Wednesday, May 17, 2006

Design Changes Planned for 205 Race Street As Condo Market Softens

Philadelphia's condo market has become like a meal that's been through a bad microwave - some spots are hot, while others are cool. Today, Second and Race Streets in Old City is definitely cool, and not in a good way. Brown/Hill Development has decided to deep-freeze its plans for an ambitious 10-story apartment house designed by SHoP, the New York firm responsible for 108 Arch in Old City and the Porter House apartments in Manhattan's Chelsea.

Brown/Hill's Greg Hill says the developer isn't abandonning the project, which was one of the best new designs in Philadelphia. But after months of slow pre-sales, the company concluded that there aren't enough people willing to pay $900,000 for a duplex with 15-foot ceilings on the edge of Old City, next to the on-ramp for the Ben Franklin bridge. That isn't to say no one wants to live in Old City anymore. But as many developers are discovering, it's easier to sell a $400,000, one-bedroom unit today than a $800,000 two-bedroom. Brown/Hill's plan now is to see if SHoP's design can be reconfigured to accommodate more moderately-priced units. It may be a matter of reducing the quality of the finishes. Or, the developers may be forced to eliminate the duplexes, which accounted for nearly all of the building's 53 units. That might trigger other serious design changes, since SHoP's rhythmic, zinc-and-glass facade reflected the interior arrangement - a jigsaw puzzle of duplexes with a single-loaded corridor. The design called for three kinds of glass in the windows. The building had many charms, including a strong retail presence on the ground floor and underground parking. "We love the design," Hill says, "but we just can't afford it."

There are rumors, unconfirmed of course, that sales are slow at several projects. But it's easier for projects with large institutional investors to wait things out. One project that definitely appears to moving ahead now is the Murano, the 42-story curved glass tower at 21st and Market. Judging by the amount of equipment and utility trenches, they're really digging. The Murano's developers, it should be noted, intentionally priced the tower's 302 units in the $400,000 range, to appeal to a broader market.

But projects in more tested locations, like Rittenhouse and Washington Squares, are still able to command high prices.
Although 205 Race didn't work out as planned, Brown/Hill and the Goldenberg Group say they are satisfied with the pace of sales at the Ayer, the art deco office building overlooking Washington Square. (Please excuse the Blogger.com blue! This photo is really a lovely golden color.)

4 Comments:

Blogger normajean said...

It's a shame that SHoP's design won't come to fruition. It truly was one of the most innovative designs Philadelphia has seen in ages. With the cost of construction ballooning as it is, are these types of projects truly infeasible? Or are the developers trying to wring out so much profit that they abondon anything that doesn't make a gazillion dollars? We've been spoiled by a RED HOT real estate market, but I can't believe that buildings like 205 Race can't be built in the healthy market that still exists.

3:34 PM  
Anonymous Anonymous said...

I understand why many of the condo projects in Philly are a pipe dream. The city and Street administration have failed miserably in attracting high wage jobs to the city. No strategy period!! The CPDc and CC District want to attract 50,000 new jobs tho CC philly. Well, I am still waiting to see a vision laid out. It will take 200,000 new jobs for the city to get back to full stregnth and I don't think that the 30,000 hopeful jobs at the Navy yard are enough to carry the entire city on its back. Other than councilman Kenny's proposal to attractfor more legal immigrants, no one seems to be able to fill Bill Rouse's shoes. Mayor Street in fact torpedoed Kenny's desire for an new immigrant job czar. He proved to be the ultimate racist and can't see far past his own nose.

3:56 PM  
Anonymous Anonymous said...

The previous post makes an important point. The "ceiling" to the condo boom will be determined as much by job growth (or lack thereof)than the aggregate real estate trends. You lower real estate taxes, you attract a flood of real estate development. If you lower business/wage taxes, . . .

1:57 PM  
Anonymous Anonymous said...

But there are so many condos being built and sold right now. Where are all of these people coming from? New York? Are that many people going to commute that far? I realize that many are retiring from the suburbs to the city, but they can't be filling all of the condos. Are the new places simply pulling many residents out of old, out-dated homes?

11:46 AM  

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