City and county officials are trying to compel Canadian authorities to take action regarding the deteriorating Motorola campus in Harvard.
The 1.52-million-square-foot facility, located on 325 acres at 2001 N. Division St., was built in 1997 and has sat empty since Motorola vacated the property in 2003. Edward Gong, a Canadian businessman, owns the property. Gong is facing criminal fraud charges in Canada.
The Motorola building has major problems including lack of heat, mold, a number of roof leaks, buckling floors, popped tiles, water damage and a failed sprinkler system, McHenry County Board Chairman Jack Franks said.
Franks sent Brian McNeely, a lawyer with the Crown Law Office in Ontario, a letter detailing the building’s shortcomings and other concerns such as loss of tax revenue and potential economic development in May.
A manufacturing company is interested in buying the property, Franks said.
Franks wouldn’t disclose the name of the interested buyer.
Crown Law Office handles criminal appeals of indictable matters in Ontario under the Ministry of the Attorney General, according to its website. McNeely didn’t respond to a request for comment.
“Starting with the owner prior to Mr. Gong, ownership has not properly maintained the facility,” Franks wrote. “Many health and safety issues have developed as a result of this neglect.”
The biggest safety concern is the defunct 22,000-head sprinkler system. The repair could cost between $2 and $4 million, Franks said.
“Without the sprinkler system, the Harvard Fire Department, even with the aid of surrounding departments, lacks the capacity to fight a fire in a structure of this size which endangers the entire community,” Franks wrote.
Franks said his biggest goal is to get the property back on the tax rolls.
Gong hasn’t paid his property taxes and currently owes the county $349,425, which includes the payment due Sept 9.
Typically when a property owner doesn’t pay taxes, the taxes go up for sale.
When property taxes are sold, the buying investor puts a lien on the property that it can then hold for 2½ to 3 years. If the owner of the property doesn’t redeem the taxes, the investor can take control of the property.
The U.S. Department of Justice placed a hold on the property in October of 2018 on behalf of the Ontario Superior Court of Justice. This means Gong can’t sell or give away the building without written approval by the Ontario attorney general. If the attorney general approves a sale, the department will hold the revenue from the sale “until further order,” according to court documents.
The hold also blocks the possibility of a tax sale and means taxing bodies such as Harvard District 50, the city of Harvard and McHenry County are missing out on that revenue. The property generates the most taxes in Harvard by far, Franks said.
City of Harvard officials also are lobbying for action. City Council members recently put forth a resolution calling for the “transformation and reuse” of the campus. The DOJ hold on the property requires Gong to keep the building up to code, and he has failed to do that, Mayor Michael Kelly said.
The building deterioration is approaching a critical point to where it might not make financial sense to restore the property for commercial use, according to the resolution.
“Continued ownership of the campus by [Gong] is intentionally harmful to the public interest,” the resolution reads. “All lawful actions shall be taken to remove [Gong] and place ownership with those who will properly restore and maintain the campus. ... It should then be sold to the highest qualified buyer prepared to do so and utilize the campus for lawful economic activity.”
Harvard officials hope that other taxing bodies in McHenry County pass similar resolutions and that the matter will make it with large support to state and federal officials, Kelly said.
“At the end of the day, the city of Harvard simply wants someone to bring business to the property,” he said. “It’s clear to us that the owner has no desire to do that, certainly not in short term.”
Kelly said he questioned whether Gong bought the property with “ill-gotten” funds.
“On that basis, he shouldn’t even own the property to begin with,” Kelly said.
Gong bought the property at an online auction for $9.3 million in April 2016, announced plans to develop a smartphone manufacturing plant in March 2017, and was arrested in Canada on fraud charges the following December.
Gong is accused of fraudulently selling securities worth hundreds of millions of dollars to Chinese citizens for two companies, 024 Pharma Inc. and Canada National TV Inc.
Gong allegedly controlled both companies and arranged the sales from the Toronto area, according to the Ontario Securities Commission. The commission said the sales took place between 2012 and Dec. 20, 2017.
Authorities abroad set wheels into motion to restrain his properties and assets in March 2017, according to court documents filed with the High Court of New Zealand.