MERIDIAN BANCORP NEGOTIATING TO LEASE REHABILITATED POMEROY'S BUILDING IN DOWNTOWN READING, PA.
READING, Pa., Nov. 29 /PRNewswire/ -- Reading Mayor Warren H. Haggerty and Samuel A. McCullough, chairman and chief executive officer of Meridian Bancorp, Inc. (NASDAQ-NMS: MRDN), jointly announced today that Meridian is negotiating to lease floors 2-7 of the former Pomeroy's building, after rehabilitation, to house its corporate headquarters and to allow it to consolidate numerous existing functions located in Reading. The facility would be named The Meridian Complex at Penn Square, with a tentative completion date of late 1995. Meridian is negotiating a long-term lease with the Greater Reading Development Partnership (GRDP) to occupy approximately 300,000 square feet of space. The seven-story, 117-year-old landmark property has stood vacant for the past eight years. Meridian also will remain in the 10-story Penn Square Center, directly across Penn Street from the Pomeroy's building. Penn Square Center, the site of the news conference announcing the project today, is owned and about 80 percent occupied by Meridian. Appropriately, Penn Square Center was the first major property developed by the newly formed Reading Center City Development Fund, backed by the former American Bank, Meridian's predecessor, in 1978. "This is the major initial project for the new development partnership," said Haggerty. "There's a lot of work needed to turn this plan into reality," Haggerty cautioned, "but the impact on the future of Reading could be far-reaching. "I thought the reopening of Penn Square would spur economic development, but not this fast," Haggerty noted. McCullough said, "This project could prove to be an opportunity for the city of Reading that matches a need for Meridian." McCullough also placed the project in the perspective of Meridian's overall growth. "Similar to the consolidation of Meridian's data processing and operations units at Spring Ridge in late 1989 and early 1990," he said, "the Pomeroy's project would allow us to consolidate many of our staff support functions. A growing company today must operate more efficiently than ever before. At Meridian, we never stop looking for ways to improve our operating efficiencies. At the same time, I'm delighted that this project, if it can be worked out, will enable us to keep our headquarters in downtown Reading." The announcement today follows the Nov. 19, 1993, purchase of the Pomeroy's building and other downtown properties by the development partnership for $1.25 million. There are many details to be ironed out on Meridian's lease of the Pomeroy's building. A preliminary rule-of- thumb $100-per-square-foot cost is being applied to renovating approximately 300,000 square feet of space primarily for Meridian's office use and corresponding parking needs and secondarily for anticipated first floor retail applications. A project estimate of approximately $40 million results. "This project also will provide a long-term solution to Meridian's downtown parking needs," McCullough added. Meridian is proceeding with negotiations and hopes to have a signed agreement by early in the first quarter of 1994, according to McCullough. The facility will be owned by the Greater Berks Development Fund (GBDF). Less than two weeks ago, Pomeroy's Associates, L.P. took title of the Pomeroy's building from Mast Properties. The GBDF will purchase the upper floors of Pomeroy's and lease the space to Meridian. Daniel R. Langdon, president of the GBDF, said, "This is the single biggest financial commitment the GBDF has made in our 46-year history. Usually, we only get involved in industrial projects. The Gateway Building at Second and Penn streets was our first office project. Just four years later, and here we are hoping to embark on the largest private office building project in the history of downtown Reading." The GBDF is a 501(c)(4) non-profit development company. In addition to the Gateway Building, recent projects have included: the acquisition, financing and leasing to the United Corrstack of the 300,000-square-foot former Continental Can building at Seventh and Laurel; the partial financing of Berks Products' expansion; and several loans to Sweet Street Desserts. Pomeroy's Associates, L.P. was formed as part of the GRDP. Thomas M. McMahon, president of the Greater Reading Development Corporation which is the general partner of GRDP, commented, "This could be the first of what we hope to be many significant announcements connected with GRDP. Meridian's continued interest in downtown Reading could induce other significant investments. I believe it will be difficult to top this." He added, "Numerous smaller firms and entrepreneurs should be encouraged by this bold move by Meridian and could follow its lead. Within the next few months, we hope to make additional announcements concerning the progress we are making as part of the GRDP." The Pomeroy's building would house Meridian's corporate headquarters and a variety of staff support functions such as retail delivery administration, sales development, asset management operations, personal banking, consumer lending administration, government affairs, legal administration, marketing, advertising and corporate communications. Those and other Meridian departments are currently scattered among four buildings that Meridian owns downtown -- The Berkshire, Sixth and Washington, Callowhill and Tenth and Penn. Branch banking personnel will remain at Meridian's three existing downtown branches at Fifth and Penn, Sixth and Washington and Tenth and Penn, according to McCullough. The development partnership is currently discussing with Meridian the appropriate re-use of the above buildings. Prospects already have been identified and contacted, according to McMahon. The Meridian organization currently has more than 7,300 employees, up by approximately 1,150 since the move to Spring Ridge in early 1990. Meridian currently employs about 820 people in downtown Reading and 2,300 people in Berks County overall. Meridian is currently the second largest private sector employer in downtown Reading and the sixth largest private sector employer in Berks County. Among its peers in the ranks of the 50 largest bank holding companies in the nation, only UJB in Princeton, N.J., and First Fidelity in Lawrenceville, N.J., are headquartered in cities smaller than Reading. The Pomeroy's property, originally known as Dives, Pomeroy & Stewart, opened for business in 1876 as a department store. The current seven-story steel and concrete building was built in 1900. The connected seven-story, 60-foot-by-270-foot addition was completed in 1921. In 1923, the store name was changed to Pomeroy's. Various improvements and store expansions were completed in succeeding years, with the most extensive being in the early 1960s. Pomeroy's closed its doors in 1985. /delval/ -0- 11/29/93 /CONTACT: George E. Biechler of Meridian, 215-655-2470, or Edward J. Swoyer of Development Partnership, 215-376-6739/ (MRDN)
CO: Meridian Bancorp, Inc.; Greater Reading Development Partnership ST: Pennsylvania IN: FIN SU: RLE
JO-MK -- PH014 -- 8283 11/29/93 12:16 EST
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|Date:||Nov 29, 1993|
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