Rising crime scaring some visitors away from Michigan Avenue and other Chicago destinations during crucial holiday shopping season
The recent rise in flash mob retail thefts and violent crime has hit home on North Michigan Avenue and at other iconic Chicago destinations, deterring holiday shopping and tourism as the city tries to emerge from nearly two years of pandemic stasis.
From retailers and restaurants to hotels, businesses are beefing up security and seeking help from law enforcement as visitors stay away in droves, alarmed by the confluence of organized crime and seemingly random assaults plaguing even once “safe” locales like the Magnificent Mile.
“People are paying attention to this,” said Kimberly Bares, president and CEO of the Magnificent Mile Association, a private membership organization focused on promoting the shopping district along North Michigan Avenue. “If there is an incident or concern about an incident, people are choosing not to come downtown.”
Chicago has long grappled with both the reality and perception of violence, from the days of Al Capone to the city’s more recent image as a center of gun violence. But that picture was always painted as a split-screen, with the city’s gleaming downtown, lakefront and shopping meccas such as North Michigan Avenue seen as somehow insulated from criminal activity.
Some of those imaginary lines have been crossed during the COVID-19 pandemic.
A number of smash-and-grab retail thefts have taken place along Michigan Avenue this holiday season, shattering windows and a sense of security at Nieman Marcus, Canada Goose, North Face and Burberry, among other locations.
CTA bus drivers planned a protest march Saturday after a driver was assaulted while stopped on North Michigan Avenue last weekend. Chicago police also planned to increase patrols and enforce curfews in the wake of broader downtown violence, while a private security firm monitors the safety of CTA bus drivers.
Organized retail theft is on the rise nationwide, costing retailers an average of $700,000 per $1 billion in sales, according to the National Retail Federation, with Chicago ranked third behind Los Angeles and San Francisco in reported thefts.
The Chicago Police Department reported 11,865 thefts this year through Dec. 5, up 19% over last year. Thefts during the holiday shopping season are up 36% over last year, according to police data.
The increase in thefts, particularly the coordinated flash mobs that have descended on shopping destinations from Michigan Avenue to Northbrook, have landed like a one-two punch for retailers still struggling to recover from the ongoing pandemic.
“There’s nowhere that’s immune,” said Rob Karr, president and CEO of the Illinois Retail Merchants Association. “It’s devastating.”
Store owners already dealing with labor shortages, supply chain issues and increased online competition are beginning to elevate security to the top of their priority lists, Karr said, spending hundreds of millions of dollars nationwide to address the rise in retail theft.
While retailers are investing more in security measures, there are limits to what they can do to fight crime at the store level, Karr said.
“We can’t turn our stores into armed camps,” Karr said. “We can’t put everything behind lock and key. Retail doesn’t work that way. It doesn’t work for the consumer that way.”
Karr said the primary responsibility rests with law enforcement, with whom the merchants association is working to develop strategies to combat organized retail theft. He said the association will have some ideas to share in the “not-too-distant” future.
The increasingly brazen retail thefts and assaults are giving people more reasons to stay home this holiday season, casting a pall on a broader swath of consumer-facing Chicago businesses.
Michael Fassnacht, president and CEO of World Business Chicago and the city’s chief marketing officer, said in an email that the city is addressing the problem.
“Public safety is one of Mayor (Lori) Lightfoot’s top priorities, and World Business Chicago works with the Mayor’s Office and local law enforcement to address public safety concerns within the business community,” Fassnacht said. “The challenges we are seeing are not a unique problem for Chicago and have not directly impacted our economic recovery from the COVID-19 pandemic.”
The Chicago restaurant industry, which has been hard-hit by the pandemic, is already facing a potentially dark winter, with thousands of restaurateurs on the brink of closing permanently without additional federal relief, according to Sam Toia, president of the Illinois Restaurant Association.
“There’s no question that people that might come in from the suburbs, or people that might come visit our city, might be a little cautious because of what’s going on with crime,” Toia said. “Crime and public safety are top concerns for restaurants throughout Chicago, especially in our central business district. It’s just another issue that restaurant owners and operators need to start dealing with now.”
Chicago hotels have also struggled during the pandemic, with occupancy dropping from 74% in 2019 to 26% last year in the central business district, according to data from research firm STR. The industry seemed to be recovering, with occupancy projected to hit 42% this year, but the omicron variant and the rise in crime threaten to halt that progress.
Michael Jacobson, president and CEO of the Illinois Hotel & Lodging Association, said the Chicago hotel industry — both convention and leisure travel — is losing business because of the growing fear of crime among travelers.
“Absolutely, it is,” Jacobson said. “And it’s something that we can’t as an industry or can’t as a city afford for that to continue.”
Chicago reached 54% hotel occupancy in October, but still lags behind Boston, Los Angeles, New York and Dallas as pandemic-era travel begins to increase. Only San Francisco and Washington, D.C., had lower hotel occupancy rates than Chicago, Jacobson said.
Leisure travel, which falls off in Chicago over the winter every year, is facing “softening demand” during the holiday season, while declining business travel has reduced midweek occupancy to the single digits at some hotels, Jacobson.
Because conventions are planned in advance, the impact of rising crime may take five or six years to fully calculate, Jacobson said.
“Where it’s hurting us on the convention side is for future bids,” Jacobson said. “There’s no way to quantify how many groups aren’t considering Chicago now when they otherwise would have if there weren’t this perception issue on crime.”
Chicago hotels are likewise fortifying security while the association meets with city and county officials to strategize a broader plan for reducing crime in the city, Jacobson said.
Sable at Navy Pier, a luxury 223-room hotel that opened at one of Chicago’s most popular tourist attractions in March, has struggled with occupancy. The hotel has assuaged worried guests and beefed up its own security — even as its remote peninsular location has helped insulate it from some of the criminal activity plaguing the city.
“We hear it all the time from people that are visitors to our city,” said longtime hotelier Bob Habeeb, CEO of Maverick Hotels and Restaurants, which developed and operates Sable at Navy Pier. “They say, we hear about all these murders and shootings, and we’re afraid. We’re afraid to come there.”
Habeeb, 60, said the hotel reached a relatively robust 70% occupancy over the summer months, but that business is declining as winter comes and some leisure travelers get cold feet about Chicago’s safety.
In addition to Navy Pier’s private security force, the hotel has implemented additional measures to protect visitors and guests, Habeeb said.
“We have dedicated a lot more of our budget to security than we had planned originally,” Habeeb said.
While the pandemic may recede, Habeeb said a reputation for crime could linger, hampering business and deterring travelers for years — even after the city gets it under control. The Sable’s remote location may be a bright spot in an otherwise gloomy outlook.
“It’s a strange twist of things that our location has actually turned out to be a huge benefit to us,” Habeeb said. “Because the marketplace that’s remained robust is leisure, and we’ve got a great leisure location. And people do feel safe out on the pier.”
The Magnificent Mile has also faced a tough road during the pandemic, with a Tribune analysis in April finding 28 vacant storefronts, or just over 25% of the 110 businesses on the avenue. In August, Japanese clothing giant Uniqlo became the latest major retailer to depart, following Gap and Macy’s.
Bares said the rise in crime may discourage new tenants from locating on Michigan Avenue.
“It has the potential to influence investors’ decisions,” Bares said. “And if they have a choice between a suburban location or a downtown location, they may well choose that suburban location rather than downtown.”
Looking beyond this holiday season, the North Michigan Avenue district is taking steps to improve safety and reduce crime in the new year by forming a special service area, which will assess additional property taxes effective Jan. 1, pending City Council approval. The new taxing district would raise an additional $742,033 annually, with $472,194 dedicated to “public health and safety programs.”
The measure, which is supported by the Magnificent Mile Association, has already earmarked some of the funds for increased security, Bares said
“We have funds for off-duty police officers, for new cameras to be installed on properties that don’t currently have cameras,” Bares said.
But getting crime under control on Michigan Avenue will require more than increased security by the retailers, Bares said.
Bares said the 2016 decision by then newly elected Cook County State’s Attorney Kim Foxx to raise the limit for charging shoplifters with a felony crime from $300 to $1,000 provided an incentive for retail theft by reducing many hauls to a misdemeanor. The solution, she said, is to turn back the clock on that law.
“We would like to see the Cook County state’s attorney’s office lower the limit for felony prosecution,” Bares said. “I think it sends a message.”
