CHICAGO | Economic & Business Development

[the urban politician]

^ I believe I had posted that news a while back

It's a wonderful trend. I want Chicago to still offer blue collar jobs, and not just turn completely into a white collar city like Boston or SF.

Diversity rules

[10023]

Chicago is getting a new corporate HQ:

https://www.nytimes.com/2018/06/26/b...alth-care.html

The division is already HQ’d in Chicago so there’s no real impact on jobs, but as an independent company it will definitely be another F500 name.

[marothisu]

Originally Posted by 10023

Chicago is getting a new corporate HQ:

https://www.nytimes.com/2018/06/26/b...alth-care.html

The division is already HQ’d in Chicago so there’s no real impact on jobs, but as an independent company it will definitely be another F500 name.

Hm interesting. GE Healthcare did over $18B in revenue in 2016, which would place them around 160th in this year's F500 rankings, about equivalent to Visa.

[10023]

Originally Posted by marothisu

Hm interesting. GE Healthcare did over $18B in revenue in 2016, which would place them around 160th in this year's F500 rankings, about equivalent to Visa.

As an aside, revenue is a pretty stupid way to rank the importance of companies. Retail businesses have enormous top-line revenue but single-digit margins, because they’re really just passing through inventory, whereas software companies with 70-80% margins are much more valuable with much lower revenues. The nature of the business also affects the quality of the jobs (that software company has a lot more highly-paid employees than the retailer). But they do it because revenue is a fairly easily obtainable metric even for private companies, whereas ranking them on market value (or profits, or cash flow) would only be possible with a good degree of certainty for public companies.

[the urban politician]

Originally Posted by 10023

As an aside, revenue is a pretty stupid way to rank the importance of companies. Retail businesses have enormous top-line revenue but single-digit margins, because they’re really just passing through inventory, whereas software companies with 70-80% margins are much more valuable with much lower revenues. The nature of the business also affects the quality of the jobs (that software company has a lot more highly-paid employees than the retailer). But they do it because revenue is a fairly easily obtainable metric even for private companies, whereas ranking them on market value (or profits, or cash flow) would only be possible with a good degree of certainty for public companies.

Very good point

[marothisu]

Originally Posted by 10023

As an aside, revenue is a pretty stupid way to rank the importance of companies. Retail businesses have enormous top-line revenue but single-digit margins, because they’re really just passing through inventory, whereas software companies with 70-80% margins are much more valuable with much lower revenues. The nature of the business also affects the quality of the jobs (that software company has a lot more highly-paid employees than the retailer). But they do it because revenue is a fairly easily obtainable metric even for private companies, whereas ranking them on market value (or profits, or cash flow) would only be possible with a good degree of certainty for public companies.

Sure - I never said anything about that other than what its ranking of the Fortune 500 list would be. I was just stating a fact. That is completely separate from the opinion of the importance of revenue. People like these talking points in the media, so it's a positive for Chicago no matter how much you believe revenue matters or doesn't matter. Chicago will grow its lead on the bay area if everything stays, which counts for something.

[10023]

Originally Posted by marothisu

Sure - I never said anything about that other than what its ranking of the Fortune 500 list would be. I was just stating a fact. That is completely separate from the opinion of the importance of revenue. People like these talking points in the media, so it's a positive for Chicago no matter how much you believe revenue matters or doesn't matter. Chicago will grow its lead on the bay area if everything stays, which counts for something.

Yeah, but that’s exactly the issue. A lot of low-value businesses are ranked ahead of higher-value businesses, and tech is particularly under ranked because of the nature of the business (i.e., there is no marginal cost to sell another licence, so margins are extremely high). The media talks about it, but people who know about such things (people with influence) don’t pay any attention to it. It doesn’t really matter what Average Joe in the bleachers at Wrigley thinks.

The Fortune 500 is kind of king of all stupid lists with questionable methodologies. But hey, I posted the news, and it’s certainly a positive not a negative, even if the positive is extremely marginal.

[emathias]

Originally Posted by 10023

As an aside, revenue is a pretty stupid way to rank the importance of companies. Retail businesses have enormous top-line revenue but single-digit margins, because they’re really just passing through inventory, whereas software companies with 70-80% margins are much more valuable with much lower revenues. The nature of the business also affects the quality of the jobs (that software company has a lot more highly-paid employees than the retailer). But they do it because revenue is a fairly easily obtainable metric even for private companies, whereas ranking them on market value (or profits, or cash flow) would only be possible with a good degree of certainty for public companies.

That is all true, although revenue also reflects a company's ability to influence the economy through how it touches money flow. Even if a retailer doesn't keep very much of its revenue, it directs where that pass-through goes and, in doing so, exerts power that way. That's a type of a power a high-net software company doesn't have (a few do, but most don't).

[moorhosj]

This is a mea culpa, as I was apparently too negative on the state and metro unemployment numbers from last month. The new metro area unemployment numbers just came out and have unemployment rates of 3.5% for Illinois (lower than Texas) and 3.3% for Chicago-Naperville-Arlington Heights (lower than Seattle, Dallas, Philly, NYC and LA).

The state and metro labor forces grew slightly over the month, but the metro fell over the year. Maybe more importantly, there are 57,800 more payroll employees in Illinois than one year ago and 32,500 more in Chicago-Naperville-Arlington Heights.

[the urban politician]

Yeah, if only in bragging rights it’s a nice little boost.

I wonder if they will change their name to carve out a new identity?

[left of center]

I'm somewhat worried that an independent GE Healthcare will seem like a ripe acquisition target for another conglomerate. We might end up losing that potential HQ and the jobs associated with it. I may be getting ahead of myself with this, but its still a possible and realistic outcome.

[the urban politician]

Originally Posted by left of center

I'm somewhat worried that an independent GE Healthcare will seem like a ripe acquisition target for another conglomerate. We might end up losing that potential HQ and the jobs associated with it. I may be getting ahead of myself with this, but its still a possible and realistic outcome.

Well, that can always happen with any company, really. Definitely not something to lose sleep over.

But once a corporation here is established, it's unlikely that an outsider will come in and uproot it and move it elsewhere.

[LouisVanDerWright]

Also it's just as likely that an unshackled GE Healthcare would acquire other companies or merge with others in a way that would wind up keeping the HQ here and increasing the size of the company.

At the end of the day an independent GE Healthcare is better for GE Healthcare which is good for Chicago.

[LouisVanDerWright]

The GE Healthcare company could end up doing something like this:

https://www.cnbc.com/2018/06/26/cona...cle-foods.html

Where $15 billion Conagra is possibly buying $8 billion Pinnacle foods. This would result in a $23 billion company. Would probably mean further consolidation of Conagras operations in their Chicago HQ by further reducing any remaining loyalty to Omaha.

[Vlajos]

^ Wow, that combo would really put Chicago at the top of the US food industry.

[left of center]

Originally Posted by Vlajos

^ Wow, that combo would really put Chicago at the top of the US food industry.

Seconded. That would be excellent news for Chicago.

Now if only we can snag Cargill from suburban Minneapolis...

[Vlajos]

Originally Posted by left of center

Seconded. That would be excellent news for Chicago.

Now if only we can snag Cargill from suburban Minneapolis...

Unfortunately, Cargill is unlikely to leave MN. Would be great though.

Mars is quietly moving folks to the former Wrigley HQ on Goose Island.

[Vlajos]

http://www.chicagotribune.com/busine...625-story.html

Pilsen gentrification continues. My guess is this won't get push back from the anti progress crowd because the owners are latino.

[the urban politician]

Originally Posted by Vlajos

http://www.chicagotribune.com/busine...625-story.html

Pilsen gentrification continues. My guess is this won't get push back from the anti progress crowd because the owners are latino.

I don’t have a Tribune account. Could anyone post highlights about this?

[left of center]

Originally Posted by the urban politician

I don’t have a Tribune account. Could anyone post highlights about this?

5 Rabbit plans brewery and restaurant in Pilsen
Source: http://www.chicagotribune.com/busine...625-story.html

Latin-themed beer-maker 5 Rabbit Cerveceria plans to open a small-batch brewery and restaurant early next year in a two-building loft office development in Pilsen, a neighborhood where increased investment is sparking concerns about gentrification.

The 7-year-old brewery has leased 12,000 square feet in a former warehouse at 1901 S. Sangamon St. that Chicago developer Condor Partners is redeveloping into loft offices.

5 Rabbit’s deal comes amid tensions in the neighborhood, where concerns about rising rents and decreasing Latino population have caused restaurants and other businesses to be tagged with anti-gentrification graffiti. But 5 Rabbit is known as a pioneer in Latin-themed brewing, using ingredients more commonly found in food across Latin America, such as chili peppers, herbs and spices in its beers.

...


Condor Partners is redeveloping the building where 5 Rabbit is leasing space, along with another long-vacant warehouse at 1911 S. Sangamon St., each of which have about 100,000 square feet of space. The former lumber storage buildings are more than a century old, McLean said.

The project is called Mural Park because it will include an outdoor art gallery in a plaza between the two buildings. Mural Park, between 19th and Cullerton streets, is along the planned 4-mile El Paseo bike and pedestrian trail on former rail tracks, which would connect the Pilsen and Little Village neighborhoods.

The developer is in talks with office tenants of 5,000 to 20,000 square feet for the 5 Rabbit building, and is seeking one or two large tenants for the south building, he said. The two-building redevelopment will cost $50 million, he said.