Drexel looks to branch out over rail yards

Originally published Nov. 11, 2012.

Drexel University's entrepreneurial president has set his sights on the possibility of building over and developing part of the Schuylkill Rail Yards, long ogled by visionaries for its expansive prospects yet largely untouched because of the potential infrastructure problems it poses.

President John A. Fry is embarking on a university-funded million-dollar-plus feasibility study with Amtrak and SEPTA to determine options.

Could 30th Street Station and its West Philadelphia community be connected to the Art Museum and Center City via an elevated platform built atop the rail yards?

"This study represents a serious attempt to try to figure that out," Fry said during an interview on Drexel's West Philadelphia campus. "If the answer is yes, it opens up possibilities that I don't think anyone has really ever thought about before, to link the city in various ways. This could be the basis for Philadelphia's innovation economy for the next 100 years."

Simultaneously, Drexel is moving forward with plans for an "innovation neighborhood" abutting 30th Street Station and hopes for a variety of collaborative projects, including potentially luring and partnering with an international university, similar to the plans between Cornell University and Israel's Technion for New York City.

The innovation neighborhood, expected to include five million square feet of commercial office space, research laboratories, student housing, and a hotel, will proceed no matter the outcome of the feasibility study, Fry said.

But options multiply if the innovation neighborhood - which Fry hopes could one day become like North Carolina's Research Triangle - could be connected to 50-plus acres of new commercial/retail and academic development over the rail yards.

"This is the hole in the doughnut," he said, pointing to a map of the rail yards. "It's crazy that we haven't captured more of this waterfront and developed more of this property around the train station."

For decades, developers mulled the 96-acre rail-yard property, largely owned by Amtrak but also in part by SEPTA. It had been considered for a baseball stadium, convention center, amusement grounds, and office and residential properties, with the potential of raising new revenue for air rights.

But ultimately, the drab view has been left untouched.

The rail yards are near a section of the Northeast Corridor, the most heavily traveled corridor in the country, and building on or around it would be extremely tricky at best and cost-prohibitive at worst. But the yards include a 55-acre parcel known as Penn Coach Yards, where trains are stored and maintained.

That area - the piece Fry is interested in - would be easier to develop but still difficult because of the rail's high-voltage electrical lines over the property. Such potentially dangerous construction likely would need to be done by experienced, unionized Amtrak workers, which could ramp up cost. Add to that the difference in land grades and the need to build a platform on which development could occur complete with roads, utilities, and other infrastructure.

"This is among the most challenging type of development," said John Gattuso, regional director and senior vice president of Liberty Property Trust, a major Philadelphia developer. The challenges, he said, "aren't just technical. They're financial."

In the past, developers opted for less daunting options.

But for a university with a stake in the neighborhood, it becomes more compelling.

Several city leaders are intrigued by Fry's idea, realizing that such a mega-project would take decades to complete. The feasibility study is likely to take two years.

"We're very encouraged that they're doing this exploration," said Alan Greenberger, Philadelphia deputy mayor for economic development. "If there's an economic viability to this, and there's a way to do the coordination, this is a good thing."

Joseph M. Casey, general manager of SEPTA, said his agency was open to all options: "We think it would be a great idea to develop that area."

Though participating in the study, Amtrak declined to comment.

Fry recently presented his ideas to a high-powered group of business leaders, including William R. Sasso, chairman of the law firm Stradley Ronon Stevens & Young.

"John is continuing the reputation of Drexel as laying the foundation for benefiting not just their campus and West Philadelphia, but the entire region," Sasso said. "This concept is exactly what the region needs to enhance job creation here."

Steven M. Altschuler, president and CEO of Children's Hospital of Philadelphia, which is involved in its own billion dollars' worth of development, also was encouraged. Children's Hospital could be interested in development on the rail yards in the future, he said.

"We're very supportive of John's vision," Altschuler said. "He has a great track record of urban development and university campus development."

Fry, 52, defies the traditional college president model: He does not have a doctoral degree, has never been a dean or provost, and has not taught or conducted research. With his M.B.A. from New York University's Stern School of Business, Fry made his mark as an entrepreneurial college administrator at the University of Pennsylvania from 1995 to 2002 under then-president Judith Rodin. Playing a leadership role in Penn's successful neighborhood revitalization, he helped bring in a movie theater and grocer, was involved in creating the public Penn Alexander School, and launched the University City District, fostering relations among colleges, retailers, and residents.

From 2002 to 2010, as president of Franklin and Marshall College in Lancaster, he had a similar focus. He was featured in the Chronicle of Higher Education for the reclamation and planned redevelopment of an industrial site.

But none of his projects was as challenging as the rail yards.

From the time 30th Street Station opened in 1933, architects envisioned other buildings around it. In the 1980s, Houston developer Gerald Hines' plan to build on a platform over the yards died.

The only building to go up there is the Cira Centre skyscraper, which opened in 2005 at 29th and Arch Streets.

Other cities have developed over active rail yards, including Chicago's $495 million, 24-acre Millennium Park. The rail yard there serves diesel trains, so it doesn't have the issue of electrical lines.

Development also is slated for rail yards on the west side of midtown Manhattan and behind Union Station in Washington. Fry plans to send a team to Washington to review the plans.

But air rights in New York and Washington are more costly than in Philadelphia, which have made projects there more palatable, noted Jerry Sweeney, president and CEO of Brandywine Realty Trust, developer of the Cira Centre.

In Philadelphia, "you can't necessarily create a good economic return," he said.

The Cira Centre was built between electrical lines and on land, not a platform, which still was expensive and time-consuming, he said.

But he likes the idea of exploring further development there: "Sometimes complicated is exciting, and that creates the best opportunity to really create a lot of value."

In 2011, Penn graduate students in planning and design studied the idea of developing the yards and issued a 133-page report. "The challenges are great. But we know how to do it," said their professor, Harris Steinberg, executive director of Penn Praxis. "It has the potential to be a game-changer for University City."

Fry had no estimate of the cost to develop the yards.

The student report estimated $3.2 billion, but that included the whole property and relocation of infrastructure.

The report noted: "The adjacent stakeholder that stands to benefit the most directly . . . is Drexel University."

Drexel has grown substantially over the last decade, and its master plan calls for a student body of 34,000 by 2021, up from the current 26,000.

Under the plan, more development, including a 1,200-bed residence hall, is planned. Drexel has bought property in its proposed innovation neighborhood and has targeted two other parcels.

The innovation neighborhood, bordered by 30th Street Station, JFK Boulevard, 32d Street, and Chestnut Street, will marry research, technology transfer, and economic development within a neighborhood, Fry said.

Think Cambridge, Research Triangle Park, and Silicon Valley, he said.

"All those things happened because they had anchors," Fry said. "Penn and Drexel could do this, on par."

Asked about cost, Fry said development largely would be funded by third parties.

"We're trying to use other people's money and our land," he said.

Fry envisions an office of corporate partnership to help small-business start-ups in technology transfer. He also wants to team with an international university on a research/graduate center, which would commercialize its products. He said he had had interest from educators in Turkey, China, and Israel.

On an invitation from New York Mayor Michael Bloomberg, Cornell, and the Technion-Israel Institute of Technology successfully bid to build and run a high-tech graduate school on Roosevelt Island.

"I think that captured the imagination of a lot of international universities," Fry said.

He sees the innovation neighborhood and potential rail-yard development as his presidential legacy.

"This might be the way," he said, "in which we vault the university up to another level."