Blue Cross Blue Shield of Texas to Move its Innovation Unit to the West End

Blue Cross Blue Shield of Texas is the first major tenant to lease a space in the West End Marketplace development, a long-shuttered but once-bustling shopping mall that is being converted into a haven for nimble technology companies.

Blue Cross isn’t moving the whole ship downtown from its newish digs in Richardson, but its so-called innovation unit will be housed there. The Dallas Morning News first reported it last week after coming across some construction permits. Blue Cross Blue Shield confirmed the lease, but wouldn’t say anything else. The developer, Granite Properties, also wouldn’t talk. But, apparently, the numbers in that News story—25,000 square feet—were a bit below whatever is being planned. But neither party would say anything else; BCBS spokesman Gustavo Bujanda told D Healthcare Daily that the plans were still being ironed out and Granite Principal Robert Jimenez said they weren’t permitted to elaborate.

Still, the news is perking up downtown’s top cheerleaders.

“Ever since Granite bought the old West End Marketplace, I knew it was just a matter of time until they started putting some pretty high quality tenants in there,” said John Crawford, the CEO of Downtown Dallas Inc. “Granite took the first major step in looking to try and create an innovation technology district down there along with several other co-working spaces, and so this is not a surprise.”

There’s scant information available about BCBS Innovation. The Texas health plan wouldn’t elaborate further on the department, even unrelated to its forthcoming move. But there are clues to be found inside some affiliates in other states. Blue plans owned by BCBSTX’s parent company, the Health Care Services Corp., tout strategic partnerships with entities private and public. One in Montana, for instance, launched a patient centered medical home with the state’s insurance commissioner that reimbursed for outcomes instead of volume.

The Blue plan in Illinois has a dedicated venture partners company that manages $300 million in capital via two funds. It coordinates buy-ins from two dozen individual Blue plans and “invests in promising emerging companies of strategic relevance” to Blue Cross and Blue Shield. Blue plans that aren’t under the HCSC banner also have their own innovation units—take Philadelphia-based Independence, which has a 5,000 square foot innovation lab that identifies potential partnerships and collaborations, analyzes data, plans out pilot projects, and mentors new businesses.

All that is in the wheelhouse of what Granite is trying to bring to the West End. The corner of downtown has been a magnet for tourists and courthouse workers, but not much else. Then folks like Trey Bowles found success launching co-working spaces like the Dallas Entrepreneur Center there. Granite in 2015 snapped up the West End Marketplace, a mall that was operational from 1984 through 2004, by which point a 10-screen movie theater, Planet Hollywood, a Dallas Cowboys store and other large retailers shuttered, according to this vintage Robert Wilonsky report.

It then sat vacant, until Granite bought it for $50 million almost exactly one year ago. It’s almost 240,000 square feet and seven stories. It’s 112 years old, and spent time as a candy factory before it was turned into a mall. Granite has coined the development Factory Six03 and vowed to bring restaurants and retail onto the ground-floor with an amenities rooftop for tenants. It’s expected to be finished by next summer.


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