Living in ships' shadows may be reality
As many as 1.5 million square feet of rental housing could be added to the Navy Yard.
Have you ever dreamed of living seaside at the Navy Yard, the vast onetime shipbuilding hub that's emerged as a hip urban office campus? Soon, you may be able to rent homes in the shadow of mothballed naval ships.
The Philadelphia Industrial Development Corp. is actively negotiating deed restrictions with the U.S. Navy to build housing at Philadelphia's Navy Yard for the first time.
John Grady, president of the PIDC, said the agency hopes talks will lead to opening the campus to developer pitches within a year. PIDC envisions as much as 1.5 million square feet of rental housing, as well as small retailers and amenities.
The Navy Yard's historic buildings would be the first to be remediated, renovated, and converted into rental housing, Grady believes. "In our 2013 master plan, we talked about opportunities where residential could add value," he said.
"We're targeting a market of young professionals focused on multifamily rentals as primary housing. There would be a combination of renovation of historic loft-type spaces and new construction. There's probably between 1,000 and 1,500 units in an initial phase, or about 200 units per year over a period of years.
"That feels right in terms of absorption in the market and large enough to support an amenity base," he said. "That's our real objective with a residential component at the Navy Yard."
PIDC and the Navy have yet to work out the details. "We are in continuing discussions with the Navy about releasing existing deed restrictions that prohibits residential use. The Navy has been open to that idea. We want to make sure residential uses don't encroach upon Navy activities, industrial and research activities that need to remain separate. I would hope that over the course of next year we'd agree with the Navy" and then approach developers, Grady adds.
Housing would turn the Navy Yard into a live-work, 24/7 microcosm of edgy, urban living. An energy-efficiency research component has attracted employers as diverse as Penn State's Consortium for Building Energy Innovation project, Thomas Jefferson University Hospital, Urban Outfitters, GlaxoSmithKline, and the Marc Vetri restaurant Lo Spiedo.
Residential developers have approached PIDC with various ideas, although Grady wouldn't name names.
The proposal process would be similar to the one that chose Liberty Property Trust as the main industrial developer. Liberty has invested more than $300 million in converting industrial to commercial space.
"We went through [a request for proposal process] when we wanted a partner for industrial redevelopment. We haven't decided how we'd approach the development community around residential, or whether it's better to have multiple partners. That will be part of the solicitation process, maybe in the next year or so," Grady said. Models for the Navy Yard's residential component include San Francisco's Mission Bay and Battery Park City in Manhattan.
Transportation is always an issue, and the Navy Yard has undergone a fourfold increase in shuttle ridership in the last year. "It's possible one day we expand the rapid bus service and even a subway stop," Grady said. "SEPTA's looking at it."
The Navy Yard buildings offer potential historic tax credits and could come to market quickly, much like Toll Bros.' Naval Square development in Southwest Center City. Still, parts of the Navy Yard aren't suitable, given contamination.
"We can manage the issues associated with remediation of lead paint and asbestos and identify the area where the developers feel comfortable with residential use. We'll go through the public process in Pennsylvania with the EPA and meet residential standards," Grady said.
Chris Cleaver, public-affairs officer for three bases including the Philadelphia Naval Yard Annex, cautioned that there was no specific timeline for any residential development. But he confirmed negotiations with PIDC over the deed restrictions were ongoing.
"It's a complicated process. . . . The Navy has learned time and again that in mixing industry with residences, we don't want our missions and programs negatively impacted," Cleaver said, noting that a buffer zone of roughly 500 feet could separate naval operations and residential sectors.