CHICAGO | Economic & Business Development

[moorhosj1]

There was a huge rush of financial services firms leaving NYC for Miami during COVID.

has already prompted hedge fund billionaires and native New Yorkers Paul Singer and Carl Icahn to relocate their respective businesses to Florida. Blackstone Group, the large private equity firm, signed a long-term lease in October for office space in downtown Miami.

https://www.forbes.com/sites/jackkel...h=346b89a6443f

[tjp]

Originally Posted by Klippenstein

It's probably more political than anything and like Citadel primarily in name since many employees are not relocating. Don't lose track of the bigger picture.

How do we always top this list but still consistently have one of the slowest growing MSA economies?

[galleyfox]

Originally Posted by tjp

How do we always top this list but still consistently have one of the slowest growing MSA economies?

Because Chicago has to constantly replace the old industrial economy until deindustrialization comes to an end.

I understand fully that Florida in general is very appealing because of the weather, diversity, and no state income tax. I personally also enjoy visiting there and am very fond of the region. Nevertheless, the push for Miami as a financial powerhouse is both perplexing and seemingly ignores a lot of pressing issues that will need to be addressed sooner than most people think.

I’m quite familiar with both places. The reason for Miami is as simple as the age of the people who move there. Chicago can’t hang onto retirees and 55+ and Miami can’t attract students and <40s. Wealthy older people of course are the main clients of financial services, and they aren’t impacted by climate events of the future.

[jboy560]

United to hire 15,000 workers, with focus on Chicago

“The largest number of those new hires — about 3,800 — will be in Chicago, where the airline is headquartered.”

https://www.chicagobusiness.com/airl...-focus-chicago

[marothisu]

Originally Posted by Chisouthside

I was curious so I looked at their open positions and alot of still listed for Chicago and New York and some of them technical. The article mentioned that they were leaving a unit in Chicago, but I imagine alot of the execs are moving or have already moved to Miami.

It's completely incorrectly reported in the media about Citadel. They haven't closed their Chicago office and even KG said so. SOME execs moved to Miami but the Chicago office still has hundreds. They're still recruiting. I personally know a few ppl who moved to Chicago with new Citadel jobs after Citadel's move announcement. They aren't closing their office here just like Boeing isn't. There are still execs including some high up ones who have not moved from Chicago.

As far as Guggenheim goes, much the same. No indication on whether they will move. But they have been remote foe the entire pandemic. Those who wanted to relocate already did according to articles. Article also said they wouldn't necessarily move anyone. Those who want to be in Chicago will remain. It sounds more like copycat stuff to me. I think its basically a bunch of older rich finance guys who could retire at any moment who want to be near the beach in a low tax env. But they aren't literally closing Chicago or NYC offices like media keeps claiming.

[Kngkyle]

Old boomers retiring and moving to Florida, taking their HQ with them. Snoozefest.

[aaron38]

Originally Posted by galleyfox

Hey look, I can see exactly when I hired into Motorola!

[SamInTheLoop]

Originally Posted by galleyfox

Because Chicago has to constantly replace the old industrial economy until deindustrialization comes to an end.

I'd argue that the chart is not supportive. My quick read would be that deindustrialization at least based on employment has mostly run its course. There are clearly ongoing reverberations which will be the case for a long time....but just macro, sure there's little growth, but the structural bleeding is more or less contained.

[SamInTheLoop]

Originally Posted by tjp

How do we always top this list but still consistently have one of the slowest growing MSA economies?

I've long puzzled over this as well. On the surface it makes little sense. Yet year after year. I'd definitely look into methodology.

One idea is just the combination of Chicago's size and economic diversity...maybe? Still have never really bought it.

[marothisu]

Originally Posted by SamInTheLoop

I've long puzzled over this as well. On the surface it makes little sense. Yet year after year. I'd definitely look into methodology.

One idea is just the combination of Chicago's size and economic diversity...maybe? Still have never really bought it.

Probably because nobody here is factoring in the size of the companies nor the number of jobs. Some of these being HQ don't have to be very large. Even if you had 50 people move here with an average $5M yearly comp, it's $250M total wages. But if you had 10,000 new jobs from some company with average comp of $125K, it's $1.25B (5 times greater) for the wages part.

Rahm, and a much smaller extent Lightfoot, focused on getting HQ to move here which is great. However, if you're going to talk about population growth, labor force growth, etc it's probably better to have those new 10,000 jobs with $125K average yearly comp vs. 1 HQ of 50 people making $5M/yr average.

[SamInTheLoop]

Originally Posted by marothisu

Probably because nobody here is factoring in the size of the companies nor the number of jobs. Some of these being HQ don't have to be very large. Even if you had 50 people move here with an average $5M yearly comp, it's $250M total wages. But if you had 10,000 new jobs from some company with average comp of $125K, it's $1.25B (5 times greater) for the wages part.

Rahm, and a much smaller extent Lightfoot, focused on getting HQ to move here which is great. However, if you're going to talk about population growth, labor force growth, etc it's probably better to have those new 10,000 jobs with $125K average yearly comp vs. 1 HQ of 50 people making $5M/yr average.

No, because I'd assume the methodology is identical across metros. So, unless you can come up with a persuasive story about how Chicago's attracting an especially large number of especially small operations, relative to all other metros the majority of which are faster-to-much-faster growing than Chicago, I say "no".

[marothisu]

Originally Posted by SamInTheLoop

No, because I'd assume the methodology is identical across metros. So, unless you can come up with a persuasive story about how Chicago's attracting an especially large number of especially small operations, relative to all other metros the majority of which are faster-to-much-faster growing than Chicago, I say "no".

This has nothing to do with what I was talking about. The question is about why Chicago is number 1 here but slower with economic growth than most other areas. Again, these are corporate relocations and expansions. It doesn't matter if it's 50 people or 5000 people - both count as 1 in this tally. There is absolutely no indication of the number of jobs actually relocated or expanded in this. It is a tally of companies who expanded or relocated to a metro regardless of the number of people.

So again, if you have a 5 HQ of 50 each moving to Chicago, at the end of the day from an economic standpoint, it's probably going to have less impact than 1 company like Apple hiring 3000 in some other location like Austin, TX. Both of them tally as 1 in here, but they are not equivalent in terms of economic development and progress.

I'm not sure why people think this is such a headscratcher.

[SamInTheLoop]

^ re-read comment. This is precisely what I was talking about. What I'm saying though is....I'm very skeptical of their data/methodolgy....I have been for years if not decades.

Tell me a credible story in which Chicago outperforms say Dallas based on their metric (count of operations/projects). Or Atlanta. Or Houston. Or Phoenix for that matter, with all other evidence to the contrary.

That's all I'm saying.

[marothisu]

Originally Posted by SamInTheLoop

^ re-read comment. This is precisely what I was talking about. What I'm saying though is....I'm very skeptical of their data/methodolgy....I have been for years if not decades.

Tell me a credible story in which Chicago outperforms say Dallas based on their metric (count of operations/projects). Or Atlanta. Or Houston. Or Phoenix for that matter, with all other evidence to the contrary.

That's all I'm saying.

Not sure you understood my comment. You are asking for exactly what I am hitting on. 5 HQ relocation of 20 people each counts as a "5" in their methodology whereas 1 HQ relocation/expansion of 5000 counts as a "1." The 5 looks better than the 1 because they aren't reporting the job numbers. If they reported the job numbers then the 1 would look way better than the 5 in this situation (because it is). When ADM relocated to Chicago, it moved 70 people (mostly execs). It wasn't thousands or even hundreds. it wasn't even 100 people who relocated here. Not sure why people still have such an outdated, old school view of what a headquarters actually is.

There is a major division of my employer which is HQ'd in Chicago with at least a few thousands workers. We're talking about a multi billion dollar wing that would be a fortune 500 company in its own right. But almost 75% of the top execs including the head are in NYC - only 1 is in Chicago. The HQ could very well "move" to NYC where everyone already is but the actual majority of the workers are still in Chicago. People could brag that the CEO of that division is in NYC but it still doesn't change the fact of where most of the actual work happens. What's happened in Chicago especially under Rahm is that type of movement. You have a handful or maybe 50-100 high up execs moving to Chicago but most everything else stays wherever they moved from. In the grand scheme of things economically, 5000 jobs paying $125K average is better than 50 jobs paying an average of $2M/year down to even the GDP calculation most likely. Keep in mind that wages/income make up over 60% of GDP by industry in any given metro area.

There's a reason why the CEO of Boeing said that there will be 0 job loss at the Chicago office even though their HQ is moving. Their actual C-Suite and high up execs have been strewn around the US already for years. Many were never even in Chicago. There's a reason why Chicago tops these lists but a lot of other cities surpass when it comes to actual economic development, GDP growth, etc. They're focusing on actual job growth other than trying to poach 50 execs who make $2M/yr each. People need to stop thinking of HQ as they were 25-30+ years ago. The CEO of Boeing


Crains wrote about this years ago:
https://www.chicagobusiness.com/static/section/hq.html

When Chicago landed ADM in 2013, it got 70 executives and white-collar employees, plus a promise of 100 technology jobs that never arrived. Two years later, Decatur still has 4,200 ADM workers in logistics, corn processing, farmer services, natural health and nutrition, oilseed processing and specialty ingredients.

"The notion of the corporate headquarters in the 'Mad Men' world when there were hundreds or thousands of people in a building with the company logo . . . those days are gone," says David Collis, a professor at Harvard Business School who studies corporate headquarters.

Chicago may have won ConAgra's headquarters recently, for example, but there's balm to soothe troubled city boosters in Omaha, Neb., its current hometown: The Gateway to the West will keep 1,200 office jobs—500 more than here—plus 900 in factories. In 2011, GE Transportation moved its headquarters here from Erie, Pa., along with 50 of 5,500 jobs. (The number in Chicago since has climbed to 150, while Erie has shrunk to 4,750, with more cuts planned this spring.) In 2013, design and construction firm Clayco agreed to make its 288-employee Chicago office its headquarters. The company now employs 620 here, while in its old home of St. Louis, it's grown to 1,025 from 700. The latest to announce plans to alight in Chicago, GE Healthcare, will pluck just the executive leadership team of 200 or fewer from suburban London, where it employs about 1,000.

[SamInTheLoop]

^ You're not telling me the story of Chicago vs huge metro X, Y and Z each of which have much more dynamic economies and attract much more net migration of companies, jobs and people.

All you are stating is that Chicago has gotten a large number of small operations moving here. Nobody is disputing that. But, it is hardly is a satisfactory explanation of the comparative outperformance of all other big metros, year after year after year - for seemingly 20, 25, maybe more years. Does this really pass a simple sniff test to you?


Is it that Chicago is a very large, diverse economy located in the (very roughly) middle of the country?
I mean Dallas certainly also fits that bill very well and is much, much, much faster growing.

Again, I'm skeptical and would like to know more about their data quality and methodology.

[marothisu]

Originally Posted by SamInTheLoop

^ You're not telling me the story of Chicago vs huge metro X, Y and Z each of which have much more dynamic economies and attract much more net migration of companies, jobs and people.

All you are stating is that Chicago has gotten a large number of small operations moving here. Nobody is disputing that. But, it is hardly is a satisfactory explanation of the comparative outperformance of all other big metros, year after year after year - for seemingly 20, 25, maybe more years. Does this really pass a simple sniff test to you?


Is it that Chicago is a very large, diverse economy located in the (very roughly) middle of the country?
I mean Dallas certainly also fits that bill very well and is much, much, much faster growing.

Again, I'm skeptical and would like to know more about their data quality and methodology.

I'm not sure you are even reading what I'm saying, if you think that is "all" I am stating. Some other metro areas are pulling in much larger, but a smaller amount, of corporate expansions/relocations. Again, 200 execs moving for some companies to Chicago ultimately has a lot lower of an economic impact than a small handful of corporate expansions adding thousands of solidly paying jobs in other metros. That's the whole point. There is nothing "wrong" with the methodology here other than them not printing how many jobs were part of the expansions/relocations and potentially the wage increase on the GDP.


Example:
Apple spending $1B to hire 5000 people in Austin. Which do you think has more impact economically - this or 70 execs moving to Chicago for ADM?
https://www.cnet.com/tech/mobile/app...-us-expansion/

[OrdoSeclorum]

Originally Posted by SamInTheLoop

^ You're not telling me the story of Chicago vs huge metro X, Y and Z each of which have much more dynamic economies and attract much more net migration of companies, jobs and people.

.

Earlier you mentioned Dallas and Phoenix. Are those the "dynamic economies" you're referring to? Those places are much more likely to be getting the kind of business that's moving from Bloomington, IL because they want employees who can only afford inexpensive housing.

[SamInTheLoop]

^ Working age college grads, on the move....

This, from just yesterday:

https://www.nytimes.com/interactive/...er-cities.html

Also, for the record, here are some median sales prices of single family homes by metro, 2022 Q4, per NAR:

Phoenix: $477.9k
Dallas: $385.5k
Chicago: $345.6k

Bloomington: $208.8k

I think Phoenix prices are inflated and will drop by quite a bit, and Dallas' will fall somewhat back as well. Chicago's will also drop over the next couple years, but perhaps on par with Dallas....maybe a bit less.

But I think you get the point. Now, clearly there's a huge advantage between the fast-charging Southern cities in affordability compared with SF, NY, Bos, Seattle, LA, etc......but it's also narrowed somehat there. There's a lot more than just affordability though at work......but, it's an important part of the equation wrt wild growth disparities....

[left of center]

New York
CNN
—
Sam Zell, the billionaire real estate magnate, died on Thursday, his company confirmed. He was 81.

Equity Residential, the company he founded decades ago, described Zell on Thursday as an “iconic figure in real estate and throughout the corporate world.”

His wide-ranging portfolio of investments, which included distressed real estate assets and an ultimately sour bet on the Tribune Co., minted him a personal net worth of $5.9 billion, according to the Bloomberg Billionaires Index.

Source: https://www.cnn.com/2023/05/18/busin...ll-dead-at-81/

[sentinel]

Originally Posted by left of center

Source: https://www.cnn.com/2023/05/18/busin...ll-dead-at-81/

Hmmm..anyway..