As it tries to shed the city’s reliance on government jobs, the Sacramento City Council unanimously approved a multimillion-dollar incentive program Tuesday designed to lure the West Coast headquarters of a Fortune 500 health insurer.
The vote was a major step in persuading St. Louis-based Centene to build a new corporate hub in North Natomas that could eventually employ 5,000 people. The company’s board of directors still has to vote on whether to place a corporate center here and is expected to take that vote early next year.
Centene manages Medicaid and other health insurance programs for more than 12 million people. It purchased Los Angeles-based health insurer Health Net last year and generates roughly $40 billion in annual revenue.
“I believe this is just the beginning of growing a high-wage private sector economy to supplement and compliment our public service sector here in Sacramento,” Mayor Darrell Steinberg said. “We’re talking jobs here, real jobs, and this is a big deal.”
The company is in negotiations to lease space along Interstate 5 in North Natomas where it could either take over existing space or build a campus. While an exact location has not been identified, sources have previously told The Sacramento Bee that the company is not in negotiations to take over the former Sleep Train Arena site. The company could begin construction as early as next year.
Under the incentive agreement, the city would give Centene $9,000 for every job created at the Sacramento headquarters that is new to the region. The company already employs 3,000 people in the area, and those jobs would not qualify for the incentives.
Centene would receive $2.7 million from the city every time it assigns 1,000 workers to its Sacramento campus, but only if 300 of those positions are new to the region. The median salary for the jobs must be at least $61,515 and the average salary must be above $64,078.
The city’s incentive package would be capped at five payments, or $13.5 million. The council approved the first $5.4 million on Tuesday. The money will come from the city’s Innovation and Growth fund, made up largely of the city’s share of tax revenues that used to go redevelopment agencies. The fund’s current balance is $8.8 million.