ST. LOUIS — 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.
It wasn’t the first time he had called out Chicago’s crime rate.
“Chicago is like Afghanistan, on a good day,” he said during a speech to the Economic Club of Chicago in 2021.
But Citadel is hardly alone in noting the role of crime in its commercial real estate decisions. Starbucks Corp. in July said it would close 16 locations due to safety concerns. Convenience store chain Wawa closed two stores in Philadelphia due in part to security challenges.
The move comes as violent crime has increased in many major U.S. cities since the onset of the Covid-19 pandemic, according to the Council on Criminal Justice.
Experts and government entities warn that the way crime rates are tabulated, as well as headlines and social media, can have an outsized effect on the way both companies and individuals perceive crime in a community — leading to cases where perception isn't reality, but it still shapes decisions.
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.
Research suggests that high crime rates can 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.
While property crimes such as robbery fell during the lockdown years, they rose in most big cities in the first half of 2022. The CCJ's analysis of crime data in 29 cities found a 19% increase in robberies.
Coupled with the rise of remote work leading to less day-to-day traffic in many downtowns, it's creating a heightened awareness of safety concerns experts say is playing a role in commercial real estate decisions.
John Boyd, principal of business relocation specialist the Boyd Cos., said crime is a factor in companies’ decisions about 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.”
St. Louis saw no gross domestic product growth through August this year, as it performed worse than Kansas City and other rivals, according to a study. The city of St. Louis continues to lose residents while the region's population is stagnant.
Boyd said his firm routinely measures statistics for clients including costs, taxes, available incentives — and also crime. And while the city of St. Louis had high per-capita crime in the first half of this year, companies increasingly are taking note of something else, Boyd said.
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