Repeat Defenders

Does earning the champion’s crown year after year ever get boring?

Not in the world of economic development. That’s because every year has a different story — with every project during that year writing its own chapter.

Andrea Zopp, President and CEO, World Business Chicago

In 2017, according to Site Selection’s Conway Projects Database, the leading metro areas for corporate facility investment projects for the previous two years have held onto their crowns again, as Greater Chicago, Omaha and Sioux City — all defined as multi-state metro areas by the Census Bureau — earn the No. 1 ranking for their respective population tiers.

For Andrea Zopp, the new president and CEO of World Business Chicago who previously served as deputy mayor and chief neighborhood development officer for the City of Chicago, the title reaffirms her city’s natural advantages, and its repeat nature reinforces the spinoff effect of corporate investment to the places that truly define Chicago: its neighborhoods. While some central business district and River North blocks have been booming for years, others among the city’s 77 community areas have decidedly not.

“Some of the work we were doing was dealing with our food deserts,” says the former Sara Lee, Sears Holdings and Exelon executive, using a phrase not always on the tip of economic developers’ tongues. “Jewel located a new grocery store at 61st and Cottage Grove in the Woodlawn community. That neighborhood has not had a full-sized grocery store in 70 years, which is outrageous.”

The grocery is joining new housing, a new sports and academic center across the street and a sprucing up of a Chicago Transit Authority (CTA) stop a few blocks away, in an area just south of the University of Chicago and on the outskirts of the spot soon to be occupied by the Obama Presidential Center.

Food, retail and redevelopment seem to go hand in hand in Chicago. Another grocery making a splash is Whole Foods. But it’s not a store. It’s a whole distribution center, located in the Pullman neighborhood known for its railcars and, yes, its labor riots of the late 1890s, when the area lost its model-town facade. The Whole Foods facility, set to open early this year in the historic Pullman district that just became a national monument a year ago, is a sign that the South Side’s rejuvenation goes beyond storefronts.

“This distribution center is another example of Whole Foods doubling down on Chicago’s South Side and adds to the renaissance that is happening in Pullman,” said Mayor Rahm Emanuel. “Neighborhood investments like these — from stores in Hyde Park and Englewood to this distribution center in Pullman — will be vital community anchors and open up more avenues of opportunity for all Chicagoans.”

The 140,000-sq.-ft. (13,006-sq.-m.) facility replaces a facility in Munster, Indiana, and will create 150 jobs in serving as many as 70 Whole Foods Market locations (25 in Chicagoland) in Illinois, Indiana, Michigan, Wisconsin, Minnesota, Missouri, Nebraska and Iowa, and the Canadian province of Ontario. The $32.4-million project received $8.4 million in tax-increment financing (TIF) assistance to help pay for site preparation costs.

Not far to the north, GGP, formerly known as General Growth Properties, is busy, but again, not with the retail real estate it’s known for: The company just completed interior construction at its new headquarters, where GGP relocated 700 employees. Serving as general contractor, Skender worked in collaboration with Chicago-based design firm ARCHIDEAS, Environmental Systems Design and JLL to successfully complete the project. The open-office, three-story plan includes a café on the third floor that walks out to a large private roof deck overlooking Wolf Point and three branches of the Chicago River.

The same construction firm in fall 2017 completed an office build-out for Monsanto subsidiary The Climate Corporation, a creator of digital tools to help farmers sustainably increase their productivity. The office is on W. Fulton Market in Chicago’s West Loop, another resurgent area that Zopp says has been catalyzed by transit-oriented development (TOD) investment.

Already known for its anchor cultural, corporate and educational institutions, Chicago soon will welcome one more, as the Obama Presidential Center and its surrounding amenities take shape adjacent to Jackson Park and the Museum of Science & Industry.

Image courtesy of DBOX

“Fulton Market would be the best example of that,” she says of the area that was literally a fruit market when she first moved to Chicago. “Now it’s thriving, with a new train station, along with office buildings and all kinds of multi-star restaurants. It’s just the perfect example of what transit investment and access to it can do. For talent, it’s making it easy to get in and out of jobs, and to other attractions.”

About 100 of those talented people will this year join mobile technology platform company Shiftgig, doubling its data science, engineering and product teams, among other departments, at its new office that just opened on State Street. The company connects businesses with the on-demand, hourly workforce through a mobile platform.

Choices for Living

The CTA station at the Wilson stop on the Red Line has undergone its own update. Meanwhile, a new measure expands the boundaries in which new development projects can seek downtown district zoning, adding about 800 acres (324 hectares) in transit-served areas and thus continuing the city’s TOD goals. After more than 40 projects created more than 5,000 units downtown and in the neighborhoods as of September 2016, the Metropolitan Planning Council in 2016 projected up to 70,000 new housing units over the next 20 years as a result of the TOD ordinance. Some units may be high-end, but the overall affordability of Chicago continues to give the city an advantage over other cities’ skyrocketing housing costs for even well-paid professionals.

2017 Project Rankings

Total Projects by Population Tiers

Metros with Population Over 1 Million

Metros with Population 200,000 To 1 Million

Metros with Population Less Than 200,000

“We’ve spent a lot of time wooing Amazon and other tech companies, and we’ve been successful because we have a lot of young people wanting to live here,” says Zopp. The area’s two- and four-year higher education institutions help feed that pipeline, but so do the neighborhood blocks where they end up living.

“In the war for talent, when the day is done, companies want to recruit talent, and want them to have a good place to live,” Zopp says. Chicago has stayed affordable. “You can be a young millennial and live downtown or a train ride close to downtown, in a cool, hip community, or move a few train stops away and buy a house that’s affordable.” Redfin analysts in December found just 25 neighborhoods that it said fit the bill across 80 major U.S. markets, and more than half were in the Chicago area, which Redfin called “the rare major metro area that has remained relatively affordable and has largely bucked the severe inventory shortage trend seen across much of the country over the past few years.”

That affordability extends to office space. Chicago didn’t even make CBRE’s top 50 most expensive global office markets list that included New York, San Francisco, L.A. and Seattle. The affordability pairs nicely with an improving fiscal situation for the city, which just received a double-notch ratings upgrade from KBRA. “There are still challenges with the state budget,” admits Zopp. “However, we have come together to navigate and address this issue with prospective companies.”

Sharing the Wealth

Helping the neighborhoods increase their own attractiveness is the city’s Neighborhood Opportunity Fund, which, as Zopp explains, “takes density bonus payments developers make and puts them into a fund that we then invest in businesses in communities where investment has not happened organically, and kickstart it. The first round of payment we made last year was $3.5 million to 32 businesses, which came from McDonald’s moving their headquarters to the heart of the city. We’re anticipating the fund will eventually grow to over $50 million. Growth is happening, but if we only have access to opportunity in parts of the city, we are limiting our potential as a city.”

Chicago follows its own advice too, selling a maintenance facility on the north side where plenty of growth is occurring, putting the 200-job operation on the south side instead, and using some of the extra money from the sale to build a new south-side high school and to buy land for a new firefighting and police training facility on the west side.

Some of the parts of the official Chicago metro area are far from the city proper, and encompass a bevy of municipalities on the outskirts. That’s why the WBC in January launched the Chicago Regional Growth Corporation (CRGC), an effort to widen the economic development circle to seven counties — Cook, DuPage, Kane, Kendall, Lake, McHenry and Will. It’s like multiplying the neighborhoods idea times 275 — the number of municipalities in those counties. CRGC builds on the Global Cities Initiative, a joint project of the Brookings Institution and JPMorgan Chase that aims to strengthen the international economic connections and competitiveness of city-regions while ensuring socio-economic inclusion.

“It’s refreshing to be a part of local government efforts to collaborate, rather than trying to compete with one another,” said DuPage County Board Chairman Dan Cronin.

Already, the working group that has become CRGC collaborated on initiatives including coordinating a regional response to Amazon’s search for an HQ2. “If the cooperation that was forged in the effort to pitch the Chicago region to Amazon for its second headquarters showed us anything, it’s that we can take job creation and economic development to a new level — a level that benefits everybody — if we work together,” said McHenry County Board Chairman Jack Franks.

2017 top Metros

Total Projects by Region

Northeast

South Atlantic

East North Central

South Central

West North Central

Mountain

Pacific

 Highlighting the metro area’s competitive depth, the HQ2 bid put forth by Chicago and the State of Illinois includes 10 different site options in Chicagoland, from various downtown, river district and lakefront sites to suburban options in Oak Brook and Schaumburg.

Freight rail congestion continues to be a thorny issue in Chicago, but the possibilities for human transit continue to expand well beyond the friendly confines of “normal” trains. In February, California’s Hyperloop Transportation Technologies (HTT), creators of tubular transportation systems, announced the signing of official agreements with the Northern Ohio Areawide Coordinating Agency, which is teaming with the Illinois Department of Transportation to begin a $1.2-million feasibility study for the region. Several corridors have been identified for study connecting Cleveland to Chicago, with a projected transit time of … this is not a typo … 28 minutes.

“We came here because places like Cleveland, Chicago and Pittsburgh have the manufacturing, the raw materials and the talented, hard-working people in order to make it happen,” said Andrea La Mendola, HTT’s chief global operations officer, of the Great Lakes region. “We can source everything from this area. This is a place where you make big things.” Pittsburgh was No. 2 in our Northeast region rankings this year, while Cleveland placed No. 8 in the East North Central region.

First-Tier Options in Tier 2 Cities

Nine metros in the Great Lakes states made the top 10s in our three population tiers, including Columbus, Cincinnati and Toledo, Ohio; Indianapolis, Indiana; Sheboygan, Wisconsin; and Saginaw, Michigan.

At the Tier 2 level — metros with populations between 200,000 and 1 million — a nearly even split occurred in the Top 10 between cities in the Midwest (led by No. 1 Omaha and three-way tie for No. 3 Toledo) and the South (led by Greensboro-High Point, North Carolina at No. 2, and the other third-place metro areas of Charleston and Greenville, South Carolina). According to the Brookings Institution’s 2018 Metro Monitor report, both of those South Carolina metros were in the Top 20 of the nation’s 100 largest metro areas when it came to gross metropolitan product growth between 2015 and 2016.

Top 2017 Omaha Projects

But the title goes to Omaha-Council Bluffs, where ongoing projects include a 970,000-sq.-ft. Facebook data center campus expected to come online in 2020, and the Lincoln Premium Poultry groundbreaking in Fremont for Costco’s first-ever poultry processing plant, hatchery and feed mill facility. Projected to open in April 2019, the $300-million project is expected to generate an overall economic impact of $1.2 billion annually, create approximately 800 new jobs and connect Costco to a dedicated network of poultry producers in eastern Nebraska.

Biotech investments continue to dot the region as well, including from stalwart Danish firm Novozymes; Switzerland’s Evolva; and a new joint venture called Veramaris from Evonik (Germany) and Royal DSM (the Netherlands). Their $200-million manufacturing venture will produce omega-3 fatty acids.

The Greater Omaha Chamber continues to see results from initiatives such as its Go! Ready site program, as half a dozen sites have qualified and two were snapped up in Sarpy County for the Facebook project. And 2018 is off to a hot start, as travel data firm Sojern and farm irrigation and road infrastructure product manufacture Lindsay Corporation announced office expansions at a new building under construction by developer Ron Cizek, and MetLife, still headquartered in New York, announced the movement of its regulatory domicile to the area.

The Greater Omaha Chamber of Commerce works with other area chambers, including in Council Bluffs, Iowa, across the Missouri River, on most economic development initiatives. But the surge in activity has even inspired growth on the City of Omaha’s economic development staff, as Mayor Jean Stothert in January brought on two new deputy chiefs of staff for economic development and development services.

Kevin Andersen and Troy Anderson will work with the Mayor, City departments, developers, and the chamber to recruit new business to Omaha, expand existing businesses and bring new development projects to successful completion. Anderson comes to the city fresh from Fremont, where as director of planning he helped bring the massive Costco project to fruition.

“We have great momentum in Omaha right now,” said Mayor Stothert. “Kevin and Troy, along with our city planners and the economic development staff at the Greater Omaha Chamber, will be a strong team as the pace of growth and development accelerates in Omaha.”

What’s in the Water in Sioux City?

In this year’s Tier 3 rankings, the two Kentucky communities of Bowling Green and Owensboro tied with Gainesville, Georgia, for second place with 13 projects each. But the tri-state area of Sioux City, Iowa-Nebraska-South Dakota, doubled them up, with 26. It’s the third time in a row at the top for a region that not so long ago felt a lot lower.

Chris McGowan, president of the Siouxland Chamber of Commerce and The Siouxland Initiative, says it all started years ago when his team looked at what this magazine was counting, and why.

NASA’s $1.5-billion Johnson Space Center was first established in Houston in 1961, and today employs nearly 10,000 people on its sprawling 1,620 acres in the Clear Lake area.

Photo courtesy of NASA

“The first time we did it, we reported zero projects,” he says. As they better understood the process and criteria, they saw the light. “I didn’t know half the projects had been done,” he says of subsequent reports. “Your database did a better job than I did — and I live here.”

Among the reasons the area continues to work so hard on tracking success is to see what proportions are recruitment or retention. One of the new arrivals is Red’s All Natural, LLC, a maker of burritos that landed in North Sioux City early in 2017. A huge hog processing plant from Seaboard Triumph has now opened, and is creating more than 1,000 jobs. Other projects have arrived from such firms as AGP, which has expanded its integrated soybean processing facility in Sergeant Bluff; Keizer Refrigeration; and Hendrix Genetics in Beresford, South Dakota.

Top 2017 Sioux City Projects

In essence, to coin an adage, success breeds success. But the first step involves driving the territory and seeing exactly where dirt’s moving and steel’s going up.

“The first time we won this,” says McGowan, “we were told to be prepared to be put on the road map. That was prophetic. I have some good things in the pipeline right now too, and nothing would make me happier than to be hearing this news again this time next year.”