Representatives from LIFE/SLIBCO, The City of Scranton, Lackawanna County and Beacon Summit at Scranton, LLC gathered to break ground on the Mount Pleasant Medical & Professional Building. Beacon Summit at Scranton, LLC purchased the 3,26

acre lot from Scranton Lackawanna lndustrial Building Company (SLIBCO) in October with plans to build a professional office building.

Beacon is an elite real estate development partnership that has been established since 1990. The principals of Beacon have designed, developed and managed over 1.5 million square feet throughout New Jersey, New York and are now making their mark in Pennsylvania with the first purchase at Mount Pleasant Corporate Center was on Friday, October 9, 2009.

Mayor Christopher Doherty, Lackawanna County commissioners Corey D. O’Brien and Michael J. Washo, Austin J. Burke of The Greater Scranton Chamber of Commerce and Vincent Visceglia of Beacon Summit at Scranton, LLC all gave remarks celebrating the commencement of construction on the 30,000 square foot, two story medical/professional services building. Space in the building will be divisible from 1,200 square feet to 30,000 square feet; the project has an expected completion date of fall2010.

“We are extremely pleased with our local team, architect Michelle Dempsey, engineer Tom Skibinski and real estate broker Mike Detter,” Vincent Visceglia, partner, Beacon Summit at Scranton, LLC commented during the morning’s ceremony. “The approved 30,000 square foot building we break ground on today is one of many new developments

in this city and county and we appreciate the opportunity to contribute to such a meaningful revitalization.”

Beacon Summit at Scranton is the first development within the Mount Pleasant Corporate Center, a 23 acre tract of land that SLIBCO purchased in March 2008 from Keystone Concrete Block Supply. The Corporate Center is a $7 million dollar project that SLIBCO expects will result in the development of over 210,000 square feet of buildings and the creation of 1,000 jobs. The park will consist of five lots ranging from 1.7 to 9.5 acres available for commercial and office development.

“SLIBCO’s investment in the future of Scranton provides the quality office setting that leading firms demand for their clients and their employees. This gateway to our city is being transformed into a beautiful, productive setting of which we can all be proud” stated Austin Burke, executive vice president, SLIBCO.

J&J Snack Foods Corp./MIA Products bought the 42,000-square-foot structure at 625 Rocky Glen Road for warehousing, MIA vice president and general manager T.J. Couzens said. MIA employs about 200 people.

The company will relocate storage operations from a leased site in Scranton to the Moosic building by April 1, Mr. Couzens said.

John Cognetti, president of Hinerfeld Commercial Realty, which represented seller Carl Touhey, of Albany, N.Y., said the structure was built in the early ’80s for Federal Express.

Its most recent tenants were DHL Express and Jack Williams Tire & Auto Service Centers.

-Courtesy of The Times-Tribune

]]> http://blog.hinerfeldcommercial.com/2008/02/snack-food-firm-expands-holdings/feed/ 0 http://blog.hinerfeldcommercial.com/2007/08/hinerfeld-commercial-sells-downtown-scranton-landmark/ http://blog.hinerfeldcommercial.com/2007/08/hinerfeld-commercial-sells-downtown-scranton-landmark/#comments Fri, 03 Aug 2007 17:58:46 +0000 administrator http://blog.hinerfeldcommercial.com/?p=122 The 12-story SNB Plaza Building at the corner of Lackawanna Avenue and North Washington Avenue in downtown Scranton was sold to Scranton Tower Associates. They were represented in the transaction by John T. Cognetti, SIOR, CCIM of Hinerfeld Commercial Real Estate.

The historic building clad in white terra cotta tile and designed in the early “skyscraper style” popular in the early 1900s, is one of the tallest buildings in Scranton’s skyline. Formerly the home of Scranton National Bank, the ornate first floor and mezzanine is currently occupied by a financial institution with the upper floors of professional offices.

Cognetti noted that this sale marks the continuation of sales of Scranton’s landmark buildings to investors both local and out of state looking to take advantage of the resurgence in downtown property values in the last five years. This property is in the center of the revitalization of Lackawanna Avenue. Both new construction and history rehabilitation have occurred in this area recently. Cognetti said that with the $15 million Lackawanna Avenue Historic District and the Intermodal Transportation Center projects due to begin soon, the avenue will return to its prominence as Scranton’s center for retail, business and entertainment.

Security National Properties-Atlantic sold the property for $1.1 million. The new owners’ immediate plans are to increase occupancy above 85 percent with long-term plans tied into the growth of the avenue.

- Courtesy of Northeast Pennsylvania Business Journal

This appears to be the situation with the housing market in NEPA, particularly in regard to shelter for the poor.
Mike Hanley, executive director of the United Neighborhood Centers (UNC) of Lackawanna County, explains that Money magazine is predicting that Scranton will soon become one of the fastest growing metro areas in the United States. This growth is currently creating some side effects that Hanley’s organization must deal with.

“Yes, economic growth like this is good for the business community,” says Hanley. “But, what about the poor caught in the squeeze as prices for regional housing escalate? This growth has not been good for the poor and working poor.”

Hanley says this situation is not limited to the Lackawanna and Wyoming Valleys. In Monroe County, rising housing costs also have forced many lower-income residents out of their communities, and increasing numbers of people with lower-paying service-sector jobs can’t afford to live within the communities where they work.

“The challenge is how to develop programs to help these types of people in the future,” says Hanley.
Low-income renters are now finding themselves in a difficult situation, according to Hanley. Federal funding cutbacks for housing are now the norm, and he says the Scranton Housing Authority may have an eight to 12 month waiting list.

On an upbeat note, Hanley says that first-home buyers are still common throughout Scranton and Wilkes-Barre. However, the overall number of mortgage foreclosures is increasing in Lackawanna and Luzerne counties.
“Many of the lenders who have written these mortgages don’t have any local presence,” says Hanley.

John Cognetti, owner of Hinerfeld Commercial Real Estate Services, comments that key changes have occurred in the way the federal government approaches urban housing for the needy and working poor.

He says Washington has moved away from gigantic housing approaches like “cellblocks” to more humane neighborhood approaches

Other changes are still forthcoming.

“The move by the federal government now is to get out of housing entirely,” says Cognetti. “But, there is a push on for lenders such as Freddie Mac to provide low-cost loans, making housing purchases more affordable.”

Cognetti says the real issue regarding housing for low-income individuals is the need for family-sustaining employment. He says that when an individual or family overstresses their meager budget for housing, they may wind up destroying their credit rating, creating a vicious cycle of unfortunate economic developments.

“As a society, we haven’t yet figured out how to deal with this social issue of low-paying jobs,” says Cognetti. “The new minimum wage helps, but prices for fuel, taxes and utilities are also up. This really hurts the working poor, and a chasm has developed for them. The business community must recognize that many working poor are not freeloaders like the common stereotype.”

Cheryl Ann Houseman, government affairs director with the Pocono Mountains Association of Realtors (PMAR), also says that her region has experienced explosive economic growth that has been profitable for many businesses. The situation has also given rise to some peculiar market conditions.

According to Houseman, there are approximately 4,000 home listings for sale in her market area at any given time. Despite this surplus, sellers are unwilling to lower their prices.

“This would appear to be a buyer’s market, but the sellers will not negotiate,” says Houseman. “Opinions vary as to why.”

Houseman says that, during the last seven years, Pocono home prices have risen 42 percent. During 2000, the average home price was $114,000, while during 2007 the average price had risen to $195,000.

In the rental arena, it is common for a two-bedroom Pocono apartment to be priced at $850 to $900 a month. Because of these steep prices, Houseman says very few housing options now exist for the lower middle class and working poor.
“One option is for people to leave the region, and that is definitely occurring,” says Houseman. “They can go west or back to the urban area. Our school district has become one of many transients because of families leaving due to financial pressure.”

To try and help with these market-driven housing problems, the PMAR is offering an Employer Assisted Housing Program. The program, which functions in partnership with various state development agencies, is working to draw awareness by employers to the worsening housing situation, and to help people afford to work and live in the same locale.

“As an example of this problem with housing costs, in Stroudsburg, East Stroudsburg and Stroud Township only nine of the 60 total police officers reside there,” says Houseman. “We hope that we can develop a program of employer down-payment assistance and low-interest loans from agencies. However, as we work on all this, the situation overall is worsening.”

Steve Nocilla, executive director with Catholic Social Services (CSS) of Lackawanna County, also says that changing market conditions are hurting low-income families in need of affordable housing.

Nocilla reports that his agency is recording double the number of inquiries for financial housing assistance as compared to the previous year. The situation is evolving so fast that CSS has not been able to develop any permanent answers to the growing numbers of people who need help.

He says because of this growth in requests for housing assistance, his agency must become more selective in the client screening process.

“The working poor, those at the top end of the scales for assistance eligibility, have been exceptionally hurt by recent prices increases for housing,” says Nocilla. “There are a shrinking number of low and moderate priced rental units that are acceptable, and this supply versus demand favors the landlords of lower priced properties.”

Nocilla says that $500 per month rentals in Lackawanna County for one person are now common. For a family of three to four people prices of $575 to $1000 are the norm, with higher rates a distinct possibility.

A dropping number of smaller rental units on the market, plus that fact that fewer people desire to be landlords, is amplifying the urban NEPA housing market. Nocilla also says that there has been a rise in the number of properties being bought by out-of-town landlords who want to make quick profits, resulting in immediate price increases.

“It’s increasingly tougher to find lower cost housing here,” says Nocilla. “Lower priced homes are being bought as investment properties and flipped. Plus, many of these homes have big trouble structurally.”

Margaret Suarez, director of case work at the Salvation Army in Scranton, identifies several market-driven changes in the rental market that are hurting the poor in NEPA.

“These cost increases have been a killer, and rents of $600 plus utilities are now common,” says Suarez. “Many families are incapable of paying this, and must choose between rent, food, or utilities. The number of absentee landlords is also growing as properties are bought up by investors from outside the area, and a move is also gaining momentum to put utility costs into the hands of the renters.”

Gary Drapek, president of the United Way of Lackawanna County, adds that some regional assistance agencies are trying to provide transitional housing. This may be in the form of an apartment for six months to a year when an individual is trying to get their feet back on the ground financially.

“As a society we must provide not a hand out, but a hand-up,” says Drapek.

- Courtesy of the Northeastern Pennsylvania Business Journal

Popular opinion indicates that many of these businesses are preying on individuals who have placed themselves in unfortunate economic circumstances. Others proclaim that these merchants occupy a vital area of commerce, and are assuming substantial risk while doing so.

John Cognetti, owner of Hinerfeld Commercial Real Estate Services, says that the arguments with higher-priced lenders and rental centers are all part of a good two-sided issue.

“Some of these businesses are performing legitimate services for their customers. Others are not, and are charging too much,” says Cognetti. “There are both sellers and buyers who abuse the system, and it works both ways.”

Cognetti explains that the familiar credit scoring for a consumer is a total compilation of a person’s total credit score over the years, and that some people have no credit history and will be automatically charged a higher rate for a loan.

Receiving that first time credit score can be a difficult task
“Establishing credit history is vital, but for many people this has never been done,” explains Cognetti.

When examining several of the business categories that tailor their products to lower income consumers, Cognetti first zeroes in on the rent-to-own outlets. He says that these merchants can in effect offer people a “test drive” situation for goods which they would never be able to purchase outright.

The check cashing services, renowned for high service rates, are also important because many people maintain no bank accounts. These individuals simply don’t want a bank relationship with its assortment of ongoing fees, and will never take out a conventional loan.

“These check cashing businesses take a real risk every time they cash a check,” says Cognetti. “The same is true for high risk lenders, including those who offer mortgages.”

Mike Hanley, executive director of the United Neighborhood Centers of Lackawanna County (UNC), says that the use of rent-to-own businesses and high rate financial services is simply the high cost of being poor.

“A lot of the people who use these businesses can’t get a regular loan, and for them simply doing business is more expensive,” says Hanley. “It’s hard to estimate the number of predators from the number of legitimate businesses. The sub-prime lenders are certainly legitimate. People don’t have to patronize a predator. The UNC is working to deliver economic justice for everyone through education.”

Evan Lewis, finance manager with One Stop Auto Credit and Tom Hesser Chevrolet, explains that the higher interest rates the working poor often receive for a car loan are not a matter of preying upon them. Instead, the entire process has been developed to allow business to be performed while protecting the merchant and loan originator.

“All interest rates are automatically based on customer credit scores compiled by the credit bureaus,” says Lewis. “The score is calculated by repayment history and the amount of credit that is outstanding on the books and any delinquency numbers. The credit bureau has no knowledge of a customer’s income. People with high debt may get a rate of 13 to 14 percent. Sometimes even physicians and lawyers wind up with a high rate, if their credit history has problems”

According to Lewis, a credit score over 700 is regarded as excellent, with 650 to 700 the average score for a consumer in Northeastern Pennsylvania (NEPA). These top prime rate consumers may typically receive a car loan interest of 6.9 percent to 7.9 percent.

A score of 600 to 650 won’t receive the prime rate, but when a customer has a score of 599 or below they may have to contend with sub prime lending. With some banks, a deal is also based on the down payment and the equity of the vehicle.

“For a sub-prime customer, there’s no easy definition,” says Lewis. “It’s a broad term. They may have had a good credit history with recent difficulty caused by illness or bankruptcy, but definitely they have experienced some credit problems.”

Lewis explains that a higher risk exists for lenders serving the sub-prime market. Payment records show that sub-prime car repossessions may be as high as 10 percent, and for consumers with a 550 score a 15 to 20 percent delinquency rate is a real possibility.

“There definitely are higher losses for sub-prime lenders, rent-to-own businesses and finance companies,” says Lewis. “They must charge higher rates to compensate for losses. These companies as a whole are good service organizations, but, yes, there are some bad apples.”

Lewis also says that, before higher-rate lenders existed, many potential customers had no options. Today, these businesses open doors to people who would have to do without a wide variety of good and services.

“Some social workers will not see whole picture of this complex market, and can be very critical of the businesses and lenders,” says Lewis.

Sub-prime customers who better manage their credit may also qualify for better loan rates in the years ahead. Lewis says that he has personally seen this scenario develop many times.

As the higher rate lending market evolves, Lewis expects business casualties to remain a regular occurrence. The high risk of issuing loans, combined with the intense competitiveness of merchants and lenders in the overall marketplace, can easily add up to a business bankruptcy with huge losses.

Cheryl Davis with the Pennsylvania Department of Welfare identifies a situation she witnessed in the Philadelphia area where one family went to a rent-to-own dealer and actually paid 2.5 times the price of a conventional retailer for a television. “We’re trying to educate people on the real cost of doing business this way,” she says.

David Jobson, M.S., professor of economics, says that the high interest lenders and rent-to-owns function in a larger market area than many people realize.

“These businesses are not just for the poor,” says Jobson. “I personally know of a suburban area outside of Washington D.C. where some extremely upscale housing went up. Many of these residents underestimated their expenses and tax burdens, and now are using rentals to furnish their homes. These businesses also serve mobile people, such as renters who are temporary in a community. Unfortunately, some of these businesses, if the opportunity allows, will make a lot of money on those consumers who are not too astute.”

In addressing the issue of why so many people have developed poor credit scores, Jobson is critical of the amount of credit being offered.

Jobson says, “Many people are being issued credit cards that they have no business receiving. The credit companies are not selective in their approaches, and it results in people misusing credit.”

- Courtesy of the Northeastern Pennsylvania Business Journal