Unisys-sign battle could hurt City Hall Posted on August 26th
It sounds so simple.
Unisys Corp. wants to hang its corporate logo on its new Center City headquarters.
Mayor Nutter backs Unisys. He’s eager for his own way to advertise to the world that Philadelphia, long ridiculed as a city that kills free enterprise with bureaucracy and high taxes, is pro-business.
But with the last scheduled hearing on the issue before Philadelphia’s Zoning Board happening Tuesday and the matter already before a federal judge, the costs to the city’s image could be high in a battle that may be difficult to win legally, lawyers and other experts said.
The spotlight so far has focused on Unisys and the 225 jobs - and the tax dollars - it will bring when it moves its headquarters from Blue Bell to Two Liberty Place next year.
But Cigna Corp. already has its headquarters in the building and opposes the Unisys sign. Cigna employs 1,500 people at Two Liberty who pay $6 million in yearly wage taxes. The city could not provide an estimate of the tax revenues it expects from the Unisys jobs.
And then there are the people who live in the skyscraper.
For most of its life, Two Liberty was an office building only. But the Falcone Group, a Florida developer, has converted floors 40 through 57 into 100 condominiums.
With about half of the units sold so far, the developer says, it expects the residences to bring in a total of $240 million. After a 10-year tax abatement, those homes will generate property taxes that will benefit the city and its schools. The condo owners have filed letters with the zoning board saying they believe the sign will damage their property values.
“That’s why the whole situation is such a shame. It’s taking constituencies that are all important to the city, and they’re all arguing,” said Carl Primavera, a local zoning lawyer who is not involved in this case.
He says the city should bring all of the parties together to work out a solution rather than having a public fight before the zoning board, echoing sentiments of others in real estate circles.
Unisys may struggle to make its legal case to the zoning board even with the mayor’s backing, said Joseph Beller, a zoning lawyer and member of Temple’s faculty.
“You can talk about what’s good, what’s bad, what’s pretty, what’s not, but that sign is not permissible as a matter of right,” said Beller, who does not have a client in this case.
The city zoning code forbids signs above the second story of a building. It also says signs cannot exceed 100 square feet. Unisys has proposed two 11-foot-high red logos that would rest on the east and west sides of Two Liberty on the 38th and 39th floors, which contain the building’s ventilation system, just below the condos. Each sign would measure about 900 square feet.
Unisys has applied to the zoning board for a variance to the rules. But to qualify for a variance, Unisys must prove a legal concept known as hardship, Beller said. Broadly speaking, hardship means the property would be worthless without the variance. Two Liberty already operates without a Unisys sign, so hardship should be hard to prove.
“It’s a very heavy burden to meet,” Beller said.
The Zoning Board of Adjustment consists of five people appointed by Nutter.
Unisys would not comment on how it plans to meet the hardship standard or on related topics, saying it does not discuss issues under litigation. The company has said the logos are crucial to its effort to re-brand the company.
Of course, all one has to do is look at the Philadelphia skyline to see signs above the second story - PSFS, Blue Cross, PNC Bank, Aramark. Most of those, however, went up before the current code took effect in 1992. Another big difference: No one lives in those buildings. And another: All of those signs connote the buildings’ main, if not sole, tenant.
Even so, some real estate experts wonder whether the code is always applied that strictly.
“Many of my buildings have signs above the second story,” said Dave Campoli, local manager of HRPT Properties Trust of Boston.
Andrew Altman, Nutter’s director of commerce, said the city has supported Unisys because the company is bringing high-paying jobs and tax revenue.
“Symbolically,” he added, “it’s important that a company is locating in Center City and will have its headquarters here.”
But he also said in an interview Friday that Cigna “is an important corporate presence as well. It’s not uncomplicated.”
The city felt comfortable taking a stand, he said, because the zoning board ultimately decides what happens.
“We knew that there would be appropriate processes to look at the signage issue, that all the voices would be heard,” he said.
The Falcone Group is fighting its battle on other fronts. The lawsuit it recently filed in federal court argues that Unisys did not get the proper permission from the group that governs the building for the sign.
Falcone co-owns Two Liberty with the Utah State Retirement Investment Fund. Falcone owns the residential condominium portions. The Utah fund owns the office space and shops. It did not return a call seeking comment.
The two owners govern the property through an eight-member board.
The suit says Unisys sought city permission for the sign without getting permission required in the building’s contracts and under Pennsylvania law from the governing board of Two Liberty. An 85 percent vote by that board is required for changes to the common areas of the building, the suit says.
In court papers, Unisys said it disagrees with that interpretation of the documents that govern Two Liberty. But even if the company prevails, it would still need a variance from the zoning board.
Richard Oller, president of Madison Parke, the company managing Two Liberty for Falcone, met with Nutter and Altman, the commerce director, to press the point that Unisys lacked enough votes.
“It’s very unfortunate that with all good intentions on the part of so many, the city, the Commerce Department, even Unisys, the residents of Two Liberty Place, that a dilemma of this nature arises,” Oller said. “Had the facts been known earlier, I don’t think we would have gotten to this point.”
Albo Antenucci Jr., Falcone’s executive vice president and project manager, said his company had offered other signage options to Unisys. Cigna, for example, decided not to push for a large sign on the outside of the building and instead has a small one near the entrances. Antenucci said he offered Unisys representatives something similar, but they refused.
“We do want Unisys to move to the city. We just don’t want their sign up there,” he said.
Contact staff writer Miriam Hill at 215-854-5520 or hillmb@phillynews.com.