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Merger muddles offices' planning

When a bank merger becomes complicated, so does the preleasing at Florencia Park.


© St. Petersburg Times, published May 23, 2001

ST. PETERSBURG -- The merger dance involving First Union Corp., Wachovia Corp. and SunTrust Banks has slowed construction of an office building downtown.

JMC Communities announced last fall that it was planning a three-story office and retail building at 80 Beach Drive, near the Florencia condominiums. To be called Florencia Park, the 47,000-square-foot building was expected to be under construction by the end of last year. It was billed as Class A office space, an alternative to high-rise office buildings.

"We're still in the preleasing process," said Lee Allen, vice president/finance at JMC. "When we receive enough signed leases to obtain financing, we will go forward with the project."

Two of the banks involved in the merger, First Union and Wachovia, were potential tenants of Florencia Park, according to Michael Talmadge, senior vice president for Echelon Real Estate Services, which is leasing space in the building.

"We had very, very strong interest from the banks," Talmadge said. "Right now we are meeting with several other large tenants," whose names he would not disclose.

First Union, headquartered in Charlotte, N.C., announced in April that it had agreed to buy Wachovia, which is based in Winston-Salem, N.C. Preparations leading up to that announcement slowed negotiations with JMC on the proposed building, Allen said. Both he and Talmadge said the banks still were interested.

Now, however, the merger has been complicated by the entry of SunTrust Banks, which wants to buy Wachovia and has horned in on First Union's bid with one of its own. A resolution is at least weeks away.

Talmadge said leasing had been affected by the slowdown in the economy.

"There has been a little bit of slowdown in real estate with the capital markets slowing down," Talmadge said. "Everybody is taking a second look before signing long-term leases. The economy has had an effect on the pace of real estate."

JMC built and has sold all of the 50 luxury condominiums in the 21-story Florencia, one of three high-end condominium projects in downtown St. Petersburg.

Florencia Park will be built, Allen said. "We are not concerned at this point at all."

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