Insurer shifts 336 jobs out of Baltimore United HealthCare laments its move but has 'to make a buck'

130 positions stay in city

Realty executive calls parking biggest bar to keeping firm here

February 25, 1997|By M. William Salganik | M. William Salganik,SUN STAFF

United HealthCare of the Mid-Atlantic will move 336 headquarters jobs from Baltimore to Woodlawn, but keep another 130 jobs in the city, Leon Kaplan, chief executive of the regional health insurer, said yesterday.

Kaplan said he had considered consolidating the headquarters at a single site, either downtown or in Woodlawn, before deciding to split the operation. He said the Woodlawn site was "economically right," but, "I'm not comfortable moving out of the city."

He said he wanted to maintain a city presence because "it's important that employers be good corporate citizens, and part of being a good corporate citizen is to help the city as much as possible. We want the city to revitalize itself, and that helps us. But we also have to make a buck."

Yesterday's announcement highlighted downtown's fluctuating fortunes. Just last week, Sylvan Learning Systems Inc. celebrated the opening of its new headquarters in Inner Harbor East and the relocation of hundreds of employees from Columbia.

Sylvan's move, announced in 1995, was the harbinger of a

number of recent widely heralded relocations by Bell Atlantic Corp., McDonald's Corp. and Crestar Financial Corp. to downtown and decisions by Alex. Brown Inc. and Legg Mason Inc. to consolidate in downtown skyscrapers.

Together, they helped counter the loss of tens of thousands of jobs to the suburbs, highlighted by USF&G Corp.'s move to its Mount Washington campus and T. Rowe Price's expansion in Owings Mills.

Kaplan said yesterday that costs were the primary factor in his decision. If United paid too much for a site in the city, he said, he was afraid some of the work would be moved out of the Baltimore area altogether. Last week, Prudential HealthCare of the Mid-Atlantic announced that its parent company was centralizing some billing, claims and member services work, and was moving 120 jobs from its Baltimore regional headquarters to Jacksonville, Fla.

Bruce Lane, a partner in the Meridian Group, a Washington firm that owns the Candler Building, the downtown site near Market Place considered by United, said parking was the biggest impediment to keeping United in the city.

"United HealthCare had a very high parking requirement, so they're better suited for the suburbs, where you can get free surface parking," Lane said. "Our rent was very competitive, but they had to add in the price of parking, and, other than that, I think we would have landed them." Kaplan said, "The city economic development people did a good job with the tools they have."

In Woodlawn, United will become the largest tenant in the Meadows Business Park, whose owners have been seeking commercial office and retail tenants in an area that has had mostly small retail and federal space related to the Social Security Administration.

United is a Minneapolis-based managed-care company that last year bought the parent of Baltimore's Chesapeake Health Plan, and combined it Jan. 1 with Virginia operations it picked up in another acquisition.

The reorganization led to a search for more space.

Chesapeake had its sales and network development departments, employing about 75, at the Environmental Elements Building on Koppers Street. The rest of its headquarters operation, employing nearly 400, was housed in its 35,000-square-foot headquarters at 814 Light St., south of the Inner Harbor.

Under the plan described by Kaplan yesterday, all United employees will move in June. The operations department, including billing and claims, will go from Light Street to Koppers Street, where employment will increase to 130, working on two shifts. United plans to keep its current space there, about 12,000 square feet. Its lease there runs about three more years.

The rest of United's Light Street employees and the departments now at Koppers Street will move to 6300 Security Blvd. in Woodlawn, in 65,000 square feet of space formerly occupied by the federal Health Care Financing Administration. The lease, not yet completed, will be for eight years, according to United.

Meadows Industrial Park was bought in 1995 by New York-based Emmes Realty Services for about $25 million. Emmes has sold three of the 22 buildings, and spent about $4 million in renovations, including $3 million on the building United will occupy, according to John Graham, vice president for sales and marketing.

"The importance of the United HealthCare deal is that we have attempted to reposition the office portion of the portfolio for Fortune 500 back office use," Graham said.

"Baltimore is not as much of a headquarters town as it used to be, but it's important for regional operations."

He said the Woodlawn site is well-suited for such use because it has a "large floor-plate" and "good road access."

United initially will occupy just over half of the building, Graham added, but to accommodate future growth, "they've negotiated layers of options and rights to the remaining space."

Pub Date: 2/25/97

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