How Much Might Chicago Taxpayers Pay For Amazon’s HQ2?

By Josh Burday
This article was originally published in Law360

Josh Burday
Imagine Chicago wins the bid for Amazon’s second headquarters. Flip a coin. Heads — the second headquarters brings in thousands of jobs benefiting the economy for years with little downside. Tails — Amazon’s new headquarters is the second coming of Chicago’s infamous parking meter deal,[1] except instead of the mistake costing taxpayers millions, this time it costs the taxpayers billions. Thanks to our government’s secrecy, as far as we know both options are on the table, and we have no way of knowing which one is the reality. The coin climbs in the air. How will it land?

Would you like more information? I would. The Illinois General Assembly has said, in no uncertain terms, that the people are entitled to more information. Much like the other 49 states in the union, as well as the federal government, the Illinois General Assembly long ago passed an open records law, the Illinois Freedom of Information Act. Illinois’ FOIA enunciates with its first breath that it is the “fundamental philosophy of the American constitutional form of government” that the government must provide full and complete access to information regarding its actions and affairs. Nor does FOIA refer to this duty as merely one duty among many. Rather, it is a “primary duty” of government to comply with FOIA and provide complete access to information about its operations. Not only must the government provide this information, but the people have an obligation to use this information to monitor government and ensure that it is conducted in the public interest.

Since Amazon announced HQ2, prospective cities have offered billions of dollars in tax breaks against city and state taxes. Chicago has offered 10 locations as the site for HQ2, but very little information on the details of the bid. Lucy Parsons Labs, a nonprofit collaboration between data scientists, transparency activists and others, requested information on Chicago’s bid for Amazon’s HQ2. Chicago refused to turn the information over. Chicago tells us that disclosing the information would result in competitive harm. In other words, it says that disclosing the information would hurt Chicago’s chances of winning the bid. The bidding period has ended, however, so no competitive harm is possible and many other bidders for Amazon’s HQ2, including Boston, Miami and Philadelphia, have all released their bids publicly. Does the government’s proffered reason for secrecy sound thin yet?

Chicago has a history of making bad deals at the taxpayers’ expense. In 2008, Chicago leased out its parking meter business for 75 years for $1.15 billion.[2] That may sound like a lot, but the city gave up long-term profits in exchange for only stopgap dollars and the mayor has acknowledged it was a bad deal.[3] The private purchasers of the parking meters have already almost made back the initial $1.15 billion investment just 10 years into the 75 year lease,[4] while the city ran through nearly $1 billion within the first two years.[5] And adding insult to injury, due to the contract’s terms, the taxpayers have been forced to pay over $100 million in annual “true-up” payments that are going to continue.[6]

But there’s more. In 2005, Chicago sold rights to the Chicago Skyway for $1.7 billion.[7] Again, the money was used to solve short-term problems at the expense of long-term health.[8] Only a decade after Chicago sold the rights to the Skyway, it was resold for $2.8 billion, highlighting just how badly Chicago got taken in the initial deal.[9]

The danger is very real that Chicago will repeat past mistakes with its bid for Amazon’s second headquarters. Chicago and Illinois have reportedly already offered Amazon $2 billion in state tax breaks, property tax discounts, infrastructure spending and other incentives.[10] They apparently further intimated that they would offer Amazon even more tax dollars if needed.[11] Moreover, even if Chicago wins the bid, there is no guarantee that the jobs Amazon brings will go to local residents.[12]

If obtaining Amazon’s new headquarters is good for the state, could we win the bid without offering Amazon swathes of tax breaks and taxpayer dollars? Are our politicians offering us up to Amazon for a deal that looks good on their resumes while saddling the people with billions of dollars in corporate tax breaks? The coin hangs in the air and we do not possess enough information to know which way it will land if Chicago wins the bid. But history teaches us to be skeptical, especially when the city tries to make deals in secret.

Government should work for the people, and the people have a responsibility to hold government accountable for its actions. We need access to complete information in order to carry out this duty. Not only does our government routinely fight to keep information secret from us, it uses taxpayer dollars to do so, sometimes to the tune of seven figures in a single case. This needs to change.

The coin descends toward its final destination and I ask once more: heads or tails?
Joshua Hart Burday is an attorney at Loevy & Loevy representing Lucy Parsons Labs in their FOIA lawsuit against the city of Chicago.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

[1] Chris Lentino, “Chicago To Pay $20 Million To Parking Meter Company In 2018,” Illinois Policy, (last visited May 2, 2018).

[2] Better Government Association, “Chicago’s Parking Meter Deal a Lesson in ‘Worst Practices'”, (last visited May 2, 2018).

[3] Mick Dumke, “How Mayor Emanuel Locked the Parking Meter Deal in Place,” Chicago Reader, June 6, 2013; “Chicago To Pay $20 Million To Parking Meter Company In 2018”

[4] Id.

[5] See “How Mayor Emanuel Locked the Parking Meter Deal in Place.”

[6] See “Chicago To Pay $20 Million To Parking Meter Company In 2018.”

[7] Id.

[8] Id.

[9] Id.

[10] John Byrne, “Emanuel Gets Heat from Community Group over Bid for Amazon’s HQ2,” Chicago Tribune, Apr. 10, 2018.

[11] Id.

[12] Andrea Guthmann, “The Amazon Race: What HQ2 Win Would Mean for Chicago,” Chicago Tonight, Jan. 30, 2018.


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