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Big North Philly station project backers should chase public cash and team with Temple, study says

The Urban Land Institute study comes about a year after plans first emerged for residential, office, and retail space on what are now vacant warehouse properties and empty lots around the North Philadelphia Station.

Artist’s rendering of proposed North Station District development, as seen from above.
Artist’s rendering of proposed North Station District development, as seen from above.Read moreSpagnolo Group Architecture

The success of a plan to revitalize the blighted area around Amtrak's North Philadelphia station into a new complex of homes, research labs and offices may hinge on whether its backers can tap more public money for the project and recruit Temple University and its health network as future anchor tenants, according to a study on the proposal.

Public subsidies would help the developers of the North Station District project charge competitive rents for the area while still making an adequate return on their construction costs, and an association with Temple would signal a level of institutional support that has aided similar proposals, experts with the Urban Land Institute (ULI), a global real-estate research nonprofit, wrote in the report released this month.

The report was completed at the request of Philadelphia's Planning and Development Office with financial support from the project's backers, a consortium of New York-based developers, consultants and investors including HFZ Capital Group, the Arete Group, and Merchant Equity Group, with Synterra Ltd. of Philadelphia as a local partner.

Its release comes about a year after plans first emerged for what could eventually be up to 1.7 million square feet of residential, office, and retail space on what are now vacant warehouse properties and empty lots around North Philadelphia Station in an area bounded by Broad Street and 17th Streets, between Glenwood and Indiana Avenues.

The proposal's first phase calls for a 21-story residential-and-office tower and a six-story apartment building on what's now the train station parking lot, and the transformation of the 180,000-square-foot derelict industrial building on an adjacent parcel to the west into work spaces for start-ups and light manufacturers.

The ULI experts said in the study that the project "could be a catalyst for broader community development" in the surrounding section of North Philadelphia that suffers from high unemployment and low household incomes. But "the lack of a comprehensive market study and/or strong institutional support are concerns."

"The proposed development might be attractive as makerspaces, innovation and research labs, but the concepts are untested and support is questionable," they said.

To better the project's chances of success, backers should pursue additional public money, without which "there is a danger the project will price itself out of the market and rent will not justify construction," the ULI report concluded. Such funds would come on top of $4 million that the project has received from the state Redevelopment Assistance Capital Program.

Philadelphia planning and development director Anne Fadullon said that the city has not fielded any specific requests for public assistance to aid the project but that "as the development progresses, the city would be happy to talk about how the community will benefit from the development and subsidies that might be available for it."

The study's authors also urged the project's developers to team up with area institutions, such as Temple, to take space in its commercial and residential buildings, noting that development in Camden has benefited from the expansion of Rutgers University in that city's center.

"Projects that have succeeded in similarly distressed areas have done so with strong and tangible institutional and public support," ULI's experts wrote. "An agreement from Temple Health System to lease space, serve as a tenant, or make a financial commitment would signal support."

Temple spokesman Brandon Lausch said the university and its medical network "continue to have conversations about the proposed North Station District and its potential benefits for North Philadelphia."

Michael Bailkin, a principal with development consortium member Arete Group who previously served as an economic development official in New York City government, said the project's backers are still evaluating ULI's specific recommendations.

"The overall consideration is to make the project work for the community," he said.