ELYRIA — An equity firm that got its start in Elyria is moving to Westlake in a shift that will result in a $15 million expansion and renovation project of a newly acquired building that used to belong to the Cleveland Clinic on Clemens Road.
Upon completion of the project, the Equity Trust Co. plans to consolidate its Elyria, Berea and Waco, Texas, operation at the Westlake location, bringing 375 jobs and an initial payroll of $14 million to the suburb.
Elyria stands to lose roughly 120 jobs.
City Auditor Ted Pileski said Equity Trust paid a little more than $11,000 in income tax withholdings in 2011. While some will not see the loss as financially significant to the city, Pileski said it is just another loss in a long list of losses.
“At this point, I would label everything as significant with everything else we are swallowing with state cuts and the re-evaluation of property. Everything is mounting up,” he said.
Mayor Holly Brinda said officials at Equity Trust have been mulling a departure from Elyria for at least eight months. During that time, she has tried her best to woo them into staying by offering a job creation tax credit to offset their income tax burden, a community reinvestment area (CRA) agreement similar to the one they are seeking in Westlake, as well as first shot at the virgin property that will be available on Broad Street after the old City Hall is demolished.
“But I think they made up their mind that they wanted to move more east,” Brinda said. “They have also worked with Team Lorain County, but just could not find the kind of office space that fit their needs in this area.”
Jeff Desich, CEO of Equity Trust, said the move was really precipitated by the opportunity with the building.
“Without a doubt are committed to Lorain County,” Desich said. “We have been in Lorain County for almost 40 years and the Desich family has been in Lorain County for a lot longer than that. If the building had been in Lorain County or Elyria, it would have been a great opportunity, but buildings just are where they are.”
Brinda said the city was basically willing to give Equity Trust the world to stay in Elyria.
The company’s corporate office is at 225 Burns Road in Lorain County Community College’s Technology Park, which is home to its operational teams.
Founded in 1974 under another name, Equity Trust — established in 2003 — moved several times in Elyria before settling on Burns Road. But the company also outgrew that space, and in 2009 opened a second location in Berea.
It has about 330 employees with about 120 to 130 working in Elyria and about 110 employees at its facility in Berea, which is home to the sales, marketing and client service teams.
It also operates affiliate offices in Waco, Texas, and Carlsbad, Calif.
The company, which has been in business more than 35 years, specializes in allowing its clients to self-direct and invest their individual retirement accounts into nontraditional assets, with the most common investments being real estate and private placements.
When it added jobs in Elyria back in 2010, company officials said the salary range of jobs was as low as $23,000 a year and upward of six-figures.
Equity Trust is negotiating a CRA agreement with Westlake officials that was detailed in a letter dated Nov. 5 to Elyria city officials.
Under Ohio law, Westlake has to notify the affected cities and provide a copy of the proposed CRA agreement.
According to the agreement, Equity Trust hopes to begin the project in December and complete the renovation and move within one year, provided the tax exemption is approved. The Westlake location will become the company’s new corporate headquarters.
The former Cleveland Clinic building is 72,000 square feet and sits on an eight-acre campus. The Elyria location is roughly 16,000 square feet, Desich said.
“It is large enough to allow for consolidation and the organic growth of the company. We have long been short on space,” he said.
The Cleveland Clinic building is being purchased for $3.75 million, and $11.25 million in improvements are planned for a total project investment of $15 million over five years.
Equity Trust is seeking a property tax exemption of 75 percent for 10 years.
To make its case of why the exemption would benefit both the city and the Westlake school district, Equity Trust said the renovation will result in a net increase in property taxes for the city and schools as well as bring additional income tax to the city.
Brinda said Equity Trust officials have told her there is a chance a small Elyria office will be maintained.
Desich said it is too early to determine what that presence will be, but maintains Equity Trust will remain loyal to Lorain County.
During those talks, Brinda said she brought up the city’s campaign to raise money to pay for Christmas lights at Ely Square and Finwood Park and was given a $15,000 donation from Equity Trust.
“I would much rather say we are keeping the jobs, but I certainly appreciate their donation and believe their willingness to contribute speaks to the fact that they want to work with us and we will continue to do everything we can to facilitate that,” she said.
Contact Lisa Roberson at 329-7121 or email@example.com.