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Google to acquire iconic Chicago building in $105 million sale

The tech giant plans to occupy Chicago's historic James R. Thompson Center as soon as 2026.

CHICAGO (CN) — Democratic Illinois Governor J.B. Pritzker announced Wednesday morning that the state had closed the sale of Chicago's architecturally renowned James R. Thompson Center for $105 million, with tech giant Google set to become the building's primary occupant.

The Thompson Center is currently a public building housing numerous state offices and is connected to the city's busiest public transit station, but the deal closed Wednesday will allow Google to redesign it as it sees fit.

"The work Google will do at the Thompson Center will support our business, our product development, and create a great environment for our employees," said Karen Sauder, site lead for Google's Chicago office.

Google has had a presence in Chicago since 2000 and already maintains a campus in in the city's Fulton Market neighborhood, with a stated payroll of about 1,800 employees. The Fulton Market campus isn't going anywhere, but the tech giant stated Wednesday that it wants to use the Thompson Center to "support engineering work in Chicago and... advance the growth of Google’s partners and customers across the Midwest and nationally."

The company also stated it has plans for Chicago's downtown area surrounding the Thompson Center, colloquially known as the Loop.

"By establishing a presence in Chicago’s central business district, we will be getting in on the ground floor of a broader revitalization of the Loop," a statement from Google read.

Pritzker first announced plans to sell the building to the Chicago-based real estate developer The Prime Group in December 2021. Those initial plans called for a $70 million sale in which the Thompson Center would remain a partially public building, with The Prime Group only purchasing only about two-thirds of the structure via the holding firm JRTC Holdings LLC. Per that agreement, the state would continue renting office space in the building as The Prime Group's tenant.

The new arrangement, as explained Wednesday morning by The Prime Group founder and CEO Michael Reschke, is for Google to fully privatize the Thompson Center and renovate it to its own specifications. JRTC Holdings, jointly owned by The Prime Group and the real estate investment firm Capri Investment Group, will remain the nominal owner of the property, but the state will completely vacate its offices there. Instead, it will purchase a separate office building several blocks south for $75 million.

"We originally agreed to purchase roughly 65% of the Thompson Center for $70 million. And now we will pay $105 million to purchase 100% of the building," Reschke said. "Then the state will use those proceeds to acquire 115 South LaSalle, which is the former BMO [Bank] headquarters, for $75 million and relocate in the West Tower."

Besides the $30 million profit the state anticipates making off the sale, it's also a major political win for both Pritzker and Chicago Mayor Lori Lightfoot, who have tried to portray themselves as pro-business Democrats as election season looms. Pritzker has even taken on the catchphrase "Illinois is open for business" in many of his public addresses. The pair took hits on that front earlier this year when aerospace & weapons technology firm Boeing and construction equipment manufacturer Caterpillar both announced they planned to relocate their corporate headquarters out of Chicago.

In pitching the sale Wednesday morning, Pritzker said he anticipated that the new Thompson Center Google campus would bring new jobs to the city and save Illinois taxpayers almost $1 billion over three decades via its inclusion on the state property tax rolls.

"This transformative agreement will save our taxpayers nearly a billion dollars over the next 30 years, and further Chicago's reputation as one of the great tech hubs not just of the United States, but of the world," Pritzker said. 

However, concerns remain over what the privatization of the Thompson Center means for the city's architectural legacy, and for Chicagoans themselves. One commenter on the governor's social media page expressed concern that residents in the area would be "priced out of their neighborhoods, like they have been in other big tech cities like San Francisco."

Besides the surrounding property value, the building is a popular lunch spot and numerous public events are held in its south plaza. It also serves as a haven for many local people experiencing homelessness, and commuters from multiple corners of the city walk through the Thompson Center every day to access the State & Lake stop, Chicago's busiest public transit station.

A representative from the Chicago chapter of the Party for Socialism and Liberation, which has hosted events in the Thompson Center's south plaza, lamented that Chicagoans were not asked for their own consent before the state closed a deal that could affect their daily lives.

"For decades city and state administrations have worked to make the downtown of the city a playground for tourists and the wealthy, rather than a public space for all to use," the PSL representative said, also adding, "While the Thompson Center was not utilized in a way that best engaged the public, it was still a publicly owned space that had the potential to be orientated towards all the people in the city. For many Chicagoans, the sale to Google is another example of a major corporation being given the power to reshape the city they live in without their input."

Neither Google, The Prime Group nor Mayor Lightfoot's office immediately responded to requests for comment on the issue of the Thompson Center's public accessibility under Google's stewardship.

Besides those concerns, the Thompson Center is also considered an important site in the history of Chicago architecture and in the postmodernist school of architectural design. Designed by German-American architect Helmut Jahn and opened in 1985, the Illinois Historic Sites Advisory Council voted in November 2021 to recommend the Thompson Center for inclusion on the National Register of Historic Places. The vote was opposed by Pritzker's office.

Ward Miller, executive director for the nonprofit Chicago historical preservation society Preservation Chicago, said he hoped the sale would be a "step in the right direction" for the building's future, including its inclusion on the National Register.

"We would hope that they would restore the exterior of the building... there's been a lot of deferred maintenance on the Thompson Center, like with a lot of our state properties, unfortunately," Miller said.

He added that Google should respect Jahn's vision for the structure in any renovations it undertakes.

"We're hoping that Google will respect the building," Miller said.

For PSL, though, the preservation of the building will mean little if most Chicagoans don't have access to it.

"We don't know yet exactly what Google's plan will entail," the PSL representative said. "However, if it means walling off the Center for their employees and creating more exclusive places in the downtown, it will destroy any goodwill they will receive for 'saving' the physical structure."

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