UPDATE: Sherwin-Williams isn’t commenting on this story and, after it was published, an internal e-mail was sent to company managers and department heads advising them to not comment if any media asks about the company moving its headquarters/research and development activities to new facilities.
It appears the stakes couldn’t be higher for the City of Cleveland as global coatings giant Sherwin-Williams Co. (SHW) prepares to issue a request for proposals from development teams seeking to build a massive new headquarters and research facility.
How high are the stakes? Perhaps as high as the 947-foot Key Tower or possibly more. That’s how tall the 153-year-old company’s new corporate headquarters could be, according to two sources. Or, considering that SHW’s executives like being within walking distance of the company’s research and development activities, it’s possible that the new HQ and R&D facilities could both move to Cleveland’s suburbs, taking nearly 4,000 good-paying jobs with them.
So the potential outcomes are an iconic new skyscraper for a growing multinational company in downtown Cleveland or the loss of thousands of jobs from a city trying to recover from decades of job losses.
Those are pretty monumental stakes.
It is apparent that SHW prefers to stay in downtown Cleveland. Since 2014, it has commissioned at least two concepts by an out-of-town architect for a new skyscraper on the Jacobs Lot on Public Square. It hired the world’s largest civil engineering firm to flesh out the concepts into plans that were nearly ready to be released to the public in late 2015. That was when SHW executives switched course and began the process of buying Minneapolis-based rival Valspar. The debt from that $11 billion acquisition should be paid down just three years from now.
More information is becoming available as the world’s biggest commercial real estate services firm prepares to circulate an RFP for a new HQ and R&D facility for the fast-growing coatings giant. It appears months of work by a century-old Cleveland-based law firm in drafting the RFP is nearing conclusion. The RFP is due to be released by the end of this year, multiple sources say.
Everything is on the table. SHW will listen to all offers. And SHW will get a lot of them as it seeks to build 1.6 million square feet of HQ space and R&D facilities, according to two sources.
Those space-needs figures are much higher than what was previously reported on this blog. SHW is growing so quickly and it needs to have the elbow room in its HQ to accommodate future growth for decades to come. Spread among six locations, SHW’s Cleveland-area employment is rapidly approaching 5,000 workers, roughly 80 percent of which are office/lab personnel; the rest are industrial. SHW has been headquartered in the Landmark Office Building, 101 Prospect Ave., since 1930 and in the Breen Technology Center, 601 Canal Road,?since 1948.
It isn’t publicly known how that 1.6 million square feet will be divided among HQ and R&D. But it appears that anywhere from 200,000 to 300,000 square feet could be for R&D. SHW’s existing R&D (currently in 140,000 square feet in the crowded Breen Center) space in Cleveland could nearly double in size.
SHW closed its Chicago lab and moved its employees into a former Valspar Applied Science & Technology Center, 1101 South 3rd St., near US Bank Stadium in downtown Minneapolis. That complex measures more than 170,000 square feet. Some R&D employees may stay in Minneapolis. Some may move to Cleveland when SHW’s new, larger R&D facility opens.
Even if all of Minneapolis’ R&D staff moves to Cleveland (which is unlikely), that leaves about 1.3 million square feet for SHW’s HQ space. For comparison, the 57-story Key Tower is 1.25 million square feet. If SHW decides to stay downtown, it might stick with past plans to build its HQ tower on the Jacobs lot on the west side of Public Square. That lot measures 50,000 square feet, but could be reduced to about 40,000 square feet if Frankfort Avenue and the Public Square sidewalk are widened as part of a plan to build a new super-tall here.
|The 1990-planned 63-story Ameritrust Center
tower on the Jacobs lot was to be built on a 12-
story-tall pedestal with 50,000-square-foot floor-
plates (same size as the lot itself), then narrow
significantly among the upper floors (KPF).
The base of Key Tower is only 28,000 square feet. Key, like many tall buildings, tapers inward as it soars higher. Its floorplates average 22,000 square feet. If a new SHW tower’s floorplates average close to that, it could be at least 60 stories tall.
Why would SHW consider the suburbs? Again, because SHW wants its HQ and R&D to be close to each other. And since R&D activities for a coatings company involve combustible materials, albeit in small quantities, it might need to be in a location where nearby land uses aren’t threatened by an accident.
But right next door to the Jacobs Lot is the largest swath of undeveloped land in the central business district — Weston Inc.’s Superblock. Currently a five-acre surface parking lot, the Superblock has lots of room and no pending plans for at least half of it. Weston’s most recent plan for the Superblock, a multi-building, multi-phase development, has faded away.
The northern half of the Superblock may be in play by Realife Real Estate Group. Through an affiliate 1350 W6 LLC, Realife purchased Stark Enterprises’ headquarters, 1350 West 3rd St. Apparently Stark’s planned move in a few years to a 24-story office tower in its nuCLEus development isn’t soon enough for Reallife. Whatever Reallife has planned for the north half of the Superblock is of a time-sensitive nature — so much so that Stark will temporarily move by the end of this year to a 28,000-square-foot space at 629 Euclid Avenue.
That still leaves the door wide open for the 2.6-acre southern half of the Superblock — the portion closest to the Jacobs lot. A 300,000-square-foot R&D facility in two buildings securely separated by 30 feet, each measuring 70 feet wide by 200 feet long (offering floorplates similar to Breen’s) and 11 stories tall could front Superior Avenue.
At this location, Superior is a 130-foot-wide right of way with no buildings across the street except for the corner of a hotel ballroom with windowless, concrete walls. Behind the R&D facility could be an 11-level, 3,000-space parking garage for SHW’s HQ and R&D workers along Frankfort Avenue, effectively shielding whatever is ultimately built north of Frankfort from the R&D structure.
But the R&D concerns may be overblown in the first place. After all, the federal government doesn’t consider SHW’s existing R&D facility a structural threat. If it did, it wouldn’t have built its 23-story, 430-foot-tall Carl B. Stokes Federal Court House Tower a mere 80 feet from SHW’s Breen Technology Center in 2003.
Even if SHW decides against putting an R&D facility in Cleveland’s central business district, other sites at the edges of downtown could be in play. One that has been discussed among real estate insiders is Scranton Peninsula. Developers of the 22-acre Thunderbird site have courted SHW, a source said.
There have been references shared in past articles in this blog that SHW’s corporate charter requires the company to keep its principal executive offices within one mile of where the company was founded in 1866 — basically where the Breen Technology Center is today. But a keyword search of corporate governance documents reveals no such requirement.
SHW’s articles of incorporation do require “the place where this Company shall be located and its principal business shall be transacted is the City of Cleveland in the County of Cuyahoga and State of Ohio.” It appears that amending the articles requires a vote by two-thirds of the company’s shareholders.
In the end, SHW’s consideration of Cleveland’s suburbs for its HQ and R&D spaces may have more in common with Swagelok’s recent facility search. In 2018, Solon-based Swagelok Co. issued an RFP for a new corporate headquarters and innovation center. While company officials claimed that it would consider building a new home anywhere, few expected Swagelok to leave the city where it was founded in 1965. Sure enough, Swagelok decided to stay put and build a new Solon facility for 400 employees now, and possibly growing to 1,000 in the near future.
SHW’s roots go 100 years deeper into Cleveland’s soil. To pull them out would be a tremendous blow to the city and to SHW as well. And it wouldn’t merely be a public relations stain on SHW.
Executives at Eaton Corp., which relocated its headquarters and 700 jobs from downtown Cleveland to suburban Highland Hills in 2013, are reportedly regretting their move. The reason is Eaton is having a difficult time luring young talent to their sprawling, disconnected office campus. Companies like PNC, NRP Group, BrightEdge, New York Life Insurance and more have moved offices downtown, while others like CrossCountry plans to move its HQ downtown and Progressive Insurance is considering growing its downtown presence.
A departure of SHW to the suburbs may not have a strong chance of occurring, but there is a chance. And it’s one that the city and downtown Cleveland cannot afford. On the flipside of that coin is a skyscraper that could become Ohio’s tallest and, when combined with an R&D facility, would help fill downtown’s largest parking crater with 4,000 jobs and urban vibrancy.
The stakes are monumental.