Motorola Mobility leaving Libertyville for Merchandise Mart
Motorola Mobility will move its Libertyville headquarters to the Merchandise Mart, the company and Mayor Rahm Emanuel announced Thursday. | Photo by Scott Stewart/Sun-Times
Updated: August 28, 2012 6:14AM
Motorola Mobility will move its Libertyville headquarters — and 3,000 workers — to downtown Chicago, taking the top four floors and rooftop of the Merchandise Mart and becoming the landmark building’s largest tenant with 600,000 square feet, Motorola Mobility CEO Dennis Woodside and Mayor Rahm Emanuel announced Thursday.
Motorola Mobility, the cellphone and TV set-top-box divisions of the old Motorola Inc., was bought by search giant Google for $12.5 billion on May 22, and is run out of Google’s headquarters in Mountain View, Calif.
But Mobility executives pledged a year before the Google takeover to keep Mobility’s well-paying engineering, finance, marketing, design and executive jobs in Illinois so Mobility could benefit from statewide tax credits worth more than $100 million over a 10-year period.
Gov. Pat Quinn said at a news conference in Deerfield that he gave Google “permission” to move from Libertyville to downtown Chicago, since that was the location Google preferred.
Motorola Mobility will join 1871, the Chicagoland Entrepreneurial Center’s 50,000-square-foot incubator for technology startups, and tech-related companies such as Allscripts and Razorfish in the Merchandise Mart, creating what Emanuel termed a “tech campus” for the city.
Mobility will be the driver in making Chicago “the digital capital of the Midwest,” Emanuel said.
The Sun-Times reported last month that Google was in talks with the Mart to take more than 500,000 square feet. Mobility will invest $300 million in the move, which includes a 15-year lease.
“It’s probably been the worst kept secret in the world,” said Libertyville Mayor Terry Weppler. “I think everybody was aware of this potential. I’m disappointed, absolutely, but Libertyville will survive.”
No city of Chicago tax incentives are involved in the relocation, a mayor’s office spokeswoman said. Google has its own presence in Chicago, employing “a few hundred” people at 20 W. Kinzie, a company spokeswoman said.
The Mobility move marks Motorola’s return as a major presence in Chicago after 36 years in the suburbs. Motorola got its start at 847 W. Harrison St. in 1928 as the Galvin Manufacturing Corp., and it took on the Motorola name in 1930. The iconic company, known worldwide for inventing the first cell phone in the 1980s and popularizing feature phones with the original Razr 20 years later, moved its headquarters to Schaumburg in 1976.
Mobility must build out the Mart space of vacated showrooms, so workers will begin moving in next summer, continuing through the fall. No opening date is set.
Woodside said Mobility will work with the village of Libertyville on the future of the company’s building and real estate in the suburb.
Woodside, who succeeded former Mobility CEO Sanjay Jha 60 days ago in the top job, said the 3,000 workers relocating to the Mart include close to a majority of Mobility’s senior executives, among them the company’s chief of staff Marshall Brown and the heads of engineering, sales and design, plus about 50 vice presidents.
Mobility also will move into the Mart 130 design and marketing employees who now work at 233 N. Michigan Ave.
Of the Mart, Woodside said, “You walk into that building and there is energy — all kinds of places to eat, the train coming right in there, the train station across the river.”
Since many Mobility workers will now commute by train instead of car, Woodside said, “We wanted people to be able to use the train time productively, and all that worked at the Mart.”
Woodside, who works out of California and was previously president of Google’s Americas region, said Mobility executives believed that the company needed the access to talent and ideas that a major city such as Chicago affords, as well as easy access to universities, public transportation and the buzzing energy of commuters, residents, tourists, office workers and others using smartphones as they walk down the street.
“We have the opportunity to create a tech innovator in the middle of the country that draws from people who are graduating from the University of Illinois, the University of Chicago, Northwestern, Michigan, Wisconsin and others — and who don’t want to have to work on the coasts to work in high tech,” Woodside said. “They want to stay home.”
He termed Mobility one of only two American companies to compete in the $300 billion global wireless industry against rivals such as Taiwan-based HTC, Seoul, South Korea-based Samsung and fledgling Chinese rivals. He didn’t mention by name the other American company, rival Apple, whose iPhone has proven a tough competitor for Mobility’s Android-based smartphones.
Woodside said Mobility foresees growth in both its wireless and TV set-top box businesses, the latter of which has been rumored to be for sale. Woodside called the set-top box division “a great business, a very solid business” and noted that he recently chose Marwan Fawaz, a former chief technology officer at Charter Communications, to be executive vice president of the so-called home unit.
Emanuel said the Mobility move to the Mart — the largest of any corporate relocations announced so far under his tenure — affirmed the city’s strategy of investing in its people and their quality of life, including education, government and infrastructure. Six other companies have previously announced headquarters relocations to Chicago: General Electric Transportation (500 jobs this year, another 500 expected later), Federal Savings Bank (400 jobs in the next three years), Hillshire Brands (former Sara Lee meats business, 650 jobs), accounting firm McGladrey (500 jobs in the next three years), Sagence management advisory firm (245 jobs) and ThyssenKrupp, a German global technology and materials group (100 jobs).
“It shows the diversity of the Chicago economy and the strength we have in terms of our talent, quality of life and decisions to invest in our core strengths.” Emanuel said.
Contributing: Dan Moran and John Roszkowski