Google expanded its presence in Chicago last Wednesday, announcing a deal to purchase a postmodern landmark in the Loop in a much-needed loft in the heart of the city’s central business district.
The tech giant’s intent to buy the James R. Thompson Center building, designed by German-born Illinois-state architect Helmut Jahn, came as Chicago’s business community serves an important function: countering the narrative that corporations flee the area. Hm.
Boeing announced in May that it would swap its high-rise headquarters in Chicago’s West Loop neighborhood for its campus outside of Washington DC. In June, Caterpillar, known for its bright yellow earthmoving equipment, decided to move its base from the Chicago suburbs to a town near Dallas.
A third setback followed the following week when billionaire Ken Griffin announced that his hedge fund Citadel would be moving its headquarters from a Loop skyscraper to Miami.
A series of high-profile departures has tarnished Chicago’s reputation as a major commercial capital.
“Chicago is a tight business community, so it’s certainly disappointing that they all left,” Roger Hochschild, chief executive of suburban Chicago-based Discover Financial Services, told the Financial Times.
Citadel founder Ken Griffin compares Chicago to a “good day in Afghanistan” © Christopher Dilts / Bloomberg
While Boeing and Caterpillar were seen as more token losses, the departure of Citadel is a blow to the heart of the city, which has provided Griffin with steady, bipartisan material support.
He has donated more than $600 million to Chicago organizations and even funded the rebuilding of the city’s pedestrian and bike paths along Lake Michigan. Two weeks after the headquarters’ announcement, he donated an additional $110 million to 40 organizations including universities, museums and hospitals, leaving local civic leaders to speculate whether the gifts would be their last.
The exit also coincided with a rise in gun violence that made headlines elsewhere. This trend has increased unease among corporate leaders.
“I’m very concerned about corporate brain drain,” said a longtime Chicago business and civic leader. “Chicago is currently not considered a winner,” is perceived in contrast to Dallas, Miami and Atlanta.
Local boosters say Chicago has more to offer when it comes to workplace health.
World Trade Chicago, the city’s public-private economic development agency, reported that the Chicago metro area added a network of 6,656 businesses, up 2.6 percent in the first two years of the coronavirus pandemic. The number of professional jobs — the types of clerical jobs at Boeing, Caterpillar and Citadel — rose 3.4 percent.
WBC said Chicago saw 173 major moves and expansions in 2021 and added an estimated 11,000 jobs. In the first half of this year, there were 96 such “pro-Chicago” decisions.
“The rumors of Chicago’s demise are grossly exaggerated,” said David Casper, chief executive officer of Chicago-based BMO Harris, the US branch of the Bank of Montreal. BMO Harris’ lineage dates back to the Great Chicago Fire of 1871, which leveled much of the city.
After announcing in June it would split into three separate companies, Michigan-based food giant Kellogg said its headquarters would be the largest in Chicago.
Abbott Laboratories, a medical device and healthcare company based on the outskirts of Chicago, has leased offices in the city’s most famous skyscraper, the Willis Tower.
Hochschild said Discover, the credit card and finance company, is expanding a new advanced analytics center after last year opening a call center in Chatham, the South Side neighborhood with the highest unemployment rate in Chicago.
San Francisco-based technology company Salesforce plans to put its name on a new glass tower that will take up the banks of the Chicago River. Jack Lavin, chief executive of the Chicagoland Chamber of Commerce, said, “Over the last 10 years, technology has been the fastest growing part of our economy.”
Gun violence has increased in many US cities since the pandemic began, but the surge in Chicago has been worrying. According to the University of Chicago Crime Lab, shootings in the city increased by more than half in 2020, killing 4,077 and gunning down 774. Shots erupted again last year, killing 4,419 and killing 801.
Chicago police officers suspect a car crash in May was linked to a fatal shooting | © Tyler Passiac Lariviere/Chicago Sun-Times/AP
Shooting in the Loop, a hub for business, government and tourism, grew from two in 2019 to 27 last year. In 2022, through July 12, a dozen more shootings took place in the district.
Before announcing the Citadel, Griffin likened the city to “Afghanistan, have a nice day” for the violence and claimed that it has become more difficult to recruit workers in Chicago “when you read the headlines.”
The business community is “deeply concerned” about the violence and reputational damage being inflicted on the city, with Lawrence Mashal, president of the Civic Federation, a tax and financial regulatory organization, calling it “uniquely detrimental to Chicago’s economic growth and business attractiveness.” .
Chicago businesses are also confronted with workplaces transformed by the pandemic. The Chicago Loop Alliance reported that office occupancy in the Loop averaged 46.3 percent in June. According to the security company Kastel Systems, city offices were almost 100 percent occupied in the first few weeks of the lockdown in 2020.
Google spends $105 million on the James R. Thompson Center in Chicago’s Loop | © Armando L. Sanchez/Chicago Tribune/Getty Images
Michael Fassnach, chief executive of World Business Chicago, said he traveled to London and Paris last month with Chicago Mayor Lori Lightfoot to bring European businesses to Chicago. He wants to “learn what we can do better” to keep the investment moving, which includes prioritizing “holistic placemaking” that connects office, commercial, art and residential spaces.
Google said it is spending $105 million on the Thompson Center, which will help serve a hybrid workforce that works in and out of the office. It already employs 1,800 people in the Fulton Market neighborhood of Chicago. “By establishing a presence in Chicago’s CBD, we will be on the ground floor of a major revitalization of the Loop,” the technology company said.