$170 Million to move to the Suburbs?

   Cleveland’s Eaton Corporation is asking the Cuyahoga County Port Authority to loan it $170 million so it can move its corporate headquarters from downtown Cleveland to move to suburban Chagrin Highlands, The Plain Dealer is reporting.

Eaton's Cleveland headquarters

Eaton's Cleveland headquarters

   The industrial manufacturing giant received $71 million in tax breaks from the state of Ohio in October for the move, which the company says is necessary to provide room for growth. The state provided the funds after Eaton threatened to move to another state.

   The port authority is expected to approve the loan at its meeting June 23, The PD reports.

   I’ve heard some people comment that this is necessary to prevent Eaton from becoming Cleveland’s NCR.

   But I think it’s time for Ohio cities to stop desperately hoping giant corporations will save them. This $170 million could provide $50,000 start-up loans to 3,500 businesses. To me, that’s smarter, more sustainable and more equitable economic development.

   Also, why are we subsidizing sprawl? I guess in Ohio, we’re about 30 years behind Portland and other more viable cities on these issues. Next, the Eaton Corporation will be complaining it can’t attract talent to Cleveland.

   What ever happened to corporate citizenship?

-AS

4 Comments

Filed under Economic Development, Featured

4 responses to “$170 Million to move to the Suburbs?

  1. While I support your argument generally, I have one point to quibble with. You suggest that $170M could be lent out as start-up loans. There is a key difference there, though: Eaton is likely to pay back $170M in loans, because they’re a well-established mega-corporation with solid revenue. $170M in startup loans, however, are much riskier. Ask anyone in finance, and they’ll tell you that loans to big companies are more reliable than a few thousand loans to startups.

    • schmange

      That is a good point and one I’ve considered. However, there is much greater potential for job growth in lending to small businesses. With Eaton, my understaning is that we’re hoping for a net-sum gain of zero. With small business loans, the number I’ve calculated is just a guess, but it’s safe to assume a bigger return, jobs-wise, I would wager.

      Also, I made a mistake in the article I want to point out. Eaton is asking for $150 million, not $170 million. $170 million is the total cost of the rehabilitation project.

  2. Rob

    Another question to ask is why this new headquarters can only be built in the suburbs. If Eaton genuinely wants a campus environment, is there nowhere in Cleveland where it can be located? Applied Industrial Technologies has a very nice campus on Euclid (east of CSU). There is seemingly plenty unused or poorly utilized land on the eastern part of downtown that can be converted into business campuses if that’s what companies want. Is is the most efficient use of urban space? Probably not. But it’s a whole lot better than vacancy.

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