PHILADELPHIA | Highrise Development Thread IX

[Milksteak]

Originally Posted by Nova08

I don't really get this. Are they trying to play off the development around Temple.

It's a combination of what's happening around Temple and the transit connections. Combine that with what I'm sure is dirt cheap land and you've got massive potential. its a gamble, but with the shift towards mass transit and the desire to be in the city, I think this could spawn a new era for North Philly. Not everybody can afford Center City these days. It's proposals like this that transform cities.

[christof]

This North Philly project is intriguing and has potential of actually getting done. But until I see funding in place, I think it is just a pie in the sky idea...

[Philly Fan]

Originally Posted by christof

This North Philly project is intriguing and has potential of actually getting done. But until I see funding in place, I think it is just a pie in the sky idea...

Sounds like almost 90% of the funding may already be in place:

Feldman’s HFZ Capital Group is part of a consortium of New York investors planning a complex of homes, offices, labs, and start-up work spaces in what is now an enclave of vacant warehouse properties and empty lots around Amtrak’s North Philadelphia station.

The $162 million first phase of North Philadelphia District LLC’s proposal calls for two new buildings on what is now the train station’s parking lot, and the renovation of a hulking dilapidated factory site nearby, said Michael Shenot, who is leading the project as a managing director with the real estate services firm JLL, in an interview Friday.

Work could begin before the end of the year if the investor group is granted its request for a $20 million state redevelopment grant to cover parts of the project, said Shenot, who previously participated in developing the World Trade Center Transportation Hub. He is now working on an expansion of New York’s Penn Station involving a historic postal building to its west.

Working quietly, N.Y. group moves to develop massive new North Philly enclave

[christof]

Originally Posted by Philly Fan

Sounds like almost 90% of the funding may already be in place:



Working quietly, N.Y. group moves to develop massive new North Philly enclave

But that last 10% may cause the whole project to collapse. Has happened in the past...

[summersm343]

Working quietly, N.Y. group moves to develop massive new North Philly enclave

Real estate magnate Ziel Feldman’s properties are in some of Manhattan’s poshest neighborhoods.

Now, he wants to build in one of Philadelphia’s most destitute.

Feldman’s HFZ Capital Group is part of a consortium of New York investors planning a complex of homes, offices, labs, and start-up work spaces in what is now an enclave of vacant warehouse properties and empty lots around Amtrak’s North Philadelphia station.

The $162 million first phase of North Philadelphia District LLC’s proposal calls for two new buildings on what is now the train station’s parking lot, and the renovation of a hulking dilapidated factory site nearby, said Michael Shenot, who is leading the project as a managing director with the real estate services firm JLL, in an interview Friday.

Work could begin before the end of the year if the investor group is granted its request for a $20 million state redevelopment grant to cover parts of the project, said Shenot, who previously participated in developing the World Trade Center Transportation Hub. He is now working on an expansion of New York’s Penn Station involving a historic postal building to its west.

Joining HFZ on the Philadelphia project are the Arete Group, a New York-based developer whose principals include attorney Michael Bailkin, previously a New York City government official, and former Trenton Mayor Douglas Palmer; and Amtrak, which holds a minority stake in the venture. The investment company Merchant Equity Group LLC of New York is a part owner of the development site.

The group envisions up to 1.7 million square feet of residential, office, and retail space at full build-out, bounded by Broad Street and 17th Streets, between Glenwood and Indiana Avenues, according to its application for a state Redevelopment Assistance Capital Program grant.

Planned for the site are a six-story, 105-unit apartment building and a 21-story tower with 128 apartments on nine floors above about 214,000 square feet of offices, Shenot said. Both buildings would feature ground-floor retail spaces that open onto a pedestrian plaza.

Also part of the initial phase is the transformation of the 180,000-square-foot decayed industrial building on an adjacent parcel to the west into work spaces for start-ups and light manufacturers. The developers have that parcel under agreement, Shenot said.

mprovements to the station itself include the restoration of an underground tunnel linking it to SEPTA’s Broad Street Line subway platforms just to the south, he said.

Completion of the apartment building and factory rehab are envisioned in September 2019, with the residential-and-office tower being finished in October 2021, according to the grant application.

Read more here:
http://www.philly.com/philly/business/re...hia-amtrak-station-district.html?photo_2

[MyDadBuiltThat]

Working quietly, N.Y. group moves to develop massive new North Philly enclave

This is really exciting. I rode the train through there last week and the area is so blighted. There's nothing there but old factories with beautiful brickwork but probably too far gone to be reused (though one can hope, I love old brick and stone work). I've always wondered why Amtrak bothered to keep the station open - it must benefit them in some way because very few people use it now.

[rduffy5]

Originally Posted by MyDadBuiltThat

Working quietly, N.Y. group moves to develop massive new North Philly enclave

Do we really expect this to be real? I mean, I understand the developers' pedigree and everything... but it just seems like such a crazy location. Do they really expect the market of people commuting from North Philly to NYC to be so lucrative? I feel like the only way they could get this to work is if they were able to force Amtrak to extend Acela service to North Philadelphia station as well as 30th. Then the trip from North Philadelphia to NY Penn would be about an hour as opposed to 1.5 for the NER.

[allovertown]

Originally Posted by rduffy5

Do we really expect this to be real? I mean, I understand the developers' pedigree and everything... but it just seems like such a crazy location. Do they really expect the market of people commuting from North Philly to NYC to be so lucrative? I feel like the only way they could get this to work is if they were able to force Amtrak to extend Acela service to North Philadelphia station as well as 30th. Then the trip from North Philadelphia to NY Penn would be about an hour as opposed to 1.5 for the NER.

Honestly the transit access to NYC I would assume is secondary to the inner city transit access. Plenty of Philadelphia neighborhoods have exploded in value over the past 20 years due to great transit access to center city. The transit access offered to Center City here is unparalleled when you consider that you have direct access not only to the BSL but also to the regional rail. Then on top of that, you're very close to Temple and even closer to their medical campus. I'd be willing to wager that none of this is being built with the idea that people will live here and commute to NYC, far too risky of a model. They must believe that this project can succeed solely based upon it's prospects to capture Philadelphians who want high end living but can't afford CC prices.

The access to NYC? That's likely just an added bonus that makes this project even more desirable.

Originally Posted by christof

But that last 10% may cause the whole project to collapse. Has happened in the past...

I think your negativity is really misplaced here. They have all the money lined up and are looking for only $20 million in states grants. Just because they are looking to get state grants, doesn't mean they need them, it's just a matter of why wouldn't they get them if they can?

But considering they have 90% of their funding before even making an announcement it doesn't seem like it's very hard to for them to secure funding. Not to mention, the article mentioned they shelled out $7 million just for research and planning this. I mean come on, they'll get some state grants at least, at worst they'll be left with a shortfall of around $15 million. Do you really think they'll let this project fall apart over a sum of money that's barely twice the amount they dropped just on speculation? Come on.

Crazy as this project seems, as long as City Council doesn't fuck this up, this looks like it's happening.

[summersm343]

New Thread Created: North Station District

http://forum.skyscraperpage.com/showthread.php?p=7744334#post7744334

[christof]

Originally Posted by allovertown

Do you really think they'll let this project fall apart over a sum of money that's barely twice the amount they dropped just on speculation? Come on.

Crazy as this project seems, as long as City Council doesn't fuck this up, this looks like it's happening.

Yes, I do. $20M is not chump change. Look at the SLS development and tell me that the lack of state money will not stop a building from being built...

And then you have City Council. Is Clarke on board already? If not, there is going to be issues.

Look, this is a quite intriguing proposal. It has a chance. It is not, however, a slam dunk. And it is best to take a wait and see approach until all funding is in place before assuming that this gets built.

[Gonzo the Great]

Originally Posted by summersm343

New Thread Created: North Station District

http://forum.skyscraperpage.com/showthread.php?p=7744334#post7744334

Maybe there should be another category between , proposed and under construction .

There are currently more than 60 projects listed in the data base as " proposed " .
I believe some of them have laid dormant in that category for YEARS . The ACC project
is one that comes to mind ..... before it finally went ten toes up .

I'm probably alone with this thought but , I might be more interested in projects that
graduate from ( three year old proposals ) to a category .... something like " approved " .

I'm not trying to piss anyone off . It's just that when I see a proposal that languishes in
it's own quagmire for more time than it takes an elephant to give birth , it dulls my senses
and I loose interest .

The same could be true for projects that , at present are 20/30 years down the road .
For me that is akin to curing cancer by watching cartoons .

[acenturi]

Originally Posted by Milksteak

This proposal is so bold, I love it. This swanky Manhattan firm is taking a big gamble on the future of our city. Imagine the potential of having what is happening in University City happen in North Philly.

"This swanky Manhattan firm is taking a big gamble on the future of"- North Philly.

[Knight Hospitaller]

Originally Posted by christof

Yes, I do. $20M is not chump change. Look at the SLS development and tell me that the lack of state money will not stop a building from being built...

And then you have City Council. Is Clarke on board already? If not, there is going to be issues.

Look, this is a quite intriguing proposal. It has a chance. It is not, however, a slam dunk. And it is best to take a wait and see approach until all funding is in place before assuming that this gets built.

Yes, we'll see, but it's worth noting that when it comes to finding money, having an NYC outfit involved is a whole different ball game.

[allovertown]

Originally Posted by christof

Yes, I do. $20M is not chump change. Look at the SLS development and tell me that the lack of state money will not stop a building from being built...

And then you have City Council. Is Clarke on board already? If not, there is going to be issues.

Look, this is a quite intriguing proposal. It has a chance. It is not, however, a slam dunk. And it is best to take a wait and see approach until all funding is in place before assuming that this gets built.

Your comparison to SLS does not make much sense in my opinion. As has now become apparent, that project needed more funding than just the state grants. SLS not only failed to get the amount of state grants that it sought, but even if the state gave they all they asked for and more, Dranoff still didn't have the funding to get SLS off the ground. Not to mention the fact that as successful as Dranoff has been in Philadelphia, he currently has a lot of projects on his plate and has never really demonstrated the ability to work on numerous large scale projects at once.

Normally a project is announced in part to generate excitement in a bid to get financing. It's not often you see a project announced that already has 90% of its funding in place. Clearly this developer is just in a different league than most her in Philadelphia. This project is further along in it's funding, on day one of it's announcement than SLS has ever been at any point. Just a totally different scenario.

I agree that $20 million is not chump change, but neither is the 9.1 million they have already spent. You don't normally see people flush nearly 10 million down the toilet on some project they're not serious about.

If they don't get $20 million from the state maybe the project is a bit shorter or is value engineered. Maybe they don't get to rehabbing that warehouse immediately. But the idea that nothing happens here at all seems unlikely.

Council is a different story, and I mentioned they could fuck this up. But when you announce a $162 million project with #142 million in hand and having already spent $9.2 million, then it just seems really unlikely that this thing is going to fall apart due to a funding shortfall.

[City Wide]

from Allovertown-------------------Normally a project is announced in part to generate excitement in a bid to get financing. It's not often you see a project announced that already has 90% of its funding in place. Clearly this developer is just in a different league than most her in Philadelphia. This project is further along in it's funding, on day one of it's announcement than SLS has ever been at any point. Just a totally different scenario.

I agree that $20 million is not chump change, but neither is the 9.1 million they have already spent. You don't normally see people flush nearly 10 million down the toilet on some project they're not serious about.

If they don't get $20 million from the state maybe the project is a bit shorter or is value engineered. Maybe they don't get to rehabbing that warehouse immediately. But the idea that nothing happens here at all seems unlikely.

Council is a different story, and I mentioned they could fuck this up. But when you announce a $162 million project with #142 million in hand and having already spent $9.2 million, then it just seems really unlikely that this thing is going to fall apart due to a funding shortfall.



Just my opinion,--------I don't think this passes the smell test for me. If I had $150M to invest in a ground up multi family project I can think of many other areas where the risk/reward factor would be much more favorable. Even if the land costs were near zero at this location all the other construction costs are going to be the same, or very close to the same. On the other side of the ledger is the rental income, will cheaper land allow the rents to be in line with what the area can afford. Doubtful.
Then there is the $9M said to be spent already, again that figure just seems so out of line with any reality I can see.
And 200K sq.ft. of office and lab space, maybe I'm missing something but I just don't see the market for that space at that location.
All in all, for me, this proposal doesn't make sense, the pieces just don't seem to come together.
But I'd be glad to be wrong.

[BenKatzPhillytoParis]

Originally Posted by City Wide

from Allovertown-------------------Normally a project is announced in part to generate excitement in a bid to get financing. It's not often you see a project announced that already has 90% of its funding in place. Clearly this developer is just in a different league than most her in Philadelphia. This project is further along in it's funding, on day one of it's announcement than SLS has ever been at any point. Just a totally different scenario.

I agree that $20 million is not chump change, but neither is the 9.1 million they have already spent. You don't normally see people flush nearly 10 million down the toilet on some project they're not serious about.

If they don't get $20 million from the state maybe the project is a bit shorter or is value engineered. Maybe they don't get to rehabbing that warehouse immediately. But the idea that nothing happens here at all seems unlikely.

Council is a different story, and I mentioned they could fuck this up. But when you announce a $162 million project with #142 million in hand and having already spent $9.2 million, then it just seems really unlikely that this thing is going to fall apart due to a funding shortfall.



Just my opinion,--------I don't think this passes the smell test for me. If I had $150M to invest in a ground up multi family project I can think of many other areas where the risk/reward factor would be much more favorable. Even if the land costs were near zero at this location all the other construction costs are going to be the same, or very close to the same. On the other side of the ledger is the rental income, will cheaper land allow the rents to be in line with what the area can afford. Doubtful.
Then there is the $9M said to be spent already, again that figure just seems so out of line with any reality I can see.
And 200K sq.ft. of office and lab space, maybe I'm missing something but I just don't see the market for that space at that location.
All in all, for me, this proposal doesn't make sense, the pieces just don't seem to come together.
But I'd be glad to be wrong.

While nothing is for real until there are shovels in the ground (or pilings), I really don't think this project merits the skepticism it is receiving, especially regarding the risk-reward calculus. For the amount of land and its proximity to high-quality, well connected public transit, you probably can't get this kind of parcel for as low a price as they acquired it anywhere else in the region. I would consider 3 other relevant factors: 1) There is revitalization and mixed-income neighborhoods up and and down Broad Street, not just to the South; i.e. among non-Temple people, I don't think they would be marketing this exclusively to gentrifiers from Center City but also to current residents of various neighborhoods in North or Upper North Philadelphia who are upwardly mobile or already have middle class incomes; 2) Temple. It's always growing and with a project of this caliber, they are sure to be able to get some professors, admin staff, and grad students to rent; and 3) this developer has a very serious track record.

I think this has a relatively serious shot of happening, certainly better than many projects about which people are not particularly skeptical.

[1487]

Originally Posted by mja

I can't even wrap my head around it. Like, I'm looking for the angle. Like, this proposed development can't be real or something. But then I'm looking at the developer and it's not some fly-by-night operation, it's a major Manhattan developer with a track record.

This proposal is something I would get excited about if it were in Center City, and here it is up in the middle of North Philly. I mean, look at the arial rendering:

http://www.philly.com/philly/business/re...tion-district.html?viewGallery=y&photo_2

That would be great on the Chinatown site, for example.

apparently you missed the part about the train station and proximity to Temple being a major reason for the investment. Chinatown isn't along a train station that connects to NYC. This location connects you to the subway, RR and Amtrak. There aren't many such locations in this, or any other city.

[1487]

Originally Posted by reparcsyks

Can we all agree that the developer and partners have probably done their due diligence regarding risk before announcing a development of this magnitude? They obviously know something that only seasoned developers know. The N. Philly station is what makes this project work. This area could be the Metro Park of Philadelphia.

Think about it, the 1-2 punch of Schuylkill Yards and N. Philly Station could be a major business force. If we can figure out our business tax situation, Philly could be a giant killer when it comes to attracting business.

article says they have spent $7m so far and people are on here acting like this is some fabricated pie in the sky proposal by half assed developers. YOu don't spend $7mil in north philly without a plan. Also says Amtrak is involved in the proposal.

[1487]

Originally Posted by christof

But that last 10% may cause the whole project to collapse. Has happened in the past...

Yeah like SLS in the heart of CC and many other projects in better areas. So how is this any different? We have seen countless CC Projects fall apart before getting off the ground at great locations. Not sure why this deserves "special" gloom and doom predictions.

[1487]

Originally Posted by christof

Yes, I do. $20M is not chump change. Look at the SLS development and tell me that the lack of state money will not stop a building from being built...

And then you have City Council. Is Clarke on board already? If not, there is going to be issues.

Look, this is a quite intriguing proposal. It has a chance. It is not, however, a slam dunk. And it is best to take a wait and see approach until all funding is in place before assuming that this gets built.

clarke doesn't represent this area. He has no say. I'm pretty sure there will be issues getting zoning approvals for something like this that will reduce blight and add some jobs. Especially considering federal funding for major projects affecting cities is going to all but vanish over next 4 years. Politicians will be desperate for a few wins in poor areas.