LET’S MAKE A DEAL
Chicago bid for Amazon’s HQ2 includes $ 2.25 billion incentive package
The Chicago area’s bid for Amazon’s second North American headquarters includes $ 2.25 billion worth of incentives — and even more if the company chooses the Thompson Center or the old Michael Reese Hospital site where the city and state could provide free land.
The incentive package includes:
◆ Roughly $ 1.4 billion in state EDGE tax credits. The newly revised program provides a 50 percent tax break for every job they create in Illinois.
◆ $ 170 million in state sales tax breaks for building materials purchased by and new construction completed by “high- end businesses.”
◆ $ 60 million in property tax breaks through the city and county programs known as Class 7B and 7C.
◆ $ 450 million in sitespecific infrastructure improvements that would come from the Illinois Department of Transportation, the Chicago Department of Transportation, the CTA and other agencies.
◆ $ 250 million worth of investments in education, workforce development and “Neighborhood Opportunity Funds” to make certain that all Chicagoans can qualify for the 50,000 high- end Amazon jobs and that businesses that spring up or move here to support Amazon locate in Chicago neighborhoods.
◆ Free land worth $ 100 million if Amazon chooses to build its second headquarters at the old Michael Reese Hospital site purchased by former MayorRichardM. Daleyas the site for an Olympics Chicago didn’t get. If Amazon chooses either to repurpose or demolish and rebuild the Thompson Center that the state has been trying desperately to sell, the free land would be worth even moremoney.
The incentive package pales by comparison to the $ 9 billion that New Jersey Gov. Chris Christie offered in hopes of luring Amazon to Newark.
But sources close to the negotiations view the package as a good- faith effort to lure the motherlode of all economic development projects and a far cry from the “corporate welfare” so many critics and gubernatorial candidates have decried.
Almost as significant as the incentive package is the fact that Gov. Bruce Rauner, Mayor Rahm Emanuel, County Board President Toni Preckwinkle and the four legislative leaders worked together to craft the bid. They’re all on the same page— for a change.
“The message to Amazon is, ‘ We’re serious. We want this. We’re all together on this,’ ” said a source familiar with the bid.
The source stressed that Chicagoans and neighborhood businesses— not Amazon— would benefit from the $ 250 million in investments in education, workforce development and “Neighborhood Opportunity Funds.”
The money would come from City Colleges funding, Workforce Development programs and Neighborhood Opportunity Funds. That’s the share- the- wealth fund Emanuel created to help rebuild long- neglected Chicago neighborhoods with contributions developers make in exchange for being allowed to build bigger and taller buildings in a broader downtown area.
Last week, Emanuel and Rauner disclosed that the Chicagoarea bid gives Amazon 10 sites from which to choose.
They include a Downtown Gateway District that includes Willis Tower and the Old Main Post Office; a River District where Tribune Media wants to build 15 office and residential towers; Lincoln Yards that includes the old Finkl Steel plant among 100 acres along the Chicago River; the Burnham Lakefront that includes the old Michael Reese Hospital site; the 78, a 62- acre site at Roosevelt and Clark; the Illinois Medical District; a City Center campus that includes the Thompson Center; the Illinois Medical District and the fast- growing and transformed Fulton Market District.
Suburban sites include the Oak Brook headquarters of McDonald’s and the former Motorola Solutions campus in Schaumburg.
Ald. Pat O’Connor ( 40th), the mayor’s City Council floor leader, said he does not view the $ 2.25 billion incentive package as corporate welfare.
It’s more like anteing up just to get in the corporate version of a game of poker.
“It’s a lot of money. But if you believe what’s also being reported as the job creation and benefits that come along with it, you get that money back pretty quickly and then, you’re on the net- plus side,” O’Connor said.