Business

Bill Virgin: Weyerhaeuser’s move says a lot about the company and Federal Way

Correction: A Page D1 column Sunday was an accidental reprint of Bill Virgin’s Aug. 24 article. His Aug. 31 column is below.

Let’s see if we can discern a forest in all the trees representing Weyerhaeuser’s decision to abandon its distinctive Federal Way headquarters building for space in one more Seattle office building.

Because, you know, Weyerhaeuser grows a lot of trees, and there’s this saying about being able to see the forest for … never mind, we’ll get through this faster if we don’t have to explain all the one-liners:

• Weyerhaeuser’s move definitely says something about the state of the company.



There used to be a standard second-reference nomenclature in stories about the company: “Federal Way-based forest-products giant.” The last word in that description has been of questionable accuracy for some time, given the paring away of not just the ancillary and “why did we buy that again?” stuff (among them a savings and loan and an annuities company) but the sorts of operations one would expect to fit in a “forest products” company. Hardwood lumber. Office paper. Containerboard and packaging.

In each case Weyerhaeuser had its strategic reasons for making the move it did — a desire to focus on a few core businesses, or to free up cash for businesses that might provide a better return, or to get out of businesses seen as being in irreversible decline. The last big strategic restructuring was to divest itself of the home-building business (including its regional representative, Quadrant), which as recently as the last CEO was regarded as one of the remaining core businesses.

But now it’s not. At one time the company sprawled across not only the building itself and a neighboring research center but a cluster of buildings across Interstate 5 in Federal Way, a development area known as West Campus. With all the divestitures and closings and layoffs, Weyerhaeuser finds itself rattling around its signature headquarters building. Its decision on where to move to brings us to the second point, that …

• Weyerhaeuser’s move says something about the current trends and fads (sorry, strategic thinking) about corporate headquarters.



Weyerhaeuser’s building was of an era when big corporations were interested in office parks and suburban campuses, putting their workers in one centralized spot. It’s an era that lasted well into the 1980s, as evidenced by Microsoft’s Redmond campus.

To that Weyerhaeuser added its own touches, with a campus that went far beyond perfunctory landscaping to an open meadow, a lake, surrounding woods (with the bonsai and rhododendron gardens), even a fleet of honking Canada geese. The building itself was a far cry from the set of standard-issue boxes found in many suburban office parks, with its extensive use of glass and plantings that draped like hanging gardens over the concrete façade. That too was purposeful. The entire package sent a signal about how Weyerhaeuser saw itself and wanted the rest of the world to view it.

That sort of attitude doesn’t count for much these days. Corporations still care about the external signals they send, but by moving to the urban core they believe it shows they’re in tune with the next generation of workers they’re trying to recruit.

Is that what Weyerhaeuser cares about? It’s a prevailing fad (there we go with that word again) in tech circles. It’s more dubious whether the same influences apply for those wanting to work for a forest-products company. And if Weyerhaeuser is feeling overlooked in Federal Way, wait until it sees its profile in Seattle.

But then, the other reasons for a corporation uprooting itself don’t seem to apply. Since Weyerhaeuser isn’t even leaving the county, this doesn’t appear to be a chase for tax preferences.

It’s also not a cheap-real-estate play. If that had been the motivating factor, Weyerhaeuser could have reclaimed some of the office space it let go in Federal Way, rather than compete with the tech guys in Seattle; it might even try downtown Tacoma if it wants urban and comparatively inexpensive. As for airport access, which often figures into corporate location decisions, Federal Way is likely to be more attractive than Pioneer Square.

The move won’t do many favors for existing employees, for some of whom proximity to work was a reason for living in South King County. They may contemplate finding other jobs rather than trying to move to Seattle or commute — and maybe that’s all part of the plan.

And the move certainly isn’t driven by the desire to be closer to Weyerhaeuser’s operations. If that had been the desire, Weyerhaeuser would be moving to Longview, not Seattle. Then again, if that entered management’s thinking at all, the trend was already established by Boeing, which deliberately moved its headquarters far from any of its existing centers of operations.

Given the shifts in corporate tastes and the increasingly footloose nature of corporate headquarters, the suburban office park might one day return to fashion. That’s not the same thing as predicting a return of Weyerhaeuser to Federal Way. The company could well be transformed yet again by the time that happens — still smaller, partnered with or a part of some other company, in another business entirely. Those scenarios, by the way, are no more a stretch of imagination than the idea of Boeing leaving Seattle, or Weyerhaeuser twice leaving its former headquarters city.

Speaking of which …

• Weyerhaeuser’s move says something about Federal Way’s ongoing efforts to define itself as more than a puzzlement-inducing name on a freeway sign.



There’s the immediate problem of filling in space in a market glutted with the stuff (Cushman & Wakefield calculates Federal Way’s office vacancy rate at 30.6 percent, compared with Seattle’s central business district at 11.5 percent), and in such a huge and unique chunk (the open floor plan is very much of its time) that will add to the challenge of finding a buyer and tenant.

Beyond that is the loss of one more high-profile company that has seen the departure of companies in the distant past — anyone remember Pacific Nuclear? Paragon Trade Brands? Both were publicly traded and locally based — and recently — Orion Industries, which moved to Auburn.

Maybe being a corporate center isn’t Federal Way’s future. Then what is? Federal Way doesn’t have an obvious niche or defining attribute to fill those office vacancies, unless it’s content with being a smaller Southcenter with more houses. And that’s not much of a strategic positioning statement.

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