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Why companies are building second HQs in Ohio

A diverse economy, low cost of living, and corporate-friendly tax structure is luring business to the Buckeye State

Why companies are building second HQs in Ohio
The Columbus, Ohio skyline.
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As Ohio goes, so goes the nation. Up until 2020, that adage accurately described the state as a bellwether for presidential elections. But it’s also an apt depiction of Ohio as a microcosm of 21st-century America. With three major metropolitan areas—and a handful of smaller ones—each with distinct socio-economic characteristics, Ohio’s diversity is hard to match. And after suffering a brutal year due to the pandemic, Ohio has helped spur the nation’s economic rebound, becoming one of the leading states in terms of recovery. The unemployment rate is below the national average, and the state added more than 28,000 new jobs in December 2020.

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A large part of this growth is attributable to companies looking to relocate or add a second headquarters. Coastal overcrowding—with the attendant skyrocketing prices for housing—coupled with Ohio’s lower overall cost of living makes the Buckeye State an attractive spot for relocation. According to a 2020 survey by Lending Tree, Cincinnati, Cleveland, and Columbus are three of the top 25 real estate markets for millennials. Throw in a diverse economy fueled by healthcare (Cleveland), finance and insurance (Columbus), and consumer goods (Cincinnati, home to Kroger and Proctor & Gamble), it becomes clear why Ohio is fertile ground for a post-pandemic economic boom.

HIGH-TECH TALENT

The fintech company Upstart uses artificial intelligence to assist partner banks with consumer loans, applying AI-generated data to approve a larger percentage of applications than loans employing traditional criteria. As the company started rolling out new offerings (such as car loans) and scaling the platform, it needed a second hub to supplement its Silicon Valley headquarters in San Mateo. The main requirement: a wealth of tech-savvy workers. The company considered Austin, Nashville, and Chicago, but Columbus proved to be the most attractive. “We wrote a bit of code for a LinkedIn script to find out how many software engineers were in each city,” says Grant Schneider, who heads Upstart’s Columbus office.

The city is home to Ohio State University, which, as one of the nation’s largest colleges, floods the market with thousands of fresh-faced graduates every year. “Fifty percent of OSU graduates spend more than two years in Columbus,” says Kenny McDonald whose One Columbus group helped woo Upstart to central Ohio. “That’s never been higher.”

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Schneider and one other colleague were the only employees to move to Columbus when Upstart opened its office in 2019. Now, the company counts a workforce of 250—a number Schneider plans to double in the coming year. He estimates that nearly half of the Columbus staff lives within walking distance of the office’s bustling Short North neighborhood. “Columbus is a hidden gem,” he says. “You’ve got all your local shops, arts, diversity, and all the things that tech employees expect and demand—and you don’t have to pay over a million dollars for a studio apartment. We have a big opportunity [here] to be ahead of the curve.”

LOCATION, LOCATION, LOCATION

While Upstart focused on livability factors in moving to Columbus, air-cargo container manufacturer Satco chose the Cincinnati region for one reason: location. The Cincinnati airport (CVG) is the seventh largest air-cargo station in North America, driven by the likes of DHL Express, as well as home to Amazon Air’s first nationwide hub. The Amazon facility is set to open later this year and will bring 3,000 jobs to the greater metropolitan area.

Satco, a family-owned company based in El Segundo, California, a few miles from LAX, chose the town of Loveland, Ohio, 20 miles northeast of downtown Cincinnati. Their 115,000-square-foot office, which opened in 2020, is close not only to CVG but also to other major Ohio cargo centers in Wilmington, Dayton, and Columbus. “Cincinnati is two hours [by air] from 60% of the country,” says Rick Weis, Satco’s CFO. “It was a huge selling point for us.”

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The company also maintains a significant presence in Louisville—home of UPS—but Weis views the Ohio location as its second headquarters, with employees involved in sales and engineering sharing space with warehouse and repair teams. The footprint will help Satco drive innovation, such as a new “burn center,” now under construction. The facility will test the fire resistance of Satco containers. “Lithium batteries are the biggest risk [for explosions], so we need to build units that, if they catch fire, the plane has enough time to land somewhere,” Weis says, pointing out that “most companies have to go to a research lab to do this.” Satco has invited local police and fire departments to use the center for training purposes.

While companies are choosing to move to Ohio for different reasons, the lack of a state income tax on corporate profits is an economic engine that unites—and benefits—them all. And despite its relatively small geographic size, Ohio offers urban, suburban, and rural options for companies looking to grow. Colorado’s Planterra, a plant-based meat company recently secured a processing plant outside of Dayton; Branch, another fintech insurance company, moved just up the street from Upstart; and France-based 3D-printer manufacturer AddUp consolidated its U.S. operations outside of Cincinnati.

“Ohio is poised to capture a generational opportunity, and its value proposition has never been more evident,” says J.P. Nauseef, the president and CEO of JobsOhio, the state’s private economic development corporation. “More businesses coast to coast now see what we have known for years: Ohio is the best place to live, work, and invest to find your own version of the American dream.”

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