Magna International Inc. plans to move its global headquarters out of the chateau-like building that came to symbolize the extravagance of company founder Frank Stronach.
The Canadian auto parts giant will shift its head office from Aurora, Ont., north of Toronto, to a site near King City, Ont., also north of Toronto, but further west and closer to Pearson International Airport.
The move will enable Magna to consolidate corporate and group head office operations in one location, Magna spokeswoman Tracy Fuerst said.
The new, 200,000-square-foot building will also include a research and development centre and will house 625 employees. Magna plans to move in by the end of 2017. The new building will be a more conventional office building than the existing head office, Ms. Fuerst said.
It's the latest in a series of moves that distances the company from Mr. Stronach, who founded the company in a Toronto garage in 1957 and was the driving force behind the building of the opulent edifice in Aurora, which is a stone's throw from his home.
Magna moved into the building in 1997, when Mr. Stronach was chairman, controlled the company through multiple-voting shares and received millions of dollars in compensation in the form of consulting fees paid by Magna.
He has since surrendered control of Magna through the controversial sale of the multiple-voting shares to the company, resigned as chairman and, as of Dec. 31, no longer receives consulting fees.
"Mr. Stronach's consulting agreements expired on December 31, 2014, and were not renewed, extended or replaced with any other form of compensation," the management proxy circular for Magna's annual meeting earlier this month stated. "The board values the legacy left by Mr. Stronach, but continues to build on it."
The Aurora head office was often referred to as the royal palace, said one former Magna executive.
"It was always very clear that we did not bring customers to Aurora," he said. Instead, when auto maker customers visited Magna operations north of Toronto, they were hosted at the more pedestrian head offices of Magna's group companies such as Tesma, Decoma or Cosma or at divisional offices, the source said.
One source said one auto maker had a room in its own head office where pictures of the Magna headquarters were posted on walls along with articles written about Mr. Stronach's compensation. The message to that car company's purchasing representatives was "This is how suppliers live, so get everything you can," the source said.
Magna no longer owns the Aurora building, but leases it from Granite Real Estate Investment Trust. Granite is the successor company to MI Developments Inc., the real estate arm of Magna that Mr. Stronach surrendered control of after his controlling stake in the auto parts company was bought out.
"What we'll do is market it with a view of sale or lease and discuss both possible buyers for it and possible tenants," said Tom Heslip, Granite's chief executive officer. The design of the building was overseen by Magna architect Stephen McCasey, who guided construction of a similar structure in Oberwaltersdorf, Austria, where Mr. Stronach placed Magna's European headquarters.
Magna no longer occupies that building either, having shifted its European head office to Vienna.
Several U.S. office operations have been consolidated into one building in Troy, Mich., in suburban Detroit.