Sherwin-Williams HQ+R&D will be in downtown Cleveland

The four finalists for Sherwin-Williams global headquarters and research & development facilities are all in downtown Cleveland. No other sites are reportedly being considered. In fact, the list may in reality be down to two finalists at this point (KJP/Google). CLICK IMAGES TO ENLARGE

Not only will Sherwin-Williams’ new headquarters plus research and development facilities be located in downtown Cleveland, but the coatings giant also has chosen its construction manager, learned the amount of its public incentives package and set its deadline for announcing its HQ+R&D site.

By the end of this month, SHW reportedly expects to announce the site for its new HQ+R&D, according to two sources. The approximately $1 billion, 1.8-million-square-foot HQ+R&D will be built adjacent to each other on whatever site is chosen and they will consolidate up to 6,000 SHW employees from throughout Northeast Ohio, Minneapolis and potentially other locations.

Among the existing, cramped and aging HQ+R&D facilities (Landmark Building and John G. Breen Technology Center), SHW totals 3,300 employees in downtown Cleveland. It has another 1,100 office and research employees scattered throughout Northeast Ohio that could be consolidated. Furthermore, about 1,600 jobs would be added through corporate growth or relocated here from other states, namely as a result of SHW’s acquisition of rival Valspar.

For “weeks,” SHW has been negotiating with the legal representatives of owners of up to four sites — and two in particular, two sources say. SHW will take the best deal offered by the property owners.

All four sites are in downtown Cleveland. SHW has received proposals for sites outside of downtown Cleveland but, according to sources, SHW is not negotiating the terms of acquiring non-downtown sites.

The four downtown sites identified by SHW and its project consultant Welty Building Co. are:

1. Jacobs/Weston: West of Public Square, a total of 8.93 acres of parking lots owned by the Jacobs Group and the Weston Group would provide the site for a connected, urbanized office campus. It would be fully integrated into the amenities of a major city’s central business district. The city and county also may be interested in this site for a new Justice Center complex, however.

An unofficial massing of a SHW HQ+R&D campus on the Jacobs/Weston lots west of Public Square (Geowizical).

2. Bedrock/SHW riverfront: The site includes about 2.7 acres of Bedrock Cleveland-owned land, between Huron and Canal roads and between the Carl B. Stokes U.S. Courthouse tower and the Tower City Center Riverview entrance. SHW also owns 9.2 acres between Canal and the Cuyahoga River. It is where SHW’s Breen Technology Center is located and where SHW was founded 153 years ago.

Outlined in blue, a SHW HQ+R&D campus site on land owned by Bedrock Cleveland and SHW could feature a tower of up to 40 stories or 500+ feet. For reference, the Carl B. Stokes U.S. Courthouse tower in the foreground is 430 feet tall. (Google).

3. Lakefront: While the site isn’t specifically known, it could be at the most recent location a Fortune 500 company had considered for an HQ. In 2008, Eaton Corp. proposed building a new HQ on 9 acres at the northern edge of the Flats East Bank district on mostly Cleveland-Cuyahoga County Port Authority-owned land. But SHW’s needs are potentially larger and might need to expand onto parking lots to the east or south.

The last time a major corporate headquarters was planned on the lakefront, it was proposed to be built north of the Flats East Bank development, shown here (Wolstein/Fairmount).

4. Flats South: A mix of land owned by Bedrock Cleveland and real estate investor Joel Scheer (as Flats South Cleveland LLC) totaling 14.5 acres may be in play but is probably a long-shot considering the extensive amount of infrastructure investment required to provide sufficient access.

Flats South Innovation District, as proposed at full build-out by Joel Scheer, was heavy on residential with less restaurant/ retail and even less office/live-work space (Cresco).

From all indications, the first two sites have a leg up on the other two. The first site, the Jacobs/Weston lots, is where SHW wanted to build a new HQ back in 2014-15 before the Valspar acquisition redirected corporate resources. SHW would add the R&D facility to the site, for which SHW is reportedly excited about building an urban campus marked by a roughly 40-story tower whose design would have no equal in Cleveland.

But if the city and county are intransigent about wanting to build the new Justice Center complex here, then SHW would turn to the Bedrock riverfront site. Two sources say SHW has been negotiating with Bedrock’s lawyers at Taft Stettinius & Hollister LLP for “weeks.”

Again, a stunning tower of up to 40 stories would be this site’s most prominent feature, but so would the riverfront which is so prominent in the Fortune 500 company’s long history. There, Breen Center would be expanded or replaced.

Notice that SHW publicly announced its HQ+R&D project on Sept. 12 although it solicited proposals starting in August. Its deadline for solicited proposals was Sept. 25. That suggests SHW wasn’t very serious about accepting proposals except for those that Welty was able to generate. And Welty generated only downtown Cleveland sites for SHW’s consideration, although unsolicited proposals were accepted in that two-week window.

Who will build SHW’s new HQ+R&D?

Goodyear Tire & Rubber Co.’s new Akron HQ was built near to where the company was founded in 1898. Welty Building and Gilbane Building Co. partnered on the project (Goodyear).

On Oct. 8, and through Welty, SHW chose Gilbane Building Co. as its construction management firm. Gilbane will work in a joint venture with Welty. It is a partnership that Welty and Gilbane have undertaken before on an HQ project in Northeast Ohio — the Goodyear Tire & Rubber Co. global HQ that opened in 2013 in Akron.

Welty also has significant political connections including former Lieutenant Governor Mary Taylor who now chairs Welty’s Finance Committee and is married to Welty President & CEO Don Taylor.

A campaign to retain the HQ+R&D facilities in Cleveland was formed under the leadership of Gov. Mike DeWine and overseen by retired Forest City Enterprises CEO Albert Ratner.

That campaign reportedly has amassed $200 million in pledged public incentives to SHW, a source said. Such an amount represents an insurance policy against any incentive package offered by other cities or states to pay what would have been SHW’s substantial relocation costs.

Sherwin-Williams’ headquarters and first factory occupied a growing area of land in 1891 along Canal Road and the Cuyahoga River where the Breen Center stands (SHW).

Gilbane was selected two days before a construction accident occurred at another site that Gilbane is managing — the 34-story Lumen apartment tower in Playhouse Square. No injuries were reported at what will be the city’s largest residentiial building. A safety review is underway.

Welty and Gilbane have several HQ credits on their resumes. Welty provided construction services at the Dealer Tire LLC HQ in Cleveland, Goodyear’s new HQ in Akron and the Timken World HQ in Canton. Welty also worked with Scheer on his Settler’s Point development in the Flats, which is home to Welty’s Cleveland office. Its main office is in the Akron suburb of Fairlawn.

Gilbane built the 20-story Ernst & Young Building at Flats East Bank in 2012, the last office tower built in downtown Cleveland. Gilbane also teamed with Welty on the Goodyear HQ.?Goodyear’s HQ reportedly impressed SHW CEO John Morikis.

Last week, NEOtrans reported that Morikis and his wife moved in March into a new 22,197-square-foot primary residence they built in Bay Village. It offered a reasonable argument that SHW’s HQ wasn’t going anywhere but within the Greater Cleveland area, despite media overreactions since SHW’s Sept. 12 announcement of plans to build a new HQ+R&D facility.

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