Sherwin-Williams picks Cleveland sites for HQ, R&D facilities; announcement "imminent"

Sherwin-Williams' old and new sites
for its headquarters plus research &
development facilities are near to
each other in downtown Cleveland.
They will allow the growing firm
to consolidate its employees in fewer
and more modern sites (Google).
CLICK IMAGES TO ENLARGE

According to multiple sources, Sherwin-Williams (SHW) has made its decision on where to build its billion-dollar new headquarters buildings and new research & development facilities. The same sources, who spoke off the record because they were not authorized to speak publicly yet, said the announcement of the locations will be made in two weeks.

SHW will consolidate up to 6,000 office and research jobs from around Greater Cleveland and even around the country to downtown Cleveland. SHW currently has 3,500 full-time employees downtown already. The consolidation of up to another 2,500 jobs here will be a huge boon to downtown and surrounding areas.

The sites that the fast-growing global coatings firm has chosen for its HQ+R&D is both a surprise and not a surprise. The unsurprising part is that SHW's 1.45 million square feet HQ will be built on the parking lots owned by the Jacobs and Weston groups on the west side of Public Square.

The site for the 350,000-square-foot R&D facility is a surprise, however -- on Scranton Peninsula across the Cuyahoga River from SHW's existing John G. Breen Technology Center and SHW's existing HQ in the Landmark Building.

The property would reportedly be, at minimum, the 9.4 acres of land owned by Scranton Averell Inc. north of Carter Road and west of Fire Station 21, 1801 Carter Rd. Additional property may ultimately be added, however.

The R&D facilities alone could account for nearly 1,000 jobs. Not only would about 400 employees from the 140,293-square-foot Breen Center be relocated there, but also another 400 Valspar R&D employees from Minneapolis and possibly several hundred workers at SHW's Automotive and Performance Coatings groups currently located in Warrensville Heights.

The amount of consolidation may demand further property acquisitions from Scranton Averell south of Carter and east of the under-construction Thunderbird development. With SHW's neighboring investment, a remaining 4-acre parcel in the Thunderbird development may go quickly.

The fate of the existing Breen Center and the 9 acres on which it sets isn't known. It is assumed by local real estate investors that SHW will sell the Landmark Building, which also houses about 100,000 square feet of non-SHW office tenants. It could be converted primarily to a residential use.

View of Sherwin-Williams' HQ (center) of the last 90 years,
seen from across the Cuyahoga River from SHW's proposed
 new site for the coatings firm's consolidated research facility
on Scranton Peninsula (Iryna Tkachenko). 

The HQ facilities will reportedly be comprised of a roughly 30-story tower on the 1.17-acre Jacobs lot on Public Square, with shorter office buildings and hundreds of thousand of square feet of parking structures spread across the 5.65-acre Weston-owned parking lots. Construction would likely start early next year. Conceptual renderings will apparently be provided in SHW's public announcement.

SHW executives, according to sources, said they weren't interested in building an iconic tower to rival the height of neighboring Key Tower, a 57-story, 888-foot-tall, 1.3-million-square-foot skyscraper.

The reason is that a building that tall would greatly increase the cost of construction and there was sufficient undeveloped land available to spread out the HQ facilities over a wider area while still providing a dense, vibrant urban setting.

As one SHW executive explained when he was asked why the conservative company wasn't considering an ostentatious skyscraper on the Jacobs lot, "Our stock value is up to nearly $600 per share because we're conservative," he said.

SHW has been investing large sums to research the Jacobs and Weston lots in recent months, doing soil and groundwater surveying and testing, as well as cleaning up legal leftovers from prior uses.

For example, a "dead" street called Broom Court N.W. was recently vacated, located off West 3rd south of the former Stark Enterprises HQ. There is no information that Stark's old HQ, now owned by Realife Real Estate Group, will be part of SHW's HQ project.

And, last fall, Weston consolidated and relocated its parking leases from the so-called Superblock bounded by Superior and St. Clair avenues, as well as West 3rd and West 6th streets, to a smaller parking lot Weston owns at the northwest corner of West 3rd and St. Clair. Weston cleared out the leases to remove any encumbrances to their sale to SHW.

Geotechnical survey holes marked
in the pavement of the Jacobs Group-
owned parking lot on Public Square,
soon to be the site of SHW's new
headquarters tower (KJP).

The next-closest rival to winning SHW's HQ site was the Riverview phase of CityBlock, behind Tower City Center, two sources said. Dan Gilbert and his Bedrock Cleveland Inc. made a strong push that gave the Jacobs/Weston groups the most competition. But the location and relative ease of developing of those large, flat parking lots in the heart of the central business district were too attractive to pass up.

SHW's existing headquarters is in the 900,000-square-foot Landmark Building, 101 Prospect Ave. But it also has about 51,000 square feet of additional offices in the neighboring Skylight Office Tower. And SHW has expanded its office space to a 151,000-square-foot flex space at 4780 Hinckley Industrial Parking on Cleveland's south side.

SHW training facilities for executives, managers, sales people and store employees are scattered among Strongsville, Baldwin-Wallace University in Berea and Case Western Reserve University in Cleveland's University Circle area. All of these will be consolidated downtown, demanding an average of at least 100 more hotel rooms per night.

SHW was a strong, growing company before it acquired a coatings rival, Minneapolis-based Valspar Corp. in 2017. Since then, however, SHW has seen its revenues grow 42 percent from the end of the second quarter 2017 to the same period a year later.

Although SHW was entertaining offers from cities around the country for its new HQ+R&D facilities, it directly approached downtown Cleveland property owners for the HQ+R&D.

The only non-downtown property owner SHW reportedly approached was the DiGeronimo family who is developing the former Veterans Administration Hospital in Brecksville. But that was only for the R&D facility, not the HQ, sources said.

END