Headquarters Moves Draw Attention
The reasons behind headquarters moves are as varied as the companies themselves, but costs, access to qualified labor, and industrial synergies usually come into play.
Lisa A. Bastian (Feb/Mar 09)
(page 2 of 2)
Biotech's "One State" Jump
PDS Biotechnology Corp., developer of disease-destroying nanotechnology, recently announced that it would relocate its Cincinnati headquarters and lab to nearby Indianapolis, Indiana.
The early-stage biopharma firm uses targeted nanoparticles to stimulate the body's immune system to destroy infections and cancers. PDS Biotech's technology will first appear in a therapy being developed to combat currently incurable cancers associated with the human papilloma virus (HPV).
President and CEO Dr. Frank Bedu-Addo said the company chose Indiana based on several important factors, including "the presence of top-rated universities, a world-class nanotechnology center, and the solid and rapidly growing biotechnology infrastructure." Indeed, Indiana University's School of Medicine educates the second-largest medical student body in the United States. And nearby Purdue University (65 miles north) has long been a leader in nanotech research. Another enticing "carrot" is a $2 million grant from the state's 21st Century Research and Technology fund.
Plastics Firm Moves "2 Exits South"
Last December Kurz-Kasch Inc. invested well over $1 million to relocate its corporate headquarters from one suburb of Dayton, Ohio, to another. The move to Miamisburg, a few miles away from its home base, consolidated manufacturing operations from Indiana, Virginia, Florida, and Georgia. (Its Newcomerstown and Wilmington, Ohio, divisions, as well as its facility in Brazil remain operational.)
Privately held Kurz-Kasch is a manufacturer of highly engineered electromagnetic and engineered composite components for diverse industries. "We're a healthy company and we're looking to make some acquisitions," said company CEO George Kochanowski. "We moved to make us more competitive. With plants in other states, we had lost some synergy," he further explained. The relocation is expected to create some 200 new manufacturing jobs in the region.
Although the company considered a number of nearby states, the CEO said Ohio won out because "it was the first to grasp we'd bring jobs from other states." Kochanowski is extremely pleased with the 100,000-square-foot renovated warehouse that is now his corporate digs. He said the site allowed the firm to expand at minimal expense and can accommodate future plans to double the facility. Other pluses? "We're in between the Dayton and Cincinnati airports, in the middle of a technology cluster, and close to numerous great universities and community college systems," he explained.
Moving Across the River to Cut Occupancy Costs
Here's a final example of how a short move can be long on cost savings:
In late 2007, escalating costs prompted AXA Equitable Life Insurance Co. (formerly The Equitable Life Assurance Society of the United States) to assess its corporate space needs; consequently, the company decided to relocate its headquarters from New York City. As a result, a total of 950 employees are being transferred from Manhattan to a new headquarters facility just across the Hudson River in Jersey City, N.J. In addition, consolidation of some of the firm's operations in New Jersey will result in the transfer of 350 employees from Secaucus, N.J., to the new headquarters in Jersey City. A capital investment of $27 million has been committed to this project.