News Column

State Farm Adding 2,000 Jobs in Washington

April 3, 2013

Kathleen Cooper

State Farm, Pierce County's seventh-largest private employer, is in the final stages of lease negotiations that would bring about 2,000 new jobs to downtown Tacoma this year.

If the deal is finalized, the implications for Tacoma and Pierce County are huge. State Farm would bring almost twice the number of employees from a single company since Russell Investments' peak about a decade ago.

The insurance giant would fill up most of the top-shelf office space downtown. And street-level retail, the key to any downtown's vibrancy and which has struggled through the loss of Russell and the worst recession in two generations, would have thousands of new potential customers.

"At this time, we're still working on everything," State Farm spokesman Brad Hilliard said Tuesday. "Nothing's been finalized. No leases have been signed."

City officials had no comment Tuesday.

Regional and local real estate brokers representing the company and the building owners wouldn't comment, nor would local economic development officials. But high-stakes negotiations have been under way for months and involve dozens of people. The News Tribune reported in January that the company had toured the former Russell headquarters, after putting out a regional request at the end of 2012 for a large amount of office space.

One of the indications that the Tacoma building owners have taken State Farm seriously: Russell Investments and the owner of its former headquarters, Ilahie Holdings, finally negotiated an early termination of its lease. Russell spokesman Steve Claiborne confirmed the termination Tuesday, saying the company gave up control of the building as of March 1.

Russell's lease originally ran through November of this year, meaning it has effectively controlled the space -- and any potential new lease deal -- since it moved out in 2010. Civic and business leaders long have wanted the two parties to negotiate such a buyout, which removes a major obstacle to refilling the building.

Sources with knowledge of the State Farm deal, who spoke on condition of anonymity, gave the broad outlines:

State Farm would maintain its operations in DuPont. It would expand into almost all the downtown office space once occupied by Russell: the 12-story building at 909 A St., as well as four stories of the Columbia Bank Center soon to be vacated by DaVita. Russell, which had about 1,100 employees at its peak, also once leased two stories of Wells Fargo Plaza but that space has new tenants.

It's not clear how long State Farm plans to lease in Tacoma. If the lease is structured similar to those in the hubs including Dallas, the terms are short and flexible, to allow the company to grow even more.

State Farm is growing, fast. It's forming hubs in Phoenix, Dallas and Atlanta, where it has leased enough new office space in the past six months to employ thousands of people. The Washington state operations won't be a hub, but will be an "initial loss reporting" center, according to a widespread company memo obtained by The News Tribune that explains the company's national reorganization.

"Last year we announced plans for ILR and Auto Express operations in the Phoenix, Atlanta and Dallas Hubs," the document reads. "A fourth ILR and Auto Express operation will be located in DuPont/Tacoma, Wash. Staffing plans are being developed to enable that site with a goal to become operational in late 2013."

The company isn't planning any other ILR centers, the document says.

The type of jobs that State Farm could bring to Tacoma is unclear, but the operation could run beyond typical office hours. A job description online for a "claim associate" in the Atlanta ILR describes work that happens 24 hours a day, seven days a week.



Source: (c)2013 The News Tribune (Tacoma, Wash.) Distributed by MCT Information Services


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