By Mike Dunn

PHILADELPHIA (CBS) — Philadelphia City Council now faces the question of whether to give the owners of the Gallery shopping mall a multimillion-dollar tax break for their planned two-year renovation of the facility along Market Street East.

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The Gallery’s owner, the Pennsylvania Real Estate Investment Trust (PREIT), plans a top-to-bottom reconstruction of the mall that will that will cost an estimated $325 million.  But they want a break on taxes from the city worth an estimated $55 million.

Saying the Gallery makeover is sorely needed, First District councilman Mark Squilla, whose district includes the mall, agreed to introduce a package of bills that includes the tax break, known as “Tax Incremental Financing” (TIF).

“East Market is such an important aspect to the growth of the City of Philadelphia,” Squilla said today.  “We have a dead zone between City Hall and the historic fabric, down around 5th and 6th on Market.  And we really need to revitalize the Market East corridor.”

(Councilman Mark Squilla, in file photo.  Credit: Mike Dunn)

(Councilman Mark Squilla, in file photo. Credit: Mike Dunn)

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Squilla believes that without the tax break, PREIT will not go forward.

“I believe the only way to get this project done is by giving them, helping them, with this TIF, to enable this project to get over the top and get started,” Squilla says.

The TIF would freeze the Gallery’s current tax bill for twenty years, until 2036.  The measure has already been approved by the School Reform Commission, which shares in property tax revenues.

Squilla said his gut feeling is that City Council will go along once his colleagues see all the financial details of the plan.

“I think once all the facts are out there and the numbers are shown, they’ll see that it will benefit Philadelphia a lot more to have this done than to not do it,” he told KYW Newsradio.

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The Gallery will be renamed the “Fashion Outlets of Philadelphia at Market East.”  PREIT says the new mall will include a mix of 125 luxury and moderate brand retailers.