Though it may sound cliché at this point, it appears the
Rivage site in East Falls will finally get developed.
Grasso Holdings in partnership with Onion Flats, both
Philadelphia real estate companies, plan to construct a $70 million, 6-story,
mixed-use project that will have 200 apartments, a 200-space underground garage
and 15,000 square feet of restaurant and retail space.
A rendering of how the project could look though parts of
it are still being tweaked.
There are still some loose ends to tie up, but if the
approval process is finalized by year-end or early next year, the developers
expect to break ground next summer and have it completed by early 2018.
Keep your fingers crossed.
Develop the Rivage, and the site itself, have been
nothing short of a saga. What has been lost in the fits and starts of getting
the site developed can't quite be calculated, but this may be its best chance
yet. What is hoped, as has been all along, is a little easier to measure.
“This project will be an anchor and incredible gateway
for East Falls,” said David Grasso of Grasso Holdings. “It will be
transformational for East Falls.”
A self-proclaimed optimist, a trait that runs through
just about every developer, Grasso is confident the project that has been
designed thus far, and under his guidance will get completed and be a financial
success. That wasn’t always the case.
Grasso got involved with the Rivage, a reference to an
old catering hall that had once been on the site, about two years ago. “It
seems like forever now,” he said.
That’s when Onion Flats, who couldn't be reached for
comment, decided it needed help with the project, according to Grasso.
In 2011, Onion Flats was selected by the Philadelphia
Redevelopment Authority to construct a proposed $26 million, net-zero energy
project on the property that originally would have stood five stories and have
126 apartments along with 8,700 square feet of retail space along Ridge Avenue.
The development would have had 138 parking spaces.
The community, who was involved in the selection, was
elated. Finally, the Rivage would be developed. But those hopes were dashed as
they were before.
This wasn’t the first time the redevelopment authority
had picked a team to develop the property that is at the intersection of Kelly
Drive, Ridge Avenue and Calumet Street.
The redevelopment authority, which has controlled the
property since 1998, selected a development team in 2007 but by the time it
went to get funds to break ground, the financial crisis and credit crunch had
killed the market for new construction. The plans stalled and the site reverted
back to the redevelopment authority until the selection of Onion Flats.
Despite its strong location and size at nearly two acres,
the site has failed to get developed for over a decade. Some observers blamed
neighborhood groups, saying they had been demanding. Others had said the site
was a challenge. According to Grasso, that is an understatement.
There are enormous grade changes, a portion of the
property sits in a flood plane, there are nagging traffic issues surrounding
it, as well as unsuitable and contaminated soils.
But that wasn’t all.
“The location doesn’t command the kind of rents you get
in Center City, but you are still spending the same amount of money you would
spend if you were building in Center City,” Grasso said.
Rents in that part of Philadelphia are about two-thirds
of what they are in Center City.
Onion Flats had already designed the project when Grasso
became involved.
The property was going to have a single-loaded corridor
with apartments just on one side. Typically, as in a hotel, apartment buildings
have double-loaded corridors with corresponding units on both sides of a
hallway. Onion Flats had also designed it to be very energy efficient and
constructed with modular materials.
Grasso spent the better part of a year studying the
plans, getting a handle on using a modular building system and meeting with
manufacturers of these materials. He also brought in Carlyle Group of
Washington D.C., as an equity partner. It seemed as if things were moving along
until, out of nowhere, they weren’t.
“We were about to close on the property and we were
notified by PennDOT and the Streets Department that they had decided to rescind
their verbal approval of the access plan we had been discussing with them for
over a year and a half,” Grasso said. “We had received nothing but positive
feedback from them but at the 11th hour, they changed their minds. Closing was
in two weeks. What were we to do?”
The closing date couldn’t be postponed so they settled on
the property and went back to work trying to figure out a solution for a better
way to access the property. One idea to share an entrance with a nearby
property owner didn’t work. There was also an issue of trying to find a way to
ease some of traffic congestion that bottles up Ridge, Kelly and Calumet during
rush hour. After some impasses, it was decided to have an entrance and exit on
Kelly.
“That really opened a Pandora’s Box and started to
unravel a lot of things,” Grasso said.
The parks department was worried about that design, as
well as for the safety of pedestrians and vehicles along Kelly Drive, but it
worked out.
The entrance was put at the far western edge of the site
but that was problematic. That part of the property sits 13 feet below grade
and a parking deck off of Ridge that was part of the design would now need a
13-foot high ramp from Kelly in order to access it. Other scenarios were considered,
but all caused other issues, such as taking up a third of the parking or
becoming way too expensive and, at the least, were unattractive.
“We had to study this issue long and hard,” Grasso said.
“We came to the conclusion that the only way to make this really work was to
increase the density of the project to generate more income. We would have to
add 50 apartments and go from 150 apartments to 200. How would we do that? We
would have to add two more floors to get the additional density that we needed,
but that was problematic. The community would be upset about adding two more
floors.”
Not only that, it changed the construction type from
wood-frame to non-combustible materials such as steel and concrete. Once that
happens, the cost to build goes up even more and that meant even more units
would have to be added to offset those costs.
It was one thing after another, but Grasso stayed
committed. It meant making a drastic decision, though.
“At that point, I said we needed to redesign the whole
thing,” he said.
That was six months ago. Morris Adjmi Architects of New
York was brought in and started from scratch. It had knowledge of all of the
issues that were making the project difficult. Whatever was designed also
needed to comply what the intent of the original plans, such as making it
energy efficient and maintaining a certain scale, and had to be acceptable to
the redevelopment authority.
Finally a design was worked out.
The development is now six stories and with double-loaded
corridors. That allowed for the density that was needed and stayed below the
level where wood-frame construction could be used, making it more economical to
construct. The new design also kept the initial sustainability goals, has
below-grade parking as well as pays more respect to the park across the street
and Kelly Drive. Access issues have been worked out and final approvals in the
works.
“I’m confident that we have finally wound up with a
design that accomplishes a lot of things that we set out to do,” Grasso said.
While a small grocery store is part of the retail space,
the last piece of the project Grasso wants to pay extra attention to is making
sure he secures the “right” restaurant or cafe in the retail space that will
face Calumet and Kelly. The plans are to make that a focal point of the whole
project, which doesn't have a formal name yet.
“That will set the tone for the overall development,” he
said.
Source: Philadelphia
Business Journal
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