The new state-of-the-art headquarters UnitedHealth Group is opening for its insurance arm in Minnetonka is just the latest chapter in the expansion of the health care giant's burgeoning real estate portfolio in the Twin Cities.
Tucked amid the lush greenery of its corporate campus off Hwy 169, the new 10-story UnitedHealthcare headquarters building is linked with an existing structure -- more fraternal than identical twin -- that opened in 2008. The two buildings, known as 9700 and 9800 Health Care Lane, unify some 3,300 employees from four benefits divisions of UnitedHealthcare, including Employer and Individual, Medicare and Retirement, Community and State, and Military and Veterans.
Parent company UnitedHealth Group has wrapped up several real estate projects in the past year, and at least one major expansion is still in the works. Currently, United has almost 3 million square feet of office space in Minnesota, a number that is likely to grow as the company expands.
"This has all been geared toward bringing the business together," said Restor Johnson, vice president of real estate services for parent company UnitedHealth Group. "It can be pretty profound when you bring groups of employees together."
The company would not reveal how much it invested in the new digs. But Hennepin County estimates the market value of the older building at 9800 Health Care Lane at approximately $46 million.
As Minnesota's largest publicly traded company with 18,000 employees in the state, UnitedHealth Group's office space is spread through 19 locations in the Twin Cities, Mankato, Duluth and International Falls.
Last year, the company paid $39.5 million for the former ADC Telecommunications headquarters in Eden Prairie, south of Hwy. 212, to house its OptumHealth business. Six months later, the complex was sold to a New York investment firm for about $50 million in a buy/lease-back deal -- in which the employees stayed put. Then, a nearly 300,000 square-foot data center in Chaska was recently completed, and an existing data center in Elk River was expanded last year.
Now, United is developing two eight-story office buildings and a parking ramp on a 70-acre tract of land in Eden Prairie, at the busy nexus of Shady Oak Road and Hwy. 62, which will ultimately serve as home to 6,700 employees.
Although the company does not reveal pricetags of individual building projects, published reports have put the investment in the Eden Prairie site at $200 million, a portion of which would involve space to accommodate the proposed Southwest Corridor light-rail station and preservation of wetlands.
Most of its offices -- with the exception of the new UnitedHealthcare headquarters -- are leased, a longstanding real estate strategy deployed by the company. "It's really a matter of corporate philosophy whether to lease or own," said Herb Tousley, director of the Shenehon Center for Real Estate at the University of St. Thomas. "If a company owns their space, they can do what they want with it; it can be more flexible."
The only other Twin Cities company that appears to be aggressively building new office space in a tough economy is Target Corp. The Minneapolis-based discounter announced plans earlier this year to expand its campus in Brooklyn Park by 650,000 square feet. The expansion will boost the current employment in the northern suburb by 3,000 to 5,400 people.
For UnitedHealthcare, the Minnetonka expansion was really about consolidating operations "into fewer and more-efficient facilities," Johnson said. "[The new UnitedHealthcare headquarters] is another step in that plan."
Inside, the building provides architectural eye candy and such sustainable design perks as warm wood trim, including some that was recovered from trees felled in the north Minneapolis tornado in 2011, and ample natural stone (much of it Kasota stone from southern Minnesota) and light. Recycled content was used in the carpet, linoleum and upholstered furniture. The cafeteria features a healthy, locally sourced menu -- there's no fryer to encourage unhealthy food choices, and only a small freezer. Even the pickles are made from scratch.
The cafeteria's seating area is linked to its sister building through an outdoor patio, a nod to encourage collaboration among employees from different work areas.
A fitness center entices the building's 1,650 employees with up-to-the-moment exercise equipment, as well as space for Pilates, yoga and other wellness-oriented classes, and well-manicured walking and jogging paths weave about outside.
United is seeking LEED (Leadership in Energy and Environmental Design) certification for the building -- environmental and efficiency standards set by U.S. Green Building Council. The LEED-friendly design will mean the building will use 32 percent less water and result in a 25 percent reduction in operational energy costs when compared with a standard office building.
But one of the biggest perks, at least from the company's point of view, is the plethora of conference rooms, big and small, communal work areas, even cubbyholes -- plus an "Innovation Garage" to spark creative ideas. The Garage is a multiuse space with modular work surfaces and seating, digital displays, a patio and kitchenette that can be used for small or large work teams focusing on new projects and ideas.
While the building's employees have workstations, the idea is that "people are stimulated by a variety of settings," Johnson said. "Very few come into the office and sit for eight hours in a workstation."
Rich Bonnin, associate vice president at HGA Architects and Engineers, said the trend in office design involves focusing on the idea that the "best work from employees happens in a collaborative setting."
That has resulted in a scaleback of large workstations and private offices, in favor of flexible workspaces, he said, "promoting a sense of belonging in an organization." HGA devised the master plan for the new UnitedHealthcare building.
RSP Architects of Minneapolis works with UnitedHealth Group on a national scale and was the architect of record and the design architect for the 9700 building. RSP expanded upon the existing 2008 master plan and designed the building and all of the interiors.
Some employers, such as General Mills, have tried a "free address system" of office design in some areas-- meaning no one has assigned or permanent seats. Rather, employees choose space depending on the type of work they're performing on any given day. While this isn't the case at the new United building, employees do have the option of working in a different type of work space, should the need arise.
Janet Moore • 612-673-7752