Headquarters relocations usually are routine matters, generating interest only among employees, stockholders and cities vying to become the new corporate home. That certainly wasn't the case in 2001, however, when Boeing Co. decided to relocate from its longtime headquarters in Seattle, Wash.
"That was one of the highest-profile moves in a decade," said Robert Pittman, consulting principal for Lockwood Greene Consulting, which is involved in corporate site selection worldwide. "It was driven in part by Boeing saying to the world, `We're not just in the commercial airline business.' They wanted to broaden out their business by moving to Chicago, which is known as a world-class business city."
Headquarters on the move
Although Boeing made the headlines, it certainly is not alone. If interest in corporate relocations is any indication, the sluggish economy is poised for a rebound.
"Since December, we have seen much increase in activity," said Joe White, president of The Pathfinders, in Dallas, Texas. White's company handles corporate site selection projects for Fortune 1000 businesses nationwide.
Business has been brisk at The Staubach Co., also based in Dallas, which handles most facets of tenant representation for national and international clients.
"Dallas traditionally has benefited in down markets," said Paul Whitman, executive vice president of Staubach. "We have an abundance of affordable office space."
Space availability was a big factor in the decision by Kinko's to move its corporate headquarters to Dallas late last year. Kinko's is the world's largest provider of document solutions and business services. Staubach represented Kinko's in the final site selection and negotiations.
"Kinko's selected the Dallas-Fort Worth metroplex because the area offers the right mix of economic and practical benefits for a company with more than 1,100 locations worldwide," said Gary Kusin, president and CEO of Kinko's. "While many cities and properties around the metroplex made very attractive proposals, the city of Dallas partnered with Kinko's to create a very strong incentive package, combined with an ideal location, and the Greater Dallas Chamber of Commerce also played a key role."
However, it's not only the Sun Belt that is a popular destination for corporate relocations.
"One thing that is apparent is the tremendous business climate in many Midwestern states," said Pittman.
"The Southwest continues to be a leader, as do the Rocky Mountain states."
Why move?
Experts agree that corporate headquarters relocations are expensive and disruptive to employees and their families. Why go through the hassle? It starts with a need that can't be met by staying put.
"There obviously must be some problem in the existing location," said White. "It could be anything, from a lack of a qualified work force to transportation. That's when you start looking at other locations where that problem won't exist."
A site that may have been ideal when the company was founded often becomes inadequate as the business grows and needs change.
"The decision to locate where they did may have been made 30 years ago - and things can change in 30 years," said White.
Moving a national or regional headquarters can be one of the most critical decisions a company faces.
"You don't just wake up one morning and say, `Lets move this week," said White. "You must decide if the benefits of moving outweigh the problems in your current location. It must be a well-thought-out decision."
And sometimes, companies may decide that expanding at their current location is the right choice. Heidelberg Druckmashinen AG is constructing a new division headquarters in Rochester, N.Y., at the Rochester Technology Park.
The $80 million project will feature more aspects of German architecture, and 1,200 people will work at the facility when completed in 2003.
"We wanted it to look much more like buildings in Germany," Doug Sprei, a spokesman for Heidelberg, told the Rochester Democrat and Chronicle. "We wanted more sunlight, windows to take advantage of whatever light Rochester gives, plus a lot more conference space, grouping people together."
Heidelberg makes printers, copiers and document handling machines.
The bottom line
always matters
Corporate finances often are the primary reason for a move. VasoGenix Pharmaceuticals Inc., a start-up biotech company with three new products in development, last year moved its headquarters to Lenexa, Kan., a suburb of Kansas City.
"It's much less expensive to operate a business here (Kansas City)," said Jeff Southard, vice president of clinical development. "Start-up businesses such as ours can stretch their limited dollars much further."
Southard was surprised by the extent of the angel network for venture capital. Through hustling and hard work, he was able to find the cash the company needed.
"They have the mass here," said Southard. "But you have to generate the critical mass."
Even well established businesses often look to relocation to improve the bottom line. Argonaut's Group Inc., a property and casualty insurance company founded in 1948, found itself in that situation. The cost of doing business in its former location had become prohibitive. After considering sites around the country, Argonaut selected San Antonio for its new headquarters.
Argonaut hired 80 new employees in San Antonio and was pleased with the available talent.
"My past experience with the work force in San Antonio was very positive," said Mark Watson III, Argonaut's CEO.
Universities also can be a valuable reservoir of trained employees and professional resources. The Institute for Computational Genomics Inc. (INCOGEN), which provides computational resources for genomics researchers, considered locations in the Southeast and West when relocating.
It decided on James City County, Va., in large part because of partnership opportunities with the College of William and Mary and the Virginia Bioinformatics Institute (VBI) at Virginia Tech.
"We had collaborated with VBI previously, so the decision to come to Virginia was significantly impacted by the opportunity to be close to the researchers at VBI," said Dr. Maciek Sasinowski, founder and CEO of INCOGEN. "I am very impressed and delighted with the level of commitment from the faculty and administration at William and Mary and the efficiency of the entire process."
The Metro Atlanta area is one of the most popular places for headquarters locations. The city ranks fourth in the country with 25 Fortune 1000 companies based in the city. Home Depot, Delta Airlines, BellSouth Corp. and Coca-Cola are just some of the more prominent companies headquartered in Atlanta.
Atlanta's Hartsfield International Airport and access to markets has brought many companies to the city. From Atlanta, 80 percent of the country's population is accessible by auto within two days, and in two hours by air.
International companies also like the city. Airline passengers can get direct flights to 40 foreign cities from Atlanta, which explains why 1,600 foreign companies do business in Atlanta.
The right tools for the job
Having access to the right people is an important step. Giving them the tools to do their job is equally important, which is why transportation and communications infrastructures are high on the checklist of most companies. A hub airport often is a necessity.
"Corporate headquarters by definition have a lot of executive travel," said Pittman. "Most companies relocating their main or regional headquarters want to be within one to one-and-a-half hours of a hub airport. That need is magnified in global corporations with frequent international travel."
Travel was an important consideration for Ashland Inc., a Fortune 500 company based in Covington, Ky. Ashland has diversified energy and road construction operations. The company was named after its hometown -
Ashland, Ky. -- which is small by corporate standards.
"We were based in Ashland from 1924 to 1999, but we were a pretty big headquarters to be located in that small of a town," said Dan Lacy, vice president of corporate affairs. "Between 1997 and 1998, we went through a lot of restructuring with our oil and refinery assets. We decided to downsize our corporate headquarters. As public trading necessitated more travel, air transportation become more important."
Alan Goforth is a freelance writer from Lee's Summit, Mo.
For Pier 1 Imports, There's No Place Like Home
Preliminary plans are in place for Pier 1 Imports to build a new headquarters on the banks overlooking the Trinity River, in Forth Worth, Texas.
When favorable lease negotiations could not be reached at its current downtown Fort Worth location, North America's largest specialty retailer of imported decorative home furnishings and gifts started shopping for a new home.
The decision, however, was not made lightly.
Pier 1 Chairman and CEO Marvin J. Girouard pondered the headquarters question for over a year, weighing the pros and cons of staying in town or looking elsewhere; moving into an existing facility or starting a building from scratch. In the end, the Fort Worth-based company didn't have to look too far to find its ideal destination.
With the help of in-house real estate professionals and outside site selection consultants, Pier 1 envisioned its new headquarters taking shape on a 12-acre piece of riverside land on the edge of downtown.
"The new Pier 1 complex will provide us with the land we need to accommodate future growth and give Pier 1 a prominent corporate presence in Fort Worth's central business district," said Girouard.
He added that it would have been a "real difficult thing" for the company - and the city - if Pier 1 were to leave town, and that ultimately the final decision came down to money, time and flexibility.
"What's beautiful about this is that on 12 acres we can do anything," Girouard told the Fort Worth Star-Telegram.
Amenities being considered for the headquarters include a child care facility, associate cafeteria, exercise center, and covered parking. Staying downtown would also ensure that commute times for Pier 1 employees would remain virtually the same, which was another key site consideration.
For Girouard, the headquarters project has been an intensely personal project from the beginning. He often struck out on his own, driving by himself to check out sites.
"This is probably the most important project on my plate," Girouard told the Star-Telegram. "But I'm not going to let it drive the business or me."
He stressed that running and growing a consistent, top-notch retail company remains his main objective. He added that if everything goes according to plan, Pier 1 anticipates relocating by 2005.
City leaders are especially excited about the impending development because the Pier 1 project is expected to be a catalyst for riverfront development. Three weeks before the Pier 1 announcement, RadioShack Corp. - also rooted in Fort Worth - revealed it planned a new corporate campus along the banks of the Trinity as well.
The development news speaks of good times ahead for the Texas town, which is home to a half-million people and companies such as Lockheed Martin, RadioShack, Bell Helicopter Textron, and Burlington Northern Santa Fe Railroad.
"Pier 1 is celebrating its 40th anniversary this year," said Girouard. "Fort Worth has been the home of Pier 1 Imports since its beginning in 1962 and it always will be."
Rachael Hedgcoth
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