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Published: Sunday, 6/19/2005

Inside vertical city, uncertainty on future of businesses' homes

BY HOMER BRICKEY
BLADE SENIOR BUSINESS WRITER
One SeaGate has 45 tenants, with Owens-Illinois Inc. occupying eight of the 28 numbered floors. One SeaGate has 45 tenants, with Owens-Illinois Inc. occupying eight of the 28 numbered floors.
FRASER / BLADE Enlarge

You could call it a "city within a city." Or you could call it a "high-rise financial district."

One SeaGate has been a part of the Toledo skyline for a quarter of a century, and some say it defines the city's skyline. At 411 feet, it is Toledo's tallest building and is regarded as a premier office site.

But last month, the largest tenant - Owens-Illinois Inc., a Fortune 500 firm that also is Toledo's second-largest corporation - announced it will move its 340 headquarters employees to Levis Development Park in Perrysburg.

Although many of the building's 45 tenants say they would like to keep offices there, they are waiting for word from the landlord.

Some tenants have decided not to renew their leases. Some are worried that the landlord, Newkirk Master Limited Partnership, of Boston, may mothball the structure if it can't find enough new tenants to replace O-I.

"I'm planning to stay as long as I can," said Joseph Pilkington, who has a law office on the seventh floor. "It's the best office building between New York and Chicago."

But Mr. Pilkington and a number of other tenants are concerned that Newkirk may not attract enough occupants. Still, he is somewhat optimistic. "It seems to me that it's feasible to bring in enough new tenants to make it viable," he said.

Peter Braverman, executive vice president of Newkirk, said last week that tenant negotiations are going "fairly well," and his firm is close to making a long-range deal with at least one major tenant. "I'd like to see us sign up a good percentage," he added.

Another seventh-floor tenant, R. Bruce Foster, who owns a financial-planning firm, is less optimistic. "We are waiting for the owners to state definitely they are going to keep it open," he said. "At this point, we don't know."

He is among many tenants who have been at One SeaGate since it opened, in late 1981.

He was then assistant treasurer for O-I but left to work for a financial firm in the building in 1987 and started his own company in 1995. "I like the building," he said. "It's always been an attractive place to work." We would certainly consider staying."

Many other tenants hold similar views. "I like the building, the location, the meeting rooms," said Laurie Clark, account supervisor for Fahlgren Advertising & Communications. "I'm hoping to stay."

Fahlgren, a tenant for more than 20 years, now occupies a fraction of the ninth floor, but it filled an entire floor when it had the Owens Corning account. Fahlgren is now a satellite for a larger office in Columbus.

One SeaGate offers nearly every financial service a person would need - investing, banking, insurance, accounting, legal - and it offers such amenities as dry cleaning, postal services, restaurants, a barber shop, a sundries store, and a health club.

The building still has a working population estimated at about 1,100. But when it opened, O-I alone had more than 2,200 of its 5,300 Toledo-area employees in its world headquarters office.

O-I, which has owned the Levis park since 1966, plans to build another structure there - 75,000 to 100,000 square feet - before its lease at One SeaGate expires Sept. 30, 2006.

The downtown building was constructed to house O-I's headquarters at a time when there was no thought of the downsizings of the 1980s or that spinoffs and divestitures would occur.

The architect, Abramovitz-Harris-Kingsland, of New York, designed the building as a showcase for O-I and for the Toledo riverfront.

Its 32 stories contain 874,000 square feet of space, of which 707,000 is rentable and the rest is public areas, elevators, and space for air-conditioning and heating equipment.

Each of the 26 floors for offices has 26,000 square feet of space, of which about 21,500 is usable. That amounts to half an acre per floor.

The vast majority of the building's current occupants are the 340 O-I employees and workers in three professional fields: 280 at seven law firms, 155 at three accounting firms, and 135 at half a dozen brokerages and investment firms.

Last month, Newkirk's Mr. Braverman warned that "in the absence of O-I, there will be a struggle to make the building profitable." Another official of Newkirk indicated this year that the building could be mothballed if the vacancy rate exceeded 50 percent.

It's estimated that One SeaGate is now about 25 percent empty.

Mr. Braverman said last week that he hopes the landlord can avoid shuttering the structure. "That would be a real shame," he said, adding, "I don't make any money doing that."

A number of the tenants said last week they are hopeful that much of the empty space will be filled by existing tenants grabbing more and other Toledo firms looking to add quarters.

One prospect is Manor Care Inc., which spun off from O-I in 1991 and is headquartered nearby on Summit Street.

Manor Care spokesman Rick Rump said the firm is growing inside its main office, which has 750 workers.

"We do have a lot of people in this building, and we're looking at a lot of alternatives," he said.

He said he is not aware of any talks with the One SeaGate landlord. "There are a lot of different alternatives," he said. "We not focusing on just one. We're OK now. It's not like we have people sitting in the hallways."

At least two tenants of One SeaGate have decided in recent weeks to not renew their leases.

Great Lakes Credit Union Inc. will relocate to its branches in talks with the One SeaGate landlord. "There are a lot of different alternatives," he said. "We not focusing on just one. We're OK now. It's not like we have people sitting in the hallways."

At least two tenants of One SeaGate have decided in recent weeks to not renew their leases.

Great Lakes Credit Union Inc. will relocate to its branches in

Sylvania and Perrysburg by next summer. David Seeger, president and chief executive, said last week that about half of its 6,000 customers are O-I workers, retirees, and their families.

McDonald Financial Group will vacate its 15th-floor offices at the end of this week and move its 18 brokerage employees to KeyBank's local headquarters at Three SeaGate.

McDonald, a KeyCorp unit, said the move had been planned for months and is not related to O-I's departure.

Many One SeaGate tenants share the sentiment of Debbie Speer, benefits administrator for Kingston HealthCare, which occupies half of the 19th floor.

"We like this building," she said. "We have lovely offices. What would please us the most is if [the landlord] can maintain the building at its current level. . I don't want to work alone in an empty building."

Contact Homer Brickey at: homerbrickey@theblade.com or 419-724-6129.



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