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To understand the potential impact of Russell leaving we really have to break it up into two clearly separate parts:

• The impact of Russell employees pulling up stakes and moving away;
• The impact of the Russell corporate offices moving out of downtown Tacoma.

In this post we’ll look at the first issue:

Losing Russell Employees

Here’s a quote from an article in the News Tribune ‘Tacoma tries to retain Russell‘

To be unequivocally clear, we have not made a decision about whether we’d stay in Tacoma and, if we did, where, [Russell CEO Craig] Ueland said.

The company has three options, Ueland said:

• 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.

Russell isn’t likely to go farther than SeaTac (according to rumors, h/t Tacoma Urbanist.) I’m guessing that part of that decision is based on the the fact that Russell treats their employees very well, probably too well to force them to uproot and move.

So let’s consider the impact of a corporate move to Federal Way. The first question is how many employees will move up there (immediately, anyway) rather than keeping their homes, keeping their kids in the same schools with all of their friends, and just commuting.

It’s likely that any Russell employees that want to live in Federal Way or South King County already live there. And of those who choose to move to be closer to work, it’s not likely to happen all at once. It will take them some time to prepare, to get to know the area, to find a place, sell their Tacoma home and then to move. So the impact to the city will be spread over a period of time that will lessen the short-term impact (which is where most measures of Real Estate values happen.)

Other factors in considering the possibility of Russell employees moving are housing prices and the traffic situation in Federal Way.

Housing prices are still affected by the King County issue (high taxes, higher cost of living and higher overall real estate prices.) It’s the reason a lot of people chose to move to Tacoma and Pierce Country.

Traffic is not good, especially in the area between ‘West Campus’ and ‘East Campus’ (which falls between Brown’s Point and East Campus). I used to live out there. It was bad then and it’s still bad now. Other areas also suffer from lack of (transportation) infrastructure caused (primarily) by overbuilding that happened under King County’s management of building permits prior to Federal Way incorporating.

Most retail spending would likely follow the employees rather than the corporate headquarters, and it’s likely that the portion of retail spending done by Russell employees would center around their homes rather than their workplace. So it’s likely that retail spending wouldn’t be affected much if employees stayed in town and commuted to work.

On the downside, the retail options in Federal Way are better than any particular area of Tacoma (which is disbursed over a wider area), though overall it would be roughly the same (in my opinion, having lived in both areas.)

Tacoma (as a whole) has lost a lot of businesses over the years and has survived. I think it would survive Russell’s move, too, assuming it’s not too far for a normal commute.
During all of the online debate over the issue, I’m amazed that people are continually confusing ‘Tacoma’ with ‘downtown Tacoma’. If Russell leaves most of the impact will be downtown. The rest of the city might feel the impact, but it will be far less than downtown. We’ll explore that in the next post.

In this series:
If Tacoma loses Russell (Part I)
If Tacoma loses Russell (Part II)
If Tacoma loses Russell (Part III)
If Tacoma loses Russell (Part IV)
If Tacoma loses Russell (Part V)
If Tacoma loses Russell (Part VI)
If Tacoma loses Russell (Part VII)

This entry was posted on Wednesday, January 9th, 2008 at 8:26 pm and is filed under Tacoma Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.