HARVARD – Winter could be rough on the former Motorola campus in Harvard.
After years of heating, maintaining and paying the property taxes on the vacant corporate campus at 2001 N. Division St., the Miami company that owns it has stopped doing so. A Chicago company recently secured a lien on the 1.5-million-square-foot building after Miami-based Optima Ventures failed to pay more than $300,000 in property taxes this fall.
Electricity at the former Motorola building has been turned off since the spring. In May, ComEd filed a lawsuit against Optima seeking more than $50,000. Without heat, the cold winter temperatures could damage the building infrastructure, said Charles Eldredge, executive director of the Harvard Economic Development Corp.
“I was told they do not intend to turn the heat on,” Eldredge said Wednesday after accompanying real estate brokers who were showing the property to potential buyers on a chilly tour of the campus. “That’s not good for the building, but it will really depend on how well they’ve drained the water. If it was done well, then the effect will be minor. If not, then there could be very substantial plumbing damage come spring.”
It’s not clear what Optima Ventures plans to do with the property. A message left for officials at the Miami company wasn’t returned.
However, the property is being marketed. Four groups have looked at the building one or more times in recent months, Eldredge said. And the price has been dropped to $15 million, although Eldredge said it fluctuates and is ultimately up to the owner.
“I presume [the groups] have some level of interest if they are looking at the property,” he said. “All the gawkers and tire-kickers have gone.”
Optima International bought the building in 2008 for $16.75 million. The Midwest Corporate Campus has 1.5 million square feet through four connected buildings. Amenities include a fitness center with a dance room, two child-care centers, nine elevators, a keyless security system, a 500-seat auditorium, a 1,100-person capacity cafeteria, miles of biking and running trails and two heliports (one rooftop, one ground level). The campus has 6,000 parking spaces and 28 underground executive parking spaces. It has been vacant since 2003.
A marketing brochure for the property notes the replacement cost of the facility is more than $250 million, “and the facility is available immediately at well below this cost.” Marketing materials don’t list an asking price for the campus.
So far, efforts to fill the property – with everything from a major company to a water park and a prison – haven’t been successful.
Chicago-based First National Assets, a specialty financing private equity group that acquires and services tax lien certificate portfolios, bought the property’s unpaid taxes at auction Oct. 24, said Glenda Miller, chief deputy McHenry County treasurer. Another company bought the taxes on vacant land adjacent to the building.
To remove the lien from the building, Optima would have to get an estimate of redemption from the county and then pay $333,307.05 plus 3 percent interest to the tax buyer, Miller said. The interest rate doubles every six months. Optima could lose the property if the lien isn’t redeemed after more than two years. But that is rare, Miller said.
“The owner has two years to pay off the tax lien,” said Jim Finnerty, tax lien portfolio manager for Chicago-based First National Assets. “It’s almost certain they will redeem it.”
Eldredge said tax buyers “are interested in getting paid interest, not acquiring real estate.”
He also said the tax lien wouldn’t hamper the sale of the property, although the lien would have to be removed before the title could change hands. However, he said, liens are “very routine in commercial real estate.”
City officials don’t think the property will rapidly deteriorate and become blighted, Harvard City Administrator David Nelson said.
“We have a very good relationship with the broker,” he said. “We’d like to see it put to good use and see people working there, but we don’t own the property. We’re just along for the ride.”
Eldredge said he couldn’t speculate on Optima’s level of interest in the property.
“Everyone can make their own judgment,” he said. “Obviously, [Optima’s] enthusiasm for the building would be perceived as greater if they turned the utilities on. On the other hand, operating the building as they have is very costly.”
He estimated the property taxes on the building “were relatively small compared to other costs” such as heating and maintaining the building.