Little is getting done these days in the cash-strapped world of commercial development. And that has proved a deal-breaker for developer Brian O'Neill.
Failure to be further along with construction on his much-ballyhooed $440 million residential/office/retail/entertainment complex on the former Worthington Steel Plant site in East Whiteland Township has lost O'Neill a corporate tenant.
Yesterday, VWR International L.L.C., a global laboratory-supply and distribution company based in Chester County, terminated an agreement it reached with O'Neill Properties Group L.P. in December to move its headquarters and about 375 employees to a yet-to-be-built office building at the 100-acre Uptown Worthington complex.
Completion of the ambitious project in these harsh economic times has been the subject of a great deal of speculation in the development community.
Though "very disappointed" by VWR's decision, the perpetually high-spirited O'Neill was adamant that he would secure the rest of the financing he needs to start delivering completed properties at Uptown Worthington "in the next 12 months, and will finish up in the next 24 months."
O'Neill said yesterday that he and others working on his behalf, including Chester County and state economic-development officials, in "one of the most cooperative financing efforts of all times" have "identified and are wrapping up about $390 million of the financing and negotiating the remaining $50 million."
About 15 percent of the funding is public, he said, including a variety of state grants and a federal infusion from the U.S. Department of Housing and Urban Development.
Of the 1.6 million square feet of built space planned for Worthington, "we have commitments for about 60 percent," O'Neill said.
That includes businesses such as Wegmans Food Markets Inc., Target Corp., L.L. Bean Inc., Turner Investment Partners Inc., and at least a dozen restaurants. O'Neill said he expected to finalize a lease today with L.A. Fitness.
VWR found the prospect of being in such a trendy, multifaceted complex an opportunity it could not pass up when it inked the deal with O'Neill on Christmas Eve. That is why VWR's chairman and chief executive officer, John Ballbach, called the decision to exercise the company's exit-clause rights with O'Neill "bittersweet."
"We thought Uptown is a great development, and I'm 100 percent sure it will be a great development at some point," Ballbach said yesterday. "Our issue was we have a finite time period. We were developing more angst over our ability to get the building built and [to] move in in the time frame we had to be out of our existing facility."
VWR faces an inflexible deadline of the end of 2010 to leave its two sites in East Goshen Township, he said.
Late yesterday, the company reached a long-term agreement to move into the recently renovated Radnor Corporate Center in Delaware County, owned by a subsidiary of Brandywine Realty Trust, said David Binswanger, VWR's location consultant.
That news did not make Tim Connor's day. He is a senior director at the Chester County Economic Development Council, which was integral last year in helping to arrange state financial incentives to keep VWR from moving to Delaware.
"We're used to having success in this organization," a dejected Connor said. "To lose them out of our county is a disappointment."
He and O'Neill were taking solace that VWR would not be leaving the state.
"Even though I did not get VWR, I can take great comfort in the fact that I helped to keep them in the state of Pennsylvania," O'Neill said.