Philadelphia Archdiocese moves forward with vision to redevelop cathedral campus near Logan Square
The Archdiocese of Philadelphia, which for years has attempted to boost revenue after years of financial distress, is finally moving forward with its plan to redevelop three parcels that surround the Cathedral Basilica of SS. Peter and Paul. Last year, it envisioned high-rise towers on the site.
A year after the Archdiocese of Philadelphia announced its vision for building sleek high-rise towers beside the Cathedral Basilica of SS. Peter and Paul, it is officially seeking requests from developers interested in taking on the project.
In a request for qualifications issued in late October, the archdiocese said it expected "several" developers to express interest in the project, which aims to develop the 2.3-acre property surrounding the Center City cathedral. Once developers' qualifications are received, the archdiocese said, its expects to bid the project out in early 2018.
To whichever developer is selected, the archdiocese will extend a 60-year lease for the L-shaped parcel running to the north and east of the 1864 cathedral, located on the 1700 block of Race Street, next to Logan Square. Ultimately, the archdiocese aims to redevelop or demolish three buildings that surround the cathedral: the Archdiocesan Pastoral Center (222 N. 17th St.), the Holy Family Center (227 N. 18th St.), and a former convent on the parcel (adjacent to the rectory at 1701-1711 Race St.). The cathedral, its adjacent chapel, and the rectory will remain untouched.
It is still unclear what might be built in place of the three properties. In renderings presented to members of the Logan Square Neighbors Association last year, the archdiocese envisioned the construction of two sleek, high-rise buildings that would house mostly residential units, the archdiocese said. The building to the north, which appeared in the initial rendering as a 44-story glass tower, would feature ground-floor retail and restaurant space, the archdiocese imagined. To the east, it envisioned a 33-story tower that could accommodate archdiocesan administrative offices on its lower floors. Between both buildings, landscaped paths dotted the area.
In an email in October, however, Ken Gavin, a spokesman for the archdiocese, wrote that the renderings were "merely conceptual" and were used to provide "the community and a potential developer with a sense of what's possible on the site."
"Ultimately, the plan will be the developer's, but we will retain some control over what we permit," Gavin said. "Presumably, market conditions will influence what's done."
Even with details remaining vague, whatever is ultimately developed on the site could be one of the archdiocese's highest-profile real estate projects in recent years. Since Archbishop Charles J. Chaput arrived in 2011, the archdiocese has worked to sell or lease many of its real estate holdings to help alleviate the deep financial distress that beset the organization and its parishes for years — including millions of dollars of losses and long-term debt, created, in part, by sliding attendance, dwindling donations, and a sex-abuse scandal that required the payout of millions of dollars in legal fees and other expenses.
To help offset that, since 2011, the archdiocese has sold 17 archdiocesan properties, totaling $49.8 million, and 85 parish properties, totaling $57.8 million, according to archdiocesan data. Fifteen more parish properties are under agreement for sale. Parish transactions are categorized separately from archdiocesan sales, Gavin said, because net proceeds from parish property sales revert to the parishes.
Many of the parish property transactions have involved selling churches, convents, school buildings, and more throughout Philadelphia and its suburbs. And although the 17 archdiocesan transactions have been more prominent — for example, the sale of the archbishop's residence along City Avenue for $10 million in 2012 — none of the properties has been in the heart of Philadelphia in the midst of the city's robust real estate boom.
According to city property records, all three of the buildings the archdiocese hopes to redevelop are valuable assets. The Archdiocesan Pastoral Center, the multistory tower across from the Sheraton Philadelphia Downtown Hotel, has a reported 2018 market value of $15.7 million for the 30,000-square-foot property, records show. The Holy Family Center, at 14,700 square feet, has a listed 2018 market value of $6.9 million. And the 14,800-square-foot former convent is listed at $3.4 million for 2018, records show.
The archdiocese did not provide details about why it chose to facilitate a lease, rather than a sale. No revenue targets were provided, but other archdiocesan lease agreements have yielded significant revenue in the past. According to a 2014 lease agreement between the archdiocese and StoneMor Partners L.P., a for-profit cemeteries operator, the Bucks County company paid the archdiocese $53 million upfront and agreed to $36 million in future payments to operate and manage 13 archdiocesan cemeteries for 60 years.
Philadelphia is not the first or only archdiocese to experiment with commercial development in an attempt to bring in a steady stream of revenue without having to give up ownership of valuable parcels. Two years ago, the Archdiocese of Boston announced that it had secured a 99-year lease with a developer to build a sleek, 160-unit apartment building with ground-floor retail on a parking lot beside the city's Cathedral of the Holy Cross.
If successful, the redevelopment of the Philadelphia cathedral area would mark the archdiocese's first large-scale commercial development deal.
"We expect that this will be a significant transaction," Gavin said. "We do not have any comparable transactions in the archdiocese."
No developer has publicly expressed interest in submitting a request.
The Logan Square area has found itself in the midst of Philadelphia's turnaround in recent years. As the city has grown wealthier and more attractive, developers have turned their attention to the neighborhood and near the Benjamin Franklin Parkway. City officials, meanwhile, have used the area to host concerts, large events, and Pope Francis' 2015 visit.
Such increased activity has translated to an increased cost of living in the Logan Square zip code, 19103, which stretches from 16th Street to the Schuylkill, and from Callowhill to Waverly Streets. In the last decade, the median house price in the zip code has jumped 8.3 percent to $830,000, according to data from Drexel University economist Kevin Gillen. The median rent for the zip code is an estimated $1,894 a month.
Not far from the archdiocesan-owned land near Logan Square, the Mormon Church is putting up a residential building using a concept similar to what the archdiocese seems to be seeking: a 32-story, 277-unit residential tower at 1601 Vine St. That property is next to the Philadelphia Pennsylvania Temple, which opened in 2016.
In an interview with the Inquirer last year, Deacon Thomas Croke, director of archdiocesan real estate services, said the organization previously had attempted to profit from the parcels near the cathedral. Previous negotiations to sell part of the complex to developer Greystar for a residential project fizzled in 2013, Croke said, over disagreements surrounding archdiocesan input on building design and access to parking.
The final plan, Gavin said last week, "would need to provide accommodation for the … resident priests and offices." He said the archdiocese also envisions "that housing for the archbishop of Philadelphia would be transferred to the current cathedral rectory."
Drew Murray, president of the Logan Square Neighbors Association, said the archdiocese unofficially presented its initial renderings last year to members of the group, and that the group ultimately gave church officials a "pretty positive" reception.
"What they showed us, it opened up the block and had open public areas, which is what we look for in the community," said Murray, who said he looked forward to seeing future plans for the space. "We were very happy when they came to us early the last time, and that they wanted to show the community conceptual plans."
"That's something really important to the Logan Square Neighborhood Association," Murray continued. "We want to have a positive relationship."