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Bethlehem's Martin Tower might soon have new owner
The landmark headquarters of the former Bethlehem Steel Corp., the 21-story Martin Tower in west Bethlehem, soon might be sold to a New Jersey development group that includes Bethlehem developer Joseph Posh Sr.
Posh, who owns Posh Construction Inc., said the developers have an ''agreement in principle'' with International Steel Group, the Cleveland steelmaker that bought the assets of bankrupt Bethlehem Steel in May.
A formal agreement to purchase the building and lease the office space could be days away.
''We'll find out by the end of the week,'' he said.
Posh, who emphasized he has a minor role in the development group, declined to name his partners until the property is under an agreement of sale.
Rodney Mott, president and chief executive officer of ISG, was optimistic about the sale.
''We are working through the final steps of an agreement,'' Mott said. ''We're within days of this.'' He declined to give details.
Posh confirmed a sale price of between $14 million and $16 million, adding that up to $25 million would be needed to improve the building's physical plant, remove asbestos and add parking to the 55-acre campus at Eighth Avenue and Route 378.
Though a minor partner in the proposed deal, Posh said he wanted to be part of restoring the landmark.
''I was born and raised in Bethlehem, and I hated to see the biggest real estate deal go down without being part of it,'' Posh said.
But he added, ''It was too big for me to handle myself.''
Posh said his group plans to lease the vacant space exclusively as offices, unlike some developers' proposals submitted in April by sealed bid.
A failed $11 million bid put in by a group of investors led by Bruce Loch, a certified public accountant in Allentown, proposed a much wider use for the property. Loch's group wanted to convert the upper floors into $300,000 to $500,000 condominiums, use the middle floors for a hotel and restaurant and lease office space on the lower floors.
The large condominiums, limited to four or five on each spacious floor, would be compelling because of the cross-shaped design of the building, Loch said.
''Every room would have a 180-degree view. It would've been really cool,'' he said.
Martin Tower, named for former Bethlehem Steel Chairman Edmund F. Martin, opened in 1972 and was appraised in 2002 at $31.6 million. At 332 feet, it is the Lehigh Valley's tallest building, outreaching PPL's in Allentown by 8 feet.
Those familiar with the property agree any new owner must keep Dun & Bradstreet Information Services and Receivable Management Services as a major tenant in the complex, which includes the tower, an annex and a print shop.
Dun & Bradstreet leases about half of the 650,000 square feet of space available in the tower and adjoining annex.
Other tenants include a skeleton staff that once worked for Bethlehem Steel and a law firm that has leased most of the 12th floor. But about 35 percent to 40 percent of the tower is unoccupied, according to Roger Osche, a consultant to ISG who oversees some of its properties in Bethlehem. That translates to the equivalent of seven to eight vacant floors.
''If Dun & Bradstreet doesn't renew you can just get the dynamite out, that building is coming down,'' said Loch.
Officials at Dun & Bradstreet did not return calls Tuesday.
Bill Wolf, first vice president of CB Richard Ellis, a commercial real estate broker who served as the leasing agent when Martin Tower was owned by Bethlehem Steel, said filling the building even with Dun & Bradstreet would be difficult.
He said commercial office leases in the Lehigh Valley have been running at about 350,000 square feet annually. If Martin Tower captured even 20 percent of that figure, it would take three to five years to fill the cavernous building, Wolf said.
''They need to land some pretty sizable deals, and there's not a lot of office deals that are done in the Lehigh Valley,'' Wolf said.
Posh said the development group is negotiating with one business that might fill the entire building but declined to identify the prospective tenant.
About 3,500 people worked at Martin Tower a year ago nearly 3,000 for Dun & Bradstreet and Electronic Data Systems, an information technologies company, and the rest for Bethlehem Steel.
With the downsizing of EDS and extinction of Bethlehem Steel, only Dun & Bradstreet and the law firm of Marshall, Dennehey, Warner, Coleman & Goggin, P.C., which employs 30 people, remain at Martin Tower.
In addition to addressing a parking crunch at the site, the need for asbestos abatement and an overhaul of the heating, electrical ventilation and air conditioning, a new owner would have to complete installation of water sprinklers.
Bethlehem Steel put that project on hold after installing sprinklers on only two floors to meet city fire codes. The new owner would have to install a fire suppression system by 2006 in the entire building at a cost of about $1.5 million.