Losing the headquarters of another publicly traded company isn’t good news for the region. But local observers say the region remains home to an array of thriving private companies, and those homegrown businesses deserve renewed focus and attention.
Last week, Butler County-based AK Steel and Cleveland-Cliffs announced a merger agreement that will leave AK’s Middletown research center open and a “significant presence” in AK’s West Chester Twp. administrative offices. And while AK will continue to run its integrated steel plant in Middletown, the company’s headquarters will be in Cleveland.
AK joins a string of other publicly traded companies that, for a variety of reasons, moved or lost their area corporate headquarters over the decades — NCR, Robbins & Myers, Mead, Teradata and others.
But those aren’t the only kind of companies important to the region, advocates say.
“It is not as big a deal losing publicly traded companies as it used to be because investments into small business efforts have substantially increased,” said Bruce Langos, who 12 years ago helped spin Teradata off from NCR, creating a publicly traded company that, until last year, had an administrative presence in Miami Twp.
“Cities like Dayton can’t get distracted with keeping headquarters,” said Dayton native and urban scholar Adam Millsap. “Creating a fertile environment for new businesses started by locals — even if they only stay small or medium-sized — is the real key. Eventually a big business may spring up from a local, and they’ll want to stay in Dayton.”
Losing a corporate base does mean a loss of high-paying administrative jobs, clusters of employees surrounding chief executives who make decisions that affect a region.
“Dayton and the region have to understand that,” said Chris Riegel, chief executive and founder of Stratacache, the Dayton-based creator of cutting-edge customer-facing marketing technologies. If a region loses those career paths, that can entail a continued “decline in the economy.”
“You want the high-tech, high-paying, high-education jobs,” Riegel said.
That doesn’t mean, however, that Dayton and cities like it lack options.
The region remain home to a number of private or closely held companies that are thriving and expanding right now — companies like Stratacache, Henny Penny, Crown Equipment, Midmark, CareSource, Winsupply and others, which have each made big area investments in recent years.
Enon-based Speedway, one of the largest revenue producing companies in the region, is on its way to independence next year from Findlay-based Marathon.
“We have some unbelievable gems in the Dayton region, and we spend a lot of time with them,” said Jeff Hoagland, president and CEO of the Dayton Development Coalition.
And those private companies enjoy a number of advantages compared to publicly traded counterparts.
“I would put it in one phrase, which is agility,” Riegel said. “I think in business, agility is one of those key points. As a private company, you can be agile. You can stop and turn on a dime. You’re not having to worry about shareholders in this quarter or in that quarter.”
That agility has allowed Riegel to make significant investments in downtown Dayton in the past year. He bought downtown’s tallest building, the former Kettering Tower, for $13 million early in 2019, just weeks after spending $1.7 million on a Courthouse Plaza building across from the historic Arcade.
And Riegel has shown openness to to further investments, participating in a recent auction for the Fifth Third Center downtown. (Another company successfully bid on that building.)
Privately held Henny Penny — a producer of food preparation equipment used in familiar restaurants worldwide — recently celebrated the launch of its biggest expansion in its 62-year history.
That expansion entails adding 150,000 square feet to Henny Penny’s Eaton building, a 35 percent increase of the company’s current space. The company will also renovate its Wagner building.
At completion, Henny Penny will have a total of 585,000 square feet on its 60-acre campus and an estimated 70 new jobs.
“I believe a private company has some advantages, and those advantages for us are: We have a long a view,” said Rob Connelly, CEO of Henny Penny. “With a long view, combined with valuing relationships, that sets up a culture to be successful and do the right thing.”
Added Connelly: “We’re building a company for infinity.”
That approach has allowed long-term relationships with Henny Penny customers — a relationship of 55 years with Chik-Fil-A, 50 years with KFC, 40 years with Wendy’s and 35 years with McDonald’s.
Henny Penny is closely held, but also employee-owned. Connelly said that offers some advantages, giving its 762 employees an economic interest in the company’s growth and confidence in its future.
Riegel doesn’t see a point on the near-horizon where he would want to take Stratacache public. He said he has spoken with fellow decision-makers about that option, but right now, he feels the cons outweigh the pros.
Riegel, who is Stratacache’s sole owner, doesn’t want to necessarily manage the business to Wall Street’s expectations.
“It changes the culture, it changes the focus,” Riegel said. “If we don’t need public funds to grow — which we don’t — then I think you end up spending a lot more money with lawyers and accountants than you do on focusing on business. And I think it can be a huge distraction.”
Riegel’s argument: If you look at how the biggest tech fortunes were made — by company founders like Jeff Bezos and Larry Ellison, among others — CEOs grew not by selling out to the public equity market early, but by keeping significant ownership shares of their companies long-term.
Said Riegel: “It’s a long-term value play.”
Some 70 percent of of all jobs are created by small businesses, so those businesses must be a part of any meaningful economic development strategy, Langos said.
“A robust small business culture is a magnet for large businesses – so it shouldn’t be considered an either-or question,” said Langos, who today is executive business advisor and board member with local developer RG Properties. “It is more important for the region to make investments in local business growth than trying to entice large public companies to the region.”
Millsap, who grew up in Dayton and Beavercreek and today is a senior fellow at the Charles Koch Institute in Arlington Va., said publicly traded companies will go where CEOs and shareholders want them to go — and often that will mean bigger cities with more amenities.
“My suggestion is not to worry about it so much,” Millsap said. “Cities like Dayton will probably only keep a headquarters long-term when the founder is from Dayton. Otherwise, hired CEOs with no ties to Dayton or similar cities will generally want to locate or live in other places.”
“The reality is, we’re not going to keep everyone,” Hoagland said. “That’s just the world we live in.”
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