Week of January 7, 2002
Rates Dive, Business Flies
Wells Fargo Home Equity
Adding 400 Jobs in Des Moines
DES MOINES, Iowa -- With historically low interest rates lifting its business to historic highs, Wells Fargo Home Equity (WFHE) is adding 400 new jobs in West Des Moines, Iowa. The expansion will increase the size of WFHE's 300-employee operation in West Des Moines by a whopping 133 percent.
The announcement the 400-employee expansion came after Wells Fargo had recorded a host of new annual records for its mortgage business - and by the end of third quarter 2001.
"In the third quarter, we established new records for applications, originations and servicing," said Mark Oman, group executive vice president of Wells Fargo Mortgage and Home Equity. "We had US$67 billion in applications and originated $48 billion, ending the quarter with a pipeline of $38 billion and a servicing portfolio of $476 billion. Year-to-date originations of $122 billion have already exceeded the full-year industry record we established in 1998 of $109 billion." Wells Fargo's bullish business mirrors the overall U.S. mortgage industry's robust times, jumpstarted by 11 interest rate cuts. When final 2000 figures are tallied, the nation's mortgage business, including home equity, mortgage refinancing and first mortgages, will register 70 percent annual growth, estimates National Mortgage News (www.nationalmortgagenews.com). Wells Fargo's home-equity-loan business is currently growing by about 30 percent annually. That's double the U.S. home-equity loan rate, according to company officials.
"With mortgage rates at historically low levels, we are seeing unprecedented levels of applications," said Oman. "Our ability to continue to profitably grow our servicing portfolio throughout a period of decreasing interest rates and increased servicing payoffs is a result of our strong origination franchise. For many years we have emphasized the balance between originations and servicing in our business model."
A Deep Financial Services Labor PoolThe fifth-largest U.S. bank's decision to expand in Des Moines rested in part on its considerable presence in the area. Wells Fargo Home Mortgage is headquartered in the Iowa city, where it has 1,400 employees.
Wells Fargo officials cited another location factor that was likely even larger in the expansion decision: Des Moines' inordinately deep financial services labor pool. Iowa's capital city, for example, is home to more than 50 insurance companies.
Des Moines' strong financial services cluster has fared well during the current economic slowdown. Through the end of October 2001, the city had a total of 41,100 workers employed in financial services. That figure actually marked a 1,000-employee increase over the October 2000 tally recorded for Des Moines' financial services cluster.
The strength of that financial services sector is reflected in some of the major real estate projects planned, under way or recently completed in Iowa's largest city.
The Principal Financial Group, for example, recently completed the state's tallest building, standing 44 stories tall and spanning 1 million sq. ft. (90,000 sq. m.) of Class A space; the company also recently completed a new 500,000-sq.-ft. (45,000 sq. m.) eight-story office building.
Other major financial services projects in the Des Moines area have included EMC Insurance Cos.' recently opened 15-story, 425,000 sq.-ft. (38,250-sq.-m.) headquarters; Equitable of Iowa Cos.' new 225,000 sq.-ft. (20,250-sq.-m.), six-story headquarters; and Farmland Insurance Cos.' $6.5 million, 50,000 sq.-ft. (4,500-sq.-m.) expansion.
Des Moines' central U.S. location also influenced Wells Fargo's expansion decision, officials added. That location will position employees to serve both U.S. coasts, they explained.
West Des Moines Ranks asWest Des Moines' rapid growth parallels Well Fargo's recent business surge. Once a bedroom community, West Des Moines has become Iowa's fastest growing city.
State's Fastest Growing City
The city's growth is underscored by the population of 46,403 it recorded in the 2000 U.S. Census; that marked a 46.4 percent increase from 1990 in the city's population. Such growth has made West Des Moines Iowa's 10th largest city and has produced the state's fourth-largest tax base, $2 billion. West Des Moines has led the state in total residential construction activity for 14 consecutive years, with a 2000 tally of $80.8 million.
The city's growth has also included strong business expansion, particularly in the financial services arena.
In addition to Wells Fargo, companies with West Des Moines operations include ADP, Allied Group Insurance, Farm Bureau Insurance, GuideOne Insurance Group, National Travelers Life, The Principal Financial Group, Seabury & Smith and Sears Credit.
Capital One Will Add 1,000 Tampa Jobs over Next Six Years
The new positions will come as a result of Capital One's expansion of its auto finance business into Tampa. Capital One Auto Finance is an outgrowth of the company's 1998 acquisition of Plano, Texas-based Summit Acceptance Corp.
The new workers will be added in the fifth office building on Capital One's 71-acre (28.4-hectare) campus in Tampa. The new office facility will complete the build-out of the current campus site.
"Capital One Auto Finance needs to expand, and Tampa has the optimal amount of space, infrastructure and labor resources to accommodate this expansion," said Capital One Financial Holdings President and COO Nigel Morris.
The 1,000 new Tampa jobs will come on top of the 2,600 Capital One employees who now work in the Florida city. The company's rapid growth in the Gulf Coast city reflects its larger expansion. Capital One entered the Tampa market in 1995 with a 150-employee call center.
Editor's note: For more on Capital One's real estate operations, see
Site Selection's July 2001 cover story, "Inside Capital One's Campus Culture."
Kentucky, Ohio Sites Frontrunners for $1 Billion Urenco Plant
Urenco's designs call for its U.S. subsidiary to construct the new plant. The uranium enrichment facility would dovetail with one major plank of the Bush administration's national energy policy: building more nuclear power plants. If Urenco's idea becomes a full-blown facility, it would mark the first time that a new enrichment facility had been built in the United States in 50 years.
For the moment, though, a welter of question marks surrounds the billion-dollar plant. One of those question marks is location. Urenco officials haven't yet specified a site for the uranium enrichment facility. They have, however, indicated that the most likely contenders would be locations that the NRC has already licensed for use as nuclear power plants or for other related activities.
Two such locations that many industry observers see as the current favorites are Paducah, Ky., and Portsmouth, Ohio.
Opened in 1952, the Paducah Gaseous Diffusion Plant is the only operating uranium enrichment facility in the United States. The U.S. Dept. of Energy owns the facility. However, United States Enrichment Corp. (USEC), the U.S. subsidiary of global energy concern USEC Inc., leases and operates the plant, which employs some 1,500 workers.
The Portsmouth operation was once a defense plant that processed enriched uranium. Today, USEC uses the Portsmouth operation to provide sampling, transfer and shipping services for its customers.
Powerful Partners: Duke Energy and ExelonThe long and winding approval process for Urenco's plan also contains question marks. The new plant would add competition in an American enrichment market in which USEC now supplies the 103 active U.S. nuclear plants with up to 70 percent of material.
The Paducah plant has an annual capacity of 11 million units of uranium -- roughly enough to power about 110 nuclear plants for one year, according to industry analysts. Paducah production, however, often falls below 11 million units, USEC officials have said.
Urenco's preliminary plans are for a plant that would produce some 3 million units of uranium a year. The company wants to build a facility that would be designed to produce at least 30 percent of the U.S. market's nuclear fuel needs, according to Peter Lenny, president of Urenco's U.S. subsidiary.
Urenco may submit a preliminary filing with the NRC early this year, Lenny indicated. An application naming a specific site would be submitted later in the year, he said.
The NRC review process, which centers on safety issues and environmental impacts, generally takes three years before a license is issued, according to NRC officials. Urenco hopes to have its plant online within five years, Lenny said.
Urenco has secured some powerful U.S. partners in its plan to build the uranium enrichment plant: Duke Energy Corp. and Exelon Corp. Late last year, Duke and Exelon executives sent a letter to President Bush stating that a group of U.S. firms is "actively seeking to deploy proven and competitive enrichment technology in the U.S."
USEC Brought Anti-DumpingAnother question mark for the $1 billion plant rests in the potential political fallout from the anti-dumping charges that USEC brought late last year against Urenco. (USEC in the same action brought charges against Eurodif SA, which is controlled by the French government).
Charges Against Urenco
In December, however, the U.S. Dept. of Commerce determined that Urenco Group imports would not be subject to anti-dumping duties. The DOC, however, did determine that Urenco imports from Germany, the Netherlands and the UK would be subject to a countervailing duty rate of 2.26 percent.
Commented Urenco Chief Executive Klaus Messer, "We have always sought to compete fairly in all world markets, including the U.S. We are pleased that the Dept. of Commerce confirmed that Urenco is not dumping with imports. . . .
"Regarding the countervailing duty assessment, we shall study the [DOC's] determination and consider our options to appeal," Messer continued. "Meanwhile, we will continue our efforts to persuade the U.S. International Trade Commission that our imports have not injured, and do not threaten, the U.S. enrichment industry.''
Briefly . . . Quick Takes NEW YORK -- Normally, the opening of a single restaurant in a culinary cornucopia like New York wouldn't be so big a deal. Not so, though, for Yoshinoya D&C Co., which has announced that it will open its first beef-bowl restaurant in New York in 2002. The new venue marks the first major Japanese investment in New York since the September 11th terrorist attacks, according to state officials. Yoshinoya's U.S. presence has heretofore been limited to California. That may change. "The North American market has high growth potential, and could accommodate up to 1,000 outlets," said Yoshinoya President Shuji Abe.
MEMPHIS, Tenn. -- Canadian National Railway (CN) has added its operation to the formidable distribution cluster that calls Memphis, Tenn., home. The rail company has opened a $5 million, 60,000-sq.-ft. (5,400-sq.-ft.) distribution center that will have paper products as its main focus. "Memphis is the distribution crossroads of North America, with 43 per cent of America's population living within 600 miles (960 km.) of the city," said CN Gulf Division Vice President Terry McManaman. "CN's new distribution center will strengthen that role and offer shippers new transportation choices."
©2002 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.