Potlatch Picks Spokane For Corporate Hq

Potlatch Corp., the giant San Francisco-based timber and paper company which started 94 years ago in North Idaho, is moving its corporate headquarters to Spokane.

With the move, planned in September, Potlatch will become the largest corporation with headquarters in Spokane, surpassing Washington Water Power Co., Egghead Software and others in annual sales and total employment.

Although the head office will employ only 40 people, it will oversee 6,700 employees, 21 operating plants, $1.55 billion in annual sales and 1.5 million acres of timberland in Idaho, Minnesota and Arkansas.

“This is a stamp of approval that Spokane is being recognized as a quality place,” said Pete Kerwien, a business recruiter at the Spokane Area Economic Development Council.

Potlatch directors, including several with ties to Hayden Lake, Idaho, and Spokane, approved the move last week and announced the decision Monday.

The announcement is a bright spot for Spokane’s economy in a year that has seen AgAmerica Farm Credit Bank move its headquarters to Sacramento, Calif., and Egghead Software scale back its operation.

The arrival of Potlatch also will boost the efforts of the Focus 21 economic development group which is seeking to lure or create high-paying jobs in Spokane. Potlatch’s top five executives each earns more than $300,000 per year in compensation, according to U.S. Securities & Exchange records.

Just last month, Potlatch was named by the San Francisco Chronicle as one of the Bay Area’s most valuable companies.

Potlatch president L. Pendleton Siegel said the lower cost of doing business here will save the company $1 million to $1.5 million a year.

More importantly, it will make it easier to train and promote managers at company headquarters without forcing them to pay exorbitant housing costs in the Bay Area.

“It’s become an almost impossible situation,” Siegel said. “Employees won’t even apply for the headquarters jobs anymore.”

Potlatch will leave up to 50 of its 90 headquarters employees in sales offices at Walnut Creek, Calif., a San Francisco suburb. The rest have the option to move to Spokane.

The move is not expected to affect the 70 corporate employees at the Northwest Region office in Lewiston, where the company has a sawmill and processes bleached paperboard, tissue paper and other products.

The diversified forest products company also operates a particle-board plant in Post Falls.

Potlatch has retained R.W. Robideaux & Co. in Spokane to help locate a 20,000-square-foot office, which will be leased in the near future, Siegel said.

Potlatch chose Spokane over Boise, Salt Lake City, Denver, Little Rock, Minneapolis and several other sites recommended by an outside consulting firm, Siegel said. Spokane got the nod because it was the closest city to Lewiston with a major airport.

“Boise, Denver and Minneapolis were all higher on the list as far as the consulting company was concerned,” said Bob Potter, president of Jobs Plus, a Coeur d’Alene business recruitment agency that spearheaded a two-state effort to woo Potlatch back to the region it left in 1965. “Their board of directors wanted Potlatch in a large city, and that’s why it stayed in San Francisco for so long. Spokane was their compromise.”

The 15-member Potlatch board in the past has met at the Hayden Lake Country Club and stayed at the Coeur d’Alene Resort.

John Richards, Potlatch chairman and chief executive officer, and board member Charles Weaver, former chief executive officer of Clorox Co., both live in Hayden Lake. Richards is the twin brother of Tom Richards, president of Idaho Forest Industries in Coeur d’Alene.

In addition, four members of the Weyerhaeuser family who serve on the Potlatch board and control more than 11 percent of the company stock, have relatives in Spokane.

Potlatch vice chairman George “Fritz” Jewett Jr. grew up in Spokane before moving to San Francisco. His daughter, Betsy Coombs, co-owner of Coombs Manufacturing Co., lives in Spokane.

Siegel said there was no connection between the cost-cutting move and recent shareholder dissatisfaction with corporate earnings. Two shareholder resolutions to make it easier to replace the board of directors were soundly rejected by stockholders last week.

Paul Latta, forest products analyst for Ragen MacKenzie securities firm in Seattle, praised the move to Spokane. “Companies that pay attention to the little things tend to do better in the overall market,” he said.

Potlatch posted a $68.5 million profit on sales of $1.55 billion in 1996, compared with a $108.5 million profit on sales of $1.61 billion in 1995.

, DataTimes