The company already has put its old headquarters complex, the historic Matchworks Building in Mentor, up for sale.
CLEVELAND, Ohio -- A publicly traded natural-gas distributor is shifting its headquarters from Mentor to downtown Cleveland, in a small deal getting outside applause from city economic-development officials and downtown advocates.
Gas Natural, Inc. recently signed a sublease at the chisel-shaped One Cleveland Center tower on East Ninth Street. The move, already under way, should be finished within a few weeks. The company has put its former headquarters complex, the historic Matchworks Building in Mentor, up for sale.
A new corporate address is yet another change for Gas Natural, which has shaken up its leadership roster in the face of regulatory scrutiny. In a wide-ranging and highly critical report released late last year, the Public Utilities Commission of Ohio raised questions about blurred lines between Gas Natural and its subsidiaries - and the impact of that fuzziness on the company's operations and its customers.
Separating the headquarters offices from local utility offices, which will stay in Mentor, will make the company look more transparent, executives said. Shedding the Matchworks Building will get Gas Natural out of the landlord business. And more central digs will give the company a higher profile and better access to attorneys, lenders and other downtown businesspeople.
"We're very excited," said Jim Sprague, the company's chief financial officer. "I'm a lifelong resident of Northeast Ohio. I've seen the good and the challenging pieces of Cleveland, and it's exciting to see where Cleveland is heading. We're glad to be part of that resurgence."
At the outset, Gas Natural will bring just 15 jobs downtown. Over the next few years, the company could add eight more headquarters positions. The city has approved a job-creation grant of up to $36,500 for Gas Natural, which will receive the money over a three-year period based on employment and payroll.
"It was 15 jobs, but it was important having a company designate Cleveland, Ohio, as their corporate headquarters," said Kevin Schmotzer, who oversees small-business work in the city's economic-development department.
Gas Natural owns publicly regulated utilities that distribute natural gas to 73,000 customers in seven states. Ohio is the company's second-largest market, served by Orwell Natural Gas Co., Northeast Ohio Natural Gas Corp. and Brainard Gas Corp. The holding company moved its headquarters to Ohio from Montana in 2008 as it reached east with utility acquisitions in Maine and North Carolina.
Gregory Osborne, who succeeded his father as chief executive officer in May, expects to keep chasing acquisitions and adding new customers. The company also has a hand in the pipeline business and natural-gas marketing.
In Ohio, Gas Natural and its subsidiaries are waiting for the results of an independent audit mandated by the public utilities commission. That audit report is set for completion this month.
Though the headquarters move was dictated, to a degree, by regulatory pressure, Gregory Osborne and Sprague pointed out that they didn't have to pick downtown. The executives canvassed suburban locations before being lured to the central business district by their real estate broker and the Downtown Cleveland Alliance, a nonprofit group that represents property owners.
Michael Deemer, who oversees business development for the downtown alliance, said that Gas Natural is following a procession of suburban companies that are moving downtown or considering satellite offices in the central business district. Most of those companies, though, hail from elsewhere in Cuyahoga County. It's more unusual to nab a business from an outlying county.
"Downtown no longer requires a whole lot of selling to suburban tenants," Deemer said. "It really is beginning to sell itself."
Gas Natural is leasing just under 6,000 square feet at One Cleveland Center. The 50,000-square-foot Matchworks Building, meanwhile, has been listed for sale with Cushman & Wakefield/Cresco Real Estate for $2.4 million.
"I think it's one of the unique properties that many people in Lake County know about," said Rico Pietro, a Cresco principal who is working with Gas Natural.
Roughly 15 utility employees will move to another location in Mentor.