N.J. insurance co. to buy Riverfront building for $4.3M
WILMINGTON – When the 169-year-old Farmers of Salem mutual insurance company began looking for a bigger home for its 52 employees two years ago, it wanted to find amenities to help it attract new talent.
James Doherty, president and CEO of Farmers of Salem, said that his company’s longtime headquarters – an 11,000-square-foot brick building in downtown Salem, N.J. – was getting crowded and presenting recruitment issues.
“For certain managers, we’ve worked with headhunters who told us that we were a bit off the beaten path and we’ve even heard from some of our applicants right out of college, “˜What is there to do in Salem at night?'” he recalled with a chuckle, adding that most employees go home.
That led the company to conduct a search for a new home that took them to sites in New Jersey, Pennsylvania and Delaware. While they preferred to stay in Jersey, Doherty said that they couldn’t find a turnkey location that fit their needs.
That’s when their broker showed them options in downtown Wilmington as well as along the Riverfront. Ultimately, they saw 1 Avenue of the Arts, a waterfront property adjacent to the Riverfront Market and Delaware Theatre Company.
“We originally thought about leasing until we learned that that it was for sale,” Doherty said.
With a focus on providing amenities for the company’s families, in terms of dining, entertainment and potentially places to live, Doherty said that the property checked all of their boxes.
According to the company’s application to the Delaware Strategic Fund for a relocation incentive package, Farmers of Salem will buy the building for $4.325 million – a slight discount from the recently advertised price of $4.5 million by brokerage Patterson Woods – and invest $500,000 into renovations. More than $750,000 more will be put toward equipment, furniture and engineering fees.
While the company will put up about $5.2 million in the move, the state also approved an incentive package of just under $400,000 as well. Doherty said the funds definitely helped the company decide to cross the Delaware River.
“Once we began looking at five or six sites that we thought were real possibilities, our broker began looking at potential for incentive packages,” he said. “[Securing the funds] helped our board of directors in looking to move away from Salem. Now we have some seed money to do some renovations that we may have otherwise not been able to do until later.”
Farmers of Salem’s future home is currently occupied by two companies, financial advisory and investment firm Blue Rock Financial Group and architectural and design firm Mitchell Associates. Blue Rock will stay on as a tenant of Farmers of Salem while Mitchell Associates will be relocating by the end of the year, Doherty said, noting he expects his company to relocate by the end of the year or early 2021.
Farmers of Salem, which is owned by its policyholders, concentrates on traditional property and casualty insurance with homeowners being the biggest line, Doherty said. Locally focused, they write business in New Jersey, Pennsylvania and Maryland, and will begin writing in Delaware by late 2020 or early 2021.
They don’t employ insurance agents, but instead work directly with about 400 independent agents in the region. Of their 52 employees, 35 are business professionals and 16 are engineers or skilled laborers, according to their state application. They will add five employees in the next three years.
Doherty said that because about 65% of his current employees are New Jersey residents, the company will help compensate commuters for the tolls on the Delaware Memorial Bridge with pay increases. He said that the employees took the news of the move well.
“A few of employees have even talked about possibly moving to Delaware once the new office opens,” he said.
While the name Farmers of Salem may be a bit outdated after the company moves to Delaware, Doherty said that they are not considering a name change right now. Notably, nationwide insurer Farmers Insurance Co. would present a rebranding obstacle for a shortened name.
Doherty, who lives in Delaware, said that he is aware of the revitalization occurring in the city and is excited to make Farmers of Salem a part of it.
“You see that it is growing and growing, so when we found this building at the Riverfront we thought it was great timing,” he said.
By Jacob Owens