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Will Chicago win the bid for Amazon’s new HQ2?

by Kelly McCabe

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Expansive land mass, a thriving tech industry, easy access to two airports, local and regional transportation, an established presence in the area — and that’s just the tip of the iceberg. On paper, Chicago seems a natural fit for Amazon’s recently announced second headquarters, but cities around the country are also trying to lure the tech giant.

While Amazon’s search is preliminary and a decision is far off, one thing is certain: Whichever city the company chooses will see its entire economy transformed in terms of jobs, housing and more.

“We expect HQ2 to be a full equal to our Seattle headquarters,” Amazon CEO Jeff Bezos said in a statement. “Amazon HQ2 will bring billions of dollars in up-front and ongoing investments, and tens of thousands of high-paying jobs. We’re excited to find a second home.”

So what cities are lining up to pitch themselves to Seattle-based Amazon? The easier question would be which ones aren’t, as most sizable cities except for Los Angeles and New York City are viable options. Among them are the usual suspects, including Chicago, Denver and San Francisco.

Also potentially throwing their hats into the ring are cities on the rise such as Nashville and Portland, Oregon, as well as other Midwest cities such as Milwaukee and Detroit. Amazon’s request for proposal says that its second headquarters “could be, but does not have to be:

  • An urban or downtown campus
  • A similar layout to Amazon’s Seattle campus
  • A development-prepped site. We want to encourage states/provinces and communities to think creatively for viable real estate options, while not negatively affecting our preferred timeline.”

What can the Chicagoland area offer Amazon?

To both Chicago Mayor Rahm and Illinois Gov. Bruce Rauner, Chicagoland as Amazon’s HQ2 is a no-brainer. Both say they’ve personally spoken to Amazon executives about the potential deal, highlighting a number of the state’s assets.

First off, Amazon already has a notable presence in the state, with 200 employees in a Loop office and 200 more coming in the next seven months. It also has distribution centers throughout Illinois that employ thousands. In July, Amazon announced it will operate a new facility in Crest Hill in Will County. Once the facility is operational in October, Amazon will be the county’s largest employer.

Emanuel has doubled down on helping large corporations see the urban center as a place of opportunity, close to transportation, access to a workforce full of educated millennials and sheer status appeal. And while he’s eager to see Amazon’s HQ2 in the city of Chicago, the suburbs have their own amenities, with one major one the city mostly lacks: space. The corporate migration to downtown of companies such as McDonald’s, Motorola and Kraft Heinz is leaving sprawling corporate campuses in its wake, perfect for a technologically advanced company to experiment, test products and give employees diverse amenities to keep them happy. 

Chicago developers and city officials already have mentioned several other sites they think would be prime for Amazon’s HQ2:

  • The Finkl Steel plant on an empty 28 acres along the Chicago River northwest of downtown straddling Lincoln Park and Bucktown. A developer recently unveiled a $10 million plan for the site, which it’d name Lincoln Yards.
  • Former Michael Reese Hospital on 49 acres just south of Chicago’s major convention space, McCormick Place. The site sits on the shores of Lake Michigan and is near major highways.
  • Old Main Post Office. Having been vacant for more than 20 years, this massive 2.4 million-square-foot building has been mired by plans from developers that shrink away after realizing the undertaking’s sheer size and price. However, that sheer size means it could comfortably fit Amazon’s expected 50,000 employees who will work at the new HQ2.

Amazon’s deadline for proposals is on Oct. 19, and it will choose the site of its new HQ2 sometime in 2018.

How would Amazon HQ affect real estate?

In July 2017, the Chicagoland area continued to experience low inventory and high demand. According to the Illinois Association of Realtors, inventory reached its lowest point since 2005, with a 16.4 percent decrease since this time last year.

But there are many positives to choosing the Chicagoland area as the new location for Amazon’s HQ2, not the least of which is housing affordability. Chicagoland’s home median price compares favorably to many of the presumed frontrunners.

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