The bank holding company's move to Two Center City is expected to be complete by 2014 and bring with it 275 jobs.
Developer J.B. Reilly's City Center Lehigh Valley proposes this 11-floor office building called Two City Center for 645 Hamilton St., Allentown.
National Penn is currently based in Boyertown, Pa., where it will still employ 150 people after the move.
The Allentown operation will employ 275 people in the building planned by developer J.B. Reilly's City Center Lehigh Valley at Seventh and Hamilton streets, the company said.
The move should be complete by 2014, the company said. It will be near the arena being built for the America Hockey League's Phantoms in Allentown's Neighborhood Improvement Zone tax district.
"It certainly is good news," Greater Lehigh Valley Chamber of Commerce President Tony Iannelli said, calling the company's move a "shot in the arm" for Allentown's redevelopment effort. "Who would have thought this kind of activity three, four years ago?"
He said the move is the reverse of what's been seen in recent years, as this company is moving from the suburbs into an urban core.
An "extremely solid organization like KNBT" making a commitment to Center City Allentown is all about "building credibility," he said. It started with Reilly bringing its "strong reputation" to the project and has been enhanced by National Penn, he said.
"The world has changed and the city needs it," he said.
Alan Jennings, an advocate for banks to invest in urban areas through his role as executive director of the Bethlehem-based Community Action Committee of the Lehigh Valley, called the move by National Penn Bancshares possibly "the most important 'community reinvestment act' in decades."
Jennings said it shows confidence by the bank that it can build its deposit and lending base in Center City Allentown while making a return on its investment.
"In other words, the bank sees an opportunity to make money," he said in a statement. "Nothing could be better for Allentown and the region: It will create jobs where they are most needed, strengthen the livelihood of downtown businesses, create wealth that will spill over to the neighborhood and improve access to credit."
Bevy of development
Two City Center is an 11-floor office building planned for 645 Hamilton St. It will be built in place of the 62-year-old First National Bank, which is being demolished. Reilly hopes Two City Center will be finished by the spring of 2014.
City Center Lehigh Valley is also building a seven-story, 200,000-square-foot office complex called One City Center in the area of the proposed arena. Lehigh Valley Health Network is set to anchor that building, providing health care to the Phantoms -- the Philadelphia Flyers' top developmental team -- and operating a sports medicine and fitness center.
Jim Harbaugh, chief operating officer for City Center Lehigh Valley, said in a statement:
"We are excited that National Penn has taken a leadership position in returning downtown Allentown to the successful business and financial district it once was. ... We look forward to welcoming National Penn and making more tenant announcements in the near future."
"The (Neighborhood Improvement Zone) is going to be transformational for the City of Allentown," he said in a statement. "National Penn Bank joins Lehigh Valley Health Network in establishing a huge presence in the downtown.
"Nat Penn is the first bank to have its headquarters in Allentown in some 25 years. The jobs coming here will put feet on the street for other downtown businesses. I look forward to other announcements of this type in the months and years ahead."
The bank plans to occupy 126,000 square feet, or the top six floors, of the 11-story Two City Center building.
"National Penn is committed to our vision of being the most highly regarded financial institution in the markets we serve," National Penn President and CEO Scott V. Fainor said in a statement.
"As a result, we have developed a forward-thinking relocation plan that will improve employee collaboration, enhance customer service and maintain our strong focus on growing the National Penn franchise," Fainor said. "This strategy will increase efficiencies and allow us to continue our focus on enhancing shareholder value as we solidify our National Penn brand."
National Penn Bancshares Inc. said it is the Lehigh Valley’s second biggest bank based on deposits, with about $8.4 billion in assets.
The company operates 120 branch offices comprising 119 branches in Pennsylvania and one branch in Maryland through National Penn Bank and its KNBT and Nittany Bank divisions. Lehigh Valley banks Keystone Savings and Nazareth National merged in 2003 to form KNBT.
The KNBT and Nittany Bank divisions will be renamed National Penn by spring 2013, the company announced today.
Benefits of zoneThe 127.3-acre Neighborhood Improvement Zone channels new state and local non-property taxes into the arena area for development. That allows City Center Lehigh Valley to lease office space at costs of $10 to $12 per square foot, rather than than the average of about $18 per square foot."
"The economic benefits of relocating to Allentown's Neighborhood Improvement Zone combined with the strategy of operating under a single name allows National Penn to be well positioned for future growth while maintaining our focus on expense management," said Michael J. Hughes, National Penn's group executive vice president and chief financial officer.National Penn will also put 125 people in a new building by fall 2013 in Spring Township, Berks County, the company said.
Other tenants have previously been announced for Two City Center.
Lehigh Gas will be the primary tenant and occupy three floors at the building. The accounting firm Buckno Lisicky & Company, law firm Davison & McCarthy, and law firm Regan Levin Bloss Brown & Savchak will also have offices there.
Staff members KJ Frantz, Colin McEvoy and Kurt Bresswein contributed to this report. Contact McEvoy at 484-894-2549 or cmcevoy@express-times.com.