Archive for Thursday, June 17, 2004

City lures home security business

Protection One to move corporate headquarters to I-70 Business Center

June 17, 2004


One of the country's largest home-security businesses is moving its headquarters to Lawrence, bringing with it 65 high-paying white collar jobs and, city officials hope, newfound prestige for the city.

Monitored security company Protection One said Wednesday it would move the company's corporate headquarters from Topeka to Lawrence's I-70 Business Center.

The move eventually will bring 80 new jobs, with an average salary of $58,000 per year, to Lawrence. Sixty-five of the jobs will be transferred from the Topeka office. Another 15 employees are expected to be added in the next several years as the company grows its area sales staff.

When it moves in later this year, Protection One will be the first publicly traded company to have corporate headquarters in the city. Once listed on the New York Stock Exchange, the company now trades on the smaller OTC market.

Economic development officials praised the announcement both for the new jobs it will create and the help it is expected to give the city in attracting other corporate headquarters.

"We think this is a jewel that we're adding to the city's portfolio," said Lynn Parman, vice president of economic development for the Lawrence Chamber of Commerce. "It will be a hallmark or a stepping stone for the community.

"We now have a publicly traded company in our community. We think that is a fact we can really build on and use to attract other corporate headquarters."

Leaving Topeka

The company is ranked by industry publications as the third-largest monitored security company in the country, behind ADT and Brinks Home Security. With 2,300 employees nationwide, it has about 1.1 million customers who buy company services such as burglar alarms and home-security systems.

But Protection One has been in a financial tailspin. It has amassed $500 million in debt, and in 2003 posted a loss of $34 million on declining sales of $277 million. Its financial troubles, in part, led Topeka-based Westar Energy in February to sell its 87 percent ownership interest in the company.

Protection One has been looking for a new corporate headquarters since the sale because the company is based in Westar's corporate offices in downtown Topeka. It had been offered financial incentives to stay in the city.

Protection One chief executive Richard Ginsburg said the company chose Lawrence because of its proximity to Topeka and the city's quality of life.

"We realized that we could get the best of both worlds in Lawrence," Ginsburg said. "We wouldn't lose our existing staff and we would be in a great city to attract new staff members."

The company will lease 15,000 square feet in the I-70 Business Center, which formerly was the Tanger Factory Outlet Mall. It will take the space formerly occupied by the Liz Claiborne store.

Ginsburg said the company wanted space near downtown. The fact the site has frontage along I-70 also was a benefit.

"We wanted a high-profile site and this one has 40,000 cars a day go by it," Ginsburg said.

The company expects the move to be completed by late November or early December.

Professional jobs

The Lawrence office will house much of the company's top management, including finance, human resources and marketing staffs, said Robin Jacobson Lampe, the company's director of corporate communication.

"We have had so many people tell us they love to live in Lawrence but have to drive to work in Topeka or Kansas City," Lampe said. "We're excited that this will give some people the opportunity to live and work in Lawrence."

But the company still faces financial challenges. Ginsburg said he was negotiating new terms with many of the company's lenders to make the firm's $500 million in debt more manageable.

The company also is trying to put behind it the negative publicity that was generated by its association with Westar Energy and former CEO David Wittig.

"It has been unfortunate for the company that we have got caught in some of the noise of the Westar issue," Ginsburg said. "It has caused us to go through some tough times, and our competitors have not been kind to us on that issue. We hope, though, that chapter is behind us."

In February, Westar sold its entire stake in the company to the East Coast investment firm Quadrangle Group. The group also is the company's largest lender.

"I'm optimistic," Ginsburg said. "The last chapter in this ordeal is dealing with our debt, but once we resolve that, we're in a good business. The security industry is a good sector of the economy. We're very bullish on the industry."

Industry observers agree. Bill Zalud, editor of Security Magazine, said a strong real estate and construction market had fueled sales growth. He said the current strength of the industry was giving Protection One an opportunity to turn around its finances.

"I don't think anyone is dead in the water right now because there's so much strength in home security," Zalud said. "The business strategy remains a strong one."

Don Johnston, a Lawrence executive with Intrust Bank, was on the company's board of directors until February when Westar sold its shares. He urged the company to look at locating in Lawrence and said he thought the company would see brighter days.

And he said the company would perform better now that it was not affiliated with Westar because it could be more nimble

"I think it is still a very viable company," Johnston said. "It is a company that has basically gotten a bad rap because of its association with Westar."

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