Illinois losing headquarters
Tuesday, Dec 10, 2013 - Posted by Rich Miller
* The company had asked for a state tax incentive, but legislators took no action. Most believed the company was going to Florida anyway. From a press release…
Office Depot, Inc. (ODP), a leading global provider of office products, services, and solutions formed by the merger of Office Depot and OfficeMax, today announced that it has chosen Boca Raton, Fla. for its global headquarters.
The decision is the result of a thorough evaluation that took into account a number of important factors, including the cost to operate each headquarters location, lease obligations and sublease considerations, tax implications, government incentives, ability to add associates and incorporate functions in the current space, and people-related costs.
“Selecting the headquarters location is a critical step toward integrating our two companies,” said Roland Smith, Chairman and CEO, Office Depot, Inc. “Both Florida and Illinois have many positive attributes, but our analysis concluded that Boca Raton provides the best platform for us to achieve planned synergies, leverage assets to drive improved profitability, and launch a compelling vision for the future.
“We appreciate the significant efforts from legislators in Illinois and the generous support we have received from the State of Florida, Palm Beach County, and City of Boca Raton,” Smith added. “We would like to thank Florida Governor Rick Scott, Illinois Governor Pat Quinn and the countless others involved in providing the information necessary for us to make this important decision.”
The Company will remain in its current 625,000-square-foot corporate campus located at 6600 North Military Trail in Boca Raton, which has ample space to accommodate associates who will relocate from Illinois.
ADM has said it will soon make a decision on the location of its new global headquarters. That company also wants a tax break to open the HQ in Chicago.
- PoolGuy - Tuesday, Dec 10, 13 @ 10:00 am:
I just hope that the same people who discredit or criticize the incentives we provide to attract and retain companies in IL, now don’t turn around and say we don’t do enough to keep or bring companies here. you can’t have it both ways…
- Sir Reel - Tuesday, Dec 10, 13 @ 10:03 am:
Given the number and variety of factors cited in their location decision, I’m not sure a tax incentive would’ve swayed them unless it was large. It’s simplistic to think tax incentives alone make the decision.
- Plutocrat03 - Tuesday, Dec 10, 13 @ 10:04 am:
An unstated criteria is also who is the stronger entity in the merger is and where do their leaders live.
It was a long shot to believe that Illinois could earn the new combined HQ. If the cost was to fork over their employee payroll deductions, then goodbye and good luck.
- Downstater - Tuesday, Dec 10, 13 @ 10:10 am:
All of the employees relocating to Florida will get a nice increase in the take home pay, since there is no state income tax.
- Wensicia - Tuesday, Dec 10, 13 @ 10:12 am:
I’m not sorry as I don’t believe the tax-break gun should be held to any state before companies decide where to locate. If the offer already exists under law, that’s different.
- wordslinger - Tuesday, Dec 10, 13 @ 10:13 am:
Boca? I’m packed and ready to go right now!
- Sunshine - Tuesday, Dec 10, 13 @ 10:14 am:
Sub freezing temperatures….or Florida
Bitter Cold Winds blasting through downtown….or Florida
Move to Chicago area with all the crime news….or Florida
Yep, it’s a toss up…..!
- A guy... - Tuesday, Dec 10, 13 @ 10:15 am:
This was all about due diligence on the part of the company to justify a decision they already were comfortable with. If it ain’t truly a jump ball, there’s no need to put anything of great value on the table. This was never a real jump-ball. In other cases I do support creating incentives to keep good companies and good jobs here. In this case, we should just wish them well and do what we can to score some distributions centers or other support functions.
- Anonymous - Tuesday, Dec 10, 13 @ 10:15 am:
The recently hired CEO has mostly worked in the South. If you do a multi-factorial regression of all of the factors involved in the location of a corporate headquarters, where the CEO wants to live comes out on top. (Even locally - recall when the CEO of Sears who lived in the northwest suburbs moved Sears out of the Sears Tower to the northwest suburbs?) Nonethless, cueing Rauner commerical on losing Office Depot in three, two, one . . .
- just a thought - Tuesday, Dec 10, 13 @ 10:21 am:
These big companies are playing with the states to get the best deal. They are not tied to Illinois and have never showed any loyalty to the people, all about the bottom line and that’s okay. This is just a good example of why “growing your own entrepreneur” is healthier for the local community. Small businesses pay their taxes, are invested in the community, won’t pull out to move to the next state on a whim. They are like your loyal friend. Maybe the state should evaluate how they treat the small guys, what can they do to assist them. Has any legislator tried to open a small business. They should pick a business idea and walk themselves through the process. Then they might be able to identify the solutions that are needed to help the small guys.
- olddog - Tuesday, Dec 10, 13 @ 10:30 am:
Looks like the Staples out on West Wabash just got my business!
- Steve - Tuesday, Dec 10, 13 @ 10:31 am:
Illinois’ high corporate income tax probably didn’t help but… there were probably other issues. Illinois has to compete with lower cost states, that isn’t easy. The good news is Office Depot workers who move to Florida will experience an increase in their standard of living.
- Grandson of Man - Tuesday, Dec 10, 13 @ 10:34 am:
“nice increase in the take home pay”
Yet Florida still has a lower per capita income than Illinois, as do the majority of right to work states, which includes Florida. Florida also has a very high percentage of people without health insurance. It’s a two way street.
- Union Man - Tuesday, Dec 10, 13 @ 10:37 am:
All these companies are trying to see what then can squeeze out of the taxpayers. Just like Cat, they scream to lower their taxes or they will move cause taxes are too high. Then they give the CEO and others multi-millon dollar bonuses. Give me a break!! If they’re not making money then there out of business. They just want bigger and bigger profits every year. It’s call GREED!!
- Nonplussed - Tuesday, Dec 10, 13 @ 10:37 am:
Then I guess we won’t have to hear about job cuts in the upcoming years. This merger depends on the companies closing overlapping stores, hoping all the customers switch to the other store thereby saving a couple hundred million dollars a year
The problem is technology has and continues to shrink the market for their products. This won’t work in the long run. Good riddance.
- Union Man - Tuesday, Dec 10, 13 @ 10:40 am:
Hope the new corporate headquarters doesn’t find a sink hole!
- Fan - Tuesday, Dec 10, 13 @ 10:45 am:
Gandson, you brought up insurance? That is going to be a mess nation wide, not Florida. Business are in it to make a profit… period. They are not just there to provide jobs and insurance for people. This company is making a smart business decision… period.
- Skirmisher - Tuesday, Dec 10, 13 @ 10:47 am:
If I have to pay these people to stay here in Illinois, then Florida is welcome to them. On the other hand, maintaining our high corporate tax rates in this economy is but one more glaring example of the chronic comprehensive misgovernance of this state.
- Plutocrat03 - Tuesday, Dec 10, 13 @ 10:49 am:
‘Lower per capita income’
While that may be true in gross numbers, the quality of life and disposable income may be higher because of lower housing costs, cheaper utilities and lower taxation rates.
- wordslinger - Tuesday, Dec 10, 13 @ 11:06 am:
–Illinois’ high corporate income tax probably didn’t help but.–
Sigh. It’s irrelevant. They only paid Illinois income tax, if any, on sales within Illinois. They’ll still have to do that, no matter where they’re located.
- Jimbo - Tuesday, Dec 10, 13 @ 11:21 am:
There needs to be a federal law that prohibits gaming states for tax dodges. It is essentially extortion. A company can threaten to leave, with no intention of actually doing so, and taxpayers are left holding the bag. If states didn’t have to race to the bottom, they could actually collect some taxes from corporations that are raking in profits.
- wordslinger - Tuesday, Dec 10, 13 @ 11:21 am:
For the record, according to the Office Max/Office Depot 2012 annual report.
Global revenues: $6.9 billion
Net income: $421 million
State taxes, across all 50 states and Puerto Rico: $17.2 million.
That’s an effective combined state income tax rate across all U.S. jurisdictions of 4%.
- bored now - Tuesday, Dec 10, 13 @ 11:23 am:
boca is not exactly an inexpensive area. but the weather is better…
- Dan Bureaucrat - Tuesday, Dec 10, 13 @ 11:36 am:
To just a thought:
Great point about local small businesses who fall through the cracks and take burdens that big corps should be taking. They are grounded here. They are loyal. They understand the weather.
We are a desirable region, but for different reasons. To compete with the Florida weather, we should bolster support of arts and culture — and Illinois tourism — not hand out big tax breaks.
- Chicago Cynic - Tuesday, Dec 10, 13 @ 11:53 am:
While I doubt it would have made a big difference, I’m sure the fact that the Speaker gave them and ADM the finger didn’t help (unless you have a different way to read this exchange: Q: They’re saying they want an answer by the end of the year.
Madigan: “OK, well that’s nice.”).
- foster brooks - Tuesday, Dec 10, 13 @ 12:04 pm:
I bet they’ll pay more for insurance down there. Between the hurricanes & sink holes. Hope they put a big generator on their headquarters.
- Blueboy - Tuesday, Dec 10, 13 @ 12:18 pm:
Rick Scott and Pat Quinn mentioned in same sentence. Speaks volumes!
- Big Muddy - Tuesday, Dec 10, 13 @ 12:19 pm:
What about the jobs that are going with the move and the income tax on the salaries as well as the sales tax on the $$$ those employees spend? This is a big loss for our state. It’s not just about Madigan not even calling the incentive bill, it’s about a net loss. One more example of how leadership in this state takes a short view and doesn’t think big picture. Madigan didn’t want to call the bill because the optics were politically bad? Tell that to the OfficeMax employees who are about to get pink slips for Christmas.
- Bill - Tuesday, Dec 10, 13 @ 12:33 pm:
Jack Klompus, supervisor - writing instruments, already lives in Del Boca Vista.
- wordslinger - Tuesday, Dec 10, 13 @ 1:09 pm:
Bill, keep the pen!
- Ruby - Tuesday, Dec 10, 13 @ 2:14 pm:
@2:19pm “What about the jobs that are going with the move and the income tax on the salaries”
Except that Office Depot wanted Illinois to let them keep their employees’ state income taxes.
- catrike - Tuesday, Dec 10, 13 @ 2:22 pm:
Del Boca Vista (Phase II)
- My Thoughts For Whatever - Tuesday, Dec 10, 13 @ 3:14 pm:
Good luck to all the ODP employees with young children that have to relocate to Florida and want to find quality schools for their children. Their income tax savings will be significantly offset by the tuitions of the private schools that are so popular in Florida.
- Bobby Hill - Tuesday, Dec 10, 13 @ 4:37 pm:
MTfW - Now you have me wanting to move to Florida. Tuition is temporary. Taxes not so much.