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

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. 

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

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

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 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.

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.

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?

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.

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@!!$. 

 

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

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.

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)....

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.

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

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...

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

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 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.

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.

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).

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.

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. 

^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.

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.

^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? 

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%.

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

Thank you for helping us understand AG better, jsz65!

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.

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.

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.

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

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.

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.

I would love to see and would prefer a downtown location.  However, at the end of the day I don't care where they locate- as long as they stay within the region.

If I was pitching a Cleveland location, I would focus on something more along the lines of Tyler Village. Here, you would have more proximity to the highway and closer proximity for East Side residents. You have an existing facility, rather than new build, and from what I've heard, incredibly reasonable rates. You have the ability to house lots of people on one single campus and, in the specific case of Tyler Village, you have warehouses, loading docks, lift elevators, etc. that would facilitate any distribution or intake of supplies and materials AND you have the type of industrial loft space that might be an appealing work environment for the staff (particularly the creatives). You also have proximity to a ton of other creatives already in the facility and in the warehouses down Superior. In some ways, this is the best of both worlds ... all the capacities that MayDay pointed out might be rough to offer in the CBD, as well as the type of urban environment that might be more appealing to talent.

 

All of that being said, I do feel really badly for Brooklyn, which seems to have had a lot of bad shakes lately. And I can't help but think that these proposed relocations in Brooklyn could have serious implications for the city proper, and particularly for the stability of Old Brooklyn. Definitely can't imagine that this is necessarily a "good thing" for Cleveland proper.

if there was ever a case for regionalism... this is it.  Sure "I/We" would love to see an American Greetings downtown, but in all honesty for the most part it shouldn't matter where American Greetings is located, we should "all" prosper from having such a great company here... instead Beachwood's "growth" will come at Brooklyn's "demise".

 

Neat.  How many times will we screw ourselves before people wake up?

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

 

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

No, that's the warehouse district thread, they're talking public square, so... http://www.urbanohio.com/forum2/index.php/topic,14285.0.html

if there was ever a case for regionalism... this is it. Sure "I/We" would love to see an American Greetings downtown, but in all honesty for the most part it shouldn't matter where American Greetings is located, we should "all" prosper from having such a great company here... instead Beachwood's "growth" will come at Brooklyn's "demise".

 

Neat. How many times will we screw ourselves before people wake up?

 

Dam right.  Remember Office Max?  We can't afford any last minute deals.  Something needs to be done NOW between the State, whichever city AG decides to move to, and Brooklyn.  Tax sharing between the city of Brooklyn and the new host city, along with any and all tax incentives the State of Ohio can offer. 

I'm not sure about making AG pay taxes to multiple political subdivisions. 

 

Once more for the win... why do we need a city of Brooklyn?  Why can't that become Cleveland?  Here's a test of our true willingness to regionalize.  How hard will we fight to maintain a suburb that makes the west side of Cleveland into a narrow spindly thing on the map?  Does W117/Memphis really need to encounter four municipalities?  Let this be the end of Brooklyn, and Linndale as well.

 

I think it's extremely important to keep AG in the Greater Cleveland Area, and all things being equal I'd prefer they relocate downtown.  But I think growth and retention are more likely, in general, if we stop forcing each local company to float a separate city hall, let alone several at once.  This region has too much overhead to be competitive and we've just got to reduce it.

 

More broadly:  Regionalism means not sweating it when a company wants to move from the west side to the east side, which is how this AG story was originally framed.  Regionalism also means, much as it pains us, not sweating it when Eaton leaves downtown but stays in the area.  It also means not begrudging Beachwood their happy-ass "corridor."  Let people work where they want... and then make the case for tax sharing.

The tax sharing has been one of Frank Jackson's policies, which I am in favor of.  In the end, a company will locate where it will have the most advantages... unless we're talking about large corporate headquarters, of course.  If the AG is destined for 271, sharing taxes with Brooklyn would lighten the blow a bit. 

 

I agree 100% with your take on regionalism, however.  My take on it is that we're stuck with the system that we have (for now, though the county in effect voted for regionalism if they know it now or not) until all cities within the region share taxes and/or merge. 

It's probably silly of me to suggest we view our map as a clean slate, giving no credence to Brooklyn's pleas for continued existence.  But we're in a radically bad position and I think it will take radical thinking to get out of it.  Agreed, the county did vote for regionalism with Issue 6, and it will interesting to see where that starts taking us next year.

 

This preference for tiny fiefdoms is a constitutional problem in Ohio, and it will take a statewide issue to change it.  But, to that end, I really think it needs to be discussed in the context of stories like AG.  I believe it's time to recognize just how bad this fiefdom model is for business.  People tend to think of it on a residential services level but that's only one aspect.

I don't see how the county voted for regionalism with Issue 6.  Instead of 3 execs beholden to the county as a whole, we'll have one, and a council beholden to their specific ward and it's parochial concerns.  We've added new fiefs and given up none.

Ward representation at the county level may "soften the blow" for people losing their city hall at the end of the block.  To me that's the main thing... it's a step toward a countywide government that still accounts for local interests.  Also, the new system would seem to be cheaper on the whole.  It gets there partially by eliminating separate elections, and to some degree, separate offices.  Authority that was once diffuse will be consolidated, and there will be a one-stop buck-stop office we've never had before.  There is a general sense that this singular county executive will be easier for businesses to deal with than the slew of offices we currently have.

 

Under the current system, each of the 3 commissioners is beholden primarily to their ethnicity.  Seriously.  This rule is obviously unwritten, but very very real.  Ain't no balkanization like racial balkanization.   

 

Once more for the win... why do we need a city of Brooklyn? Why can't that become Cleveland? Here's a test of our true willingness to regionalize. How hard will we fight to maintain a suburb that makes the west side of Cleveland into a narrow spindly thing on the map? Does W117/Memphis really need to encounter four municipalities? Let this be the end of Brooklyn, and Linndale as well.

 

 

I don't disagree with you.  But as someone who grew up in Brooklyn, worked for the city for over five years, and still knows many people living there, I can tell you that residents generally look down on Cleveland and will not choose to become part of it.

 

Once more for the win... why do we need a city of Brooklyn?  Why can't that become Cleveland?  Here's a test of our true willingness to regionalize.  How hard will we fight to maintain a suburb that makes the west side of Cleveland into a narrow spindly thing on the map?  Does W117/Memphis really need to encounter four municipalities?  Let this be the end of Brooklyn, and Linndale as well.

 

 

I don't disagree with you.  But as someone who grew up in Brooklyn, worked for the city for over five years, and still knows many people living there, I can tell you that residents generally look down on Cleveland and will not choose to become part of it.

 

I just got that same line of thought from a co-worker who grew up there.  My answer:  look at the map of your "hometown."  If you choose to "look down upon" Cleveland, which surrounds you on 3 sides, you're certifiably insane.  We cannot allow insanity to continue running this town(s).  If we're going to save the day here, we will not be able to accomodate every little nugget of hate.

^^Too bad that in today's world Brooklyn IS Cleveland, no matter how much Brooklyn may look down on residents of Cleveland.  We're all in this same boat together.  It will take ALL of us to keep it from sinking.  If cities within this region including Brooklyn could do it alone, the region would fare better right about now (we should go to the regionalism thread for this). 

 

I guess we'll have to wait on what happens with AG.  Maybe a phone call or email blast to state politicians should be in order...

Another point my co-worker made is that Brooklyn also just lost Hugo Boss, and the reason is that in order to fund its I-hate-Cleveland city hall, Brooklyn recently tried to raise taxes on these two regional golden geese.  It might be that they refused to provide a tax break, I don't know.  Either way, Hugo Boss is gone and AG is up in the air.  We should all have a say on how employers of this magnitiude are treated... it shouldn't be the sole discretion of Brooklyn City Hall.

 

 

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.

AG has not produced cards in Ohio in many years.  The jobs are pretty much all white-collar, including a large creative/art studio.