CHICAGO — Google has agreed to buy the soon-to-be-renovated James R. Thompson Center in heart of the Loop, a victory for Chicago’s central business district and for Illinois Gov. J.B. Pritzker as he seeks reelection and fends off criticism over recent high-profile corporate departures.
Under the Google deal, announced at a Wednesday morning news conference in the soaring atrium of the Helmut Jahn-designed building, the state will be paid $30 million in cash and get the title to the former BMO Harris Bank headquarters at 115 S. LaSalle Street, valued at $75 million, which will become a state office building.
It is an updated version of a previously announced agreement to sell the Thompson Center to a group led by developer Michael Reschke for a $70 million upfront cash payment. That deal called for 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 massive win for the city of Chicago and for Illinois taxpayers.”
“We’re saving taxpayers money. We’re growing high paying jobs. We’re adding vitality to the Loop and improving the work environment for thousands of private- and public-sector employees,” Pritzker said. “Let the word go out that Chicago and Illinois are open for business.”
The vote of confidence from Google, whose parent company Alphabet ranks No. 8 on the Fortune 500, comes as Pritzker has taken heat for recent decisions by Boeing, Caterpillar and Citadel to relocate their headquarters out of state.
Pritzker has pushed back on those criticisms, pointing to other companies that have grown in or relocated to Chicago and Illinois, including the decision by Kellogg last month to open the headquarters of its new snacks business in Chicago as it splits into three separate companies.
The expansion by 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 the promise and the greatness of Chicago,” the governor said.
“If it wasn’t evident before, then surely it is crystal clear now: Google is one of Chicago’s most important companies,” Pritzker said. “You are an integral part of our community and you have invested in your future while investing in ours.”
Mayor Lori Lightfoot, who’s up for reelection next year, also has faced criticism for the departures of Boeing and Citadel, said Google’s decision “represents the single largest company announcement in the last 10 years for our city and one of the largest economic opportunity development opportunities in decades.”
The move into the heart of Chicago’s downtown is part of a nationwide push by Google to grow its workforce and get them back to the office. Part of that push is to make sure workers have the best, most enticing facilities, and the company plans to invest about $9.5 billion in its U.S. offices and data centers this year, according to an April blog post by Sundar Pichai, CEO of Google and its parent, Alphabet.
“It might seem counterintuitive to step up our investment in physical offices even as we embrace more flexibility in how we work,” Pichai wrote. “Yet we believe it’s more important than ever to invest in our campuses and that doing so will make for better products, a greater quality of life for our employees, and stronger communities.”
The exact timeline for Google’s move into the Thompson Center is unclear, though Reschke previously estimated overhauling the 17-story glass-and-steel structure would take about two years and cost roughly $280 million.
Karen Sauder, the company’s top executive in Chicago, said the tech giant looks forward to working with the developer “to thoughtfully update this building to our high sustainability standards while respecting its iconic design.”
Part of the draw for Google was the busy CTA station connected to the building, which will remain in operation throughout the renovation.
But “the way we see it, the Thompson Center is more than just a building,” Sauder said. “Establishing a presence here in the Loop allows us to get in on the ground floor of revitalizing and breathing new life into the very heart of the city. Just as we’re proud of the role we played in turning Fulton Market into 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 in Fulton Market, she said.
The state has been looking to unload its iconic but much-maligned downtown headquarters for several years. The sale is an opportunity to offload a building that would need more than $300 million worth of maintenance and upgrades and to consolidate some of its downtown workforce from leased 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 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 its 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 Near West Side office building that was previously home to regional offices of PepsiCo. The governor’s office and other state agencies have moved into the building at 555 W. Monroe over the past several months.
Pritzker signed a bill in April 2019 authorizing the sale of the Thompson Center, but the coronavirus pandemic that came less than a year later sharply drove down demand for downtown commercial space and pushed back 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 opening in 1985. Some see it as an iconic example of postmodern architecture, while to others it’s an eyesore.
For many state employees, it’s long been an uncomfortable work environment due to temperature control issues and lack of upkeep.
Jack Lavin, president and CEO of Chicagoland Chamber of Commerce, nodded to that history at Wednesday’s news conference.
“I think I can speak on behalf of the thousands of former state employees: We are thrilled to see this day come,” said Lavin, who was previously chief of staff to former Gov. Pat Quinn and headed the state’s Department of Commerce and Economic Opportunity.
