community Blue Cross Blue Shield of Michigan (BCBSM)


has announced they will move approximately 3,000 employees from Southfield, Mich., to De- troit’s Renaissance Center beginning in 2011.


long-term real estate costs, streamline opera- tions, improve corporate culture and positively impact their Michigan legacy.


The agreement finalized by BCBSM, General


Motors Corporation, the City of Detroit, Wayne County, and others will relocate workers into 435,245 square feet of space in Towers 500 and 600 of the iconic Detroit landmark.


It is estimated the phased move will save


BCBSM more than $30 million in long-term real estate costs. The move will increase BCBSM’s downtown Detroit workforce to about 6,000 people.


BCBSM will retain its current Detroit offices


located at 500 and 600 East Lafayette Avenue and 441 East Jefferson Ave., creating a campus extending from the Detroit Riverfront to Lafay- ette Ave.


BCBSM will become one of Detroit’s largest


downtown employers. “Creating a single campus for our southeast


Michigan workforce will dramatically improve our corporate culture by bringing our people closer together to accomplish our shared goals,” said Daniel J. Loepp, BCBSM president and CEO.


“It will also significantly improve our op-


erational flexibility, which is necessary as we continue to respond to national health care reform.”


The 3,000 additional workers will provide


a significant boost to the downtown Detroit economy and to the Renaissance Center, fill- ing formerly vacant space and helping the land- mark facility in the long-term.


With this move, the Renaissance Center will


move to an occupancy rate estimated above 90 percent for the first time in many years.


During the announcement, which took place on Thursday, July 29, Loepp thanked Detroit


The company says the move will reduce their


THE MICHIGAN CHRONICLE


August 4-10, 2010


Page C-2


Blue Cross Blue Shield of Michigan grows with downtown move ‘BCBSM to


Mayor Dave Bing, Wayne County Executive Robert Ficano, General Motors CEO Ed Whita- cre and their teams, for their leadership in this public-private partnership.


move approximately 3,000 employees to Detroit’s GM Renais- sance Center’


He also shared that employees will contrib-


ute to decisions involving the project and the acclimation process.


Even with the transition of these workers


from Southfield to Detroit, BCBSM will remain among the top employers in Oakland County. The corporate headquarters of Blue Care Net- work, BCBSM’s HMO subsidiary, will remain in Southfield.


BCBSM also will invest in improving its fa-


cility in New Hudson. That facility is used for meetings and employee education, and serves as the enterprise’s disaster recovery center. More than 1,200 full-time and contractual em- ployees work at both locations.


BCBSM plans to sell its four-building campus


on 11 Mile Road in Southfield to a private firm. A sale would make the property taxable by local governments. The tax value is estimated at $1.8 million to $2.2 million.


“Michigan is home for Blue Cross,” accord-


ing to Dan Loepp. “This investment in Detroit’s urban center


enables the Blues to begin a new chapter for a company with deep roots in Michigan’s story, and in a city with even deeper roots in the American experience.”


Frequently Asked Questions 1. What did BCBSM an-


nounce on July 29, 2010? Blue Cross Blue Shield of


Michigan (BCBSM) will merge two Southeast Michigan office campuses into one by moving approximately 3,000 employ- ees from Southfield to leased office space in the Renais- sance Center beginning in 2011.


BCBSM also will retain its


current Detroit offices hous- ing approximately 3,000 em- ployees located at 500 and 600 East Lafayette Ave. and 441 East Jefferson Ave., creating a campus extending from the Detroit Riverfront to Lafayette Avenue.


BCBSM will become one


of Detroit’s largest downtown employers. BCBSM also an- nounced that the corporate headquarters of its HMO sub- sidiary, Blue Care Network of Michigan (BCN), will remain in Southfield and that BCBSM also will invest in renovating its conference and disaster re- covery center located in New Hudson, Mich.


2. What will be the total


number of BCBSM employees downtown after the move?


Approximately 6,000 em-


ployees. Approximately 3,000 employees will move from Southfield and approximate- ly 3,000 already are located downtown.


3. What is the size of the


Renaissance Center space BCBSM will occupy? Does the arrangement


include


parking? It


encompasses about


436,000 square feet of space using all of Tower 500 and sig- nificant portions of Tower 600 as floors become available. It includes 2,300 indoor and out- door parking spaces located underneath and adjacent to Renaissance Center.


4. Will BCBSM move into


existing offices or will you be remodeling? What will the move cost?


BCBSM will be moving into


ready space in Tower 500 and will be building to suit in Tower 600 as space becomes available. BCBSM estimates long-term real estate savings of between $30 million and $40 million, including the costs associated with restacking and renovating office space.


5. What offices are the


employees moving from? BCBSM owns a four-build-


ing property on Eleven Mile Road, near Inkster Road, in Southfield which encompass- es about 700,000 square feet. BCBSM also leases space elsewhere in Southfield and Detroit and will be moving em- ployees from leased locations as those leases expire.more -


6. What offices does


BCBSM already have in downtown Detroit?


BCBSM owns a three-build-


ing campus downtown Detroit. It includes a 21-story office building at 600 East Lafayette, an adjoining six-story office building at 500 East Lafayette and a seven-story building at 441 East Jefferson Avenue at Beaubien.


7. When will the move


occur? The phased move will begin


in 2011. 8. What is the length of


the lease at Renaissance Center?


Fifteen years. 9. Why did BCBSM make


the move? It will strengthen the cor-


porate culture by bringing together employees from two large campuses, reduce its long-term administrative costs and promote operational flex- ibility.


10. What kinds of BCBSM


office functions are moving downtown?


The plans for restack-


ing office locations are cur- rently in progress. Eventu- ally moving downtown will be Southfield-based functions, including product develop- ment, sales and marketing, claims processing, call cen- ters, medical programs and information technology.


11. How long has BCBSM


been discussing its real estate options?


BCBSM began discuss-


ing options for its future real estate assets more than a year ago as part of a broader effort to address administrative costs.


A complete array of options


was considered, and was ex- pedited following a voluntary workforce reduction program in 2009 that resulted in a 14 percent reduction in work- force.


The options included re-


maining in current state, building new facilities, leas- ing space and others. The current state option included a vacancy of more than 2,000 workspaces, and was not con- sidered an acceptable option from a cost standpoint.


12. How much money does


BCBSM expect to save from the move?


The move will consolidate


space and result in between $30-$40 million in long-term real estate cost savings for the enterprise.


13. How long has BCBSM


been in downtown Detroit? It has been a member of the


downtown business commu- nity for 71 years (since 1939). The Tower building on Lafay- ette was constructed in 1971. The Bricktown Service Center, adjoined to the Tower, was constructed in 1998.


14. Does the Detroit


real estate arrangement in- clude any incentives or tax breaks?


A partnership between the


City of Detroit, Wayne County, State of Michigan and General Motors Corporation exists to retain the corporate headquar- ters of General Motors at Re- naissance Center.


This partnership benefits


the BCBSM real estate initia- tive by leveraging incentives for tenant improvement funds and new market tax credits. People Mover support also was provided to BCBSM. The total package reaches approxi- mately $35 million.


15. Will BCBSM’s affiliat-


ed HMO, Blue Care Network, stay in Southfield?


Yes, Blue Care Network


will remain headquartered in Southfield, where between 900 and 1,000 full-time employees and contractors are currently based.


16. Will BCBSM sell its


Southfield campus? BCBSM has a strategy for


disposition of the Southfield campus on Eleven Mile Road and is currently marketing the property to potential buyers.


17. What is the value if


BCBSM property in South- field becomes taxable?


As a nonprofit healthcare


corporation, BCBSM currently is exempt from state and local taxation. BCBSM property on Eleven Mile Road in Southfield becomes taxable by local gov- ernments if it is sold to a pri- vate entity. Property tax value estimated at $1.8 to $2.2 mil- lion based on recent apprais- als.


18. Will the Blues as


an enterprise continue to have a presence in Oakland County?


Yes, the Blues enterprise


will continue to be one of Oakland County’s Top 30 larg- est employers. Blue Care Net- work is headquartered in Oak- land County and BCBSM also owns a conference and disas- ter recovery center on Grand River Avenue in New Hudson, Mich.


19. How many employ-


ees are located at the New Hudson conference and di- saster recovery center and what functions does it per- form?


BCBSM’s conference and


disaster recovery center in Oakland County provides a base of operations for disaster recovery,


information tech-


nology and warehousing and shipping, in addition to con- ference facilities. There are 290 full-time employees based at the facility.


20. Will the CEO move to


Renaissance Center? No, 600 E. Lafayette will


remain the corporate head- quarters for BCBSM and the Office of the President will remain in the Tower building.


21. Are reductions in


force expected as a result of this move?


Not as a direct result, and


reductions in force are not an objective of this move. Future considerations around work- force will be the result of ongo- ing assessments of business operations across all divisions of the organization.


22. What actions is the


company planning to ease the transition of employees?


The company acknowledges


that a change of work location for its Southfield workforce will impact employees who are based there, and is committed to communicating openly with employees, listening to their input and ideas, and continu- ously evaluating how it can respond to employee needs to ease their transition to down- town Detroit.


Loepp pushes Blue Cross Blue Shield agenda forward


Daniel J. Loepp is presi-


dent and chief executive offi- cer of Blue Cross Blue Shield of Michigan.


In that position, Loepp has


led the transformation of the Blues into a more vibrant and valuable resource in the state of Michigan. He is driving a four-part strategy through every part of the company. It includes, as a top priority, en- hancing the value of health- care by improving quality and constraining cost increases.


While it is still in progress,


this strategy saved $350 mil- lion between 2006 and the end of 2009. The strategy is also yielding substantial improve- ments in stakeholder experi- ence, is introducing new prod- ucts to meet the increasingly diverse needs of consumers and employers, and is rejuve- nating the Blues’ social mis- sion.


Michigan. Loepp joined the Blues in


2000. Prior to becoming CEO in 2006, he led a two-year co- alition that spurred health reform in Michigan and stabi- lized health insurance rates for small businesses across the state. He also led a signifi- cant expansion in the compa- ny’s product lineup, including new offerings for seniors.


He is a national leader in Daniel J. Loepp


Loepp is an innovative leader. While navigating the recent financial crisis, he was able to balance the needs of the Blues with the challenges of the state. For example, he launched a unique partnership with a Detroit company that gave the Blues’ needed oper- ating flexibility while keeping jobs in hard-hit Southeast


the healthcare industry. He serves on the board of direc- tors of the Blue Cross and Blue Shield Association and chairs its Health Policy and Legislative Committee.


Loepp serves on the board


of directors for the Detroit Re- gional Chamber. He served as its board chairman in 2007- 2008. He also chaired the chamber’s 2007 Mackinac Policy Conference.


Blue Cross Blue Shield of Michigan ahead of the pack


Once again, Blue Cross Blue


Shield of Michigan stands as a model for national health care reform — this time with its longstanding policy of not re- scinding coverage, the much- maligned practice of dropping health insurance coverage when people become sick. BCBSM proudly stands with 38 other Blues plans across the nation as an insurer that does not rescind coverage except in cases of fraud or ma- terial misrepresentation.


“Blue Cross Blue Shield of


Michigan believes in covering people, not rejecting people. We believe in fulfilling the promise of health insurance when it’s needed most,” said Andrew Hetzel, BCBSM vice president for corporate com- munications. “It has never been our policy to drop some- one’s coverage when they get sick, and we support the rest of the health insurance indus- try following suit.”


For more than 70 years,


BCBSM has been a guarantee- issue insurer with a mission to provide broad access to health coverage. BCBSM is the only health insurance company in Michigan that guarantees access to coverage every day of the year. BCBSM also must submit its rates for regulatory approval prior to using them in the market.


BCBSM has been asking the


Michigan Legislature for more than three years to increase consumer protections by ending the practice of rescis- sions, requiring all insurers to take everyone and leveling the playing field in regards to how rates are set.


“We are pleased to see the


reforms we have championed here in Michigan take hold as a result of national health care reform,” Hetzel said. “But there remains a need here in Michigan to bridge the gap between now and 2014, when comprehensive insurance re- forms take effect.”


Blue Cross is earning praise


lately for its existing coverage policies. Just last week, as Congress and the Obama Ad- ministration pressed health insurers to change their poli- cies of dropping young adults under age 26 from their par- ents’ health coverage upon graduation from college, BCBSM reiterated its long- standing policy of keeping college graduates — as well as young adults who turn 19 and choose not to attend college — active on their parents’ fully insured plans. Self-funded plans — plans for which Blue Cross administers claims — will independently determine whether to adopt a similar ap- proach.


Blue Cross Blue Shield of


Michigan is a nonprofit cor- poration and an independent licensee of the Blue Cross and Blue Shield Association. For more company information, visit bcbsm.com.


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