Northeast Times

Pharmaceutical manufacturer buys former IRS property

It was a big Decem­ber for the Lan­nett Com­pany.

With­in a week, the North­east-based cor­por­a­tion began trad­ing on the New York Stock Ex­change, se­cured a $50 mil­lion bank loan and pur­chased a large por­tion of the former In­tern­al Rev­en­ue Ser­vice pro­cessing cen­ter on Roosevelt Boulevard.

Ex­actly which por­tion re­mains to be seen, as do the com­pany’s spe­cif­ic plans for the site.

In a no­tice to the U.S. Se­cur­it­ies and Ex­change Com­mis­sion dated Dec. 20, Lan­nett re­por­ted the pur­chase of two sep­ar­ate par­cels for $4 mil­lion and $5 mil­lion, re­spect­ively. Both trans­ac­tions in­volved prop­er­ties in Phil­adelphia. The no­tice did not provide ad­dresses.

Since then, a “sold” plac­ard has been pos­ted on a “for sale” sign at the en­trance to the former IRS com­plex at 11601 and 11501 Roosevelt Blvd. The IRS fa­cil­ity pre­vi­ously en­com­passed more than 52 acres on four ad­ja­cent par­cels along the Boulevard, along with a fifth par­cel about one mile south at the in­ter­sec­tion of Blue Grass Road.

A spokes­man for Lan­nett, Robert Jaffe, con­firmed last week that the com­pany had bought two of the former IRS par­cels, but did not spe­cify which ones. Lan­nett in­tends to re­devel­op the prop­er­ties for man­u­fac­tur­ing, product de­vel­op­ment and ware­hous­ing, Jaffe said. The com­pany has not de­clared a timetable.

Lan­nett man­u­fac­tures and dis­trib­utes gen­er­ic med­ic­a­tions. Foun­ded in 1942, the com­pany is based at 13200 Town­send Road and owns oth­er fa­cil­it­ies at 9000 State Road and 9001 Tor­res­dale Ave. To­geth­er, those prop­er­ties cov­er al­most 14 acres and fea­ture 160,000 square feet of op­er­at­ing space.

Most of the former IRS pro­cessing cen­ter has re­mained idle, with its fu­ture use un­cer­tain, since the gov­ern­ment agency va­cated the site in March 2011. The IRS had leased the prop­er­ties from private own­ers for dec­ades, but began mov­ing its op­er­a­tions, in­clud­ing some 5,000 em­ploy­ees, to the former 30th Street Post Of­fice in late 2010.

City prop­erty re­cords at the time showed vari­ous own­ers for the five va­cated par­cels, not­ably an in­vest­ment part­ner­ship con­trolled by a pub­licly traded cor­por­a­tion known prin­cip­ally for de­vel­op­ing and op­er­at­ing shop­ping cen­ters.

The Phil­adelphia In­dus­tri­al De­vel­op­ment Cor­por­a­tion and City Coun­cil­man Bri­an O’Neill strongly op­posed any re­tail con­ver­sions for the in­dus­tri­ally zoned IRS site. PIDC was the ori­gin­al de­veloper of the site and ini­ti­ated a deed re­stric­tion reg­u­lat­ing zon­ing changes. O’Neill’s 10th Coun­cil­man­ic Dis­trict in­cludes the prop­er­ties.

PIDC and O’Neill have cited stud­ies in­dic­at­ing that in­dus­tri­al uses gen­er­ally cre­ate more jobs that pay bet­ter and of­fer bet­ter be­ne­fits pack­ages than re­tail uses do.

In April 2012, Fraternal Or­der of Po­lice Lodge 5 pur­chased one of the five par­cels, a 3.5-acre prop­erty at the rear of the site, for about $2 mil­lion. The FOP spent ad­di­tion­al mil­lions to re­devel­op an ex­ist­ing build­ing on the prop­erty, which has ac­cess via Car­oline Road. Last Feb­ru­ary, the city’s po­lice uni­on opened its headquar­ters there with of­fices, a lounge/nightclub and a ca­ter­ing hall, among oth­er uses.

Lan­nett’s latest ac­quis­i­tions ap­pear to in­dic­ate the com­pany’s in­ten­tion to re­main in North­east Phil­adelphia and ex­pand here. The com­pany’s web­site de­scribes its 66,000-square-foot Town­send Road headquar­ters as a “re­cent pur­chase.”

On Dec. 13, Lan­nett began trad­ing on the New York Stock Ex­change after trans­ition­ing from the NYSE MKT ex­change (the former Amer­ic­an Stock Ex­change). Com­pany pres­id­ent and CEO Ar­thur Bed­ro­sian rang the open­ing bell. Lan­nett now trades un­der the tick­er sym­bol LCI.

On Dec. 19, Lan­nett an­nounced that it had es­tab­lished a five-year, $50 mil­lion re­volving cred­it line with a syn­dic­ate of two lenders, Cit­ibank, N.A. and PNC Bank, Na­tion­al As­so­ci­ation.

“This cred­it fa­cil­ity sup­ports our plans for con­tin­ued growth and provides ad­di­tion­al cap­it­al for po­ten­tial ac­quis­i­tions,” Bed­ro­sian said.

In Novem­ber, Lan­nett re­por­ted re­cord net sales for the com­pany’s fisc­al 2014 first quarter. Sales rose 30 per­cent to $45.8 mil­lion for the peri­od con­clud­ing Sept. 30, ac­cord­ing to the Wall Street Journ­al. For the full year fisc­al 2013, Lan­nett re­por­ted net sales of $151.1 mil­lion com­pared to $123 mil­lion for fisc­al 2012, with gross profit in­creas­ing to $57.4 mil­lion from $38.9 mil­lion. ••

You can reach at wkenny@bsmphilly.com.

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