Morgan's Brain

Sep. 9, 2009 at 9:15am

Russell Moving To Seattle. Now What?

The TNT is reporting that Russell sent out an email to employees today announcing plans to move to Seattle. I don't think this is a big surprise. The question now is... what? What will happen to their building and what impact will it have on downtown?

comments [53]  |  posted under tacoma

Comments

by Erik on 9/9/2009 @ 9:35am
Russell likely wanted to move out the entire time and was being nice to Tacoma by hearing their presentations. Just a few close talks lately with Seattle was all that was needed to finalize the move.

Had the Winthrop Hotel restoration and other projects moved along, and the LID not been delayed the decision might have been different. Tacoma did too little too late.

Russell will not move for a while. Now we can see if another company wants move in. Here is the available class A office space that eveyone said they wanted.

by KevinFreitas on 9/9/2009 @ 9:41am
Very true. Time to look forward and not dwell on the loss of a company except to try and make sure we don't make this mistake again. Perhaps Davita will seek to make use of the space? New City Hall? Artists lofts?

by Nick on 9/9/2009 @ 10:31am
Actually, I just thought of something... now what happens to all that money we were going to fill a swimming pool with for Russell to swim in? How about re-paving all the freakin' streets within city limits? Sounds like a better use of the money anyway ;-)

(I know my car's suspension would love that idea!)

by Erik on 9/9/2009 @ 12:02pm
From Andrew Austin:

Dear Politicos and Friends of Tacoma,



Without a doubt today is a sad day for the City of Destiny.



I think the Russell Announcement gives us a unique opportunity to re-evaluate what our priorities as a community should be. Do we want to create a vibrant urban center filled with arts, music, parks, and bikes and streetcars? What should we prioritize higher parking or people? What do we need to do as a community to highlight our great neighborhoods and vibrant downtown to small businesses, new employers, and potential residents?



Please join me and Tacoma’s best and brightest as we informally discuss these things over pitchers and pitchers and pitchers and pitchers of beer at the Parkway tonight. Besides the need to informally brainstorm and pivot our messages, this is a sad day and nobody should drink alone.



Commiserating the Exodus of Russell…Celebrating the Future of Tacoma

Parkway Tavern

Pitchers will be flowing

8pm tonight (probably will be located in the African Red Sexy Room)



Andrew



Feel free to forward to your friends and lovers, as long as they love Tacoma (but don’t post it on the internetJ).



Andrew Austin

Andrew.n.Austin@gmail.com

Tacoma, Washington



by thriceallamerican on 9/9/2009 @ 12:30pm
Haha. It's awesome that you posted it on the internet w/o editing out the part that said not to post it on the internet.

by fredo on 9/9/2009 @ 12:35pm
The bad news: FR is moving to Seattle

The good news: Efforts to put parking meters downtown can now be abandoned.

by Erik on 9/9/2009 @ 1:05pm
Ooops.

by JesseHillFan on 9/9/2009 @ 2:19pm
I feel that RR should do a Tacomic drawing on Russell leaving.
No parking meters yeah!

by Erik on 9/9/2009 @ 2:58pm
I feel that RR should do a Tacomic drawing on Russell leaving.

I think RR almost certainly will.

As for parking issues, however, I don't think the Russell move will effect the UWT area. They might around city hall. We will see.

by tacoma1 on 9/9/2009 @ 3:24pm
Certainly, this feels like a blow below the belt.

On a positive note, there is time for the city and the building owner to go a-courting for a new dance partner(s). If we end up with two or three tenants in the one building, we won't ever feel like we have a gun to our head again. Maybe it's time to diversify the job bank portfolio.

If the new tenants don't get all the free perks that the City of Tacoma dangled and Russell shunned, us little tax payers will eventually be better off. Hopefully the building won't be empty for long, if at all.

And keep those parking meters coming. They will encourage people to walk more, use and pay for transit, pollute less, and park for shorter time periods. All things that lead to a more vibrant livable community.

by L.S.Erhardt on 9/9/2009 @ 7:26pm
They're going to flip the WaMu building? With the tsunami approaching in the commercial market? With the over-building of commercial space across the nation and in Seattle?

Maybe this isn't so bad. We can laugh our asses off when Russell is getting TARP 3 funds to stave off bankruptcy in 2013.

At least they made a decision finally. Unfortunately, we're still going to be hearing gloating from Seattle and still more drama for some time. No thanks... I'll return to blissfully ignoring them like I did for years until this situation came up.

by NineInchNachos on 9/9/2009 @ 10:08pm
wow you spend the day in the workshop and stuff like this happens. oh well, so it goes. Now to fold zines and watch dawn of the dead on hulu.

by Crenshaw Sepulveda on 9/9/2009 @ 10:15pm
I've said this before, I'll say it again. Change Mt. Rainier's name back to the original name and the curse upon Tacoma will be lifted.

by morgan on 9/9/2009 @ 10:20pm
Crenshaw Sepulveda: make it so. I have the application, are you in?

by Crenshaw Sepulveda on 9/9/2009 @ 10:24pm
How long before the county lines are redrawn to put Mt. Tahoma into King County?

by NineInchNachos on 9/9/2009 @ 10:43pm
Lets move the City of Tacoma to Seattle. Russell won't have to move.

by Nick K. on 9/9/2009 @ 10:46pm
I've heard a few say this move will spin Tacoma into another downward spiral. As I see it Tacoma has been, to use a more appropriate phrase, "downsizing" since Frank Mars relocated what is now the worlds largest candy company to the Midwest in 1920.

So on that note, let me say that Tacoma should stop trying to be a "metropolitan" city and, instead, be more like a "Neapolitan" city. No I don't mean we should all start learning Italian, I was thinking more like the ice cream.

How about painting the Tacoma Dome Brown Vanilla and Pink and work towards making Tacoma a world class destination for sweets and ice cream. Heck, we already Brown & Haley to anchor by. We could cease being the City of Destiny and start promoting Tacoma as the City of Creamery! Just a thought.

by NSHDscott on 9/9/2009 @ 10:50pm
Hollywood already moved Stadium High to Seattle, and if they can do that, they can do anything!

They also moved Lakewood's Thornewood Castle (aka Rose Red) to downtown Seattle, and it got all cobwebby and evil. Good luck with that, Russell!

by fredo on 9/10/2009 @ 7:37am
",,,hopefully it won't be vacant for long"-tacoma1

I suppose it's possible that the FR properties will soon be filled up with other family wage firms that are waiting to get into Tacoma but the prospect seems pretty unlikely. Isn't there already a glut of office vacancies downtown?

Here are some real short term possibilities from the FR departure:

1. Increased residential listings.
2. Downward pressure on residential valuations.
3. Lower property tax revenue.
4. Lower retail activity
5. Lower sales tax revenue
6. Increasing budget deficits at city hall
7. Increased failure rate for small businesses
8. Increased foreclosure rate
9. Lower excise tax and B & O tax collections
10. Pressure to raise local taxes

There may be some long term benefit from the departure but I think most of the short term effects are going to be bad for Tacomans across the board.

However, unlike some of the posters, I hold no animosity for the FR company. I hope they succeed in their new business location and continue to employ a lot of our Tacoma neighbors.

by boearc on 9/10/2009 @ 7:44am
Next Downtown Tacoma Employer Retention Crisis - saving Brown and Hailey from relocating to Fife.

by The Jinxmedic on 9/10/2009 @ 10:00am
Remember, not only did Hollywood move the "nice parts" such as Stadium High, Thornewood, and all of North Yakima Avenue (Remember "The Hand that Rocks the Cradle"?) to Seattle to make Seattle more charismatic than it actually was, they also moved the not-so-nice bits of industrial detritus (Gasworks Park - "Three Fugitives") to Tacoma to make the City of Density more "gritty". My recollection is that "Three Fugitives" was the LAST movie that Tacoma actively acommodated, due to the way the final cut of the film portrayed the city.

by Nick on 9/10/2009 @ 11:54am
I don't know, to me this isn't about Russell at all, but is just an indicator of a deeper problem with Tacoma (granted, some of these problems are finally being addressed, so looking forward I think Russell may be the last one to pull a Weyerhaeuser on us).

Here are my thoughts, Seth & Amy/SNL-style:

"Really? Really Tacoma? You impose B&O taxes on a struggling business climate while Seattle charges nothing? Really? You impose suburban parking requirements on new construction while our competing cities do not? Really? You choose to invest city funds in firms OUTSIDE OF TACOMA rather than a local Russell, arguably one of the best known financial firms outside NY? Really? And after all that, you wonder why employers leave? REALLY?"

by Erik on 9/10/2009 @ 12:13pm
Next Downtown Tacoma Employer Retention Crisis - saving Brown and Hailey from relocating to Fife.

The city needs to eliminate quickly their portion of the B&O tax which are causing companies to leave Tacoma to other areas which do not have the B&O tax such as Fife.

Eric Anderson started a commission to look at the issue but it fizzled out.

by Marty on 9/10/2009 @ 2:08pm
Some one double check my numbers:

900 employees...
they just laid off 20% = 720 ppl
44% live in Tacoma = 317 ppl

20% decide to take another job or go back to school, ect...
50% decide to commute
30% decide to move

About 106 houses, apartments & condos on the market over the next 18 months.

Will it apply downward pressure? Some.
However it is not 900 houses on the market in a month.

by fredo on 9/10/2009 @ 8:47pm
Marty you can make the result what ever you want, just change the assumptions to get the desired answer. In fact we can make the loss of FR a good thing! Just assume that we fill the vacated office building with businesses that pay their employees more than FR does and the FR departure becomes a good thing.

Your scenario ignores the fact that many businesses and individuals rely on the local income that FR produces. The economic fallout will not be confined to the loss of 900 family wage jobs, there will be a ripple effect which will affect every Tacoman.

by L.S.Erhardt on 9/10/2009 @ 8:50pm
This just in from the internets!
Anyone see this article in the Washington Post? I'll post the whole thing. It's long, but a scary read. Me no like.



Universities attract students in novels ways
By Adam Moves, staff reporter Washington Post.

WASHINGTON - In an age of ever increasing competition and diminishing returns, many State and private universities are fighting harder to attract students. Due mostly to the recent recession, attendance of higher education is sliding towards twenty year lows. Most prospective students cite costs of schooling, living and possible relocation as drawbacks to seeking both four year and more advanced degrees.

"It's really hard to find a job to help pay my extra expenses" said Joe Whingerbermhule, a sophomore at Kentucky State. "Even if you get the max loans for the school, it doesn't cover stuff like car insurance, gas and food for my ferret. I was planning on riding my credit cards, but Chase recently dropped my limit by half. I'm struggling and I don't even know how I'll be able to pay my loans off if this continues".

Times like these often turn away freshmen and sometimes current students up to even their senior year. It's both easy and convenient to blame what some call the worst recession since the Depression. However, several leading schools aren't buying that reason. A few universities are leading the charge with a new game plan to get students back.

"Schools have to offer something more, an added value" said Rick Bonche, President Emeritus of Southern Georgia University. "Why go to just any school in any no-name town? Young adults don't want to be in Toledo, Ohio no matter how acclaimed the University of Toledo is. Decaying cities like that don't have the attraction power, nor the appeal to keep students there both during and after graduation. Kids go instead to Chicago or New York, where there is a perception of a more exciting, fulfilling life. There is an increasing trend of students flocking to lesser-name schools in vibrant urban hubs than prestigious ones in less appealing locales."

Some schools have taken this trend on, and have used it to their advantage. Branch campuses are not a new idea, and have been used extensively for years in the west - especially California. Many universities open a branch or two in a suburb or nearby town with greater appeal than the home city. One wildly successful example is Ron Gildorf College in Victoria, Texas. Unable to grow in their current home, the four-year school opened a branch campus in Houston in 2001. By 2008, the branch had grown to enroll 2,000 more students than at the home campus. Students interviewed by the school claim they chose the Houston location over the Victoria one because, plain and simple, Houston has more to do and a better night life. Giving the immense popularity, the Ron Gildorf board is considering relocating all their administrative offices to Houston.

This brings up the other emerging trend: schools moving all together. While not always feasible from a financial and infrastructural view, some universities are taking the chance, such as the University of Puget Sound. This private school has been in Tacoma, Washington since it's founding in 1888. Recently, the school closed a non-publicized purchase of one hundred and ten acres near Discovery Park in nearby Seattle. Initially what was planned to be a branch campus has evolved into something bigger, something ambitious. They plan to sell their current campus and completely relocate to Seattle.

"These days it's hard to compete with the larger schools in Seattle" said Todd McGee, assistant spokesman for the University. "While it will be both difficult and hard to move our entire operations to Seattle, we feel it will be beneficial to our faculty and students. Tacoma has been a great city to us for the last one hundred twenty-one years, but the time has come to move on. Our students deserve the Seattle experience, and we feel that being located there will help the University of Puget Sound attract more people to our school. All of us, faculty, staff and the student body deserve better than Tacoma could hope to offer."

When asked what the City of Tacoma thought about their plans to move to Seattle, Mr McGee replied: "While we know the city will be disappointed, we feel that they will understand and approve of our decision once we formally announce it at the end of September". While the move is clearly necessary, this reporter finds it hard to believe any city would encourage it's institutes of higher learning to leave.

But then again, a reporter might see things differently that either a politician or a board member of a university.

by NineInchNachos on 9/10/2009 @ 9:06pm
oh man. We rode by UPS today on the tandem. It will be sad to lose all that hip young blood. 2009 has not been kind to lady Tacoma.

by fredo on 9/10/2009 @ 9:18pm
Thorax I thought I'd check out the UPS story on the News Tribune website. When I searched the term "university of puget sound" it gave the following result: "did you mean the University of Beget Sound?" I swear, try it for yourself.

by NineInchNachos on 9/10/2009 @ 9:23pm
New Tribune searches are next to worthless.

better use google with " , news tribune"

by Crenshaw Sepulveda on 9/10/2009 @ 9:25pm
I guess I'll have to track down the Post article online to see what I really feel about this business. Not familiar with that Ron Gildorf College in Victoria, Texas.

by jenyum on 9/10/2009 @ 9:38pm
Thorax, is that for real or are you just messing wit'us? I can't find it anywhere on the internets.

by jenyum on 9/10/2009 @ 9:44pm
Yeah, nice quote from "Joe Whingerbermhule."

I guess I am really tired tonight, made me look it up.

by NineInchNachos on 9/10/2009 @ 10:05pm
ha ha nice psyc-out

by L.S.Erhardt on 9/10/2009 @ 11:05pm
You can find it on the internets... You just read it on an internet-enabled device, no?

by NineInchNachos on 9/10/2009 @ 11:19pm
is this real outside the scope of your imagination thorax?

hit us with a url

by L.S.Erhardt on 9/10/2009 @ 11:27pm
Read it here



Ah, but truth be told, this article is indeed a product of my hyper-active imagination. Perhaps it was in bad taste, but it illustrates that there are far more valuable things in Tacoma than an investment bank.

by NineInchNachos on 9/10/2009 @ 11:33pm
You've been spending to much time at that refinery sir. Your mind has a case of the vapors.

by L.S.Erhardt on 9/10/2009 @ 11:38pm
asphalt fumes... better than LSD!

by NineInchNachos on 9/10/2009 @ 11:47pm
False Profit Prophet !

by NineInchNachos on 9/10/2009 @ 11:54pm
weeklyvolcano.typepad.com/spew/2009/09/p...

by L.S.Erhardt on 9/11/2009 @ 12:03am
ZOMG!!!

RR, that is one of the greatest links of all times. Looks to me like ARSNIC has been at it again! Wonder where they will strike again?

by morgan on 9/11/2009 @ 6:40am
TOT's story is based on reality though: UPS sold their law school off and it moved to Seattle some years back. That has to be one of the biggest blunders in Tacoma's history! Erik knows the details on that story.

by Nick on 9/11/2009 @ 8:28am
Thorax, you really had me going there for a second! Towards the beginning I was just thinking about how I wouldn't have even known Tacoma was anything but Toyota pickup truck if it weren't for UPS...

Then I started thinking that maybe T-Town was about to implode on itself - thanks for pulling my mind back from the edge. ;-)

by fredo on 9/11/2009 @ 9:50am
"make sure we don't make this mistake again" Kevin Freitas

Kevin what was the mistake we made? I don't get it.

by Nick on 9/11/2009 @ 10:29am
I'd say we created an environment hostile to business growth and investment. We tried going to the emergency room for last-minute surgery with that ridiculous please-stay-here package, which was too lilttle too late.

A city is like a garden, and we neglected to take care of ours for too long. Dumping a bunch of fertilizer on a bunch of wilted plants after ignoring them all season isn't the most effective way to grow a healthy one.

by Mofo from the Hood on 9/11/2009 @ 10:52am
Russell Investments is not like the rest of Tacoma businesses.

The people that manage that company are not like you and me.

They got money.

by tacoma1 on 9/11/2009 @ 11:28am
An article in todays Seattle Times is below. Russell Investments saw an opportunity to buy prime property for a song, so they did. It's really that simple. If you could sell your house in Tacoma, and buy an even better house for almost a third less, in a more prestigious neighborhood in Seattle............even all of us who love Tacoma would be tempted to do so.

seattletimes.nwsource.com/html/businesst...

"Russell Investments' parent company paid $115 million for the 42-story downtown Seattle tower known until recently as the WaMu Center, according to a document filed Thursday with King County.

The filing confirms reports that insurance giant Northwestern Mutual got the 3-year-old skyscraper for a bargain-basement price. The county lists the assessed value of the property for tax purposes at $300 million, and real-estate insiders said it probably would cost at least that much to build today.

A year ago the county appraised the property at $347 million.

"It's an incredible opportunity, and they [Northwestern Mutual] capitalized on it," said Bill Condon, vice president and managing director in brokerage Grubb & Ellis' Seattle office."

by dolly varden on 9/11/2009 @ 12:15pm
tacoma1 is right -- that's how the world works -- who wouldn't buy that beautiful new building for such a bargain if they could afford it? And they can go downstairs to SAM on their lunch breaks!

We need to move on, hopefully nurturing small business, the arts, and education, which is what we would have needed to do anyway.

Glad the U. or Puget Sound isn't leaving tough, Thorax! BTW, getting rid of the law school made a lot of sense for Puget Sound, as UPS likes to call itself these days. They wanted, rightfully -- and pretty successfully so far -- to focus on becoming a competitive, quality liberal arts school.

You have to make your downtown strong enough to weather common sense business decisions by independent actors.

by tacoma1 on 9/11/2009 @ 12:40pm
Forget SAM during the lunch hour, the Lusty Lady's cross the street! Don't ask me how I know that, btw.

I had a neighbor who went to UPS law school back in the day, and she said the whole time she went there, she felt ripped off. Prior to enrolling, she saw all the beautifull UPS brochures, visited that amazing park like campus, fell in love with the place, then after she enrolled, figured out the law school campus was actually off the main campus - it was in a friggin Lakewood strip mall.

by NSHDscott on 9/11/2009 @ 12:46pm
Well, I think tacoma1's metaphor about selling your house is a bit of a stretch because businesses have employees that homeowners don't. Taking the employees (and any possible lingering hometown loyalty) out of the equation, the Seattle move was a pretty obvious one. Too bad that Russell's employees didn't carry more weight in the decision as that was really Tacoma's only advantage, once the Seattle commercial real estate market imploded.

by tacoma1 on 9/11/2009 @ 1:10pm
Corporations exist primarily for profit, especially an international investment company owned by a huge out of state insurance company. Russell Investments hasn't (technically) been a home town company since 1999. In this economy, the employees would have very little leverage. If they refuse to move, I'm sure that they can be replaced quite quickly. If unemployment was hovering around 3%, and commercial real estate prices in Seattle was sky high, Russell would be staying put and building in Tacoma.

by boearc on 9/11/2009 @ 2:01pm
So - say I worked for Russell. Cool. I'll ride my bike the 5 miles into Downtown Tacoma in the morning, check it into a secure bike garage slot, grab my coffee and NYTimes at Frieghthouse Square, climb aboard the Sounder, fire-up the lap-top and ride into work. At my lunch hour walk over to Pike Place Market or Westlake to run some errands. After work have a few beers with da boys (maybe one too many - good thing I ride the train for bit on the return), and then bike home (or call my wife pick me up). So maybe we just need to go with the flow for awhile. Why not strive to turn Downtown Tacoma into a bitchen cool Ballard-esqe, funky mixed-use center that is a bedroom community to Seattle (a Proctor District on steriods so to speak) - or for those anglo-files, become more like Bromley to the City of London (rather than trying to be Birmingham). Take all the $$ being promised to Russell and put it into Infrastructure Improvements in the Dome District (i.e. do the Sounder Extension right) and spend time on the linkages to the neighborhoods, the neighborhoods themselves, and our schools - and maybe become the start-up incubator city of Washington (you going to start a business lad, well then you better check-out T-town). Make Tacoma the place to live - and work where you may - or better yet, we will help you start your own.

by NineInchNachos on 9/11/2009 @ 2:08pm
Ballard rules