Russell Investments, a global investment advisory firm founded in Tacoma in 1936, will move its headquarters from downtown Tacoma to downtown Seattle by the end of 2010, according to an e-mail sent to employees this morning.
The company, which has $151 billion in assets under management, had said it would decide by the end of this month whether to remain in Tacoma or move away when its downtown leases expire.
Russell is downtown Tacoma’s largest private employer, with approximately 1,000 employees occupying several buildings throughout the central business district.
Though the company has a long history in Tacoma, it was purchased by Milwaukee-based Northwestern Mutual Insurance Co. in 1998. With leases set to expire in 2013 and out-of-town ownership, many wondered if the company would remain in the Pacific Northwest, move to NMI’s Midwest headquarters, or find a home in another city.
Tacoma and Pierce County deal-makers formed a group of city, county, and state leaders known as the “Tacoma Partnership” to court Russell with financial perks. In April 2008, the Partnership, headed up largely by the Pierce County Economic Development Board, met with Russell executives to make its pitch, which includes $144 million in benefits — $65 million from the city; $25 million from the federal government; and $54 million from the state. Similarly, in June 2008, Tacoma City Council approved an ordinance that created an International Financial Services Area in a swath of downtown that included Russell’s headquarters.
In a statement released this morning, the company announced it will purchase the former WaMu Center — now Chase Center — located at 1301 Second Ave. in downtown Seattle. The building will be renamed the Russell Investments Center.
“After a thorough search and analysis of multiple sites in the Puget Sound region, we came to the clear conclusion that this is the right decision to best serve the long-term interests of our business, both from an economic and qualitative standpoint, and particularly given the unique conditions of the commercial real estate market in Seattle,” said Russell Investments President and Chief Executive Officer Andrew Doman.
According to the statement, Russell will consolidate all of its Puget Sound associates into its new headquarters location. The move will also provide the company “with access to a large talent pool and will place Russell in the center of a major Pacific Rim city, alongside other like-minded global firms and business pioneers,” said Dorman.
“All of the key factors lined up and pointed us in the same direction,” said Doman. “At the same time, we recognize that this news will be disappointing to some. We weighed all considerations carefully, and in the final analysis our decision was based on what would best serve Russell over the long-term.”
Doman added, “I greatly appreciate the time and leadership that Congressman Norm Dicks and the Tacoma Partnership invested in the process. Tacoma and Pierce County are important parts of Russell’s history, and areas we will continue to support through our commitment in improving the quality of life in communities where our associates live and where we do business.”
Doman added that moving to Seattle “will serve as an outstanding platform from which to embark on what I believe to be a future filled with enormous opportunity. This will be good for Russell and for the entire Puget Sound region.”
SETBACK FOR TACOMA AND PIERCE COUNTY
Still, the decision was a setback for Tacoma and Pierce County leaders who had tried to keep the company in town.
“Of course we are disappointed in Russell’s decision to move,” said Bruce Kendall, President and CEO of the Economic Development Board for Tacoma-Pierce County and leader of the Tacoma Partnership, in a statement. “We continue to believe that the incentive and real estate packages the Tacoma Partnership developed for Russell provided the best choice for the firm as it worked to right-size itself and get back to profitability. We are concerned for the Russell employees who have invested their lives and professions in this community and hope that many of them will choose to continue to do so going forward.
“Russell became a world-class company while it was growing here in Tacoma, and we’re confident that our city will nurture more world-class firms in the future,” he added. “That said, we believe that downtown Tacoma remains an outstanding place to do business and we look forward to welcoming a new company into the space that will be vacated.”
Kendall added that Russell’s departure “can actually create an opportunity for Tacoma by freeing up attractive office space downtown. And we have outstanding development sites available. We have had interest in Tacoma from other companies in the recent past and had to turn them away due to lack of premier office space. We expect interest from other firms going forward. We have a downtown economic development strategy and will continue to implement it with vigor. The transformation of downtown Tacoma into a magnet for regional and corporate headquarters will continue, of course. It is the nature of business for companies to come and go, but in the end a city thrives because it remains a great place to do business and Tacoma is just that.”
GOV. GREGOIRE ‘DELIGHTED’ RUSSELL REMAINS IN WASHINGTON STATE
Washington State Gov. Chris Gregoire said she understood Tacoma and Pierce County’s disappointment, but was pleased Russell would remain in the state.
“I am delighted that Russell has decided to stay in the state of Washington, ensuring that those important jobs remain in the Northwest,” said Gov. Chris Gregoire in a statement. “I certainly understand the disappointment of the Tacoma community. I know the city did an outstanding job of presenting its case. Russell Investment Group has been a major employer in Pierce County, and has played an integral role in shaping downtown Tacoma. After talking with Russell CEO Andrew Doman, I respect this was a difficult business decision, and wish the company continued success at its new location.”
A WIN FOR DOWNTOWN SEATTLE
In Seattle, downtown civic leaders applauded the decision.
“I am pleased with today’s announcement that Russell Investments has decided to locate in downtown Seattle,” said Seattle Mayor Greg Nickels in a statement. “We warmly welcome Russell and its employees. With an international reputation, Russell will be a tremendous addition to our city. We know that Russell evaluated all its options and considered many factors in making this business decision, and I am heartened by its conclusion that Seattle is an excellent place to do business. Across the world, Seattle is known for its innovative companies and we look forward to having Russell join our community. As we welcome the employees of Russell Investments, we recognize the effect of Russell’s decision on our neighbors in Tacoma. Ultimately, the most important fact is that workers can stay in the Puget Sound area and that a prominent company will continue to call the Northwest home.”
“We couldn’t be more thrilled to welcome Russell Investments to Downtown Seattle,” said Downtown Seattle Association President Kate Joncas. “Russell Investments is a great company, with a great reputation, so there’s no question they were highly sought after, and they had a difficult choice to make. I’m confident, however, that both the company and its employees will benefit from all that Seattle has to offer and that they’ll feel right at home with other best-in-class organizations such as Amazon, Gates Foundation, Nordstrom and Starbucks who also make downtown home.”
Kinzer Real Estate Services led the site search with support from Seneca Real Estate Group Inc., NBBJ and Sellen Construction Company. Russell was also assisted by external counsel Davis Wright Tremaine and McCullough Hill, PS.