Chipotle Mexican Grill to close Denver headquarters, relocate staff to California and Ohio
Posted May 24, 2018 5:53 p.m. EDT
DENVER — Chipotle Mexican Grill will close its Denver headquarters and move to California later this year after more than 20 years in the Mile High City.
The company said in a news release the headquarters will move to Newport Beach, Calif. and other functions within the Denver office will move to the company's existing office in Columbus, Ohio.
The company said the moves will affect around 400 employees in Denver and New York in the fourth quarter of 2018 and said some people would be offered relocation and retention packages.
The Newport Beach location will serve as the company's main headquarters, and support functions will move to Columbus. After the moves, the Denver and New York offices will be closed, the company said.
"We'll always be proud of our Denver roots where we opened our first restaurant 25 years ago. The consolidation of offices and the move to California will help us drive sustainable growth while continuing to position us well in the competition for top talent," said Chipotle CEO Brian Niccol.
The news comes as a surprise to some in Denver, as the company announced in December it was moving its headquarters to a new office tower downtown that was still under construction.
"We wish @ChipotleTweets all the best. We want their existing employees to know we have services that can help them find new jobs," Gov. John Hickenlooper tweeted Wednesday afternoon. His wife, Robin, has sat on Chipotle's board of directors since December 2016.
It signed a 15-year lease for five floors of a 40-story skyscraper located on 15th Street between Arapahoe and Lawrence streets. The status of the lease is currently unclear, though the building held its grand opening in recent months.
The CEO at the time, Steve Ells, said: "Our roots are here, and this contemporary, collaborative and modern space will position us to look ahead to the next 25 years."
Hines, the international real estate firm that Chipotle's real estate broker signed the lease with in December, said Chipotle will coordinate with the company to find someone to sublease the floors or find a replacement tenant.
"Like all of Denver, we are disappointed that Chipotle made this decision to relocate its corporate offices outside of Colorado, but we also know that other premier tenants wanting to be in the best office building downtown will now have the opportunity to do so," said Hines Senior Managing Director Jay Despard in a statement to Denver7.
Niccol, who was formerly the CEO of Taco Bell, replaced Ells in early March. In the company's Q1 earnings call that happened in April, Niccol hinted at a "special call" in which he would unveil more details about the company's upcoming strategy, and a news release from the company issued Wednesday said more information would be released about the moves in a special investor call scheduled for June 27.
Paul Seaborn, an assistant professor of management at the University of Denver, has watched Chipotle's performance closely and co-wrote a case study last year for an international competition that focused on the key challenges facing the company. He said Chipotle's new CEO is cooking up a culture shock with this latest move.
"This is not the old Chipotle. We are looking for new ideas and maybe a new location to really shake things up," said Seaborn. "He's [Niccol] putting his reputation on the line with this move."
Seaborn also said he believes there are no real benefits to moving the headquarters to Newport Beach other than the new CEO's own connections to California. As the former CEO of Taco Bell its headquarters are in nearby Irvine, California.
"This seems much more of a personal management decision," said Seaborn. "This particular move is going to create a big question around retention and who are the key employees that they feel are really pushing the company forward and can they get them to move to California."
Chipotle said in December there were about 450 employees working for the company. Restaurant Business Online ranks Chipotle as the nation's 16th-largest restaurant chain in terms of sales.