Ok, there's the better weather, lower crime, taxes and less business regulation, right to work stuff...but I'm still not getting it. I love it here!
What I really don't understand is how the WSJ got the story before the Chicago Tribune? WTF?
Boeing to move corporate headquarters out of Chicago, but ‘maintain a significant presence’ in city
By Sarah Freishtat, Brian J. Rogal and Robert McCoppin, Chicago Tribune
May 05, 2022 at 7:34 pm
Some 20 years after Boeing arrived in Chicago, the defense contractor and airplane-maker is moving its global headquarters out of the city, the company said Thursday.
Boeing will relocate its headquarters to its campus in Arlington, Virginia, and will also create a research and technology hub nearby. The move will bring company executives closer to federal officials.
“The region makes strategic sense for our global headquarters given its proximity to our customers and stakeholders, and its access to world-class engineering and technical talent,” Boeing CEO Dave Calhoun said in a statement.
The move will not lead to major Chicago job cuts or relocations, and the company will continue to employ more than 400 people in the city, Boeing spokesman Paul Lewis said. Still, the company will cut office space, needing less as telecommuting has led to more flexible work options.
The move was first reported by The Wall Street Journal.
Boeing corporate headquarters at 100 N. Riverside Plaza on May 5, 2022, after a report the company would be moving its headquarters to Virginia. (Brian Cassella / Chicago Tribune)
Boeing is the latest company to shrink its space in Chicago, as the city’s downtown and office market reel from two years of the COVID-19 pandemic. In December, United Airlines announced it would move 900 employees — more than a quarter of its downtown workforce — from its Willis Tower headquarters to Arlington Heights.
Boeing’s headquarters have been at 100 N. Riverside Plaza since 2001, when Chicago beat Denver and Dallas in a high-profile contest to win the corporate office.
The move brought relatively few jobs, but a great deal of prestige for Chicago. It also came with a price tag: both Illinois and Chicago offered controversial incentive packages scheduled to last 20 years, the Tribune reported at the time.
Lewis said Boeing applied for the incentives annually, and did not pursue any in the final tax year.
Boeing will not receive any state incentives from Virginia. A spokeswoman for the Arlington County economic development office did not immediately respond to questions about whether Boeing had been offered local incentives, The Associated Press reported.
Boeing’s downsizing will now open another hole in the downtown Chicago office market. The company occupies 285,000 square feet on 13 floors in the 36-story riverfront tower, which totals more than 1.1 million square feet, according to CoStar Group.
And even though thousands of office workers recently began streaming back to the Loop for at least several days a week, more empty spaces keep popping up in 2022, a sign that the market still hasn’t recovered from the two-year-old pandemic. The downtown vacancy rate jumped to 19.7% by the end of March, according to a report from commercial real estate firm Colliers International, up from 17.9% at year’s end.
But a Colliers’ office broker said Boeing’s exit doesn’t raise fears that a larger corporate exodus is starting.
“This isn’t really about downtown Chicago as much as it’s about Boeing’s need to be near Washington, D.C., where many of their contracts come from,” said David Burden, a Colliers’ principal.
Chicago’s high vacancy rate largely stems from a lot of empty spaces throughout older office buildings in places such as the Central Loop, he added, but eager tenants keep moving into gleaming new towers along the Chicago River and to the west in Fulton Market, the city’s hottest market. 100 North Riverside was 15 years old when Boeing bought it for $165 million in 2005, but it has qualities that should get office users in the door, especially if it undergoes a renovation, according to Burden.
“There are a lot of tenants that are now looking for 100,000 square feet or so in the next three years, and the Boeing building would be an attractive option,” Burden said. “Tenants want to be by the river and near the (Metra) trains, or in Fulton Market.”
Mayor Lori Lightfoot said the city expects announcements of “major corporate relocations and expansions” in the coming months. She said 173 corporations relocated or expanded in Chicago in the past year, and 67 had done so since the start of 2022.
Boeing corporate headquarters at 100 N. Riverside Plaza on May 5, 2022, after a report the company would be relocating its headquarters. (Brian Cassella / Chicago Tribune)
“What remains to be true is that Chicago is a major hub for global corporations that recognize our diverse workforce, expansive infrastructure and thriving economy,” she said in a statement.
Still, Boeing’s move will be felt in Chicago. Such companies “help fuel Chicago’s economic engine and our iconic position on the global state,” said Farzin Parang, executive director of the Building Owners and Managers Association of Chicago, in a statement.
“Though its absence will be felt, Boeing’s tenure in Chicago is a testament to our city’s civic-mindedness and the strength of the public-private partnerships that brought them here,” he said. “We have many such strengths, and as long as we continue to invest in our competitiveness, our businesses and residents will prosper.”
Boeing’s move comes as the company has faced a slew of challenges in recent years and a strained relationship with the Federal Aviation Administration. Boeing 737 Max airliners were grounded for nearly two years beginning in 2019 after two crashes killed hundreds of people, and production flaws have halted delivery of 787 Dreamliners.
In late April, the company reported a first quarter loss of $1.2 billion. It said it had increased production and deliveries of its 737, and submitted plans for FAA certification of the 787.
When it moves, Boeing will join rival defense contractors including General Dynamics, Lockheed Martin and Northrop Grumman, which are already in the D.C. area.
Boeing’s move may make sense from the perspective of wanting to be closer to the government decision makers in Washington as well as international customers, a production facility in South Carolina and NASA missions in Florida, travel industry analyst Henry Harteveldt said.
But the move would take company leaders farther away from their large manufacturing facility outside Seattle, while the company’s production problems suggest executives should have greater oversight of the production process, said Harteveldt, principal at Atmosphere Research. Boeing also needs new airplanes to fill gaps in its lineup, while its main competitor Airbus continues to do well.
“What concerns me is that Boeing leadership needs to be closer to its employees,” Harteveldt said. “It’s clear that by not being on site things aren’t going as well at Boeing. The message it sends to people in Seattle is, you’re just not that important.”
The Associated Press contributed