Investors rush in to rent out foreclosures

The foreclosed home on Kenmore Street in Aurora was an outdated, unkempt eyesore until crews arrived this fall, performing thousands of dollars of work to make it attractive and modern, inside and out.

But it wasn't until workers walked across the street to ask for some water that neighbors Mario Cervantes and Oralia Balderas-Cervantes learned that a corporation, not a consumer, had bought the house, intending to turn it into a rental property. Despite being landlords themselves, the couple aren't sure they like the idea.

"If it's going to be a company that is watching out for the community, yes," Cervantes said. "If it's going to be a company that is watching out for themselves, no."

Added Balderas-Cervantes: "I'd rather see a homeowner. A lot of renters don't care. It's like renting a car versus buying a car. It's different."

Similar scenarios and concerns are unfolding across Chicago and in other markets hard-hit by the housing crisis. Well-capitalized, out-of-town private equity funds are scouring neighborhoods, paying cash for distressed single-family homes and renting them out. The opportunities are plentiful, enabling investment groups to profit from low home prices, rising rents and an increase in the number of potential renters.

The transactions are returning vacant properties to active use. But they also are stoking fears among neighbors and municipalities about the long-term effect of large, private investors — including many that are operating under the radar — in their communities.

"This scares the hell out of me," said Ed Jacob, executive director of Neighborhood Housing Services of Chicago Inc. "In this rush to say this is a new asset class, are we creating the next community development problem?

"You talk to them and it's all about neighborhood recovery. They all have the narrative down."

In April, housing research firm CoreLogic named the Chicago area one of the better housing markets for institutional investor funds. It cited the area's large number of foreclosures, which will increase the number of vacant homes, and the estimated rental income relative to the low cost of acquisition.

The general strategy of the companies is the same: buy low, make the necessary upgrades, fill them with tenants and then sell the homes in three to seven years. With companies and analysts anticipating projected returns of at least 8 percent, there also is talk of creating publicly traded real estate investment trusts.

"What this reminds me of is the dot-com boom," said Rick Sharga, executive vice president of Carrington Mortgage Holdings LLC, a California firm whose asset management arm is actively looking in the Chicago market. "That's what this feels like. Every investor in America wants to buy foreclosures and turn them into rentals."

Two statistics increasing that appetite are the homeownership rate and rental rates. Foreclosures, tight lending conditions and wary consumers have pushed down the nation's homeownership rate to 65.5 percent at the end of September, according to census data. Meanwhile, the percentage of vacant rental units has been on a steady decline since 2010 as more people opt for leases rather than mortgages.

Tighter inventories are pushing up rents. As of October, annualized rents in Chicago were up 7.7 percent, more than the national increase of 5.1 percent, online real estate site Trulia found.

But investors aren't flocking to all neighborhoods equally. Most want homes in desirable neighborhoods with strong area employment. They also look at the strength of local rules protecting landlords in disputes with tenants.

After vetting the tenant and securing a lease, property managers say they routinely drive by the homes and sometimes schedule inside inspections to protect their investment.

Weighing risks, rewards

It remains to be seen whether their expectations will be met. One problem with the business model is there's no performance track record to speak of. And as housing prices slowly recover, acquisition costs also will increase and cut into returns.

There also isn't any history on property management firms tasked with overseeing so many scattered-site rental properties. Any well-publicized mistakes involving poorly maintained properties or wronged tenants could taint investors' reputations.

That's one reason why big-name players are likely to avoid buying in neighborhoods where they fear a greater chance of eviction proceedings occurring.

"You make one mistake in those properties and you'll be toast," Sharga said.

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2 hurt in stabbing at North Michigan Avenue hotel

A 67-year-old man was stabbed in the neck Saturday evening near the front of the Westin Hotel on North Michigan Avenue, and a second man was cut trying to stop the assailant from fleeing, authorities and witnesses said.

The incident began shortly before 8 p.m. when the 67-year-old man was stabbed during an attempted robbery, Chicago Police News Affairs Officer Amina Greer said, citing preliminary information.

A 35-year-old man was cut in the chest as he tried to stop the assailant from fleeing, Greer said.

Police took a 56-year-old man into custody following the incident. A weapon was also recovered, Greer said.

The 67-year-old was taken to Northwestern Memorial Hospital, where his condition was stabilized, Greer said. The 35-year-old was taken to Northwestern in good condition.

By 8:30 p.m., crime scene tape surrounded the entrance to the Westin Hotel on Delaware Street and Michigan Avenue with patches of blood visible on the pavement, and two police cars blocked the street.

Mangers at the Westin declined to comment late Saturday and early Sunday.

Olivia Morrow, 18, said she and her friend were returning to the hotel around 8 p.m. to meet their parents when they saw police on the scene.

Morrow said shortly after that she saw about five hotel officials running out of the building toward the stairs leading to the Hancock Tower and neighboring The Cheesecake Factory Restaurant.

"They had radios and phones in their hands, saying that (the attacker) was last seen running down the stairs," Morrow said.

Genevieve Waldron of Michigan City, Ind., was among the crowd waiting for a table outside when she and her mother saw dozens of officers sprinting toward the restaurant from every direction.

"They were obviously looking for somebody and we were trying to stay out of the way," Waldron said.

A few minutes later, two officers came back up the stairs, flanking a young man who was handcuffed, and loaded him into the back of a marked car.

Neither The Cheesecake Factory nor the hotel were evacuated, as guests on the south-facing side of the building peered out of the windows to get a view of the scene. There appeared to be little commotion at the restaurant, where diners poured out into the hallways waiting for a table.

Tribune reporter Liam Ford contributed.

cdrhodes@tribune.com

Twitter: @ChicagoBreaking

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Larry Clark film wins top prize at Rome fest

ROME (AP) — A film by “Kids” director Larry Clark set in a small Texan town and to be released online only has taken the top award at Rome’s film festival.

“Marfa Girl” explores the inner life of a teenage boy and other characters in a town near the Mexican border and bustling with border patrol police.

The festival jury gave it the Golden Marcus Aurelius prize for best film on Saturday night.

Clark, whose other credits include “Bully” and “Ken Park,” says the new film won’t be distributed in theaters but will be available online later this month to get around the Hollywood system.

Entertainment News Headlines – Yahoo! News

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The Neediest Cases: Emerging From a Bleak Life to Become Fabulous Phil

For years, Phillip Johnson was caught in what seemed like an endless trench of bad luck. He was fired from a job, experienced intensifying psychological problems, lost his apartment and spent time in homeless shelters. At one point, he was hospitalized after overdosing on an antipsychotic drug.

“I had a rough road,” he said.

Since his hospital stay two years ago, and despite setbacks, Mr. Johnson, 27, has been getting his life on track. At Brooklyn Community Services, where he goes for daily counseling and therapy, everybody knows him as Fabulous Phil.

“Phillip is a light, the way he evokes happiness in other people,” his former caseworker, Teresa O’Brien, said. “Phillip’s character led directly to his nickname.”

About six months ago, with Ms. O’Brien’s help, Mr. Johnson started an event: Fabulous Phil Friday Dance Party Fridays.

One recent afternoon at the agency, 30 clients and a few counselors were eating cake, drinking soft drinks and juice, and grooving for 45 minutes to Jay-Z and Drake pulsating from a boom box.

Mr. Johnson’s voice rose with excitement when he talked about the party. Clients and counselors, he said, “enjoy themselves.”

“They connect more; they communicate more,” he continued. “Everybody is celebrating and laughing.”

The leadership Mr. Johnson now displays seems to be a far cry from the excruciatingly introverted person he was.

As an only child living with his single mother in public housing in Bedford-Stuyvesant, Brooklyn, he said, he tended to isolate himself. “A lot of kids my age would say, ‘Come outside,’ but I would always stay in my room,” he said. He occupied himself by writing comic books or reading them, his favorites being Batman and Spiderman because, he said, “they were heroes who saved the day.”

After graduating from high school in 2003, he worked odd jobs until 2006, when he took a full-time position at a food court at La Guardia Airport, where he helped to clean up. The steady paycheck allowed him to leave his mother’s apartment and rent a room in Queens.

But the depression and bleak moods that had shadowed him throughout middle and high school asserted themselves.

“My thinking got confused,” he said. “Racing thoughts through my mind. Disorganized thoughts. I had a hard time focusing on one thing.”

In 2008, after two years on the job, Mr. Johnson was fired for loud and inappropriate behavior, and for being “unpredictable,” he said. The boss said he needed counseling. He moved back in with his mother, and in 2009 entered a program at an outpatient addiction treatment service, Bridge Back to Life. It was there, he said, that he received a diagnosis of schizophrenia and help with his depression and marijuana use.

But one evening in May 2010, he had a bout with insomnia.

He realized the antipsychotic medication he had been prescribed, Risperdal, made him feel tired, he said, so he took 12 of the pills, rather than his usual dosage of two pills twice a day. When 12 did not work, he took 6 more.

“The next morning when I woke up, it was hard for me to breathe,” he said.

He called an ambulance, which took to Woodhull Hospital. He was released after about a month.

Not long after, he returned to his mother’s apartment, but by February 2011, they both decided he should leave, and he relocated to a homeless shelter in East New York, where, he said, eight other people were crammed into his cubicle and there were “bedbugs, people lying in your bed, breaking into your locker to steal your stuff.”

In late spring 2011, he found a room for rent in Manhattan, but by Thanksgiving he was hospitalized again. Another stint in a shelter followed in April, when his building was sold.

Finally, in July, Mr. Johnson moved to supported housing on Staten Island, where he lives with a roommate. His monthly $900 Social Security disability check is sent to the residence, which deducts $600 for rent and gives him $175 in spending money; he has breakfast and lunch at the Brooklyn agency. To assist Mr. Johnson with unexpected expenses, a grant of $550 through The New York Times Neediest Cases Fund went to buy him a bed and pay a Medicare prescription plan fee for three months.

“I was so happy I have a bed to sleep on,” he said about the replacement for an air mattress. “When I have a long day, I have a bed to lay in, and I feel good about that.”

Mr. Johnson’s goals include getting his driver’s license — “I already have a learner’s permit,” he said, proudly — finishing his program at the agency, and then entering an apprenticeship program to become a plumber, carpenter or mechanic.

But seeing how his peers have benefited from Fabulous Phil Fridays has made him vow to remain involved with people dealing with mental illnesses or substance abuse.

He was asked at the party: Might he be like the comic-book heroes he loves? A smile spread across his face. He seemed to think so.

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Chocolatier finds sweet spot in Belize

Katrina Markoff, the founder of high-end Chicago chocolatier Vosges Haut-Chocolat, is nearing completion on two high-profile projects: a winery-style chocolate facility in Logan Square and an education center at a cacao plantation and eco-lodge in Belize.

Markoff isn't ready to talk about the Logan Square project, her spokeswoman said. But in an interview last week, she said she hopes the Belcampo farm in Belize will become the source of a majority of Vosges' cacao once its plants mature.

The project means Markoff will soon play a role in every aspect of production from seed selection through packaging without having to assume the financial risk of owning a tropical plantation.

Belcampo Group CEO Anya Fernald said the education center that Markoff helped design will open in mid-December, and Markoff will teach her first "master class" on cacao to guests at the 12-room lodge April 23-27. In exchange for her time and expertise, Markoff will receive a better price on the beans.

"I've always wanted to be involved through the full vertical, from actually growing the varietals of cacao I want, and being particular about how they're grown and harvested and fermented and dried," she said.

Once the farm reaches full yield in about five years, Fernald estimated it will produce 250,000 pounds of cacao annually. Already, with only 60 acres planted so far — all under a rain forest canopy — Fernald said Belcampo is already Belize's largest cacao plantation.

"The integrity of that project is really, really unique and special," Markoff said. "Typically when people buy beans to make chocolate, they just buy whatever is available in the commodity market. There's not a lot of control over how it's grafted, where it's planted, how it's nurtured, who's taking care of it. You just don't get that kind of control."

Bluhm continues gambling push

Chicago real estate and gambling executive Neil Bluhm is entering the race to build one of four planned casinos in Massachusetts and has launched an online gaming division in Chicago, said Greg Carlin, chief executive of Bluhm's Rush Street Gaming.

Earlier this year Rush Street hired Richard Schwartz from Waukegan-based WMS Industries and appointed him president of Rush Street Interactive, its new online gaming division.

"We think (Internet gaming) is going to be eventually legalized throughout the country, or in jurisdictions that have bricks-and-mortar casinos," Carlin said. "Illinois is actually a leader in selling lottery tickets online and could be a leader in Internet gaming as well if they get ahead of the curve and pass legislation before some of the other states."

Nevada and Delaware have legalized some forms of Internet gambling.

In recent years, Bluhm has built three casinos: Rivers Casino in Des Plaines, one in Pittsburgh and another in Philadelphia. In October, Bluhm sold his first U.S. casino, Riverwalk Casino and Hotel, in Vicksburg, Miss., for $141 million in cash to Churchill Downs Inc. (Bluhm held a 70 percent stake in Riverwalk.)

Churchill Downs, a horse racing and wagering company, also owns Arlington Park in Arlington Heights. Its largest shareholder is Duchossois Group, founded by Arlington Park Chairman Richard "Dick" Duchossois.

Duchossois has been trying to persuade the Illinois Legislature to approve slots at racetracks, which, if successful, would make Arlington Park a competitor of Bluhm's Des Plaines casino.

As for the Massachusetts casino, the gambling commission there will weigh applications for casino licenses well into 2013.

Alvarez joins Culloton

Public relations firm Culloton Strategies has hired Michael Alvarez, a commissioner of the Metropolitan Water Reclamation District of Greater Chicago, as senior vice president for public affairs.

As the Sun-Times reported in January, Alvarez, 32, has worked for Barack Obama, Rod Blagojevich and Richard M. Daley — while he has close ties to Ald. Richard Mell, Blagojevich's father-in-law.

In addition to his $70,000 annual salary at the water district, Alvarez has a $60,000-a-year public relations contract with the Illinois Sports Facilities Authority and a "fast-growing" lobbying practice, the Sun-Times reported.

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Metra riders could face fare hike

Many Metra riders could be facing another fare increase this February, just one year after digging deep for the biggest fare hike in the commuter rail line's history.

Metra's board is expected to vote Friday on a recommendation to raise the price of the popular 10-ride tickets about 11 percent, the Tribune has learned.

That would mean an increase ranging from $2.75 to $9.25 per 10-ride ticket, depending on the distance.

If approved, the increase would deprive 10-ride ticket buyers of the discount traditionally associated with the ticket. Currently, 10-ride tickets cost the equivalent of nine rides.

Word of the possible increase did not set well with riders Thursday evening.

Student Satya Shah, 24, of Rogers Park, said that if the price goes up, he'll have to consider taking the CTA from Rogers Park to downtown, even though Metra is closer to his home.

"It's going to hurt the wallet," he said of an increase. "If it works out to be cheaper, I'll take the CTA."

Customers now pay anywhere from $24.75 per 10-ride ticket for close-in Metra zones to $83.25 for the farthest communities.

Ten-ride ticket users account for about 22 percent of Metra's ridership. Customers who use monthly passes — about 57 percent of Metra's riders — and those who buy single tickets would not see their fares increase.

Metra's staff estimates the fare increase would produce $8.3 million in 2013 to help meet the agency's capital needs. Those include system improvements, maintenance and equipment.

Unveiling a proposed 2013 budget totaling $713.5 million last month, Metra officials warned that they would consider "scenarios" for raising fares up to 10 percent but did not specify any options.

Friday's recommendation comes as a result of discussions among board members and Metra staff, officials said.

Spokesman Michael Gillis said Thursday that the agency wants to use the $8.3 million in additional revenue as a match to obtain federal dollars for capital needs.

Metra needs about $7.4 billion over the next 10 years to keep the commuter rail line in what officials call a "state of good repair."

Board members contacted Thursday said they expected to have a thorough discussion of the fare increase Friday before taking action.

If the board approves the increase Friday, Metra still would need to hold a series of hearings to get public comment before the increase would get final adoption. That could come as early as Metra's Dec. 14 meeting.

Arlene Mulder, who represents suburban Cook County on the board, said she had not decided whether she would support the increase.

"I feel we need to cover our costs, but I know a lot of people who are on extraordinarily tight budgets now," said Mulder, who also is the mayor of Arlington Heights. "We can't lose sight of that."

James LaBelle, who represents Lake County, said he supported increasing the price of a 10-ride ticket to cover the cost of 91/2 rides.

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“Gangnam Style” song channels New Yorkers’ power woes

NEW YORK (Reuters) – Move over Psy. The next hot thing – at least on Long Island, New York – is a music video parodying the South Korean rapper and dancer’s blockbuster hit, “Gangnam Style.”

While the locally produced “LIPA Style” may not attract millions of YouTube views, it’s channeling the frustration of thousands of disgruntled New Yorkers, many of whom went weeks without power after Sandy slammed the East Coast last month.

“There’s been this outpouring of thanks,” said John “Online” Mingione, a correspondent for a Long Island radio station, who created the video after going more than week without power.

After watching the video, people “are saying this is the first time they’ve been able to smile in weeks,” said Mingione.

The response to the cleanup by the Long Island Power Authority (LIPA) has resulted in lawsuits and investigations. The chief operating officer of the state-owned utility also quit under fire for the company’s slow response in restoring power.

Mingione, 23, did not initially mind going without power at his Long Island home. But after five days, the food and friends were gone, and he started to get lonely and bored. A colleague came up with the idea for the song, which was inspired by thousands of complaints the station – WBLI/106.1 FM – received from listeners.

In less than a week, the video with its lyrics about life without power, pleas for help from LIPA and absurd dance moves performed by Mingione and two co-workers in faux LIPA uniforms with a local 5-year-old has been viewed more than 250,000 times on YouTube.

Mingione’s favorite line: “I’m running out of formula, my baby won’t stop crying” which included footage with a co-worker’s infant son.

“I know they’re working their hardest,” he said. “It’s not the linemen’s fault, but at this point it’s ridiculous that people are still without power.”

(Reporting by Jilian Mincer; Editing by Paul Thomasch and Jackie Frank)

Music News Headlines – Yahoo! News

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Recipes for Health: Baked Acorn Squash With Wild Rice — Recipes for Health

Andrew Scrivani for The New York Times

The filling here is a Greco-Italian fusion, with a little American (wild rice) thrown in. I’m usually not a fusion sort of cook, but I wanted something creamy like risotto to fill these squash. Look for small acorn squash so that each person can have one. They’ll be like miniature vegetarian (or vegan) turkeys.

6 small acorn squash

1 bunch kale or 1 10-ounce package stemmed and washed kale, stems picked out and discarded

1 cup cooked wild rice (1/3 cup uncooked)*

1 quart vegetable stock

2 tablespoons extra virgin olive oil

1/2 cup minced onion

Salt to taste

2/3 cup arborio rice

1 plump garlic clove, minced

1/2 cup dry white wine, like pinot grigio or sauvignon blanc

1/4 cup chopped fresh dill

1/4 cup chopped flat-leaf parsley Freshly ground pepper to taste

1/4 to 1/2 cup freshly grated Parmesan cheese (1 to 2 ounces) (optional)

Cayenne or freshly grated nutmeg to taste (optional)

1. Heat the oven to 425 degrees. Line a baking sheet with foil and brush the foil with olive oil. Place the squash in the oven and bake 30 minutes. Each squash should be intact but beginning to give on the side it’s resting on, and soft enough to cut through. Remove from the oven and let sit for 15 minutes, until the squash has cooled slightly. Then, resting a squash on the slightly flattened side that it was sitting on in the oven, cut away the top third. You will be putting the top “cap” back on once the squash is filled, so cut it off in one neat slice. Scrape out the seeds and membranes from both pieces and set aside. Repeat for the remaining squash. Turn the oven heat down to 350 degrees. Oil a baking dish or sheet pan that can accommodate all of the squash.

2. Meanwhile, blanch the kale in a large pot of salted boiling water for 2 to 4 minutes, until just tender. Transfer to a bowl of cold water, drain and squeeze out excess water. Chop medium-fine and set aside. Cook the wild rice, following the directions below, and set aside.

3. Put the stock into a saucepan and bring it to a simmer over low heat, with a ladle nearby. Heat 1 tablespoon of the olive oil over medium heat in a wide, heavy nonstick saucepan or skillet. Add the onion and a generous pinch of salt, and cook gently until it is just tender, 3 to 5 minutes.

4. Add the arborio rice and garlic and stir until the grains separate and begin to crackle. Add the wine and stir until it has been absorbed. Begin adding the simmering stock, a couple of ladlefuls (about 1/2 cup) at a time. The stock should just cover the rice, and should be bubbling, not too slowly but not too quickly. Cook, stirring often, until it is just about absorbed. Add another ladleful or two of the stock and continue to cook in this fashion, adding more stock and stirring when the rice is almost dry. You do not have to stir constantly, but stir often. Continue to add stock and stir until the rice is almost tender, about 20 minutes. The rice should still be a little chewy. Add another ladleful of stock and stir in the kale, wild rice and herbs. Stir together until the stock is just about absorbed, about 5 minutes, and add another ladleful of stock. Remove from the heat. Add pepper, taste and adjust seasonings. Stir in the remaining olive oil and the Parmesan if using.

5. Season the surface of the acorn squash with salt, pepper and nutmeg or cayenne (if desired). Fill the hollowed-out squash with the risotto. Place the tops back on the squash and put them in the baking dish or on the sheet pan.

6. Bake 40 minutes, or until the squash is tender all the way through when pierced with a knife.

* To cook the wild rice, bring 2 cups of the stock or water to boil in a medium saucepan. Add salt to taste and the wild rice. When the water returns to the boil, reduce the heat, cover and simmer 40 to 45 minutes, until the rice is tender and has begun to splay. Drain and transfer the rice to a large bowl.

Yield: 6 to 8 generous servings

Advance preparation: The risotto can be made a day ahead, but you will want to heat it and add a little more stock to get the creaminess that will be lost overnight.

Nutritional information per serving (6 servings): 366 calories; 5 grams fat; 1 gram saturated fat; 1 gram polyunsaturated fat; 3 grams monounsaturated fat; 0 milligrams cholesterol; 75 grams carbohydrates; 9 grams dietary fiber; 53 milligrams sodium (does not include salt to taste); 9 grams protein

Nutritional information per serving (8 servings): 274 calories; 4 grams fat; 1 gram saturated fat; 1 gram polyunsaturated fat; 3 grams monounsaturated fat; 0 milligrams cholesterol; 56 grams carbohydrates; 7 grams dietary fiber; 40 milligrams sodium (does not include salt to taste); 6 grams protein

Martha Rose Shulman is the author of “The Very Best of Recipes for Health

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United Airlines experiences yet another major computer glitch

A massive computer outage at United Airlines early Thursday stranded passengers across the country.A spokesperson for United tells WGN-TV that the airline is up and running again.

United Airlines, just a week before the year's busiest travel period, experienced yet another major computer problem Thursday morning that delayed hundreds of flights across the country, mostly on the East Coast. Some airline industry observers called for "heads to roll" at the world's largest airline.

The latest glitch involved the dispatch system software that enables Chicago-based United to communicate with airplanes before departure, delivering information on the plane's weight and balance, number of passengers and baggage, said United spokesman Charlie Hobart.

Flights of United's regional jet service, United Express, were not affected.

The outage occurred from about 7:30 to 9:30 a.m. Thursday and resulted in 257 delays directly attributable to the outage and more through the day, along with about 10 cancellations. The airline said it had 636 delays Thursday, far more than its typical number of about 300. The delays affected a relatively small number of the airline's 5,500 daily flights — fewer than 5 percent, Hobart said.

The impact at O'Hare International Airport seemed to be minimal, United and airport officials said.

United has had rampant problems with an unrelated system, its passenger reservation system it switched to in March. In August, the airline had another unrelated network outage that occurred when a piece of communication equipment in a United data center failed and disabled communications with airports and the United website, United.com. That was due to a failure at a United vendor.

The computer problems, especially the reservation system problem that affected flights in midsummer, have had Jeff Smisek, CEO of United's parent company, United Continental Holdings, making public apologies since March. He conceded to Wall Street analysts that operational problems hurt the airline's third-quarter profits as many customers fled to competitors. But he said during an earnings call with analysts in late October that those problems were behind the airline and that he was confident United would perform well during the busy holiday travel season.

Aside from weather-related delays, such as superstorm Sandy and a snowstorm on the East Coast, that seemed true until Thursday's outage. Even on Thursday, United's on-time performance was about 80 percent, meeting its target, a spokesman said.

"It was a software issue that we found and fixed in that two-hour period," United spokesman Rahsaan Johnson said. "It will not happen again."

Hobart said he did not have details about what went wrong.

Joe Brancatelli, a business travel writer at JoeSentMe.com, said the failures point to a larger problem.

Some industry observers said United is out of excuses.

"It is flat-out unacceptable," said Henry Harteveldt, co-founder of Atmosphere Research Group. "This makes United a laughingstock among airlines."

He said airline computer systems are complex and Thursday's problem might be a one-time issue, but the repeated failures are not only embarrassing for United, they "undermine trust in the airline" and "demoralize employees."

"There are clearly failures in the airline's strategy and the airline's execution, and heads need to roll," he said. "United's (chief information officer) should resign or be dismissed."

Hobart said the airline has improved recently.

"Since this summer, we've significantly improved our operational performance, with nearly 85 percent of our flights on time so far this month and nearly 80 percent of flights arriving on time in October, despite operational challenges like Hurricane Sandy," he said. "We understand this outage was frustrating for our customers, and we are enabling them to rebook without penalty and receive a full refund if their flights were delayed by at least two hours."

"Mostly what it says is that (airlines) have got to stop looking at mergers as two route maps you can smash together," Brancatelli said. He contends that the United-Continental merger was not planned properly.

"There are too many things going wrong," he said. Blame rests with "the guys running the show," he said of United's top executives. "The fish stinks from the head."

gkarp@tribune.com

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Union: Police shoot, kill man who stabbed man on South Side

Police shot and killed a man who was stabbing another man and came at officers with a hammer in the South Chicago neighborhood late Wednesday, with another officer suffering a graze wound from the gunfire, a police union spokesman said.

There was no exchange of gunfire as initially reported, but police were defending themselves against a man who police saw stabbing another man and who then came after officers with a hammer, authorities said.

Police responded to a call of a disturbance at South Shore Food & Liquors, 7900 S. South Shore Dr., about 11:45 p.m. and saw one man stabbing another on the street, said Patrick Camden, a spokesman for Fraternal Order of Police Lodge 7.

Police approached and told the man to drop the knife, but he did not and at some point pulled a hammer out of a pocket and went at the officers, Camden said.

Officers hit the man with a Taser, but he continued to be combative. At least one officer began shooting, striking the man several times, and grazing the officer once, Camden said.

The man with the hammer died on the scene, and his body remained in the middle of 79th Street, surrounded by numerous shell casings and red police tape street as officers investigated about 2 a.m.

The officer was driven to Advocate Trinity Hospital by another police officer, according to police, and the weapons used in the attack were located at the scene.

The man who was stabbed was taken to Northwestern Memorial Hospital for treatment, but his condition was not immediately available.

The officer is a woman in her late 20s or early 30s. She was shot in the leg and taken to Advocate Trinity Hospital for treatment, where she was treated and released.

The police department's office of news affairs released a statement saying the man stabbed was in serious condition.

Chicago Police Superintendent Garry McCarthy was briefly at the scene, and declined to speak to reporters at Trinity.

Check back for updates.

pnickeas@tribune.com

Twitter: @peternickeas

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