The Daily Pennsylvanian
Plans have been finalized for replacing the deteriorating parking lot that currently sits at 34th and Chestnut with a $100 million luxury apartment complex, scheduled to be completed by the end of 2007.
Work on the project, which is being designed, built and funded by the Hanover Company -- a Texas-based private real-estate developer -- has already begun.
"We think it will do extremely well," Facilities and Real Estate Services Senior Vice President Omar Blaik said.
Plans for the building call for 295 luxury apartments averaging 1,034 square feet each, as well as two restaurants and a variety of retail outlets on its lower levels.
"Given the vibrant lifestyle offered by a university setting ... the project will offer a dramatic new lifestyle for University City that will allow residents working in the immediate area to live at a community that offers quality beyond anything seen before," the Hanover Company's Brandt Bowden wrote in an e-mail.
"We are extremely excited. This is a project as ambitious as the Inn at Penn," Blaik said.
However, unlike the Inn at Penn, which was built and funded by the University, the new project will not have the financial backing of College Hall.
"We are getting market rate return on that ground," Blaik said.
Under the plan, Hanover will lease the land from Penn for 65 years, at the end of which it will be returned to the University.
Facilities Services spokesman Tony Sorrentino said that the benefit of this type of contract is that Penn does not assume any risk if something goes wrong with the plan.
Penn "no longer needs to raise capital to develop its own projects" as it did in the development of University Square, located at 36th and Walnut streets, Sorrentino said. "It can now take its land and lease it to someone who pays ... for the rights to build on that land -- and then [developers] spend their own money," Sorrentino said.
Despite the large number of other luxury apartment complexes being built in Center City, as well as the Left Bank loft apartments barely three blocks away, Blaik said that Penn has always been a "huge generator of demand" for residential developers.
"We are not a speculative developer," Blaik said. "By not producing supply, [the University will] lose the opportunity to keep the demand," he added.
Bowden agreed, writing that in addition to residents of University City, "we also expect to pull from the central business district ... and the nine county region, which includes South Jersey."
Blaik noted that the large plots set aside for retail stores will allow the company to attract larger retailers that have not been able to operate in the smaller spaces around Penn's campus.
"The Hanover and Penn relationship worked well not because the Hanover Company would adapt to develop in a campus, but [because the project] would be an interesting, new addition to the urban environment surrounding the campus," Bowden added.
"It is a great site in an exciting market; we're happy to be here."
