In a major boost to Boston’s economy, Mayor Thomas M. Menino and state officials today announced that Liberty Mutual plans to grow its global headquarters in Boston, creating 1,100 new jobs and generating more than $50 million in new tax revenue for the City. The company, founded in Boston in 1912, had opportunities to expand in other parts of the country, but ultimately decided that Boston provides the best opportunity for its growth. Liberty Mutual’s anticipated total investment of approximately $300 million in its corporate headquarters would make Boston one of the largest insurance hubs in the country.

“Putting people back to work is a top priority,” Mayor Menino said. “Creating new jobs – 600 permanent and 500 construction jobs – as local unemployment numbers are at an all time high is my focus. Liberty Mutual and the insurance sector represent a $3.2 billion industry that is critical to Boston’s economic growth.”

Edmund F. Kelly, Liberty Mutual Group chairman, president and chief executive officer said, “We thank Mayor Menino, Governor Patrick and their staffs for working so hard and creatively with Liberty Mutual to make this investment in Boston and its future economically attractive.”

“We are eager to continue our collaboration with Mayor Menino, the City of Boston, and Liberty Mutual to bring this expansion project to fruition,” said Secretary of Housing and Economic Development Greg Bialecki. “Growing jobs is the number one priority for the Patrick Administration, and this partnership is a great example of creating employment opportunities for hundreds of people.”

Liberty Mutual recently acquired the former Salvation Army building and the Benjamin Franklin Smith building, which are located adjacent to the current Liberty Mutual home office campus at 175 Berkeley Street. The former Salvation Army building previously generated no tax revenue for the City.

Working with the State to stimulate the economy, the City is utilizing Tax Increment Financing (TIF) to generate these 1,100 jobs and spur revitalization. A TIF allows the City to provide a property tax exemption for a portion of the new value created by the project. The exemption, worth $16 million, would phase in over a twenty year period as the new property is developed. The City would receive a net benefit of approximately $50 million in new tax revenues over the same period.

The Boston Redevelopment Authority will vote on the TIF agreement at its board meeting on Tuesday, February 16, 2010. The agreement must also be approved by the City Council. Liberty Mutual will then need to apply to the Massachusetts Economic Assistance Coordinating Council (EACC) for designation as a certified project.

“Liberty Mutual’s expanded and integrated downtown Boston campus can’t come soon enough for our residents who work in the building trades, said John F. Palmieri, Director of the BRA. “With unemployment rates up to 50% in parts of the construction industry, we must find ways to put these men and women back to work.”

The BRA is in the midst of conducting a planning study for the Stuart Street area. Liberty Mutual has been an active participant in the process and any new development that they propose will reflect the Stuart Street guidelines, which are currently in draft form. In order to move forward with the redevelopment, Liberty Mutual will need to go through the Article 80 development review process, which includes community review, and receive BRA approval.

Click here for additional information on Tax Increment Financing.

About Liberty Mutual

Boston-based Liberty Mutual Group has more than 4,100 employees in Massachusetts located at 31 offices across the Commonwealth. The company has more than 2,500 employees located at its home office campus in Boston, making Liberty Mutual one of the largest private employers in the City.

Liberty Mutual is a diversified global insurer and fifth largest property and casualty insurer in the U.S. based on 2008 direct written premium. The Company also ranks 86th on the Fortune 500 list of largest corporations in the U.S. based on 2008 revenue, and is the only Fortune 100 company headquartered in Boston. As of December 31, 2008, Liberty Mutual Group had $104.3 billion in consolidated assets, $94.2 billion in consolidated liabilities and $28.9 billion in annual consolidated revenue.

Liberty Mutual Group offers a wide range of insurance products and services, including personal automobile, homeowners, workers compensation, commercial multiple peril, commercial automobile, general liability, global specialty, group disability, assumed reinsurance, fire and surety. Liberty Mutual Group (www.libertymutualgroup.com ) employs over 45,000 people in more than 900 offices throughout the world.

Media Contact: Jessica Shumaker, BRA, 617.918.4446 and John Cusolito, Liberty Mutual, 617.574.5512.

Release Date: February 11, 2010