A Penthouse View of Historic Market Street for Chester County Elected Officials . . . Rent $3.1Million per year
Based on Chester County’s recent lease negotiation with a private developer, no one would believe that we are facing the same economic challenges as the rest of the country.
The administrative offices of Chester County are moving from West Chester’s historic courthouse to a new privately owned 6-story office building on W. Market Street starting on March 18. Why the move . . . did they outgrow the courthouse office space . . . did they tire of their historic offices and long for the ‘new-car smell’ of new offices?
The county’s elected officials including commissioners, county controller, county treasurer, county solicitor, Recorder of Deeds will be leaving their courthouse offices behind for this new location. The lower 2 floors are parking for county employees and the upper four floors is office space in the new building. The Tax Assessment office will move to the third floor and the County commissioners and row officers will enjoy offices on the sixth floor, overlooking historic Market Street.
We do know the price tag for their new digs. The county is paying $3.1 million in rent for the first year; increasing by $31K each year for the length of the 20-year lease. The lease option is $37 million for the first 10 years. At that point, the county could purchase or extend the lease for the remaining 10 years. I am not sure how this lease agreement would work . . . the county will not own the building but will pay rent. I don’t see any economic or tax benefit to this arrangement. If the county needed more office space, why not either renovate existing county-owned space in the courthouse or use bond money to build an office building. At a minimum, the county would benefit from ‘owning’ rather than ‘renting’ their office space.
The county’s elected officials including commissioners, county controller, county treasurer, county solicitor, Recorder of Deeds will be leaving their courthouse offices behind for this new location. The lower 2 floors are parking for county employees and the upper four floors are offices in the new building. The Tax Assessment office will move to the third floor and the County commissioners will enjoy offices on the sixth floor, overlooking historic Market Street.
As an aside, I did some research on the property owner of the new office building . . . J. Loew & Associates, a commercial real estate developer from Downingtown. Based on the vast availability of office space listed on their website, J. Loew appears somewhat overextended with their available rental commercial real estate. In a quick analysis, I counted that the developer currently has over 30 office buildings, warehouse and retail complexes available for lease. In addition, some of the available office space is very large corporate office buildings in the Great Valley.
I guess a 20-year lease agreement with the county of $3.1+ million a year helped ease some of the pressure for J. Loew & Associates. Think about it, the company finances and builds the Market Street office building in West Chester, rents it to the county at a profit and [if the county decides at the end of 10 years] turns around and sells it to the county for a profit. Savvy business negotiating. Also when researching J. Loew & Associates, I discovered another interesting fact. The business partner of J. Loew & Associates, Eli Kahn, donated $25K to the Chester County Republican Committee over the last four years. All so very interesting.
Many of our Chester County officials were elected on campaign pledges of no tax increases and many of those individuals seeking election or re-election continue similar austerity promises. How will these same individuals now rationalize this lease agreement? Are taxpayers going to pay for our elected official’s penthouse view of historic Market Street?
Filed under: Chester County, Chester County Republican Committee
Tags: Chester County, Chester County Courthouse, Chester County Republican Committee, Community Matters, Eli Kahn, J. Loew & Associates, Jack Loew, Pattye Benson