Blue Cross invests $16 million in research park renovation
Credit: Cassandra Sherrill/Journal
Published: February 22, 2011
Blue Cross Blue Shield of N.C. is testing the waters of a state tax credit aimed at breathing life into formermanufacturing plants, with an investment of up to $16 million toward renovating a tobacco warehouse donated to Piedmont Triad Research Park.
The insurer's investment over three years, announced Monday, represents 18 percent of the projected $87 million cost of renovating Building 91 at Fifth Street and Patterson Avenue. R.J. Reynolds Tobacco Co.donated the building to the research park.
Brad Wilson, the insurer's president and chief executive, said, "Blue Cross Blue Shield of North Carolina has a 77-year tradition of investing in the health of North Carolinians. We are pleased to continue that tradition with this investment, which creates new medical-research labs from historic tobacco warehouses.
"You could say we're preserving the past while creating a new future for this part of the Triad."
Skordas said Blue Cross doesn't plan to move any operations into the building. The company has more than 600 employees in a customer-service and claims-administration operation at Madison Park in northwestWinston-Salem.
Renovation of the building, which has been renamed Wake Forest BioTech Place, is expected to be completed by year's end.
Officials at Wake Forest Baptist, which is landlocked on its main campus, have longed for years for expansion space for its research departments.
The building will offer 242,000 square feet of space for laboratories, offices and other uses, primarily for operations that Wake Forest University Health Sciences is transferring from its Hawthorne campus. About 350 employees will work in the new space — a 38 percent increase in the park's work force to 1,275.
Wake Forest Baptist plans to occupy 85 percent of the space. There are plans for laboratories for startup companies and retail that could include a cafe and a financial-services company, Dan Cramer, a regional executive for Wexford, said in June.
To qualify for the tax credit, the building must have been used as a manufacturing facility, a warehouse for selling agricultural products, or a public or private utility. It must be certified as a historic structure, and it must have been at least 80 percent vacant for at least two years when eligibility is certified.
It is unclear, however, how much of a tax credit Blue Cross would receive.
According to the N.C. General Statutes, there is an overall 30 percent state tax credit for rehabbing of income-producing historic structures in a tier 3 county such as Forsyth. The project also likely qualifies for 20 percent federal investment tax credit.
"We expect to receive a market-based return on our investment," Skordas said.
The amount of tax credits will depend on the project costs, Skourdas said. Investors receive returns from the federal and state incentives and from leasing the space, she said.
"It enhances the financing of the project and preserves a historic building."
"There can be good long-run returns in carefully selected commercial real-estate investments," Walden said. "So the move could accomplish both objectives."
Both Edgeton and Cramer expressed confidence that the project could be the first of many involving the groups.