MassMutual to build $240 million office in Seaport District
Massachusetts Mutual Life Insurance Co. said Thursday that it will bring about 1,000 workers to a $240 million office space the financial services firm plans to build on Fan Pier, making it the latest major business to expand in Boston’s booming Seaport District.
Springfield-based MassMutual said the move is part of a broader strategy to consolidate operations in its home state and give the company increased access to the city’s growing pool of tech and financial industry workers.
“A stronger Boston presence immerses us in a booming financial and digital economy,” said chief executive Roger Crandall.
MassMutual will also add 1,500 jobs in Springfield — where it has had a headquarters since 1851, and now employs about 3,000 people — and invest $50 million in its campus there. Most of the additional workers for that expansion will come from an office MassMutual will close in Enfield, Conn., 9 miles away and just over the state line.
In addition, the company — which has about 7,300 employees overall — will close offices in New Jersey, North Carolina, Pennsylvania, and Tennessee and transfer those jobs to Massachusetts. It considered expanding elsewhere, a company spokesman said, but in the end decided to grow on familiar turf.
“Following a thorough strategic assessment of our operations and footprint, we concluded that our home state of Massachusetts is the best place for us to grow and thrive over the long term,” Crandall said.
There’s also a financial incentive for MassMutual to consolidate operations in Massachusetts — the state has offered up to $46 million in tax credits over five years in return for the company creating at least 2,000 new jobs. The Baker administration said that would be the largest such award ever granted to a business in Western Massachusetts.
Boston Mayor Martin J. Walsh said Thursday that the company is not receiving any tax breaks from the city.
With $29.6 billion in revenue in 2016, MassMutual is one of the largest businesses based in Massachusetts. Crandall and Governor Charlie Baker have been talking about the expansion for awhile, according to state economic secretary Jay Ash. Those talks got serious about six months ago, he said.
“They’re making a major commitment to Massachusetts by saying we’re all in here, we’re bringing everybody home,” Ash said. “This is a talent play.”
But Noah Berger, president of the liberal-leaning Massachusetts Budget and Policy Center, said he is skeptical of the value of such a large tax break. Berger said the state might have been better served using the money to invest directly in projects in Springfield.
In the Seaport, MassMutual joins a growing list of well-established companies that want to have a presence in a neighborhood that once was billed as a magnet for startups. General Electric and Reebok recently moved their headquarters to the Seaport. PricewaterhouseCoopers and law firm Goodwin have moved major offices there as well. Tech firm PTC plans to move to the district next year, to a new building it will share with Alexion Pharmaceuticals, which is now based in New Haven.
Amazon — which already has established a presence in the area — is reportedly searching for additional space in the Seaport, while other big-name companies also have expressed interest in being in the area.
The district may not be as tech-centric as was originally planned, Walsh said, but the growing diversity of industries bolsters the neighborhood and helps protect the city against an economic downturn in any one sector.
“This continues the diversification of the neighborhood,” Walsh said. “When you think about the Seaport, you think about tech companies, legal and financial services companies, now insurance. Within a very small area there you have a mix of everybody.”
MassMutual was one of the first major investors in the current wave of development in the Seaport, and it co-owns the undeveloped parcels of Fan Pier with developer The Fallon Co. It will use one of those lots, on Fan Pier Boulevard between Vertex Pharmaceuticals and the Fan Pier marina, for a 300,000-square-foot office space. Construction could start later this year, and MassMutual aims to open the building in 2021.
MassMutual already has small, technology-focused offices in a nearby building. The new space will be designed to “primarily house functions that will benefit most from being located in a vibrant ecosystem with access to financial markets and digital talent,” the company said.
That has been a common refrain from companies expanding in Boston lately, said Jonathan Sullivan, research manager at real estate firm Newmark Knight Frank.
“The push for talent is really what this is all about,” Sullivan said. “Everyone is realizing we’ve got to be in the city, in the urban center, to attract the right employees.”
Doing business in the Seaport is a way to reinvigorate the entire company, said Steve Purpura, who leads the Boston office of real estate firm Transwestern, by creating a new image for an old-line insurance firm.
MassMutual, he noted, isn’t the first company to tie a corporate image makeover to the Seaport, and it won’t be the last.
“The Seaport has had a pretty impressive last 12 or 18 months,” Purpura said. “That trend is going to continue.”