Axalta Coating Systems Inc. will bring an estimated $70
million global research-and-development facility to the Philadelphia Navy Yard
and relocate 190 jobs to the site with the expectation it could double the
number of its employees at the South Philly campus over the next five to seven
years.
The Philadelphia-based maker of liquid and powder
coatings signed a 20-year lease with Liberty Property Trust (NYSE:LPT) on what
will be a two-story building totaling 175,000 square feet. It will serve as
Axalta's “Global Innovation Center.”
The new 175,000-square-foot building was designed to be
west-facing and frames the views of League Island Park. It will sit two blocks
from Central Green.
The new 175,000-square-foot building was designed to be
west-facing and frames the views… more
Liberty expects to complete construction by late 2017 and
the facility should be fully operational by 2018. Axalta (NYSE: AXTA) has the
ability to extend its lease, as well as an option to expand the structure by
one level if growth warrants it. Erdy McHenry Architecture designed the
building.
The facility will house Axalta’s global research, product
development and technology operations.
Employees now working in Wilmington, Del., will relocate
to the facility. Upwards of 400 people could eventually work from there. The
jobs are high-paying with starting salaries of $100,000 or more.
The company received a $400,000 grant from state and a
$750,000 low-interest loan made by Philadelphia Industrial Development Corp. on
behalf of the city that can be forgiven if certain job creation targets are
met.
The project is also receiving a $2.25 million loan from
PIDC to finance a portion of Axalta’s fit out and equipment costs. The company
will also be located in a Keystone Opportunity Zone, which, in this case, gives
breaks on certain state and local taxes through 2025. The value of the KOZ is
different for each company, but, at the local level, the biggest benefit would
be waiving real estate and use and occupancy taxes.
Axalta Coating, formerly DuPont Performance Coatings, is
a spin off from DuPont.
It is owned by the Carlyle Group, a global asset
management firm based in Washington, D.C. It is the fourth-largest supplier of
coatings in what is a $127 billion industry. Its coatings, which are designed
to deter corrosion, are used on vehicles, buildings, pipelines and other
products.
In fall 2013, Axalta moved its headquarters to Commerce
Square in Philadelphia from Delaware.
The company began its search for a site for its global
research center last year – prompting rumors of a potential project at the Navy
Yard.
Once Axalta executives felt it had finally settled in
from the initial transition from DuPont, the company began to analyze in
earnest where it wanted to locate its new R&D center.
“We didn’t want to jump off a cliff the first year and
make a decision and regret it,” said Charlie Shaver, Axalta chairman and CEO in
an interview. “We wanted to solve for a bigger question and that was where do
we want to do our innovation work and how should we think of that with regard
to global growth, our market and competition.”
Through its evaluation, Axalta concluded its R&D was
scattered all over the world.
As part of its focus on launching a new facility, the
company decided it also wanted to recruit a veteran to head up R&D and help
guide the development of a new facility, hiring Barry Snyder in January. Snyder
came to the company after holding similar leadership positions at other
companies, like Rohm and Haas, that manufactured products that went into making
paints and coatings.
Once Snyder was secured, his input was critical in
figuring out the direction Axalta wanted to go into.
“We knew we wanted something different,” Shaver said.
Although Axalta had its headquarters in Center City
didn't mean it would automatically put the center in Philadelphia, Shaver said.
Several areas, including Shanghai and Cologne, Germany were in the running,
along with Philadelphia.
The Navy Yard became a compelling option even though
others were cheaper and it brings city wage tax into the fold, Shaver said.
It is a dynamic campus with amenities and other
characteristics that make it an attractive work environment. Those factors were
important because Axalta is moving people from other regions and wanted to make
sure they would be “excited” to relocate to the site. It also wants to recruit
talent – and increasingly companies are using their physical spaces as part of
the allure.
“There are no martyrs any more. You have to be able to
offer them something and an environment that will be exiting for them to work
from,” Shaver said. “In the end, the economic incentives we got made a big
difference in our decision.”
As part of this move, Axalta has also formed a
relationship with the Science Leadership Academy, a high school that is a
partnership between the Philadelphia School District and the Franklin
Institute.
The company will offer the school financial support as
well as arranging mentoring programs. The effort, however, is not completely
altruistic. While the company is supporting an academic institution focused on
science and technology, the relationship could eventually groom what could be
potential, future employees.
Editor's Note: An earlier version of the story said
employees from Glen Mills, Pa., and Exton, Pa., would be moving to the new
facility. That was incorrect. It's employees from Wilmington, Del., that will
be relocating.
Source: Philadelphia
Business Journal
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