First Niagara, the Buffalo, N.Y.based banking company that bought troubled Harleysville National Bank, formerly the biggest bank based in suburban Philadelphia, three years ago, has raised millions for a series of high-profile development projects around the Philadelphia area that Harleysville alone would have had a tough time funding.
First Niagara is lead lender for Carl Dranoff's next South Broad Street apartment project, 85-unit Southstar Lofts; for Ron Caplan's project to convert the long-vacant AAA building on Market Street West into apartments; and for Victory Brewing Co.'s new $33 million brewery and restaurant complex in Parkesburg, Pa., on the western edge of the Philadelphia area in Chester County.
The bank is also finishing work on a multi-million-dollar project to expand a Philadelphia-area nonprofit's New Jersey facilities.
"Harleysville was a great community bank. But it couldn't have done the AAA transaction," Robert Kane, the ex-PNC Bank officer who heads First Niagara's Philadelphia region, told me. "That property had sat there. There had been plans to make it a hotel, to make it condos," back in the mid-2000s real estate bubble. More recently, "Philadelphia's apartment business has expanded, it's a great location." So Kane's team took the proposal by Caplan's Philadelphia Management Corp. to his company's real estate syndication group, which brought in TD Bank as a supporting lender and financed the deal.
Victory, by contrast, was a past Harleysville customer; the two companies "have grown proportionately," and First Niagara's Capital Markets group syndicated the $33 million credit.
Sometimes the loss of a local company turns out to be net gain, for the region if not its immediate headquarters town.