Anthony Iatarola’s grand vision for a mixed-use campus of more than 1,000 homes and commercial retail in Chicago’s northwest suburbs has been replaced with a haul of cash from a data center developer.
Iatarola’s firm 5a7 and its affiliates sold more than 180 undeveloped acres in Hoffman Estates for $45 million to a venture of Naples, Florida-based Karis Critical, which will prep the land for a data center operator, according to public records and the seller.
The deal nixes a long-envisioned plan Iatarola’s firm had for the land that it was calling Plum Farms. It proposed to erect between 500 and 750 multifamily units, 500 to 600 single-family, townhome and rowhouse units and more build-to-rent homes across as many as 33 acres, along with up to 200,000 square feet in other mixed-use commercial space.
The land is at the intersection of Higgins Road and Route 59 and has been owned by Iatarola’s family for decades. The Plum Farms proposal also included a meditation facility, an ice rink, walking trails and green houses.
But the high prices being paid for development sites by data center players proved too tempting to stick with the plan, which encountered several speed bumps during years of planning.
While Plum Farms required timing the housing and commercial market as well as negotiating complex tax increment financing incentives with local officials in order to get utility service to the development site, data center firms are shelling out big bucks for real estate as they scramble to provide more computing capacity to meet an anticipated surge in demand from artificial intelligence and increasing cloud storage.
Several massive data center proposals — including one by Compass Datacenters that’s replacing the sprawling former Sears office headquarters just across Higgins Road from the Plum Farms site — are in the works across Chicagoland, which has proven attractive to the sector due to its power supply.
At more than $240,000 per acre, Karis’ purchase of Plum Farms exceeds that of two recent purchases by data center player T5 for undeveloped land in Grayslake, a northern suburb in Lake County.
“It was a pleasure dealing with the village of Hoffman estates and the buyer, the founder of which is a well-heeled, incredibly talented man that I’ve known for seven or eight years.” Iatarola told The Real Deal. “I’m so confident that what he has in mind and the village is going to work cooperatively and become a tremendous success for the participants and the area.”
Karis is led by CEO Jake Finley, according to its website; the firm did not respond to a request for comment. Karis also has a cold storage division which may pursue a facility alongside a data center building.
Iatarola has made a career in Chicagoland real estate development. His family developed the 400,000-square-foot Poplar Creek shopping center, completed in 2006 and featuring a Target just south of Higgins from the Plum Farms site. He also previously led the real estate business of the Wirtz family, which owns the NHL’s Chicago Blackhawks.
Plum Farms went through several delays. First, Iatarola waited out the real estate downturn sparked by the 2008 financial crisis. In 2017, Plum Farms also became subject of a lawsuit brought by residents of the Regency at the Woods of South Barrington retirement community, who were concerned with its density. A Barrington school district intervened in the suit on behalf of the residents, objecting to the potential for additional students’ costs to exceed the increase in tax revenue from the development, but the case was dismissed in 2019.
In 2023, the Daily Herald reported the Plum Farms team hadn’t yet reached an agreement with the village of Hoffman Estates over which of costs for the plan could be reimbursed through a tax increment financing plan.