HomeFed May Leave Downtown to Cut Costs

Troubled HomeFed Bank may vacate its downtown headquarters building and move its administrative operations to Sorrento Mesa to cut costs. The savings and loan also said Thursday it may put its main office and another downtown tower that it owns up for sale.

Rocked by more than $530 million in losses over the past year and a half, HomeFed is deficient in two of three regulatory capital requirements and fighting for its life. The S&L; is in the process of downsizing and reducing costs in its bid for survival.

If it so decides, HomeFed would move most, if not all, of its 780 downtown workers to its Sorrento Mesa operations center, a complex of office buildings called Fletcher Center that totals 226,000 square feet on Mira Mesa Boulevard. The center, now only 60% occupied, has 781 employees.

HomeFed chief executive Thomas Wageman will make a decision on the move by September, a spokeswoman said. A consolidation would “follow Tom’s philosophy of the best way to run a company,” she added. HomeFed hired Wageman as chief executive in June after regulators forced out his predecessor, Robert Adelizzi.

Wageman believes the consolidation would be logical because of the unused Sorrento Mesa space and because the downtown buildings are more suitable to be leased to outside tenants, the spokeswoman said.

The S&L; does not know how much money would be saved by the move, she added. The company 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 one block east on Broadway. The spokeswoman said HomeFed would sell the buildings if the right offer was made.

The Fletcher Center was filled with more than 1,100 employees as recently as 1989. At that point, HomeFed was planning to build another five-story building. Then the S&L;’s loan problems began to surface, and the operation began to shrink.

Over the past year, HomeFed has sold its escrow, home equity, corporate banking and other operations to raise capital and trim its size.