By Mike Dunn
PHILADELPHIA (CBS) — A $325 million dollar planned makeover of the Gallery Mall in Center City hit a big roadblock Thursday, when City Council members delayed a vote on the project.
The Gallery’s owner, the Pennsylvania Real Estate Investment Trust, or PREIT, needs City Council approval of six bills that allow the renovation of the Gallery to move forward.
But at the hearing, some lawmakers like Wilson Goode wanted guarantees that retailers at the new Gallery will pay their workers a fair wage.
“We’re talking about 1,400 new jobs.” said Goode. “What about the quality of jobs beyond what may already be required by law?”
Joe Coradino, the CEO of PREIT, said forcing new retailers to pay higher wages to workers would drive those retailers away.
“We don’t believe that we’ll be able to get retailers to come to the Gallery,” said Coradino, “Given the fact that this would be the only location in Philadelphia where they would pay that level of wages.”
This prompted a tense exchange between Goode and Coradino:
Goode: “So there is no real commitment in terms of job quality for those people employed by the tenants? It’s not built into the legislation?”
Coradino: “We’re not able to do that.”
Goode: “What commitment are you making to job quality for the 1,400 new jobs?”
Coradino: “The same level of job quality that they would have at Cherry Hill mall, or Moorestown Mall.”
In the end, Council President Darrell Clarke opted to hold off on a committee vote until next week, as the issue of wages is worked out.
“This gives us time to tie all of those loose ends together,” said Clarke, “And move forward with something that we feel good about.”
Coradino, the PREIT CEO, was diplomatic about the delay.
“It’s a very complicated project, and we expected that there were a couple of steps to it.” said Coradino. “And I think that we’re optimistic that its going to conclude with hammers and nails at the Gallery in a couple of weeks.”
Another issue Clarke wants resolved involves finding new locations for kiosk vendors displaced by the Gallery renovation.
SEPTA has agreed to provide them space, but those leases still need to be finalized.
Drawing less concern from the lawmakers is that the legislation includes a $55 million dollar tax break for PREIT.
Commerce Director Alan Greenberger told Council members that, in the end, it’ll mean more revenue for Philadelphia:
“Over twenty years, tax revenues for the project are projected to exceed $435 million, of which more than $307 million in base and incremental taxes will be retained by the city and school district.”
No council member seemed to object to that tax break, known as a TIFF, given that it has been structured to hold the struggling school district harmless in the short-term.
The Gallery will be renamed “the Fashion Outlets of Philadelphia at Market East,” and will include a mix of 125-luxury and moderate brand retailers.
Coradino told Council it will revitalize East Market Street:
“In short, we will create an inviting pedestrian experience from 8th (street) to 11th, where all Philadelphia residents and its visitors can shop, dine, work and entertain.”
The council committee plans to reconvene on the Gallery legislation next Wednesday.