Clarification: An earlier version of this story said Mutual plans to build its new headquarters once the yearlong study determines key details such as location, design and budget. Company officials say, however, that a final decision by Mutual’s board of directors to build the headquarters won’t be made until the study is completed.
Mutual of Omaha is beginning a formal study that could lead to breaking ground in mid-2019 on a $200 million-plus headquarters building, likely on property it owns near its longtime headquarters at 33rd and Dodge Streets.
Mutual Chairman and Chief Executive James Blackledge told The World-Herald on Wednesday that the study would consider a new headquarters that would be designed to improve collaboration among the company’s 3,500 Omaha employees, encourage innovation that will serve its customers far into the future and allow Mutual to “attract and retain the best talent.”
“Once in every other generation do you think about something of this magnitude,” Blackledge said.
Last fall, Blackledge mentioned the possibility of a new headquarters. Now Mutual has hired Hines, a Houston real estate development company, and Gensler, a global architecture, design and planning firm, to make a formal study for a new headquarters that will take about a year.
In an interview, Blackledge said the study would determine whether Mutual builds a new headquarters. It will look at the use of current space, review employee and business needs, seek information from people in the community and review options for the location, design, timing and budget.
When the study is completed, he said, Mutual’s board of directors will determine whether to build a new headquarters. If the plan goes ahead, he said, “I expect it to be fairly close to where we are now, because you don’t want to disrupt a lot of employees. My planning assumption is to be in midtown. We’ve got a presence in midtown. We like midtown. ... It would take a lot for me to want to move” elsewhere in the city.
The fate of the existing building also is subject to the study’s findings and board action, he said.
“Worst case scenario, we knock it down,” he said, but some or all of the building could be converted to other uses, such as residential or commercial space compatible with Mutual’s $365 million Midtown Crossing development just to the east or the Blackstone District just to the west.
Blackledge said the existing interconnected buildings between Dodge and Farnam Streets have outlived their usefulness as a corporate headquarters and are inflexible and costly to maintain. The newest above-ground section of the home office, the dark 14-story tower, is 40 years old, and the other parts date as far back as 1940.
The current headquarters has about 1.1 million square feet, so the new structure would have at least as much space, Blackledge said. Mutual’s employment has grown steadily but not rapidly in recent years.
“I don’t see us growing dramatically in the number of employees, or shrinking,” said Blackledge, who became Mutual’s CEO in 2016.
Regardless of whether a new headquarters is built, Mutual would keep its west Omaha sales office and its buildings on the south side of Farnam Street, with about 600,000 square feet, including 146,000 square feet leased to other tenants.
The total cost of the new headquarters isn’t pinned down yet, but construction could cost $200 per square foot, Blackledge said, with millions more to equip the building for occupancy in 2022 or 2023. He said the building would be “frugal” but designed for the long-term benefit of Mutual’s customers and staff.
He said the exact location hasn’t been chosen, although Mutual owns property both west and east of its current office campus that would be big enough for a new headquarters. The campus is close to the midpoint of where Mutual’s employees live.
Building downtown is unlikely, he said, although there are vacant lots such as the site of the former Civic Auditorium on 17th Street. Blackledge said Mutual’s current property is considered part of the city’s core, and a new headquarters nearby would add strength to that part of the city.
“This is where they want the density,” Blackledge said.
In late 2016 Mutual and Ryan Cos. of Minneapolis unveiled a “Turner Park East” plan, which called for a multi-block mixed-use campus heavy on office space but including a six-story hotel and apartments. That property is east of Midtown Crossing and bounded generally by Turner Boulevard, Interstate 480, Douglas and Harney Streets.
Blackledge said the shape of the new structure hasn’t been decided, and it need not be tall. For example, Mutual owns a 3-acre surface parking lot at 34th and Dodge that could hold a building with 100,000 square feet on each floor. Ten stories would yield 1 million square feet of space.
On the other end of Mutual’s property, the Turner Park East plan included a City of Omaha commitment to build a 400-space parking complex to accelerate the transformation of that partly-cleared land.
Groundwork there has been going on since at least 2013, when The World-Herald reported that Mutual was quietly buying up a swath of properties.
World-Herald staff writer Cindy Gonzalez contributed to this report.