Fashion entrepreneur Brian Spaly got his start co-founding Bonobos, a New York-based e-commerce firm that sells men's slacks designed to eliminate the baggy-bottom look.
For his second act, he has transplanted a fledgling personal shopping service for men, Trunk Club, from the West Coast to Chicago's artsy River North neighborhood.
Since taking office in 1989, Mayor Richard Daley has hauled Chicago into the information age and made it a greener and more sophisticated place to live and work. This month he received a hearty pat on the back for his economic development efforts from two of the world's prestigious think tanks: the Brookings Institution and the London School of Economics and Political Science.
"He has done an absolutely remarkable job," former Brookings board member James Johnson said, in presenting Daley with the organizations' Global Metro Award.
Yet, while no one would deny Daley his due — the central city is among the nation's most vibrant, the economy is more diversified and cultural offerings have blossomed — observers say Chicago's robust performance of the 1990s has slackened in the past decade and now is seriously stalled.
The outlook can best be described as murky as unemployment rates have outstripped the national average during the downturn, the once-bubbly commercial and residential real estate markets remain battered, and city government edges ever closer to a full-blown financial crisis, a status already crippling the state.
The region also has lagged in innovation, firm creation and growth in productivity and gross metropolitan product over the past decade, according to economic development consultant Robert Weissbourd, president of RW Ventures LLC.
Daley's two long-held dreams of Chicago emerging as a high-tech center and a global business center remain just out of reach.
Chicago ranked seventh in 2009 tech employment among U.S. cities, having lost 8,200 jobs that year, according to the TechAmerica Foundation. And a report by Chicago Federal Reserve Bank economist William Testa suggests the city's economy remains largely tied to its traditional Midwestern business partners.
"We haven't made the real global jump yet, and we have not made the tech jump either, but we are finally poised," said Paul O'Connor, who for many years ran World Business Chicago, the city's economic development affiliate. "We are still a major contender, but, yeah, we can blow it."
Or, as Testa put it, "Given the poor performance of this decade, we need to rethink the challenges for Chicago."
On our newsroom blog Trib Nation, an overview of how the Tribune is covering issues in the mayoral race.
Rita Athas, president of World Business Chicago, argues for a brighter outlook, noting that the city has been recognized as a global city by a number of organizations and that the meteoric rise of Chicago-born daily deal site Groupon will lead to greater recognition of the city's emerging tech base.
"The foundation the mayor laid is really serving us well," she said.
And, indeed, Chicago arrives at this turning point with some critical economic underpinnings working in its favor.
The mayor's firmly forged alliance with the city's business elite, as well as his liberal use of conventional economic development tools, from earmarking property-tax growth for infrastructure development to crafting incentive packages to land corporate headquarters, have helped the city move beyond its smokestack roots and more deeply into business, professional and technical services.
And with Millennium Park as its crown jewel, downtown has expanded southward and westward, with the central city becoming home to a youthful, educated work force. Thirty-one percent of the city's population had a bachelor's degree in 2008, up from 19.5 percent in 1990.
"That stuff is hugely valuable to me," said 33-year-old entrepreneur Spaly, who moved Trunk Club, an online men's outfitter, from Bend, Ore., to River North late last year.
His investors suggested New York or San Francisco, but the Midwest native chose Chicago, and not just because of lower rents and salary levels.
"There are scores of young, talented, hardworking people living within blocks of the office; it's awesome," said Spaly, who lives nearby himself. The startup has hired 20 workers, all younger than Spaly, and the company hopes to reach $5 million in sales next year.
Eric Lefkofsky, co-founder of Groupon, the city's first truly highflying tech startup, said Chicago has the ingredients for nurturing new companies, from a sophisticated work force and top-rated universities to willing investors, but it lacks confidence.
"You go to New York, and there's nothing that city doesn't think it can achieve," he said. "You go to Silicon Valley, and they think everything there is cutting edge. And Boston thinks they are smarter than everyone.
"In Chicago, we think, 'We've got the Cubs; we've got the best buildings,'" he said. "We need to embrace (the city's strengths)."
There might be something to the notion of Midwestern humility, said Testa, vice president and director of regional research at the Chicago Fed.
"But, then again, we're known as the Windy City," he said. "We're not that humble. We're not the Amish."
Chicago's economic picture has suffered a number of setbacks in recent years, he noted in a report, among them losing the bid for the 2016 Olympic summer games, the exit of Oprah Winfrey's television show, the departure of a couple of key trade shows and the aborted plans for the Spire residential tower.
And while the city has had its positive developments, from the rising prominence of the financial exchanges to the opening of the Trump Tower and the Art Institute of Chicago's Modern Wing, the city's economic outlook remains dicey, he found.
The biggest cloud arises from the fiscal woes of the city and state, both of which are spending at levels that greatly exceed their annually recurring revenues and both of which have enormous levels of unfunded pension liabilities.
"For those who would invest in homes or assets or operations, it may give pause," he said.
The situation worries Charlie Cretors, chief executive of a 125-year-old North Side family business that makes commercial popcorn poppers, cotton candy machines, hot dog cookers and ice shavers.
"You kind of grit your teeth," Cretors said, in reference to Chicago's fiscal problems. "They will get their money somewhere, and you hope it's not where it hits us."
Cretors turns 70 this month and has no intentions of moving C. Cretors & Co. elsewhere, but he said his son, Andrew, the company's president, may eventually have different ideas if the costs of doing business pile up too high.
The next generation "has a commitment to keep the company going, but not necessarily in the same spot," he said.
Though the manufacturing sector has receded in recent decades, it may hold the key to a portion of the city's revival, as demand for U.S. products grows in emerging industrial countries.
Technologically advanced factories report a shortage of qualified workers, said Dan Swinney, executive director of the Chicago Manufacturing Renaissance Council, which in 2007 founded Austin Polytechnical Academy, a manufacturing- and engineering-oriented high school on the West Side.
"This city needs to be a global leader in manufacturing complex products. It's the only way to rebuild the middle class in the city," he said. "This will require a dramatic upgrade of the educational system."
Bob Laystrom, president of Laystrom Manufacturing Co., said he searched for three or four months before hiring a maintenance worker who could tend to both sophisticated laser-cutting machinery and older equipment at the West Logan Square company, which makes metal parts for products ranging from cell phone towers to drum sets.
Some observers say another key to recovery is for the next mayor to move beyond courting big, established businesses.
"If I could wave a magic wand, I would get government to start thinking differently about … what are the levers that we need to push, away from the traditional (tax increment finance district) thinking and away from the traditional thinking of, 'Let's just get a big company to move here,' and toward thinking about how to foster innovation and creativity," Christie Hefner, former chairman and chief executive of Playboy Enterprises Inc., said at a recent economic forum.
One step in that direction would be to move away from Daley's top-down model, another observer suggests.
"Mayor Daley became the traffic light … nothing happens unless he says yes or no," said O'Connor, who is now an urban strategist for architecture firm Skidmore Owings & Merrill LLP.
"What we have now, to some extent, is a stodgy Midwest establishment, and underneath them are the kids who moved here, some of them in their 30s now," he said. "They get it; they know how to do it. … We either give them permission and invite them to the table, which the next mayor should do and which Mayor Daley has begun to do a little bit lately, or we let them do it themselves."
Outlook 2011: Chicago economy
This is one in a series of articles looking at what lies ahead for various sectors in the new year.
Mayor Richard Daley's economic engine stalls
Next Chicago mayor faces monumental hurdles
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