HomeFed to Relocate Half of Its Downtown Workers

SAN DIEGO —  HomeFed Bank will move nearly half of its 730 downtown employees to a Sorrento Mesa office by the end of the year to consolidate operations and reduce costs, the savings and loan announced Wednesday.

The move of 360 HomeFed workers is the latest of several departures or staff shrinkages by downtown office tenants in recent months, including Great American Bank and Union Bank. The San Diego County Sheriff’s Department is considering leaving, and the proposed acquisition of Security Pacific Bank by Bank of America later this year would probably lead to layoffs and consolidation of the two banks’ downtown San Diego offices.

HomeFed, which occupies space in two buildings on Broadway between 6th and 8th avenues, said it will try to lease the office space it is vacating to outside firms, a move that will add to the already glutted downtown market, observers said.

“The downtown market right now is soft,” said Steve Rahe, an associate at CB Commercial Group’s San Diego office. “The office vacancy rate is 18% to 19%, and this will just add more space.”

The announcement comes as no surprise. New HomeFed Chief Executive Thomas Wageman said earlier this month that he was considering moving virtually all of HomeFed’s downtown employees to the Charles K. Fletcher Center east of Interstate 805 on Mira Mesa Boulevard.

But the S&L; decided to leave 370 employees in the S&L;’s asset management group and trust company in their downtown offices. All of HomeFed’s executive staff, including Wageman and other top managers, will be moving to Sorrento Mesa, however.

The S&L; said it is moving the employees to a “complex that is suitable for the close working relationships that are required between our departments.” Cost savings are projected, although the S&L; has not determined how much money it will save, a spokeswoman said Wednesday.

The Fletcher center has 226,000 square feet and is only 60% occupied. Before HomeFed began to encounter financial problems early last year, the center was filled with HomeFed employees. But the S&L;’s problems forced it to sell off operations, losing many of the center’s occupants.

HomeFed now occupies 80% of the 167,000-square-foot HomeFed building on Broadway between 6th and 7th avenues and 57% of the 171,000-square-foot Great Western building a block to the east. HomeFed owns both buildings.