Google To Buy The Thompson Center In A Shot In The Arm For The Loop
In one of the biggest downtown deals of the decade, Google announced it intends to buy the Loop’s iconic James R. Thompson Center.
Following reports of a potential purchase late last month, the tech giant announced Wednesday it will buy the 1.2M SF Helmut Jahn-designed building after it undergoes renovations.
“The Thompson Center will provide employees with unparalleled public transit access as the only building in the city where six L train lines converge, easily connecting Chicago’s South, West and North sides,” Google said in a blog post. "Once renovated to a Class A environmentally friendly office building, we anticipate occupying the Thompson Center starting in 2026.”
The Silicon Valley-based company, which started its Chicago operations with two people in a River North office 22 years ago, has expanded to nearly 2,000 employees at 1000 West Fulton St. and 210 North Carpenter St. in Fulton Market.
Evan Jahn, president of Chicago-based architecture firm Jahn, which designed the Thompson Center in the 1980s, said that his firm understands the building and its potential better than anyone.
“The original design of the James R. Thompson Center was centered on the transparency of government, and now it will showcase the openness of technology, which in many ways is representative of its initial concept as a building designed for the 21st century," Jahn said in an email to Bisnow.
The purchase changes plans made by Prime Group Chairman Michael Reschke to buy the Thompson Center from the state for $70M, overhaul it and sell a portion of its offices back to the state. Under that deal, Reschke would have marketed about two-thirds of the building to new office and retail tenants.
With Google in the picture, Reschke's venture will pay $105M for the entire Thompson Center, which it will renovate and sell to the tech giant.
Under the new deal, the state will receive $30M in cash, with the rest coming via title to an office complex at 115 South LaSalle St., which both parties agreed was worth $75M, according to a news release from the state obtained by Crain’s Chicago Business.
The deal will put Reschke on track to purchase 115 South LaSalle, which BMO Harris Bank is vacating. That building will be occupied and owned by the state.
As companies have steadily moved their offices along the Chicago River and to Fulton Market, the Loop has struggled to compete.
With more employees working on hybrid schedules or from home, a decrease in workspace demand has led to high office vacancy in the area. Google said its new building places the tech giant at the ground floor of a broader revitalization of the area.
The announcement was especially welcome following the high-profile losses of Boeing, Caterpillar and Citadel, which have all announced plans to move their headquarters out of the city. City and state officials said it also highlights Chicago's viability as a key player in the tech industry while generating tax revenue for the city.
The deal is also a good look for Gov. J.B. Pritzker, who is pushing Chicago's bid for the 2024 Democratic National Convention.
He referred to Google as one of the world's most important companies and one that is investing in its future while investing in the city.
"We're saving taxpayers money, we're growing high-paying jobs, we're adding vitality to the Loop," Pritzker said at a Wednesday press conference. “Let the word go out that Chicago and Illinois are open for business.”
