WILKES-BARRE — The new offer from Panzitta Enterprises to get the Times Leader building into the hands of the Wilkes-Barre Area School District would have a fixed cost to the district of $13.2 million over 20 years, with the district never owning the building but getting the deed to the parking lot at no extra cost.
John Panzitta provided details to the school board at a special meeting Monday and Solicitor Ray Wendolowski provided those documents to the Times Leader Wednesday.
The newspaper’s parent company, Civitas Media, put the North Main Street building up for sale last year. In February, Panzitta proposed buying the building, renovating it to classroom space and leasing it to the district for 20 years, then turning the title over to the district.
But when Wendolowski checked with the State Department of Education, he learned a lease-to-own deal would be problematic, but a straight lease would be fine.
Panzitta outlined his latest offer in a document that included his anticipated costs for purchase and renovation, totaling $8 million with a contingency fund of $500,000. He amortized the $8.5 million over 20 years at 4.75 percent for a monthly rental of $55,000.
At the meeting, he stressed that, once a deal is struck and work begins, his company would not raise the rental price if unexpected problems drive up his own costs.
The new proposal rents the building to the district for 20 years, with an option to renew three times for 20 years each time. After the initial 20 years, future leases would rent at $1 a month.
Some other aspects of the deal outlined in Panzitta’s document:
• The premises could only be used as a school, administration offices or warehouse operations of the Wilkes-Barre Area School District.
• The district would be responsible for custodial and maintenance care and for any repairs resulting from the use of the building and would pay all utility bills. The district could not alter the property without permission from Panzitta.
• The district must hold the lessor, officially named Coughlin on Main LLC, harmless for any liability or claims resulting from the district’s activities, excluding liability that is due to negligence or misconduct by the lessor.
• The district and Panzitta will “mutually agree on a plan for renovation.”
• Any deal is contingent upon the lessor getting “final unappealable zoning variance for use of the premises as a public school from the city of Wilkes-Barre.”
• Upon payment of the first month’s rent, Panzitta will convey ownership of the parking lot behind the building — already legally identified as a separate lot at 36 N. Washington St. — to the district.
Panzitta also provided a review of rental rates for similar property conducted by Rosen Real Estate. The review determined similar Class A type office space “within the Northeastern Pennsylvania Market leases for between approximately $15.85 per square foot and $20 per square foot.” The Panzitta proposal works out to about $16 per square foot per year.
The letter from Attorney Alan P. Rosen concedes a direct comparison is npt possible. “Due to the paucity of comparable rental information for spaces similar to the subject, it was necessary to use comparables of medical offices and professional offices.”
Rosen’s letter listed three primary properties used for comparison: 47 S. Washington St. and 39 Public Square in Wilkes-Barre, and 114 Lt. Michael Cleary Drive in Dallas.
Reach Mark Guydish at 570-991-6112 or on Twitter @TLMarkGuydish