Friday, October 31, 2014

PREIT seeking public financing for Gallery makeover



Bright red shopping bags have been flowing out of Century 21's new store at the Gallery at Market East, but other changes - big and small - are afoot at the Center City mall.


Though some small tenants have departed in recent weeks - a 25-year-old sandwich shop will close for good Saturday - and others hear rumors about stores moving, the mall's landlord, Pennsylvania Real Estate Investment Trust, has approached the City of Philadelphia about public financing, according to chief executive officer Joseph F. Coradino and Mayor Nutter's office.

In his remarks to financial analysts Wednesday to discuss PREIT's quarterly results, Coradino referred to unspecified plans with newly added partner Macerich Inc. and the possibility of getting public money.

"Century 21 opened to the public just yesterday, and we're tremendously pleased with the warm welcome they have received from Philadelphians," Coradino said in a conference call. "This marks the first step in the renaissance of the Gallery with Macerich as our partner. We're poised to deliver a world-class project. Our discussion with the public sector continues to progress with the expectation that City Council will consider a public financing package in December and ratify it in early 2015. As this process unfolds, we intend to update you on our vision, scope, schedule, and returns."

Council President Darrell L. Clarke's spokeswoman said Thursday she was unaware of such plans for Council consideration. After Coradino's remarks were relayed to him, Nutter spokesman Mark McDonald confirmed Thursday that PREIT was seeking public help.

"The mayor is strongly supportive of the efforts to transform Market Street, and clearly the renewal of the Gallery is a key part of that effort," McDonald said. "In broad strokes, we hope for more doors onto the street and more activity on the street, a more exciting and inviting place for Philadelphians and visitors."

The Philadelphia Redevelopment Authority owns the Gallery, having spent $101 million on it in the 1970s. Deputy Mayor Alan Greenberger told The Inquirer in February a new lease was in the works to give PREIT control of the entire property.

"Once that lease is finished, PREIT will seek private financing for the substantial renovation of the Gallery," McDonald said. "The city has been asked for help to fill in any gaps in that funding. We are working on the issues, including the lease and funding, and we don't have a final plan in place. The timing issue as you present it is roughly accurate, all depending on a variety of factors related to the completion of the proposed lease and other matters."

A call to Heather Crowell, PREIT's Philadelphia vice president for communications and investor relations, was not returned. Calls and e-mails to a New York PREIT representative were not returned.

Meanwhile, it will be more difficult to get a sandwich at the Gallery next week.

After 25 years, Michelfelder's Deli will close. Owner Ki Kim had a four-color, handwritten sign atop a front counter thanking customers and telling them the store will close Nov. 1. He fielded a call from a worried friend while talking to a reporter in a back office. He said he had no problem with management of the mall.

"The main reason is there is not enough business to stay open," Kim, 70, said noting the bad stretch started during the 2008-09 financial crisis. "This is the worst year in five years."

A bookstore and fish market within steps of his shop closed in September. Next door, Prime Time Jewelers store manager Tarun Verma said, "This is the worst month since we opened the store in December 2011."

Auntie Anne's assistant manager Thomas Robinson said he had heard that mall officials might want all food stores in a larger food court and that something might happen in late December, but he also lamented the loss of Michelfelder's.

"Most of the people come this way for Mr. Kim's hoagies," he said.

Kim said he hoped Century 21 and other unknown changes would benefit his small-store colleagues.

"I think it will, but I don't know," Kim said. "It's only been here for a few days."

Source: Philly.com

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