Goodyear's SLB Part of $900M MXD Project

The tentative deal, announced Wednesday and approved by Goodyear's board of directors, requires IRG to buy the company's buildings, including the current seven-story headquarters and an adjacent six-story hall. Most of the buildings on the property, founded in 1898, are many decades old. On the south side of I-76, the developer is going to build Goodyear a 450,000-sf office headquarters and renovate the hall, as well as construct at least 1.2 million sf of retail, with some big box and lifestyle center-style properties. The south side will also feature some property for a future flex office and industrial park. The north side holds the company's current headquarters. When the new main office is complete, IRG will renovate the existing buildings into 800,000 sf of spec office, apartments and some retail.

Stuart Lichter, president of IRG, has been working development deals across Ohio for years, and tells GlobeSt.com that he knew Goodyear was thinking of leaving its home. "We wanted to preserve Goodyear in Akron, but we knew the property was totally obsolete, they had a real problem retaining and attracting people to work there," Lichter says. "It's in the middle of nowhere, with no restaurants, no hotels, nothing. They were going to leave."

So Lichter, along with city and state officials, began working with the company on a plan to stay. A Goodyear spokesman says building age was part of the problem, but also, there was too much space. "These facilities are just so much larger than we need now," the spokesman tells GlobeSt.com. "The company doesn't manufacture tires here anymore, we just don't need that level of space for support staff. We needed to rightsize into a new building, while also getting something state-of-the-art." He says that public reports that the firm was looking to move to North Carolina, Virginia or Arizona are completely false. "While Akron has seen some companies move out, we would not entertain the idea of looking around," the spokesman says. "We always said we were going to focus on this [IRG's] proposal, we didn't review or meet with anyone else. We've been here 108 years, we're very proud of our heritage and history."

However, a high-level state official said he believes there was some out-of-state talk by the company. While Lt. Gov. Lee Fisher lauded the IRG deal Wednesday, he tells GlobeSt.com that the state always knew there was a competition afoot. "They said they wanted to give Ohio a chance to compete, but it became clear that there was at least two other states that had put together proposals."

Fisher said Ohio has to fight hard to keep companies today, and has adopted a business-friendly attitude, offering low taxes and regulations, and a highly supportive state and local government. "It's clear that global companies like Goodyear can pick up and move and do business anywhere in the world. It wasn't true 10 to 15 years ago, but it is today," he tells GlobeSt.com. "We looked at this as a job retention project, keeping jobs, and we're fighting hard to win jobs for the state. Look at Amylin Pharmaceuticals, which is staying with a $400-million investment in Butler County; a multi-state Continental hub in Cleveland, and the coming Tata Consultancy North American delivery headquarters in Miami Township."

Goodyear plans on signing a 20-year lease for its new facilities, with 11 five-year renewals as part of the contract. Lichter says work will begin in 2008 on the new hotels and headquarters, with construction on the retail portion not far behind. "The retail will likely be done in a couple phases. The north side we can't start until the headquarters is complete, which will be in 2010," he says. There's been a tremendous amount of retail interest in the property already, Lichter says. "It's a great site for retail, with two exits on one side of I-76 and three on the other side. It will be a great recreation of the entire neighborhood," he says.

The deal is going along to plans by Akron officials to declare the surrounding area a blighted zone, in order to use eminent domain and garner incentives for the rebuild. This summer, the city council designated the area as the Eastgate Urban Renewal Area. Deputy Mayor Bob Bowman tells GlobeSt.com that the city has almost taken over 20 acres to donate for IRG's project. "We've not had to take any land yet," he says. "We've now acquired 18 of the 21 parcels, and one of them is in foreclosure, so we feel that we'll get it. Two are holding out, but everybody's still talking, so it looks encouraging."