The publicly traded company announced the decision this morning during a meeting with employees at its longtime headquarters in Brooklyn.
View full sizeAmerican Greetings Corp. plans to move its headquarters to Westlake in 2014. The company envisions a 700,000 square foot project on 13 acres at the south end of Crocker Park.BROOKLYN, Ohio -- American Greetings Corp. has chosen a 13-acre site in Westlake for its new headquarters -- a decision that deals a blow to the city of Brooklyn but promises new prospects for retail and hotel projects at the mixed-use Crocker Park development.
The publicly traded company announced the decision this morning during a meeting with employees at its longtime headquarters in Brooklyn. Construction on a 700,000 square foot corporate headquarters project off Main Street at Crocker Park could start in 2012, and the company plans to move in 2014.
American Greetings made its decision after more than a yearlong analysis of factors including changes in the greeting-card industry, employee recruitment, local tax rates, the costs of a new or renovated facility, moving expenses, and the company's desire for offices that better fit an evolving business with a large creative shop.
"Our headquarters must reflect who we are now and what we want to be in the future," Zev Weiss, the chief executive officer, and Jeff Weiss, president and chief operating officer, wrote in a memo sent to employees this morning.
"We are confident that moving to Westlake is the right business decision for our consumers, our retailers, our associates, shareholders and American Greetings -- both now and in the future. And we are pleased that we are maintaining our commitment to Cuyahoga County and northeast Ohio by staying in the area."
The company, Brooklyn's largest employer, said it will work with the city, the county, the region's chamber of commerce and other organizations to find another owner, tenant or use for its current headquarters.
American Greetings is still working out the details of its new headquarters, but the project likely will cost more than $100 million. The company plans to move the equivalent of 1,750 full-time workers, with a payroll of $155 million, to an undeveloped site at the south end of Crocker Park.
To complement the corporate headquarters, developer Stark Enterprises plans to add 250,000 square feet of retail to Crocker Park, which already includes 515,000 square feet of stores and restaurants, 125,000 square feet of offices and 216 apartments. The Plain Dealer reported early this month that Stark Enterprises has hired a consultant to look at hotel prospects for the 75-acre site, where roughly 25 acres remain undeveloped.
View full sizeAmerican Greetings plans to build new headquarters on a 13-acre site at the south end of Crocker Park.The retail expansion will be a $100 million project, the developer said.
The Weiss family, which leads American Greetings, owns a minority stake in Crocker Park. The company has said that ownership interest would not affect the headquarters decision, which was made by a committee of independent directors.
"What I believe is that they felt this offers a context that is completely unique," said Steve Rubin, chief operating officer for Stark Enterprises. "I think they appreciated the context as an amenity package that just can't be replicated anywhere else. For us, it marries a creative workforce with a creative environment and place that we create. And I think that makes a very good marriage."
The American Greetings relocation and the expansion of Crocker Park will benefit from a series of city and state incentives. Under a deal announced earlier this year, American Greetings will receive a state package worth up to $93.5 million over 15 years.
That bundle includes a refundable job-retention tax credit tailored to companies that employ at least 1,000 people, agree to make $25 million in capital improvements over three consecutive years and received a written offer last year from another state. American Greetings also will receive a $15 million low-interest state loan, a $2.5 million grant to help with construction costs and a $1 million grant for infrastructure.
View New American Greetings site in a larger map
Roughly $41 million worth of infrastructure improvements -- mainly roads and parking garages -- will be required to support the American Greetings headquarters and additional retail at Crocker Park.
The city of Westlake and the Westlake City Schools are talking to American Greetings about a 30-year tax-increment financial deal that would tap increased property tax revenues from the development to pay for much of the public improvements. Under the deal, 75 percent of new property-tax revenues from the project would be diverted to pay for roads and parking.
And Westlake is offering American Greetings an income-tax credit, shaving half a percentage point off what would otherwise be a 1.5 percent local income-tax rate for 15 years. On a $155 million annual payroll, that credit would be worth approximately $775,000 a year -- or $11.6 million over the full 15 years.
"We were very pleased to play a part in American Greetings staying in this region, because it's such an important economic engine," said Westlake Mayor Dennis Clough, who found out about the company's decision on Thursday.
"I think it's great not only for Westlake but for American Greetings and Cuyahoga County," he added.