The biggest bank in Pennsylvania plans a 40-story, $400 million, 800,000-square-foot, "green" downtown office tower that will put 2,500 tradespeople back to work.
That tower will rise, not in Philadelphia, but in little Pittsburgh, where PNC Financial Services Group Monday announced its new headquarters.
Philadelphia builders carp that it is almost as expensive to build here as in New York, but rents are a lot lower, making the city less attractive to commercial real estate investors.
So how come Pittsburgh gets a tower? It's home for the bank, so "they can make the numbers work," says Pete Davisson, boss at Jackson Cross Partners, commercial real estate brokers in Wilmington, which has represented PNC on past deals.
Comcast Corp. built the last big building in Philadelphia, also a home-office headquarters, in the mid-2000s.
"Development is not impossible in Philly," says Jeanne Leonard, spokeswoman for landlord Liberty Property Trust, which built Comcast's tower. All we need is a big corporate tenant. But who? Comcast has capacity for a second tower, but it seems content to fill empty space in nearby buildings. GlaxoSmithKline is vacating 800,000 square feet in Center City for a new, smaller Liberty building at the Navy Yard.
The P in PNC stands for Pittsburgh, but it also stood for Provident, one of the half-dozen big Philadelphia banks, each with its own office tower, whose boards all sold to out-of-towners in the 1980s and 1990s,
idling thousands and moving corporate energy to places like Pittsburgh. Philadelphia still feels that loss.
Power shovels and rock trucks restarted Monday at the Greenwood anthracite coal strip mine, which sprawls across 7,500 acres of five towns in Schuylkill and Carbon Counties near Tamaqua. The mine reopened, putting 40 miners and other workers back on the payroll, thanks to new demand from steelmakers turned off by the high price of other fuels.
BET Associates, the investment firm backed by auto-sales and housing mogul Bruce E. Toll, of Philadelphia, and his managing partner, Doug Topkis, bought the mine for $11 million last year in a federal bankruptcy court after its former owner, the once-powerful Lehigh Coal & Navigation Co., was unable to refinance operations. Years of falling home and business use of anthracite, and rising environmental costs, were the reasons.
But anthracite, which burns cleaner and hotter than other commercial coal, is now in high demand by U.S. and foreign steelmakers because the cost of coke, the coal byproduct used to heat steel furnaces, has topped $350 a ton. That's more than twice anthracite's price, says Rusty Taylor, the Levittown native who heads Robindale Energy Services, the Armagh, Pa., company BET hired to run the diggings.
Anthracite doesn't replace coke, but it can be mixed in to reduce total coke use in a steel mill, Taylor says.
Anthracite "also works in water filtration," and scraps are burned as fuel in nearby power plants, Topkis said. Lehigh hopes to boost production to more than 300,000 tons a year, and increase the workforce to about 80, plus contractors.
Faith in Corbett
A survey of more than 300 chief financial officers in the eight most populous U.S. states shows a majority in every state believe state corporate income taxes will rise this year - except in Pennsylvania.
Some 13 of the 17 CFOs polled in Pennsylvania told accountants Grant Thornton L.L.P. that state corporate taxes would be flat or declining here. By contrast, a big majority of corporate-finance bosses in cash-strapped Illinois and California believe their state taxes will go up; majorities in Florida, Michigan, New Jersey, New York, and Texas agreed.
What's the difference? Pennsylvania last fall elected Gov. Corbett and his GOP allies on a no-new-taxes pledge. The governor chose to trim college and school subsidies, instead of boosting personal or corporate income taxes.
"Pennsylvania is really the exception," Brian Murphy, head of Chicago-based Grant Thornton's state and local tax practice, told me. "You have a new administration that promised no new taxes. And people are believing it."