Google has agreed to buy the soon-to-be-renovated James R. Thompson Center in the heart of the Loop, a victory for Chicago’s central business district and Democratic Gov. JB Pritzker as he seeks re-election and avoids criticism for recent top jobs. . corporate exit profile.
Under the Google deal, announced at a press conference Wednesday morning in the soaring atrium of the Helmut Jahn-designed building, the state will receive a $30 million cash payment and obtain title to the former BMO headquarters. Harris Bank at 115 S. LaSalle Street. , valued at $75 million, to be converted into a state office building.
It’s an updated version of a previously announced deal to sell the Thompson Center to a group led by developer Michael Reschke for an upfront cash payment of $70 million. That deal required the state to buy back about a third of the renovated 1.2 million-square-foot building for more than double that amount.
Pritzker called the amended agreement “a great victory for the city of Chicago and for the taxpayers of Illinois.”
“We are saving taxpayers money. We are creating good paying jobs. We are adding vitality to the Loop and improving the work environment for thousands of public and private sector employees,” said Pritzker. “Get the word out that Chicago and Illinois are open for business.”
The vote of confidence from Google, whose parent company Alphabet ranks eighth on the Fortune 500, comes as Pritzker has come under fire for recent decisions by Boeing, Caterpillar and Citadel to move their headquarters out of state.
Pritzker has pushed back on those criticisms, pointing to other companies that have grown or moved to Chicago and Illinois, including Kellogg’s decision last month to open the headquarters of its new snack business in Chicago, as it splits into three companies. separated.
The expansion of Google’s Chicago operation, which has grown over the past two decades from a two-person office in River North to a two-building campus in the bustling Fulton Market district, shows the company’s “commitment to promise and greatness of Chicago. ”, said the governor.
“If it wasn’t obvious before, surely it’s abundantly clear now: Google is one of the biggest companies in Chicago,” Pritzker said. “You are an integral part of our community and have invested in your future while investing in ours.”
Mayor Lori Lightfoot, who is running for re-election next year, has also faced criticism over the departures of Boeing and Citadel, saying Google’s decision “represents the largest single company announcement in the last 10 years for our city and one of the largest economic opportunity development opportunities. in decades.”
The move to the heart of downtown Chicago is part of a national push by Google to grow its workforce and get them back in the office. Part of that drive is making sure workers have the best and most attractive facilities, and the company plans to invest about $9.5 billion in its US offices and data centers this year, according to an April blog post. of Sundar Pichai, CEO of Google and his father, Alphabet.
“It may seem counterintuitive to increase our investment in physical offices even as we embrace greater flexibility in the way we work,” Pichai wrote. “However, we believe it is more important than ever to invest in our campuses and that doing so will lead to better products, a better quality of life for our employees and stronger communities.”
The exact timeline for Google’s move to the Thompson Center is unclear, though Reschke previously estimated that overhauling the 17-story glass-and-steel structure would take about two years and cost roughly $280 million.
Karen Sauder, the company’s chief executive in Chicago, said the tech giant looks forward to working with the developer “to carefully upgrade this building to our high sustainability standards while respecting its iconic design.”
Part of the draw for Google was the busy CTA station attached to the building, which will remain operational during the renovation.
But “as we see it, the Thompson Center is more than a building,” Sauder said. “Establishing a presence here in the Loop allows us to get on the ground floor to revitalize and breathe new life into the heart of the city. Just as we are proud of the role we played in making Fulton Market one of the most vibrant and energetic neighborhoods in the city, we have the opportunity to do it all over again here.”
Google plans to maintain a presence at Fulton Market, he said.
The state has been looking to get rid of its iconic but much-maligned headquarters for several years. The sale is an opportunity to get rid of a building that would need more than $300 million in maintenance and upgrades and to consolidate some of its workforce downtown from rented office space.
The state plans to move about 1,800 workers from the Thompson Center and leased offices to the BMO Harris building. Reschke’s JRTC Holdings will renovate the 591,845-square-foot west building of the three-building complex at 115 S. LaSalle and 111 W. Monroe St. for the state, with the project expected to take about 18 months.
The cost will be “significantly less” than the $148 million the state was expected to pay for the renovated portion of the Thompson Center, though the state did not immediately provide a firm estimate.
The move comes after the state last year. paid $73.3 million to buy a 17-story, 429,316-square-foot office building on the Near West Side which previously housed the regional offices of PepsiCo. The governor’s office and other state agencies have moved into the building at 555 W. Monroe in recent months.
Pritzker signed a bill into law in April 2019 authorizing the sale of the Thompson Center, but the coronavirus pandemic that came less than a year later dramatically reduced demand for retail space in the center and delayed those plans. After the legislature extended the deadline to find a buyer, the state late last year announced a tentative deal with Reschke.
The Thompson Center, named for former Republican Gov. James R. “Big Jim” Thompson, has inspired strong opinions since its opening in 1985. Some see it as an iconic example of postmodern architecture, while others see it as an eyesore.
For many state employees, it has long been an uncomfortable work environment due to temperature control issues and lack of maintenance.
Jack Lavin, president and CEO of the Chicagoland Chamber of Commerce, agreed with that story at Wednesday’s news conference.
“I think I can speak for the thousands of former state employees — we are thrilled to see this day come,” said Lavin, who was previously chief of staff for former Gov. Pat Quinn and headed the state Department of Commerce and Economy. Chance.