While Adam had Eve to pluck the fruit from the Tree of Knowledge, it seems that Chicago Mayor Rahm Emanuel has all manner of help to pluck the corporate fruit of Amazon’s second world headquarters, but critics are saying that there was no reptilian voice urging him on, only the desire for legacy, and perhaps a tiny bit of hubris.
With the Oct. 19 deadline looming, Emanuel and even his arch rival Gov. Bruce Rauner, have held hands to lure the world’s retail giant, ready to seemingly pounce on the lucrative needs of worldwide retail, a place where everyone from the suburban millennial to the future Queen of England, the Duchess of Cambridge, seems to shop.
In a story that has legs, this is the best for most of the nation, as they have answered the Requests for Proposals from the corporate giant, and its CEO Jeff Bezos, with the promise of jobs, and ancillary services and prestige.
Cities like Chicago are looking at a $5 billion investment,and 50,000 jobs; and Emanuel has touted the city as having the right combination of “talent, transportation, technology,” as the draw.
He has also leaned heavily on clout rich people such as lawyer Jamie Gorelick, Environmental Systems Design head, Zackery House, and employer food provider Dustin Lasky to provide a plan and financing, and has scoured various sites for consideration, including the grand Art Deco style, old Post Office Building, or a site near the ever so chic River North, with a twinned tower of residential and corporate tenants, in a mix that some say suggests Buck Rogers meets Frank Lloyd Wright.
Waggish critics aside, the most pressing concern is meeting Bezos’ conditions for consideration, and that includes a prominent request for incentives, that is described as a “significant factor in the decision making process,” in other words big bucks, be it in infrastructure breaks, or most seen as tax breaks.
For a city that has been reeling in red ink for several years as it struggles to pay for earlier pension holidays for teachers, municipal workers, firefighter and police, how much of a tax break can be proffered to Bezos, when Emanuel closed over 50 schools in predominantly black neighborhoods, and mental health clinics in his first term, and the largest property tax increase in modern Chicago history?
Not to mention a public school deficit that has, despite heavy borrowing, still need $500 million dollars and that with a new state funding formula cut millions of dollars from South and West Side communities, that just happen to witness some of the most violent crime.
Some are saying that this is the new definition of bailout a term that has been bandied about the state for several years, and where each penny gained seems to tie the city to the rails for help, like a damsel in distress, as she pleads for mercy from the Eastern banking elite, who gloat over the interest Chicago has paid to keep the doors open on the schools alone.
All in all, Chicago property owners can expect to see an addition to the already $543 million in taxes, they currently pay. Not to mention, the phase in of the burgeoning contributions to police and firefighters pension fund, pegged at 10 percent, and even those living in the North and South Suburbs can see a surge of 6.5 and 3.9 percent.
These are part of four-year increases set to expire in 2019, but more will continue when the ARC payments begin; these are formally known as Actuarially Required Contributions, which require payment from the city to the pension fund while the city sets aside enough money for future payments.”
Can Emanuel afford what some are saying is a bailout of $2.25 billion while slashing public service and hiking taxes? For example, a 28 percent fee for dialing the emergency number 911, or increases in water and sewage, just to ‘stuff billions more into Jeff Bezos’s pockets says Anwar Patel, head of a liberal umbrella group called Grassroots Collaborative.
“Without a trained workforce ready to take these tech jobs, they will go to transplants. One only has to look at San Francisco — a shell of its former self, full of businesses and housing developments for the wealthy but lacking basic amenities for the poor — to see what a tech-company paradise looks like,” claimed Jacobin Magazine.
If Chicago wins the contest, costs in increased housing and services will force many from the city, who has already faced a significant population drain due to a myriad of taxes, including shopping bags, and a recent sweetened beverage tax, due to expire on Dec. 1 after loud protests to Cook County commissioners.
To add insult to injury, “More recently, reports have surfaced showing that Chicago Public Schools (CPS) CEO Forrest Claypool, an Emanuel appointee, cut the special-education program budget by $29 million. At the same time, he’s trying to increase payments to outside consultants to a total of $28 million: almost enough to fully restore special-education services to the schools,” the magazine noted.
Drawing a cautionary note is State Rep. Kelly Cassidy who in a press release said that she has “introduced a resolution and a companion bill requiring a measure of common sense in our State’s pursuit of Amazon.com, Inc.’s new headquarters.”
“Just recently, the State of Illinois in conjunction with the City of Chicago responded to Amazon’s“request for proposals” with an offer of tax and land incentives. Though the full details of this offer have not been released to the public responsible for subsidizing it, initial reports place the total at several billion dollars. HR655 urges caution and requests public hearings before any final deal is struck, complete with expert testimony demonstrating to the public whether this is an economically effective use of their money.”
“Job growth and retention is crucial”, Cassidy said. “But fighting with taxpayer money to win a bid from a corporation that has absolutely no financial need for subsidization is a dangerous path to tread.”
Citing previous examples she cautioned that “Illinois has been burned in deals like this before. In 2011, Illinois gave Sears $275 million to keep its corporate headquarters in the state. Only a few months later, it laid off 100 workers. Illinois taxpayers filled the corporate coffers and actually lost jobs in the process.”
Cassidy stressed that “Capping subsidies at $50,000 ensures at the very least that Illinois won’t get stuck in a deal it regrets for decades. But even so, public hearings should be required before any final deal so Illinoisans know exactly what we’re signing up for.”
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