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Blue Cross Moving Hundreds of Workers Out of Providence - After Promises in Exchange for Tax Breaks

Wednesday, April 19, 2017

 

Blue Cross Tower cost $90 million to construct and $30 million for soft costs and furniture

Despite making promises to the City of Providence in 2007 to centralize its work force in its gleaming $125 million tower, Blue Cross Blue Shield of RI confirmed late Tuesday that it will be moving more than 125 jobs out of Providence to East Providence. 

The Blue Cross Tower is assessed at $46 million, but only pays a portion of its tax obligation because of a generous twenty-year tax stabilization.

Blue Cross’ Waterplace Tower is a 13-story, 315,000 square foot building that was custom designed to house 1,100 Blue Cross employees. After the exodus of these workers from the building, the Tower will house approximately 600 Blue Cross employees, according to sources.

The new location in East Providence is a 47,000 square foot office building located at 50 Jordan Street. According to East Providence tax records the building is co-owned DFH Management Corporation and Gilbane Development.

Jill Flaxton at Blue Cross Blue Shield of Rhode Island said the jobs will move from Providence in late 2017 or early 2018.  

Providence City Officials Were Caught Unaware

“We're going to lose (more than) 125 jobs? This is the first I've heard of this. I've heard nothing of this until you just told me,” said John Igliozzi, Chair of the City Council Finance Committee.

“When [Blue Cross] came before us -- to request a TSA for the new building -- one of the primary reasons was having a central location. They moved from an old building to new building, centralizing services. The major driving point was new construction, new investment and jobs in city, and in turn city invested in them for the tax stabilization,” said Igliozzi.

Providence City Treasurer Jim Lombardi said that he was unaware of the Blue Cross move and would be looking to see if Blue Cross' decision violates the Tax Stabilization agreement for the property.

Blue Cross' decision to build the tower was widely criticized at the time for the building's expense and opulence, but was defended as being critical to efficiency and environmental benefits.

“When some 1,100 Blue Cross & Blue Shield of Rhode Island workers start moving into their new 13-story office building next weekend, most will enjoy sweeping views of downtown shared only by those who can afford to rent or own pricey nearby condominiums,” the late Peter Lord wrote in 2009. 

"They will get to exercise in a gym that shares the same striking views and eat lunch in a cafeteria that overlooks Waterplace Park," Lord wrote. "Each worker will be able to control his or her light and desk space. Each will get a personalized mug for coffee and water and be offered only utensils that are made from biodegradable materials."

The building was criticized by then-Governor Donald Carcieri for the cost and impact on ratepayers.

New Blue Cross location in East Providence - PHOTO: Tax Assessor

“Again, this is the first time I'm hearing of this, so there's not much I can say right now. I'm going to contact my staff and pull out the TSA -- it's a contract between the City of Providence and the entity, and the question is are they fulfilling the letter and spirit of that contract.  I need to do a legal analysis and go from there, then we'll do any action we need to do,” said Igliozzi

“Our job is to make sure that they fulfill their obligation under the contract and to protect the people of Providence who invested in in their business.”

In an article in 2007, Igliozzi told the Providence Journal, "The tax treaty is a contract between the two parties, and if a party on either side breaches that contract in any material way, there's an opportunity to remedy that breach; or if it can't be, then it can be revoked."

EDITOR’S NOTE: GoLocal began publishing in May of 2010

 

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