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SHOREVIEW, MN-Wells Fargo & Co. plans to build a new operations center here, starting construction in August on a two-story, 400,000-sf building at Rice CreekCorporate Park near Interstate 35W and County Road J. Crediting its steady growth, the San Francisco-based bank expects to add up to 500 new employees at the building, which will also consolidate about 1,200 additional employees from two other Twin Citieslocations.

The project, expected to cost between $40 million and $60 million, isexpected to be finished in mid-2003. The deal represents a trend in which banks are moving some of their back office and customer service operations out of the Downtown business districts to suburban sites, where land is less expensive, traffic is less congested and parking is cheap.

For instance, Minneapolis-based US Bancorp also plans to invest $65 million to expand and consolidate some Twin Cities operations in a proposed project on the West SideFlats across the Mississippi River from Downtown St. Paul.

Wells Fargo has run out of room at its existing offices in the Twin Cities as its Minnesota business is boomingl. It needs additional room for customer service centers and back-office operations such as check processing and mail service, says Teresa Morrow, a spokeswoman for Wells Fargo. In fact, the bank has had to turn business away because it hasn’t had the staffing for it, she adds.

“It’s just jam-packed,” she says.

The expansion is the latest for Wells Fargo in the Twin Cities in the past 18 months. The bank is renovating the former Honeywell campus in south Minneapolis for its mortgage business and is moving its Downtown St. Paul branch from Norwest Center tothe World Trade Center next month.

In addition to back-office operations, the Shoreview building will combine three Wells Fargo call centers–two in Minneapolis and one in St. Paul–that employ a total of 385 people. The St. Paul call center in the Norwest Center basement in Downtown St. Paulwill close, and its 250 employees will transfer to Shoreview.

The Minneapolis operations center on Washington Avenue will remain open and fully occupied, she says. Wells Fargo, one of Minnesota’s largest banks, has more than 15,000 employees in Minnesota, including about 12,000 in the Twin Cities.

Wells Fargo spent $7 million to buy 50 acres of land in Shoreview earlier this year.

The Shoreview building also will have updated technology and a comprehensive backup power system, which none of its existing call centers here have,Morrow says. When power was shut off in much of the Downtown St. Paul because of an underground electrical fire last month, Wells Fargo’s call center was shutdown for about four hours, she adds.

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