Albertson's Inc. still intends to maintain a corporate presence in Salt Lake City once its acquisition of American Stores is completed in the next month or two, but it will not be as one of the merged company's planned eight regional offices.
"Salt Lake won't be a regional headquarters, but it will be something," said Mike Read, spokesman for Boise-based Albertson's.Most likely, Salt Lake City will go from being the national headquarters for American Stores to a relatively minor role as one of 30 divisions, in this case answering to the new Intermountain Region headquarters in Denver.
Read said the Salt Lake office will be staffed primarily by operations people who work directly with the Albertson's stores in Utah, including merchandisers, accountants, information and technical services people.
How many employees that divisional operation will need remains to be seen, but it's clear that it won't number anything like the 1,900 American Stores staffers who began moving into the company's new downtown headquarters building last June only to have the merger announced in August.
It also remains unclear how many American Stores headquarters employees will still have jobs in the new company and what Albertson's plans to do with that $100 million high-rise on the corner of Main and Broadway.
"Certainly we want and need a lot of those folks, but whether they accept offers and stay with us remains to be seen," said Read.
Albertson's made it clear from the beginning that it would not move all of American's headquarters staff to Boise, but it has never said whether it intends to offer jobs to hundreds or a handful, and it's not saying now.
Whatever the fate of the relatively small number of Ameri- can's headquarters staff, the acquisition will double Albertson's total employees to more than 200,000.
As for the 25-story office tower, Read says the company hasn't made a decision on what to do with it. "Our focus has been on things that will occur on day one (of the merger completion). We'll get to the building at an appropriate time."
It has been speculated that the 427,000 square feet of space in the building would simply be leased out to a variety of tenants, much as any other office building. But those familiar with the structure have said that would not be as easy as it sounds because the tower was built for a single user and would require significant modifications to accommodate a variety of occupants.
Under an agreement with the Salt Lake Redevelopment Agency, American Stores will soon be due a second $900,000 payment from the RDA which agreed to pay the company $5.5 million over 11 years as an incentive to locate the headquarters downtown. But the contract states that if American Stores -- or Albertson's after the merger -- leases out 30 percent or more of the space above the second level, then the deal is off and RDA gets to keep the money.
It doesn't seem likely, but RDA Director Alice Steiner hopes that Albertson's keeps enough people in the building to prevent that from happening.
"The sad thing is, we would like to have the money to reinvest downtown, but I would rather have that building occupied by a major corporation," rather than a group of smaller tenants, she said.
Steiner agrees that the building is ill suited to being divvied up into small pieces for a lot of different companies.
"They (American Stores) don't have offices, they have cubicles. That would work for full-floor or multi-floor tenants, but it would have to be retrofit to make offices for multiple tenants."
At this point, Albertson's expects the $11.7 billion buyout of American Stores to be completed late in its first fiscal quarter or early in its second, which would mean late April or May. It is still awaiting final approvals from the Federal Trade Commission and three states where its stores compete directly with American Stores units and thus raise antitrust concerns: California, Nevada and New Mexico.
When it gets the go-ahead, the massive three-phase merger plan that Albertson's has been working on over the past seven months will be implemented. "We've been working very hard internally on what we want to do with the company when the merger is complete," said Read, "but until then, everything has to be held in abeyance."
For now, Albertson's intends to continue operating the various stores now owned by American Stores under their existing names.
The eight new regional headquarters planned for the merged company will be in Malvern, Pa., where Acme Markets is based; Chicago, where Jewel and Osco are located; San Leandro, Calif., where Lucky Stores North is based; and Buena Park, Calif., home of Lucky Stores South.
Scottsdale, Ariz., will administer stand-alone drug stores and pharmacies, and three other regional offices will be based in Dallas, Denver and Boise, the latter separate from the corporate headquarters.