Toll Brothers, the Horsham, PA-based megadeveloper, has found late-career success in the unlikeliest of places: bustling cities. The company has done projects throughout New York City, as well as the remarkably successful 600-unit Naval Square in Graduate Hospital. Now Toll Bros. is pushing its latest Philadelphia offering: the still-under-construction 410 at Society Hill, the luxury condo complex on Headhouse Square that replaces the large hole where Newmarket once stood.
We’re seeing progress on two major projects that’ll radically change the intersection of 15th and Chestnut: Brook Lenfest’s long-discussed W and Element hotel tower right behind the Residences at the Ritz Carlton, and, right across 15th Street, Alterra Property Group and the Scully Company’s conversion of 150,000 square feet of class B office space into 180 apartments, with a small amount of office and retail space. (That latter project was mentioned in an Inquirer story a few days ago.)
Earlier today, we noticed that the parking lot on the hotel site was closed (temporarily, a sign said). Philly Chit Chat’s HughE Dillon explains:
This week they are beginning to test the soil in anticipation for the building as well as the extensive underground parking lot they’re building. Last week officials from the project went around to the surrounding buildings, including the new Alterra project, and took photos of them inside an out – “The Before Photos”, just in case vibrations from the drilling and building the W causes any cracks in the neighboring buildings.
So let’s see if I’ve gotten this right: The real reason the bigger, bolder Pennsylvania Convention Center is empty much of the time and getting emptier is because we don’t have enough hotel rooms.
This comes as a total surprise to me. Here I’ve been laboring under the conventional wisdom that the center’s well publicized labor (and labor cost) problems are the main reason conventions are staying away in droves.
Yesterday the Concerned Hotel Owners of Philadelphia published an open letter questioning the wisdom of opening a 700-room hotel in downtown Philadelphia — and particularly with public monies. From the letter:
Philadelphia’s downtown hotel market is not strong enough to absorb another 700 rooms on top of what’s already planned without cannibalizing business from existing properties. The next few years are projected to be generally flat for the Center City hotel market due to moderate increases in supply, but only modest increases in demand and continued pressures on average room rate.
Occupancy currently sits below that of other major East Coast markets, and property revenues are projected to grow far slower than most other major markets over the next three years.
Brook J. Lenfest, scion of philantropist Gerry Lenfest and owner of the Chestnut Street site slated to be the new Starwood Element/W Hotel, is in hot water again. The 22,400-square-foot parcel was originally purchased in 2000 by Lenfest and a group others–including Mariner Chestnut Partners L.P.–for $11.15 million. Plans (Waldorf Astoria, anyone?) ensued and tanked and were pitched and ditched. Litigation has been endless.