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Chicago survives the first cut in Amazon HQ2 sweepstakes

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Amazon today announced that it has picked 20 metro areas “to move to the next phase of the process” as it looks for a home for a second headquarters. The 20 areas in alphabetical order:

Atlanta
Austin, Texas
Boston
Chicago
Columbus, Ohio
Dallas
Denver
Indianapolis
Los Angeles
Miami
Montgomery County, Md.
Nashville, Tenn.
Newark, N.J.
New York City
Northern Virginia
Philadelphia
Pittsburgh
Raleigh, N.C.
Toronto
Washington D.C.

The list is a broad mix of cities big and small, ranging from Columbus, Ohio, and Indianapolis to Los Angeles and New York. It includes many of the early favorites, including Austin, Denver, Boston, Toronto and Washington, D.C. Three of the 20 finalists are near the nation’s capital, where Amazon has 2,500 employees.

Chicago was seen as a likely contender, based on Amazon’s criteria of wanting to be in an urban area with more than 1 million people within 45 minutes of an international airport and preferably have direct access to mass transit.

Discuss.

…Adding… Tribune…

“Today we are announcing the communities that will proceed to the next step in the HQ2 process. Getting from 238 to 20 was very tough — all the proposals showed tremendous enthusiasm and creativity,” Amazon tweeted.

On its website, Amazon said, “In the coming months, Amazon will work with each of the candidate locations to dive deeper into their proposals, request additional information as necessary, and evaluate the feasibility of a future partnership that can accommodate our hiring plans as well as benefit our employees and the local community. We expect to make a decision in 2018.”

Illinois, Chicago and Cook County teamed up to offer more than $2 billion in incentives to Amazon, and offered 10 proposed sites. They are Lincoln Yards, a development along the Chicago River near Lincoln Park and Bucktown; the Downtown Gateway District, which includes space in Willis Tower and redevelopment of the old main post office and Union Station; City Center Campus, a proposed redevelopment of the state-owned Thompson Center in the Loop; the River District, a 37-acre development along the river and Halsted Street; the Burnham Lakefront, a Bronzeville development that includes the Michael Reese Hospital site; the 78, a development planned on 62 acres along the river between the South Loop and Chinatown; Fulton Market district properties controlled by multiple owners; Illinois Medical District redevelopment; the soon-to-be-vacated, 145-acre McDonald’s campus in Oak Brook, which the company will leave for Fulton Market; and more than 260 acres available for development on the longtime Motorola Solutions campus in Schaumburg, where Zurich North America recently built a new headquarters.

…Adding… Mayor Emanuel’s office…

Today’s news makes clear that Amazon recognizes Chicago’s great strengths - access to talent, transportation, higher education, affordability and quality of life, which are the keys to growth and prosperity.

As companies including GE Healthcare, ConAgra and McDonalds have concluded, Chicago offers unparalleled opportunities, and we are going to continue to work as a region to make the case to Amazon that Chicago is the ideal location for HQ2. We are prepared to compete at the next level and the next level after that.

posted by Rich Miller
Thursday, Jan 18, 18 @ 9:28 am

Comments

I don’t understand. I thought businesses were fleeing the state, not coming here. At least, so says He-Who-Is-Not-In-Charge.

Comment by JoanP Thursday, Jan 18, 18 @ 9:30 am
At least we no longer have to worry about whether the gov is helping the St Louis bid. That would have been awful to get a bunch of good paying jobs for the Metro East area & Southern Illinois.

Comment by m Thursday, Jan 18, 18 @ 9:32 am
My money is on Northern Virginia. Amazon needs a presence where all the government officials and lobbyists are located.

Comment by Angry Republican Thursday, Jan 18, 18 @ 9:33 am
This is just Amazon’s way of asking these locations “What else you got to give us?”

Comment by Just Visiting Thursday, Jan 18, 18 @ 9:33 am
Because his re-election chances depend on this failing, Rauner will try to derail it, and then blame Madigan.

Comment by Nick Name Thursday, Jan 18, 18 @ 9:34 am
I am surprised at just how many locations are still in contention. But Chicago has always been considered to be “centrally located,” in addition to its other qualities, so perhaps we still have a chance.

Comment by Christopher Thursday, Jan 18, 18 @ 9:36 am
Good thing the Governor has spent the better part of the last couple of years trashing the State and talking about how businesses want to flee Illinois. Maybe if we heard a little more positive talk Illinois might have a better chance.

Comment by Stones Thursday, Jan 18, 18 @ 9:38 am
So 3 of the 20 picks are DC adjacent? Putting their HQ 2 there would be one way to ensure govt keeps their monopoly afloat.

Still as much as I worry about their clout I can’t help purchasing stuff through Amazon. Wish we didn’t have such an incompetent for governor trying to help woo this thing to IL

Comment by hisgirlfriday Thursday, Jan 18, 18 @ 9:39 am
Yes Joan it’s either Chicago or Newark. LOL

Comment by Sue Thursday, Jan 18, 18 @ 9:40 am
==My money is on Northern Virginia. Amazon needs a presence where all the government officials and lobbyists are located.==

It helps that Bezos just bought a house in DC.

Comment by Arsenal Thursday, Jan 18, 18 @ 9:41 am
(Sigh)

In this “round”, if Chicago *wasn’t* a Top 20 choice, that would be making news.

See me when it’s down to 5-6 to get a true measure and how much of a contender Chicago is when it’s going to matter.

Chicago is a Top 20 choice for any company. #NotAlternativeFact

As an aside, Detroit not making the cut was a mild eyebrow raiser. Location (including proximity to Canada), property to build, a chance to make and shape a city that’s evolving…

That’s news, for me.

Comment by Oswego Willy Thursday, Jan 18, 18 @ 9:41 am
This would be a game changer and help Chicago and Illinois to turn things around. Regardless of who the governor is. Hopefully our leaders can stop bickering long enough to allow this to happen.

Comment by SSL Thursday, Jan 18, 18 @ 9:44 am
Rauner should go ahead and run up the Mission Accomplished banner

Comment by Rogue Roni Thursday, Jan 18, 18 @ 9:44 am
It is pretty simple in my mind. Amazon will never select a location that has a cloud tax, as Chicago does. What many people don’t realize about Amazon is that a majority of their profits come from their cloud services. Therefore, they absolutely will not endorse a city that taxes these services. And I agree with Oswego Willy, at this point, it would be news if Chicago wasn’t among the top 20, based on the criteria Amazon publicly stated.

Comment by Smalls Thursday, Jan 18, 18 @ 9:46 am
No Milwaukee, St. Louis? Thanks, Madigan.

Are the Cheeseheads out because the economy is on fire up yonder? Or because they’re already over-extended on the corporate welfare?

Maybe Bezos is lactose intolerant. Sad to see that discrimination against white beverages still exists in 2018.

What a circus. Amazon knows where they want to go, they’re just going through this “competition” to maximize the handout.

It will be the biggest ever — until the next one.

Because governments create jobs in the private sector.

Comment by wordslinger Thursday, Jan 18, 18 @ 9:48 am
Good and hopeful news.

Comment by Scott Cross for President Thursday, Jan 18, 18 @ 9:50 am
=== t is pretty simple in my mind. Amazon will never select a location that has a cloud tax, as Chicago does. What many people don’t realize about Amazon is that a majority of their profits come from their cloud services. ===

Well, keep in mind, “Chicago” probably doesn’t mean only the city proper, but Chicagoland.

Comment by Just Observing Thursday, Jan 18, 18 @ 9:51 am
I respect what Bezos has accomplished withAmazon. American traits of capitalism gone berserk with success. But I hate the way he is sitting on his throne, scepter in hand, awaiting the groveling toadies, begging for King Bezos to toss them a piece of the pie (which the winner will pay dearly).
Like all the rest, his dY will come too. Remember, Sears was the king at one time.

Comment by Anonymous Thursday, Jan 18, 18 @ 9:55 am
===Amazon will never select a location that has a cloud tax, as Chicago does===

Taxes can be repealed.

Comment by Rich Miller Thursday, Jan 18, 18 @ 9:58 am
Chicago is a great city. I’m tired of right wingers exploiting it negatively for political gain. Trump does this. Rauner does it too. The city certainly has bad things and needs help, but in many ways it’s world class.

Economic growth does not have to overrely on massive tax breaks to the wealthiest corporations. An article came out in which the vast majority of 100 big corporations who were asked have not indicated that they’ll invest the big corporate tax cut in employees—Apple notwithstanding.

I would love and support Amazon coming to Chicago but would love also to see marijuana legalization and a casino. In this way we’d get tax revenue for economic growth rather than giving away large amounts of tax dollars, like Foxconn in Wisconsin.

Comment by Grandson of Man Thursday, Jan 18, 18 @ 10:15 am
Amazon just leased 500 thousand square feet of space with option for 500 more in Boston near the new waterfront area. That much space isn’t for anything else

Comment by Sue Thursday, Jan 18, 18 @ 10:17 am
Have to believe they already have a much shorter list, like about 3 to 5 locations, and this is just another attempt to sweeten the incentives pot.

I also believe one of the really big factors is an underutilized large airport with good rail and Interstate freight connections … and a large USPS facility. When you boil it down, this is all about shipping stuff. Not that you can’t build from scratch, but existing infrastructure helps.

Comment by RNUG Thursday, Jan 18, 18 @ 10:22 am
I don’t want the state or city to offer too many tax breaks etc. to Amazon to land them. But with Chicago’s history and reputation as the nation’s premier catalog/mail order retail center for a hundred years or so, (Sears and Montgomery Wards monster HQs going back into the 19th century) Amazon in Chicago as the 21st century’s version would be both logical and wonderful both for them and for us in carrying on this tradition.

Comment by Responsa Thursday, Jan 18, 18 @ 10:27 am
—I would love and support Amazon coming to Chicago but would love also to see marijuana legalization and a casino. In this way we’d get tax revenue for economic growth rather than giving away large amounts of tax dollars, like Foxconn in Wisconsin.—

GOM - Great point. Specifically cannabis legalization. It will create a new billion dollar industry with jobs, infrastructure, and tax revenue. That would be a much bigger accomplishment then landing Amazon which will be watered down with tax incentives to the company.

Comment by Illinois Resident Thursday, Jan 18, 18 @ 10:27 am
Hopefully, they can structure a deal on prevailing wage for the project. Crain’s has a great article on “prevailing wage” in this state.

As they point out, Vermillion County (Danville, IL) has an average “prevailing wage” over $100,000 per year. This is a county where the median household income is only $43k.

Doesn’t sound like it’s reflective of the “prevailing wage” in the county.

Comment by Downstate Thursday, Jan 18, 18 @ 10:37 am
–Hopefully, they can structure a deal on prevailing wage for the project.–

What are you talking about? How would prevailing wage apply for a corporate hq?

Comment by wordslinger Thursday, Jan 18, 18 @ 10:44 am
@Downstate

Prevailing wage applies to public construction projects. Amazon HQ will be a private development. If it’s in Chicago, the majority of workers will be union anyways.

Comment by California Guy Thursday, Jan 18, 18 @ 10:45 am
Word,
If there are state tax credits involved it will often trigger a prevailing wage rate. Any grants will likely do so as well.

Comment by Downstate Thursday, Jan 18, 18 @ 10:49 am
One advantage of living in Chicago is not having to connect through O’Hare. Made a huge difference when I was consulting.

Sears exited mail order just before the internet transformed the business. Foresight was lacking. I think their delivery systems were antiquated and inefficient. Talk about throwing away first mover advantage.

Comment by Last Bull Moose Thursday, Jan 18, 18 @ 10:53 am
===As they point out, Vermillion County (Danville, IL) has an average “prevailing wage” over $100,000 per year. This is a county where the median household income is only $43k. ===

Yep. Excellent idea. Just lower wages for skilled trades. What could possibly go wrong? Maybe McDonald’s can cut its prices some more.

Comment by Rich Miller Thursday, Jan 18, 18 @ 10:54 am
Rich,
The “prevailing” wage rates in the counties are not reflective of what construction professionals actually receive. The increased cost of construction (30% or more) due to “prevailing” wage rates reduces the ability of local school districts to make necessary improvements to their infrastructure….as just one example.

Comment by Downstate Thursday, Jan 18, 18 @ 11:01 am
Downstate:

You are still advocating for cutting wages. That attitude is wrong.

Comment by Demoralized Thursday, Jan 18, 18 @ 11:06 am
==median household income is only $43k==

And I’m not sure why that’s relevant. We should be striving to reduce wages because they make more than the average? Nonsense.

Comment by Demoralized Thursday, Jan 18, 18 @ 11:08 am
==My money is on Northern Virginia.==

Home of the most Amazon EC2 Availability Zones in the world: 6.

Top 5 Rankings: Austin, Northern Virginia, Boston, Atlanta, Chicago.

Comment by City Zen Thursday, Jan 18, 18 @ 11:21 am
I think we should up the ante to $3 billion and make a promise that Illinois will never attempt to tax online sales. While we are at it ,change the naming rights of Soldier Field to Amazon Arena.

Comment by Blue dog dem Thursday, Jan 18, 18 @ 11:50 am
@Downstate

Only the infrastructure portions of a project which end up become public property are subject to prevailing wage. Prevailing wage cannot apply to a private development without new legislation being passed, even if funds come from the State.

I agree that wage controls like prevailing wage are wrong headed, but they won’t apply to Amazon’s development. Even if it did, that wouldn’t make much of a difference anyways seeing how they’re going to have to pay union rates in Chicago due to reasons other than prevailing wage anyways.

Comment by California Guy Thursday, Jan 18, 18 @ 11:54 am
Downstate, the next skyscraper you build south of I 80 contact a non union company and see if they have the workforce or knowledge to build one.

Comment by Almost the Weekend Thursday, Jan 18, 18 @ 12:12 pm
Almost. Many of the large commercial general contractors in the south and southwest blend high skilled union trades with non union low skilled jobs. Where the rub always comes in is the relaxed job description rules and trade ownership positions. It’s always difficult to compare apples to apples, but my experience shows it a bit cheaper to build in Dallas than Chicago. Weather factored in.

Comment by Blue dog dem Thursday, Jan 18, 18 @ 12:32 pm
I’m just amused “Northern Virginia” is listed in all the press releases as a city. Well, maybe that’s not a misnomer.

Comment by ZC Thursday, Jan 18, 18 @ 12:39 pm
Newark offered the most so it’s gonna go to Newark.

Comment by Da Big Bad Wolf Thursday, Jan 18, 18 @ 1:23 pm
Shocked that Kankakee’s prosposal to become “Amazon City” with Bezos International Airport didn’t pass the muster….

Comment by OurMagician Thursday, Jan 18, 18 @ 2:13 pm
From the State of Illinois on the Prevailing wage act.

What makes a project subject to the Act?
All fixed works constructed by any public body or paid in whole or in part with public funds, including all projects funded or financed in whole or in part with bonds, grants, loans or other funds made available by or through the State or any of its political subdivisions, or undertaken by an institution supported in whole or in part by public funds. Landscape or modifications to real estate are included within the definition of fixed work. A project does not have to be for public use to be covered.

Comment by Downstate Thursday, Jan 18, 18 @ 2:40 pm
Along with the other cynics, a list of 20 “finalists” seems like nothing more than a blatant attempt to up the incentives.

Objectively, having spent time in most of these areas, I’d put Chicago in the top 10, but with really strong competition from the other 9. There are 5 or 6 I can easily discount, based only on my experience vis a vis Amazon’s criteria. I also don’t think you can automatically discount some of the smaller metro areas, like Indy and Columbus, because of their proximity to other urban areas and the ability for something like Amazon HQ2 to make those cities career destinations in themselves.

Comment by Downstate43 Thursday, Jan 18, 18 @ 2:53 pm
@ Downstate

I believe I stand corrected. The applicability of prevailing wage to PRIVATE construction projects CAN happen per the 2015 court ruling for Mt. Vernon. Understanding that, Amazon would be wise to negotiate a tax deal with Chicago/Illinois that does not lead to public funds being used to build the actual structure of HQ2.

I looked up Chicago’s offer in a Crain’s article by G Heinz here: http://www.chicagobusiness.com/article/20171023/BLOGS02/171029963/chicagos-offer-to-amazon-2-25-billion-in-incentives

It looks like the incentives are in income tax breaks, public infrastructure spending, an employee “training fund,” and possibly free land. The offer does not appear to subsidize the construction activity of the building itself.

Comment by California Guy Thursday, Jan 18, 18 @ 3:20 pm
For some reason, Rauner dumped all over the Chicago bid earlier today.

Maybe sit this one out, champ. Grownups are at work.

http://www.chicagobusiness.com/article/20180118/BLOGS02/180119885/emanuel-rauner-clash-in-wake-of-amazon-news#utm_medium=email&utm_source=ccb-dailyalert&utm_campaign=ccb-dailyalert-20180118

Comment by wordslinger Thursday, Jan 18, 18 @ 3:27 pm
Wouldn’t it be amazing if Chicago landed Amazon IN SPITE of Rauner?

Comment by RNUG Thursday, Jan 18, 18 @ 3:30 pm
The question asked about “climate” included the political climate(?)

Why the antagonizing?

Cooperation, or the appearance of it, seems to be something of a positive selling point…

Comment by Oswego Willy Thursday, Jan 18, 18 @ 3:35 pm
Boston according to WGN

Comment by Foster brooks Friday, Jan 19, 18 @ 6:20 am
https://www.theatlantic.com/business/archive/2018/01/amazon-hq2-20-cities/550790/

Comment by Anonymous Friday, Jan 19, 18 @ 7:25 am
New Jersey is offering $7 billion to Amazon.

Comment by Anonymous Friday, Jan 19, 18 @ 8:44 am
–Yes Joan it’s either Chicago or Newark. LOL–

Take a look at a map. Newark is the next Brooklyn.

https://www.nytimes.com/2017/08/08/nyregion/newark-development-projects.html

Comment by wordslinger Friday, Jan 19, 18 @ 8:53 am