City-burbs corridor gets boost

A trophy building it is not.

Three stories of drab brown brick and dark-tinted windows, 15 Kings Grant Dr. in Bala Cynwyd is a suburban office relic built in 1957 by the insurance company that still occupies it, Liberty Mutual.

Word last week of its $3.69 million sale - and a planned $5 million renovation by buyer Keystone Property Group - triggered an enthusiastic response that spread into Philadelphia.

Not that that's so far. Kings Grant is a tiny road that intersects with City Avenue - the high-traffic commercial route that is the boundary between Lower Merion Township and Philadelphia.

The area has been the focus of a unique multi-jurisdictional effort since 1998 to bring a more modern, multiuse, pedestrian-friendly look and feel to the suburban-city business corridor - where an estimated 30,000 work and the newest office building went up in 1988. So far, substantial change has not come.

That's why the Liberty Mutual deal - the third property purchase and makeover by Keystone in Bala Cynwyd, a section of Lower Merion, since 2006 - elicited an outright giddy response from the leading advocate on City Council for the City Avenue transformation, Curtis Jones Jr.

"I want to give a big 'atta boy' to the City Avenue Special Services District," Jones said Thursday. "Without their planning, without their vision, none of this stuff would start."

Of the more than 1,500 business-improvement districts in the United States, the City Avenue Special Services District of Philadelphia and Lower Merion, or CityAve District, is a rarity in that it crosses political boundaries. It encompasses City Avenue from the Schuylkill Expressway to 63d Street (on the city side) and Wynnewood Road (on the township side.)

The priorities there have been improving lighting and security. Advocates are hopeful that the key to achieving more dramatic change - such as much taller buildings - is close to being accomplished: a new zoning plan. Actually, two plans given that two political jurisdictions govern the land-use decisions in the district.

Philadelphia's zoning plan was enacted in 2009. Among the highlights: It calls for mixed uses, parking at the rear of properties, wider sidewalks, and development set closer to sidewalks and roads so that the corridor, especially the stretch from the Expressway to Belmont Avenue known as the Regional Center Area, has a more walkable, village characteristic.

Philadelphia's original zoning plan for the area never included height restrictions, thus allowing for the 23-story Adam's Mark Hotel just off City Avenue on Monument Road that has since been replaced by a Target and a variety of restaurant and retail sites, said Terrence Foley, president and chief executive officer of the CityAve District.

The new plan does include height caps, from 300 feet (about 25 stories) closer to the Expressway down to 65 (about five stories) toward the more residential end of the district, near St. Joseph's University.

Reaching consensus on a zoning plan to guide development on the Lower Merion side of the corridor has been a more protracted affair, dating from 2007. More than a year's worth of public workshops and hearings have yielded an ordinance in final draft form with requirements and allowed uses similar to Philadelphia's. Though in Lower Merion, buildings could only rise as high as 250 feet.

The ordinance could come before the Board of Commissioners for a vote in July.

Another ordinance in the works in Lower Merion would establish a traffic-impact fee that would be charged to developers for off-site road improvements in the City Avenue district.

Streetscape improvements totaling $2.5 million - along Bala Avenue in Lower Merion and on 63d Street in Philadelphia - are set to begin by early fall. Funding is from federal, state, and local grants, Foley said.

Meanwhile, he was among those encouraged by Keystone Property's decision to invest yet again in the City Avenue district with its purchase of the 53,920-square-foot Liberty Mutual building in a sale/leaseback arrangement that will keep the insurance company in the building for at least the near term.

"It's a sign that people still recognize we have a superior location," Foley said.

In promoting City Avenue over competitor suburban office markets such as Radnor and Conshohocken, Foley points out its close proximity to Center City, a car ride of as little as 15 minutes if traffic is cooperating.

That is what largely motivated Keystone Property to move its headquarters from Conshohocken to City Avenue's Lower Merion side in 2007, said company president Bill Glazer.

Keystone had made its $19 million purchase of One Presidential Boulevard, the former Aamco Transmissions headquarters, in 2006. Like Liberty Mutual, it was a circa 1950s yawner that Keystone spent $15 million modernizing with lots of windows, granite flooring, and mahogany wood finishes, along with upgraded mechanical systems. It went from being 30 percent occupied to nearly completely full, with Keystone among the tenants.

In 2007, Keystone bought the three-story 225 City Ave. for $13.4 million, and gave it a fresher look inside and out, similar to One Presidential. The 80,000-square-foot building is 98 percent occupied, Glazer said. It is across from the Liberty Mutual property.

The three properties are just the beginning of what Glazer plans to be a sizable presence by Keystone on City Avenue - likely on the Lower Merion side for tax reasons.

Once the zoning plans on both sides are in effect, he expects a lot more company.

"We're just at the front edge of a very powerful tide," Glazer said.

Go to go.philly.com/ commercial for more coverage of the Phila. region's commercial real estate market.

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