In a stunning development, a little-known downtown Toledo firm that invests in health-care facilities plans to buy the 160-acre campus of Dana Holding Corp., which means the automotive-parts supplier will move its global base to the suburb of Maumee.
The announcement yesterday, which will open space in a premier riverfront office building that is trying to find tenants, means Health Care REIT Inc. will push Dana out of Toledo after 80 years.
No purchase price was disclosed.
The transaction is to be finalized by Oct. 1, and Dana will vacate the 4500 Dorr St. colonial-style office by September, 2009. It will move into its modern-looking Automotive Systems Technology Center about eight miles away off of Maumee-Western Road in Maumee.
The move gives Health Care REIT a signature property, although it is taking on considerably more space than it has in its 1 floors leased in Fifth Third Center at One SeaGate on Summit Street downtown. And Dana, a Fortune 500 firm, will trim expenses and generate money as it consolidates into its tech center built four years ago.
It fits our growth mode for the next 30 years and it fits Dana s decision to move to Maumee and expand that building, said George Chapman, Health Care REIT chairman and chief executive.
Sometimes in business, opportunities don t always come around at exactly the right time, he said. But this is a landmark property in Toledo. We are willing to make a commitment per-haps a bit earlier than we would have otherwise.
John Devine, Dana executive chairman, said, This location has been an important symbol for Dana for a long time. It is part of our heritage.
Dana, which emerged from bankruptcy Feb. 1 and is working to cut costs in a troubled automotive industry, has been trying to sell the Dorr campus since June, assembling a list of potential buyers.
Consolidation is something that appeals to us now to save some money, he said. Our face to our customers is important too and this really is a trophy property. For an automotive supplier, it probably didn t present the right face to the customer. It s a little too grand for an automotive supplier these days.
Dana would lease its Dorr buildings for a year until new offices at its Maumee tech center are done. Then it will move the 175 employees at its headquarters. The firm plans to spend $5 million to improve the offices at the tech center.
It wants entrance and exit ramps off the I-475/U.S. 23 expressway next to its Maumee building, and has requested state assistance for it and for the remodeling.
Health Care REIT, a real estate investment trust which owns but doesn t operate health-care operations in 38 states, then would remodel the Dana site and move its 75 headquarters employees.
It estimates the remodeling will cost $8 million to $10 million, and the company has asked the Ohio Department of Development, Lucas County, and Toledo for financial assistance.
The company leases 35,000 square feet on the 14th and 15th floors in One SeaGate and just signed a five-year lease there, which it must honor. Rents in that building typically run about $20 a square foot per year. The Dorr office has 200,000 square feet, but Mr. Chapman said only about 110,000 square feet of the red-brick and white trim, mansionlike building are usable.
A strategic move
Toledo Mayor Carty Finkbeiner called the deal a strategic move for both companies and the best in economically challenged times. Dana s move was expected, he said, adding, I am delighted they are still going to be part of northwestern Ohio and the city.
Dana, founded in 1904 in South Plainfield, N.J., came to Toledo eight decades ago on Bennett Road and moved into its current office in 1970.
The firm sold part of its campus in 2006, buildings off of Richards Road that housed the former Dana Commercial Credit leasing subsidiary. ProMedica Health Systems paid $9.3 million. Elsewhere, Dana s test track and research center on 300 acres near Ottawa Lake, Mich., is practically mothballed and for sale, without any buyers as yet.
As it continues to struggle after its bankruptcy, Dana said three weeks ago it will cut about 3,000 workers, including 100 on salary at its Maumee tech center.
Dana has about 1,000 employees in metro Toledo of its 35,000 worldwide. It has 380 employees at its 200,000-square-foot tech center and it can accommodate about 500 workers there.
The maker of axles, drivetrains, and other under-car parts has employees on Longbow Drive in Arrowhead Park in Maumee and on Trust Drive in Holland, but those people will not be affected, a Dana spokesman said.
A need to cut costs
Aaron Bragman, an auto industry analyst with Global Insight in Detroit, said the move is a minor one but is pragmatic.
They will be consolidating operations and personnel under one roof, he said of Dana. Forty years ago, it might have made sense to have a big headquarters, but times are a lot tighter now and they need to make adjustments and cut costs just like a lot of other automakers and suppliers are doing.
The deal had little impact on the stock of the two firms. Dana s closed down 6 cents a share to $6.32, and Health Care REIT s was down 58 cents at $50.55.
Health Care REIT began in Lima, Ohio, in 1970 and moved to downtown Toledo in 1986. It has added 15 to 20 employees annually and has development arms in Nashville and Jupiter, Fla., that could move to Toledo, company officials said.
The firm, as a landlord investment firm, receives relatively little publicity, but its portfolio has been growing.
Mr. Chapman said the amenities and extra space at the Dana site will be nice for his employees. The Dana office has a dining room and kitchen, plus two auditoriums to conduct meetings and seminars. The site has three guest-house buildings that Health Care REIT will use to house visiting employees or customers.
We think we can be more involved in bringing in speakers and improving the education process as it relates to health care, the CEO said.
It may be possible, Mr. Chapman said, to sublease space to company affiliates or others at the mostly wide-open Dana campus. He said he toured the Dana building at night twice and the company decided to buy it two months ago.
The campus is impressive and should make it easier to recruit new employees, he said.
I tend, from an architectural and design standpoint, to be more taken with contemporary styles over colonial. But it fits so well on that site, and one could add some modern and contemporary aspects internally, he said.
Still, the firm s departure from One SeaGate poses yet another obstacle for office building that two years ago was headquarters to Owens-Illinois Inc., which decided to leave for a new headquarters in the suburb of Perrysburg. Fifth Third Bank moved its northwest Ohio headquarters into the glass tower on the Maumee River, but the structure is about 50 percent empty.
Mr. Devine said his firm s move will not affect its relationship with Toledo, where it is involved in various philanthropic commitments.
We re not going far away, he said.
Toledo won t lose out too much on the Dana move. The tech center is within an economic development district that provides taxes to Toledo, Maumee, and Monclova Township. Mr. Finkbeiner said the district has proved to be very profitable for all parties.
The decision not to sell the Dana campus to developers shows the firm s commitment to Toledo, Mr. Devine said.
Frankly, we probably left money on the table, he said. We could have made more with a developer, but we felt we had to put [the Dorr Street site] in the right hands.
Contact Jon Chavez at:email@example.com 419-724-6128.