State to lease two sites for Philadelphia offices

State officials were in Philadelphia this morning negotiating final details of the move of 1,000 state employees to the former Strawbridge & Clothier on Market Street and a second building a block away on Arch.

The Inquirer reported yesterday that the state office building at Broad and Spring Garden Streets would be sold to developer Bart Blatstein's Tower Investments Inc. for $25.2 million. Blatstein plans residential units and new stores.

State Department of General Services Secretary James P. Creedon said the sale and move would save taxpayers more than $30 million over the next 20 years, compared with the cost of improving the heating, air-conditioning, windows, electrical and other systems at the state building, which dates to 1959. "It's a very inefficient office building," Creedon said.

In a statement, Gov. Rendell's office said the state would take 212,000 square feet of office space at the old Strawbridge's for the state Department of Public Welfare and 11 other state agencies. The Labor Department and two other agencies will move into 49,000 square feet at 801 Arch.

The 801 Arch St. property, owned by Morris, Michael, Benjamin and Bruce Willner, will rent for $19.73 a square foot. The 801 Market St. rent is still being negotiated with Pennsylvania Real Estate Investment Trust, according to Rendell and Creedon.

At the Strawbridge's building, PREIT controls the second through sixth floors, which are vacant office space, along with the ground floor, where PREIT hopes to land a major retail store, PREIT spokesman Shawn Southard said.

PREIT executives, led by chairman Ronald Rubin, gave Rendell $50,000 in campaign contributions from 2001 through 2005, according to state records.

C.B. Richard Ellis marketed the building for the state and arranged the new leases, according to Rendell.