Waiting to

PHIL GEIB/TRIBUNE ILLUSTRATION

BUSINESS Flip over for

B Sunday, October 27, 2013 | Section 2

More thanahalf-dozen idea factories are slated toopen inChicago over the next couple of years. Someare focused on scientific research, others onproductdesign and development. All are hoping to contrib-ute to the next generation of homegrown techstartups.

Most of the planned centers are coming out of thearea’suniversities,whichareeager tocommercializetheir research and meet growing demand fromstudents and faculty for more entrepreneurship-related resources. But private-sector groups arejumping in aswell.

“For a healthy startup scene, you need connectiv-ityandyouneeddensity,” saidJohnFlavin, executivedirector of the Chicago Innovation Exchange, arecently announced project from the University ofChicago. “What’s occurring now is the engineeringof those densities through the build-out of theseinnovation spaces.”

Serving as partial inspiration for these centers is1871, the 50,000-square-foot startup hub at theMerchandise Mart that opened last year. Thecollaborative workspace, which caters mostly toearly-stage companies building Web and mobile

applications, is oftenheld up as a symbol of the city’sbustling tech sector. It hosts events each week andactsasaconnectionpoint forentrepreneurs, venturecapitalists, academics and industry officials. Organ-izersof thenewtechcenters arehoping to foster thissamemix of people.

“1871hasbeenphenomenal, andpeoplehavebeenlooking to replicate this secret sauce,” said MarkHarris, president of the Illinois Science&Technolo-gyCoalition, anorganizationcomprisingpublic- and

New tech hubs set for city will help incubate next breed of startupsByWailinWong | Tribune reporter

Please turn to Page 3

Marijuana will soon belegal in Illinois as a pre-scription painkiller, butthat doesn’tmeanpatientswho test positive for potcan’t be fired from theirjobs. At the same time,employers will not be ableto discriminate againstworkers or applicants onthe sole basis of theirstatus as medical marijua-na patients.

Are you dazed and con-fused?

The legalization ofmedical marijuana, com-ing Jan. 1, presents somethorny workplace issues,especially since federallawcontinues tobanmari-juanause. The language inthe Illinois law sets up a

potential clash between adrug-free workplace andpatients’ rights.

Employers in Illinoisare struggling to reconciletheir drug policies withthe new right to get high.The Illinois Chamber ofCommercehasheldadoz-enwebinarson thematter,and all of them have soldout, said Todd Maisch,executive vice president.

Human resource man-agers are wrestling withsuchquestions aswhetheremployees who use mari-juana before they come towork might be too im-paired to do their jobs,what they are allowed toask job candidates andwhether they can punishsomeone for engaging inwhat is nowdeemed legal.

“I’m still seeing a lot of

confusion over the law,”said Tom Posey, an em-ployment-law attorney atFaegre Baker Daniels inChicago who representsbusinesses. “There areprotections in Illinois forboth employers and em-ployees, and that’s wherewe’re going to see con-flict.”

Posey said some em-ployers are under themis-taken impression thattheir hands are tied if aworker tests positive formarijuana and pulls out aprescription. But the Illi-nois law says that it doesnot “prohibit an employer

Employers hazy on new pot lawIllinois firms struggle to reconcile drugpolicies, medical marijuana legalization

Illinois’ medical marijuana law sets up a potential clashbetween a drug-free workplace and patients’ rights.

ANTHONY SOUFFLE/TRIBUNE PHOTO

Please turn to Page 4

By Ameet SachdevTribune reporter

JohnRogers Jr. RichardDriehaus. RalphWanger.

If you do business inChicago, their namesshould be familiar. Peoplehave entrusted each ofthemwith billions of dol-lars. They evenmight havemanaged yourmoneywith-out your ever knowing it.(If one hadmoney in thenow$20.5 billionAcornmutual fund between 1970and 2003, that’sWanger.)

In a newbook, Swedishhedge fundmanagerMag-nusAngenfelt has namedthe threeChicagoansamong “TheWorld’s 99Greatest Investors.” Thebookwas the perfect ex-cuse to ask the threemenabout their careers, therisks inherent in the stock-picking business andhowthey’veweathered thefinancial crisis.

JohnRogers Jr.JohnRogers Jr.met his

first real swindler on “TheOprahWinfrey Show.”

OnstagewithRogers inApril 1987wasBarryMin-kow, whohad taken public

3 acclaimed investorsshare their wisdomChicago’s Rogers, Driehaus andWangeramong world’s ‘99 greatest,’ author says

Melissa HarrisChicago Confidential

Please turn to Page 4

Kitchen looking more likean office? At this rate, youmight want both.

1. 1.99% Introductory Annual Percentage Rate (APR) is available on Equiline Home Equity Lines of Credit with a 70% or 80% loan-to-value (LTV) or less, depending upon the market. The introductory interest rate will befixed at 1.99% during the six month introductory period.A higher introductory rate will apply for an LTV above 70%. Offer is available for new applications submitted from September 9, 2013 to November 10, 2013. Existingcustomers are eligible with at least a $20,000 increase in balance and commitment amount. After the six month introductory period: the APR is variable and is based upon an index plus a margin. The APR will vary withPrime Rate (the index) as published in theWall Street Journal. As of September 1, 2013, the variable rate for home equity lines of credit ranged from 3.75%APR to 8.75%APR. Higher rates may apply for a credit limit below

$75,000 (depending upon the market), an LTV above 70% or 80% (depending upon the market), a low credit score and/or not having a U.S. Bank personal Package Checking account. The rate will not varyabove 25% APR, or applicable state law, or below 1.99% APR. An annual fee of up to $90 may apply after the first year. Offer is subject to normal credit qualifications and program guidelines. Rates are subjectto change without notice. 2. Property insurance is required. 3. Consult your tax advisor regarding the deductibility of interest. Other restrictions may apply. See the Consumer Pricing Information brochure forterms and conditions that apply to U.S. Bank Package Checking accounts. Home Equity Loans and Lines of Credit are offered through U.S. Bank National Association. ©2013 U.S. Bank. All rights reserved.Deposit products are offered through U.S. Bank National Association. Member FDIC.

branch usbank.com/lowrate 800.209.BANK (2265)

APR1

%1.99Home Equity Line of Credit

APR1

%3.75Rates As Low As

Variable Rate afterIntroductory Period

With rates still at an all-time low, now is the time to make those home improvementsyou’ve been thinking about. U.S. Bank is offering a Home Equity Line of Credit at agreat rate with no closing costs.2 Not to mention potential tax advantages,3 great serviceand more than 80 Chicagoland locations. Start adding value to your home today.

Introductory Rate for 6 MonthsRate available 09/09/13-11/10/13

Rates are subject to change

3B Chicago Tribune | Business | Section 2 | Sunday, October 27, 2013

private-sector members focused on tech-driven eco-nomic development. “The fact we have a physicalspace really has illuminated the value of having placeswhere there are these interactions that wouldn’t havehappened otherwise.”

Organizers of these tech hubs are raising funds fortheir construction projects and seeking support fromlocal corporations. As Illinois Institute of TechnologyProvost Alan Cramb put it, “You’re always incompetition for money.” Still, he and his counterpartsat other institutions said they believe there is plenty ofsupport for all the centers, especially as the tech sectorcontinues to grow.

“Chicago has a longway to go before it saturates thethreshold where there ends up being competition forthose kinds of resources,” Flavin said.

Here’s a look at the tech hubs coming to the area:

Health, Technology, Innovationat theUniversity of Illinois atChicago

IntheIllinoisMedicalDistrictnear theUniversityofIllinois at Chicago’s medical school, this 12,000-square-foot space is scheduled to open by year’s endand serve as a “proof-of-concept center” for researchin the biological sciences that could form the basis forviable businesses.

The state of Illinois’ Department of Commerce andEconomic Opportunity provided half of the $3.4million needed to overhaul the space, a formerresearch animal care facility that had been empty forseveral years. UICprovided the rest of the funds.

Health, Technology, Innovation will rent office andlaboratory spaceby themonth.MembersdonotneedaUIC affiliation to use the facilities. The idea behindHTI is tocreateapipelineof research-based ideaswithcommercial potential.

IllinoisVentures, the University of Illinois’ early-stage technology investment firm,will relocate fromitscurrent offices in the Civic Opera House to HTI. Thecenter also will provide programs and educationalseminars in topics such as navigating the regulatoryprocess for drugs or raising investment, taught byindustry experts.

Kapila Viges, director of EnterpriseWorks Chicago,said she wants representatives from corporations tohold office hours and run workshops. Enterprise-Works is theUniversity of Illinois’ business incubator.

“Our success depends on having that early industryengagement,” Viges said.

Plannedbiomedical centerLocalbiotech industryofficials areworkingwith the

city and other organizations on a 25,000-square-footspace downtown for biomedical companies. JeffAronin, chief executive of Northbrook-based ParagonPharmaceuticals, said the center will bring togetherentrepreneurs, academic institutions, investors andindustry representatives. Itwill not have lab space, butitwill beahubforworkshopsandmentoring, aswell asa meeting place for universities to connect withcompanies.

Thecenterwill be runas anonprofit, andorganizersare “moving in the right direction” on finding a space,Aronin said. It is targeted to open in early 2014.

TheGarage atNorthwesternUniversityNorthwestern University officials are planning to

open a space on the north side of its Evanston campusfor students to tinkerwith ideas in early, pre-companystages. The center, part of theuniversity’s constructionofa six-levelparkingstructure, isdesigned for studentsfrom different disciplines — not just those studyingbusiness or engineering — to collaborate with oneanother. The Garage will have movable walls so thespace can be configured for big events or small groups.

“We really believe that the space matters and iscentral for creativity and innovation,” said AliciaLoffler, executive director of Northwestern’s Innova-tionandNewVenturesOffice. “Thedesignof thespaceis key. ... It affects howpeoplewill interact.”

Officials hope to open The Garage by the end of2014, pending ongoing fundraising. Loffler said arepresentative from NUseeds, a new university fundfor startups,will have anoffice inTheGarage.Officialsare also considering having an established startupcompany anchor the space andmentor students.

Coalition: LoopThis 10,000-square-foot space occupies the top

floor of the Gage Building at 18 S. Michigan Ave. andprovides 19private offices and twogeneral co-workingspaces for members of the energy and greentechnology sector. Construction is almost complete,and Coalition co-founder David Rotbard has lined upabout 40 tenants tomove in by year’s end.

“We’re excited about bringing quality events andprogramming here for the industry and creating aspace for theenergycommunity togrow,”saidRotbard,whose company, Micro Office, operates flexibleworkspaces in its homebase ofNewYork.

One Coalition tenant will be Energy Foundry, a$22.5 million venture fund supported by electricutilities Commonwealth Edison Co. and AmerenIllinois. The fund, created under 2011 legislationrelated to the grid modernization, backs startups inenergy and clean tech. Energy Foundry’s five-personstaff currently works out of 1871 and had found that“trying to set up one of these incubators or co-workingspaces on your own can be expensive,” said VicePresident Jeremy Adelman. “And as a venture fund,being a landlordwasn’t in our expertise.”

Rotbard is also looking to open a Coalition center inRiverNorth inearly2014 thatwillbeorganizedaroundstartup sectors, such as education or financial servicestechnology. At the Loop location, renting a standarddesk in the open co-working area costs $400 amonth,while a private office starts at $700 amonth.

Project1872A group of hardware-oriented entrepreneurs will

kick off a campaign early next year to raise funds andinterest in a center where startups making physicalproducts can work on testing and development. Thespace will have equipment such as 3-D printers andlaser cutters,which allow for rapid prototyping.

Bill Fienup, who is helping lead the effortcode-named“Project 1872,” saidorganizersare lookingfor corporate sponsorship, as well as donations andgrantmoney fromgovernment sources.Eventually, thespace should be sustainable based onmember fees.

The group had initially looked at installing afabrication laboratory, or “fab lab,” inside 1871. But thatwould mean “you’d have laser cutters creating fumesandmillingmachinescreatingnoise,” saidFienup,who

worked at design firm IDEO and Insight ProductDevelopment before becoming a full-time entrepre-neur last year. “It wasn’t the best fit. So the next stepwas to build our own.”

The Chicago area is home to other “hackerspaces,”which provide equipment for hobbyists to tinker withhardware projects. The Project 1872 organizers wanttheir center to help entrepreneurs develop a viablecommercial product and take it tomarket. To that end,they foresee the space hosting community events andworkshops. They also want to create an onlinedirectory of local manufacturers and connect themwith startups early in a product’s development.

“There’s some hesitation (amongmanufacturers) totake the chance and work with an entrepreneurbecause sometimes these things fail, and initially thequantities are low.…They’re kind of taking the gamblewith you,” Fienup said. “Being part of a hardwarecommunity with mentorship and advice will reducefailures and legitimizes requests tomanufacturers.”

InnovationCenter at theIllinois Institute ofTechnology

The school is raising $30 million for a 100,000-square-footbuildingon its SouthSidecampus thatwillact as a hub for its innovation- and entrepreneurship-related activities. IIT plans to set up a materialsworkshop and lab with digital manufacturing equip-ment, an electrical workshop, and digital mediastations for activities such as mobile applicationdevelopment and animation.

The Innovation Center also will house IIT’sInterprofessional Projects Program, or IPRO, whichbrings together students acrossdifferent fieldsof studyto collaborate on solving a real-world problem. Thecurriculum is “very focused on how do you take yourideas, build a prototype, go to a customer, get theirfeedback and change the idea so it’s more appropriatefor the customer,” saidCramb, the provost.

IIT already runs a multibuilding technology park,which includes a startup incubator. Officials envisionstudents taking their IPRO projects from the Innova-tion Center into the tech park, where they’ll receiveadditional resources to keep developing their businessideas. The Innovation Center is also expected to hostprograms formiddle andhigh schoolers.

The new building is part of a larger trend inacademia to develop more creative professionals,Cramb said. “What we’ve seen is the decrease of thelarge corporation, the decrease of people working inthe same place for many years, and a growing interestamong our students inworking for smaller companiesor starting their own companies,” he said.

Chicago InnovationExchangeat theUniversity ofChicago

The University of Chicago is building a center inHydePark thatwill open in late 2014. The first stage ofthe multiphase project involves creating co-workingspace for about 190 people, aswell as large-scale event

and smaller lounge spaces, in 24,000 square feetspread across two university-owned buildings at 53rdStreet and Harper Avenue. Argonne National Labora-tory and the university’s Institute for MolecularEngineering will get dedicated office space in theChicago InnovationExchange, orCIE.

The center is expected toproduce five to 10 startupsa year in areas such as energy storage technology andwater resourcemanagement,whichare research focuspoints for Argonne and the Institute for MolecularEngineering. The CIE will also collaborate with theBooth School of Business’ Polsky Center for Entrepre-neurship and Innovation.

In conjunction with the build-out of the physicalspace, which will cost about $6 million, the universityhas set up a $20million venture fund to back startups.Officials say the CIE’s second phase, whose timing isyet to be determined, involves construction of a30,000- to 40,000-square-foot facility with prototyp-ing equipment andwet labs. The CIE project is part ofa “much broader investment to redevelop the 53rdStreet commercial corridor in Hyde Park and bringnew businesses and jobs to the community,” theuniversity said in a statement.

Flavin, the CIE’s executive director, said he believesthe tech hubs being built in the area complement eachother in physical infrastructure and areas of focus.

“At some point, some of these companies (from theUniversity ofChicago)might need to access additionalkinds of space,” he said. “IIT will be right down thestreet. … I can envision a company that starts here andmight need laboratory space to do chemistry work.They could do it out at HTI (at UIC). … I seecross-pollination.”

UILabsThe organizers of this ambitious center describe UI

Labs as a “Chicago-based research, training andcommercialization center” that will allow students,faculty, companies and other groups to tackle prob-lems in everything frommanufacturing to health care.

The project is affiliated with the University ofIllinois but is spearheaded by a private, not-for-profitcompany. It has garnered support from partneruniversities and companies, as well as Mayor RahmEmanuel and Gov. Pat Quinn. Officials are looking for50,000 to 100,000 square feet downtown, and theproject is still in the early stages of development.

“UI Labs is designed to be a vehicle for academicand industry partnerships as it relates to solving bigproblems,” said Caralynn Nowinski, chief operatingofficer and interim executive director.

She said she didn’t seeUILabs as being competitivewith the area’s other planned tech hubs.

“In fact, I thinkwearequitecomplementaryandcanbe a feeder to many of them from the perspective ofaccelerating startup formation and the incubation ofnewcompanies and technologies,” she said.

wawong@tribune.comTwitter@VelocityWong

New ‘innovation spaces’ for startups

On Michigan Avenue, work is nearly done on a Coalition project to offer 19 private offices and two general co-workingspaces for the energy and green technology sector. Representatives of some of the groups taking part include UzmaNoormohamed, from left, Brandon Pearlman, Jim Eber, Phil Hoffer, Jeremy Adelman, Jason Blumberg and Ellen K. Bell.

TERRENCE ANTONIO JAMES/TRIBUNE PHOTO

Kapila Viges, director of EnterpriseWorks Chicago, shows the soon-to-open Health, Technology, Innovation space nearUIC’s medical school. It will be a center for research in the biological sciences that could have commercial potential.

ALEX GARCIA/TRIBUNE PHOTO

Continued from Page 1

FOCUS TECHNOLOGY