A data center firm is expected to close on the Sears campus this month. Then what happens?
Sources familiar with efforts to market the former Sears headquarters in Hoffman Estates say Dallas-based Compass Datacenters is expected to close on its purchase of the 273-acre property this month.
Such a move would solve the 20-month mystery over the fate of the sprawling office campus, as well as erase the last visible presence of a 20th-century retail giant from the state it long called home.
Hoffman Estates village officials said they could not comment on the status of any pending real estate transaction, but they indicated they are prepared for a redevelopment of the Sears site.
"Whatever it is that ends up happening, we're ready for it," Director of Development Services Peter Gugliotta said. "We can get through the review process fairly quickly."
A data center campus would present a much simpler approval process for the village and other entities than Sears' plan for the previously undeveloped land in the early 1990s.
Much of the effort back then concerned bringing infrastructure to the site - including sewer, water, roads and tollway interchanges - and the taxation mechanisms to enable it, Gugliotta said.
With all that established, the only additional need for a data center campus would be the extraordinary amount of electricity it requires. And that is something the property owner would have to address with ComEd, Gugliotta said.
Hoffman Estates is familiar with data centers, having dealt with Microsoft's plan to construct a pair of 207,000-square-foot buildings and a power substation on 53 acres north of the Bell Works Chicagoland development along Interstate 90.
In February, Microsoft bought another 30 acres adjacent to that site.
"What we learned (about data centers) from Microsoft plays forward," Gugliotta said. "We're in a knowledgeable position."
Even without that familiarity, Hoffman Estates believes it is a good destination for the booming data center industry given the amount of open land available on the community's west side.
In the wrong place, with neighbors too close, data centers could be considered noisy and less than attractive buildings. But even after Microsoft and the former Sears campus, the village still has several hundred vacant acres left for more, Gugliotta said.
While data centers won't bring Hoffman Estates the kind of sales tax revenues it might see from a retail or commercial redevelopment of the Sears site, there are benefits to the village.
A recently approved electricity tax rate increase for high-volume users - like data centers - will fund the $16 million replacement for the village's more than 50-year-old Fire Station 22 at 1700 Moon Lake Blvd.
Gugliotta said there's been no indication the new rate - still moderate for the region - would have a chilling effect on Hoffman Estates' draw for data center development.
The local economy, particularly service-related businesses, also should see an immediate impact from the resumption of activity at the Sears campus, Gugliotta said.
Hoffman Estates Mayor Bill McLeod said the property value of the massive site would continue to drop without the redevelopment.
"Right now you've got a building with nobody in it," he said.
One universal truth about the data center industry, Gugliotta said, is quality isn't compromised in any area of construction or operation.
What remains unknown is what a data center campus on the Sears site might look like. As similar developments in Elk Grove Village, Mount Prospect and elsewhere demonstrate, data centers come in a variety of sizes, shapes and heights.
And while any future landowner might want to demolish the 2.4 million square feet of office space on campus as quickly as possible, there already are 70 vacant acres on the west side of the property ready for development.
A representative of Compass Datacenters could not be reached for comment for this story.
The company is in the process of being acquired by Brookfield Infrastructure Partners LP and the Ontario Teachers' Pension Plan, according to a company news release in June.
"The industry is at a critical inflection point today with AI and cloud demand continuing to fuel significant growth," Compass CEO Chris Crosby wrote at the time. "With Brookfield Infrastructure and Ontario Teachers' strategic expertise and deep financial resources, Compass is ideally positioned to meet growing demand for hyperscale data centers and campuses."
Transformco, the company that emerged from Sears' bankruptcy, is the current land owner.
The last Sears department store in Illinois - at Woodfield Mall in Schaumburg - closed in the fall of 2021.
According to an online listing, there were 11 Sears stores left in the nation in late June - three in California, three in Florida, and one each in Massachusetts, New Jersey, Puerto Rico, Texas and Washington.