CHICAGO | Economic & Business Development

[left of center]

Originally Posted by Baronvonellis

Why is Paris so high? What do they even do there? When I went, it seems like all people do is sit around in cafes and parks eating croissants and coffee.

It's one the largest financial centers in Europe, along with Zurich, Amsterdam, Frankfurt and (maybe not for much longer) London.

The areas around Notre Dame and the Arc de Triomphe are crowded with tourists, and naturally all the service businesses there will cater to them. Amble on over to the corporate oriented La Defense and see how many street crepe makers and postcard stands you see there

[bnk]

I was pretty confident about H2 before the it got warm outside.
Chicago has been taking in on the chin in local and national media since Obama got elected. If all one did was just read the news from Seattle one would think Chicago is like Port-au-Prince and Illinois is like Haiti.

We all know of the great stuff that's going on in Chicago but the news every single day for the last few months are these headlines. 90% of it is negative.



Debt-plagued Chicago becomes latest blue stronghold to consider free 'basic income'

Father of 43 children found beaten to death in Chicago West Side home

2 CVS workers fired after cops called on Chicago customer

Trial date set for Chicago officer charged with murdering Laquan McDonald

Protests in Chicago continue after officials release video of police shooting

I Was Tortured into Giving a False Confession to Chicago Police

10 people shot, 1 fatally, in 6 hours in Chicago

Woman Fatally Shot in Chicago During Attempted Carjacking

The last Sears store in Chicago is closing

Anti-gun violence protesters take over Chicago highway

Census: Working-age population is leaving Illinois

Man caught on video confronting woman over Puerto Rico shirt charged with felony hate crime

'Unacceptable and frustrating': Chicago sees most violent weekend of the year

Cities with the worst bed bug infestation: A dubious honor







Most all of these are just from today. Google Illinois and its almost as bad.

[left of center]

Any and every city has bad news about itself being reported on the daily, although I will concede that holding the title of most homicides in the US is giving our reputation a beating in the national press. Otherwise, this is nothing out of the ordinary. The press enjoys broadcasting negative news. It brings in viewers and ad dollars.

This however is news to me:

Debt-plagued Chicago becomes latest blue stronghold to consider free 'basic income'

Where exactly does the city propose they get the money for this experiment? What crackpot alderman is supporting this initiative?

[left of center]

Originally Posted by Stockerzzz

Ald. Pawar wants to give 1,000 low income families $500 per month. He calls it "universal basic income".

Except UBI requires stripping government benefits and replacing them with cash transfers. The people in the Chicago pilot will not lose any government benefits.

Further, true UBI includes the word "universal" because it is given to everyone and not just poor people.

This is just a PR stunt that wastes $500,000 so we can conclude that giving low income people extra money provides them with extra money. Insightful!

I'm familiar with UBI. While I think its a good idea, we are at least a few decades away from it being necessary. AI is not going to be taking jobs en masse from people anytime in the near term. I mean FFS, unemployment is at 30 year lows! To what purpose does this expensive boondoggle benefit the citizenry of Chicago at large?

If the city has a spare 500K per month to blow, use it to shore up our craptastic pensions, or maybe for various CTA and other transportation infrastructure that sorely needs investment.

SMDH.

[SIGSEGV]

Originally Posted by left of center

Any and every city has bad news about itself being reported on the daily, although I will concede that holding the title of most homicides in the US is giving our reputation a beating in the national press. Otherwise, this is nothing out of the ordinary. The press enjoys broadcasting negative news. It brings in viewers and ad dollars.

This however is news to me:



Where exactly does the city propose they get the money for this experiment? What crackpot alderman is supporting this initiative?

The homicide rates in Atlanta or DC are not substantially different though, which doesn't seem to affect their perception as much.

[Kenmore]

Everyone loves to blow a gasket when someone floats giving poor people a little help but have not problem with multi million dollar corporate handouts....America!

[jpIllInoIs]

Originally Posted by Kenmore

Everyone loves to blow a gasket when someone floats giving poor people a little help but have not problem with multi million dollar corporate handouts....America!

Understatement of the year. Bezos passed 150 Billion personal net worth last week and city/states are lining up to give him 4b to 9b more.

[Vlajos]

The city should not be doing this Basic Income. If we do it, it should be through the Feds.

[jpIllInoIs]

Originally Posted by Stockerzzz

I'm not sure you should post on the economic forum since you can't distinguish personal net worth from tax incentives to a corporation.

Chicago would absolutely come out on top from a pure tax perspective if Amazon brings 50,000 jobs that average $100,000. That's why the State of Illinois chipped in too.

50,000 people * $100,000 salary * 4.95% IL personal income tax = $247,500,000 per year of additional State tax revenue (in perpetuity).

If Amazon stays for 20 years that is an additional $4.95 billion in state income tax.

Now factor in: 1) the corporate income tax of 7% for the State; 2) PPRT (2.5% corporate tax on income); 3) property taxes for the City for the new homes these employees buy; 4) property taxes for the City for the new corporate campus; 5) increased home prices in the City which will increase property taxes on everyone else; and, 6) the huge amount of disposable income these employees will spend in the City which will go towards local business like restaurants, gyms, dry cleaners, grocery stores, etc.

I may have been a little lax on my reply to Kenmore. My response was more toward the proclivity of granting corporate welfare in general and the 1% who benefit, Bezos included. We do not know the full HQ2 welfare package proposed by ILL and CHI. It is at least 4.5b MD offered more than 9b,

Your rudimentary analysis includes city property taxes and state corporate taxes...those are part of the giveaway. And state income taxes returned to Amazon could be part of the package too. That is how some of these are structured. And you have not included ANY costs for infrastructure requirements. with the property taxes abated for a decade or more the infrastructure costs will fall on others to pay. And if those others are corporate then they will either Balk or Walk. Accelerating the corporate giveaways and further burdening homeowners and others with fees and taxes.

There is a growing sentiment among economists and urbanologist that the HQ2 money would be better spent on supporting existing and emerging concerns within your own city. This is not news to anyone on this board.

HQ2 would be great but at what costs? We do not have that answer and no one can accurately access the cost/benefit until ALL costs are known and the actual employee count is realized.

[ardecila]

Originally Posted by Vlajos

The city should not be doing this Basic Income. If we do it, it should be through the Feds.

It could work on the state level but would be difficult to administer and police. The city level is impossible, I understand they are proposing this to study the idea and collect data but I can't imagine only 1000 families participating in a flawed version of UBI will be enough to collect valid data.

Obviously the Federal level is the best way to do it but you can't "pilot" a UBI for the entire country. If economists want to collect data, they'd be better off focusing on a relatively small country with similar deindustrialization factors to the US. Maybe Belgium or something. Of course, if the Europeans try it first then the Republicans will have all the ammo they need to kill it in the US, all they have to do is scream "European socialism!!!"

[left of center]

Originally Posted by Kenmore

Everyone loves to blow a gasket when someone floats giving poor people a little help but have not problem with multi million dollar corporate handouts....America!

Refer to this quote:

Originally Posted by Vlajos

The city should not be doing this Basic Income. If we do it, it should be through the Feds.

Chicago is in no condition to start handing out free money. The city lurches from one fiscal year to the next doing its best to avoid a complete financial calamity. Giving out 500K a month shouldn't even be whispered about when so much of the city's infrastructure is rotting away and in desperate need of repair.

As I mentioned in my initial post, I do think UBI is a good idea. But now isn't the best time for it (again, historically low unemployment), and should not be done at the municipal level.

[left of center]

Originally Posted by SIGSEGV

The homicide rates in Atlanta or DC are not substantially different though, which doesn't seem to affect their perception as much.

Unfortunately, no one cares about the homicide rate, only the raw homicide numbers. Our homicide rate is no where near as bad as New Orleans, Baltimore, Detroit Memphis, St. Louis, etc. and only slightly worse than cities like Indianapolis, Charlotte, and Las Vegas. But since those cities are much smaller, their total count is as well.

[moorhosj]

Originally Posted by left of center

AI is not going to be taking jobs en masse from people anytime in the near term. I mean FFS, unemployment is at 30 year lows!.

"Unemployment is historically low", meanwhile real wage growth is negative and laborforce participation is lagging.

AI might not be taking people's jobs, but automation has given us record manufacturing output while manufacturing employment has cratered. Replacing middle-class manufacturing jobs with $15/hour warehouse jobs doesn't give you a robust economy. Especially when the costs of education, healthcare and housing consistently outpace inflation.

[LouisVanDerWright]

^^^ Manufacturing has added over 300,000 jobs just since Trump was elected. This article is out of date since it's only from April, but the last few months have each seen five figure job growth as well putting us nearly at 350,000 new manufacturing jobs since 2016.

https://www.cnbc.com/2018/04/06/manu...der-trump.html

What is happening, in my opinion, is that wages are being held down by technology bringing more workers into the labor force. Stuff like Uber, Shiftgig, or instacart combined with the universality of smartphones have created new low skill jobs and temporary positions that allow a lot of people who might not have been able to work in these areas in.

For example, how easy is it to hold down a job as a cabbie where you need to lease a car and a medallion or pay dues to a cab company, etc. You have to do that job full time or close to it. Meanwhile you have a shit ton of people who own cars and maybe have 10 extra hours a week where they'd like to pick up some spending money. All of those people are willing to come in and underbid the cabbies offering a cheaper service to consumers with time they might not have been otherwise been able to be productive during.

A great example of this was my sister who just finished PA school. So at this point she is super highly qualified, you know prime "economic contributer" material. She was even employed already right out of school, problem is her job didn't start for 3 months. In the past that would basically be three months of wasted productivity because what job is she going to find that she can just stuff between her schooling and her career? What did she do? Well she went and got on Instacart and started doing that 30 hours a week temporarily.

That three months doesn't sound like much, but think about that in the aggregate. How many recent grads have to wait a period of time before their new job starts? How many gaps between jobs are there just for people in the workforce quitting one and starting another? How many stay at home parents don't have time for a 9-5 or the ability to hold down a part time position that requires them to take a minimum number of hours per week? How many millions of man hours has that technology freed up? So yes, cabbies are seeing their wages plummet and that's something that's holding back wage growth, same thing is happening in many industries, but the economy as a whole is actually becoming significantly more efficient. This is further backed up by the fact that wages in many specific sectors of the economy are surging, it's just in old line service sector jobs (cabs, old school retail, dining, hospitality, etc) are getting hammered as those sectors are crushed by the likes of Amazon or Uber.

[VKChaz]

Originally Posted by LouisVanDerWright

^^^ Manufacturing has added over 300,000 jobs just since Trump was elected. This article is out of date since it's only from April, but the last few months have each seen five figure job growth as well putting us nearly at 350,000 new manufacturing jobs since 2016. .....

Sure, the number of manufacturing jobs has increased since the economic collapse. Though I think the point being made is that the long-term trend in manufacturing jobs is down as they have declined substantially since their height in the '70s while output simultaneously increased. And that is not unexpected given advances in technology.

[left of center]

Originally Posted by moorhosj

"Unemployment is historically low", meanwhile real wage growth is negative and laborforce participation is lagging.

AI might not be taking people's jobs, but automation has given us record manufacturing output while manufacturing employment has cratered. Replacing middle-class manufacturing jobs with $15/hour warehouse jobs doesn't give you a robust economy. Especially when the costs of education, healthcare and housing consistently outpace inflation.

In the sentence immediately before the one you cherry picked I indicated that I thought UBI is a good idea, but a few decades away. I am fully well aware that increased automation has caused manufacturing jobs to decline over the last half century. This isn't news. We will absolutely need UBI in the decades to come, but as of now I think it is too early for such a roll out, one that should be handled at the federal level and not a crazy patchwork of state, county and municipal UBI systems across the US. I am fine with locales doing experiments with it, but I seriously doubt Chicago is in a financial position to undertake said experiment. The city's credit is junk, the school district's credit is junk, and Illinois's credit is one notch above junk status, the lowest among all the states.

I'm merely taking the position of common sense. Chicago is not equipped for this. The city and state owe billions of back payments to charities and not for profits that should be paid first before we attempt fiscally unsound pipe dreams.

[the urban politician]

^ Plus we’ll get all the cronyism, machine politics, and another generation of people looking for handouts to boot. It will be racially & politically charged, and good luck getting rid of the “poor people fund” once it’s been established. Hell, politicians will probably feel obliged to expand it just to get votes.

Horrible idea

[Centropolis]

Originally Posted by left of center

Unfortunately, no one cares about the homicide rate, only the raw homicide numbers. Our homicide rate is no where near as bad as New Orleans, Baltimore, Detroit Memphis, St. Louis, etc. and only slightly worse than cities like Indianapolis, Charlotte, and Las Vegas. But since those cities are much smaller, their total count is as well.

the metro homicide rates for st. louis and chicago are pretty similar...

[bnk]

http://www.chicagotribune.com/busine...717-story.html



Ferrara Candy moving headquarters next year to Chicago from Oakbrook Terrace




Ferrara Candy, the Oakbrook Terrace maker of Lemonheads, Red Hots and Trolli gummies, plans to move its 300-person corporate headquarters to Chicago’s Near West Side next spring.
Ferrara is negotiating a lease of two floors, or about 60,000 square feet, in a recently completed office building at 625 W. Adams St., across the street from Old St. Patrick’s Church, according to sources.

...

If the deal is finalized as expected, Ferrara would be the first tenant to commit to the 20-story building developed by White Oak Realty Partners and CA Ventures, both of Chicago, and San Antonio-based USAA Real Estate.
The tower near the Kennedy Expressway was built on speculation, or without any leases signed in advance.


...


“As one of the largest confections companies in the U.S., our business continues to grow, and we need a more adaptive and flexible workspace that will meet the demands of our growing team,” said Mike Goldwasser, chief human resources officer at Ferrara. “Relocating to the city of Chicago allows us to build a more open, collaborative and dynamic environment that a modern workforce expects, while providing access and appeal to a broader employee demographic.”
Many large food companies have moved downtown in recent years, to the West Loop in particular, as companies compete for younger, tech-savvy talent and a growing number of workers who prefer city living to a suburban commute.
Chicago didn’t offer incentives to the company to relocate,

..

[bnk]

https://www.rejournals.com/mixed-sen...rkets-20180717


Mixed sentiment for Chicago real estate markets

July 17, 2018 | Staff Writer

Chicago real estate professionals universally agree that the commercial real estate markets have been consistently strong through the first half of 2018. However, according to a Mid-Year Chicago CRE Market Survey conducted by The Real Estate Center at DePaul University …


Second half outlook

No one in commercial real estate is denying that Chicago has experienced an incredible bull market run for nearly one decade. It is the length of that run, in part, that has served to somewhat temper enthusiasm in the market and make people more concerned in 2018 than they were in 2017.
“Given the sustained bullishness of the Chicago marketplace, it is rational to think that some type of correction is in order,” said Brian Rogan, vice president, Associated Bank. He went on to say that while there may be some pricing softness in the next year, he does not expect to see a major, across-the-board correction taking place.

…


Amazon HQ2 or sustained organic growth

Survey participants were hard pressed to say that one outcome—winning the battle for Amazon’s HQ2 or productive, ongoing organic growth—would be more impactful for the city of Chicago. Just over 56 percent said Amazon HQ2 would be most impactful, though many expressed concern or a wait-and-see attitude based on gaining a better understanding of the incentive package that would be awarded to Amazon.
“It’s hard to know what the Amazon incentive package will mean; hard to gauge the impact, because we don’t know what has been offered,” Wurtzebach said. “Amazon is one tenant, and there is risk in putting all your eggs into one basket.”
Shilling noted that an Amazon victory is not void of concerns. “Sometimes you have to worry about what you wish for,” he said, comparing the issues that San Francisco and Seattle have experienced—huge infrastructure spending and major congestion—as they have grown as major tech hubs.
For Episcope, the question of Amazon versus organic growth is not an either/or situation, it’s an and. “If Amazon comes to Chicago we’ll see growth we haven’t seen in 40 years,” he said. He also noted that over the long run, Chicago needs to sustain the growth of Fortune 100 companies to the City.