Smartphone maker Motorola Mobility will move its headquarters from Libertyville to the Merchandise Mart in the summer of 2013, relocating 3,000 employees to downtown Chicago, the company and Mayor Rahm Emanuel announced Thursday.
Motorola Mobility, which was acquired by Google Inc. for $12.5 billion in May, will invest $300 million in the move. This figure includes rent on a 15-year lease for nearly 600,000 square feet that includes the top four floors and rooftop of the design center. No employees will be left in Libertyville, which has long been the headquarters for Motorola's cellular handset division. When Motorola Inc. spun off its mobile devices and cable TV set-top boxes into an independent entity called Motorola Mobility at the beginning of 2011, the company kept its headquarters at the Libertyville campus.
The city did not provide any financial incentives for the move, though the company has received incentives to remain in Illinois. In 2011, after considering a headquarters move to California or Texas, Motorola Mobility struck an agreement with the state to maintain a local workforce of 2,500 in exchange for more than $100 million in tax credits over 10 years. That agreement remained in place after the Google acquisition.
The relocation benefits the city and the company, Emanuel and Woodside said on Thursday. The city is eager to establish Chicago as a hub for technology companies that will create high-value jobs in areas such as engineering and software development. About 2,000 of the 3,000 employees are engineers, said Motorola Mobility Chief Executive Dennis Woodside.
And the company wants to attract talented workers and be located where it can observe how smartphone- and tablet-toting consumers use their devices as they walk around or ride the train.
"We think we can create a place where the best and brightest, whether they are already working (in the) industry or coming out of school, and who want to work in technology and who are from the Midwest, can go and have a career and create a product that millions of people can use," said Woodside, who replaced Sanjay Jha as the head of Motorola Mobility after the Google deal closed.
Merchandise Mart and the River North area are already home to a blossoming high-tech community, whose young workforce likes the access to public transportation and bike lanes. This year, 1871, a collaborative workspace for digital startups, opened in 50,000 square feet on the 12th floor of the Merchandise Mart. The space has financial backing from local venture capitalist J.B. Pritzker and Illinois. Several local venture capital firms and universities have offices in 1871, which is also used as a space for networking events and seminars. Further west, the former Montgomery Ward catalog building is the site of Groupon's headquarters, as well as venture capital firm Lightbank and its many portfolio companies.
Bringing Motorola Mobility to downtown Chicago will be a further catalyst for the local tech scene, Emanuel said.
"We've never had a place where all the intellectual capital can come and be generated, and that's what's going to happen, both at the Merchandise Mart and with Google/Motorola's presence," Emanuel said. "It will be a game-changer for that capacity."
Google's Chicago office is also in River North on Kinzie Street. Those offices were too small to accommodate Motorola Mobility's 3,000 employees, Woodside said. In addition, the company needed extensive space for engineering labs.
"We're really doing this stuff," Woodside said. "This is not just office workers. These are people building phones and tablets and all kinds of things we can't even imagine right now."
Woodside said he would divide his time between Chicago and Sunnyvale, Calif., where many members of Motorola Mobility's senior leadership team are based. The smartphone company's California connection is well-established. Jha, Woodside's predecessor, was a former Qualcomm executive who kept his residence in San Diego and commuted to the Chicago area while he ran Motorola Mobility. Woodside said senior staff based locally include the heads of engineering, sales and design.
"Sunnyvale will be the center of excellence for software and here will be the center of excellence for hardware," Woodside said.
As for the Libertyville campus, which Motorola Mobility owns, Woodside said the company "will work with Lake County and the city of Libertyville to figure out a good use for that space."
