Corporate location decision making in light of terrorism threaten city environments - The cases of New York and Chicago

Corporate location decision making has been based, for many years, on proximity to transit sources, concentration of qualified employees, relationship with peer and other institutions, among numerous factors. Downtowns of major cities have always offered significant benefits in all the aforementioned areas compared to remote locations, attracting corporations in significant numbers. After the terrorist attacks of September 11, 2001 in the U.S., corporations are highly concerned with their security at high risk downtown locations as well as the increasing cost associated with these locations. This paper examines the corporate relocation patterns of tenants of the World Trade Center complex after its collapse and the psychological shockwaves the terrorist attack spread to Chicago, a city with a major concentration of corporate headquarters and the site of the tallest office building in the U.S. The results of the study indicate a very limited disperse of corporate tenants of the former World Trade Center complex beyond Manhattan, a trend not followed by Chicago. The paper also highlights additional reasoning for the diverse effect of terrorism in an impacted city (New York) versus a city under threat (Chicago).