CHICAGO | Salesforce Tower | 850 FT | 60 FLOORS

[Skyguy_7]

Good to see some of you guys gradually coming to grips with tax breaks for corporations. The long term reward far outweighs any short term/ miniscule "cost" to the city. I put "cost" in quotations because a tax break can hardly be considered a cost. We want as many businesses to do their business here as possible, even when it requires doling out incentives.

[moorhosj]

Originally Posted by marothisu

Yep. And for Salesforce based on the data I've seen for their Chicago office, $50K is low. That is more of what their sales people make as base salary. Their software developers were average close to 6 figures or actually 6 figures. When I did a rough calculation yesterday, I used closer to $75K average which may be even low.

The housing is a good point, which people seem to fail to not be able to think about these things at such a deep level. We aren't talking about 200 people. We are talking about 5000 new jobs. There will be indirect impact in things like you say like new housing, the tax generated from that, the new jobs, etc.

1,500 people paying the city average of $4,100 in property taxes is $6.2 million of revenue annually.

[bgsrand]

Well it's delicate, on one hand you want to establish a precedent that the corps. need the city, and not vice versa. The economic impact absolutely exceeds any short term "cost" but you also can't give away the farm for 20 years.

[Notyrview]

Yeah there must be a balance. Ideally they would be precluded from accepting tax breaks under federal law. that way the playing field would remain even and you wouldn’t see states and cities competing in a race to the bottom vis a vis revenue collection. Until that happens the city should squeeze whatever it can out of corporations that benefit from its dynamic workforce and utterly magnificent urban landscape.

[Khantilever]

Originally Posted by Skyguy_7

Good to see some of you guys gradually coming to grips with tax breaks for corporations. The long term reward far outweighs any short term/ miniscule "cost" to the city. I put "cost" in quotations because a tax break can hardly be considered a cost. We want as many businesses to do their business here as possible, even when it requires doling out incentives.

Rhetorical note: It should be understood as a tax break for certain actions, like hiring or investing, and not as a tax break "for corporations" (i.e., simply for existing, which would just be redistribution to shareholders).

And it's really just basic, sound public policy to subsidize these kinds of things. The same rationale behind taxing carbon and subsidizing R&D applies here.

Originally Posted by Notyrview

Yeah there must be a balance. Ideally they would be precluded from accepting tax breaks under federal law. that way the playing field would remain even and you wouldn’t see states and cities competing in a race to the bottom vis a vis revenue collection. Until that happens the city should squeeze whatever it can out of corporations that benefit from its dynamic workforce and utterly magnificent urban landscape.

The thing is, some places need more investment than others. Some places may benefit more from certain *types* of investment than others. There are tons of articles out there begging Bezos to choose a struggling city like Detroit for Amazon HQ2 on the basis that those places could really use it. Allowing cities and states of offer incentives could help corporations properly internalize the effects their investment decisions will have on society. (Distributional concerns about how we ultimately raise revenue can still be addressed separately)

[marothisu]

Yep. Tax breaks can be seen as investment **if** done in a way that makes the city/state win too. Money doesn't come out of thin air. You have to spend some money to make some money. I am not a fan of corporations sucking cities dry, but $10M is hardly anything when dealing with 5000 new pretty well paying jobs. If you structure it in a way that the city wins, then I have no issues with it. Programs like EDGE are set up like this for a reason, and also why they have a "retention" aspect to their agreement.

[BVictor1]

Originally Posted by Skyguy_7

Good to see some of you guys gradually coming to grips with tax breaks for corporations. The long term reward far outweighs any short term/ miniscule "cost" to the city. I put "cost" in quotations because a tax break can hardly be considered a cost. We want as many businesses to do their business here as possible, even when it requires doling out incentives.

It's about the kind that's given, but corporations are flush with cash, the common man isn't..... Some tax breaks aren't necessary.

If Salesforce does hammer out a deal, they're looking for 500,000 sq ft. I don't know what the proposed floor plate sizes were to be, but office floors are always taller than residential and 500,000 sq ft fills a number of floors and the tower will be built on the allowable FAR.

I'm wondering and oh so hoping that this tower grows. This location deserves something signature.

[the urban politician]

Originally Posted by BVictor1

I'm wondering and oh so hoping that this tower grows. This location deserves something signature.

^ Yeah, if Salesforce comes in with 500,000 sf of space, I would hope this gives the developers enough incentive to try to break the 1000 ft height barrier

[west-town-brad]

Originally Posted by Skyguy_7

Good to see some of you guys gradually coming to grips with tax breaks for corporations. The long term reward far outweighs any short term/ miniscule "cost" to the city. I put "cost" in quotations because a tax break can hardly be considered a cost. We want as many businesses to do their business here as possible, even when it requires doling out incentives.

http://theweek.com/articles/754007/a...centives-worth

Economists say that most of the time, the incentives are counterproductive — a zero-sum game in which jobs created in one community come at the expense of jobs lost somewhere else.

It's like being happy for housing prices going up.... the same house costs more, yay!

[bgsrand]

Originally Posted by west-town-brad

http://theweek.com/articles/754007/a...centives-worth

Economists say that most of the time, the incentives are counterproductive — a zero-sum game in which jobs created in one community come at the expense of jobs lost somewhere else.

It's like being happy for housing prices going up.... the same house costs more, yay!

Yeah except that Chicago is not competing against Chicago for the jobs, and therefore it's not "zero-sum" so that quote doesn't work here...

Chicago's gain is Seattle's, San Franciso's, Portland's, etc loss

[LouisVanDerWright]

Originally Posted by PittsburghPA

Is there a concrete reason why they chose the order of development (West, East, South)? I'd assume it is because they went least costly to most costly? Also not to get wet before it rains but is there a chance a commitment from a large anchor tenant could expedite the process for WPS?

I mean with a 500,000 SF tenant on a 1.5 millions SF building they could basically start whenever they are ready. IF they come to terms with Salesforce on this, then WPS is a done deal.

It's also interesting the article mentions the deal includes options for "significantly more space". This announcement is great news and further cements Chicago as an outlet for all these tech companies that are choaking their own growth off by overstauring entire metropolitan markets on the West Coast.

[LouisVanDerWright]

Originally Posted by Kenmore

tax abatement, obnoxious signage, video wall(puke), no wonder y'all are so excited

No it's the rampant gentrification it will cause that really has us jazzed...

Kenmore continues to plunge deeper into trolldom...

[the urban politician]

Originally Posted by LouisVanDerWright

Kenmore continues to plunge deeper into trolldom...

Yup

No it's a rampant gentrification it will cause that has me excited..

Well, that's already happening without Salesforce. But ultimately what's happening downtown isn't really 'gentrification'. You aren't gentrifying when a vacant lot or a garage, or a small 1 story retail building gets replaced with a 30 story apartment tower full of 500 renters. And you certainly aren't gentrifying when an aging or halfway vacant office building in the Loop is being converted into new apartments. It's simply adding population that wasn't there to begin with.

For the people out there who hate gentrification, this would be a good thing (in your eyes) because it doesn't displace people.

What makes me salivate (not so much as a property owner but as one who loves watching Chicago's skyline become ever more awesome) is that 5000 more jobs can probably support about 10-20 more apartment highrises alone.

[gebs]

Originally Posted by the urban politician

What makes me salivate (not so much as a property owner but as one who loves watching Chicago's skyline become ever more awesome) is that 5000 more jobs can probably support about 10-20 more apartment highrises alone.

This is the answer to the question that inevitably pops up in every single Curbed article announcing a new development in the city: Who is going to fill this? Every corporate relocation brings a lot of people to the city. If NEMA by itself is 792 units, even if we assumed 100% occupancy with at least 3 people in each unit, that's just over two additional NEMAs required to house 5,000 people.

[Khantilever]

Originally Posted by west-town-brad

http://theweek.com/articles/754007/a...centives-worth

Economists say that most of the time, the incentives are counterproductive — a zero-sum game in which jobs created in one community come at the expense of jobs lost somewhere else.

LOL. As an urban economist (albeit, still in grad school), I wouldn't say that--and I certainly wouldn't say that's a consensus position in the field either. In fact, the economist quoted in that article, Enrico Moretti, has a very influential paper about productivity spillovers that is often cited as evidence for municipalities to offer incentives.

[PittsburghPA]

Originally Posted by gebs

This is the answer to the question that inevitably pops up in every single Curbed article announcing a new development in the city: Who is going to fill this? Every corporate relocation brings a lot of people to the city. If NEMA by itself is 792 units, even if we assumed 100% occupancy with at least 3 people in each unit, that's just over two additional NEMAs required to house 5,000 people.

Of course this is a very exciting piece of news and no doubt has the potential to bring a lot of permanent residents to the city but keep in mind I'm sure a large portion of the 5000 would elect to live outside of the city in Chicagoland.

[Notyrview]

I want 1100’

[marothisu]

Originally Posted by PittsburghPA

Of course this is a very exciting piece of news and no doubt has the potential to bring a lot of permanent residents to the city but keep in mind I'm sure a large portion of the 5000 would elect to live outside of the city in Chicagoland.

Based on what evidence? If the majority of these people wanted to live outside of the city of Chicago, then don't you think Salesforce would consider locating an office elsewhere? I know you're kind of new to Chicago, but there is a reason why so many companies have either completely moved from the suburbs into the city or have just opened up downtown offices. The people that they are looking to hire are usually the ones who will want to live in the city itself and probably in areas either downtown or the usual suspects. I don't think your statement is based on actual sort of actual fact unless you care to share your evidence.

[bnk]

I would not say most but those workers that are older and have multiple school age children could easily choose a suburb with excellent public schools and take a very convenient ride on Metra to DT would. Private schools in Chicago are expensive enough to consider public suburban schools easily.

The singles and workers with no children or children not in school Chicago is the clear choice.

[Notyrview]

When i worked downtown, I’d say 30% of the office lived in the burbs, mostly middle managers with kids. That would be about 1,500 of the “up
to” 5,000. All the young people and most of the executives lived in the city.