USG Finds New Home in $128M West Loop Building

Now headquartered in 263,000 sf at 125 S. Franklin St., USG Corp. will take the upper nine floors at 550 W. Adams St., just northwest of Union Station. Although the subsidy raised some eyebrows among community development commission members, the deal keeps 630 jobs, accounting for $89 million of the company's payroll, in the city.

Now a parking lot, a 470,000-sf office building at 550 W. Adams St. is expected to generate $59.6 million in additional property tax revenue over the 23-year life of the TIF, says Steve Patterson of the department of planning and development's finance division. Property taxes are expected to increase from the current $131,000 to $3.8 million by 2009, he adds.

Besides exploring city locations as well as fielding an attractive offer to remain at 125 S. Franklin St. beyond its June 2007 lease expiration, USG Corp.'s best move economically would have been relocating to the suburbs, says company treasurer Karen Leets. The company's top choice there would have been Downers Grove, she adds.

"The cheapest option for us is the suburbs," Leets says. "Economics were important, but so was work space as well."

Headquartered in Chicago since 1902, the building material manufacturer has been under Chapter 11 bankruptcy court protection since 2001. Despite sales of $3.8 billion last year and posting a $200-million profit, Leets explains the company sought bankruptcy court protection from potential liability from asbestos claims.

The deal must be approved by three creditor committees as well as a bankruptcy court judge.

USG Corp. is going to an open work space scheme, Patterson says. USG Corp. was attracted to the 27,000-sf floor plates offered by the new building, to be developed by Christiana Investors, LLC, a Fifield Realty Corp. company.