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Then, like other major employers in this age of corporate consolidation, it waited for the incentives to roll in. And they apparently did, because Mayor Richard Daley's office said Friday that there will be a news conference Saturday to announce a deal in which the carrier will move to 77 W. Wacker Drive.United would pay top dollar, about $16 million a year for 10 or 15 years, to rent approximately 165,000 square feet in one of the top office towers in the city. To offset some of that expense, the carrier is likely to receive a multimillion-dollar incentive package from the city and state.
As is customary in the city's weak leasing market, the landlord, Prime Group Realty Trust, probably will pay the brokerage fees and perhaps about two-thirds of the $100 a square foot required to fit out United's interior office space. That could add up to about $12 million.
"It's a huge deal," said Shawn Mobley, executive vice president at real estate firm Grubb & Ellis Co. "The last major corporate relocation downtown was when Boeing left Seattle almost five years ago.
"Not to suggest a ruse in any way, but it's a classic leverage play," said Mobley, who has represented several firms in relocating. He engineered his own firm's move downtown from suburban Northbrook this year to be closer to its clients.
"You go through the motions of looking out of state," Mobley explained. "The package you get correlates to public officials' belief that the company has a better alternative location."
But in getting a good incentive package, he said, "you walk a fine line." There's a risk of losing workers worried they'll be out of a job, or of the firm being seen as "a heavy-handed corporate citizen," Mobley said.
Tough negotiations are needed in today's tough economy, said Peter Livaditis, an executive vice president for the Dallas-based real estate firm Trammell Crow Co.
"Corporations need to find every cost advantage they can, including the cost of real estate, labor, technology and government incentives," he said.
Chicago Tribune
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