PhillyDeals: Korman proposing 722 apartments near Philadelphia International Airport

Posted: May 31, 2012

In one of the biggest middle-income developments planned for Philadelphia in recent memory, Korman Residential, of Trevose, is "proposing to build 722 apartment units" near Philadelphia International Airport, boss John Korman tells me. Rents to start at $1,150/month for one bedroom, $1,400/month for two.

There’s no formal proposal at the city planning office yet. But you could say this project has been in the works since the 1950s, when the federal government agreed to give the city $77 million to "condemn" and purchase four square miles in Eastwick and sweep away the village neighborhoods there so Reynolds Aluminum Co. and a syndicate of Northeast Philadelphia builders that included the old Hyman Korman Co. could put up tens of thousands of new homes and hundreds of acres of factories for a $300 million, 60,000-resident "city within the city."

The result has been a lot less grand. There are the hotels and warehouses and a PNC Bank back office along I-95, and blocks of single-family homes and apartments, along Lindbergh Boulevard down to 84th Street.

But until recently, Philadelphia’s population was going down, not up, and more industry was leaving than moving in. In 2005, Redevelopment Authority chairman John Dougherty called the Eastwick deal, with its plentiful litigation and its lack of deadlines and incentives, "a poster child for how the city should not do business."

Finally the city asked for some of its unbuilt land back from Korman. "About 125 acres of the original 500 acres" for which Korman was granted development rights "remain undeveloped," Redevelopment Authority spokesman Paul Chrystie told me.

Under a proposal working its way past the Planning Commission and the Redevelopment Authority toward City Council with support from Councilman Kenyatta Johnson, Korman will use 35 acres to build its apartments, and keep 10 more acres for "undetermined development." The city gets 79 acres, for use by the airport.

Once approved, Korman will build its apartments near 84th and Lindbergh, past the three International City apartment complexes — the Mews, Villas and Chalets — "which we built in the 1960s and 1970s and still manage," John Korman told me. Alcoa, Reynolds Aluminum’s successor, remains partners with Korman in what’s officially called New Eastwick Corp. "If everything goes in line, we’ll break ground in a year," Korman concluded.

Cheaper to sell

Vanguard Group, the Malvern-based company that’s become the largest and fastest-growing mutual-fund organization since the stock market went flat in the early 2000s, last week stopped charging fees of up to 2 percent that it had used to punish investors who bought funds and sold them too quickly for its taste.

Vanguard founder John Bogle used low purchase and management fees as a marketing tool, but he discouraged mutual-fund "market timing" and day trading, which he believed attracted impatient short-term investors.

"Because we have other measures in place to protect the interests of long-term investors and to discourage frequent trading, we determined that we no longer needed this fee," Vanguard said in announcing the fee cuts.

Vanguard’s move "stripped the back-end loads off of virtually all of its funds," including foreign stock funds, health, energy and other industry-sector funds, and junk-bond, Primecap, and Select Value funds, writes Dan Wiener, Brooklyn-based publisher of the Independent Adviser for Vanguard Investors newsletter. Only Vanguard’s foreign small-cap and foreign real estate funds still charge the fees.

The former "back-end fees reflect[ed] poorly on a company that wants to be seen as consumer-friendly," Wiener added. Plus they may have discouraged some investors and distributors, at a time when people who want to trade funds can easily invest in exchange-traded funds (ETFs). As Wiener noted, most of the funds that charged the fees "have seen net asset outflows" over the last year.

Read Joseph N. DiStefano’s blog at Reach him at 215-854-5194, or @PhillyJoeD on Twitter.

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