Schaumburg Settles Tax Incentive Fight With Motorola

Schaumburg called a truce with Motorola Solutions, settling a lawsuit over millions in withheld tax increment financing funds tied to post-pandemic office attendance.

The village agreed to immediately pay the Chicago-based tech company just under $6.1 million in previously frozen TIF reimbursements, resolving a dispute over how many employees were expected to physically work at Motorola’s campus in the redeveloped former corporate headquarters site, the Daily Herald reported. In exchange, Motorola’s maximum potential payout over the life of the TIF district was reduced from $27 million to $23.5 million.

Village officials said the disagreement hinged on a now familiar fault line in office real estate: whether incentive agreements required a certain number of employees to be regularly working on site, or simply assigned to the location. Assistant Village Attorney Howard Jablecki said the case mirrored a similar lawsuit filed by Zurich North America over the same redevelopment area at 1299 Zurich Way.

Both settlements, officials said, reaffirm Schaumburg’s expectation that companies receiving public assistance maintain a defined level of in-person staffing — a key assumption underpinning the village’s investment.

TIF districts typically reimburse developers or companies for infrastructure and other eligible costs over as long as 23 years, using incremental property tax revenue generated within the district. In this case, Schaumburg’s financial backing supported the transformation of what had once been Motorola’s sprawling campus at Algonquin and Meacham roads into a mixed-use district anchored by Zurich’s North American headquarters and the Veridian development.

Zurich opened its 783,800-square-foot headquarters building about a decade ago, as Motorola downsized its office use but retained a presence nearby. At its pre-pandemic peak, the Zurich building housed roughly 2,500 employees.

More recently, Zurich repositioned the property as a multitenant building, leasing about 360,000 square feet to Wheels Incorporated and ADP.

The stakes go beyond legal language for Schaumburg, as suburban municipalities have long banked on office workers as a daytime population that sustains restaurants, retailers and service businesses, according to the publication.

— Eric Weilbacher