Bell Works Case Study by HLW and the USC Spatial Sciences Institute

Lessons From a Transformational Redevelopment

A research report developed by HLW and the USC Spatial Sciences Institute March 2022

Contents Project Background Two Sites with a Common History AT&T Ascendance, Bell Labs, and the Shaping of Holmdel Identity T&T Break-Up, Ameritech’s Growth, and the Identity of A Hoffman Estates From Bell Labs to Bell Works Preservation Over Radical Change Building Trust and Protecting Interests Sealing the Deal The Impact of Bell Works in Holmdel The Business Impact of Bell Works Inspiration for Hoffman Estates Hoffman Estates Today Fundamental Learnings About the Authors Special Thanks Bibliography

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Project Background

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Project Background The opportunity to conduct a site-impact research study on the redevelopment of Eero Saarinen’s iconic Bell Labs site in Holmdel, New Jersey originated in the summer of 2020 among pandemic-era reflections about the future of cities, urban regions, design, and work-life. During that time, I co-wrote an article about the future of the urban office with a few of my HLW colleagues. The article presented ideas for readapting existing buildings into new usage typologies that would foster high-quality interpersonal connections while conforming to the new social and organizational realities shaped by the pandemic. Among the examples we illustrated in our article was Somerset Development’s transformation of the Bell Labs site into a mixed-use hybrid of corporate, retail, small business, and community space. The site – rebranded as “Bell Works” – offered a new typology of suburban workspace at a time when organizations were rethinking their place among urban density. Although we’re far from writing the urban office’s obituary, we recognize new opportunities to rethink suburban space that caters to organizations looking to diversify their real estate portfolios.

Bell Labs, Murray Hill, New Jersey Corporate campus designed by HLW for AT&T in the 1940's

“Although we’re far from writing the urban office’s obituary, we recognize new opportunities to rethink suburban space that caters to organizations looking to diversify their real estate portfolios.”

HLW was familiar with the Bell Works redevelopment in that the firm designed space in it for one of the project’s earliest commercial tenants. HLW also has a long history associated with Bell Labs and the historical building typology it represents. Some of the firm's earliest work at the beginning of the 20th Century was for the Metropolitan Telephone & Telegraph Company, AT&T, and Western Electric. HLW designed the original Bell Labs in the early 1920's, which was an industrial building located on Manhattan's west side. Bell Labs relocated to Murray Hill, New Jersey in 1941. The Murray Hill campus, also designed by HLW, was the first suburban site for Bell Labs and was one of the earliest of several suburban and rural corporate R&D centers that the firm would eventually design in the New York City metropolitan area and throughout the United States in the postwar years.

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In the fall of 2020, I had the opportunity to visit v2.0 of Bell Works, which was taking shape in the western suburbs of Chicago.

Branded as Bell Works Chicagoland, Somerset Development had acquired a 1990’s era former Ameritech corporate campus in Hoffman Estates, Illinois and was applying the same playbook to its redevelopment into a similarly programmed mix-use space. Between this project and the original Holmdel project, it became clear that the similarities and differences between both sites could serve as the basis for a research study. To explore the possibilities for such a study, I contacted Darren Ruddell at the University of Southern California Spatial Sciences Institute, who was collaborating with us on a separate HLW R&D project. He invited his colleague, Leilei Duan, to join the discussions. The three of us jointly developed a research prospectus for what we hoped to accomplish by studying the parallel histories of both the

Bell Labs, Murray Hill, New Jersey Corporate campus designed by HLW for AT&T in the 1940's

Bell Labs, Holmdel, New Jersey Corporate campus designed by Eero Saarinen for AT&T in the 1960's

Holmdel and Hoffman Estates sites and how they converged under Somerset Development’s ownership and redeveloped into what Somerset calls a “Metroburb”. A "Metroburb" is a mixed-use concept for bringing dense amenities and services to the suburbs. Somerset agreed to support our research efforts by granting us access to their records. In exchange for their access to project data, site information, documents, and other information, we produced this report as a narrative of our findings.

The narrative of Bell Works and its origins in the history of Bell Labs illustrates the ongoing dialectic between the values of urban and suburban space. The redevelopment of Bell Works represents a resolution of sorts by showing how a suburban site can incorporate certain characteristics of urban space (density, diversity, mixed use, and serendipity) but in a manner that reflects the local characteristics that give suburban towns their individual identities. Our intent is that the insights shared in these pages will be supplemented with subsequent academic and professional publications, as well as follow up articles through which the narrative of Bell Works and the constructs of what we call “civic place identity” will be gradually shaped and refined. This report is a first step of a research journey but one that offers practical insights to inform the practice of planning, design, and real estate development.

Bell Labs, Holmdel, New Jersey Corporate campus designed by Eero Saarinen for AT&T in the 1960's

Peter A. Bacevice March 2022 8

Two Sites with a Common History

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Two Sites with a Common History In undertaking this project, one of the first interesting insights to emerge was just how much the two Bell Works sites have in common through the buildings’ shared histories along the corporate timeline of AT&T. The Holmdel site has long been recognized by architectural historians as a notable example of post-war American corporate office architecture. While much has been written over the years about the Holmdel site, comparatively little exists in design or

academic publications about the site in Hoffman Estates. Perhaps it’s because the Holmdel site was designed at the height of AT&T’s corporate dominance, while the Hoffman Estates site was designed as the result of its post-antirust-era break-up. This seemingly trivial fact happens to explain some of the differences between the redevelopments of the Holmdel and Hoffman Estates sites and the differences in how both towns approached redevelopment.

Bell Works Chicagoland, Hoffman Estates, Illinois

Bell Works, Holmdel, New Jersey

Regional Distance Map of the United States

Chicagoland

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FIGURE 1

New Jersey

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Two Sites with a Common History Holmdel: Then & Now

Map of Holmdel, New Jersey - 1873 Created by cartographer Frederick W. Beers 13 | Bell Works Research Report

FIGURE 2

Map of Holmdel, New Jersey - 2021 Bell Works Zone (AL RA) emphasized; Created by CME Associates, Consulting & Municipal Engineers 14

Two Sites with a Common History Holmdel: In Context

FIGURE 3

15 Min Drive

30 Min Drive

45 Min Drive

Regional Distance Map of Holmdel, NJ

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15 Min Drive

Local Distance Map of Holmdel, NJ

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Two Sites with a Common History AT&T Ascendance, Bell Labs, and the Shaping of Holmdel Identity Holmdel became a destination site for AT&T’s period of midtwentieth century growth and its corporate and scientific dominance. These factors gave the town a sense of civic pride and identity for many decades throughout AT&T’s presence. In 1957, AT&T commissioned the design and construction of a new site in Holmdel to expand its R&D organization, known as Bell Labs. The new site was completed in phases between 1962 and 1966 at a cost of $34 million (over $903 million in 2021 inflation-adjusted dollars).

The situating of R&D sites in upper middle class suburban locations like Holmdel was a strategic decision made by organizational leaders at that time. Because corporate labs competed with university labs for top researchers, corporate R&D organizations invested heavily in designing attractive facilities and settings of privilege that mimicked the culture of academic freedom of universities.

Suburban locations were convenient to corporate leaders who ran the organization and to the scientists they recruited. These sites stood in contrast to the American postwar upper middle-class attitudes of what was perceived as the dirty, working-class urban

Bell Labs, Holmdel, New Jersey - 1962

manufacturing facilities in urban settings. The pastoral nature of sites like Bell Labs, accessible exclusively by car, enabled these sites to reflect a sense of postwar modernity and prosperity. AT&T’s selection of Eero Saarinen was also significant, given his design of other notable R&D sites for top companies of the era. Arguably, Saarinen was a corporate “starchitect” before the term even existed.

His earlier designs of the General Motors Technical Center in Warren, Michigan and the Thomas J. Watson Research Center for IBM in Yorktown Heights, New York are architectural emblems of mid-twentieth century corporate modernity, which have been the subjects of several academic scholars and architectural writers.

The Bell Labs site was developed at a time of increasing postwar residential growth in Holmdel. Figure 5 illustrates the growth trajectory of residential development by decade. Starting in 1920 and continuing to the present day, Holmdel Township home construction increased each decade until such growth decreased beginning in 2000.

FIGURE 4: HOLMDEL TOWNSHIP PRESENT DAY LAND USE

FIGURE 5: HOLMDEL TOWNSHIP POPULATION BY DECADE

Bell Labs Completion 1966

20K 18K 16K

Commercial/Industrial/Mixed Use (3%) Rural(2%) Office (4%) Bell Labs Redevelopment Area (5%)

Open Space (19%)

18.05 Sq MI Total

Covering 5% of the total land area of Holmdel, the Bell Labs site provides supporting uses to a predominately residential township and makes a strong contribution to the towns identity.

Residential (65%)

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POPULATION

Other (2%)

16,773

17,082

2010

2020

15,781

14K 11,532

12K 10K

8,447

8K

6,117

6K 4K 2K

2,959 1,100

1,191

1,201

1920

1930

1940

1,380

0 1950

1960

YEAR

1970

1980

1990

2000

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Two Sites with a Common History The landing of a major corporate R&D site designed by a notable architect, paired with the presence of a highly educated class of professionals gave Holmdel a sense of civic pride that was unmatched by few towns in the United States. Our discussions with current and former public officials in Holmdel provided us with a sense of how Holmdel saw itself during the AT&T era. The people with whom we spoke collectively described Holmdel as an upscale

Bell Labs Site Plan - 2000

intellectual town whose presence of highly educated employees (some of whom lived in town) resulted in premier schools with a commitment to STEM education. Although the town benefited from the tax revenue provided by AT&T, the officials with whom we spoke all described AT&T (and later Lucent) as an excellent partner with the town that went above and beyond its tax obligation to provide additional money to the schools and other civic functions.

FIGURE 6

“The impending sale of the site represented a major turning point for the town in that its decades-long association with Bell Labs, its intellectual culture, and its association with major scientific innovations were threatened with major change.”

Although Bell Labs occupied 472 acres of land in the center of town and contained nearly 2 million square feet of space, its architecture was unimposing, and the site receded into the rural landscape. (By comparison, the Empire State Building is roughly 2.7 million square feet. The Bell Labs building is the size of a major urban skyscraper laid out on its side.) Despite the presence of the building in their midst, many residents in recent decades had not been inside the building. One official with whom we spoke characterized the presence of the increasingly empty Bell Labs as being like “Charlie and the Chocolate Factory,” in reference to Roald Dahl’s fictional children’s story of a mysterious chocolate factory sitting behind massive gates in the middle of town operated by an enigmatic candymaker.

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Holmdel, New Jersey

The U.S. government forced the break-up of AT&T in 1984 after a major antitrust ruling by the Justice Department. The nearly $2 billion R&D budget was cut, and the company’s R&D workforce was gradually scaled back. In 1996, AT&T spun-off AT&T Technologies, which included Bell Labs, and the new company became known as Lucent Technologies. By the time Lucent put the building on the market in 2006, the site only employed 1,200 workers – representing an 80% decrease from its early days of employing 6,000 workers. At that time, the impending sale of the site represented a major turning point for the town in that its decades-long association with Bell Labs, its intellectual culture, and its association with major scientific innovations were threatened with major change.

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Two Sites with a Common History

Hoffman Estates: Then & Now

FIGURE 7

AT&T Break-Up, Ameritech’s Growth, and the Identity of Hoffman Estates

Zoning Map of Hoffman Estates, Illinois - 1985

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Freedom Run Dog Park

DS LEE RD

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Beacon Pointe T7 Park

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R6

72HIGG AMCOL International

CMIC, Inc.

Mary Ka y Cosmetics

AT

Life Changers Church

BETTY GLOYD DR

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Beacon Pointe Wetlands

CMU

B3

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Cabela's

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Prairie Stone Comm ons

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Barrington Township

Hanover Township

Canterbury Park Place

NIU

GE Comm ercia l Finance

Dundee Township

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PR

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Prairie Stone Sports & Wellness Center

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72

SE

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Willow Recreation Center

Willow Skate Park

Spring Creek Forest Preserve

WILLIAM CT

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SUFFOLK LN

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LICHFIELD DR

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THORNBARK DR

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WILD WOOD CT

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BRIG ANTINE CT N SAPPHIRE DR

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59

BRIG ANTINE LN

LOMBARDY CT

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CHESAP

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N

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BICEK CT

RBO CIR R

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HA

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HUNTINGTON BLV

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HUNTINGTON BLV

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WIN DIN TRA G LN IL

CT

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N DO WO G OD CT

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N FIRESTONE LN

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Barrington Rd

VIC

ISO

RD

N FIRESTONE CT

NV IC

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Brittany Park

RR

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Valley Park

PAR

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Whiteley School

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MUM

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ON IMS CR CT

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A R DY LN

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ROCK COVE CT ROCK COVE

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R4

Holy Family Parish Catholic

WOOD HOLLOW CT

Arbor Day Park

DR FOR TUN BAY E CT

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W STURBRIDGE DR

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Park

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OLD TIMBER CT

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Fire Sta. 23

E

LAKE EDGE CT

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Forest View Plaza

DR

R5

WHISPERING LEATHER LEAF Douglas CT Park

R7

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CHESAPEAKE DR

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59

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W HIS

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B

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CT

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Juniper

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STUR BRIDGE CT

Park ART HUR

R7

LO M

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62

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OLD TIMBER LN

MUM

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A1 Apartment District AG Agricultural District B1 Neighborhood Business District B2 Community Business District B3 Business District B4 Business District CMU Commercial Mixed Use FP Forest Preserve H Historic District M1 Manufacturing M2 Manufacturing O1 Office District O3 Office District O4 Office District O5 Office District R1 One Family Residential - 1 acre min.

R2 One Family Residential - 20,000 sq. ft. min.

R3 One Family Residential - 10,000 sq. ft. min.

R4 One Family Residential - 9,250 sq. ft. min.

R5 One Family Residential - 8,500 sq. ft. min.

R6 One Family Residential - 7,500 sq. ft. min.

R7 One Family Residential - 4,000 sq. ft. min.

R8 Two Family Residential R9 Planned Development District R10 Attached Single Family RAA Residential Active Adult RPD Residential Planned Development District TN Traditional Neighborhood

PONDEROSA LN

SILVER PINE DR

T5

R9 Zone C

R9 Zone E

E BAYSIDE CT

BURNING B

R3

TURN BERRY DR

GARNET CIR

BUCKTHORN DR

RING WHISPE TRAILS CT T4

R5

Seminole Nature Area

BAR

SAP DR

BAYSIDE CIR

SAN D L

LN

OAK KNOL LN L

WOOD RIDGE LN

Rd

Willow Creek Community Church

DR

EK

W BAYSIDE CT

CHERRY CT

CAPSTAN DR

BEACON CT

N SH O RE W

OOD REW CT

R5

R9 Zone D

Basic Zoning Codes

R6

W TAMARACK DR

DIAMOND DR

W RE PHI

CAPE BRETON CT

B LEW O

IDE W PARKS DR

Algonq uin

TARRINGTON DR

E

SHO

PE B

Colony Point Nature Area

R

Charles Plaza

R9 Zone D

WESTBURY DR

R7

W COTTON

D

R

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Cipri Park

Pebble Park

S

R9 Zone F2

AMBER CIR

BIC DOVER CT

Park

R9 Zone B

RO N

C MA L SU TR

DR

CT

WE LO NF LN

OD

R E

CAME

SU

W SH

R5

DRIFTWOOD CT

Colony

Park

PALATINE RD CASTAWAY LN

R9 Sub Zones A Single Family B Attached Single Family C Multiple Family - 3 Story or Less D Mid-Rise Apartment E Public F1 Business F2 Business

Penny Rd

PAISLEY CT

Kingston

WEST HAVEN CT

CASTAWAY CT

Palatine Rd

R-9 Sub-Zones

EXETER CT

OT M EL LN

R6

PRESTWICK PL

T IN G O N L

CA

BARD WICK CT

TRAILSIDE CT

FT N

WEST BRIDGE CT

RO RC CT BA

T DR

BRADWELL RD

R4 ESSING TON CT

N FIRESTONE DR

Bradwell Rd

Village of Hoffman Estates Zoning Map

LAT OU CT R

Hoffman Estates, a sprawling suburb northwest of the Chicago Loop incorporated in 1959, became a destination for one of the newly created offshoots of the 1984 AT&T break-up.

The AT&T break-up created an entirely new network of “Baby Bells,” or regional telephone operating companies.

Ameritech was the regional operating company for telephone service in the western Great Lakes region (Ohio, Indiana, Illinois, Wisconsin, and Michigan). The newly created Ameritech was headquartered in the Chicago region.

In the mid-1980’s, shortly after its founding, Ameritech employed more than 10,000 workers. Hoffman Estates was not Ameritech’s original home, but it eventually became the home of the company’s consolidated operations roughly seven years later. At that time, Ameritech had a scattered presence in Chicago’s older western suburbs of Schaumburg and Arlington Heights, while Hoffman Estates offered even newer and larger tracts of land that the company would find attractive as it sought increasing efficiencies. Hoffman Estates secured Ameritech at a time when American corporate organizations were undergoing rapid changes, conducting complex organizational restructurings, and searching for operational and financial efficiencies.

DR

While Bell Works Holmdel occupies a site that came of age during AT&T corporate dominance, Bell Works Chicagoland occupies a former Ameritech site in the suburban village of Hoffman Estates that was emblematic of AT&T’s post-breakup corporate structure.

Both buildings were designed with flexibility in mind. However, at the time each respective building was designed, the term “flexibility” carried different meanings. For Holmdel, the modularity of the design of lab spaces was reflective of the changing nature of scientific projects. For Hoffman Estates, the design for corporate functions through the use of flexible open-plan office space enabled the spaces to be easily reconfigured as corporate restructurings occurred.

The half-life of the site’s original Ameritech tenant was much shorter than that of its Holmdel cousin. The Ameritech building itself proved sufficiently flexible to accommodate rapidly shifting corporate priorities and, ultimately, redevelopment as a mixed-use site.

COUGAR TRAIL

μ

SCHAUMBURG RD

Bell Works Chicagoland, Hoffman Estates, Illinois

21 | Bell Works Research Report

Zoning Map of Hoffman Estates, Illinois - 2019

22

Two Sites with a Common History Hoffman Estates: In Context

FIGURE 8

15 Min Drive 30 Min Drive 45 Min Drive 15 Min Drive

Regional Distance Map of Hoffman Estates, IL

23 | Bell Works Research Report

Local Distance Map of Hoffman Estates, IL

24

Two Sites with a Common History In contrast to Holmdel, whose sense of civic identity was tied to that of a single company, that company’s institutional characteristics, and the company’s symbiotic relationship with the town’s rural character, Hoffman Estates carved out an identity as a home to the presence of multiple corporate organizations that created sprawling campuses through lenient developer-friendly land-use policies, endowing the village with a rich tax base.

Ameritech was not the only company to land in Hoffman Estates in the late 1980’s. Sears, Roebuck & Company – the iconic Chicago retailer that built the world’s tallest building in the Chicago Loop in the early 1970’s – announced in the late 1980’s that it would move its merchandise group operations to Hoffman Estates and develop a sprawling, 2 million square foot campus within a 780-acre business park that it developed in order to attract other corporate tenants. Other corporate organizations with offices in the village during this time of development included Allstate Insurance (at the time, part of Sears) and Siemens.

At that time, the village was comprised of about 8,000 residents and an area of about three square miles. Subsequent growth occurred through the gradual annexation of adjacent parcels in neighboring townships. A 1989 Chicago Tribune article described Hoffman Estates in the words of several of its residents at the time as a “middle of the road place…Schaumburg is more expensive, and Streamwood is too cheap…Everything is just right here.” The same article also references a scandal that the town experienced in the 1970’s when elected officials were sent to prison on charges of accepting bribes from developers in exchange for favorable zoning. The town’s shape on the map is an oddly zig-zag shape that reflected annexation patterns by nearby towns as a strategy to head off Hoffman Estates development. By 2010, the village had reached 21 square miles in size and had a population of nearly 52,000 residents. Ultimately, the village boundaries were created by the weaving together of parcels from five townships – Dundee, Barrington, Palatine, Schaumburg, and Hanover.

“In the decade since it was established after the AT&T breakup, Ameritech’s bureaucracy continued to reinforce inefficient business practices that were stymieing its long-term prospects and leaving it vulnerable to competition.”

However, it was the development of the mammoth Ameritech and Sears campuses changed the character of Hoffman Estates from that of a bedroom community to one that gained a sizable daytime population through the presence of two major regional employers. At the time the Ameritech Center opened, the village reported that center generated 30,000 hotel room nights per year because of the various people who traveled to the site from elsewhere. This additional population of workers and visitors generated traffic that benefited local businesses.

Prior to its incorporation in 1959, Hoffman Estates was part of the larger Schaumburg Township. The 1954 sale of a township farm to a local developer/construction team – Sam and Jack Hoffman – led to the building of a subdivision of homes on half acre lots.

The community voted to incorporate as the Village of Hoffman Estates, which was granted its charter in September 1959.

25 | Bell Works Research Report

Ameritech purchased 200 acres in Hoffman Estates in 1987 with plans to build an office park that would allow it to consolidate several scattered corporate functions and subsidiaries into a single complex. Ameritech’s choice of an architect for its campus was Dirk Lohan, a prominent Chicago architect who is also the grandson of another notable architect, Ludwig Mies van der Rohe.

While Mies brought the international style to Chicago through his work at the Illinois Institute of Technology, Lohan established his own style through his works in the city and the region. In the 1980’s and 1990’s, Lohan and his firm designed several corporate office parks in suburban locations throughout the Chicago region.

His work included the McDonald’s headquarters and campus plan in Oak Brook; the Safety-Kleen headquarters in Elgin; and the Ameritech Center. The 1.3 million square foot Ameritech Center opened in the fall of 1991. When it opened, the site was the first phase of what was to be a multi-phase plan that would eventually evolve into a 3.3 million square foot facility.

Hoffman Estates - 1955 Aerial view of 250-acre farm site in Hoffman Estates, IL

Hoffman Estates - 2019 Aerial view of Hoffman Estates, IL

Hoffman Estates, IL Aerial view of Hoffman Estates' subdivisions

26

Two Sites with a Common History Hoffman Estates, IL

Ultimately, that amount of space was never needed, as the Ameritech workforce between shrink soon after it moved to Hoffman Estates. As the company moved to occupy its new space, layoffs were already underway among the workforce that was to occupy the complex. Across all of its locations, Ameritech eliminated 3,000 management jobs in 1992 and another 1,500 in 1993. Overall, between 1989 and 1994, Ameritech eliminated 10,000 jobs from its workforce, which had 67,000 employees in 1994. In the decade since it was established after the AT&T breakup, Ameritech’s bureaucracy continued to reinforce inefficient business practices that were stymieing its long-term prospects and leaving it vulnerable to competition.

In 1999, SBC Communications (formerly Southwestern Bell, and one of the original 1984 “Baby Bells” created after the AT&T breakup) acquired Ameritech. The Ameritech Center in Hoffman Estates was then renamed the SBC Center. SBC sold the building to Inland REIT in November 2005 for $338 million and then leased the space back from Inland. SBC retained ownership of 80 acres of vacant land around the complex. The lease was worth $22.7 million in annual rent to Inland. The SBC complex was Inland’s largest holding. By 2005, SBC purchased its original parent company of AT&T. Originally planned as a primary location for one of the original spinoffs of the AT&T breakup, the Hoffman Estates site was now one of several properties within a now-smaller AT&T portfolio.

FIGURE 9: HOFFMAN ESTATES PRESENT DAY LAND USE

FIGURE 10: HOFFMAN ESTATES POPULATION BY DECADE

Other (1%) Agriculture (6%) Commercial (7%)

Office (8%)

21.06 Sq MI Total

With business friendly policies Hoffman Estates has attracted a number of commercial tenants and devoted a larger portion of it's land area to office and commercial activity.

50K 45K 40K

POPULATION

Manufacturing (3%)

49,495

Ameritech Completion 1991 37,272

51,942

50,753

46,561

35K 30K 25K

22,238

20K Open Space (35%)

Residential (41%)

15K 10K

8,300

5K 0 1960

1970

1980

1990

2000

2010

2020

YEAR 27 | Bell Works Research Report

28

Two Sites with a Common History “The village of Hoffman Estates was eager to find a buyer for the vacant site. The loss of tax revenue was a major financial hit to the village.”

Ameritech/SBC Campus Site Plan

FIGURE 11

Former Ameritech/SBC Campus - 2018 Aerial view of 150-acre site of the former Ameritech/SBC Campus in Hoffman Estates, IL

In 2011, with lease on the site now held by AT&T, the company sought a sub-tenant as it continued to reduce its real estate needs.

In 2013, AT&T announced plans to vacate the complex. At the time, the complex, now owned by Highland REIT, was considered a distressed property because of the debt assumed by its owner that was subsequently broken up and sold into multiple mortgagebacked securities. AT&T’s decision to not renew its lease, coupled with the softening demand for such a large space, forced Highland to default on its mortgage against the property.

29 | Bell Works Research Report

With the expiration of the AT&T lease in August 2016, the property owners defaulted on the property, and its lenders foreclosed on it.

The village of Hoffman Estates was eager to find a buyer for the vacant site. The loss of tax revenue was a major financial hit to the village. The site generated $8.8 million in property tax revenue.

Of that, $1.5 million went to the village, while balance went to the school district. Furthermore, the departure of a major corporate tenant meant a loss of hotel stays and a loss of traffic to other local businesses.

30

From Bell Labs to Bell Works

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32

From Bell Labs to Bell Works Holmdel Zoning Map

FIGURE 12

Preservation Over Radical Change At the time it was put up for sale, the Bell Labs site in Holmdel was the largest single commercial office vacancy in the world.

Built in an era when corporate R&D budgets were flush and steady lifetime employment were the norm in corporate America, the 1.9 million square foot site was a relic of a different time whose massive footprint was not desirable to any single corporate organization. The building had accumulated a lot of deferred maintenance, and its energy costs were very high relative to more recent advances in technologies that made commercial properties more energy efficient. Furthermore, its suburban location that placed it nearly an hour’s drive from New York City put it out of reach to companies that were attracted to locations in the city. Large tech companies, including Google, were courted into considering the site, but none expressed interest.

They cited a strain on infrastructure, a strain on the school system, increased traffic, and a lowering of home values compared to what new homes would attract in the market. They also emphasized that although additional housing would generate property tax revenue, the revenue would not offset the costs of the required increased town services, and the increased residential tax base would pale in comparison to what a corporate tenant would generate for the town.

In March 2006, Lucent initially went into contract with a Pennsylvania developer, Preferred Real Estate Investments, Inc. (PREI). Citing the high costs of operating the building, which had increased ten-fold since its opening, PREI’s original plan was to demolish it. The plan triggered reactions by historic preservationists who were concerned about the fate of the Saarinen architecture.

Facing pressure from preservationists, PREI offered an alternate

“Bell Labs was good for Holmdel... At its peak it provided nearly 20% of the property tax revenue for the town. This large undeveloped piece of land remained a valuable part of the ecosystem."

To prospective developers, the perceived opportunity was in the land. The various officials with whom we spoke described how the town received numerous inquiries from developers and other interested parties who sought zoning variations in exchange for redevelopment. The range of proposals was described to us as a mix of “professional, creative, while some were back of napkin.” The town rebuffed these offers for not having what one official described as “Holmdel centric” interests at heart. There were options to create space for universities, but the town rejected those plans because such developments would be tax exempt. Many developers wanted to build housing. Another developer proposed something “Xanadu-like”(in reference to a massive, multi-billion-dollar, mixed-use sports-retail-entertainment complex that was being developed in East Rutherford, New Jersey around that time). Nearly every official with whom we spoke reiterated the town’s concerns about converting the site into housing, which echoes what was written in the press during those years.

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plan that would have demolished portions of the building while retaining the original phase 1 structure and the atrium. Two new commercial buildings would be added to the site and connected by a plaza. In addition, PREI proposed to save much of the original landscape architecture.

PREI’s plans also included portions of the site to be developed as housing, which triggered Holmdel residents to voice further concerns about the PREI redevelopment plans. A group called “Citizens for Informed Land Use” became actively involved in fighting PREI’s plan and its housing provision. CILU organized as a 501(c)(4) in 1998 to address community concerns about “rapid growth and development” in Holmdel. CILU can be characterized as a community organization that engages in what landscape scholars have defined as “place protective action” on behalf of local residents. In the case of CILU, such actions defended against a collective identity with the landscape and the Bell Labs placement within it that Lucent’s departure and proposed redevelopment destabilized and threatened.

34

From Bell Labs to Bell Works Historic Bell Labs: At the time of the PREI proposed redevelopment plan, CILU defined how the Bell Labs site fit with the rural atmosphere and access to open space that they stated embodied the character of Holmdel. “Bell Labs was good for Holmdel. It gave the town a unique character and attracted talented people. At its peak it provided nearly 20% of the property tax revenue for the town. The Bell Labs property also provided an attractive open space in the middle of town. This large undeveloped piece of land remained a valuable part of the ecosystem.” At the time PREI submitted its site plan to the township, which would have required a zoning change from office-laboratory use to residential, CILU advocated for the township to vote against the rezoning. Among the concerns outlined by CILU, they argued that homeowners would bear a greater tax burden because of the shift from commercial to residential zoning. They also raised concerns that additional housing would adversely affect the water supply, and they raised concerns that housing would remove the open space around the property, which they stated would compromise the town’s character. By the fall of 2007, facing pressure from the town and lack of support for its redevelopment proposal, PREI backed out of the deal.

The threat of demolition and the uncertainty associated with the future of site galvanized members of the architecture and architectural preservation community to organize and encourage the preservation of the building. In early April 2008, a three-day design charrette was facilitated at the Bell Labs site through a partnership among the AIA New Jersey chapter, Preservation New Jersey, the National Trust for Historic Preservation, and Docomomo (a nonprofit organization targeting the preservation of modern architecture). The charrette convened 52 participants, including design professionals, planners, researchers, former Bell Labs workers, and community members. CILU supported the charrette through logistical assistance. While the majority of participants were from New Jersey and New York, others traveled from Boston and Washington, DC. Several ideas for the site were discussed, which included a health care center, university space, sub-dividing the space for multiple companies to share, a modernized R&D site for a single organization, a mixed-use facility, and even sub-dividing the space into residential units (apartments and condos). A common denominator among each of the options proposed was the need to address the building’s energy consumption and the related costs of operating it, which the previous developer raised as an issue and as a justification for demolition. Acknowledging the State of New Jersey’s support for the preservation of the Bell Labs site, the report stemming from the charrette was recognized at the state’s 19th Annual New Jersey Historic Preservation Awards ceremony in May 2009.

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Bell Labs Main Reception - 1990 Interiors of Bell Labs when purchased by Somerset Development

Bell Labs Site Aeriel - 1995 Bell Labs Site when purchased by Somerset Development 36

From Bell Labs to Bell Works Holmdel Streams & Wetlands

FIGURE 13

Building Trust and Protecting Interests Before Somerset Development became the preferred developer of the Holmdel site, the earlier battles between the town and PREI and the town’s resistance to the various other proposed redevelopment plans foreshadowed the challenges that Somerset would face. Their status as the preferred developer was not a foregone conclusion at the time they approached the town in late 2007. Somerset’s original plan consisted of retaining the entirety of Saarinen’s structure but, like PREI, building housing adjacent to the site. Inspired by principles of new urbanism, Somerset’s original plan in 2008 was to surround the building with a mix of over 700 residential units of various sizes and configurations. Township’s residents did not respond favorably to the housing plan. Some expressed concern that Somerset was only interested in the housing portion of the site, yet economic conditions associated with the collapse of the housing market in late 2008 would have made a purely residential redevelopment financially difficult. Even as Somerset gradually reduced the number of houses in subsequent iterations of their redevelopment plan, CILU continued to push against housing proposals, particularly ones that would have brought density to the town that would have required a zoning changes lessening minimum lot size. In a CILU document entitled “Is Holmdel Evolving to an Urban Environment?” the organization argued,

As an attribute of federal and state sovereignty, one of the constitutionally granted powers appertained to municipal governments is eminent domain. Several decades of case law from the mid-twentieth century onward defined the limits of eminent domain. A 2005 Supreme Court ruling (Kelo vs. City of New London) reaffirmed earlier precedents but specifically ruled that a local municipality may take private residential property and reallocate it to a private corporation for the public benefit of economic development. The New Jersey Constitution (1947) specifically allows the government to use eminent domain powers to seize property for economic development purposes, provided the property is declared blighted. However, the New Jersey Constitution does not define “blighted.” Several subsequent statutes did so, including the 1949 New Jersey Blighted Areas Act; 1951, 1985, and 1986 amendments to the act; and the 1992 New Jersey Local Redevelopment and Housing Law (LRHL). The LRHL outlined a seven-step process for how a local municipality can declare a property as a redevelopment site, effectively allowing it to seize control of the property through its eminent domain powers. The LRHL afforded municipalities with a great deal of flexibility to work with and select developers once a property was designated for redevelopment. Municipalities could also work with developers

“New Jersey Local Redevelopment and Housing Law... gave the town a lot of leverage over a developer, effectively giving it the power to declare the area a redevelopment site and seize control of it through eminent domain.”

“Redevelopment Plan for Lucent Property Allows 225 Residences on Lucent Tract. This means that housing density will exceed that of ½ acre zoning if stream buffers and wetlands are preserved. This is the tip of the iceberg, considering other uses permitted. Consider how these changes will impact traffic, way of life and ultimately property values. A redevelopment plan may be needed but we feel the current one is fundamentally flawed and has not been given adequate benefit of public input.”

37 | Bell Works Research Report

approaching them in seeking a redevelopment designation for a specific piece of property. The passage of the LRHL and the 2005 Supreme Court ruling in the Kelo case had a combined effect of portraying redevelopment in a bad way. Nationally, Kelo raised concerns about municipalities and developers signing agreements to take property and displace entire communities. New Jersey had a history of being liberal in using eminent domain because of the many ways that blight could be defined.

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From Bell Labs to Bell Works These precedents and the broader legal context are important for understanding the early stages of the relationship between Somerset Development and the Town of Holmdel and why redevelopment of the Bell Labs site faced local resistance. LRHL gave the town a lot of leverage over a developer, effectively giving it the power to declare the area a redevelopment site and seize control of it through eminent domain. When Somerset Development expressed interest in the Bell Labs site, they were initially cautious in their pursuit of it out of concern that the town would seize control of the property.

Without an agreement in place between Somerset Development and the Town of Holmdel that protected the property from seizure, Somerset’s capital would be at risk.

Historic Bell Labs:

Somerset and the Town of Holmdel still struggled to reach consensus on the site redevelopment plan, despite Somerset’s continued reduction in the number of residential units it planned to build on the site. Somerset president Ralph Zucker contacted Kim Guadagno, the Lieutenant Governor of New Jersey who was a Monmouth County resident. She had given Zucker her cell phone number, and he reached out to her for support. Her intervention with the town brought both sides back together. Negotiations between Somerset Development and the Town of Holmdel continued on an off between 2009 and 2013. Throughout these negotiations, a fundamental tension needed to be resolved. The Town wanted to preserve the physical character of the site and not be compelled into approving a site plan that would be used as a proxy for housing development. While Somerset Development needed to raise capital through the development of homes on part of the property to fund the redevelopment of the Bell Labs structure while convincing the town of the sincerity of its intent.

Furthermore, Somerset needed to protect the capital it raised and strengthen its ability to raise additional capital by ensuring that the site would not be subject to an eminent domain seizure by the Town of Holmdel. Somerset’s legal counsel was involved in a committee within the New Jersey Builders Association (a trade group representing the construction industry) to lobby the State Legislature to amend the LRHL in a way that would allow municipalities to enter into redevelopment agreements under “non-condemnation” terms. In 2012, Somerset and the Town of Holmdel reached an agreement in which the town would be subject to a non-condemnation clause in Somerset’s redevelopment plan.

The agreement protected Somerset from the town, but it also gave assurances to the town because it essentially locked Somerset’s capital into the terms of the redevelopment. The lobbying for such non-condemnation protections by Somerset’s legal team eventually helped achieve the codification of such provisions into law, which was passed by the New Jersey Legislature in 2013. Under the 2013 LRHL amendment law, municipalities must decide, at the beginning of the process, if a redevelopment plan will be subject to eminent domain seizures.

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Bell Labs Atrium - 2013 Interiors of Bell Labs when purchased by Somerset Development 40

From Bell Labs to Bell Works Sealing the Deal Along the way during this time, Somerset went to great lengths to demonstrate to residents the redevelopment possibilities for the interior of the Bell Labs building. In September 2009, Somerset hosted a “mock town center” night inside the space for local residents. The space was decorated with mock storefronts, restaurants, library, and a wine bar to demonstrate the possibilities for the site and help the 2,000 visitors who attended visualize the possibilities for the site and for the community. In April 2012, Somerset Development submitted their redevelopment plan to the township. On May 17, 2012, the Township Committee adopted an ordinance approving Somerset’s redevelopment plan. On June 18, 2013, the Township Committee by resolution conditionally designated Somerset Development as the redeveloper of the property. Mayor Patrick Impreveduto’s seasonal newsletter to township residents reiterated this approval and township’s priority in balancing the needs of redevelopment with the township’s “quality of life.”

In 2013, Somerset signed a deal with Toll Brothers to sell 103 acres for them to develop 225 homes on a portion of the property between the main building and Crawfords Corner Road. Somerset was approached by multiple homebuilders. They selected Toll Brothers because the head of the company’s operations in suburban New York and New Jersey grew up in Holmdel and felt he could earn town’s trust. The plan called for 225 homes, which were comprised of 40-single family homes and 185 age-restricted homes for residents aged 55 and older. The single-family homes met the town’s criteria of one-acre lot sizes, while the age restricted “active adult” homes were positioned as homes whose buyers would not “burden” the local school system.

Bell Works Site Plan - 2020

FIGURE 14

Somerset’s ownership in the site was finalized in August 2013 after Holmdel Township accepted Somerset’s mixed-use redevelopment plan for the site. The sale was nearly thwarted at the last hour when a Florida developer usurped Somerset’s offer on the property.

“We feel that the overall redevelopment of this significant property in the Township will create a sense of place in the community, as well as bring back this once vibrant site for the betterment of Holmdel.”

The mayor wrote, “As we have done throughout this entire process, we will work to ensure that the quality of life for the residents that live close to this site will be maintained. We feel that the overall redevelopment of this significant property in the township will create a sense of place in the community, as well as bring back this once vibrant site for the betterment of Holmdel.”

Somerset continued to explore the possibility a housing plan that would meet the approval of the town Committee. The possibility of housing on the site would have provided Somerset with capital to help fund the renovations of the main building. To ensure that Somerset would develop the main building and not simply use the negotiations to push more housing, the town stipulated in its approval process that 20% of the main building would need to be occupied before any certificates of occupancy would be granted on housing, thus placing capital demands on Somerset.

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Somerset’s purchase agreement with Lucent protected its costs from such an action, and Lucent was obligated to pay Somerset a sevenfigure sum to walk away from the deal, which it did. However, the Florida developer’s presentations to the town Committee were met with sharp criticism that they derailed the deal and brought Somerset back to the table. Once the deal was finalized, Somerset acquired the property from Alcatel-Lucent for $27 million. The concept would mark the beginning of the redevelopment efforts undertaken by Somerset, its architect, and its interior design team to transform the site into a space that would serve the Holmdel community and other nearby residents with the features of an urban environment (shops, dining, retail, library, offices, etc.) within the structure of an iconic piece of mid-twentieth-century architecture.

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From Bell Labs to Bell Works Bell Works New Jersey

The Impact of Bell Works in Holmdel As the site redevelopment took shape, Holmdel Township took opportunities to laud the progress and successes of the project.

In early August 2015, the Mayor Eric Hinds spoke on a “Revitalizing New Jersey” panel event at Bell Works and indicated how participants and guests of the event were “VERY impressed with the space,” which also coincided with the time when Somerset Development signed the space’s first commercial tenant – Symbolic IO Corporation. The mayor indicated how Symbolic IO, a fast growing start-up, would reside in a space known for its legacy of innovation. “We are thrilled to welcome a business that will continue the ground breaking history this building thrived upon years ago.” A year later the mayor announced with another startup, iCIMS signed a lease for space in Bell Works. In 2015 and 2016, the township featured construction updates in its newsletters to residents, and it also highlighted local events held at the site.

Mayor Hinds took the opportunity to connect the Bell Works site in his community with the potential economic benefits of keeping young workers in Holmdel instead of losing them to New York City or Philadelphia companies.

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In early 2016, the mayor said, “It’s providing an outlet for the next generation to work and not have to go to New York City and not have to go to Philadelphia and wouldn’t it be great if kids actually grew up in suburbia and they can work in suburbia and make a real living to continue to raise their families.… This building right here is going to provide jobs and resources and create other opportunities in Monmouth County like we haven’t seen in decades.”

Another notable civic connection between Bell Works and the Holmdel community was the signing of a 99-year lease agreement between Somerset Development and the township in the amount of $0 for housing the Holmdel branch of the Monmouth County Library at Bell Works. One of the officials with whom we spoke described the library’s move to Bell Works as being one of the most positive impacts on the community. The previous library was a small 3,000 square foot space located in the town hall basement and was “graded a C when everything else in town was graded an A.” The 18,000 square foot library space at Bell Works was a significant upgrade to the community.

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From Bell Labs to Bell Works Bell Works New Jersey

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From Bell Labs to Bell Works Bell Works New Jersey

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From Bell Labs to Bell Works Bell Works New Jersey

The Business Impact of Bell Works Bell Works was designed to appeal to business tenants. The mixeduse concept is an important feature for business tenants that want to part of a more integrated work environment. Somerset’s “Metroburb” concept is organized to provide the scale and mix of an urban streetscape and program mix within a large suburban building footprint. In doing so, it is defining a new suburban office typology that recreates elements of urban density indoors. In the course of our research, we had the opportunity to speak with several of the business tenants who made the Bell Works space their home. We wanted to understand why they moved their businesses to Bell Works and how the typology supports their work and their respective organization identities. We generally found that business tenants were attracted to Bell Works for the flexibility and modularity of the space, the amenities and experience beyond their individual walls, and being part of something bigger than themselves.

One customer they hosted said, “Bell Works is the best site they come to when they visit New Jersey.” The space also garners attention from others within the global IFF organization. The person we interviewed said that “within the IFF world, people want to come to Bell Works.” The history of innovation at Bell Labs and the agglomeration effect of multiple businesses at Bell Works reflects IFF’s corporate identity of innovation.

In a company press release announcing the space’s opening, a divisional CEO said, “Innovation runs through the DNA of Bell Works, making it the perfect environment to establish a new inspiring home for our creative teams as we seek to redefine and transform how we live in and care for the world.

I look forward to IFF’s contributions to the story of this extraordinary place.”

“Bell Works is the best site they come to when they visit New Jersey.”

One of the largest corporate tenants in Holmdel is International Flavors and Fragrances (IFF). IFF is a global company that operates a headquarters in Manhattan and various R&D facilities in New Jersey. To supplement this regional presence, IFF opened a 60,000 square foot home and fabric care innovation center at Bell Works in August 2019. Bell Works was an ideal location that was close to many of its New York-based customers and other New Jersey-based operations. IFF develops and supplies proprietary flavors and scents to companies across a range of industries, including cosmetic, home care, food, and pharmaceuticals. We spoke to one of their group directors who described their move to Bell Works as a strategic decision for the company that would help them attract talent to the company. They cited many of the Bell Works amenities as ones that they regularly use in engaging with employees. Managers regularly do “walk and talk” meetings with their employees as they stroll throughout the building. Employees use the gym, the food spaces, the bar, and the outdoor spaces. IFF also extends the offer of this site experience to its customer organizations that they regularly host in person through working sessions in IFF’s various evaluation spaces and labs.

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As evidence of how the mixed-use concept and openness to the public is good for business, the person we interviewed described how IFF sometimes operates pop-up tests during the site’s Wednesday farmers’ market to get quick reads on scents from passers-by. By having casual access to members of the public, IFF is able to capitalize on their location for market research.

We also spoke to individuals who operate smaller businesses from Bell Works. For these business owners, the Somerset team developed flexible seating in its CoLab coworking space. It also offers what they called “Ready to Wear” (RTW) offices, which were spaces of roughly 1,000 to 3,000 square feet that could be easily configured to meet the needs of small to medium-sized companies who required dedicated space. The RTW concept provides tenants with the basic program of an individual office suite (seating areas, conference room, and pantry) and offers customization options for furniture and branding.

International Flavors and Fragrances (IFF) Photography provided by HLW

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From Bell Labs to Bell Works Bell Works New Jersey

One of the RTW tenants with whom we spoke was Frankie Corrado, Managing Director and Principal of Robertson Stephens Wealth Management. Corrado grew up in Holmdel and indicated how he was attracted to the opportunity to occupy space in the building and being part of a business hub, which he characterized as “urban in one building.” Corrado’s business was an early tenant that relocated to Bell Works in 2016. His team has a small headcount and occupies 1,200 square feet of space but uses meeting spaces in the CoLab area or elsewhere in the building as needed. His clients enjoy coming to the space and taking advantage of its amenities while they’re onsite. When meeting onsite with clients, he illustrated how he uses the story of the building’s redevelopment as a metaphor for vision and growth in ways that make it relatable for them. He indicated that Bell Works is a “space we can be proud of” that reflects well on his business as “relaxed, not stodgy, but still professional.” As an early tenant of Bell Works, he described the trajectory of change in the building over more than five years. While it felt like a “work in progress”

The Fortis agency occupies a 3,500 square feet RTW space at Bell Works. Cox-West described her firm as young and one that set out to differentiate itself from the “marble towers” of other established financial firms from which she and her cofounders had previously worked. When starting their business, she and her co-founders realized that they could operate as a largely virtual organization but realized that physical presence in a space like Bell Works would benefit them in the long run.

“When you walk into Bell Works, there is a tremendous amount of credibility” associated with being among other businesses that was important to them, said Cox-West. She described how the “upbeat” environment within Bell Works is good for meeting with clients and for recruiting people to join her team. In terms of networking, Cox-West described the importance of referrals for generating business for her company. She described using the Bell Works space, including its outdoor patio and common areas in the warm weather, to host professional networking events.

“When you walk into Bell Works, there is a tremendous amount of credibility.” when he first moved in, he indicated how the space feels finished. He recognizes the opportunity to build relationships with other businesses in the space and feels that it will become easier to do as the pandemic eases.

Bell Works remained open throughout the Covid-19 pandemic with implemented safety protocols. Officials with whom we spoke told us that the town residents were receptive to having the space open during the pandemic. Corrado described how getting out of the house and using the space during covid was a positive experience for him. We also spoke to Christine Cox-West, co-founder of the Fortis Agency (independent financial advisory group) that moved into Bell Works in June 2020. Despite relocating her business during the early days of the pandemic, Cox-West described the experience as a positive one for her team. Initially her team worked on A/B schedules in order to reduce capacity and ensure physical distancing, and they took other measures to ensure safety within their space.

The size of Bell Works and the ability move throughout the expanse of the building were attributes that both Corrado and Cox-West described as beneficial for their businesses during the pandemic.

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In the course of our research, we dropped into one of these casual get-togethers during the summer of 2021 and joined Cox-West and others from her company on the back patio at Bell Works. One of the things we observed during this get together was the Somerset team’s receptiveness to new ideas for space and event programming. We listened to a lively exchange among the Fortis co-founders, Ralph Zucker, and other Somerset executives in which they discussed ways to design events and golf-themed activities on the grounds at Bell Works, which could be used for client and community gatherings.

At the time of this writing, the site continues to evolve, and programming continues to grow. Fourth of July fireworks events, holiday festivals, weekly onsite farmers markets, and the addition of new food, retail, and service tenants over the past year have given the space a critical mass of users. Furthermore, it has evolved into a mutually constituted agglomeration that creates the desired and differentiating experience of Bell Works, which reflects the value proposition to rent-paying tenants and a new form of civic place identity for residents and other visitors.

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From Bell Labs to Bell Works Inspiration for Hoffman Estates Once the Bell Works site in Holmdel was opened and utilized, news of the project began to spread. The timing of the redevelopment of the Holmdel site would prove fortuitous for officials in Hoffman Estates who were dealing with the vacancy of the now former Ameritech Center. Village officials knew in 2013 that AT&T would vacate the complex. In 2014, the company and the village commissioned a study to explore potential re-uses for the site. As was the case with the Holmdel site when it was initially put on the market, the Ameritech Center in Hoffman Estates was considered too large to attract the needs of a single corporate tenant. Development officials in the village were accepting the reality that attracting a single tenant to take over the site would be difficult. Some of the options considered included sub-dividing the space for 2-3 smaller tenants; use as a university facility; and use as a correctional facility.

Bell Works Chicagoland Launch of colab, Bell Works' coworking space

Bell Works Chicagoland Bell Works Holiday Party

the possibilities for redevelopment. Village officials told us that the Somerset Development team was the only developer that showed significant interest in the site and submitted the only bid. Somerset was selected as the preferred developer in February 2018.

Somerset Development’s plan to redevelop the Ameritech site under its “Metroburb” concept, which describes its approach to the Holmdel site, required the village to rezone the site. The land on which the Ameritech Center was built was rezoned multiple times throughout the site’s history. In 1986, the land was zoned for manufacturing use. By 1989, the site was rezoned as “office and research” in order to accommodate the Ameritech campus. In 2014, the site was zoned for office use.

"As was the case with the Holmdel site when it was initially put on the market, the Ameritech Center in Hoffman Estates was considered too large to attract the needs of a single corporate tenant.”

In addition, redeveloping the site as a shopping mall was considered, however that option was deemed infeasible given the presence of nearby Woodfield Mall in Schaumburg, which was already a major, successful, regional shopping center. The village even considered an option for demolishing the buildings and selling the parcels. The village was open to any possibility that would provide mutual benefit for village residents, the schools, and the business community.

The village development team undertook their own research and benchmarking to familiarize themselves with adaptive reuse projects around the country. By 2017, village officials had met with a dozen developers. They were looking for developers with a combination of “creativity and capital.” In April 2017, a village staff member attended a planning conference, which included a tour of the Bell Works site in Holmdel. The staff member met Ralph Zucker and invited him to come to Hoffman Estates to tour the Ameritech site. Zucker came to Hoffman Estates in June 2017 and toured the site for three hours and became interested in

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Neighboring parcels were zoned for manufacturing, which reflected the gradual subdivision of the site for use by other corporate occupants. In March 2018, the site was again rezoned as “commercial mixed use” (CMU). The CMU zoning accommodates Somerset’s site plan, which consists of the redevelopment of the Ameritech building into the same kind of multi-use space that it developed for Holmdel; a hotel on the property; and apartments and townhouses to the east of the building (and adjacent to a forest preserve). The rezoning initiative was a 1-month process, and it passed the village board by a 7-0 vote with virtually no pushback from the board or residents.

The incorporation of housing in the redevelopment plan in Hoffman Estates served multiple purposes. First, by selling off portions of the land to housing developers, Somerset was able to raise additional capital to fund the costs of redeveloping the former Ameritech building. This was similar to their strategy at the Holmdel, however they faced much less resistance from local officials in Hoffman Estates than they did from Holmdel officials in getting approvals

for housing. Second, the incorporation of housing on the site brings greater density of residents in closer proximity to the services available in the redeveloped building. It aligns with the “new urbanist” civic planning principles to which Somerset adheres.

The housing plan consists of a mix of townhouses and apartment units. The apartments on the Bell Works site represent the first multi-family housing construction in Hoffman Estates since the late 1970s. The plan consists of 380 multifamily residential units and 170 townhouses.

To further incentivize the redevelopment of the site, the village designated the area around the Bell Works site as a special tax incentive district (TIF). The TIF freezes the property tax rate on the commercial part of the Bell Works redevelopment (not the housing portion) at current rates. The TIF went into effect in 2019 and expires in 2042. As the value of the property increases during the period of time the TIF goes into effect, the difference between the first-year valuation and the increase goes into a fund to pay for public improvements.

Bell Works Chicagoland "Ready-to-wear" office space located within the Metroburb

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From Bell Labs to Bell Works Bell Works Chicagoland

Hoffman Estates Today The Bell Works Chicagoland site in Hoffman Estates welcomed its first business tenant to a 1,500 square foot “ready to wear” office in the fall of 2021 – CPA Advisors Group, Inc. We spoke to firm’s founder, Martin Wojtulewicz about why he relocated his business to Bell Works. He first saw the Bell Works site in August 2020 when it was under construction but understood Somerset’s vision for a mixed-use site. He described seeing a billboard advertisement for Bell Works, which caught his interest. Wojtulewicz was excited about having space in a bright and modern building that would give him an opportunity to network with other tenants. Although the building was largely empty when he moved in, by the 2021 holiday season, other tenants were beginning to move in, and many of them met one another during a holiday party in the main square of the building. He described how the building’s location directly off Interstate 90 and in close proximity to other major highways was convenient for his clients. He indicated that the Bell Works building was a little overwhelming at first for some clients but that improvements to signage and wayfinding design would help alleviate those issues. Wojtulewicz echoed what the Holmdel business tenants told us that the site’s amenities would be an added benefit for his clients when they came onsite.

space on a separate floor for its affiliated title company. Platinum’s previous office was a larger – 30,000 square foot space – located about 10 miles east of Bell Works in the nearby suburb of Rolling Meadows. The smaller space at Bell Works reflects decisions around longer-term hybrid working models (combination of home-based and office-based working) and the available amenities (fitness center, full-service food options, coffee shop, etc.) within the Bell Works site that don’t have to be included in a tenant’s individual space. As we toured their new space, we learned that many employees were looking forward to returning to the office at the new Bell Works location. The design of the space and the site amenities gave the employees a reason to return to office-based work.

As we concluded our tour of the Hoffman Estates site, we got a glimpse of the construction in progress for the site’s second major tenant that will relocate in spring 2022. Headline Solar, a 2-yearold solar panel installation company, signed a lease for about 16,000 square feet of custom space, close to Platinum on the 4th floor. Work continues to evolve at the Hoffman Estates site.

“We looked at a variety of spaces and this one caught my eye and caught the staff's eye because it's so unique.”

As we concluded our research in the winter of 2022, we visited the Hoffman Estates site and paid a visit to Wojtulewicz and to a few of the other newer tenants. One of the new tenants we visited was Platinum Home Mortgage. Platinum Home Mortgage relocated to 18,000 square feet of space on the 4th floor of Bell Works in January 2022 and is the first larger tenant to occupy space on the upper levels of the building. (Prior to Platinum’s office relocation to Bell Works, each of the new tenants occupied CoLab or Ready-to-Wear offices on the ground floor.) In reflecting on the decision to relocate to Bell Works, Platinum’s CEO stated in the press, “We looked at a variety of spaces and this one caught my eye and caught the staff's eye because it's so unique.” Platinum’s space includes a private outdoor terrace that is one of several such spaces throughout the building. In addition to having an office for its approximately 100 employees, its lease includes a smaller

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Lessons learned from Holmdel are shaping the continued development of event space, outdoor space, food spaces, and the targeted mix of other tenants. As in Holmdel, the Hoffman Estates site will eventually host a weekly farmers’ market inside the building. Somerset Development is working with Fresh Markets, a New Jersey-based operator of farmers markets. Fresh Markets operates the farmers’ market at the Holmdel site. Although other Chicago-based operators were considered for the Hoffman Estates site, Somerset elected to work with their existing service provider, which had the requisite experience working in suburban markets and within the site typology. Somerset’s interior design team, NPZ Style+Décor, is applying lessons learned from Holmdel as they open new spaces at Hoffman Estates. In particular, they have revised the site’s design guidelines and branding standards to ensure an optimal balance between the Bell Works brand identity and the brand identities of the individual businesses in the building.

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Fundamental Learnings

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Fundamental Learnings This research project resulted in some key learnings that can guide others in approaching large scale adaptive re-use projects and achieving project success. As a result of our own research, which includes synthesizing the perspectives expressed by Somerset Development, we offer the following guidelines.

1

Building Trust with the Local Community

2

Change Management

3

The Bell Labs site was central to how town residents expressed their sense of place identity to Holmdel.

The presence of a major R&D center gave the town a sense of pride, and its architecture reinforced the pastoral qualities that residents valued in the town’s built and natural environment. The closure and sale of the site was moment that threatened a feature that was central to the town’s identity narrative. Many unsuccessful redevelopment proposals were out of sync with the town’s sense of place identity and its civic values. Somerset’s redevelopment plan, which the town ultimately approved, took years of trust building.

Trust was necessary because the redevelopment of Bell Labs into the kind of mixed use site that now exists was unprecedented at that scale, which meant that Somerset needed to sell both a vision and the capability to operationalize the vision and make it a reality. Bell Works Holmdel was a large scale proof-of-concept for what became Somerset’s “Metroburb” development playbook, which gave it the requisite credibility for redeveloping the Hoffman Estates site.

It is natural for people for form an affinity for the built and natural environments around them. Think of the attachment people feel to their home towns, the college towns where they went to school, the places where they first met loved ones, or even workplaces that marked a pivotal moment in one’s career. This phenomenon is called place attachment. Real or imagined threats to these spaces and places can trigger a sense of concern, despair, or even fear. The built and natural environments in our cities and communities are shared resources. A place that is meaningful to one person may be trivial to another person. Proposed changes to buildings, landscapes, and other spaces and places should be approached in an empathetic way that acknowledges the importance they plan in peoples’ lives. Helping residents visualize what is possible (i.e. “show, don’t tell”) was a strategy that helped the Somerset Development team win approval for its redevelopment plan. Managing change in an urban redevelopment project is an iterative process of combining negotiation, trust-building, and story-telling in reaching shared consensus for the future.

Build a Space that Reflects the Identity of the Business Community Our discussions with business tenants revealed how the Bell Works vision of new kind of mixed-use work environment reflected the image of their respective businesses. While many business tenants were attracted to the design and flexibility afforded by the Bell Works concept, the mixed-use and hive-like ecosystem reflected their corporate identities and helped these businesses convey messages about openness, innovation, flexibility, and community. The built environment often reflects the tastes, attitudes, identities, and aspirations of its users and occupants. The architecture, design, branding, programmatic mix, and accessibility of a mixed-use project each serve a role in shaping user perceptions. Single-use and single-tenant spaces can be tailored to meet specific the needs of individual occupants, whereas a mixed-use project relies on a successful interplay of user types. In the case of Bell Works, this interplay spanned corporate, small business, retail, and public uses.

Given that Bell Works relies on business tenants for rental income, it had to redefine a new kind of mixed-use suburban workspace typology where the various user groups mutually constituted a unique experience that created a shared sense of value.

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Fundamental Learnings

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4

Consistent Site Selection Criteria

5

Experiential, People-Centric Design

As a large-scale proof-of-concept for future “Metroburb” projects, the Holmdel redevelopment provided a standard against which future projects (including the Hoffman Estates site) would be considered. Somerset’s identity as a developer is now shaped by the Metroburb concept, and its site selection criteria is based on replicating the concept in other locations. The Somerset team looks for properties in secondary locations situated in close proximity to major metropolitan markets with great accessibility and connectivity to those markets. Communities with an educated workforce and highwealth residents with spending power represent the target user demographic. In evaluating potential spaces, Somerset considers large, vacant spaces, previously single-tenant facilities with large walkable atriums, deep floor plates, and ample natural light penetration. Ultimately, a potential site needs to deliver a dynamic, multifaceted urban experience in a single location.

Bell Works was designed with the needs of local residents and visitors in mind. Bell Works is a place where people work, socialize, eat, shop, and participate in community activities. In linking it to some of the other concepts discussed here, a successful redevelopment gives the community a new reason to identify with the space. The result is cumulative. In the case of Holmdel, Bell Works preserved the building and landscape architecture that was meaningful to local residents. There are several historic elements throughout the building that remind visitors of the intellectual heritage and innovations associated with the space, which set the stage for new tenant companies to contribute to that narrative.

But while history and existing sources of place identity were preserved, the project gave new reasons for more people to use the space and connect with it. Doing so was the result of an integrated team that includes the developer, architects, interior designers, event planners, and a hospitality team. The diversity of the team assembled to create and maintain the Bell Works experience reflects the variety of events, services, and programs offered onsite.

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About the Authors

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About the Authors Pete Bacevice

Special Thanks

Pete Bacevice is an Associate Principal and Director of Research at HLW, an architecture, design, and strategy practice based in New York City. He oversees the firm’s internal R&D efforts, which have produced research findings on an interdisciplinary range of topics, including neuro-architecture, modular healthcare design innovation, and academic learning spaces. In addition, Pete is a Research Associate at the University of Michigan Ross School of Business where he has collaborated on studies related to thriving at work, professional identity, and their intersection with workplace design. He earned a PhD in Education from the University of Michigan where his studies focused on technology transfer, academic innovation, and learning space design.

The importance of recognizing the generosity, hard work, and tireless effort of the team cannot be overstated. Thank you to everyone from HLW, Somerset Development, and the University of Southern California for all of your expertise and assistance.

Sarah Batchelor Digital Marketing Strategist

Michael A. Bruno Chair of Redevelopment, Giordano, Halleran & Ciesla

Brian Ledder Senior Design Strategist

Alexander Gorlin Founder, Alexander Gorlin Architects Paola Zamudio Founder + Head Designer, NPZ Style & Decor

Darren Ruddell Darren Ruddell is an Associate Professor at the University of Southern California’s Spatial Sciences Institute where he teaches and develops curricula in GeoDesign and advanced online programs in Geographic Information Science and Technology.

GeoDesign is a forward-thinking, interdisciplinary framework that pairs planning, design and environmental systems with geospatial technologies to explore ways to build a better world. He earned his PhD from the School of Geographical Sciences and Urban Planning at Arizona State University, and his research efforts utilize geospatial technologies to investigate and advance issues of urban sustainability.

Ralph Zucker President

Additional Thanks

Tom Michnewicz Vice President of Development

Kevin Kramer Village of Hoffman Estates, Illinois

Rika Zahner Executive Assistant

Eric Palm Village of Hoffman Estates, Illinois

Jacob Cohen Director - Construction Operations

Peter Gugliotta Village of Hoffman Estates, Illinois

Pat Garofalo Senior Property Manager

The Honorable Greg Buontempo Mayor, Town of Holmdel, New Jersey

Leilei Duan

Susan Lugones Administrative Assistant

The Honorable Eric Hinds Former Mayor, Town of Holmdel, New Jersey

Leilei Duan is a Lecturer with the Spatial Sciences Institute at the University of Southern California. Her research and teaching interests are in and use planning and resource allocation; computer-aided urban design; pedagogy, methodology and practice in GeoDesign; urban data analysis: statistics, spatial analysis, visualization; application of geographic information system in urban planning; three-dimensional modeling system; quality of life and built environment; urban form and network analysis; and environmental planning. In particular, she has explored the GeoDesign workflow in the population and employment allocation process and the impact of land use patterns on changes on traffic crashes. She is a member of the American Planning Association (APA), the American Association of Geographers (AAG), and the Student Planning Association (SPA). She holds a PhD in design, construction, and planning from the University of Florida.

Benjamin Wald Financial Analyst

Cherron Rountree Town of Holmdel, New Jersey

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The Honorable Serena DiMaso New Jersey General Assembly Derek DeLuca Legislative Director, New Jersey General Assembly Victoria Woodside Account Supervisor

Niels van Manen Vrije Universiteit Amsterdam

Christian Rizzo Senior Director

M.J. Swiderski Vrije Universiteit Amsterdam

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Holmdel Township. Mayor’s newsletter, September 2016, Holmdel Twp. Accessed online: http://www.holmdeltownship-nj.com/ DocumentCenter/View/957/Mayor-Newsletter-September-2016 Holmdel Township. Mayor’s newsletter, May 2016, Holmdel Twp. Accessed online: http://www.holmdeltownship-nj.com/ DocumentCenter/View/908/Mayor-Newsletter-May-2016?bidId= Holmdel Township. Mayor’s newsletter, November 2016, Holmdel Twp. Accessed online: http://www.holmdeltownship-nj.com/ DocumentCenter/View/993/Mayors-Newsletter-November-2016 Ibata, D. (1987, December 3). Ameritech eyes suburb complex. Chicago Tribune.

Blair, K. (1991, September 22). The case against space: Suburban office design planners preach that less is more. Chicago Tribune.

Jacobs, K. (2016, May 23). The Bargain That Revived Bell Labs. Architect Magazine. Accessed online: https://www.architectmagazine.com/ design/culture/the-bargain-that-revived-bell-labs_o.

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Cander, A. (2011). The law and practice of municipal land assembly: Fifty years of urban redevelopment and community opposition in Newark, New Jersey. Doctoral Dissertation submitted to Rutgers, The State University of New Jersey.

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Chou, F. (2006). Compromise Reached to Save Saarinen’s Bell Lab Building. Docomomo Fall 2006 newsletter. Accessed online at: https:// docomomo-us.org/resource/files%2F5lvjp7okfslrd8v.pdf.

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Lohan Anderson project profile. Accessed online: http://www.lohananderson.com/projects/planning/104-ameritech-headquarters

Citizens for Informed Land Use. “Holmdel Land Use - The Lucent Tract - Keeping Holmdel Holmdel” – CILU pamphlet. Accessed online at: https://static1.squarespace.com/static/5f7201d783760f0f0e1fa4dc/t/5f74d7627684bd684c12d1ea/1615405384004/brochure_CILU.FOHOS_ Holmdel+Land+Use+-+The+Lucent+Tract+-+Keeping+Holmdel+Holmdel

Martin, A. (2006, September 20). An inventive solution to save home of Bell Labs. New York Times.

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Myler, K. (1984, January 1). AT&T divestiture gives a major boost to office leasing markets. Chicago Tribune.

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Docomomo US (2006, October 18). Bell Laboratories: Compromise to Save Saarinen’s Original Building. Accessed online at: https://www. docomomo-us.org/news/bell-laboratories-compromise-to-save-saarinen-s-original-building Ecker, D. (2021, July 5). Former AT&T campus gets its first commercial tenant. Crain’s Chicago Business.

Emrich, R (2007, August 14). Bell Labs: Birthplace of the Transistor and Cell Phone at Risk. Cultural Landscape Foundation blog. Accessed online at: https://tclf.org/content/birthplace-transistor-and-cell-phone-risk.

Fradin, D. (1977). Bell Labs. Illinois Issues, 11. Accessed online at: https://www.lib.niu.edu/1977/ii770309.html Gallun, A. (2016, July 18). Default looms for former AT&T campus in Hoffman Estates. Crain’s Chicago Business.

Gallun, A. (2016, September 12). Big foreclosure suit hits former AT&T campus. Crain’s Chicago Business.

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Pohl, K. (2005, November 17). Changing of the guard in works at SBC Center. Daily Herald, Arlington Heights.

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Sammons, M. (1990, September 24). Biz exodus dulls Schaumburg’s luster. Crain’s Chicago Business.

Schmidt, S. (2006). Nature in the suburbs: Open space, fiscal preservation, fiscal planning, and exclusion. Doctoral Dissertation submitted to Rutgers, The State University of New Jersey.

Sirefman, S. (1996). Chicago: A Guide to Recent Architecture. London: Ellipsis Könemann.

State of New Jersey Department of Environmental Protection (2009, May 28). “People, Projects Honored for Preserving Priceless Pieces of New Jersey’s Past” (press release). Accessed online at: https://www.nj.gov/dep/newsrel/2009/09_0009.htm

Hall, A & Clark, E. (1984, December 3). Deregulation drags Bell Labs out of its ivory tower. BusinessWeek, 2871, 116-124.

State of New Jersey Historic Preservation Office (2013). 2013 – 2019 New Jersey Comprehensive Statewide Historic Preservation Plan. Accessed online at: https://www.nj.gov/dep/hpo/Index_HomePage_images_links/hpo_plan%202013_2019/hpoplan2014.pdf.

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Thompson, S. (2007, March 23). Residents fight development at Lucent site. Asbury Park Press.

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Troianovski, A. (2010, May 17). Commercial property: Reinventing old site of Bell Labs is tricky – Developer drops plan for new housing on 473 acres. Wall Street Journal.

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Young, D. (1991, September 20). Ameritech goes out on a limb with tree-filled complex. Chicago Tribune.

Ziemba, S. (1989, July 27). A new mecca rises with Ameritech. Chicago Tribune.

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Bibliography For Further Reading Bacevice, P., Mack, J., Tehrani, P., and Triebner (2020). Re-imagining the urban office. Harvard Business Review.

Available online at: https://hbr.org/2020/08/reimagining-the-urban-office.

Clark, J. (2014). Siting ‘scientific spaces’ in the US: The push and pull of regional development strategies and national innovation policies. Environment and Planning C: Government and Policy, 32, 880-895.

Conzen, M. (1986). The changing character of metropolitan Chicago. Journal of Geography, 85 (5), 224-236.

Devine-Wright, P. (2009). Rethinking NIMBYism: The role of place attachment and place identity in explaining place-protective action. Journal of Community & Applied Social Psychology, 19, 426-441.

Knowles, S. & Leslie, S. (2001). “Industrial Versailles”: Eero Saarinen’s corporate campuses for GM, IBM, and AT&T. Isis, 92 (1), 1-33.

Martin, R. (2003). The Organizational Complex: Architecture, Media, and Corporate Space. Cambridge, MA: MIT Press.

Mozingo, L. (2011). Pastoral Capitalism: A History of Suburban Corporate Landscapes. Cambridge, MA: MIT Press.

Pelkonen, E. & Albrecht, D. (2006). Introduction. In E. Pelkonen & D. Albrecht, Eds., Eero Saarinen: Shaping the Future (pp. 1-9). New Haven, CT: Yale University Press.

Rankin, W. (2010). The epistemology of the suburbs: Knowledge, production, and corporate laboratory design.

Critical Inquiry, 36 (4), 771-806.

Sirefman, S. (1996). Chicago: A Guide to Recent Architecture. London: Ellipsis Könemann.

Stobbelaar, D. & Pedroli, B. (2011). Perspectives on landscape identity: A conceptual challenge. Landscape Research, 36 (3), 321-339.

Walh, J. (1966). Bell Labs: A systems approach to innovation is the main thing. Science, 153 (3734), 393-396

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