Boeing Has 3 Cities Competing for Prestige and Ripple Effect

The three cities nominated by Boeing Co. for its new headquarters already are touting themselves to lure the aerospace giant. But exactly what kind of a payoff are Chicago, Dallas and Denver fighting for?

After all, Boeing plans to move only about 500 executives and other white-collar workers from its longtime Seattle base to its new home, so the direct economic impact on the winning city’s industrial base and real estate market will be minimal.

But landing a company of Boeing’s stature--it’s the world’s largest aerospace company and a defense industry giant--will mean much more to the city than prestige and bragging rights, analysts say.

“Over time, having a company like Boeing will bring in a lot of additional business, because all of Boeing’s vendors, customers and suppliers are going to want to have a presence close to corporate headquarters,” said Bernard Weinstein, director of the Center for Economic Development and Research at the University of North Texas in Denton.

Hotels and restaurants also are likely to spring up around the new headquarters to serve the wave of visitors that will come to see Boeing Chairman Phil Condit and his staff.

There’s also the prospect that Boeing might eventually move some of its production or research operations to a site near its new home. And there’s a modest ripple effect on nearby businesses, from office-cleaning companies to firms that fix the copying machines.

Then there’s the philanthropic and civic benefit, said Chris Walker, director of community and economic development at the Urban Institute, a nonpartisan policy research group in Washington.

“There will be an expectation that Boeing will do its part as a corporate contributor to various charitable causes,” and provide “senior talent” for civic events and programs, he said.

Boeing had revenue last year of $51 billion.

Even though landing Boeing’s headquarters would pale in economic terms to attracting a big production plant or research facility, it “sends an important signal to the world that Dallas or wherever they choose is a good choice for a corporate headquarters,” said Michael Davis, an economics instructor at Southern Methodist University in Dallas. That could help attract still more companies, he said.

Within hours of Boeing’s announcement Wednesday, all three cities on the short list launched into public-relations boosterism to court the company. However, details of their pitches are only now being formulated; none of them knew in advance they were finalists.

Fort Worth Mayor Kenneth Barr, for instance, is mulling whether to join Dallas Mayor Ron Kirk on a trip to Seattle to press for the company’s relocation to north Texas, said Barr spokeswoman Shirley Little.

All three cities are likely to dangle tax breaks and other economic incentives typically used to lure new businesses.

“The state is trying to find out from them [Boeing] what they want, what the criteria will be,” said Dennis Culloton, press secretary for Illinois Gov. George Ryan.

On Wednesday, Chicago Mayor Richard Daley called a quick news conference to proclaim that “Chicago is the best city to call home.”

Not so fast, Denver Mayor Wellington Webb said Thursday. “I was born in Chicago, I’ve been to Dallas and I’m glad I’m in Denver,” Webb said. “If a company is looking for a state and city that in the future are going to be on the leading edge of globalization, Colorado and Denver are the place.”

It won’t be an easy choice. All three cities have attributes that could appeal to Boeing. Chicago, for instance, is one of the nation’s top transportation hubs because of its central U.S. location. Suburban Chicago also is home to Boeing customer UAL Corp., parent of United Airlines, the world’s largest airline.

The Dallas-Fort Worth area provides a strong airport and is home to AMR Corp. and its American Airlines unit. It’s also home to Southwest Airlines. It has moderate living costs and there is no state income tax.

The region also has had considerable success in attracting high-profile headquarters over the years, mostly at the expense of New York. Companies that have left the Big Apple for Texas include not only American Airlines, but also J.C. Penney Co. and Exxon (now Exxon Mobil Corp.).

“We think we have several key factors that would be important: business environment, global accessibility, strategic customer relationships with American and Southwest Airlines,” said Jan Hart Black, president of the Dallas Chamber of Commerce.

Denver can point to its relatively new airport and its well-regarded quality of life. The U.S. Space Command is in Colorado Springs, and the state hosts several aerospace facilities. One of Colorado’s U.S. senators, Republican Wayne Allard, is a member of the Armed Services Committee and thus an influential lawmaker in the defense arena.

“We will take full advantage of that situation when it comes to talking to Boeing,” said Allard spokesman Sean Conway.

Mayor Webb has forged a reputation for a business-friendly environment in Denver and has presided over a successful revitalization of the city’s once-slumbering downtown. The city’s economic upturn also has led to an unemployment rate of just 2.6%, well below the national level.

Gov. Bill Owens asserted that Boeing should move to Colorado “because we have low taxes, because we have the best business climate in the country, because we have the best-educated work force, and because it’s the best place to live and raise a family.”

But he said Denver will not get into a bidding war for the aerospace giant, adding: “It wouldn’t be my expectation to try to buy Boeing’s move to Colorado.”

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Times staff writers Julie Cart in Denver and John Beckham in Chicago and researcher Lianne Hart in Houston contributed to this report.