A couple more big companies just announced major relocations into signature downtown (or near-downtown) structures in the Midwest.
The big news is in Detroit, where Ford Motor Company is buying the decrepit Michigan Central Station, planning to renovate it into the heart of a campus that will include as many as 2,500 employees. It does not appear this will be the headquarters, but a home for the company’s new mobility services endeavors.
The symbolism of this is hard to overstate, given that the rotting train station served for so long as a visual emblem of everything wrong with Detroit. As Detroit Free Press columnist John Gallagher wrote:
Trying to sum up the significance of Ford’s plans for the Michigan Central Station, a quote by Winston Churchill seems apt.
“Now, this is not the end,” Churchill said of an early Allied victory in World War II. “It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”
That’s what Ford taking on the old train station means for Detroit. Years of hard work lie ahead for the city to truly come back. But Ford’s act of faith in Detroit’s future with the enormous investment it will bring signals a new era.
Victory no longer seems so remote. The issue is no longer in doubt.
Meanwhile in Chicago, the hulking former main Post Office – a huge structure that straddles the Eisenhower Expressway – is coming back to life as Walgreens signs to be the first anchor tenant, moving 1,300 new jobs downtown from suburban Deerfield and apparently consolidating 500 others from elsewhere in downtown:
Walgreens has eyed the Post Office as an office destination before. It was negotiating a deal in 2014 with the building’s previous owner to move its headquarters to the building, but the agreement never materialized and the owner, British investor Bill Davies, died in 2016 just as his venture was selling the property.
Since Walgreens began those talks to move to the city, a flurry of companies have uprooted from their suburban homes for new downtown headquarters. Among the big movers have been Motorola Solutions, Kraft Heinz, Hillshire Brands, GE Healthcare, Beam Suntory and, most recently, McDonald’s. Smaller companies such as FTD and Peapod have also relocated to the city.
Again, my impression is that the quantity of suburban to downtown moves in Chicago is far higher than any other city out there. Unlike the out of town firms moving in the HQs, which tend to be smaller “executive headquarters” type operations, some of these suburbs to downtown relocations involve significant numbers of jobs.
These are both jobs moves within the region, so aren’t really net gains. In fact, it will be interesting to see what the over regional impact is. Neither Chicago nor Detroit is growing that much at a regional level. Chicago has significant suburban office vacancy problems. The Loop is a world class business destination but the Chicago suburbs are not especially competitive. It’s too early to tell but if these trend keeps going the changes in intra-regional economic dynamics will be interesting to watch.
from Aaron M. Renn