The high hopes of landing a corporate tenant for the former Russell Investment Group headquarters as a way to boost Tacoma’s downtown retail marketplace might be more wishful thinking than actual impact. But it is a start.
“There’s not a lot of tenants looking around,” said Kidder Mathews Associate Vice President of Business Services Dominic Accetturo. “The deals that are being done are for lower rates.”
The recent economic downturn hurt retailers everywhere, including those in downtown Tacoma. The loss of the Russell Investment workers two years ago further cut into the customer pool for downtown shops and restaurants. Filling the downtown office space would certainly help, but might not be the savior that many hope.
“It would be a pretty big impact,” Accetturo said. “But what would really help retailers is more people living downtown. I think that is the key. It’s really hard to make enough between 11 and two, Monday through Friday.”
But retailers and city boosters will take what they can get because occupied office buildings are better than vacant parking lots and closed doors.
Russell Investments left its 12-story Tacoma location in 2010 to take over office spaces in Seattle. About 900 employees of the financial giant no longer report for work in Tacoma since the move. The company still pays rent on the office, but that ends this fall. That timeline, and a recent site visit of the building by State Farm officials, has sparked hopes anew new tenants are on the way. But no one is talking about specifics.
“Yes, company representatives recently toured the Russell Investments building in Tacoma,” State Farm spokesman Brad Hilliard said. “We continually evaluate all aspects of our operations, including our facilities, as an ongoing part of our business efforts to ensure that we are able to meet the needs of our customers. For business reasons we do not speculate on any rumors.”
State Farm has been looking for as much as 600,000 square feet of high-end office space, including the Russell site, but other sites are in the mix. That amount of office space would translate to more than 2,000 employees. State Farm already has about 1,000 workers at its DuPont facility. Similar expansions or space shuffles elsewhere, namely Dallas and Atlanta, suggest big changes at the insurance giant are in the works. But no one is talking about those corporate changes or what they would mean for the Pierce County operations.
One option that business boosters could take to land a tenant for the Russell building as this issue plays out is to reactivate the Tacoma Partnership effort that was established to keep the financial giant in the first place. That effort totaled $149 million in public and private support through tax breaks, infrastructure upgrades and fee concessions as well as an additional $133 million in potential “operational savings” over 10 years that would include items such as lower salary rates based on the cost of living differences between Seattle and Tacoma.
While no one is talking about pulling together a public-and-private partnership again, it will likely become a topic as talks continue as business boosters like the Economic Development Board of Tacoma/Pierce County and local officials work to show their open arm to a new corporate resident downtown.
“I think re-sparking it is a good start,” said Deputy Mayor Marty Campbell, who is also the chair of Tacoma City Council’s Economic Development Committee. “Buildings like Russell are what the EDC is for.”
New corporate workers, no matter what company, would not only aid downtown but provide a “fresh start” for downtown economics with potential new customers who see Tacoma as a city on the rise, not one burdened with the history of what it was.
“New employees won't hide inside scared of past experiences during a ‘bad time’ in downtown,” Campbell said.
“There were a couple of years they (Russell workers) had to be escorted to their cars. It was unsafe and dirty, so they just holed up; and once things changed, the habits remained. So yeah, I could see the fresh start analogy.”
Suffice it to say that there are many parties interested in landing a new tenant for the building. Ilahie Holdings owns the building and would rather get a tenant deal done rather than go without rent payments once Russell’s lease expires. Tacoma-Pierce County Chamber officials would like to see a major corporate resident join the fold. Shop owners would like the see more downtown workers to find their way to their storefronts. City officials would like the increased tax revenue and business activity a new tenant would provide. Each group has a role to play to make it all happen.
“We try to make sure that all the economic development components and partners are working on the same goals,” Mayor Marilyn Strickland said.
Multi-agency efforts like the Tacoma Partnership that formed to keep Russell might not have worked, but the effort isn’t dead. The concepts and incentives to land a corporate headquarters or other major downtown business can be retooled to fit the needs of whatever the new tenant might need to make such a deal pencil out.
“We are always really flexible,” Strickland said.
|1||JOINT BASE LEWIS-MCCHORD||56,624||MILITARY|
|2||LOCAL PUBLIC SCHOOL DISTRICTS (k-12)||13,352||PUBLIC SECTOR|
|3||MULTICARE HEALTH SYSTEM||6,547||HEALTH CARE|
|4||WASHINGTON STATE EMPLOYEES||6,488||PUBLIC SECTOR|
|5||FRANCISCAN HEALTH SYSTEM||5,709||HEALTH CARE|
|6||PIERCE COUNTY GOVERNMENT||2,872||PUBLIC SECTOR|
|7||WA STATE HIGHTER EDUCATION||2,632||PUBLIC SECTOR|
|8||CITY OF TACOMA||2,222||PUBLIC SECTOR|
|9||EMERALD QUEEN CASINO||2,200||GAMING|
|12||TACOMA PUBLIC UTILITIES||1,332||PUBLIC SECTOR|
|14||U.S. POSTAL SERVICE||1,100||PUBLIC SECTOR|
|15||STATE FARM INSURANCE||1,070||INSURANCE|
|16||WA. STATE NATIONAL GUARD||1,050||MILITARY|
|17||COMCAST CABLE||1,018||CABLE TELEVISION SERVICES|
|18||PUYALLUP TRIBE||984||TRIBAL GOVERNMENT|
Courtesy of Economic Development
Board of Tacoma/Pierce County
Headcount was used for some employers where full-time equivalent count was not available