Any chance that this is a negotiating tactic employed by Eaton?  Let's leak a story to the PeeDee, in the hopes the city comes around to see the error of their ways...

http://www.crainscleveland.com/article/20080915/SUB1/809129950/1071&Profile=1071

 

Most frequently, sources say Eaton would like the city of Cleveland to change the way it computes city income tax.

 

House Bill 95, passed in 2003, forced all Ohio communities into a single definition of income subject to a municipal tax. That law made what is called nonqualified deferred compensation subject to municipal taxes across the state.

 

According to Mark Engel, a tax lawyer with the Cincinnati office of the Bricker & Eckler law firm, the change does not affect the typical 401(k) retirement plans, just some special plans for top executives. However, Mr. Engel said, the law allowed communities to pass their own legislation to exempt these high-end retirement plans from city income tax.

 

 

Always all about the bottom line.  Which is worse (City of Cleveland Leaders)?  Losing a large company headquarters or changing tax laws to receive less income tax from top executives?

Until there is a change in leadership in that town, Cleveland will continue to be what it is.. and it's not just Jackson.. the town hasn't had a good mayor since Voinovich.

 

The city lost jobs and residents under Voinovich, too. The sad reality is that any urban area that's more than 40-50 years old is not favored by state policies. They haven't been supported for decades except to provide social welfare and that doesn't do anything to increase wealth and reinvestment.

Hard to stay positive about this one.  Huge loss to the city.  I bet Beachwood is giving them a nice tax free incentive.  Regionalism at its best.  F'm

 

Time to add Eaton to the boycott list.

 

Highland Hills isn't part of Beachwood. It's a separate political subdivision that was created in 1990.

Crains just released basically the same story as the plain dealer citing the main reason for not going into the flats as being

 

Eaton spokesman Gary Klasen told Crain’s Cleveland Business that because the company has been growing rapidly, the Flats site “did not have the size to meet our future growth needs.”

 

Maybe if they didn't build it like a campus.....

 

http://crainscleveland.com/article/20080917/FREE/809179967/1004/rss01&rssfeed=rss01

i agree with what believeland just pointed out.  All the story says is "likely" and "leading canidate".  So let's hold out.  Also, I don't believe Wolstein is involved with the negotiations.  Right now it is still about the land (which the port owns) and the tax structure (which the city controls)... and I'll just say this, as I do know someone very intimately involved on the city end of things (whom I have not asked about this in a few weeks).  They had mentioned to me a while back that the sticking point in the negotiations was some tax thing involving retirement accounts.  Of course I didn't know exactly what it was they were talking about until the crain's article the other day that seems to have hit the nail on the head.  But to those who say city pols getting in the way and what not, understand how precarious a negotiation like this is.  I'm sure there are many who will say... "yeah, but isn't 550 peoples taxes at a lesser amount better than no taxes?"  It would seem like logic.  But think about it.  If the city of Cleveland rewrites this tax rule for Eaton... Don't you think other corporations are going to demand the same deal?  And at somewhere between 110,000 and 130,000 downtown workers, don't you think that might be a pretty difficult pill to swallow.  As in more catastrophic than the loss of 550 jobs?  Not to mention the same corporations in the circle and other Cleveland Neighborhoods that will want this. Just something to chew on.

 

  And regardless, like I said, this is still a lot of "likely" and "leading".  We'll see how it shakes out.  If I hear anything new that I can post I'll let you know.

http://www.crainscleveland.com/article/20080915/SUB1/809129950/1071&Profile=1071

 

Most frequently, sources say Eaton would like the city of Cleveland to change the way it computes city income tax.

 

House Bill 95, passed in 2003, forced all Ohio communities into a single definition of income subject to a municipal tax. That law made what is called nonqualified deferred compensation subject to municipal taxes across the state.

 

According to Mark Engel, a tax lawyer with the Cincinnati office of the Bricker & Eckler law firm, the change does not affect the typical 401(k) retirement plans, just some special plans for top executives. However, Mr. Engel said, the law allowed communities to pass their own legislation to exempt these high-end retirement plans from city income tax.

 

 

Always all about the bottom line.  Which is worse (City of Cleveland Leaders)?  Losing a large company headquarters or changing tax laws to receive less income tax from top executives?

 

Regarding the tax law - the way I'm reading it is that if the City rewrites the law to provide an exemption for the executive's retirement plans (stock options and such), then all executives of all companies in Cleveland would immediately benefit, not just Eaton. 

 

(Thanks for posting the excerpt from the article shs96.  I thought that's the way I remembered reading it, and the excerpt seems to confirm it.)

 

Without researching the law much further, it sounds like the law passed by the State forces an executive to claim a stock option grant as income.  The executives would prefer to be able to defer it until they actually execute those options and "cash in". 

Highland Hills isn't part of Beachwood. It's a separate political subdivision that was created in 1990.

 

Correct - it has little housing/residents (~1,600)...it's mostly office complexes and a jail. 

 

Something tells me its tax structure is business friendly...

Another thought on this tax law.  By changing the tax law to allow executives to defer paying taxes on stock options or other firms of deferred compensation, it may actually encourage additional business investment.  Many start-ups compensate executives using stock options, in lieu of regular compensation.  They do this because they don't have the money to pay executives their "market rate" up-front, so instead they backload the deal. 

 

So passing this law, if I understand it correctly, could make Cleveland more attractive to start-ups like the ones sprouting up around University Circle and the Clinic.

 

Don't jump all over me here.  I'm just providing some thoughts about the other side of the coin regarding this tax law.  I don't know all the details about the law or the upfront $ ramifications for Cleveland if they pass the exemption.

And they wonder why Ohio keeps losing our best and brightest. Good luck trying to retain talented young people; and especially trying to attract talented young people who want to work in THIS:

 

or THIS:

 

But the best your company can offer is THIS:

 

Sounds just like some old people who voted to move a certain community federation out of downtown - they simply don't give a sh!t.

 

Regarding the tax law - the way I'm reading it is that if the City rewrites the law to provide an exemption for the executive's retirement plans (stock options and such), then all executives of all companies in Cleveland would immediately benefit, not just Eaton. 

 

 

That is my impression too, although I am no tax expert.

 

Still, it seems to be in the City's best interest to shave off high end income tax revenue to prevent a HQ from leaving...also might be a good incentive for more companies to move back in.

 

Quantity vs. Quality is always better, IMO, when it comes to a tax base.  Those lost employees will be spending their work week money elsewhere...business meetings, lunches, errands, etc...

Wasn't Chagrin Highlands land that was owned by the City of Cleveland at one point?  Somewhat off-topic, but relevant if we're talking municipal laws and tax regulations.

Dammit.. the more I think about this, the more I get pissed off.

Dammit.. the more I think about this, the more I get pissed off.

 

....don't even get me started.

Earlier today, I tried to figure out how to get from my office in University Circle to a meeting I have in Beachwood after work without a car.  It's going to be a 2-bus + 1-train ride that could take me anywhere from 50 minutes to 1.5 hours, depending on making my transfers during rush hour.  I may opt for CityWheels, which is a luxury I have in the Circle, but I'd rather not have to spend the cash.

 

Connections between these exurban job centers and our urban job centers and neighborhoods is SO automobile dependent, which is one of many reasons why news like this sickens me. 

Wasn't Chagrin Highlands land that was owned by the City of Cleveland at one point?  Somewhat off-topic, but relevant if we're talking municipal laws and tax regulations.

 

This is what I found in the Encyclopedia of Cleveland History:  http://ech.case.edu/ech-cgi/article.pl?id=HHV

 

HIGHLAND HILLS VILLAGE was created out of Warrensville Twp. in 1990 as a result of a plan by FIGGIE INTERNATIONAL, INC. to move its headquarters to northeastern Ohio. The township was established in 1816. It is located southeast of Cleveland and bounded on the north by BEACHWOOD, on the west by SHAKER HEIGHTS, on the east by ORANGE, and on the southwest by WARRENSVILLE HEIGHTS The original Warrensville Twp. covered 25 sq. mi., and included portions of the present Shaker Hts., Univ. Hts., and Warrensville Hts. and all of BEACHWOOD. Warrensville was named for settler DANIEL WARREN†, who arrived in 1810. Throughout the 19th century, it was a rural agricultural community (see AGRICULTURE). Between 1904-15 progressive city and county institutions located in the present township: the County Infirmary (1904, now part of Highland View Hospital); the county tuberculosis sanatorium at Cooley Farms (1906, later the Sunny Acres Sanatarium, see CUYAHOGA COUNTY HOSPITAL SYSTEM (CCHS)); and the CLEVELAND WORKHOUSE and House of Correction (1912). The township contained the Highland Park Cemetery, the Highland Park Golf Course, and the Eastern Campus of CUYAHOGA COMMUNITY COLLEGE. The population of Highland Hills in 2000 was 1,618.

From the Crains article  "... the law allowed communities to pass their own legislation to exempt these high-end retirement plans from city income tax."

It is this provision in House Bill 95 that allows for the sort of destructive wrangling between communities that can lead to the slow death of the center city. Since it seems clear that the corporate leadership is far more interested in protecting their personal wealth than committing to the vibrancy of downtown this provision gives them an added tool to do just that. I can only imagine why this language was included in the bill to begin with.

 

I would love to remain positive, as some have, but this city is in need of some good news and losing your largest (by revenue) company to the burbs is just not good news. It will now be fact that the two largest companies in the region will be located outside of downtown. My hope is that this is not the start of dangerous trend and that Eatons' decision is not final.

 

I seem to recall that the tax revenues from the Chagrin Highlands development were to be split among Highland Hills, Warrensville Heights and the City of Cleveland. Anyone else remember that?

 

But I don't know if an office building for Eaton would be part of that agreement.

From the Crains article  "... the law allowed communities to pass their own legislation to exempt these high-end retirement plans from city income tax."

It is this provision in House Bill 95 that allows for the sort of destructive wrangling between communities that can lead to the slow death of the center city. Since it seems clear that the corporate leadership is far more interested in protecting their personal wealth than committing to the vibrancy of downtown this provision gives them an added tool to do just that. I can only imagine why this language was included in the bill to begin with.

 

I would love to remain positive, as some have, but this city is in need of some good news and losing your largest (by revenue) company to the burbs is just not good news. It will now be fact that the two largest companies in the region will be located outside of downtown. My hope is that this is not the start of dangerous trend and that Eatons' decision is not final.

 

TWO?

I seem to recall that the tax revenues from the Chagrin Highlands development were to be split among Highland Hills, Warrensville Heights and the City of Cleveland. Anyone else remember that?

 

But I don't know if an office building for Eaton would be part of that agreement.

If this is the old Figgie site, then yes I think so.

 

Edit: Sorry, I didn't see above.

From the Crains article  "... the law allowed communities to pass their own legislation to exempt these high-end retirement plans from city income tax."

It is this provision in House Bill 95 that allows for the sort of destructive wrangling between communities that can lead to the slow death of the center city. Since it seems clear that the corporate leadership is far more interested in protecting their personal wealth than committing to the vibrancy of downtown this provision gives them an added tool to do just that. I can only imagine why this language was included in the bill to begin with.

 

I would love to remain positive, as some have, but this city is in need of some good news and losing your largest (by revenue) company to the burbs is just not good news. It will now be fact that the two largest companies in the region will be located outside of downtown. My hope is that this is not the start of dangerous trend and that Eatons' decision is not final.

 

TWO?

 

Progressive and Eaton

From the Crains article  "... the law allowed communities to pass their own legislation to exempt these high-end retirement plans from city income tax."

It is this provision in House Bill 95 that allows for the sort of destructive wrangling between communities that can lead to the slow death of the center city. Since it seems clear that the corporate leadership is far more interested in protecting their personal wealth than committing to the vibrancy of downtown this provision gives them an added tool to do just that. I can only imagine why this language was included in the bill to begin with.

 

I would love to remain positive, as some have, but this city is in need of some good news and losing your largest (by revenue) company to the burbs is just not good news. It will now be fact that the two largest companies in the region will be located outside of downtown. My hope is that this is not the start of dangerous trend and that Eatons' decision is not final.

 

TWO?

 

Progressive and Eaton

 

But they are not the two largest.  Large employers yes, but the two largest, no.

From the Crains article "... the law allowed communities to pass their own legislation to exempt these high-end retirement plans from city income tax."

It is this provision in House Bill 95 that allows for the sort of destructive wrangling between communities that can lead to the slow death of the center city. Since it seems clear that the corporate leadership is far more interested in protecting their personal wealth than committing to the vibrancy of downtown this provision gives them an added tool to do just that. I can only imagine why this language was included in the bill to begin with.

 

I would love to remain positive, as some have, but this city is in need of some good news and losing your largest (by revenue) company to the burbs is just not good news. It will now be fact that the two largest companies in the region will be located outside of downtown. My hope is that this is not the start of dangerous trend and that Eatons' decision is not final.

 

TWO?

 

Progressive and Eaton

 

But they are not the two largest. Large employers yes, but the two largest, no.

 

According to Fortune 500 they had the most revenue on their 2008 list. Progressive = 14.687 Billion    Eaton = 13.033 Billion

F Beachwood all the way to hell.  This is such horsesh&it.

From the Crains article  "... the law allowed communities to pass their own legislation to exempt these high-end retirement plans from city income tax."

It is this provision in House Bill 95 that allows for the sort of destructive wrangling between communities that can lead to the slow death of the center city. Since it seems clear that the corporate leadership is far more interested in protecting their personal wealth than committing to the vibrancy of downtown this provision gives them an added tool to do just that. I can only imagine why this language was included in the bill to begin with.

 

I would love to remain positive, as some have, but this city is in need of some good news and losing your largest (by revenue) company to the burbs is just not good news. It will now be fact that the two largest companies in the region will be located outside of downtown. My hope is that this is not the start of dangerous trend and that Eatons' decision is not final.

 

TWO?

 

Progressive and Eaton

 

But they are not the two largest.  Large employers yes, but the two largest, no.

 

According to Fortune 500 they had the most revenue on their 2008 list. Progressive = 14.687 Billion     Eaton = 13.033 Billion

 

I took what you said to mean in terms of EMPLOYEE'S. 

Mierda del caballo!!

Mierda del caballo!!

LOL.  That was a polite way to say it!

Mierda del caballo!!

LOL. That was a polite way to say it!

 

 

Hehe.

Connections between these exurban job centers and our urban job centers and neighborhoods is SO automobile dependent, which is one of many reasons why news like this sickens me.

 

Along the same lines (as MayDay too)... in a city like Cleveland, a downtown location easily accommodates either an auto-dependent suburban/exurban lifestyle (light traffic, plentiful parking) or a more urban, transit friendly lifestyle.  The choice is left up to the employee.  An exurban location...not so much.  Unless of course Eaton plans on running its own buses to the city center like Yahoo....which I don't really see happening.

Eaton possibly leaving for Beachwood is very upsetting. Obviously, area company leaders do not understand a strong central core is essential for a healthy region. A strong central core also makes attracting talent much easier. I guess if you're a 50ish executive what do you care. On the other hand, it seems like Eaton always wanted a "corporate park." In my opinion, they never really wanted to stay downtown. Either way, I wish this city could catch break. Think about it, downtown has all this momentum, and its largest company wants to build a "corporate park" in Beachwood. How backward is that? Where is the foresight and desire to think outside the box?

Eaton to Highland Hills

 

http://blog.cleveland.com/realtimenews/2008/09/eaton_likely_to_move_to_chagri/print.html

 

UPDATED: Cleveland's largest Fortune 500 company is likely to leave downtown for the city's eastern suburbs, rejecting up to $25 million in city tax incentives for building a corporate campus near the east bank of the Flats.

 

 

redbrick said: "Having done consulting stints in dozens of "Eaton type" HQs over the years, the sad truth is that the average HQ employee probably views a move to a campus type setting at a place like Chagrin Highlands as a very positive move. Easy on/off the expressway, plenty a parking, numerous chain retail/restaurants in the vicinity and perceived "safe" surroundings."

 

I completely agree with this assessment.  At my previous company, I was in the department that surveyed the employees when we were getting ready to move.  Now obviously no company is democratic enough that whatever the majority decides is what they will do, but the bigger majority wanted a move to a suburb, any suburb, and the reasons cited again and again were "free parking" "more restaurants" and "safer" in the suburban location.  If someone is driving downtown (and most of the people I work with do), they are paying at least $80 or $90 a month for the lots around us, over $200 a month for parking in our building.  Removing that in one fell swoop would be much more important to the average employee than an abstract concept of "keeping the money in Cleveland."  Remember, these are people who mostly shop at Walmart and eat at chains, they don't CARE about what's good for Cleveland, they care about what's the cheapest.

so kids have you voiced your concerns?

http://www.eaton.com/EatonCom/OurCompany/AboutUs/FromtheCEO/index.htm

 

Let him know what you think!

 

So Cleveland is allowing Eaton to move because of a lack of open space to expand to?  You're kidding me right?  You're freaking kidding me?  You could throw a wrecking ball from E12th to E40th between Lakeside and St. Clair (minus Avenue District) and the most that would be lost is the city mission.

And how can Jackson say that he respects their decision?  If I were mayor and this were a done deal I would be ripping that company a new one, and shutting down the water to anything in a 2 mile radius of Cedar and Richmond.

Rockandroller - You make an excellent point. Most of the employees at Eaton could care less about downtown. From my experience, most of them couldn't even tell you what is going on downtown besides a couple places to eat. I worked in the Penton Media building for a few years, and I knew several people who never ventured beyond E. 9th and St. Clair. You are also a 100% right about not caring about or understanding the concept of keeping the "money in Cleveland." Some of these people are so provincial they don't even understand that a stronger Cleveland is good for the entire region. They think suburbs are totally independent from Cleveland. I know a few people who think Cleveland could disappear tomorrow, and their suburb would be okay.

Rockandroller - You make an excellent point. Most of the employees at Eaton could care less about downtown. From my experience, most of them couldn't even tell you what is going on downtown besides a couple places to eat. I worked in the Penton Media building for a few years, and I knew several people who never ventured beyond E. 9th and St. Clair. You are also a 100% right about not caring about or understanding the concept of keeping the "money in Cleveland." Some of these people are so provincial they don't even understand that a stronger Cleveland is good for the entire region. They think suburbs are totally independent from Cleveland. I know a few people who think Cleveland could disappear tomorrow, and their suburb would be okay.

 

AMEN!

Quote:Does anyone in here know anybody important enough to at least be heard out on an arguement?

 

Who do you want me to call?  Im not trying to brag but I can get just about any person on the phone or set up a meeting...  this isnt city politics... this is exactly what it looks like, corporate greed and short-sightedness. (of which cleveland has no limit)

PS, whom ever thinks they have the best diction and grasp of the matter... PLEASE WRITE AN OP-ED PIECE FOR THE PD TO RUN

Quote:Remember, these are people who mostly shop at Walmart and eat at chains, they don't CARE about what's good for Cleveland, they care about what's the cheapest.

 

 

Macro vs. Micro Econ...  in class I learned what is good for the individual is not always good for the collective... hmmmm

Sweetie I love you, but you don't need to make a new post for each thought.

 

Get familiar with the MODIFY button, OK.  thanks!  :wave:

I agree. Eaton is so full of lame excuses. This is total bullshit. Like w28th said, there's PLENTY OF SPACE in Cleveland to expand!

 

It has everything to do with corporate greed.

September 17, 2008

City of Cleveland – Office of the Council

 

Statement from Community and Economic Development Committee Chairwoman Sabra Pierce Scott:

 

On Eaton Corporation

 

“Cleveland City Council, through the Community and Economic Development Committee and in cooperation with the Jackson Administration, passed legislation to offer Eaton Corporation a prime location in the City of Cleveland along with incentives to stay.

 

While disappointed, we understand Eaton’s needs to consider their best interests and align their continuing expansion to their future business goals. 

 

Council’s Community and Economic Development Committee has done its due diligence to ensure the success of the Flats East Bank project, which has doubled in size this passed year.  We will continue to support the developer in bringing this new and vibrant vision of the Flats into being. The completion of this project will serve as a catalyst for further development in and around the downtown area.

 

Further, Cleveland City Council will continue to collaborate with the Jackson Administration to retain and grow Cleveland’s economy.”

I remember commenting on the FEB thread how dissappointed I was in this "corporate campus" component of the FEB and hoped Eaton would consider a different more appropriate downtown option. I still don't understand how the corporate campus is more advantageous to the day to day operation of a company and invite anyone to enlighten me on the matter.

 

It was a childlike hope I had that if somehow the powers that be would recognize that if FCE stopped proposing the TC site for a CC they had an ideal candidate in Eaton for developing their land.

Picture a tower on the corner of Ontario and Huron similar in massing to the courthouse tower. That would still leave room for campus like growth in the future. A well conceived master plan for the site could make it a stunning development and FCE would have a growing fortune 500 tenant on the doorstep of their mall.

 

Credit for the photo to kcgridlock originally posted on the Above Cleveland thread.       

Now it appears that Eaton is leaving $25+ million in tax breaks from the city on the table to move to a corporate campus because they WANT to.  F*ck Eaton.

^Second

Hard to stay positive about this one.  Huge loss to the city.  I bet Beachwood is giving them a nice tax free incentive.  Regionalism at its best.  F'm

 

Time to add Eaton to the boycott list.

 

 

Not sure I agree with this one...Boycott Eaton?

 

What are you going to do?  Trade in your truck's clutch or differential for another one?  :-P

 

Good luck with that.

 

At least they are still in NEO...there are plenty of companies to truly boycott for taking their headquarters out of the region altogether....let's see....Office Max (now Chicago), CVS (was Revco now in RI), Pearle Vision (now Luxottica in Cincy), Firestone (Nashville), British Petroleum (Chicago)...the list goes on and on and on. 

 

Save your venom for them. 

Hard to stay positive about this one.  Huge loss to the city.  I bet Beachwood is giving them a nice tax free incentive.  Regionalism at its best.  F'm

 

Time to add Eaton to the boycott list.

 

 

Not sure I agree with this one...Boycott Eaton?

 

What are you going to do?  Trade in your truck's clutch or differential for another one?  :-P

 

Good luck with that.

 

At least they are still in NEO...there are plenty of companies to truly boycott for taking their headquarters out of the region altogether....let's see....Office Max (now Chicago), CVS (was Revco now in RI), Pearle Vision (now Luxottica in Cincy), Firestone (Nashville), British Petroleum (Chicago)...the list goes on and on and on. 

 

Save your venom for them. 

 

BPs Corporate HQ was never in Cleveland.

 

Carry on.....

This isn't an anti-Cleveland move by Eaton.  This is a move to be at a very central place with easy highway access and surrounded by a variety of housing options.  Also there are many competitors and clients all around I-271 with Rockwell and Parker Hannifan very close by in Landerhaven.

 

The same exact thing is going on in other places for example in Cincinnati they have a suburb/exurb called Mason.  They have a TON of large companies HQs that are based out of Mason.  Top 2 would be Luxottica (aka Lenscrafters, which purchased and moved Pearle Vision and Cole Managed Vision there from the Cleveland area) and Cintas.  They have many other major operations of large companies there including Coca Cola, Wellpoint/Anthem, Proctor and Gamble, Siemens etc.

 

This isn't some unique Cleveland thing. 

 

 

 

This isn't some unique Cleveland thing.

 

I don't think anyone is saying it is.

 

I think we're all sounding off because we're frustrated it's happened in Cleveland yet again.

 

You're right, though. This is more or less a nationwide problem, and until people in these urban centers realize the value of these urban centers and what exactly they're doing to those centers when they take their companies' headquarters out of them, the fabric of America's cities (especially struggling cities like Cleveland) will continue to deteriorate.

 

People need to start placing value on urban centers. They're hugely important to the fabric of America, I think.

The industrial parts and systems manufacturer told employees it is looking at a site in Chagrin Highlands, which includes some Cleveland-owned land but is also within the southeast suburb Beachwood.

 

What does this really mean? It's not part of the city limits right? Do the taxes get shared then as someone mentioned earlier in this thread?

 

http://www.newsnet5.com/news/17499355/detail.html