With the Sixers’ plan to build a new downtown arena now a rapidly fading memory, the prospects for large-scale redevelopment along the faded Market East corridor are once again in limbo.
The team’s owners have said they’re still committed to revitalizing the area. But they’ve shifted their focus to building a new arena with Comcast in South Philly’s stadium district, and they haven’t said anything about what they have in mind for Market Street or when they might act.
Mayor Cherelle Parker has said the city will now “fast-track” creation of a master plan — it was apparently on a slower track before — but details are scarce on that as well. City planning officials have declined to comment on the status of that process.
The planning vacuum has been filled by fervent opinionating about what new types of businesses, public plazas and other uses should be planted along Market Street between City Hall and roughly 6th Street. The question is how to replace or occupy the many vacant structures and a couple long-undeveloped parking lots, and bring life back to the relatively barren sidewalks in the heart of Center City.
Less common, with rare exceptions, are outlines of how to pay for such projects or suggestions for who should take charge of them. We’ve been here before: the city ran a thorough planning process for the corridor back in 2009, which arguably helped spur some development but plainly didn’t result in a comprehensive revitalization, due in part to a lack of investment.
A few practical themes have emerged, however. A number of observers, though not all, say planning for Market East should focus on doing much more residential development, in order to bring people to the neighborhood. There needs to be a dedicated, long-term planning effort, not just a one-time plan, with strong leadership, they say.
In addition, government — city, state and possibly federal — needs to improve the financial equation behind development, by making it easier to build and putting a lot of a public money into the effort.
Less parking, more help for historic renovation
A major obstacle to development along Market East — as in much of Philadelphia — is the high cost of projects, especially with current, relatively high interest rates for construction loans. Reducing costs for developers could help spur construction on long-vacant lots and renovation of underused or unused older buildings, experts say.
One of the “lowest hanging fruit” would be eliminating the city’s parking requirements for new projects on the corridor, which drive up costs substantially and stymie development, said Job Itzkowitz, executive director of the Old City District, whose neighborhood is immediately east of Market East.
“We just spent two years studying just how many people commute to this exact corridor, on foot, by bike, via public transportation. There’s really no reason to be required to build on-site parking,” he said. “If you want to you should be able to, but the expense of constructing new parking is a barrier.”
Since City Council voted in 2021 to end parking mandates in Old City’s commercial core, several residential projects have been built without parking in the district, yet there’s been no decrease in the availability of spots, Itzkowitz said. He noted that dozens of U.S. cities, such as Austin, Texas, and San Jose, Calif., have eliminated parking requirements in recent years.
Ending city permits for two parking lots on Market Street, at 8th and 13th streets, could also push the property owners to pursue other uses for those sites, Inga Saffron wrote in the Inquirer.
Another helpful step would be to provide tax breaks or other incentives to reduce the cost of renovating Market East’s many historically significant structures, such as the former Strawbridge & Clothier building at 8th Street, where a Giant Heirloom Market shut down in December, Itzkowitz said.
Those might be easier to get approved than a broader tax abatement and would reduce the threat of overproduction, he said.
“Build as much housing as possible”
The city’s 2009 strategic plan for Market East largely sought to maximize the area’s existing attractions and assets. It proposed an intermodal transit hub, expansions of Chinatown and Reading Terminal down to Market, and an office tower over the Gallery (now Fashion District) mall.
But it also envisioned major new residential and hotel developments, including high-rises along the south side of the street and several buildings in the Franklin Square/Chinatown area.
Since then the pandemic and work-from-home have killed demand for office space. Retail is doing well nearby but has struggled on Market East itself, as evidenced by the shuttering of the Giant Heirloom market, the imminent closure of Macy’s, and the corridor’s many other vacancies. Plans for attractions, like a Disney mini-theme park, a casino and, most recently, the Sixers arena, have repeatedly foundered.
That arguably leaves residential or mixed-use construction as the remaining savior for the area. National Real Estate’s recent $1 billion development on the south side of Market between 11th and 12th streets is often cited as a model for how to reimagine the corridor. It has two apartment towers and a hotel, along with a Jefferson Health medical tower, an office building, a hotel, restaurants, shops, a grocery store and a public plaza.
“We have to make it as easy as possible to build as much housing as possible, because that will help support commercial corridors,” Itzkowitz said. “Now there’s fewer office workers in that area, and there’s fewer people shopping in malls, we need people living nearby in order to support a retail corridor.”
Saffron similarly envisions a mixed-use future for Market East, citing a 1996 study that called for conversion of upper floors of commercial buildings into housing.
Yet she also describes residential as a “hard sell” because of the existing blight and the street’s commercial feel, a view echoed by developers like Mohamed Rushdy, president of the Building Industry Association of Philadelphia.
Without the stimulus provided by a new arena, “Market East is not a viable corridor,” he told WHYY’s PlanPhilly.
“In the residential financing community, they sort of don’t like the neighborhood there,” said Donald Pulver, president of Oliver Tyrone Pulver Corp., which has built office towers on Market Street and other areas. “When you walk out of your door in a residential area, you’d really rather be at Rittenhouse Square or Washington Square or some other place, and not in the honky tonk of Market East.”
An urban redevelopment redux?
The current moment in some ways recalls an earlier turning point for the strip, back in the 1960s and ‘70s. The blocks east of City Hall had for generations drawn shoppers to their many department stores, but suburbanization and the growth of shopping malls led to their decline and blight on Market East.
Part of the response then was construction of offices — which historically had been concentrated south of City Hall — in some cases with significant government support.
That was the case for 1234 Market St., built by Pulver Corp. in 1974 and now home to SEPTA’s headquarters, the Philadelphia Redevelopment Authority (PRA) and other city agencies. “There was federal involvement, including providing funds to acquire the land where 1234 was built, and so that was a way to get that project off the ground,” said Ellen Pulver Flatt, the company’s general counsel.
Using dollars from the U.S. Department of Housing and Urban Development, the PRA also supported the construction of the Gallery in 1977.
“Urban redevelopment, back in its day, was a big deal all around the country,” said Donald Pulver, who also later built 1600 Market Street and other office towers. Those funds, “among other things, carried condemnation — if you couldn’t put it all together privately, you could get [properties] condemned out and put together.”
More recently, in 2016, Pulver proposed building a 38-story office tower at 1301 Market, the parking lot across from Macy’s. Prospective tenants weren’t interested and the project stalled, in part because Keystone Opportunity Zones — which eliminate almost all state and local taxes on a designated property — were making it more attractive to build at Schuylkill Yards near 30th Street Station and at the Navy Yard, the Pulver Corp. executives said.
“It could be argued that some of that money should have been put in Center City all this time,” said Esther Pulver, the company’s vice president of marketing and leasing.
A change in strategy that concentrates programs like KOZs, grants from the state’s Redevelopment Assistance Capital Program and Business in Our Sites, and potentially new federal money on key sites along Market East could make their redevelopment financially feasible, the Pulver execs and others say.
A billion dollars, please
The potential for more government investment is unclear. Gov. Josh Shapiro hasn’t mentioned putting money into Market East, although he has held out the possibility of supporting a new arena in South Philly, while at the same time praising the Sixers and Comcast for promising not to abandon the corridor.
Their agreement to “work together means we’re going to have something really dynamic in Market East,” he told the Inquirer.
He also set a potential precedent for investment in October, when he announced a $63 million state contribution toward a $600 million, 10-year plan to reimagine downtown Pittsburgh. That will go toward subsidies for five housing projects and improvements at a state park and a public square.
A similar level of government support for Market East could kickstart a wave of redevelopment and an eventual economic upswing, Esther Pulver said.
“Sixty million will pay some of your upfront fees to get things cooking, design and lawyers,” she said. “You can envision it could be a billion dollars at the end of the day, if you want to make an impact. That requires federal support. It could be argued that they should put in money to restore some of the city’s legs — to earn revenue for the city.”
One challenge is that redevelopment efforts sometimes run into a “chicken and egg” problem, said Elizabeth Castleman, Pulver’s vice president of communications and research. Government funders want a building plan and list of tenants before they’ll consider a grant application, but tenants want an assurance of funding before they’ll commit to move in.
Coordinating such an effort would take leadership, she and others say.
As the example of the city’s 2009 strategic plan for Market East shows, drawing up a document doesn’t mean its suggestions will actually be implemented. Someone needs to get landowners and developers on board with specific projects, lobby for government support, encourage private investors and win support from City Council members, community groups and other influential constituencies.
Saffron called for an organizing entity or “curator” to do some of that work. The Center City District, which put out a streetscape improvement plan in 2023 to accompany the proposed Sixers arena, could play a role. Castleman called for a public-private partnership “with really smart people” along the lines of the group that developed the business district in Conshohocken and West Conshohocken, where Pulver Corp. built several office buildings.
Building in the city involves managing a lot of bureaucratic “red tape,” she said, as well as potentially extensive community engagement, as the arena approval process demonstrated.
“You’ve got to have your professionals and your lawyers and everybody lined up. It’s an expensive commitment, but plenty of us want to do it,” she said. “We want to make it work. We love Philadelphia, and we want it to be as great as it could be.”
