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When a Suburb Loses Its Headquarters

The exodus of corporate HQs to Chicago has left surrounding towns scrambling to fill the void.

Illustration by John W. Tomac
Illustration: John W. Tomac

When McDonald’s Corp. decided in 2016 to bolt from Oak Brook to Chicago’s trendy Fulton Market District, residents of the western suburb feared they’d be trading Hamburger U for McMansions. The fast-food giant’s global headquarters were situated on a sprawling, 150-acre campus that included 34 acres of bucolic green space — or, to a hungry residential developer, prime real estate.

Oak Brook is part of an uneasy club of suburbs — including Schaumburg, Hoffman Estates, and, most recently, Deerfield — that are being forced to reinvent vast swaths of land in the wake of a marquee company’s departure. Sixty-eight suburban headquarters or major offices have relocated to the Loop, West Loop, or River North since 2007, with most of the moves happening since the aggressively probusiness mayor Rahm Emanuel took office in 2011, according to data compiled by CBRE Midwest. But as these companies seek greater proximity to a young, tech-savvy workforce that doesn’t want to hoof it to the burbs, they’re taking with them prestige, employees, and tax revenues. And in the case of Oak Brook, jeopardizing the very character of the community.

For many of these suburbs, the solution isn’t to replace one corporate behemoth with another. Instead, they’re dicing up the land for different uses and radically changing the face of suburbia for decades to come — just as the mammoth corporate enclaves and shopping malls once did. In Oak Brook, for example, an unexpected entity pursued the 34 undeveloped acres at McDonald’s. “As soon as we found out they were leaving, we asked if they wanted to donate it,” says Laure Kosey, executive director of the Oak Brook Park District. “They said, ‘Good idea, but we’re going to put it up for sale.’ ”

So the park district bought it. Residents of Oak Brook, a village that levies no property tax, took the unusual step of taxing themselves by voting for a bond referendum that covers the $15.8 million price tag, with $2 million left over for creating soccer fields and spaces for other recreational activities. The deal closed in December with the promise that the land won’t turn into anything other than a park.

A separate McDonald’s property a few miles from the main campus, next to the Oakbrook Center mall, was sold to Houston-based developer Hines last summer. It will likely become a mix of apartment buildings, office space, and shops — what the developer has called a “new village center.” It’s a similar tack to the one Schaumburg is taking after it was rattled in 2016 by the loss of Motorola Solutions’ headquarters, which moved to the West Loop. Chicago-based UrbanStreet Group bought 225 of the site’s 322 acres and intends to remake the parcel into a mini community with houses and apartments, a retirement home, a driving range, a park, and sidewalk cafés.

 

Flight of the Headquarters

In the past 12 years, 68 major corporate offices have decamped from the burbs to Chicago. Schaumburg and Lombard, which tied for the title of biggest loser, each bade adieu to six.

chart
Source: CBRE Midwest

Nearby Hoffman Estates has already lost one giant — AT&T, which began vacating its 150-acre satellite campus in 2014 for several smaller sites in Chicago and other suburbs — and doesn’t exactly have a sure thing in another: the hobbled Sears Holdings Corporation, which is fighting to stave off liquidation. New Jersey–based Somerset Development is turning the AT&T site into what it calls an indoor downtown, essentially a 21st-century Bio-Dome that packs offices, restaurants, entertainment spots, conference centers, and hotels under a massive roof. It’s possible a Montessori school, public library, and other communal spaces will be weaved into the site, just as the developer did in New Jersey, where it revamped the huge Bell Labs property.

While it may not be enough to lure Pauly Shore, Somerset does expect the development to entice corporations from surrounding suburbs looking to provide workers who can’t or won’t relocate to Chicago with a more urbanized environment, says Somerset president Ralph Zucker. He expects the project, estimated to cost more than $200 million, to be completed by 2024.

Though Hoffman Estates seems to have found a partial solution, albeit a vaguely eerie sci-fi-ish one, its sudden loss of a corporate titan serves as inspiration for legislation that would boost other suburbs that find themselves in a similar predicament. State representative Fred Crespo, a Democrat from the village, is floating a so-called Big Empties bill, which is being redrafted after it was introduced during the last session of the General Assembly. It would provide hefty incentives, including relief on up to half of the property taxes, for developers that make over old HQs larger than one million square feet.

The bill, which is designed to fill sprawling campuses, won’t help north suburban Deerfield as it attempts to replace Mondelez International, which announced its departure in January from a large office building. It’s following in the footsteps of spirits seller Beam Suntory, which decamped to Chicago in 2016, and Takeda Pharmaceutical Company, which is moving to the Boston area.

Deerfield mayor Harriet Rosenthal concedes the departures hurt, but the suburb is trying to pump up its appeal to other potential HQs by promoting its proximity to O’Hare International Airport and expanding a Metra station so commuting to and from Chicago is easier. The focus on transportation seems to be working: Rosenthal notes that Caterpillar recently relocated its headquarters to Deerfield from Peoria to gain accessibility to Chicago and the airport. The grass is always greener in somebody else’s metro area.

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