Real Estate News

SECU to buy Blue Cross’ landmark Chapel Hill HQ for $35M

The State Employees’ Credit Union has signed an agreement to purchase Blue Cross and Blue Shield of North Carolina’s landmark headquarters in Chapel Hill for $35 million.
The State Employees’ Credit Union has signed an agreement to purchase Blue Cross and Blue Shield of North Carolina’s landmark headquarters in Chapel Hill for $35 million. HARRY LYNCH -

A State Employees’ Credit Union land deal announced Wednesday will preserve a landmark building and bring new jobs to Chapel Hill, officials said.

The credit union signed a $35 million agreement to buy the former U.S. 15-501 headquarters of Blue Cross and Blue Shield of North Carolina. SECU officials could close this fall on the deal for the 39-acre site, which includes six houses and two vacant parcels of land.

SECU plans to upgrade and refurbish the building – a rhomboid, glass structure that opened in 1973 – as the home for a new disaster recovery center. The center will take advantage of an existing Blue Cross data center, backup generators and data communication lines, SECU President Jim Blaine said.

The move includes relocating an existing branch office on Elliott Road. SECU has seven Orange County branches and more than 70,000 members in the Chapel Hill area, officials said, but the Elliott Road office, which employs roughly two dozen people, has outgrown its location.

Blue Cross plans to lease back the property from SECU while completing the expansion of its 48-acre Durham campus. The move, which started in 2013, could wrap up by next summer, officials said.

Local officials called the deal good news for Chapel Hill and Orange County.

SECU will continue to pay taxes on the $35.4 million property; Blue Cross paid $584,889 in town, county and school district taxes last year. Dwight Bassett, the town’s economic development officer, said he expects SECU to add more jobs in the future.

“They thought that it would grow rather quickly,” he said, “because (information technology is) their fastest-growing division right now.”

The data center also would be less than a mile from GoTriangle’s planned Gateway light-rail transit station off Old Chapel Hill Road. The plan for the 17-mile Orange-Durham light rail line is that land surrounding the stations would be developed with a dense mix of homes, offices and retail.

Bassett said the first step is getting the data center off the ground and deciding how the customer service branch fits that space. Company officials are aware of plans for the light rail station, he said, and have indicated a desire to work with the town to ensure community benefits.

SECU officials are not developers, Blaine said, but they “can take a little longer view” of how the property might be used. The company could lease the space that it won’t use initially to UNC and others in the community, he said.

Much of the business will be automated, he said, but SECU has many younger workers and could grow into the building. Transit connections among Chapel Hill, Durham and Raleigh would make dense development more attractive, he said.

SECU had been looking several years for the right location, said Blaine, who is a Chapel Hill native. The Blue Cross building’s underground data center “allows us to avoid incurring the cost of trying to replicate that,” he said. The building itself will be retrofitted to modern standards.

Architect A.G. Odell Jr.’s firm designed the international, contemporary style building in the late 1960s. The exterior is covered with nearly 5,000 panes of reflective glass, and the rectangular floors – 90 feet wide by 550 feet long – are roughly the length of two city blocks.

The five-story, 240,000-square-foot building has an open, flexible floor plan. About 900 Blue Cross employees still work there, but company officials had said the building was too costly to operate and no longer met the needs of its workforce.

David Bracken contributed