Gallery's revival clears first government hurdle

Turns out there's a truck tunnel beneath the Gallery at Market East.

It's been there since the structure was built in the 1970s - a huge, hidden space defined by loading docks and trash bins, used as a means to deliver merchandise, food, and supplies when the mall was in its heyday.

"It actually is pretty cool," said Brian Abernathy, executive director of the Philadelphia Redevelopment Authority. "Like a subterranean cavern."

The question of who controls it and who may use it in the future stood among a half-dozen complex matters considered and resolved Thursday, as the authority took the first official step toward placing control of the rundown mall into the hands of a developer who plans a complete remake.

The authority board, at a special session, voted unanimously to award a 69-year lease to the Pennsylvania Real Estate Investment Trust, which has joined with California-based Macerich Co. to undertake a top-to-bottom renovation of the mall.

The lease agreement must be approved by City Council, which is expected to consider the matter next week. The measure approved Thursday would consolidate the multiple interests that govern the Gallery's operation under the control of the project developer.

"It's an extremely complicated transaction, but one that will change the face of Market East," said James Cuorato, the authority's chairman. "This is the first step in a series of events that need to happen to make this a reality."

The agreement ensured, for instance, that after construction, pedestrians and commuters would still be allowed to walk through the mall to and from SEPTA's Jefferson Station. Most of the mall would close during renovation, however, estimated to take two years.

The Gallery is seen as the key piece of a long-hoped-for revitalization of the eight-block stretch of Market East from Independence Mall to City Hall. The RDA board met for the sole purpose of officially uniting a set of agreements, easements, and claims involving the property.

No one spoke during the public-comment portion of the meeting.

"This project provides a foundation for future development of Market East," Abernathy said.

This week, PREIT executives outlined a three-part approach to transform the nearly empty mall. It's centered on a new retail strategy, architecture, and public funding. Many tenants would be lower-cost outlets of high-end clothing retailers, brands such as Gucci, Prada, and Burberry. Some restaurants would be destination attractions.

The fortresslike Market Street exterior of the mall would be broken down and replaced with glass storefronts. The name will change to the Fashion Outlets of Philadelphia.

Plans call for the city to invest about $113 million in the project over time. The total project is worth $575 million, the company said.

As part of the agreement approved Thursday, PREIT agreed to hire 25 percent to 40 percent women and minorities, depending on the job, as the mall is built.

PREIT will have title to the truck tunnel, which is entered by a ramp at Ninth and Arch Streets. The Girard Estate, which owns property at the west end of the mall, would still be able to use it.