The team that's revamping the former Gallery at Market East into a new Center City shopping and entertainment hub is taking it to the street: shabby, activity-starved Filbert Street.
With their latest round of tenant announcements, mall owners Pennsylvania Real Estate Investment Trust and Macerich are bringing new clarity to their plans for the street that forms the northern boundary of what they've named the Fashion District Philadelphia project.
Prominent among the businesses announced this week for Filbert Street is a branch of music and wine destination City Winery. With on-site winemaking, a 350-seat performance area, restaurant space, and room for private events, it will be the seventh such venue nationwide since the New York music club impresario Michael Dorf started the first City Winery in 2008.
Also facing Filbert Street will be a branch of barbecue chain Dallas BBQ, now with locations in and around New York, and the entrance to the project's AMC Theatres cinema, with more tenants along the street to be announced.
"This is a way to open the project up onto the street," PREIT chief executive Joseph Coradino said in an interview Thursday. "Street frontage is valuable."
Philadelphia-based PREIT and Macerich, of Santa Monica, Calif., announced their plan to revamp the Gallery, bordered by Market and Filbert Streets, between Eighth and 11th Streets, in 2015.
Together with Washington, D.C.-based National Real Estate Development's East Market project across the street and improvements to the former Lit Bros. department store building farther east, the Gallery overhaul has been seen as a major component in the revitalization of the strip of Market Street running through eastern Center City.
But the Gallery's redevelopment stands to also make a substantial mark on Filbert Street, now lined by the former mall's long, blank walls on one side, with a row of parking lots, garages, and a Greyhound Lines Inc. station on the other.
Larry Steinberg, who leads the retail practice at Philadelphia-based commercial brokerage Rittenhouse Realty Advisors, said City Winery's ability to draw music lovers and oenophiles to Filbert Street will aid PREIT and Macerich as they strive to activate the north edge of their property.
"They've been working hard to bring entertainment and food and beverage to that piece of their project, and this will really legitimize their efforts," said Steinberg, who is not involved with the plans. "This is a major piece of entertainment tenancy that really is a great win for them."
Dorf said City Winery has helped fuel commercial development in other places where it's opened, so he's confident the venue can also give Filbert Street some of the boost it needs.
In the years since he's opened in Chicago's West Loop area, for example, real estate values have soared, while his location in Atlanta's Ponce City Market development has been an asset to the surrounding neighborhood in that city's Midtown section, he said.
More recently, City Winery was among the tenants recruited to help anchor Douglas Development Corp.'s redevelopment initiative in Washington, D.C.'s Ivy City section, he said.
"When you start looking at longer-view real estate planning, incorporating something like us is part of smart planning," Dorf said.
Dorf said he's even been in talks with the likes of commercial real estate giants Brookfield Properties and Related Cos., which would like him to open a new City Winery flagship in their big New York projects.
He said he's mulling Related's 28-acre Hudson Yards development underway on Manhattan's far West Side as a potential location for the new venue, which would replace his first location in Lower Manhattan that's soon to become part of a construction site for Walt Disney Co.'s planned new headquarters tower.
In Philadelphia, City Winery will fill a 30,000-square-foot, two-level space at the southeast corner of 10th and Filbert Streets on the former Gallery's first floor and in its underground concourse, PREIT's Coradino said. Another two restaurants — a brew pub and a "dueling piano bar" — also are planned along the strip of Filbert between Ninth and 10th Streets.
Across the street to the west, between 10th and 11th Streets, Dallas BBQ will occupy about 10,000 square feet beside the AMC Theatre entrance, Coradino said.
And two more Filbert Street-facing restaurants are planned between Eighth and Ninth Streets, he said. A food hall planned for the ground floor of the former Strawbridge & Clothier department store building at Eighth Street would also have an entrance onto Filbert, Coradino said.
PREIT and Macerich are not alone among mall landlords in reimagining ways to use parts of their property that are no longer optimal for retail, as more customers shop online, said Anthony Buono, global president for retail at CBRE, the real estate services firm.
"It's really no different from a lot of things we see across the country in terms of what's really happening to retail environments," said Buono, who is not involved with the project. "They're transforming."