The developer of Center City's luxury 1706 Rittenhouse Square Street condominiums said Monday that he plans to build a 26-story, 40-unit condo tower at Fifth and Walnut Streets at a cost of $150 million.
The tower will overlook Independence Hall, developer Tom Scannapieco said, and will be built on an 18,155-square-foot site vacant for more than a decade. A number of proposals for the land have been made, most recently in 2004.
Scannapieco said construction should begin in spring 2015, with units ready for occupancy in March 2017.
The "glass-needle" tower is being designed by Philadelphia's Cecil Baker, who also was the architect for the 26-story, 85-unit condo tower proposed in 2004 by 500-506 Walnut Street Associates. Baker has been working with the National Park Service on building setback and other issues, the developer said.
Requirements for a building adjacent to Independence National Historical Park, and within the view corridor from the Liberty Bell to Independence Hall, must be considered in any design, according to court documents filed in litigation over the site in 2012.
As a result, the building is designed not to interfere with "an onlooker's view from the Liberty Bell to Independence Hall," Scannapieco said.
Baker said the site is "perched on the threshold of history," adding that he envisioned the building as "accepting and cognizant of its historical foreground."
The 2012 litigation was a successful appeal by Abington Bank of a Common Pleas Court decision overturning 2005 Zoning Board of Appeals variances to make building possible at what was considered a difficult site. Abington Bank, which was the lender for the 2004 proposal, bought the site at sheriff's sale in June 2009 for $1.7 million by Abington Bank.
Scannapieco said he expects to close on the property, which he is buying from Five Hundred Walnut Associates for $8.5 million, in 60 days. Parkway Corp. chairman and CEO Joseph S. Zuritsky, a principal of Five Hundred Walnut Associates, acquired the site from Abington Bank in 2012 for $3.16 million.
Scannapieco is paying more for the site than Zuritsky did because the latter bought it before it had court-approved zoning. Zuritsky was involved in the 31-story, 31-unit, $145 million 1706 Rittenhouse project, but sources say his role in 500 Walnut would be minimal, if any.
The site is under court-mandated zoning for as many as 84 units. Scannapieco plans only 40, however, with the top stories developed as full-floor units of 4,200 square feet and the remaining floors having two units each.
Two penthouses will be offered - each of two stories with more than 8,400 square feet - that will have private interior elevators, multiple balconies, and fireplaces.
"It is a beautiful site," Scannapieco said in an interview, adding that he would take advantage of Philadelphia's 10-year tax-abatement program, a "very valuable incentive."
That program is being challenged by City Councilman Wilson Goode Jr., who has said it favors wealthy developers and home buyers at the expense of the public school system.
Scannapieco said his plan for 500 Walnut builds upon "the luxury" of 1706 Rittenhouse Square Street, and will offer greater "privacy and intimacy" than the earlier project, which sold out last year after reaching prices of $3.9 million to $12.5 million.
Is there enough local demand for what Scannapieco describes as "ultra-luxury?"
In his original marketing research, he said, he found that there were perhaps 2,000 people in the Philadelphia metropolitan area with net worth in excess of $10 million who could afford to live in such pricey condos.
Center City Realtor Joanne Davidow, who says she sold "the most units" at 1706 Rittenhouse, noted that she continued to receive "inquiries from potential buyers after it had sold out."
Developer Carl Dranoff said that while prices in Society Hill have traditionally been lower than in Rittenhouse Square, he believes Scannapieco can succeed with a limited number of units.
"The air is rare at that level," Dranoff said. With demand increasing as the real estate market recovers, he added, "a rising tide carries all ships."
Yet buyers at 1706 Rittenhouse also have said they would not have purchased their condos without the Rittenhouse Square location, parking, and the privacy single-floor living affords.
Davidow said there are expensive units in the Society Hill neighborhood already. Sales results so far at Toll Bros. Inc.'s 55-unit 410 Society Hill condo project between Second and Front Streets, where prices range from $500,000 to $1.7 million, show that there is demand coming from longtime Society Hill residents looking to move down, she said, and from people now living in the suburbs as well.
She wouldn't be surprised, she added, if 500 Walnut sold out before the foundation was dug.
BY THE NUMBERS
Cost of the condo tower at Fifth and Walnut Streets.
Number of stories.
Number of units.
Expected cost of acquiring the property from Five Hundred Walnut Associates.
Square feet in two two-story penthouses, featuring private elevators, multiple balconies, and fireplaces.EndText