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BCR's Daily Fishwrap Report for April 2, 2009

DDI's Kalkhof: Burt's Bees move to ATC a positive step for Durham, downtown

Following on the heels of yesterday's announcement that personal care products maker Burt's Bees is scoping out a move to downtown's American Tobacco Campus comes the following thoughts from Bill Kalkhof of Downtown Durham, Inc.

Kalkhof notes DDI's support for the economic incentives offered in this deal, pointing out that they're in line with a 2007 city policy that supports incentive dollars for corporate headquarters moves such as this one. Kalkhof also notes the interest of the firm in making the Hill Building in American Tobacco a more "green" building, a move that seems a fit for the company's image.

DDI's executive director has asked for space to share his thoughts on this proposal:

In today’s very challenging economic environment, downtown Durham is very fortunate to have an opportunity to keep a valued local company in our community with the relocation of the Burt’s Bees headquarters to the American Tobacco Historic Campus.

Burt’s Bees needs little in the way of introduction. It is a profitable “earth friendly” natural personal care company whose products are marketed world-wide. Burt’s Bees is a nationally known “Durham brand” and our community should do all that it can to keep this valuable brand image in Durham. The company is 25 years old, and currently employees almost 400 people across sales, manufacturing and distribution. The corporate headquarter function includes 145 people who would be moving into the new downtown location. The company offers very competitive and attractive salaries for the Triangle region, and it provides 100% health care benefits. As a condition of this deal, Burt’s Bees, in an environment of job lay-offs, plans to create 51 well-paying jobs over three years for our community after relocating to downtown Durham.

In addition to its profitable business model, Burt’s Bees is a very valuable community partner. The company has funded and built Habitat for Humanity houses, provided significant financial grants to Teach America, encouraged employee community work days, provided funding for community service organizations through its “Greater Good Foundation,” and company representatives continue to participate on the boards of Habitat and the Triangle Community Foundation, etc.

In my discussions with the brokers working this deal, Burt’s Bees will be very focused on converting select elements of the building into more of a “green building” where they will focus on doing everything from recycling to numerous energy reduction measures. They are a true 21st century corporate citizen.

As your readers may know, there is currently over 1.1 million square feet of sub lease space available in the Triangle market; and, that space is leasing for 60% - 70% of market leasing rates. This is simply to inform the public that Burt’s Bees has had several offers related to its re-location, including a Wake County location at 1500 Perimeter Park. So, we are competing to keep this outstanding company and corporate citizen in our community.

The corporate culture of Burt’s Bees would appear to be a perfect match for the business and social culture of American Tobacco and downtown Durham. However, when decisions are made by executives to move a headquarters site, the cost of such moves must also be considered in the equation. In this case, there is a significant “financial gap” between Burt’s Bees staying and expanding at its current location, moving to Perimeter Park, or making the more costly move to American Tobacco.

The incentive package the City Council is requested to consider is to help narrow this “financial gap.”

On May 7, 2007 the City Council passed a resolution entitled “Resolution Establishing a Job Creation and Retention and Investment Incentive Policy.” This resolution allows the Council to provide incentives to a headquarters move such as the Burt’s Bees deal.

The City Council is being asked to provide performance-based incentives in an amount not to exceed $138,750 over the life of the deal as proposed by the City Administration.

On behalf of Downtown Durham, Inc., we believe this is a very wise investment of taxpayer funds for the reasons noted above, and especially in our current economic climate.















Comments

Bass

It would definitely be a win win situation.

Todd P

This would be a good move for Durham. Burt's Bees is a great corporate citizen, and they are not asking for much.

Anonymous

Burt's Bees WAS a Durham company. They have been owned by Clorox since 2007. While business wise it may be a great boon for American Tobacco, it's probably just best to make sure their classification isn't so much a Durham based good corporate citizen but an offshoot of a major corporate powerhouse. http://www.forbes.com/2007/10/31/clorox-burts-bees-markets-equity-cx_af_1031markets15.html

I just mention this because as a former lover of all things Burts, I gave up the brand after Clorox, a company that produces lots and lots of non environmentally friendly products, purchased what was once a true Durham brand.

Woody Holliman

Wow -- I was unaware of the Clorox connection. That's sad! Nonetheless, I'd still like to see them in downtown Durham.

Rob

Anonymous-- Burt's Bees was not founded in Durham. They moved down here from May for the park once they started to get serious.

No matter who owns them, they produce jobs for Durham residents. And the jobs aren't just for college grads; they provide jobs for compounders and other high school education level jobs.

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