Naperville suffered an economic setback Tuesday after learning that Office Depot Inc. will make its global headquarters in Boca Raton, Fla., rather than in Naperville.
The newly formed company, which resulted from a merger between Office Depot and the Naperville-based OfficeMax, will continue to use its 625,000 square-foot corporate campus in Boca Raton, which the company said, “has ample space to accommodate associates who will relocate from Illinois.”
While the transition and integration process occurs, Office Depot will keep a presence in Naperville. The company said that it is too early to estimate how many employees will relocate from the local facility at 263 Shuman Blvd. The company has about 1,250 employees at the Naperville location, and about 1,700 in Boca Raton.
The location of Office Depot and OfficeMax stores, customer service centers, warehouses and distribution centers are not affected by the selection of the headquarters location.
Naperville Mayor A. George Pradel said the city “is saddened not by the merger, but by the effect on the employees here and through the area.”
“You’ve got (a large number of) employees and their families here, and I think the company was something like the sixth largest employer,” Pradel said. “We tried hard to keep them here, but they’ve got golf courses down there and the ocean, and it’s kind of inviting. But the quality of life here is something I think a lot of the employees are going to miss.”
Pradel said the company is still operating under a 2½-year lease at its Naperville facility and that “there is still a lot of work to be done in consolidation.”
“This isn’t going to happen tomorrow and hopefully the building they are using will incorporate other entities,” he said. “We hope that some of the people will be kept here and somehow keep Naperville as a part of the process.”
Pat Skarr, spokesman for the Naperville Chamber of Commerce, said that the Chamber has “no comment” on the matter, other than the news is “very disappointing.”
Naperville Development Partnership officials said they were “disappointed” with the announcement, noting that OfficeMax moved its headquarters to Naperville in 2006.
“The loss to Illinois is considerable on every level,” said Christine Jeffries, president of the Naperville Economic Development Partnership. “The purchasing power of their employees is a significant economic benefit to our communities and they will be sorely missed in Illinois.”
Roland Smith, chairman and CEO of Office Depot Inc., said the decision to go with Boca Raton over Naperville was a difficult one.
“Selecting the headquarters location is a critical step toward integrating our two companies,” he said. “Both Florida and Illinois have many positive attributes.”
An incentive package to encourage Office Depot Inc. to locate its corporate headquarters in Naperville passed in the state Senate, but House lawmakers adjourned earlier this month before voting on the measure.
State Sen. Tom Cullerton (D-Villa Park), the plan’s sponsor, and executives from the newly-formed company testified in favor of the plan in Springfield. The proposal included offering a tax credit based on the number of jobs kept in Naperville and new jobs brought into the state.
Illinois Chamber of Commerce President and CEO Doug Whitley criticized “Illinois political leaders for not acting in a timelier manner” to get the headquarters for Illinois.
“Our leaders need to come to grips with the fact that the private sector does not wait around for people to make up their mind, and the worst thing government can do is do nothing,” Whitley said. “The General Assembly left the private sector twisting in the wind by not acting on these bills that were going to provide some incentives to the company. Government needs to make it clear what it’s willing to do. To do nothing or send no signals is wrong.”
Karen Denning, senior director of Media Relations for Office Depot Inc., said the decision to keep the headquarters in Florida was based on a number of economic factors as well as those affecting future employment and space issues.
“Incentives from Florida and Illinois were a significant factor considered in the headquarters selection process,” Denning said. “Other factors included the cost to operate each headquarters location, lease obligations and sublease considerations, tax implications, ability to add associates and incorporate functions in the current space, and people-related costs. All factors were weighed in aggregate to reach a final decision.”
Smith said that the company’s 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.”
Jeffries said that the Naperville Development Partnership will work to find a new tenant for the current facility in Naperville.
“The building at 263 Shuman Boulevard remains an outstanding headquarters location and the NDP will work to bring another great business to the building in Naperville,” she said.