State Office Building on N. Broad is sold

Gov. Rendell's office is scheduled to announce this morning that Pennsylvania has sold the 19-story office building at 1400 Spring Garden St. to Tower Investments Inc. for conversion into residences.

The real estate development firm will pay $25 million for the building, at the corner of North Broad Street, under a contract signed Thursday, according to Tower.

"It's the most important corner on North Broad Street," said Tower owner Bart Blatstein, whose previous projects include Avenue North, at Broad and Cecil B. Moore Avenue. "North Broad was once the busiest street in the city, and it's coming back, from City Hall up to Temple University." Avenue North is a complex of stores, a movie theater and Temple University student housing.

The 299,000-square-foot building on Spring Garden houses more than 1,000 state workers in an old factory neighborhood that has been attracting residential redevelopment and office rehabs. Blatstein said he had not decided if the units would sell as condominiums or rent as apartments.

The deal includes 1.9 acres and a 208-space underground parking garage. Tower Investments plans to build stores along Spring Garden Street, just north of the tower, which was built in 1959.

The state accepted bids for the property in October, but the final deal was delayed as the two sides settled terms and the state negotiated leases on replacement space.

The sale was authorized last year by Rendell and the General Assembly. The governor "is a strong supporter of the sale. He believes that putting state services under a rental agreement would be more cost-effective," said Chuck Ardo, a spokesman for Rendell.

The building houses 406 employees of the Department of Public Welfare, 78 from the Department of Labor and Industry, and smaller groups from 12 other departments, said Ed Myslewicz, spokesman for the Pennsylvania Department of General Services, which managed the sale.

Sources in the real estate industry say a leading contender among the likely sites for those workers is the former Strawbridge & Clothier department store at Eighth and Market Streets.

Shawn Southard, spokesman for Pennsylvania Real Estate Investment Trust, which controls the Strawbridge's space, declined to comment. The trust also has discussed renting the ground floor of that site to retailers Target Corp. or Boscov's Department Store L.L.C.

Once the Philadelphia sale is complete, the state plans to sell its major office building in Pittsburgh, Myslewicz said.