Brandon Johnson ran a pro-worker, tax-the-‘ultra-rich’ campaign. Can he and business leaders find common ground?
For decades, Chicago’s business community enjoyed a cozy relationship with City Hall’s fifth floor. So Brandon Johnson’s mayoral victory — after a campaign promoting unabashed progressive, pro-worker initiatives and an enthusiasm to tax “big corporations and the ultra-rich” to pay for those measures — was cause for worry in some of the city’s boardrooms.
Johnson during his campaign proposed hiking a tax on hotels, reinstituting a city head tax, tripling the tax on high-end real estate transactions, taxing jet fuel and levying tolls on securities trading. Business leaders also expressed concern about Johnson’s positions on policing following two rounds of civil unrest that ended in wide-ranging theft and property destruction that also diminished the city’s downtown and other commercial corridors.
But just days before he is set to take office May 15, Johnson has extended olive branches to the downtown business community and given signals that the lines of communication between them and his office will remain open.
Shortly after his April 4 win against former Chicago Public Schools CEO Paul Vallas, Johnson reached out to leaders from the city’s public-private development arm World Business Chicago, the Chicagoland Chamber of Commerce, Illinois Manufacturers’ Association, Illinois Retail Merchants Association and other industry leaders. And the nonprofit Civic Consulting Alliance, which has strong ties to the city’s biggest corporations, is assisting Johnson’s transition just as it has helped previous mayoral transition teams. In recent weeks, Johnson has also attended a number of dinners with groups of business leaders, his campaign confirmed. Just Thursday, he had coffee with a members of the Illinois Hispanic Chamber of Commerce.
Jason Lee, a senior adviser to Johnson’s transition, who previously worked in corporate finance and investment banking at Morgan Stanley, declined to disclose who else Johnson has spoken with but said the conversations were focused on “mutual, shared interests, particularly around growing the economy” and “making sure young people have opportunities this summer and future summers.” Talks have been with “a broad range and a significant number of leaders,” Lee said.
Short of a warm embrace, Johnson’s moves have led to cautious optimism in the city’s business community.
IMA President and CEO Mark Denzler said he’s been encouraged by his conversations with Johnson. The two had a 10-minute call the day after the election and a 30-minute sit-down during the mayor-elect’s recent visit to Springfield.
“We talked a lot about manufacturing jobs, workforce development, about how we get particularly young people in disinvested communities engaged in manufacturing,” Denzler said.
Johnson made no promises to back off any of his campaign pledges, Denzler said. But like other business leaders the Tribune spoke with, Denzler said he is encouraged that the door is open and hopes that applies to discussions about Johnson’s campaign vow to create environmental rules that would likely affect new and current manufacturers IMA represents in the city.
“Ultimately, the proof will be in the pudding,” he said. “We’ll see what regulations and policies will be put forth. Clearly he’s an impressive individual; he clearly has an open mind right now, it seems like.”
Lee confirmed the Civic Consulting Alliance’s involvement in the Johnson transition. The nonprofit is closely tied to the city’s powerful Commercial Club and has long provided pro bono services to mayoral transitions, including document management, tracking resumes and unfilled positions, and formatting organizational charts.
Locally, the CCA has consulted on special government projects, most recently working with the city and state on asylum-seeker resettlement, a revamp of the Police Department’s reform communications strategy and Chicago Public Schools’ back-to-school COVID-19 mitigation for the 2023 school year, according to its website.
Historic partnerships between the mayor’s office and groups such as the CCA demonstrate the many direct lines Chicago’s downtown businesses community has had with the mayor’s office. While acknowledging the important role downtown plays in the city’s economy, critics have hammered the overemphasis mayors in the past have placed on the city center, often at the expense of business corridors in Chicago’s neighborhoods, particularly those on the South and West sides.
Mayor Richard M. Daley described his alliance with the downtown business community as “key” to the city’s success. Though he was a Democrat, his tenure was characterized by a willingness to sometimes challenge unions and privatize city services. Mayor Rahm Emanuel, a veteran of the investment world, was known for cajoling corporations to relocate to the city, courting foreign investors, bolstering the city’s tech community and bragging about the number of construction cranes dotting the skyline.
Mayor Lori Lightfoot was not as ingratiating, and like her other relationships, sometimes alienating. Her business legacy was made more difficult to measure because of the COVID-19 pandemic. But her tenure does include a continued strong corporate relocation record — notwithstanding the losses of headquarters for Boeing and Citadel — and close ties with some industry leaders such as Ariel Investments’ Mellody Hobson and Morningstar founder Joe Mansueto.
But, in part because of Daley’s and Emanuel’s emphasis on downtown, Lightfoot’s public focus was often on smaller neighborhood businesses through her Invest South/West initiative, and she made a point of expanding protections for domestic workers, boosting the city’s minimum wage and passing a new mandate for predictive scheduling.
Lightfoot’s leadership spurred concern among some business leaders during her reelection bid. Ahead of the Feb. 28 election in which Lightfoot placed third, executive chair of the investment firm Duchossois Group, Craig Duchossois, described Lightfoot as “well intended, but … not effective,” according to Bloomberg.
Duchossois also was one of several business leaders who worried aloud about the city’s public safety plans and continued leftward bent heading into the election’s first round. He told The Wall Street Journal in February he couldn’t “see our city becoming more progressive or socialist than it already is.” And, describing the possibility of a progressive mayor as a scary prospect, he gave Vallas’ campaign $760,000, according to state records, some of the millions of dollars Vallas received from leaders in Chicago’s financial services and investment community.
Vallas also won the endorsement of the Chamber of Commerce, which said the city could not “afford leadership that supports higher taxes and is not committed to keeping our businesses open and our streets safe.”
The opposition came in part because during the campaign Johnson promised to raise $800 million in various taxes aimed at some of the city’s most powerful industry interests. The proposed hotel tax would raise $1 per room per night; the head tax calls for charging $4 per worker for larger corporations; the real estate tax would hit property sales over $1 million; the jet fuel tax is aimed at raising $98 million annually; and the traders tax would levy a $1 or $2 tax on each securities trading contract.
Despite that, one of Johnson’s early transition hires gave business leaders some assurances his administration will have a balanced approach, including on addressing public safety.
Though a handful of his early picks included progressives and union stalwarts, Johnson’s choice for chief of staff, Richard Guidice, won plaudits from the business community. A fixture of Daley’s administration, Guidice rose through the ranks at the Office of Emergency Management & Communications through Emanuel’s term before taking the agency’s top position four years ago and remaining under Lightfoot.
In that time, Guidice managed the city’s emergency call center and coordinated with the Police and Fire departments on crises and major events such as Lollapalooza, storms and civil unrest.
Guidice’s appointment was a signal of Johnson’s “commitment to prioritizing solutions to some of the most pressing concerns facing our city, including safety and security,” the Illinois Restaurant Association said in a statement the day of the announcement.
“Across the board, he’d do excellent. That’s a great security blanket,” said Farzin Parang, a fellow veteran of the Daley and Emanuel administrations who is now executive director of the Building Owners and Managers Association of Chicago.
“That’s not to say folks are super comfortable with where we are,” Parang said. Weekend youth gatherings in the Loop that ended in shootings last month have reignited nerves among tenants of downtown buildings, he said. But to the extent the business community “might’ve been worried about early statements about police hiring, I think (Johnson) walked that back a lot,” Parang said, noting Johnson also made repeated promises to promote detectives, though he’s been less specific about Police Department staffing levels.
At a Joyce Foundation forum this week on public safety and police reform, Johnson said along with community groups, he has engaged business leaders on plans for summer safety. CEOs continue to ask, “How can we help?” he said, claiming that some corporations had committed to doubling youth summer employment. A spokesperson declined to provide specifics on the corporations or how many jobs.
Johnson’s choice to permanently lead the Police Department will be closely watched by business leaders, as will leadership of the Department of Business Affairs and Consumer Protection, Finance, Planning and Development, World Business Chicago and any deputies overseeing economic development.
On Wednesday, Johnson named Fred Waller, a 34-year veteran of CPD respected by supervisors and rank-and-file officers, as his choice for interim superintendent. Two former CPD leaders are on Johnson’s transition committee: former Chief of Detectives Brendan Deenihan and Robert Boik, CPD’s former executive director of constitutional policing and reform, who was fired after pushing back on plans to divert his staff from training to patrol. Another team member is state Sen. Robert Peters of Chicago, a main supporter of the state’s Safety, Accountability, Fairness and Equity-Today Act, and Tanya Watkins, a community organizer against police brutality.
If Daley’s and Emanuel’s executive board rooms had a long table with business leaders seated close by, Lee said Johnson’s table would be “a round table, where your proximity to the mayor isn’t as important as your ability to kind of be equal at the table. … It’s less about kind of the proximity and the seating location than it is about the ability to have your allotted time to communicate. We’ll try to give everyone a fair hearing on that front.”
Of the roughly 50 people Johnson named to serve on his transition committee and chair its subcommittees, just a handful are high-profile business leaders, including Martin Cabrera of Cabrera Capital Markets, Mesirow Executive Chairman Richard Price and World Business Chicago CEO Michael Fassnacht. Many others are labor figures or progressive organizers or elected officials.
Johnson “spent most of his career as an organizer, an educator,” Lee said. “He knows how to facilitate engagement. His model may look different, but the goal is that people who have an interest have the opportunity to participate and bring the best of themselves to bear in a way that makes sense and actually is effective and not just perfunctory.”
On fiscal issues, two key areas where Johnson would need help from lawmakers in Springfield are increasing the real estate transfer tax to pay for homeless services and the traders’ tax, which Gov. J.B. Pritzker has poured some cold water on.
Parang was relieved Johnson did not use the Springfield trip to push for an increase in the real estate transfer tax to pay for homeless services. “He didn’t lean into that publicly yet, which to me, again, I’m cautiously optimistic that’s a signal they’re going to sit down and give everyone the opportunity” to advocate for themselves. Parang and other business leaders hope Johnson also sticks to his pledge not to raise the city’s property tax levy.
Not long after, however, Johnson appointed a key backer of the transfer tax hike to his transition committee. Julie Dworkin, policy lead for the Chicago Coalition for the Homeless, will lead Johnson’s housing subcommittee alongside Sendy Soto, who previously worked in the Department of Housing under Lightfoot, as well as Jonathan Jones of the Mid-America Carpenters Regional Council.
Johnson preached a unity message and talked about the importance of business in his address to state lawmakers in Springfield.
“No one has to lose at the expense of someone else winning,” he said, noting rural Illinois provides the crops that feed Chicago and that areas just outside of Springfield would soon be delivering solar power to the city as well. “Chicago, as you know, is the economic engine of Illinois. When our economy grows, it drives widespread prosperity across our state. Businesses of all sizes, small to large, are essential to that prosperity. We must work with the entrepreneurs and the business community to grow the industries of today and attract the industries of tomorrow.”
Denzler said he’ll be looking to see whether Johnson lives up to those promises of unity, and thinks others are too.
While companies make location decisions for many reasons, and the city’s educated workforce, airports, cultural offerings and access to water and shipping routes have long been draws, “they’re going to sit back and say OK, who is the mayor? What are their policies going to be? What are City Council’s policies going to be? That can make a difference, that may be the tipping point.”