Why Chicago won’t get Amazon’s HQ2 — and why it does not matter

Brace yourselves, Chicago. We’re not going to win the competition for Amazon’s second headquarters, HQ2.

But you know what? In the long run it probably won’t make much difference.

Odds are the winner will be metropolitan Washington, D.C.

I mean that literally. Bovada, a large online gambling site, periodically publishes a betting line for the 20 cities on the HQ2 short list. The favorite? A collection of sites in northern Virginia just across the Potomac from D.C. Number 2: Washington itself.

Chicago, number 11, faces tough odds. Wager $100 on northern Virginia and you stand to win $240. That same bet on longshot Chicago puts you in line for $4,000.

Metro D.C.’s chances have improved since the HQ2 list was announced in January. Bovada, like most bookmakers, adjusts its odds to reflect the betting trend. It’s fair to say the smart money favors the district.

And for good reason. It’s long been obvious Jeff Bezos wants to be there. Three of the 20 short-listed locales are in the Washington metro area. (The third is in D.C.’s Maryland suburbs.)

Bezos clearly has decided he needs to be a D.C. player to protect his company against federal whims. He bought the Washington Post. He spent $23 million on what’s reportedly the biggest house in Washington, which he aspires to make a gathering place for the capital’s influencers.

So if a D.C.-area site wins, it won’t be because of Chicago’s deficiencies. It’ll be because the nation’s capital was a better fit with Amazon’s grand designs.

That said, putting HQ2 in metro Washington will come at a cost for Amazon — and once you understand that cost, you realize Chicago has no cause for despair.

In its request for proposals from communities seeking to win HQ2, Amazon lays out its requirements: ample office space, access to transportation, and so on. It would prefer, although it doesn’t require, an urban or downtown campus.

Why? Millennial tech workers like a lively city environment. That’s why San Francisco and New York, the country’s two most urbane cities, dominate the technology industry.

But a lively urban scene isn’t easy to come by in the U.S. — that’s why Amazon merely expresses a preference. Only a few cities qualify, and most are expensive and can’t easily handle the 50,000 workers projected for HQ2.

That’s the problem in D.C. Washington’s a great town, but locating HQ2 within the city itself isn’t really practical.

One obvious difficulty: Washington has fewer than 700,000 people — roughly 320,000 households. Adding another 50,000 households will cause its already high housing costs to soar, forcing out low-income residents, a trend now decades old. The black population of the district — once 70 percent African-American — has fallen sharply, while the white population has grown.

In recent years, D.C.’s black population has recovered modestly. But most of the district’s proposed HQ2 sites are in or near predominantly African-American communities. Already fear of displacement is stirring opposition.

A site in Virginia would sidestep that problem. I’m told that knowledgeable parties in D.C. think Amazon will pick Crystal City in Arlington. It can meet Amazon’s space needs, has good highway and transit access, and is next to Reagan airport.

But the half-dozen 20-something D.C. residents I spoke to had nothing good to say about it — brutalist architecture, chain restaurants, no street life, etc.

Nothing is certain, of course. But let’s assume the oddsmakers are right.

If Bezos wants a presence near D.C., he can get it. But if he also wants a workplace with the urban vibe he knows attracts millennials, he won’t get that.

That’s worth keeping in mind in Chicago. Few firms share Amazon’s strategic need to be in the nation’s capital, but most want to lure millennials. Of the handful of U.S. towns with big-city buzz, we’re arguably the only one where you can both live and work in the center of the action at reasonable cost.

Even if we don’t score a home run with HQ2, we can still hit a lot of singles. Google, Facebook and Salesforce are already expanding their Chicago footprints. I won’t be surprised if Rahm lands a good-sized Amazon facility as a consolation prize if HQ2 gets away.

Plus — no small thing — we won’t have to come up with the multi-billion-dollar bounty that winning HQ2 would entail.

That kind of money can be better spent elsewhere. Sure, Chicago has, among other advantages, lots of room for new office construction in the core. The fact remains that many sites are hard to get to, and providing better transportation access so all Chicagoans have an equal shot at jobs will require investment.

But that’s a discussion for another day.

Ed Zotti is a veteran Chicago journalist specializing in urban and regional planning issues.

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