By adding its logo last week to this building in Cleveland’s University Circle, Canon Healthcare visually marked it territory — a site where it could expand south and east with new research and manufacturing facilities in the coming years (Dwain Ross II, Photographer, Untapped Visuals). CLICK IMAGES TO ENLARGE THEM.
Ohio’s largest metro competed for Canon
When the Ohio Tax Credit Authority on Monday approved financial assistance to Canon Healthcare USA Inc. for its new headquarters in Cleveland, state officials revealed that Ohio wasn’t the only state that was focused on the Japanese-based imaging company. NEOtrans also learned details of Canon’s property lease with the Cleveland Clinic Foundation which helped secure the new HQ.
The Ohio Tax Credit Authority approved a 2.842 percent, 10-year tax credit for Canon Healthcare USA for the creation of $7.5 million in new annual payroll as a result of the company’s project in Cleveland. The city of Cleveland is also providing to Canon Healthcare a five-year, 50-percent payroll tax credit on the 2.5 percent income tax withheld by Canon.
As part of the tax credit agreement, the tax credit authority, which is part of the Ohio Department of Development, requires the company to maintain operations at the project location for at least 13 years, according to a scope of work for the project, requested by NEOtrans.
“Ohio is competing with Illinois, Massachusetts, and Pennsylvania for this proposed project,” said an Ohio Department of Development spokesperson. “State support will help ensure the proposed project moves forward in Ohio.”
Canon Healthcare is a manufacturer of advanced medical imaging systems. Products include MRIs, diagnostic ultrasound systems, and x-ray machines. The company is a subsidiary to Canon, Inc. and was formed in 2023 to focus on U.S. healthcare operations. The effort to land Canon here has been in the works for more than three years.
At the southeast corner of Cedar Avenue and East 105th Street in Cleveland’s University Circle district is the new headquarters for Canon Healthcare USA. It is set on land that is owned by Cleveland Clinic for which Canon signed a lease two weeks ago (Canon).
The proposed project by Canon Healthcare in Cleveland includes the acquisition of a 2018-built, 41,630-square-foot facility at 10500 Cedar Ave. that was owned by an affiliate of Geis Companies. There, it will focus on the production of imaging machines for cardiology, neurology and musculoskeletal medicine, state officials said.
Canon Healthcare expects to create 50 full-time equivalent employees generating $7.5 million new annual payroll by Dec. 31, 2028 at its new location. In addition, the company will claim the tax credit on Ohio employee payroll generated at the project location in excess of the company’s baseline payroll at the project location.
In a Jan. 7 letter, city of Cleveland officials supported the Ohio Tax Credit Authority’s passage of incentives to support Canon locating at the former IBM Explorys building at Cedar and East 105th Street. The site is also in the state-designated Cleveland Innovation District where it announced its intentions four years ago to focus job-creation incentives.
While the purchase price of the new HQ building was not disclosed, Canon said will invest a total of $33.65 million to buy and retrofit the building. The 2.3 acres of land on which it sets will remain in the ownership of the Cleveland Clinic Foundation.
According to Cuyahoga County property records, Canon on Feb. 13 took over and terminated Geis’ 50-year ground lease of the property. The lease was begun in 2017. The Geis affiliate which owned the building and had the lease with the Clinic was 105th Cedar Partners LLC. Alfred Geis was its manager, public records show.
In Mayfield Village, the newly opened Canon Medical Academy USA and Canon affiliate Quality Electrodynamics, LLC are located in this building on Beta Drive. Last year, Canon renovated 14,662 square feet in this building for its training center. This photo is from 2022 (Google).
As Geis conveyed its leasehold interest in the property to Canon, Canon secured a new 50-year ground lease with Cleveland Clinic on Feb. 11. The lease has an option to extend it for another 50 years. No dollar amount was associated with the public record, only “good and valuable consideration.”
Signing the lease for Canon Healthcare was Vice President Tsuneo Imai. The signatory for the Cleveland Clinic was Executive Vice President and Chief of Operations William Peacock III, the public record shows.
As part of the deal, Canon or any entity on a sublease will not engage in the operation of a hospital, primary care facility or provision of other heath care services that would have a “material adverse economic effect on landlord’s business,” the lease reads.
There are also a large number of other activities and uses which cannot take place on the land at 10500 Cedar. They include prohibitions against operating a theater, spectator sports or entertainment viewing activities, restaurant, massage parlor, car sales, and others.
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