Office Space

The state office building at Broad and Spring Garden streets is good enough for 943 state employees, but it's not good enough for the governor's personal representative to southeastern Pennsylvania. That's even though the governor's liaison gets the penthouse suite on the 18th floor. Admittedly, the building isn't among Philadelphia's most stunning, but it does have a great view of the Daily News and Inquirer building. That charming feature apparently doesn't appeal to Ridge's vicar, John DiBuonaventuro.

The federal government has scrapped an office relocation plan that could have moved thousands of government jobs out of Philadelphia, U.S. Rep. Robert Borski said yesterday. "I have received every indication from GSA (General Services Administration) that the plan to leave the city is dead," Borski said yesterday in a statement. "However, I am awaiting official confirmation from GSA. I expect to receive that confirmation very soon," said Borski, who serves on the House Public Works and Transportation Committee, which has jurisdiction over GSA. Earlier this week, GSA officials postponed a plan to solicit proposals from developers for construction of an office complex that could accommodate as many as 2,500 federal employees now working in rented Center City office space.

Three firms have been picked to share office space with The Inquirer and other Philadelphia Media Network outlets in the Project Liberty Digital Incubator , the newest local space dedicated to start-up tech businesses. The firms, selected by PMN adviser and incubator operator Ben Franklin Technology Partners of Southeastern Pennsylvania , are CloudMine , a smartphone applications developer platform headed by CEO Brendan McCorkle; voter-guide app developer ElectNext , headed by Princeton and Wharton-trained political scientist Keya J. Dannenbaum , and SnipSnap , a print-to-mobile coupon scanner conversion service headed by Ted Mann . "We're providing these companies free rent, free office equipment, and the infrastructure to operate their business, day-to-day, for a six-month period, while they agree to develop a media product for consideration" by The Inquirer, the Daily News , Philadelphia SportsWeek , and Philly.com , spokesman Mark Block said.

The Montgomery County commissioners yesterday adopted a new method for leasing space for district justice offices that requires the county to advertise its needs before entering into new lease agreements. In May, the commissioners asked the county's waste-reduction committee to review the agreements and the negotiations process. The committee's report was submitted at the commissioners' weekly meeting. "The process is going slower than I would like, but we are definitely moving forward on this," said Commissioner Joseph M. Hoeffel 3d. The review was requested after an Inquirer examination of the leases revealed that the county paid significantly more than market rates for many of its district justice offices, and that many of the leases were awarded to people who donated to the Republican Party or to Republican candidates.

As executives at Cigna consider the prospects of possibly moving 4,400 workers and their office operations outside the city, two factors will weigh heavily. Can Cigna pocket enough savings to make it worthwhile? And if the insurance giant can save substantially, can it hold on to its large skilled work force? It would take a good bargain to lure Cigna out of the city. According to its financial statement, Cigna rents the bulk of its prime Center City space - 830,000 square feet - for $16.26 a square foot, about one-third less than the average cost of other downtown space.

If Center City has bigger hotels, better restaurants, costlier homes and more residents than it did at the end of the last wave of skyscraper construction in the early 1990s, one thing hasn't changed: Landlords are still pushing Class A office space at about $32 a square foot. Space in the city's best office buildings is cheaper than it used to be, adjusted for inflation. Rents are also low compared to the going rate of $50 plus for the best space in Washington, $60 in Boston, and more than $90 on recent Manhattan leases, said Matthew Wright, research services manager at commercial brokers Grubb & Ellis Co. in Philadelphia.

Developers are once again building office space before they know who will occupy it. But although speculative real estate development is on the rise throughout the Philadelphia suburbs, it now has a targeted, customer-service focus instead of the generic, overly optimistic construction of a decade ago. After years of moving offices farther into the hinterlands, to office parks devoid of amenities, companies are choosing convenient sites, close...

At the Avenue of the Arts Building, Broad and Chestnut Streets, the elevator doors are open, but no one is getting on. The lobby is locked and the Mac machine is dark. In the concourse below, the steps to the building are sealed off with plywood. Even the green and white concourse sign reading "Chestnut Street" has been tiled over. In real estate terms, the vacant Avenue of the Arts Building has been "mothballed. " Philadelphia's core business district has at least 10 office buildings that are completely vacant.

In the fall, Ken Balin wanted to convert the old 12-story office building he owned at 1600 Walnut St. into apartments. He had already put an upscale Wawa and a croissant shop on the first floor. Now he wanted to convert the second floor into small offices for architects and maybe software entrepreneurs. Above that, he planned to build 91 apartments, mostly studios and one-bedrooms. "The plans were all done. They were going to be really nice. We were ready," recalled Balin, president of the Delancey Investment Group, a Philadelphia real estate investment/development firm.

When Chester County government moved into its new, $36 million office complex this year, elected officials celebrated with a day-long community party. After all, here was a building that would finally bring nearly all of the county departments together under one roof. No longer would officials be forced to spend huge amounts to rent office space in scattered buildings around the county. But five months after the move, records show, the county is still renting office buildings.