If someone had said three years ago that a business park would be developed next to the former Pennsylvania Hospital Insurance Co. building, a real estate agent would look at them like they were crazy.
The new four-story office buildings each would comprise 125,000 square feet and cost a combined $40 million to develop. The properties would have a combined 2,200 parking spaces. Hoffer hopes to start construction on the first office building after securing a lead tenant, which should be within eight to 18 months, Posavec said. Hoffer Properties owner Norm Hoffer declined an interview request for this story. He soon hopes to start selling or leasing the retail sites, also, Posavec said.
Silver Spring Township officials have approved the preliminary office building plans and think developing a business park on the corner is a great idea, said Sam Monticello, township manager. The township planned to review final plans and vote on the office buildings project on March 23, he said. This edition went to print before the vote took place.
Township officials are pleased with how Hoffer turned around the PHICO building and expect to be just as pleased with the new buildings, Monticello said. As retail investors become interested in the site, each development plan will go before the township, he said. The retail and office buildings fit the existing mixture of businesses along the Carlisle Pike, Monticello said.
The township is not worried about traffic problems the new businesses could create, because Hoffer filed a highway occupancy permit with the state Department of Transportation and has taken care of any problems that might have existed, Monticello said.
“Whatever means there is to lessen the problem with traffic has been identified and carried out,” he said. “(Hoffer Properties) have been a first-class operation to date, and we would expect nothing less.”
Hoffer purchased One Sterling Place for $15 million in 2004. The building cost the now-bankrupt PHICO $40 million to develop in 1985, Posavec said.
After Hoffer bought the building, it had to be renovated to accommodate multiple tenants. Hoffer gutted it, replaced the heating and ventilation systems and reconfigured parking on the property. Hoffer installed 100 heating units in the building, Posavec said. He also added an access road to the site from the Carlisle Pike. But by the time the company finished studying how to use it and upgrading the facility, the economy started to fizzle, and Posavec had trouble finding tenants who wanted to spend money to move.
Posavec steadily leased 100,000 square feet of the building, but leasing activity suddenly fell off as 2007 approached. There were customers who wanted to move and continued talking about it, but they didn’t go through with it because of the economy, he said.
“We were getting looks. Lease prices were competitive and we were the best-looking building for the money. People had money for rent, but they didn’t have money for moving costs,” Posavec said. “We couldn’t get over the hump of those moving costs.”
By mid-2009 the economy stopped its free fall, and new tenants started looking at the remaining 100,000 square feet in the building. Larger users, businesses that needed 20,000 and 30,000 square feet, leased spaces, and Hoffer landed even more leases by the end of 2009, Posavec said. Carlisle-based Giant Foods Stores moved 200 office employees to Carlisle last year, and the building gained two tenants because they wanted to be near the new employment base, he said. The location is only 15 minutes from Harrisburg and is close to Carlisle and Mechanicsburg, he said.
“We were off to the races from late 2009 to now,” he said.
The location is a great site for a business park because it offers convenient access to Route 114, Interstate 81 and other major arteries on the West Shore, said Anthony Amadure, business development specialist with Cumberland County Economic Development.
Amadure has shown various companies space in the building after they contacted the economic development office There isn’t a whole lot of large office space in the immediate area or along the Carlisle Pike, Amadure said. There are smaller individual office spaces of 3,000 to 7,000 square feet, but nothing as large as One Sterling Place or the other planned buildings for the site, he said.
There are a lot of retail businesses and restaurants in the immediate area, but companies that contacted Amadure wanted to know if there was anything closer for employees in a business park setting so they wouldn’t have to cross the busy Carlisle Pike.
“I definitely think it is a prime spot for development. Even though there (is retail) across the street, (potential clients) asked if there were things within. There definitely has been interest. I think that will be an even bigger draw there.”