Affordable housing in the mix for apartment project at old PHA headquarters
by Jacob Adelman, Staff Writer @jacobadelman
The Philadelphia Housing Authority is expected to endorse a plan Thursday to replace its long-vacant former headquarters building near Rittenhouse Square with an apartment tower offering some subsidized units for low-income renters.
The PHA Board of Commissioners will take a final vote on a deal granting a 99-year ground lease for the 2012 Chestnut St. headquarters site and an adjacent parking lot to the Philadelphia-based developer Alterra Property Group.
The deal would require Alterra, which is partnering on the project with Rheal Capital Management LLC of New York, to rent 40 of the project’s 200 or so apartments to low-income residents, the agency said in a statement.
A tower of about 20 stories would displace the rare remaining instance of blight in the Rittenhouse Square area, which has seen some of the city’s highest rents and most robust commercial activity.
“It’s a good project in a good part of town,” Alterra managing partner Leo Addimando said in an interview this week. “We just thought it made sense.”
The PHA’s 89-year-old, four-story headquarters building has been vacant since January 2008, when the agency finished dividing its operations between two locations in Center City and Grays Ferry that it currently occupies. The agency plans to consolidate those offices eventually at a headquarters building proposed for the North Philadelphia neighborhood of Sharswood, which is north of Girard College.
Past efforts to develop the Chestnut Street site — including a proposal for a new PHA headquarters there — have fizzled, even as developers have rushed the surrounding area to build high-end apartment projects.
The 110-unit AQ Rittenhouse apartment tower across the street from the PHA site was sold to Chicago-based LaSalle Investment Management last year for $51.1 million.
Alterra’s previous developments include the Icon residential project a few blocks to the southeast at 1616 Walnut St., which sold last year for $112 million, as well as the Shirt Corner apartments in Old City.
Work on the new tower, which also is to include 7,000 square feet of ground-floor commercial space, should begin within two years, after permits and zoning adjustments are secured, Addimando said.
Financial terms of the ground lease were not immediately available, PHA spokesman Kirk Dorn said.
Kelvin Jeremiah, PHA’s president and chief executive, said inclusion of affordable units “was a critical component” of the project for the agency.
“We are very pleased to be on the verge of working out an agreement that is beneficial to Center City, PHA and the residents who will live at 2012 Chestnut,” he said in the statement.
Maximum incomes for the building’s affordable units will be 60 percent of the area median, equivalent to $30,840 for a family of two or $38,550 for a family of four, Dorn said. Rents will be set at 30 percent of residents’ monthly incomes, with PHA subsidies making up the difference, he said.
The subsidized units will be situated among — and indistinguishable from — those being rented at market rate, Addimando said.
Beth McConnell, policy director for the Philadelphia Association of Community Development Corporations, praised the approach of integrating the affordable units with market-rate units in a project located in a desirable part of town.
“A lot of the development we tend to do for low-income and affordable housing is not in high-income neighborhoods, where land is scarce and expensive,” McConnell said. “Building that in Center City is very much an example of equitable development.”
The Philadelphia Housing Authority is expected to endorse a plan Thursday to replace its long-vacant former headquarters building near Rittenhouse Square with an apartment tower offering some subsidized units for low-income renters.
The PHA Board of Commissioners will take a final vote on a deal granting a 99-year ground lease for the 2012 Chestnut St. headquarters site and an adjacent parking lot to the Philadelphia-based developer Alterra Property Group.
The deal would require Alterra, which is partnering on the project with Rheal Capital Management LLC of New York, to rent 40 of the project’s 200 or so apartments to low-income residents, the agency said in a statement.
A tower of about 20 stories would displace the rare remaining instance of blight in the Rittenhouse Square area, which has seen some of the city’s highest rents and most robust commercial activity.
“It’s a good project in a good part of town,” Alterra managing partner Leo Addimando said in an interview this week. “We just thought it made sense.”
The PHA’s 89-year-old, four-story headquarters building has been vacant since January 2008, when the agency finished dividing its operations between two locations in Center City and Grays Ferry that it currently occupies. The agency plans to consolidate those offices eventually at a headquarters building proposed for the North Philadelphia neighborhood of Sharswood, which is north of Girard College.
Past efforts to develop the Chestnut Street site — including a proposal for a new PHA headquarters there — have fizzled, even as developers have rushed the surrounding area to build high-end apartment projects.
The 110-unit AQ Rittenhouse apartment tower across the street from the PHA site was sold to Chicago-based LaSalle Investment Management last year for $51.1 million.
Alterra’s previous developments include the Icon residential project a few blocks to the southeast at 1616 Walnut St., which sold last year for $112 million, as well as the Shirt Corner apartments in Old City.
Work on the new tower, which also is to include 7,000 square feet of ground-floor commercial space, should begin within two years, after permits and zoning adjustments are secured, Addimando said.
Financial terms of the ground lease were not immediately available, PHA spokesman Kirk Dorn said.
Kelvin Jeremiah, PHA’s president and chief executive, said inclusion of affordable units “was a critical component” of the project for the agency.
“We are very pleased to be on the verge of working out an agreement that is beneficial to Center City, PHA and the residents who will live at 2012 Chestnut,” he said in the statement.
Maximum incomes for the building’s affordable units will be 60 percent of the area median, equivalent to $30,840 for a family of two or $38,550 for a family of four, Dorn said. Rents will be set at 30 percent of residents’ monthly incomes, with PHA subsidies making up the difference, he said.
The subsidized units will be situated among — and indistinguishable from — those being rented at market rate, Addimando said.
Beth McConnell, policy director for the Philadelphia Association of Community Development Corporations, praised the approach of integrating the affordable units with market-rate units in a project located in a desirable part of town.
“A lot of the development we tend to do for low-income and affordable housing is not in high-income neighborhoods, where land is scarce and expensive,” McConnell said. “Building that in Center City is very much an example of equitable development.”
