CHICAGO — Ford Motor Co. is expanding in Chicago after signing a lease for a big industrial building near its southeast side assembly plant.
The automaker has leased a new 359,000-square-foot building within a large industrial park under construction on the site of the former Republic Steel factory, said Tom George, vice president of acquisitions at NorthPoint Development, which is developing the property.
Ford, which signed the lease in late 2019, plans to use the building for “pre-assembly work” of components that will be delivered to the Ford factory about 1.5 miles away, he said.
George did not know how many people would work in the Ford warehouse, the first of as many as six large industrial buildings NorthPoint plans in the park. A Ford spokeswoman declined to comment.
The lease is good news for NorthPoint and the Chicago economy, which is reeling from the impact of the coronavirus. Government restrictions to slow the spread of the virus have forced many businesses to shut down temporarily and left many people without a job.
Ford idled its North American factories for two months in response to the pandemic, reopening them in mid-May. But a couple days later, the company shut its Chicago plant briefly after two workers there tested positive for the virus.
Ford expects to increase its production to pre-pandemic levels at its North American factories with weeks, but the automaker has forecast a $5 billion loss in the second quarter due to COVID-19. Still, George has seen no signs that the company is reconsidering its decision to move into the new building.
“They have been anxious to get in there, so I assume that’s still the case,” George said.
Before the pandemic, Ford made a major commitment to its Chicago operations, spending $1 billion to modernize the South Side factory, where is makes Ford Explorers, and a Chicago Heights stamping plant. The company employed a combined 6,500 people in the plants as of last June.
Kansas City, Mo.-based NorthPoint also made a big commitment to the Southeast Side, launching its $164 million plan to revamp the Republic Steel site last year. The city of Chicago gave the project a big push with a $52 million tax-increment financing subsidy. Its expected return on investment: 660 permanent jobs and 650 temporary construction jobs.
With 2.3 million square feet of buildings over 196 acres, the project, called the Avenue O Industrial Park, is the largest industrial development in Chicago since the creation of the 1.6 million-square-foot Ford supplier park next door more than 16 years ago. NorthPoint also owns the supplier park, whose tenants include Tower Automotive and Flex-N-Gate.
