Changing Gears: Empty Places: HQ
There’s a hot new trend among companies around the Midwest – threatening to leave.
Several companies – especially around Chicago – have been asking big picture questions as they take a look at their bottom lines.
Take food maker Sara Lee.
It’s going through a major transition as it prepares to split into two companies.
One focused on meats – sausages, hot dogs.
The other one - on drinks.
Jon Harris is a company spokesman.
HARRIS: We do believe that a downtown location would provide our new North American meats company with an environment that will be energetic, that will foster breakthrough thinking, create revolutionary products, offer fresh perspectives and really own the market.
Sara Lee’s headquarters and test kitchens are currently based in Chicago’s western suburbs.
A town called Downers Grove.
It has a large campus there.
Harris says no location has been chosen for the meat company – but downtown Chicago is preferred.
If Sara Lee does pack up and move – it would leave behind a massive office building designed to hold at least 1,000 workers.
Something the mayor of Downers Grove – Martin Tully - isn’t too excited about.
Especially as it relates to collecting property taxes.
TULLY: It’s not insignificant.
Tully says he’s working with Sara Lee to try to keep it.
But it’s hard when the company is going to split up.
Sara Lee has no deep ties to Downers Grove.
Its offices have been there for six years.
Tully says those six years have been worth it – even if he has to find a new tenant.
The way he frames it - who would pass up having Michael Jordan on your basketball team for six years?
But he has a word of warning for other towns that might be looking to unload one giant piece of land.
TULLY: You have to be on your toes and alert for those things as a community and as an economic development engine.
Take the example of United Airlines.
It’s moving thousands of employees to what used to be called the Sears Tower.
And it’s trying to sell its property in Chicago’s northwest suburbs – with nobody really biting.
Mount Prospect - the town next door - wants to take over the land to try to redevelop it – even though there aren’t any buyers.
Stacey Kruger Birndorf looks at office space real estate issues for Transwestern.
She says towns like Mount Prospect have to keep in mind what companies want when they look for a new home.
KRUGER BIRNDORF: I think so much of it is economically driven. I wish I could say it’s geographically driven, but so much of it is economics.
Kruger Birndorf says companies look at the cost of the property…
Where new recruits would want to work…
And proximity to clients.
She says young people by and large want to be downtown.
But if a company wants a lot of space – the suburbs might be a better fit.
As for whether it’s worth it for towns to allow big campuses that are hard to re-work into anything other than office space – Kruger Birndorf says towns have to go for it.
KRUGER BIRNDORF: If we don’t have some hope and some optimism there would never be any reason to do anything.
Enter the city of Ann Arbor, Michigan.
The drug company Pfizer had a 70-acre facility there that it moved from in 2007.
Leaving a modern research facility empty – and taking a chunk of the city’s property tax budget with it.
When Ann Arbor couldn’t find a buyer – the price dropped – and the University of Michigan stepped in.
CANTER: You’re getting 2.2 million square feet of office and lab buildings, which seems like an incredible steal for $108 million.
David Canter is the Executive Director of the North Campus Research Complex.
He’s turning the facility into a new type of research center for academia.
One that’s more open to getting researchers from different departments into the same workspace.
Before taking over the Pfizer building – each department on the university’s campus had its own building.
Now – Canter says pharmacists, dentists, mathematicians - can all be in the same place.
CANTER: As a result, the university will be able to grow without having to invest in designing and developing a lot of series of new buildings that tend to follow growth rather than be in advance of growth.
Canter says if Pfizer hadn’t left – this research project from the university wouldn’t exist.
And it’s an example of how thinking creatively about how work space is used – can let both companies and towns breathe easier.
For Changing Gears – I’m Tony Arnold in Chicago