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Quest for space, access spur UGI's move to LancasterUtility has doubled its customer base over past decade

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Two things are driving UGI Utilities' plans to move its 150-staff headquarters from an old building just outside Reading to new offices in a farm field in Lancaster County: growth and the need for easy regional access.

“We need to find a headquarters that fits the profile of what UGI has become,” spokesman Joe Swope said.

The natural gas company’s building also would complement plans for other development just down the street, said officials in East Cocalico Township in northeastern Lancaster County.

UGI has doubled its customer base to about 700,000 over the past decade. Now serving 45 counties in Pennsylvania, the company is in growth mode and is open to more acquisitions, Swope said.

In August 2006, UGI Utilities bought Southern Union Co. for about $580 million, adding 158,000 customers.

In March 2008, the company acquired PPL Gas Utilities Corp. for $268 million, adding 76,000 customers.

Along with acquisitions, lower natural-gas prices have added customers to UGI’s rolls as residents and businesses convert their furnaces from oil.

Since 2009, the company has sheltered its executive, accounting, human resources, engineering and marketing and communications employees in a former Agere Systems Inc. electronic-chip plant at 2525 N. 12th St., Muhlenberg Township, just north of Reading. It’s at capacity, Swope said.

Feeling the pressure, the company looked around the region and settled on East Cocalico, Swope said. The move could occur in 2018 or 2019.

“Generally the [employee] reaction has been positive that we recognize the need and are moving forward,” Swope said.

Besides plenty of room, the Lancaster County location would provide easy access for employees and visitors. A survey of employees found that the move generally would not increase commute times, Swope said.

The land is near Route 222 and the Pennsylvania Turnpike, providing east-west access at 70 mph and slightly less rapid access north-south.

Many employees in the headquarters in Muhlenberg live in Berks County; others live in Lancaster and Philadelphia, Swope said.

Beside its office inhabitants, many other people need to get to company headquarters — employees and visitors regularly arrive from Harrisburg, the Lehigh Valley and Wilkes-Barre-Scranton area.

“Everybody’s looking for easy access and visibility, and this spot provides both,” said East Cocalico’s interim township manager Steve Gabriel.

The township has plans for restaurants, shops and a hotel across Route 222 along Colonel Howard Boulevard.

“The potential is you could have some real complementary uses,” Gabriel said.

The East Cocalico land was owned by MC Realty, with an address in West Reading, a subsidiary of Reading Health System that was established “to strategically acquire real estate” in the area, according to a KPMG auditor’s report.

UGI looked at “a number of places,” including in the area around the Morgantown Turnpike exit, Swope said. The company’s growth around Lancaster, Harrisburg and Carlisle made Route 222 — the next exit westward — a better fit, Swope said.

Pam Shupp, president of Greater Reading Economic Partnership, a development agency in Berks County, said in an email that UGI’s move is too far in the future to start aggressively marketing the Muhlenberg building.

Muhlenberg Township manager Jamal Abodalo said the building would not sit empty for long, citing township economic development efforts.

AGR133 LLC, in Audubon, bought the 133-acre property in December 2005 for $1.7 million. No one at AGR133 returned messages asking about the property.

“We will definitely miss UGI,” Abodalo said. “[But] I believe the place itself is more suited as an industrial, warehousing or manufacturing facility.”

UGI still has several years on its lease. Swope said company leaders hope to move in 2018 or 2019.

“UGI will still have a significant presence in Berks,” Swope said. More than 300 service and field employees will remain at its site at 225 Morgantown Road in Reading.

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