Memphis, TN, October 27, 2006--ServiceMaster Co.'s board of directors will meet today and is widely expected to vote to relocate its world headquarters from Chicago to Memphis, according to the Memphis Commercial Appeal.
The newspaper reported that officials are scheduled to announce their decision during a news conference Monday at 2:30 p.m., said sources familiar with the company's plans.
ServiceMaster would not comment.
City, county and state officials also remain tight lipped, but excitement is building as Memphis seems certain to land its second Fortune 500 headquarters this year -- the other being International Paper, which relocated from Stamford, Conn., in August.
ServiceMaster would also mark the third Fortune 500 company to relocate its headquarters to Tennessee in a year. Nissan North America Inc. relocated its headquarters to Nashville in June.
"The things we hear from companies are that Tennessee has a very productive workforce, a high-quality workforce and quality of life and great cooperation with local, state and federal agencies," said state Economic and Community Development spokeswoman Dawn Rutledge Jones. "With the corporate headquarter relocations that have come to the state and other industries that have come to the state, the governor has been focused on economic develop, investment in workforce development, education and infrastructure."
ServiceMaster is based in Downer's Grove, Ill., a suburb of Chicago, where it employs 165 executives. It employs about 2,400 people in Memphis, where all of its divisions are based.
The provider of housecleaning, pest control and landscaping services is proposing to create 500 jobs -- including the 165 executive positions --- in Memphis through the end of 2011.
ServiceMaster CEO J. Patrick Spainhour -- a former board member who usually spends three days a week in Memphis and recently purchased a home here -- has been pushing for the relocation, according to several sources familiar with the company.
With benefits, the annual median wage would be $67,300, far above Shelby County's per-capita income of $35,237, including benefits.
ServiceMaster is considering two options for its relocation, and the Memphis and Shelby County Industrial Development Board last week granted the company payment-in-lieu-of-tax freezes for each option.
One option includes staying at Boyle Investment Co.'s Ridgeway Center office park in East Memphis, the primary site for ServiceMaster's Memphis business operations.
Under this option, ServiceMaster said its investment would be $10.5 million to $12 million.
The IDB awarded the company a 12-year PILOT that would save the company $8 million.
The other option is to build a new headquarters at an undetermined site, but within the city's limits or reserve areas. That would cost $122 million for four 150,000-square-foot office buildings.
The IDB granted the company a 15-year PILOT that would save the company $18 million.
ServiceMaster -- which is working with Memphis-based Commercial Advisors LLC -- is scouting sites for the possible office campus.
With deep ties to Chicago, where it was founded in 1929, the company is grappling with the decision to relocate.
ServiceMaster president Ernie Mrozek said at the IDB meeting that moving to Memphis could improve the speed and effectiveness of communications and decision making within the company.
"Frankly, it will make everyone feel more like part of one family and that is important to us," Mrozek said.
Mrozek also said there are significant drawbacks to making the move, including costs and a possible "brain drain," the loss of senior executives who do not want to make the move to Memphis.
"We would lose a large number of very knowledgeable, talented and committed people," he said.
