Ilahie Holdings has bought or secured options to buy nearly two full downtown Tacoma blocks across the street from Russell Investments’ international headquarters.
Why? To win the high-stakes competition as the future home for Russell, Ilahie Holdings believes it must think big. Supersized big.
“Yes, it’s a big vision,” said Nate Dreon, president of Ilahie Holdings, a Seattle company.
Ilahie already has a lot of chips in this game. It bought Russell’s headquarters at 909 A St. in December 2006 for $63.7 million. If Russell – now on a hunt for a larger, post-2013 headquarters – chooses to move, Ilahie must scramble to fill a 227,000-square-foot, 12-story hole designed for one high-rent tenant.
You have to admire Ilahie’s play. It hired NBBJ, one of the world’s leading architectural firms, headquartered in Seattle. NBBJ designed the future headquarters for the Bill & Melinda Gates Foundation in Seattle, the AsiaWorld-Expo event center at Hong Kong International Airport and a new headquarters for Telnor, the international telecommunications company, in Oslo, Norway.
The concept for a new Russell home incorporates the current Russell home in a three-phased expansion. Get this:
• Phase 1 involves building a 10- to 25-story tower across A Street that includes two block-long trading floors. The tower would incorporate the narrow white marble Italian renaissance-style Bowes Building at 902 A St., protected by both the Tacoma and national historic registers.
The Russell Indexes, which track changes in world financial markets, would run continuously like a stock market ticker on digital screens across the outside of the trading floor, la Times Square in New York. A helipad atop the tower would allow Russell’s cadre of traveling executives and guests to bypass Interstate 5 traffic delays for quick trips to and from Sea-Tac Airport.
The plan could connect the current headquarters with the new construction via a skybridge or, if the city agrees to close A Street, a ground-level portico.
• Phase 2 would add an office tower at the corner of South Ninth Street and Pacific Avenue.
• Phase 3 – if needed – would involve the demolition of the recently remodeled 1903, six-story Provident Building, formerly the Security Building, to make way for more office space.
(The owners of the Provident Building had it added to the Tacoma Register of Historic Places last year. Demolition of a historic property could pose the only Achilles’ heel to Ilahie’s concept.)
All expansion phases could include ground-floor retail space and underground parking. A boutique hotel – for visiting Russell clients or Russell employees in Tacoma on temporary extended-stay assignment – would fit in phases 2 or 3.
If City Hall wants to play along in a public-private partnership, Dreon said, open space overpasses and stairways could link the expanded Russell campus to Fireman’s Park and over the cliff to the Thea Foss Waterway.
Ilahie won’t release cost estimates for the expansion, Dreon said, because how Russell chooses to phase in its growth and what amenities it wants mean costs could fluctuate widely.
“We have all of the real estate under control or advanced dialogue to control” other pieces, Dreon said.
Ilahie’s proposal, one of three Tacoma concepts pitched to Russell executives, offers the largest footprint and would allow the company, potentially, to save money by avoiding a wholesale relocation.
The other two Tacoma options are:
• The block of South 13th to South 14th streets between A Street and Pacific Avenue. German billionaire Erivan Haub, a longtime vacationer and investor in Tacoma, last year consolidated the block by buying the U.S. Postal Service parking lot.
• The Marcato property, nearly a full block at South 15th Street and Fawcett Avenue. Vision One, the development company overseeing the construction of an urban village over three blocks, has offered Russell the hillside parcel above the Greater Tacoma Convention & Trade Center.
So, you probably want to know, what do Russell executives think of Ilahie’s concept?
While Dreon has had multiple meetings with Russell representatives to discuss the concept, he said he hasn’t gotten any indication of how it stacks up against the company’s other options.
“We’re not going to comment on the process by which we’re making our evaluation,” Jennifer Tice, spokeswoman for Russell Investments, said Tuesday. “We’re evaluating our options, but no decisions have been made.”
Russell CEO Craig Ueland told me in December that he expected to decide by the end of 2008 where Russell will call home after its leases in four downtown buildings expire in 2013. The company needs the lead time, he said, to allow for planning and construction of new space.
The company’s options, Ueland said, include:
• Add on to the current A Street headquarters.
• Build a high-rise office tower in Tacoma.
• Build a high-rise office tower or a low-rise corporate campus elsewhere in the Puget Sound region.
At the headquarters of the Economic Development Board for Tacoma-Pierce County, President and CEO Bruce Kendall heads up Project Destiny – a semisecret multiagency, business and government effort to keep Russell Investments in Tacoma.
Last week, at the EDB’s annual luncheon, Kendall told the crowd that 30 to 40 people work all day every day on Project Destiny.
This week, Kendall said, Ilahie’s concept underscores a misunderstood element of Project Destiny.
“This isn’t just about Russell,” Kendall said.
Although the potential loss of Russell inspired it, Project Destiny aims to make downtown Tacoma an alluring option for a new wave of corporate tenants and development.
That three separate, respected, capable developers have assembled significant swaths of downtown property showcases Tacoma’s potential to Russell – and others, Kendall said.
“This city will be transformed into a corporate center of high-rises if we implement this strategy that the collective has embraced,” he said, referring to Project Destiny. “It’ll work.”
Added Dreon, “Russell’s on everyone’s front burner, but we’re all trying to cater to the community and bring other (tenants) to downtown. … It’s a belief in the future of downtown Tacoma.”
Dan Voelpel: 253-597-8785