Friday, November 13, 2015

Before Viaduct Rail Park is born, it nurtures area investment



Backers of a plan to transform unused rail lines north of Center City into an elevated park say it will draw private investment to blighted areas.


That may already be happening at 990 Spring Garden, which sits near a stretch of the planned Viaduct Rail Park that runs through a rundown industrial district along Callowhill Street east of Broad.

Owners of the 88-year-old building, now mostly home to city offices, are turning it into loft-style suites to attract creatively minded companies and technology firms.

The revamp is part of a multi-property plan by Arts and Crafts Holdings, whose principals include an engineer of eastern Center City's revival.

Its first taker at 990 Spring Garden is Azavea, a mapping-software developer that will move into a full floor of the building early next year, says PernaFrederick Commercial Real Estate, which helped broker the lease.

"I'm excited about the rail park," said Azavea founder Robert Cheetham.

Arts and Crafts' plans are just one example of the real estate activity along the proposed three-mile linear park, which takes New York's High Line as an inspiration. It's happening even before the park's backers, the Center City District and the Friends of the Rail Park group, have finished raising money for its first phase.

There's good reason for the optimism: The High Line drew about $2 billion in private investment by 2011, just six years after getting its zoning approvals, then-New York Mayor Michael Bloomberg said at the time.

"Everybody is now aware of what the High Line in New York City represented in terms of stimulating investment," said Center City District president and CEO Paul Levy.
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The Viaduct Rail Park's backers have raised about 60 percent of the $9.6 million needed for the project's first quarter-mile phase, which would lay gravel and boarded paths on a section from near Broad and Noble Streets to a junction just past 12th and Callowhill Streets.

Much of the remaining budget for that expanse, owned by SEPTA, is expected to come from the state, Levy said.

It's likely areas traversed by the proposed park would be targets for investment on their own. Some of the rails run just north of Center City's revitalized core and west of increasingly affluent Northern Liberties. Another section runs below grade near long-gentrified sections of the city's Fairmount section.

Still, much of the development activity is concentrated along the proposed park. At 21st and Hamilton Streets near the Philadelphia Museum of Art, Washington-based Dalian Development is investing about $130 million in a 10-story apartment complex across from a below-grade portion of the former railway.

"If this can become High Line-esque, it's nothing but upside," said Brady Nolan, Dalian's vice president for development.

Along the planned first phase of the park, meanwhile, the owners of about 1.4 acres of parking lots between 12th and 13th Streets sought a rezoning in September that could allow taller buildings there, said Sarah McEneaney, president of the Callowhill Neighborhood Association.

But the most pronounced activity is along the proposed park's eastern end by Arts and Crafts Holdings. The company is partly headed by Craig Grossman, who helped lead the redevelopment of Center City's Midtown Village along South 13th Street as the former Philadelphia chief for the late New York developer Tony Goldman.

Grossman's involvement in Arts and Crafts was confirmed by Azavea's Cheetham and others. He did not respond to an email seeking comment.

He and partner Aaron Cohen, a Brandywine Realty Trust alumnus, bought at least two other properties in addition to the seven-story 990 Spring Garden building, according to Arts and Crafts' website.

Those include a seven-story industrial building at 448 N. 10th St. built in the early 1900s for Haverford Cycle Co. and a six-story manufacturing-turned-residential building at 1027 Ridge Ave.

The properties are near a three-quarter-mile section of the planned rail park owned by Reading Co., with which the project's backers have not yet begun negotiating.

Cohen said offices are planned at the old Haverford Cycle building, but he declined to discuss the company's activities beyond 990 Spring Garden.

He played down the importance of the rail park to his company's plans.

"There are a lot of exciting things happening, but most importantly, we think the building is an incredibly good fit for the thriving creative class," he said.

Arts and Crafts' website is less ambiguous. "As the proposed Rail Park expands, it will pass right behind this building," it says in its description of the Haverford Cycle property.

Source: Philly.com

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