Omnova Solutions Inc., the Fairlawn surfaces and laminates maker whose roots in Akron date to General Tire & Rubber Co., said Tuesday it will build a new headquarters in the Cleveland suburb of Beachwood.
Omnova said the Beachwood City Council and the Warrensville Heights Board of Education approved the headquarters project in separate meetings Monday night. Omnova said in a three-page news release the votes allowed the company to move ahead on its construction plans.
Omnova’s current headquarters is across from Summit Mall at Ghent Road and Smith Road.
The move was not unexpected. The polymer company confirmed publicly last month that it had been searching for a new headquarters site for nearly two years and that Beachwood was a likely location. The company said it is retaining its Akron-based technology center, factory and a Mogadore facility.
Fairlawn made a significant effort to retain Omnova, which provides about 4 percent of the city’s tax revenue. The city put together a proposal to relocate Omnova to Fairlawn Corporate Park.
Fairlawn and Akron-area officials expressed disappointment while noting Omnova will remain in Northeast Ohio.
Fairlawn Mayor Bill Roth said he had received a “courtesy call” from Omnova’s top executive two to three weeks ago telling him that it was pretty certain the headquarters were moving to Beachwood.
Roth said he was disappointed by the company’s decision.
“We gave a very aggressive offer to the company, which we gave in good faith to keep them here,” he said. “It was probably the most aggressive offer to retain a company in the city’s history. I believe we went as far as we could in good faith.”
Fairlawn put together a $5.2 million package of financial incentives in an attempt to keep the company. Fairlawn’s proposal called for a new headquarters near the new A. Schulman Inc. site at Fairlawn Corporate Park, off Cleveland-Massillon Road.
The corporate park, near Interstate 77, would have been an ideal spot for Omnova, Roth said. In addition, global companies such as Schulman, Veyance Technologies Inc. (the former Goodyear Engineered Products division) and Kumho Tires are in or close to Fairlawn Corporate Park, he said.
Beachwood was able to offer more in incentives because Omnova will represent all new tax money, Roth said. Fairlawn could only go so far in incentives because it was preserving existing jobs, he said.
Omnova’s current headquarters is owned by an investment group, Roth said. Area commercial real estate brokers have told him that leasing the building “could be problematic” and take some time because it is owned by a consortium, he said.
“Certainly, we’re disappointed they didn’t choose to stay, but we’re very pleased they will continue their investment in Akron,” said Dan Colantone, president and chief executive officer of the Greater Akron Chamber. “While they will move somewhere different, the talent pool will still be pulled from the Akron area.”
Akron Mayor Don Plusquellic said Omnova’s impending move is unfortunate for the Akron area.
“It’s one less company supporting the area,” Plusquellic said.
The move to Cuyahoga County will mean losing local institutional knowledge and, over time, employees will move closer to the headquarters, Plusquellic said. “They will become more engaged in their [new] community.”
Plusquellic said when city officials began hearing that Omnova was looking to leave Fairlawn, he called Roth to see what the city could do to help them.
Akron Deputy Mayor for Economic Development Bob Bowman also met with Omnova, said Plusquellic.
“We wanted to let them know we would work with them [and Fairlawn]. We have partnerships with JEDDS [joint economic development districts], if they wanted to move somewhere else close,” Plusquellic said. “We didn’t go in and say here, we’ve got a great property in Akron.”
The Omnova Solutions Foundation will still have a solid commitment to Akron, said S. Theresa Carter, foundation president.
“Two thirds of our employees still live in Summit County. We are still committed,” Carter said. The foundation has $24 million in assets and distributes about $1.5 million annually worldwide.
Carter said her offices will be in Beachwood since the new headquarters will be there.
Omnova said in August that no matter which location it picked, the company would continue to have a “strong presence” in Northeast Ohio.
Omnova noted it recently invested $9 million to refurbish its Global Technology Center in Akron and made improvements to its plants in Akron and Mogadore.
The company said that together these three Akron-area facilities employ nearly two-thirds of its Northeast Ohio workforce. Omnova said it has 110 full-time jobs at its headquarters and has 365 employees now at four sites in Northeast Ohio.
Omnova Solutions traces its roots to the former General Tire & Rubber Co. that was based at One General St. in East Akron. General Tire’s successor company was called GenCorp. Omnova was spun off from GenCorp in 1999.
Omnova said it expects to relocate to Beachwood late in 2014, before its lease expires on its current headquarters. It expects to break ground this fall on 8.5 acres being acquired in the Chagrin Highlands corporate community.
Reasons for relocating
The new 57,000-square-foot building, which can be expanded, will incorporate Omnova products and materials. The site has easy access to interstates, airports and more, the company said. If the economy and market remain stable, Omnova said it anticipates company growth could increase Beachwood headquarters employment by 70 people over the next five years.
“In the end, the Beachwood site proved to be the most compelling choice,” Omnova Chairman and CEO Kevin McMullen said in a statement.
The dollar value of the construction cost was not disclosed. But McMullen said in a statement that one reason for relocating was to reduce its annual operating costs.
“It was important to us to stay in Northeast Ohio,” McMullen said. “The Beachwood site is in a vibrant, expanding corporate setting where we can meet our criteria around retention, growth and cost. ... We believe it is the perfect spot to build our future.”
Omnova had sales of $1.1 billion in its 2013 fiscal year and employs about 2,300 worldwide.
Beacon Journal reporters Jim Mackinnon, Betty Lin-Fisher and Katie Byard contributed to this story.