You guys cry too much about things that aren't even close to being concrete, and are we really getting our underwear bunched up about a measly 10 mil? This would be the equivalent of Amazon just asking for 100 million in tax incentives, compared to the billions they want (also fuck Amazon).

I think we can all step away from the bridge and breathe a little lmao

Wow, poor 130 N Franklin passed over again. It's probably shuffling down the sidewalk with a Dangerfield impression.

"No respect, I don't get no respect!"

I was just thinking about 130 N Franklin. I guess it is not visible enough for what SF wants?

Also, why not the Old Post Office site? I’m sure they could get naming rights for 5000 jobs. Still a lot more than Walgreen’s 1800, and it’s also a prominent site

I am new to Chicago (10 months) and what I said was purely based on conjecture. I'm not trying to go toe to toe with the resident population expert but is it not fair to assume that at least a portion of those employees will live outside of city proper limits? If I had my wish all 5000 would live downtown and several new construction projects for all of us to follow will come from it!

Of course a portion will live outside of the city. That's just inevitable. Maybe I interpreted when you said "large portion" incorrectly. I took it to mean more than 50%. Maybe that's not what you meant. Personally my guess would be more around 25%..I guess that's large based purely on the fact that 5000 new hires for one company in one location is big.

Are we even sure there would be 5,000 new hires? Salesforce currently has an office in River North with its name plastered on it. An additional 3-4,000 new jobs is nothing to scoff at, but I question the figures being thrown out there (source: used to support economic development efforts on business relocation deals where projections of hiring were rosy at best).

Blair Kamin with an article today about this (can’t read it due to paywall), but predictably he’s griping about signage on the riverfront.

No, it's "up to" 5,000 jobs. But pretty sure we can expect a big hiring spree.

It says up to 5000 new hires, so I think it's more than what you are thinking. My office has around 125k square ft and 900 people. We also have numerous conference rooms, entire area with pool tables, ping pong, etc, cafeteria, etc. Salesforce wants at least 500k square ft, which is realistically around or over 4000 employees, possibly 5000, especially since it's minimum of 500k square ft of space.

And as mentioned before, there are tax vehicles like EDGE where the company only starts getting their tax break after they suffice a certain number of new hires and retain certain percentage of workers over a period of time. Chicago could probably do this.

Lol he quotes Lady Bird Johnson in the piece. You can view the article if you open it in an incognito window btw.

"Good design is good business. So channel your inner Lady Bird, Mr. Mayor. I’m referring, as I’m sure you know, to Lady Bird Johnson, the wife of former President Lyndon Johnson. When Lady Bird crusaded in the 1960s to clear the nation’s highways of ugly billboards, her call to arms was 'Keep America Beautiful.'"

Yes, some portion of the new employees will undoubtedly live outside of city limits, but the kind of person Salesforce hires skews wildly into the "urban liberal" category. My guess would be that very very few of these employees will locate in places like Schaumburg and the majority of employees who do end up outside of city limits will be living places like Park Ridge or Oak Park or Evanston that are still fairly urban with good transit connections.

Yeah, the article also says that there's potential for "significant additional expansion" to the lease they are considering. In other words the new space can accommodate 5000 new hires but they might just keep hiring from there.

So here's some food for thought:

Amazon HQ2 is expected to be "up to 50,000 employees and 5,000,000 SF" starting with a 500,000 SF initial chunk of space.

Salesforce alone is adding 5,000 employees and 500,000 SF which is 10% of the ultimate "total" HQ2 might yield. Their initial requirement is the same size as the HQ2 initial requirement of 500,000.

A few weeks ago Facebook just added 250,000 SF expected to add another 2,000 jobs. That brings our total to 750,000 SF and 7,000 tech jobs. Between Facebook and Salesforce alone Chicago just added the same number of SF of tech as the largest office lease in San Francisco history which was 750,000 SF Facebook took downtown SF earlier this year.

Google also announced a 100,000 SF expansion again in line with the rumored Google operations center which might also be about 500,000 SF with 5,000 employees. So in the last month Chicago has added 850,000 SF of new tech offices which could provide about 8,000 additional tech jobs.

We've already won, that's an HQ 2 in it's own right. Yes it's not 50,000 workers day one, but neither is HQ2. Over time these significant investments by FAANG companies all but guarantee continued investment in Chicago's tech scene by these companies. If you consider the recent moves by McD, Walgreen, et. al. to the CBD we have probably already added a diversified HQ2 to downtown over a couple of years. The best part about all of this is that Chicago is demonstrating why Amazon should come here by actually going out and doing what Amazon needs it's candidate city to be capable of doing: absorbing tens of thousands of jobs in the labor market and millions of square feet of office in the office market. And Chicago is doing this with ease, making it look simple. "Oh you need a 500,000 SF block of space, just put it in this premier waterfront space in supertall tower, NBD"...

Think of how many support jobs and ancillary businesses these moves will create. Salesforce on it's own is more employees than McD brought to the West Loop. How many companies that do business with Salesforce will follow to have close contact with their vendor or client? How many new restaurants does 8,000 employees in the river corridor and West Loop support? How many new apartment towers with valet guys, desk guards, maintenance men, etc does this fill? The ramifications of these three moves (Google, Facebook, Salesforce) alone spell out ongoing expansion of the central district and outlying neighborhoods. Now compound that with the ongoing flight of F500 companies from the suburbs to the core. It's really quite astounding the kind of numbers Chicago is putting up right now! And just think of the regional talent these companies will retain for Chicago. So many Big Ten or U of C grads who will stick around instead of flee to the coasts.



But you have guys like Kenmore who this this is bad for the city...

* posts deleted *

guys, no presidential politics in the development threads.

our president is so polarizing that any mention or reference to him will be summarily deleted to keep these worthwhile development threads from going completely off the rails.

if you have an opinion of the president that you feel you must express, then please take it to the current events subforum.

I believe it when I see it. I think they'll hire a lot, but the bull run can't last forever, and business services firm like Salesforce are the most vulnerable to recessions and the first to shed employees. Virtually everyone agrees now that a contraction is on the way.

I gotta say personally, too, that my experience working with Salesforce in my job has not been good. I was shocked to see how janky their tools were for managing email campaigns. Like literally half the time when i would log into the management console it would freeze up and it's a really ugly and confusing interface. For a blue chip tech company, they certainly have a lot of kinks to work out.

B2B Tech companies invest far more in sales talent than in engineering/product talent, which is why most B2B tech sucks. The "5,000 employees" will be sales and customer support roles.

The Trib's paywall is defeated by Chrome's incognito mode FYI

A contraction is literally always "on the way", the question is when not if. Also, I disagree with the notion that companies like Salesforce are the first to shed jobs. They were going on a hiring binge throughout the recession. I know this because my best friend is a computer programmer there and was part of a massive wave of hiring in 2010. Salesforce is actually core to many many businesses now that can't really operate in the modern economy without them, which brings me to my next point below:

Salesforce is not about "email management" anymore. That is a legacy business from the early days of their company. The type of stuff that Salesforce does now is, for example, host the entire website and mobile app interface of companies like Chase and Bank of America on their unified platform. Salesforce isn't interested in your email management, they are interested in getting long term contracts from Chase to build and maintain the very means through which the vast majority of Chase's customers now interact with their business. Chase cannot afford to "fire" Salesforce and they can't just not offer mobile access to your checking account. It's not about "bleeding edge tech", Salesforce is a blue chip company now by just about any definition. And the business they have built is defensible and wildly profitable.

Another thing Salesforce does is run advanced data management for F500 companies. For example, my buddy was working on the CAT account for several years where they were building cloud software that constantly communicates with the massive capital equipment CAT builds. The software basically coordinates all of the vehicles on a given jobsite and uses predictive analytics to do things like anticipate when a certain part is about to fail or when a piece of equipment needs to be serviced to avoid failure. An example is monitoring all the mega equipment in a strip mine (mining shovels, loaders, those massive dump trucks, etc.) and telling the mining company you need to get Widget B for shovel #1234 because this signal is coming from the engine that we are starting to get decreased performance from that part and it might fail causing downtime. Or telling a mining company "widget Z in dump truck #789 just failed, send dump truck #321 to pit 3 to take it's place" and then automatically ordering the part, informing the maintenance contractor, and deploying a service crew to get that valuable capital back up and running ASAP.

Again, the last thing CAT is going to cut is a contract with a company like Salesforce that is adding real value to their product. Regardless of economic conditions, the cost of Salesforce developing these features for CAT is dwarfed by value added to their products. Downtime for that kind of equipment is killer and a massive waste of resources. Eliminating that downtime is low hanging fruit for Salesforce because they can easily use their massive data management expertise to automate the logistics of it all.

^Huh, what are you talking about? its email cloud is the cornerstone of the business. And if there's a downturn, I know my business would shed a bunch of those campaigns that we run right now just bc we're flush with cash.

Yes, there's always a downturn on the way, but everyone agrees now that one is just around the corner. All the indicators are pointing to it.

This is true, it's basically a giant sales/marketing company. But even still, I was shocked that you had to constantly refresh a page just to get it to function properly.

I would also argue that because it's a giant sales firm, more employees than we think will be living in the burbs. It's not the same crowd as a Groupon or a Grub Hub.

This boom is reaching exit velocity. Don't think for one second Amazon isn't paying attention to what this is going to do demographically to the tech workforce in Chicago.

If this constitutes a proven track record for attracting talent, added to the cost differential to the coasts (e.g. Boston), added to the available real estate, added to the coming O'Hare expansion, Chicago is becoming a no-brainer choice for HQ2.

Salesforce is a huge HUGE deal. Get 'er done.

Again though, email marketing is a legacy business for them, yes they still make a lot of money off of it, but the focus of the firm is no longer sales. Salesforce has long since transitioned into a platform for businesses to offer additional services like online banking or maintenance management to their customers. Salesforce is not achieving revenue growth by convincing Chase to send their customers more spam email using their system, they are making money because Chase signs a big fat contract for Salesforce to house and build all of their digital interaction with their customers on one platform.

^ Don't forget that Salesforce isn't the only major company adding thousands of jobs into the city. Facebook is hiring an additional 1000 workers, and Walgreens is moving 1800 jobs (albeit not all in tech) into downtown, and Google still has plans to add several hundred to several thousand jobs. With how much that's been announced the past couple of months, I'm not that bummed out if we lose HQ2. Downtown Chicago will continue to be leading environment for tech companies, with or without Amazon.

In addition the central area still has room to grow and expand, unlike many other cities. The 78, The River District, Lincoln Yards, and the Burnham Lakefront all expect to add tens of millions sqft of office space over the next decade. While some proposals are more realistic and fleshed out than others (@Lincoln Yards), the fact that the city can still grow will help the central area prepare for the future.

^definitely hitting critical mass ..

Admittedly my post was poorly worded. I didn't mean a majority, but a large percentage proportional to the 5k number. I meant more like your estimation of 25%.

Email marketing is certainly not a legacy business for Salesforce (my wife is a VP of sales there, with the company since 2006), I work at Oracle, very much know their business.

Email marketing is their Salesforce Marketing Cloud, which is the Indianapolis based company, Exacttarget, which Salesforce acquired in 2013.

I don't know why you think more sales people means more living in the suburbs, but it's a very good thing the salesforce crowd is not the same as the Groupon or Grub Hub crowd.

I moved the discussion about the sign on trump tower to the trump tower thread.

http://forum.skyscraperpage.com/showthread.php?t=177400

let's please keep this thread on topic and on track.

Because typically sales people are more conservative for lack of a better term. And I don't mean politically, so no one have a heart attack. I just mean lifestyle-wise. Believe me, I'm not taking sides. The ultra hip tech crowd can be completely obnoxious, but it's also true that they generally aspire to live in edgier neighborhoods.

this side discussion of where these potential salesforce workers might live is very silly.

some would choose to live in the city and some would choose to live in the burbs (duh).

the split probably lies somewhere between 30% and 70%.

anyone definitively splitting those hairs any finer than that at this extremely preliminary point is talking out of their ass.

According to their financial statement, their revenue streams are decently diversified. The Marketing Cloud platform is their smallest revenue generator.

https://i.imgur.com/HulHBjl.png

Lot of money in cloud type of services these days. AWS made nearly $17.5B in revenue alone for 2017 for Amazon. That is more revenue than all of Sears, General Mills, Gap, Nordstrom, Colgate-Palmolive, CDW, Texas Instruments, CBS, Loews, Mastercard, etc etc etc took in as entire companies in the same time period (individually). Just let that sink in. Lot of money in it and that will just continue to grow. Looks like Salesforce is growing well in this - at least from what I found, they nearly doubled their revenue from cloud offerings since 2015 (projected for 2018 at least).

Thanks that's actually really useful information and it shows why the convo about where people will live is actually important. I guess a $3 million abatement is still a win, but hopefully it'll be more like 2,000 people living in the city.

If anyone's interested, here are the latest figures for commuter-adjusted population i could find, from 2006-2010. Looks like 35% of workers commute, but that's probably gone down as the core continues to become more and more desirable/livable.

Exactly, because it is a "legacy business". Salesforce started as the Marketing Cloud and has rapidly diversified itself into a platform, not just one service. Yes the CRM side of it is still important, but it's not their core business anymore, not by a mile.

As someone else mentioned Salesforce has actually diversified largely through acquiring start ups with promising products that complement its existing businesses. My buddy who works there was actually technically hired by Model Metrics (though they were already owned by Salesforce and hadn't yet been fully merged) which was a Chicago based tech startup that Salesforce acquired. They specialized in the type of cloud based mobile applications that my friend works on and ended up being the core of this branch of the Salesforce platform. That acquisition certainly has turned out to be a coup for Chicago almost moreso than Groupon or Grubhub given this news about the new office. We can probably attribute Salesforce ending up here to the fact that they got a taste of the Chicago market from Model Metrics and it must have tasted pretty sweet.

This is wrong.

It doesn't really matter what proportion is sales/service/email/marketing. The point is that Salesforce is a work horse tech company, not a hip one. And that has implications for how many of its employees will live in the city, pay property taxes and offset the costs of the property tax abatement.

My eyes are glossing over

I think you're drawing too harsh a dichotomy between "work horse company" employees and "hip company" employees. Not every company is a General Motors dinosaur or a zany youthful BuzzFeed.

There's a whole spectrum, and even people in old-economy jobs might like to live in vibrant urban neighborhoods. That's why the current urban boom is so interesting, because urban living now appeals to people across the economy and not just members of certain subcultures.

But even if you take for granted that salespeople are culturally different and don't want to live in edgy neighborhoods (which is demonstrably false, I know plenty of urbanites in sales roles) not every Chicago neighborhood is Logan Square, Albany Park or Pilsen. There are plenty of neighborhoods like Lakeview, Irving Park, Edgebrook, Norwood, etc that have been comfortable white enclaves for decades.

This is great news for the City of Chicago and I think the addition of this very tall building at this site will make the skyline even better. My only concern is that is the density of Wolf Point with all three Kennedy developed buildings going to be over the top? I walk by this site often and wonder how that density with the Apparel Mart and the Merchandise Mart right next door will work for the infrastructure? Would like to hear other's thoughts? Thanks!

!!!

Race aside, Salesforce is definitley more a meat and potatoes kind of business and that invariably means more commuters than say Groupon.. Sure there are some shades of grey, but overall, that’s the reality. On the flip side, meat and potatoes ares essential and that’s why SF does so well.

^ What, exactly, makes an edgy neighborhood edgy? Usually it's (temporary) diversity and demographics in flux. What, exactly, other than sheer age, makes "meat and potatoes" workers prefer the suburbs over a city neighborhood? Can't really dance around race here. If you control for age and we're simply talking about personal preferences, then a lot of people are making housing choices based on the race of their neighbors.

(Obviously parents, who tend to be older, face very real challenges getting a safe/quality education in the city, so there are rational reasons to go suburban at the point.)

But also, Groupon? Groupon is like 90% sales, it's not even really a tech company anymore and it's not rolling out new products on the back of those sweet sweet ad sales like Google does. It's certainly not vacuuming up "hip, edgy" coders like a Google or a Salesforce.

^Why are you so obsessed with what’s edgy? We’re talking about the suburbs vs the city, and i think it’s fair to say that any neighborhood in the city is edgier than Naperville. And you’re just flat out wrong comparing Salesforce to google or groupon. Lol. Wrong. It’s ok to be a meat and potatoes work horse. There’s nothing wrong with that and you shouldn’t take it so hard.

The density of this area, existing and proposed, does not come anywhere close to taxing the 'infrastructure'... by which I assume you mean traffic congestion concerns...

The fact that all of the properties you mention are serviced my multiple roadways, some of which are stacked, and the fact that the WP properties are serviced by a non-thru street (which is an advantage), means that I think it would be close to impossible to over tax the surrounding 'infrastructure' with even the most extreme office density of WPS...

Thanks Pilsenarch. Appreciate your insight to the density question.

Wow, it seems like every time I go out of town for a week, there's a news bombshell. I need to leave town more often :)

My thoughts/questions on this crazy torrent of news:

1. If Salesforce is taking a huge bite out of the marketable office space in this tower, would the developers then consider adding more space? (and thus, potentially breaching the 1000 ft mark, if not higher than that?)

2. I would be fine with a "video board" if it was something along the lines of the Salesforce tower in SF, but not so much if it was akin to a giant LED screen that many skyscrapers in cities like Hong Kong and Shanghai have.

3. The $10 million in tax incentives is clearly a negotiable entry bid, and expected to come down as the city counter bids. I'd imagine they would get somewhere along the lines of half of that.

4. Will the 5,000 employee headcount consist of brand hires/positions, or does that number include the 1,000 people they already employ in the city?

Very exciting news! Between this, as well as Google and Facebook greatly expanding their headcounts here, I wonder if Amazon is itching to get in while the getting is still good? :)

I don't think so. Developers don't usually move the goalposts like that in a significant way.

Plus - this tower is relatively slender and any significant increase in height will require more elevators that will eat into the leasable area on every floor. The footprint of this building is constrained by narrow easements to Apparel Center (or whatever its called now) so the floorplates can't really get any bigger, and the narrower the floorplates become, the less desirable they are generally.

That being said, Salesforce seems to regard this tower as a huge status symbol for them, so they may ask for decorative elements that raise the height beyond 1000'... but I wouldn't expect any more floors.

I think we might eek out 1000' because of the ego thing and a big ass video board crown. Bring it.

More floors would be great, but I would totally be fine with a spire or a decorative crown element that would cross the 1,000 ft mark :)

This seems to be Salesforce's MO: in SF and Indy, they've gone for the most prominent towers in the city, generally modernist glass & steel, with signage, etc. to announce it as the "SalesForce Tower".

That's very different than google's funky adaptive re-use like Fulton Market and their NYC's chelsea market buildings, or apple's gee-whiz design-heavy spaceship campus and apple stores.

If SF does have a specific "type" of building they like, than WPS is definitely right up their alley.

As for the project itself, I don't mind the $10mil in incentives. For 5k jobs, that's ~$2k per job, which will easily be recouped in the first year of income taxes alone, not to mention property and sales taxes. For comparison, Chicago and IL are reportedly offering >$1bil in incentives for Amazon's 50k jobs (spread over 10 years of hiring), which is 10x worse than what SF is asking for. And it's nowhere near such atrocities as Wisconsin offering $4bil for 13,000 factory jobs at Foxconn. For an apples-to-apples comparison, Indianapolis gave SF $17mil in incentives for 800 new jobs.

Of course, the city needs that money more than the company, and I'm no fan of incentives in general, but that's the way the game is played these days and Chicago is getting a pretty good deal for $10mil.

And I don't mind the park closures. Assuming they're asking for a few days a month, or maybe a couple weeks a year, and the city ensures that there's advanced notice, and maybe some coordination with other events planned along the riverwalk, I don't think it'd be a big deal.

What I'm still undecided on is the video wall. On the one hand, Times Square and futuristic places like Tokyo and Shanghai are cool, and it would definitely be fun to recreate something like that in Chicago. But is the river the best place to do so? We already have a fantastic urban canyon with awe-inspiring architecture that speaks for itself and is unique to this city. It's elegant and a great blend of nature and man-made marvels. A video wall changes that, even if it's done in a tasteful way.

If this was proposed for a part of the Loop, I'd have no problem with it. Combine it with the lights under the el tracks that have been proposed, and let's create our very own Times Square / Shibuya Crossing / Blade Runner district. But the river is something different... I haven't decided if the video wall is a net plus or negative there (OTOH, 5k jobs is nothing to sneeze at so maybe hoity-toity discussions about architecture should take a backseat to getting jobs into a city that desperately needs them...)

It seems like some of us are forgetting that this thing called "Art on theMART" goes live in a month, which will project things/animations on the side of Merchandise Mart that faces the river. That is a 2.5 acre face that will now be projection animated next to the river at a much more human height/elevation.

Yeah, I don't think a crown that's lit up 800+ feet up almost next door is going to get the attention nor are people going to really notice too much when they're along the river.

Exactly, you won’t notice it unless you’re looking at the skyline from a distance, in which case it’ll only enhance he viewing.

It would be kinda funny if this thing gets height bummed to be taller than Salesforce Tower in San Francisco