CAPITAL FLEES

Boeing Exits Chicago as City Wrestles With Crime, Exodus



Steve Stroth and Julie Johnsson
Thu, May 5, 2022,

(Bloomberg) -- Boeing Co.’s decision to leave Chicago is the latest blow to a U.S. city that already has seen its once-mighty economy battered by Covid-19 and crime.

The planemaker said Thursday that it will shift its headquarters to Arlington, Virginia, from Chicago, a move that would put Boeing near federal government decision-makers in Washington.

Chicago, the nation’s third-most populous city, has seen a rise in crime that prompted its richest resident, Citadel founder Ken Griffin, to say he’s likely to move his $38 billion hedge fund elsewhere. Chicago’s Magnificent Mile and State Street shopping districts, along with many restaurants in the downtown Loop, have yet to recover from the pandemic. Even the National Football League’s Bears franchise is considering an exit to the suburbs.

“Boeing’s decision to leave Illinois is incredibly disappointing -- every level of government in our state has worked to make Chicago and Illinois the perfect home for Boeing’s headquarters for the past 20 years,” U.S. Senator Dick Durbin of Illinois said in a statement Thursday. “We are working together to ensure Boeing leadership both understands how harmful this move will be and does everything possible to protect Illinois’s workers and jobs.”

Chicago remains home for many big companies, including McDonald’s Corp., Aon Plc, Archer-Daniels-Midland Co., Conagra Brands Inc. and R.R. Donnelley & Co. But the city has had other recent departures. United Airlines Holdings Inc. said in December that it will move as many as 1,300 workers from its Willis Tower headquarters to Arlington Heights, a suburb about 30 miles (48 kilometers) away that also is being considered by the Chicago Bears.

Arlington is wealthier, with 2020 per-capita personal income of $100,823, or 169.4% of the national average, compared with Chicago’s Cook County at $69,935, or 117.5%, government data show. Since 2000, compounded annual growth for the Chicago metropolitan area was 2.9%, compared with 4.1% in the Washington, D.C., area.

A recurring complaint about Chicago is crime, which is up 35% so far this year compared to the same period in 2021. Though murders and shooting incidents are down, all other major categories of crime are up, including a 67% jump in thefts.

Boeing says the biggest chunk of its employees remain in Washington state -- more than 55,000 employees out of nearly 142,000. In 2018, the company estimated it had 729 employees in Illinois, where it spent $1 billion on suppliers and vendors, and donated $23.8 million to local charities that year. The company said Thursday it would “maintain a significant presence” in the city.

Boeing moved its headquarters from Seattle to a 36-story building along the Chicago River in 2001, choosing the city over Denver and Dallas as the company sought to expand beyond planemaking and to be more centrally located in the U.S.

Mayor Lori Lightfoot offered assurances that Chicago is a thriving economy that’s attracting new businesses with its diverse workforce and expansive infrastructure-network.

“Chicago is a world-class city and in the last year, 173 corporations relocated or expanded here, and 67 corporations have made that same decision since the start of 2022,” Lightfoot said in a statement on Thursday. “We have a robust pipeline of major corporate relocations and expansions, and we expect more announcements in the coming months.”

Lightfoot also announced that Bally’s Corp. will build a $1.7 billion casino and hotel complex that would generate 3,000 permanent jobs and hundreds of millions in tax revenue.