Neighborhood approval could clear way for Philly’s first new Center City headquarters building since Comcast
The Logan Square Neighborhood Association voted not to stand in the way of Parkway Corp.'s plan for about 400,000 square feet of offices.
A Center City community group has signaled its consent for a 15-story office tower at 20th and Arch Streets, opening a path for what could be the first new corporate headquarters building to rise in Philadelphia’s core since work on the Comcast Center began 14 years ago.
The Logan Square Neighborhood Association voted Tuesday to green-light Parkway Corp.'s plan for about 400,000 square feet of offices and ground-floor retail at a former Avis rental car lot, which the Philadelphia-based developer has owned since 2014.
The proposal would require City Council legislation to relax a height limit that applies to the site because of its proximity to the Benjamin Franklin Parkway and to tweak the city’s system of awarding “bonuses” that permit greater density.
Brian Berson, Parkway’s senior vice president for real estate and development, said in a presentation to the community group that the legislation was needed to assure the corporate tenant eyeing the site that the plan would be able to progress. He did not identify the tenant, who he said would sign an initial 20-year lease.
Council President Darrell L. Clarke, whose district includes the development site, had indicated to Parkway that he would introduce that legislation if the community group backed the proposal, Parkway president Robert Zuritsky said in an interview Tuesday.
Clarke spokesperson Jane Roh said in an email Wednesday that the Council president “will be prepared to work with the property owners toward a final development proposal that makes sense for the area and provides a net benefit to the city," providing that support from near neighbors is verified.
The plan also would require the relocation of a historically protected gas station building from the early 20th century at the site. Zuritsky said Parkway is working with the Philadelphia Historical Commission to find a new home for the terra-cotta tile-roofed Spanish Colonial-style structure.
New office projects have been rare in Center City, where market rents are typically considered too low to justify the cost of new construction. Parkway is seeking $5 million in state redevelopment funds to help jump-start another office tower proposal, at a property nearby on Market Street.
Zuritsky said during the community meeting that the prospective tenant for the Arch Street parcel also is considering sites outside the state, as well as a Philadelphia site that has been designated a Keystone Opportunity Zone (KOZ), which can qualify companies for city and state tax breaks. One such site with that designation is the West Philadelphia tract where the Schuylkill Yards development is underway.
Zuritsky conceded that it may be costlier for Parkway’s prospective tenant to locate on Arch Street than it would be for it to lease space in a KOZ, where it might be able to afford higher rents because its tax payments would be lower. But he said the prospective tenant wants to be in Philadelphia’s central business district, which is enjoying a growing cachet among other businesses and potential recruitment candidates.
“This is a validation of the city being strong enough so that someone is willing to pay the high cost for new construction as well as not get incredible tax breaks,” he said.
Bill Luff, who leads commercial property consultancy CRE Visions in Philadelphia, said Parkway has the advantage of having bought the development site when Center City land costs were lower than they are now, which makes the project less expensive.
And because the tenant would be the building’s sole occupant, it can decide which features and amenities it wants, said Luff, who has no involvement in the proposal.
Parkway representatives said during their Tuesday presentation that the company has had a presence in the Philadelphia community for many years and that its move would involve personnel from outside the city.
That description matches insurance giant Chubb Ltd., which is known to be searching for new office space, according to a person familiar with the company’s real-estate requirements but unauthorized to discuss it publicly.
Luff said Chubb, which is based in Zurich but maintains executive offices in Philadelphia, New York, and Whitehouse Station, N.J., is a “logical tenant."
Chubb spokesperson Eric R. Samansky said in an email that the company is “always looking at options to meet our needs [but has] nothing to report.”
In Philadelphia, the insurer occupies a historic building that it owns at 436 Walnut St., in addition to space that it leases at the near-neighboring former Penn Mutual Tower.
Philadelphia is also home to Chubb’s oldest active subsidiary, Insurance Company of North America, which had been a unit of insurer ACE Ltd. when that company acquired Chubb in 2016 and assumed its name.
In 2016, a Pennsylvania Historical and Museum Commission marker was dedicated to INA, as the 227-year-old firm is known, outside Chubb’s main Walnut Street building.
John Laprocido of architecture firm L2P, which is designing the proposed tower at 20th and Arch Streets, said during Tuesday’s presentation that the building’s prospective tenant is considering a ground-floor museum to illustrate its history if it selects the site.
An architectural rendering of the building portrays a boxy glass tower with reddish-brown panels on parts of its lower stories that echo neighboring brick structures.
Luff said such austerity may be just what a company such as Chubb wants in a new headquarters.
“They’re in a very competitive business, the insurance business,” he said. “Imaging could be important to them that they’re not building the Taj Mahal.”