CRIME RATES SPARK RELOCATIONS

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CRIME RATES SPARK RELOCATIONS

Safety concerns fuel migrations to Florida

PHOTO ILLUSTRATION BY JAKE STEVENS/SFBJ; GETTY IMAGES

By Brian Bandell  –  Senior Reporter, South Florida Business Journal

Oct 20, 2022

When billionaire Ken Griffin announced in June that he planned to move the headquarters of his Chicago-based hedge fund Citadel to Miami, he cited the Windy City’s high crime rate as a key factor.

“Chicago is like Afghanistan, on a good day,” he said during a speech to the Economic Club of Chicago in 2021.

The move highlights a growing trend of corporate relocations nationwide. This comes as violent crime has increased in most U.S. cities since the onset of the Covid-19 pandemic, according to the Council on Criminal Justice.

Persistent crime is one reason companies leave cities, often over concerns for executives’ or employees’ safety, experts say. Property crime also wreaks havoc on retailers and small businesses that are frequent targets of theft, prompting some of them to shutter.

Strong research suggests that high crime rates cause a population exodus, said Richard Rosenfeld, a professor of criminology and criminal justice at the University of Missouri-St. Louis and a co-author of the CCJ study.

“The same conditions that prompt people to relocate may also prompt business relocations and impact the ability of a city to attract new business,” he said.

Luckily, Florida has benefited from this trend, as it’s been the No. 1 draw for wealthy residents from high-tax states over the past few years. Lower crime rates than other metro areas has been one of the factors for this migration, along with lower tax rates and Florida’s reputation as a pro-business state.

And it’s important to note that while property crimes such as robbery fell during the lockdown years, they rose in most big cities in the first half of 2022.

John Boyd, principal of Boca Raton-based business relocation specialist the Boyd Cos., said crime always plays a role in a company’s decision of where to move.

“One of the big reasons you see migration from California, New York and Philadelphia is not just high taxes, but crime statistics,” Boyd said. “St. Louis hasn’t enjoyed the type of growth Kansas City has in recent years, and crime is a big reason why.”

While crime statistics are important, where residents migrate to is also a huge factor because companies strive to follow the workforce talent, said Tom Stringer, managing director of site selection and incentives for BDO in New York. The two go hand in hand because if people are reluctant to live in a city because they’re concerned about crime, it’s harder to find workers there.

“Three or four years ago, if you wanted a great job, you needed to move to a big coastal city,” Stringer said. “That flipped on its head because a lot of migration post-Covid has been companies chasing the workforce.”

Crime has had a negative impact on the retail real estate market in some cities, such as San Francisco, where retailers shut down because dealing with theft was too costly and shoplifting was rarely prosecuted, said Tim Blair, a partner at commercial real estate firm Shannon Waltchack in Birmingham, Alabama, and past president of CCIM International.

“Nobody wants to spend time in an area near crime,” he said. “[But] part of that is the city government’s willingness to make sure crime doesn’t occur.”

Chicago-based McDonald’s CEO Chris Kempczinski recently told the Economic Club of Chicago that the city is “in crisis” over crime, according to CNN. That has hurt the performance of its local restaurants, made it harder to recruit employees to its corporate offices, and slowed workers’ return to its offices, he added.

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