By Kellie Patrick Gates
A real estate snag threatens to prevent Foxwoods Casino from getting the zoning it needs to open at the former Strawbridge & Clothier department store building.
A bill that would rezone the property at 8th and Market Streets as a Commercial Entertainment District made it out of City Council’s Rules Committee Wednesday but 1st District Councilman Frank DiCicco, the bill’s sponsor, will not call it up for full council approval until the Pennsylvania Real Estate Investment Trust, which owns the lower floors of the building, reached agreements with both the company that owns the upper floors and Foxwoods.
DiCicco said at the very least, those parties need to produce legally binding documents showing that agreements were forthcoming.
An attorney representing Gramercy Capital, which owns the top floors, came forward during last week’s committee meeting with concerns that rezoning would negatively impact his client. DiCicco said Wednesday that he was dismayed that PREIT had not previously told him about the problem.
The Strawbridge Building is a commercial condominium. DiCicco is concerned that there is something in the ownership agreement that would prohibit the bottom floors from being used as a casino. He is also worried that Gramercy might take either PREIT or City Council to court if the CED legislation is passed. He also said Gramercy could potentially file a lawsuit alleging that the zoning change lessened the value of its property.
DiCicco said it would not matter if the potential lawsuits had merit because any suit would slow down the already delayed process of opening a casino at the site.
DiCicco has so far been unable to get specifics about Gramercy’s legal rights in this matter. But he said there is no point in moving forward with the zoning legislation until that issue is resolved. The legislation that the committee considered yesterday, Bill 090295, would amend the city’s zoning maps so that the Strawbridge Building was within a Commercial Entertainment District. A related piece of legislation that amends the conditions within a CED, Bill 090294, passed out of committee last week. Both pieces of legislation are scheduled to be introduced in full council Thursday. And both were slated for a vote at the following council meeting on May 21. The CED amendment bill is still on that track. But without the mapping bill, Foxwoods cannot move forward.
PREIT representative Chris Mrozinski told the committee Wednesday that PREIT has been meeting with both Foxwoods and Gramercy but no agreements have been reached.
Of the talks with Foxwoods, Mrozinski said: “Several productive meetings with the principals of the gaming partnership since last Thursday. These negotiations continue to move in a positive direction. And we continue to believe that the two parties are motivated to get a deal accomplished.”
“Productive converations” have also been held with Gramercy, Mrozinski said. “Nothing has been resolved as of today, but the discussions are moving forward.”
See Mrozinski’s testimony, DiCicco’s response, and the comments of Washington Square West resident Amy Michael here.
Neither Mrozinski or a PREIT attorney would comment further after the hearing. The attorney referred questions to PREIT President Joseph Coradino. PlanPhilly has a call out to his office.
“We are moving this process forward as expeditiously as we can. We just need to figure out in the next couple of weeks if this is real, if they have something, if it’s the real deal,” DiCicco said after the meeting.
Council breaks for the summer recess on June 18th. DiCicco said he’d still like for Council to take all actions it must for the casino to move forward by then, but he can’t without knowing for certain that PREIT has worked out all outstanding issues with its prospective tenant and fellow Strawbridge Building owner. “The clock is ticking,” DiCicco said.
Foxwoods’ operating license also expires in June. Foxwoods notified the PBCB on April 8 that it will be applying for an extension to its license. Foxwoods also intend to ask the board to relocate the license to the Strawbridge site from Delaware Ave. and Reed Street in South Philadelphia, but will not take that step until council approves the zoning change.
DiCicco said he believes if the details at 8th and Market cannot be worked out, Foxwoods will focus its attention back on the Delaware Riverfront, a site where the casino concern already has its needed approvals. He does not think Foxwoods will be interested in going back to the last site it had considered, 11th and Market, because that part of The Gallery at Market East is owned by the City’s Redevelopment Authority. PREIT leases from the RDA, and tenants sublet, essentially, from PREIT. That was too complicated a situation, DiCicco said.
The City had rezoned 11th and Market as a Commercial Entertainment District. The mapping bill swaps that location for the 8th street site. The Planning Commission has already approved the change. DiCicco said that to go back to 11th and Market, “We’d have to start all over again.”
Foxwoods agreed to look at sites other than Columbus Boulevard and Reed Street under pressure from city officials. Neither DiCicco nor Mayor Michael Nutter and his administration supported opening Foxwoods in South Philadelphia. DiCicco and the administration are in favor of the Strawbridge site. They say the casino could play a valuable role as part of the city’s long-range plans to revitalize the Market East Corridor. They also like having the casino within walking distance from the Convention Center and hotels, and near a huge public transit hub.
In response to pressure from Harrisburg and the financial crisis related budget woes, officials have pledged to move forward with both Foxwoods and SugarHouse – the other Philadelphia casino project – as quickly as possible.
While the city’s casino position has changed, many neighborhood activists are still fighting. While most of the public comments on the Foxwoods’ CED were voiced last week, a few people spoke Wednesday, including Washington Square West resident Amy Michael and Chinatown resident George Moy. Michael said that PREIT should not be counted on to revitalize Market East, since they’ve not done much so far with The Gallery. Moy kept his comments short, saying the committee members were very familiar with his opinions. “All I can do now is hope and pray that some event will…stymie the casino from opening its doors,” he said.
Foxwoods spokeswoman Maureen Garrity said the casino will not speculate on what would happen if the 8th and Market site falls through. She said any questions about the legal standing Gramercy has in the issue should be directed to PREIT.
“Foxwoods is pleased that Council has voted our zoning out of committee,” she said. “We and PREIT have made solid progress towards finalizing a lease for the Strawbridge & Clothier space. We remain hopeful that PREIT, as the landlord, can resolve the issues with Gramercy Capital Corporation.”
Joshua Cohen, the GreenbergTraurig attorney representing Gramercy, could not be reached for comment Wednesday by email or phone. Last week, he said that his client had no further comment.
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