Deluxe Corp. is moving its corporate headquarters from Shoreview to downtown Minneapolis, one of several bold moves as the company continues to evolve from its historic check-printing business to a more diversified mix of small-business services.
Deluxe, which has annual revenue of $2 billion, is moving to the 801 Marquette Building, which is the former TCF Building in the heart of the central business district. About 525 employees could move downtown when the space is ready in the fall of 2021.
The company also announced last week it is building a financial technology center near Atlanta. A developer has bought its current Shoreview campus and Deluxe will lease it back until the downtown space is ready.
“Moving to downtown Minneapolis is an exciting next step, helping accelerate our transformation while deepening our community commitment,” said Deluxe Chief Executive Barry McCarthy.
The announcement from Deluxe comes at a time when the vibrancy of downtown has been dulled in recent months because of the coronavirus pandemic and civic unrest. Public officials at Monday’s announcement pointed to Deluxe’s move as a positive sign for the city.
“Today’s announcement means hundreds of jobs will not only stay in Minnesota, they will be in the heart of downtown Minneapolis,” said Gov. Tim Walz. “The move will help maintain downtown Minneapolis’ vibrancy and will help our entire state prosper.”
The number of people working in downtown Minneapolis in 2019 was 218,325, up more than 6% since 2017, according to the Minneapolis Downtown Council.
The residential population also is growing, with McCarthy among them. He and his wife bought a historic downtown loft and are completing renovations on the space.
Deluxe Corp., over 105 years old, is best known as a printer of checks and business forms. Company founder W.R. Hotchkiss invented the personalized flat pocket checkbook.
It was synonymous with personalized check printing for decades, but as more payments move online, Deluxe has adapted through a series of acquisitions. It now offers a mix of small-business services, and its check printing unit is now 40% of the overall business.
Since being named president and CEO in 2018, McCarthy has made all employees owner/shareholders by granting them options in the company, and he’s slowed acquisitions to build upon and integrate its units.
Deluxe will be leasing 94,000 square feet on the third and fourth floors of the 801 Marquette Building and the seventh floor of the adjacent 121 Building. The buildings’ owner, Franklin Street Properties Corp., said in a release that Deluxe had signed a 16-year lease and that each building is about 92% leased.
Deluxe officials said the company has options for more space in the 121 building if needed.
The company said the state provided some job-related incentives for Deluxe’s move from Shoreview to Minneapolis but did not disclose the amount.
The company has a sale/lease-back arrangement for the 40-acre Shoreview campus for the interim period, although most of the employees there are working from home because of the coronavirus pandemic.
Jobs in finance, marketing, creative support and human resources are headed downtown. The new space will be designed to offer flexible work options for Deluxe employees and will reflect the company’s successful work-from-home shift, the company said.
Deluxe is in the midst of a review of its entire real estate holdings. A couple of years ago, it had 84 locations and stated it would close about half of them. The work-from-home shift has accelerated that review, which will be completed by the end of next year with about 20 locations closing this year.
Some consolidation will be at a new 172,000-square-foot financial technology center just north of Atlanta in Sandy Springs, Ga., where there are several other fin-tech operations. That location will eventually house 700 workers.
Right now, 200 of Deluxe’s 6,300 employees work in Georgia.
“We believe that there is great value in having co-located product management, application development, strategy etc. around our two real growth engines for the company — payments and the cloud,” McCarthy said.
The company’s third major hub is in Kansas City, with major manufacturing operations and call centers.
McCarthy said the company did a national search for a new location for the fin-tech center but quickly settled on the Atlanta area.
“Atlanta is known broadly as one of the major financial technology centers in the U.S.,” McCarthy said. “The state has a done a tremendous amount to support financial-technology companies.”
The Georgia Department of Economic Development has invested heavily to attract fin-tech companies to the area.
The city of Sandy Springs will waive $255,000 in permit and building license fees for the project, according to the Atlanta Journal Constitution, which first reported on the project. Deluxe did not disclose any other state and county economic development incentives.
“I’m not at liberty to discuss the specifics but the state and local governments were very aggressive in courting us and this opportunity,” McCarthy said.
The renovated office space in Georgia, like in downtown Minneapolis, will be built out with COVID precautions, McCarthy said, including more flexible work spaces and greater spacing for employees.
“We feel lucky to be doing this now,” he said, “because we have the opportunity now to configure for the future.”