Aramark zeroing in on 2400 Market as HQ option

As part of an ongoing search for a new headquarters, Aramark Corp. is said to be narrowing its choices and is focusing on 2400 Market St. in Center City.

While a final decision by the company has not been announced, Mayor Jim Kenney said during a live interview Tuesday night with the Philadelphia Business Journal that he has been in communication with Eric Foss, CEO of the global food services company, and it is zeroing in on a building at 24th and Market as one of its main options to pursue for a new headquarters.

“Mr. Foss has been extremely courteous and open in his conversations with me,” Kenney said. “I understand their issues and their considerations. I understand that they’re a publicly-traded company, but there’s a place out on 2400 Market which is one of the finalists in the selection process."

Kenney said development activity underway in that part of the city as well as across the river in University City have made it attractive to companies and others entities.

"What’s going to go on out there with Drexel… John Fry’s vision for his campus and the environment of his campus is visionary," Kenny said. "The Schuylkill Banks project is just awesome. All [Foss] is asking us to do is help him or get out of the way. Take the obstacles away and help when we can. I think Aramark — and I’m not speaking for them — but I’m hoping that they will see that future there.”

One of the issues Foss had raised to Kenney was having to deal with the Philadelphia Art Commission. Signs, such as putting a logo on top of a building, need to be approved by the art commission and also require a sign permit issued by the Department of Licenses and Inspections. It is often looked as yet another obstacle of doing business in Philadelphia.

And it's not always easy to get a sign on a building. In 2008, Unisys Corp. decided it wanted to move its headquarters to Philadelphia from Blue Bell, Pa., and signed a lease at Two Liberty Place. As part of a branding effort, the company wanted to put its logo on the upper floors of the skyscraper and not just street level. It caused such as controversy that it played a part in Unisys backing out of its decision to relocate to Center City even though it had signed a lease on the space. The company remains in Blue Bell.

“He was like, ‘If we stay here, we want our logo on our building and I don’t want to have to jump over nine hoops to get it,’" Kenney said. “He won’t.”

There are very few buildings in Philadelphia that have enough space to accommodate Aramark. The company occupies 350,000 square feet in Aramark Tower at 1101 Market St. It is a 32-story, 620,000-square-foot office building that has served as the company’s headquarters for the last three decades. Aramark has its recognizable logo on the top of the building and it has been a mainstay in the East Market area of Philadelphia.

Among the limited number of existing buildings that could have enough space for the company is 2400 Market.

St. Lubert-Adler and PMC Property Group bought 2400 Market, which now totals 370,000 square feet, for $42 million in 2014. Ever since it acquired the property, the partnership envisioned redeveloping the existing space and constructing a tower on top of the structure that would have residential and office space. Preliminary plans by the Lubert-Adler-PMC team have a 22-story addition totaling 450,000 square feet being built on top of the structure.

While 2400 Market is in the mix, Kenney later said Camden, N.J., was also on Aramark’s shortlist.

It's not uncommon for companies, big and small, to assess their space options. Sometimes it is done as a fiduciary duty to shareholders and even employees to find the best space to conduct business on a long-term basis. Other times, it's posturing to get financial and other incentives from state and local governments and even existing landlords.

Aramark (NYSE: ARMK) decided to launch an evaluation of its options when it comes to where it wants its headquarters. The company has said that its lease at 1100 Market St. expires in 2018 and that it is reviewing its options to keep its headquarters in Philadelphia or relocate it.

“As a public company, we have a responsibility to our shareholders to completely assess all available choices," a company spokesman previously said. "That includes remaining in Philadelphia or possibly relocating."

The company has said it is working with state and local officials on the matter and should have a decision soon.

Source: Philadelphia Business Journal