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KJP

Cleveland: Downtown: Sherwin-Williams Headquarters

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17 minutes ago, KJP said:

 

Some site prep may occur as early as this summer. But don't expect to see shovels in the ground until early next year.

Ok thank you 

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17 hours ago, Frmr CLEder said:

 

I know SW confirmed it's guidance in regards to Q1, but don't be surprised if they lower their estimated earnings for Q2, Q3 and the year. COVID-19 didn't really start to disrupt any business until late March when many states put a "Stay Home" policy in place. SW closed their sales floor last week as well, only were taking orders through phone, e-mail, and online. Depending how bad their international sales took a hit in the last 2-3 months, we will find out during the earnings call next month, I wouldn't be surprised if you see a delay in the new HQ and R&D facility breaking ground.

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Unless the pandemic lasts for years, which is doubtful, it shouldn't impact the HQ/R&D, which isn't even slated to break ground for a couple of years.

 

As for Q2-Q4, "stay at home" boredom may create opportunities for increases in product ultilization. I wouldnt write SW off just yet.

Edited by Frmr CLEder
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"Couple of years?" Where'd you get that from? SHW's HQ+R&D are due to break ground early next year. 

 

BTW, Covid-19 isn't affecting most construction projects.

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14 minutes ago, Frmr CLEder said:

Unless the pandemic lasts for years, which is doubtful, it shouldn't impact the HQ/R&D, which isn't even slated to break ground for a couple of years.

 

As for Q2-Q4, "stay at home" boredom may create opportunities for increases in product ultilization. I wouldnt write SW off just yet.

 

Who said they were writing them off? I just said the short term doesn't really matter when it came to having their guidance confirmed, it was so late in the quarter they knew any dip in sales wouldn't be enough to offset any gains they made in January, February and early March. So like I said, you're going to see adjusted earnings for the year, you can almost bet on that. Sherwin Williams is a major international business and if you don't think this has affected them on the global market (China, Italy, UK all major countries they do business in) then idk what to tell you.

 

As far as breaking ground in a few years, if i"m not mistaken, some people were saying some work would start on the lots this summer with the major ground breaking early next year? And when I say delay, I'm not talking about 3-5 years, but I would venture to guess that you could see a delay that sees a late 2021 early 2022 groundbreaking.

Edited by Stang10
bad grammar

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2 minutes ago, KJP said:

"Couple of years?" Where'd you get that from? SHW's HQ+R&D are due to break ground early next year. 

 

BTW, Covid-19 isn't affecting most construction projects.

 

 

I know COVID-19 isn't affecting major constructions projects, but SW doesn't make the majority of their money on these major construction projects. They strive doing business with small time painters that are buying paint to paint in your home (Residential Repaints). You will probably see DIY sales tick up a bit because people are doing some work from home, but you're going to see a drop off in the customers that are going into people's home. Also, they closed the sales floor to the stores and significantly shortened their hours, you don't think this is going to affect their business? SW will be fine, this isn't doom and gloom, but I do anticipate a revised earnings estimate during their call next month and a delay in their project.

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I don't expect their earnings estimate will significantly impact the HQ+R&D project. Cash flow might. That's the one to watch.


"Life is 10% what happens to you and 90% how you respond." -- Coach Lou Holtz

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From what I've read they are flush with cash and despite lockdowns and social distancing rules, construction cranes here in Miami are moving full speed ahead. It's nothing like 2008 when developers were walking away from projects, cranes in place.

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I can vouch for people doing home work during all of this. I am one of them, $700 later at just Sherwin Williams alone.

Edited by JB
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Statement from someone working in the TAG division at SHW:

 

Q: How have your sales been the last two weeks?

 

A: "Sales have been through the roof"

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They also just announced they're giving all store employees and drivers a raise of $2 an hour.

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3 minutes ago, roman totale XVII said:

 

 

🙄 Yes, because there's no small business spinoff from having a major HQ in town.

 

Old man needs to retire.

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Polensek needs to quit grandstanding. I said this earlier, this is a once in a lifetime development opportunity. Silver bullet economic development usually doesn't work (looking at you sports stadiums), but this has potential for real economic spinoff, not just bars and restaurants that are busy a handful of days a year.

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15 minutes ago, marty15 said:

They can still sell Valspar in all the open Lowe’s stores FYI 

 

True, and SHW is much more than just a consumer/contractor paint company...

 

Their coatings go on just about every imaginable surface that exists - furniture, ventilators, oxygen tanks, hospital bed frames, food packaging, the inside drink of bottles, all Caterpillar's heavy equipment and so on and so forth.

Edited by Clefan98
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58 minutes ago, GISguy said:

 

🙄 Yes, because there's no small business spinoff from having a major HQ in town.

 

Old man needs to retire.

The city has seen record tax collections (in part thanks to a tax increase the residents gave Mayor Jackson), without increasing services (at least that I can tell).   

 

Why couldn't they do both in this case?   Small businesses can and should be saved, and Sherwin Williams should go ahead with the project.  

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37 minutes ago, Mendo said:

Polensek needs to quit grandstanding. I said this earlier, this is a once in a lifetime development opportunity. Silver bullet economic development usually doesn't work (looking at you sports stadiums), but this has potential for real economic spinoff, not just bars and restaurants that are busy a handful of days a year.

Sherwin Williams already bought the land. They are not going to pull out because our representatives rightfully call them out for demanding incentives. Additionally, we have only seen the smallest portions of incentives as the state and JobsOhio figures are unknown. I find it problematic everyone operates from a position of fear instead of strength. Relocating is costly and was extremely unlikely. I'm not saying it was a bad deal. There are significant benefits to each party. Although, at the very least, we should allow our representatives to humble the corporations that seek these incentives. If that means calling them out in the time of a crisis, then so be it. 

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13 minutes ago, Metz44 said:

Sherwin Williams already bought the land. They are not going to pull out because our representatives rightfully call them out for demanding incentives. Additionally, we have only seen the smallest portions of incentives as the state and JobsOhio figures are unknown. I find it problematic everyone operates from a position of fear instead of strength. Relocating is costly and was extremely unlikely. I'm not saying it was a bad deal. There are significant benefits to each party. Although, at the very least, we should allow our representatives to humble the corporations that seek these incentives. If that means calling them out in the time of a crisis, then so be it. 

 

Calling their bluff probably isn't in Cleveland's best interest. In a world of multinational corporations moving around a state, or even a region to save on their tax burdens, hometown company or not, SHW has the incentive and obligation to reward their shareholders not the city- the purchase price of the lots/cost of walking away is chump change when compared to incentive packages that other regions would offer. Cle can't afford to screw this up. 

 

After the drama and anticipation of them committing to Cleveland, I'm not too enthusiastic of playing with fire. As @Mendo said (and I'm sure @KJP can confirm...in time) it's not just the HQ, it's all of the related spinoff development that we're talking about. 

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20 minutes ago, Metz44 said:

Sherwin Williams already bought the land. They are not going to pull out because our representatives rightfully call them out for demanding incentives. Additionally, we have only seen the smallest portions of incentives as the state and JobsOhio figures are unknown. I find it problematic everyone operates from a position of fear instead of strength. Relocating is costly and was extremely unlikely. I'm not saying it was a bad deal. There are significant benefits to each party. Although, at the very least, we should allow our representatives to humble the corporations that seek these incentives. If that means calling them out in the time of a crisis, then so be it. 

Playing chicken with thousands of jobs when you need them more than they need you is a really stupid strategy 

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8 minutes ago, GISguy said:

 

After the drama and anticipation of them committing to Cleveland, I'm not too enthusiastic of playing with fire. As @Mendo said (and I'm sure @KJP can confirm...in time) it's not just the HQ, it's all of the related spinoff development that we're talking about. 

 

Yes. There are number of projects that haven't been announced yet as a spin-off to SHW. The money for those projects would be put on hold or go elsewhere if SHW's incentive package was similarly put on hold.

 

And just because SHW bought the land doesn't mean they're going to build anything. From whom did SHW buy the land? From Weston (which planned some cool stuff in the 2010s but didn't build anything) and from Jacobs (which planned a really big building in 1990 but sat on the land for 30 years after that project died). Fear may not be reason to act or not act, but an opportunity staring you in the face is a pretty good reason to act and an even better reason to avoid inaction.

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I think all your reactions demonstrate the inability to negotiate in a position of strength. I simply was in favor of representatives speaking up and publicizing the amount of incentives corporations are granted. It's not a game of chicken, it's using leverage to further your interests. I don't believe it was a bad deal but the incentive package does seem a little much. Especially when you look into the headquarters only costing $300m. This building will not be as transformational as some of you state with that price tag. Additionally, we don't even have the full scope of the agreement. I don't understand the notion of being silent unless you're in 100% agreement with the deal. 

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22 minutes ago, Metz44 said:

I think all your reactions demonstrate the inability to negotiate in a position of strength. I simply was in favor of representatives speaking up and publicizing the amount of incentives corporations are granted. It's not a game of chicken, it's using leverage to further your interests. I don't believe it was a bad deal but the incentive package does seem a little much. Especially when you look into the headquarters only costing $300m. This building will not be as transformational as some of you state with that price tag. Additionally, we don't even have the full scope of the agreement. I don't understand the notion of being silent unless you're in 100% agreement with the deal. 

It’s hard to negotiate from a position of strength when you are not at a position of strength. We need SHW more than SHW needed us. They wanted to stay, but they didn’t HAVE to stay. Many mistakes in this city have been made by people stupidly trying to negotiate from a position of strength that they did not have 

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1 hour ago, GISguy said:

 

Calling their bluff probably isn't in Cleveland's best interest. In a world of multinational corporations moving around a state, or even a region to save on their tax burdens, hometown company or not, SHW has the incentive and obligation to reward their shareholders not the city- the purchase price of the lots/cost of walking away is chump change when compared to incentive packages that other regions would offer. Cle can't afford to screw this up. 

 

After the drama and anticipation of them committing to Cleveland, I'm not too enthusiastic of playing with fire. As @Mendo said (and I'm sure @KJP can confirm...in time) it's not just the HQ, it's all of the related spinoff development that we're talking about. 

It may be a new concept for the administration and city council, but there's this thing called "Integrity."

 

As a city, you dont commit and then renege on that commitment. 

Edited by Frmr CLEder
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2 hours ago, Metz44 said:

Sherwin Williams already bought the land. They are not going to pull out because our representatives rightfully call them out for demanding incentives. Additionally, we have only seen the smallest portions of incentives as the state and JobsOhio figures are unknown. I find it problematic everyone operates from a position of fear instead of strength. Relocating is costly and was extremely unlikely. I'm not saying it was a bad deal. There are significant benefits to each party. Although, at the very least, we should allow our representatives to humble the corporations that seek these incentives. If that means calling them out in the time of a crisis, then so be it. 

 

As an attorney here - if the incentives were used as a part of the package, a bad faith claim against the city is not a good look...

 

Moreover, SHW could afford to take a 20% loss on that land and not bat an eyelash

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48 minutes ago, YABO713 said:

 

As an attorney here - if the incentives were used as a part of the package, a bad faith claim against the city is not a good look...

 

Moreover, SHW could afford to take a 20% loss on that land and not bat an eyelash

A bad faith claim? Really? None of us know when payments are due to SHW. JobsOhio hasn't even stated their grant package yet so its unlikely payments are due anytime soon. But please continue with the fear tactics bigshot.

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1 minute ago, Metz44 said:

A bad faith claim? Really? None of us know when payments are due to SHW. JobsOhio hasn't even stated their grant package yet so its unlikely payments are due anytime soon. But please continue with the fear tactics bigshot.

I almost guarantee all the incentives yet disclosed to the public have been presented to SHW already. SHW agreed to the deal for all of the incentives. City does not have the strength here.

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8 minutes ago, WindyBuckeye said:

I almost guarantee all the incentives yet disclosed to the public have been presented to SHW already. SHW agreed to the deal for all of the incentives. City does not have the strength here.

We're talking about Polensek's letter to fellow council representatives. The city obviously has to pay the incentives agreed upon within the package. The question is whether the payments are due soon or that money could be used for loans instead of sitting aside for the time being.

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48 minutes ago, Metz44 said:

We're talking about Polensek's letter to fellow council representatives. The city obviously has to pay the incentives agreed upon within the package. The question is whether the payments are due soon or that money could be used for loans instead of sitting aside for the time being.

How about just making the loans? Just do it. Period. End of story.

 

Why does there have to be an announcement or letter that stipulates that the loans would come from the package that has already been promised to SW?

 

I'm sorry but the optics are terrible.

Edited by Frmr CLEder

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2 hours ago, Metz44 said:

I think all your reactions demonstrate the inability to negotiate in a position of strength. I simply was in favor of representatives speaking up and publicizing the amount of incentives corporations are granted. It's not a game of chicken, it's using leverage to further your interests. I don't believe it was a bad deal but the incentive package does seem a little much. Especially when you look into the headquarters only costing $300m. This building will not be as transformational as some of you state with that price tag. Additionally, we don't even have the full scope of the agreement. I don't understand the notion of being silent unless you're in 100% agreement with the deal. 

 

Maybe we're not fans of the City going back on its word and stabbing a major employer in the back?  This seems like the dumbest thing the City could do, and that's why some of us are having such a strong reaction to it.  Why would anyone do business with Cleveland ever again?

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^ Especially to hear something like this on the heels of the dissolution of the Richard Pace - Northcoast Harbor partnership with the City.

 

Edited by Frmr CLEder

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1 hour ago, Metz44 said:

A bad faith claim? Really? None of us know when payments are due to SHW. JobsOhio hasn't even stated their grant package yet so its unlikely payments are due anytime soon. But please continue with the fear tactics bigshot.

 

Lmao... what ward do you represent? 

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Cleveland still has obligations to pay teachers, police, and firefighters. All the while receiving significantly reduced tax income. Luckily the city does have built up reserves but $14M sitting aside isn't the best investment right now. SHW likely wouldn't even care if that money was loaned out right now and their grant payment was pushed back to 2021. But you guys are so set in your ways in believing we can't even ask. Tomorrow thousands of small business owners are going to be faced with difficult decisions. Do they pay rent or close up shop? Thankfully none of you represent our communities. Small businesses are the foundation of our economy and shame on you for reprimanding the city on trying to find any possible solution. Even if that means asking a major employer for a delayed payment. 

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I'm not at all a fan of corporate subsidy or bailouts and agree the money would be better spent nearly anywhere else. But the promise was already made and its going to SW regardless. Polensek is doing nothing buy grandstanding for his own political gain and collateral damage is the city's reputation on being able to keep its word. What does it say to people wanting to invest in the city in the future? Shame on us? Shame on Polensek.

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One person's opinion......

 

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1 hour ago, Metz44 said:

Cleveland still has obligations to pay teachers, police, and firefighters. All the while receiving significantly reduced tax income. Luckily the city does have built up reserves but $14M sitting aside isn't the best investment right now. SHW likely wouldn't even care if that money was loaned out right now and their grant payment was pushed back to 2021. But you guys are so set in your ways in believing we can't even ask. Tomorrow thousands of small business owners are going to be faced with difficult decisions. Do they pay rent or close up shop? Thankfully none of you represent our communities. Small businesses are the foundation of our economy and shame on you for reprimanding the city on trying to find any possible solution. Even if that means asking a major employer for a delayed payment. 

 

You're too new on this forum to start calling people sarcastic names (bigshot) and pulling that "shame on you" stuff.  Give it a couple hundred more posts.

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40 minutes ago, KJP said:

One person's opinion......

 

I thought the Federal stimulus included a component for small businesses.  I am wrong?

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5 minutes ago, Frmr CLEder said:

I thought the Federal stimulus included a component for small businesses.  I am wrong?

 

I posted the info in the correct thread so we can stay on topic here.....

 

 

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Total conjecture on Polensek’s part, or maybe he feels this appeals to his constituents.  I imagine the city can get creative in creating loan money for small businesses without pitting them against Sherwin-Williams.  

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I join the many voices above who respectfully  disagree with the notion that the city can negotiate or “ask” about new specifics or terms of an agreement with SHW without it being a “bad look”. And it’s not about “position of strength” - it’s about integrity.  We’re in a new time of unprecedented crisis - but we still hear that old old argument  “Why help the rich when there are so many others with  needs that require our attention? “ That argument might work for a councilman with a specific “base”.  And I’m in no position to preach - but shouldn’t we all be supportive of one of the city’s great employers- a company BUILDING in this city - one committed to its future - one that will produce literally hundreds of new jobs and maintain thousands more?  I don’t think there’s ever been a more important time to go forward with plans  to build our city.   

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Forgive me if this comes across as insensitive or incorrect, but the CARE act that was approved on Friday seems to do the trick for basically every small business. Why does the City need to dip into their coffers to offer a solution that's already been solved. Again, just curious.

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11 hours ago, Frmr CLEder said:

I thought the Federal stimulus included a component for small businesses.  I am wrong?

 

No, you're absolutely right. But think of it as a short term capital injection versus sustainable financing.

 

With the jobs (and thereby residents) Sherwin's new tower will add, it makes the surrounding businesses more sustainable. I'm by no means a finance expert, though. 

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I think there is a lot of fear, desperation and frustration within our communities. Today is April 1st and some businesses, employers and employees have been closed for two weeks. Government: 

- Offices are closed

- Phones lines are overwhelmed

- Web sites are crashing 

 

The feedback we get from elected officials is, "the check is in the mail"

Edited by Frmr CLEder

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23 hours ago, Frmr CLEder said:

From what I've read they are flush with cash and despite lockdowns and social distancing rules, construction cranes here in Miami are moving full speed ahead. It's nothing like 2008 when developers were walking away from projects, cranes in place.

 

People didn't walk away in 2008 all on the same day.  It was a gradual meltdown during the fall. 

 

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To follow up on yesterday's discussion.......

 

Some companies that came into the year with an investment-grade credit rating still only reported enough cash and other readily available assets to operate for a short time in an extreme scenario where their sales stalled and they didn't cut costs. They include paint-maker Sherwin-Williams Co. (54 days) and home-improvement chain Home Depot Inc. (17 days).

 

Sherwin-Williams doesn't carry cash but has $3.5 billion of available liquidity, a spokesman said. Home Depot can adjust its costs and believes its investment-grade credit rating is a better measure of the retailer's ability to access capital when needed, a spokesman said.

 

https://www.wsj.com/articles/coronavirus-puts-a-premium-on-cash-even-for-biggest-u-s-companies-11585153040

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