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For some companies, the suburban landscape is losing its shine

Tony Arnold Jul 7, 2011

For some companies, the suburban landscape is losing its shine

Tony Arnold Jul 7, 2011

HOBSON: Well the State of Michigan has reportedly offered an incentive package worth $50 million to Sears if the company moves its headquarters from Illinois to Michigan. And if Sears does move it could join the ranks of companies abandoning a sprawling corporate campus in the suburbs for more urban digs.

From WBEZ in Chicago, Tony Arnold reports.

TONY ARNOLD: Relocating whole companies from the city to the suburbs caught fire in the 80s and early 90s as corporations looked to cut overhead costs. Looking around Chicago’s suburbs you can find the corporate campuses of Kraft, Sara Lee, Motorola Solutions and Sears Holdings, among others. They’re hulking presences in their respective suburbs, drawing thousands of employees every weekday.

But now the trend could be reversing itself. United Airlines is in the process of leaving its suburban location and shifting 4,000 people to offices in downtown Chicago. Out East, Swiss bank UBS is considering leaving behind is corporate campus in Stamford, Conn., reportedly for New York City.

PAUL SWINNAND: I do think it’s outdated.

Paul Swinnand is an analyst with Morningstar. In Sears’ case, he says the company is long overdue for a shakeup. And the best way to do that is recruit younger people. Ditching its current facility in Hoffman Estates could help attract twenty-somethings who crave the excitement of a bustling city.

SWINNAND: Why wouldn’t you want your staff, even if they’d be in the Finance Division, to actually be seeing what people are wearing, seeing what people are buying, feeling the vibe of a downtown city?

Officially, a Sears spokesman says the company is considering all its options. The State of Illinois is working on an incentive package of its own to keep the retailer.

Last year, United Airlines decided to move most of its employees from its headquarters near O’Hare Airport.

Jeff Smisek is United’s CEO.

JEFF SMISEK: Many of these jobs, certainly, for example, the technology jobs, could be located anywhere and we chose Chicago.

But while United looks for some urban cachet, businesses around the old headquarters have a case of the suburban blues.

Tony LaBosco manages D’Agostino’s Auto Repair Service.

TONY LABOSCO: I got people that come here for 28 years since I been here that work for United Airlines that come around. And now they’re gonna go downtown. They’re not going to come to me any more.

LaBosco says United may be moving downtown to grow but without that traffic from its employees in Elk Grove Village he may be facing layoffs.

In Chicago, I’m Tony Arnold for Marketplace.

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