Governor Rendell announces sale of Philadelphia State Office Building taxpayers will save more than $30 million over 20 years


HARRISBURG – Jan. 16, 2008 – Governor Edward G. Rendell today announced that, after a competitive bidding process, the Philadelphia State Office Building at Broad and Spring Garden streets will be sold to Tower Investments for $25.2 million.

“The sale of the Philadelphia State Office building not only will save taxpayers a substantial amount of money over the next 20 years, it will also put the property back on the tax rolls for the City of Philadelphia and it will serve as a catalyst for continued economic development for the region,” Governor Rendell said. “This is an example where we have made a smart economic decision in the best interest of taxpayers.”

The 19-story Philadelphia State Office Building houses approximately 900 state workers from various agencies, including the departments of Conservation and Natural Resources, Education, Insurance, Labor & Industry and Public Welfare.

State employees will relocate into two downtown locations so that disruption to state-offered public services will be minimal.

The Philadelphia State Office Building was occupied by the state in 1960 after the land for the building was acquired in 1958. It holds approximately 250,000 square feet of usable space, plus surface and underground parking. It is situated on approximately 1.9 acres of land.

“The building is beginning to show its age, and we are at a point where it would require the commonwealth to make a substantial capital investment to keep it running efficiently,” Governor Rendell said. “Our limited capital dollars could be better invested in key public services.”

The Department of General Services administered the public solicitation efforts for the sale of the building. The agency estimates the savings to taxpayers at approximately $30 million over 20 years, based on the costs to maintain the building, make necessary repairs and lease replacement space. C.B. Richard Ellis, Philadelphia, assisted in the negotiations.

The state will lease approximately 212,000 square feet at 801 Market St. for a minimum of 20 years. Final lease negotiations are currently underway for the space. Three agencies will move into offices at 801 Arch St.

Agencies planning to move to 801 Market include the Auditor General, Human Relations Commission, Inspector General, Public Utility Commission, Securities Commission, State Police, and the departments of Community and Economic Development, Education, General Services, Public Welfare, State, and Treasury.

At 801 Arch, the departments of Labor & Industry, Revenue, and Health will take up residence there. The commonwealth will lease more than 49,000 square feet under the terms of a 10-year contract that will have two, five-year renewal options. The rental rate is $19.73 per square foot.

Tower Investments, Philadelphia, has indicated it plans to convert the office into a mixed retail and residential use property.

The state plans to close on the sale of the property in late 2008 or early 2009.

The General Assembly granted approval to sell the property in Act 54 of 2007.


The Rendell administration is committed to creating a first-rate public education system, protecting our most vulnerable citizens and continuing economic investment to support our communities and businesses.  To find out more about Governor Rendell’s initiatives and to sign up for his weekly newsletter, visit


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