Editor’s note: This piece was originally published in the Mackinac Policy Conference edition of the Michigan Chronicle.
Building a stronger body starts with developing the core muscles at the center of the body. The same holds true for building stronger metropolitan regions — developing the core urban center allows for stronger, more sustainable regional economies.
At Blue Cross Blue Shield of Michigan, we believe that one of the keys to Michigan’s economic recovery is doing what we can to strengthen our cities. By making our cities places of prosperity, we make the regions around them more competitive and hospitable to future growth.
Our company’s relocation of nearly 3,000 workers from the Detroit suburbs into the Renaissance Center is one of the ways we are seeking to strengthen not just the City of Detroit, but the region as well. With nearly 6,000 Blue Cross workers in the downtown business district by 2012, we hope to create the critical mass that attracts other companies to Metro Detroit from outside the region and the state.
Other companies — notably Compuware and Quicken Loans — were early leaders in moving workforces into downtown Detroit. As more companies follow, we hope other businesses take notice that Detroit is, in fact, open for business.
The urbanization of Blue Cross’s workforce has been accelerating recently. In fact, by 2013, 97 percent of our statewide workforce will be located within the downtown cores of Michigan’s largest cities — Detroit, Lansing and Grand Rapids. This has many strategic benefits to the Blue Cross enterprise. It will help us run our business better and realize significant cost savings at a time when both the competitive climate is more complex than ever and the cost of health care remains a leading concern for all our stakeholders. Our efforts also have major positive impacts for the cities in which we are investing.
Earlier this spring, Accident Fund Holdings, Inc., a BCBSM subsidiary, moved 620 employees into a gleaming new headquarters along the Grand River in downtown Lansing. This move came as a result of renovating a historic, but dilapidated power station in the heart of the city. It was a massive undertaking fueled by partnership across the public and private sectors. It gave Accident Fund room to grow by a projected 500 employees over the next decade.
As a result, Accident Fund’s downtown Lansing office building became vacant — so Blue Cross is moving in our workers from the suburbs. By the end of these moves, BCBSM will have more than 260 of our employees in downtown Lansing. Added to Accident Fund’s employee base, the BCBSM enterprise will eventually total more than 1,300 workers in Lansing’s central business district.
Our ability to make these investments in Detroit and Lansing began seven years ago when BCBSM renovated the old Steketee’s Department Store in downtown Grand Rapids and made it our West Michigan headquarters. Again, we moved our workers into the city center from suburban locations — and strengthened a key part of downtown Grand Rapids just as it was turning a corner. The area is now thriving.
Consolidation of our workforce in Michigan’s core cities will bring thousands of additional full-time jobs to those cities, while also adding millions of dollars in wages as well as property and income tax revenues. Our most recent action in Detroit, for example, will bring $180 million in BCBSM annual payroll into the city and add more than $3 million to the city tax rolls. In our renovation efforts alone, we are bringing $25 million in wages to Detroit and a significant portion of that will go to minority suppliers.
As the Detroit, Grand Rapids and Lansing regions market themselves as viable destinations for companies looking to establish a presence in Michigan, they can now point to their downtowns as more vibrant, more enticing places.
Blue Cross Blue Shield of Michigan runs its business with a Michigan conscience. We want our state to grow and succeed, and we are proud to join other Michigan-based companies that believe vibrant urban centers are key to the growth and prosperity we all seek.
Daniel J. Loepp is president and chief executive officer of Blue Cross Blue Shield of Michigan and chairman of the Blue Cross Blue Shield Association national board, which represents 39 Blue plans covering nearly 100 million Americans.