NU Online News Service, Feb.12, 11:41 a.m. EST

Liberty Mutual together with Boston Mayor Thomas M. Menino and state officials announced today that the company plans an expansion of its Boston headquarters that will create 1,100 new jobs.

If local government authority approvals are secured, the project would get a tax break of more than $15 million.

The mayor's announcement said the project will add 600 new full-time positions with the company and the work on a property it purchased will mean 500 construction jobs.

According to the company the expansion activity should generate more than $50 million in new tax revenue for the city.

Liberty Mutual said that it had opportunities to expand in other parts of the country, but ultimately decided that Boston provides the best opportunity for its growth. The insurer added that anticipated total investment of approximately $300 million in its corporate headquarters would make Boston one of the largest insurance hubs in the country.

"Putting people back to work is a top priority," Mayor Menino's statement said. "Creating new jobs--600 permanent and 500 construction jobs--as local unemployment numbers are at an all time high is my focus. Liberty Mutual and the insurance sector represent a $3.2 billion industry that is critical to Boston's economic growth."

Edmund F. Kelly, Liberty Mutual Group chairman, president and chief executive officer, said, "We thank Mayor Menino, Governor Patrick and their staffs for working so hard and creatively with Liberty Mutual to make this investment in Boston and its future economically attractive."

"We are eager to continue our collaboration with Mayor Menino, the City of Boston and Liberty Mutual to bring this expansion project to fruition," said Massachusetts Secretary of Housing and Economic Development Greg Bialecki. "Growing jobs is the number-one priority for the Patrick administration, and this partnership is a great example of creating employment opportunities for hundreds of people."

For its expansion, Liberty Mutual recently acquired two buildings in the city--the former Salvation Army building and the Benjamin Franklin Smith building, which are located adjacent to the current Liberty Mutual home office campus at 175 Berkeley Street. The former Salvation Army building previously generated no tax revenue for the city, the company noted.

It was explained that the city is utilizing Tax Increment Financing (TIF) for the project, which allows it to provide a property tax exemption for a portion of the new value created by the project.

The exemption, worth $16 million, would phase in over a twenty-year period as the new property is developed. The city would receive a net benefit of an estimated $50 million in new tax revenues over the same period.

The Boston Redevelopment Authority will vote on the TIF agreement at its board meeting on Tuesday. The agreement must also be approved by the City Council. Liberty Mutual will then need to apply to the Massachusetts Economic Assistance Coordinating Council (EACC) for designation as a certified project.

"Liberty Mutual's expanded and integrated downtown Boston campus can't come soon enough for our residents who work in the building trades, said John F. Palmieri, Boston Redevelopment Authority director. "With unemployment rates up to 50 percent in parts of the construction industry, we must find ways to put these men and women back to work."

The BRA is in the midst of conducting a planning study for the Stuart Street area. Liberty Mutual has been an active participant in the process and any new development that they propose will reflect the Stuart Street guidelines, which are currently in draft form.

In order to move forward with the redevelopment, Liberty Mutual will need to go through the Article 80 development review process, which includes community review, and receive BRA approval.

Liberty Mutual, founded in 1912, has more than 4,100 employees in Massachusetts located at 31 offices across the Commonwealth. The company has more than 2,500 employees located at its home office campus in Boston.