Akron's not Cleveland — it's years behind its big sister in terms of downtown development and its bar and restaurant scene.
But that's no reason to downplay the Rubber City's ability to provide space and amenities for a corporate headquarters, its backers say.
Many in Akron, Ohio, were confused when Myers Industries Inc., a plastics manufacturer and tire service supply company, said it was picking up stakes and moving to the big city on the lake. They were sad to lose a company with an 85-year history in town, but more upset that Myers made it sound like Akron didn't have space for such a company.
"They made their decision, I'm sure, based on lots of different reasons. But globally, I agree with other folks — we have space for a corporate headquarters in downtown Akron," said James Hardy, chief of staff to Akron Mayor Dan Horrigan.
Hardy and others were struck when Myers vice president Kevin Gehrt told Cuyahoga County officials that the company "tried really hard to stay in Akron … (but) we just weren't able to find the right property with the right owner, or the metrics and financials to make it work."
Myers did not return a call or email requesting an interview to discuss its move.
The company is not small. Myers is listed on the New York Stock Exchange. But it's not huge, either. It had net sales of $547 million in 2017 and only needs 40,000 square feet of space for an initial 120 employees in Cleveland.
Commercial real estate professionals in Akron say the city would have no trouble finding space for a company of that size — and that Myers had numerous opportunities in Akron if it wanted to stay. Privately, at least five sources who spoke to Crain's said they believe the real reason for the company's move was that some of its executives, including CEO R. David Banyard, live in Cleveland's wealthy suburbs.
"There's an old adage in real estate that if you look at where the CEO lives, you know where the company is going to locate," said Tom Fox, president of NAI Cummins Real Estate on Akron's White Pond Drive.
Fox noted that he was speaking generally. He didn't work with Myers on a search of local properties. But like others, he disagrees there are no good places in Akron to locate a midsize corporate headquarters. Downtown, for example, there's the AES Building, he said, which is offering 65,000 square feet of Class A space on Main Street. That's something Hardy and others say Myers looked at, initially showed interest in, but then dropped.
He also noted that the city has land available right downtown for new construction, thanks to the closing of the Innerbelt highway, and said the city would have worked with any company seeking to build a headquarters there — a point on which Hardy concurred.
But developers note that the cost of new construction is currently extremely high. "The cost of OSB board (particle board used in construction) has doubled in the last few years," said Akron developer Tony Troppe.
Jerry Fiume, managing director at SVN Summit Commercial Real Estate Group in Akron, says there are still spaces in Akron that Myers could have used.
"I would thoroughly disagree with the CEO of Myers Industries," Fiume said when asked about Akron's ability to host the company. "There's East End (Stuart Lichter's development) in Akron, there are all kinds of options in downtown Akron. There's a building right here at Ghent in Fairlawn that's available," Fiume said.
Lichter's East End, along with the AES Building, were among the most viable locations for Myers, said real estate sources and Hardy. It's built around Goodyear's former headquarters in Akron and has 1.4 million square feet of space, luxury apartments, restaurants and amenities, including a theater.
"We clearly could have accommodated them at East End. They were not interested," Lichter said.
It's not as if the parties didn't have time to work on something. Hardy said the mayor began courting Myers about two years ago, after it hired Banyard.
"We had a good amount of notice. The mayor suspected it was time to pay a visit when the new CEO came in, because he was not from Akron and we'd been noticing that the C-suite members were less from," Hardy said.
At first, things went well.
"The CEO was very upfront that they wanted to find another location for their corporate headquarters and to their credit, at least in the beginning, they were very clear that they wanted to give Akron first shot at it," Hardy said.
The city worked for months to put together a package it hoped would keep the company in town, he said, including a $750,000 loan from the Akron Chamber's Development Fund to pay for improvements at the AES Building, $200,000 in workforce assistance from Summit County, $150,000 from the county and an offer from the city to take Myers' old building.
Ultimately, the company took a deal that included a $400,000 loan from Cuyahoga County and $2.6 million in improvements by the landlord of North Point Tower in Cleveland, Myers' future home. The company also expects the city of Cleveland to OK a $405,000 loan and grant package and is working with JobsOhio for more support.
But Akronites don't think the decision came down to a six-figure loan, or even building improvements. Many suspect Myers had made up its mind and was heading to Cleveland. They were still shocked.
"Honestly, everybody felt like 'We're good to go.' We thought in a matter of weeks we'd hear that the lease was signed. … We were not even aware there was a competition going on within the region," Hardy said.
Some say they understand Myers' reasoning, though. Cleveland does have more to do downtown than Akron at the moment — and Akron's promise of a vital downtown surrounding its big, mixed-use Bowery Project and other developments requires a wait and is no sure thing.
"There's no question that Akron doesn't have the downtown vibe that Cleveland does, and maybe that's what these guys are looking for," Fox said.
Akron can't let this slow it down, though, Hardy said. If anything, Myers' move to Cleveland only affirms the wisdom of the city's drive to develop its downtown into a mix of apartments, retail, restaurants and other amenities.
"Cleveland, you're right, it's about 10 years ahead of us. We've been stepping on the gas full bore to catch up and build out the Akron urban core — and this is why," Hardy said.
