Illinois strikes out on Amazon HQ2
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.
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.
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.