BlueCross BlueShield of Tennessee’s new corporate home in Chattanooga is to receive another shot of funding.
Chattanooga’s Industrial Development Board agreed Thursday to the issuance of up to $200 million in taxable bonds to pay for part of the $299 million office complex underway on Cameron Hill.
John Giblin, the insurer’s chief financial officer, said interest rates have fallen since BlueCross began the project in 2006.
It now makes more financial sense to borrow some of the costs rather than pay from the company’s reserves, he said.
“It’s more cost effective,” Mr. Giblin said. BlueCross officials said the project is on time and on budget.
Alfred Smith, an attorney representing BlueCross, added that the insurer wants to preserve the right to later refinance and seek tax-exempt financing of up to $50 million.
He said that under certain circumstances when financing is supported by payment in lieu of tax — or so-called pilot — payments as is this project, bonds can enjoy a tax-exempt rate.
But, Mr. Smith said, the entire $200 million sought doesn’t quality for tax-exempt financing because the pilot payments don’t financially support the whole amount.
While the board usually approves bonds as an incentive to companies to start economic development projects, panel attorney Randy Nelson said the bonds are taxable and “BlueCross is not getting anything special.”
Mr. Nelson said if BlueCross seeks the tax-exempt bond financing, it will have to go before the board again.
BlueCross is to start moving into its new headquarters early next year.
NEW BLUECROSS OFFICES
* Location: Cameron Hill
* Size: 950,000 square feet
* Cost: $299 million
* Parking: 3,000 space garage
* Employees: 4,000
Mike Pare, the deputy Business editor at the Chattanooga Times Free Press, has worked at the paper for 27 years. In addition to editing, Mike also writes Business stories and covers Volkswagen, economic development and manufacturing in Chattanooga and the surrounding area. In the past he also has covered higher education. Mike, a native of Fort Lauderdale, Fla., received a bachelor’s degree in communications from Florida Atlantic University. he worked at the Rome News-Tribune before ...