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A big corporate employer leaves town. Then what?

by Scott Klocksin

A big corporate employer leaves town. Then what?

Renderings of the Bell Works development, courtesy of the Village of Hoffman Estates’ Economic Development Department

Last year, downtown Chicago added almost 20,000 new jobs — nearly tripling the job growth rate of the metro area as a whole. It’s good news for the city. But often, those jobs leave the suburbs with vacant office space, depleted tax coffers and a weakened residential real estate market in their wake. McDonald’s left Oak Brook last year for the West Loop. Also last year, Walgreens announced that it would move 1,800 jobs from Deerfield to the downtown area. And in Hoffman Estates, AT&T closed up shop at a massive 1.6-million-square-foot office complex in September 2016.

Indeed, a two-headed monster of corporate downsizing has loomed over Hoffman Estates for about the past decade, since both Sears Holdings and AT&T have shrunk their headcount of local employees.  Sears, which is based in the northwest suburb, came to the brink of bankruptcy this past winter, and has since limped into the future as a much smaller company. And after selling its complex and renting some of the space while incrementally moving jobs out of the village, AT&T left Hoffman Estates for good in September 2016, moving the 3,000 or so jobs that remained to scattered sites elsewhere in the suburbs.
But an exodus of corporate jobs doesn’t automatically spell bad news for a suburb’s real estate market, according to Sharon Poisel, a relocation specialist and agent with Baird & Warner who works in the northwest suburbs, including Hoffman Estates — especially when the jobs don’t all leave at once.

“I don’t think our buyers are necessarily paying much attention to companies leaving,” she said. “It’s been kind of tiered, so they haven’t left all at once, and that’s helped.”

The village of about 52,000 residents has taken an active role in turning what could have been an economic disaster into a potential boon: The town’s economic development division approached Somerset Development, a New Jersey-based firm that gave new life to a former corporate office park in a suburban part of its home state when it transformed a 2-million-square-foot vacant property into a mixed-use complex with offices, retail space and a hotel. The developer now plans to duplicate the success of that project in Hoffman Estates, including residential units such as for-sale townhomes and rentals. The New Jersey site was formerly a research facility for Bell Labs, so in its new life it was dubbed Bell Works. The Hoffman Estates development will share that name.

While suburbs such as Homewood and Berwyn have run ad campaigns designed to attract younger residents who live in the city, Kevin Kramer, Hoffman Estates’ economic development director, said there hasn’t been a need to do that, because many of those younger potential residents are already familiar with the area from going to Woodfield Mall or the IKEA store in neighboring Schaumburg.

“We’re already well known in this area,” he said. “But we expect there to be more of a light shone on the northwest suburbs as people see what Bell Works becomes.”

But regardless of how well the Bell Works development goes, it’s not realistic to expect a reversal of the trend of jobs moving into the city. That’s one reason why Hoffman Estates, which lacks direct Metra access, recently increased its connectivity to the city by investing in a new park-and-ride station for express buses that take commuters to Rosemont, where they can connect to CTA trains into the city.

While it’s hard to draw a direct cause-and-effect link between efforts like these and a suburb’s sustained prosperity, the numbers indicate that Hoffman Estates has prospered, even while facing headwinds like the flight of jobs to the city and an overall declining population throughout Chicagoland. The village’s population has held just about steady since the last census, while the metro area as a whole has experienced a loss in population for the fourth straight year.

Of course, an entire town is more than a few big employers, and it can help if there are demand drivers from folks who may not even be in the workforce anymore. Poisel has noticed increased demand for Hoffman Estates’ stock of single-story homes from aging baby boomers looking to downsize and age in place.

“It’s a natural progression, and somebody else is going to move in and take over the kingdom if the area loses a headquarters,” Poisel said. “It’s a chance to reinvent.”

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