Citing an insufficient talent pool in Marin to accommodate its major expansion into a new line of business, Mill Valley-based investment firm Redwood Trust is opening a large facility in Colorado and creating more than 550 new jobs there to support the move.
Despite the decision not to expand in Marin, company officials insist they are committed to keeping Redwood’s headquarters in Marin, where it’s been based for 19 years.
Redwood Trust, a real estate investment trust that invests in residential and commercial real estate loans and asset-backed securities, is expanding from the jumbo mortgage market to the conforming mortgage market, according to Michael McMahon, the company's managing director. He said that conforming mortgage market is more than 10 times larger than Redwood’s existing business.
“We’re going to need a lot more people to enter that business line than we have now,” McMahon said. “The issue for us was simple. There isn’t a sufficient talent pool of people available in the high cost Marin area to expand, so we’ve had to look at where there was talent available.”
The 552 jobs Redwood hopes to hire over the next five years include positions dealing with loan origination, information technology and human resources, among other specialties. Those jobs will pay an average annual wage of $66,847 per employee, according to Colorado’s Office of Economic Development and International Trade.
Finding 552 people to fill those jobs at that wage in close proximity to Marin would have been very difficult, McMahon said.
“It’s very difficult to find mortgage banking processing talent in one of the most affluent counties in America,” he said.
Robert Eyler, the interim CEO of the Marin Economic Forum and chair of the Economics department at Sonoma State University, agreed with McMahon’s assessment. According to the Marin Workforce Housing Trust, approximately two-thirds of all Marin employees earn less than the $55,176 annual income needed to affordably rent a median 1-bedroom apartment in Marin.
“To find 550 people that can do mortgage analysis in a short period of time would have been tricky to do in Marin County, for sure,” Eyler said. “Marin struggles with those kinds of jobs.”
Eyler also noted that significantly expanding the geographic expanse from which Redwood could draw that talent pool to Marin would increase the already large percentage of local workers who commute into Marin to work. Nearly 60 percent of the total county workforce commutes into Marin, according to county data.
Though it would have been difficult to accommodate Redwood’s needs locally, Eyler wished the company had reached out to his organization, which has a program to assist Marin employers to see if expansion or major business changes can be retained in Marin.
“It’s definitely a missed opportunity,” he said. “We want to try to solve these problems locally. This would’ve been very tough. But they didn’t ask.”
Redwood Trust execs marked the expansion in a ceremony in Denver with Colorado Gov. John Hickenlooper earlier this month.
“Redwood Trust is a significant and welcome addition to Colorado’s financial services industry,” Hickenlooper said.
The Colorado Economic Development Commission voted unanimously last December to offer job-growth tax credits worth as much as $5.39 million to Redwood Trust over five years if it creates the full amount of jobs, according to the Denver Business Journal.
“The governor and the whole business environment in Denver was very welcoming,” McMahon said.
Eyler said the move is reminiscent in some ways of Lucasfilm’s decision in 2005 to relocate the bulk of its operations to the Presidio in San Francisco. Autodesk, another longtime major employer in Marin, has opened offices around the world in recent years to accommodate its own expansion but eliminated more than 500 jobs, including at least 70 in Marin, in 2012.
“But this sort of situation with Redwood Trust is unprecedented,” Eyler said.