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CPS moving its headquarters to smaller offices

1 North Dearborn st. | Rich Hein/Sun-Times

1 North Dearborn st. | Rich Hein/Sun-Times

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Updated: January 19, 2014 6:10AM

On the heels of closing dozens of schools, Chicago Public Schools is moving its headquarters to smaller offices, in the same building that currently houses Sears’ flailing flagship store off State Street, raising questions over its future, the Chicago Sun-Times has learned.

CPS will move next year from 125 S. Clark, where it has been since 1998, to the first three floors at 1 N. Dearborn, CPS officials said.

Sears Holdings declined repeatedly to comment on whether it is moving from 2 N. State — which is in the same building — or more broadly, about its future in downtown Chicago.

Spokesman Howard Riefs said in a statement: “The store will continue to serve our members and customers as normal, including throughout the holiday season.”

The spokesman would not expand beyond that statement.

Meanwhile, CPS is looking toward the move, which comes on the heels of the district’s closing of a record number of schools.

“As everybody knows, the basis for that was underutilization, so we turned that mirror on ourselves and discovered that our headquarters is over 50 percent underutilized,” said Tom Tyrrell, CPS’ chief operating officer.

The Chicago Board of Education is anticipated to take up the move on Wednesday. Officials say moving will save tens of millions of dollars over time.

CPS officials have been looking at downsizing the central office since spring. The central office staff, which now has about 1,200 people, has shrunk over the years.

Jesse Ruiz, the school board vice president and a lawyer, said there’s just too much unnecessary space in the current office building.

“The office I’m assigned at CPS headquarters is larger than my law firm office,” he said.

The 19-story building CPS now owns and occupies will go on the market in the coming weeks. Tyrrell declined to say what it might be worth. When CPS bought the building in 1998 from ComEd, it paid $8.3 million, a CPS spokesman said.

CPS plans to be in the new space by November.

Renting the new spot will cost $34.6 million over that period of time, but CPS declined to specify its rent. Staying in the current building would cost $94.9 million over 15 years, he said. Those costs include building operations and maintenance.

“If we’re going to be responsible stewards of the public trust, we have to make sure we’re making decent business decisions when it comes time to make a business decision,” he said. “It’s just silly to sit here 15 years and shell out $95 million bucks when you don’t have to.”

The move means CPS will be “putting $60 million back in classrooms over 15 years,” Tyrrell said.

Tyrrell, the retired marine colonel who helped manage the school closings, said the district considered about 140 other buildings to move its headquarters, including 52 empty school buildings. That includes the former Wentworth Elementary School building, 6950 S. Sangamon. The building was emptied when Altgeld Elementary School was closed and Wentworth was moved into its building. CPS determined that to move and stay in that building would cost $79.4 million over 15 years, including the “huge” cost to retrofit the vintage building.

CPS also looked at options for staying in its current building or converting part of the building to condos, but the savings just weren’t there, Tyrrell said.

Location also was a consideration. While CPS didn’t necessarily need to be headquartered in the Loop, it wanted to be centrally located for those who need to travel to the schools or travel to the CPS central office.

That includes people who attend the monthly CPS board meetings.

The new Board of Education chambers will be able to fit 250 people — more than twice as many as in the current building, Tyrrell said.

Sears has been at its State Street location since 2001. At the time, it was lured back to a revived State Street after an 18-year absence.

Sears, based in Hoffman Estates, has been cutting costs and inventory and shedding assets — moves designed to help it return to profitability.

In March 2006, Sears opened an e-commerce development center on the fourth floor of the property at 2 N. State, employing software developers, project managers and technical architects.

Marty Stern, board chairman of the Chicago Loop Alliance, said he’s not aware of any imminent plan by Sears to close its State Street store.

But if the store does ultimately close, Stern said it would only be a “temporary hiccup” for State Street that could be easily overcome by retaining ground-floor retail.

Contributing: Brian Slodysko

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