A potential buyer could close on the former Motorola campus in Harvard as soon as April, a U.S. Department of Justice representative said in court Friday, but city officials don’t know who that buyer is.
The Justice Department entered a contract with a potential buyer for the long-vacant 1.5 million-square-foot property. The sale likely will be finalized in April, Justice Department representative Mary Butler said during a hearing Friday in McHenry County court. Butler did not identify the potential buyer, noting that nondisclosure agreements are “standard in these types of transactions.”
Harvard officials have been eager to sell the former Motorola campus for years. Until recently, court orders tied to a criminal case against the most recent owner, Xiao Hua “Edward” Gong, have prevented new businesses from moving into the space at 2001 N. Division St. A Sept. 25 order from the Ontario Superior Court in Canada, however, has allowed for the sale of the property before the criminal case against Gong is resolved.
“Obviously, we’d like to know the identity of the buyer as soon as possible, but we understand there’s a process,” the city’s attorney, Timothy Clifton, said in court Friday.
Proceeds from the sale first will be used to pay off more than $1 million worth of outstanding property taxes and then to make necessary repairs, according to the order. Any leftover money will be held by the U.S. Marshals Service pending the outcome of a final judgment in Gong’s case in Canada.
Gong bought the property, which has been vacant since 2003, for $9.3 million through an online auction in April 2016. At the time, he submitted an incomplete application for economic incentives through the Harvard-Woodstock enterprise zone. Gong’s proposed $32 million smartphone manufacturing project was never realized, however.
In the meantime, Gong allowed property taxes to fall delinquent for three consecutive years, leaving more than $1 million in unpaid taxes, records show.
The city of Harvard has been working to move the property into more productive hands in an attempt to recoup lost property taxes and save the promising but deteriorating campus. As Gong’s case unfolds in Canada, the campus and an attached local historical landmark, the William H. Coventry House, have been left mostly unattended. Attorneys were unsure Friday whether the property was insured.
The most recent complaint filed against Gong in McHenry County came from Harvard-based Black Brick Landscaping Co. The business filed a lawsuit in December against Gong’s company, Edward Harvard Holdings LLC, seeking $18,000 for unpaid lawn care services performed at the Harvard property between April and October of last year.
Despite the necessary and potentially costly repairs it would take to bring the property within health and safety guidelines, an Ohio-based digital signage company tried for years to get its hands on the space.
The company, Stratacache, first inquired about buying the Harvard property after Gong’s indictment, the company’s CEO, Chris Riegel, has said. After years of unsuccessful attempts to purchase the space, however, Stratacache backed out in July and instead bought a former computer-chip factory in Oregon.
Reached by email Friday, Reigel confirmed that Stratacache was not the mystery buyer mentioned during Friday’s hearing.
Peter Baugher – the attorney who represents Stratacache’s acquisition company, Amadeus – voiced his own concerns Friday about the transparency of the sale process.
“I think this is a strange and remarkable circumstance not to even know who the prospective purchaser who has signed the contract is,” Baugher said.
McHenry County Judge Thomas Meyer continued the case to April 1, at which point Butler is expected to provide an updated timeline regarding the closing process.
Before signing off from the Zoom call during which the attorneys made their remote court appearances Friday, Butler joked that the next status date was scheduled for April Fools’ Day.
“I think it’s great,” Baugher said. “I think that’s an appropriate date.”