Zurich American Insurance has received final approval for its new 750,000-square-foot North American headquarters on a part of the existing Motorola Solutions campus in Schaumburg -- not far from the iconic office towers Zurich plans to vacate in 2016.
Schaumburg officials this week also approved a provision for a potential 220,000-square-foot expansion of the building, as well as a development agreement specifying the amount of public funds the project is eligible to receive.
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Though the project generally will be eligible to be reimbursed 65 percent of the property taxes it generates as part of the village's newly established Tax Increment finance (TIF) district, the total will be capped at $100 million for the initial phase and $10 million for the possible expansion.
Schaumburg Community Development Director Julie Fitzgerald said without the cap, the first phase would have been eligible for up to $130 million.
TIF districts are established to help foster redevelopment partly by providing funding for public improvements. Though TIF eligibility was seen as an incentive for Zurich to relocate elsewhere in Schaumburg rather than move out of town, the cap will save some money for the village to do more public improvements elsewhere in the district, Village Manager Brian Townsend said.
Demolition of some existing structures on the Motorola site is expected to occur in late spring, in anticipation of the Zurich construction to follow. As many as 2,500 employees could work out of the 38.8-acre site.
Village staff were pleased by the design of the proposed Zurich building, expected to be occupied sometime during the third quarter of 2016.
"The building is spectacular," Fitzgerald said.
No specific date or commitment has been made regarding the potential expansion.
"The expansion would go off to the southwest," Townsend explained.
Schaumburg wants some assurances for the public funding it's providing for the project -- especially as the intent is economic growth for the area.
Zurich's reimbursement of its property taxes would drop from 65 to 50 percent if its number of employees falls below 1,700. And TIF payments would stop completely if there are fewer than 1,000 employees.
A TIF district works by freezing property taxes to all taxing bodies at the level of district's first year. Any annual increases above that amount go to a special fund reserved for public improvements within the district.
TIF districts expire after 23 years or when all improvements have been paid off, whichever comes first. This particular TIF district, which will expire in 2038, stretches from Algonquin Road to the north, the tollway to the south, Roselle Road to the west and Arbor Drive to east.
One further tweak to the plan this week was to reserve 6.5 acres at the corner of Meacham Road and the tollway for the Illinois State Toll Highway Authority. This is to provide a needed right-of-way for the upcoming construction of an interchange and widening of the roadway. Taking care of it now prevents a delay of possibly 6 to 9 months if tollway has to work with new landowner Zurich, Schaumburg Landscape & Design Planner Todd Wenger said.
Zurich currently has no tenants lined up to move into its towers when the company moves into the new headquarters in 2016.