Sansom Common work stops

Penn defaulted on its loans, forcing work on the project to be delayed indefinitely. In a development that threatens Penn's hopes for revitalizing retail in the area and may leave students without a bookstore in the fall, University administrators announced yesterday that Penn had defaulted on the loans financing Sansom Common, delaying construction on the project indefinitely. Penn had borrowed about 80 percent of the $73 million needed to finance the massive project -- whose first phase was designed to contain a new bookstore and several retail outlets -- but officials had long stressed that the deal was financially sound and would eventually pay for itself. Yesterday, however, University administrators conceded that they had been "far too optimistic" in structuring the deal, and admitted they did not yet know how to replace the lost funding -- or how to to find a way to complete the project. Work on the project will stop at the end of the week. "Despite months of feasibility studies, I am sorry to say that we made a mistake in computing our expected yearly income from the project and grossly over-exaggerated our ability to repay the loans," Penn President Judith Rodin said in a written statement. "In the short term, we will be unable to proceed with construction related to Sansom Common," she added. With the current Book Store slated to close in May to make way for a new Wharton facility, the announcement means that the University community is likely to begin the academic year without a centrally located, academic bookstore. Additionally, the announcement raises serious concerns about the future of retail in the area. Penn officials had long said that Sansom Common would provide the "funky and upscale" type of shops --Eincluding a City Sports, XandO and Urban Outfitters -- needed to cater to the University community. Officials had gone so far as to say that the stores would serve to revitalize all retail in the area. But with construction and renovation forcing the closing of all of the retail outlets near the current Book Store and in the basement of Houston Hall, as well as the continuing vacancies in the 3401 Walnut Street complex, the loss of the Sansom Common retailers is a serious economic blow for the area. Executive Vice President John Fry told The Daily Pennsylvanian that Penn was aware of the "economic and societal impact of the announcement" and was "desperately seeking" alternate methods of finishing the project, which was originally scheduled to open in June. "What makes this so painful and hard to accept is that this was the one University project in recent memory that was actually on schedule and under budget," he said. Fry explained that Penn's initial estimates of its yearly income from the project "significantly overstated" the rents Penn could charge Sansom Common retailers. "I was shocked to see that XandO and Urban Outfitters wouldn't agree to pay $955 per square foot, which is a very competitive price for a similar project in downtown Tokyo, or on the moon." Sources close to the retailers, however, said the real sticking point was a clause in the contract allowing Penn to move the retailers at a moment's notice, confiscate their remaining merchandise and sell their employees into bondage. "Retailers are only willing to bend so far," one source said. "Relocation? Maybe. Confiscation of any unsold stuff? Doable. But selling employees into slavery? That went a bit too far." The announcement sent shockwaves through the Penn community, as students and faculty members struggled to come to terms with the thought of having the skeletal, half-finished project looming over campus indefinitely. "It's definitely sort of a scary and depressing thought," said Undergraduate Assembly Chairperson Noah Bilenker, a College junior. "But students should rest easy knowing that the UA is taking proactive measures to fix the problem." He added that he will propose a resolution at the body's next meeting demanding that banks lend Penn more money. Reached for comment, College senior John La Bombard said he was not concerned about the possibility of having to walk by the unfinished project every day. La Bombard added that he just hoped the delay in construction wouldn't "hit my penis."