Erica C. Barnett contributed to this report.
The Seattle Times has the news that Russell Investments, a global financial investment firm that manages $151 billion in assets, is moving into the Chase Center (former WaMu headquarters) in downtown Seattle.
The city of Tacoma put together a local, state, and federal incentives package worth more than $141 million to keep Russell in Tacoma, where the 1,100-employee company has outgrown its current location.
Although Mayor Greg Nickels issued a press release claiming the city "did not offer any tax breaks or incentives" to win Russell, that's not exactly true: The city created a new tax classification that lowered Russell's business and occupation tax substantially back in June.
No word yet on whether Team Nickels will continue pushing for repeal of the supposedly onerous $25-per-employee "head tax," the transportation tax that became a political issue earlier this summer. Russell reportedly leaned on the mayor and city council members to repeal the "head tax," which is still very much in place.
Here's Nickels' statement:
SEATTLE – Mayor Greg Nickels today issued this statement regarding the announcement by Russell Investments that it will relocate its headquarters to Seattle:
“I am pleased with today’s announcement that Russell Investments has decided to locate in downtown Seattle. 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.”
Earlier this year, Russell Investments contacted the city of Seattle asking how much it would pay in taxes if the company headquarters were to move. To clarify the tax code, the city Department of Finance proposed an ordinance to bring Seattle in line with the State of Washington and Tacoma with regard to businesses classified as “International Investment Management Services.” The city of Seattle did not offer any tax breaks or incentives to Russell. The company is expected to pay approximately $250,000 a year in business and occupation taxes to the city.
The bolds are ours. And they're meant to be snarky. Here's why: Despite widespread opposition by businesses, including Russell, to the "head tax," the tax was hardly a major burden on employers. And today's good news about Russell Investments adds evidence to the case that all the noise about repealing the "head tax" was gimmicky campaign posturing by Mayor Nickels.
We have a call in to Mayor Nickels office to see if the mayor told Russell the head tax would be repealed.
We've also contacted Russell to ask how the "head tax" figured in their decision. They said they would call us back on that issue. In the meantime, they sent over their press release.
We've linked that below the fold.
Russell Investments will relocate to 1301 Second Ave. in downtown Seattle
TACOMA, WASH, September 9, 2009 – Russell Investments announced it will relocate its global headquarters to downtown Seattle. The company will move into 1301 Second Ave. which, upon occupancy in 2010, will become 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.
Russell will consolidate all of its Puget Sound associates into its new headquarters location. The move will 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.
Russell noted that the decision was driven in part by the current economics of the Seattle real estate market. “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 concluded, “Moving to Seattle is an important milestone in Russell’s extraordinary history and 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.”
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.