Progress

December 11, 2008

Curtain rises on new W-B act

2 firms will oversee theater project space

By Jerry Lynott jlynott@timesleader.com
Business Writer
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WILKES-BARRE – It took 18 months for Bill Geary to wrap up the deal for the downtown theater project, but much quicker for him to get to work.

The president and chief executive officer of Carlsberg Management Co. said he plans to announce soon a new retail tenant for Northampton and Main mixed-used complex.

“It’s going to be coffee, cookies and ice cream all in one. As soon as I get the lease signed I’ll make an announcement,” Geary said Wednesday after he was introduced during an afternoon event inside the lobby of the complex’s anchor tenant, Wilkes-Barre Movies 14.

Carlsberg, of Los Angeles, Calif., had been negotiating with the developer, the Greater Wilkes-Barre Chamber of Business and Industry, to take over the $31 million complex. The new deal calls for Carlsberg to take over the commercial space, including the theater, and for York-based Susquehanna Real Estate to build and sell 21 loft condominiums on 30,000 square feet of the upper floors.

Representatives of Susquehanna were not in attendance. In a prepared statement, company president Jack Kay said Susquehanna, which will do business as WB 14, is “confident that an untapped market for housing exists in the downtown.” The developer looks forward to making its part of the project as successful as the theater, he added.

The chamber will retain a 25-percent share “to ensure the public trust,” in the 150,000-square-foot complex built with chamber money and public funds, said chamber President and Chief Executive Officer Todd Vonderheid.

“We, the county, the city, the state, we’ve made this possible,” he said. “It’s time for the right management to take over.”

When no one else would risk undertaking such a project in the downtown, the chamber stepped forward as developer of last resort. It will not recoup its total investment. “We’ve made nearly a $10 million gift investment in the city,” Vonderheid said.

But the risk the chamber took is paying dividends, as the complex has delivered on its promise to revitalize the downtown. More than 500,000 people a year have been patronizing the theater. Twelve new bars, restaurants and nightclubs have opened since the theater began showing films in June 2006. Multitenant office occupancy rates have increased by 6 percent as a result, according to the chamber.

Wilkes-Barre Mayor Tom Leighton welcomed Geary with a handshake and said he is confident Carlsberg will increase the pedestrian traffic in the downtown, even more so than what he sees when he drives past the theater on a Friday or Saturday night. Thousands of people, from high school students to senior citizens to families, visit and bring the city alive at night, he said.

“We often talked that we want to make Wilkes-Barre an 18-hour downtown,” Leighton said. “I believe we’ve reached that goal.”

While the chamber selected Susquehanna Real Estate, which has done work in Harrisburg, York and State College, Geary contacted the chamber. His company has worked with theater owner R/C Theatres on a project in Daytona Beach, Fla.

Vonderheid described Carlsberg as the owner of more than 20 separate real estate properties across the country and as an “expert in taking problem properties … and making them positive.”

The complex does not fall under that category, he stressed, but has just two retail tenants, a Quiznos sub franchise and a Januzzi’s Pizza & Subs restaurant.

What are lacking in the complex and in the downtown are national names, Geary pointed out.

“Wilkes-Barre, we found out, is under-retailed,” Geary said.

He declined to identify the soon to be announced tenant, but said the approach is to attract restaurants first and retailers next.

“That’s the way it usually happens,” Geary said.

Carlsberg is not excluding local businesses, he added.

The company is working with a local group to bring an Irish bar and restaurant to the downtown.

Noting there are other sites for retailers to locate, such as the area on Montage Mountain around the Cinemark theaters, Geary said rent will be lower in the downtown space, and the two colleges will be used to market the space.

“This is a little pocket that will do well for retailers,” he said.

He also acknowledged the credit crunch gripping the financial markets prevented Carlsberg from getting new financing for the deal. “So we had to go back to the existing banks and ask them to stay with us,” he said.

Geary estimated Carlsberg will invest more than a million to fit out the vacant ground-floor space, on top of the $8.4 million note the company assumed from a 10-bank consortium that had worked with chamber on the complex.

Jerry Lynott, a Times Leader staff writer, can be contacted at 570 829-7237.

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