Friday, June 19, 2015

Council, Nutter OK bills to give control of Gallery to PREIT, Macerich



ONLY ABOUT an hour after City Council approved a package of bills to kickstart a $325 million revamping of the Gallery at Market East shopping mall, Mayor Nutter held a special signing ceremony to sign the legislation into law.


"The overhaul of the Gallery at Market East will transform this property into a destination that will benefit Philadelphians who have known and loved the Gallery for many years, as well as attracting many new residents and visitors from the city, region and beyond," Nutter said.

The project will mean the closing of the current Gallery shopping space in phases over at least a two-year period with the plan for a new, brighter and more-upscale mall called the Fashion Outlets of Philadelphia at Market East.

The Pennsylvania Real Estate Investment Trust and the Macerich Co. formed a partnership to remake the mall, with demolition of what was once known as Gallery I starting in August.

At the earlier Council session, Irma Lopez Salter, a spokeswoman for kiosk merchants who were the first to be forced to leave the now-empty Gallery I, said she looks forward to the ribbon-cutting for the new mall and expects that she and other vendors will have an opportunity to return.

"We will be there at the ribbon-cutting," Lopez Salter said.

Nutter's office issued a statement saying that the project is expected to create more than 2,000 construction jobs and 1,000 permanent jobs.

In addition, the mayor's office said, the project may generate more than $435 million in tax revenue over the next 20 years, including nearly $200 million in new direct tax revenue to both the city and the School District of Philadelphia.

But for the package to get the financing the developers want, City Council and Nutter approved bills that transfer ownership of what had been city-owned property within the subsurface areas of the mall.

Council and the mayor also gave final approval to the city's largest investment in the project - a $55 million Tax Increment Financing deal that lets the Gallery owners borrow money against rises in property taxes, to divert increased tax liability to pay off the construction debt the owners will face during the next 20 years.

The city would continue paying maintenance costs for 40 years, adding up to another $58 million. The state also has pledged another $35 million.

Other bills approved yesterday strike certain streets around the Gallery from the city plan.

In other action, the Council approved a bill intended to increase the number of digital billboards, while removing some of the clutter of traditional, or static, billboards.

Councilman Bobby Henon had planned to call for a vote on the bill earlier this spring, but delayed it after the Pennsylvania Department of Transportation suddenly told city officials that it was withdrawing the city's authority to write sign laws in certain locations.

Henon's bill allows some static billboards to be converted to digital as long as the billboard owner removes two other billboards. Council passed the law yesterday even though jurisdiction issues with PennDOT haven't been resolved.

Source: Philly.com

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