Friday, June 17, 2011

Chicago Area Companies Rethink The Corporate Campus & Move Back Into Downtown

A few of the very large old school cities-mostly Chicago and New York have begun to draw back many more of the corporate headquarters that left for suburban campuses. (In NY, this has been going on for a long time)

From Crain's Chicago Business

Today, Sears Holdings Corp. and AT&T Inc. are looking to escape their compounds in northwest suburban Hoffman Estates. A shrunken Motorola has space to let in Schaumburg. Sara Lee Corp. eyes downtown office space after less than a decade in Downers Grove. Companies from Groupon Inc. to GE Capital hire thousands in Chicago while their suburban counterparts shed workers.

All reflect changes in the corporate mindset that spawned the campuses dotting outer suburbia. Empire-building CEOs from the 1970s through the 1990s craved not only cheap real estate but total control of their environments. They created self-contained corporate villages that cut off employees from outside influences.

As the 21st century enters its second decade, many companies are discovering the drawbacks of the isolation they sought. Hard-to-get-to headquarters limit the talent pool a company can draw on and feed a “not-invented-here” insularity that ignores major shifts in industries and markets.

Interestingly, companies and some of their investors are starting to connect suburban settings with a lack of innovation.

Another major factor is that in an era of leaner freelance work environments being tapped into a deep pool of potential workers, contractors and suppliers that central urban areas can provide is ever more important. One also can cut costs by not having to provide cafeterias, gyms and other services to replace the normal services of a city.

Potential employees are making similar calculations in reverse about the potential to find a new job in more remote suburban locations and finding it wiser to locate where the largest number of employers are.

One big problem with these very specially designed and isolated campuses designed around a single company is that they are often very hard to fill if that company shrinks or leaves.

Building an attractive city and a large broad base of small companies can help attract the big ones. Google now has it's second largest offices in NYC and has located next to a company it bought, DoubleClick.

So far, this trend has not happened strongly in many other cities-partly because real urban locations with substantial advantages over office parks are rare. It's a "Catch-22" situation-The city lacks enough density, diversity and energy to have a big network of companies and it can't build up any energy cause 60% of the land area is for parking.

More links

Chicago area businesses looking to move from suburban campuses.

Are the Millennials Driving Downtown Corporate Relocations?

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