ST. LOUIS – Pharmacy benefit management company Express Scripts last year obtained a presence at the University of Missouri-St. Louis, and this year it plans to expand that footprint by building a 200,000-square-foot facility on eight adjacent acres and consolidating most of its regional employees there, BioRegion News has learned.
Express Scripts was able to take this step by exercising an option the university gave it to erect a second building within a site adjacent to its existing 17-acre facility, UMSL Chancellor Thomas George told attendees during the 2007 annual conference of the Association of University Research Parks, held here last week.
The disclosure comes less than a week after the St. Louis Business Journal quoted a university spokesman saying that the school is “talking about other things with Express Scripts that haven't come to fruition yet.” That report quoted an Express Scripts executive, Rita Holmes-Bobo, as saying it was too early for the company to discuss an expansion of its headquarters at UMSL. The expansion, which is set to get underway sometime in 2008, would become the company’s second facility in the region to house customer-contact and pharmacy IT operations. The first one is based 12 miles west of the campus in Maryland Heights at 13900 Riverport Drive.
As of last year, 1,600 Express Scripts employees were based in Maryland Heights. “When it’s all said and done, they’re going to have almost all of their employees” relocated to the new facility, George said.
Speaking to BioRegion News soon after his AURP address, George said Express Scripts would start construction on an approximately 200,000-square-foot building no later than next year. That would be larger than the 180,000-square-foot plan for which the company issued a formal request for proposals back in March. A parking structure would link the new building to the existing structure.
“They’re going to do the expansion. I gave them permission to start leveling some of the space already, even though it’s not yet official yet,” George said in an interview. “I would say they’re going to get started on the structure some time in 2008.”
Speaking to BRN last week, Express Scripts spokesman Steve Littlejohn, who appeared at the conference for a panel discussion, maintained the company’s silence over its future expansion plans at the university campus: “We have made no official announcement as of yet. Stay tuned.”
Express Scripts bases 1,200 of its total 13,000 employees in a $50 million, 316,000-square-foot building that officially opened in June, following a ceremony led by George, CEO George Paz, Missouri Gov. Matt Blunt, and St. Louis County executive Charlie Dooley. The state awarded Express Scripts $12.5 million in tax credits, including $8 million toward brownfield cleanup costs, while the county shelled out $11 million for a new road to the facility.
Express Scripts, which pays rent to UMSL under a 99-year lease, has said it is the highest-ranking Fortune 500 company headquartered within a university campus.
The company began its headquarters search late in 2004, hoping to consolidate what was a home base scattered over several buildings in Maryland Heights. In January 2005, UMSL submitted to Express Scripts its own response to its formal request for development proposals – a site along I-70 and about 5 miles east of St. Louis-Lambert International Airport.
“We had been looking for a headquarters because we’d been spilling out of eight different buildings in this [Maryland Heights office] park. We had people hanging from the rafters,” Littlejohn recalled. “Eventually it came down to Illinois and the St. Louis region.”
Even after Express Scripts selected UMSL as its developer, additional challenges took place. George told conference attendees the university paid “three or four times what they were worth” for the properties of a handful of residents living on the site to avoid delays and bad publicity that could derail the project: ”the idea was to keep it out of the newspapers.” Construction had to be delayed in order to clean up brownfield pollution that was not apparent when work started on the company’s HQ.
UMSL was able to accommodate Express Scripts within a part of the campus envisioned since the early 1990s for one or more business occupants, George said: “Part of our mission is to do outreach to the community, to do economic development. In fact, we think we have a four-legged stool: We have teaching. We have research. We have service. And then we also have economic development as really accomplishing our mission.”
But not just any business: “We don’t want a warehouse, for example. When a company or companies go into that park, there’s got to be some value added both ways. This had to be something where we can share in the growth of a company, that company can share with us, and then we can bring other partners in. We were very picky.”
Express Scripts “had been looking for a headquarters because we’d been spilling out of eight different buildings in this [Maryland Heights office] park. We had people hanging from the rafters.”
UMSL has assembled to date 60 acres toward its vision of a tech-based business park — half of that land contiguous — and is continuing to acquire additional properties, George said.
The current building will have 30,000 vacant square feet the company could use to accommodate extra employees. That space has yet to be used, Littlejohn told BRN.
The university and Express Scripts have said their arrangement will allow for a variety of enhanced collaborations. For instance, last summer Express Scripts launched its first formal internship program at the school and signed on five UMSL students.
And this fall, also for the first time, UMSL students developed an “Intro to Business” program exposing employees of Express Scripts to the business side of pharmacy benefits.
Each semester, the university will open its continuing education programs to company employees. And several information-technology students at the university will work with the company’s IT department on projects to be implemented at Express Scripts.
Overseeing the collaborations is a joint task force made of representatives from UMSL and Express Scripts, co-chaired by Littlejohn and Keith Womer, dean of the UMSL College of Business Administration.
“The first conclusion we all came to in order to make it work was that we all had to have cultural patience. We’re a workplan-driven company that’s going like a mile a minute,” Littlejohn said. “The university being an educational institution, certain things require a lot of discussion. There are a lot of bases to touch, committees to deal with, and we respect that.
But in time, we hope that the two cultures will come together and create something new and interesting,” Littlejohn said.
Express Scripts is publicly traded and finished last year with about $17.7 billion in revenue. On Oct. 24, the company announced that third-quarter 2007 profits increased 43 percent to $142.9 million from $114.7 million year over year on a 4-percent rise in revenue, which grew to $4.5 billion from $4.3 billion.
But challenges remain for Express Scripts. The company recently announced it would shut down six underperforming sites and reduce overhead for its infusion-drug prescription business following an operating loss of $6.8 million for the quarter and $12.5 million for the first nine months of 2007