Wednesday, November 16, 2011

PhillyDeals: How Philadelphia attracted a new Teva

by Joseph N. DiStefano

"After losing business to its newer, lower-cost neighbors, job- and tax-hungry Philadelphia is finding ways to welcome business that surrounding counties can't or won't attract.

"In the suburbs, this would be impossible," says Jim Petrucci, speaking of Teva Pharmaceuticals' new Northeast Philadelphia trucking and warehouse site.

Petrucci, owner of broker J.G. Petrucci & Sons in Asbury, N.J., represented investor John Parsons and his partners in landing Teva for the site.

Israel-based Teva's plant will rise on Red Lion Road, on 136 acres at the site of the short-lived Island Green Country Club, part of the former World War II-era Budd Co. complex that made cargo planes and railcars.

"When they put in the golf course, they left the underlying [industrial] zoning in place. And that's what made the deal work," Petrucci told me after speaking at last week's Urban Land Institute forum at the Union League.

Besides land for a million-square-foot-plus warehouse, Teva wanted hangar-like 125-foot floor-to-ceiling clearance. In most suburban towns, Petrucci says, "The zoning would cap a building height at 60 feet. People don't want giant buildings in the suburbs."

Teva had been trying to pick from among three suburban sites, including a former quarry in Warrington. Neighbors there mobilized against what they expected to be 24-hour truck traffic.

"Then we went to Philly, and they had not only the zoning, [but also roads and utilities] that could handle the project. It would have taken 20 times the site prep in the suburbs," Petrucci said.

Gov. Corbett sweetened the package by promising Teva a $2.5 million Redevelopment Assistance Capital grant. Teva earned $1.3 billion in profits over the last 12 months.
City agencies - the Philadelphia Industrial Development Corp., the Water Department - sweated the details, Petrucci says. "I've been doing this a long time, and I don't think we've ever been received this well," he told me. "Our experience, on a scale of 1 to 10, was a 12. Mayor Nutter was proactive and understood very early what this represented in terms of tax rateables for the city."

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