Boeing and Chicago

http://www.citizenworks.org/corp/boeing.php

In 2001, Boeing moved its headquarters (and the fewer than 500 jobs that go with it) to Chicago after obtaining a sweetheart deal that resulted after a bidding war between Chicago (with help from the state of Illinois), Dallas and Denver. Chicago pledged $ 3 million in subsidies, tax-increment financing incentives and $19 million in property tax abatements over 20 years, while the state of Illinois kicked in state income tax exemptions and another $41 million in tax credits and benefits.

 

 

http://www.areachicago.org/p/issues/city-as-lab/snuggle-commercial-club-chicago/

Snuggle up to the Commercial Club of Chicago

Published in City as Lab on June 7, 2008

Cozy relationships between business and government are pervasive. In Chicago’s machine politics, it’s often unclear whose motives are being represented in new initiatives — the City of Chicago is not well-known for its commitment to meaningful public participation in decision-making processes. Given Mayor Daley‘s penchant for unilateral moves, it’s difficult to think of many significant city projects being out of his grasp. Yet for more than a century, city policy has been shaped — quite openly — by influential groups like the Commercial Club of Chicago, whose interest in improving the city is a strategy to improve the business climate.

Under monikers like “civic improvement club” and “good government group,” the Commercial Club has released studies and initiated plans that have transformed Chicago. The Club’s first major achievement was commissioning the Plan for Chicago in 1909, Daniel Burnham and Edward Bennett‘s seminal work laying out a new vision for the city. The Plan for Chicago is responsible for the geographic layout of Chicago, its development and its park and boulevard system. More recently, and perhaps most controversially, the Civic Committee of the Commercial Club commissioned a report on the state of the Chicago Public School system called “Left Behind.” The recommendations from this report became “Renaissance 2010,” a plan underway to close poorly performing Chicago Public Schools and reopen them as choice and charter schools, creating a competitive private market for public education in Chicago (for more see Pauline Lipman’s article on page xx).

Movers and Shakers

How does an unelected group of people have undue influence on long-term transformational city policy? Like other pillars of Chicago politics, the Commercial Club is a long-standing institution comprised of those with power and money. As Pamela Strobel, head of the Commercial Club’s spinoff organization, the Chicago Consulting Alliance, says, “Business and government have always worked hand in hand in Chicago. There is a long history of Mayoral leadership in fostering collaboration with the business community. Put simply, it’s just what you do in Chicago when you are in a leadership position.”

The Commercial Club was formed in 1877 by a handful of prominent Chicago business leaders, with a mission to promote the city’s “public welfare and commercial interests” (this has since been altered to read the “social and economic vitality” of the metropolitan region). Beginning with 17 businessmen, membership has grown to almost 500, with dues in 2005 of $1,800 annually. The first twenty years of member names reads like a street map of Chicago: Wacker, Clark, Armour, Farwell and Carpenter alongside George Pullman, Marshall Field, Cyrus McCormick, and Albert Sprague. Membership is “limited to residents of the Chicago metropolitan area who shall be deemed qualified by reason of their personality, general reputation, position in their business or profession, and service in the public welfare.” The club’s makeup is self-perpetuating: new members are accepted based on a written nomination by a current member, and requires seconds from at least six other members.

The Commercial Club’s current membership is a who’s who of Fortune 500 companies and major institutions. Well-represented are major corporations headquartered in Chicago like Walgreens, Kraft, Sara Lee, and the Tribune company; chancellors and presidents of universities (University of Illinois at Chicago, DePaul, University of Chicago, Loyola, Northwestern, etc.); real estate developers; financial service companies; major foundations (Polk, MacArthur, Chicago Community Trust, etc.); and numerous law firms (see sidebar for more).

Early club meeting agendas, from 1880-1900, addressed a wide array of topics: sewerage, taxation, city streets, legislative interference with private rights, “nuisances afflicting Chicago,” the creation of an industrial training school, municipal corruption, unemployed laborers, the nature of instruction in public schools, rapid transit, “The Press: Its power for good and evil. How can we promote one and discourage the other?”, the eight-hour movement, relations with Cuba, and “How may Chicago be made more interesting and attractive?” Listed among the guest speakers at these meetings were Mayors, comptrollers, judges, and Aldermen.

More recent speakers have included Barack Obama, Rahm Immanuel, Dennis Hastert, Donald Rumsfeld, Mayor Richard M. Daley, Rod Blagojevich, and numerous CEOs of both local and national notoriety. In many ways, it seems the Club hasn’t strayed far from its beginnings, tackling major issues facing growth and development in Chicago. They have moved beyond sewers, for the most part, but the heated debate on what makes for a successful city continues. The strategies employed by the Commercial Club to pursue its priorities have shifted. In the 1980s, the Club began creating non-profit institutions supported with Commercial Club member capital. The Civic Committee, the Chicago Consulting Alliance, Metropolis 2020, and the Renaissance Schools Fund are all 501c3 organizations funded through the Commercial Club and guided by volunteer “senior executive boards” made up of Club members.

Make no little plans

The Commercial Club of Chicago is clearly a visionary organization, but the critical question is whose vision it represents. The Club’s modern day initiatives aspire to the scale of Burnham’s Plan for Chicago, yet it’s up for debate whether all of Chicago’s residents will benefit from them.

In 1996, the Club commissioned a report called “Metropolis 2020: Preparing Metropolitan Chicago for the 21st Century.” The Commercial Club’s website states that the plan’s aim is “to develop a long-term policy framework to reshape metropolitan Chicago in ways that would enhance the quality and equity of regional life and ensure Chicago’s place in the top tier of global cities.” The plan deals with critical urban issues such as education, economic development, taxation, governance, transportation, land use, and housing.

It’s hard to argue with the integral role played by these issues in determining the vitality and capacity of our fair city. In the introduction, Metropolis 2020 is compared to the Plan for Chicago, but with a focus not on space in the city but on the “nonphysical infrastructures that economists and philosophers have recognized as providing the indispensable background conditions for a dynamic market economy and a good society.” The very use of the terms “dynamic market economy” and “good society” as parallel goals of the plan beg questions about the definition of a good society, and how the tangible benefits of this dynamic market will be distributed across the city.

The Commercial Club created an organization to carry out the lofty, ‘global city’ goals of Metropolis 2020, bearing the same name. The drive to attain ‘global city’ status has meant engaging in intense competition to attract business (particularly in the financial and hi-tech services sectors: think Boeing), a focus on city image over substance (think the campaign for “greenest city in America”), remaking particular areas as playgrounds (think Millennium Park), and an overall increase in the polarization of rich and poor as priorities shift. As Rob Mier said, “be wary of visionary plans because they hold little benefit for the most work-needy.”

Public/Private Partnerships

The Commercial Club is directed by the interests of big business and the desire to keep Chicago competitive in the global marketplace. Their attempts to restructure city services to rely on market forces results in displacement and disenfranchisement for the individuals who are more susceptible to the volatility of the market. The uneven development that follows is evident in Chicago’s geography: a decrease in living wage jobs, affordable housing pushed to the edges, limited access to education and food, public transportation that fails to link workers to employment.

Involvement by business in setting policy agendas happens all the time; the Commercial Club, and countless other business coalitions, have organized their interests into effective public economic development policy for more than a century. The Commercial Club advertises proudly and publicly their lobbying and influencing efforts, hoping to both improve the economic vitality of the region and also cash in from the recognition they’ll receive with good press of their civic engagement. But what are the deeper motives for Chicago-based corporations to dedicate their resources to overhauling local public services like schools? These companies, who have their pick of the world’s most talented labor pool, are unlikely to need CPS-educated labor to increase their profits. It is more likely that they need to have competitive, highly-ranked schools in their vicinity to prove to the labor pool they are trying to attract that the city is not home to the nations “worst,” as U.S. Secretary of Education William Bennett claimed in 1987. In an era of fierce competition between cities, amenities ranging from popular restaurants and theaters to parks and school systems are necessary components of getting the upper hand.

The Commercial Club is the most influential civic organization in the city. The choice by the city to seek input and follow recommendations of these allied business interests serves to legitimate the authority of the private sector to determine the well-being of people in Chicago. What are the implications of city policy being framed around a corporate definition of a good society? Do we want our children’s educational opportunities to be dictated by JP Morgan Chase, Exelon, Morgan Stanley and Bank of America? Public policymaking should not be the domain of Chicago’s corporate elite, whose fundamental motives lie with increasing the potential for their own profit. The lack of accountability, public input, and counterbalance for the privileged access granted to the Commercial Club speaks to the need for a critical reading of policy initiatives and an organized demand for accountability. It’s time to insert the public in this public/private partnership. ♦


Illustration by Beth Gutelius

Sources:

Business clubs and Organizations (2007, March 5). Crain’s Chicago Business.

Glessner, John J. (1910). The Commercial Club of Chicago: Its Beginning and Something of Its Work.

Johnson, Elmer W. (2001). Chicago Metropolis 2020: the Chicago plan for the twenty-first century. Chicago: University of Chicago Press.

Sachdev, A. (2004, June 13). At 25, women’s executive club celebrates, re-evaluates. Chicago Tribune.

Mier, R. (1994). Some Observations on Race in Planning. Journal of the American Planning Association, 60:2, 235-240.

http://www.commercialclub.com

partial listing of members:

Abbott Laboratories

IIT

UIC

Northwestern

University of Chicago

PricewaterhouseCoopers

Archdiocese of Chicago

Commonwealth Edison

Boeing

Leo Burnett

Walgreens

LaSalle Bank

Chicago Council on Foreign Affairs

Tribune Company

Sara Lee

General Growth Properties

Waste Management

Aon

Chicago Urban League

AT&T

Henry Crown

Art Institute od Chicago

Quaker Oats

Inland Steel

Mayor Richard M Daley

Chicago Public Library

Federal Reserve Bank

Skimore, Owings, and Merrill

Rahm Immanuel

MacArthur Foundation

McCormick Tribune Foundation

Sun-Times Media Group

Polk Bros Foundation

Chicago Public Schools

DePaul University

BankOne

Arthur Andersen

Boston Consulting Group

Chicago Community Trust

Kraft

http://www.areachicago.org/p/issues/city-as-lab/growth-machine-gone-global/

Growth Machine Gone Global

The Practice of Neoliberalism in Chicago
Published in City as Lab on June 7, 2008

For decades, those involved in Chicago community organizing have toiled against what has been coined the Growth Machine; a coalescence of interests around promoting the “development” of the loop and downtown. Generations of organizers have advanced an alternative agenda of development for Chicago, a neighborhood based agenda that emphasized using city resources to target development where most Chicagoans live and work, instead of as a tool to entice investment downtown. Such a position was championed in the 1980’s by the insurgent Chicago Mayor, Harold Washington, who managed to outmaneuver the Democratic Party machinery to win the election for mayor in 1983. His administration sought to balance the resources between downtown and the neighborhoods. He allowed downtown to continue its growth while also being proactive about fleeing industrial jobs and passed a bond issue through city council for much needed improvements across all wards, not just the politically connected. Sadly however, Harold Washington’s neighborhood vision was cut short due to a fatal heart attack after his re-election in 1987, but his legacy of an openly progressive challenge was a milestone for the politics of Chicago development.

Fast forward to 2008 where the media limelight has shifted to a new debate between Neoliberalism and its “Anti-globalization” critics. Chicago radicals now are more familiar with authors like Naomi Klein, Arundhati Roy or Noam Chomsky who emphasize the national and international consequences of free-trade than hometown legends like Saul Alinksy or a Lu Palmer speaking about neighborhood neglect. Despite heroic attempts to the contrary, this past decade has seen a divide emerge between Chicago’s organizing community over emphasizing a neighborhood agenda or a more encompassing, yet less articulated, criticism of Neoliberalism. What is emerging however is a synthesis acknowledging that the Neoliberal agenda is not only practiced, but is being authored right here in Chicago and not by a Clinton or a Bush but by our own Mayor Daley.

Neoliberalism in urban American contexts like Chicago has meant a shift of political priorities away from maximizing social welfare and towards maximizing a city’s attractiveness to certain kinds of investment. This new political framework of Chicago has also had a profound impact on urban political economy. Possibly the most relevant implementation of the Neoliberal program in Chicago has been the development strategy designed to support the “postindustrial” financial, real estate, tourist and business service sectors of the economy. Neoliberal ideology holds a transition into a purely service and knowledge based economy as inevitable and that policy makers must accommodate. This inevitable free fall of manufacturing is blamed on the social safety net policies in the developed world that have put our cities at a permanent competitive disadvantage. America’s much ballyhooed transition to the “knowledge economy” is premised on the advantages held in terms of human capital and expertise by the developing world in postindustrial service sectors of the economy. [1] Many neoliberal commentators ranging from John Naisbitt to Michael Rotschild to Thomas Friedman have emphasized policies that pursue growth in the financial and business service sector over manufacturing on the premise of exploiting a national competitive advantage in those service sectors of the economy.

Within the ideological framework of Neoliberalism “individuals” are solely concerned with material welfare, “happiness” is only measured in dollars earned and spent. Immaterial benefits that accrue over the long term to individuals such as the quality of life in a community are not calculated into decision making. Such a systemic bias has influenced policy makers and corporate leadership alike towards promoting short term gain and promoting postindustrial services where gains could be realized much faster such as in financial speculation as opposed to manufacturing industries which require larger physical investments and often realize growth for a community of stakeholders over the long term through the larger average employment per firm, higher average wages, longer term employment and positive spillover effects onto the local economy.

Origins of Chicago Neoliberalism

Chicago’s shift towards a Neoliberal development agenda began in the 1950’s under the first Daley regime. Metropolitan planning under the Daley Sr. administration already acknowledged and supported a shift towards a postindustrial service economy beginning with his election as mayor in 1955. Ambitious plans to reinvigorate the downtown loop area like the 1958 Development Plan for the Central Area of Chicago called for the exclusive use of urban renewal dollars in the central business district. [2] Downtown business interests represented by the Central Area Committee and the Commercial Club lined up in support of the new development strategy that would focus on raising property values downtown, with laudable editorials from the Chicago Tribune about the transformations to come. Daley’s single minded drive to promote downtown development would lead to the construction of 32 million square feet of office space between 1962 and 1977. [3] Reinforcing the dominant political agenda was the political visibility disparity of the downtown stakeholders within the postindustrial services over the stakeholders in manufacturing. Whereas downtown firms like Lasalle Bank, Marshall Fields and Leo Burnett were concentrated into influential constituencies like the Commercial Club and counted the local media outlets like the Chicago Tribune and the Chicago Sun-Times in their ranks [4] the manufacturing stakeholders included a large number of small firms, dozens of Daley boot licking alderman and a near invisible workforce dispersed in the periphery neighborhoods of the city.

Chicago’s political landscape changed after Daley Sr.’s death in 1976; though the neoliberal agenda was continued by mayors Michael Bilandic and Jane Byrne. Post Daley Sr., the Democratic Party power base had been eroded by federal investigations into patronage, a diluted white ethnic support base and the alienation of Chicago’s Black community from the political machine; all of which meant that elections needed to marshal even more financial resources from downtown donors to compensate for the dearth of political hirings.

Under Daley Sr., Bilandic and Byrne the consequences of the neoliberal agenda were apparent; between 1967 and 1987 Chicago lost 326,000 manufacturing jobs. [5] Industrial suburbs such as Cicero were particularly hard hit; by the 1980’s Cicero lost 50% of its total employment. Neoliberalism’s explanation for deindustrialization blamed manufacturing’s lack of “international competitiveness,” yet many disagreed with the economic fatalism. Economists such as Paul Krugman estimated that foreign competition could only account for a small portion of manufacturing’s decline at 15% or less. Many firms lost during deindustrialization were liquidated due to attrition and could have survived with the help of a less negligent city government. The majority of Chicago manufacturing firms are small privately held companies; some liquidated their assets because of the lack of a succession plan between generations. Numerous progeny of (white)manufacturing entrepreneurs no longer wanted to be tied to physical assets in deteriorating and often racially changing neighborhoods. In a study conducted by the Chicago based Center for Community and Labor Research, fully 40% of Chicago’s manufacturing firms were at risk of attrition due to the lack of a succession strategy. [6]

Firms even left comfortable profit margins in Chicago to follow the neoliberal maxim to pursue the higher short term gains. Insidiously, another practice which became commonplace during the rapid deindustrialization of Chicago was known as “milking the cash cow.” One notorious corporate sponsor of this strategy was the Gulf and Western, a company that was financed from Chase Manhattan Bank to begin acquiring profitable manufacturing firms. The “strategy” literally meant driving the companies it purchased into the ground, neglecting necessary improvements and repairs and strong arming workers for concessions with the threat of plant closure. Only a few years after the acquisitions of the companies the end result was the formerly profitable companies’ liquidation and the reinvestment of the massive profits back into industries with higher profit margins; in Gulf and Western’s case the profits from plant closures in the Chicago area were reinvested in Paramount Pictures. [7]

Although many working class neighborhoods were affected by Neoliberal deindustrialization, beginning with the closings of the meat packing plants in the late 1950’s, deindustrialization in Chicago disproportionately affected Chicago’s black communities. As the University of Chicago sociologist William Julius Wilson found in his work The Truly Disadvantaged, deindustrialization particularly hurt Chicago’s black community who were traditionally the last hired and the first fired in a manufacturing sector where the ownership was 90% white. [8] Southern black √©migr√©s from the Great Migration caused by the modernization of the cotton industry in the 20th century found employment at the bottom rungs of industry, such as in the slaughtering floors in the meatpacking industry or manning the scorching blast furnaces in Chicago’s steel mills. Neoliberalism’s consequences for Black Chicago devastated already desperate neighborhoods, between 1978 and 1987 the percentage of the black male workforce employed in manufacturing in Chicago plummeted from 52% in 1978 to 28% in 1987. [9]

The west side neighborhood of North Lawndale had been especially devastated by Neoliberal deindustrialization. Once a center of industry and home to the world headquarters of Sears and Roebuck, North Lawndale’s economy collapsed after a number of relocations and plant closings. The International Harvester plant closing in the late 1960’s led to 14,000 lay offs, in 1973 Sears relocated its headquarters downtown and in 1987 relocated its magazine distribution leaving thousands jobless, and the slow decline leading to an eventual shut down in 1984 of the Hawthorne plant of Western Electric left 43,000 jobless. By 1986 the economic devastation was near complete; hundreds of service and retail jobs had also evaporated with the manufacturing jobs. By the close of the 21st century North Lawndale with a population of 66,000 had only one bank and one supermarket. [10] The economic alternative provided by the Neoliberal postindustrialists was the prospect of a becoming home to Chicago’s first Wal-mart to generate employment in the area, unfortunately for North Lawndale however, the neighboring community of Austin was instead selected as the location for the Wal-mart.

Growth” Goes Global:
Chicago in the 21st Century

The city is changing, you’re not going to see the factories back… I think you’re going to have to look at the financial markets—banking, service industry, the development of O’Hare Field, tourism, trade. This is going to be an international city.” —Mayor Richard M. Daley

Chicago’s contemporary Neoliberal coalition coalesced around the 1989 primary campaign of Richard M. Daley in the aftermath of the old-school machine of Daley Sr. and Harold Washington’s progressive neighborhood focused alternative to economic development. The incumbent mayor after Harold Washington’s death, Eugene Sawyer, was overwhelmed by Daley’s election campaign and not only found himself isolated without a city-wide base to draw from, but also was saddled with a lackluster enthusiasm from his black base. Daley Jr. also had the advantage of being the only credible white candidate put forward by the Democratic regulars and could count on the united support of the northwest and southwest ethnic enclaves which viscerally opposed the Washington campaign and Washington’s subsequent administrations. Since Richard M. Daley could not exploit a Democratic Party machine for his election campaign, he instead relied on the electoral war chest provided to him by his corporate backers. In the primary alone he amassed over four million dollars and was able to own a virtual monopoly on radio, television and print media advertising. [11]

Shortly after his election as Mayor, Richard M. Daley began lobbying for state funds to further develop the central business district, advancing bold plans to revitalize Navy Pier as a major tourist destination and downtown highlight. Mayor Daley’s investment in a new United Center that would serve as home to the Chicago Bulls would become emblematic of Chicago’s emergence as a “Global City.” The other major public investment that helped secure Chicago’s place as a “Global City” and a leading center of postindustrial services would be the renovation of the McCormick Place, an anchor for many of the important postindustrial services in Chicago. Other downtown beautification projects such as Millennium Park and the Soldier Field and Comiskey Park renovation were also spear headed by Mayor Daley and the neoliberal coalition. Even though Daley Jr. masterfully shifted some of the financial burdens from such extravagant developments to other parties, the city still bore much of the costs of the Neoliberal downtown development scheme. Instead of funding desperately needed capital improvements in black neighborhoods, or funding industrial retention programs, the coalition’s strategy maintained an exclusive focus on downtown. Constructing the entertainment complex at Navy Pier totaled out at $250 million dollars, [12] the McCormick Place expansion totaled $987 million dollars, the United Center at $150 million dollars, the new US Cellular Field at $200 million, Millennium Park after being over budget and behind schedule totaled over $500 million, the Lakeshore Drive and Museum campus project totaled at $110 million and Soldier Field’s expansion totaled $680 million . [13]

For such a massive public investment, the tourism industry is only responsible for generating an estimated 128,000 jobs [14], barely even keeping pace with the continued hemorrhage of the manufacturing industry, which between 1985 and 2000 lost another 100,000 jobs. [15] When viewing the jobs created by tourism as replacing those in manufacturing, one should be cognizant of the significant disparity in wages between the new jobs in hospitality vs. the jobs in the manufacturing industry; manufacturing jobs provide three times the weekly take home pay of those in hospitality. There is also a substantial difference in the career path opportunity disparities between the two industries; whereas one is very unlikely to advance through the career ladder at a hotel establishment from an entry level position, one is much more likely to advance in the manufacturing industry because the additional skill sets and expertise that accumulate over time are the essentials to promotion with less emphasis on formal education.

Significant wage disparities exist between manufacturing employment and the employment offered to those without a college degree in the postindustrial economy. As per the 1997 census statistics as calculated by the Chicago based Center for Labor and Community Research, the average annual salary for Cook County manufacturing workers was $40,840 while Cook County service-sector workers averaged $32,251 and with retail workers averaging $17,045. [16] In March 2003 the average weekly take home pay of a manufacturing worker was $610 whereas the weekly take home pay of restaurant worker was $194, the weekly take home pay of a retail worker was $332 and the weekly take home pay of someone in the hospitality industry was $211. [17] Over 70% of manufacturing employers also provided direct healthcare coverage to their employees compared to less than 50% for the rest of the private sector, and 78% provided contributions to retirement accounts. [18]

The spillover effects on the community from manufacturing employment are considerable as well. For every job created in manufacturing, 2.7 jobs are created in the local economy, whereas each job in services only creates .8 jobs on average. The health of the manufacturing sector therefore influences the health of many other sectors of the economy, as each job in manufacturing creates more jobs in other sectors of the economy. High wages and benefits paid to employees help create this multiplier effect as well as a recycling of manufacturing firm purchases back into the local economy through spending on local inputs and services, with nearly 47% of all spending being recycled back into the local economy. [19]

In addition to spending hundreds of millions of dollars in public infrastructure to accommodate certain industries, Daley Jr.’s neoliberal coalition provided other, more direct, incentives for corporations as well. When Boeing announced it was planning on relocating its corporate headquarters from Seattle, Chicago entered a bidding war with Denver to see which city would be willing to make the pot the sweetest for Boeing. The decision was made to relocate to Chicago after a subsidy package worth $64 million had been organized containing various tax incentives, promises of facilities and other expenses incurred by the city and state government, besting Denver’s offer of only $18 million in incentive money. [20] Even though the Boeing relocation was provided around 400 jobs that were mostly executive and administrative, the successful bid by Daley for the relocation was heralded a success for his Neoliberal vision of a cosmopolitan and corporate downtown business district.

Was it Think Locally, or Think Globally? Maybe it was Act Occasionally?

Clearly Mayor Daley and the Commercial Club know what direction they want Chicago to follow. The question is, are we ready to pose a challenge to their agenda that privileges profit over people. We have an opportunity to mount an offensive against the Daley regime’s Neoliberal agenda. What we need is a radical agenda that can unite Chicago’s labor, peoples of color and white liberal constituencies around a new vision of politics. Chicago needs a new and pragmatic social order that can educate our youth, provide decent housing, a green urban landscape, rewarding employment and end the political and police corruption. Hope alone is audacious, but it becomes potent when combined with vision and determination. ♦

1. See Naisbitt, John. Megatrends 2000 : Ten New Directions for the 1990s. New York City: Murrow, 1990.

2. Rast, Joel. “Manufacturing Industrial Decline: the Politics of Economic Change in Chicago, 1955-1998.” Journal of Urban Affairs 23 (2001): 175-190.

3. Ibid.

4. See http://www.civiccommittee.org/
members/index.html

5. Pg. 30. Wilson, William J. When Work Disappears. New York: Alfred a. Knopf, 1996.

6. Pg. 169. Creating a Manufacturing Career Path in Cook County

7. Dan, Swinney. Building the Bridge to the High Road. 2000. http://clcr.org/publications/pdf/building_a_bridge.pdf Pg. 12.

8. Interview with Dan Swinney, Director of Center for Labor and Community Research Circa Fall 2007

9. Wilson, pg. 34.

10. Wilson, 1996, pg. 35

11. Pg. 118. Green, Paul M., and Melvin G. Holli. Restoration 1989: Chicago Elects a New Daley. Chicago: Lyceum Books Inc, 1991.

12. Smith, James M. Public Rhetoric, Private Development, and Urban Government in the Postindustrial City: the Case of Chicago’S Navy Pier. University of Illinois At Chicago. 2005.

13. Koval, pg. 279.

14. “Visitor Impact.” 2005. Chicago Tourism and Convention Bureau. http://www.choosechicago.com/media/statistics/visitor_impact/Pages/default.aspx

15. Pg. 34. Creating a Manufacturing Career Path in Cook County.

16. Pg. 22. Creating a Manufacturing Career Path in Cook County. Center for Community and Labor Research. 2001.

17. Pg. 13. The State of Illinois Manufacturing: a Report for the Illinois’ Manufacturing Association. Center for Community and Labor Research. 2003.

18. Pg. 24. Creating a Manufacturing Career Path in Cook County

19. Pg. 13. The State of Illinois Manufacturing: a Report for the Illinois’ Manufacturing Association.

20. Roeder, David. “Boeing’ Kind of Town.” Chicago Sun-Times 11 May 2001.

from the archives of kick boeing to the curb…

http://groundtortureflights.wordpress.com/about/ Below is some text I drafted as a starting point for a handout. This fills up about one, two-column page. I don?t know that we want to go much longer than that. Feel free to make any edits. If someone is really ambitious and wants to design something, great. If not, I can put something together in LaTeX. When most people think of The Boeing Company, they think of commercial airplane manufacturing, like that of the familiar Boeing 747. However, Boeing is involved in much more than just commercial airplane manufacturing, and many of its activities involve manufacturing products and offering services that facilitate gross human rights violations and the destruction of life and property. War Machines. The Boeing Company has three divisions–Commercial Airplanes, Integrated Defense Systems, and the Boeing Capital Corporation. Integrated Defense Systems is Boeing’s primary war profiteering division. It produces well over 100 different war machines, from fighters and bombers to missiles to satellites to “unmanned aerial vehicles” (or drones). Boeing is even involved in the “Star Wars” defense program in an effort to militarize outer space. Financing War. Boeing not only builds machines for war but also finances war through the Boeing Capital Corporation. Little is known about this division, except that it provides “asset-based leasing and lending services” and is made up to two divisions: Aircraft Financial Services and Space & Defense Financial Services. The “Virtual Fence.” Boeing not only develops war machines for use overseas but also for use here at home. One of the most glaring examples is Boeing’s multi-billion dollar contract to build a “virtual fence” along the U.S.-Mexico border as part Homeland Security’s “Secure Border Initiative” (SBInet). SBInet will consist of increased border police, ground vibration sensors, lasers, satellites, and “unmanned aircraft.” “Extraordinary Rendition.” Boeing facilitates torture through a wholly owned subsidiary, Jeppesen Dataplan, Inc. Jeppesen provides flight plans, fueling arrangements, and even hotel bookings for the CIA’s “extraordinary rendition” program, a program that involves the clandestine transport of suspected “terrorists” to secret overseas locations where they are subjected to torture. Deadbeats. Boeing feeds at the public trough but skimps on paying its own taxes. The State of Illinois and the City of Chicago gave Boeing a $56M package of tax credits, exemptions, and abatements, along with other incentives, to relocate to Chicago in 2001. As a result, Boeing is making huge profits by facilitating atrocities at the expense of the people of Chicago. Some reports suggest that the tax breaks were not a significant factor in Boeing’s relocation decision and, hence, were not even necessary. Who We Are. Kick Boeing to the Curb is an anti-war group focused on stopping war profiteering. Our work primarily has been exposing and opposing Boeing’s weapons manufacturing, in addition to demonstrating against other war profiteers, such as, Blackwater. We have also worked to publicize and protest Boeing’s role in other social injustices, including the anti-immigrant “virtual fence” along the U.S.-Mexico border. Currently, we are working with civil liberties and human rights groups to stop Boeing’s role in the CIA’s extraordinary rendition torture flights. Our goal is to use exciting and innovative tactics to bring an immediate end to the War in Iraq and to promote social and economic justice. Take Action If you’re interested in getting involved with Kick Boeing to the Curb, please contact us. All people of good will are welcome: Kick Boeing to the Curb kickboeingtothec…@gmail.com kickboeingtothecurb.com Some most of us didn’t finish reading the articles we took to read on Boeing’s tax breaks. And some of us lost the ones we had. Below are the titles of the articles we have on the issue that are unclaimed. Let me know which ones you want and I can scan and email them to you. *Boeing PR release on Partial tax Settlement *Blog entry on tax breaks from everything.com *Huge tax breaks for aerospace didn’t deliver many new jobs *European Union accuses U.S. of paying billions in Boeing subsidies *Sky’s no limit as Boeing wings Illinois lottery *Price was high, but was it worth it? *Aircraft giant chooses city for its new HQ *A Boon to Boeing *Where the candidates stand on earmarks In an effort in incent Boeing to relocate to Chicago in 2001, the State of Illinois and the City of Chicago offered a $56M package of tax credits, exemptions, and abatements, along with other incentives. While the propriety and wisdom of offering such relocation packages is debatable, what is clear is that the tax incentives offered to Boeing were likely not a significant factor in Boeing’s relocation decision. Depending on which sources one studies, the tax incentives were not a factor at all, were not a significant factor, were too generous, or were possibly meaningless based on how Illinois calculates corporate income tax liability. Overall, Boeing’s relocation decision seems to have had more to do with corporate strategy than with state and local subsidies. Disinvestment in Seattle-area production; Chicago’s cosmopolitan milieu; Chicago’s diverse workforce; Illinois’ political influences; and Chicago’s business-services sector, air services, and cultural and recreational amenities seem to have been more of a factor. Business experts have noted that chasing corporate nomads like Boeing is likely not a good economic development strategy for Illinois or Chicago and that a more effective strategy would be investing in things like airports, universities, and telecom infrastructure as these things don’t move, are the kinds of things companies look for when relocating, and attract entrepreneurs. As Boeing’s own Phil Condit has stated, “Economic growth follows infrastructure.” Boeing’s War Footing; Lobbyists Are Its Army, Washington Its Battlefield By James Dao with Laura M. Holson New York Times December 12, 2001 http://tinyurl.com/6658ng Few companies can rival Boeing’s influence in the capital. Its Washington office, headed by Rudy F. de Leon, the deputy secretary of defense in the final year of the Clinton administration, employs 34 in-house and more than 50 outside lobbyists. US: Boeing’s Skillful Lobbying Efforts by Marianne Brun-Rovet, Joshua Chaffin, Caroline Daniel and James Harding Financial Times (UK) December 8th, 2003 http://www.corpwatch.org/article.php?id=7856 Missile Defense: ‘Longest Running Scam’ Exposed by Katrina vanden Heuvel The Nation March 7, 2008 http://www.commondreams.org/archive/2008/03/07/7548/ In Congress yesterday, Representative John Tierney, Chair of the House National Security and Foreign Affairs Subcommittee, convened the first in a series of hearings to examine a US missile defense program that is out of control, straining relations with allies, and renewing an arms race with Russia. This is the first comprehensive review of the program since 1993 – the year before Republicans took control of Congress – and it’s long overdue. The focus yesterday was on the extent of the missile threat – 
as compared to other security vulnerabilities – and whether spending 
more than $10 billion annually on ballistic missile defense (BMD) is 
justifiable from that perspective. Continued at: 
http://www.commondreams.org/archive/2008/03/07/7548/ Star Wars, Continued 
The Boondoggle that Won’t Stop, 
and the Corporate Money 
that Keeps it Going 
By William D. Hartung and Michelle Ciarrocca 
 The Multinational Monitor 
October 2000 
http://multinationalmonitor.org/mm2000/00october/corp1.html Boeing, currently in charge of a $2.2 billion contract for the Lead Systems Integrator for the NMD program, donated $100,000 to the Democratic National Convention. In total, Boeing has supplied more $2.2 million in PAC and soft money to candidates and the parties. http://www.federalnewsradio.com/?nid=169&pid=&sid=1361166&page=1 but it’s mostly about how hardy boeing is, and ready to adapt to all the “challenges” they face. http://www.forumdemocracy.net/article.php?list=type&type=255&printsafe=1

More about the WTO Boeing-Airbus Case

The WTO case pitting the world’s two largest commercial aircraft companies against each other could come to an end this summer.  The European Union and the United States submitted dueling complaints to the WTO in the fall of 2004.  An initial tribunal ruling from the World Trade Organization dispute body is expected soon.  Neither the United States nor the European Union shows any sign of backing down and negotiating a compromise in the high stakes conflict.

Any ruling will have implications for state and local governments in the United States that provide tax and financial incentives designed to attract or retain industry.  Critical to state and local governments is whether the WTO will take up the ‘legality’ (WTO-compliance) of state-local incentive programs.  The European Union alleges that state and local governments in Washington, Illinois and Kansas provided billions of dollars in subsidies to Boeing in violation of the WTO agreement on Subsidies and Countervailing Measures (SCM).

According to the U.S. Office of the Trade Representative,

Over its 35 year history, Airbus has benefited from massive amounts of EU member state and EU subsidies that have enabled the company to create a full product line of aircraft….Every major Airbus aircraft model was financed, in whole or in part, with EU government subsidies taking the form of ‘launch aid’ – financing with no or low rates of interest, and repayment tied to sales of the aircraft. If the sales of a particular model are less than expected, Airbus does not have to repay the remainder of the financing. EU governments have forgiven Airbus debt; provided equity infusions; provided dedicated infrastructure support; and provided substantial amounts of research and development funds for civil aircraft projects.

USTR claims that EU subsidies to Airbus are “prohibited export subsidies” and “actionable subsidies adversely affecting the United States”, in violation of the SCM agreement.

The European Union counters:

The core of the EU’s challenge is the lavish R&D support provided by the US Department of Defense and NASA through various means, as well as Boeing-specific support provided at state and local levels, such as subsidy packages tailor-made for Boeing in the states of Washington, Kansas and Illinois. The support clearly aims at weakening Airbus’ position and competitiveness and boosting that of Boeing. Although the US tries to dismiss the challenges using smoke and mirrors, US federal law makers, high-ranking officials, and local politicians have all acknowledged the vital role this support plays for Boeing.

With respect to state and local subsidies to Boeing, the EU alleges that:

 

  • The State of Washington gave Boeing $3.4 billion in tax incentives; the City of Everett gave Boeing $67.5 million in tax reductions; and state and local governments in Washington provided another $395 million in other subsidies including workforce training, infrastructure improvements, and assumption of legal costs, among others.
  • The City of Wichita, Kansas by issuing industrial revenue bonds provided tax breaks to Boeing worth $783 million; and, the State of Kansas pays the interest on bonds financing aircraft production facilities worth another $122 million to Boeing.
  • The State of Illinois, the City of Chicago, and Cook County provided tax incentives and direct payment of relocation and other costs to Boeing worth $24.8 million.

 

 

http://www.allbusiness.com/labor-employment/labor-relations-labor-unions/5586461-1.html

 

SPEEA to Picket Boeing in Chicago Over Outsourcing and a Contract Offer For Kansas.

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City Desks & News/Business Editors

CHICAGO–(BUSINESS WIRE)–March 29, 2004

Employees from several states will picket The Boeing Company’s headquarters on Tuesday to protest the aerospace giant’s continued efforts to cut its United States workforce while expanding overseas employment.

Members and union officials from the Society of Professional Engineering Employees in Aerospace (SPEEA), IFPTE Local 2001, AFL-CIO, will set up pickets at 9 a.m., (Tuesday, March 30) outside Boeing World Headquarters, 100 North Riverside Plaza. Around noon, the group will march to Chicago City Hall to draw attention to the $22 million of city-backed incentives used to attract Boeing.

Boeing cut more than 35,000 employees from its U.S. workforce in the past three years. The names of 4,122 of those employees who were represented by the engineers, technical and professional union are contained on informational flyers and a 12-foot banner the picketers are bringing to Chicago.

 

 

 

http://www.jessejacksonjr.org/query/creadpr.cgi?id=3323
Boeing Trims Local List Down To 4 (Chicago Tribune)
04/24/01 Article/Interview/Speech
BOEING TRIMS LOCAL LIST DOWN TO 4
2 Suburban Sites, 2 In Chicago Still In The Running
By Ray Long And Susan Kuczka, Chicago Tribune
Tribune staff reporters Gary Washburn and Jon Yates contributed to this report.
Tuesday, April 24, 2001
Boeing Co. executives searching for a new company headquarters on Monday eliminated three more Chicago-area addresses but kept four locations in the running as state officials forwarded a multimillion dollar incentive package to the Seattle-based aircraft maker, state and municipal officials said.Boeing rejected potential sites in Westmont and Bannockburn as well as one at 550 W. Jackson St. in Chicago. The firm had earlier scratched a site in Elgin from its list of potential new homes in the Chicago area. Still on Boeing’s list of potential Chicago area sites are locations in Schaumburg and Rolling Meadows as well as two in the city at 100 N. Riverside Plaza and 123 N. Wacker Drive.The Seattle-based firm is also reviewing sites in Dallas and Denver as possible locales for its new corporate home.Chicago officials said they could neither confirm nor deny whether the Jackson Street site had been pared from the list by Boeing, but other sources familiar with Boeing’s search confirmed it was scratched.A disappointed Bannockburn Village Administrator David Lothspeich said officials “thought Boeing couldn’t go wrong with picking Bannockburn.”

“I would say the lure of the village of Bannockburn was the existing office building, and just the proximity to transportation and housing,” he said.

Boeing officials visited Bannockburn and Westmont last week on their whirlwind tour of several potential Chicago area sites.

“It’s a big letdown for all of us,” said Westmont Mayor William Rahn. “We were just really hoping. We felt very self-assured that, if they came to the Chicago area, we would have a shot at it.”

Pam McDonough, director of the Illinois Department of Commerce and Community Affairs, said the state shipped a package to Boeing on Monday that included a variety of incentive programs as well as a sales pitch for the region, its schools, quality of life and position in a global market. “We’ve got global reach,” McDonough said.

The Illinois proposal could potentially be worth tens of millions of dollars to the firm, but the precise value is difficult to pinpoint because it would depend on the way Boeing structured a final deal.

The agency has floated proposed legislation that would expand to 15 from 10 years a business-tax break that allows a company to get corporate tax credits roughly equivalent to the amount of income taxes the firm’s new employees pay the state.

Boeing plans to relocate 500 top executives, and if their salaries averaged about $100,000 a year, the tax credit could mean more than $22 million in tax breaks to the firm over 15 years should it choose Illinois.

State officials also said Illinois could provide an Illinois FIRST grant of up to $5 million to facilitate the move, as well as partial reimbursement for relocation costs and industrial training grants.

DCCA officials have also proposed legislation that would allow a municipality to grant Boeing tax abatements worth up to 100 percent of its property-tax bill for up to 20 years should it decide to relocate there.
-30-

Paid for and maintained by Jesse Jackson, Jr. for Congress

$64 Billion Falls Through the Tax Cracks

That $3.2 billion bribe to keep Boeing here is merely the biggest of hundreds of tax exemptions for Washington businesses.

Rick Anderson

Published on February 18, 2004

If you happen to be in the business of buying or selling body parts in Washington, you already know it can be done without paying an arm and a leg in taxes. By law, there are no sales or usage taxes on blood, bone, tissue, organs, or human remains sold for medical use or research—saving those businesses about $2 million a year. Give me a break is the mantra for thousands of other businesses, as well. Unlike the certainty of death and its by-products, the certainty of taxes has its exemptions—a point made most dramatically by the estimated $3.2 billion, mostly through elimination of business and occupation (B&O) taxes, that Gov. Gary Locke recently handed Boeing to locate its new 7E7 Dreamliner assembly plant in Everett. In addition to that windfall, the Chicago-based aerospace company has an estimated $1 billion in existing tax “incentives,” wrangled through years of heavy lobbying, campaign donations, and regular threats to pack up and move to another state—which, in the case of its headquarters, for example, Boeing did anyway.

It turns out the certainty of not paying some taxes—sales, property, business, and other levies—is legally guaranteed for an ever-growing, record number of Washington recipients, most of them businesses and corporations. It’s kind of a dirty secret, a fact not heard over the caterwauling about Washington’s supposedly regressive and unfair business-tax structure. Thanks to the largesse of current and past governors and lawmakers, dating back to the territorial 1850s, not to mention an arm- twisting legion of now nearly 1,000 lobbyists bearing campaign boodle, the state has granted what today are 503 tax breaks or exemptions valued at $64.7 billion per biennium budget. Theoretically, that is lost revenue, drained off before it reaches public coffers, although much of it, such as property tax exemptions for churches, would be uncollectible anyhow.

But an enticing chunk—$13 billion, mostly from suspended retail and use taxes—could be recouped if those exemptions were repealed and the revenue was dedicated to help pay public costs, according to a new state study. Repeal could be Washington’s own Dreamliner: fully funded police, fire, education, and health services. Or, to dream more wildly, paying for that Alaskan Way tunnel on Seattle’s waterfront and a citywide monorail, building new state highways, establishing more parks, providing more low-income housing, and creating thousands of jobs along the way. Locke could brag he performed these miracles without raising taxes—merely by using existing ones.

Instead, the reverse is happening. Tax exemptions have soared by nearly $20 billion under Locke, not counting Boeing’s new breaks, just since 2000, when there were 431 exemptions worth $45.9 billion. The excess revenue, as the state calls it, has been refunded mostly to businesses to help jump-start economic recovery. At the current rate, tax giveaways in Washington—favors generally doled out to encourage job growth—could surpass $100 billion by the end of the decade. Over the same period, the state is predicting that necessary spending will far outpace revenues, leaving a $3 billion budget hole. Locke said the Boeing giveaway demonstrates that the state is “open for business in a way we have never been before.” We might never know just how open, because the records are closed. The details and true cost of the Boeing deal aren’t known because the governor and the company have decided to withhold the information, claiming it is exempt from disclosure under the state’s Open Records Act. Page after page of public records on the agreement have been blacked out under a claim that use of the money the public is giving Boeing is not the public’s business—it’s proprietary information controlled by Boeing. The company also can invoke a right to keep confidential the amount of money it pockets from exemptions. Locke’s 7E7 deal with Boeing also allows the company to take deductions for expenses incurred before the 7E7 was even on the drawing board—for machinery the company bought eight years ago.


OTHERS NEED NOT APPLYSome of the tax exemptions given to Boeing might be illegal. A B&O tax credit for computer and software investment, a sales-tax exemption for construction, and a leasehold excise tax break were drawn up to help “manufacturers of commercial airplanes” or “manufacturers of super-efficient airplanes” in Washington. Of course, only Boeing and its fuel-sipping Dreamliner qualify. It is illegal for the state to extend credit to a single private entity, but Locke and his staff claim Boeing is not being singled out. “It’s done on behalf of the entire aerospace industry,” maintains Robin Pollard, of the state’s Department of Community, Trade and Economic Development and Locke’s program manager for the 7E7. (She’s paid by taxpayers to be one of two full-time Boeing liaisons, so decreed by Locke.) The exemptions are not illegal, Pollard says, because “they have passed the scrutiny of the attorney general.” She calls the Boeing exemptions “the model” the state now will use “in collaborating with industry.” Says Russ Brubaker, assistant director of the Department of Revenue: “We think it [the incentives package] truly targets the industry and not just Boeing,” although, at a meeting of the Pacific Northwest Aerospace Association in Lynnwood last week, he agreed with another speaker that only Boeing gets some of the “industry” breaks. In a talk, Rachel LeMieux, a senior certified public accountant with Moss Adams and a former state revenue analyst, called the exemptions “essentially a tax credit for Boeing” and “Boeing-related only.” Why, I asked her afterward, aren’t such single-recipient credits illegal? “They got around it by not specifically mentioning Boeing in the legislation. That’s how they do it,” she said. How would such sweetheart legislation stand up in court? I asked. LeMieux smiled and shook her head. “I’m not a lawyer,” she said.

(click on link to read rest of article from seattle weekly)

http://www.seattleweekly.com/2004-02-18/news/64-billion-falls-through-the-tax-cracks/

http://www.siteselection.com/ssinsider/incentive/ti0106.htm

$63 Million in Incentives, Last-Second
Space Deal Help Chicago Land Boeing

By JACK LYNESite Selection Executive Editor of Interactive Publishing

CHICAGO — The Second City wasn’t second. Not in this, one of the most heated, high-profile site selections of recent vintage. “Chicago Wins! Welcome Boeing,” blared the marquee fronting the Chicago Theatre.
Concluding a whirlwind seven-week process that featured a hefty dose of cloak-and-dagger intrigue, Boeing (www.boeing.com) ended a fierce three-city tug of war by picking 250,000 sq. ft. (23,230 sq. m.) of space at 100 N. Riverside Plaza to house its relocated Seattle headquarters. Besting Dallas/Ft. Worth and Denver, Chicago gained 500 headquarters jobs (though 80 percent will likely be transfers from Seattle). Perhaps more importantly, it collected a generous chunk of location cachet.

Two business-attractin’ amigos: Prior to bagging Boeing, the bipartisan combo of Republican Gov. Ryan (left) and Democratic Mayor Daley collectively marshaled $100.9 million in incentives to land Ford Motor Co.’s 1,000 new jobs and $40 million to secure Solo Cup Co.’s 1,000-job relocation.


“Today’s decision confirms to the world that Chicago is a great place to live, work and do business,” Mayor Richard Daley (www.ci.chi.il.us/Mayor) said at the project’s official unveiling at Midway Airport. “It tells the international business community that Chicago’s economy is strong, that our leaders can work together to get things done, and that Chicago can meet the needs of any business in the world – from the largest to the smallest . . . Boeing’s decision reinforces what most of us already know: Chicago has a quality of life that is unmatched by any major city in the country.”
But the quality win didn’t come cheaply. Illinois and Chicago ponied up a US$63 million incentive package. A substantial outlay for 500 jobs, it drew predictable criticism. Countered Gov. George Ryan (www.state.il.us/gov), “It’s going to be a very modest investment for the state of Illinois for the money that it’ll bring back.” The governor cited an Arthur Andersen study that estimated Boeing could have an area economic impact of $4.5 billion over the next 20 years, with each headquarters job creating five more high-end jobs.
But there was a far less noticed major factor in landing Boeing: some frantic all-night negotiations to free up the Chicago space to house the headquarters. In the end, even the most astute location strategist still needs some real, live space in which to transform strategy into reality.

Boeing Decides to Redefine Itself

Boeing’s migratory odyssey began on March 21, when the world’s largest aerospace company announced it would move its headquarters from the city where it was founded in 1916. (“If it ain’t Boeing, I ain’t going” read bumper stickers on some Seattle vehicles.) Chairman Philip Condit decided that he wanted to distance the company’s headquarters from its operating divisions, focusing headquarters’ energies on new business lines and long-term growth. “We intend to do no less than define the future of aerospace,” Condit said at the Midway Airport press conference.
From the get-go, Boeing said that its headquarters was bound for either Chicago, Dallas/Ft. Worth or Denver – all listed in Fortune’s 2000 top 10 “Best Cities for Business.” With Boeing’s reliance on military contracts and Texas’ White House clout, many observers deemed Dallas/Ft. Worth the odds-on favorite.
(A notable exception: Cognetics’ location guru David Birch, who predicted that quality-of-life considerations would sway things Denver’s way.)

‘Any of the Cities Would Have Worked’

The Texas location was indeed the apparent frontrunner in Boeing’s early considerations, according to insiders. The order of the pack, though, shifted down the stretch. Boeing’s site selection team ultimately picked Chicago, particularly fancying its closer proximity to Wall Street and the nation’s capital.
Then there was the little matter of incentives. Illinois’ $63 million package dwarfed Denver’s reported $13 million to $18 million package and Dallas/Ft. Worth’s $14 million. The final decision, however, was Condit’s. The Boeing chairman allowed that he’d picked the Windy City after studying “a big matrix” of each city’s assets that his staff had compiled. “It was a very difficult decision, and no single factor made the difference,” Condit explained in Chicago. “We looked at three very exciting metropolitan areas in which to base our company. Each community had many positive attributes and would be a suitable location for a corporate headquarters. In the end, we looked at all the data and made what we believe is the right choice for Boeing.”
Conduit said the company liked Chicago’s “strong pro-business environment,” its cultural diversity, easy access to the company’s operations and customers and ready access to global markets. Boeing’s chairman allowed that he’d wearied of long flights from Seattle to New York, Washington, D.C., and a host of other U.S. and international destinations.
Said John Warner, the senior vice president and chief administrative officer who led Boeing’s site search team, “Any one of these three cities would have worked, including Seattle if it weren’t co-located with our commercial airplanes headquarters.”

Space Problem Almost Scuttles Deal

Boeing kept things under an airtight lid as the decision date neared. Condit told all three cities’ mayors that the winner would have only four hours advance notice. Only after Boeing’s corporate jet lifted off from Seattle for a then-unknown destination did Condit call the city’s chiefs.
Still, last-minute troubles in securing space almost capsized the deal. Boeing’s leasing agent initially hit a brick wall in trying to convince Philadelphia-based Rohm and Haas Co. (www.rohmhaas.com) to give up its space inside 100 N. Riverside. Rohm and Haas wasn’t interesting in buying out its existing long-term lease, negotiated at above-market rents of $28 per square foot.
That spurred several all-night negotiating sessions. Huddled in those feverish gatherings were Boeing’s agent; Rohm and Haas; a host of lawyers and bureaucrats; Chicago-based John Buck Co., the building’s leasing agent, and Lend Lease Real Estate Investments, the advisor for the Florida pension fund, which owns 100 N. Riverside. The tension had to be palpable around the negotiating table. Boeing had already announced that it had “contingency plans” that would kick in if it picked any of the three cities.


The whole Boeing deal was almost scuttled when an existing tenant balked at giving up
the space that the aerospace power wanted inside 100 N. Riverside Plaza (pictured).


In the wee hours of May 10, the deal finally came together. City officials agreed to fork over an additional $1 million to nudge Rohm and Haas out; and the Florida pension fund agreed to let the Philadelphia chemical company walk away with no buyout on its 54-year lease. Later that day, Boeing’s jet took off and Condit began making his mayoral phone calls.
Boeing reportedly signed a 15-year lease for the top 12 floors of the 36-story 100 N. Riverside. The aerospace giant will pay market-rate rent of $20 per square foot during the agreement’s first year, with rent thereafter escalating 3 percent a year.
Boeing has announced Sept. 4 as the target move-in date for the Chicago headquarters.

The Incentives That Brought Down
Boeing in the Windy City

State: $41 million.
• With an extension of the state’s EDGE program (www.commerce.state.il.us/communities/edge/factsheet2.htm) from 10 to 15 years, Boeing will be able to take a tax credit that’s equal to the income taxes its employees generate.
• Boeing get annual grants over the next decade will equal to half of the total employees’ income taxes, which will cover up to 50 percent of Boeing’s moving expenses.
• Grants for job training, technology and capital improvements are also included.Local: $20 million.
• Although its space is leased, Boeing will receive some $1 million a year in property tax abatements over the next 20 years.

Other: $2 million (est.)
• The city will contribute another $1 million to retire the lease of Rohm and Haas, an existing tenant in the 100 N. Riverside space that Boeing will occupy.
• The city will help pay for improvements at Midway Airport’s hangars that are intended to improve the efficiencies of Boeing’s Chicago operations.

Still to Be Done:
• The Illinois General Assembly must still approve the EDGE tax credit program expansion, and must also okay the moving reimbursement plan and Chicago’s tax abatement.
• The city agreed to establish a downtown heliport that Boeing, as well as other firms, can use to ferry executives in and out of the center city. Once included as part of the plan for the aircraft manufacturer’s headquarters, the heliport will now be located at a yet-to-be-determined downtown site.

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