Posted on 09/05/2018 12:02:12 PM PDT by 2ndDivisionVet
Chicago Mayor Rahm Emanuel’s Tuesday announcement that he won’t seek a third term throws a big unknown into the city’s efforts to score Amazon’s second headquarters, which would be the crowning achievement in a line of corporate wins under his leadership.
The city is one of 20 locations in the running for what Amazon has dubbed HQ2, which will bring up to 50,000 high-paying new jobs to the chosen North American location. Amazon has said it will pick a location by year’s end.
Emanuel has been hands-on in trying to woo Amazon to Chicago, touting the city’s growing tech sector, assembling 600 heavy hitters on a committee to support the bid and even hiring William Shatner to narrate a pitch video because Amazon CEO Jeff Bezos is a “Star Trek” fan.
An Amazon spokesman declined to comment.
The pending exit of the pro-business mayor after eight years creates new questions for corporations that already have a large presence in the city, those considering one and the developers whose cranes dot the downtown skyline. Emanuel is known for being an aggressive pitchman, often picking up the phone himself to call CEOs and tell them why they should consider Chicago.
“I don’t know anybody who could do it better,” said Dennis Donovan, principal at site selection consultant Wadley Donovan Gutshaw Consulting. “He made it known Chicago was open for business.”
Donovan and other site-selection experts who’ve followed the Amazon saga doubted Emanuel’s announcement would give a company like Amazon cold feet because companies planning major projects like HQ2 are concerned about bigger-picture issues, like whether the city has enough talented workers to fill their ranks. Some observers also doubt a change in the mayor’s office would threaten the $2 billion in proposed incentives, with additional funding for worker training, offered to Amazon.
If elected officials were to rescind an existing offer, “That puts a bad taste in everybody’s mouth, not just for Amazon but any potential prospects they deal with,” said Jeff Forsythe, a corporate site selection consultant and president of Forsythe & Associates.
Despite headlines about the city’s violent crime and fiscal woes, Emanuel has helped line up a parade of high-profile headquarters moves to the city from Chicago’s suburbs and other locations. Corporate relocations have shifted thousands of jobs downtown, helping fuel a real estate development boom that also has included residential, hotel and retail projects.
The list of companies with new Chicago headquarters includes McDonald’s, Conagra Brands, Kraft Heinz, Motorola Mobility, Archer Daniels Midland, Gogo, Motorola Solutions, Hillshire Brands and Beam Suntory. Other large suburban employers, such as Walgreens and Allstate, have kept their headquarters in place while shifting large numbers of jobs downtown.
Chicago’s technology sector also has expanded, both through the creation of tech incubator 1871 and local startups, as well as big hiring initiatives by behemoths such as Google, which established its Midwest headquarters in Chicago, Facebook and Salesforce.
“It’s hard to argue with Rahm’s effectiveness in bringing Fortune 500 companies to the city,” said Andy Gloor, managing principal at Chicago real estate development firm Sterling Bay, which developed properties for McDonald’s and Google.
Chicago also has added amenities to make doing business in the city more attractive, such as building The 606 elevated trail and the riverwalk. The newly elected mayor will inherit ongoing plans to expand both.
Also along the river, Emanuel led an effort to change land-use policy in a 3.7-mile corridor along the North Branch that previously was reserved mostly for industrial uses.
Emanuel’s successor will face headwinds in continuing a downtown jobs and development boom, said developer Steve Fifield, founder and CEO of Chicago-based Fifield Cos.
“The various conflicting agendas of the City Council members and lack of pension reform, increasing real estate taxes and the recently enacted pilot area affordable housing requirements will certainly have a chilling effect on future housing that doesn’t pencil for most developers,” Fifield said in an email. “That means the opportunity to expand Chicago’s real estate tax base and keep lots of construction workers busy will be adversely impacted.
“We are now busier outside Chicago than in it. ‘The City that works’ needs a new slogan.”
The next Chicago mayor will inherit a long list of multibillion-dollar projects, such as Sterling Bay’s proposed more than 70-acre Lincoln Yards mixed-use project along Lincoln Park and Bucktown. If approved, Lincoln Yards would bring office, residential and hotel towers, as well as a 20,000-seat soccer stadium and a music and entertainment complex, to properties that previously were home to gritty uses such as the A. Finkl & Sons steel plant.
South of there, broadcast company Tribune Media plans a mixed-use redevelopment of 37 acres, which it is calling the River District.
And south of downtown, outside the former riverfront industrial corridor, developer Related Midwest proposes The 78, a mixed-use project that would bring a series of high-rises to a riverfront site connecting the South Loop and Chinatown. That 62-acre site is near several other ongoing developments, including the long-awaited redevelopment of the old main post office, a redevelopment and expansion of Union Station, and the addition of a new retail and entertainment base to the city’s tallest building, 110-story Willis Tower.
At another long-stalled development site, the former Michael Reese Hospital and adjacent land south of McCormick Place, a team including Farpoint Development and Draper & Kramer proposes a mixed-use project called the Burnham Lakefront.
Chicago’s downtown expansion also has included the emergence of the Fulton Market district as an office, residential, hotel and retail market. The area west of the Kennedy Expressway, spurred in part by zoning changes, has experienced a wave of developments. That includes McDonald’s headquarters, which opened earlier this year on the former site of Oprah Winfrey’s Harpo Studios, and Google’s Midwest headquarters in the former Fulton Market Cold Storage building.
Lincoln Yards, the River District, the 78, the Burnham Lakefront and several Fulton Market properties made up the five options Amazon officials toured during a March visit to Chicago.
In recent years, political leaders have been taking on a bigger role in the site selection process, particularly in larger cities where high-profile mayors like Emanuel or former Newark, N.J., Mayor Cory Booker aggressively advocated for their cities, said John H. Boyd, principal of The Boyd Co., a Princeton, N.J.-based corporate site selection consultancy.
“(Emanuel) was an aggressive, high-profile force of nature,” he said.
“He had a touch and feel for economic development, and the proof is in all the high-profile relocations during his tenure, and the growth of the IT and banking industries,” Boyd said.
It’s all a fraud. Lots of tax incentives that others have to pay for. Glitz on the surface but rotten underneath. Because of a forced relocation I wound up having to commute to downtown Chicago for 17 freaking years. Hateful.b
Thanks 2ndDivisionVet. Ah, okay, some clearing of the overcast there.
But Crazy Bernie claims Amazon screws it’s workers and the US, why would we unleash such horrors on the city? It is akin to Slave Labor.
The only problem with working in the Loop is the travel time to get there. I did it for 33 yrs and got a helluva lot of reading done.
I rode in from NW suburbs on metra trains. Listened to radio and read papers. Watched all the poor bastards on the Kennedy.
Same deal for me in Midtown, NYC, but I was traveling in Europe for business much of the time, until the terrorists hit the Italian airport terminal in 1985, which we’d just left 15mins before, on our flight back home. That was the end of my business travels over there.
Forced??? How about choices have consequences.
No F-ing way amazon puts HQ2 in Chicago, no matter what ... Illinois has one of the worst business and business tax climates of any state in the U.S., not to mention the crime and corruption and the fact that the entire state is on the verge of bankruptcy, further down THAT road than any other state as well ...
“Forced??? How about choices have consequences.”
Employer moved us in from the suburbs (5 minutes from my house) and said here’s where your new office is. The choice was to blow a career and retirement or commute.
I do not like Rahm Emanuel by any measure.
However, as the tenure of the current GOP governor of Illinois shows, Illinois and Chicago are like Argentina, not possible to reform except by a benevolent dictator that would forcibly retire every local bureaucrat and every political figure and give them no role in successors that would be appointed to take over.
No one seeking elective politics and actually wanting to “make a change”, as opposed to be a puppet of a political machine, should even think of running for office in Chicago.
I can’t blame Rahm for wanting out. Even if I don’t like him, I think he naively thought he would get to run his own show. Never happended.
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