Mellon Bank Center to take hit in FMC move

In its search for a new headquarters, FMC Corp. looked in its back yard, across the river in New Jersey and down I-95 in Delaware.

It decided to stay in Philadelphia — crossing the Schuylkill River — and signed a 16-year, 253,000-square-foot lease to move into a building to be called FMC Tower at Cira Centre South. The company will occupy 10 floors at the new building and has an option to take another three floors.

Though the property sits in a Keystone Opportunity Zone, which gives FMC certain tax breaks on state and local taxes, the chemical company decided it will not take advantage of those benefits. Instead, it will take a $10 million incentive package from Pennsylvania after having reviewed similar offers from Delaware and New Jersey. The offer from the Garden State was “extremely competitive.”

Incentives typically compensate for high taxes and offset some costs of doing business.

In 2004 when FMC went looking for a new lease deal, it decided to remain at the Mellon Bank Center and took $1 million in state incentives. The company decided then not threaten to leave the city or try to hammer out a large incentive package, figuring then that Center City real estate market conditions were weak enough to hash out a sweet deal with its landlord.

This time it took a different tack.

The company started the search process about a year ago, knowing its lease at Mellon Bank Center was scheduled to expire in 2016, said Pierre R. Brondeau, president and chief executive of FMC.

While it considered other nearby states, “my heart has always been with Philadelphia and that is where I always wanted to be but we have shareholders to consider and we have to be fiscally responsible,” Brondeau said. “It was very important for us that a building is not only where you put people but also a way to shape who you want to be as a company, shape your culture and image.”

A new, modern building was what worked best for that goal, he said. The company also saw advantages to being closer to University City, where it plans to seek out opportunities to collaborate with Drexel University and the University of Pennsylvania as well as draw recruits from the schools.

The company did consider staying put in Mellon Bank Center, where it occupies 250,000 square feet and employs 546 people. The move to Cira South will mean that Mellon Bank Center and the Central Business District take a hit. Mellon Bank totals 54 stories and 1.3 million square feet and is owned by CommonWealth REIT.

“It’s a great building and it served a great purpose for us,” Brondeau said. “It’s an older type of building and it would have been extremely expensive for us to retrofit it to the type of space we wanted.”

Source: Philadelphia Business Journal