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City will lose 10 percent of its tax revenue.
Northern Kentucky leaders quickly moved from shock and dismay to damage control Tuesday, as the region reacts to Monday’s surprise announcement that Toyota Motor Corp. will relocate 1,600 jobs from its North American manufacturing headquarters to Texas, Michigan and Georgetown, Ky.
The Northern Kentucky Chamber of Commerce is working with Northern Kentucky Tri-County Economic Development Corp., the region’s lead economic development agency, to put a workforce-assistance program in place to help Toyota employees remain in the region if they choose not to move to Texas.
Erlanger City Administrator Marc Fields embarked on a planning process to determine what kinds of budget cuts will be required if revenue from Toyota jobs isn’t replaced by the time the company starts relocating personnel in 2016.
Governor Steve Beshear brushed off questions about Kentucky's business climate, saying Toyota will still hav 8,600 employees in the Commonwealth.
“We’ve got a great investment with Toyota,” he said. “So, we’re going to build on that and just keep marching right on.”
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Toyota Motor Corp. in Erlanger, Kentucky.
CINCINNATI - Northern Kentucky leaders quickly moved from shock and dismay to damage control Tuesday, as the region reacts to Monday’s surprise announcement that Toyota Motor Corp. will relocate 1,600 jobs from its North American manufacturing headquarters to Texas, Michigan and Georgetown, Ky.
“We’ve already had a couple of meetings with the chamber to address the workforce issues,” said Dan Tobergte, Tri-Ed president and CEO. “We’ll be working with the state to handle transitional issues to accommodate those that want to stay.”
Fields said he is worried about not only Toyota jobs, but vendors and suppliers who followed the Japanese automaker to Northern Kentucky. Toyota Boshoku, for example, a parts supplier that occupies an office building across the highway from Toyota, ranks in Erlanger’s top five in earnings taxes paid.
Toyota Boshoku declined to comment.
Early estimates are that Toyota job losses will reduce Erlanger’s revenue by $1.3 million. That’s eight percent of its $16 million budget. But if other companies follow Toyota to Texas, Fields said the loss could easily climb to $2 million.
“If everybody ends up leaving it’ll be over that,” said Fields. “We’re going to plan, look at all the different scenarios and have a contingency plan for all those.”
The 44-acre Toyota campus is likely to draw interest from office users, two commercial real estate brokers told WCPO. Both said it’s a high-profile location that’s near the airport and it’s a well-designed, attractive property.
“It’s no white elephant, that’s for sure. It’s a nice asset,” said Fred Macke, senior vice president and principal for Colliers International. Northern Kentucky’s office market has a nearly 30 percent vacancy at present because of two large vacancies at the RiverCenter Complex in Covington. Take out those two buildings and the Northern Kentucky rate is in line with the region’s average of 15.6 percent, he said.
The Toyota property has two buildings with lots of open space along with lakes and topography that could make it expensive to convert into a multi-tenant office complex. But Macke said that doesn’t mean the property will sit vacant.
“I’d say the chances are very good within 36 months they would find a user, a little less likely in 24 months,” Macke said. “They would be fairly lucky to find a user in less than 12 months.”
Wayne Hach, founder and principal owner of Cushman & Wakefield/Cincinnati Commercial Realtors, said local demand is strong for single-user office properties because larger companies tend to like high-profile locations.
“I’m not worried about the real estate,” said Hach. “The loss of the corporate citizen and the jobs, that’s sad. They were a great company, great for the community. That’s kind of a blow to the region.”
Tobergte said Toyota has asked for a few months before it talks about attracting new users to the headquarters property, built in the early 1990s as a training center by Cincinnati Bell and upgraded several times by Toyota since.
"We’re going to be working with Toyota probably in the latter part of this summer," he said. "They asked for some time to digest what they’re doing."
Kentucky Gov. Steve Beshear spoke to reporters about Toyota’s surprise announcement. He said Kentucky still has a strong business climate and a good relationship with the automaker, which will create 750 new jobs when it starts producing a new Lexus model in Georgetown, where it plans to build a new facility to house 300 engineering personnel moving from Erlanger.
Bob Driehaus contributed to this story