Concerns over Humana's future surface in Al J. Schneider Co. dis - WDRB 41 Louisville News

Concerns over Humana's future surface in Al J. Schneider Co. dispute

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Humana is the biggest tenant in Waterfront Plaza Humana is the biggest tenant in Waterfront Plaza

LOUISVILLE, Ky. (WDRB) – Since the proposed sale of Louisville-based Humana Inc. was announced last summer, executives and public officials have brushed off concerns about the loss of local jobs after Connecticut-based Aetna takes over.

In fact, they have said Louisville will gain jobs, on balance, after the deal.

But there is fresh evidence that one of the landlords renting office space to Humana isn’t so sure about the merger’s lack of impact on employment in the city.

Humana is the biggest tenant of Waterfront Plaza -- three-tower office complex at 321-325 W. Main Street -- where the company rents more than half the space. About 2,000 employees work in the complex, according a Humana spokeswoman.

And at least some of the people associated with the building’s owner, the Al J. Schneider Co., have been concerned about whether Humana will continue to be such a big tenant.

That’s according to records that have recently become public as the Schneider Co. heirs fight in court over the proposed sale of the Galt House Hotel.

Last summer, just about a month after the Humana-Aetna merger was announced, the Schneider Co.’s Board of Directors met to debate whether the time was right to put the company’s vast real estate holdings -- including Waterfront Plaza and the Galt House -- up for sale.

Charles A. Brown Jr., one of the non-family directors on the board, argued that the proposed Aetna acquisition – along with interest rates and other factors – was an impetus for the Schneider Co. to go ahead and sell.

“Mr. Brown pointed out that the company continues to be exposed to market risks such as the Humana announcement and stated there has never been a more ‘pregnant’ moment to market these properties,”  according to official minutes of the Aug. 4, 2015 meeting.

Reached this week at his home in Naples, Fla., Brown elaborated:

“The concern of the board was, we had no guidance on what Humana would or would not do (following the Aetna merger),” he said. “When a sale like that is announced, there is a lot of uncertainty in the family and in the board as to what the best decisions would be.”

Months later, the concern over Humana’s status would resurface in a letter from the Schneider beneficiaries who oppose the Galt House sale.

“The brief remaining terms of the Humana leases (which have not been renewed)… further increases the risk to the Company’s cash flow position,” according to the Jan. 7 letter, which does not mention the Aetna transaction.

Nowhere in the trove of Schneider Co. records does it say when Humana’s leases in Waterfront Tower expire.

Humana spokeswoman Kate Marx said the company “routinely review(s) the status of all of our leased properties and space around the country in advance of those leases expiring or being up for renewal.

“Managing our lease commitments at Waterfront Plaza is part of this internal routine and part of normal business operations. As we continue to evaluate our portfolio, we will negotiate our future space needs based on the interest of Humana.”

Related: On Friday, our partners at Business First reported that office brokers "have been worried about Humana possibly vacating some of its voluminous office space in Louisville ever since" the Aetna merger was announced, including Waterfront Plaza.

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