Topic: Cleveland Area: American Greetings HQ relocation?

[MayDay]

This oughta be interesting; from cleveland.com

American Greetings may pull its world headquarters out of Brooklyn, Ohio
By Janet Cho, The Plain Dealer January 07, 2010, 1:13PM

BROOKLYN, Ohio -- American Greetings Corp., the nation's largest publicly held greeting card manufacturer, is exploring moving its global headquarters from Brooklyn to another community in Northeast Ohio with lower taxes.

In an internal memo sent to employees on Wednesday, the company said that because the City of Brooklyn had increased its payroll taxes 25 percent, to 2.5 percent from 2.0 percent, "we are launching a study to consider whether or not we should move the company's world headquarters to another location."

More at http://www.cleveland.com/business/index.ssf/2010/01/american_greetings_may_pull_it.html

[willyboy]

Now that this has been published they will be getting tons of offers from various municipalities inside and out of the Cleveland region and state.....  The competition begins.

The only good scenario that I could have imagined is if (since the head of AG is friends with Bob Stark) that they moved downtown into his warehouse district project, but that is no longer on the table for Stark. 

[Hts121]

Steal 'em away Frank.  I won't hold it against you.

[MuRrAy HiLL]

I take back my negative comment on American Greetings....this could be good.  A lot of possibilities for NEO/Cleveland!

[Confiteordeo]

I take back my negative comment on American Greetings....this could be good.  A lot of possibilities for NEO/Cleveland!

Can you say District of Design? 

[KJP]

I take back my negative comment on American Greetings....this could be good.  A lot of possibilities for NEO/Cleveland!

Can you say District of Design? 

I see Cleveland's payroll tax rate is 2 percent, so Cleveland might be worth their consideration. I especially like the District of Design for them, but their old headquarters on Berea Road just east of West 117th Street still stands and is in use. But I don't know who's in there now.

[cd-cleveland]

Why would American Greetings pay lots of money to acquire the old drive-in movie theater/flea market, then close it to develop a pretty unspectacular park, then seek to move? 

Bad days in Brooklyn, with difficulties at KeyBank, Hugo Boss, American Greetings, and the Plain Dealer.  The City has had layoffs and employees were forced to make a lot of major concessions.

[Coneybear]

This could be good news for Cleveland.  There's some nice office space available (or soon to be available) in downtown Cleveland that would be great for American Greetings. The current Huntington building, Breuer Tower (unlikely), Higbee Building, maybe even some office space in the Flats East Bank project...
By the way, does anyone know how many people are currently hired by American Greetings?

[Oldmanladyluck]

The article said 2,000 workers.  That would be a nice boost for downtown.  I'm hoping that some of the downtown owners called American Greetings as soon as they heard the news.

What about some regional cooperation?  The city could share property taxes with Brooklyn and offer tax incentives to stay, along with the State of Ohio.  Now that the news is out there, the region and this state needs to do all it can to keep this company here.

[willyboy]

What about some regional cooperation?  The city could share property taxes with Brooklyn and offer tax incentives to stay, along with the State of Ohio.  Now that the news is out there, the region and this state needs to do all it can to keep this company here.

Exactly.  By publicizing this they are going to get so many offers from the many
Vultures out there.  Remember Firestone and several others recently.  The area will have to outdo these offers that will be flowing in from many states. 
All over a .5 increase in payrole taxes...?   They are just following suit, and know they have the area by the b@!!$. 

[lewarctj]

I personally can not support the economic demise of Brooklyn, OH for the benefit of Downtown Cleveland - these two cities border eachother. 

[X]

If low taxes is what they're after, they aren't coming to Cleveland.  They'll end up in Medina, Avon, or the like.  Or in the South.

[KJP]

You're probably right, but a guy can hope that a business can see the value in things beyond the "almighty" payroll tax (such as being the signature business in a high-profile location)....

[327]

There shouldn't be a City of Brooklyn, Ohio.  If we're consolidating suburbs that one's in my top 3.  The shape of Brooklyn on a map is a pictogram that says "Cleveland sucks."  Get rid of it.

[X]

They'll move to Avon and call that a high profile location.  They'll build a suburban campus and call it a signature property.

[Hts121]

I personally can not support the economic demise of Brooklyn, OH for the benefit of Downtown Cleveland - these two cities border eachother. 

It's not like they are either going to move to downtown or stay in Brooklyn.  Then, I could understand your point.  But if they are moving REGARDLESS, we might as well wish they go downtown.  That would be better for Brooklyn than AG moving out to Avon.  What's good for the goose...

[3231]

They'll probably threaten to move to Charlotte and then the state will flood them with tax breaks.

[rockandroller]

Not that I put a lot of stock in cleveland.com comments, but several people say a lot of the controlling powers that be at AG live on the E side, and that that's where they'll relocate.  *throws away job posting from AG from earlier this week*

[X]

^I know some business relocation studies have shown that where the top execs live is a bigger determiner of where a business will relocate to than tax rates or incentives.

[Oldmanladyluck]

I just thought about the proposed Jacobs tower (I believe he was looking for an anchor office tenant).  He's got enough clout and connections to get something done, I believe, between the city and the State.  Just wishful thinking, I guess.

[KJP]

The only good scenario that I could have imagined is if (since the head of AG is friends with Bob Stark) that they moved downtown into his warehouse district project, but that is no longer on the table for Stark. 

I wasn't aware they were friends. While Stark isn't a player in the Warehouse District anymore, he does have other properties downtown (East 14th/Prospect area).

[Hts121]

Not that I put a lot of stock in cleveland.com comments, but several people say a lot of the controlling powers that be at AG live on the E side, and that that's where they'll relocate.  *throws away job posting from AG from earlier this week*

I saw some comment that claimed the 4 controlling members live in the UH-Beachwood area around Green Road.

[Oldmanladyluck]

The only good scenario that I could have imagined is if (since the head of AG is friends with Bob Stark) that they moved downtown into his warehouse district project, but that is no longer on the table for Stark. 

I wasn't aware they were friends. While Stark isn't a player in the Warehouse District anymore, he does have other properties downtown (East 14th/Prospect area).

Does Stark own some of the surface lots in the area?  It would be great to see those developed if so. 

[StrapHanger]

^No-I think he had entered into development agreements with some owners, but didn't own any lots himself- the details are in the old and dormant "Pesht" thread.

[jsz65]

As an executive with AG for over 16 years Ill give you my two cents on this situation.  AG is still owned and controlled (even though it is a publically traded company) by the heirs of Irving Stone.  All of Irving's grandsons run the company; Zev is CEO, Jeff is President, Gary is SVP, their father Morry is Chairman of the Board.  The entire family lives on the same street in Beachwood - due to their faith they must walk to Synagogue on Saturdays.  They are an extremely devout Jewish family.  They would never move the company to a location without a sizable Jewish population (ie Charlotte).  They would however, and have dreamed about, moving the company to the I-271 corridor.  They looked at the former MBNA space but the Clinic beat them to it.  There are 2000 employees today in the HQ - 15 years ago there were 3,800.  As you can imagine about half the HQ is empty.  Now is a perfect time to move to a smaller building on the East Side with lower taxes and a shorter commute for the owners.  I think AG will be in Chagrin Highlands in 2 - 3 years tops.

[MayDay]

^Just curious - how busy/active is the distribution component of the HQ? I know a lot of people would love to see AG move downtown but correct me if I'm wrong - a big reason AG located in Brooklyn (as well as the PDs printing facilities) is the proximity of I-480. It'd be hard to imagine an ideal site downtown if AG needs a large truck marshalling yard/loading dock area, right? 

[StrapHanger]

As an executive with AG for over 16 years Ill give you my two cents on this situation.  AG is still owned and controlled (even though it is a publically traded company) by the heirs of Irving Stone.  All of Irving's grandsons run the company; Zev is CEO, Jeff is President, Gary is SVP, their father Morry is Chairman of the Board.  The entire family lives on the same street in Beachwood - due to their faith they must walk to Synagogue on Saturdays.  They are an extremely devout Jewish family.  They would never move the company to a location without a sizable Jewish population (ie Charlotte).  They would however, and have dreamed about, moving the company to the I-271 corridor.  They looked at the former MBNA space but the Clinic beat them to it.  There are 2000 employees today in the HQ - 15 years ago there were 3,800.  As you can imagine about half the HQ is empty.  Now is a perfect time to move to a smaller building on the East Side with lower taxes and a shorter commute for the owners.  I think AG will be in Chagrin Highlands in 2 - 3 years tops.

Thanks for your informed view- very interesting.  For what it's worth, I believe Beachwood's income tax is only 1.5%.

[jsz65]

To answer Maydays question - when it was built the AG facility in Brooklyn was mostly used for greeting card distribution - this is back in the 70's.  At that time AG had manufacturing on West 117th and Berea and Creative/Administration on west 78th street off of Detroit. The last of the distribution functions were moved to a giant facility in Oceola, Arkansa in the late 90's. As distribution was moving out offices were moving in; Creative was moved to Brooklyn in 80's, retail was moved from independence in the 90's etc. At this point the only thing being warehoused there is some fixtures and such, so there isnt the need for all the loading docks anymore

[KJP]

Thank you for helping us understand AG better, jsz65!

[Coneybear]

thanks jsz65!

It would be nice to see American Greetings moving downtown, but I guess the most important thing it to keep it in the region.

[Pugu]

AG could be anchor for a new tower at 33 Public Square, which was torn down for the Ameritrust Tower many years ago. About a year or two ago, Hines (a developer) released plans to build a 21-story building on the site, but that story seemed to fade away faster than the availability of credit.

[Coneybear]

I think this would be a great addition to the Flats East Bank project. I circled a location in an old rendering of the project that I think would be perfect for the new AG HQ:



This location is just secluded enough from the rest of downtown (being sandwiched between all those train tracks) that it shouldn't be a problem for loading trucks to maneuver there compared to a more high-traffic location downtown.

[Etheostoma Caeruleum]

^^ So then is something finally going to happen on that parking lot?

[tedders55]

I believe all your questions about that parking lot can be found here:

http://www.urbanohio.com/forum2/index.php/topic,18732.0.html

As far as the AG movement, based on jsz65's post it does not sound like the controlling parties in the company would be looking to move downtown.  We can hope, but it doesn't seem likely.

[327]

Re: trucks, are they moving the HQ or that plus production?  I'm not sure if they do production at their Brooklyn compound or not.  If so, and if they want to keep them together, downtown may not be the best plan for them.  That's a whole lotta truck traffic, and printing operations aren't the cleanest things in the world.