Evanston business leaders and Northwestern University are putting their money behind their fledgling efforts to work with city fathers in the name of economic development.
Given the animosity that split those three groups until just a few years ago, it`s money well spent. And it may be a lesson to the city south of the Evanston border.
Earlier this month, the university and four Evanston-based companies purchased $1 million of 6 percent, 10-year debentures issued by the new Evanston Business Investment Corp.
The companies are Washington National Corp., American Hospital Supply Corp. (now part of Baxter Travenol Laboratories Inc.), First Illinois Bank of Evanston and State National Bank of Evanston.
The money will be used to make below-market loans and seed capital equity investments in start-up companies and small companies moving to or growing in Evanston.
”Evanston`s most obvious problem is that it`s a high-tax city,” said Thomas E. Parkinson, a recent Northwestern MBA and the corporation`s executive director.
”Evanston has also fully developed. If we`re going to compete with the cities that are growing rapidly, we have to be able to offer something besides a lot of cheap, readily available land.”
James E. Dresmal, vice president and head of the investment department at Washington National and chairman of the new corporation, said his company`s $300,000 commitment to the program is part of a larger program of social investing.
Money set aside for social investing makes up the difference between the 6 percent rate to be earned on the Evanston Business Investment Corp. debentures and what Washington National could have earned at market rates on a similar investment.
Therefore, ”It won`t impair our investment return,” Dresmal explained. Washington National has made a similar commitment of $200,000 to a program established by the United Negro College Fund.
”What attracted us to the Evanston Business Investment Corp. was that we were looking for a vehicle where we could get the maximum benefit from our investments,” Dresmal said.
”It`s difficult to make a $300,000 investment in a single project. Here, we`re pooling money and investing in many different projects, and it has the added benefit that`s it`s right in our backyard.”
So far, two businesses, an office supply and service company and a software company relocating to Evanston, are on the drawing board for financing.
The objective is to use the business investment corporation`s resources in conjunction with bank loans or Small Business Administration-relate d loans.
”Bankers don`t like anything below market rates,” said David E. Albertson, president of State National Bank. ”We look at the difference (in rates) as a contribution to our community. It provides leveraged funding to make some things happen for some businesses that without it couldn`t grow or couldn`t move here.”
Also on the board of the corporation are Ronald Kysiak, executive director of Evanston Inventure, a local economic development group; Bruce I. McPhee, president of First Illinois Bank of Evanston; James L. Muchow, senior vice president in commercial lending at State National Bank; Joseph A. Swanson, a professor at Northwestern`s Kellogg Graduate School of Management; Wayne A. McCoy, an attorney with Schiff Hardin & Waite and member of Evanston`s economic development committee; Mary Walter, owner of Mary Walter Inc., a women`s apparel store; Harrison James Sargeant, chief executive officer of C.E. Niehoff & Co.; and Ken Williams owner of an Evanston dry cleaning shop.
The $300,000 contributed by Northwestern is to earn a 12 percent rate, but that money will be used for riskier equity investments. The other $700,000 will be used for loans subordinated to conventional bank loans or other financing.
”Call back in six months,” Albertson told us. ”If we haven`t put something together in six months, it seems to me we`re spinning our wheels.” `Cut the fat,` he
said–and they did
Memo to corporate executives: If you get named to the CEO`s new committee on organizational efficiency, watch out. Signed: Charles F. Mikuta, former vice president, Northern Trust Co.
Mikuta, who until Friday headed advertising and public relations at the bank, says he feels ”like a sacrificial goat.”
Mikuta was a member of a 20-person management study committee created several months ago by Northern`s cost-cutting chairman, Weston R.
Christopherson, to recommend ways to reduce the bank`s layers of management.
Late last week, Mikuta, an 11-year veteran of Northern, got the word that his job was being eliminated, effective immediately.
The two persons who reported to him will continue to head their departments–Susan Rageas as head of public relations and Charles Jessop as head of advertising.
Both now will report directly to John B. Snyder, executive vice president, secretary and general counsel, Mikuta`s former boss.
”I don`t want to speak critically about the Northern,” Mikuta said.
”They gave me a generous severance.”
But one member of Northern`s staff said Christopherson apparently feels that ”one person running a department is enough.”
Rumors circulated throughout the bank that other executives would soon feel the ax. One rumor even centered on Edward Byron Smith Jr., an executive vice president and member of the family that holds a large share of the holding company`s stock.
Smith, reached by phone, denied that he might leave the bank and said:
”My desk is piled high with work.” He declined to say if he knew who else might be cut but added: ”If that happens, the pile on my desk might go even higher.”
CBOE brochure
irks Philadelphia
The feisty Arnold Staloff, president of the Philadelphia Board of Trade, has taken offense at a promotional brochure published in December by his rival in foreign currency options trading, the Chicago Board Options Exchange.
Staloff fired off a press release Tuesday to rebut what he called
”potentially misleading information” disseminated by the CBOE regarding trading volume in the contracts. The pamphlet said the CBOE, which began trading options in six currencies in October, had captured 25 percent of the market.
”Coming from Chicago, with the Bears and all, they have this feeling about what they can do,” he said. ”They have said they are going to bury us. ”Last Friday, we had a record trading day of 43,409 contracts; they traded less than 2,100 contracts.”
Robert Bassi, spokesman for the CBOE, said the data were accurate when published and acknowledged that the Philadelphia exchange was having a good January.
”Philadelphia has always been a feisty bunch, and I sort of admire that,” he said. ”But no one exchange has pockets deep enough to handle all of the business.”
Well, it`s not really
quite appalling . . .
Roger M. Kubarych, chief economist for the Conference Board, called to say he erred in terming labor absentee rates in the Midwest ”appalling,” as we reported in last Wednesday`s column.
Upon returning to New York, Kubarych checked current data and found that Midwest absentee rates, which measure the percentage of the work force taking unscheduled absences, are actually better than rates for the Northeast, the South and the West.
”I think I was wrong in calling attention to outdated information,” he said.
