Chicago’s bid for Amazon HQ#2

Here are a few details of what Chicago is offering Amazon to attract its second headquarters:

“Chicago offers unparalleled potential for future growth for businesses of all sizes and is the ideal place for Amazon to build its HQ2,” Emanuel said in the news release. “This bid will demonstrate to Amazon that Chicago has the talent, transportation and technology to help the company as it reaches new heights and continues to thrive for generations to come.”

Developers of four Chicago sites have provided details of their Amazon bids to the Tribune. Those sites are Lincoln Yards, the planned redevelopment of the former A. Finkl & Sons steel plant and other land along the Chicago River in Lincoln Park and Bucktown; the vacant old main post office along the river and Congress Parkway; 37 acres owned by broadcast company Tribune Media along the Chicago River near Chicago Avenue and Halsted Street; and the former Michael Reese Hospital site and nearby land in Bronzeville.

Chicago’s bid highlighted Chicago’s transportation network, talent pool, diverse economy, airport access, quality of life and proximity to research centers, according to the news release…

On Sept. 7, the day Seattle-based Amazon announced plans to invest $5 billion on creating a second headquarters, Emanuel told the Tribune the city planned to make a bid, and said he’d already spoken with Amazon CEO Jeff Bezos multiple times about bringing HQ2 to Chicago.

No word on the tax breaks and incentives the city and state are offering. I’m guessing they are plentiful.

At the same time, why wouldn’t Chicago have a good chance at this?

  1. Chicago is a top #10 global city.
  2. A central location. I know we are in the Internet/social media age and all but location still matters.
  3. A strong transportation network with multiple airports, rail connections, highways, and shipping.
  4. While the city may be losing residents, the region is still growing slightly and has plenty of workers.
  5. An wild card factor: if President Trump continues to use Chicago as an example of a (Democratic) city with problems, would Bezos and company like to stick it to him and show they are committed Chicago? Lots of cities can offer land and other incentives but Amazon could claim to be a significant part of turning Chicago around. (Whether a single headquarters could do this is another story but there are business considerations as well as political narratives at play here.)

Now to see how long it takes Amazon to announce a decision.

Unusually successful experiment: the CTA Yellow Line

The CTA Yellow Line to Skokie was constructed in the 1960s and quickly became a success:

The proposed transit test brought together a unique trio: a federal agency looking to improve transit, a city rail system experimenting with expansion, and a suburb grabbing at the chance to maintain a rail connection to the city. Funding for the concept was split between the three parties—$349,217 came from the Department of Housing and Development, $1,837,415 from the CTA, and $37,193 from the village of Skokie. At the conclusion of a two-year test, the parties would figure out next steps…

After one day, the CTA logged 3,959 riders, and almost immediately added weekend hours. By early 1965, 6,000 riders a day rode the Swift (the CTA estimated that the service removed 1,000 cars a day from the highway). The CTA logged more than 3.5 million rides during the two year test period, and by 1967, the passenger load had grown 170 percent from already-high 1964 numbers, hitting a record high that year of 8,150 riders a day. Chairman DeMent told the Chicago Tribune that it was “a perfect example of how good rapid transit can induce motorists to leave their cars at home.” Not only did the service prove itself, it made a profit of $216,717 on revenues of just under $800,000 in its first two years of operation. At one point, the Feds actually asked for $250,000 of their funding back.

This success didn’t necessarily lead to much change across metropolitan areas:

In short, the experiment wasn’t replicated. As some writers at the time noted, other Chicago suburbs could have set up similar lines, and even had the abandoned rail lines to do it; the Chicago, Aurora, and Elgin Railroad, which ran through western suburbs such as Wheaton and Glen Ellyn, lay dormant beginning in 1961 (to be fair, the line was eventually turned into the Prairie Path, a wildly successful rails-to-trails conversion). In the late ‘60s, Skokie voters rejected a bid to apply for a federal transportation improvement project.

Perhaps most importantly, during a period of highway expansion and urban renewal, the money wasn’t there, and additional capital for building such systems from scratch was hard to come by. Just look at the 1967 federal transportation budget. Of the $5.35 billion spent, only $160 million, or 3 percent, went to transit. As Joe Asher, a writer for Railway Age, wrote in 1968, “the streets and highways of U.S. cities suffer arteriosclerosis, the urban population chokes on auto exhaust, and one downtown after another gets chopped up to make room for new spaghetti-bowls of highways.”

It is hard to convince suburbanites to use mass transit unless it has significant advantages compared to driving. The Yellow Line to Skokie seems to offer such advantages: a relatively short ride with Skokie right outside the city, a big parking lot, and a fast train. But, could this work further out from the city? What if the train was a slower commuter train or a bus? Or, if parking was hard to find in the suburban lot?

Rather than seeing the Yellow Line as a model to follow, perhaps it is difficult to replicate. That does not mean cities shouldn’t attempt similar efforts – we have a good sense of what building more highways leads to – but they should be realistic about what is possible.

Apple: new Chicago store will “transform the riverfront”

The claim that Apple stores can serve as town squares is questionable and another claim about the new Apple store on the Chicago River might be as well:

During the keynote address, Apple’s Angela Ahrendts claimed that the new store will “transform the riverfront.” And in typical Apple fashion, the new store combines form and function to deliver perhaps the most transformative retail offerings in years. Similar to designs for other Apple flagship retail stores, the new Michigan Avenue store boasts a glassy, transparent box shape. However, it is capped with a curved roofline that resembles the lid of its Macbook laptop computer.

The new store has taken over a large portion of Pioneer Court, an outdoor office plaza which had previously served as the location for large-scale art installations. Construction on the new store officially kicked off last March, and after a year, the store began to take shape as workers installed the store’s large glass walls.

Apple is known for its focus on design, and its big move and new location is notable for not just being on the river, but for adding more to Michigan Avenue south of the Magnificent Mile. Once a quiet stretch, the length of Michigan Avenue between the Mag Mile and Millennium Park has gained significant momentum with the delivery of a new apartment tower, a new hotel, and the planned overhaul of the Tribune Tower and its surrounding properties.

This one store has been talked about for months and certainly has a striking design. Yet, can it truly “transform the riverfront”? That remains to be seen. Part of the issue could be exactly how transformation is defined. Is it simply operating an iconic building? Does it involve attracting a lot of people? If it does bring in a lot of people, what if those people primarily stay inside the Apple store rather than lingering on the riverfront and frequenting other spaces and businesses? Is it bringing in big money (sales as well as tax revenues)? Is is transferring the high status of Apple to a development project – the Riverfront – that could use some status?

Let’s see what happens. My guess that this will be an iconic store for Apple but the Chicago Riverfront is going to need much more than this to truly be a destination in its own right.

I disagree: Loop building boom a sign of “the re-urbanization of America”

An insightful analysis of the high-rise construction boom in Chicago’s Loop includes this claim about what all this new development means:

“It’s the re-urbanization of America,” said John Lahey, chairman of Solomon Cordwell Buenz, a Chicago-based firm that specializes in residential high-rises.

It’s also a shift in the urban map: The once-frayed edges of downtown, home to the poor and working-class, are now the glittering home of the affluent. Rental rates, while less expensive than on the coasts, still leave many priced out. City officials last month proposed a pilot program to generate affordable housing in gentrifying areas of the Near North and Near West sides as well as along Milwaukee Avenue. But changing the trajectory of the marketplace won’t be easy.

This is an interesting claim to make in Chicago. The “Super Loop” is indeed growing in population and tall buildings. But, the city as a whole is not doing so well. See the population loss. See the persistent problems – meaning, decades-long concerns – in numerous poor neighborhoods. See the slow population growth in the suburbs within the metropolitan region and also the emerging presence of urban issues (affordable housing, poverty, exclusion) in suburban areas.

A better description might be this: what is happening is the concentration of wealth in urban cores while outlying areas of cities and suburbs are suffering. The same process is happening in New York City, Miami, Seattle, San Francisco, and other major cities.

Wrong direction on Lake Shore Drive in “When Harry Met Sally”

I noticed this again recently: the movie When Harry Met Sally gets an important feature of Chicago wrong early on. As described by IMDB:

When Harry and Sally drive from the University of Chicago to New York, they should drive on the Lake Shore Drive heading to the south (to the direction of Gary), not to the north (to the direction of downtown). So they should not be on the Lake Shore drive on the north of downtown.

It is not clear how this mistake was made but it could be an easy one to make for multiple reasons:

  1. The University of Chicago is an island onto itself on the south side of Chicago. It takes several miles and multiple social worlds to get to the better known, wealthier, whiter part of Chicago (the Loop and North Side). Perhaps this is commentary about where University of Chicago students end up?
  2. Would the view along the southern portion of Lake Shore Drive be recognizable to many people? The views of Chicago are very different at these different ends. The southern approach to the city provides a more industrial, working-class view while the north side emphasizes high-rises and waterfront amenities.
  3. Perhaps this could further fuel Chicago’s sense of inferiority compared to New York City: “they don’t even know the north and south sides of our great city!”

Why doesn’t everyone leave Chicago or Illinois?

With the recent news of Chicago’s continuing population decline as well as population loss in some suburbs, some critics have suggested this all makes sense with the problems facing Chicago and the state of Illinois. The argument goes like this: when social, economic, and political conditions are bad, people vote with their feet and leave. Look at all the people moving to Texas and the Sun Belt!

However, there are multiple reasons people stay in Chicago and Illinois. Among them:

  1. It is costly financially to move. It takes time and money to move to a new location. Having a good job on the other hand is needed.
  2. It is costly socially to move. Finding new friends and social connections can be difficult, particularly in today’s society where Americans tend to stick to themselves.
  3. They have a good job in Illinois or Chicago. There are still plenty of good jobs here; Chicago is the #7 global city after all and there are lots of headquarters, major offices, and research facilities alongside large service and retail sectors.
  4. They have families or ties to the area. The Chicago region is the third biggest in the country – over 9 million residents – and there are lots of residents with long histories and/or many connections.
  5. Both places have a lot of amenities. One of the busiest airports in the world? Impressive skyline? Access to Lake Michigan? Good farmland? Located in the center geographically and socially in the United States? Land of Lincoln?

All that said, for the vast majority of Chicago and Illinois resident, there are not enough negatives outweighing the positives of staying. (This is not the same as saying current residents are happy or wouldn’t prefer to live somewhere else.) Compared to other American locations which are growing more quickly, it doesn’t look good but Chicago and Illinois also aren’t emptying out like American major cities did in the postwar era or some rural areas.

More important than actual figures: Chicago’s population loss compared to others

Last year, I argued Chicago’s slight population loss was just an estimate. This year, it might be worthwhile to focus less on how many people Chicago actually lost – 8,638 – and instead discuss why it is the only major city that lost population:

Chicago was the only city among the nation’s 20 largest to lose population in 2016 — and it lost nearly double the number of residents as the year before, according to newly released data from the U.S. Census Bureau…

While the major cities in those states continue to grow, they aren’t growing as rapidly as they have in recent years. Houston, which saw the second-largest increase among major cities in 2015, when it gained 40,817 residents, gained 18,666 residents in 2016…

Even New York didn’t see as much growth in 2016 as it had in previous years. It grew by 21,171 people, compared with 44,512 people in 2015 and 49,530 in 2014.

“The big city growth we saw at the beginning of the decade is not quite as evident in the last couple years,” said William Frey, a demographer with the Brookings Institution who analyzes census data.

Two trends are discussed here: (1) Chicago is slowly losing population – this has been happening since the early 2010s – and (2) big cities overall didn’t grow as much during this past year. Both are important to note, even if these are just year to year estimates. A third ongoing trend complicates the story even more: the majority of the fastest-growing cities were in the South and West and communities in those regions had higher rates of population growth. In this broader context, it isn’t that strange that Chicago is losing people given its history and location (Rust Belt city, numerous ongoing issues) plus ongoing broader population shifts to the Sun Belt plus a slowdown in urban growth across the country.

For those who care about these figures, the bigger issue is that this does appear to be a trend over this decade: Chicago is slowly losing residents. The article notes several reasons including a loss of black residents and a slowing of immigration from Mexico. Apparently, even with all those luxury buildings going up downtown, there are not enough white suburbanites or millennials moving in.