Timken said it has decided to build a $42 million office complex connected to its global technology center in Jackson Township to serve as offices for 500 employees who work on the company’s bearings and power transmission products. Construction is set to start in April.
The Timken Co. said Tuesday that it will spend $42 million to build a two-story office complex in Jackson Township to serve as the new offices for 500 of its Bearings and Power Transmission employees.
Those staffers currently work at a leased office building at 1100 Cherry Ave. SE in downtown Canton.
The company said the new 160,000-square-foot complex will be connected to the western side of its existing global technology center, which sits on about 95 acres at 4500 Mount Pleasant St. NW near the Summit County line.
Construction is scheduled to start in April and set to be finished in late 2013. The employees would move soon after that.
“We’re pleased to have an expansion of Timken’s facility in Jackson Township,” said township Trustee James N. Walters. “We’re thrilled they’re going to increase their presence in Jackson, and we welcome them with open arms.”
DELIBERATED FOR MONTHS
The company, which employs more than 4,000 in Stark County, announced in September it was considering the move and that it would not directly lead to any job gains or losses.
Timken employees on Cherry work in sales and marketing, financial planning, executive functions, customer service and supply channel management for the company’s bearing and power transmission products for aerospace, mobile machinery and rail industries.
The roughly 400 to 500 employees at the global technology center, one of Timken’s nine around the world, include engineers who perform research and design the bearings and power transmission products. Metallurgists at the center also work on Timken’s steel products.
Timken executives feel that putting bearings and transmission employees in the same facility as the engineers will increase collaboration and innovation.
By being at the one location, those who sell and market the products will better understand them and provide the engineers customer feedback, the company says.
In a statement, Timken CEO James W. Griffith said the company’s expansion into the power transmission business has increased the need for more Timken employees to work together at the same site.
“More effective collaboration between our business and technology teams will speed the pace of innovation in the company. Improved physical space with closer proximity of work teams is key to that collaboration,” Griffith said.
Timken has said its lease on its Cherry location expires soon after April 2014.
INCOME TAX HIT
Canton stands to lose a significant amount of income tax revenue. If the 500 workers each earned $50,000 a year on the average, Canton — which has an income tax rate of 2 percent — could lose roughly $1,000 a year for each lost worker who doesn’t live in the city limits. That totals up to hundreds of thousands of dollars.
Last year, Canton Mayor William J. Healy II said Canton could seek to negotiate a new Joint Economic Development District agreement with Jackson Township to split income tax revenue from the combined nearly 1,000 Timken employees at Mount Pleasant.
Page 2 of 2 - However, Walters said, the city and township have no JEDD agreement that includes Timken’s Mount Pleasant campus nor the office complex to be constructed.
Timken said it did not explore a JEDD because it will build on property it already owns next to a building that’s served as Timken offices for decades.
Jackson Township stands to gain an unknown amount of property tax revenue with the construction.
Healy said the income tax revenue generated from 1,500 new announced jobs in the city and declining unemployment outweighs the loss from the Timken employees. And the fact the Timken employees are staying in Stark County means they will still patronize Canton businesses and spend money in the city.
“We have to be bringing new businesses and new jobs into our city all the time because you’re going to always have companies that leave,” said Healy. “I’m not going to panic because the Timken Co. is moving forward and happened to find a location that works for them that happens to be outside the city’s borders. ... this is not going to be the end of Canton because a few hundred jobs crossed the border.”
Healy said the city will offer inducements to Timken and Jackson Township to agree on a Cooperative Economic Development Agreement where the city could still collect income taxes from Timken employees at the Mount Pleasant campus. Healy declined to say what those inducements would be.
“We’re doing everything in our power to support the Timken Co. and maintain their presence in Canton and Stark County,” said Healy. “We just don’t give up and walk away.”
The owner of the Timken’s leased Cherry Avenue offices is SL Canton LLC, which is incorporated in Delaware. Healy said he’s spoken with representatives of the owner about finding a new tenant, but he declined to identify the individuals who control the corporation.
Healy said the building has ample office space, enough to help the city lure a large company.
Canton Councilman Greg Hawk, D-1, didn’t share Healy’s optimism, saying the loss of tax revenue could result in the elimination of the jobs of six to eight police officers, firefighters or street workers.
“I’m sorely disappointed,” he said. “It’s a big loss for our city.”