Mike Reschke, the Thompson Center and Google CEO Sundar Pichai (Reschke by Matt Haas, Getty, ajay_suresh, CC BY 2.0 via Wikimedia Commons)
Veteran Chicago developer Mike Reschke has completed a deft juggling act with the struggling Central Loop properties to land Google for the Thompson Center in a much-needed boost for the LaSalle Street corridor.
The tech giant aims to move into the 1.2 million-square-foot property by 2026, after its renovation by Reschke. He made one of the two bids that were received to buy the property from the state of Illinois, which had owned it for decades and housed public sector offices there.
“With one of the top locations in downtown Chicago, we knew after the planned renovation that the iconic building would attract world-class tenants,” Reschke said in a statement. The announcement comes after the developer, who has likened his approach to risk in real estate to daredevil tightrope walker Nik Wallenda, dismissed an earlier report of Google’s interest in buying the property as a “wild rumor.”
As part of the deal, the state will receive $30 million in cash in addition to the title to 115 South LaSalle, the former BMO Harris Bank building that the financial institution just vacated for its new namesake tower next to Union Station.
That move dropped the property’s value below the $191 million loan against it, and Reschke bid on the debt at a discount, giving him the ability to flip it to the state to land Google for the Thompson Center. Both the state and Reschke agreed to value the former BMO building at $75 million.
Reschke originally planned to buy the Thompson Center for $70 million from the state.
He said he would pour as much as $280 million into upgrading the spaceship-shaped building, a design that also proved to be inefficient over the years, with single-paned glass walls making for poor insulation in both summer and winter and cost taxpayers $17 million annually to operate the building.
“The Thompson Center gives us a presence in the central business district, enabling us to get in on the ground floor of revitalizing the Loop with its unparalleled access to public transit, which is so important to today’s hybrid workforce,” Karen Sauder, who led Google’s site selection, said in a statement.
Google’s decision also comes just after other major tech companies, Meta and Amazon, pulled back on planned expansions in New York and as the Central Loop faces a reckoning with empty offices. Twenty-four percent of LaSalle Street offices are vacant as of earlier this year, before BMO left the corridor long considered Chicago’s financial district.
Reschke is retaining control of the eastern portion of the former BMO building, which is a two-tower complex with the second at 111 West Monroe Street. He plans to convert that part of the property, which consists of offices now, into as many as 500 apartments.
Google moved into Fulton Market about 10 years ago, where it now has 1,800 employees. It’s reportedly seeking to expand in that neighborhood, into a Trammell Crow-owned building. It’s unclear how the Thompson Center purchase impacts those rumored plans.
— Sam Lounsberry
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