All The Details On Durst's Plan For Penn's Landing
The Delaware River Waterfront Corp., the nonprofit that controls long stretches of publicly owned land along Philadelphia's eastern riverfront, announced on Wednesday that it has selected The Durst Organization as lead developer for acres of land between Market and Lombard streets. The DRWC's board of directors unanimously voted for the Durst plan over three other finalists, according to the organization's press release.
Now that the selection process is complete, DRWC and Durst will negotiate further over the specifics of a development deal. After that, Durst has promised a robust community input process.
DRWC's 2019 request for proposals covered two sites, the first a 7.5-acre lot bounded by Market Street to the north and Chestnut Street to the south, abutting the future site of the $225M park that will cover Interstate 95 and reconnect the waterfront to the rest of the city between Walnut and Chestnut streets. The second site is bounded by Spruce Street Harbor Park to the north and Lombard Street to the south and covers 3.4 acres in a rectangular strip overlooking a marina.
Durst has committed to bringing in a minority-owned firm for at least a 20% equity stake in the project, with an emphasis on trying to find a local partner. The company has also committed to using at least 20% minority- or woman-owned businesses and labor for construction, maintenance and ongoing operations contracts, promising to hire a third-party firm to keep it accountable.
In its RFP, DRWC laid out key preferences and priorities for developers to integrate into their plans:
- Mid- to high-rise scale at the Market Street site and low- to mid-rise scale at the marina site.
- A focus on residential construction with ground-floor retail.
- Public access to the riverfront and the walking and bike trails that line it.
- At least one hotel and entertainment venue at the Market Street site, plus a grocery store and school.
- Mixed-income housing.
- New locations for the Independence Seaport Museum that currently sits on the marina site and Philadelphia's African American Museum, currently located at Seventh and Arch streets.
- A plan to use the development to help build wealth for disadvantaged communities.
- Environmental sustainability and public green space.
- Inclusion of minority- and woman-owned businesses for the development, construction and business partnerships of the project.
The final three elements in that list were considered mandatory for any winning proposal, according to the presentation given at Wednesday's meeting by the chair of DRWC's selection committee, former Liberty Property Trust CEO Bill Hankowsky.
The Durst Organization, a family-owned company based in New York, proposed a $2.2B investment into 3.5M SF of development split between 12 buildings, with the highest reaching 703 feet tall.
Each site is slated to contain six buildings, with the Market Street site including a 225-room hotel and 94K SF of retail including a grocery store, school, gymnasium and new headquarters for DRWC. Across both sites, Durst plans to build 2,390 residential units.
Durst has enlisted Pelli Clarke Pelli Architects (which designed the FMC tower in University City) as master planner and architect at the Market Street site, with Hargreaves Associates as landscape architect. Hargreaves is also the landscape architect in charge of the I-95 capping project's park.
For the marina site, Durst selected Bjarke Ingels Group as architect and master planner. All buildings will target LEED Gold sustainability ratings at least.
The Durst proposal, the only one that did not include the use of any public subsidy, is laid out in four phases with an estimated nine-year overall timeline. Durst is also in the planning phase on a 25-story multifamily tower a few blocks north of the Market Street site, where it owns multiple stretches of waterfront property outright.
The plan submitted by Harris Blitzer Sports and Entertainment, the group that owns the Philadelphia 76ers, would have expanded the scope of the project to include a new arena for the basketball team, as well as the use of lots not included in the RFP for additional mixed-use development and parking.
The project was to be partially financed by the issuance of public bonds to be paid back with revenue that would otherwise be collected as property taxes, as previously reported.
Hankowsky's presentation revealed that HBSE was seeking as much as $885M in public financing through the program, called a Neighborhood Improvement Zone. The NIZ was created as a specific part of state law designed to fund the development of Allentown to the north, and would have required both legislative assistance and amendments to the DRWC's master plan for the waterfront, the Central Delaware Overlay.
To fulfill the minority inclusion component, HBSE enlisted local, Black-owned firm Mosaic Development Partners to have an equity stake in the project as well as involvement in the mixed-use portion of the project. Earlier this summer, Mosaic had been tapped to be Philadelphia Industrial Development Corp.'s partner for the next phase of redevelopment at the Philadelphia Navy Yard. Other proposed local stakeholders in the 76ers' plan included Dranoff Properties and Korman Communities.
A third proposal reviewed by the DRWC board came from Hoffman & Associates, which is still delivering parts of The Wharf, a waterfront project with similar aims in its hometown of Washington, D.C. Hoffman's proposal included a 484K SF office building at the Market Street site and 174 for-sale condominiums split between the two sites.
Though Hoffman didn't propose any buildings taller than 240 feet, its vision did include a transit hub and twice as much retail square footage as Durst's, including a 6K SF concert hall. Hoffman recruited Gattuso Development as its local partner. The D.C. company's plan would have required $176M in tax increment financing and infrastructure grants to complete, though it provided less ambitious alternatives that would have required less public money.
The final proposal shortlisted by DRWC came from a consortium of local development names, along with the Republic Family of Cos. out of D.C., which already plans to develop a life sciences building in University City. Keystone Property Group, Toll Brothers, Hersha Hospitality Management, Parkway Corp. and Pennrose would have joined together in an entity called Penn's Landing Community Partners if it had been selected.
PLCP's proposal would have included 160 affordable housing units (presumably overseen by Pennrose, one of the national leaders in the sector), buildings as tall as 500 feet, office space for DRWC and a total of almost 150K SF of retail. The proposal called for $375M in public financing through two federal programs: the Transportation Finance and Infrastructure Act and the Water Infrastructure Finance and Innovation Act.
The local proposal was perhaps the most ambitious of the four in terms of environmental sustainability: all buildings would have been designed to meet Passive House standards, and mass timber would have been considered as a building material for the marina site.
“I’m pleased with DRWC’s decision and appreciate its collaborative selection process," Mayor Jim Kenney said in a statement as part of the press release. "The Durst Organization's thoughtful proposal prioritized minority participation and economic impact, without the need for a tax-payer subsidy."