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Kaid Benfield’s Blog

Is it over for suburban corporate campuses?

Kaid Benfield

Posted May 31, 2011 in Green Enterprise, Living Sustainably

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  Jack Henry & Assoc. HQ outside Birmingham AL(by: Curtis Palmer, creative commons license)

In the late 1990s, when Don Chen, Matt Raimi and I were researching our book, Once There Were Greenfields, we lamented the flight of business from America’s central cities to increasingly outer suburbs and farmland.  In that book we frequently turned for data to metropolitan Chicago where, for example, Ameritech had built a half-mile-long “landscraper” near O’Hare Airport far from the Loop, Motorola had set up camp in Schaumberg, and Sears had fled the iconic Sears tower for Hoffman Estates.

Now, just as the tide has turned against large-lot suburban residential subdivisions, corporations are moving back into town (or, as in the case of Dublin, Ohio, doing everything they can to make their suburb more urban in character).  The best and the brightest of the rising labor force, it turns out, don’t care to live and work in sprawl.

Writing in Crain’s, Eddie Baeb reports that the new trend is changing the face of greater Chicago:

“Companies seeking to tap a broader talent pool and get into the flow of innovation are looking back to the urban core.  Sara Lee is only the latest suburban company to seek a new headquarters in downtown Chicago.  United Airlines made the move in the past decade, as did Navteq Corp. and Allscripts Healthcare Solutions Inc.  Morningstar HQ, Chicago (via glassdoor.com)Some of the most successful local companies of recent years, like Morningstar Inc. and Accretive Health Inc., never left the city.

“’The whole corporate campus seems a little dated,’ says Joe Mansueto, chairman and CEO of Morningstar, who moved the company's 1,100 headquarters workers across the Loop to a new office tower at 22 W. Washington St. two years ago without even considering a move to the suburbs.  ‘We've always liked being in Chicago.  It helps keep employees on the pulse of what's happening in our society. It keeps them current with cultural trends and possibly technological ones.’

“The change has the same far-reaching implications for the region that the suburban stampede of the post-war era had on living and working patterns around Chicago.  Well-paying jobs are up in the city, raising questions for the housing market in outer suburbia.  New transit challenges will arise as more workers ditch suburb-to-suburb auto commuting and board trains and buses headed downtown.”

Baeb’s article also points out that central city locations help recruiting efforts not only with young, urban professionals but also with workers throughout the region:  “For most people in greater Chicago, it's easier to commute downtown than to a suburb on the other side of the metropolitan area.”  That, of course, is a textbook illustration of what transportation researchers call “regional (or “destination”) formerly Applebee's; soon, EPA (via KansasCity.com)accessibility,” the single most powerful indicator among land-use factors of how far people will drive, on average, over the course of a year.  Central locations both facilitate transit access and reduce driving distances.

All this makes even more ridiculous the recent decision of the federal General Services Administration and the US Environmental Protection Agency to move EPA’s regional headquarters out of downtown Kansas City, Kansas, and 20 miles away to a completely automobile-dependent former (natch) corporate headquarters campus across the road from a wheatfield.  EPA, of course, is the agency that’s all about sustainable communities these days.  Except when it’s not.  Will that decision affect recruiting of bright, creative young talent?  Time will tell.

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Kaid Benfield writes (almost) daily about community, development, and the environment.  For more posts, see his blog's home page.

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Comments

PaytonMay 31 2011 01:28 PM

Suburban office nationally has long been an investment laggard in the "Emerging Trends" reports -- partly because it's too easy to build replacements, and partly because demand is softening.

In regions that are relatively well-served by transit and offer significant urban amenities (including quality in-town residential), the accessibility edge that downtown has just can't be beat. In an era when meeting face to face has become *the* key reason to come to the office -- everything else can be done remotely -- why sequester the office out in the woods?

Jonathan WirthlinMay 31 2011 07:20 PM

As a resident of the "suburbs" of Los Angeles, I see the opposite here. This is because our downtown, while "central", is NOT easily accessible. Traffic and relatively poor public transit make commuting downtown for residents of such a sprawled city undesireable. Many major companies do reside downtown, but I see a huge population of recruits looking for options in nearby smaller cities. Places where the feel is urban, but the commute is far less. This narrows the field a bit, because you cannot recruit on the opposite side of downtown so easily, but with a high local population you have plenty of interested parties.

David S. (@seemsartless)Jun 1 2011 09:50 AM

I'd be interested to see how this compares to Canadian metropolitan areas (like the Greater Toronto Area). Much of our downtown core is vibrant at night, condos mixed with office space, but we also have turned near-by farmland into parking lots and campuses.

Jim NoonanJun 1 2011 12:38 PM

Interesting article and responses. I think the 'campus' style of development is seeing a slow, but real decline in favor of central places.

I would also urge repondents not to confuse corporate decisions to locate in smaller towns with suburban business park development. While new development in smaller cities may look like any other suburban location, they are often far more connected to the towns in which they are located and have greater potential for walkability and interactions with downtown economies.

Kaid @ NRDCJun 1 2011 12:48 PM

I very much agree with Jim's addition.

Alger HoratioJun 2 2011 03:32 PM

Let us not overlook the importance of the declining rents for inner-city office space. The typical large American city has considerable vacant office space in amazing locations in modern buildings.
Building an office park in a greenspace simply doesn't make sense in the overbuilt environment of the past five years.

PaytonJun 3 2011 03:43 PM

How could I have forgotten this headline?

FEELINGS OF EMPTINESS RISE IN SUBURBS
J Linn Allen; Chicago Tribune; Jun 16, 1999

Even back then, vacancy rates in the suburbs were rising -- and with a few localized exceptions, haven't declined since.

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Switchboard is the staff blog of the Natural Resources Defense Council, the nation’s most effective environmental group. For more about our work, including in-depth policy documents, action alerts and ways you can contribute, visit NRDC.org.

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