New Thompson Center owners lure Google as tenant

CHICAGO (CBS)-- The sale of the iconic Thompson Center in downtown Chicago is being finalized with Google planning to occupy office space following extensive renovations by the new owner.

Google will take over the entire building once the new owners, JRTC Holdings, renovate the Thompson Center to the tech giant's specifications.

With Google eventually taking over 1.2 million square feet of space downtown, officials said it's the biggest corporate expansion in the city's history.

At an announcement Wednesday morning in the Thompson Center atrium, Gov. JB Pritzker called the deal "a massive win for the City of Chicago, and for Illinois taxpayers."

"This is tremendously positive for JRTC Holdings, for the State of Illinois, and for the Loop," Pritzke said. "If it wasn't evident before, then surely it is crystal clear now: Google is one of Chicago's most important companies."

Selling the Thompson Center has been a priority for Pritzker since he took office in 2019. He finalized a sale agreement with the new owner JRTC Holdings back in March. Today's announcement included revisions to the financial agreement and the addition of Google as a main tenant. 

Originally, the state planned to sell about 65% of the Thompson Center to JRTC Holdings for $70 million, but now will be selling the entire building for $105 million, including $30 million in cash. The remaining proceeds will be used to buy the former BMO Harris Bank building at 115 S. LaSalle St., according to JRTC Holdings owner Michael Reschke.

Rather than keeping some office space in the Thompson Center after the sale, the state of Illinois plans to move approximately 1,800 state workers to 115 S. LaSalle St. JRTC Holdings will renovate 115 S. LaSalle St. to meet the state's needs before the move takes place.

"The state will now own 50% more space in LaSalle Street at 50% less cost," Reschke said.

The state of Illinois already has relocated approximately 2,000 employees from the Thompson Center to a building at 555 W. Monroe St. and other nearby public buildings.

Pritzker said the consolidation of state offices will save taxpayers approximately $1 billion over the next 30 years.

Meantime, JRTC Holdings will renovate the Thompson Center to Google's specifications, and Google plans to eventually purchase the renovated building from JRTC Holdings.

"The way we see it, the Thompson Center is more than just a building. Establishing a presence here in the Loop allows us to get in on the ground floor of revitalizing and breathing new life into the very heart of this city," said Karen Sauder, Google's site lead in Chicago. "Just as we're proud of the role we played in turning Fulton Market into one of the most vibrant and energetic neighborhoods in the city, we have the opportunity to do it all over again here."

The state's decision to sell the Thompson Center has been a long time coming, as state officials have said the building's operational inefficiencies have led to high operating costs and a maintenance backlog that would cost the state more than $325 million to fix. Reschke said the cost of updating the Thompson Center isn't a concern, because they're planning to fully gut the building to renovate it for Google.

"We're not going to repair and maintain what's there. We're ripping it out and replacing it. So we have a huge significant capital budget, but it's different than the way the state was looking at it. We're putting a brand-new curtain wall on the building that'll be energy-efficient insulated glass, versus what's there today is a single-pane non-insulated glass," Reschke said. "The only thing we're keeping is the steel structure. So all of the problems, per se, will be fixed, because everything's being replaced. The building will be completely new."

Reschke said he expects the full renovation to cost around $500 million. He said the iconic atrium will remain, but the blue and salmon colored glass panels will not. Initial plans call for several outdoor terraces and a large rooftop deck to be added.

"So there will be close to 80,000 feet of outdoor terrace space," Reschke said.

He expects designs to be complete by early next year with construction possibly starting in March of next year.

Google touted the Thompson Center's direct access to six CTA lines as providing its employees with "unparalleled public transit access." 

The Thompson Center connects to the Blue, Brown, Green, Orange, Purple, and Pink Lines, and the proposed renovations at the building will not require any shutdown to CTA operations, according to a news release from the state. 

Google currently has about 1,800 employees at its existing Chicago offices in Fulton Market. It's unclear how many new employees will be moving into the renovated Thompson Center.

Google expects to begin moving in to the Thompson Center starting in 2026.