Motorola is asking a court to order the village of Schaumburg to pay it more than $1.5 million, saying the village has reneged on its obligations under a redevelopment tax incentive deal, because the village now claims its “monitoring of parking lots” at Motorola’s office campus from 2020-2021 revealed the company wasn’t bringing as many people to work in the Schaumburg facility as the company claims.
Motorola Solutions filed suit against Schaumburg in Cook County Circuit Court on Dec. 15.
The lawsuit centers around the terms of a 2016 agreement between Motorola and Schaumburg providing certain tax incentives to the company in exchange for investing more than $141 million of renovations to the company’s Schaumburg campus at Meacham Road and Interstate 90.
Under the deal, the village agreed to reimburse Motorola 65% of its annual property taxes. However, that provision hinges on how many people Motorola employs at the campus.
To reach the 65% threshold, Motorola must employ at least 1,100 workers at the site. If between 650-1,100 people work at the campus, the village would refund 50% of the tax bill. If fewer than 650, however, the village would refund nothing, under the deal.
In the lawsuit, Motorola asserts the village agreed to define workers on site as those “assigned” to work at the campus.
Motorola claims it still has 1,100 workers assigned to work at the campus. The company asserts Schaumburg has never objected to that definition previously, having paid out three prior tax reimbursement requests submitted under the deal from 2017-2021.
Motorola says it has certified more than 1,500 workers were still assigned to the Schaumburg campus as recently as late 2021.
However, Motorola said the village refused to pay a fourth reimbursement request submitted in the fall of 2021.
According to the complaint, village officials told Motorola it disagreed with its calculation concerning the number of employees assigned to the Schaumburg campus. In response to the reimbursement request, the village allegedly for the first time argued that “employees working at alternative locations – regardless of what location that are assigned to by Motorola for Motorola’s internal employment tracking purposes” cannot be used to meet the requirements of the development agreement.
According to the complaint, the village further asserted it believed “there were significantly less employees working on-site at the Schaumburg Campus” based on “the Village’s monitoring of the parking lots throughout 2020-2021.”
The complaint does not reference the potential cause for any substantial decrease of traffic at Motorola’s Schaumburg campus in 2020-2021. However, in 2020, Gov. JB Pritzker, in response to the onset of the Covid-19 pandemic, ordered employers to direct employees who could work from home to do so.
Many companies across the country continued to allow employees to work from home throughout 2020 and 2021 to reduce the spread of the virus among their workers.
The complaint does not indicate what Motorola’s policies may have been during that time concerning work-from-home arrangements, or what policies the company may have in place now.
In the complaint, Motorola asserts the village’s “monitoring of parking lots” is not a valid way to count employment at the Schaumburg campus, under the terms of the development agreement.
“In refusing to pay Motorola 65% of the incremental taxes that were collected by the Village in 2020, the Village has improperly interpreted the (development agreement) to require Motorola’s Employees and Independent Contractors to “be working on-site … at the Schaumburg Campus to count towards the employment levels in” the development agreement, Motorola wrote in its complaint.
The company asserts that “whether or not Motorola’s employees and independent contractors are physically present” at the Schaumburg campus “is not relevant” to the employment counts required by the development agreement.
The lawsuit seeks a court order directing the village to pay $1.465 million, plus prejudgment interest from the date of the breach, plus attorney fees.
The company is also seeking a court order declaring the village is wrong to demand that employees be physically present at the campus to count toward employment thresholds established under the development agreement.
Representatives of the village of Schaumburg did not reply to a request for comment about the lawsuit from The Cook County Record.
Motorola is represented by attorneys Matthew S. Klepper and Devin J. Carpenter, of DLA Piper LLP, of Chicago.