When headquarters exit, cities struggle to fi ll vacuum
PEORIA, Illinois — Peoria Mayor Jim Ardis planned to open this year’s State of the City speech by thanking Caterpillar Inc. for its longtime commitment to the central Illinois town, declaring, “We wouldn’t be Peoria without Caterpillar.”
It’s been that way for decades in Peoria and in other company towns across the United States. A major employer provided generations of locals with jobs and gave the cities a central identity; executives helped keep cultural institutions, Rotary clubs and higher-end housing markets healthy.
Now many of those mid-size communities are looking for a new identity, as more companies trade their longtime hometowns for major cities with easier access to global markets and to the lifestyle that talented young workers want, with public transit, nightlife and trendy restaurants.
Caterpillar’s recent decision to move 300 top headquarters jobs to the Chicago area made Peoria one of the most recent towns with a vacuum to fill. In 2014, Decatur, Illinois, lost Archer Daniels Midland’s headquarters to Chicago after 40 years in the town. ConAgra Foods moved 1,000 jobs last year from Omaha to Chicago.
Some companies also are leaving suburban areas for downtowns, though the suburbs are still a popular choice. General Electric is moving its executives from a suburban campus in Fairfield, Connecticut, to downtown Boston, and McDonald’s said last year that it will relocate to downtown Chicago from a sprawling headquarters in suburban Oak Brook.
A study by the virtual think tank CityObservatory.org found the number of jobs located within 3 miles of the city center grew by nearly 2 percent between 2011 and 2014, according to U.S. Census Bureau data. Center-city jobs grew slightly faster than those in the periphery in one recent seven-year period, a reversal from much of the past several decades.
“I don’t know that I’d call it a trend yet, but it certainly is becoming one,” said Tom Murphy, a former Pittsburgh mayor and senior resident fellow at the Urban Land Institute. “Maybe for the first time in history, rather than having people follow where jobs are ... we’re beginning to see jobs following people instead.”
By a 2-to-1 margin, young college graduates are now choosing a place to live first, then finding a job, said Joe Cortright, director of CityObservatory.org.
For companies recruiting top talent, “the biggest competitive advantage is to be in the city,” Cortright said.
The change is adding to the divide between urban and smaller communities in the United States, especially in the Midwest, which is beset with sagging manufacturing industries.
“We joke that there’s the great state of Chicago, and then there’s the rest of Illinois,” said Bishop Harold Dawson Jr., a lifelong Peoria resident and pastor of New Life Christian Church.
Like many locals, Dawson can rattle off a list of relatives whose livelihoods in Peoria have depended on Caterpillar. The company — CAT for short — established its first plant in Peoria in 1909 and employs more than 12,000 workers in the area, even after several layoffs.