Cme (Chicago, Aurora, Kell: lease, credit, house)

[sunnyandcloudydays]

Who thinks CME will remain HQ in Chicago

[Attrill]

They're staying. Most likely they'll get some sort of tax break from the State in exchange for committing to expand or something.

Even if they don't get a break they'll most likely stay. They're very dependent upon services and employees that are really only available in Chicago, NYC, and maybe LA. The other locations have higher taxes.

[ctyrider]

They aren't going anywhere.. they are just trying to get concessions. They are hugely dependent on infra in Illinois, like several datacenters including a new one in Aurora. To move all that would probably cost billions.

[sunnyandcloudydays]

That was my original thoughts as well
I was trying to come up with reasons why they would sell part of the bldg.

First thing comes to mind is the meeting from last week and they are trying to boost cash flow

then property taxes came to mind, obviously they would pay it somewhere in the lease but I am not familiar with all the ins and outs of advantages of a leaseback

Sure wish the economy would rebound

[chet everett]

I dunno, the actual technical jobs associatated many of the esoteric functions could be shifted to Texas at the drop of hat, and the about of house that the salaried folks would be able to afford is easily double or triple what they can buy up here.

As far as traders and even the heads of the trading groups they could spend most of their time in Timmbuktu, so those that like to have offices downtown probably will continue to pretend they need to get out of the house daily and those that are getting sick of stuff will go wherever they want...

[Attrill]

Originally Posted by chet everett

I dunno, the actual technical jobs associatated many of the esoteric functions could be shifted to Texas at the drop of hat,

Not really. The hardware demands of low-latency trading are pretty unique, and can't be moved at the "drop of a hat". They're currently in the middle of a multi-year plan to upgrade their datacenters just to keep pace with competing markets. They've already sunk hundreds of millions into it, and replacing it would not only cost them hundreds of millions, it would also put them a few years behind their competitors on the technology side of things. Their datacenters aren't going anywhere anytime soon.

[chet everett]

Aurora is already "not Chicago" --- CME Group Opens Chicago Trading Hub « Data Center Knowledge

[Jandur]

Originally Posted by chet everett

Aurora is already "not Chicago" --- CME Group Opens Chicago Trading Hub « Data Center Knowledge

Right, but it's very close. The issue, as mentioned above, is that when dealing with these sorts of trading environments, especially HFT, all of their systems need to have low latency, eg very very fast response time.

The amount of of data that CME pours through every day is vast, and the further away the actual users are, the slower that of information becomes. A lot of these trades can be made or broken by a few seconds, so that time is precious, and literally money.

[Attrill]

Originally Posted by chet everett

Aurora is already "not Chicago" --- CME Group Opens Chicago Trading Hub « Data Center Knowledge

They aren't saying ANYTHING about problems with taxes in Chicago, they're talking about the State Corporate tax. Only one out of six companies pays any corporate tax to the state, but due to the nature of their business I'm sure that they do. What they're likely pushing for is a change in apportionment rules at the state level, and not just a one time credit or something. Either way, their issues are with the state, not Chicago. The Aurora datacenter has dedicated connections to the Chicago trading floor and offices in Chicago, that's part of the millions they've spent.

This isn't a suburban/urban choice they're making here. It is all about what State they will be in. Half of the company is tied to the services that are only available in downtown locations of major cities (i.e. Chicago or NYC) and the other half is tied to massive facility in Aurora. All other similar facilities in the US are in NYC - where the datacenters are in NJ and the offices are on Wall St.

They aren't leaving.

[chet everett]

The primary data channels that already exist between Seacaucus and Aurora are just as fast as the secondary channels that go to backup sites in Texas.

The OCC has about 1/3 of its employees in Keller TX and could shift more there if needed...