PhillyDeals: Gearing up for big expansion of Drexel's neighborhood

The Drexel area around 30th Street Station that is set for development, seen from the Walnut Street Bridge. University chief John Fry hopes to lure firms that hire or are started by students.
The Drexel area around 30th Street Station that is set for development, seen from the Walnut Street Bridge. University chief John Fry hopes to lure firms that hire or are started by students. (MICHAEL BRYANT / Staff Photographer)
Posted: March 03, 2014

Design consultants from around the world have been meeting with chiefs at Drexel University, Amtrak, Brandywine Realty Trust, and other local powers over the last couple of weeks to pitch competing development proposals they hope will help grow the neighborhood around 30th Street Station into a forest of high-rise towers and busy spaces.

"We are in the process of determining and selecting a winning bid," Amtrak spokesman Craig Schulz told me. "My understanding is, we should have that process wrapped up in the next several weeks."

Amtrak wants to build over its rail yards north of the station.

The university is proposing a Drexel Innovation Neighborhood to the south and west, adding 6.5 million square feet of every kind of construction - four times larger than the proposed new Comcast office tower 12 blocks east.

Brandywine, as the top private-sector office landlord in Center City and University City, has much to gain.

All the parties want public support for walkways, train-yard coverings, road ramps.

There has been no shortage of high-rise dreams for University City. What they have mostly lacked are paying tenants. It took six years for Brandywine to land the chemical-maker FMC Corp., so Brandywine can start work this summer for a 47-story tower of offices, apartments, and stores at 30th and Walnut Streets.

This time, Drexel is taking a leading role. Defying dire predictions for private colleges in the slow-growing Northeast,  Drexel president John Fry hopes to boost enrollment one-third in the next seven years, to 34,000. Drexel is already ringed with cranes building high-rise dorms and apartments. Fry wants to add companies that hire Drexel kids, firms started by Drexel scholars, labs, entertainment, shopping, and hotels. And to build them conveniently close to where Amtrak, the airport, SEPTA, and the interstate ramps deliver people.

Boosters, such as Center City District chief Paul Levy, like to stress the leading role of "eds and meds" - the colleges and hospitals that are dominant employers in Philadelphia. The problem with colleges and hospitals as economic engines is that they tend to add students and patients only as fast as a region's private employment grows. In Philadelphia, that has been slowly.

So Drexel has worked to be more like Penn, using its popular co-op program - that places students at well-paid corporate jobs six months a year - to attract scholars and others from across the United States and Asia.

"Step One of a very long process," said Brandon Famous, who heads CBRE Inc.'s retail-property brokerage in the region.

Famous hopes Drexel will create "the fifth square of Philadelphia" - locals know the four squares set by William Penn are Washington, Franklin, Rittenhouse, and Logan. The original fifth square, Penn Square, was replaced by the current City Hall.

Buying in

While JPMorgan Chase & Co. plans job cuts elsewhere, it's preparing to buy a piece of AstraZeneca's partly vacant U.S. headquarters complex near the U.S. 202 (Concord Pike) exit off I-95 in Fairfax, Del. It would be for a new operations center that local officials hope will also house bank workers moving from high-cost New York.

The company, which employs 7,500 in northern Delaware, already bought the Wilmington towers that have housed its credit-card operations since the 1990s for $87 million in 2013, from Brandywine Realty Trust.

Why is a giant company buying buildings, even as it cuts jobs?

"All corporate entities that have substantial properties leased are looking at acquiring them because anticipated changes in the Federal Accounting Standards Board regulations will give them more favorable tax treatment if they own the buildings, rather than lease them," said Pete Davisson, principal at Jackson-Cross commercial real estate brokers in Wilmington.


JoeD@phillynews.com

215-854-5194 @PhillyJoeD

www.inquirer.com/phillydeals.

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