'A huge leap forward': Judge paves way for sale of former Harvard Motorola property

Officials hope to see the former Harvard Motorola campus revived after a U.S. federal court order explicitly allowing for the sale of the property.

A yearslong battle over the property at 2001 N. Division St. reached a tipping point Nov. 5, when a U.S. district judge transferred the land's title to the U.S. Marshals Service so it could begin the bidding process, court records show.

Now city and county officials hope to see the space used for a manufacturing operation that would bring hundreds of jobs, not only to Harvard but also to the surrounding area, said Jim McConaughey, McHenry County Economic Development Corp.'s executive director.

"We're a huge leap forward closer to that end goal," McConaughey said.

A Mutual Legal Assistance Treaty between the U.S. and Canada previously raised questions about who would be allowed to sell the property, especially because it could be subject to forfeiture in a criminal case against the most recent landlord.

That former owner, Xiao Hua "Edward" Gong, is a politically connected Canadian businessman who is accused of fraudulently selling securities worth hundreds of millions of dollars to citizens.

Harvard officials and prospective buyers have long complained Gong has exaggerated conversations with interested bidders in an attempt to delay the sale of the property.

Reached by phone Tuesday, Gong's attorney Michael Walsh said he hadn't seen the Nov. 5 order and declined to comment.

Under the judge's recent order, Gong cannot interfere with the sale of the property and must cooperate with the U.S. Marshals Service if necessary. That includes turning over the details of all offers or possible offers received for the property since Jan. 1, 2019, according to the order.

Stratacache - an Ohio-based digital signage company that previously showed interest in buying the property - is determining whether the space is worth the cost of necessary repairs. Gong hasn't kept up with the building's maintenance, local officials said. The space has been vacant since 2003 when the highly anticipated but ultimately failed Motorola plant closed its doors.

"I would love to see something productive happen with this building, but I have my doubts at this point," Stratacache CEO Chris Riegel said Wednesday.

When Riegel had the property appraised last year, he learned it would cost an estimated $46 million of repairs to bring the essentially abandoned building within health and safety regulations. At the time, the building was marred by mold, roof leaks, buckling floors, water damage and a failed 22,000-head sprinkler system, court records show.

Riegel toured the property again two weeks ago and said the buildings have further deteriorated.

"I think that if the state of Illinois and McHenry County seek to have the building be reused, they probably have to come to the table with a pretty strong (incentives) package - especially with the current commercial real estate environment," Riegel said.

Commercial properties have faced two major struggles since the COVID-19 pandemic devastated brick-and-mortar operations throughout the country this year. A shift toward working from home means tenants are considering renting less space, The Associated Press reported in June. At the same time, a trend toward online shopping threatens to weaken the demand for storefronts and retail space, the AP reported.

But if a sale is successful, the Harvard campus could bring hundreds of high-tech jobs and vocational training opportunities to McHenry County and the surrounding region, Harvard Economic Development Corp. Executive Director Charlie Eldredge said.

Taxes for the former Motorola campus, the largest taxpayer within the city of Harvard and Harvard School District 50, have not been paid since 2017, property records show. District 50 and the city stand to collect the most from the former campus' property taxes.

"The property has been for quite some time the largest vacant building in the state of Illinois and it at one time employed over 5,000 people," Eldredge said.

The property will be sold in the U.S. while Gong's criminal case is pending.

Proceeds from the sale will first be used to pay off about $9.7 million of outstanding property taxes and then to make necessary repairs, according to the order. Any leftover money will be held by the U.S. Marshals Service pending the outcome of a final judgment in Gong's Canadian case.

The Nov. 5 federal order only applies to Gong's Harvard property, and not those he also owns in Dearborn, Michigan, and Chicago.

Attorneys are expected to discuss the details of the sale process and a potential timeline at a Nov. 20 court date in McHenry County.

"Now it looks like there's at least a path to resolution," Riegel said.