Chicago’s flagship tech incubator 1871 will close its space in the Merchandise Mart due to financial pressures and a different business landscape since the COVID-19 pandemic, announced 1871 CEO Elizabeth Ziegler on Wednesday.
The Mart has been home to 1871 since the nonprofit launched in 2012. But the entrepreneurship hub cannot “sustain the real estate commitment that once served 1871 so well in the pre-COVID years. As such, we have no other option other than to relinquish our space at The Mart,” Ziegler said in an email to members and supporters.
She said the incubator “has not been immune to the post-COVID challenges that many organizations — especially nonprofits — have faced.”
Ziegler added, “As we deal with our new economic realities, we are embracing a more flexible model that reflects today’s entrepreneurial landscape. We will continue to leverage our incredible network of partners to showcase Chicago as a global hub for innovation.”
The organization did not comment beyond Ziegler’s email.
1871 will leave its 120,000-square-foot space by May 1, according to Crain’s Chicago Business. It will look for a new home but did not indicate where.
Until then, programs appear to be continuing at 1871, such as its sold-out Mar. 6 International Women’s Day event. Ziegler’s email did not disclose whether 1871 would cut any of its 32 employees.
Tech incubator 1871’s space at the Merchandise Mart features a mural painted by Justus Roe.
Tyler Pasciak LaRiviere/Sun-Times
Under 1871’s original model, entrepreneurs paid membership fees to use its coworking space in the Mart, as well as the hub’s other resources and networks. Over the years, member companies have created roughly 15,000 jobs and raised $4 billion in capital, Ziegler said.
But as the pandemic hit, fewer people were using its coworking space. For example, in early 2021, only about 20 people were at 1871 on a given weekday — far fewer than before the pandemic. Overall membership was still steady, but some users who rented space in 1871 had given it up, Ziegler told the Sun-Times in 2021.
1871 is run by the nonprofit Chicagoland Entrepreneurial Center, whose revenue has declined from $9.1 million in 2018 to $6.2 million in 2023, according to tax filings.
Gov. JB Pritzker founded 1871 and harnessed support for the incubator from business and civic leaders. At a 2019 celebration at the tech hub, he said, “Chicago is now one of the top tech cities in the country. … 1871 and the entrepreneurial drive of our community did that. You turned our big idea into a factory for innovation and job creation that’s become the envy of cities across the world.”
Derek Eder, co-founder of civic tech company DataMade, said 1871’s departure from the Mart is “definitely the end of an era.”
Eder also co-founded Chi Hack Night, which was held at 1871 for 2½ years and helped establish the city’s civic tech community, he said.
“While we were there from 2012 to 2015, every time I walked into 1871 it felt like the center of Chicago’s tech universe,” said Eder.
He recalled the one-year anniversary of Open Gov Hack Night at 1871: “We had in one small room, 50 people from tech, government, policy and academia all talking and collaborating on civic problems for the public good of Chicago.”
Merchandise Mart is home to PayPal, Motorola Mobility and health care incubator Matter, as well as Conagra Brands, Allstate, Medline Industries, Beam Suntory, Avant and Grainger.
Downtown Chicago’s office vacancy rate hit a record high of 23.2% in the fourth quarter of 2024, up from 22% at midyear, according to real estate firm Bradford Allen.
But the Mart’s vacancy is lower than downtown Chicago, with occupancy at 80.1% as of Dec. 31, 2024, according to the landlord Vornado Realty’s fourth quarter earnings.
