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July 13, 2000
Labor Ready Inc. bought the 10-story Weyerhaeuser Building in downtown Tacoma for a thrifty $6.4 million, a big score for the revitalizing downtown.
|Weyerhaeuser began in Tacoma in 1900. The structure served as Weyerhaeuser's headquarters as the company grew into an international timber giant.|
The provider of temporary laborers plans to move 275 headquarters employees into the 90-year-old structure later this year from two locations outside of downtown, said Bruce Marley, Labor Ready's director of real estate.
Labor Ready told city of Tacoma officials that the company expects to employ between 350 and 400 employees in the tower. Marley said the building's 135,000 net square feet of offices could house up to 650 workers.
The company plans to spend at least $5 million renovating the building, everything from upgrading sprinkler and air systems to installing new carpets and painting, Marley said.
City economic development officials said they couldn't do better than drawing a big company like Labor Ready into downtown, especially into a big building that otherwise would likely stand vacant.
"Oh, it's very much what we wanted," said J.J. McCament, a member of the city's Economic Development Department. "They're a local company that's coming into downtown and expanding. They're bringing jobs into downtown. And it means we won't have a vacant building. We went from one major user to another."
Weyerhaeuser began in Tacoma in 1900 and moved into the handsome, freshly built building in 1910. It was originally called the Tacoma Building. The structure served as Weyerhaeuser's headquarters as the company grew into an international timber giant. The company doubled the building's square footage in the 1950s.
In 1971, Weyerhaeuser moved its headquarters to Federal Way, where the company has created a major campus for itself flanking both the east and west sides of Interstate 5. Some 450 Weyerhaeuser office staff continued working in the downtown Tacoma tower until the company began moving them out to Federal Way last year.
The last of them left in April, said spokesman Frank Mendizabal.
Meanwhile, downtown Tacoma remained largely stagnant, even as the rest of the area boomed. City officials were already spending heavily, though, to trigger a revitalization, led by the bold move of using public funds to install a fiber optic loop. The city now promotes itself as America's most wired city.
The University of Washington's new Tacoma campus, located on the south edge of downtown, also opened. The school is expected to provide downtown a solid, long-lasting boost. This year construction began on a new office tower along with the start of planning for another one. Companies have begun considering Tacoma as a viable office space option because rents are dramatically cheaper than in King County.
Labor Ready signed a contract to buy the Weyerhaeuser Building 1 1/2 years ago. The building is located at 1015 A St.
For the $6.4 million purchase price, Labor Ready also received 297 parking stalls in a shared parking garage located across the street. The city, Key Bank and Labor Ready now share ownership of the "condominiumized," 550-space parking garage.
The city committed to a variety of inducements to convince Labor Ready to move into downtown, led by promising to pay $2.2 million to build another 125 parking spaces atop the garage to lease to Labor Ready, said city economic development specialist Merten Johnson. He declined to reveal the rent Labor Ready would pay for the 125 spaces, but described it as "very good deal" for Labor Ready.
The city also helped Labor Ready qualify for historic preservation tax credits, even though the structure isn't a designated historic structure yet, and downtown empowerment zone tax credits.
Ignoring the parking, which typically comes with a building, the $6.4 million price equals a mere $48 per square foot.
Colliers International broker Kim Marvik said the price is so low in part because the building is an old, "blue-collar" structure that would appeal to a limited number of users and in part because Weyerhaeuser and Labor Ready agreed to the price 1 1/2 years ago. "The market's up 25 percent since then," she said.
Marvik and fellow Colliers brokers Bob Naber and Vanessa Herzog represented Labor Ready in the deal. Weyerhaeuser negotiated for itself.
The roughly $5 million in renovations equal $37.50 per square foot.
Labor Ready is leaning toward selling the two Tacoma buildings its office staff now occupies, but hasn't fully decided, Marley said. The buildings are a roughly 40,000-square-footer on Center Street near 23rd and a 20,000-square-footer on Pacific Avenue near 23rd.