Ken Griffin isn’t the only longtime Chicago-area business owner packing up his company for the Sun Belt.
Keith Hoogland, whose Family Video chain outlasted Blockbuster before closing for good last year, is pulling up stakes and moving the diversified Glenview-based parent company, Highland Ventures, to Nashville in September.
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The family-owned business, which has turned its 700-plus former video stores into a sprawling, multistate real estate company and the largest franchise owner for Marco’s Pizza, will head south with dozens of employees and almost as many Hooglands in search of greener corporate pastures.
Like Griffin, the billionaire hedge fund owner who announced last month he was moving his investment firm Citadel from Chicago to Miami after 30 years, Hoogland had some parting shots for Illinois, citing crime, taxes and, he says, a shrinking talent pool.
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“I’m the leader of my family and I’m the leader of my company,” said Hoogland, 62, whose great-grandfather settled in downstate Illinois in the 1870s. “I think what’s best for my family and my company is to leave Illinois.”
Hoogland built his Illinois-based empire as a regional player in the once-booming video rental business. Founded in 1978, Family Video went from renting Betamax tapes to VHS to DVDs over the years, and grew to an 800-store chain at its zenith. As video rentals gave way to online streaming, the company evolved its business model, partnering with Marco’s Pizza in 2015 to help lure customers during the inexorable decline.
Industry giant Blockbuster closed its corporate-owned stores in 2013 as the video rental industry wound down, but Family Video somehow survived by catering to a dwindling small-town customer base scattered across 17 mostly Midwestern states. Ultimately, the COVID-19 pandemic sounded the death knell for the Family Video business, which closed its remaining 250 stores in January 2021.
“We did a great job running our business — lasted longer than everybody — and then we did a great job closing our business and making sure all of our employees landed on their feet,” Hoogland said.
Highland Ventures has since been “transitioning” its business model, converting its 700-plus retail locations into small strip malls, leasing out space to the likes of Jersey Mike’s Subs, Subway and 90 Little Caesars pizza shops, among other businesses, Hoogland said. In addition, the company has put its own Marco’s Pizza franchises in more than 100 locations across 12 states, including 20 in Illinois.
While its primary focus is retail real estate, the company has also expanded into office space, buying about 20 buildings — none of which are located in Illinois, Hoogland said. The entire commercial real estate portfolio covers 22 states and is valued at over $800 million, according to the company’s website.
Other new businesses include 16 Family Vet animal hospitals and Highland Pure Water & Ice, which has 100 self-service kiosks, mostly located at company-owned properties.
Not all of the new ventures have proved successful. Like Family Video, Stay Fit 24, essentially a self-service 24/7 gym, also folded up during the pandemic, Hoogland said.
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“It was doing pretty well and COVID just literally crushed it,” Hoogland said.
Hoogland declined to disclose annual revenues for Highland Ventures.
Built in 2003, the Highland Ventures headquarters is a 25,000-square-foot standalone building near the Glen Town Center shopping district in Glenview. The office is home to about 80 employees. with another 20 or so working mostly in the field. Hoogland plans to lease out the building after the move, and corporate employees will eventually need to relocate to Nashville, where the company has secured a new office in suburban Brentwood.
Two of Hoogland’s children and his son-in-law also work for the company, and all six of his children are planning to move to Nashville with their families, including seven grandchildren, he said.
Nashville, which has seen rapid population growth over the past decade, launched a marketing campaign in October to lure workers from Chicago’s robust technology community, touting such benefits as no state income tax, shorter commute times, milder weather and the city’s country music scene.
Hoogland, who graduated from Vanderbilt and chose his former college town for the new headquarters over two other cities, seems sold on all of the above, as well as a lower corporate tax rate.
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Illinois has a 9.5% marginal corporate income tax rate — one of the highest in the nation — while Tennessee has a 6.5% corporate tax rate, according to the Tax Foundation, a Washington, D.C.-based nonprofit organization.
“It’s really about opportunity,” Hoogland said. “We feel that Illinois is a shrinking state. We feel that the tax base is shrinking, therefore the taxes are going to get worse before they get better.”
Beyond taxes, Hoogland said the talent base in Nashville is growing, enabling continued expansion of the company, which plans to open 15 to 20 new Marco’s restaurants per year and acquire new office buildings. Illinois is not part of those expansion plans, he said.
“The plan is to slow growth in Illinois, or stop it,” Hoogland said. “I’m not buying office buildings here and I probably won’t open any more pizza places here.”
Hoogland said his frustration with crime in Chicago, something Griffin has cited as well, is another major factor driving the decision to relocate his company.
In addition to Citadel, the Chicago area has lost other major corporate headquarters in recent months. Last month, Caterpillar announced it would relocate its headquarters from north suburban Deerfield to an existing office in Irving, Texas, outside Dallas. In May, aerospace giant Boeing said it was moving its headquarters to Arlington, Virginia, after more than 20 years in the West Loop.
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Those losses were offset somewhat by last month’s announcement that Battle Creek, Michigan-based Kellogg Co. is splitting into three separate companies and locating its new snacks headquarters in Chicago.
Griffin, who has been a major philanthropic force during his more than three decades in the city, softened the blow of Citadel’s exit by donating $130 million to Chicago organizations in June as he left for Florida.
Hoogland, who cited his own charitable donations, including millions contributed for cancer research at University of Chicago Medicine and funding the nonprofit Hoogland Center for the Arts in Springfield, said there would be no such parting gifts as he leaves the state.
“We’ve just done a lot of things for the state of Illinois and the community in general,” Hoogland said. “And all that will stop, unfortunately, and we’ll be doing that in Tennessee.”
