Pennsylvania Real Estate Investment Trust PREIT and The Macerich Company announced that they had reached a tentative agreement with the City of Philadelphia on redevelopment and re-branding of the historic Gallery shopping mall and transit center in the heart of Center City.
The Gallery will be rebranded as the Fashion Outlets of Philadelphia at Market East following a two-year renovation that will open the site to Market Street and completely reimagine the shopping, dining, and entertainment experience for tourists, commuters, office workers, and residents throughout Philadelphia and the region. The project will offer a fusion of outlet retail to take luxury and moderate brands, traditional mall retail, popular flagship retail, artisanal food experiences, and entertainment offerings.
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“We believe that the proposed redevelopment will position The Gallery as the next great urban marketplace in the United States, capitalizing on its central location where mass transit, tourism, the residential population, and employment bases converge,” said Joseph F. Coradino, CEO of PREIT. “The redeveloped property will become the foundation of a new, vibrant Market East District, and we are excited to lead this effort.”
The redevelopment benefits significantly from project partner Macerich’s participation, one of the nation’s top mall owners, operators, and developers, with extensive experience in adding value to well-situated assets in densely populated, urban environments. Macerich’s market-right development and leasing – exemplified by projects such as the award-winning Fashion Outlets of Chicago that features exceptional brands in an upscale environment just minutes from O’Hare International Airport – succeed retailers, shoppers, and communities.
“The exciting plans for The Gallery are a strong strategic fit for Macerich’s proven redevelopment expertise, our leadership in the growing outlet sector, and our sizable geographic concentration in the New York City to Washington D.C. corridor,” said Art Coppola, Chairman, and CEO, Macerich. “Philadelphia is one of the great cities of the world, and this is a tremendous opportunity to create a highly successful, one-of-a-kind retail, dining, and entertainment experience.”
The project envisions a strong working partnership with the City to streamline The Gallery’s existing complex ownership structure to foster a unified and comprehensive renovation and re-branding of the facility. The tentative agreement calls for public investment from the Commonwealth of Pennsylvania and the City toward the project, which results in an estimated $235 million net investment by PREIT and Macerich to fund the redevelopment. City Council must approve the City funding, and the Philadelphia Redevelopment Authority must approve the School Reform Commission and the transaction.
Under the proposed redevelopment plan, the Gallery will undergo a top-to-bottom redesign that will reconfigure the 1.5 million square foot mixed-use facility as a bright, new contemporary space that welcomes shoppers and reconnects to Market Street with accessible storefronts, sidewalk cafes, a new streetscape, digital signage and graphics, all complementing the existing office space. Inside, the plan creates an open, well-lit, and easily accessible three-block corridor of approximately 125 new stores, including dining and entertainment options. The highlight of the newly-reimagined space will be a stunning new glass-walled Center Court at 9th and Market that will welcome the robust number of tourists, office workers, conventioneers, and residents alike.
The proposed project includes a two-year construction schedule and a scheduled Grand Reopening in spring 2017. PREIT and Macerich are prepared to begin construction immediately upon obtaining the necessary public approvals.
