Liberty Mutual to Expand in Boston with $300M Addition to HQ Campus
- Feb 17, 2010
February 17, 2010
By Barbra Murray, Contributing Editor
A behemoth new office tower is being planned for Boston’s occupancy-challenged office market, but fortunately, the entire facility has been spoken for. Liberty Mutual Group just announced it will expand its headquarters with the addition of a new $300 million office building downtown on land adjacent to its current home office.
Plans are in the earliest stages, but Liberty Mutual’s preliminary estimate calls for a 30-story, 580,000-square-foot structure on a site that is currently home to the former Salvation Army building and the Benjamin Franklin Smith Building. The global insurer acquired the properties in 2009 after considering other locales for growth.
“Their decision to expand in Boston is a testament to the strength of the city and its workforce,” Jessica Shumaker of the Boston Redevelopment Authority (BRA) told CPE. “They had the opportunity to expand elsewhere in the Northeast and at other campuses across the country.”
Before Liberty Mutual can move forward with its plans, it has a few hurdles to jump, one of which it just cleared on February 16. At a meeting that day, the BRA’s Board of Directors gave the go-ahead for the organization to apply jointly with Liberty Mutual to the State of Massachusetts for Tax Increment Financing (TIF) for the project. Next, the City Council has to sign off on the agreement before the proposal can be submitted to the State. The TIF funding will allow the City of Boston to provide a property tax exemption for Liberty Mutual that would be valued at $16 million.
If all goes as planned, work on the office building could get underway within the next several months. “Liberty Mutual has talked about wanting to be in the ground at the end of the year, pending the TIF approval,” Shumaker said.
The development will produce 1,100 new jobs, create over $50 million in tax revenue and help revitalize a little corner of downtown that has escaped attention. “The Salvation Army and Benjamin Franklin Smith buildings weren’t living up to their potential as far as tax revenue and the look and feel of the neighborhood,” she said.
Additionally, Liberty Mutual’s expansion will make Boston one of the largest insurance hubs in the U.S. The city’s new status as a leading insurance locale could attract other industry businesses and help lower downtown’s overall office vacancy rate, which is currently 10.1 percent, according to a fourth quarter 2009 report by real estate services firm CB Richard Ellis.