How high can you go?

The bidding is underway for Amazon’s new headquarters

Usually, Amazon sells stuff at a discounted price. At the moment it is trying to sell something at the highest possible price – a second headquarters operation somewhere other than its hometown of Seattle. That takes in a lot of territory, and a hundred or so U.S. cities are competing for it. The prize (according to the company) is 50,000 jobs (most of them well-paid, six-figure executive jobs) and new construction worth $5 billion.
How big is 50,000 jobs? According to the U.S. Bureau of labor Statistics, in September the number of people in Sangamon and Menard counties employed in the three biggest sectors of the area economy – education, health care and government – was just over 50,000.

The company says that it wants a site no more than 30 miles from a population center within a metropolitan area of more than 1 million and within 45 minutes of an international airport, preferably one that offers direct flights to Seattle, New York, San Francisco and D.C. Its staff needs access to transit – buses, trains, roads, bikeways – and would like to be near major universities because, well, smart people. Such a wondrous place exists right here in Illinois, that den of iniquity that Satan calls home sweet home, but which Illinoisans call Chicago. City and company would be a perfect match; Amazon’s minimum criteria reads like a state contract whose specs were written to favor an inside bidder.

The talk is that HQ2 would transform Chicago, but those who know it will tell you that the city has transformed itself in the past 20 years. Downtown Chicago, newly Europeaninzed, used to be a “nice-place-to-visit but…” kind of place, but it has grown up and out, becoming a great place to live for more people than live in Springfield.

In much of Downstate, Chicago’s bid for HQ2 has been treated as a Chicago story, when it is treated at all. This misunderstands its import. What makes Chicago a better pace to live makes Illinois a better place to live in; what helps Chicago prosper helps Illinois prosper, as that city and its suburbs are Illinois’ economic engine.

And prosper Chicago would. Accommodating Amazon would require as many as 8 million square feet of office space (about 18 Stratton Buildings). For various reasons, the city at the moment has an astonishing array of large parcels of developable land available, any one of which could provide not only the office space but the ground-level retail, residences and street-level amenities required by evolved creatures like Jeff Bezos’ Amazonians.

In addition to very cooperative private developers, Amazon would find in Chicago a subsidy package offered by city and state officials potentially worth about $2 billion, comprising roughly $1.6 billion in tax breaks and $400 million in infrastructure and capital spending. That comes to 40 grand per job, which is a better deal than most of this kind. (See “Such a deal” from Jan. 26, 2012, and “Pennies and nickels” from Oct. 10, 2013, at However, the state’s EDGE tax credit is not cash out of pocket but is applied against future income that wouldn’t have existed without the investment.

Of course, Bezos knows how to sell a bill of goods; he’s persuaded investors to put billions into a company that only someday might make a profit. I don’t think for a moment that the company will generate that many jobs at HQ2 or that they will all pay that much. As for taxable profits, nothing about the way Amazon does business suggests that the company is less creative when it comes to what are usually called “accounting tricks” (the polite media term for tax fraud) than its corporate cousins. None of these points argue against trying hard to land HQ2, only against doing it rashly.

The hoo-ha about taxpayer subsidies to big corporations obscures an important truth. The creation story according to people like poor Mr. Rauner has God creating the heavens and earth and populating it with plants and animals, but Business creating everything else. This, to quote John Stuart Mill, is hooey. Consider the real public subsidies that Chicago offers – the museums and orchestras, the fine universities, the parks and public lakefront, a revivified riverfront, the splendid streetscapes, the public art, the road network and (though it is sadly invisible to most tourists) a fine public transit system. All of it enriches the public realm, and all of it paid for by public money or by private money forgiven taxation because it serves a noble public purpose. We would like Illinois better and care for it more were we to pause every once in while to appreciate it all. You can bet that Amazon will.

Contact James Krohe Jr. at

NOTE: The holidays beckon, The smart host will have handy a copy of my new history of mid-Illinois, Corn Kings and One-Horse Thieves (SIU Press, 2017) to read aloud to his guests when the fun starts to pall. Available online and from area bookstores.

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