Shuman: Let me redevelop five downtown buildings

According to developer Alan Shuman, the Reading-owned, 68,000-square-foot brick office tower at Fifth and Penn streets on prime downtown Penn Square property has been sitting vacant for far too long.

So Monday night, Nov. 23, at a City Council meeting – Shuman wants to “stir things up.”

For the second time, the owner and broker of record for Shuman Development Group in Reading will propose the redevelopment of the nine-story Callowhill Building and four adjacent vacant buildings.

After Shuman submitted his original proposal in April 2014, Reading City Council last November instead voted 5-2 to allow Reading retail giant Al Boscov and his nonprofit Our City Reading to redevelop the site. Work was supposed to begin by the end of 2014.

According to Shuman, nothing has yet to be done to the property, except to be used as office space for staff of the soon-to-open DoubleTree by Hilton Hotel Reading, of which Boscov is the prime investor.

An official in the mayor’s office said that work is being done on the properties, on the physical infrastructure inside the building, making it not visible from the outside. Shuman’s plans include transforming a two-story 24,000-square-foot historic bank building into a restaurant and making the Callowhill building into an office tower. He also wants to raze the three remaining condemned buildings to make way for a 25,000-square-foot retail center that includes a rooftop restaurant.

As much of the architecture will be saved from the condemned buildings and will be used in the new construction, Shuman said.

“My hope is to get this project back on track and moving forward,” Shuman said. “I feel it’s important for any big building in the downtown [to] be developed.”

Shuman is projecting that the office tower and bank building will be a combined $8 million project. The retail center will cost $5.5 million, but will be proposed as a City Revitalization and Improvement Zone project, if the city’s reapplication for the CRIZ designation is approved.

The office tower and bank are not considered for CRIZ, Shuman said.

With the CRIZ, qualified state and local tax revenues can be used for payment of debt service on bonds or loans issued for the acquisition, improvement and development of capital improvements in the zone. The CRIZ is available in only two cities in the state, Bethlehem and Lancaster, with a pilot program in one borough, Tamaqua.

Shuman has been a key participant in the city’s efforts to obtain the CRIZ, as he has been giving presentations to the CRIZ board on the projects that he has in the works. Reading lost out on the 2014 CRIZ designation, as it did not have enough shovel-ready projects to submit.

According to Chuck Broad, executive director of the Reading Downtown Improvement District, he is hopeful that the Penn Square property will get moving.

“The Downtown Improvement District looks forward to the development of the properties for the economic vitality of downtown Reading,” said Broad when told about Shuman’s plans.

Shuman said there is a huge demand for retail in Reading, which is what he told an audience of about 160 people last week at Lehigh Valley Business’ first Berks Real Estate & Development Symposium at Stokesay Castle.

Shuman was a speaker for the event’s first panel discussion, which focused on major projects in Berks County. His company has redeveloped, sold and leased more than two million square feet of commercial property in downtown Reading in the last decade.

“If you don’t get a tenant when they’re ready to move in, you can lose them,” he said. “All I’m going to do [at the city council meeting] is stir things up.”

According to city officials, Boscov has been a huge contributor to the city and is the right person to rebuild the site.

“He [Boscov] is the most competent and most deserving of the contract,” Adam Mukerji, executive director of Reading’s Redevelopment Authority, said in a previous interview with Lehigh Valley Business. “He has been the biggest benefactor for the city of Reading.”

Boscov was unavailable for comment.

According to Shuman, Boscov had $4.8 million of tax money to spend by the end of 2014 and vowed to start the project by then. Boscov was not going to take possession of the building but take up partnership with the city.

According to Shuman, the deed to the property has not been transferred to reflect Boscov’s partnership.

“What I hear from city council is that the mayor [Vaughn Spencer] negotiated a contract, and city council hasn’t seen it,” Shuman said. “I am merely going there to make the proposal, to see if I can put pressure on the administration to release the agreement.”

The city sunk $3 million into the property since buying it in 2013, Shuman said. It spent $2.5 million to buy it and another half-million for emergency repairs and carrying costs.

“Now you have a building off of tax rolls for two years and there is no accountability for it,” Shuman said.

Shuman said he would buy the building from the city for what it is really worth and redevelop it to bring in double the taxes.

“It’s a whole lot better of a return for the city,” he said.

According to Shuman, he is hopeful that Wally Scott, the mayor elect, will be helpful for his project.

“He [Scott] is definitely not fond of properties that do not pay taxes,” Shuman said.

Source: LVB