February 09, 2016
PREIT and Macerich/for PhillyVoice
An exterior rendering of what Ninth and Market streets would look like if the proposed renovation plan is approved.
Shoppers eager to set foot in the hotly anticipated Fashion Outlets of Philadelphia will have to wait an additional year. The Pennsylvania Real Estate Investment Trust (PREIT), which will lead The Gallery's renovation, announced projections to reopen in 2018 rather than the original estimate for 2017.
The $325 million redevelopment by PREIT and partner Macerich will feature approximately 125 new stores offering a combination of luxury retail outlets, moderate brands, artisanal food establishments and entertainment. After securing $90.5 million in city and state support for the Market East renovation, PREIT worked with the City Planning Commission to iron out zoning, design and mall property maintenance issues.
According to PREIT spokesman Kevin Feeley, the scheduled 2017 reopening has been delayed due to negotiations with the Philadelphia Redevelopment Authority, CBS 3 reports.
“It is a $325-million investment, it’s a big project, lots of moving parts and, there’s not a problem that’s caused the delay, it just took longer to complete the ground lease than we originally anticipated.”
The Gallery, built in the 1970s and purchased by PREIT for $60 million in 2013, closed at the beginning of the year to start the demolition process and line up tenants for the 1.5-million-square-foot Fashion Outlets of Philadelphia. During negotiations with the Redevelopment Authority, PREIT and Macerich, which share a 50 percent common ownership interest, agreed to relieve the city of all past and future liabilities related to the property.
In addition to a $55 million tax increment financing package, Philadelphia will contribute $58 million in maintenance costs for surrounding public transportation projects over the next four decades.
Last month, after nearly 20 years with PREIT, executive chairman and former CEO Ron Rubin announced he would step down in June and remain on the Board of Trustees. PREIT, which owns malls across Pennsylvania and New Jersey, touted the Fashion Outlets of Philadelphia as a revival of the Market East District when it announced the project last June.
"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," PREIT CEO Joseph F. Coradino said in January. "The redeveloped property will become the foundation of a new, vibrant Market East District, and we are excited to lead this effort."
