“I worry it’s only a matter of time that one of my employees is walking from Ogilvie (Transportation Center) to the office and, God forbid, something happens. Do I take that chance? Do I stay in Chicago, or do I move to the suburbs?” says Craig Rupp, CEO of Sabanto, an agricultural-technology startup with 10 employees in an office several blocks from the scene of the shooting. “I get asked (by potential hires): ‘I don’t have to live in Chicago, do I?’ It wasn’t a question before. It is now.”
Rupp’s concerns, which are shared by others in the industry, confirm that violence has joined money and talent as the biggest challenges facing Chicago tech companies. Fear of crime is making it harder to recruit and retain workers, threatening Chicago’s hopes of becoming a hub for high tech and the well-paying jobs that come with it.
The day after the Sept. 29 shooting, an out-of-town tech company walked away from plans to lease an office in Fulton Market, says a broker involved in the project. “Their biggest concern was the violence, and then it played out right in front of them,” says the broker, who spoke on condition of anonymity and declined to name the company.
Fulton Market, the city’s hottest new business destination, still bustles with new development. But after two years of COVID-19 dislocation, executives reconsidering their post-pandemic office requirements realize that no neighborhood is immune to rising violence across the city.
Chicago had 836 murders last year, the most since 1994, according to the Cook County Medical Examiner. Shootings rose 9%, topping 3,500 for the second time in five years. Carjackings soared 30% to 1,836, three times the total in 2019 and the most in two decades.
“(The violence) is a bad look that impacts hiring,” says Jett McCandless, CEO of Project 44, a fast-growing logistics-software maker that employs 1,100 globally and 280 at its River North headquarters. McCandless, who owns a condo in Fulton Market, says several candidates for senior-level jobs have balked at moving to the city because of crime, accepting offers only when the company agreed to let them work remotely.
A spokeswoman for Chicago Mayor Lori Lightfoot acknowledges the rise in crime, and says the city is working with companies “to ensure Chicago is a safe place to work and live for everyone.” She adds that “public safety is Mayor Lightfoot’s No. 1 priority, and the mayor’s office and World Business Chicago are in constant contact with both current and potential future employers about what steps the city is taking to address the national trend in violent crime.”
Once relegated to whispers among CEOs, local business leaders’ concerns about violent crime spilled out into public view less than a week after the Milwaukee Avenue incident, when billionaire Ken Griffin compared the city to Afghanistan. The founder of Citadel, one of the world’s biggest hedge funds and a significant tech employer, said crime could cause him to move his headquarters, and noted that he’s been hiring more people in New York and Florida than Chicago.
A reputation for violence has dogged Chicago since the days of Al Capone. Until recently, real estate brokers and city officials wooing corporations were able to downplay the threat to office workers. When Chicago was pursuing Amazon’s second headquarters five years ago, the city’s pitch team presented charts and heat maps showing that carjackings, shootings and homicides happened mostly in areas where its employees were unlikely to live or work.
Chicago can’t offer such assurances anymore. Steven Galanis, CEO of Cameo, an e-commerce company that has been operating remotely throughout the coronavirus pandemic, recently brought about 70 workers back to an office in the Merchandise Mart for a few weeks.
“The first night we were there, a couple employees witnessed someone getting mugged under the El on Wells Street,” he says.
Even more alarming was a shooting of two people next door to the River North condo that he’s owned for 11 years. “These things didn’t happen before. Now they’re happening,” says Galanis, who spoke out about the crime issue on Twitter.
Galanis, who moved to Miami during the pandemic, says more than a dozen Chicago employees also have moved out of town. “It may have started with CEOs and investors leaving, but now it’s rank-and-file employees, which you didn’t see (in 2020). It’s gotten worse, especially in the last six months.”
The five-year-old company employs roughly 400, about 350 of whom were hired in the past 18 months. Headcount in Chicago increased by 20 or 30. “We hired a lot of people in Chicago, but we had a lot of people who left,” he says. “Some great people are leaving, and it seems harder to attract people to Chicago than ever before.”