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Manhattan Printers Waiting for Good News

October 1998

"For them not to be looking for space is going to put them in a bad position," Geoghegan says. "We find that tenants who have very little time left on their leases are at a very disadvantaged position with the landlord because they have so few options and they can't develop options."

He says those who can stay aboard with Insignia/ESG are going to get "the best economic deal in Manhattan. And if that's not low enough, then we'll develop opportunities outside of Manhattan.

"But I believe if we work in unison, and work with the city, the state and with the landlords, then we'll be able to put together something that makes sense."

How much space will cost remains to be seen. Bill Dirzulaitis, president of the AGC, doesn't believe it will be secured for less than $15 per square foot per year.

Several factors will be taken into account, he says. The incentive package, along with city and state aid, as well as other types of financial support, figure prominently in any deal.

Dirzulaitis feels it is important for the companies to have a deal finalized within a six-month period—by the end of the first quarter in 1999.

"If companies go out of business, you'll have an awful lot of unemployed skilled workers. Where's a bindery worker going to go, McDonald's? The jobs are not transferable to other industries, in most cases."

Frank Figliola, president of Sterling Mounting & Finishing Co., understands the severity of this issue. His lease expires Jan. 31, 1999.

Even if Insignia/ESG is able to come to terms with a landlord by the end of the year, it may not be in time to aid Sterling Mounting & Finishing.

"A lot of people besides myself have come across the same problem," Figliola says. "They either stay and pay 50 percent more and above or they have to move. And if you move, where do you go? If you're a large corporation, there is no place to go. I require 20,000 square feet—where do I go?"

Figliola is in the fold with Insignia/ESG. If the broker can't help him, Brooklyn is an option. Crossing the Brooklyn Bridge might be too risky a step, however, as could a move to New Jersey or anywhere outside the borough. Customers are finicky.

"I can move to Brooklyn tomorrow, get $6 per square foot, a grant from the city development corporation and I can get some tax credits," Figliola says. "But would my customers follow me?"

Herb Blum, vice president of Blum Printing, is on AGC's board of directors and co-chairs the committee that aided in selecting Insignia/ESG. He has fewer than four years remaining on his company's lease and is not optimistic that Insignia/ESG can close a deal in the near future. He doesn't expect any action before the first of the year.

Still, Blum predicts Insignia/ ESG will land the printers an attractive package.

"I believe what we'll see happen is some companies moving out of Manhattan and some merger and acquisition activity," he says.

"Some will wind up shutting down. There's a lot of people, including us, running old equipment. To move this stuff doesn't make sense and to buy new equipment may not make sense, either, because the capital investment is so huge."

By Erik Cagle
 

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