Planning Commission approves zoning, streets tweaks for Gallery project

The Philadelphia City Planning Commission voted this week to approve a handful of bills that remove obstacles to the redevelopment of the Gallery on Market East. The redevelopment envisioned by PREIT (Pennsylvania Real Estate Investment Trust), the mall manager, would remake the Gallery as the Fashion Outlets of Philadelphia, based on a Chicago mall. The managers are looking to bring higher-end retail vendors to the mall, which was constructed in the 1970s.

The bills presented to the Commission on Tuesday are aimed at allowing the project to get started without serial trips to the zoning board and City Council. Council’s Committee of the Whole will consider those bills, along with a $55 million Tax Increment Financing package (TIF), during a hearing next week.

The bills approved by Planning:

• Authorize a new schedule of payments from the City to the developers for the maintenance of certain public areas of the mall. The city was already obligated to continue making maintenance payments to the Mall Maintenance Corporations for the next 60 years. The new schedule has the city on the hook for a total of $175 million over the next 43 years.

• Strike certain public streets and concourse areas from the city plan and transfer them to the developer. The city is giving up its partial ownership of the mall, as well as its liability.

• Permit various encroachments into the public right-of-way. The bill allows the developer to hang signs that encroach into public areas. The size and design of the signage, for the entire mall as well as for individual stores, have not been decided on yet. The bill gives the developer and retailers leeway in making those decisions.

• Change the zoning code to permit non-conforming signs, including accessory signs as well as billboards. The city recently created a Market East Advertising District, which allows developers to construct digital billboards if they invest at least $10 million in building improvements. The sign on top of the Lits Brothers building is the first example.

The project is expected to cost $325 million in total. In exchange for the substantial legislative and tax relief, PREIT and Macerich, a mall management company, are guaranteeing the city that they’ll complete the project. City officials are also framing the deal as relief for the public, which will bring its ownership of the mall, which has struggled throughout the years, to an end.

“The key is that it releases the public from past and future liability for capital investment and reduces the city’s current exposure for investment in public areas,” said Planning staff member Laura Spina, who presented the bills.

PlanPhilly will have more coverage of this package of legislation next week, when City Council holds hearings.

Watch the Planning Commission’s full presentation below.