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A TALE OF TWO CITIES

Kravco helping write new chapters for Newark, Philadelphia

By Donna Mitchell

Among its many projects, Kravco’s new division, Downtown Works, is leasing The Left Bank, a mixed-use development near the University of Pennsylvania in Philadelphia.

Newark, N.J., and Philadelphia have a few things in common: Like many North American cities, both experienced economic declines as their industries left, taking with them working, affluent residents. Both have aging buildings with huge redevelopment potential. And both are benefiting from the attention of Downtown Works, a new division of Kravco Co., the King of Prussia, Pa.-based shopping center development and management firm.

With fewer suburban malls left to build, the company established the unit as it sought new frontiers for retail development. Downtown Works, as its name suggests, will focus on retail, restaurant and entertainment development in American’s urban centers, and will also provide consultation on leasing, merchandising and development issues.

“We do not know of many city situations where the retail community could not be improved,” said Margaret McCauley, director of Downtown Works.

The company certainly has its work cut out for it when it comes to Newark, which in many ways could take some cues from Philadelphia. Not so long ago the City of Brotherly Love was looking decidedly unloved, but has worked hard in recent years to revive its fortunes through the nurturing of its residential and business areas, and the vigorous development of retail and entertainment.

Newark, however, remains several steps behind Philadelphia. While Philly has seen a comprehensive revival from its center to the city’s fringes, Newark’s redevelopment is more spotty. Sometimes called “The Bricks,” Newark still bears scars from economic blight and the 1960s riots; trash covers crumbling sidewalks overgrown with weeds, and there are empty lots everywhere.

To be sure, there is a revitalization going on with, for example, the opening of the New Jersey Performing Arts Center in 1997 and a proposed professional sports arena. There is a small, tidy skyline, where Prudential Insurance Co., the financial giant, is headquartered, along with IDT, a Santa Clara, Calif.-based telecommunications company.

But when everyone goes home at the end of the day, the streets fall silent. There are few residents, and little in the way of retail or entertainment to attract and keep office workers after work.

“The key to a successful downtown is having a 24-hour presence there that only residents can bring,” said Jim Schmidt, executive director of the New Newark Foundation, created by New Jersey Nets owner Raymond G. Chambers to revitalize the city.

Which is where Kravco comes in. Where others see blight, McCauley spots opportunity. Many inner cities down on their luck have wonderful old buildings, she observed, but often they’ve either been abandoned or tenanted indiscriminately and covered with jumbled signage. Kravco has teamed up with two other companies — Dranoff Development and Universal Cos., both of Philadelphia — to transform two such buildings into Parkside, a 400,000-square-foot mixed-use development. Calling themselves Parkside Associates, the partners plan to spend up to $180 million to turn the buildings — one the former Hahne & Co. department store on Broad Street, the other the Griffith Piano Co., a block over — into about 550 one- and two-bedroom loft apartments, street-level shops, restaurants, entertainment and health club facilities. Retail offerings would amount to 145,000 square feet of space, said McCauley. Moderately priced national retailers will make up the retail portion.

The Aztar Corp. of Phoenix, owners of the Tropicana Casino and Resort in Atlantic City, N.J., also is investing $20 million in the project, under the Urban Revitalization Incentive Program — legislation signed in August that provides tax incentives for casinos to expand their non-gaming facilities (see Betting on a seaside Las Vegas).

Proponents hope Parkside will help make the downtown a bustling round-the-clock district. Newark’s total daytime population is about 125,000, according to estimates from the Regional Business Partnership, a nonprofit organization working to improve the economy in northeastern New Jersey. The academic community accounts for a huge chunk of that — about 45,000 students and faculty stream into the city daily, according to Schmidt; several universities and two law schools, as well as city libraries, the cavernous Newark Museum and the performing arts center surround the project site. There is a major transportation hub within a 10-minute walk of the project: Amtrak’s busiest route, the Northeast corridor, passes through downtown, as do commuter lines to Manhattan. Newark International Airport nearby serves more passengers than any other in the New York metropolitan area.

Dranoff Development, which specializes in converting historical buildings into residential units — it has done about 68 restoration projects already — will lease and manage the residential portion of Parkside. Universal Cos., founded by Kenny Gamble, the music producer, advocates vocational and entrepreneurial skills for minorities. Its goal is to establish live entertainment venues at Parkside, and perhaps recreate a phenomenon known as “the circuit,” wherein jazz musicians would move in a tight circle of cities including Washington, D.C.; New York City; Baltimore; and Philadelphia, said McCauley.

Because the century-old Hahne & Co. building is a national landmark, the design will not change dramatically, said McCauley. The adjacent Griffith building will have a more updated look, and both will have atrium cutouts in the center. Paresi Design Studio and Bower Lewis Thrower, both of Philadelphia, are the architects for the project.

Next summer, the partnership is aiming to break ground on the project and complete the first phase by fall 2003, with a second phase following about 18 months later, McCauley said.

“We firmly believe that everybody wants this to happen,” said McCauley. “It is the best thing that could happen to the downtown of Newark.”

Meanwhile, Downtown Works is keeping busy in Philadelphia, where it is acting as a leasing consultant on several retail projects that are being undertaken by Parkway Corp. of Philadelphia, a developer of mixed-use properties.

Kravco’s role is to create about 120,000 square feet of street-level retail space in Center City, Philadelphia’s multifaceted downtown hub, to complement the city’s burgeoning residential and cultural assets. All the projects will incorporate garage or residential space over the retail.

Several of these projects are nurturing the so-called Avenue of the Arts, a section within Center City that is home to cultural institutions such as the Academy of Music, the oldest continuously used opera house in the country. The Shops at Fifteenth and Spruce will be constructed in conjunction with The Kimmel Center for the Performing Arts, a campus that will provide a home for the Philadelphia Orchestra. Opening this December, The Shops will provide 19,000 square feet of restaurants.

The Shops at Twelfth and Arch Street, another leasing project for Downtown Works, will feature 40,000 square feet of entertainment and restaurant space on two levels.

Next to that, and already open, is The Shops at Twelfth Street and Filbert. This includes 31,000 square feet of shop space under an eight-story facility for about 900 cars. The development, which opened in July, is located across the street from the Pennsylvania Convention Center.

Lastly there is The Left Bank. Upon completion, this mixed-use project, located on the west bank of the Schuylkill River, which runs through the center of Philadelphia, will have about 30,000 square feet of retail space, 282 luxury loft apartments — similar to the ones in Newark’s Parkside — and a 100,000-square-foot office component. The building, which used to be a General Electric missile manufacturing plant, will be revamped by Dranoff Development. The building has been empty for 10 years, said McCauley.

Philadelphia has undergone a series of post-World War II redevelopment projects. And Center City, the thriving downtown district with shopping, dining, and cultural offerings, has in recent years seen an upsurge in residential development. Since 1997, long-vacated buildings have been converted to townhouses, apartments, and luxury condominiums. At least 2,600 new residents have been added to Center City, and between 80,000 and 90,000 people live in the downtown, according to the city’s commerce department.

Newark is taking notes.

 

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