Navy Yard's next phase

When Nina Johnsen, wife of Aker Philadelphia Shipyard CEO Kristian Rokke, cracked a champagne bottle over a bow to christen Aker's 18th tanker last week, many of the yard's 1,100 employees cheered.

The shipyard, after several lean years, is building two tankers for Exxon Mobil Corp. Times are flush again.

Aker is emblematic of how far the Navy Yard has come in a decade: from shriveled military base to 130 businesses and 10,000 employees.

The latest arrival, GlaxoSmithKline P.L.C., will move 1,300 workers, starting Monday into a gleaming all-glass office building near the Navy Yard's front gate.

With the recent transfer of 200 acres at the east end to the Philadelphia port for a proposed Southport marine terminal, and with the Navy's desire to expand its machinery research and engineering facilities at the Navy Yard, architect Robert A.M. Stern went back to the drawing board to tweak the 2004 master plan for 1,200 acres at the southern end of Broad Street.

Stern, dean of Yale University's architecture school, presented the design Friday at a celebration marking the 10,000-employee milestone. It was hosted by the city and Navy Yard developers, the Philadelphia Industrial Development Corp. (PIDC), and partners Liberty Property Trust and Synterra Partners.

The Navy still occupies 200 acres at the former military base and employs more than 2,100 who build advanced ship systems, design propulsion technologies, conduct engine testing, and cast propellers for ships and submarines.

"The Navy has been here, in some form, since we started as a Navy boiler test laboratory in 1910," said Patricia Woody, head of machinery research and engineering. "We are responsible for all the equipment in a ship that's not combat or weapons systems."

Until now, new construction at the Navy Yard has been focused in the "corporate center," 75 acres near the Broad Street entrance.

The next phase will extend commercial and industrial development south toward the river in three public spaces dubbed the Canal District, Mustin Park, and the Central Green.

The planned construction will be multi-tenant, mid-rise structures, including a 15-story office building near the water.

"Liberty has been very successful in developing small- and midsize buildings," PIDC president John Grady said. "So, in the update, we create some slightly different building sizes to fill out the development of the property."

The plan envisions a campus next to the river with canals that would bring water into the Navy Yard and "create views down to the river that now don't exist," Grady said. A series of canals and lawns would manage stormwater and recycle it into the Delaware.

With 200 acres transferred to the port and 30 to 50 additional acres going to the Navy, the city has less land to work with. An area once envisioned for single-family houses has been scrapped.

Instead, 1,000 apartments targeted at young professionals are planned for three existing and five or six new buildings.

In addition to Glaxo, the Navy Yard is home to Tasty Baking Co., Iroko Pharmaceuticals, and a Courtyard by Marriott hotel under construction. Urban Outfitters and Unique Industries Inc. have corporate headquarters there.

In all, 11 new buildings have gone up.

Villanova, Pennsylvania State, and Drexel Universities offer classes at the Navy Yard. Thomas Jefferson University has clinical and surgical practices there. Several community colleges offer training and employment.

Academic institutions including Penn State, the University of Pennsylvania, Carnegie Mellon, Rutgers, Princeton, and Purdue Universities, are affiliated with private companies in an "energy-efficient buildings research hub" whose goal is to reduce energy use in buildings by 20 percent by 2020.

Excel Welding & Industrial Supplies, Metals USA, and Rhoads Industries operate businesses at the Navy Yard that support the Aker shipyard.

In the last decade, more than $700 million in private investment has been spent at the Navy Yard, Grady said.

Sixty-five percent of the firms are new to Philadelphia - new ventures or national companies that have come to the city. Thirty-five of the 130 get tax breaks, or Keystone Opportunity Zone benefits.

Two-thirds of the businesses, including GlaxoSmithKline, pay regular taxes, Grady said. Those getting tax breaks, such as Tasty Baking and Urban Outfitters, are required to make capital investments equal to a certain amount of annual revenue or spend money to increase employment to a certain level, Grady said.

Urban Outfitters, with 1,300 employees, has invested $150 million.

In 2012, employment at the Navy Yard generated $30 million in Philadelphia wage taxes and $47 million in state income and sales taxes.

With the growing workforce, developers want to convert a historic gatehouse with views of old battleships into a restaurant serving lunch and dinner. "We are trying to create a new kind of workplace at the Navy Yard, a mix of uses, not 9 to 5," Grady said.

"In the early days of redevelopment, everybody was looking for that one thing to fill the void of the Navy," he said. "Today it's 130 things that have filled the void of the Naval Shipyard. If we are going to build an economy, and create a place that's real, it's going to be another 130 things that continue to replace the Navy."