A major employer in Tacoma’s downtown announced Thursday that it will move its remaining 500 employees to Federal Way in four years.
DaVita, a Fortune 500 company specializing in kidney dialysis, will move its remaining workforce once it builds an office building next to an existing structure that houses 500 workers, said Jim Hilger, DaVita chief accounting officer.
The company will vacate a 10-story tower in the heart of Tacoma’s downtown, at Pacific Avenue and South 15th Street. DaVita occupies all 96,000 square feet of the Peter Sandberg Building.
Four years ago, DaVita sent a third of its workforce to the Weyerhaeuser campus in Federal Way. At the time, Hilger told The News Tribune, “we are still committed to Tacoma.”
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But times change, and the company wanted all of its business unit workers on the same campus, which Hilger said will increase productivity.
“We outgrew our facility and frankly we have over 500 teammates in Federal Way,” Hilger said Thursday. “And so we have 1,000 teammates. We have a strong desire to have them together.”
Building a high rise in Tacoma would be much more expensive than on comparatively sprawling land in Federal Way, he said.
Hilger said he doesn’t expect the move to affect DaVita workers negatively.
“For the vast majority of (employees), the commutes will not be any longer,” he said. “They will be different but they will not be any longer — that’s assuming the state ever finishes I-5 construction.”
Workers in Tacoma moving to Federal Way include those in medical billing and collecting, information technology and a large financial and accounting department.
Employees for a dialysis center will remain, as well as about 10 who work in a data center adjacent to the downtown office.
“Our lease in Tacoma expires in early 2021, and we want this new office space to be ready in time for that,” Hilger said.
The Economic Development Board for Tacoma-Pierce County worked with DaVita for about a year to keep its workers in Pierce County, said board CEO Bruce Kendall.
He said he’s not worried about filling the space once DaVita leaves.
“That is one hot property,” Kendall said. “There is going to be a lot of interest from a lot of companies in that building for sure.”
Office space vacancy rates are low, he said, and companies interested in Tacoma don’t have a lot of choice when looking for space here.
The city presented several options to DaVita to stave off the move, said Elly Walkowiak, a business development manager with the city of Tacoma’s economic development office. One option included building on city-owned parking lots at the Tacoma Dome, she said.
DaVita never followed up, she said.
“Four years from now, Tacoma will be even more vital,” Walkowiak said. “There’s more than $1 billion being invested in downtown Tacoma and surrounding areas.”
DaVita’s new building in Federal Way will have about 150,000 to 200,000 square feet, and be built on a 2.6-acre lot east of DaVita’s offices at 32275 32nd Ave. S., Federal Way, Hilger said.
The company also bought a nearby 3-acre parcel for future expansion, Hilger said. He expects DaVita to add “hundreds of new positions” in the next five years and continued growth after that.
In earnings results released earlier this week, DaVita’s reported net income for the quarter ending June 30 of $127 million, while adjusted net income for the quarter was $179 million.
The Denver Business Journal reported CEO Kent Thiry describing it as a “solid” second quarter in boosting profit.
The Journal reported that CFO Joel Ackerman had increased expected losses in DaVita’s international division to $13 million for the year, largely due to slower acquisition activity overseas.
The Journal also noted the company has faced recent legislative battles in California in relation to medical loss ratios and staffing ratios at its clinics.
Staff writer Debbie Cockrell contributed to this report.