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Fate of PAETEC's Rochester headquarters "yet to be determined"

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Courtesy photo
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City of Rochester
PAETEC CEO Arunas Chesonis says it's "less likely" this will be built.

WXXI Innovation Trail reporter Zack Seward got a chance to chat with PAETEC CEO Arunas Chesonis about the deal to sell his company to Arkansas-based Windstream.

The interview includes a discussion about the future of nearly 900 local PAETEC employees, and the fate of the company's plans to build a new headquarters in downtown Rochester. According to Chesonis:

Over the next four or five months as we approach the closing of the deal we'll figure out exactly what roles and responsibilities people will have in Rochester compared to the rest of the country and as we go through that process we'll figure out how much space and what type we need in Rochester. I know it's not a real helpful guide right now but it's still yet to be determined.

Click through for the full transcript.

Transcript

SEWARD: Arunas Chesonis, thanks for joining us. First of all, congratulations on the sale of PAETEC.

CHESONIS: Well, thanks very much.

SEWARD: First of all, I think what's top of mind for a lot of people in the Rochester area is, how is this sale going to affect future plans for developing at [former downtown mall site] Midtown?

CHESONIS: That's a great question. I think that the conversations that I've had with the CEO of Windstream, his name is Jeff Gardner, he's based in Little Rock, Arkansas, which is their corporate headquarters, he's told me that their plans are to make Rochester one of their operational centers for the combined company and over the next four or five months as we approach the closing of the deal we'll figure out exactly what roles and responsibilities people will have in Rochester compared to the rest of the country and as we go through that process we'll figure out how much space and what type we need in Rochester. I know it's not a real helpful guide right now but it's still yet to be determined.

SEWARD: So at this point it's basically in their court as to what will happen down there?

CHESONIS: Yeah, I do think they've been very good to work with so far, very knowledgeable hardworking folks. And I think they're looking to acquire PAETEC because of the talent of the people and some of the expertise in some of the areas that they're not as active in in certain parts of the country, and certain products, so they like the folks and they just want to spend some time to get to know us better.

SEWARD: That being said, do you think it's more unlikely that that site will be downtown with, say, a Windstream logo on the front?

CHESONIS: Well, I think it's tough to say right now. Again, we still have to go through that process but I don't think it's unfair to say when you have a company that's headquartered in Rochester versus one that's headquartered in Little Rock that it would be less likely for the Little Rock headquartered company to have their biggest center here. So I think, you know, let's wait and see how everything plays out. But, you know, it's a great company, I think there's going to be a lot of opportunity for folks here in Rochester.

SEWARD: Mayor Richards held a press conference earlier this morning at City Hall saying that this came out of the blue for them. And after working so closely with the city to negotiate the downtown deal, has there been communication now currently around this pending acquisition.

CHESONIS: Well I got a chance to speak with Mayor Richards this morning, but again, as you know, these types of transactions they are fairly confidential. So we're a publicly traded company and as we make our SEC filings over the month or so, some of the history behind this deal will come out and people will have a chance to take a look at that.

SEWARD: It's early yet but it's obviously of concern to the 900 or so local employees here: How will this deal affect them?

CHESONIS: Well, I think just along the same lines as the building. It's really the facilities follow how many people you have, not the other way around. As we go through the responsibilities and the jobs and the types of positions that the combined Windstream-PAETEC want, that's how we'll figure that out. 

SEWARD: One of those employees that may not be with the Windstream team is you yourself, is that true?

CHESONIS: That's true, that's true. My last day will be the day after closing of the transaction.

SEWARD: What's next for you personally?

CHESONIS: Oh I don't know, I think most importantly we work over the next six months to make sure all the employees can be taken care of as much as they can through some of integration work, and take care of the customers, and do that. Then my wife and I will sit back and, you know, maybe take a week off and then think about what's next.

SEWARD: I was listening in on the investor call that Windstream put on this morning and they mentioned that they had been eyeing PAETEC for a while now. Were you actively shopping PAETEC around or did they come to you inquiring about this transaction?

CHESONIS: That's a great question and again it's one of those things unfortunately as a public company we really can't tell folks right now until all those public filings are done and everyone has a chance to see it at the same time. But I'd be happy to share more of that with you at a later time.

SEWARD: You mentioned you spoke to Mayor Richards, have you spoken to former Mayor Duffy about this?  Getting this downtown deal was a big part of his efforts.

CHESONIS: I did, I had a chance to visit with Bob earlier today and he really was willing to be as helpful as possible to help try and persuade the Windstream folks to do more [rather] than less in Rochester. And he is a persuasive man so hopefully that'll help.

What's at stake

Here's a "virtual tour" of the exterior of the building that might never be built, courtesy of Bergmann Associates

And here's video of former Rochester mayor, now lieutenant governor, Bob Duffy, talking about what a downtown PAETEC headquarters would mean for the city, to WXXI back in December 2010.   

One passage stands out in particular:

"Arunas is a great CEO, he's doing this [moving the headquarters downtown] not just for business reasons, he's doing it to help Rochester. People like Arunas ... who have invested here, sometimes are quite different from those who have fled the city, who have left and moved on and moved out. In many ways they're like pioneers."

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