Office Depot picks Boca Raton HQ over Chicago-area

Office Depot will continue taking care of business in South Florida.

The company announced Tuesday it has chosen Boca Raton as its corporate headquarters after its merger last month with suburban Chicago-based OfficeMax.

State and local economic development officials consider Office Depot's decision a major win that could attract new business to the region.

"The governor has been calling me at least every other day to make sure I'm making this deal," said Kelly Smallridge, president of Palm Beach County's Business Development Board. "There was nothing we weren't going to do to assist them in their efforts."

Office Depot, which once used the song "Takin' Care of Business" by Bachman-Turner Overdrive in its advertising campaign, currently pumps $123 million annually into the local economy, officials have said. Before merging with OfficeMax, the company had 1,700 employees at its Boca Raton headquarters.

"Selecting the headquarters location is a critical step toward integrating our two companies," said Roland Smith, the former Wendy's chief executive who was named CEO of Office Depot last month. "Both Florida and Illinois have many positive attributes, but our analysis concluded that Boca Raton provides the best platform."

Both office-supply companies asked for tax breaks from Florida and Illinois. But Illinois lawmakers adjourned last week before deciding on a proposed $53 million deal over 15 years.

Smallridge said city, county and state officials are still in talks about additional incentives for Office Depot — which already has a multimillion incentives contract with state and local governments — but there is "no [new] contract yet."

Incentives were "part of the analysis," said Office Depot spokesman Brian Levine. But, until final contracts are entered into with the state, county and city, "we do not plan to disclose the amount or nature of incentives," he said.

Office Depot, one of the region's few Fortune 500 companies, said, 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. Boca Raton has ample room for expansion, which was an advantage, the company said.

OfficeMax, which for now is an Office Depot subsidiary, has about 1,600 employees at its Naperville, Ill., headquarters, spokeswoman Karen Denning said.

Newly appointed Office Depot CEO Roland Smith, who flew to Naperville to address OfficeMax employees Tuesday, said the "best talent available from both locations" will be selected to take the company forward. Spokesman Brian Levine said it is too early to estimate how many OfficeMax employees might move to Boca Raton.

The two companies' combined revenues will make Office Depot a $17 billion company with about 66,000 employees and 2,200 stores in 59 countries.

Office Depot's current incentives deal stems from the company's 2008 move from Delray Beach to Boca Raton, where it built a new headquarters. Under that contract, the company so far has received $645,000 in tax refunds following its creation of 281 confirmed new jobs — about $2,300 a job — and a $216 million investment in Florida, according to Florida's Department of Economic Opportunity. In 2006, Office Depot received $2.7 million from the state's Quick Action Closing Fund, which is used at the governor's discretion to close such deals.

The state declined Tuesday to say whether Gov. Rick Scott has offered Office Depot additional cash from the discretionary fund to retain the headquarters in the state.

On Tuesday, 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 and business development officials said they were excited — and relieved.

"We're ecstatic that the decision was made today. Doing it before the holidays has certainly put a lot of families at ease," said Smallridge.

Smallridge had asked CEOs of other local companies, including Boca Raton-based electronic security company ADT, to tout the area to Smith. Smallridge said retaining Office Depot was not only important to help the region's employment but also to keep the company foundation's charitable efforts. Office Depot has made $1.1 million in cash contributions and $1 million in-kind contributions to Palm Beach County from 2008 to 2012.

Boca Raton Mayor Susan Whelchel said she has been "sitting on pins and needles for months. The Illinois Legislature was really throwing out the dollar signs and that gave us a scare," she said.

But when Illinois lawmakers didn't take action on proposed incentives for Office Depot, she thought the city had a good chance to remain its headquarters.

"That 650,000-square-foot building with its hub of activity and workers — that would have been a major loss," Whelchel said.

mpounds@sunsentinel.com or 561-243-6650