradeoffs of starting an internet company in the Chicago vs the Bay Area. Of course I love living in Chicago, but I want to have a good understanding of what, if anything, I’m missing by not being in SF to know if it could ever justify moving there. I just heard one of the most interesting answers to date. I was listening to an interview with Scott Rafer, CEO of Feedster and MyBlogLog. Toward the end he touched on what he thinks makes the bay area unique for entrepreneurs. I’m paraphrasing from memory:
I think this really gets at the essence of the culture. It’s a great explanation as to why you see a lot of what you see out there. I have experienced this “culture” every time I visit, but I had not identified it and put the words to it. It’s this “benefit of the doubt” that makes it easier to convince others to join you, raise money at early stages, convince your spouse/parents/relatives that it’s okay for you to quite your great job and give this idea a chance, etc. It’s like your swimming downstream. One caveat, I think this social pressure is a consequence rather than a cause of all the start-up activity over the years. There is something more fundamental about the geography or the culture that originated the phenomonen in the first place. Paul Graham has a great essay on why Silicon Valley came to be. Personally, I’m still not sold on SF over Chicago. Notice I’m still here. The jury is still out for me, I love Chicago. |
Wednesday, May 9, 2007
FW: Chicago Beta: Chicago vs The Bay Area. Swimming downstream
Monday, April 30, 2007
Chicago Tribune: Condo boom thunderous
Condo boom thunderous
Study also shows how city has lost apartments since '89
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April 30, 2007
As the debate over affordable housing picks up steam, a new study analyzing 15 years of Chicago's boom in residential construction found that for every 1,000 condominium units a neighborhood gained, it lost, on average, 27 small apartment buildings and about six large ones.
The study, to be released Monday, offers the sharpest snapshot yet of the dramatic changes that took place in the city's housing stock from 1989 to 2004, changes that have transformed the face of neighborhoods and heightened concerns about affordability.
While the number of housing units in the city remained constant at a little more than 1 million, as many as 97,894 apartment units were removed from the city's housing stock during the period, according to the report by the Center for Urban Research and Learning at Loyola University. Meanwhile, 102,408 condo units located in nearly 5,000 buildings were added.
Based on data from the Cook County assessor's office, the report found that the loss of small and large apartment buildings has been widespread. Condominium growth, while pervasive, has been most intense on the North, Near South and Near West Sides.
Overall, Chicago lost 10,779 -- or 8 percent -- of its small apartment buildings (two to six units). The gentrifying neighborhoods of Uptown, Lakeview, Lincoln Park and the Near North Side lost between 20 and 31 percent of such buildings.
During the same period, the city lost nearly 3,300, or 31 percent, of its large apartment buildings (seven or more units), with Rogers Park, West Ridge, Uptown, Lincoln Square and the Near North Side outpacing the city average. The Near North Side, for example, lost half, or 135, of its larger rental buildings.
Citywide, the number of condo units increased from about 71,800 in 1989 to about 174,200 in 2004. Even more dramatic was the construction of condo buildings, which increased nearly 200 percent from 2,500 in 1989 to 7,450 in 2004.
For years, residents have perceived that "something big was going on" in the city's housing stock, said report co-author David Merriman. But the analysis of previously unavailable or understudied data, he said, quantifies the true scope of the boom in housing construction.
"When I walk home from the train and see apartments that are now condos, I didn't know how common that was. Now I do," said Merriman, an economics professor at Loyola. "The next question is, to what extent has this affected affordability?"
The study by Merriman and Julie Lynn Davis, a doctoral student in sociology, shies from exploring the causes or public policy implications. But it will be distributed this week to the City Council, where an affordable-housing plan by Mayor Richard Daley is under consideration.
The city now requires developers of projects encompassing at least 10 units to reserve 10 percent for low- or moderate-income buyers if the project receives discounted city land and 20 percent if city subsidies are provided.
Daley recently proposed broadening the requirement, mandating a 10 percent set-aside if certain zoning changes are provided and if any city land is involved, even if it is purchased at the market rate.
But the Balanced Development Coalition, an affordable-housing advocacy group, has called for a 15 percent unit set-aside when city land is purchased for new projects and 20 percent if zoning changes are granted that favor the developer.
"A lot has happened, and it's happened fast," Merriman said of the development wave. "If there should be policy, we better get on it right away because it's happening as we speak."
In 1989 nine neighborhoods -- Rogers Park, West Ridge, Edgewater, Uptown, Lincoln Square, North Center, Lakeview, Lincoln Park, the Near North Side -- held 68 percent of Chicago's condo buildings and 77 percent of the city's condo units.
By 2004 these communities gained between 120 and 786 buildings and between 1,200 and 22,000 units apiece, the report found.
Logan Square, West Town and the Near West Side also experienced dramatic condo growth. In 1989, the three areas had only 458 units in 31 buildings; by 2004 they had nearly 22,000 units in more than 1,300 buildings. The percentage of the city's condos in the three areas climbed from just 0.6 percent in 1989 to 13 percent in 2004.
In general, areas that gained condos generally lost apartment buildings. For example, over the 15-year period, Rogers Park gained 2,196 condo units and lost 217 large apartment buildings and 119 small ones.
Even small communities, such as Archer Heights, were affected. In 1989 there were 18 large apartment buildings in the Southwest Side neighborhood. By 2004 they were as extinct as dinosaurs, all converted into condominiums.
"Two of my friends, both widows, moved out of the buildings because they couldn't afford the condos," said Stan Lihosit, a 50-year resident.
Ald. Manuel Flores (1st), whose ward includes West Town and portions of Logan Square, said economic factors such as low interest rates and market demand no doubt fueled condo growth. "There were a lot of young professionals buying condos because they thought, 'Why pay $1,000 in rent when I can pay a mortgage and build equity?'
" Flores said.
But he said he remains concerned about the decline of affordable apartments.
"One thousand dollars a month for a lot of people is not affordable," Flores said. "Just because it's a rental doesn't translate into an affordable-living option."
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jebriggs@tribune.com
Friday, April 27, 2007
Chicago Top City of Future
Foreign Direct Investment (fDi) is a specialty magazine published by the Financial Times group for C-level executives and their professional advisors.
This is not the first time Chicago has received the top honor. This time around, though, the competition was more fierce. The award, which is given by the magazine every two years, combined several different categories into one. When Chicago last won in 2005 and 2006, the city didn’t have to compete globally.
The panel consisted of a variety of judges from around the world with different backgrounds relevant to the study. Judges were selected by fDi editor Courtney Fingar and chosen because of their involvement in inward investment decisions. They had a keen understanding of the North American market and its investment climate.
Todd Malan, CEO of the Organization for International Investment in Washington, also applied his expertise in international business to the study. He has done surveys for site selection and is versed in why and where businesses locate and invest where they do.
The criteria for this award was selected “with particular regard to the factors most likely to encourage inward investment,” fDi research editor Charles Piggott said in an interview with MidwestBusiness.com. There were several different selection factors including:
Each of these factors contained their own set of criteria. Chicago ranked in the top five in all of them and took first place in four. Overall, Toronto came in second behind Chicago followed by Pittsburgh; Atlanta; Guadalajara, Mexico; Baltimore; Montreal; Mexico City; Boston; and Miami.
Judges were given statistical data and a written copy that included descriptions about transportation, school, health-care facilities and universities. Don Holbrook, one of the panel judges and a board member of the International Economic Development Council, looked for credibility after receiving the data.
“I was scoring more severe on who was more valid,” Holbrook said in an interview with MidwestBusiness.com. Judges scored on a 10-point scale. Piggott says the winners in each category scored the most points in that category and the overall winner scored the most points across all seven categories.
Though Chicago was named overall city of the future, it ranked second in cost effectiveness, third in both human resources and quality of life and fifth in business friendliness. The human resources and quality of life criteria both touched upon education.
“Chicago scored well for its attractive housing areas, good hospitals and vibrant cultural life,” Piggott said.
He added: “It also picked up points for its large number of state universities and graduates and the fact that the state is home to three of the world’s top 200 universities. However, the percentage of graduates among the general population is still lower than in many other locations in Canada and the U.S.”
Holbrook offered some suggestions to raise the quality of life in Chicago. He stresses the importance of education and how it’s critical for the city and the country to teach children life skills and how to become involved with the economy. Holbrook says children need to be taught to be self-sufficient and how to engage in the social structure of the world.
Education is a “20th century model for a 21st century problem,” Holbrook said. He says Chicago and other cities across the country need to make education personalized, safe and friendly. Children need to be trained on concepts that are useful and are in conjunction with the business world.
There are many reasons why Chicago stands out from the rest of the country. Tom Bartkoski, director of international business development at World Business Chicago, says location is the most important.
Chicago’s geographic location allows companies to cover their own markets and track other markets across the country as well, Bartkoski said in an interview with MidwestBusiness.com. He added: “It is something a costal city can’t duplicate.” He says Chicago can easily reach markets because of shipping capabilities and air transportation.
In terms of Chicago’s friendliness to business, Bartkoski believes this is subjective. There was only so much information that could be included within the proposals. Chicago did include tax records and employer contribution data. He added: “We would like to improve this ranking the next time around.”
“Chicago has a high-energy economy, a world-class development and investment promotion program, good human resources and quality of life, good infrastructure, a strong track record in attracting inward investment and reasonable real estate, utility and labor costs,” Piggot said.
The announcement of the city of the future award has many benefits for the city. Bartkoski added: “It raises international [interest] coming from a foreign source. It spreads the message of Chicago as a site for foreign investments.”
Bartkoski says the award is positive in terms of rank and competition. Along with alerting an international community, he says it lets a domestic audience know how their city ranks against the rest of the world.
The fDi city of the future award is another honor Chicago can show as it bids for the 2016 Olympics. As Chicago looks to the future, 2009 not only be when the city finds out if it has won the bid but it’ll be the next time fDi submits its city award.
By STACY JEZIOROWSKI
Staff Writer
stacy@midwestbusiness.com
FW: Message From Senator Durbin
> From: <Correspondence_Reply@durbin.senate.gov>
> Subject: Message From Senator Durbin
> Date: Thu, 26 Apr 2007 18:27:05 -0400
>
>
>
>
> April 26, 2007
>
>
>
> Dear Mrs. H:
>
> Thank you for contacting me about the war in Iraq.
> I appreciate hearing
> from you.
>
> Like you, I have a great deal of respect and gratitude for our men and
> women in uniform. They have served our country with honor and
> distinction in the war against terrorism and the invasions of
> Afghanistan and Iraq. Even though I have strongly disagreed with the
> Bush Administration's policies toward Iraq, I have consistently worked
> to ensure that our troops who are currently deployed have the best
> equipment and protection possible.
>
> Congress gave the Administration every dollar it requested, yet
> too many soldiers have traveled the dangerous roads of Iraq in
> inadequately armored Humvees, with widespread reports of soldiers
> lacking vital equipment such as protective body armor and modern
> defenses on helicopters. The failure to properly equip our military
> personnel is unconscionable, so I have pressed hard for the deployment
> of up-armored Humvees and the best equipment we can provide. I also
> worked successfully to increase the level of combat pay we provide to
> our troops and have fought to make up the salary difference for
> federal employees who take a pay cut when they are mobilized as a
> member of the National Guard or Reserves, just as many state and local
> governments and private companies have done for their employees.
>
> Far too many of our soldiers have made the ultimate sacrifice in this
> war, including many from our own Illinois communities who serve in the
> National Guard and Reserves. My deepest sympathies go out to the
> families and friends of the more than 3,000 American soldiers who have
> lost their lives in this endeavor, as well as to the more than 22,000
> who have suffered life-changing injuries.
>
> We owe it to our troops and their families to hold our government
> accountable and continue to press for a new direction. With our
> involvement in Iraq now in its fifth year, it is clear that the
> current approach is not working. That is why I am a cosponsor of S.
> 433, the Iraq War De-Escalation Act of 2007, which was introduced by
> Senator Obama on January 30, 2007, and is currently in the Senate
> Foreign Relations Committee. This bill would prohibit an increase in
> troop levels without Congressional authorization and would begin
> redeploying troops this year.
>
> The bill would also intensify the training of Iraqi security forces so
> that they can more quickly assume control of their own country, and
> require the Iraqi government to adhere to specific conditions in order
> to continue to receive economic assistance from the United States.
> Finally, the bill would emphasize diplomatic initiatives to restore
> peace in Iraq and prevent a regional conflict in the Middle East.
>
> The Senate has now gone on record in support of a timetable for
> redeploying our troops from Iraq. The supplemental spending bill
> approved by the Senate would require the President to begin
> redeploying troops within 120 days of the bill's enactment and
> proposes a goal of redeploying most of the troops by March 31, 2008.
>
> Americans cannot win an Iraqi civil war, and we need to implement a
> strategy that gives the Iraqis a chance to build a government that
> stands on its own. Escalation of the war will only increase the costs
> for our taxpayers and troops, prolong our involvement in Iraq, and
> send the wrong message to the Iraqis without pressuring them to make
> the political compromises necessary to bring their country together.
>
> Winning the war on terror requires us to be able to respond to
> dangerous situations wherever they may occur. Reducing the U.S.
> military presence in Iraq will not only give the Iraqis a greater
> incentive to take the lead in securing their own nation, it will also
> allow U.S. forces to respond more easily to contingencies affecting
> the security of the United States elsewhere in the world.
>
> Thank you again for your message.
>
> Sincerely,
> Richard J. Durbin
> United States Senator
>
> RJD/cd
>
> P.S. If you are ever visiting Washington, please feel free to join
> Senator Obama and me at our weekly constituent coffee. When the
> Senate is in session, we provide coffee and donuts every Thursday at
> 8:30 a.m.
> as we hear what is on the minds of Illinoisans and respond to your
> questions. We would welcome your participation.
> Please call my D.C.
> office for more details.
>
>
>
>
__________________________________________________
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Monday, April 23, 2007
Bank of America to buy ABN's LaSalle
Monday April 23, 11:47 am ET
By Jonathan Stempel
The all-cash purchase would fill a hole in Bank of America's 5,737-branch network, the nation's largest, and make it Chicago's largest bank, passing JPMorgan Chase & Co. JPM.N>. It would also give Bank of America its first branches in Michigan, a state ravaged by contraction of a once-dominant auto industry.
Bank of America said the purchase would add 411 branches, 1,500 automated teller machines, 1.4 million retail customers, 17,000 commercial clients, and $113 billion of assets.
ABN AMRO, a Dutch bank, has agreed to be acquired by Britain's Barclays Plc (LSE:BARC.L - News) for 67 billion euros ($91 billion).
Bank of America said its net cost for LaSalle would be $16 billion, after a return of excess capital. It estimated the price at 21.3 times expected 2007 earnings, above a 16.3 multiple on comparable acquisitions, and 2.2 times book value.
"It's a full price," said Chris Hagedorn, who helps invest more than $20 billion at Fifth Third Asset Management in Cincinnati. "It's hard to say they really wanted to be in Michigan on their own. The key takeaway is the desire to be in Chicago in a bigger way."
Chief Executive Kenneth Lewis has long eyed expansion in Chicago. "The opportunity arose, and we have acted," Lewis said on a conference call. He said the bank plans no more acquisitions "of any size whatsoever through 2008."
LaSalle has 141 branches around Chicago, 264 in Michigan and six in Indiana. Bank of America has 56 branches in Chicago.
In morning trading, Bank of America shares fell 53 cents to $50.51 on the New York Stock Exchange.
CHICAGO, MICHIGAN
Lewis said Chicago's "size of population, attractive demographics, projected growth and overall wealth concentration" was appealing.
He added that "the LaSalle retail franchise has materially underpenetrated Chicago, and to a lesser extent Detroit."
The bank will drop the 67-year-old LaSalle name. LaSalle's roots date to 1927.
As of June 30, 2006, JPMorgan had 15.3 percent of deposits in the Chicago area, LaSalle had 14.11 percent and Bank of America had 1.81 percent, according to Federal Deposit Insurance Corp. data.
Lewis said his Charlotte, North Carolina-based bank was confident it would not breach a federal regulatory cap that bars acquisitions giving a bank more than 10 percent of U.S. deposits. Bank of America recently controlled 9.1 percent.
Chicago has experienced a surge in bank branches, so much so that Washington Mutual Inc. (NYSE:WM - News), the largest U.S. savings and loan, is shutting some branches there.
Michigan, meanwhile, has suffered the loss of some 80,000 jobs in recent months at the Big Three U.S. automakers alone.
Last month, Comerica Inc. (NYSE:CMA - News), the state's other main bank, said it will move its headquarters to Dallas from Detroit to be closer to its faster-growing southern markets.
DOUBLING DOWN
The purchase means Lewis will have spent well over $100 billion on acquisitions since he became chief executive in 2001, including more than $82 billion for FleetBoston Financial Corp. and credit card issuer MBNA Corp.
The bank is also buying Charles Schwab Corp.'s (NasdaqGS:SCHW - News) U.S. Trust Corp. unit and a stake in student lender SLM Corp. (NYSE:SLM - News), or Sallie Mae.
Lewis, who has been praised for integrating Fleet and MBNA and surpassing his cost-cutting goals, has a reputation for paying big prices for acquisitions.
Bank of America shares traded at 10.5 times expected 2007 earnings, the lowest multiple of any major U.S. bank, and 1.7 times book value. Analysts say Lewis' appetite for acquisitions is a reason for the low multiples.
Still, referring to LaSalle, Lewis said that "having a dominant position in some of the best markets in the best economy in the world is not a bad double-down."
Bank of America expects LaSalle to generate $800 million of savings by 2009, result in $800 million of restructuring costs, and add 2 percent to earnings per share in the first year. It expects a late 2007 or early 2008 closing.
ABN AMRO can accept a higher offer for LaSalle for two weeks. Bank of America can match a higher offer and would get $200 million if its agreement its terminated.
Can't beat fun at the ol' car park: In Wrigleyville, residents have own cottage industry
Can't beat fun at the ol' car park: In Wrigleyville, residents have
own cottage industry
By Josh Noel
Tribune staff reporter
April 23, 2007
A little more than 5 feet tall, gray hair swept into a bun, Erika
Alojado spends 81 days a year along Waveland Avenue with a crutch in
her left hand and a wood paddle in her right that says "PARKING."
The 86-year-old tries to shepherd the passing drivers, who are headed
to Cubs games, into the two-car garage behind her Racine Avenue
apartment, where they can nestle their vehicles amid years of
Alojado's accumulation: art, books, a full-length mirror, hanging
clothes and cups filled with pens.
An all-star car wooer for nearly 30 years, Alojado has found the
practice taxing since a man backing into her garage four years ago
backed into her instead, knocking her out and leaving her with a
broken leg and dislocated shoulder.
She took the rest of that season off, but the next Opening Day she was
back on Waveland with her crutch and sign.
"By the end of last year, I was getting tired," Alojado said in a soft
German accent. "When you are almost 87 years old, it's different than
when you are in your 50s."
As Alojado stood last week one block from Wrigley Field, Julio
Ramirez, 82, perched across the street with his own "PARKING" sign
painted on a white fan blade. Next to him was another old-timer who
leaned on a cane and waved a sign that promised "EZ OUT."
Down the street was Carole Radloff, a retiree in her 60s who has
parked cars behind her three-flat since her husband lost his job.
Adam Mancuso, 28, stood against a light pole down Waveland, selling
his parking spot for the first time. He and his wife plan to make it a
habit this summer.
The Wrigleyville residents usually ask $25 to $35 for the spots in
their garages and behind their homes. Near one of only two Major
League Baseball stadiums without dedicated mass parking -- the other
is Boston's Fenway Park -- they usually get it. Over the summer, they
also forge their own set of gentleman's agreements, friendships and
rivalries.
Most are longtime Wrigleyville residents who bought in when the area
was affordable but struggle now to pay soaring property taxes. Many
are retired or disabled. Others don't own the properties but rent out
spots on behalf of building owners, then split the take.
Many cite Alojado as an influence.
"She was all by herself, then we all started coming out," said
Ramirez, who began shopping his spots after retiring as a fender and
body man 16 years ago. "Helps pay the taxes."
A gentle man quick to smile, he wore a blue cap that said "JULIO'S
PARKING" and gave customers handwritten business cards that remind
them where they parked.
Some say they used to get a dollar or two for their spots. Now they
get as much as $80 for a playoff game, not that that tends to be an
issue at Wrigley. Regulars, usually suburbanites, have the spot
holders' phone numbers, and the customers arrive in wide-ranging
packages -- last week, a Porsche SUV sat in an alley beside a
10-year-old Toyota Corolla. The scarcity of street parking around
Wrigley doesn't discriminate.
City ordinance allows property owners to rent out three spaces per
building. Any more without a garage license, and the Department of
Business Affairs and Licensing can show up and make life unpleasant.
But few people in the neighborhood know that when they start. They
just see their neighbors cashing in and try to do the same. Like Rudy
Dobrich, 49, who started parking cars three years ago behind the
white-sided two-story building on Magnolia Avenue where he grew up and
where his parents died. At first he packed in 10 cars, which lasted
until Business Affairs and Licensing, responding to a complaint,
slapped him with a cease-and-desist.
They cited him last season when they again found more than three cars
on his property. Dobrich, a retired teacher, was ordered to pay $700.
He has built a fence behind his building that allows room for three
cars to be parked. No more.
"I don't need trouble," he said. "I just do my three, and that's it."
Sometimes when asking strangers for $30 or $40, the locals are called
crazy, are berated, or even cursed. But regular Cubs fans generally
appreciate the option, and tourists think the practice is quaint.
Plus, the spot providers reason that they are doing far more than just
storing vehicles.
"We're sort of ambassadors for the city," said Tina Heise, 56, who
lives on Addison Street and has filled spots for property owners for
years. "We give directions and recommend restaurants and make Chicago
more friendly. If we're nice, they'll think Chicago is nice."
Heise works alongside her husband, Al, 79, a one-time paratrooper, in
an alley off Racine in the shadow of the McDonald's at Clark and
Addison Streets. Their only competition in the alley is Dale Bennett,
51, a former limousine driver, and his friend who sometimes helps out,
Paul Emswiller, 44, a video store clerk.
The relationship is symbiotic. Both parties try to charge the same
amount to avoid getting overly competitive. They trade turns with the
customers who drive up.
When one is full, they will refer cars to the other. When things slow
down, they sit in their folding chairs and kibitz about the weather,
the cars and what they read in the news.
"To me this is a stage play waiting to happen," Emswiller said. "I can
already see the backdrop: three garages. It'll be about the trials and
tribulations of people parking cars at Wrigley Field and their
personalities."
A woozy fan wearing a Cubs jersey walked by and asked a reasonable
question: "Hey, why aren't you guys drinking beer?"
Emswiller ignored him but, when pressed, had a simple explanation.
"I don't drink when I work," he said.
Tensions can run hot when people don't follow the one-for-me,
one-for-you rule. Or if someone charges a lot more or less than their
neighbor.
"See her? She's the biggest pain," Bennett said of an older woman who
began circling the block in a long station wagon. Bennett said the
woman was looking for street parking that she could occupy with her
car, then sell to a desperate, late-arriving fan.
"All the rest of us want to do is our own thing and not have any
hassles," Bennett said.
For all the sagacious veterans, every season sees a rookie try to cash in.
About 11 a.m. before a Tuesday afternoon game, Mancuso walked to the
corner of Racine and Waveland with a sign his wife had made from white
poster board and red and blue makers. It said, simply, "Parking,"
without a price, to keep their options open.
Within 30 minutes, Mancuso found a taker -- a guy at the wheel of a
massive SUV who agreed to $25.
"Hey, what's the weather supposed to be?" the man said after backing
into the space behind Mancuso's apartment.
"It's supposed to cool off," Mancuso said.
"So what should we do for attire?"
"Where are you sitting?"
"Bleachers."
"Ah, you'll be fine. Bleachers get sun all day."
With the man gone and $25 in hand, Mancuso, who works in information
technology, was satisfied.
"We have to put up with a lot ... from the fans, so we might as well
get something back," he said. "Now I can go inside and do work. Now I
can do my real job."
But others, like Alojado, take pride in staying with the vehicles
until a game is over. Or at least until the owners return.
Last week, as she directed cars into her parking spots -- two in the
garage and one beside it -- she asked each customer the same question:
"Are you familiar with the neighborhood?"
She reminded them where they had parked and noted that Wrigley is
often "5 to 7 degrees cooler inside."
Then Alojado set up a white plastic chair that barely fit between the
two cars in her garage, wrapped herself in blankets in the 50-degree
weather and waited for the game to end.
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jbnoel@tribune.com