‘A place to last’: Hoffman Estates says goodbye to Sears HQ, hello to Compass Datacenters as redevelopment kicks off

Though demolition and construction still lie ahead, Thursday marked a significant milestone in the transition of 273 acres in Hoffman Estates from Sears’ corporate headquarters into one of the largest data center campuses in Illinois.

Dallas-based Compass Datacenters hosted a kickoff event on the property, where it and its future customer will invest $10 billion to build five hyperscale data centers — each more than a quarter-million square feet — and provide the supply of electricity they’ll require.

Among the attendees were the CEOs of Compass and ComEd, Hoffman Estates Mayor Bill McLeod, and representatives of community organizations, trade workers, and the seven-county Greater Chicago Economic Partnership.

“We’re super excited to be here,” Compass CEO Chris Crosby said. “These data centers are akin to the highway systems of the past.”

He was among the speakers who addressed the legacy of Sears, but said the goal is to exceed the company’s tenure in Hoffman Estates. The modular design of the data centers makes them easy to update, with a 100 years not out of the question, he said.

“One of our core concepts at Compass is that this will be a place to last,” Crosby added. “The economic effect of this is pretty massive.”

ComEd President and CEO Gil Quiniones said his company stands ready to power the data centers that are powering today’s economy.

“Fortunately, ComEd has a great abundance of power in our grid,” he added. “We have been proud to partner with you and your team, Chris, every step of the way.

Quiniones said ComEd can meet 96% of its electricity output from clean energy, and that percentage is growing.

Hoffman Estates Mayor Bill McLeod said the village was fortunate to attract Sears from Chicago’s Sears Tower in the early 1990s to build the utility infrastructure for the site that a new industry will now benefit from.

“We wouldn’t have much of a west side without Sears,” McLeod said. “We salute Sears. And now we move forward into a new era with Compass Datacenters.”

McLeod recalled his time as a village trustee 30 years ago when Sears officials pondered whether they would have the same relationship with the municipal leaders of the future as those who’d welcomed them to town.

“Ironically, Sears is gone and I’m still here,” he joked.

Compass’ Vice President of Development Brett Collard said the company has primarily developed its campuses for a single tenant each and the Hoffman Estates site is likely to do the same.

Though no specific tenant was identified in advance, a number of tech companies could be in the market for a site of this size, Collard said.

Carol Stream-based American Demolition has the initial task of erasing Sears’ former 2.4-million-square-foot presence from the landscape, using sustainable practices and recycling when possible. The company already has been clearing out building interiors for the past few months.

While that lengthy process is going on, Compass will be designing and seeking village approval of its data centers. Construction is expected to begin in late 2025, with ComEd preparing to power the first of the buildings by mid-2026.

Compass’ data centers will use water-free cooling and hydrogenated vegetable oil-based fuels for backup power, as well as taking additional sustainable measures. Construction of the campus is anticipated to create about 1,000 jobs.

Northern Illinois has become a top location for data centers in the United States, adding nearly 30 data centers over the past five years. Many companies have come for the availability and reliability of the necessary electricity supply, ComEd officials said.

The willing cooperation of the power company is a big consideration in where a data center developer will locate, Data Center Coalition President Josh Levi told the Daily Herald.

Another key enabler of the state’s recent success is Illinois’ tax incentive, he added.

Taking effect in 2020, the state’s program offers data center owners and operators a tax credit of 20% on the wages for construction workers on projects in underserved areas. Among the criteria are an investment of at least $250 million over five years and the creation of at least 20 permanent jobs for the operation and maintenance of the facilities.

Other factors contributing to the Chicago region’s popularity are land and energy costs, local taxes, a sufficient construction and operations workforce, connectivity and a lower risk of natural disasters, Levi said.