Checking in on the 5 big projects likely to make a big difference in Philly

UNOCCUPIED TERRITORY: Dilworth Plaza will reopen as Dilworth Park once the $55 million renovation — which began in January 2012 — is completed in September.
Mark Stehle

At the northwest corner of Dilworth Plaza, young trees await planting amid stacks of gray paving slabs that will form the pavement and walkways of central Philadelphia’s newest and most visible public construction project.

As dozens of yellow-shirted construction workers build the terraces, lawns and seating areas of the plaza, two sloping glass canopies rise from its surface, marking new entrances to SEPTA’s transit concourse, and signaling the closing stages of a project due for completion in early September.

Four blocks away, another construction team has gouged out the asphalt and reinforcing bar of a former parking lot on the 1800 block of Arch Street to begin the foundation of what will be Philadelphia’s tallest building, Comcast’s Innovation and Technology Center, when it opens in the first quarter of 2018.

Further west, Drexel University’s Summit, a 580,000-square-foot student housing and retail project at 34th Street and  Lancaster Avenue, was overshadowed on a recent morning by a red construction crane, and scaled by two workers hanging panes of blue glass on its west front in preparation for its opening next fall.

Along the east bank of the Schuylkill River opposite Penn Park, the newest section of the Schuylkill River Trail, a walkway built on pilings some 50 feet from the bank, was getting shiny new aluminum barriers in the latest phase of a project that will allow runners, bikers and walkers to skirt a section of freight railroad track on their way from Locust Street to the South Street Bridge. The latest link is expected to open in late September.

Mark Stehle

WALK ON WATER: The 2,000-foot “boardwalk” extension of the Schuylkill River Trail will fill in the gap between Locust Street and the South Street Bridge.

And on North Broad Street, even the Divine Lorraine Hotel, the storied but decaying colossus at the intersection with Fairmount Avenue, is finally showing signs of life, having been cleansed of much of its graffiti in recent weeks in preparation for what its developer says will be new life as an apartment building or a hotel.

The five projects may not in and of themselves constitute a construction boom but they represent significant additions to Philadelphia’s urban infrastructure that are generating jobs, repurposing long-neglected buildings, creating more livable public spaces and improving incentives for young people to build lives in the city for more than just their college careers.

“In my 40 years in Philadelphia, I can’t remember a development boom quite this pronounced,” said Alan Greenberger, the city’s deputy mayor for economic development. “The last time we really had major boom was in the late ’80s when a number of the skyscrapers like Liberty Place got built, but it wasn’t necessarily coincident with other sectors.

“Now we are seeing multiple sectors growing at the same time, and I don’t remember that happening.”

Citywide, Greenberger’s office estimates that there are $7 to $7.5 billion worth of construction projects that have either been completed since January 2013, are underway right now or are due to begin in the near future. Greenberger attributed the upswing in part to an influx of young people and immigrants arriving in the city, but argued that the deeper story is one of a newfound confidence.

“Philadelphia has found its own stride as a place that has a presence nationally and even internationally, and people are understanding that, possibly more outside the city than inside the city,” he said in an interview. “It creates a level of publicity that makes us desirable and that’s why people are moving in.” 

Demand for jobs, apartments and better public spaces is fueled by students who are more likely to stay in the city after graduation than they were a few years ago, thanks to increasing job opportunities and housing costs in accessible areas that are more affordable than in New York and Washington, D.C., Greenberger said. One survey found 48 percent of students stayed after graduation in 2012, up from 28 percent in 2006.

One result is that Philadelphia now has the fastest growth in the number of 24- to 34-year-olds of any major American city, he said.

The creation of improved public spaces like Dilworth Plaza is an important indicator of growing civic confidence, Greenberger said.

“It’s a signal to people that the city believes in itself, that it’s willing to make investments for the well-being of the city, for the quality of life, and that’s a huge determinant these days of what makes people choose one place over another,” he said. “Cities that are down on themselves don’t make those investments.”

The Dilworth project is designed to transform a drab and inhospitable plaza, scarred by uninviting below-grade areas, into a lively public space that will become a center for entertainment and recreation as well as a central meeting place.

“Dilworth Park is being transformed from an inaccessible, multi-level, hard-surface plaza into a sustainable, well-maintained, green public space with no stairs or barriers from the street,” said Linda Harris, a spokeswoman for the Center City District (CCD), which is heading the transformation in cooperation with the city.

Due for completion by early September, the $55 million renovation will consist of 120,000 square feet of lawn, trees and pavement along with a programmable fountain, a café and space for 400 benches and chairs, as well as a completely reconstructed concourse. Programming will include concerts, special events and winter ice-skating.

The plaza, which began construction in January 2012, will also improve access to the Broad and Market Street subways and trolley lines, and will include elevators that allow passengers to reach the transit levels directly from the plaza for the first time.

The construction is being paid for by the federal and state governments, as well as SEPTA, the CCD, the city’s capital program and a variety of private funders and foundations, Harris said.

Real estate professionals call the new plaza a major improvement in public infrastructure that will encourage more people to live and work downtown.

“How many times have you walked in front of City Hall, and you really haven’t enjoyed walking there?” asked Michael Silverman, managing director in the Philadelphia office of Integra Realty Resources, a national real estate valuation firm. “This will bring people there to become part of the city.”

Together with other major retail, residential and office developments, the new plaza will also help to spur further development, he predicted.

“All of that is creating demand for people to be here, and investors are looking at projects to satisfy that demand,” Silverman said.

David Scolnic, a real estate attorney at the Philadelphia firm of Hangley, Aronchick, Segal, Pudlin & Schiller, said the new plaza helps to meet growing public demand for accessible, green open space within the city.

The plaza and the Schuylkill River Trail extension are the latest examples of how cities are providing more outdoor public space that allows people to stay in touch with the natural environment, he said.

“There’s a structural change in how we view cities, which is really quite exciting,” Scolnic said. “With the presence of many more millennials and other environmentally conscious individuals in the city, there’s almost an insatiable appetite of urban dwellers to reconnect to the environment in a meaningful way within their own city, and that will only accelerate.”

Mark Stehle

XFINITY AND BEYOND: Comcast’s Innovation and Technology Center (top) will be the tallest building in Philadelphia when it’s completed in 2018.

Among the users of the new square are likely to be 1,500 new permanent workers to be hired by Comcast, which will take 75 percent of the office space in its new tower a few blocks away. The jobs are expected to boost the Philadelphia economy by supporting 2,800 other jobs and generating an additional $21.5 million in tax revenue annually, according to an Econsult study commissioned by Comcast. 

During construction, the $1.2 billion tower will create 6,300 temporary jobs and some $16 million in tax revenue, the study said.

Integra’s Silverman argued that the city will benefit not only from the influx of new Comcast workers and the addition of 1.5-million square feet of rentable space to the local market, but also from the physical presence of the 1,121-foot tower, which will be among the tallest in the country.

“This is going to be one of the top 10 tallest buildings in the United States,” he said. “Major corporations are going to take another look at investing in the city of Philadelphia.”

On Drexel University’s West Philadelphia campus, the $170 million Summit building will provide accommodation for some 1,300 students, as well as a student- and community-dining center when complete in September 2015. The 580,000-square-foot building, the largest construction project in Drexel’s history, will also contain 20,000 square feet of retail space divided into 11 locations at street level.

Together with a new student dorm that is already open at 33rd and Chestnut, the  Summit development will allow all Drexel freshmen and sophomores to live on campus, a new requirement that’s designed to take the pressure off housing in neighboring Powelton Village, where years of student demand for apartments has eroded the neighborhood’s stock of single-family homes.

Meanwhile, the university is pressing ahead with plans for its “Innovation Neighborhood,” a mixture of academic, residential and retail space on a 12-acre site immediately west of 30th Street Station, using buildings and land that the college has acquired over the last decade. 

When complete, the development would combine academic research in fast-growing areas like information technology, energy and biosciences with the business interests that could commercialize them, while providing residential and retail space for an anticipated influx of young workers, all within walking distance of rail service to New York and Washington.

The $2-billion development will consist of 10 new buildings, the first of which could be complete by late 2017 or early 2018, and the remainder over the following 10 to 20 years, said Drexel President John Fry.

The university is now seeking a master developer, and expects to issue a request for proposals in August.   

Fry is also looking at the far more radical step of building over 30th Street’s 75-acre rail yard to develop what he considers to be a major piece of underused real estate on the edge of campus.

In May, Drexel, along with Amtrak and developer Brandywine Realty Trust, selected architecture-and-urban-planning firm Skidmore, Owings and Merrill to develop a master plan for the whole 30th Street area.

Fry said he wants the redeveloped area to become Philadelphia’s “Sixth Square,” adding to the five created by William Penn starting in the late 17th century.

“We’d like to add our own around 30th Street Station and call it Philadelphia’s sixth square so that it isn’t just where you get off the train and then where you enter into Drexel’s campus: It becomes a major public-assembly space with nice amenities,” he said in an interview.

Meanwhile, along the Schuylkill, the 2,000-foot “boardwalk” trail extension will fill in a gap between Locust Street and South Street Bridge — the  land between the river and the CSX rail tracks being too narrow for a trail.

By creating the 15-foot-wide boardwalk, about 10 feet above the water, the project will join two points currently only accessible by  back streets. The project also includes a 450-foot ramp over the train tracks up onto the South Street Bridge, and provides four overlooks, offering views across the river to Penn Park.

Lane Fike, director of capital programs at the Schuylkill River Development Corp., said $9 million of the $17 million project was funded by the federal government under its stimulus program in the wake of the 2008 financial crash. The rest came from Pennsylvania, he said. 

The trail extension is due to open in late September after construction setbacks during the severe winter and on May 1, when flooding put the boardwalk more than 2 feet underwater, leading to the loss of some contractors’ tools and some railings, Fike said.

The 42-inch-high railings will make it safe for users to venture out over the water, but the project will also provide foldable ladders to allow anyone who falls in to climb back onto the boardwalk, he said.

On North Broad Street, half a dozen blocks from City Hall, the first signs of renovation at the famous Divine Lorraine Hotel are another indication of an upswing in the local real estate market.

Now largely stripped of graffiti, and with new lines of scaffolding protecting pedestrians from falling debris on its west and north sides, the building may finally be on its way to renovation after years of abandonment and unrealized development plans.

Photo: Mark Stehle

Named after the Rev. Maj. Jealous Divine, a church leader who bought it in 1948, the building was stripped of its ornate interior by a subsequent owner who then walked away, leaving some 100,000 square feet of empty space as a target for vandals and pigeons. 

Still, some intrinsic architectural features — an alabaster stairway, a coffered basement ceiling and a secret speakeasy entrance among them— remain, and will be restored when the building is redeveloped, said owner Eric Blumenfeld.

The building’s future brightened earlier this year when Blumenfeld received a commitment of $31.5 million in investment capital from New York developer Billy Procida, a former employee of Donald Trump with a long record of heading development projects in New York and New Jersey.

Procida expressed confidence that the remade Divine Lorraine would become both a business success and an economic boost to the neighborhood.

“It’s going to make money, it’s going to be good for the community,” he said, during a visit here.

By the end of July, the parties are due to have a “soft close” on the investment for architectural and predevelopment costs, said Chris Cordaro, executive director of Blumenfeld’s EB Realty Management. 

Cordaro recently said there would be “shovels in the ground in 90 days” and that he expected the project to be completed 18 months after that.

It’s still not clear whether the Divine Lorraine will be reborn as a hotel or an apartment building, but Blumenfeld predicted the building will anchor a bright new future for its neighborhood — a stretch of North Broad between City Hall and Girard Avenue that still lacks pizzazz despite bright spots such as Marc Vetri’s Osteria restaurant, and 640 North Broad, a former factory where Blumenfeld has created 265 loft apartments.

Six-Forty is located just a block south of the Divine Lorraine and is 100-percent occupied,showing the viability of further development, according to Blumenfeld. “It proves the model that people would be willing to live along North Broad Street,” he said. 

“This project is the centerpiece,” he said, referring to the Divine Lorraine. “This thing is really going to transform North Broad Street.”

As an apartment building, the Divine Lorraine would contain 127 rental units costing residents $1,500 a month. A hotel project would consist of guest rooms on five floors and two floors of banquet or meeting space, Blumenfeld said.

Either way, the influx of residents or hotel guests at the Broad Street subway’s Fairmount stop and just a few blocks north of City Hall and the Pennsylvania Convention Center would draw new shops, restaurants and other service businesses that together would transform the neighborhood, he predicted.

Blumenfeld’s grand vision for North Broad also includes renovating the nearby Metropolitan Opera House, which, like the Divine Lorraine, has fallen into disrepair after 106 years as a concert hall, sports venue and most recently, the Holy Ghost Headquarters church. Blumenfeld bought the building in 2013 and plans a 3,000-seat concert hall and 5,000 square feet of restaurant space.

Whether individual projects like the Opera House succeed, there’s evidence that the upswing has taken hold and is attracting the attention of national investors, Greenberger argued.

He cited Don Peebles, a developer who is spending some $90 million to buy and renovate the old Family Court building on Vine Street into a hotel, and National Real Estate Advisors, a Washington, D.C.-based company that is heading the $230-million East Market retail development on Market between 11th and 12th streets.

“One of the things that happens when you get outside money is they talk it up, it’s in their own self-interest,” Greenberger said. “They truly believe there are great investments to be made, and other national investment groups see that and they think, ‘OK, something must be for real.’”