Early Christmas Present for FL Gov. Scott – Office Depot Chooses Boca Raton for Hew Headquarters

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News outlets in South Florida could only speculate. Local and state legislators hoped that the package of incentives that they had presented to the Office Depot Board of Directors would be enough to seal the deal for Palm Beach County. They all waited until this past Tuesday afternoon, when the “new” Office Depot, born of the merger of Office Depot and OfficeMax, announced that it will be vacating the former headquarters of OfficeMax in Naperville and Itasca in Illinois, and consolidating all operations into the 625,000 square-foot Office Depot complex in Boca Raton. In making the decision, Office Depot’s new CEO Roland Smith stated, “Both Florida and Illinois have many positive attributes, but our analysis concluded that Boca Raton provides the best platform.” A spokesperson for Office Depot earlier had said that in the end, the headquarters decision was based on such factors as costs to operate each corporate base, lease obligations, taxes and the ability to add employees at the selected location.

Office_Depot_Corporate_HeadquartersTo anyone following the story, the State of Illinois didn’t look like it was willing to dangle any substantial carrots to entice Office Depot to stay.  Quite the contrary, the state’s House of Representatives adjourned without considering a bill sponsored by State Senator Thomas Cullerton (D – Villa Park), which passed in the Senate and would have given the company a fifteen-year, $53 million tax package, and possibly kept nearly 1,600 jobs in the state. Between the years 1992 through 2010, nearly $7 billion in wealth had already walked from Illinois to Florida.

Illinois’ real target is Boeing. Already headquartered in Chicago, Boeing is looking for a manufacturing facility for its new 777x, and Illinois is more than willing to roll out the red carpet for that. Given the state’s woeful financial condition, it is pretty clear that Springfield simply couldn’t afford to court them both. Considering all the other, better qualified contenders in that fight, it is going to take a lot of financial wrangling and concessions to pull this off. The state has taken a major gamble here, on a long-shot win at best.

As for Florida, it is true that it may have taken generous incentives, but for the state and Governor Scott, this is a huge win. Scott called Office Depot’s decision a “game changer” for Florida, saying in a news release the company would add or retain 2,000 jobs as well as make new capital investments in the state. Local government is ecstatic and relieved. With the Christmas holiday approaching, the decision alleviated layoff concerns and put many a South Florida family at ease. Boca Raton Mayor Susan Whelchel said she has been “sitting on pins and needles for months.”

But there is another fortuity for Governor Scott in this story. In real estate terms, “location, location, location” is what matters, and in this case the location of the new Office Depot Headquarters could not be sweeter. Southeastern Florida is a bastion of the Democratic Party. What better way for a Republican governor to win the hearts of these voters in 2014 than with an economic stimulus and job creator like this.