The New Norristown: 1,000 Units, Hospital Redevelopment Set To Revitalize Disinvested Town

Suburban NIMBYism and lengthy entitlement processes have made Montgomery County a notoriously difficult place to build, but developers are hearing a different tune in Norristown.

More than 1,000 new residential units were recently delivered or are in the pipeline, and the major mixed-use redevelopment of a defunct psychiatric hospital is underway in the long-overlooked county seat. 

That is a notable change of pace for Norristown, where officials are eager to expand the tax base hollowed out by deindustrialization and competition from booming nearby suburbs in the late 20th century.

“It’s time for us to bring Norristown back to what it was,” Municipal Administrator Leonard Lightner said.

The municipality’s population peaked at 38,925 in 1960 and dropped to 30,749 in 1990, when it began expanding again due in part to the growth of its Latin American immigrant population. There were 35,748 residents counted in the 2020 census.

Three things are making development easier in Norristown: a low amount of resident pushback, a local government eager to disperse its land bank and a sizable development-ready plot, a rarity in lower Montgomery County after decades of voracious suburban expansion.

Norristown State Hospital shut down in 2019. Its campus was part of a 225-acre tract, 140 of which sit within Norristown’s northwest corner. 

Pinnacle Realty Development Corp. scored the 68-acre campus for $4.5M from the Montgomery County Redevelopment Authority in February, setting the stage for the largest redevelopment in Norristown’s history. 

In addition to 453 for-sale townhomes and 288 apartments, PRDC plans to build 36K SF of retail and 200K SF of flex industrial/office space on the site, President Anthony Maras said. He expects the project to be worth more than $300M.

Maras estimated that the homes will sell for around $300K to $500K. The median listing price in Montgomery County is $495K, according to Realtor.com. 

He wasn’t sure how much the apartments will rent for but said they would likely be less than the new units coming online in nearby locales like King of Prussia, where apartments go for $2,150 on average, according to RentCafe.

PRDC still needs to get its master plan for the site approved, but Maras said he expects construction to begin late next year or in early 2027.

“We’re taking a property that pays no taxes right now and converting it to the tax rolls,” Maras said.

He said the project will net roughly $4.5M annually for the municipality, county and school district.

The for-sale residences align with Lightner’s vision to boost Norristown’s homeownership rate from the 41% counted in a 2023 Census Bureau report.

“From a tax base perspective, that’s what’s important,” he said, since owners contribute more per capita to the municipality’s coffers than renters. 

Officials in the township want to see other parts of the campus redeveloped, but they are focused on getting PRDC’s project across the finish line first, Lightner said.

The borough owns another 88K SF of land that it is looking to offload for development, he said. 

MCRDA has also identified dozens of other properties across Norristown that would be suitable for redevelopment, including many in the borough’s historic downtown.

And a slate of other projects are already in the works. 

MM Partners is gearing up a mixed-use project for a vacant parcel in the neighborhood. It plans to build 116 apartments and 10K SF of retail on a site at Main and DeKalb streets acquired for $2.5M from the MCRDA.

The Grand, as the development is known, is just one block from the Montgomery County Courthouse, where a $415M project will enhance a parklike environment at the corner of Main and Swede streets. SEPTA’s Norristown Transit Center, which provides direct rail connections to Center City and a variety of suburban destinations, is also a short walk away.

MMP Managing Partner David Waxman said he expects to spend $30M on construction. Work is slated to commence early next year and wrap up within 20 months. Rents for the units will range from $1K to $2,300.

Downtown Norristown can be a bit devoid of activity, particularly on nights and weekends when county workers aren’t around. Waxman wants the new residents the Grand will bring to the neighborhood to change that.

“That will create a lively streetscape,” the developer said, although he noted this won’t happen overnight.

MMP also purchased two other nearby parcels where Waxman plans to begin work after wrapping up the Grand.

Cussler Development has compiled several properties on the other side of Main Street, according to county property records. It is exploring funding through Pennsylvania’s Redevelopment Assistance Capital Program, Lightner said.

The intersection is one block away from the former PNC Building at 1 W. Main St., where the upper floors were converted into 16 apartments by New Orleans-based Sam Madi. 

Norristown officials plan to build a food hall and small business incubator in a different part of the property, Lightner said.

Otherwise, the neighborhood hasn’t seen much development in recent years. Waxman said that is a big part of why developers have seen little of the resident opposition so prevalent in other Philadelphia suburbs.

“If there hasn’t been a ton of development, you don’t necessarily know what it looks like when it happens,” he said.

The high proportion of renters in the municipality may also explain the limited pushback, said Jumpstart Norristown founder Prudence Browne, whose organization helps educate and fund aspiring developers. Renters tend to be more itinerant and less personally invested in the neighborhoods where they live.

Browne added that Norristown has a large community of Spanish-speaking immigrants, who sometimes face language barriers when navigating government meetings.

Revitalization has long seemed just out of reach for Norristown. Conshohocken, just one train stop away, has a similar history of deindustrialization but was successfully redeveloped as a dense office and multifamily hub.

Many CRE players saw Norristown as next in line during the first years of the new millennium, which led Philly Office Retail President Ken Weinstein to buy two office properties in the borough.

While his Swede Street building across from the courthouse is fully occupied, he has struggled to market the available space in the four-story former Bell Telephone building at 401 DeKalb St.

“We have one and a half floors vacant that we have not been able to lease, and that’s concerning because the building is basically underwater,” he said.

While Weinstein said the postpandemic office slump is partly to blame, he also recalled high hopes for Norristown that never came to fruition.

The presence of the Norristown Sewage Treatment Plant is one stumbling block. Extensive efforts have been made to ensure it doesn’t emit unpleasant odors or create quality-of-life issues for potential neighbors, Lightner said. But the optics of building next to a facility like that are challenging, Weinstein said.

Norristown’s industrial history has also left some of the riverfront polluted. That was the case at the Nicolet Industries site next to the sewage plant, where asbestos production and lead contamination led to an Environmental Protection Agency superfund site designation.

That didn’t stop Brian O’Neill, a main force behind the redevelopment of Conshohocken, from buying the Nicolet property. It was part of 13 acres he assembled along the riverfront over more than a decade.

Weinstein said O’Neill’s vision is part of what drew him and other investors to Norristown in the 2000s.

But that project never made it out of the ground. O’Neill couldn’t compile as large a tract as he wanted and ended up selling the land he bought from MCRDA for about $950K back to the organization for $3.7M in 2010.

O’Neill told The Philadelphia Inquirer at the time that he still had faith in Norristown, but his exit left a void.

Weinstein said he struggled to get a tax increment financing designation on his DeKalb Street property from the Norristown Area School District shortly thereafter. He said the organization was worried he was going to pull out like O’Neill had.

Another limiting factor to development is that while downtown Norristown has exceptional passenger rail service, it doesn’t have direct access to a major highway. The community has been awaiting a project to connect Norristown to the Pennsylvania Turnpike via a new slip ramp for more than a decade.

The new connection will open “in the next year or two” and should boost traffic to the town, Montgomery County Commerce Department Director Stephen Forster said.

Not everyone thinks Norristown should aspire to be like Conshohocken.

The municipality has one of lower Montgomery County’s last pockets of relatively affordable housing, Maras said. A large wave of gentrification could imperil that. 

So far, he said, officials have been doing a good job of balancing development and affordability. Browne said she agrees the municipality is on the right path and that the new wave of projects is beneficial for the community.

“I’m not worried that development is skipping Norristown,” she said. “I think it’s on track.”