Eaton Gains Incentives for $170M New HQ

The company, now based in Downtown Cleveland, had been considering another site in the city, in the planned $500-million-plus, mixed-use project called the Flats East Bank. However, the company two months ago announced its rejection of that site and the selection of the Chagrin location in the suburbs, off Interstate 271, as the preferred property.

A total of $7 million was awarded to 10 companies to help create and retain jobs, said Lt. Gov. Lee Fisher. "Ohio's portfolio of innovative companies will expand as a result of their ability to research, develop and commercialize products and processes," Fisher said in a statement.

For the Eaton project, the state has also offered a $17 million, 75% job creation tax credit for 15 years and a state income tax credit of up to $30 million for 15 years. The Cleveland-Cuyahoga County Port Authority, which would purchase the property for the company and lease the space, has been offered a direct loan for $15.5 million, and the Ohio Enterprise Bond Fund has promised a loan for $8.8 million, says a spokesman for the Ohio Department of Development.

The state spokesman tells GlobeSt.com that the main concern was keeping the large automotive supplier in the state, regardless of the location. "We're very happy to have a company like Eaton. There's the significant presence of the company, the name recognition, the technology development that comes with the firm…they're a worldwide company. Economic development begins with retention and job creation, and keeping them in Ohio and Cuyahoga County was good enough for us."

Eaton has not said when it would start construction. In a recent statement, Alexander Cutler, chairman and CEO, said the company would not move to a new location before mid-year 2011. "We had not been under any particular pressure to relocate because our lease here at Eaton Center runs for the next several years and was renewable," said Cutler in the statement. "We are working with the potential developer, the Richard E. Jacobs Group, to determine if we can reach a mutually advantageous agreement."

Though Cleveland won't keep the firm in its limits, it will still benefit, as it owns the Beachwood property. The specific location is north of Harvard Road and west of Richmond Road. Cleveland Mayor Frank Jackson, in a statement, said the company's move will still provide Cleveland with revenue, in a deal that gives the city 50% of the income taxes generated by Eaton, as well as the proceeds from the sale of the property.

Flats East Bank LLC, a venture of Fairmont Properties and the Wolstein Group (led by Developers Diversified Realty CEO and board chairman Scott Wolstein), said in a statement that its project will still move forward without Eaton. "This project was announced before Eaton expressed any interest in the site, and it will proceed without them on the exact course we have been pursuing for the last three years – to create a dynamic new mixed-use neighborhood along the riverfront. We expect to make some exciting retail tenant announcements in the near future," said company officials in the statement. The officials also said they have been overwhelmed by the demand for office space, including from companies from outside Ohio, but no specific firms were mentioned.

Eaton, with 82,000 employees around the globe, has been on the development move lately. It also recently opened an expanded Electrical Research and Development Center in Suzhou, Jiangsu Province, China; and purchased a new Asia Pacific headquarters building in the International Business Park of Changning District, Shanghai, China.