BY JEFF McKINNEY
The Cincinnati Enquirer
The banking company created by Star Banc Corp.'s acquisition of Firstar Corp. has agreed to buy Firstar Center in Milwaukee - the 42-story home to Star's new headquarters and Wisconsin's largest office complex.
The building's purchase, from ECW Associates - a partnership consisting of New York-based Equitable Life Assurance Society of the United States, the California Public Employees Retirement System and the State of Wisconsin Investment Board - illustrates how closely Firstar's new management will pay attention to cutting costs, something that helped Star become one of the nation's most efficient and best-run banks.
Wall Street analysts said that by buying the building, Firstar will save about $4 million a year, adding about 2 cents to annual share earnings.
Since the merger was completed, Star has wasted little time in instituting its cost-cutting culture at Firstar.
Firstar's move Friday to buy the Firstar Center Complex in downtown Milwaukee confirmed a rumor that had been circulating in Milwaukee for about two months.
The 1.2 million-square-foot complex includes two other buildings that are adjacent to Firstar Center. The complex, which Firstar sold in 1988 and decided to repurchase, includes 1,500 parking spaces.
Though Firstar would not disclose how much it paid for the building, skyscraper, the building and property, the complex was assessed last summer for about $132.5 million, according to the Milwaukee treasurer's office.
"The acquisition of Firstar Center is financially attractive and is in the best interest of our shareholders and the community," said Jerry Grundhofer, Firstar's chief executive and president. Firstar expects the building purchase to allow it to control expenses, generate revenue from tenants and benefit from various accounting functions. The building includes more than 1,000 Firstar employees. It is 99 percent filled, with Firstar occupying 52.5 percent.
Execs at Firstar, which also owns the Star Tower at 425 Walnut St. in downtown Cincinnati, said they have no plans to sell that building.
On another matter, shares of Firstar gained $1.75 to close at $73.75 Friday.
The uptick came a day after Standard & Poor's Corp. said it would add Firstar to its benchmark 500 Index.
The stock is expected to start trading in the index by year-end. The stock will join the index after Cincinnati-based Star last month bought Milwaukee-based Firstar for $8 billion, creating a Midwestern banking power.
