Independence Mall neighborhood finds its groove

The Liberty Bell sat across the street, the symbolic copper-and-tin companion to the stately red brick of Independence Hall.

But celebrity chef Michael Schulson wasn't wowed by the historic backdrop.

In fact, as he listened to a business pitch imploring him to open a restaurant inside the forbidding concrete walls of the nearby Dow building, he was stunned by something more pedestrian: the lack of pedestrians.

"It was dead," said the Sampan and Buddakan New York maestro, recalling that September 2013 evening in the heart of colonial Philadelphia.

The real estate magnate who was trying to reel him in, Bill Glazer, could not protest. The chemical-company office building he bought on the grassy perimeter of Independence Mall, the heart of a national park that draws 3.6 million visitors a year, was like its modern neighbors - stark, sterile, and still.

"Even the crickets were asleep," Glazer said.

Still, on that night, Glazer challenged the chef: "What are we going to do to make this amazing?"

Two years later, the space around the mall is awakening, stirred by a real estate gold rush that has giant properties changing hands, towers on the rise, and builders replacing dowdy with deluxe.

Bit by bit, the surge of investment is transforming the one-note tourist corridor into something that more closely resembles a neighborhood on the edge of Center City.

Schulson's open-air answer to Glazer at Sixth and Market - the Independence Beer Garden - is so busy in this, its second year, that lines of customers form along the sidewalk each day at Happy Hour. Each week the kegs dispense enough beer to serve a stadium.

This week, La Colombe coffee will open a new cafe inside the base of the Dow building. Construction workers blasted open an 8-foot perimeter wall to add a corner staircase with mahogany railings, a gateway to fine beans.

Plans for a 32-story residential tower a half-block off the mall recently won Historical Commission approval, to go on the 700 block of Chestnut Street. Ultra-luxury condominiums that face Independence Hall are rising at Fifth and Walnut Streets.

Across the park, the Bourse Building is for sale. At Sixth and Chestnut, the Public Ledger building is on the market. The Penn Mutual office towers, facing Independence Hall on 500 Walnut, have already changed hands.

For the first time in ages, properties around the mall are no longer necessary evils, sore thumbs stuck beside the green, three-block expanse of federal parkland. They're prime picks in a neighborhood brimming with potential.

"I think people are seeing what can be done," Schulson said.

The frenzy of investment near the mall is an extension of the wave of redevelopment stretching eight blocks west on Market East. The bedraggled corridor, from City Hall to the Liberty Bell, booms with construction.

This month City Council gave final approval to plans for a $325 million, two-year remake of the bunkerlike Gallery mall, to be reborn as the Fashion Outlets of Philadelphia. At 11th, developers are preparing to pour concrete for a $230 million, 322-apartment housing-and-retail complex called East Market. Just south at 1100 Chestnut, a steel frame is rising for a nearly block-long complex of apartments and stores.

Next to the Dow building, at Seventh and Market, Brandywine Realty Trust just paid $17 million for a parking garage, saying it saw the property as a future development site, providing that a vital corridor continues to emerge.

This helps explain why big money is flowing to developed if deserted-at-night blocks near Independence Mall.

"I think it all rises together," said Daniel Killinger, managing director of National Real Estate Development, which is building East Market.

Glazer's Keystone Property Group picked up the Dow in 2013 for $40.5 million and the Curtis in 2014 for $125 million, aided by partners Mack-Cali Realty Corp. and Parkway Corp.

Last week, as Glazer sat on an Adirondack chair inside the leafy beer garden, set on the Dow building's 20,000-square-foot concrete and gravel plaza, a standing-room-only crowd offered proof that the implausible had become real.

For decades, the Dow's fortresslike edifice screamed Stay away! But on this evening, 20- and 30-somethings drank craft beer from plastic cups, tossed bean bags, scarfed $26 buckets of fried chicken, and chilled out to music.

"What was a really rough and untended place," Glazer said of Market East, "is now the coolest spot in the city."

Part of the glow stems from its setting on America's front porch. Seemingly fixed and permanent, the mall itself has been changing for 60 years.

In the years after the Depression, Independence Hall faced a dense urban stew of warehouses, rowhouses, water towers, and storefronts. The first block of buildings was demolished in 1954.

By the early 1960s, however, the area was so undesirable to investors that the city had to persuade the specialty chemical-maker Rohm & Haas - predecessor to Dow - to put its new corporate headquarters at Sixth and Market.

"There was no market or demand for office space east of Broad Street," said Walter D'Alessio, a partner in NorthMarq Advisors who in the 1960s helped lead the city Redevelopment Authority.

Companies wanted to be near commuter rail lines, and that meant Suburban Station, a mile west. Market East Station, today renamed Jefferson Station, did not then exist.

The city took what it could get: The blocky federal mint opened in 1969, the impervious U.S. courthouse in 1975. The nine-story, International-style headquarters of Rohm & Haas opened in 1964.

It featured chandeliers made from the company's signature product: Plexiglas. And it had a blast shelter in the basement, in case the Soviets dropped the bomb.

The mall moved toward its current form in the 1990s: The Independence Visitor Center opened in 2001, the National Constitution Center in 2003, the President's House in 2010.

It wasn't until late 2012, when the luxury Hotel Monaco opened at Fifth and Chestnut in the empty Lafayette Building, that those watching the neighborhood raised their eyebrows: The Monaco showed something hip could work on the mall.

Robert Zuritsky believed the Dow building could be a good buy - if parking were added. And as president of Parkway Corp., he knew how to do it.

Given its proximity to historic attractions, a 100-space parking lot would mint money - and give the owners room to be creative with the Dow building. With Mack-Cali on board, the partners put a garage in the basement and spent $2 million to create Schulson's vision of an outdoor beer garden.

The partners bought Curtis, a block away, in mid-2014. A year from now, they say, the building will offer 75 to 100 luxury condos, many overlooking the lush colonial park at Washington Square.

All of it remains risky, of course. Buying or recrafting property around the mall means creating a new market. At the start, no one knew if a beer garden would draw a single customer.

Schulson, despite his initial misgivings, developed such confidence that he signed a 10-year lease.

Many customers, he said, are Philadelphians who never visited the historic district.

"I think the next five years," Schulson said, "that's going to be one of the hottest areas in the city."

Source: Philly.com