Friday, May 9th, 2014

Is Something Wrong With Chicago’s Suburbs?

I previously talked about Connecticut becoming a suburban corporate wasteland as well as the rise of the executive headquarters in major global city downtowns. What we see is that high end functions have shown anecdotal signs of re-centralizing, while the more bread and butter – though still often well-paying – jobs are heading to less expensive suburban locales in places like Austin, Charlotte, and Salt Lake City. These leaves expensive and business hostile suburbs around global cities, like most of those in Connecticut, in a tough spot.

Suburban Chicago isn’t as expensive or business hostile as say Connecticut or New Jersey, but there are so many stories about businesses leaving it that I can’t help but wonder if something is seriously wrong there.

First, downtown Chicago has attracted a number of marquee executive headquarters locations like Boeing, MillerCoors, and now ADM. The suburbs have only picked up a handful of smaller operations, like Mead Johnson Nutritionals.

Second, a number of suburban companies have relocated (or announced relocations of) headquarters to downtown. This includes a Sara Lee spinoff, the old Motorola cell phone division, United Airlines, and Gogo Internet. What distinguishes this from the executive headquarters relocations is that some of these involved big numbers of jobs. I believe there were about 3,000 United Airlines employees and about 2,500 Motorola ones.

Third, even companies that haven’t moved their headquarters have opened downtown offices or relocated operations there. Walgreens moved its e-Commerce operations to the Loop and BP relocated some employees, for example.

Fourth, some suburban based companies have simply abandoned the Chicagoland area outright. Office Max comes to mind, which is moving 1,600 jobs to Boca Raton. Sears is having a slow-motion going out of business sale.

Two recent news articles this week reinforce to me the lack of competitiveness of Chicago’s suburbs. First, when Toyota announced it was relocating its headquarters from Los Angeles and Cincinnati to suburban Dallas, Greg Hinz at Crain’s Chicago Business asked why Chicago wasn’t even on the list of candidate cities for this operation.

I believe Toyota wanted to be in the South. But if you look at where they located, namely the suburb of Plano, you’ll see that this is why Chicago is off the list. Chicago’s suburbs have been losing these types of corporations, not gaining them. If you’re going to choose a suburban location, why would you pick Schaumburg over Plano? You probably wouldn’t unless you had a major reason to be in Chicagoland, such as having a primarily Midwest presence or if your company was founded in the area.

What this shows is that while Chicago’s stellar Loop environment is great for executive headquarters type operations, the suburbs lack appeal to people looking to build a greenfield operation from out of town. This hurts the region’s ability to attract large scale employers like Toyota.

Then yesterday Crain’s reported that Walgreens is looking at relocating its entire headquarters downtown in the old Main Post Office building. This isn’t a done deal by any means, but the fact that a company I’d always considered dyed-in-the-wool suburban would consider this is incredible. (Investors have been pressuring Walgreens to move its HQ overseas, but like Aon’s re-domicle to London, even if it happened it might not involve many jobs, especially since the pharmacy business in the United States is so radically different from that in the rest of the world).

So unlike in even other global cities, Chicago’s suburbs can’t even seem to hang on to large scale employers within the region. I don’t want to overstate a trend here, but this would be at least the third company moving thousands of jobs downtown. That’s huge and I don’t see it happening anywhere else at this scale.

Which raises the question of what might be wrong with Chicago’s suburbs. They can’t seem to be competitive for greenfield operations like Toyota, and they are losing some marquee established employers. I took a quick peek at suburban vacancy rates, and it looks like at first glance every major sub-market is over 20% and there was net negative absorption last year (do some further research before quoting me on that). Is there a big problem going on out there?

I’ve long observed that while Chicago has some great residential suburbs, its business suburbs are weak. Places like Schaumburg and Oak Brook are just generic, unattractive edge cities of a typology that, like the enclosed mall, appears falling out of favor. Chicago seems to lack the kind of suburb that combines residential appeal with a strong business presence and a significant regional amenity draw. Only Naperville would seem to fit the bill here.

So while Chicago’s suburbs are not super-high cost by global city standards, and Illinois isn’t the worst when it comes to taxes and a poor business climate by any means, those suburbs appear to have a serious competitiveness issue. It’s a major concern that regional suburban business centers should look to address. As other edge city environments around the country like Stamford (one part of Connecticut I would say has significant strengths) and Tyson’s Corner upgrade themselves, Chicago’s suburbs are only going to fall further behind.

47 Comments
Topics: Economic Development
Cities: Chicago

47 Responses to “Is Something Wrong With Chicago’s Suburbs?”

  1. Eric says:

    It has to at least partly be about talent, right?

    I was in Dallas this week and it seems like every professional peer there lives in Plano or some place like it. These are folks that would be downtown in Chicago, or reluctantly moving to a suburb so their kids could have a lawn.

    The only reason I can see why Walgreen’s would move downtown is to recruit talent. I can’t count the number of people I know who’ve said, “I have a job offer, but it’s in the suburbs, so I’m going to keep looking.”

    If you’re the kind of company with a corporate culture that isn’t interested in, say, providing domestic partner rights for it’s gay employees, you’re not going to move to Chicago’s Loop, and that’s where all the talent is. So your options are limited to placed like Charlotte, Dallas. If you build a campus there, developers will be building apartments for your employees right next to the off ramp in a manner or weeks.

  2. Racaille says:

    “This hurts the region’s ability to attract large scale employers like Toyota.”

    Ah no.

    Toyota moved to Plano for the 40 million dollars worth of incentives provided by Texas.

    Plain and simple.

  3. Ah, yes, Racaille right on cue, who over course neglects to mention that Chicago gave Boeing even more money for fewer jobs to pick Chicago over Dallas.

  4. Racaille says:

    Furthermore, you say:

    “Places like Schaumburg and Oak Brook are just generic, unattractive edge cities of a typology that, like the enclosed mall, appears falling out of favor.

    Clearly, you have never been to DFW. Because in fact, the entire Metroplex is plain, generic, and unattractive.

    Not that Torrance was much better…but at least you had the mountains….and nice weather…and the ocean….and good restaurants.

    They will retain about 20% of their California employees. The rest will move back.

    Book it.

  5. Racaille says:

    “Ah, yes, Racaille right on cue, who over course neglects to mention that Chicago gave Boeing even more money for fewer jobs to pick Chicago over Dallas.”

    So you agree that location is irrelevant.

  6. Brian says:

    Maybe there’s nothing particularly wrong with the Chicago suburbs (other than not being in the South), maybe its just that the Loop is too attractive to compete against.

  7. pete-rock says:

    Chicago suburbs face a major dilemma, the inverse of what the city faced 30-40 years ago. If suburban is what a company wants as a HQ location, there are Sun Belt locales that simply do it better, and don’t face a strong global city downtown pressure. Plano is more similar to downtown Dallas than Schaumburg is to the Loop. In the past the Loop tried to compete with the ‘burbs on the same level and lost out. Then it started to play up its distinctiveness and competitive advantage and started winning out.

    Personal anecdote: United moved many of its workers in Chicago to Willis Tower, where I previously worked. Willis Tower rolled out the red carpet for the new workers. Every day I’d hear elevator chit-chat from United workers, who at first were perplexed and feeling inconvenienced by the move. However, within just a few months, United workers would start talking about the greater profile United had because of the move, easier connections to other businesses and the wealth of amenities in the Loop, and started talking about trading their suburban home for a city one. Great move for United and similar corporations.

    However, this trend has me worried because while jobs and middle/upper middle class people are coming back to the city, low income people and minorities are moving out at an accelerated pace. There are people who believe they are moving toward prosperity when they are actually moving away from it.

  8. Racaille says:

    “However, this trend has me worried because while jobs and middle/upper middle class people are coming back to the city, low income people and minorities are moving out at an accelerated pace. There are people who believe they are moving toward prosperity when they are actually moving away from it.”

    It’s call the Europeanization of American cities. That why cities like Los Angeles are in process of building major downtown developments.

    And quite frankly, Apple’s new HQ maybe the last great suburban campus built in the US. As new workers have little interest in working on a “campus”

  9. Lou says:

    If jobs are in the loop minorities on the south side of Chicagoland can easily reach them by public transit either by Metra or CTA. If jobs are on the north or west sides of Chicagoland low income south side residents need a car and have to deal with crippling traffic (many cant afford a car or deal with the traffic). The only place in Chicagoland for everyone to reach in a reasonable amount of time for a reasonable cost is the Loop.

    METRA and CTA are Chicago’s great advantage that no other midwestern city has.

  10. Mike says:

    On the surface I don’t see much difference between Plano and Schaumburg. That being said I agree, beyond a few locations, Chicago suburbs don’t really offer much.

    I can only add a personal anecdote. Most all of my friends are Chicago transplants drawn to the city because it’s a dynamic and interesting place. But considering our futures here we all agree that settling in any but a few of Chicago’s suburbs would less than ideal. They are all mostly very dull and if given the option we would rather move away from Chicagoland altogether.

    Illinois as a whole is neither pretty nor that interesting outside of Chicago. Personally if I had to live in the suburbs I’d (A), rather do it in a place that is either more physically beautiful or has more history (B), live in a smaller city where at least traffic and commuting isn’t as burdensome. Chicago burbs are flat, dull, boring set in a sprawling region with crippling traffic, and largely inaccessible to any interesting natural or historical escape. Not really all that appealing as places to live.

  11. Chris Barnett says:

    One piece at a time:

    On the surface I don’t see much difference between Plano and Schaumburg

    Never discount climate. Dallas: normal daily average temperature in January of 47.0 °F. Chicago: not.

    Illinois as a whole is neither pretty nor that interesting outside of Chicago…. Chicago burbs are flat, dull, boring set in a sprawling region with crippling traffic, and largely inaccessible to any interesting natural or historical escape.

    I am far from a Chicago booster, but this is just wrong on so many levels. Chicago’s burbs are not very far from the Wisconsin Dells, Lake Michigan, the forests downstate, and even the Michigan UP.

    Chicago is very historically significant in the fields of architecture and urban planning. Oak Park is ground zero for Frank Lloyd Wright and the Willis Tower is ground zero for supertall buildings. The City Beautiful movement gained great momentum from the Columbian Exposition of the 1890s and its artifacts still endow the city richly.

    One of the oldest European settlements in the Midwest is just down highway 41 (Vincennes, Indiana), and nearby is an early Utopian settlement (New Harmony).

  12. Racaille says:

    “Never discount climate. Dallas: normal daily average temperature in January of 47.0 °F. Chicago: not.”

    Dallas: Normal daily temperature in June/July/August 100.0 degrees….without rain.

    In fact, it doesn’t cool down until November.

  13. Mike says:

    Something not being discussed often enough is why the suburbs are not cultivating an environment to help existing businesses prosper? Versus competing with other cities to lure new out of state businesses into a completely foreign region. That’s a tough sell on its own. The State of Illinois makes it very difficult and insanely expensive to run a business here. Therefore perpetuating smaller and growing companies to leave the State before they become a big corporation.

    Chicago is already a business rooted city with the necessary tools already built in place, it’s naturally the right location to plant your company. In actuality, your neighbor is most likely connected to the corporate world in one way or the other. Chicago is a historic business center, ideal for entrepreneurs and business networking. Despite the red tape and corruption. It too must also change its practices if it intends to compete regionally, nationally and globally.

    Perhaps the suburbs should to offer their hometown start-ups economic & tax incentives etc… at the time when they really need it? Instead of some out of town companies that truly has zero vested interest in the community? Create an economic friendly environment and a culture that does everything possible to support businesses “growth.” Therefore, small companies turn into large companies and they’re already located in a healthy business climate, that’s only poised to grow. In the end, the idea of competitive poaching will not so critical to a towns economic viability.

    Illinois is a “One-Horse State” meaning the Chicagoland region is the primary drive for the entire State. The governor needs to spread the wealth so the state is not so top heavy. I think Michigan is the exact opposite of Illinois. Weak city center (Detroit) and nice balance throughout the rest of the state. At the end of the day, it all comes down to corrupt politicians as well as the Illinois/Chicago people that continue to vote these crooks into office.

  14. Mike says:

    Chris,

    I don’t like to court controversy and I wouldn’t dispute the places and things you listed. For architecture especially greater Chicago can’t be beat. Trust me I love living in this city and have found plenty of nice and unexpected areas of beauty outside of it. But based on my own preferences if I had to choose between living in say Carol Stream and some other equivalent place back east, out west or down south all things being equal I probably wouldn’t be choosing Carol Stream.

    Are my preferences equivalent to others? I don’t know, at least among my friends they seem to align. I’m just saying if the Chicago burbs can’t advertise weather, and they can’t advertise cost and they are not remarkably different from a quality of life perspective as other suburbs elsewhere–besides the obvious proximity to a truly great American city and a beautiful lake–what else are you getting by moving to them?

    Ultimately I think it’d have to be a really good job in a growing and dynamic region. Unfortunately that doesn’t seem like a big draw in Illinois these days. And not to bring up this silly poll
    http://www.gallup.com/poll/168770/half-illinois-connecticut-move-elsewhere.aspx
    but 50% of Illinois the most of any other state said they’d move if they could. Actually what I find more interesting is why they would move, tops are jobs, weather and quality of life. About 65% of Illinoisans live in metro Chicago, that has to mean something right?

  15. pete-rock says:

    If I were to draw a distinction between Chicago suburbs that will weather this change well and those that won’t, I’d say those that are on Metra rail lines and go all in on TOD will be the winners.

    Look at the towns along Metra’s BNSF Line. Berywn, LaGrange, Hinsdale, Clarendon Hills, Downers Grove and Naperville either have already or have the bones to build up transit-oriented town centers along the rail line. They will become affordable alternatives for Chicago living, offering similar amenities at a cheaper price. The same goes for towns along other lines, once the municipalities realize it.

    In fact, I see three tiers of suburbs in our future: 1) the TOD burbs that will do well, especially if they also have highway access (see Naperville); 2) highway-adjacent and highway-dependent burbs that will have mixed fortunes (Schaumburg may do continue to OK but Carol Stream may not); and 3) highway-dependent burbs that are far from highways will languish (honestly, too many to mention).

    Today we’re seeing corporations abandon suburban office parks in places like Hoffman Estates or Elk Grove Village, towns that are squarely in that third tier.

  16. anonymous says:

    Chicago suburbs will be a tough sell for the large fraction of the population (majority?) Who live life indoors and in cars. These people hate slowing down to drive in the snow. Heat is not an issue because they are always in AC.

    Chicago is also a tough sell for the minority who enjoy outdoor activities like hiking, mountain biking, camping and skiing. Large parks and national forests are always in places that are difficult to farm. Chicago is surrounded by mega farms for hundreds of miles in every direction .

    When we lived there, we tried to go hiking in WI, downstate, etc. The parks were so small, it was hard to get out of earshot of major roads. And flat land gives few views. It took 6 hours to get to Southern IL. The lake is very nice, but that’s the end of it. All other attractions are man made and therefore available elsewhere.

    Of course, Dallas and Austin are every bit as flat, without even the lake.

  17. Harvey says:

    Most suburban infrastructure is around 50 years old and the bills are starting to come due. Not only that, but you’re out of greenfield construction space if you want to build a custom campus anywhere near the Loop or an airport. And you lose a ton of productivity to bad roads in case of heavy rain or snow.

    The smaller a political unit gets, the more petty and personal corruption becomes – would you rather p— off Rahm Emanuel or Larry Dominick? It’s harder to raise money, and a bad reputation is a death spiral for the entire municipality – there’s no “two Harveys” the way there’s two Chicagos. Cuts come fast and hard.

    As #1 stated, ambitious workers are increasingly looking to downtown – I was recently out of work and it’s night and day how much the city and suburbs are interested in/desperate for you working there. For one thing, Chicago has unfortunately availed itself of a conveyor belt of college students and 20-somethings that are low-paid and easily replaceable under temp or internship conditions. Where in the suburbs, if you shove someone out the door you might not find the next worker waiting to take their place.

    Plus, all the other stuff that’s been said about being boring as hell and hard to get to.

  18. Ziggy says:

    I’m glad to see Aaron raising this topic and perhaps rattle some cages.

    One of the dynamics that commentators haven’t addressed (but many are probably familiar with) are the market preferences of Millennials when it comes to choosing a place to live. Companies relocating from the burbs to the Loop are smart – even if you don’t live in Chicago, its transportation system allows for relatively painless commutes via rail or CTA from close in locations like Elmhurst, Des Plaines, Oak Park and Evanston. So, the younger talent that big companies want can still get to work even if they can’t afford to live in Lakeview.

    Another bit of good news is that thanks to RTA funding, many rail suburbs have been undertaking TOD planning for their central biz districts over the past decade. It takes many years for the benefits of such planning to become visible, but at least the consciousness of many suburban leaders has been raised.

    I’ve consulted in many suburbs over the past decade and confirm that elected leadership is a real issue. Elected office in many suburbs is essentially a moonlighting job and those who undertake the brain damage and abuse of running and holding office often do not have a good understanding of the macro issues facing their communities. Benchmarking is poor and the local debilitating effects of personality politics can be very harmful. It’s one thing to see economically stressed communities stumble to compete in the global market, it’s another to watch relatively wealthy communities that actually have options and control over their destiny flounder due to bad decision making.

    Finally, I think the suburban rail communities with supercharged downtowns (with the walkable environments and urbane amenities that Millennials and many other seek), and the room to add both jobs and new residents will be competitive in the decades ahead.

    Those that do not will have to strengthen other assets that make them competitive – schools, public safety, parks and rec, overall appearance. Public resources for these kinds of investments will be increasingly challenging to come by, but having resources is no guarantee of success if leaders doesn’t understand the real problems their communities are facing.

  19. david vartanoff says:

    About Toyota, see http://www.latimes.com/opinion/topoftheticket/la-na-tt-toyota-exit-20140501-story.html
    some of the decision was apparently trying to centralize operations. One might remember that GM found trying to micro manage Saturn cost wasted travel time if they elected to send a Detroit desk jockey down to Spring Hill to impose new policies.

    On another point, the younger brighter “creative class” have shown they are not entirely thrilled by endless malls and subdivisions. Much of the moves to the edge cities IMHO was a mix of white flight, executives locating the office close to their own mcmansions, and in the Chicago case putting the offices where South Siders w/out cars would not be in the employee pool.

  20. Roland S says:

    Lots of good comments here. I think those regions that have seen strong suburban growth over the last decade are those that have a far more centralized power structure. Look at Washington, where a huge amount of power is vested at the county level in both Virginia and Maryland. If these massive jurisdictions adopt smart policies, whole swaths of the region benefit. Chicagoland is chopped into many tiny fiefdoms, which hinders planning efforts and makes cooperation all but impossible. Chicago itself is central, yes, but it’s also the only huge player in a field of pipsqueaks, at 14 times the size of the next largest suburb (Aurora).

    Specific policies like TOD, infrastructure expansion, non-poaching agreements, tax policy, etc may give metros a slight edge, but I think the consolidation itself is a huge factor.

    Heck, Aaron, I’m sure you could identify some ways that Unigov helped Indy grow and attract/retain business.

  21. Chris Barnett says:

    I suspect the “younger brighter creative class” may yet turn out to be a lot like their parents when their own children get to school age. They will probably (grudgingly) trade off and accept a world of strip malls and long commutes to get affordable houses with yards, cul-de-sacs, and good schools.

  22. John Morris says:

    “Another bit of good news is that thanks to RTA funding, many rail suburbs have been undertaking TOD planning for their central biz districts over the past decade. It takes many years for the benefits of such planning to become visible, but at least the consciousness of many suburban leaders has been raised.”

    And there we get to the gripe I have about the role Chicago’s leaders play in the region. The whole area was built on rail and still has one of the few decent commuter rail systems.

    Is there any communication going on tho maximize this asset to recreate the synergistic suburb/ city relationships that once existed?

    A working group among urban activists and leaders to change zoning laws along the rail lines would be a huge step forward and unleash huge amounts of trapped real estate value.

  23. John Morris says:

    Zoning and land use is the key to almost everything. Dense mixed use development keeps trains full in all directions at all hours and reduces peak loads. Likewise, intense development = more revenue to fund the lines through all types of value capture.

  24. the urban politician says:

    An interesting question posed by Aaron here.

    It’s the reverse of the “Chicago’s core is attractive to young upwardly mobile people” by asking the inverse question, namely “is something wrong with Chicago’s suburbs”?

    My answer is no. I don’t think there is anything distinctly wrong with Chicago’s suburbs when compared to other suburbs around the country. I just think that unlike most other US cities, Chicago’s suburbs have the benefit of being linked to one of the nation’s most desirable urban cores, and naturally that will be a talent magnent when the chickens come home to roost (ie the suburban dream reaches middle age and society realizes that it’s not all that it’s cracked up to me).

    In the long run, Chicago’s burbs will evolve into what they were initially intended to be–bedroom communities surrounding the vibrant city in the center. But lets get real, the suburbs are still where a majority of jobs and companies are based, and I still don’t see that changing. And there are still some outliers: Zurich Financial is bucking the trend and building a huge new headquarters campus out in Schaumburg. And you still have large distribution/industrial centers getting built out in the suburban hinterland.

    Finally, there continues to be a lot of new investment in the suburbs, both residential and commercial. I think it goes a bit too far to say that they are doomed.

  25. John Morris says:

    Does the Chicago region have a commuter suburb/ transit linked city leading the way with TOD- like a Jersey City or Arlington?

    “In the long run, Chicago’s burbs will evolve into what they were initially intended to be–bedroom communities surrounding the vibrant city in the center.”

    A pretty big trend is emerging towards the dominance of mixed use districts. Midtown Manahttan’s office only areas are losing ground to places like Chelsea, Soho & The Meat District. Lower Manhattan is a hot office market now- only because it has lots of residents too.

    Notice how Google picked the west Loop in Chicago over the Loop? The whole pure bedroom/ pure CBD model is breaking down.

    Even if one assumes that a lot of people still want to live in sprawled single family only areas, the basic economic model results in staggering taxes for most.

  26. Alon Levy says:

    Nitpick: can we please not use “upwardly mobile” as a stand-in for “yuppies” or “hipsters” or “creative class”? Usually people in this class are not upwardly mobile at all – they grew up upper middle-class at least, in comfortable suburbs. If you want to see upward mobility in the US, go to a Chinese or Indian or Mexican or Cuban enclave.

  27. the urban politician says:

    John,

    The closest example Chicago has to an Arlington or Jersey City is Evanston, IL. It has extensive transit links to the city and has been building vertically for quite some time, although nothing on the order of Jersey City. But bear in mind that Jersey City is directly across the Hudson from Manhattan, so it has some natural advantages. There is no Chicago suburb that is anywhere nearly as close to the city’s downtown.

    Chicago’s next best option is to promote TOD in its neighborhoods, which it is doing to a modest success at best.

  28. Harvey says:

    Downtown Oak Park is about five miles from downtown Chicago and accessible on the Green and (near) Blue Lines and Metra, but as far as I can tell they’re more of a lifestyle suburb and not doing much to attract anything more than boutique employers. Plus, you have to cross the West Side to get there, which shouldn’t be a big deal but you know Chicagoans…

  29. Harvey says:

    Ugh, I’m bad at math. It’s about 8 miles.

  30. John Morris says:

    OK, I know Jersey City is an outlier in terms of location. But the region needs some examples of successful TOD.

    Even then, there is a big chance people and political leaders won’t get it. Politics is structured to throw good money after bad.

    A huge percent of net growth in New Jersey is TOD in places like Jersey City & Newark but most of the infrastructure spending is going to support what isn’t working.

  31. Ziggy says:

    I had a conversation with friends about Aaron’s post and we’ve come to a consensus that there exists in Chicago a dividing line that could be called the “Pork
    Belly Curtin.”

    The Pork Belly Curtain (PBC) existing to west on a line roughly parallel to I-294. Inside the PBC there are generally progressive communities and neighborhoods with lots to offer talented Millennials, including innovative cultural opportunities in the visual arts, performing arts and, especially, the culinary arts – as exemplified by the multiple variations on pork belly appetizers at hipster centric eateries such as those clustered around Logan Square.

    West of the Pork Belly Curtain lie the more sedentary burbs whose restaurant fare is considerably less adventurous. In fact, dining in many popular burb spots is like riding the time machine back to 1998.

    The core of Chicago is attracting smart, ambitious innovators from all over th enlace. Maybe they wind up in Buffalo Grove later, but the creative energy inside the Pork Belly Curtain is noticeably more prevalent than outside.

  32. John Morris says:

    @Ziggy

    But from what I can tell the city itself also lags in transit oriented development. Many areas seem to be going backwards.

    http://chi.streetsblog.org/2014/03/20/south-shore-residents-resist-demolition-of-walkable-retail-block/

    “Urban Partnership Bank, which took over failed community development banking pioneer ShoreBank in 2010, will close their office on March 22. DNAinfo reported last month that Monroe Investment Partners is “under contract to buy the bank and parking lot,” demolish the two-story bank building and its neighbors, and replace the entire block between Jeffery and Euclid with a one-story building that could include a drive-through-only McDonald’s.

    Eric Rogers leads public outreach for the two groups’ campaign against demolition, starting with a petition to aldermen Leslie Hairston (5th Ward), Natashia Holmes (7th), and Michelle Harris (8th) to establish a landmark district. The proposed strip mall, he says, “is idiotic on so many levels,” particularly since there’s a “33 percent vacant strip mall with ample parking kitty corner” from the soon-to-be-vacated bank. Rogers said that kind of development is wrong for the area, explaining that 71st and Jeffery “has great transit, but it’s already clogged with cars, so transit-oriented development is needed.””

  33. As someone that has lived in virtually every part of Chicagoland at some point (grew up in the South Suburbs, lived on the South Side of the city, the North Side of the city and the North Suburbs, and now live in Naperville in the West Suburbs while commuting on the Metra to the Loop), there’s a partial truth to Aaron’s post that the city is gaining at the suburbs’ expense in some areas but an overstatement of how widespread it is. I agree that corporate jobs are definitely migrating back to the Loop and Millenials certainly have a preference for urban life… at least for now when they’re still in their 20s without school age children (which we’ll get to further in a moment). From a pure financial perspective, the cost of office space in the Loop isn’t so much dramatically more than the suburbs in the way that, say, Manhattan office space is compared to Westchester County office. That makes all of the amenities of the Loop that much more attractive.

    On the other hand, the supposed exodus from the suburbs (both in terms of companies and people) shouldn’t be overstated. Several of the bluest of the blue chip corporations, such as McDonald’s, Allstate and Abbott Labs are still entrenched in the Chicago suburbs. The North Suburbs have one of highest concentration of pharmaceutical companies on the world, while the West Suburbs have a disproportionate number of tech workers.

    Also, as Chris Barnett noted, we still have to see what Millenials will do en masse when they actually have *school age* children (not just when they are in strollers). Millenials are putting off both marriage and having children until much later in their lives, so some of the effect of them staying in the city longer than previous generations is that they still haven’t taken the family-based steps that send a lot of people out of the city. The public schools are still a *massive* differentiator between Chicago and its suburbs. While this is a common phenomenon, the difference is arguably greater between the city and suburbs in the Chicago area than anywhere else in the country. Sure, there are small handfuls of neighborhood schools improving in Chicago, but wherever that occurs translates into massive real estate price increases to the point where even people with incomes in the low six figures (much less those with middle class incomes) essentially have the choice of (a) playing the selective enrollment lottery (and “lottery” is an apt term because the odds are so low), (b) pay a ton for private school or (c) head to the suburbs. Millenials, for the most part, are still largely in the stage where it’s easy to live in the city where it can be completely about a lifestyle choice.

    I feel attuned to this because for me, I’d choose to live back in the city myself if I didn’t have children. When they head off to college in 13 years or so, I’ll probably be looking for a place in the city again. I’m in the generation that’s just a little bit older than the Millenials, and I really think we preferred urban life as a matter of course coming out of college just as much as they do now. However, there simply isn’t anything more important than the schooling for my kids. Not lifestyle. Not commute. Not anything else. Great public schools are non-negotiable for me and a lot of other people with my type of income and educational levels (and that’s why we’re in Naperville). Until we see Millenials actually have to face that choice en masse (and they really haven’t yet), then we really can’t be sure that their living patterns are going to be permanent. Children really do completely change everything and that’s still where the Chicago suburbs offer a lot of compelling selling points.

  34. John Morris says:

    If what you say is mostly true, and schools alone are the main suburban advantage- they are hanging by a pretty slim thread.

    A) The economics of many single use suburbs creates very thin, vulnerable tax bases and very high tax rates to support those schools. For every great suburban district there are many poor ones.

    B) For the exact opposite reasons- dense cities allow for access to many more options. If and when school choice becomes more common, that thread will be cut.

  35. John Morris says:

    @Frank the Tank

    I am making a general statement. Naperville has a much larger and diverse economy than many suburbs. It probably has a lot of room to adapt.

    Smaller fragmented suburbs are more vulnerable.

    Just saying one can’t cherry pick out the wealthy top tier suburbs to sell the idea that the business model is widely sustainable.

  36. Racaille says:

    @Frank the Tank

    “However, there simply isn’t anything more important than the schooling for my kids. Not lifestyle. Not commute. Not anything else. Great public schools are non-negotiable for me and a lot of other people with my type of income and educational levels (and that’s why we’re in Naperville).”

    It’s interesting how people continue to believe that Naperville schools rank so much higher than the rest because they do not.

    http://www.chicagomag.com/Chicago-Magazine/September-2012/Best-Public-Schools-in-Chicago-and-the-Suburbs/

    And based on your age, I am rather certain you moved to Naperville for other reasons.

  37. Harvey says:

    @Racaille – I grew up in the Northwest Suburbs and 3 of the top 10 high schools on the Cook County list were in my district, including the one I graduated from. None of them scored quite as high as Chicago’s prep schools. But you didn’t have to test into them, you were never more than a couple miles from a good high school, and if you fell behind you weren’t in danger of being shunted off to a lower-performing school to keep scores up at the prestigious academy (although we had an “alternative” school you might get banished to if you were really bad). There’s something to be said for simplicity and knowing your kid is guaranteed a spot in a good school close to home.

    Prep schools, selecting enrollment, charters, etc. might have made sense in Chicago when there was no money to go around (there still isn’t) and the upwardly mobile needed placating. But now large areas of the city are under gentrification, and it’s just as damned expensive to administer all this testing, a bunch of parallel systems and the constant closing, reopening, demolishing and rebuilding of all these schools. It’s time to invest in good open-enrollment neighborhood schools in Chicago again, intellectual trendiness be damned.

    As for Naperville, I think it’s annoyingly overhyped, but then again I’m a Northsider. Where are you from? It seems to be more of an aspirational suburb for the South and West Sides.

  38. John Morris says:

    Right, its not the great schools that drive suburbs but the lower risk of a kid ending up in a bad school. A great neighborhood usually = a few great elementary schools but the middle school might be bad and the high school is probably bad. (If all three are great, the housing costs are probably through the roof)

    We have to be adult about this. NYC rates pretty high in terms of schools segregated by class. Rich parents and smart kids end up in private or quality magnet schools.

    The upside is that people are not leaving areas based on schools alone- and neighborhoods sustain more diversity.

    Problem is how hard it is for an average sprawled suburb to sustain quality schools without nosebleed taxes.

  39. @Frank the Tank,

    A couple things. Yes, there are still mega-corporate campuses out in the ‘burbs. But think back to when Sears moved to Hoffman Estates. When is the last time a major move like that happened? Today it seems more likely to be the reverse. Just as the rise of the ‘burbs didn’t kill the Loop, the suburban districts aren’t going to die off completely by any means. But clearly in Chicago at least, the pendulum is showing a bit of a sign of swinging back. I’m not saying that’s a general rule for all cities. But in Chicago were you have a combination of a superb, reasonably priced, accessible Loop vs. generic suburbs with terrible traffic that aren’t even accessible to many commuters because of that and distance, incentives favor downtown.

    Naperville is a sprawly place to be sure and not personally my favorite. But it does have a good combination of affordability, residential desirability (partially for that reason), a downtown that’s excellent and a regional draw, and a lot of office/retail.

    There are TOD zones in Chicago to be sure, but what Chicago doesn’t have is something like Stamford, which is an edge city with direct transit accessibility to offices (a more geographically fair comparison than Jersey City). You can reverse commute to Naperville, but the Metra stations aren’t really in tune with the offices. When I was working up on Lake-Cook, they had a service called the “Shuttle Bug” which I believe still exits that ferried people between the office parks and the Metra, but it wasn’t really TOD office.

    The Metro-North to Stamford takes an hour, but it’s an express trip with minimum half hourly service all day. (Being at the border gives Stamford tax arbitrage opportunities as well). Metra’s reverse commute trains are almost all milk runs and run hourly on most lines. There isn’t yet a suburban business district I can name that really leverages and integrates with Metra.

  40. John Morris says:

    “There isn’t yet a suburban business district I can name that really leverages and integrates with Metra.”

    I am sort of thinking of Stamford, but Jersey City or especially Arlington are what I have in mind.

    Stamford isn’t too far along in terms of creating a residential district. Its more a rail oriented office park. (Parking for commuters still dominates) Both Arlington and Jersey City have mixed use communities that have a real synergy with NYC. People really flow back and forth.

    The killer app for Chicago- is shifting more of the highway oriented development around the transit links.

    The Loop itself is becoming less of a pure business district.

  41. Racaille says:

    @John Morris

    “Right, its not the great schools that drive suburbs but the lower risk of a kid ending up in a bad school. A great neighborhood usually = a few great elementary schools but the middle school might be bad and the high school is probably bad. (If all three are great, the housing costs are probably through the roof).

    Quite frankly, I don’t believe there is such a thing as a “bad school” when it comes to academics in Chicago or anywhere else in the US. Sure, some teachers are mediocre perhaps even intellectual challenged, but on an international level, American K-12 schools rank quite poorly anyway.

    What we do have in the US is a lot of schools with a lot of bad students. A good student will be a good student anywhere regardless of the school.

    And like you said, let’s be adult about this; The schools aren’t failing the communities that they serve, the community is FAILING the school.

    And nothing is going to change until that dynamic broken.

  42. CAV says:

    re: Frank the Tank in Naperville:

    We are Gen-X’ers that stayed in the city, our kids are now high school age, in a CPS selective enrollment school. When they started, we were both working and we opted for the more expensive but in many ways easier private grammar school. But in the 10 years since our kids started school, not only has our local K-8 CPS school (Oscar Meyer) done a complete 180 in terms of quality, there are many many other public schools that have also done the same or better. Had we the chance to do it over again, they would absolutely attend CPS from the beginning.

    It’s great that you (and many people like you) think that schools are the only thing that matters. But some of us, and I believe the Millennials will also feel this way, believe that education in the classroom is just ONE aspect of life. Our kids, growing up in an urban environment, are not becoming cookie-cutter prototypes of Mom and Dad, they are befriending and working with kids of all different backgrounds, they are seeing life from many sides, not just the ones that look exactly like they do. They are gaining, at an early age, a strength and savvy that suburban kids won’t get until adulthood. They are growing up global in an age where borders are disappearing.

    So to assume that the ONLY choice you had was to move 60 miles away from the city to educate your kids, that’s pretty narrow. There are big and growing numbers of families that are choosing to stay and raise their kids in an urban environment and not shortchanging them in the process. And the more of us that do that, the more of us who get and remain involved in improving our local schools instead of fleeing them, the better they will be for years to come.

  43. urbanleftbehind says:

    CAV, I agree with your general sentiments. It is just that the timeframe for “the changing of students” has been too glacial for many to take a chance on. Nowadays the battle ground for good schools is not Lincoln Park, Lakeview, or North Center, but places like Ukrainian Village, Edgewater East Humboldt Park, Albany Park, McKinley Park and Bridgeport. An option of “only an extremely bad kid doesnt get in” cited by Harvey would suffice in the more strollerfied areas. I think making Lane Tech’s base a little less expansive, plus a selective enrollment school east of Clemente and west of the River might work. I see a lot of younger couples with children approaching elementary age trying to make it there and having some targeted (until the changing of students is more of a fait compli) would help.

  44. Ryan Richter says:

    @Aaron Renn,

    “There isn’t yet a suburban business district I can name that really leverages and integrates with Metra.”

    This is absolutely correct for a couple of reasons. First, there are no edge city type locations built around a TOD hub in the Chicago area as you have correctly pointed out. Interestingly, I’m curious about the potential revival of some of the older industrial satellite cities such as Aurora, Elgin, Joliet and Waukegan that have good urban bones but have struggled to compete with both the City and surrounding suburbs.

    Second, Metra does not have the type of reverse commute services necessary to encourage office development to thrive. After peak travel periods, headways are an hour at best and service in the evenings after the peak reduce considerably. If Metra were to ever increase service, this would help to provide the connectivity that these businesses need. Even Lake-Cook, which is probably the closest thing to a Stamford or Tysons Corner, and is home to Walgreens has serious land use inefficiencies that are also not helped by Metra’s poor off-peak service.

  45. Eric says:

    The Toyota move was a cost of housing and housing capacity thing. I think the business courier or free press covered a comparison between the two cities.

  46. Eric says:

    And a side note on Toyota, engineering is still going to be in the Midwest but not Chicago. Who knew Motown still had its pluses:

    “Osamu (Simon) Nagata, president and CEO of Toyota Engineering & Manufacturing North America, told me he expects the consolidation of engineering and purchasing staffs near Ann Arbor, bringing Toyota’s head count there to 1,400, will help his people “be more flexible and open-minded to accept new ideas proposed by North American suppliers.” With the recent appointment of Ann Arbor based Monte Kaehr as chief engineer for the 2015 Camry, Toyota now has chief engineers based in Michigan for five of its models.” http://www.freep.com/article/20140501/COL06/305010033/Tom-Walsh-Toyota-Volkswagen-BorgWaner

  47. Jeff says:

    Why is this even considered a problem? Don’t we want our metro regions central business districts to be thriving and attracting new businesses? Cleveland, where I live, and lots of other cities would KILL to have that kind of movement of jobs into their downtowns.

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