J.D. Power explores Westlake lease alternatives
The future of the J.D. Power and Associates headquarters in Westlake Village is up in the air and a move to consolidate two Southern California offices could be on the horizon. The big question is where the global marketing services firm and its approximately 250 Ventura County employees will land.
The company’s lease at its headquarters at 2625 Townsgate Road is up next year and the firm is exploring alternatives, a company spokesperson said.
Many of J.D. Power’s Westlake Village employees live within a short commuting distance. Its Orange County office has 40 employees, including several of its top executives, according to sources.
Employees at J.D. Power have been told that the company will not renew its lease in Westlake Village and most employees could be moved to Orange or Irvine, the Business Times has learned.
But with plenty of time yet to work a new deal or extend the current lease, a J.D. Power spokesman said the company is thinking about employees first.
“We want to do what’s best for our employees,” said Jim Tews, director of media relations for J.D. Power. “Most of the employees who work in the Westlake office live in the Westlake area and we want to make sure that we do right by them.”
Still, Tews said the company is exploring a number of options and that as the expiration of the lease gets closer the firm would have more details to discuss.
A relocation to Thousand Oaks Boulevard in Thousand Oaks, a commercial corridor that is currently undergoing major redevelopment, isn’t out of the question either, the company said. Attracting major corporate headquarters plays right into the city’s efforts there, and it’s the kind of move that officials in Thousand Oaks have said they’re looking for to drive retail and higher-end housing.
“Nothing has been finalized yet, but the goal is to try and minimize the impact … the Orange County lJ.D. Power lease is also up next year and we’re going through the same process there,” Tews said. “[The company] has started looking at not only the potential of staying, but if we don’t stay where do we go?”
The company went through a similar process two years ago at its Troy, Michigan, location and in the end only moved two miles down the road, he said.
J.D. Power has six offices in the Americas, including in Mexico City, São Paulo and Toronto. The company has five offices in the Asia-Pacific region and one in Europe.
J.D. Power is owned by parent company McGraw Hill Financial, which has been cutting expenses after dumping its publishing business in March 2013 and focusing its future on financial services.
The company’s new CEO, Doug Peterson, recently sold off his boss’s old jet, but the $5 million in annual savings pale in comparison to the $5 billion U.S. Department of Justice lawsuit McGraw Hill’s Standard & Poor’s unit is facing.
Prosecutors allege S&P accommodated issuers of mortgage bonds at the expense of investors before the 2008 financial crisis, Bloomberg news reported last month. S&P also faces a possible Securities and Exchange Commission penalty regarding 2011 ratings of commercial mortgage-backed securities, according to Bloomberg.
S&P has said the lawsuit is the backlash for downgrading the country’s credit rating in 2011.
Still, new McGraw CEO Peterson is tearing through the company looking for places to slash costs.
McGraw Hill paid $60 million to terminate the lease at its building across the street from the Rockefeller Center five years early and there are plans to cut 6 percent of the S&P’s ratings workforce by offering voluntary buyouts to as many as 100 U.S. employees with business titles of director and above, according to Bloomberg.
The lawsuit with the Justice Department is the company’s single largest liability and puts roughly five years of profit in jeopardy.
If the the two sides don’t settle first, a trial could come as early as fall of 2015.
“The government doesn’t want to put S&P out of business, but they do want to take a healthy bite out of them,” Peter J. Henning, a professor at Wayne State University Law School in Detroit and a former Justice Department attorney told Bloomberg. “A new CEO comes in and says, ‘Find a dollar figure that can resolve this.’ ”
