Owner of Family Video following Ken Griffin out of state and moving his company from suburban Chicago to the Sun Belt

Ken Griffin isn’t the only longtime Chicago-area businessman packing his business for the Sun Belt.

Keith Hoogland, whose Family Video chain survived Blockbuster before closing for good last year, is rebounding and moving Glenview-based diversified parent company Highland Ventures to Nashville in September.

The family business, which has turned its more than 700 former video stores into a sprawling multistate real estate company and the largest Marco’s Pizza franchise owner, will head south with dozens of employees and nearly as many Hooglands. in search of greener companies. grasses.

Like Griffin, the billionaire hedge fund owner who announced last month that he was moving his investment firm Citadel from Chicago to Miami after 30 years, Hoogland had some parting shots for Illinois, citing crime, taxes and, he says, a dwindling talent pool.

“I am the leader of my family and I am the leader of my business,” said Hoogland, 62, whose great-grandfather settled in southern Illinois in the 1870s. “I think the best thing for my family and my company is to leave Illinois.”

Hoogland built his Illinois-based empire as a regional player in the once-thriving video rental business. Founded in 1978, Family Video went from renting Betamax tapes to VHS and DVD over the years and grew to an 800-store chain at its zenith. As video rentals gave way to online streaming, the company evolved its business modelpartnering with Marco’s Pizza in 2015 to help attract customers during the inexorable decline.

industry giant Blockbuster it closed its corporate-owned stores in 2013 as the video rental industry faltered, but Family Video has somehow survived by serving a dwindling customer base from small towns scattered across 17 states, mostly from the Midwest. Ultimately, the COVID-19 pandemic sounded the death knell for the Family Video business, which closed its remaining 250 stores in January 2021.

“We did a great job of running our business, we outlasted everyone, and then we did a great job of closing our business and making sure all of our employees stood up,” Hoogland said.

Since then, Highland Ventures has been “transitioning” its business model, converting its more than 700 retail locations into small strip malls, leasing space to the likes of Jersey Mike’s Subs, Subway and 90 Little Caesars pizzerias, among other businesses, Hoogland said. Additionally, the company has set up its own Marco’s Pizza franchises in more than 100 locations in 12 states, including 20 in Illinois.

While its main focus is retail real estate, the company has also expanded into office space, buying about 20 buildings, none of which are located in Illinois, Hoogland said. The entire commercial real estate portfolio covers 22 states and is valued at more than $800 million, according to the company’s website.

Other new businesses include 16 Family Vet animal hospitals and Highland Pure Water & Ice, which has 100 self-service kiosks, mostly located on company property.

Not all new businesses have been successful. Like Family Video, Stay Fit 24, essentially a 24/7 drive-in gym, also closed during the pandemic, Hoogland said.

“He was doing pretty well and COVID literally crushed him,” Hoogland said.

Hoogland declined to disclose Highland Ventures’ annual revenue.

Built in 2003, the Highland Ventures headquarters is a 25,000-square-foot freestanding building near the Glen Town Center business district in Glenview. The office houses about 80 employees, with another 20 working primarily in the field. Hoogland plans to lease the building after the move, and corporate employees will eventually need to move to Nashville, where the company has secured a new office in suburban Brentwood.

Two of Hoogland’s children and his son-in-law also work for the company, and his six children plan to move to Nashville with their families, including seven grandchildren, he said.

Nashville, which has experienced rapid population growth over the past decade, launched a Marketing campaign in October to attract workers from Chicago’s robust tech community, touting benefits such as no state income taxes, shorter commute times, milder weather and the city’s country music scene.

Hoogland, who graduated from Vanderbilt and chose his old college town for the new headquarters over two other cities, seems convinced of all of the above, as well as a lower corporate tax rate.

Illinois has a marginal corporate tax rate of 9.5%, one of the highest in the country, while Tennessee has a corporate tax rate of 6.5%, according to the Tax Foundation, a Washington-based nonprofit. DC.

“It’s really about opportunity,” Hoogland said. “We believe that Illinois is a shrinking state. We feel that the tax base is shrinking, therefore taxes are going to get worse before they get better.”

Beyond taxes, Hoogland said the talent base in Nashville is growing, allowing for the continued expansion of the company, which plans to open 15 to 20 new Marco’s restaurants a year and acquire new office buildings. Illinois is not part of those expansion plans, he said.

“The plan is to slow growth in Illinois or stop it,” Hoogland said. “I’m not going to buy office buildings here and I’m probably not going to open any more pizzerias here.”

Hoogland said his frustration with crime in Chicago, something Griffin has also cited, is another big factor behind the decision to relocate his company.

In addition to Citadel, the Chicago area has lost other major corporate headquarters in recent months. Last month, advertised caterpillar would move its headquarters from the northern suburbs of Deerfield to an existing office in Irving, Texas, outside of Dallas. In May, the aerospace giant boeing said was relocating its headquarters to Arlington, Virginia, after more than 20 years in the West Loop.

Those losses were somewhat offset by last month’s announcement that the Battle Creek, Michigan-based company kellogg’s company is splitting into three separate companies and locating its new snack headquarters in Chicago.

Griffin, who has been a major philanthropic force during his more than three decades in the city, softened the blow of Citadel’s departure by donating $130 million to Chicago organizations in June when he went to Florida.

Hoogland, who cited his own charitable donations, including millions contributed to cancer research at the University of Chicago Medicine and funding of the nonprofit Hoogland Center for the Arts in Springfield, said there would be no such parting gifts when he leaves. the state.

“We have done a lot for the state of Illinois and the community at large,” Hoogland said. “And all of that will stop, unfortunately, and we’ll do it in Tennessee.”


Source link

Leave a Reply

Your email address will not be published.