From today's Sun-Times...
OfficeMax to create HQ here
August 16, 2005
BY ERIC HERMAN Business Reporter Advertisement
OfficeMax plans to create a new, 1,500-employee headquarters in the Chicago area, merging its Itasca corporate functions with retail offices to be relocated from Ohio, the company said Monday.
The nation's No. 3 office supply chain will close a retail command center in Shaker Heights, Ohio, that was once its corporate headquarters. Meanwhile, OfficeMax plans to add 700 jobs to existing operations in Illinois, where it already employs about 800. It will receive $20 million worth of incentives from the state for doing so.
"It really comes down to overall cost savings, and where we can have the best overall access to talent and retention," said Tom Russell, OfficeMax's senior director of marketing.
Russell said the streamlining seemed logical after the July 2003 deal that created OfficeMax in its current form. In that deal, paper products giant Boise Cascade bought Ohio-based OfficeMax for $1.1 billion. Boise later sold its paper business, changed the remaining company's name to OfficeMax and relocated to Itasca.
Since then, OfficeMax's senior corporate staff has worked from its headquarters in the suburbs, while retail operations remained based just outside Cleveland. About 600 retail managers and other staffers work at the Shaker Heights facility. Most will be offered the chance to relocate to Chicago, Russell said.
According to Russell, OfficeMax considered moving the headquarters to Ohio. The search for a consolidated headquarters "got serious" in the second fiscal quarter this year, he said.
The state incentive package, administered by the Department of Commerce and Economic Opportunity, includes $17.5 million in corporate income tax credits through a program called Economic Development for a Growing Economy. The program gives tax credits of 3 percent of the total pay for newly created positions, and 1-1/2 percent of the payroll for retained jobs. If OfficeMax brings less than 700 jobs here, it will not receive credit for them, said DCEO spokesman Brendan Moore.
The state also promised OfficeMax a $1.5 million large-business development grant and $775,000 in job training funds.
"We've been working with them over the past three or four months, talking about Illinois versus Ohio," said DCEO director Jack Lavin.
OfficeMax's commitment makes it the fourth Fortune 250 company to consolidate its headquarters in Illinois in the last year, he said.
"This is a good example of what we're doing, and Gov. Blagojevich's strategy to bring jobs to Illinois," Lavin said.
While activists often deride incentives as "corporate welfare," Jeff McCourt of Good Jobs First-Illinois, which has criticized such deals, said the OfficeMax package did not seem overly lavish.
"We think tax credits are in general harder to monitor. But at least the EDGE credit is directly tied to the number of jobs being created," he said.
OfficeMax executives and state officials said the company had not picked a site for its consolidated headquarters. The company has hired the real estate firm Staubach Co. to help it find a location.
The past year has been difficult for OfficeMax, whose shares are near their two-year low. Earlier this year, the company revealed employees had falsified $3.3 million worth of rebates allegedly owed by suppliers.
OfficeMax shares rose seven cents in Monday's trading, closing at $27.44.
The FOURTH company to consolidate HQ operations here in the past year!!! That is awesome. What does that list include aside from Sara Lee?
I imagine OfficeMax is committed to the suburbs... Damnit, a 1,500 employee operation needs about 400,000 square feet, which could do wonders to rescue 190 South LaSalle, the Aon Center, or the IBM Building from their low occupancy rates. (I'm assuming Kirkland and Ellis is moving from Aon to 300 North LaSalle.) OfficeMax could anchor the IBM Building and have it renamed in its 'honor.'> |
0 comments:
Post a Comment