Construction Progress

How far along is the construction on the new headquarters?

The project is approximately 91 percent complete.

How much money has been spent on the project to date?

$210 million (combination of financing methods, i.e., reserves, bonds)

Financials/Costs

With insurance premiums continuing to rise, how can you justify the cost of a new office complex?

Actually, this investment will optimize our business processes and activities and control costs over the long term. Administrative inefficiencies caused by having employees located in several different areas add considerable costs to our operations. Our analyses have predicted that our workforce will be significantly more efficient with a consolidated office complex.

In addition, our present buildings, which have an average age of 69 years, would require considerable expenditures over the next decade to keep them in suitable condition, especially to comply with stringent government security regulations. The efficiencies gained by building a facility to meet our specific needs will allow us to reduce our total space requirements. We strongly believe that a consolidated office complex is a wise investment that will help us better serve our members.

Will insurance premiums increase to pay for the new building?

No. In fact, we believe that with the increase in administrative efficiency that the new office complex will bring, it will allow us to keep insurance rates as low as possible. 

Even with the increase in size and cost, we will still be spending less on facilities and related costs for the new campus versus our current operations.  In fact, we estimate that consolidating Chattanooga operations into one campus will result in at least a ten percent reduction in overall facilities costs.

• Absenteeism could be reduced by 1 to 2 percent annually and overall performance and productivity could be enhanced by as much as 5 percent.
• Reduction in operating costs and lower maintenance and services costs could result in $2 to $3 million in savings per year ongoing.
• Significant curtailment of capital expenditures for furniture, along with reduced need for building improvements during the first five years of occupancy could produce annual savings of $4 million per year. Additional annual savings of $1 million could be achieved for an extended five-year timeframe.

What tax incentives are you receiving and do you think they’re fair?

The County Commission and the City Council approved a property tax incentive package that will make the Cameron Hill project economically feasible for BlueCross and, at the same time, will result in a projected increase of $6.5 million annually in new tax revenues to the city and county. The incentives are similar to those offered to other companies that build or expand in the area.

Properties

What will happen to the Lupton City property?

We are considering options for the 210-acre Lupton City property as we move forward with construction of our new headquarters.  No decision has been made.

How many building are you moving out of?

We are consolidating eight (8) of our 13 facilities.

How many buildings will be on the hill?

There will a total of five buildings on the hill as well as a parking garage.

What will happen to the buildings BlueCross vacates?

We are working closely with city and county officials, the Chamber of Commerce, the RiverCity Company, and other groups to find occupants for any office space we will vacate.  We anticipate selling and/or leasing the vacated buildings for a variety of potential uses, i.e., retail, commercial, residential. Whatever action is taken, it will be made to improve the city.

What are the values of your owned properties?

We need to keep that information proprietary as we work to secure buyers.

What is your exit timeline?  What buildings will you vacate first?

We will move into the Cameron Hill complex in several phases.  It will probably begin in late 2008 and finish by mid 2009, so that will give us time for a planned, careful exit from our present buildings.

What will happen to Boynton Park on Cameron Hill?

BlueCross recognizes that Cameron Hill holds a special place in Chattanooga’s history.  With the construction of the new corporate headquarters and the design’s emphasis on public space, the company hopes to return beauty and pride to this landmark property. 

The exact plans for Boynton Park or similar public areas are yet to be determined.

Community Connection

How many employees will relocate to the hill?

Approximately, 4,300 employees will work from the Cameron Hill complex.

How does BlueCross plan to stay connected to downtown?  How will businesses be impacted?

We are seeking to balance the public and private space of our campus.  There’s a real need to create a working environment that is safe and secure while meeting the expectations of the public’s desire not to lose access to the hill.

We want to make the site walkable and viewable for the public.  This may take the form of walking trails, observation space, public meeting rooms, etc.

As far as the potential impact on retail and restaurant business, we are exploring ways to keep our employees tied to downtown. We’re thinking innovatively to make the journey up and down the hill as attractive as possible for our employees. We haven’t yet determined what the best means to do this are, perhaps a tiered walking path or a shuttle service.

How will downtown traffic be impacted by the new headquarters?

About 1,100 employees will return to downtown from our Eastgate Mall office.  Traffic engineers associated with our new campus are studying traffic flow and designing multiple ways into and out of the campus location.  Currently, we think there will be a modest increase in traffic but it will occur in a staggered fashion.  We have flex hours; employees come and go at different times. Additionally, we are working with the Tennessee Department of Transportation on the US27 redesign.  The redesign and construction of US27 as currently drawn will provide more ingress/egress routes and make it easier to navigate downtown traffic.

Have you reached your local and minority vendor participation goals?

To ensure that our suppliers reflect our diversity goals, BlueCross has worked to establish on-going relationships with minority-owned and small businesses. These relationships not only further the growth and development of the individual businesses, but also ultimately benefit our health plan members.