For decades, most of the neighborhood surrounding Market East has been an urban desert, a sad, gray stretch of moribund office spaces, vacant storefronts, discount retail, and not much else. It has been a neighborhood for little more than mid-day shoppers and commuters, “the city that is devoured by locusts each day and spat out each night,” to paraphrase E.B. White.
After five o’clock, walking along Chestnut between 8th and 11th Streets has been good for little else than inducing melancholia. But that’s all poised to change in the next few years, as a veritable building boom promises to transform this stretch of Center City into a bustling neighborhood full of residents, retail, and restaurants.
Now, even the Philadelphia Parking Authority (PPA) is getting into the mix. The PPA board authorized ongoing discussions with Brickstone Companies, a real estate developer that has invested heavily around Market East recently, to replace its dilapidated garage at 10th and Chestnut with a pair of new buildings.
PPA owns and operates a 450-spot parking garage at 10th and Ludlow Street; that property includes 60 feet of long-vacant street-level retail at 1023-29 Chestnut Street. Brickstone, which bought neighboring 1021 Chestnut Street in 2014, approached the PPA last year with a development proposal for both properties. The proposed development would include a 650-lot parking garage, first-floor retail, and a to-be-determined mix of residential and commercial space above. The lots are zoned CMX-5, the most permissive designation for high density, mixed use development.
PPA would run the new garage, and Brickstone would manage the buildings above and street level retail, which PPA Deputy Executive Director Richard Dickson admitted, “we’re not good at.”
“Our primary focus is not retail,” said Dickson. “We provide parking. But related to parking, we really need to make sure that the street presence, where that retail is, is something that attracts people.”
Last week’s PPA board vote only approved continued negotiations and due diligence with Brickstone—nothing will be set in stone unless both sides enter a contract, which would require additional formal authorizations by the PPA board—but Dickson told PlanPhilly that he hopes that construction could begin before the end of 2016.
The preliminary sketch of the deal would see the two parties trading air rights over their properties, netting the PPA $13 million. That $13 million, however, would go to the estimated $27 million construction cost of the garage. Last year, the PPA board approved a $10 million loan to rehabilitate the 10th and Ludlow garage, the authority’s oldest. That money could easily be shifted to fund construction, said Dickson, and the PPA’s future development fund could cover the remaining building costs.
“I think this can be a really transformational project for that block,” said Dickson. “It could really add some life to that block; there isn’t a lot of reason to walk down the street there.”
Transformation seems to be Brickstone’s goal for the neighborhood. In recent years, the company has begun development on at least eight properties in the area, all within a half-mile of one another. Brickstone also owns two nearby landmarks: the Lit Brothers building at 7th and Market and the Wanamaker building next to City Hall.
Brickstone did not respond to a request for comment.
Alone, Brickstone’s investments in—a mix of apartments, co-working spaces, more traditional office space, and retail—would be enough to create a radically different looking Market East.
But Brickstone isn’t alone. National Real Estate Development, a Washington D.C.-based developer, plans its massive East Market project to finish construction early next year. Across the street, PREIT is spending $325 million to completely overhaul the Gallery. The Inquirer recently estimated about 1,400 new apartments were in the works for the area bounded by 13th, Filbert, Seventh, and Chestnut Streets.