Health insurance company will hire 200 for new Military Circle office

March 08--NORFOLK -- A health insurance company will hire about 200 people for a new customer-service center inside the former J.C. Penney at Military Circle Mall, the city announced Wednesday.

The contract with Optima Health is the first major development deal since Mayor Kenny Alexander and two other new council members took office last summer. It's also part of a broader city effort to revitalize Military Highway and the struggling mall.

Optima, a unit of Sentara Healthcare, will rent 45,000 square feet in the building, which is owned by the Norfolk Economic Development Authority.

Starting June 1, Optima will become the second tenant in the two-story former department store. Movement Mortgage is leasing the first floor, about 90,000 square feet, and also plans to open its office there in June. Movement is relocating 550 jobs from Virginia Beach and plans to hire 200 new people over two years.

Under an initial seven-year lease, Optima will pay rent that starts at just under $600,000 per year, then goes up by 2.5 percent a year. The new office is linked to a deal Optima signed with the state in February to serve people covered by Medicaid who have long-term needs.

The new program, called Commonwealth Coordinated Care Plus, covers older people and those with disabilities and chronic illnesses.

Randy Ricker, a vice president with Optima, said the new Military Circle center will house two main groups of employees. The first is an operations team that will pay claims, answer phones and do other administrative tasks. The second includes nurses and social workers who will call people who are homebound or in nursing homes to make sure they're getting the care they need. That can include doctor's appointments, but also non-medical needs such a Meals on Wheels visit, Ricker said.

Serving those with long-term needs more efficiently is key, Ricker said, because they make up only 30 percent of the people on Medicaid in Virginia but account for 70 percent of the costs.

The J.C. Penney store at Military Circle closed in 2014. Later that year, Norfolk's development arm bought it and 1,400 parking spaces -- 16 acres in all -- for $2.5 million. The City Council and Development Authority voted last year to spend $18 million to renovate the building into office space.

The deal with Optima for half the second floor leaves 45,000 square feet left to rent. Alexander and other officials said it also moves Norfolk past the break-even point on the investment.

Following a news conference inside the old department store, the Development Authority voted to approve the Optima deal. Members then took a tour of the building, which is unfinished but will soon be filled with hundreds of cubicles. Movement Mortgage plans to start moving in furniture this month.

Andrew Yancey, a business development manager for the city, said nearly everything except the structural steel is new, including the electrical and HVAC systems, sprinklers and roof. Crews removed the old department store escalator and filled in the resulting hole in the first-floor ceiling. They also added windows for more lighting.

"It's basically a new building on top of some old bones," Yancey said while walking through the second floor.

Alexander pointed to the promise of almost 1,000 new workers coming to Military Circle every day. City officials hope those jobs will draw new restaurants and other businesses.

Councilwoman Angelia Williams Graves, whose ward includes the mall, said she has fond memories of going there as a child.

But in the past five years, it has lost three anchor stores -- Sears in 2012, J.C. Penney in 2014 and Macy's last year.

"Our mall was on life support, and so now I think it might be able to breathe a little bit on its own," Graves said.

Turning to the city staff present, she added: "But I don't want you guys to stop. I want you to make sure we bring this area back so that it is a living, breathing facility here in the city of Norfolk."

___

(c)2017 The Virginian-Pilot (Norfolk, Va.)

Visit The Virginian-Pilot (Norfolk, Va.) at pilotonline.com

Distributed by Tribune Content Agency, LLC.