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Developers have high hopes for old Blue Cross complex in Richardson
12:00 AM CST on Friday, November 13, 2009
The Blue Cross and Blue Shield of Texas complex started out as a department store. Now it's the biggest block of new office space up for grabs in Richardson's Telecom Corridor.When Blue Cross moves to its new headquarters in north Richardson early next year, its complex on U.S. Highway 75 at Spring Valley Road goes dark.
Developer KDC hopes that won't last long.
The commercial property builder, which has just finished work on the new Blue Cross head office, is gearing up to renovate the old buildings.
The 26-acre corporate complex includes more than 500,000 square feet of office space.
It's two blocks from a DART light-rail station and next to restaurant and retail space.
As soon as Blue Cross moves its workers to the new buildings south of State Highway 190, KDC will start changing the look of the old complex with new landscaping, a formal entry and signs.
"We are going to create some new view corridors from the highway and increase the drive-up appeal," KDC president Toby Grove said. "We have every confidence that we will be able to lease this space.
"Locating in this property will cost a tenant a fraction of what it would to go in a new facility."
The original building on the site was constructed in 1971 for Cooks Department Stores. After the discount retailer shut down, the single-story building was converted to offices. In 1980, more office buildings and a parking garage were added to the complex.
Blue Cross had a long-term commitment to lease the buildings from the owner, San Francisco's Swig family.
KDC had to take over responsibility for the buildings before it could get Blue Cross to agree to a new headquarters.
"If we hadn't done that, it wouldn't have been done," Grove said. "We went into this with our eyes wide open.
"Current zoning there will allow up to 1.5 million square feet of building," he said. "We have done several design schemes to expand the buildings."
KDC has also considered turning the old insurance campus into a mixed-use development.
But with the economy limping along, the developer decided to revamp the existing buildings first.
KDC already has redeveloped a former EDS office complex in Plano's Legacy business park that is more than half leased.
"The Legacy project was a lot tougher than this one," KDC senior vice president John Brownlee said. "This isn't rocket science – we'll freshen the complex up and find a new tenant."
The office campus includes an auditorium, a cafeteria and 2,000 parking spaces, 900 of them covered.
"Everything is in great shape inside – we have 2,400 workstations in place and ready to go," Brownlee said. "We toured a potential tenant through the buildings last week.
"Companies are focused on finding value and getting bang for their buck," he said.
Almost 700,000 square feet of office leases have been signed in the Telecom Corridor this year. Less than 3 million square feet of office space is vacant in the area, third-quarter reports show.
"Our goal is to find a single company or a couple of large tenants," Grove said, adding that the number of vacant office spaces outside of downtown this large is small.
The city of Richardson is supporting KDC in its efforts to lure a new tenant. The area along Spring Valley is seeing new development with a large apartment and retail complex going up next to DART's rail stop.
Richardson economic development officials say they hope the Blue Cross buildings will score big with relocating businesses.
"It's a self-contained corporate campus with access to light rail," said Bill Sproull, CEO of the Richardson Chamber. "That's proved invaluable to recruiting employees to Richardson.
"I think it's well-positioned to attract a company."
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