Smithers to renovate Akron building as new headquarters

AKRON—Smithers will be moving into a new headquarters by mid-2020 on North Main Street in downtown Akron as part of a collaborative effort with the city and others.

Renovation of the 63,000-sq.-ft. building includes construction of a new research and development building in the range of 25,000 square feet, with a total investment of about $16.9 million, according to Smithers. The new collaboration involves Smithers, Summit County, the city of Akron, the Development Finance Authority of Summit County, Team NEO, JobsOhio, Akron Children's Hospital, FirstEnergy and the Welty Building Co.

The building was originally the headquarters for the Austen BioInnovation Institute in Akron, a collaboration of biomedical companies, according to Summit County Executive Ilene Shapiro's State of the County speech Aug. 29.

"Unfortunately, not all collaborative endeavors can be successful," she said.

While ABIA's goals did not materialize, the building is still used by Akron Children's Hospital and Cleveland Clinic Akron General, she said.

The building, currently owned by the DFA, served as ABIA's headquarters for about seven years, with the original transaction closing in 2011 and opening after renovations the next year, said Jason Dodson of Roetzel & Andress L.P.A.

Smithers had been looking at its options for expansion from its Market Street location just west of downtown in April 2018 when the site was initially suggested, said Nat Leonard, president of materials science and engineering for Smithers.

"We knew we needed space," Leonard said. "We had the nice challenge of growing, and we needed space for operations. We liked the link of the biotech history of 47 N. Main, and a lot of the industries that we serve are medical and pharma-related."

Once the connection with city officials had been made over the site as a potential landing space for Smithers, "we found a group that worked really hard for a long time to find a solution that met the requirements we all had and overcame a lot of challenges. We appreciate the persistence to get us to where we are today," Leonard said.

The deal also includes two nearby buildings on North Main Street, both owned by Summit County, said Brian Nelson, Shapiro's chief of staff. Before the ABIA deal, the county operated its Department of Job and Family Services out of one of those buildings through 2016. It also operated on floors four, five and six of the ABIA building. ABIA itself occupied floors one, two, three and most of the basement. Since Job and Family Services moved out, DFA continued operation on the fourth floor. The remainder of floors five and six went unused, with Akron General using a portion of the sixth floor. Akron Children's has been leasing ABIA's section of the building, and has agreed to a 10-year commitment through the renovation.

Under the new project, the site will be split into a condominium with A and B units, Nelson said. The A unit will consist mostly of where ABIA had been operating, including most of the basement and floors one, two and three. The B unit, where the new Smithers headquarters will be located, will include the upper floors four, five and six. The parcel includes the space where the new research and development building will be constructed, wrapping around the current building.

Three buildings, including a trolley shed, will be demolished to make space for the R&D site and parking, Nelson said. A retaining wall will be constructed to shore up Maiden Lane, and some of the site will be made into a parking lot. Smithers will retain the option to purchase a building on the south edge of the parcel for the next seven years. The larger parking lot will include an easement from Smithers to allow the city to use the area as a quasi-public space for city events, similar to the agreement already in place for the city to use the Bridgestone deck.

Moving forward

Nelson said Smithers' purchase price of the B unit and the R&D building parcel from the DFA will be $750,000. Construction is expected to begin immediately after the closing of financing. A term sheet has already been executed, and legislation authorizing the project was brought before Summit County Council on Sept. 16.

Approval could come as soon as Sept. 23, with Akron City Council following with a goal of having the legislation adopted by Oct. 7, Dodson said. The collaborative group is looking at a closing day of Nov. 21, though the complexity of the deal may push it back toward December, or possibly early in January.

"We all are going to be working as tough as we can to stick by that Nov. 21 timeframe," Dodson said.

The first part of the project will include building demolition as well as renovation of the main building on the campus, said Mike Hollabaugh, chief financial officer for Smithers. The firm anticipates that the first wave of its team members will move into the new headquarters in mid-2020. The second part of the project will start at the end of the first phase, which will include the construction of the new R&D lab building.

Smithers has not determined how the move will affect its West Market Street or South Main locations, Leonard said.

The two locations support 111 employees currently, and Smithers is planning to add another 84 jobs to its ranks through the next four years alongside this project, Hollabaugh said.

Those planned new jobs will include a combination of bachelor's and doctorate-level positions, particularly in the R&D facility, Leonard said. Smithers also will be adding an unspecified amount of new equipment, with the majority going to the R&D facility as well. Smithers' materials science and engineering team members, which focus on lifecycle testing, physical and functional testing, chemical characterization and analytical chemistry, primarily will be based in the lab building. The front building will house Smithers' information division, providing market intelligence through market reports and consulting; quality assessments, providing certification, quality and management systems; and corporate staff.

Akron Children's and Akron General Medical will continue to maintain space in the renovated building, but there is also the potential for a small space for an additional tenant, Hollabaugh said.

"The idea would be a tenant who's got a mindset around biotech, who might be complementary to the biotech-type campus that we envision here," he said.

The $16.9 million total for the project comes from a series of investments and grants from among the collaborative partners, Dodson said. Those include DFA taxable bonds worth about $5.5 million from its bond fund, the proceeds of which will be lent to Smithers to pay primarily for renovations at 47 N. Main. The city of Akron is providing a $2 million grant, the majority of which will go to parts of the project defined as public improvements, as well as the demolition and abatement phases. The city also provided a grant of about $48,000 for sewer connections. FirstEnergy contributed a $150,000 grant, and JobsOhio committed two separate funds for a total of $1.6 million. Through a sales tax exemption with the DFA, the savings will generate $455,000 toward the project. Finally, Smithers will provide $7.1 million.

The partnership and project, along with the advanced materials and innovation, are "very much in line" with the city of Akron's priorities, said James Hardy, deputy mayor for integrated development and chief of staff.

"We want companies like Smithers to stay and grow, and we wouldn't have been able to do that without everybody at the table," Hardy said.

It also provides support for Akron's downtown, as the upward trajectory of the downtown area gave Smithers a reason to continue its growth nearby, he said.

"To see what we're going to have now, with Smithers anchoring that, along with Akron Public Schools and a lot of the other properties down there, is just spectacular from a city perspective," Hardy said. "Again, it's a huge vote of confidence for downtown, and we thank Smithers for believing in that future."

Consolidating brands

For Smithers, the move comes alongside its launch of a single brand identity for the company, rather than its individual legacy brands. The rebranding had been in the planning stage for about 18 months, but happened to line up with the announcement of the renovation project by coincidence, said Glenn Goldney, vice president of sales and marketing for Smithers.

"That was really an effort of ease in doing business for our clients," Goldney said. "Many of our clients around the world knew us simply as Smithers."

The firm is leaving behind the legacy brands, including Smithers Apex, Avanza, Pira, Quality Assessments, Rapra and Viscient to simplify the process for customers, Goldney said. It retained its legacy logo and image, and introduced a new tagline: "Innovate with Confidence." The change took effect Sept. 10.