O-I, the citys second-largest corporation, is exploring its options for when its lease expires at One SeaGate in 2006.If it moved to a new building on its suburban property, construction would have to begin in about a year.
OC, the citys third-largest corporation, which is trying to get out of bankruptcy, has said it will vacate its riverfront headquarters this year if it cannot get its bondholders to lower what amounts to its lease payments. It has considered offices downtown and the suburbs.
And Pilkington, a British-owned operation once known as Libbey-Owens-Ford Co. and the equivalent in size of a U.S. Fortune 1,000 firm, must decide by July 1 whether to vacate its North American headquarters on Madison Avenue. The firm has looked at other sites downtown and in the suburbs.
While O-Is situation is unclear, OC is hopeful of getting its bondholders to agree to lower payments, and Pilkington appears likely to stay but with substantially less space.
A departure by any of the three would be a psychological punch to Toledos image and potentially an economic blow to downtown and the community.
Toledos identity and image are so closely associated with the glass industry that the city itself is the Glass City. To lose companies associated with that image would create a loss of identity, said Bill Hudnut, former mayor of Indianapolis and now a senior resident at the Urban Land Institute in Washington.
It would be as if Indianapolis lost Eli-Lily or the [Indianapolis] Speedway, he said. Your feeling of identity and the psychology of your image is lost.
If Toledo had to rebuild a chunk of its identity after losing a signature company, the process might take a decade or longer, he said.
From a revenue standpoint, Toledo would need to rebuild its tax base and replace lost jobs as soon as possible to keep city services from being cut. But even more important, Mr. Hudnut said, is fixing damage of a different kind: the perception that Toledo cant hold its downtown together.
With these companies, ... its more than that they just occupy office space," said Dave Ball, a downtown developer who is an owner of the building occupied by Pilkington.
"Their people occupy homes, they spend money, it makes a real impact on your community. These companies support the arts and other things that are more important to your community.
Marty Gallagher, a partner with Michael Realty Co., a Toledo commercial real estate firm, said the abandoned office space left by any of the three would be difficult to fill. If all three left, it would be unprecedented, he said.
"It would just be devastating to the [central business district], he said. It could be worse than the 80s.
For years, O-I has been rumored to be leaving its 32-story office to build a new, smaller headquarters on land it owns in Perrysburg. Its long-term lease at One SeaGate expires in the fall of 2006. If it wants to move, it will need to make a decision next year to give it an adequate two-year construction timetable.
A spokesman said the $5.8 billion Fortune 500 firm has no commitment beyond 2006. We are exploring various options for our facilities needs after that date, Sara Theis said. The company will look for sites with available space, suitability, and rental costs to determine where it will end up, she added.
The ties to One SeaGate are not as strong as they once were, said Mike Poulos, a commercial real estate agent with CB Richard Ellis Reichle/Klein in Springfield Township. Property tax abatement that O-I received for staying in its headquarters ended in 2001. The glass and plastic container company owns Levis Park in Perrysburg and would have room to build a new office, he said.
One SeaGate, the gleaming all-glass building on Summit Street near Cherry Street, is considered downtowns premier office space by most local commercial real estate agents. The tallest building downtown has 707,000 square feet but about a fourth of it, or about 150,000 square feet, is empty. That is the largest amount of unused space in years.
O-I occupies about a third of the building, and other large tenants include Eastman and Smith, Harbor Capital, PrudentialSecurities, UBS Painewebber, Health Care REIT, and Ernst & Young.
OC, another Fortune 500, has looked at the vacant space in One SeaGate. Even though the building has three vacant floors and pockets of unused space elsewhere, it could not accommodate all of OCs 1,100 downtown employees.
But the $4.9 billion company has said it might have scattered offices downtown and in the suburbs, if it decides to move from 400,000 square-foot headquarters built in 1996 on the banks of the Maumee River.
Company spokesman Dave Dimmer said OC has reached agreement with most bond holders to get the payments lowered and hopes to have total agreement, which is necessary for the plan to work, by a May 19 bankruptcy court hearing.
Figuring in the cost of a move ... it now makes sense to stay here, Mr. Dimmer said.
If OC left its campus-style office, filling it would be a problem, given other available downtown space and the lack of large new tenants looking downtown, commercial real estate agents say.
The prospects would be very slim to find a user of that size in our marketplace," Mr. Gallagher said. I dont know who youd lease it to, and it was never designed to be split up."
But it is one of the few downtown buildings with free parking for its workers. It also has a sizable, upscale cafeteria, a fitness room, and outdoor running or walking trail.
Pilkington, whose Toledo-based North American operations had sales of $994 million in its last fiscal year, occupies all 12 floors at 811 Madison Ave. and must decide in less than two months whether to sign a new lease or vacate by years end.
The maker of car and building glass looked last winter at possible homes in and near Toledo, but appears now to be about a month away from signing a seven-year lease for its current building.
Our preference continues to be remaining as part of downtown Toledo, said Pilkington spokesman Roberta Steedman, so were in the final stages of negotiating a new lease for another seven years.
If the deal is completed, the company, a unit of a British glassmaking giant, will occupy only five floors of the 190,000-square-foot building. But no space there is expected to be left unused.
The rest would be occupied by the Hylant Group insurance company, whose chairman and CEO, Patrick Hylant, co-owns the building with Mr. Ball.