Amazon narrows its list of cities for its second HQ

[rocket surgeon]

With respect to amazon choosing Chicago,  a possible negative could be the cost of doing business there.  This is where forgottens post may be relevant. If amazon were to consider Chicago and its positive attributes, they are going to want some incentives and this is where the politicians prosper...in more ways than one, eyn’er? 

[jfmu]

I hope Chicago gets strong consideration. Sterling Bays proposal is really interesting.

[Tugg Speedman]

With respect to amazon choosing Chicago,  a possible negative could be the cost of doing business there.  This is where forgottens post may be relevant. If amazon were to consider Chicago and its positive attributes, they are going to want some incentives and this is where the politicians prosper...in more ways than one, eyn’er?

Actually, it is very easy and simple ... when you're big like Amazon (or say the Cubs) you only have to pay one person ... "Da Mayor."  Part of the deal in making him happy is he keeps all the other leeches away.

The problem is the vast majority of businesses cannot afford Da Mayor and have to pay one leech at a time until they are sucked dry.

[Herman Cain]

Imagine yourself as 22 year old hipster graduating with a degree in a hot field like coding or data science.  Imagine yourself single and aggressive and willing to work 70 to 80 hour weeks.  Where do you want to live.  This is the criteria they will use.

Answer ... NYC, followed by DC and then Chicago in that order.  Forgot the tax breaks, everyone is throwing money at them so that is a wash.  They are not creating HQ2 to save money .. they are doing it to stay competitive with Google and Apple and Facebook.

Hate to break it to you but that 22 year old hipster does not want to live in northern Virginia, Montgomery, Religh, Columbus, Atlanta, or Indy.  Newark is a form of punishment.  Toronto is a nice idea but they are not getting AMERICAN hipsters to “do that.”

My take is they are trying to make NYC work but might Find space for 50,000 in Manhattan might literally take all the money in the world.

Companies are not necessarily looking  22 year old hipsters. They are looking for hard working dependable  and stable more seasoned employees. Speaking as a large employer, in a situation like this maximum political benefit and  proven quality of workers are key.  The logistics part can all be made to work. For Example, Any area with a quality airport, can become a hub over night. Some of the locations involved were once hubs or mini hubs. 

[dgies9156]

Companies are not necessarily looking  22 year old hipsters. They are looking for hard working dependable  and stable more seasoned employees. Speaking as a large employer, in a situation like this maximum political benefit and  proven quality of workers are key.  The logistics part can all be made to work. For Example, Any area with a quality airport, can become a hub over night. Some of the locations involved were once hubs or mini hubs.

Herm, not quite. My firm moved from Wacker Drive to the Near West Side solely because our CEO thought is would be a good move to attract Millennials (we're three blocks from our old building).  Everything from the interior design to the interior offices is designed to stroke the ego of the Millennial.

They are looking for Millennials, like it or not. Trust me, I could do without a big hunk of 'em (though some are really gifted).

As to a hub airport, Amazon may spark some flights to Seattle, as it did in Milwaukee. But if you want a hub that's truly global, you're probably only considering a half dozen destinations. Of Amazon's group, this would be Newark, Chicago, Atlanta, Washington, Philadelphia and Dallas. No one, and I mean no one, will plunk down a hub in Indianapolis, Nashville or Raleigh given the proximity to Atlanta, Dulles, Chicago or Newark and Philadelphia. Not gonna happen. Airline economics don't work that way.

[Tugg Speedman]

Herm, not quite. My firm moved from Wacker Drive to the Near West Side solely because our CEO thought is would be a good move to attract Millennials (we're three blocks from our old building).  Everything from the interior design to the interior offices is designed to stroke the ego of the Millennial.

They are looking for Millennials, like it or not. Trust me, I could do without a big hunk of 'em (though some are really gifted).

GE moved to Boston (from Stamford) to attract millennials.  McDonalds moved from Oakbrook to the west side of Chicago to attract millennials (Harpo studios space).

The way companies operate in the next 10 to 15 years, the products they sell, the way they advertise them, heck even the money they use to pay for them (see the bitcoin thread) has not been invented yet.  The millennials will invent as these things.

The over 40 crowd (and especially the over 50 crowd) is only interested in fighting change to preserve the status quoted. I hear it all the time.  You can see it in the bitcoin and driverless car threads here.

So if you plan on being business in 10 to 15 years, you have to conclude three things ... what you will be doing in 10 to 15 years will most likely bear little relationship to what you do now, you probably don’t know what that will look like, and the over 40 crowd will not get you there and fight every change to preserve the status quo.

[Juan Anderson's Mixtape]

Millennials are old news. The YZ Cusp (born 1995-2000) is starting to join the work force and Gen Z (born after 2000) is right behind.  What Gen Z becomes remains to be seen.  Those starting to cater to millennials are behind the curve.  Younger millennials will be transitioning from young & single to the family years.  It'll be interesting to see how their living habits change over the next 5-10 years.  My experience: Older millennials are starting to flock to the suburbs. Whether that is a widespread trend or not, I don't know.

[Tugg Speedman]

Millennials are old news. The YZ Cusp (born 1995-2000) is starting to join the work force and Gen Z (born after 2000) is right behind.  What Gen Z becomes remains to be seen.  Those starting to cater to millennials are behind the curve.  Younger millennials will be transitioning from young & single to the family years.  It'll be interesting to see how their living habits change over the next 5-10 years.  My experience: Older millennials are starting to flock to the suburbs. Whether that is a widespread trend or not, I don't know.

Much of the data I have seen suggests the opposite.  Millennials are more urban than any generation before them which accounts for soaring urban home prices relative suburban home prices.

[Juan Anderson's Mixtape]

Much of the data I have seen suggests the opposite.  Millennials are more urban than any generation before them which accounts for soaring urban home prices relative suburban home prices.

I've seen the same research and my personal observations were that was accurate.  But that research is backwards looking.  I was talking about  where millennials are headed.

Like I said, I think the trend is just starting as millennials move into their 30's.  The younger millennials are urban...for now.  I'm not sure that holds 5-10 years from now but maybe it does.  Maybe Gen Z fills the urban gap if millennials flock to the burbs.   Or they might create their own paradigm that no one sees coming, just like millennials did.  Time will tell.

[Tugg Speedman]

I've seen the same research and my personal observations were that was accurate.  But that research is backwards looking.  I was talking about  where millennials are headed.

Like I said, I think the trend is just starting as millennials move into their 30's.  The younger millennials are urban...for now.  I'm not sure that holds 5-10 years from now but maybe it does.  Maybe Gen Z fills the urban gap if millennials flock to the burbs.   Or they might create their own paradigm that no one sees coming, just like millennials did.  Time will tell.

Amazon said the average pay for these 50,000 jobs (yes it will take 10 years) will be over $100k.  If so, go long private schools in the urban area they are located and not real estate in the nice suburb 45 minutes away.

[Tugg Speedman]

SNL did a skit on Amazon's HQ2 search

https://www.youtube.com/watch?v=Xop8ug07KS8

<a href="http://www.youtube.com/v/Xop8ug07KS8" target="_blank" rel="noopener noreferrer" class="bbc_link bbc_flash_disabled new_win">http://www.youtube.com/v/Xop8ug07KS8</a>

(Hey mods, none of the youtube embeds are working)

[Benny B]

Herm, not quite. My firm moved from Wacker Drive to the Near West Side solely because our CEO thought is would be a good move to attract Millennials (we're three blocks from our old building).  Everything from the interior design to the interior offices is designed to stroke the ego of the Millennial.

They are looking for Millennials, like it or not. Trust me, I could do without a big hunk of 'em (though some are really gifted).

As to a hub airport, Amazon may spark some flights to Seattle, as it did in Milwaukee. But if you want a hub that's truly global, you're probably only considering a half dozen destinations. Of Amazon's group, this would be Newark, Chicago, Atlanta, Washington, Philadelphia and Dallas. No one, and I mean no one, will plunk down a hub in Indianapolis, Nashville or Raleigh given the proximity to Atlanta, Dulles, Chicago or Newark and Philadelphia. Not gonna happen. Airline economics don't work that way.

Don't want to speak for Hermicos, but I think he was saying that HQ2 might not be targeting swaths of educated Millennials.  I do it too.... most every reference society makes to Millennials is in the context of college-educated workforce with some level of disposable income.  IOW, Millennials are a generational cohort, not a socioeconomic class.  There are millions of Millennials who only have a HS education (and some with less), and those people are nowhere near the "hipsters" who relish the live/work/play... these are people who live on the south sides and Resedas and Cumberland Counties.

Short example... if HQ2 is going to sport a disproportionately large back-office operation (e.g. customer care, low-level admin, bookkeeping, in-house sales, etc.), i.e. jobs that do not necessarily support a live-work-play lifestyle, then a hipster downtown location would be counterproductive to their search efforts.

[Tugg Speedman]

Don't want to speak for Hermicos, but I think he was saying that HQ2 might not be targeting swaths of educated Millennials.  I do it too.... most every reference society makes to Millennials is in the context of college-educated workforce with some level of disposable income.  IOW, Millennials are a generational cohort, not a socioeconomic class.  There are millions of Millennials who only have a HS education (and some with less), and those people are nowhere near the "hipsters" who relish the live/work/play... these are people who live on the south sides and Resedas and Cumberland Counties.

Short example... if HQ2 is going to sport a disproportionately large back-office operation (e.g. customer care, low-level admin, bookkeeping, in-house sales, etc.), i.e. jobs that do not necessarily support a live-work-play lifestyle, then a hipster downtown location would be counterproductive to their search efforts.

Not low level ... it's 50,000 hipsters that are going to redefine retailing.

https://www.npr.org/sections/alltechconsidered/2017/09/18/551773552/cities-try-convincing-amazon-they-re-ready-for-its-new-headquarters
The top-line pitch is Amazon's promise to invest $5 billion in whatever community it picks to be the home of its second headquarters. And the company says it would bring up to 50,000 new jobs, with an average salary of more than $100,000.

[Pakuni]

Not low level ... it's 50,000 hipsters that are going to redefine retailing.

https://www.npr.org/sections/alltechconsidered/2017/09/18/551773552/cities-try-convincing-amazon-they-re-ready-for-its-new-headquarters
The top-line pitch is Amazon's promise to invest $5 billion in whatever community it picks to be the home of its second headquarters. And the company says it would bring up to 50,000 new jobs, with an average salary of more than $100,000.

In this case, I suspect the median is going to be more telling than the average. A (relative) handful of seven-figure execs could throw that average out of wack.
That said, this isn't a warehouse operation. By and large this will be white collar workers earning salaries well above the national median.

[Tugg Speedman]

In this case, I suspect the median is going to be more telling than the average. A (relative) handful of seven-figure execs could throw that average out of wack.
That said, this isn't a warehouse operation. By and large this will be white collar workers earning salaries well above the national median.

Correct

this is not a distribution center.  This is not customer service.  Amazon has very few low-level admin, that is all programmed and they employ virtually no secretaries.

It is going to be thousands of tech jobs, thousands of sales jobs, thousands of management jobs.

The availability and desirability of millennial tech employees will drive this decision.

That's why I think the top three are NYC, DC, and Chicago.  If you are a millennial tech hotshot, that is where you want to live.

[dgies9156]

GE moved to Boston (from Stamford) to attract millennials.  McDonalds moved from Oakbrook to the west side of Chicago to attract millennials (Harpo studios space).

The over 40 crowd (and especially the over 50 crowd) is only interested in fighting change to preserve the status quoted. I hear it all the time.  You can see it in the bitcoin and driverless car threads here.

A couple of thoughts to this:

  1) For now, the West Side of Chicago, Boston, etc., are the haunts of the upscale, well-educated Millennials. No doubt. But at some point, these people will start having children and these children will need to go to schools. I see no way, shape or form in which a Millennial will send their children to the Chicago Public Schools. Yes, I know there are magnet schools but there are not enough spaces in Magnet Schools and not enough politically connected Millennials to meet the demand from Millennials. Add to that the safety factors and government instability in cities and I suspect lots of them will do what we Boomers did, move to the suburbs, where schools are good and their children would have a shot at the Ivys.

  2) I don't see the Millennials putting up with government like that existing in Chicago. Bad schools, bad public works, massive taxes and aldermen who exist to be served rather than to serve will have the same effect on them it did on us, causing folks to seek opportunity in the suburbs.

  3) As much as our generation at times loathes the Millennials, they are not a whole lot different than we Boomers were. They're well-educated, anxious and hoping for a good life. They loathe all us older folks because we're in the way of what they perceive as their growth trajectory.  Show me a boomer who didn't feel the same way in the 1970s and 1980s!

[Tugg Speedman]

A couple of thoughts to this:

  1) For now, the West Side of Chicago, Boston, etc., are the haunts of the upscale, well-educated Millennials. No doubt. But at some point, these people will start having children and these children will need to go to schools. I see no way, shape or form in which a Millennial will send their children to the Chicago Public Schools. Yes, I know there are magnet schools but there are not enough spaces in Magnet Schools and not enough politically connected Millennials to meet the demand from Millennials. Add to that the safety factors and government instability in cities and I suspect lots of them will do what we Boomers did, move to the suburbs, where schools are good and their children would have a shot at the Ivys.

  2) I don't see the Millennials putting up with government like that existing in Chicago. Bad schools, bad public works, massive taxes and aldermen who exist to be served rather than to serve will have the same effect on them it did on us, causing folks to seek opportunity in the suburbs.

  3) As much as our generation at times loathes the Millennials, they are not a whole lot different than we Boomers were. They're well-educated, anxious and hoping for a good life. They loathe all us older folks because we're in the way of what they perceive as their growth trajectory.  Show me a boomer who didn't feel the same way in the 1970s and 1980s!

DG, I think you’re telling is a lot about yourself.  Becuase pretty much the opposite is happening.

1) private daycare, private pre-school, nannies and private and charter schools are absolutely booming in the city.  They cannot building them fast enough.  Latin school spent $50 million of privately raised money on its campus.  The British School is building a huge campus near UIC, GEMS academy had a waiting list the first year it was opened and City Day is expanding.  Charter schools are now nearly 20% of all CPS students and going up left and right.  Pre-schools are opening left and right all over the city.

Gone are the days that the best education in the area was New Trier and/if Hinsdale.  It is now in the city.  I believe this comment applies for most large Cities, certainly the 20 Amazon is considering.

2) Millennials will not put up with bad government service, and they will not.  The dirty little secret is government services are spread out according to the tax base.  Go down an alley in Lincoln Park.  THen do the same in Pilsen, the cleanliness and quality are not close to the same.  Call 911 in Lincoln Park and watch how three cars will be there in less than a minute.  Do that in Chatham and watch how no one might come.  Againm this applies for all the finalist.

My point is they are “Urban” and intend on staying that way.  They will move into a bad neighborhood before the ‘burbs.  So like you correctly noted their mindset in 3), that mindset also is “urban” and they are not leaving for the suburbs.

[WarriorDad]

Millennial moving to the suburbs has some weight to it

http://fortune.com/2016/03/28/millennials-leaving-cities/


https://www.inc.com/dustin-mckissen/studies-show-millennials-are-moving-to-suburbs-employers-are-following.html

[LAZER]

DG, I think you’re telling is a lot about yourself.  Becuase pretty much the opposite is happening.

1) private daycare, private pre-school, nannies and private and charter schools are absolutely booming in the city.  They cannot building them fast enough.  Latin school spent $50 million of privately raised money on its campus.  The British School is building a huge campus near UIC, GEMS academy had a waiting list the first year it was opened and City Day is expanding.  Charter schools are now nearly 20% of all CPS students and going up left and right.  Pre-schools are opening left and right all over the city.

Gone are the days that the best education in the area was New Trier and/if Hinsdale.  It is now in the city.  I believe this comment applies for most large Cities, certainly the 20 Amazon is considering.

2) Millennials will not put up with bad government service, and they will not.  The dirty little secret is government services are spread out according to the tax base.  Go down an alley in Lincoln Park.  THen do the same in Pilsen, the cleanliness and quality are not close to the same.  Call 911 in Lincoln Park and watch how three cars will be there in less than a minute.  Do that in Chatham and watch how no one might come.  Againm this applies for all the finalist.

My point is they are “Urban” and intend on staying that way.  They will move into a bad neighborhood before the ‘burbs.  So like you correctly noted their mindset in 3), that mindset also is “urban” and they are not leaving for the suburbs.

I can't speak to other major cities, but I'm not so sure this is the case in Chicago.

[mu03eng]

[jesmu84]

DG, I think you’re telling is a lot about yourself.  Becuase pretty much the opposite is happening.

1) private daycare, private pre-school, nannies and private and charter schools are absolutely booming in the city.  They cannot building them fast enough.  Latin school spent $50 million of privately raised money on its campus.  The British School is building a huge campus near UIC, GEMS academy had a waiting list the first year it was opened and City Day is expanding.  Charter schools are now nearly 20% of all CPS students and going up left and right.  Pre-schools are opening left and right all over the city.

Gone are the days that the best education in the area was New Trier and/if Hinsdale.  It is now in the city.  I believe this comment applies for most large Cities, certainly the 20 Amazon is considering.

2) Millennials will not put up with bad government service, and they will not.  The dirty little secret is government services are spread out according to the tax base.  Go down an alley in Lincoln Park.  THen do the same in Pilsen, the cleanliness and quality are not close to the same.  Call 911 in Lincoln Park and watch how three cars will be there in less than a minute.  Do that in Chatham and watch how no one might come.  Againm this applies for all the finalist.

My point is they are “Urban” and intend on staying that way.  They will move into a bad neighborhood before the ‘burbs.  So like you correctly noted their mindset in 3), that mindset also is “urban” and they are not leaving for the suburbs.

Where is all the money coming from for millennials paying for this stuff? All the anecdotal evidence I have, plus articles I've read, says millennials have too much debt for this stuff

[Tugg Speedman]

Where is all the money coming from for millennials paying for this stuff? All the anecdotal evidence I have, plus articles I've read, says millennials have too much debt for this stuff

I’m talking about the millennials that make over $100k at Amazon in the new HQ2.

[Tugg Speedman]

I can't speak to other major cities, but I'm not so sure this is the case in Chicago.

Absolutely is.  When the private and charter schools are factored in, which they are not in most of the surveys, Hinsdale Central and New Trier tumble down the list.

Chicago uHigh arguably has the highest average SAT for an high school in the country.  One-third of Latin’s graduating class goes to a top 10 university.  Parker has about 15 kids at Stanford now.

I’m not arguing Hinsdale or New Trier are bad, they are outstanding.  Rather the truly best academic high schools in the area are the private schools in the city.

So if you’re a millennial making well North of 100k, and you need more room ... hello Lake View.

Same applies to the other 20 cities

[LAZER]

Absolutely is.  When the private and charter schools are factored in, which they are not in most of the surveys, Hinsdale Central and New Trier tumble down the list.

Chicago uHigh arguably has the highest average SAT for an high school in the country.  One-third of Latin’s graduating class goes to a top 10 university.  Parker has about 15 kids at Stanford now.

I’m not arguing Hinsdale or New Trier are bad, they are outstanding.  Rather the truly best academic high schools in the area are the private schools in the city.

So if you’re a millennial making well North of 100k, and you need more room ... hello Lake View.

Same applies to the other 20 cities

"Well North of 100k" is quite an understatement of the salary required to send multiple kids to a school like Latin.

[Pakuni]

Absolutely is.  When the private and charter schools are factored in, which they are not in most of the surveys, Hinsdale Central and New Trier tumble down the list.

This is misleading, though, because these private and charter schools  can pick and chose the kids they want to educate, and therefore can insure that they're only dealing with high-achieving students (and push out the ones who aren't). Hence, really high SAT scores. Public schools - even the Stevensons and New Triers - have to educate every kid in the district, so they've got 'C' students dragging down their average test scores.

I'm not taking anything away from those others schools. They're all excellent and deserving of their reputations. But comparing their SAT/standardized test scores to public schools is not a fair or relevant comparison.

Another point .... indications are that once millennials get married and have kids, they, like previous generations, are moving to the suburbs. Definitely later in life, and perhaps not at quite the same frequency, but they're still doing it. The notion that they're all going to be urban dwellers is vastly overstated. Certainly some will choose to remain in the city into their late 40s and raise high schoolers there (remember ... they're not having kids until their 30+), most will be out in the burbs just like their parents.

https://www.npr.org/2017/09/15/551232392/as-millennials-get-older-many-are-buying-suvs-to-drive-to-their-suburban-homes
https://www.bloomberg.com/view/articles/2017-08-25/millennials-are-driving-the-suburban-resurgence