Amazon HQ2: Chicago loses out on tech giant's second headquarters

CHICAGO -- Chicago is once again the second city, losing out to New York and Virginia as the site for Amazon's new headquarters.

While Mayor Rahm Emanuel spoke with the tech giant, he would not publicly give an exact reason why Amazon passed on Chicago.

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"It's a combination and we have a lot of strengths and they noted that. Remember, this started with 250 and it came down to 20," Emanuel said.

Emanuel acknowledged a larger subsidy package from the winners may have played a role. But, the mayor said he is not sorry the city and state didn't offer more.

"I do believe the right way you incentivize a company isn't through money, but also a 21st century airport, 21st century mass transit and 21st century workforce," he said.

All of which Emanuel said has helped Chicago become the No. 1 city for corporate relocations.

But when it comes to tech, Chicago still has a long way to go to catch up with coastal cities. However, the Illinois Technology Association does not think the loss of Amazon will set Chicago back.

"Google is up to 1,000 employees in the city, SalesForce is getting close to that as well. We are seeing that investment from some of these other coastal companies, I think we'll continue to see that," said Julia Kanouse, CEO of the Illinois Technology Association.

But Kanouse said Chicago's negatives such as violence and financial problems may be keeping good talent away. Leaders in Springfield would not be surprised if the state's fiscal instability drove Amazon away.

"I think the dynamics of City Hall and also state government probably had a factor in that decision," said State Rep. Jim Durkin.

"I know there was a meeting once with the Amazon people, Mayor Emanuel and Governor Rauner. The mayor said a lot of good things about Illinois and Chicago, the governor debunked him. The governor argued against Illinois," House Speaker Michael Madigan said.

Amazon's Jay Carney said attracting talent played a major role in its decision, and incentives were not the driving factor. He said Washington D.C. and New York City are two places world class talent would like to live.

As for the Chicago sites Amazon was looking at, Emanuel is confident they all will be developed.


After running a year-long competition that drew interest from hundreds of cities and a number of states, Amazon has chosen New York City and Northern Virginia to split duty as its second headquarters.

On Tuesday, Amazon announced it has chosen New York's Long Island City and Virginia's Arlington for HQ2.
The development projects promise to bring the cities a giant infusion of high-paying jobs and tax revenue, but are almost certain to draw fire from critics concerned about their impact on infrastructure and property values.

The search began in September 2017 when Seattle-based Amazon announced it would start accepting proposals for what quickly became known as HQ2.

During the process, Amazon narrowed 238 bids to 20 finalists, including Chicago, Denver, Indianapolis, Nashville and Miami. Executives traveled across the United States -- and to one Canadian city -- to tour sites to find the company's next home.

Amazon's criteria for HQ2 included proximity to a major airport, ability to attract technical talent and a suburban or urban area with over 1 million people.

In a surprise twist, Amazon ultimately decided to choose two winners instead of one. It originally said HQ2 would create 50,000 high-paying jobs and would be a fully equal to its Seattle headquarters.

The search ignited a frenzy among cities looking to boost their economies. Some cities responded with elaborate gestures to try to woo Amazon. Tucson, Arizona, famously sent Amazon CEO Jeff Bezos a giant cactus, and Birmingham, Alabama, installed massive Amazon delivery boxes around the city. Kansas City's mayor gave five-star reviews to 1,000 random items on Amazon's website, and Stonecrest, Georgia offered to rename some of its land the city of Amazon.

Amazon has said employees who work in Seattle will have a chance to relocate. It will also hire teams and executives for the new locations.
The company estimates that its investments in Seattle from 2010 to 2016 added $38 billion to the city's economy. These investments include buildings, parks and infrastructure, such as corporate offices and Prime Now delivery sites.

But Amazon's search for HQ2 was never just about finding a new home.

Throughout the process, Amazon skillfully obtained free data from cities across North America, including proprietary information about real estate sites under development, details about their talent pool, local labor cost and what incentives cities and states were willing to pony up to bring the company to town.

"Amazon was not going through this exercise to pick a single HQ2," said Richard Florida, a leading urbanist and professor at the University of Toronto. "It was part of a broader effort -- a corporate relocation strategy -- to crowd source a wide variety of data."

And the company itself has said it would use the information from the bids when considering where to open new facilities, such as warehouses and smaller corporate offices. Several cities that didn't make the final 20 have already seen an investment from Amazon, including fulfillment centers in Spokane, Washington, and Ottawa, as well as a new office in Vancouver with jobs in fields like machine learning and cloud computing.

WLS and CNN contributed to this report.