Chattanooga: Eastgate eyes life after BlueCross

Chattanooga: Eastgate eyes life after BlueCross

February 18th, 2009 by Mike Pare in Local Regional News

Staff Photo by Dan Henry Blue Cross Blue Shield customer service representative Diana Gains, right in yellow, works at the company's current main location inside of Eastgate Town Center Tuesday afternoon. A majority of the employees are expected to begin moving to BCBST's new Cameron Hill campus at the beginning of March.

Eastgate Town Center will soon lose a tenant that takes up about a quarter of its office space when BlueCross BlueShield of Tennessee shifts workers to downtown Chattanooga.

But, an official for the center said that educational, government and other office entities could fill the void left by the insurer's departure.

"We hope to build on this sound base of educational and state agencies," said Paul Mallchok, the center's general manager.

BlueCross is leasing 221,000 square feet at what was Chattanooga's first mall when it opened in 1962 on Brainerd Road.

The company moved in about 10 years ago after much of the retail left and its owners decided to aim the building heavily at office space. Other big tenants include Convergys, which has a call center in the former Proffitt's in the south end of the building, and insurer Merastar.

In addition, Chattanooga State Technical Community College and ITT Technical Institute, along with government offices, are some other key occupants.

By late this spring, BlueCross is expected to shift about 1,300 workers from the site to the insurer's new campus, said company spokeswoman Mary Thompson.

"Customer service and claims folks will move over in late February and March, and it may nudge into April," she said.

Retailers which are left in the center, including a handful of food court eateries, are expected to feel the departure of BlueCross.

Peggy Gaber of the General Nutrition Center store said it does get some BlueCross worker business.

But, she said, the insurer's departure may free up parking space, adding that customers sometimes complain about finding spots for their vehicles.

Mr. Mallchok said the center overall is "pretty well leased up," but there isn't a replacement yet for BlueCross.

"We're talking with a couple of people but there's nothing to say," he said.

Mr. Mallchok said there's demolition going on in the former Goody's store on the north end and the center is in negotiations with a couple of potential tenants.

Eastgate was a busy shopping center for many years, but it fell on hard times after Hamilton Place mall opened in 1987.

A plan emerged about a decade later where Eastgate was to be a place where people worked, shopped and were entertained. The plan was to dedicate the north end of the center to retail tenants and the south end to offices, services and amenities.

Eastgate has about 1 million square feet of space, and about 800,000 square feet is offices.

Two years ago, the ownership group spent what was then estimated at between $3 million and $5 million to reconfigure space and revamp the center.