Trustees updated on Civic Center

Penn expects to build several facilities in the next several years on the current Civic Center site. The University Trustees last week passed three resolutions supporting the acquisition and development of land formerly occupied by the Philadelphia Civic Center to make way for a parking garage and a state-of-the-art cancer-research and -treatment center. Penn officials have long coveted the enormous property on the southeastern edge of campus. City officials, though, had rejected all of the University's past offers to buy the site. But Philadelphia City Council's December approval of a bill introduced in October by City Council member Jannie Blackwell secured a large portion of the site for use by Penn and the Children's Hospital of Philadelphia in founding a world-class cancer-research and -treatment center and a 2.2 acre parking garage. This past Friday, the Trustees approved a resolution calling for the creation of the Civic Center Development Corporation, a non-profit corporation led by the University and CHOP. According to the resolution, the CCDC will "oversee, finance, facilitate and govern the development of the parking garage." The garage will occupy an approximately 2.2 acre piece of the former Civic Center site and will supply the University and the University of Pennsylvania Health System with up to 1,000 new parking spaces. The project will cost about $26 million and will be funded equally by the University and CHOP. The land itself will be purchased from the city of Philadelphia for $5 million, of which the University will front $2.5 million through an internal loan to be repaid with the revenues created by the garage. The CCDC will then acquire a $21 million loan on behalf of the University and CHOP to fund the development of the garage. Both institutions will repay the CCDC through the garage's revenues. According to Penn Vice President for Finance Kathy Engebretson, the creation of the CCDC will allow the University to pay its share of the garage's development without incurring debt that may decrease the University's bond rating. "The debt would be in the name of the CCDC, not in the name of the University," Engebretson said. The Trustees also passed a resolution in support of the demolition of two structures on a six-acre portion of the site where the cancer center will likely be built. According to Health System officials, the new site would consolidate Penn's prestigious 25-year-old Cancer Center, currently spread throughout 41 departments in eight University schools, into a single, world-class facility. The University will buy the property for $1 and spend $13.5 million -- funded by another internal loan budgeted by the University and repaid over time through University revenues -- in the demolition of and asbestos removal from the Civic Center's Exhibition Hall and Center Hall. The famed Convention Hall -- where rock legends the Beatles played in the 1960s -- will not be touched. Penn Executive Vice President John Fry said he believes the developments will be extremely successful, with multiple benefits for each party involved. "Everyone was a winner here," Fry said. "We got what we think is a very fair price for the six acres. CHOP gets the parcel it needed and the city has value created where there was no value before. That was sort of the genius behind the whole thing." Exactly what the University plans to do with the six-acre parcel is not yet clear, although administrators did say that the site will likely include the new cancer center. "I think we're still looking at our options relative to what we want to do there," Fry said. CHOP will also secure a 2.5 acre portion of the site, where it plans to build a separate research facility to further its own projects in pediatrics. While more specific details about the cancer center and other possible lands uses are not yet available, University officials estimate that the development of the entire 10.7 acre parcel will cost about $450 million, with the University contributing $350 million and CHOP throwing in the other $100 million. "It's a collaborative model. It takes into account the fact that CHOP needs space, we need space -- the city is still the owner of many of those buildings," Fry said. The University had expressed interest in acquiring at least parts of the Civic Center for nearly a decade, but administrators feel that they have made dramatic breakthroughs throughout this past year. "We went to the city and we said that we really think over time a huge amount of activity could occur, if we could just unlock the first couple parcels," Fry said. The entire project -- including the parking garage and the CHOP research facility -- is slated for completion in five years.