In Philadelphia, vacant factories loom over rundown neighborhoods. It’s different out in the suburbs, where former pharmaceutical company buildings and other vacant industrial properties are routinely recycled into modern work spaces.
Joe Mirabile, CEO of United States Seating Corp. (USSC), says his biggest challenge at the moment is adding nearly 200 staff to the 250 working at the firm’s new home in the former West Pharmaceuticals Corp. plant in Exton — the facility that not too long ago underwent a $75 million-renovation, backed by $1 million in state aid.
To turn the vacant pharma complex into a seating and safety-equipment plant, crews working from plans by Eli Kahn Real Estate and Goodman Properties “built a full steel overlay over the atrium. They had to close them in completely to create our space,” said Mirabile, who comes from a Norristown beverage-business family.
USSC was started in Conshohocken in 1984 by Christian Hammarskjold, who targeted the often-political railroad-supply business, building seats for SEPTA and Amtrak cars. Boston investment firm Dubin Clark, whose other investments range from retailers such as CompUSA and Party City to portable-toilet manager Johnny-on-the-Spot, bought a controlling interest in USSC in 2016. Mirabile went to Germantown Academy, the University of Pennsylvania, and Temple University Law before joining the company in 2010. He and other bosses have “re-invested” and remain part-owners in USSC. The company’s clients include the Wolfington family’s truck business, also based in Chester County.
At the former West Pharmaceuticals building, builders knocked out the second floor to accommodate bigger machines, warehouse racks, and forklifts.
“I was amazed once we started removing the ceilings,” Mirabile said. “This building had really strong bones. A well-poured concrete foundation so it could handle the weight of our machines. And it’s on a 35-acres site, where we can start work on another 200,000-square-foot space,” which he hopes to finish a year from now.
USSC moved from the former National Foam building right on Pottstown Pike. Mirabile said he needed updated space to appeal to new millennial workers. "We are recruiting from customer service through the factory floor all the way up through Ph.D.s in engineering.”
Despite the impressive headcount, his plants are increasingly automated with robot welders and self-driving (autonomous) equipment. Workers commute from the old factory centers of Reading, Coatesville, and Philadelphia. Wages start at $14 an hour. “Salaries can range from $50,000 up to $150,000,” and finding people is getting harder. The firm considered moving down South or to New Jersey, but the skilled labor force “kept us here.”
Near Lansdale, a training facility Merck built to house 1,500 people in 1999 has been lying vacant since 2016 when the drugmaker consolidated facilities. Enter Mark Nicoletti and his family-owned Philadelphia Suburban Development Corp., a mostly nonunion builder that has profited from the widening of the Pennsylvania Turnpike’s Northeast Extension to develop properties around the Lansdale interchange.
The firm has rechristened the 340,000-square-foot Merck building “the Pinnacle” and started leasing it to tech companies — including Sicom Systems, the 425-worker fast food-software firm backed by Ira Lubert’s LLR Partners, which sold it earlier this year to Global Payments Inc. of Atlanta for $415 million.
“Merck acquired many hundreds of thousands of square feet in excess of their needs. Little by little, they’re selling,” Nicoletti said. “This building was maintained very well, but it was not modernized."
One challenge: cutting the building from Merck’s regional utility grid. The developers picked new phone, data, and Internet connectivity.
Nicoletti’s company has added the millennial amenities corporate recruiters now demand, said Stephen Kriz, broker at CBRE in Radnor. They added “contemporary collaborative common space, food providers, shared conference facilities, access to transit" — the SEPTA Lansdale and Norristown lines aren’t close enough for most people to walk, so there are shuttles — "fitness, and good parking.”
“This is nicer than anything in Conshohocken. It’s as nice as anything in King of Prussia,” claims Nicoletti. “I think we can get this to $20 a square foot,” a bargain by Center City standards, but a step up for central Montco, where the mortgage meltdown of the mid-2000s removed a string of longtime employers. “People are moving to the suburbs,” he concluded, discounting worries of a builder slowdown in 2019, and listing the homebuilders he says have approached him lately "for our land at the Lansdale interchange: Toll, Pulte, Ryan, and Hovnanian. “That’s the new thing.”
Kriz also flagged another former pharmaceutical company site that may become home to growing suburban companies or local centers of national companies: the mostly vacant GlaxoSmithKline pill factories in King of Prussia.