Vermont-based Green Mountain is looking for about 200,000 square feet of space somewhere between Seattle and Olympia to move roasting, packaging and distribution from Tully’s headquarters in Seattle’s historic Rainier Brewery, said Green Mountain COO Scott McCreary.

McCreary said Green Mountain needs a more modern facility and more space than the 80,000 square feet available at the brewery.

Green Mountain has offered jobs to all of Tully’s production employees in Seattle, who number between 80 and 85, said McCreary. Green Mountain could add another 40 to 80 employees over the next two years as the company expands in this region, he said.

Executives from Tully’s and Green Mountain Coffee gathered Monday at Tully’s headquarters to discuss the deal between the two companies, which was finalized Friday six months after it was announced. The deal was recently approved by shareholders from both companies.

With the deal, Green Mountain gets Tully’s wholesale business, branding rights and trademarks. Green Mountain also will supply coffee for Tully’s retail operations, which include 170 company-owned and licensed locations in Washington, Oregon and seven other western states. Green Mountain also will distribute Tully’s-branded coffee to about 500 supermarkets and grocery stores.

Tully’s Founder Tom O’Keefe said the deal will allow Tully’s to focus on retail stores in the United States and its Asian-based operations. Tully’s will operate under TC Global Inc. and the company will continue to be led by Carl Pennington.

Tully’s has struggled financially and the deal with Green Mountain should help Tully’s return some money to shareholders and become profitable, said O’Keefe. He said Tully’s has plans in the coming years to open 200 company-owned, licensed and franchised locations.

O’Keefe said Green Mountain will continue roasting at the old brewery south of downtown Seattle

for the next few months. Beyond that, O’Keefe said he would like to keep Tully’s headquarters there, but no final decision has been made. About 45 people will be left at the headquarters location, which Tully’s leases.

Green Mountain is looking to expand its brand and also is banking on the increasing popularity of single-cup brewing in the United States.

Green Mountain CEO Larry Blanford said his company’s Keurig single-cup brewing system has an 80 percent share of that rapidly growing segment of the coffee market as more of the drip machines make their way into homes and offices. In the fourth quarter of 2008, Blanford said his company’s single-cup machines accounted for about 9 percent off all coffee machines bought and about 20 percent of the dollars spent on coffee makers.