A Lehigh Valley real estate agent is launching a business brokerage firm. Tejas Gosai and his team, who work for Century 21 Keim Realtors in Allentown, have formed Lehigh Valley Business Brokerage to help consult and assist businesses in the valuation and the sale of their businesses.
Gosai said he originally planned to launch the full-service business brokerage firm in December, but decided to hold off until spring, and then the coronarvirus pandemic hit.
He decided to go ahead with opening the business because there is still a great deal of consulting work that can be done now, to prepare businesses for when they are able and ready to sell. He also noted that some transactions that don’t involve real estate can be conducted even under the current restrictions.
While the brokerage will handle all varieties of businesses, Gosai said with his ethnic heritage he has many contacts in industries that are traditionally owned by the Indian population, so he will specialize in hotels, gas stations and small markets.
Lehigh Valley Business Brokerage will work with tax advisers, CPAs, financial advisers, attorneys, law firms, auditing firms, physicians, and industry-specific advisors to streamline the process.
The building that formerly housed Hackman’s Bible Book Store, a well-known faith-based book store that operated in Whitehall for 70 years before closing in 2018, has a new owner.
The 19,000-square-foot property was purchased by Dave Dooley, owner of EZ Micro Solutions, a Whitehall Township IT provider, who will renovate the building that housed Hackman’s for 30 of its 70 years and relocate his IT business there.
The property was purchased from Bible Fellowship Church Homes, which purchased the vacant property in 2019, but put it back on the market after its plans changed.
Two Hanna Frederick Commercial Real Estate Realtors handled the transaction. Joseph McDermott represented Dooley and Randy Beitler represented Bible Fellowship.
Riverview Bank handled the financing.
Dooley closed on the sale April 30. The agreement of sale was signed prior to the March 6 deadline set by the state, which allowed the transaction to proceed.
The Pennsylvania Association of Realtors is throwing its support behind House Bill 2412, sponsored by Todd Polinchock, R-Chalfont, that would reopen the real estate industry as a life-sustaining business.
“Real estate is an essential business and we believe we can practice safely under CDC guidelines,” said William Festa, president of PAR.
He noted that real estate is not a high contact industry. “We meet a few people at a time,” he said.
PAR is not recommending business as usual. While it can’t control what individual firms do, it would caution against such things as open houses. Festa said the association has a task force in place that is putting together a standardized guide on how it’s best to operate once the governor lifts the order issued on March 19.
Kim Shindle, PAR’s director of communications, said most states are allowing real estate sales to continue, which causes another set of problems for Pennsylvania Realtors and those looking to move here from other states.
“There are some people who may have sold a home in another state and can’t settle on their home in Pennsylvania,” Festa said. “There are a lot of people carrying two mortgages. There’s a lot of economic distress.”
PAR also sees inconsistency in Gov. Wolf’s red-yellow-green plan to re-open the state gradually. PAR wants real estate opened uniformly.
“Otherwise we’re creating a lot of confusion,” Shindle said.
The governor’s plan creates challenges if buyers in red regions are looking to buy in green regions – or the other way around, she said.
“Allowing real estate services to be conducted in one county, while those in a bordering county are unable to do so, simply isn’t practical,” added Festa. “The phased reopening would provide housing relief to some Pennsylvanians, while prohibiting others’ ability to gain shelter.”
In the meantime, Festa said the industry is doing what it can. Sales are off between 75% and 80%, but a few have gone through. Such sales have been rare and complicated because vital components of a sale, such as home inspections and appraisals, aren’t allowed.
“A buyer would pretty much have to waive everything, but some have,” he said.
A study by the National Association of Realtors show that home sellers are holding steady and there hasn’t been any major decline in home prices during the pandemic. Prices are holding steady in Pennsylvania as well, Festa said. The properties just aren’t selling.
A local architect and engineering firm will move into an Allentown property long occupied by the Girl Scouts of Eastern Pennsylvania.
Acela Architects and Engineers, which has a location at 4969 Hamilton St. in Lower Macungie Township, will occupy the building.
Feinberg Real Estate Advisors LLC represented the Girl Scouts in the $610,000 sale of 2619 Moravian Ave., a 7,500-square-foot property in Allentown.
Cindy McDonnell Feinberg, principal of Feinberg Real Estate Advisors in South Whitehall Township, who represented the seller, said the transaction was completed last week.
James Balliet of KW Commercial of South Whitehall Township represented the buyer, HIWT LLC, an investment group that plans to redevelop the property for Acela Architects and Engineers, she said.
The firm plans to move into the new building within the next four weeks and use it for its new corporate headquarters in the Lehigh Valley, said Daniel Witczak, president of Acela Architects and Engineers.
“It’s a beautiful facility, it gives us a lot of room to grow,” Witczak said. “It’s an easy access on and off highway, it’s convenient for our clients.”
The property on Moravian Avenue was originally developed in 1977 as the headquarters for the Great Valley Girl Scouts and later became a service center with the merger of county-based programs, which led to the creation of Girl Scouts of Eastern Pennsylvania with headquarters in Miquon, Montgomery County, Feinberg said.
For now, Girls Scout employees are working remotely in different Girl Scouts locations, Feinberg said.
Acela has 18 employees and plans to add three more people at the new location once the pandemic ends, Witczak said.
“We’ve been set up to work from home from the beginning,” he said. “Everybody has a laptop and docking station. That’s the way we started our company.”
Employees have the ability to work from home and take laptops home as needed.
Acela has been at its Lower Macungie office for three years and has three other locations in Ohio, New York and New Jersey.
To help business owners struggling to recover from COVID-19, an Easton nonprofit is collaborating with the city and another organization to create a relief fund of $300,000 in emergency capital.
The Greater Easton Development Partnership has joined with the city of Easton and the Easton Area Industrial Land Development to create the Support Easton Small Business Relief Fund.
The partners have already raised $200,000, which includes some of the city’s own resources, said John Kingsley, director of Community and Economic Development for Easton.
The program is open to any for-profit business in the city. The application period has begun and will end April 12. GEDP will administer the program, working with the city’s Department of Community and Economic Development.
The city has its own loan program through the city’s Redevelopment Authority where it committed some resources in addition to the funds EALD and GEDP provided, he added.
“It’s going to be a short-term working capital loan,” Kingsley said. “This is not a significant maximum loan amount.”
There is a $10,000 cap, and he anticipates most of the loans would be less than that.
“Our small businesses are the ones that are going to suffer the most as they are going to be impacted by tourism,” Kingsley said.
Although there are several state and federal funding programs available for businesses, getting those resources would take a while, he said. “We believe by putting together our own resources, we would be more agile; we recognize what they are going through.”
A number of local corporate and philanthropic partners have provided funds, including Peoples Security Bank & Trust, Wells Fargo, Post Road Management, Univest Bank & Trust Co., BSI Corporate Benefits, Lafayette College, Merchants Bank, Fidelity Bank and Valor Insurance.
But they are looking for more partners to donate.
“We are challenging other community partners to step up,” said Jared Mast, executive director of GEDP. “We are in this to be a short-term relief valve. We are looking at the next 30 to 60 days. We are trying to deploy funds very quickly in the hope of getting businesses through the next month or two.”
Anthony DaRae, CEO of BSI Corporate Benefits in Bethlehem, one of the early supporters, said said he was on board immediately.
“The federal and state governments will do their parts but ultimately, we know our communities best and we know the faces of the people and businesses that are hardest hit,” DaRae said in a statement. “When Jared contacted me about this project, I was on board immediately. This business community is hurting like so many others across the country, but this one is ours, and it is our responsibility to be there in this great time of need. In pulling this relief fund together with great buy-in from the business community, it is clear who is committed during this challenging time. I’m proud to support the Easton business community and this vital initiative.”
This effort goes along with the supporteaston.com website that GEDP debuted on March 21. That website directs community members to Easton businesses that are staying open and finding creative ways to serve customers at this time, such as curbside pick-up, takeout, online workshops and classes, and online ordering.
Amid the statewide shutdown that has slowed the economy to a crawl, some construction officials say their industry should reopen.
In neighboring states, governors have deemed construction an essential business.
Pennsylvania should do the same, industry leaders tell Lehigh Valley Business, noting that work can continue safely. Stalled projects exposed to the weather elements could be damaged and create hazardous conditions, they argue.
“We have a lot of projects that are out there just sitting in the elements,” said Richard Reppert Jr., president of R.L. Reppert Inc. of Emmaus. “With this quick shutdown, it was very difficult to secure the projects.”
Overall, R.L. Reppert, which employs about 80 workers, has about 15 projects affected by the shutdown, which went into effect March 19. Shutting down building sites and construction projects inevitably results in opening projects to the weather conditions, which could be a potential hazard to the community, and add costs for the project, he said.
With its Lehigh University Bridge West project (now called Singleton, Hitch & Maida Houses) in Bethlehem, Reppert’s company had to shut down the building, creating the potential for the drywall to crack.
While his company is following the governor’s orders, he said it is imperative that these projects resume to a certain extent to allow completion, but also to eliminate hazards.
A spokesperson from the state Department of Community & Economic Development said the governor’s highest priority remains protecting Pennsylvanians’ health and safety as the state works to mitigate the spread of COVID-19.
“Residential construction must be suspended but limited activities may continue to the extent necessary to stabilize the site, temporarily prevent weather damage and make emergency repairs,” said Rachel Wrigley, spokesperson for the PA DCED, in a statement.
Additionally, she said residential construction projects that are substantially complete could continue. For all other residential construction projects, limited activities could continue to the extent needed to stabilize the site, temporarily prevent weather damage, or make emergency repairs only.
The state considers those projects issued a final occupancy permit as substantially completed.
The state does not allow new residential construction projects to begin.
In addition, workers must suspend non-residential construction unless for emergency repairs or health care facility construction, Wrigley said.
States such as New York, California, New Jersey, and others listed construction as essential, Reppert said. While projects would need to maintain CDC guidelines and require special circumstances to ensure employees are protected, construction is an area of work where these precautions can happen and will be easily achievable, Reppert said.
This would also cut down on the unemployment rates, which have skyrocketed, Reppert said.
When the shutdown occurred, Reppert had to lay off all employees. A few projects have continued, such as those that involve nursing homes and hospitals, but all others have stopped.
“It’s going to be hard to bounce back from this in a timely manner,” Reppert said.
The Eastern Pennsylvania Chapter of the Associated Builders & Contractors Association has requested a meeting with the governor to ask that all construction resume. The chapter is pushing its message on social media, and has joined a coalition of 20 organizations to create a safety task force, of which ABC would take the lead, said Joe Perpiglia, chapter president and CEO.
“What’s paramount for our group is that we are promoting a safe return to work as quickly as possible,” he said. “We understand that’s not a simple thing.”
He wants all organizations in construction to join them, regardless of labor affiliation.
The governor is not considering this option of having a safety task force at this time, Wrigley said.
Perpiglia said he is concerned about the shutdown, currently set to end April 30, extending into the summer.
“It’s gonna cripple the economy, people are already suffering,” he said. “There is extreme concern now.”
Several senators led by Sen. David J. Arnold Jr., (R-Lebanon) are seeking relief for construction firms throughout the state who have largely shuttered their companies and most projects after Gov. Wolf’s business closure order on March 19.
Arnold, along with co-sponsor Sen. Camera Bartolotta, and Senators John DiSanto, and Daniel Laughlin, sent a memo to all Senate members on March 27 asking for support for bill that would require the state Department of Community & Economic Development to issue a waiver to the governor’s order. The waiver would allow all private and public construction activities to continue if workers adhere to social distancing guidelines and other mitigation measures defined by the Centers for Disease Control to protect workers and prevent the spread of COVID-19.
Arnold could not say when the bill would be filed since Senate members are unable to meet in person, but was confident it would garner “a lot of support.”
“The premium is on health and safety; we just feel there’s a way to do both,” Arnold said. “We’ve seen in other states that they can get safely back to work, and Pennsylvania should follow suit.”
Pennsylvania is the only state to shut down all active public and private construction sites, while issuing some selective waivers on an ad hoc basis, with no consistency, according to the memo. While governors in New Jersey, California, Illinois and New York have issued shelter in place orders, they have all included exemptions for construction personnel and construction activities.
With highway and other infrastructure jobs across Pennsylvania sitting idle, workers still need to complete these jobs in a timely manner. Stopping these projects, which are of an open-air nature, makes no sense, according to the memo.
The response to the proposed bill from other senators has been positive so far, he added.
“We need to continue on with life as best we can,” Arnold said. “I think this is a field where we can accomplish that.”
Harvest Health & Recreation, a Tempe, Arizona–based multi-state cannabis operator, said it closed on the acquisition of Franklin Labs LLC, a subsidiary of CannaPharmacy, for about $25.5 million
The acquisition, payable with $15.5 million in cash and a $10 million promissory note, includes a 46,800-square-foot cultivation and manufacturing/processing facility in Reading.
Pending necessary approvals, Harvest expects to expand the existing cultivation operation this year and potentially complete further expansion to support market growth.
It plans to begin manufacturing and processing operations this year during the second quarter. Franklin Labs is the only cultivation facility owned by Harvest in Pennsylvania and is expected to supply significant product to retail dispensaries across the state, the company said.
“This acquisition helps to alleviate supply constraints in a fast-growing market, while contributing to improved financial performance,” said Harvest CEO Steve White, in a statement. “This investment in Pennsylvania is an important milestone in our plan to expand operations in key states and return to profitability.”
Harvest of Reading is at 201 Lancaster Ave., and is open from 9 a.m. to 6 p.m., Tuesday through Saturday. Its other Reading location is on North Fifth Street.
Harvest affiliated entities own and operate five retail dispensaries in Pennsylvania: two in Reading, and one each in Harrisburg, Johnstown, and Scranton. Harvest affiliated entities are permitted for up to 15 total retail locations across the state.
“This investment is part of our focus on allocating capital to a core state where we can improve our financial performance by going deeper,” said Alex Howe, spokesperson for Harvest. “It will allow us to improve our margin profile of our overall Pennsylvania operations and provide high-quality products to medical patients and our existing and future stores. Pennsylvania is an important market where we see significant growth in the future.”
After one local college announced it would close its campus because of COVID-19, others quickly followed suit.
It was the beginning of the local higher education response to the rising concerns over the virus that sent students across the state out of their dorms and classrooms and into online instruction for the remainder of the spring semester.
The move led many students and families to wonder if they would get some type of refund for losing access to housing, dining services and other amenities they already paid for.
So far, it’s a mixed bag, with most offering partial refunds of some amenities, but not tuition.
Kutztown University is offering partial refunds based on guidance it received from the Pennsylvania State System of Higher Education, according to the university’s office of student accounts. The university calculated a 50% refund of selected fees for the current semester that it would send to students the week of April 6.
The university is refunding those fees that are no longer available to students because its face-to-face operations have closed, and for the majority of students, residence halls have closed.
However, the university is not refunding tuition, as full tuition costs will remain in place, based on a 50% face-to-face and 50% online ratio. The change in instruction does not meet the distance education requirement of 80% online or more, the university’s office said.
“The financial impact of refunds will be significant for the university,” said Matt Santos, vice president of University Relations at Kutztown University, in a statement. “We plan to issue refunds for 50% of the spring semester fees for housing, dining, and select auxiliary services. This equates to about $9.5 million in lost revenue.”
That means the university will have to dip into its cash reserves.
Because of the timing of the COVID-19 virus and resulting campus shutdown of these operations, the university won’t be able to reduce its expenses at the same rate of the revenue losses, Santos said. The university will need to use cash reserves, previously designated for deferred maintenance and building renovations, in order to fill the anticipated gap.
As the university asked students to move out, they’ve vacated most of the residence halls, he added. After letting the halls sit vacant for a few days, the university will deep clean them in preparation for their next use.
“We host a significant number of overnight campus and conferences during the summer, and at this time, there is no change to the summer schedule,” Santos said.
Lafayette College in Easton is working on a process to prorate room and board fees where appropriate and hopes to have the details worked out in early April, said Scott Morse, senior director of communications at Lafayette College, in a statement.
Alvernia University in Reading will seek state and/or federal reimbursement for students if funds become available, said Glynis Fitzgerald, senior vice president and provost, and John McCloskey, senior vice president and chief of staff.
In a statement, they said they would continuously monitor the situation.
According to its website, Lehigh University in Bethlehem is offering partial refunds for housing, dining and parking services on a prorated basis for undergraduate students who are not parking on campus, living in residence halls or using meal plans. Undergraduate students will have the ability to request a refund or apply the credit to future bills. Refunds do not apply to off-campus rentals or facilities that the university does not own or operate, such as SouthSide Commons.
The university began online instruction on March 16 and began prorating the refunds from that time, said Patricia Johnson, vice president of finance and administration at Lehigh University.
The university will have some cost savings on cleaning costs and general maintenance costs since many buildings on campus are empty, she said.
“They are not big savings,” Johnson said.
Utilities have to be kept on in the buildings, but other elements, such as air conditioning, can be turned off.
She said it is too early to determine what the possible financial impact to the university would be.
The university is not refunding tuition because it is offering online instruction.
“We placed some resources and provided training to faculty to use Zoom because many of them had never used it before,” Johnson said.
Overall, she said the university staff and faculty appear to be adjusting very well, noting the university converted to online instruction within a week.
“Some of our professors seem engaged, thinking about different ways of teaching,” Johnson said.
The university could delay graduation, currently set for May 18. Potentially, the university may push that date to August, she said.
Meanwhile, in a message to students at East Stroudsburg University, Kenneth Long, vice president of administration and finance said the university would issue pro-rated reductions of housing, dining, general, and parking and transportation charges on students’ accounts during the week of March 29.
The university is prorating the refunds based on the number of days it would not provide these services, as of the last day of ESU’s original spring break, March 13, estimated at 50%.
Gov. Tom Wolf’s order to shutter all non-life-sustaining businesses to control the spread of COVID-19 has effectively halted most construction in Pennsylvania, sending a shockwave through the industry.
Many construction firms quickly applied for a waiver from the state Department of Community & Economic Development to continue working. Meanwhile, many are finding they have to quickly adapt to a new normal and grapple with the uncertainties this brings to their industry.
In a letter to the governor, officials from the five chapters that make up the Associated Builders and Contractors of Pennsylvania asked Wolf for further clarification of his executive order and to grant a waiver for the construction-industry-at-large.
Prior to Wolf’s closure announcement, many construction firms were operating as usual, even as many businesses closed their doors over fears of the mounting crisis.
“We had one client ask us to stop work, it was a health care provider and we’ve had some other projects that we have stopped, but with existing buildings we put a few additional measures in,” said Sean Boyle, president and CEO of Boyle Construction of South Whitehall Township.
Boyle was interviewed shortly before Wolf’s announcement.
For one project, an existing building with two elevators, the company put up barriers to protect workers from the occupants. His company also issued a policy to clients that explained how they are operating with safety procedures in place.
“If they stop inspections, that’s going to put construction at a halt,” Boyle said. “If we get to that point, and we can’t put the drywall on, we can’t go any farther. That’s going to put a huge financial burden on us.”
Production was still at 90% capacity as of March 16, Boyle said.
The company’s office functions shifted to allow those employees to work from home. For the most part, the construction workers are spread out and there haven’t been any issues getting supplies yet, Boyle said.
After Wolf’s order, Boyle said his company applied for waivers for jobs deemed essential, such as pharmaceutical, biotech, health care, financial institutions and a few others related to food distribution. So have some of his clients, he added.
Boyle’s company is still working but only on health care projects for major health care networks. He is hoping for more waivers soon to get other jobs working.
As of March 23, Boyle his company laid off about 70% of its field work force.
“Our full office staff is working remotely this week from home,” Boyle said. “We will analyze field staff day to day based on waivers and where we are permitted to work.”
The COVID-19 pandemic is affecting construction in the commercial and industrial sectors. The integrated supply chain of the construction industry creates production and supply problems if one company is shuttered and another is not, or if one state shuts down construction businesses and another does not.
As an example, New Jersey currently exempts construction from shutting down.
“I think you are going to have a nationwide shutdown,” said Kevin McGowan, president of McGowan Corporate Real Estate Advisors in Upper Macungie Township.
If companies that produce the materials required to build warehouses close it will halt those projects, he said.
“The production and delivery of that is the issue,” McGowan said. “We have seen buildings that are mostly completed; this construction shutdown is hurting that.”
Some companies took action earlier in the COVID-19 scare to identify staff members that were highly susceptible to contagion and set them up to work remotely. Ron Jerdon, president of Jerdon Construction in Upper Macungie, said his company did it once COVID-19 began hitting the headlines. Now, nearly all field staff management and administrative staff are working remotely, he said.
“We are adapting fairly well, taking a day-by-day approach, keeping all our staff informed on a daily basis,” he said. “We are continuing to function fairly well, meeting the project needs we have going.”
The company still does estimates and collaborates with design teams, but everything is done virtually. “We are planning for the future, making sure we have a solid financial base,” Jerdon said.
Preparing for the future
However, his company, which employs about 38, had to make some temporary field staff layoffs because of COVID-19. About 60 percent of his workforce is laid off but he plans to hire them back once the pandemic ends.
“We are trying to take advantage of any government programs available,” Jerdon said. “Our plan is to get everything back as quickly as possible. Right now, we are trying to maintain as much operation as we can. At this time, we don’t want to put anyone’s health at risk.”
His company has been able to continue working on a few key projects for Lehigh Valley Health Network and he was able to secure a waiver from the state to continue working. He acknowledged it took a while because the volume of requests was so large.
His company also has been practicing social distancing at job sites and incorporated mandatory practices and Occupational Safety and Hazard Administration policies for COVID-19.
The firm cancelled all in-person meetings and increased sanitization of job sites.
Employees have been adjusting as well as can be expected, Jerdon said. “Every effort is being made to resume normal activity as quickly as possible.”
Obtaining supplies is getting harder every day. Jerdon’s company has had trouble getting concrete for one of the health care projects and many vendors have limited service.
“So far, we’ve been able to navigate all of the obstacles fairly well,” he said.
He also foresees more restrictions.
“Given the daily updates, I think with confirmed cases constantly rising, I think it’s just a matter of time before more restrictions are put in place.”
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