CLEVELAND — Cleveland City Council voted to approve a proposal that would allow the city to provide an incentive package for the new Sherwin-Williams headquarters that includes tax breaks and construction grants.
The incentive package includes:
• Tax Increment Financing (TIF), which diverts the increase in future property taxes resulting from the project’s improvements for up to 30 years. (The TIF will be approved at an up-coming meeting.)
• A construction grant of up to $13.5 million.
• A job creation grant equal to 50 percent of new income taxes, up to a maximum of $11.5 million.
For its investment, the city retains more than 3,100 Sherwin-Williams employees on its income tax rolls, plus the creation of 140 more. The Cleveland public school district will also benefit from new property tax revenues, estimated at $4 million a year.
Last month, Sherwin-Williams confirmed that their plans include building a new global headquarters in downtown Cleveland and a new R&D center in Brecksville, as 3News’ Mark Naymik first reported.
According to Cleveland Mayor Frank Jackson, the incentive package offered to Sherwin Williams is possibly the biggest in the city's history.
"In terms of dollar amount and duration, it will be higher than others we have done while I've been mayor," Jackson said when the deal was announced.
However, not everyone is in favor of Cleveland City Council voting on the proposal while the COVID-19 pandemic threatens the local economy.
"As the COVID-19 crisis is forcing employers to lay off workers, the city of Cleveland will lose a large portion of its main source of revenue, the payroll tax. The prospect of an economic downturn makes it unwise for city council to approve the incentives at this time. State policymakers should also think twice about supporting the deal, and in particular subsidizing the move of the company's research facilities from Warrensville Heights and Cleveland to Brecksville," wrote Polcy Matters Ohio's Research Director Zach Schiller. "Cleveland's finances alone should be reason enough to delay the deal."
Preliminary plans show a $600 million investment to build both locations. The transition to the new facilities is not expected until 2025 at the earliest.
“The plans follow an extensive competitive site selection process and are contingent upon completion of standard due diligence, approvals of incentives and other matters at the state, county and city levels, and resolution of business and legal matters that accompany such major real estate investment projects,” Sherwin-Williams said in a press release.
The $300 million global headquarters will be just west of Public Square between St. Clair Avenue and Superior Avenue inside a building that’s approximately 1 million square feet.
Sherwin-Williams was founded in Cleveland in 1866.