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ILLINOIS
STRIKES OUT ON AMAZON HQ2
Illinois Policy Institute/
Brad Weisenstein
Amazon picked two of the 20 remaining
cities to split its $5 billion, 50,000-job HQ2, with a third city
receiving 5,000 jobs. Illinois struck out on all three.
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 Three cities got special deliveries Nov. 13 from Amazon.
Illinois got negative seller feedback.
Chicago was one of 20 cities still chasing Amazon after the online shopping
giant pared down the original list of 238 cities competing for its second
headquarters, or HQ2. Amazon announced Nov. 13 that Arlington, Virginia, and
Long Island City in New York will split the 50,000 jobs and at least a $5
billion investment promised by Amazon. Nashville, Tennessee, will get an
operations center with more than 5,000 jobs.
The new HQ2 locations are intended to supplement Amazon’s Seattle headquarters,
which since 2010 has grown to more than 40,000 employees with an annual payroll
of $25.7 billion. The company’s total employment tops 540,000.
The Amazon HQ2 would have been a major boost to Chicago’s status as a tech
center, with many of the 50,000 jobs going to highly paid computer engineers and
software developers. Chicago’s bid committee included 600 members, including
United Airlines CEO
Oscar Muniz, Loop Capital CEO Jim Reynolds and Penny Pritzker, former U.S.
Commerce Secretary and sister of Illinois’ Gov.-elect J.B. Pritzker.
“Of course Amazon would speed things up because it’s a big infusion of
opportunity for the talent, but that doesn’t mean we can’t speed up … with other
companies,” Pritzker told the Chicago Tribune.
Salesforce’s expansion, with an additional 5,000 jobs, and possibly a
5,000-worker Google operations center are pending projects for the city.
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Chicago’s poor finances, high crime rate or even
its perceived lack of stature situated in “flyover country” may all
bear some blame for the loss. Outgoing Mayor Rahm Emanuel nodded
toward his scapegoat: Illinois state government.
Did two years without a budget, a pair of income tax hikes, at least
$130 billion in pension debt and a state credit rating just above
junk status factor into Amazon’s decision? Emanuel’s response: “Let
me put it this way: I know what Chicago has to offer, and we put our
best foot forward.”
As valuable as Amazon would be to any local economy, the losers were
tallying the benefits of not landing 50,000 Amazon jobs paying an
average of $150,000. Congestion, housing costs and especially
incentive costs for taxpayers were common criticisms.
New York is offering at least $2 billion combined in tax credits.
Arlington will give Amazon more than $500 million in cash grants.
Nashville is prepared to deliver $65 million in cash grants, in
addition to tax credits.
Illinois has been a loser when it comes to betting taxpayers’ money
on which companies will succeed in its hostile business climate.
Rather than lament the Amazon loss, state and city leaders should
instead support solutions to grow the state’s economy and business
climate organically, rather than trying to bribe multibillion-dollar
businesses.
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