Smaller IBM footprint invites new opportunities in Rochester

More than 1 million square feet of commercial space in Rochester is up for sale after IBM said this week it will consolidate its sprawling campus, a move that local business advocates and policymakers see as a pathway to new growth.
Over the next year, IBM will move all of its operations into eight buildings on the east side of its campus, about a 10-minute drive northeast of downtown Rochester near Highway 52. The company said it plans to sell the surplus space, much of it vacant for several years, to a developer.
The company will keep all its employees through the transition, though its headcount in Rochester is far lower than it once was. IBM would not provide a worker tally, but cuts in recent years are believed to have cut that figure substantially as the company moves away from manufacturing.
But while the latest move is a reminder IBM has chipped away at its powerhouse status in Rochester, a chance to overhaul the massive campus and bring in new players is an unmistakable win for a city chasing massive expansion, said Gary Smith, president of Rochester Area Economic Development Inc.
“We see this as a very positive development,” said Smith, whose organization plans to assist prospective buyers. “Freeing the rest of that space up and selling that site off will allow for continued development and productive use of the rest of that facility.”
The field of prospective users is wide open, especially as Rochester claws its way to new prominence. The city is in the early stages of the Destination Medical Center initiative, a buildout anchored by the Mayo Clinic to reshape Rochester into a hotspot for innovation.
Given its proximity to downtown, the IBM campus could factor into that push. Space outside Rochester’s downtown area is generally cheaper but can still be close to the action, Rochester Area Chamber of Commerce President Rob Miller said.
“I think it’s going to be very, very desirable,” he said. “It’s a beautiful facility. I think it’s going to be good, and I think it’ll focus attention a little bit outside the downtown core and I view that all as positive.”
Notoriously tight-lipped IBM offered little information on the move, except to say it expects to shrink its footprint by March of next year. A spokesperson would not confirm exactly how many square feet or buildings would be sold.
The company is redesigning its office space to allow for more collaboration, a common shift in modern corporate offices.
“This will drive faster innovation, create an even better environment for our employees and result in a win for IBM and our clients,” Tory Johnson, the company’s vice president of supply chain engineering and senior location executive in Rochester, said in a statement.
Ultimately, the IBM site will almost certainly be home to a variety of tenants, with room for corporate offices, manufacturing facilities and storage space.
Rochester City Council President Randy Staver said he was surprised – but not alarmed – to hear one of his city’s biggest names was scaling down its footprint. The switch could dovetail well with ambitious growth initiatives in the city and throughout the region, he said.
“Now that IBM is making the explicit move to consolidate and sell off some space, that may very well present some new opportunities for businesses, technology or otherwise, to gain entry into Rochester,” Staver said.
In recent years, IBM began to lease out portions of the property. Telecom firm Charter Communications, headquartered in Connecticut, occupies 111,563 square feet across three of the buildings, home to 680 employees. Its lease will be transferred to the new owner.
Charter spokesperson Kimberly Noetzel said in an email that the company planned to keep operations at the site, and was optimistic about welcoming new neighbors. California-based data storage company HGST, formerly known as Hitachi Global Storage Technologies, also has an office in the complex.
Existing tenants demonstrate interest in the property, but IBM’s official announcement puts the property under a brighter spotlight. RAEDI, the Rochester-area economic development group, is ready to provide information and help interested parties as they come forward.
“The site has been being leased up over the past couple of years,” Smith said. “But this move will allow for a more concentrated effort and will be a good thing in the long run.”

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