State Tower Associates advertises on-site management for the building. Up until early 2004, the building had a superintendent who was on site full-time to serve the needs of the tenants. When the superintendent retired in early 2004, a full-time replacement was neither hired nor sought. Instead, as a cost-saving measure, the local partners brought in part-time managers with offices and primary responsiblities in other buildings.
The on-site office staff consisted of the office manager, whose hours are often irregular. Because there is no other official building personnel assigned to the office, it is often unmanned when the office manager is out because of illness, vacation or for personal reasons. The responsibilities of the office manager position necessarily encompasses payroll, accounts payable and receivable, reception and dictation, among others.
The State Tower uses other cost-saving measures whenever possible. Rather than pay the $350 price for the retail professional version of Microsoft Office, the office purchased an academic version for $130 despite not meeting the qualifications. The building discontinued company-paid medical insurance for all of its full-time employees at the end of 2004 and provides neither pension nor 401k plans.
The maintenance staff consisted of one mechanic and one helper to service a nominal 186,000 square feet of space, a ratio that pales compared to the over 100 full-time mechanics responsible for the Empire State Building’s 2.1 million square feet. That means the Empire State has over 50 times more mechanics for 11 times more square footage. Among other things, in recent years, tenants have had to wait days for air conditioners to be fixed in the heat of summer.
Up until the 1960s, the State Tower Building was a prestigious address with a high occupancy rate. Then residents, shoppers and businesses began their exodus from the city center and the vacancy rate for downtown buildings skyrocketed. The building claimed an 84% occupancy rate as of late 2005, however, a survey of the building shows substantial sections of the building empty, which would seem to contradict the claim. (Interestingly, the building boasts that it is located in "Historic Hanover Square," yet decided to ignore Syracuse landmark preservation guidelines during the 2003 renovations.) By spring 2006, the claim had dropped to 78%, however, with employees confirming virtually no change in tenant numbers, the reason for the 6% drop is not apparent. Educated guesses place the estimated occupancy rate in the mid-60% range and even lower when various long-term storage spaces rented at below market rates are excluded. At the beginning of 2006, the 12th floor was almost completely vacant, as was at least 50% of the 2nd and 10th floors. Reasons include dated interiors and a reluctance by businesses and their customers and clients to deal with downtown traffic and parking hassles. The 12th floor was considered so unrentable that one of the suites (of at least 200-300 square feet) was completely given over to a desk-sized air-conditioning unit for the adjacent elevator mechanical room. Such use of State Tower space is not unusual. With vacant space readily available in the building, the building loses nothing since they won't be rented out in the foreseeable future. Many of the suites that have been vacant for years, including former offices of doctors, dentists and lawyers, are today being leased to existing tenants for long-term storage.
Upcoming departures by the three New York State Department of Transportation offices continue to threaten the building. Suites 500, 504 and 512 take up most of the fifth floor, a major blow coming on top of the departure of the NYS Office of Real Property Services, which rented most of the second floor. The ORPS space, room 220, has been vacant since October 2003 when they relocated to Dey's Centennial Plaza two blocks south. The VESID program of the NYS Education Department moved earlier still to the State Office Building. State Tower bids submitted to the NYS Office of General Services have been uncompetitive, resulting in few new government tenants.
The remaining space is substantial, but highly fragmented with many suites smaller than 400 square feet. That makes it difficult for medium-to-large companies -- those with more than 15 employees -- to rent enough space to house all of their workers. With no load-bearing interior walls, spaces can be reconfigured, but very few companies were willing to pay the high costs of a full demolition and buildout. The limited number of monthly parking spaces available in the State Tower Garage and the high monthly permit prices also factor into their reluctance. Many tenants already park at lots three to four blocks away to avoid State Tower Garage rates, which are as much as five times higher than those nearby lots. For many years, Allright-Central Parking leased the garage. Locally owned Murbro Parking took over after 2003, promptly cutting the staff from four to two parking attendants on duty at any given time. Because the State Tower Garage has tight confines, parking is by valet service only -- with only attendants allowed beyond the main level, except for monthly customers -- so the reduced staffing often slows parking and retrieval of cars, especially during peak periods.
To offset the continuing decline in professional tenants in recent years, the building has wooed Internet and telecommunications companies by touting the building's fiber optic connections, but the strategy has had mixed results. With the rapid pace of mergers, acquisitions and corporate failures in the telecommunications field, there have been quite a few changes in tenants. A brief history of room 702 is a prime example.
Room 720 (seen at right), after having been empty and used for furniture storage for more than a decade, was built out for Mid-Hudson Communications before they merged with Tech Valley Communications in February 2002. Tech Valley never moved in and the space was vacant at least through mid-2006.
Room 921 was built out as an equipment space for Fastnet, complete with raised floor. Fastnet filed for Chapter 11 in June 2003 and vacated the space, which remained unused until USA Datanet expanded into it more than a year later.
While the State Tower is heavily wired for communications, its structure is not ideal for heavy machinery. The early reinforced concrete floors have a lower load rating than more modern buildings like the MONY (now Axa) Towers and One Lincoln Center, so if heavy items like banks of backup batteries need to be installed, new I-beams usually must be welded to the building's original structural steel columns to create a support platform. For example, the State Tower floors would not meet IBM's 70psf minimum specifications for siting their DS8000 Total Storage units.
Conduits for copper and fiber have been run through the only stairwell that runs the full height of the building (the second stairwell only extends to the tenth floor). However, with virtually no room remaining to install new conduits in the stairwell, an alternate route is also required. The second stairwell, closer to the eastern half of the building, lacks a central space to run conduits through. Subsequent conduits are being attached on the northeast outside corner of the building. At the lower six floors, the conduit passes through a bare-bones fire escape, which was grafted onto the building when spaces in that section of the building were consolidated into large suites, including the previously mentioned room 220 and the soon-to-be-vacated 512. Fire codes demanded a separate exit for spaces of such size in the event of fire.
At street level, three out of the eight storefronts are vacant. Two of them have been vacant so long and were in such bad condition that they were converted into storage for construction materials (including aluminum extrusions to construct frames for new windows, rarely used) and their windows blacked out. With no other space to move the construction materials, those spaces will likely not be rentable in the foreseeable future.
The building was eager enough to land Scottrade as an prestige anchor on the ground floor that it leased only the first floor of the space. The mezzanine level was not included in the lease and Scottrade was asked not to use it. Because it is accessible only from a stairway within the suite, it cannot be leased to another tenant and is essentially lost space.
Foot traffic through the lobby is low enough that ground-floor shops inside struggle for profitability. Some have found the high rent and low traffic an insurmountable obstacle. Sam’s Newsstand and the State Tower Deli both closed without warning, their owners abandoning furniture, utensils, fixtures, supplies, equipment and merchandise in their haste to depart. It took over a year to find someone willing to reopen the newsstand. More than two years passed before a new restaurant operator was found and renovation work begun. Previous owners of the newsstand complained of mice and ants attacking their stocks of chocolate bars. Skateboard and snowboard shop Hardpact Boardgear made an unannounced departure in 2004 and sought bankruptcy protection. Its renovated space at the sourtheast corner of the building remains vacant, as it was for many years between Hardpact and previous tenant Child Guide Shoes.
Murphy's Downtown Books may be next to leave. In an interview with the Syracuse New Times in December 2005, owner Dennis Murphy decried the sad state of business, "Downtown is dead and it's getting worse." He regretted moving to the State Tower, saying, "I decided to move here. I wish I hadn't, because business isn't as good here." Pedestrian traffic past the Genesee Street storefronts is especially light, producing a low volume of impulse shoppers.