Office Depot to buy OfficeMax

Office Depot Inc. said on Wednesday that it would buy smaller rival OfficeMax Inc. for $1.17 billion in stock to get more clout with suppliers and better compete against Staples Inc and Amazon.com Inc .

After days of speculation that a deal was close, the news was buried on the fourth page of Office Depot's earnings press release. Nearly an hour after it came out, there was still no mention on OfficeMax's website.

Office Depot will issue 2.69 new shares of common stock for each outstanding common share of OfficeMax. At Tuesday's closing prices, the deal is valued at $13.50 per share, or $1.17 billion, based on 86.7 million shares outstanding as of Oct. 26.

After the merger is completed, Office Depot's board will consist of an equal number of directors chosen by that company and OfficeMax.

The news comes as both companies face pressure from investors to boost profitability and lift their sagging shares.

Analysts say they expect far less pushback from antitrust authorities for this deal than what Office Depot faced in the 1990s, when it tried to merge with Staples, given the changes in the office supply market since then.

Underscoring how tough that business has become, Office Depot reported a fourth-quarter net loss, hurt by a 6 percent decrease in comparable sales at its North American stores and a revenue drop at its unit that serves North American businesses.

Office supply retailers, which are often seen as reflecting overall economic health, have suffered as demand for their products fell in the years after the last U.S. recession led companies to cut spending.

They also face strong competition from the likes of Amazon and Wal-Mart Stores Inc in selling everything from pens and notebooks to furniture and break room supplies to government, businesses and individuals.

SMALL PREMIUM

The offer represented a premium of just under 4 percent to OfficeMax's $13 close. It was not immediately clear if that was enough to satisfy one of the company's largest shareholders, Neuberger Berman, which said earlier this week it would support a deal depending on the terms.

OfficeMax shares rose 9.2 percent to $14.20 in premarket trading. Office Depot was up 10 percent at $5.52, meaning that OfficeMax was still trading below the value of the bid.

The deal, considered long overdue by many on Wall Street, will also give Office Depot and OfficeMax a chance to save hundreds of millions of dollars by closing stores, cutting advertising costs and streamlining their supply chain.

Industry experts have long hoped Office Depot would join hands with OfficeMax to take on Staples, which boosted its international business and clout with suppliers by buying Dutch rival Corporate Express in 2008.

BB&T Capital Markets analyst Anthony Chukumba said the Office Depot-OfficeMax combination would help Staples, however.

"Clearly, you can't make this deal work unless you close a bunch of stores," he said. "Store rationalization is long overdue, and Staples will clearly benefit from just having fewer stores to compete with."

Staples has 39.9 percent of the U.S. office supply market, Office Depot 19.2 percent and OfficeMax holds 15.7 percent, according to Euromonitor International.

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Prosecution details 'horrific' murder case against Pistorius

PRETORIA -- "Blade Runner" Oscar Pistorius put on his artificial legs and walked across his bedroom before firing four handgun rounds into the locked bathroom door, killing his cowering girlfriend in cold blood, prosecutors said on Tuesday.

Reeva Steenkamp, a law graduate and model, died after being hit by three rounds, prosecutor Gerrie Nel said.

Pistorius wept uncontrollably in court as Nel outlined details of a shooting that has gripped South Africa and the millions around the world who saw the double amputee's track glory as the ultimate tale of triumph over adversity.

Scores of mourners gathered in the coastal city of Port Elizabeth for Steenkamp's funeral, where the mood was one of grief tinged with anger at the loss of "an angel".

In Pretoria central magistrate's court, defense lawyer Barry Roux disputed the murder charge, saying the facts surrounding the shooting in the early hours of Thursday were unclear.

"All we really know is she locked herself behind the toilet door and she was shot," he told the packed courtroom.

However, the prosecution painted a picture of premeditated killing - a crime that carries a life sentence in South Africa.

"If I arm myself, walk a distance and murder a person, that is premeditated," he said. "The door is closed. There is no doubt. I walk seven meters and I kill."

"The motive is 'I want to kill'. That's it," he added. "This deceased was in a 1.4 by 1.14 meter little room. She could go nowhere. It must have been horrific."

The arrest of Pistorius, 26, stunned the millions who had watched in awe last year as the Olympic and Paralympic sprinter reached the semi-final of the 400 meters in the London Olympics, running on high-technology carbon fiber 'blades'.

Initial reports suggested he might have mistaken Steenkamp for an intruder - a possibility in crime-ridden South Africa and a version Pistorius told his sister immediately after the shooting, Nel said.

The prosecution countered this theory by saying Steenkamp's overnight bag had been found in the bedroom of the plush two-storey home in a gated compound north of Pretoria.

Later, in an affidavit read out by defense lawyer Barry Roux, Pistorius said he had been "deeply in love" with Steenkamp and had no intention of killing her.

'ROT IN JAIL'

Dressed in a dark suit, Pistorius arrived at the court in a police car shortly before 7 a.m. (0500 GMT). Proceedings were delayed as more than 100 journalists from around the world jostled to get into the dimly lit, brick-face courtroom.

The case has drawn further attention to endemic violence against women in South Africa after the gang-rape, mutilation and murder of a 17-year-old near Cape Town this month.

Members of the Women's League of the ruling African National Congress protested outside the building, waving placards saying: "No Bail for Pistorius" and "Rot in jail".

At Steenkamp's cremation in the windswept Victoria Park Crematorium in Port Elizabeth, sorrow mingled with outrage.

"She was an angel. She was so soft, so innocent. Such a lovely person. It's just sad that this could happen to somebody so good," said Gavin Venter, an ex-jockey who worked for Steenkamp's father.

"I'm disgusted with what he did. He must be dealt with harshly," he added. "Without a doubt he's a danger to the public. He'll be a danger to witnesses. He must stay in jail."

After the hour-long private ceremony in the cream-colored hill-top church, Steenkamp's brother Adam and uncle Mike, fighting back tears, spoke briefly to reporters.

"There's a space missing inside all the people that she knew that can't be filled again," Adam Steenkamp said. "We are going to keep all the positive things that we remember and know about my sister. We will miss her."

The case has gripped sports-mad South Africa, where Pistorius was seen as a rare hero who had transcended the racial divides that persist 19 years after the end of apartheid.

Pistorius' endorsements and sponsorships, which include sportswear giant Nike, British telecoms firm BT, sunglasses maker Oakley and French designer Thierry Mugler, are thought to be worth as much as $2 million a year.

Nike said on Monday it had dropped Pistorius from any future advertising campaigns. Other sponsors have said they will make no decisions until the legal process has run its course.

Pistorius has cancelled scheduled track appearances in Australia, Brazil and Britain in the coming months to focus on his attempt to clear his name.

Born without a fibula in either leg, Pistorius had his lower legs amputated as an 11-month-old baby but became the highest-profile athlete in the history of the Paralympic Games.

In last year's Paralympics he suffered his first loss over 200 meters in nine years. After the race he questioned the legitimacy of Brazilian winner Alan Oliveira's prosthetic blades, but was quick to express regret for the comments.

Reuters

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National Briefing | South: Abortion Curbs Clear Senate in Arkansas

The State Senate voted 25 to 7 on Monday to ban most abortions 20 weeks into a pregnancy. The measure goes back to the House to consider an amendment that added exceptions for rape and incest. The legislation is based on the belief that fetuses can feel pain 20 weeks into a pregnancy, and is similar to bans in several other states. Opponents say it would require mothers to deliver babies with fatal conditions. Gov. Mike Beebe has said he has constitutional concerns about the proposal but has not said whether he will veto it.

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Second major hotel planned for McCormick area

The agency that owns McCormick Place announced Tuesday it will build a second hotel near the convention center complex, with plans calling for a 1,200-room facility that can serve as a headquarters for trade shows and conventions.

The Metropolitan Pier and Exposition Authority, also known as McPier, said it is acquiring land for the $400 million project, which will be located between Indiana and Michigan, along the south side of Cermak.

The announcement was made jointly with Mayor Rahm Emanuel and Gov. Pat Quinn. McPier has made it known for some time that it was drawing up plans to add to hotel and entertainment offerings in the area to better compete with rival cities such as Orlando and Las Vegas.

The hotel will operate in cooperation with McPier's existing hotel on the convention campus, the Hyatt Regency McCormick Place, which is undergoing a major expansion.

kbergen@tribune.com | Twitter@kathy_bergen

 

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2 questioned in fatal shooting of Chicago teen

Janay McFarlane, 18, was shot on the way to a store, the same day Obama spoke on gun violence.

Two people are being questioned in connection with the fatal shooting of an 18-year-old Chicago woman who was killed Friday, the same day her sister attended President Barack Obama's speech on gun violence, officials said Sunday.

An 18-year-old man and a 20-year-old man are considered persons of interest in the homicide investigation and are being questioned by North Chicago police and officials from the Lake County State's Attorney's Office in connection with the death of Janay McFarlane, according to a statement released Sunday afternoon by North Chicago police.

The men were arrested after McFarlane was shot at about 11:30 p.m. Friday on the  1300 block of Jackson Avenue in the northern suburb.

Angela Blakely, McFarlane’s mother, said she knew few details about the investigation but was encouraged by the news of the arrests.

“I’m just hoping that they do find out who did this to my baby, so they can pay for the crime they committed,” she said.

Blakely urged anyone with information about the killing to talk with police.

McFarlane, 18, of the 8900 block of South Lowe Avenue, was in North Chicago visiting family and friends and was walking with friends when she was shot, according Blakely. McFarlane was walking with friends, one of whom may have been the intended target, Blakely said.

When police responded to a call of shots being fired in the area they found McFarlane fatally shot, police said. They canvassed the area and were tipped off to the men who were taken in for questioning, according to police.

McFarlane was killed just hours after her sister, Destini Warren, 14, had attended President Barack Obama's speech against gun violence Friday.

Blakely, the mother of both girls, said that the family had been anticipating the President's visit to the school where Destini is a freshman.

Leading up to the visit, McFarlane frequently mentioned the recent death of Hadiya Pendleton, 15, whose own shooting death a mile from the Obama's home spurred the President's visit.

"It's terrible, it's terrible the only thing I can remember is my daughter telling me, 'Mommy, it's so sad about Hadiya. That makes no sense,' " Blakely said. "She always asked me a lot of questions about death."

The speech resonated even more when her family got the call from McFarlane's father in North Chicago, who told Destini that her sister was dead, she said.

"It was like real painful," said Destini, her voice choking back tears.

North Chicago officials said McFarlane's killing is the first in the northern suburb since October. The October slaying was the only homicide for the town last year.

chicagobreaking@tribune.com

Twitter: @ChicagoBreaking

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Well: Health Effects of Smoking for Women

The title of a recent report on smoking and health might well have paraphrased the popular ad campaign for Virginia Slims, introduced in 1968 by Philip Morris and aimed at young professional women: “You’ve come a long way, baby.”

Today that slogan should include: “…toward a shorter life.” Ten years shorter, in fact.

The new report is one of two rather shocking analyses of the hazards of smoking and the benefits of quitting published last month in The New England Journal of Medicine. The data show that “women who smoke like men die like men who smoke,” Dr. Steven A. Schroeder, a professor of health and health care at the University of California, San Francisco, wrote in an accompanying editorial.

That was not always the case. Half a century ago, the risk of death from lung cancer among men who smoked was five times higher than that among women smokers. But by the first decade of this century, that risk had equalized: for both men and women who smoked, the risk of death from lung cancer was 25 times greater than for nonsmokers, Dr. Michael J. Thun of the American Cancer Society and his colleagues reported.

Today, women who smoke are even more likely than men who smoke to die of lung cancer. According to a second study in the same journal, women smokers face a 17.8 times greater risk of dying of lung cancer than women who do not smoke; men who smoke are at 14.6 times greater risk to die of lung cancer than men who don’t. Women who smoke now face a risk of death from lung cancer that is 50 percent higher than the estimates reported in the 1980s, according to Dr. Prabhat Jha of the Center for Global Health Research in Toronto and his colleagues.

After controlling for age, body weight, education level and alcohol use, the new analysis found something else: men and women who continue to smoke die on average 10 years sooner than those who never smoked.

Dramatic progress has been made in reducing the prevalence of smoking, which has fallen from 42 percent of adults in 1965 (the year after the first surgeon general’s report on smoking and health) to 19 percent in 2010. Yet smoking still results in nearly 200,000 deaths a year among people 35 to 69 years old in the United States. A quarter of all deaths in this age group would not occur if smokers had the same risk of death as nonsmokers.

The risks are even greater among men 55 to 74 and women 60 to 74. More than two-thirds of all deaths among current smokers in these age groups are related to smoking. Over all, the death rate from all causes combined in these age groups “is now at least three times as high among current smokers as among those who have never smoked,” Dr. Thun’s team found.

While lung cancer is the most infamous hazard linked to smoking, the habit also raises the risk of death from heart disease, stroke, pulmonary disease and other cancers, including breast cancer.

Furthermore, changes in how cigarettes are manufactured may have increased the dangers of smoking. The use of perforated filters, tobacco blends that are less irritating, and paper that is more porous made it easier to inhale smoke and encouraged deeper inhalation to achieve satisfying blood levels of nicotine.

The result of deeper inhalation, Dr. Thun’s report suggests, has been an increased risk of chronic obstructive pulmonary disease, or C.O.P.D., and a shift in the kind of lung cancer linked to smoking. Among nonsmokers, the risk of death from C.O.P.D. has declined by 45 percent in men and has remained stable in women, but the death rate has more than doubled among smokers.

But there is good news, too: it’s never too late to reap the benefits of quitting. The younger you are when you stop smoking, the greater your chances of living a long and healthy life, according to the findings of Dr. Jha’s international team.

The team analyzed smoking and smoking-cessation histories of 113,752 women and 88,496 men 25 and older and linked them to causes of deaths in these groups through 2006.

Those who quit smoking by age 34 lived 10 years longer on average than those who continued to smoke, giving them a life expectancy comparable to people who never smoked. Smokers who quit between ages 35 and 44 lived nine years longer, and those who quit between 45 and 54 lived six years longer. Even quitting smoking between ages 55 and 64 resulted in a four-year gain in life expectancy.

The researchers emphasized, however, that the numbers do not mean it is safe to smoke until age 40 and then stop. Former smokers who quit by 40 still experienced a 20 percent greater risk of death than nonsmokers. About one in six former smokers who died before the age of 80 would not have died if he or she had never smoked, they reported.

Dr. Schroeder believes we can do a lot better to reduce the prevalence of smoking with the tools currently in hand if government agencies, medical insurers and the public cooperate.

Unlike the races, ribbons and fund-raisers for breast cancer, “there’s no public face for lung cancer, even though it kills more women than breast cancer does,” Dr. Schroeder said in an interview. Lung cancer is stigmatized as a disease people bring on themselves, even though many older victims were hooked on nicotine in the 1940s and 1950s, when little was known about the hazards of smoking and doctors appeared in ads assuring the public it was safe to smoke.

Raising taxes on cigarettes can help. The states with the highest prevalence of smoking have the lowest tax rates on cigarettes, Dr. Schroeder said. Also helpful would be prohibiting smoking in more public places like parks and beaches. Some states have criminalized smoking in cars when children are present.

More “countermarketing” of cigarettes is needed, he said, including antismoking public service ads on television and dramatic health warnings on cigarette packs, as is now done in Australia. But two American courts have ruled that the proposed label warnings infringed on the tobacco industry’s right to free speech.

Health insurers, both private and government, could broaden their coverage of stop-smoking aids and better publicize telephone quit lines, and doctors “should do more to stimulate quit attempts,” Dr. Schroeder said.

As Nicola Roxon, a former Australian health minister, put it, “We are killing people by not acting.”

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U. of C. Medicine's leader gears up for challenges

Nearly every morning, before 7 a.m., Dr. Kenneth Polonsky is dropped off near the Lakefront Trail on Chicago's South Side, a few steps from Lake Michigan.

He carries no briefcase, wears no suit and has no cup of coffee, the standard trappings of his executive contemporaries.

Instead — at least in the winter — he's covered in high-tech running gear, leaving only a small patch of skin around his eyes exposed to the weather. The outfit, he muses, must raise suspicions among cab drivers.

"It's 6:30 in the morning, it's dark and can be, maybe, 10 degrees outside," he says. "When I ask the driver to drop me by the side of (the road), they must think, 'What's going on with this guy? There's something funny here.'"

Twelve months a year, through heat waves, cold snaps, rain, sleet and snow, the top official at University of Chicago Medicine starts most mornings running 5 miles to work.

It's a routine that reflects lessons learned from decades of studying diabetes and treating patients with the disease and one he pairs with watching his diet "like a hawk." The daily run also is a vehicle for the cerebral 62-year-old M.D. to contemplate the challenges that lie ahead.

There are many, starting with the massive transformation of the way medical care is paid for and delivered as part of President Barack Obama's 2010 health care overhaul.

Polonsky also faces cuts to research funding that flows to the Pritzker School of Medicine through the National Institutes of Health and growing financial pressure from Illinois' Medicaid program, the federal-state health insurance program that serves a substantial percentage of the hospital's South Side patients.

All this while christening and trying to pay for a $700 million, 1.2 million-square-foot new hospital, a 10-story, boxy, modernist structure that towers above a campus better known for its ubiquitous, early-20th-century red-roofed Gothic buildings.

The hospital, dubbed the Center for Care and Discovery in the absence of a donor willing to lay down $50 million for naming rights, is scheduled to open Saturday.

With 240 private patient rooms, 28 supersize operating rooms and seven advanced imaging rooms, the hospital will specialize in neuroscience and the treatment of cancer and gastrointestinal diseases.

But even what is supposed to be a celebratory, clink-the-glasses moment for Polonsky and the university has been sullied by controversy.

An estimated 50 protesters entered the hospital on a Sunday afternoon in January, holding placards and using a megaphone to voice their displeasure that such a costly facility was not outfitted with a trauma unit.

University police with batons were videotaped shoving protesters to the ground. Four were arrested in the melee.

Polonsky said the system is re-evaluating its role in trauma care, "a legitimate question for discussion and debate and one we are looking at again in detail."

Managing this issue will be a major test of Polonsky's leadership in 2013 and will occur against the backdrop of the largest upheaval to the health care industry in a generation.

"We're in a really vulnerable situation at the moment; there's no question about it," Polonsky said of the shift under way in health care. "But that's one of the reasons I'm interested in my job. I believe I can impact a series of big issues."

Many people, he said, go through life wondering whether what they're doing is worthwhile or significant in the big picture of things.

"I'm very fortunate to never, ever have had that problem," Polonsky said.

A boy in South Africa

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Woman shot, killed hours after sibling attends Obama speech

Hours after Destini Warren, 14, attended President Barack Obama’s speech against gun violence Friday, her family learned of a terrible irony.

Destini’s sister, Janay McFarlane, 18, was the victim of the very thing that the President was condemning at Hyde Park Academy in Chicago.

McFarlane, of the 8900 block of South Lowe Avenue, was visiting friends and family in North Chicago when she was shot on her way to a store in the northern suburb, her family said.

She was pronounced dead at 11:30 p.m., shortly after sustaining a single gunshot wound to her head, according to the Lake County Coroner’s office.

North Chicago Police officials did not return calls for comment Saturday.

Angela Blakely, the mother of both girls, said that the family had been anticipating the President's visit to the school where Destini is a freshman.

Leading up to the visit, McFarlane frequently mentioned the recent death of Hadiya Pendleton, 15, whose own shooting death a mile from the Obama's home spurred the President's visit.

“It's terrible, it's terrible the only thing I can remember is my daughter telling me, 'Mommy, it's so sad about Hadiya. That makes no sense,'“ Blakely said. “She always asked me a lot of questions about death.”

Blakely said that McFarlane was still trying to make sense of the violence that claimed Pendleton’s life. She kept questioning why someone so innocent could die from violence.

McFarlane, who attended Hyde Park Academy before she became pregnant with her son Jayden — 3-months-old — and dropped out, was excited that her younger sister was able to attend Obama’s speech.

Destini said that during the days before the President arrived to Chicago, her sister would come by and talk to her about the visit. Destini said she last spoke to her sister on Thursday night before the younger girl went to sleep.

“She was like 'Just tell me how it's going to be.' She was excited for me,” said Destini. “ (The violence) was really wracking her because she was talking to my momma about Hadiya.”

Destini said she was sitting on a bench about two rows behind the President on stage listening as he spoke about gun violence.

“I could relate to it because that's been happening to a lot of people,” said Destini.

The speech resonated even more when her family got the call from McFarlane's father in North Chicago, who told Destini that her sister was dead, she said.

“It was like real painful,” said Destini, her voice choking back tears.

Since President Obama's speech on Friday, two people have been killed and six injured by guns in Chicago.

csadovi@tribune.com

Freelance reporter Ruth Fuller contributed

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Romanian film “Child’s Pose” wins Berlin Golden Bear

BERLIN (Reuters) – “Child’s Pose”, a Romanian drama about a domineering mother using her social position to try to save her son from jail, won the Golden Bear for best picture at the Berlin film festival on Saturday.

The movie, directed by Calin Peter Netzer and starring Luminita Gheorghiu in the central role, had been among the favorites for the coveted prize, which extends the remarkable success of Romanian filmmakers on the European festival circuit.

The awards ceremony brought to a close the 11-day cinema showcase, where hundreds of movies were screened across Berlin and stars including Matt Damon, Nicolas Cage, Anne Hathaway, Jude Law and Catherine Deneuve walked the red carpet.

In “Child’s Pose”, Gheorghiu shines as the wealthy 60-year-old Cornelia, who attempts to buy off the poor family of a boy killed by her son in a road accident.

The veteran actress also appeared in Cristian Mungiu’s “4 Months, 3 Weeks and 2 Days”, a grisly abortion drama that put Romanian cinema firmly on the international map when it won the Palme d’Or at the Cannes film festival in 2007.

“I’m still shell-shocked,” Netzer told reporters after the ceremony. “I haven’t quite woken up to this new reality. It will probably take a couple of days for it to sink in.”

The big surprise on the night was the best actor award for Nazif Mujic, a Bosnian Roma who had to be convinced to play himself in “An Episode in the Life of an Iron Picker” about his own experiences on the fringes of society.

The movie, a docu-drama directed by Danis Tanovic and made for 30,000 euros ($ 40,100), captured hearts in Berlin for its straightforward storytelling and moving account of the impoverished Mujic’s desperate attempts to pay for his wife’s emergency operation.

“FEELS LIKE NEIL ARMSTRONG”

Tanovic, an Oscar winner for his 2001 war movie “No Man’s Land”, read about the story in a local newspaper in 2011 and was so angry at Bosnian society’s apparent lack of humanity that he determined to make a film about it.

“I think he (Mujic) feels like Neil Armstrong when he went to the moon, seriously,” Tanovic said of his star. “And I really do hope it is going to change his life for the better.”

Arguably the most popular winner at the 63rd Berlin film festival was Paulina Garcia, the Chilean actress whose portrayal in “Gloria” of a 58-year-old divorcee in Santiago was the highlight for many festival-goers and won her best actress.

Refusing to retire quietly into the background, Gloria drinks, smokes, parties and enjoys sex, all the while holding down a full time job and keeping in touch with her children.

The powerful older woman was a constant theme throughout the main competition of 19 films eligible for prizes, and Garcia was up against Gheorghiu and French actresses Catherine Deneuve and Juliette Binoche for the acting Silver Bear.

Best director went to U.S. filmmaker David Gordon Green for his touching road movie “Prince Avalanche”, in which Paul Rudd and Emile Hirsch play a pair of misfits who go to work in a remote forest where they embark on a journey of self-discovery.

Iranian entry “Closed Curtain” picked up the best script prize for directors Kamboziya Partovi and Jafar Panahi. Panahi made the movie in secret in defiance of a 20-year filmmaking ban and was not allowed to travel to Berlin to collect his award.

“Tradition and culture remain, politicians come and go,” Partovi told reporters after receiving the honor.

Kazakh cinematographer Aziz Zhambakiyev was honored for outstanding artistic achievement for his painterly work on “Harmony Lessons”, set on the harsh steppes of Kazakhstan.

($ 1 = 0.7490 euros)

(Reporting by Mike Collett-White, editing by Paul Casciato)

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Daley turns focus toward Gary

Richard M. Daley has kept a low profile since leaving office in 2011.

That doesn't mean he has lost interest in urban issues. The former mayor has turned his attention in a surprising direction, beyond Chicago's borders to one of the most intractable urban tragedies in America: the collapse of Gary, Ind.

"I always believe no part of America should be forgotten, and I think Gary has been forgotten," Daley said.

Daley is using his influence at the University of Chicago, where he is a distinguished senior fellow, to push a modest but growing amount of manpower toward Gary Mayor Karen Freeman-Wilson.

With guidance from Daley and Freeman-Wilson, University of Chicago graduate students are trying to figure out what to do with Gary's abandoned buildings and how to promote greater use of technology to help the city accomplish more with less, among other projects.

The hope is that the students will go on to help other cities after graduation. If successful, the U. of C.-Gary partnership could be replicated in other industrial towns grappling with decline.

Gary spans about 55 square miles, nearly a quarter of the size of Chicago. Yet the steel town's population has plummeted to an estimated 80,000, meaning the city has lost about half its people since 1960. The city's problems have mounted, including abandoned buildings and homes, sagging infrastructure and a declining budget to pay for services.

Outsiders have tried to fix Gary since at least the Lyndon B. Johnson administration. Freeman-Wilson, a former Indiana attorney general, judge and Harvard College and Harvard Law School graduate, has reinvigorated Gary's renewal efforts. And she's unafraid to ask for help.

Immediately after winning the 2011 Democratic primary, Freeman-Wilson called Daley for advice. They met, and Daley invited her to be the first guest speaker at his lecture series at the University of Chicago's Harris School of Public Policy, where Daley has a five-year appointment.

This quarter, 11 students from the university's public policy, business and social services schools are getting course credit for working on projects for Gary.

"It was Mayor Daley's idea," Freeman-Wilson said as she rode from a meeting on Chicago's West Side to Gary. "I had always envisioned getting the support and work from (University of Chicago Law School) alums, because there were issues around codes and things of that nature. It was not until the mayor came up with the idea of using students from the (Harris) School of Public Policy that I said, 'Oh yeah, that would work. That would work very well.'"

Daley does not teach a class at the University of Chicago. He runs an occasional lecture series.

Carol Brown, his last policy chief at City Hall, leads the program and the class, which is called the "Urban Revitalization Project: City of Gary, Ind." Grants from the Chicago-based Joyce and MacArthur foundations help pay administrative costs, including Brown's salary and that of a part-time assistant.

Last quarter's class was divided into three project teams. One team is cataloging Gary's abandoned buildings, which are magnets for crime and eyesores that further depress surrounding property values. Another is trying to recruit pro bono legal and consulting services for the city. And a third is trying to craft a strategy to clean up front stoops and empty lots one block at a time. This quarter's class also is tackling untapped funding opportunities and economic development.

Freeman-Wilson said a major benefit of the partnership is the fresh ideas from students "who aren't jaded by the limitations of government, whereas a 20-year employee might say, 'Oh, no, we can't do that in government because we don't have X, Y and Z.'"

Already their work has prompted more widespread use among Gary employees of a technology that stores and analyzes geographic data. City workers are now using the technology to map potholes, fallen tree limbs and illegal dump sites. That way work crews can be dispatched to neighborhoods where the problems are most severe.

"This partnership encourages urban planners to think broadly about regions instead of cities — greater Chicago instead of the city of Chicago," said Stephen Paul O'Hara, a historian at Xavier University who wrote a book about Gary.

The students operate as consultants. They gather best practices and ideas from cities around the country and then recommend a course of action. At the end of each 10-week quarter, students present their recommendations to Daley, Freeman-Wilson and their staffs. Their grades are based on those presentations and supporting reports.

"I will tell you, it never stops getting nerve-wracking," second-year graduate student Jocelyn Hare said of presenting to Daley. "But it gets easier."

Last spring, Hare, 32, responded to an email seeking student volunteers to conduct preliminary research to test the idea of a partnership. Hare then interned for the city of Gary during the summer. The Harris school paid her $15 an hour. She then enrolled in the first class in the fall and again this winter, when it was opened to graduate students outside of Harris for the first time.

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