Chipotle Mexican Grill announced plans on Wednesday to relocate its headquarters, currently in Denver, to Newport Beach, California.
Functions within the current Denver office will either be consolidated in Chipotle's existing office in Columbus, Ohio or moved to the new headquarters in Newport Beach.
In a statement posted to the company’s website, Brian Niccol, CEO at Chipotle briefly addressed reasons for the move.
"We'll always be proud of our Denver roots where we opened our first restaurant 25 years ago," he wrote. "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."
Denver Business Journal reporter, Ed Sealover, has been covering Chipotle for a while.
“They’ve been through a lot of changes in recent years,” Sealover explained. “The biggest [change] being their founder, Steve Ells, stepped down as CEO in February and they brought on Brian Niccol, the former CEO of Taco Bell.”
Based on his research, Sealover believes the move to California is due, in part, to the leadership change.
“Because that’s where Niccols is,” he explained. “Sometimes CEOs bring companies to where they are, rather than go to where companies are.”
Sealover points to another likely reason for the move:
“Southern California is has a ton of fast casual and quick service restaurants located in it. And the idea that you can get a lot of executive talent, especially if you’re turning over a lot of people who have been working for you – you want to be in an epicenter like that,” he explained. “This is a place that has not only Niccols’ former employer Taco Bell but has the likes of Panda Express, Jack in the Box, places like that. And you’re really able to build a staff because there’s a lot of people with experience running restaurants like that out there.”
The 2015 ecoli outbreak at some Chipotle restaurants in other states hurt the company's bottom line.
But the headquarters move still came as a surprise. Metro Denver Economic Development Corporation CEO J.J. Ament said they got no advance warning. Just this winter, Chipotle announced it was moving corporate offices into a new, 40-story skyscraper in downtown Denver.
“It's very unusual to see a company going from Colorado to California,” Sealover said. “We’ve had a flood of companies coming the other way. California is a high tax state, California is a high regulation state, and there are a lot of people that just don’t want to do business there because of the cost of doing business out there anymore.
Over the next six months, Chipotle will transition its Denver and New York office functions to Newport Beach and Columbus. Newport Beach will serve as the headquarters for the company's operations, business development, marketing, communications, finance, supply chain, food safety, technology, HR and other corporate functions.
The support functions will be located in the Shared Services Center in Columbus. After this, Chipotle will close its Denver and New York City offices.
This move will affect approximately 400 employees in Denver and New York, with some being offered relocation and retention packages.
