By Mike Dunn
PHILADELPHIA (CBS) — As Philadelphia City Council wrapped up business before its summer recess, lawmakers today approved a package of bills that will allow for a top-to-bottom renovation of the Gallery shopping mall, along Market Street in center city. Mayor Nutter signed the legislation within hours of its passage (photo below).
Councilman Mark Squilla, whose district includes the Gallery site, says final approval of the Gallery renovation measures was a long time coming.
“This was one of the most complicated procedures that I have been involved with in Council,” Squilla (standing behind Nutter in photo) said today. “Understanding the complexity of it, to allow this to happen, working to make sure all the stakeholders were taken care of, to get to this point, it’s a very rewarding process.”
The deal was complex because it involved a multi-block mall that is intertwined with city property, and the city had responsibility for maintenance of certain portions of it.
Complexity also ensued because the owner, the Pennsylvania Real Estate Investment Trust, wanted a tax break worth $55 million, and because kiosk vendors who were displaced sought to be made whole, with new space in a SEPTA concourse.
Squilla was pleased that the tax break, known as Tax Increment Financing, never became contentious.
“Having all the stakeholders involved early on sort of set the councilmembers’ minds at ease about what the benefits of the TIF are, and I think all the members see that now,” he told KYW Newsradio.
Squilla said the tax break actually helps taxpayers because it allows the city to remove itself from the obligation to perform maintenance on the Gallery site, as was necessary under terms of the old lease:
“The cost of a 40-year old building for us to have to pay capital improvements on would have drained city resources. So we saw this as an opportunity to get out of that long-term lease.”
The entire project is expected to cost $325 million. PREIT plans to rename the Gallery as “the Fashion Outlets of Philadelphia at Market East.”
It will include a mix of 125-luxury and moderate brand retailers. The renovation will take two to three years.