CareFirst agrees to keep downtown offices

Reversal comes after city agrees to subsidize parking spots for firm

Health insurance

January 07, 2000|By Gerard Shields | Gerard Shields,SUN STAFF

City and state officials announced yesterday that CareFirst BlueCross BlueShield would abandon its plans to move its downtown operation out of the city, saving 350 jobs.

The reversal came a day after the city agreed to subsidize 400 city parking spots for use by CareFirst for $48,000 a year.

In addition, Gov. Parris N. Glendening said yesterday that the state would contribute another $5 million to help the city address its parking, which many believe is the most critical factor in keeping businesses downtown.

"This was a great way for the city and the state to start off the new century," Glendening said of the CareFirst announcement. "The heart of the economy is to keep what you have. We're not in the business of helping trade business from one area to another."

The save was viewed as a critical step to stopping the exodus of downtown businesses to the suburbs. The state's largest law firm, Piper & Marbury, intends to move its downtown location to Mount Washington, along with 500 jobs.

Glendening also said Baltimore architectural design giant RTKL Associates Inc. has also indicated a desire to move out of the city.

The governor joined Mayor Martin O'Malley, House Appropriations Committee Chairman Howard P. Rawlings and City Comptroller Joan M. Pratt in working to keep CareFirst in town.

"This sends a very important message," O'Malley said. "Baltimore is open for business."

CareFirst, which handles 2.5 million clients in Maryland and the District of Columbia, said in September that it would abandon its offices at 100 S. Charles St. The company signed a lease to build a new facility near its Owings Mills headquarters.

President William L. Jews announced yesterday at a City Hall news conference that city and state officials immediately responded to CareFirst's needs for more parking and worries over improving public safety for employees. The parking pact was contingent on CareFirst signing a seven-year lease to remain at the 17-story Bank of America building, which the company did after the city's approval of the pact Wednesday.

O'Malley commended Jews for showing corporate leadership in taking the city's offer back to his board of directors.

"It would be real easy to go out to a cornfield and pave it," O'Malley said. "What was hard here for Bill Jews was to step up to the plate and wrestle with his board."

Baltimore is one of CareFirst's largest clients. The city recently approved a $127 million contract with the company to handle the third-party insurance claims for 30,000 of the city's 44,000 workers and retirees.

The city deferred approving the contract after CareFirst announced its intent to move out. But O'Malley and Jews said the city business never became part of the negotiations.

"There was no implied or inferred threat," Jews said.

Although happy with the outcome, O'Malley expressed desire to get the city moving more quickly on building four parking lots. The $47 million to build and purchase the lots was approved 14 months ago.

O'Malley said he will likely remove parking from under the city Department of Public Works and create a separate authority.

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