Johns Hopkins has a contract to acquire the former Zurich Insurance Co. property in north Baltimore and will use it to consolidate financial, data processing and administrative functions currently spread out in several city locations.
The 11.4 acre property at Keswick Road and W. 40th Street will be acquired by a subsidiary jointly owned by The Johns Hopkins University, based on the Homewood campus less than half a mile away, and the Johns Hopkins Health System in East Baltimore.
The transaction is expected eventually to bring up to 1,100 Hopkins employees to a location that was vacated this fall, when Zurich moved its employees to Baltimore County. The sale is scheduled to close by March 31, and the price was not disclosed.
The sale "underscores the continued strength of the Hopkins institutions and their impact on Baltimore's economy and the Greater Homewood community," said Al Barry, a planning consultant and representative for Hekemian, a New Jersey company that is planning a $100 million expansion of the Rotunda shopping center next to the Zurich property.
"It's a wonderful fit for Hopkins to bring some of their support services close to the main campus," Barry said.
The Zurich site has two large buildings containing 415,000 square feet of usable space, including large, open floors and two data centers. The parcel also includes 1,500 parking spaces, a cafeteria and meeting and classroom space. That makes it ideal for housing financial services and information technology operations, said James T. McGill, the university's senior vice president for finance and administration.
"The property's location, layout, infrastructure and amenities made it a very attractive facility for both Johns Hopkins institutions," McGill said.
"The more we looked at both our future needs and what we're paying now to operate in leased and owned space throughout the metro area, the clearer it became that buying this property made good economic sense for both entities," said Ronald Werthman, vice president for finance of the Johns Hopkins Health System.
The departments that will move to the site have not all been identified. Hopkins spokesman Dennis O'Shea said the buildings will be filled with Johns Hopkins employees over time, as leases elsewhere expire and as other business considerations dictate. The first workers are expected to move in during the second half of 2010. He said employees likely will come from a variety of Hopkins locations, including the former Eastern High School property on 33rd Street, the former USF&G; campus in Mount Washington and East Baltimore. The Zurich setting is not envisioned as a setting for teaching, O'Shea said.
The university and health system, though they are separate corporations, have combined seven large back-office operations such as purchasing and accounts payable and receivable into what they call "shared services centers" that serve both entities, O'Shea said. Some of those centers — which work together on a daily basis — are prime candidates for relocation to the Zurich property, he said. So are other still-separate university and health system offices that often collaborate, he said.
Johns Hopkins information technology functions are run by an organization called IT@Johns Hopkins that also crosses the lines between the two corporations. Some IT@Johns Hopkins groups, particularly those supporting business functions, are candidates for the Zurich property, though Johns Hopkins will continue to operate data centers elsewhere.
O'Shea said Hopkins will benefit from the cost savings of bringing employees in one location.
"It's really a matter of consolidating people who have been spread out in various locations," he said. "This is a configuration that does allow for collaboration among large groups of financial services people."