State Farm era ends in Woodbury as cavernous old building falls to wrecking ball

The colossal State Farm office complex ruled over Woodbury's skyline for years, signaling economic prosperity at first, and later failed fortunes.

Now the 450,000-square-foot structure is nearly gone, its towering flanks of brick and glass chewed away and hauled off for recycling. From that barren ground, at the city's northern gateway along Interstate 94, office towers will rise in the midst of new businesses.

"I think it's an acknowledgment of the changing marketplace," said Bill Hargis, who was Woodbury's mayor during both the rise and fall of the State Farm workforce, which topped 1,500 employees at its peak. "It does certainly change the look up here. It will be good to have the big State Farm building in our rearview mirror."

The transformation from one of the east metro's largest office buildings comes 10 years after State Farm vacated its three-story campus for new quarters in Nebraska. Despite the city's efforts to find a new tenant, the dark, cavernous building and its shuttered 100-acre campus lingered as a symbol of the recession on one of Woodbury's most visible borders.

As machines claw away the last of it, eyes turn to what's coming next — the new CityPlace development, where 10 new businesses already have opened on the land that State Farm's sprawling parking lots once occupied. More are coming, too, including a 116-room Residence Inn by Marriott and the anchor tenant, a Whole Foods grocery store that will open in 2017.

"It looks like a blank canvas," said developer Juan DeAngulo, who on Thursday was watching machines erase the State Farm building from the landscape. "It's been a great transformation."

Economic prominence

The development is expected to give a further boost to Woodbury's growing prominence in the east-metro economy. The city produces 35 percent of Washington County's total commercial-industrial tax revenue, which is even more than in pre-recession days.

Even more telling is this: The market value of Woodbury's commercial property in 2015 was $999.8 million — producing $35.7 million in tax revenue — compared with $645.3 million just 10 years earlier before the recession. In 2005, commercial-industrial taxation in Woodbury brought $21.2 million in tax revenue.

City leaders tried for years to interest someone in converting the abandoned State Farm building into offices but got no takers. Its vast empty hulk — described by a real estate agent as resembling the horror movie "The Shining" — once housed the insurer's main operations center for Minnesota, Wisconsin, Iowa, the Dakotas and Nebraska. The city finally conceded that the building would never appeal to smaller companies shopping for modern office space.

"It just became apparent that the building is so large that there wasn't much natural light in it," Dwight Picha, Woodbury's longtime community development director, said before the teardown began. "I don't think there are 10 offices in that whole building. It's just one giant space."

By 2015, he said, the land value remained strong but the building's taxable value declined to the point that "from the city's perspective there was no reason to leave the building there." By comparison, CityPlace when fully built will have nearly double the usable space, he said.

Before State Farm left Woodbury, it was the No. 4 taxpayer in Washington County. In 2005 it had a market value of $39.8 million and paid $1.29 million in taxes, according to Washington County tax records.

Mayor Mary Giuliani Stephens, who succeeded Hargis in 2010, said the city's main goal with CityPlace is jobs, and that prospect will come easier in the post-State Farm era. Woodbury's prominence as an economic engine has much to do with its large commercial districts, she said, but she and other city leaders want more office space better suited for modern companies.

New jobs and tax revenues

Already, the new CityPlace businesses are producing more tax revenue than State Farm at its peak, but the forthcoming office towers could bring hundreds if not thousands of workers. Woodbury now has 22,000 jobs, but about 80 percent of working residents work outside the city.

"I think the potential for jobs is very high," Giuliani Stephens said. "The vision for the site has been long-term. I think it's responsive to the market, to the way people live and work."

DeAngulo's company, Elion Partners, plans to build three to five office towers where State Farm stood. "It could vary depending on what the market brings," he said. No specific tenants have been named.

Also coming will be a three-story Tria Orthopaedic Center that will be built just east of Residence Inn. The 75,000-square-foot clinic is expected to open the summer of 2017.

The Florida company's investment in CityPlace of about "nine figures" — DeAngulo wouldn't specify the precise amount — will connect two large retail areas in north Woodbury. To the east is Woodbury Lakes, built to resemble a traditional downtown. To the west is the Tamarack shopping district, recently expanded to include a Cabela's outdoors store.

"We've heard many people call our site the 'center of the doughnut,' " DeAngulo said. "It definitely makes it a more cohesive marketplace."

Elion's $835,000 demolition of State Farm, which opened in 1996, includes extensive recycling. Veit and Co. Inc. of Rogers will crush concrete, brick and other masonry materials on site for use as backfill material. The company's permit with the city estimated 25,000 tons of concrete would be recycled. Copper, steel and other metals, lifted from the debris with a high-powered magnet, will total about 4,000 tons.

Debris, estimated at 7,500 tons, will be hauled to a landfill in Inver Grove Heights.

City leaders link Woodbury's fortunes to its strategic location at the junction of I-94 and I-694, but even more to painstaking economic planning that helped the city grow from 6,000 residents about 40 years ago to more than 67,000 today.

Such was the case with demolishing the sprawling campus of State Farm, a company Picha said remained a responsible corporate citizen until the end, keeping the property secure and in good repair.

"I kept telling everybody that we've got to be patient, and the patience paid off," he said.

Kevin Giles • 651-925-5037