Toll Bros. sets sights on Rittenhouse Square

Toll Brothers Inc. is exploring constructing a mixed-use development on a long-vacant site on Rittenhouse Square in Philadelphia.

The Horsham, Pa., homebuilder is reportedly in talks to buy 1911 Walnut St. with an eye toward building a condominium tower that would have a hotel and retail space, according to several sources familiar with the situation. This would expand Toll’s footprint in Philadelphia, where it has developed Naval Square, a residential project in Society Hill and South Street.

Through a spokeswoman, Toll Brother declined to comment.

This prime parcel on Rittenhouse Square has remained undeveloped since the early 1990s and was put up back for sale in January. Interest in the parcel was expected to run high because of its size and location. Toll Brothers has been very aggressive in its offer.

Any time a project has been proposed for the high-profile site, controversy erupts and a development never moves forward. The L-shaped property is comprised of 1907-1914 Walnut St. and 1906-1920 Sansom St. It totals nearly an acre.

The current owner, Castleway Properties of Ireland, has owned 1911 Walnut since late 2007 when it bought the land from the Philadelphia Parking Authority for a staggering $36.7 million, or $1,011 a square foot.

In early 2008, a few months after it bought the property, Castleway had drawn up plans that included a 50-story mixed-use project with 150 condominiums, retail and hotel, but the project never moved forward.

Many believe the steep price Castleway paid for the site derailed its development while others contend that demands from neighborhood groups made a scaled-down project financially unfeasible. In hindsight, the timing wasn’t good either.

The company bought the property a year before the financial crisis was full throttle and had plans designed for a project in early 2008, when the economy was tanking and forcing many developers to pull the plug on projects.

Even though the parcel sits on one of the city’s most prominent squares, it has had an odd history. The property has sat derelict since December 1994 when what had been the Metropolitan Reporting Bureau and Eric Rittenhouse theater burned to the ground in a six-alarm blaze. In the late 1990s, Moreland Development owned the development rights to the property, which was then controlled by the Philadelphia Parking Authority (PPA).

Moreland had proposed a Ritz theater, a 12,000-square-foot restaurant along with a 600-vehicle garage that had 6,000 square feet of retail.

Neighborhood opposition thought, at the time, that the scale of the garage was too big and opposed the demolition of three historical buildings — the Oliver Bair Funeral Home, Warwick Apartments and Rittenhouse Coffee Shop — that sit on the property along Sansom Street.

The Philadelphia Historical Commission decertified their historic designation but that was appealed by neighborhood groups and eventually overturned by a Court of Common Pleas. The project was derailed, Moreland relinquished its development rights and the PPA maintained ownership of the property.

The PPA decided in 2007 take bids to sell the site. Three finalists competed for it and Castleway had the highest bid.

Source: Philadelphia Business Journal