BlueCross BlueShield leaves Chapel Hill

As a major insurance company prepares to leave its Chapel Hill headquarters, town officials say the move represents an opportunity for development.

BlueCross BlueShield of North Carolina announced May 31 that the company will be moving its headquarters from its location near the intersection of U.S. 15-501 and Interstate 40 to a new campus just a few miles down the road, on University Drive in Durham.

The move will begin in the fall, but is expected to take more than a year.

Chapel Hill Mayor Mark Kleinschmidt said the news did not come as a surprise, and that he recognizes the difficulties of maintaining the large building.

“It’s one of the most challenging buildings to heat and cool,” he said.

Kleinschmidt said he was disappointed, but thinks that the former BCBS property has a lot of potential for future projects.

“It says there are some opportunities for us,” he said.

Kleinschmidt said he was not sure what the land would specifically be used for, but he did mention that a light rail stop has been proposed for that location. Planning for the proposed light rail, which officials hope will someday connect Chapel Hill, Durham and Raleigh, began in April.

Kleinschmidt said he thinks the property’s large parking lots make for a space that would be conducive to a transit center.

Roughly 900 employees who work in the current building will be affected by the move, said BCBS spokesman Lew Borman.

Borman said the purpose of the move is to reduce operating and utility costs — a change he thinks will save $2.5 million. He said it was inevitable that the company would vacate the building, which is 40 years old.

“We’ve been evaluating our real estate profile for a number of years,” he said.

Borman also said half of BCBS’s employees who work at the Chapel Hill location already commute to the Durham campus. He said he thinks centralizing the company’s headquarters will increase efficiency and create a better work environment.

“What this creates is the ability to have an efficient, highly operable, attractive, walkable and environmentally friendly campus,” he said.

Borman noted that the move will happen in phases, starting in September and finishing by the end of 2014. He said it’s possible that not all 900 employees will move, since some may choose to work from home.

Kleinschmidt said BCBS brings in $175,000 per year in tax revenue to the town, but that will not change because the building’s landlord must continue to pay taxes.

Neither Kleinschmidt nor Chapel Hill-Carrboro Chamber of Commerce President Aaron Nelson said they were concerned the move would affect the town’s business climate because the new location is just a few miles from the old one.

“If they were moving to Toledo, this would have a big impact on employment,” Nelson said.

Nelson said he thinks the only potential for lost revenue would be a decrease in employee spending as workers will now be in Durham for lunch breaks, rather than Chapel Hill.

He said he thinks the building, despite its age, would be suitable for another large company but said he is open to many options.

“I think there’ll need to be a realistic conversation about it,” he said.

Ultimately, Borman thinks the move will be beneficial to employees without hurting Chapel Hill.

“It’s a broad-based group and this is a way for that group to be centralized,” he said.

“It’s an exciting opportunity for us.”

Contact the desk editor at city@dailytarheel.com.