Huntington Bank has agreed to keep 1,200 jobs, a regional headquarters and millions of tax dollars in Akron while it closes 70 branch locations in America, 30 in Ohio and two in Summit County.
The closings are part of a broad consolidation plan. Starting Jan. 1, a Norton branch at 4160 S. Cleveland-Massillon Road and Goodyear Heights location at 840 Brittain Road will shutter. "These branches have an existing Huntington branch in close proximity that can support customers of the consolidating offices," Emily Smith, a Huntington spokesperson, said in an email.
Earlier this month, Akron City Council approved a development deal with the Columbus-based bank. In exchange for more public improvements around Cascade Plaza, the bank would guarantee that Akron would maintain 1,200 jobs and $63 million in payroll or what was paid in 2017, not counting “one-time bonuses” and “termination pay” for 179 employees. The five-year deal negotiated by Mayor Dan Horrigan's economic development team also incentivizes job creation after branch locations in New Franklin, Lakemore and two in Akron closed last year.
Huntington, which has set up philanthropic funds for the community since moving here, acquired Akron-based FirstMerit in 2016 for $3.4 billion in stock and cash. Since 2013, when FirstMerit signed the last five-year deal to keep 2,000 jobs in Akron, employment has fallen by at least 40 percent citywide.
Should Huntington increase payroll or add to the 1,200 jobs, the city would pay the bank 28 percent of the taxes collected from those additional workers as a "Growth Incentive Distribution." Proceeds from voter-approved income taxes for new schools, police, fire and roads would not be touched.
At the minimum, the deal would guarantee $7.875 million in income taxes on the 1,200 baseline jobs over the life of the five-year deal.
For its part, the city has agreed to spend up to $1 million by the end of 2019 to fix lighting in the Cascade Parking Deck. The repairs were scheduled years ago in the 2013 deal struck with FirstMerit. The new agreement with Huntington also credits work done on the plaza and commits the city to connect the courtyard with sidewalk and street improvements on Main Street, including upgrades to the stairs and wall overlooking Quaker Street and new public signage that replaces FirstMerit with Huntington.
Huntington said it would get back to 1,200 jobs in the city by the end of 2017. Smith was not able to provide how many people the company currently employs in Akron.
It’s never been clear whether FirstMerit hit the jobs numbers it promised in the first deal. Questioned then, city staff said the older deal was structured in a way that stopped the city from demanding proof that FirstMerit was meeting jobs commitments. FirstMerit and its successor, Huntington, would have qualified for a 1 percent income tax reduction, if they had. But there's no record of the banks ever trying to collect that discount, according to Annie McFadden, deputy chief of staff for Mayor Horrigan.
The jobs agreement Horrigan struck this month gives the city more teeth. “Huntington shall provide the City all data, financial or otherwise, required for the City to perform an annual review,” the agreement says. Huntington can mark some of that material as confidential and not subject to public records requests.
The first five-year deal committed the city to $4.2 million in improvements. The city borrowed from FirstMerit to fix up Cascade Plaza for $3.3 million, plus $1.3 million for LED lighting in two of the five levels of the parking garage below what is now the Huntington building. Lighting in the other three levels had already been fixed. The new deal says the city must finish the job.
The current agreement has nothing to do with the financing for the nearby Bowery Project, McFadden said. And, soon, the city should know if Cascade Plaza’s newest tenant is keeping its new promises. “Huntington Bank has complied with all aspects of the agreement thus far and will be reporting the updated numbers about 60 days into the new year,” McFadden said.
According to annual reports filed with the U.S. Securities and Exchange Commission, Huntington's net income grew 10 percent in 2015 and 3 percent in 2016. In 2017, the year after buying FirstMerit, income shot up 67 percent from $712 million to $1.2 billion — the highest annual growth rate since 2011.
Smith said despite the 30 location consolidations in Ohio, Huntington would still have more than 420 branch locations — more than any other bank in the Buckeye state. "Huntington regularly reviews its distribution network to ensure our mix of branches, ATMs and online and mobile banking meets our customers’ evolving needs. In making these adjustments, branches were reviewed for customer traffic patterns, transaction trends and proximity to nearby Huntington branch locations," Smith said.
"Our priority is to help our customers’ transition to a new location and to offer more extensive digital and mobile capabilities to meet changing customer channel preferences," she continued. "Savings from the branch consolidation will be substantially reinvested in these increasingly-used channels."
Reach Doug Livingston at 330-996-3792 or email@example.com.