Jim Reynolds’ story is more remarkable than he’d like it to be. Reynolds, 59, grew up in Englewood and graduated from Chicago Vocational High School with intentions of becoming a TV repairman. After a misadventure with his mother’s set, Reynolds decided to stop working with his hands.
Since then, he’s spent his entire career in finance, first at large firms like Smith Barney and Merrill Lynch. In 1997, he struck out on his own and founded Loop Capital, an investment bank with more than 170 employees.
In February, Mayor Rahm Emanuel chose Reynolds to co-chair the Public Safety Action Committee, which aims to prevent violence through intensive mentorship and intervention in the lives of at-risk youth. To date, the initiative, which is funded by donations from the business community, has raised $45 million.
Your expertise is in municipal bonds. Let’s start out with a question we’ve been hearing ever since Chicago’s bond rating was downgraded the same July day that Detroit declared bankruptcy: Are we the next Detroit?
Mayor Emanuel inherited a tough situation. But to his credit, he’s aggressively moving to try to get it fixed. The reasons for the downgrades are virtually all pension-fund related. If you look at downtown Detroit, all you saw was devastation. Downtown Chicago is nothing like that.
The thing about pension obligations is you can fix them. If you have an unfunded pension liability of $10 billion or $20 billion or whatever it is, that’s a present value of an obligation for 30 or 40 years. You can take aggressive action today to turn that around. The biggest challenge for Chicago is when they’re going to have movement in Springfield to provide us the model for addressing our pension funds here.
We still haven’t made those hard choices here. If we did that here, Chicago’s rating would probably get double-upgraded within a week, if they made just that one decision. Because you have time to fix your pension problems if you fix them. That’s why Chicago is not going to be another Detroit. Chicago has a vibrant, growing, active tax base. Springfield has to provide the guidance for these pension issues. That, to me, is it in a nutshell.
As co-chairman of the Public Safety Action Committee, you’re trying to stanch the bleeding in some of the city’s most troubled areas. How’d we get here?
In previous years, we’ve focused a lot on the central business district. North Side beaches in the summer rival Jamaica or Barbados — water’s colder, not as clean, don’t want to get any in your mouth if you can avoid it — but we have done a very good job of catering to that constituency. But at the same time, we’ve seen unprecedented decay and hopelessness on the South and West side. Unprecedented, and we’ve got to get our arms around that.
When a 16-year-old shoots another 16-year-old, with pretty good knowledge that they’ll be caught and in jail for a long time, but still makes that decision, what’s the calculus that goes into that? They’re rational actors. It’s pretty much a suicide — I don’t have a lot to live for, and many think they won’t live past 25 anyway because a lot of their friends don’t. So why not? It’s a suicide mission.
Until we get in there and add something, add some hope, some structure, some feeling that hey, we get it, we want to get in there and intercede now before it gets too far, before you get to 16, 17, 18 and you’re so hopeless that you think it’s a good idea just to pull a gun and shoot someone.
What about you accounts for your unusual story?
I would say luck. Because I was not very different from any other kid in the neighborhood that’s probably either dead now, incarcerated now, didn’t go to college. It was really a matter of degree. I hung out with those guys, my standard of living was exactly the same as theirs — we all had nothing. We were all equal. I can point to some times when they were going to do something that for whatever the reason, I wasn’t there. I just didn’t happen to be there.
I’m not going to say I consciously committed this righteous path because I didn’t. But for me, there were lines that were drawn that were subtle lines, and for other guys, maybe they were blurrier lines. I never joined a gang, and I was surrounded by gangs. I knew the gang members because you had to because you couldn’t come out your front door, and if you’re going to school every day, they knew where you lived.
You grew up in Englewood, less than a mile from the site where Whole Foods will build a new store. What are its chances for success?
First and foremost, the Whole Foods brand, that’s a very well-run company with an outstanding CEO and executive team with an incredible history of success. You have to trust executives when they choose to make a decision like this.
When you use the term food desert, a lot of people use it very loosely because they’ve never driven through the South Side and seen miles and miles without a decent grocery store. So I’m a big fan of that development over there. It’s my expectation that it’ll do pretty well over there, because remember, I don’t expect that it’s just going to draw just from that core area, which it will — it’s the best grocery store for a good distance around there. And around that area are also some decent middle-class type areas.
It’d be hard to argue against a Whole Foods arriving in that neighborhood. But do you believe that the $10 million subsidy is warranted?
I’m very comfortable with the subsidy. I think we have to do something like that to spur development. I’m a public finance guy, so I’m a numbers guy. I understand that if I’m Whole Foods and I’m going to build in an area like that and create jobs and revitalize the community, then I think a subsidy would be something that’s very appropriate for that.
When you look at the way you grew up and the way things are now, do they resemble each other?
It’s different now. One is, the pressure on the youth now is much stronger to make a decision. You either join a gang, or I have to have money, I have to figure out how to survive. We always ate — whether it was your house, a cousin’s house, a neighbor’s house. You really didn’t know what you didn’t have. Television and media wasn’t so pervasive that you really didn’t observe what other people had that you didn’t have. Nobody had fancy cars, Cristal Champagne; you’re watching Dick Van Dyke, “Leave it to Beaver.” That’s about as complicated as it got.
You’ve been in investment banking for more than 30 years. Is it more diverse than when you started?
In business, in investment banking, African-Americans comprise some small fraction of one percent of investment bankers. You’re probably more likely to walk out and see a unicorn on State Street than another Jim Reynolds.
There’s very few people who wake up in the morning and say, “I’m going to discriminate against someone today.” It’s not conscious racism in many instances, not that I can put my finger on. But when you look at certain measurements that don’t take into account other things, you just eliminate certain groups. And you have to create this full mosaic of the person to figure out what you’re going to do next. And it’s hard to create the mosaic of the kid from Englewood, makes his way to college, gets an MBA, versus the kid who’s been studying that since he was 4 years old.
Photo by Sara Mays