Goodyear to Stay in Akron For Long Run - Tire Review Magazine

Goodyear to Stay in Akron For Long Run

(Akron Beacon Journal) Goodyear executives anticipate the global tire company’s headquarters will remain in Akron for a good, long time.

At a minimum, 20 to 25 years. At the upper end, 75 years remains conceivable.

As for specifically where, Goodyear expects to stay put in its current aging headquarters on East Market Street for as long as five more years.

The deep worldwide recession and related credit crunch have delayed construction of a state-of-the-art headquarters on land next to the company’s tech center on Martha Avenue as part of a $900 million East Akron redevelopment project announced with great fanfare in December 2007. The initial public-private financing agreement called for Goodyear to lease its new headquarters for a minimum of 20 years, followed by options to renew in five-year increments.

The original game plan called for the new headquarters to be finished by the end of 2010. The floundering economy put an end to that timetable. And now the developer, facing major problems getting financing, has flip-flopped the concept to begin working on renovating the current buildings first, followed by construction of the new headquarters.

Goodyear is now working on a new, interim five-year agreement with California development company Industrial Realty Group, also called IRG, and its founder and president, Stuart Lichter.

“The ultimate goal is the new headquarters and the 20-year agreement,” said Rob Whitehouse, Goodyear’s director of corporate communications. “This five-year agreement is a temporary agreement that will keep us in the older buildings while [Lichter and public officials] work out the financing to get the new buildings built. … By agreeing to this five-year, stop-gap measure, we’re indicating how dedicated Goodyear is to this project. We want this to happen. We want Goodyear headquarters to be here.”

And it’s in that five-year stop-gap agreement, along with related complicated financial arrangements being finalized between Lichter and city and Summit County governments, where the company says there might be confusion over how long it and 3,000 employees intend to stay here.

Goodyear anticipates it will soon sell its current campus to Lichter and lease it back for five years. The deal is expected to buy Lichter time to get private financing in place to complete the rest of the project, including putting up the new global and North American headquarters complex along with a hotel and retail development across the site off Martha Avenue.

Akron and Summit County governments recently agreed to help Lichter’s company, IRG, get $17.2 million in bond funding through the Summit County Port Authority to get the project started and purchase the Goodyear properties. IRG will pay back the interim public funding from income it gets from its lease with Goodyear.

Lichter said the new agreement is all but signed and executed.

“We’re going forward with the framework with the city and county,” he said.

Lichter said he continues to pursue private financing for the rest of the project, and said there are signs that credit markets are getting a little bit better.

“We’re working on this constantly,” Lichter said. “There is no choice but to work through it.”

Whitehouse said the interim five-year lease agreement between Goodyear and IRG should provide enough time for the entire project to get financing.

“The five-year agreement gives the developer enough time to start doing some work in these old buildings while at the same time continuing to work on getting the credit that he needs to build the new buildings,” he said.

Remaining in place will not affect how Goodyear headquarters employees and executives do their work or have an impact on such things as the NASCAR tire production facility behind the Martha Avenue tech center, he said.

The five-year contract is not finalized yet, Whitehouse said. “We in principle agreed to it.”

Once Lichter and the various public entities agree on the contract, Goodyear will also sign, he said.

“We’d like to have it as soon as possible. We’d like to have it this spring, early summer. The sooner the better,” Whitehouse said.

When the new building construction is finished, the 20-year lease agreement between Lichter and Goodyear will kick in, with options to renew leases afterwards five years at a time up to 75 years total, Whitehouse said.

“We want the long-term deal. We want to be here,” he said.

Lichter earlier this year said he needed to start renovating Goodyear’s existing buildings before starting to build the company’s new headquarters.

Lichter plans to find new uses, including housing, for the old Goodyear buildings once they are vacated. (Tire Review/Akron)

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