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Diebold backs out of Green project

11/1/2012 - South Side Leader
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By Emily Chesnic

Company not building world headquarters in Union Square

GREEN — Diebold Inc.’s decision to halt construction plans for a new facility in Green won’t stop the city from continuing to develop the Massillon Road corridor, but it will postpone a road project, said city Mayor Dick Norton.

The ATM-maker announced Oct. 26 it indefinitely is suspending plans to construct a proposed $100 million global headquarters campus on 55 acres of land in the new Union Square Development, at the intersection of Massillon Road and Town Park Boulevard.

In a released statement, Diebold said it would instead focus on “generating long-term, sustainable growth,” using assets to capitalize on new opportunities and invest in technologies.

Norton said he was disappointed with the announcement, but the vision for the corridor remains: to create an attractive town center in which people can work, shop and dine.

Summa Health System recently opened a 24-hour emergency facility in the corridor, in the new Heritage Crossings development. Akron General Medical Center recently opened up its own 24-hour emergency facility in the corridor, in Union Square. An Acme Fresh Market also is set to locate in Heritage Crossings. City officials have said additional restaurants, shops and businesses are proposed for Heritage Crossings, as well.

According to city officials, however, plans to extend Town Park Boulevard to the east to Wise Road are being put on hold for now due to Diebold’s announcement. The extension was to be built in 2013 to accommodate the new facility. 

“At this time, the city is stopping all expenditures of funds related to construction of any infrastructure related to accommodate the new facility,” Norton said.

According to Diebold officials, the company no longer has plans to construct a global headquarters — in Green or anywhere else — but is committed to staying in its Green location at 5995 Mayfair Road.

“Diebold executives were quick to reassure me that they intend to stay in Green in their current headquarters, and that they will invest some amount of money into the current facility to accommodate their near-term needs,” Norton said.

Diebold executives met with Norton last week to announce the company indefinitely would suspend plans to build a new world headquarters. That announcement came as a surprise, said Green Communications Coordinator Valerie Wolford.

“This was the first the city administration had heard of their decision,” she said.

When asked about the timing of the decision, Mike Jacobsen, Diebold senior director of corporate communications, said the company “just recently came to the conclusion that investing more than $100 million in a new headquarter facility wasn’t in the company’s best interests.”

“We have to focus our resources and efforts in areas that will organically and acquisitively grow our business,” he said.

In order for that to happen, Jacobsen said, the company can’t commit to an investment of more than $100 million in a new facility.

Diebold officials said earlier this year the company’s new headquarters would have a $400 million impact on the local economy.

Construction was slated to begin next summer on the new world headquarters.

“Clearly I would have preferred to have the new facility. On the other hand, I can certainly respect their position to make this tough decision to delay the project and to invest in growing the business,” Norton said.

Diebold’s decision was “difficult” and not made lightly, Jacobsen explained.

“We share the disappointment of the Green community, its leadership and our employees that we won’t be moving forward with our headquarters plans. At the end of the day, the intent of this decision is to maintain capital flexibility to enable us to invest in those areas which will grow our business — which would be a benefit to Ohio, Green and all the local communities in which we operate,” he said.

Diebold is declining the various state and local financial incentives offered as part of the company’s initial plans to construct a world headquarters in Green, Jacobsen said.

“We greatly appreciate the tremendous support from the state of Ohio, the city of Green and other key partners we engaged throughout this process,” said Thomas Swidarski, Diebold president and CEO. “Also, I deeply regret that our plans raised the hopes and expectations of our associates and the community. However, I believe this decision is in the best interests of our company, our associates, our shareholders and the long-term growth prospects of our business.”

In April 2011, Diebold announced its plans to construct a new, consolidated corporate campus that would form an expanded global headquarters in the Akron/Canton region, and in January 2012, the company announced it chose the Union Square property in Green as its preferred site.

Diebold now will address its commitments relative to the company’s agreement to purchase the property at the Union Square site “directly with the property owner,” Jacobsen said.

Diebold also will be coming up with a new plan to improve various aspects of the current corporate campus, he said, to demonstrate the company’s commitment to the area and to provide an “outstanding” physical working environment for its employees.

Jacobsen explained the updates to be done in the next few years would include modernizing the facility and related elements, such as heating and cooling systems; office furniture and layout improvements; flooring and carpeting; and meeting space.

“We remain firmly committed to our associates, our community and the state of Ohio,” Swidarski said. “We will appropriately spend on our current headquarters in the city of Green and our other Northeast Ohio facilities. Our intent is to solidify our presence in this region as we invest in growing our business globally — and continue to make a significant economic contribution to the state.”

Jacobsen said business and market conditions would dictate the level of hiring and work force adjustments Diebold would make at the Mayfair Road facility.

“Diebold has added about 100 jobs in the Akron/Canton area during the past year and is hiring to fill key roles that will contribute to our near- and long-term growth objectives,” he said.

Diebold currently employs approximately 2,000 associates in Northeast Ohio, with an annual payroll of about $130 million, and the company maintains seven facilities in the Akron/Canton region, he explained.

Jacobsen said Diebold’s recent acquisitions — logical security and services businesses in Brazil and Turkey — and recent spending on information technologies represent the kinds of investments Diebold is making “to grow the company and build a solid foundation for the future.”

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