Providence has assembled a team of city officials to persuade Blue Cross &
Blue Shield of Rhode Island to keep its offices and 1,000 workers downtown.
The effort comes as Blue Cross examines possible cost savings related to a relocation.
Donald Eversley, president of the Providence Economic Development Partnership Inc., said the team was formed recently based on what Eversley called “very active” rumors about a move.
“It’s fair to say I’ve heard the rumors,” he said. “We really don’t know how serious it is … but it’s something we definitely take seriously.”
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There has been speculation by a number of local officials for more than a month that Blue Cross is eyeing the former Gorham manufacturing facility in Smithfield as a new location. CB Richard Ellis Whittier Partners NE is brokering the 153,000-square-foot property, which is listed for $4.5 million. The Gorham outlet store is still located inside the facility.
Scott Fraser, a Blue Cross spokesman, said a study – commissioned by the company to examine if it could save money by relocating – is just one more tool that could ultimately be used to save customers money.
“Affordability is a No. 1 issue that affects health care – we’re always looking for ways to (reduce) operating costs, and do our job better in a less costly manner,” he said. “We commissioned a study to look at that. We’ve made no final decisions.”
Concern about Blue Cross leaving downtown comes less than a year after the city dropped Blue Cross as its health care provider.
Fraser said the relocation study had nothing to do with the city’s decision to go to UnitedHealthcare. “That was not a factor at all,” Fraser said.
Blue Cross currently owns two buildings downtown – 15 LaSalle Square and 1 Empire Plaza – and rents three others – 7 Jackson Walkway, a facility on Niantic Avenue (on the Providence-Cranston line) and the building at 444 Westminster St.
Joseph Paolino Jr. purchased the building at 444 Westminster St. last fall, knowing that Blue Cross, some time in 2005, planned to consolidate administrative services from his building into the LaSalle Square building and keep the other building it already owns, he said.
“The city is very concerned and we’ve assembled a group to explore some options
for ideas and incentives we can bring to the table to make them stay,” Eversley
said. “If they need more space, there are a number of possibilities in the city.
We want to make sure the CEO and board have been apprised of all the options.”
Impact on businesses
A number of real estate experts said they are concerned not just for the vacancy that a Blue Cross move would open up in Providence, but also its effects on smaller businesses that depend on the health care provider.
“It would, in terms of day-to-day business in the city, mean a lot to the smaller businesses and services – they would be hurt the most,” said Michael Giuttari, president of NAI/MG Commercial Real Estate. “From a real estate perspective, if someone moved into the buildings, the tax revenue would continue, but maybe down the line, Johnson & Wales might come in and take it off the tax rolls.”
Paolino said he wouldn’t be affected much if Blue Cross decides to move out of the city – he was preparing for them to move out of his building all along.
But a move would impact the city and local business, he said. Paolino said he didn’t know if Blue Cross was looking to move.
“Blue Cross has been a very important partner to the city of Providence and downtown in particular,” he said. “The success of downtown depends on Blue Cross staying in the city. If Blue Cross leaves, 1,000 more people will be leaving downtown and that affects the city.”
The state Economic Development Corporation hadn’t had any contact with Blue Cross as of press time and could not confirm a possible move, said Townsend Goddard, an EDC spokesman; and as a rule, the corporation tries to stay out of any in-state relocations.
“We try not – to the extent that we can – to get involved with company relocations within the state,” he said. “If they’ve reached their capacity and the only option is to relocate, then it’s good because they’re growing. What we don’t want is to see them leave a major hub” for other reasons.
“Things are really happening in Providence – there’s a lot of economic energy,” Goddard added. “Blue Cross would be bucking the trend.”
Blue Cross has been looking at ways to cut costs – which helps customers – for a couple of years, Fraser said.
“If we were to decide to make a move, it would have to satisfy two criteria,” he said. A move would have to result in more overall savings and increase Blue Cross’ overall efficiency as a company, he said.
When asked, Smithfield Town Manager Russell Marcoux said, “I’m not going to confirm or deny anything. That’s up to Blue Cross Blue Shield.”
