Skilled labor, a central location, accessible housing and a soon-to-be-expanded O’Hare airport, if Mayor Rahm Emanuel gets his way, landed Chicago as the top metro area in the nation for corporate relocation and investment for a fifth consecutive year.
The recognition, announced Monday, hits as Chicago pursues Amazon’s second headquarters along with 19 other finalists. Chicago’s bid for the e-commerce giant’s $5 billion Seattle satellite has included 10 possible locations in the city and suburbs.
The Chicago-Elgin-Naperville metro area topped second-place Houston–The Woodlands–Sugar Land, according to the 64-year-old Site Selection magazine, published by the Atlanta-based corporate investment and expansion consultancy Conway. The rest of the top 5 metros for relocation in populations over 1 million were Dallas–Fort Worth–Arlington, then Atlanta–Sandy Springs–Roswell and New York–Newark–Jersey City.
The Midwest’s smaller markets also proved attractive in Site Selection’s calculations. Omaha–Council Bluffs in Nebraska and Iowa was No. 1 among areas with populations between 200,000 and 1 million. And the Sioux City, Iowa, area, which spills over into Nebraska and South Dakota, was No. 1 among areas with populations between 50,000 and 200,000. Read the full results, including Nebraska’s claim as the magazine’s top spot for capital investment.
Site Selection tracks headquarters, manufacturing plants, R&D and logistics sites. In order to be considered, new facilities and expansions must meet at least one of three criteria: capital investment of at least $1 million; creation of at least 20 new jobs; or at least 20,000 square feet of new floor area.
Chicago’s win was based on “77 distinct city neighborhoods in various phases of realizing their potential, 275 municipalities and seven counties comprising the new Chicago Regional Growth Corporation, 10 viable candidate sites for Amazon HQ2 or any other corporate campus, impressive transit-oriented, mixed-use redevelopment and — perhaps best of all — housing stock that people can actually afford,” said Adam Bruns, managing editor of Site Selection, in the release.
In 2017, Chicago’s World Business Council, which is a public-private effort organized by Emanuel’s office, tracked a record 351 business expansions and relocations in the metro area. These projects accounted for $2.2 billion in investment and nearly 14,000 new jobs. Corporate relocations and expansions last year included EXP, CRRC, Flex-N-Gate, Trustwave, iam bank and Peapod.
The city’s urban core and its presumed desirability for a younger workforce has been in full promotional mode, with the bulk of the Amazon pitches featuring downtown ZIP codes. This spring, McDonald’s
officially leaves a sprawling, leafy and car-accessed Oak Brook, Ill., campus that’s been its home for 40 years for Chicago’s once gritty, now trendy Fulton Market district.
On Monday, East Syracuse, N.Y.–based Aspen Dental, which provides administrative and business support to more than 660 branded dental practices in 36 states, said it will be opening a second headquarters in Chicago, employing about 250 people, also in Fulton Market, just to the west of the downtown Loop.
Companies including GE Healthcare
also concluded an that an urban fit was best with moves over the last few years. Agriculture player Archer Daniels Midland
moved its headquarters to Chicago in 2014, after also considering Atlanta, Dallas and Minneapolis. Kraft
left Chicago’s suburbs to run operations out of the towering Aon Center near Lake Michigan and Chicago shopping mecca Michigan Avenue.
Andy Gloor, managing principal at corporate developer Sterling Bay, said the accessibility in and out of Chicago’s O’Hare International Airport is a key competitive advantage. On top of the airport’s vast array of flights already, the mayor’s office is close to sealing an $8.5 billion expansion plan for the aging facility, reportedly pushing ahead over an 11th-hour protest from major carrier American Airlines
, which argued that an unfair number of gates are being allocated to Chicago-based airline United Continental
”We have the labor base, a great airport, affordable housing and, most importantly, room to grow compared to other markets,” Gloor said. “People underestimate tech and other job-growth opportunities. You sometimes have to read past the headlines.”
The headlines he’s talking about include a high murder rate relative to Chicago’s fellow top urban areas (the city recorded 650 murders in 2017, a drop from 771 murders in 2016 — the deadliest year in decades) and a costly debt burden and long-run pension problems as a yoke on growth for the city and the state of Illinois.
The state’s credit ratings have fallen to the lowest level among all states due to a $129 billion unfunded pension liability and an unpaid bill backlog that reached $16 billion during a roughly two-year budget impasse that has since been resolved.
Meanwhile, the city’s required annual contributions to its four worker pension funds will increase significantly over three years starting in 2020. The city will have to come up with $864 million more a year by 2022 for those pension funds — which are nearly $36 billion short of the money needed to meet their obligations.
The rest of the country is watching. Moody’s Investors Service continues to categorize city debt as below investment grade — commonly called “junk.” Emanuel has been critical of Moody’s reluctance to recognize city progress toward shoring up the pension system.
“Ideally, sure, we’d like to have California’s $8 billion surplus,” said Gloor. “And no doubt in the next five years, we need a pension reworking. But, as we’ve seen, fiscal health is not a detriment to corporate attraction. It’s not a deal killer — yet.”