J.B. Pritzker: The Other Mayor of Chicago This billionaire power broker doubles as a down-to-earth guy—and he just may turn Chicago into a tech hub after all.

Above: J.B. Pritzker, left (with FTD product development manager Timm McIntyre, center, and venture capitalist Gabe Greenbaum, right) greets the gang at River North tech accelerator 1871 in December. Photo: Carlos Javier Ortiz No entourage surrounds J.B. Pritzker as he steps off an elevator at the Merchandise Mart. No PR minder rushes to his side; no flunky steps up to hand him coffee. Looking a little like the portly character actor Oliver Platt, he ambles amiably into the polished-concrete environs of the tech company incubator 1871 with an open, friendly smile. He looks about as intimidating as an old friend dropping by to see if you want to catch the Hawks game. Despite the low-key entrance, within a few seconds entrepreneurs in their 20s and 30s—people trying to create the next Groupon or Snapchat—begin smiling and gravitating to the 49-year-old Pritzker like iron filings to a magnet. He beams back, greeting every jeans-and-hoodie-clad person who approaches: “Hi, how are you?” or “What are you working on?” Watching Pritzker interact with these fledgling CEOs, it’s clear that he commands their respect, and not just because he bears a last name that’s synonymous with wealth and power. (Three Pritzkers appear on Chicago’s Power List—more people than from any single family.) Nor just because he’s a shrewd investor in his own right. (Thanks to judicious investments in such companies as Facebook well before they went public, Pritzker has grown his billion-dollar-plus inheritance to a net worth that Forbes estimates at $3 billion. That puts him at No. 166 on the magazine’s 2013 list of the richest people in the nation, tied with Tony, his brother and business partner. No other Pritzker ranks higher.) Advertisement No, the main source of his allure is that for nearly two decades, he has devoted himself to making sure that one day “Silicon Prairie” will be an honest-to-God nickname for his adopted city, not a stubbornly elusive dream. This very incubator wouldn’t exist without Pritzker: Two years ago, he ponied up $1 million and built a coalition of other supporters to get 1871 off the ground. In October, Mayor Rahm Emanuel launched ChicagoNEXT, an offshoot of World Business Chicago that aims to lure more new ventures, with Pritzker at the helm. When asked to imagine that effort without him, Emanuel cuts off the question: “I don’t even want to think about it.” Oh, and one more thing. In a city that tends to sharpen knives when big business or political players spread their peacock feathers, Pritzker is widely acknowledged to be that least elitist of things: a nice guy. “He’s almost shockingly nice,” says restaurant mogul Larry Levy, a fellow trustee at Northwestern University, “especially in the sense that he doesn’t have to be.” Plenty of criticism has been lobbed at various Pritzkers over the years, from accusations of tax evasion (J.B.’s grandfather set up a boatload of trusts in the Bahamas to escape the IRS) to cries of gross mismanagement (the notorious 2001 failure of the family-owned Superior Bank). But dozens of interviews with J.B.’s current and former associates, family members, friends, and competitors—even off the record—turned up scarcely a soul with anything negative to say about the man himself. Even David Schultz, a contractor who in November won a court battle alleging that Pritzker and his wife owed him nearly $1 million on a $25 million renovation of their Gold Coast mansion, says that the few times he has talked to him have been “nothing but pleasant.” When you try to analyze Pritzker’s clout in Chicago, you start to realize that it’s rooted in a rare ability to straddle different, sometimes conflicting, worlds. He’s Silicon Valley, where he grew up, but he’s also as Chicago as the el. He’s a businessman, but he’s also a politician. He’s a billionaire, but he’s Everyman. He has a likable, almost childlike, enthusiasm—a poignant quality given that his childhood demanded a strength well beyond his years. The tale of the Pritzkers’ rise from penniless Ukrainian Jews to stupendously wealthy power brokers has already passed into legend. Nicholas, J.B.’s great-grandfather, moving from Kiev to Chicago in 1881 at the age of 10, attending Harvard Law School, and starting his own law firm. The expansion into business under Nicholas’s sons, Harry, A.N., and Jack, who made a fortune buying up distressed properties and other assets. And then, thanks mostly to the savvy of A.N.’s elder sons, Jay and Robert, the growth into a multibillion-dollar family-held conglomerate called Marmon, which owned mostly manufacturing companies; they also acquired casinos and even an airline (Braniff). In 1957, Jay, an indefatigable dealmaker and the de facto head of the Pritzker family’s third generation, bought a Los Angeles hotel called Hyatt House. He soon summoned his younger brother Donald—who had recently earned a law degree at the University of Chicago—to run it.

So in 1959, Donald and his wife, Sue, both 26, and their six-month-old daughter, Penny, moved from Chicago to Atherton, California, in the heart of what would become Silicon Valley. Two years later, Tony came along; four years later, Jay Robert (J.B.). J.B. Pritzker recalls his earliest years in the sequoia- and redwood-studded area as idyllic. “My father was a very gregarious, very open guy,” he says, “so every weekend the house was full of people”: Stanford professors, tech entrepreneurs, politicians (both Sue and Donald were active in the California Democratic Party). Hewlett-Packard’s founder, David Packard, lived just down the road. “He was the crazy guy doing something in his garage,” Pritzker recalls. Donald’s business was booming. With Sue’s help—“she was the person responsible for opening the new hotels and motels,” Pritzker says—Donald grew Hyatt into a chain, the nation’s fifth largest by 1972. (Hyatt, currently a public company, owns 535 properties worldwide; Jay’s son Tom is executive chairman.) On a hot day in May of that year, when J.B. was seven, his father clutched his chest on the tennis court, and everything changed. Donald had suffered a fatal heart attack at the age of 39. “So here this big personality was just gone,” Pritzker says. “My mother was left with three young kids, ages 13, 11, and 7. It was devastating.” Sue’s drinking soon spiraled out of control. The kids became her caretakers. “The number of nights I remember having to stay up and watch her smoke, because if I went to sleep she might pass out or fall asleep with a cigarette in bed, are too many to recall,” Pritzker says. One day Sue slipped and fell, hitting her head, and lay bleeding on the bathroom floor. “I had to call 911 and essentially get her to the hospital,” Pritzker recalls. Penny, Tony, and J.B. turned to one another. “We had a common enemy: the alcoholism,” Pritzker says. “We had to kind of band together. … Who was going to drive you to your friend’s house, or who’s going to drive you to the soccer game? Because you don’t want Mom to drive you.” He adds: “I think one of the reasons today that we’re all three responsible sorts of people, and have the ability to carry crises on our shoulders, is because we had to band together to deal with these circumstances.” Pritzker pauses. “I want to be clear: My mother to me was a hero. [Because] she fought her alcoholism. Really fought. She found someone to take care of us for a couple of weeks so she could check herself into a rehab program. She went to Alcoholics Anonymous meetings and was sober on and off. But she would fall off the wagon.” Before she entered rehab, Pritzker says, his mother gave each of her children a slim volume about alcoholism, explaining that she had it and was trying to get help. “She said, ‘I want you to read this. And I want you to know that this is a disease. I love you, and sometimes I’m challenged by my alcoholism to do everything I should be doing as a mother, but I want you to know that it’s not because I don’t love you.’ ” Ten years to the day after Donald’s fatal heart attack, in May 1982, tragedy struck a second time. According to police reports, Sue was run over after leaping out of a truck that was towing her car. J.B., still in high school, was now an orphan. “It was a very hard, dark time [for him],” recalls childhood friend Karl Austen, now a Hollywood attorney. “Thank God he had his brother and sister”—who were by this time students at Dartmouth and at Stanford, respectively. J.B. also had his Chicago relatives, and he relied on them—particularly his uncles Jay and Robert and their wives—for emotional support. “My uncles and my aunts were outstanding,” Pritzker says. “There’s just no other way to say it. They lived in Chicago, they had their own kids. We were very lucky to have an extended family that was so far away but still cared a lot about us.” J.B. entered Georgetown University that fall (he would later transfer to Duke). He opted against studying business, despite having displayed the family knack for it early on. Tony recalls how his 10-year-old brother had “started buying gum wholesale and then selling it on the bus at a profit. To finance that, he created a little company and issued shares. He did pretty well.” But Pritzker—gregarious like his father and passionate about such liberal causes as early childhood education (“I think much of what you learn as a kid comes before age seven”)—felt that his true calling was politics. “I was always fascinated by politics, and I was exposed to it quite a lot,” he says. “I was riding around the neighborhood with bumper stickers for Jimmy Carter in 1976; my father was the finance chair for Ed Muskie in California when he ran for president; and my mother was the finance chair for [former U.S. senator] John Tunney.”

Armed with a bachelor’s degree in political science, Pritzker moved to Washington, D.C., in 1987, working first for Senator Terry Sanford from South Carolina and later for Senator Alan Dixon from Illinois. During this time, he was fixed up on a blind date with a fetching 21-year-old named Mary Kathryn Muenster, who was working as a staff assistant in Senator Tom Daschle’s office. In some ways, the two couldn’t have been more different: He a West Coast Jew from a superrich clan, she a Midwestern Protestant from a family that was comfortable but not wealthy. What’s more, M.K., a South Dakota native who was attending the University of Nebraska, was casually dating the center on the school’s basketball team, says Pritzker. “I felt like I had no shot.” But, M.K. says, “His great sense of humor made a huge impression on me. … More importantly, from the very beginning he demonstrated to me that he was a very good and kind man in every sense.” They dated for three and a half years before Pritzker worked up the nerve to ask her to marry him. They wed in 1993, the same year he graduated from Northwestern University Law School. “I fell in the lucky tub,” he says, shaking his head slightly, as though still marveling at his good fortune. With more relatives in Chicago than in California, Pritzker began to put down roots in the Windy City. He and M.K. settled in Evanston. Though he still nurtured political ambitions, he started working at a boutique investment bank called the Chicago Corporation. The job provided a chance to bet on the kinds of people who had made such an impression on him during his boyhood: tech entrepreneurs. He found that he loved the work. “The idea of investing in entrepreneurs who are building things from scratch, where I can participate in their dream, was very, very exciting to me,” he explains. It tapped into the same let’s-change-the-world enthusiasm that he had for politics. By late 1995, Pritzker recalls, “I’d seen a bunch of startup Internet companies, and the investment banks couldn’t do the deals because [the deals] were too small. I thought they were just tremendous opportunities.” He started his own firm, New World Ventures, to invest in such startups and had “several pretty big successes,” including egreetings.com, an online greeting card company that went public in 1999. Pritzker felt ready to launch his own political bid in 1998. He tossed his hat in the ring, along with five other Democratic challengers, for the congressional seat in Illinois’s highly competitive 9th District. Despite spending more than $1 million of his own money, he lost the primary to Jan Schakowsky. The experience left him feeling bruised—and eventually convinced him to take his uncle Jay’s advice. “He told me that I could accomplish many public policy goals by making money and going without the public life,” Pritzker told the Tribune a few weeks after the primary. A year later, in 1999, Pritzker’s uncle Jay died the same way his father had years before: from a heart attack. There was no doubt who would run the family enterprise going forward. Jay had anointed his eldest son, Tom, then 52—supported by Jay’s niece, Penny, 43, and Jay’s first cousin Nick (who, at 56, was closer in age to the fourth generation than to the third). They would take over an empire that had grown almost unimaginably vast. The Hyatt chain plus the scores of profitable manufacturing and transportation enterprises owned by Marmon were now worth about $15 billion, making the Pritzkers’ one of the largest family fortunes in the nation. Family businesses are notorious for hitting rocky patches after passing to the third generation. The third generation of Pritzkers managed to deliver good financial results and maintain family harmony, but perhaps it was inevitable that conflict would emerge with the fourth: 12 people with a wide range of ages and interests. And so it was. In 2000, John, Daniel, James (now Jennifer), Linda, Karen, Tony, and J.B. accused Tom, Penny, and Nick of diverting assets to themselves instead of to the family. Two years later, J.B.’s much younger first cousins Matthew and Liesel—Robert’s children by his second marriage—sued their father, accusing him of taking more than $1 billion from their trust funds. The very public upshot: The family agreed to break up the empire, selling businesses off or taking them public and divvying up the proceeds among the cousins. The unwinding would require a decade to complete and give each Pritzker except Matthew and Liesel control over more than a billion dollars. Continued below