Blue Cross leaving landmark Chapel Hill headquarters for Durham

dbracken@newsobserver.comMay 31, 2013 

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The Blue Cross Blue Shield of NC headquarters building sits off U.S. 15-501 in Chapel Hill. The insurance group will vacate this building to consolidate employees in Durham.

HARRY LYNCH — 2010 News & Observer file photo

Blue Cross Blue Shield of North Carolina will vacate its landmark headquarters in Chapel Hill next year as the insurer consolidates its Triangle workforce on its expanding Durham campus.

The move became official Friday after Blue Cross acquired two additional buildings at its Durham campus on University Drive. Spokesman Lew Borman said the insurer paid $10 million for University Place 4 and University Place 5, which together contain about 100,000 square feet.

Blue Cross now owns eight buildings with about 560,000 square feet on its 48-acre Durham campus, where it has a customer service center. The additional buildings will allow Blue Cross to gradually relocate the 900 employees now working at its Chapel Hill headquarters. The move is expected to be completed by the end of next year.

Blue Cross, the state’s largest insurer, has more than 4,000 employees in North Carolina. Borman said the Durham campus will now have the capacity for about 3,500 employees. It also includes some vacant land.

Blue Cross officials said the insurer’s distinctive Chapel Hill headquarters – a rhomboid, glass structure designed by the architect A.G. Odell Jr.’s firm – had become more costly to operate than its other buildings and didn’t fit the way employees work today.

The 240,000-square-foot building, which opened in 1973, features rectangular floors that are 90 feet wide and 550 feet long – or roughly two city blocks.

“It’s surprisingly large,” said Charles McMurray, who was 26 when he worked as the designer in charge of the project, which started in the late ‘60s. “Its appearance in a way is deceptive in that it’s so clean and slick. I don’t think it seems as long as it is.”

McMurray, now 72 and retired in Miami Beach, said the building was designed with open, flexible floor plans that would allow paperwork to flow from one end to the other. The building also allowed Blue Cross to – yes – consolidate its employees, who at the time were scattered across a number of other buildings in Chapel Hill.

When McMurray presented a lit-up model of the building to Blue Cross’ president at the time, he said he got the following response: “This is not what I expected. I don’t know what I expected, but I like it.”

The building’s international, contemporary style was unlike anything else in the Southeast.

“This was a state-of-the-art building and headquarters 40 years ago when it was built,” Borman said.

$2.5 million a year savings

But Blue Cross has been consolidating its footprint in the Triangle ever since it conducted a review of its real estate portfolio in an effort to reduce operating costs. At the time, the company owned about 825,000 square feet of office space in Durham and Chapel Hill.

The review resulted in Blue Cross selling seven buildings in Chapel Hill’s Eastowne Office Park to UNC Health Care for $14.2 million. In June 2012, Blue Cross acquired the 49,000-square-foot One University Place building on its Durham campus for $2.284 million.

Blue Cross expects the move to Durham will ultimately save it more than $2.5 million annually in utilities and operating costs.

“It will be a walkable, flexible environment, and create a community of literally all of our employees,” Borman said.

As for the Chapel Hill headquarters, Blue Cross plans to work with town officials to determine the property’s future, Borman said.

McMurray worries what will become of his building.

“It’s sad that they’re leaving it,” he said. “I don’t know what you do with it.”

He notes that we are now living in a very different period from the one during which the building was designed.

“The corporate headquarters building was the cathedral of that time, and people were really investing in major buildings,” he said. “It only happens now in major cities.”

Bracken: 919-829-4548

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