Passport Considers Selling West Louisville Site To Revive Stalled Headquarters Project
Passport Health Plan is taking a new direction in its approach to the west Louisville site where construction on its planned headquarters has been stalled since last year. As the company aims to win a bid to renew its contract with the state, its CEO Scott Bowers announced Passport will issue a call to interested developers to restart the project.
Bowers said Passport will issue a request for proposals by the end of next week. In an interview Friday, he said the RFP would include an opportunity for a developer to buy some or all of the 20-acre property at 18th and Broadway.
“Instead of Passport developing it ourselves, financing it ourselves and managing the project ourselves, we want a partner developer to do that with and for us,” he said.
Though the company first said it would switch to outside development last summer, this is the first indication it is open to selling some of the land in west Louisville.
A West End Headquarters?
The west Louisville site was intended to host a $130 million, multi-building campus that would include a new corporate headquarters for Passport. The company put construction on hold in February, citing financial difficulties.
Passport is now ready to get it going again as it pursues a new state contract and finds itself on stronger financial footing, Bowers said.
“I don't want to over-sell that ... you're [not] going to see the dirt turning tomorrow,” he said. “It's going to take us a little bit of time to get the developers all pulled together, reset our financing, but we're no longer in that sort of wait-and-see mode.”
The company has been working on ways to restart the project since last summer, around the time it named Bowers CEO. He came over from Evolent Health, the Virginia-based company that completed its purchase of a 70 percent stake in Passport this week.
Now, as Passport seeks to reverse its luck and win a contract renewal from Gov. Andy Beshear's administration, it is attempting to “revitalize” the west Louisville project. Beshear announced last month that he would redo the bid process for state contracts amid concerns of bias around the awards given by his predecessor Matt Bevin, who elected not to renew Passport’s contract.
Bowers said the RFP could lead to a developer buying the site, as long as the developer lines up with Passport’s vision of helping the community, bringing jobs to the area and improving health and quality of life.
“Certainly the development takes on a very different look and feel if we don't have a long-term contract, but what we're doing is creating a flexible RFP that allows, you know, a developer to see the benefits of Passport as a long-term tenant,” he said.
Passport and Evolent have 600 employees in Louisville and are committed to leasing up to 140,000 square feet on the campus.
Bowers said the company is trying to be “flexible and helpful to a developer to encourage them to want to invest in that area.”
A Path Forward
The Passport project is one of a number of major planned investments in west Louisville, a group of neighborhoods that are economically depressed as a result of decades of racist government policies. A historical lack of development has made the area unattractive to companies. An attempt to build a Walmart there failed in 2016.
West Louisville is also home to many low-income and African American citizens, including many enrollees in Passport’s plan.
Bowers said Passport is pursuing a new financial setup to complete development of the land and campus. A spokesman for the company recently said it had already invested $40 million into the project. Passport also received federal New Markets Tax Credits and a local Tax Increment Financing district for the project.
David Zetter, a Pennsylvania-based healthcare management consultant, said it makes sense for a healthcare company to focus on its core business rather than property development.
“Why would they want to be involved in building, developing a piece of property? Let an expert do that,” he said. “They are a health insurance company, not a property developer or a building developer.”
A competing bidder, California-based Molina Healthcare, is also interested in the site. A source familiar with the situation said the company would be willing to commit to a medium-term lease for more than 1,100 employees. Bevin awarded a contract to Molina, which plans to reapply to the Beshear administration in hopes of gaining entry to the Kentucky Medicaid market.