Sherwin-Williams seeks Bedrock site for R&D

A conceptual massing of Bedrock's CityBlock riverfront
site, viewed from the vicinity of Sherwin-William's (SHW)
Breen Technology Center along Canal Road. This is where
SHW is now focusing its efforts to secure land for its new
research center. Also proposed to be in CityBlock's river
front is a hotel, apartments and a significant amount of
public greenspace along the Cuyahoga River, aided by
the removal of part of Canal Road (Vocon/3rd party).
CLICK IMAGES TO ENLARGE THEM

It seems that Sherwin-Williams' (SHW) new research and development (R&D) facility may not wander far from home after all, according to three high-level sources who asked not to be identified.

In light of SHW executives wanting the new R&D facility to be built as close as possible to their company's new headquarters (HQ), the global coatings giant is reportedly in negotiations with Bedrock Cleveland and its lawyers at Taft Stettinius & Hollister LLP to secure land for its R&D site.

That site, which SHW had previously considered as the runner-up for its expanded and consolidated HQ facilities, is located between Tower City Center and the Cuyahoga River. It was previously considered for Bedrock's phase two casino but Bedrock has since been exiting the casino business.

There, on 19.6 acres of land it owns, Bedrock plans to build the riverfront phase of its CityBlock development featuring a mix of offices, a hotel, apartment towers and possibly SHW's R&D facility.

The first phase of CityBlock is due to start construction this year with a $110 million re-purposing of the existing Avenue portion of Tower City Center as a business incubator. Vocon was hired as Bedrock's architect for CityBlock. It's the same firm that SHW hired for its HQ+R&D project.

The proposed R&D site is next to SHW's existing, primary Cleveland R&D facility, the John G. Breen Technology Center, 601 Canal Rd. Breen, comprised of a 1948-built lab and a 1993-built addition, measures 140,000 square feet and houses about 400 jobs, according to SHW.

SHW has already chosen its HQ site. It has a purchase agreement with the Jacobs Group to acquire the 1.17-acre parking lot on the west side of Public Square for its new HQ office tower. And SHW has a purchase agreement with the Weston Group to acquire the 5.65 acres of parking lots west of the Jacobs lot for potentially shorter office buildings and hundreds of thousand of square feet of parking structures. SHW has spent a great deal of money on the Jacobs/Weston lots in recent months.

The office component of SHW's new HQ would total up to 1.45 million square feet, consolidating as many as 5,000 jobs compared to 3,500 SHW HQ jobs downtown currently. Construction could start early next year.

An overview of various HQ+R&D downtown
Cleveland sites for SHW, be they current, pro-
posed or discarded (Google-KJP).

Compared to the new HQ, finding a site for the R&D facilities has been more problematic for SHW. Sources said the R&D search has delayed the public announcement for both the HQ+R&D.

A public announcement by SHW may be made in mid-February, assuming the company secures the site for its R&D facilities by then. Those facilities would measure 350,000 square feet and consolidate about 1,000 research jobs from several locations in Greater Cleveland and Minneapolis.

A joint venture of the Welty and Gilbane building companies, incorporated last October, could not secure for SHW approximately 9.4 acres of apparently polluted land on Scranton Peninsula owned by Scranton Averell Inc. Welty/Gilbane JV, LLC is leading SHW's efforts to build its new HQ+R&D facilities. Welty/Gilbane previously joined forces in building Goodyear's world HQ in Akron.

The Scranton Peninsula site had been favored by SHW because it was near the new HQ site, offered SHW the opportunity to build the R&D horizontally in a campus-like setting and provide less expensive surface parking (vs. structured parking).

Those efforts shifted to the other side of the river, next to where SHW was founded in 1866. For a large, global, Fortune 500 corporation, SHW is surprisingly sentimental about its history. That includes where SHW was founded and the business principals of its founders that guide the firm to this day.

But while a vertical headquarters might easily fit onto Bedrock's riverfront site, a horizontal R&D "campus" might not. The reason is that Canal Road divides the SHW and Bedrock properties, giving them less elbow room.

So discussions have reportedly been underway for weeks between city, state and Bedrock officials about vacating a portion of Canal Road to provide more depth to the site and potentially integrate the riverfront with a public park, boardwalk and/or walkway, two sources said. The discussions also involve utilizing the existing, 9.2-acre Breen site and whether Bedrock and/or SHW can expand onto that property.

In 2007, prior to Bedrock Cleveland buying Tower City
Center, or planning CityBlock or the phase two casino
before it, Forest City Enterprises offered to build the new
convention center as the Riverview Phase of Tower City
Center. It included building the center over Canal Road
and a station for the Cuyahoga Valley Scenic Railroad.
The convention center was rebuilt below the malls (KA).

The reason why city and state officials are involved in the discussions go beyond deciding whether to vacate Canal. There's an increased cost due to the topography and logistics of the Bedrock site that city and state funding would need to defray to make this location economically competitive with less costly yet less-connected alternatives.

Unlike the rejected Scranton Peninsula site that is open and flat, the Bedrock site involves a nearly 50-foot descent from the Tower City parking lot between Huron and Canal roads to the Bedrock parking lot between Canal and the river.

But if SHW chose that site for development of its 1,000-employee R&D facility, it would bolster Bedrock's CityBlock plans for the rest of the riverfront. And Bedrock has significant capital -- potentially $843 million -- to deploy from the recent sale and leaseback of its Cleveland-area casino properties.

CityBlock would also greatly enhance physical interaction between two of downtown's prime public spaces -- the riverfront and Public Square, as well as between SHW's HQ+R&D. Employees could walk between them using outdoor sidewalks or mostly indoor passageways via Tower City Center.

CityBlock was originally proposed as an incubator for digitally based technology start-up firms. Now, its purpose is being broadened to all start-ups. But the original purpose is ironic in light of SHW's R&D facility possibly being part of the riverfront phase. Why is it ironic?

Market research firm Frost & Sullivan recently issued a report showing how the use of digital technologies is transforming the coatings industry, including R&D, sourcing, marketing and even using digital itself as an alternative to traditional paints and coatings.

Lastly, SHW apparently is no longer giving serious consideration to locating its R&D facility in Brecksville. Breckville Mayor Jerry Hruby informed Crain's Cleveland Business reporter Stan Bullard that he hasn't had any conversations with SHW or anyone working on its behalf about locating a SHW facility in his suburb.

END