A partnership that owns the forlorn Chesterbrook Shopping
Center has an $85 million plan to breathe new life into the property.
That work calls for razing a large portion of the existing
center and constructing a mixed-use development with a community of townhouses
with just a small retail strip. It’s what the partnership believes the site can
sustain and, after struggling for so many years, also make it thrive.
“When we bought the property, we wanted to figure out why it
was broken and how we could fix it,” said Robert F. Whalen Jr. of RW Capital
Partners Inc., a Plymouth Meeting, Pa., real estate investment company.
The conclusion was that it no longer worked as a pure retail
outlet.
When the 122,216-square-foot center was constructed in 1981,
Genuardi’s was its anchor and the grocer had a devoted following throughout the
region. For a time, the center held its own in spite of just 9,600 vehicles
passing along Chesterbrook Boulevard on a daily basis. The grocer’s sales were
just about $200,000 a week.
As time went on, competition ate into those meager sales.
Trader Joe’s moved into the Gateway Shopping Center, which isn’t too far away.
Wegman’s, Whole Foods, and even other retailers that incorporated groceries
into their stores (such as Wal-Mart and Target) took business away. Then,
Safeway bought Genuardi’s and the once-family-owned chain of grocers lost much
of its luster.
The lack of pedestrian and vehicular traffic combined with
poor visibility also hurt the center. Its design didn’t help either, Whalen
said. It was no secret that a courtyard that was incorporated into the center’s
original design hid stores and deterred shoppers from milling around.
The economic downturn was the final nail. The recession wore
on and Genuardi’s vacated in 2010 its 38,502-square-foot store. Some of the
other retailers closed up and many of its vacancies were never re-leased. A
total of 78,960 square feet was empty and 21 of its 41 store fronts were vacant
at the time Whalen’s partnership bought the property last fall.
With vacancies plaguing it, the lender on the property, U.S.
Bank, initiated last June foreclosure proceedings against Chesterbrook Village
Center Associates, an affiliate of Brixmor Property Group that owned it.
Brixmor gained the property when it acquired in 2011 Centro Properties.
At that time, Chesterbrook Village Center Associates owed
$9.8 million on a $10.5 million loan that was issued on it in 2004.
The situation allowed Whalen, along with Brian McElwee of
Valley Forge Investment Corp. and RLD Land Development, to buy the note on the
center last November. While Whalen declined to disclose how much the group paid
for it, some sources estimate they paid roughly $8.9 million. After purchasing
the center, Whalen and his partners attempted to figure out the best use for
the property going forward and what would financially make sense. They also
needed to figure out what would be most palatable for the existing residential
neighbors, said Whalen, who at one point sat on Tredyffrin’s planning
commission.
A 5-story structure with 300 apartments was considered but
ruled out. The same goes for an 8-story office building. The plan they hatched
that would work best involved tearing down a section of the center,
constructing 124 townhouses on the 13-acre parcel. The residential portion of
the project is expected to be sold off to Cornell Homes, which is based in
Media, Pa.
The front part of the center, where Pizza Land and some
other shops are located, would remain and be expanded on either end by 13,000
square feet to accommodate a Rite Aid and Citizens Bank. Goodwin Architects
Inc. is the designer.
The plan is going through the township approval process but
if all goes well Whalen is hopeful to have everything finalized this fall.
“I’m really passionate about this project,” he said.
Source: Philadelphia
Business Journal
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