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How Realistic Are Chicago's Chances To Land Amazon's Second HQ? Quite, Experts Say

Amazon's request for proposals for a second North American headquarters has fueled a frenzy of speculation usually reserved for football teams threatening to relocate to another city, and may command tax incentives equal to building a new stadium. With Mayor Rahm Emanuel already lobbying Amazon CEO Jeff Bezos to bring HQ2 to the Windy City, what are Chicago's major selling points?

NKF Executive Managing Director Geoff Kasselman
NKF Executive Managing Director Geoff Kasselman

NKF Executive Managing Director Geoff Kasselman said Chicago's central location is its best asset. Amazon employees can fly from Chicago to Seattle nonstop from either O'Hare or Midway International Airports, while O'Hare allows travelers to get to anywhere on the planet. Chicago's network of universities and colleges would allow Amazon direct access to the knowledge workforce, which is the reason companies like ConAgra and Motorola have relocated downtown in recent years.

Chicago already has experience convincing Seattle-based companies to relocate downtown. In 2001, the city and state offered Boeing $60M to move its corporate HQ to 100 North Riverside Plaza.

Kasselman said Chicago's high quality of life and low cost, compared to the coasts, would be another attraction for Amazon.

"We have essentially the same things that Seattle already offers," Kasselman said.

Chicago Tribune's Freedom Center printing press operations in Chicago
Sinclair Broadcasting's $3.9B acquisition of Tribune Media includes the Chicago Tribune's Freedom Center printing plant in River West.

If Chicago does win Amazon HQ2, the company would find plenty of sites to choose from, ranging from the Old Main Post Office and Union Station to the Finkl Steel site, Related Midwest's 60-acre South Loop riverfront site and U.S. Steel's South Works site.

Kasselman said the strongest Chicago contender is the Tribune Freedom Center printing site. The size of the site and the relaxed zoning approved by the North Branch Industrial Framework would allow Amazon to build the headquarters it envisions, while connecting River North to Lincoln Park, River West and West Town, and Fulton Market and the West Loop. 

"The Freedom Center is the doughnut hole that would bring all of these neighborhoods together," Kasselman said.

There is another site that Kasselman said no one is talking about, a short walk from the Freedom Center. A contiguous collection of sites north of Chicago Avenue and west of Orleans Street, mostly owned by churches, would also connect the same neighborhoods the Freedom Center would. Kasselman said he has heard some discussion about developers and landowners joining forces to redevelop this site.

Chicago Neighborhood Initiatives president David Doig
Chicago Neighborhood Initiatives President David Doig

Chicago Neighborhood Initiatives President David Doig said the Michael Reese Hospital site would be another strong candidate, if Amazon chooses Chicago. The site, which Farpoint Development is redeveloping with CNI and Draper and Kramer, is close enough to downtown and has the size Amazon would need.

The biggest obstacles to Chicago being considered are lingering issues related to the city's and state's pension funding shortfalls and budget deficits. Any bid for HQ2 will require significant city and state tax incentives and abatements. Kasselman said the state's inability to agree on a basic state budget leaves large suburban sites like McDonald's Oak Brook HQ on the outside looking in. The Chicago bids would be stronger because the city would not need as much in state incentives to put together an attractive bid package for Amazon.

There may even be hope there. The 2018 Illinois gubernatorial race is around the corner. Kasselman said incumbent Republican Gov. Bruce Rauner will face tough competition from a Democratic challenger, and there are two strong candidates in J.B. Pritzker and Chris Kennedy. Rauner will have a hard time winning, based on what he has not accomplished in his first term. Who becomes governor may affect Amazon's decision.