The Gallery At Market East; Philadelphia, Pennsylvania

The Gallery At Market East in Philadelphia, PA

The placement of enclosed shopping centers in urban cores and downtowns in America has always been a bit curious and fascinating to us.  Perhaps it’s because their designs must be creative in order to weave the structure into the existing built environment.  Or maybe it’s because they challenge the very notion of the traditional downtown, which struggled with its identity after the automobile age brought clusters of stores into the suburbs and away from downtowns, outmoding them from the 1950s to the present day.

At any rate, most medium- to large-sized American cities have, or at one time had, some semblance of a mall downtown.   Most of these malls were built as urban renewal projects starting in the 1970s as a response to the explosion of suburban malls, in order to compete with the suburbs and keep people and businesses from fleeing downtown areas.  Some of them were built a bit later in successful downtown districts like Indianapolis (Circle Center, 1995) and Chicago (North Bridge, 2000).  Many of these hatve also failed, succumbing to the conveniences suburban malls offer shoppers, such as free parking, less traffic, and convenience to home.  Many downtown malls have also failed even after protracted periods of success, like the downtown malls in Salt Lake City, Columbus, Milwaukee, Rochester, Hartford, and many more.  But why is this?  In most large American cities, people still congregate downtown for work if not for play, and increasingly people are choosing to live closer to urban centers because of gas prices, culture, and other economic issues, not to mention commuting is a pain.

The Gallery At Market East in Philadelphia, PA The Gallery At Market East in Philadelphia, PA

Center City Philadelphia is full of shopping destinations, most of which center around Market Street, the major east-west thoroughfare through downtown.  Along Market Street are several small atriums and enclosed shopping facilities, but only a few of them really function as malls per se, and The Gallery at Market East is by far the largest of them at 1.1 million square feet.  It opened in 1977 (with a major expansion in 1984), and is currently anchored by Burlington Coat Factory and K-Mart, with Modell’s, Old Navy, and Pay/Half taking junior anchor space.  I probably needn’t say more after that, except that the Gallery only holds a modicum of success today when compared to still-successful downtown malls in other cities like Chicago.  But why? 

The Gallery At Market East in Philadelphia, PAThe Gallery’s layout and design are the most interesting features of the center overall, combined with the mall’s facade and how it interacts with the street.  The main entrance of The Gallery along Market Street provides a portal of access not unlike entering a large fortress.  Because the ground level of The Gallery is subterranean, a wide staircase leads down from the street to sets of doors, which are flanked along a tall wall of glass.  Although this entrance looks impressive from the inside of the mall, the outside of this facade is in a rather small space and easily glanced over.  In addition, the rest of the street facade is also unremarkable, outdated, and awkward.  Gallery East also does a poor job with continuity, and breaks the space in between Independence Hall, downtown, and Chinatown abruptly rather than connecting these areas of the city with a pedestrian-friendly theme. 

The layout of the mall itself consists of four main levels in two “Gallery” developments, Gallery I and Gallery II, which opened in 1977 and 1984, respectively.  Gallery I was the first development and consisted of the block between 10th street and the former Strawbridges.  Gallery II was a westward extension of Gallery I ending at the former JCPenney (now Burlington Coat Factory); today, the I and II distinctions are mostly gone and the mall is simply known collectively as The Gallery At Market East.  The first mall level is subterranean and goes throughout the length of the entire mall, from the former Strawbridge’s anchor in the east to Pay/Half on the west end, spanning nearly two blocks and going underneath K-Mart.  The next level of the mall is at street level, and spans from the former Strawbridges in the east directly through K-Mart in the middle, where it is discontiguous at 10th street and shoppers must go outside and cross the street (or go up or down a level) to come back in again to continue across to Burlington Coat Factory.  The third and fourth levels go from the vacant Strawbridges directly through middle anchor K-Mart and comes out on the other side, ending at Burlington Coat Factory, except the third and fourth levels converge to go through K-Mart.

The Gallery At Market East Big K-Mart in Philadelphia, PAThroughout The Gallery’s history turmoil has taken its toll right from the beginning.  As soon as the project was announced, city leaders and developers were criticized for the city’s infusing money into the project at the expense of Philadelphia’s beleagured neighborhoods away from downtown.  Obviously the irony that the city ponied up money to compete with the suburbs at their own game while other parts of the city suffered, also because of suburbs, wasn’t lost.  In addition, during its early periods of success Gallery I was the site of numerous protests due to the fact that no black entrepreneurs owned any of the businesses there despite the fact that a great percentage of Philadelphia is black.  Oops.

Nonetheless, The Gallery at Market East enjoyed decent period of success, through the 1980s and into the 1990s.  By that time, even though the center was integrated into SEPTA’s system with three stations, it was still obvious that the mall itself just didn’t ‘feel’ integrated into downtown and the surrounding areas.  Because the area to the east is a heavily trafficked tourist area, The Gallery should present a welcoming facade to them with high street visibility on the Market Street facade, drawing them into the mall, and vice versa from the City Hall side, where locals use the mall’s entrances for a bite to eat at the food court, shopping, or to enter SEPTA.  In addition, the indoor corridors of the mall’s four-level structure could also be updated with warmer fixtures and lighting. 

The Gallery At Market East Burlington Coat Factory in Philadelphia, PAAnchor and tenancy issues haven’t helped The Gallery’s plight either.  The original anchor and stalwart for all of downtown Philadelphia shopping was the flagship for Strawbridge and Clothier, which became the east end of the mall in 1977.  Macy’s, who ended up purchasing the Strawbridge chain, decided to close this location in 2006; it’s still vacant as of August 2008.  The original west anchor was Gimbel’s, which later became the center’s middle anchor after Gallery II opened in 1984.  After Gimbel’s closed in 1986, this anchor became Stern’s and Clover before K-Mart in 1999.  The west anchor, JCPenney, opened with Gallery II in 1984 and closed, later becoming Burlington Coat Factory which it is today.  The in-line roster of stores has also degraded somewhat after having a more upscale set of stores some 15-plus years ago; today, many of the stores selling apparel are urban wear, discounters, or shoe stores.  The food court has, however, remained viable due to the amount of foot traffic from people accessing the train and tourists in the area. 

Some redevelopment plans and steps in the right direction for The Gallery have emerged over the years.  In 2006, PREIT, the company who owns The Gallery, acquired the vacant Strawbridge’s flagship and have been shopping it around, mostly to uninterested parties.   

The Gallery At Market East in Philadelphia, PA The Gallery At Market East in Philadelphia, PA

In short, The Gallery At Market East could be a wonderful centerpiece for downtown Philadelphia, connecting a multiplicity of neighborhoods and peoples with a far more upscale line-up of stores and services than it has today.  With its accessibility and location, it has the potential to be both visually and economically stimulating to the city of Philadelphia, and in a city living in the shadows of the east coast this is probably not a bad idea.  Instead, The Gallery is slowly withering and even dying, earning a sour reputation among Philadelphians.  Normally I would suggest milking a mall’s decline for all its worth, but not here.  Normally I would advocate the placement of Burlington Coat Factory, Pay/Half, and K-Mart, because these viable stores are better than nothing.  But not here.  This area can do far better.  That is, if it gets in gear and makes some renovations and changes to not only bring the mall into this century, but to bring different parts of Philadelphia together.  It could really be nothing short of amazing.

The pictures featured here were taken by me in July 2008.  Feel free to add your own stories, information, comments, or reactions in the comments section. 

The Gallery At Market East in Philadelphia, PA The Gallery At Market East in Philadelphia, PA The Gallery At Market East directory in Philadelphia, PA

The Gallery At Market East in Philadelphia, PA The Gallery At Market East in Philadelphia, PA The Gallery At Market East in Philadelphia, PA

The Gallery At Market East in Philadelphia, PA The Gallery At Market East food court in Philadelphia, PA The Gallery At Market East in Philadelphia, PA

The Gallery At Market East in Philadelphia, PA The Gallery At Market East in Philadelphia, PA

87 Responses to “The Gallery At Market East; Philadelphia, Pennsylvania”

  1. The Gallery is certainly looking a lot better than it was. When I last visited many, many years ago, it was a dark and dingy place, and everything seemed like it was done on the cheap. You couldn’t really tell if this was a mall, or a transit center, or what. It combined these elements poorly. Unfortunately the Burlington Coat Factory is the death knell of pretty much any mall.

    Seeing these pictures certainly makes it look more like a mall, and the super easy train access *should* make this a very popular destination. However, I think that hulking mass known as King of Prussia has certainly done something to keep people away.

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  2. Wait, didn’t this already have a blog post?

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  3. Wait, didn’t this already have a blog post?

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  4. Very sad to see the state of this place as I do agree that it has potential. At least the mall still has one fountain left (I think there was another large one at the main entrance, but I’m not sure if it’s there anymore). Urban malls built at this time were thougt of as escapes from the city and city streets and were therefore built with that in mind. As a result, the only street access the mall had was an occassional entrance, as well as the anchors. Really nothing to draw people in. Other urban malls such as Stamford Town Center, The White Plains Galleria and the Shops at National Place had this major flaw. Urban Centers such as Providence Place and the Shops at Liberty Place (right down the street) have fixed that flaw. STC has also fixed it with their recent renovations.

    If The Gallery fixes up its interior making it more current and also its streetscape, it could definitely bounce back and be as successful as The Shops at Liberty Place and The Shops at Bellvue.

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  5. Really nice mall. Had no idea there were this many downtown malls, after showing the ones in Utah and West Virginia. That is an interesting design the way the potted plants are sitting in holsters that line the upper level rails. I agree it is a little dated and maybe could use some more color. My first impression was that there is too much white. But to be honest, I like really do like dated malls, it just keeps reminding me of how much better older malls were concieved in their concepts and just had so much more heart and soul. I do like the design of the mall in pictures, but it does sound complicated and kind of hard to understand the description of the layout. There appear to be a few too many local and urban shops, as well as the discount achors, for a mall that looks like it was meant to be much more upscale. The pictures make it look more upscale until you enlarge them and see all those local shops. Maybe it could be developed with better stores in the future if there is some kind of resurgence in downtown that could meet a demand for more upscale stores in downtown.

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  6. Reminds me of Golf Mill, in which the mall cuts through one of its anchors.

    Still, that’s one haphazard design, just looking at that directory. The mall’s interiors still have remnants of the 1980s that recall to me of Milwaukee’s downtown (Grand Avenue) mall in its thriving years.

    Like you, I’m also dumbfounded as to why the mall’s not more successful. I mean…access from the train that runs through the city, all the people that work downtown, people moving back into the city to get away from the ‘burbs. It should be doing a ripping business.

    I’d say weak anchors. K-mart and Burlington Coat are not quite what I’d call ‘draws’. Lots of ‘discount-y’ types of stores too it seems like.

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  7. Jamie:

    That particular neighborhood of Philadelphia is OK, as is most of Center City. Very similarly to Galleria Vittorio Emanauel in Milan, it is at the convergence of two distinct neighborhoods: Center City and Old City/Society Hill, which is both an historic area (Independence Hall is located not far) and an affluent area. The Gallery suffers as a result of its design flaws, its uninviting streetscape and the fact that PREIT has not put much capital into it since its acquisition. This was originally designed by Rouse, who had done other urban malls (both indoors and outdoors) at this time.

    As we had all stated, a major renovation, both interior and exterior, could definitely give new life to the Gallery at Market East.

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  8. Matt,
    I agree, this mall looks very reminiscent of Grand Avenue in its former glory. The problem with urban malls, as I see it anyway, is how they are positioned. Matt, let me ask you, when you are done with work, do you go shopping? Most of the time probably not, right. You go home. .The people that work downtown do not have time to shop on their lunch hours, generally speaking, nor do they want to shop after a tiring day at the office. And most people still live outside of the downtown area and commute to work. It is not a destination for them or anyone.

    So, how can these malls position themselves to work for the people that actually LIVE downtown? By recreating themselves as centers of convenience. The malls have to have hours conducive to night time shopping, after dinner. A pharmacy like Walgreens with a 24 hour drive through perhaps. A grocery chain would be a welcome addition downtown, to pick up a meal on the way home. Lower end discount stores like Target would provide downtown consumers with an arena of convenience, given longer hours like 10 p.m. for these anchors as opposed to traditional department store anchors. An Office maxx makes sense.

    An IHOP is something Milwaukeans have been asking for in their downtown for awhile. A good coffee shop could create a gathering place, and if the concept were open air enough, I could see meeting clients there instead of Starbucks in the local strip center. I have found that clients love meeting in these places as opposed to a stuffy office. Give it a theme; make it different. How about a coffee shop with an adjacent location and access to a business center like Kinko’s. Provide a few monitors and computers at a few tables and you’ve got something.

    In Milwaukee the post office is across from the mall, a few blocks over. Hell, put a branch of the post office IN the mall instead. WE Energies is across the street from the mall. Put a bill payment center IN the mall instead. The DMV is across from the mall a few blocks over. Put it IN the mall and you have a captive audience with plenty of (waiting) time on their hands, before their number is called. Add a GOOD drycleaner. We already have an alteration shop in our mall downtown. It is one of the few stores where I actually see activity, so that is an indication that people are looking for service oriented businesses downtown. If they won’t come on their own, MAKE them come.

    Now, the most important part: make it accessible and parking plentiful.

    With this ‘core’ in place, other stores might have a chance of attracting weekend or night time business. Filling the mall with traditional mall stores is not going to bring back our downtown malls.

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  9. No, this mall wasn’t posted before, but it was mentioned in an article we wrote about 2 years ago about the former Strawbridge’s being purchased.

    Functionality notwithstanding, I really liked this mall and the confusing, creative devices used in its design and the impressive glassy center court in the east half. I was actually kind of surprised when I came home to research the mall a little bit more and found out Philadelphians consider it a joke, dead, full of awful stores, or all of the above. It seemed packed to me, and the vacancy rate isn’t terribly high. I guess it’s just that it could be much, much better like it was when it opened.

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  10. KOP is a short car or bus ride away with numerous restaurant choices in the mall or across Gottard Boulevard from J C Penny where the Best Buy & the UA theatres are located. This negates any reason for shopping trips into Center City.

    Mallguy,

    Your comparison to stamford & White Plains are right on, remember both Stamford & White Plains have downtown areas that are reemerging as complete communities with housing, small shop retail, big boxes & restaurants. There’s street activity day & night. Your discription of the galleria really points out the most criticle flaw, not having any intigration with the rest of downtown.

    For the Gallery to survive, they must correct the same flaws that the Galleria has, plus make Center City a 24 hour neighborhood with restaurants, bars & mager retailers. Including drug stores , supermarkets & places to get itoms for day to day needs.

    To top this all off the area MUST have the residential mass to support the stores, if not the area will continue to suffer, sending shoppers to the 19406.

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  11. Saw this one in its better days (’91) and a couple years ago, as well as in the late 90s. Even in better times, Market Street, itself, was dead and that masked the liveliness of the mall, itself. More recently, it seems like everything around the mall has gained life (including the once low-end Chestnut Street retail area), while the mall is in visible decline. It may be 95% occupied, but it probably is not generating the kinds of rents that it could. Better integration into the nearby neighborhoods would be a plus and they may need to scarifice one of the department store shells or some of the street level space to achieve that.

    As an aside, successful urban malls aren’t the only story in their areas. Water Tower Place succeeded (and still succeeds) in Chicago, because it anchored an existing shopping/business corridor and brought in new stores.The other malls on Michigan Avenue have never succeeded as well, They brought department stores, but provided no real anchors. Michigan Avenue, itself, is more successful than any of them. The original downtown malls like The Arcade in Cleveland (now a hotel, but successful as a retail office complex for decades), functioned like this and tied shopping streets to more office-oriented corridors or tied together different shopping streets (the smaller Colonial and Euclid Arcades did this in Cleveland). The one really successful mall like Market East that I’ve seen is Eaton Center in Toronto, which is extrodinarily busy, but which also has choked the life out of its surroundings, which remain pretty downscale.

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  12. I can see this mall being gone in a couple of years. Looks very cheap. I wouldn’t have a reason to go in there.

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  13. “Lead is lethal – Get kids tested!”
    I laughed when I saw this, how corney is that? I’m sure the mall is just self-promoting health, but my question is…
    Where would these so called “kids” get lead from, the mall itself?
    To which kids are you talking about? I think I should just grab someones kid and test them for lead.

    I’m sure if someone did that to your child, you would think that they are a sexual preditor / rapist.

    ANYWHO, this mall has some nice decor, however it’s lacking in the fashion department.

    I’m sure they don’t need 100000 billion shoes stores, with the same generic brands, a few is enough. or more with variety for that matter.

    Two, it’s lacking a regular anchor. Burlington Coat Factory Kmart, Old Navy, & the other anchors mentioned are DISCOUNT stores. If the mall had at least two regular department stores, that haven’t been purchased or gone out of business, then we could see more business.

    This reminds me of Tower City Center in Cleveland, however it opened to much fanfare, and more upscale stores for the executive downtown workers due to large presents of company buildings, now its full of “ghetto” looking shoe stores & urban clothes stores.

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  14. has anyone ever died from falling off the 3rd floor?

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  15. AceJay: no, it just mentioned PREIT buying the old Strawbridge’s.

    I actually parked on this one’s parking garage, not knowing the mall was inside. It’s well-hidden.

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  16. Like I said, some people (read: tourists) just don’t see it, buried in historic buildings. I really have nothing against this mall, even Big Kmart seems fairly nice. It’s just that it’s a crying shame that, like Mallguy said, a good location: a convergence of a tourist area and an upscale area. I think maybe some exterior signage would be nice, maybe including the word “mall” in the signage, adding a few more “convenience” tenants (like CoryTJ said), and maybe adding a few festival marketplace-like tourist/gift shops. Not necessarily little statues of Ben Franklin, but neat stuff that really does say “Philadelphia” and innovation.

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  17. I stopped at the food court here sometime in the Spring (on a Saturday) and it was full of people. Most were not, to put it nicely, the “upper crust”, but they were shoppers and living in Bucks County I know Philadelphia doesn’t need upscale stores like Nordstrom, or even a sears or a Boscov’s. The Strawbridge’s is just too big for one store, it should include several anchors. And the mall does have at least somewhat of a connection with people, Santa shows up here every December (I think on a fire truck or something that gets it on the news).

    I would suggest something like a Steve & Barry’s, except for that minor “going out of business completely bankrupt” thing. Maybe a value City/Stein Mart could work, but trying to change the mall to a real mall simply won’t work, the fancy shops are on Broad Street, as are the fancy eateries, and fast food has taken shelter in Liberty One so in my opinion they’re better off living with what they have.

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  18. The Gallery’s in a bad situation, and I’m not sure how PREIT can turn it around.

    The first problem is that The Gallery was designed to be a middle-of-the-road shopping destination, but over the last 30 years Philadelphia’s economy has changed into one in which there is a solid pocket of affluence in Center City generally surrounded by vast rings of poverty at worst and lower-middle-income areas at best (with some exceptions). The result is that the customers that The Gallery was designed to serve — the same people who shopped at Gimbels and Stern’s back then and who likely shop at Boscov’s today — just don’t exist in Philadelphia anymore in the numbers they once did. Instead, those customers are out in the suburbs, where they’re shopping at places like Franklin Mills and Exton Square. The upper-income people who live in Center City today are interested in upscale retail, and upscale retail in Philadelphia wants to be along Walnut Street near Rittenhouse Square or increasingly along once-moribund Chestnut Street. As upscale retail has gravitated to the southern and western sides of downtown, The Gallery has become the de facto shopping center for the impoverished or struggling areas that make up most of the rest of Philadelphia (places like Chestnut Hill and the Great Northeast excepted). That’s exacerbated the replacement of middle-of-the-road retailers with local shops, particularly those specializing in denim, sneakers, and other urban styles. The result is a snowball effect, in which a broader base of customers has decamped for the suburbs or Walnut Street, leaving The Gallery only to attract the low-end discounters and local shops that exist today.

    The second problem is that, as with many struggling malls, The Gallery has also picked up a (probably undeserved) reputation as a dangerous place to hang out. In part that’s driven by the fairly sketchy underground concourse that connects two of the subway stations beneath The Gallery, but the result is yet another psychological hurdle to attracting more shoppers to The Gallery.

    The third problem is that there’s really no other niche left for The Gallery to fill. Upscale shopping is centered on Walnut Street and King of Prussia. Midscale shopping is throughout the suburbs. Philadelphia’s neighborhoods are filled with the kind of services people need in their daily lives, and nobody is going to skip the neighborhood post office, dry cleaner, or market to get those services in a mall when they’re already likely located on the same block.

    And yet, redevelopment of The Gallery is crucially important to Philadelphia. Over the last 15 years, Center City Philadelphia has begun an incredible renaissance. Thousands more residents live downtown, destination retail has returned to downtown, and the restaurant scene has become one of the best in the country. In large part, this redevelopment has occurred in areas that are unconnected but only blocks apart. The biggest impediment in linking the growth in the Old City/Independence Hall area with that happening along the City Hall/Avenue of the Arts corridor are the blocks of Market East, in particular The Gallery.

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  19. Sort of reminds me of the old Worcester Common Fashion Outlets in my city of Worcester, MA. That sort of not-very-welcoming, not-very-accessible downtown mall placed desperately, haphazardly because it was better than what was there. I think you’re right, though, that it’s got a lot of potential. Especially in a city the size of Philly, a bit of sprucing up would probably help it considerably. And with direct connections to mass transit in the center of downtown, how could you not make it work? I don’t know anything about Philly, I admit, but I agree that there’s lots of potential here.

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  20. Craig’s analysis makes a lot of sense. The owners need to be creative and look for niches that are not being addressed in Center City. Big boxes that appeal to a middle/upper-middle bracket clientelel would help, although they often stay away from malls. Making the mall more open to the street would help. The 1970s “riot modern” kind of design would be less ncessary if the ground floor retail was better designed. If the food court is working then one direction might be to add more dining choices and gradually take things more upscale. Some simple changes like buying out the K-Mart lease and bringing in traget would help..Tenants like gyms are increasingly common in urban malls and might be one way to create destination space on the upper floor which is probably the most difficult to rent, although tenants like gyms may reduce foot traffic if their not placed right. Converting some of the anchor space to offices would create new traffic for the mall and, at the same time, reduce the amount of space that needs to be filled. By themeleves none of these fixes would work, but a combination would change the merchandise mix and cleintele for the mall..

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  21. i shop k mart i like the changes thay are making dont count them out thay ben in the mall through the hard times mabe tay deservre to stay. every butty is not rich mabe thay should fill the empty space first like the big empty department store thay all ready have not cerate another one. oh and by the way i like burlington also i think there reputation as the dead mall storer is because owqners wate tell so many things are wrong that thay stand no chance of saving there mall tomarow the new burlington opens in regency mall in racine wi. the mall will have all four ancor spots filled with stores of all levels it is truly a mall for every one i have not been to the gallarey but wood love to see the malls in the philly areia it looks to be in much better shape than milwaukes grand ave and i feel that ther is still hope for that one so there is also hope for the gallery
    john

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  22. I remember taking the train from the burbs to Market East (probably about 12 years ago) with my mom to go shopping at Strawbridge’s and some of the other stores (Burlington Coat Factory used to be Penney’s), and the mall certainly has changed. About 5 years ago I moved to University City to go to college, and I’d sometimes take the El to The Gallery to go to K-Mart for crap for my dorm, and wow how it had changed. I’d go to the K-Mart (which is sort of expensive for a K-Mart) and go to Strawbridge’s to shop, but that was it. There’s a Gap that I may have gone into, but a majority of the stores were urban themed or discount (Pay/Half, Payless Shoes, for instance) and just not my thing. The decor is also rather datede, and occasionally it is kind of dirty inside. When Strawbridge’s closed I got smart, brought my car down, and shopped on Delaware Ave or went to CHM or KOP. It’s a shame that management can’t clean this place up and attract more upscale stores, but I wonder if it is too late, with more and more upscale shops already moving to Rittenhouse area (Sephora, among others, have opened in the past year there).

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  23. The Gallery is never going to get any kind of major change…although the area around it may be higher-class, its a Septa (train) station. People of all kinds just use the mall as a shortcut or a giant loitering area, with workers coming in to fill the food courts. I never even thought of The Gallery as a real mall. There is no way a high end department store could survive in there..JCPenney couldn’t even make it.

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  24. in va there have at least several atempts at opening downtown malls two in richmond alone the now destroyed 6’th street marketplace, at was anchored by thalhimers & miller & rhodes & main street station, & in norfolk by parkside marketplace.

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  25. I believe there was a Lucille Roberts gym on the 4th floor, but I think that closed about a year ago. Also interesting to the location is that the PA Convention Center is actually accessible to the Gallery at 13th Street. With all the influx of people frequently coming for conventions, it is somewhat surprising that this place isn’t a little nicer.

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  26. I live in Philly right now and the only time I actually “shop” in the Gallery is if I find myself in the area (ie. on the way to Chinatown or Reading Terminal Market via SEPTA). I only visit a handful of stores in there because most of them don’t interest me, although they do have this cool kiosk on the lower level selling only kung-fu/martial arts movies, if you like that sort of thing. The mall layout is horrendous and I hate that they recently closed a lot of the stores I actually used to go to. Still, it’s a surprisingly busy place, especially near the food court.

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  27. I don’t know if this has been mentioned, but the original name of Strawbridge’s was Strawbridge’s & Clothier. I believe when the name changed in the late ’90s, the chain changed ownership. Also, Clover was a discount chain owned by the same company, but it disappeared when Strawbridge & Clothier became plain Strawbridge’s.

    As an almost-lifelong resident of Philadelphia (I grew up in lower Roxborough, a neighorhood in the Northwest section of the city), I have a lot of memories of this mall — mostly how many things changed over the years and how others (like the signage) have always been the same. The one thing I noticed is, as South Street, another shopping destination for “average” Philadelphians (those from the neighborhoods and not downtown) like myself, improved this decade, The Gallery went into decline. I worked for three summers on South Street and, as the used book stores and record stores disappeared but the housing projects nearby were renovated, thus making the area look less dirty and dangerous, more “upscale” but independent stores seemed to pop up. But the Gallery, even when JC Penney’s was still there, became known as the “ghetto mall,” not for all of the high schoolers and homeless people you find there, but for the fact that everything became geared toward a more urban clientele. However, unlike South Street, which has more urban “designer” stores like City Blue/Lady Blue, Utica, and other smaller urban designer boutiques, the Gallery has gone a very discount route.

    First, though, what wasn’t mentioned in this article was that The Gallery has two food courts, the larger one inside the mall and a smaller one near the train/subway stations.

    As far as memories go, I remember shopping here a lot in the ’90s mostly because the mall didn’t have such an urban feel to it, and. back then, thr trult “ghetto mall” of the area was Cheltenham Mall, which has gotten better, from what I’ve heard. My mom, my sister, and I would go downtown — by train, because the train station at the bottom of our street took us directly to the Gallery — go to shopping for clothes, shoes, or music at the Gallery and then eat across the street at Reading Terminal Market. However, the last time I recall going there for clothes or shoes was in 1998 (I recall a sketchers store in the mall at this time), and, at the time, I prefered the Gallery to King of Prussia and the Plymouth Meeting Mall because it was in the city and, as a resident of Philadelphia, you kind of have a love-hate relationship with the suburbs.

    But, in the late ’90s, early 2000s, I frequented this mall a lot after school. I was going to high school in the Northeast at the time and, to get home, I would take the Market-Frankford Line (the El) downtown and hang around the Gallery. During school days, the mall seemed to have activity but it was dead on weekends. Mostly, I went to the Gallery not to shop but to go to the smaller food court by the train station and then to look at the kiosks and go to The Wall/FYE. The place I used to go to was Adam’s Cafe, which had a mix of Asian and American food, smoothies, and other convenience store stuff. But, at times when I would eat in the food court, homeless people would come up to me to ask for money as I’d be sitting around and doing my calculus homework and eating lomein. As far as the other stores go, The Wall/FYE was very disorganized by this time but the kiosks used to have some cool things.

    Another time, I had to go up to school on a weekend to help out at the Special Olympics. I tried climbing up a six-foot fence and ripped the back of my pants. After the event was over, I went downtown to the Gallery to get a pita wrap from the Greek place and walked around. On a Saturday, the mall was open but dead. By the time I got home, my mother noticed the huge hole I had in my jeans and, after cursing at me in Ukranian for a bit, asked me why I didn’t come home sooner. I told her I was walking around the Gallery. She asked me, “With a hole in your pants?” And I say something along the lines of, “Yeah, but no one is at The Gallery on a Saturday.”

    I think the last time I was at the Gallery was in 2004. I was there to meet a friend across the street at PennDOT, but when she didn’t show, I went to the Gallery to take the El over to Kensington. The woman in the token booth wouldn’t take my transfer — the 9 bus only stops at Chesnut street, not the Gallery, so it’s not a “true” transfer (God, I had how SEPTA can be asinine sometimes) — so I went into the mall to look for an ATM, stopped at Adam’s cafe for a smoothie, and then took the El. I recall it being kind of dead, although stores and resturants were still open. Mostly, I think as long as the El and regional rail are running, the Gallery is open. Although, I recall I went there on a Sunday, and the mall was so creepy I decided not to take the train and take a SEPTA bus through West Philly to go home.

    I don’t know if this is of any significance, but, over the years, I do remember the 11th street stop (the El station at the Gallery) getting a reputation for violence. The last incident I remember hearing about was a woman getting stabbed in the back of the neck while waiting for a train, but, since I’ve been in New England for six years, I really don’t know if anything has happened there since then.

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  28. Another thing — someone had mentioned the signs about testing your children for lead. Sometime ago, in 1999 or 2000 I believe, the public schools in Philadelphia were tested for lead in the water. It turned out that, after testing the largest schools, the percentage of lead in the drinking water was too high and all drinking fountains were shut off. I haven’t lived in Philly in over 6 years, but maybe this is still an issue in the city. After all, there are advertisements telling you to get exercise, and a few years ago, Philly was listed as the “fattest city.” I don’t think they necessarily pertain to the Gallery, as the Gallery is far more cleaner than most public schools in the city, but more of a general reminder to those at the mall.

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  29. In that picture of the Big Kmart, there’s a woman holding a Macy’s bag. Where did that come from? There’s no Macy’s in this mall!

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  30. Jonah Norason,
    Macy’s is close by in the Old Lord and Taylor/Wanamaker’s flagship store. Macy’s took over the Lord and taylor store in 2006.

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  31. Yeah, there’s a standalone Macy’s about 2 blocks down Market Street. In a more interesting scenario they could make the mall much larger and have it end at Macy’s, but I don’t think that’s really necessary.

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  32. I’ve visited this mall twice when I traveled to Philly. It definitely isn’t much to write home about. It doesn’t have many national retailers, and it is so confusing to navigate between the different levels. To make it worse, the Kmart splits the mall in half making the Gallery II separate from the other half. I don’t think this mall could be saved, considering that Rittenhouse Square is only steps away. It would be pretty hard to replace the Strawbridge Anchor spot with another department store – it should probably be converted into office or hotel space. This is another case of hasty quick fix solution of adding a mall to drive traffic into a downtown, only to quickly deteriote and fail.

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  33. BREAKING NEWS!!

    Foxwoods Casino is considering turning The Galley into a casino. For anyone not familiar with the Philadelphia area, there’s been talk for several years about one or more casinos being built along the Delaware River waterfront where abandoned factories and collapsing piers currently stand. Howevr, as in any big project, there’s major opposition and now Foxwoods is considered turning the Gallery into a slots parlor. It’s way too early to speculate on what will actually happen, but this could change the entire center city landscape.

    See article: http://cbs3.com/local/foxwoods.casino.slots.2.814037.html

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  34. Based on that article, that means desperation has set in on how to upgrade the area.

    Read the book “Winner Takes All” by Christina Binkly to understande more. Mostly set in Las Vegas, the book also explanes what happend in other communities desperite for cash like Tunica Mississippi. Phili falls into that same catigory.

    The book is avaleable on CD & down loadable as well.

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  35. Turning the Gallery into a casino is one of the most rediculous things I have ever heard. Foxwoods is looking for a cheap, quick fix. Can you imagine…,.A CASINO BLOCKS AWAY FROM THE LIBERTY BELL? The project will be squashed within days. A casino within the city is a bad idea in general. It wont give Philadelphia a good image. The only places that can make gambling look somewhat good are Las Vegas and Atlantic City.

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  36. Lol are you people too lazy to go to Alantic City.

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  37. philadelphia has an image? i dont think we have much left 2 ruin – worts happens is we tear it down in 3 years. and 4 your information Mr. D, its not that we’re too lazy, its that we have casions in bucks and delaware counties now.

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  38. The Gallery is in need of serious help, but a casino? Really? That is the worse thing to happen. It will attract crime to an already troublesome area AND scare away tourists.

    The fact that the Gallery is connected to the SEPTA system (which sounds suspiciously like SEPTIC system) gives the Gallery additional crime and literal filth, plus providing an easy place for kids to hang out with only a few transfers (this “universal hang-out syndrome” also caused Prestonwood Town Center in Dallas to go, and yes, that was an enclosed mall).

    Ideally, the Gallery is a hub, connecting the various parts of Philly together. It should have a few mid-market stores, a few urban shops, a handful of touristy gift shops, a few shops catering to locals.

    The food court should be moved down to floor one, signage should be better, and do something about Strawbridge’s.

    Comments?

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  39. Read the book, you’ll have a better understanding of what is going on.

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  40. There has been talk about casinos and slot parlors in PA and Philly for a while now, but what I’ve heard was mostly in the Penn’s Landing area. Penn’s Landing could use a little more help, but while the casino may work near Dave and Busters, it will not necessarily mesh with the Independence Seaport Museum and the rest of Penn’s. I do think that the piers and decks need to be rehabbed and convereted into dockside dining restaurants, bars, etc. They do have a few, but not enough; and many are discouraged since the pier collapse a few years ago.

    I am vehemently against The Gallery being converted into a casino. If any neighborhood, a casino should NOT be located at the convergence of Center City and Old City/Society Hill. The mall can be saved, but it needs a lot of reworking, an updated streetscape adn a focus on dining and entertainment…Rittenhouse Square, The Shops at Liberty Place and Bellvue are the shopping destinations and should stay that way. You may have to slightly downsize, but bring in a large movie theater, an IMAX, a large bookstore and many restaurants, and you could have a viable entertainment destination…and all adjacent to SEPTA and the major tourist areas. Remember, the tourist areas and Center City are quite walkable (and safer than the rest of Philly), so this will cater to a good sized area.

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  41. Mallguy,

    Not to long ago an AMC theatre was part of the rehab of the waterfront area. Steiner Associates of Easton fame is the developer. Several of there projects have AMC as the theatre tennent. In this case I don’t know what happend, but the theatre was removed from the original plan.

    http://www.steinerassociates.com.

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  42. My bad, it’s http://www.steiner.com.

    Any way as far as a casino goes, we could turn this into a night time drama for ABC called “desperite politissions.” That’s exactly what it is, a means to balance the budget any way possible.

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  43. Sean: I don’t want to read some vague book on casinos, I want a straight answer on why the Mall can’t be reworked into a better mall.

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  44. This sure won’t help.

    83-year-old man from East falls nearly beaten to death at the Gallery.

    STORY: http://www.nbc10.com/news/17453223/detail.html

    Tear the damn thing down already and turn it into condominiums or more parking or anything better than this crime hole with a few stores that’s currently an eyesore everyone passing between Center City and Old City has to look at.

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  45. Glad to hear he survived, but seriously, what the fuck is wrong with Philly? The crime is rediculous.

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  46. If you want a derect answer Jonah, here it is, there’s no market for the Gallery as it stands. No reworking of this mall can save it. That is why Foxwoods is looking at that property, although a casino is not the best use for those buildings.

    Could you imagine the entire Gallery being turned into a casino? I mean not just slots like Philadelphia Park, but more like Atlantic City with table games as well. What would happen to the area around the Gallery? Not only THAT, What about the traffic & the SEPTA trains that travel through there.

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  47. I doubt the Gallery will become a casino. It seems that, over the past ten years, developers have tried to “improve” Philly by creating plans for casinos because they’ll result in more money and jobs. I recall, probably earlier this decade, Donald Trump wanted to put a couple of casinos in north Philadelphia but that plan never materialized.

    The Gallery was not a bad mall but it certainly can be cleaned up. Although SEPTA has a station in the mall, SEPTA stations are generally dirty, unpleasant places and, yes, SEPTIC is an accurate description of SEPTA. The Market East Train Station and the 11th Street El stop have attracted their share of violence over the years and have probably brought more into the Gallery than if the train station were across the street. But, sadly, most transit hubs in the city are like that.

    A casino downtown is pretty ridiculous. Philly does have a reputation as a dirty, violent sh*thole at times, but a casino downtown? Downtown is generally one of the better sections of the city and, as a shopping area, the Gallery does have a good location and at one point, before Strawbridge’s and JC Penney left, it did have good stores.

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  48. When Atlantic City got the OK to build casinos a rosey picture was drawn on how the city would be reborn. 30 years later the area really isn’t great, look at the slums just off the bordwalk as an example.

    Does anybody believe that it would be any different in Philadelphia? I drove through part of the city where I-276 comes close to I-95, the area wasn’t to pleasant & it was after dark. A casino wouldn’t benefit the city unless the tax rate was 90% on all profits. Even with that, I to would agree it’s a bad idea.

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  49. On Philly, as I said earlier, The Gallery needs to be redeveloped into an entertainment mall with streetside restaurants (think Harborplace or Providence Place…on a smaller scale) and entertainment anchors (e.g. Barnes and Noble, AMC, IMAX, etc). The mall may have to be rebuilt but it will be worth it. In terms of safety, the usual rule is don’t go north of Vine Street and the Vine St Expressway and farther afoot from the UPenn campus in West Philly after dark. I truly believe the Casino will ruin Center City, and believe it or not, Philly likes preservation…they did not build a direct access freeway ramp to/from the Ben Franklin Bridge because it would have destroyed Franklin Square.

    On AC, Sean, it has come a lot farther along in the past 5 years and believe it or not, it’s due to new retail (The Walk, The Pier Shops, The Quarter). It’s still not perfect (and I would even say incomplete), but I do see a major difference. It would be nice to see a few more themed shopping areas in AC (e.g. a New Orleans themed shopping area/entertainment area at Showboat).

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  50. Mallguy,

    You are correct on A C AS FAR AS RETAIL goes. It has made things somewhat better, but they have plenty to do to improve the cities immage beyond a gambling mecca. There are plenty of houses that need TLC & could serve as afordable housing for many families in need. also cant a city of 50,000 have at least a supermarket within city limits other than Waw Waw? Am I asking for to much here? Come on Donold Trump, Gary Loveman & others, open your wallets & do a city proud.

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  51. @ Irene I was the one talking about the “testing children for lead” signs, thanks for the extra information, I was wondering why they had them.

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  52. Great article. I used to live near the “ghetto mall” and shopped there frequently before my move to the suburbs. This mall is really pathetic. It caters to the lowest bargain shoppers, is dirty and outdated, and your safety is in question at times. It is a horrible shopping experience. I take the train through there once in a while and I am always glad that I moved out of the city. Last night I was taking the train through Market East (the station below the ghetto mall) and we were stuck on the tracks for an hour because of “police activity” at the station. Ghetto ghetto ghetto. They should tear it down and leave the station. That entire block of Market should have all of those low class businesses zone out and a higher caliber of retail storefronts opened.

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  53. Wow… fantastic website!!

    I was born and raised in NE Philadelphia, but spent the better part of my weekends as a teenager downtown. As such, the revitalizations of some parts of Center City (to the detriment of others) fascinate me.

    While waiting to catch SEPTA regional rail back home I used to hang out at the Gallery. The thing that stuck the most in my head was just how outdated and dark it seemed. A big part of this I’m sure is the fact that it is, as the blog mentioned, literally downtown. As a teenager (and later, as a broke college student) I definitely had use for discount stores, so the selection of retail didn’t bother me. But it was just something about the lights, the mirrored ceilings, etc. that made everything seem… I don’t know… sketchier? Even in the food court… I could tell myself that the Teryaki Boy sushi there was the exact same as the Teryaki Boy in the Shops at Liberty Place (where I ended up more often despite the fact I couldn’t afford much there!), but it all just felt cheaper.

    To me, they’re not going going to attract an anchor to replace Strawbridge’s (RIP) until they address the issue of aesthetics.

    Although, last time I was around the Gallery much of the surrounding area still felt cheap as well. I’ll be interested when I go back this weekend to see if it’s changed, and if so, I wonder what that means for the future of the Gallery.

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  54. And mallguy… step a few more blocks away from the boardwalk in AC (even past the new shopping district), THEN tell me that anything has changed in the city… :(

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  55. Spot on. The potential of this site is RIDICULOUS. How many malls can boast the following?

    Connection to a convention center?
    Connection to a hotel?
    Connection to a farmers’ market?
    Connection to a train station?!?!
    Proximity to a Greyhound terminal?
    Proximity to a huge historical tourist attraction, ie. Independence Hall?
    Proximity to national monuments like Pat’s and Gino’s?

    I mean, come on! If this isn’t a gem of a site going to waste I don’t know what is. It’s no wonder Foxwoods Resort Casino wants to move their new casino project from the waterfront to here. I have to say, however, that I think a casino would almost be a waste of these resources. A casino by Foxwoods is most likely going to succeed almost wherever it is (they didn’t build the biggest casino in the world by accident). I feel like another venue, preferably retail, would benefit better from the site. Even if it is just another mall that better interacts with its surroundings.

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  56. I moved to Philly in 04 and have only used the Gallery a few times, mostly just to pick up specific items, not shop around. Really the main thing its got going for itself is convenience. With the subway and regional rail stations literally inside the mall, the Gallery can be reached from virtually anywhere in the city (and without a car!). King of Prussia and the strip malls on Columbus Blvd are nice and fulfill most of people’s needs but a little too far away when traveling via SEPTA (I’ve taken bus rides that took over an hour to both destinations which causes running a few errands to turn into an entire day trip).

    I’ve always felt that the first floor/underground part of the Gallery was a little sketchy looking. The dim lighting, narrow hallways, and the dark tiles (especially around the food court) make it rather uninviting. I really like the funky layout though. It takes some getting used to but I think its one of the things that makes this place unique. I did get confused though the first time I tried to get to the stores on the 3rd/4th combo floor.

    I really wish the Gallery could get some more chain clothing stores, Old Navy, the Gap, and NY and Co. do an alright job but more selection would be nice. Something like Target would be amazing downtown. The K-Mart offers the same type of products but this K-Mart, in my opinion, is just small and dingy. The last time I was there I couldn’t find anything that I was shopping for and the whole store seemed to be a big mess. A Kohl’s might work in the first level of the old Strawbridge’s. I agree with a previous poster’s suggestion of a Barnes & Noble. While the Gallery currently has express versions of B.Dalton’s and Borders, downtown could really use a full scale B&N. The only Barnes & Noble downtown is off of Rittenhouse which again can be a little inconvenient to access via public transportation. I think this area could benefit the most from some more chain restaurants that could cater to tourists and convention center attendees.

    Also I just thought that with the way the Gallery is split in half they could reorganize it to house some of the more discount/convenience stores near the train stations and fill the other end with more chains one usually finds in a mall (not necessarily upscale but not the bargain type stores that are there now).

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  57. Just Came by to say that i have alway enjoyed shopping he and i really like the all the different choices there are such as the stores the stand
    and the pricing that very important to me , and i am a big kung fu movie fan i found a stand down there that has every thing i could not find eles where, i am a happy shopper

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  58. Here’s the real problem with The Gallery. It is owned by several different real estate partnerships and, do they not only not talk to one another…they willfully work against a cohesive idea of what to do with the place.

    Preit controls most of the Gallery mall itself and also bought the former Strawbridges building, but they are a Wall Street-driven real estate trust, and they make short term decisions to satisfy their investors…not an easy crowd these days. Also, except for Cherry Hill and Willow Grove, Preit mostly operates lower-end malls and really doesnt know how to upscale something as complicated as an urban mall. I really wish they would sell it, since this isnt thier real strength.

    A company called Vornado owns the Kmart building, and they are even worse. They made the upper floors of this building (made for Gimbels flagship originally) into offices and cut into the facade cheap-looking tiny windows. It is an embarassing looking attempt, and it shows how little conc ern for the city they have. As usual, another MBA-driven cheap real estate company is screwing center city Philly to make a fast buck. They couldn’t do a nicer job with the facade? Puleease!

    But surprisingly, the worst offender of all is the city who controls the Burlington Coat (old JCPenney) building. They took ‘bids’ on who to lease it to when Penney’s left, and instead of going out to cut a deal for something better (in this case maybe a Target or Boscovs ) they gave it to the Burlington, who gave them cheap/quick money and a fast lease. No attention to how it would affect the rest of the mall or whether people like me who lived in center city would even want to go there. So, now I am still forced to go to Columbus Blvd, or KofP to do ‘decent’ retail shopping.

    Macy’s also ruined a chance to make the Gallery into something better as well. Instead of staying in the Strawbridges building, they abandoned it for smaller space in the former Lord & Taylor, once they sold that division off . (For history buffs, this place is a gem….its the old John Wanamaker flagship store….a national architectural landmark. To say its beautiful is an understatement….it’s one of the finest commercial buildings in the U.S. It was the store in the movie ‘Mannequin’ if you’re a bad 80’s movie fan) I don’t necessarily blame Macy’s for the move, but they left big empty space for a smaller store and have much less selection in their new location than what they could’ve had in the old Strawbridge’s. They did add a nicer home goods area last fall, but the overall store is much smaller than even most of their suburban stores. This is ironic, since before they converted most of the upper floors of the Wanamaker building to office space, it was once one of the world’s largest department stores. The loss of these stores says a lot about what has happened to Philadelphia overall.

    As for the casino idea……let’s make sure this absolutely does not happen. The last thing center city needs is the element that this will bring. You think its bad at the mall now, just wait. Been to Atlantic City lately? Not pretty.

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  59. i’ve been a lifelong resident of philly and i personally find some of the comments people left reguarding this article extremely negative and with strong racial undertones. i belive the gallery will be updated within the next decade or so because lately an influx of “well-to-do’s” have been relocating back into the city therefore raising property values, and pushing our city’s lower income residents out into they’re former suburban retreats.(just take a look at areas like norristown, conshohocken and abington nowadays). dont build something, then abandon it, and expect it to run itself.

    where are you going to run after the so-called “section 8-welfare-ghetto trash” repopulate in your cozy suburbia???

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  60. I went to school in the Philly area, and since no one in my circle had a car, we usually just hopped on the train to go to Market East (the only way we could get to King of Prussia was either to grab a ride or use the school’s horribly overcrowded bus trips). Back then, almost a decade ago, it was okay – not the destination it tried to make itself out to be but fine for a night of group shopping. It never struck us as dangerous – just in need of some work.

    I haven’t seen it since, but I know (at least for my own entertainment) I’d rather have a run-down mall that could be fixed up than some smoky, disspiriting casino. And as someone who works in Philly now, I’d rather have the same thing – having a fixer-upper of a mall is better than having a poverty-encouraging slot pit. Part of my company’s goal is to eliminate poverty, and having a place fueled by “get rich quick” pipe dreams in Center City will make us look even more hopeless. Not to mention make the city look low-class.

    Speaking of low-class… shawn, still bitter about the eviction?

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  61. Cops Nab 15 after Flash-Mob Rampage.

    Yes, it started at the Gallery, which isn’t about to help them any, unfortunately.

    Two things: you can tell this is a Daily News articles because it’s less professionally written than most blogs. Also, I can’t help but picture some bitter Chicago transplant jumping into the fray at Macy’s, crying vengeance for Marshall Fields.

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  62. Will there be a movie theater inside the Gallery Mall and who will take over the former strawbridge & clothier location.

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  63. There is an excellent historic reason why Market East was the retail mecca of the region…once. Location, location, location. But suburbanization, bankruptcies, buyouts, and demolition of vital assets took their toll, and so Market East has fallen on hard times, and after the Federated-May merger left only one true department store, harder times in the aughts.

    I think this is the nadir of the Gallery. That is to say that the area is too important, retail-wise, for things to get much worse, and sooner or later the powerful draw of Location (and let’s be frank, this place, in the center of a metropolitan region in the center of a megalopolitan region, has more Location than King of Prussia) will start to cut through the anemic reek of what’s there. Other urban malls have improved after hard times. Toronto’s Eaton Centre, for instance, hit a major nadir after the company it’s named after went out of business but has bounced back. There is a niche here and that niche is determined by Location–but it’s also a niche the Gallery isn’t filling.

    Another key issue is one of ownership. In most malls, like Plymouth Meeting or King of Prussia, a single owner controls leases and lease locations to maximize profit; in the Gallery, however, traditionally all three anchor tenants were owned by different entities (they still are), and to make things worse, the two halves were as well! The fact that PREIT has managed to bring half of the disparate elements under one roof, in this context, is no mean feat, and it’s arguable that had they failed, the Gallery would sink lower than it already has. For PREIT, the current main goals are most likely to gain control over Kmart and the Burlington Coat Factory, as well as to fill the Strawbridge & Clothier with a good tenant. No clean ownership makes renovation work extremely difficult to undertake.

    Macy’s deciding to concentrate on Wanamaker instead of S&C also weakened Market East. Since the company is focusing on two brands–Macy’s and Bloomingdale’s–and the Wanamaker building has always have a feel of, and reputation for, high-class elegance, had Macy’s decided to convert Lord & Taylor into Bloomingdale’s and S&C into Macy’s, Market East would feel more appropriate and would be in a stronger position than it is now. This is a major mistake, but not a fatal one. The god of Location is hovering above the miasma on the ground, remember, and if a libertarian solution were pursued, eventually the strength of location would dictate that the terrible urban conditions would be rectified.

    I wonder how old the Old Navy in the Gallery is? the Five Below? Gallery II–the west half–seems to be strengthening on its lower three floors, all things considered, so perhaps allowing PREIT to assemble the ownership pieces before moving ahead with any renovation plans may be the best move of all.

    Finally, something not many people know: the Gallery is overbuilt. That means that it has been built to be able to support a skyscraper on top of the better part of both halves–particularly the Kmart and Burlington Coat Factory anchors–which could conceivably be offices, or hotels, or apartments, or condos. (Un)fortunately, the best candidates for this overbuilding are said anchors, still not in PREIT’s control. What it means, however, is that the external elements to improve the Gallery can be built right on top of the Gallery.

    And let none of us forget the fact that the Gallery isn’t just a standalone! It needs to fill a niche not so much as a mall but as an element of a successful Market East. This is why what is in the long term the most important solution of all–bringing the Gallery to meet the street–is the one that recontextualizes the Gallery into Market East, and allows it to shed the fortress aura. Minneapolis’ Nicolette Mall is successful in part because the façade contextualizes the mall into the greater business district–that is, it makes the mall seamlessly blend into the urban landscape rather than stand out from it. Eaton Centre’s revitalization didn’t really get started in earnest until a recontextualization with the street and neighborhood began. The fortress appeal of the suburban mall has no place in the city; to be successful, the urban mall must be able to share itself with its surroundings–and these surroundings are almost always a retail center.

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  64. Forgot to add:

    Breathe a sigh of relief. Foxwoods has been kicked back to the river by the courts and is close to losing its license. The retail parts of the S&C can still be saved.

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  65. While I was in Philadelphia yesterday, I poked my head into the Gallery for about one minute and saw a former shell of itself…a lot of vacant stores and very few shoppers. More people loitering than shopping. The whole 8 block stretch of Market Street between Reading Terminal and Independence Hall leaves a lot to be desired for in terms of quality of shopping. Very sad to see. Better shopping in Philadelphia still exists in the Shops at Liberty Place, Shops at Bellvue and Rittenhouse Square/Walnut Street. Plus, Macy’s does a pretty good job of preserving the John Wanamaker bullding.

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  66. And on the subject of the casino, the SugarHouse Casino has opened along Delaware Avenue, about a 1/2 mile North of Dave & Busters, in the “Fishtown” neighborhood, just north of Penns Landing. It remains to be seen what this will do for the neighborhood. With the casino, I was very surprised I didn’t see them rent more billboard space along I-95. If you don’t know it’s there, you could miss it.

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    SEAN Reply:

    @mallguy, Here’s an article from the NYT I just happen to find. Although it is about Reno v California, you can draw similar conclusions about Philadelphia in reguards to Atlantic City.

    Two foot notes… – first there was an article in the times asking the question are state governments becomeing too dependent on casinos for tax revenues? second you will never see a casino built in an area that is ecconomicly stable.

    For Nevada Casinos, Threats in California
    By JESSE McKINLEY
    LINCOLN, Calif. — The Thunder Valley casino, outside Sacramento, has all the trappings of a modern gambling resort: endless rows of slot machines, a high-end spa offering gold-leaf facials and the type of performers — Tony Bennett, Peter Cetera — for whom casinos were seemingly invented.

    But ask Ken Lawson why he brought his father, George, here on a recent afternoon, and his answer has nothing to do with shows, slots or service.

    “It’s just a shorter drive,” said Mr. Lawson, who lives in Rio Linda, a nearby suburb.

    Like many, Mr. Lawson favors California convenience over old-school Nevada glitz. A decade after California voters expanded gambling on tribal lands, Indian casinos here have slowly been squeezing their competition across the border by building increasingly elaborate — and exceedingly accessible — gambling centers along the major freeways leading from the Bay Area and the Central Valley over the Sierra Nevada.

    The result has been a prolonged slump for many of Northern Nevada’s gambling towns. In Reno, “the biggest little city in the world,” gambling revenue has declined in 30 of the last 37 months, according to Michael Lawton, a research analyst with the Nevada Gaming Control Board. And while the recession has certainly taken its toll on gambling nationwide, experts say the problems have more to do with proximity than pocketbooks.

    “Less people are coming over the hill,” said Frank Streshley, chief of the tax and license division of the Gaming Control Board.

    In Reno, total gambling revenue is off 25 percent since the spring of 2007, according to David G. Schwartz, the director of the Center for Gaming Research at the University of Nevada, Las Vegas, while other nearby towns on Lake Tahoe have seen declines of more than 40 percent.

    Frank J. Fahrenkopf Jr., president and chief executive of the American Gaming Association, the casino industry lobbying group, said the effect on Reno and nearby cities is particularly profound when snow shuts off the mountain passes.

    “I’ve been under a car many times putting chains on,” said Mr. Fahrenkopf, who grew up in Reno. “I can’t think of another market anywhere in the United States that’s been hit as hard as Northern Nevada by the spread of Native American gaming.”

    Congress set up the statutory basis for the regulation of Indian gambling in 1988, and in 2000, California voters passed a ballot initiative that allowed slots and house-backed card games like blackjack on Indian land. (Before that, only so-called Class II games — primarily bingo and poker — were permitted.)

    Since then, the state has become the single-largest Indian gambling market in the country, with estimated revenues of $7.3 billion in 2008, according to Alan P. Meister, an analyst with Nathan Associates, an economic consulting firm. And at least some of that growth has to do with convenience.

    And while early tribal operations may have been little more than small, bland card rooms, recent renovations are enhancing properties throughout Northern California. Over the last two years, several tribes have added hotels and event centers and have expanded floor space.

    More than such amenities, though, what California casinos seem to be banking on is location. Thunder Valley is owned by the United Auburn Indian Community, which is made up of Miwok and Maidu Indians. It expanded to 200,000 square feet of gambling space over the summer, adding a steakhouse, a 300-room hotel and a cabana-ringed pool. The casino sits in the middle of a patch of browning farmland, flanked by a few lonely ranch houses and a nearby landfill, but is also just minutes off Interstate 80, a well-traveled corridor between the Bay Area and Reno.

    To the south of Thunder Valley is the hulking Red Hawk casino, opened by the Shingle Springs Band of Miwok Indians just outside Sacramento in December 2008. The opening caused traffic jams along Highway 50, a main east-west route to South Lake Tahoe from which the casino has its own exit.

    Meanwhile in Reno, several casinos are out of business or have been closed for extended periods in the city’s downtown, where low-rent motels sit near a new minor-league ballpark and the National Bowling Center.

    With fewer Californians at the tables, many Reno casinos are now focusing on local players, using loyalty cards, inexpensive entertainment and direct mail and e-mail offers. And while the Reno downtown district still has clusters of casinos — something the California tribes, almost all single-casino operations, do not offer — the most successful casinos in Reno offer more basic suburban amenities.

    “Good parking, well-lit floors, good security and easy access have become more attractive for local clientele,” said William Eadington, director of the Institute for the Study of Gambling and Commercial Gaming at University of Nevada at Reno.

    Reno tourism officials, meanwhile, began a marketing campaign last year called “Reno Tahoe, USA — Far From Expected,” which emphasized activities like world-record motorcycle jumps, an exhibit featuring Elvis Presley’s Cadillac and the world’s largest sporting goods store. And a radio ad in the Bay Area, featuring a talking bighorn sheep, boasts of the region’s “trails, beaches, fairways, rivers,” but makes no mention of casinos.

    Notice the absence of Las Vegas in this article. No matter what, Las Vegas will always be king of the casino world.

    [Reply]

    mallguy Reply:

    @SEAN, In recent years, Pennsylvania has been very welcoming to the idea of building casinos throughout the state. Beside Philadelphia, there are casinos in Chester, Bethlehem and the Poconos (to my knowledge…there may be more). They are trying to directly compete with Atlantic City and their market share. It remains to be seen if it will be a success. Due to the economic climate, Atlantic City is in a period of struggle and the struggle has been a problem since at least 2006/2007.

    The rule in Philadelphia is “don’t go north of Vine” as the neighborhoods get sketchy (and yes, even in Temple’s neighborhood) and the area where SugarHouse is built is rather sketchy. They’ve been trying to gentrify Penn’s Landing for years and were somewhat successful with it between Dave and Busters and the Independence Seaport Museum. The casino is in walking distance from D&B’s, but honestly, you don’t want to walk there!

    Philadelphia also needs to take a look at the area of Market Street where the Gallery is. Not for a casino (which has been determined won’t happen), but for some kind of fix-up.

    [Reply]

    SEAN Reply:

    @mallguy, And do what exactly? Casinos don’t atract the best element of society & aren’t nessessarily in the best neighborhood either. Locally all I need to do is take a quick trip to Yonkers Raceway & walk around to prove my point.

    There was another article in the Times Oct. 2nd on Las Vegas that was somewhat similar to the one I posted above. Basicly with a reported 14.5% unemployment rate, locals & visitors are spending & gambling less. Current spending figgures are at 2004 levels, meaning they lost 6-years worth of revenues in 3-years & don’t have any pricing power in room rates like they did as recently as 2006 & 2007.

    [Reply]

    mallguy Reply:

    @SEAN, I would propose a mix of residential and commercial development. The mall is right above a train station and the Philadelphia Convention Center is right next door. With those two developments, it would attract new and better shopping not just to the Gallery, but to the 6 block section of Market Street between Reading Terminal and Independence Historical Park.

    [Reply]

    SEAN Reply:

    @mallguy, Hmmm, I can see that working quite nicely. Is there residential in the neighborhood already? If so are we talking new construction or row houses that were rehabbed. Either way a strong residential base will support delis, local shops, banks & most importently grocery stores like Genuarti’s to keep a neighborhood healthy.

    [Reply]

    mallguy Reply:

    @SEAN, Not really sure, as that’s basically Center City, but there needs to be a heavy rehabbing of business and retail in that area. It’s all discount stores, mom and pop sporting good stores and chain drugstores/pharmacies.

    [Reply]

    Steve S. Reply:

    @mallguy, @SEAN, I would disagree that the “don’t go north of Vine” rule holds anymore. There aren’t any really SKETCHY neighborhoods south of Spring Garden St. anymore–although the Spring Garden Industrial Corridor between Old City and Northern Liberties is really ripe for massive redevelopment, given how much it’s been given over to parking lots–and the closest really SKETCHY neighborhood to Center City, the old Richard Allen homes, is located just off Broad, nowhere near the waterfront. Like the S.G.I.C., the Northern Liberties/Fishtown waterfront has the feel of a disinvested industrial district–mostly empty, but by no means “sketchy”. In my mind, the waterfront is also a completely different neighborhood than its inland counterparts–so great is the walling effect of I-95.

    The “Foxwoods” group finally lost its license. Lenfest recently proposed to turn the S.S. United States–which he recently saved almost single-handedly–into a destination casino, so let’s hope that when this interminable debate comes around it’s an iteration of that proposal that gets built.

    There’s a Bolton’s in the Gallery now. While it’s still well off of what it needs to be, much less what it could be, the presence of a New York store that also has a location on Wall Street near a Tiffany’s (of all places!) should give us heart.

    On a different note–there is a new sign ordinance going around for Market East. Getting this ordinance, or something like it, passed is important: Toronto, for example, has had tremendous success with its sign district. It is, however, opposed by those nimrods at SCRUB, an organization which (counter to its name) seems to be far better at creating and preserving urban blight by preventing large signage from being installed in context while at the same time having been leashed to some extent against their main target, highway billboards.

    [Reply]

    SEAN Reply:

    @Steve S., Can you give a little more info in reguards to this ordenance & how it relates to Market East & Toronto? Also who or better yet, what is SCRUBS? Sounds like one of those weirdo actavist groups whose title denotes one thing & there actions denote something entirely different.

    [Reply]

    Rich Reply:

    @Steve S., I’ve been an occasional visitor to Philly for years and would agree, that there is little that could be called sketchy in Center City and nearby. Chestnut Street which once was the low rent commercial counterpart to Market Street has gradually been transformed over time and the northerly areas are far from intimidating. The area, though, has places that even locals don’t know about. I’ve taken long-time Philadelphians to restaurants they hadn’t even heard about.

    Market East would work better if it were open to the street rather than turning its back. It would be very expensive to do this, but it be a big shot in the arm to the complex and the downtown area.

    Conversion of mall space to mixed-use would help diversify the shopper base and make use of the availability of transit.

    [Reply]

    SEAN Reply:

    @Rich, So true with that last statement. here is an interesting website for you to check out http://www.walkscore.com. As the name suggests, you can get a walk score for any adress & the closer to 100 the more walkable the area is. Recently new features were added including transit score, witch calculates how transit friendly the area around a specifide adress is if avaleable. It is quite amazing.

    [Reply]

    Steve S. Reply:

    @SEAN, SCRUB (Society Created for the Reduction of Urban Blight) is exactly as you say it is. The Planning Commission has been entertaining an idea for a sign district (i.e. billboards) for Market East–not quite like Times Square, however; the apt analogue is considered Yonge Street in Toronto. SCRUB, being primarily anti-billboard, is fighting this, much to the dismay of pretty much everyone else in the city.

    @Rich, fully agreed. It also helps that the “good” sections of Philadelphia are rapidly expanding. I would characterize the area north to Girard west of Broad, north to Girard east of 5th, and north almost all the way to Lehigh east of Front “good”, as, I am sure, almost anyone else.

    Interestingly enough, South Street too is on the decline. East Passyunk, (west) Fairmount Avenue, Baltimore Avenue, the Piazza at Schmidt’s, Girard Avenue (in Fishtown), and the Frankford Avenue Arts Corridor (despite its vacancies) are now much more interesting places to shop, or open a business, at. I wonder if this may be because of a reluctance of midmarket retailers to invest in the urban core while the higher rents drive the smaller, more independent, operations further into the gentrification zones, thereby creating a gray area between the affluence of Walnut and the Avenue of the Arts and the trendiness of the emergent districts…

    In any event, the (obvious) lack of recent renovations in the Gallery is, probably as much as its fortresslike atmosphere, an issue that turns prospective shoppers off…but the customer counts at the Gallery are sky-high–I don’t think there’s any other mall in America that sees so much traffic yet is so dead.

    [Reply]

  67. Center City On The Rise
    Philadelphia roundtable focuses on City Center as the place for new retail to be.
    Moderated by Randall Shearin

    Shopping Center Business recently held a roundtable in Center City Philadelphia, hosted by the Philadelphia Industrial Development Corporation at its offices. In attendance were: Joseph Coradino, PREIT Services; John David Franklin, Madison Marquette, Michelle Shannon, Center City District; Paul Levy, Center City District; Karen Randal, City of Philadelphia; Michael Salove, Michael Salove Company; John Wilson, Cushman & Wakefield, Steve Gartner, Metro Commercial; Haley Samsi, Center City District; Anne Nevins, PIDC; Mary Dougherty, Betsey Johnson; Jim Pearlstein, Pearl Properties; Ivy Olesh, Center City District, Catherine Timko, The Riddle Company; Steve Jeffries, Precision Realty Group; Michael Barmash, Colliers; Dawn Summerville, City of Philadelphia.

    SCB: Steve [Gartner], do you want to give an overview of the market?

    Steve Gartner: All of the hard work by a lot of people, public and private, in Philadelphia have resulted in, brick by brick, a viable atmosphere for retailers to make a lot of money in Center City. It’s a strong residential base that feeds it, both in Center City and in our adjacent neighborhoods. It’s a stable office workforce that has not diminished. It’s an atmosphere in which visitors, whether regional or tourists, can come into Center City to play or go to the theater or go visit a doctor, all benefit the retail atmosphere that’s in Center City. As a result, we’re seeing high demand by retailers that want to locate in Philadelphia and frankly, not enough spaces to accommodate them.

    SCB: You mentioned a lot of residents from outside the area visit and shop, as well as residents that live here, so you have a dual market that’s being discovered by retailers here. Restaurants really draw a lot of people within that group too.

    Michelle Shannon: Over the past 10 to 15 years, the residential base of Center City has grown tremendously. We’re now the third largest downtown residential population in the country, which is amazing. A lot of those people not only live in Center City but they work in Center City as well. Over the years, that residential base as it grew, grew the demand as well for the kinds of retail that we’re getting in now. Residents don’t want to have to drive to King of Prussia or Cherry Hill to buy the kinds of goods and services that they need. Bit by bit we’re starting to see the retail demand being met but there’s still so much more opportunity for retailers here than what exists today.

    SCB: Does most of this exist in pockets or is the whole city coming together?

    Haley Samsi: The restaurant scene is helping to expand it. It started as a concentrated area. Restaurants are much more willing to be the pioneers and go to an area that needs to get a little bit more oomph. Places like North Broad — there’s restaurateurs going up there and retailers will eventually go there.

    Catherine Timko: One of the things you’re seeing is shift in demographics The population in downtown and the core of downtown which is river to river, is getting younger, they are having babies, and there are more families. We’ve had 20,000 babies born in the last decade. This is influencing what people are looking for in retail. The population that lives here is well educated; 86 percent of the people between 25 and 34 have at least a college degree. That makes a statement about how retailers are looking at this market. Downtown also experienced the greatest rate of growth; 16.3 percent alone in the Center City core.

    John Wilson: Two of the strongest employers in our city are hospitals and universities. We were recently at a point where they were declaring war on the fact that our college kids would leave the city. As they are staying here and living more in concentrated in Center City, that’s when you’re seeing the off neighborhoods become more popular.

    Timko: The latest survey showed 58 percent of kids coming out of school are staying in Philadelphia.

    Shannon: It wasn’t like that 10 years ago. Before Campus Philly and some of the other retention efforts, we were losing a lot of young people. But that has turned around during the past couple of years.

    Ivy Olesh: To your point earlier Catherine, not only are college graduates staying right after they graduate and find a job in Philadelphia, but then they are staying downtown and marrying downtown and having families downtown. When their kids are school age, they are staying downtown. There’s no longer the flight to the suburbs that we used to see.

    SCB: How does that boost the want for retailers here?

    Michael Salove: We’re very bullish on University City. As Penn (the University of Pennsylvania) and Drexel University continue to grow — both are doing so in huge leaps and bounds — it’s creating the connection between University City and the CBD. We’re handling a mixed-use project for Drexel. It will be a gateway for Drexel from the CBD into University City with a new large bookstore, 30,000 square feet of retail and we are oversubscribed. At this point, we are picking and choosing and we wish it was bigger. Next to Rittenhouse Row, University City is the biggest demand for retail that we as company are seeing.

    SCB: Are there other areas of Center City where you’re seeing a lot of retailers come to town? What do they want to see? What do they know about?

    Shannon: They know about Walnut Street, that’s probably where most people want to go. As rents go up and space is less available, they are spilling onto West Chestnut and the cross streets, 16th, 18th, 19th.

    Salove: It also depends specifically on the user. We have people that are more interested in visitors, in tourist traffic. We’re working with the city and lot of folks at various organizations to find location for Madame Tussaud’s. Mostly tourist driven, we want to be as close to the Liberty Bell as we can get. Other folks, a little bit younger demographic, looking at Midtown Village. University City pulls just about everything. You have a wonderful residential population there full time, not just university related, that a lot of people don’t know exists. So we’re seeing retailers and restaurants of every type looking at that market.

    Gartner: Geographic barriers are changing. It used to be that retailers would never go east of Broad Street. There has been a seismic change, even as recently as the last year or two, that 13th Street and 12th Street, areas east of Broad are becoming viable. Getting back to the restaurants, restaurants are the ‘Navy Seals’ in a neighborhood. They are the first ones there. It’s the local chef that has some backing and starts a new place. In almost every transitional neighborhood, it’s usually a restaurant or two or three to go in first. If you go around Center City like a clock and you look at Northern Liberties, the art museum area, Fitler Square, Graduate Hospital area, south Broad Street, it’s restaurants that are creating the energy in those areas.

    Olesh: Those are the areas where recent grads up to 35 are settling.

    SCB: How are the landlords reacting to this? Are they changing their mindset?

    Jim Pearlstein: The cat’s out of the bag a little bit with Philadelphia. We sat here a year ago or 2 years ago, when you talk about these second locations, there are prime examples. Steve [Gartner] opened an office in Center City. Anne [Nevins], you’re taking applications for loans from companies from Chicago and Cleveland. It’s not just the retail, residential or the fact that we’re creating neighborhoods, we’ve never been noticed before. We’ve been stuck between New York and Washington, D.C. Now we have second locations — we’ve just put Le Pain Quotidien at 8th and Walnut. They have a second location five blocks away. Are you kidding me? And they are killing it. The point is: we are starting to see second locations. We were never a second location retail city. Maybe they would go to University City because of Penn’s demographics. Now all the clients that we have all over town are looking for second locations. Those second locations can be east of Broad, they can be north of Vine.

    Gartner: H&M also has two stores two blocks from each other. They found those to be viable and different shopping streets.

    Pearlstein: We’ve always been real quiet but I think Philadelphia is unique. When you go to most cities, you don’t get the live-work-play pedestrian traffic that you see. If you go to Phoenix, if anybody’s been there, there is no town. It’s just so spread out and large. There’s no vibe. There are very few cities like Chicago, New York, D.C. and Philadelphia where you can go and stay within 20 square blocks and have the vibe that we have here.

    Wilson: It’s exciting. Everyone in here is working on educating the tenant. We’re also educating the outside brokers. At Cushman, one of our New York guys said, ‘we’re coming to Philly and the client doesn’t want to go anywhere but Walnut Street.’ They had to be on Walnut. Now we’re educating them on Chestnut and east of Broad. We have to, because eventually we’ll run out of supply on Walnut and we’re going to have to put them somewhere. And the education is working, we’ve seen that in the last year.

    SCB: Do retailers pretty much know where they want to go? You mentioned H&M has two stores, obviously they did some research to pick those two stores.

    Wilson: What’s happening is they are not coming and pounding down our door. We are creating that interest. You’ve got a few that know they want to be here but for the most part, every broker is calling tenants to get them here.

    Pearlstein: We spent a lot of years being overlooked. People would jump over Philly to go to Washington.

    Salove: To stick with the H&M example though, we worked together, did some heavy lifting to get them to come to Philadelphia. This often happens where first thing they say, as Jim said, ‘Why Philadelphia? I’m in New York, I’m in D.C.’ So we chip away at that, we finally get them here, we pray for good weather, we walk around and they point to something impossible and say, ‘If you get me an unbelievable deal, we’ll take this corner.’ So we delivered the impossible deal on the corner, and they are open and doing incredibly well and they wanted a second store, which we did a couple of blocks away.

    Gartner: The retailer that is looking in Philadelphia has changed over time, in a good way. Twenty years ago when there was white glove, high-end retailers and we had our aspirational luxury retailers. Right now, the shopper in Center City — while it’s younger — is shopping more. They are energetic, post-college to late 30s customer and you really see it on evenings and weekends. If you walk around the shopping corridors on Saturday and Sunday, it’s like out of central casting. It’s a great time to show space. It shops and feels like suburbia. What’s important, too, is that retailers want to see expansive day parts. We have a home furnishings client in Philadelphia who happened to be passing through and we spent Sunday walking around. The vibrancy exists here on weekends, not just at lunchtime.

    Anne Nevins: One of our other strengths is the hospitality industry, particularly in our leisure market. The leisure market has really driven the Saturday night hotel stays in downtown. That plays into the traffic and the activity that happens downtown on Saturday and Sunday.

    Gartner: We don’t have to convince retailers; they get Philadelphia. The college population is a huge driver here. It’s not like a demographics report that you give somebody on King of Prussia and say, ‘Here are the sales that are going out of the mall.’ You have to cobble together a narrative of all of these drivers of traffic and they all add up to a huge benefit of people live, shop, work and play, but it’s those four components.

    SCB: You mentioned that white glove, old line heritage of Philadelphia and a lot of the success of today’s retail might have something to do with that. If you look at some of the engines to retail here, a lot of them were independent but they appealed to an upper end, educated crowd that’s here. Do you see that continuing or has it gone more mainline?

    Steve Jeffries: I would agree the high-end retailers we have along Walnut set the tone for the street. The underlying point we are trying to make is that some of the newest retailers who are going in after some of the retailers have left like the high-end demographics, but are more skewed towards urban…like North Face, the perfect example. The same person who shops at North Face would also shop at some of our highest end stores because North Face is just a different part of their fashion as a whole. I think what Steve [Gartner] is trying to say is the people who are staying in the city and living here and working here are shopping on many different levels of life on Walnut Street.

    Pearlstein: Also this generation doesn’t know any differently. Center City is cool but my parents aren’t coming down here to shop. They are at Cherry Hill Mall and King of Prussia mall. They don’t even know what’s going on down here and we’ve had to battle that for years. A whole generation went to King of Prussia and Cherry Hill Mall and spent all their money and didn’t know Philadelphia existed. This generation doesn’t know any different. That’s why the future of the city is just unbelievable. We haven’t even seen what’s going to happen in the city. We talk about second locations, in a couple of years we’ll be talking about third locations and 20,000 more people. Everybody is going urban and this city is being reinvented.

    SCB: Do you get a lot of comments from retailers about the anomaly of this market? Because it’s a little bit different, you’re gaining population, you’re looking at new locations here, you have the opportunity here, and a lot of markets these days aren’t building anything, there’s plenty of space and there’s not a lot of retailers that want to enter these markets.

    Mary Dougherty: When we opened our downtown location, that property was not what it is now. Philly now feels like a winning team. It’s not just the sports, it’s the retail. It’s a multi-use, multi-friendly city. organizations like PRMA and GPTMC which has only been around 15 years. They were created to support bringing in customers to the city. I will say that almost 20 years later I’m happy to be here. I don’t know if my brand can support another store in Philadelphia, but I’m glad that we are not a stepping stone to D.C. or New York anymore.

    Joe Coradino: Unquestionably, dining is the key to driving traffic today in Philadelphia. Certainly there are very exciting opportunities and places to be. There are also great, high-end luxury stores. The piece that seems to me that’s missing is the traditional, mid-level retailer. You talked about your mom and dad, they are probably not going to shop that much in town anymore. We’re working on that. If you look at where the disposable income is being spent, it’s being spent on and by someone who is 12 to 18 years old. If you want to get people to come to the city from the suburbs, the missing piece is that traditional retailer. We had a great experience in Washington, D.C., where we redeveloped an inner city mall. This is not cutting edge stuff, very traditional retailers you’d find in any mall in America, it’s missing from Philadelphia right now.

    Timko: The repeat trips are important to creating a sustainable retail base.

    Gartner: That’s a good segue to Market East. A great city can have lots of different shopping zones and all be successful because they serve a luxury market and a middle market area. One’s not at the expense of another. One of the big opportunities now is the redevelopment on Market Street, east of Broad. It will allow those middle market retailers that have shunned away from Center City, not because they don’t want to be in Center City but primarily because they haven’t had suitable space and economics that make sense for them to plop down.

    SCB: Are there retailers that want to come in here that don’t really have the space to fit in? How do you work with retailers to find their spaces?

    Samsi: It’s about getting creative. Our job is to be creative and show them that you can assemble properties or go into spaces that you wouldn’t normally go into when you have that cookie cutter space you’re looking for.

    Pearlstein: Where you are focused is Walnut Street, Market East and maybe University City. We have been building apartments in the neighborhoods — the neighborhoods are full of lower rent retailers. Along Passyunk Avenue there aren’t many vacancies, the rent is low, there are a lot of boutiques, and they do well.

    Coradino: You’re not going to get the suburban shopper to shop those neighborhoods.

    Pearlstein: Every block is filled with people.

    Coradino: I agree you’re meeting a demand in the neighborhoods. The point I’m making, and let me be specific: I had a meeting with Nordstrom in 2003 and I didn’t pitch them Cherry Hill; I pitched them Moorestown Mall. When we draw a 5-mile circle around Moorestown Mall you don’t hit Camden. The 5-mile circle around Cherry Hill Mall hits Camden. They said, ‘Yes, but you also hit downtown Philadelphia.’ If you look at the drawing power of Cherry Hill now, we’re drawing in the shoppers from Drexel Hill. That customer is not going to King of Prussia anymore, it’s coming to Cherry Hill [Mall] and that means it’s driving right by Center City. It’s pretty good for us. It’s not a terrible thing. I think Center City is missing the opportunity to draw those customers. Remember the choices they have: King of Prussia, Springfield Mall, Cherry Hill Mall. This involves getting into a car and driving. We’ve got the dining, we’ve got the restaurants. What we are missing is that middle market piece. I’m not suggesting the neighborhoods.

    John David Franklin: There might be a historical legacy to this point which means that for many years Center City was surrounded by some very good malls. You shop the malls owned by PREIT, Kravco and other companies like that. Cherry Hill Mall, Christiana Mall, and King of Prussia were part of that. If you live in Chestnut Hill, you went somewhere else. You lived on Passyunk Avenue, you went to Deptford Mall. So there was all the mall mentality and Center City was passed over for a number of years. So this recovery is a renaissance and it’s certainly making headway. Joe raised a good point: there are segments that we don’t have and we will catch up.

    Jeffries: The middle market retailer will come, the neighborhoods are an important part of our growth here. I talk to retailers all the time and the vibe I get is they appreciate the fact that Philadelphia is not overbuilt. The developments that they’ve done haven’t left the ground floor vacant, except in rare situations. Once we fill the neighborhoods I think the middle market retailers are going to say wow we’ve got the power streets, we’ve got the neighborhoods and now we have to fill the gaps. And those same developers or brokers that helped them will put deals together for the middle markets.

    Michael Barmash: Some people will say, ‘build it and they will come.’ When that first [middle-market] retailer comes here, other middle market retailers will follow them. In the summer time, 20 years ago, you could shoot a cannon and not hit anyone. This summer, in areas like Northern Liberties, the restaurants were definitely the driver. There wasn’t a seat to be had; there wasn’t a parking spot.

    Pearlstein: Philadelphia is being noticed. As we grow, we’re going to get better retail and the real estate is going to get better. I think they focus on what’s going on here, the pedestrian traffic counts you put out are amazing, where else can you get something like that. This is more of a city feel, more of a vibe.

    Gartner: If we were talking about another retail market in suburban Philadelphia or another city, we’d be talking about demographics and sales per foot and that’s where the conversation would begin and end. But when we talk about Center City, you have to talk about all of these little bricks — about who is living here, who’s going to school here, the transportation network that has kept Center City an incredibly strong place for office workers to get to, and for employees to get to stores. There are 13 regional rail lines that all meet at two stops in Center City and one in University City. All of those things add up. It’s not a story about demos and sales per foot.

    Samsi: It’s the urban experience, it’s not comparable to a suburban mall.

    Salove: That’s the point that I think we all know is worth making. We’re going to have the retailers that Joe [Coradino] is talking about. We need them and want them and we’re going to have Target, Best Buy and Bed Bath & Beyond and they’re all going to be somewhere in the city. That’s great, we need them. I have kids that drive and are of shopping age and why would they get in the car and come here versus King of Prussia? Because we have interesting, one-of-a-kind, homegrown retailers and some that are not so homegrown. When I have friends come in from out of town, we walk the numbered streets. If I walk Walnut Street with them, they’ve seen just about everybody who’s there. That’s great and we need it but the character of this city includes places like Baltimore Avenue — there are streets that some of us may have never even walked on that have really cool, homegrown stuff.

    Dawn Summerville: Absolutely. I think you hit the nail on the head, because it’s an experience. There was a couple in for a Phillies game and all they talked about was ‘high energy.’ They were going down to Midtown Village to go to the boutiques. You’re not going to find that at King of Prussia or Cherry Hill and that’s what they were looking for.

    Coradino: Once you’ve got that couple here, given the full range of shopping opportunities, don’t just give them a quarter of the pot, give them the whole pot. I couldn’t agree more. I love Philadelphia. This summer my family was living at the beach, so I was in Center City every night and the place just absolutely rocks. It’s sort of like half of the pie, we need the rest of the pie. We clearly have everything we need, there’s nothing else Philadelphia needs. It’s not missing anything. The question is it’s up to everybody in this group and everybody at ICSC to go out and get those other retailers, that half of the pie, to come to Philadelphia.

    SCB: What are some of the wants and needs here?

    Gartner: It goes back to the point Joe [Coradino] made which is the conveniences of life. You go and you buy Charmin and Tide a lot more than you buy a North Face jacket. So to make it a place that you can live well, you do need to conveniences of life and part of those things are going to be middle market retailers, they don’t have to be just discount department stores and drug stores.

    Timko: It’s the children’s stores, it’s the tween stores that are middle market price. A lot of residents in the city don’t have cars, they may have a Zipcar that they’ll drive to a mall, if they have to. There are voids: supermarkets, children’s retailers, the mid-level boxes.

    Dougherty: We do a large bridal business and the problem that I have is that when people are going to take their car and come into Philadelphia, they want to have a selection. I love the fact that they want to come to me and buy everything but that’s not always going to happen. They want to have two or three other places to hit and then come back and make a purchase. There are a lot of categories [missing]. I don’t care if you’re spending $10 or $10,000.

    SCB: What are some of the upgrades the city is doing? Are there infrastructure improvements underway to make retail easier here?

    Paul Levy: Just to tie together a couple of points: If you go back to 20 years, we were a 9 to 5 office district with overnight shifts in the hospitals. All the retailers closed at 5:30. So much of the success of the city has been a layering of things. In 1993, we opened a convention center which drove a 95 percent increase in hotel rooms. The goal that we’ve been working on with the city is not only to make a clean, safe environment but pedestrian lighting, the whole downtown is well-lit at night with directional signs. We’ve been increasingly focused on public spaces like parks, Chestnut Park. The city is focused on getting another convention/hotel into the city and really fostering a lot of start up businesses so you put all that together and we have this very diversified downtown economy so this is the first recession in 50 years. Philadelphia went into recession later than the region, fell less far and is tracking national averages. We are out performing the suburbs in terms of the economy itself. This live/work environment everybody is talking about held up people’s housing values better, everyone is seeing a drop because of the recession but the drop here is far less. There is a huge deal we are all waiting on: Market East, where you get this incredible space between historic area, 3 million visitors to the convention center. It’s not only the middle market, it’s the tourists, it’s the entertainment market so looking forward in the city. To me, it’s diversification that’s really going to see and also walkability. Walkable places have held up better than your auto dependable places. The next 2 to 3 years there will be some major deals announced, there’s going to be construction underway and that will send a signal into the market that we’re going to the next level.

    SCB: Are there retailers who would like to be here, like grocery stores, but who can’t find the space?

    Barmash: We have four major grocery stores downtown. Two Whole Foods, two Super Freshes. There are so many downtowns that I talk to that are so desperate for their first grocery stores, we’ve got them all over the place plus the boutique markets to DiBruno’s. You’ve got Italian markets, you’ve got food markets everywhere. Saturdays you’ve got a market on Rittenhouse Square. We’ve got a whole fresh food movement going on that’s bringing food right to people.

    Salove: There are whole scale suburban style grocery stores that want to be in the CBD and we’re working with two. As everyone has commented finding a suitable footprint, dealing with loading, access issues and so forth makes it a little slow going. So they are coming in, they’re looking, they want to be here. We did a 74,000-square-foot Giant supermarket within the city that’s in northeast Philadelphia at Grant and Bluegrass. That is their first unit in Philadelphia and they would like to be downtown.

    Timko: The city has great architecture. It has some of the best examples of adaptive reuse. Just look at the Ritz-Carlton and what they’ve done with the former Girard Bank Building. We have been looking at models in other cities to show retailers and big boxes that might not find the ideal footprint here.

    Dawn Summerville: She’s right, we’re finding retailers are concerned about the space and how we can help create and adapt to it. The issue is loading and how a retailer fits into Center City.

    Gartner: We need to be careful on trying to convince retailers to be creative. They know they have to bend their prototype and bend the rules a little bit for Center City.

    Pearlstein: You’ve got to deal with responsible developers then. Someone mentioned DiBruno Brothers. It was a closed Limited store. You have to have vision. That rent is ridiculous for that space, but it worked. If you go into DiBruno’s, you see a vibe there. That deal worked and it made other properties on that street even better. You can’t just sit on a property because it’s not on grade and say, ‘Well, some of the properties are kind of awkward.’ You’ve got to deal with them.

    Levy: To underscore that, 187 former offices and office buildings in downtown are condos and apartment buildings. All but two of our new hotels are historic reuses.

    Pearlstein: With Trader Joe’s, the proof is in the pudding. It’s the top grossing Trader Joe’s that doesn’t sell alcohol in Pennsylvania. So when those stories can be told, I don’t feel as if we’re under matched for any category, for any retailer. If you’re working with the right developers and have the right brokers helping you, I think that the vibe right now is that we can really do anything in Philadelphia from this point. We can bring any retailer that you put your mind to, that you put your development to and your money to. We have all of that so I don’t think we feel under matched.

    SCB: Let’s talk about the projects or opportunities here a little bit that exist. You have this area from Midtown Village towards the south part of town that’s filling in. What are some of the areas like that that retail can go here in the future?

    Levy: East Chestnut and East Market are two opportunities that are a totally different type of space. East Chestnut gives us just a small, intimate scale. Things have been converted so well on 13th Street. Market East gives us the large footprints that are not available elsewhere. It’s simply changing the perception of that area which I think a lot of projects can do very quickly.

    Salove: We market Chestnut East, where there’s a lot of great opportunity. We’re also seeing opportunities on Market West, which traditionally was just an office corridor banks on the ground floor, where there is new construction. We have a project we’re representing for Brandywine Realty Trust, 1919 Market Street, previously a vacant lot, and will now be a mixed-use project with office, residential, retail. When we went to market we were looking for ground floor retailers, service oriented, the types you see up and down Market. As the word got out the response was such that now we’re talking multi level retail with as many as four to five floors of vertical retail which as been unheard of in Philadelphia.

    Nevins: That compliments 2040 Market, the former AAA building that’s being developed into residential. It will have a smaller retail component but the idea is that they are bringing a new residential population to that part of West Market Street is important.

    Salove: And one of the things for either 2040 or 1919, we talked about large footprints, access loading and so forth. A lot of people have come to the realization for grocery and so on that that’s probably as close as you’re going to get to service the Rittenhouse Square market, and pull from the art museum and other neighborhoods. A lot of the challenges you face in the neighborhood with perhaps residents saying they don’t want to hear trucks delivering in the middle of the night, you don’t really have as much of that on Market West.

    SCB: The city has some programs here to help retailers. What are you doing to assist?

    Randal: The biggest thing the commerce department can offer is the navigation through the process, which really is appreciated and in fact, makes it easier for retailers to find that second location. We have great relationships with the incentive programs and with the other departments within the city, licenses and inspection, health and safety, you name it. We really tapped into the other departments of commerce that would impact a retailer being here.

    Gartner: We just did a deal that opened last week with Jack Wills. It is a British retailer and this is their first location outside New England in the U.S. It was a coup for Philadelphia that we got them over New York, Washington and Chicago. The commerce department and other city agencies helped make that process for an out of town retailer that didn’t know how to navigate the waters here relatively easy.

    Franklin: We purchased a lot of real estate out of foreclosure; we are probably one of the biggest buyers in the country right now. Florida has essentially been given away over the last few years. California as well. There have been virtually no, or a very small amount, of commercial and residential foreclosures in this region. That speaks very highly. If you’re buying in Philadelphia, you’re buying quality but you’re not buying out of the third circuit court in bankruptcy.

    Salove: As a broker in the city, we’re part of a international network of similar companies, so we have a larger perspective. I’ll often talk to people and say, ‘We can reach out for Paul, Michelle or Karen,’ and they are very accessible. I don’t know any other market in the country where people can do that and I personally have called all of you many times for assistance. It’s wonderful…for as big as the city is and as big as it plays, it’s a very personal roll up your sleeves atmosphere here.

    Dougherty: That’s an important point from a retailer’s perspective. We don’t have big support staffs, so when you’re a retailer and you are driving to open, you are thinking about lighting and fixtures and all these things. You have no idea what’s around the corner for you. So that somebody is ther saying, ‘we’ll help you, don’t worry about permitting, we’ll help you navigate’…that’s huge. Just that somebody answers your phone call. Philadelphia is so friendly and supportive that way.

    Summerville: You mentioned incentives for the city. A lot of our incentives from the commerce department are federal dollars and are for low income areas, which a lot of retailers would not qualify for. However, there’s a job creation tax credit that a lot of retailers can take advantage of coming into Center City as well as job force training. The other thing is the collaborative effort with the brokers. In Center City, we all collaborate. Once the retailer is here, if we step away they still have someone to support and help them with their issue. A year or 2 years down the road, we are still here to support and make sure that retailer or business is successful. I think that’s important and we all have a buy-in for that.

    Nevins: We do have extensive financing resources that are available to both retailers, as well as retail development projects across all neighborhoods in the city. A primary driver of what we can typically do for a project relates to the jobs that are being created, whether that’s in retail stores or a mix of uses like a hotel with ground floor retail. We place substantial resources into projects to help bridge gaps between what we need to make the project happen and what resources are available in the private sector. Obviously, given some of the downturn and challenges in the overall capital markets, those resources have become even more important and we have worked very hard to expand those to assist in energy efficiency, so it’s not just about putting in tenants into spaces, but making Philadelphia a more sustainable city.

    Olesh: To wrap up a lot of what has been said, it’s a huge selling point that support that exists in the city from a retailer’s perspective. I talk primarily with regional retailers. They usually want one location and don’t know that much about Center City. They don’t get a downtown vibe and when I say, ‘If you’d like to come take a tour of Center City and once you see some spaces you may like, I can call someone in the commerce department to talk to you about the process in the city, I can connect you with someone in PIDC that will talk to you about incentives that are offered by the city,’ they go, ‘What? Really? That exists for me? That doesn’t exist in suburbia.’ It’s a huge selling point. They are blown away that this exists.

    Timko: There’s a couple of big box retailers that have committed to the city and these financial incentives are helping to make their real estate decisions easier.

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  68. PREIT Signs Deals with Regal, Charming Charlie and the Philadelphia Inquirer

    PREIT announced a series of major leases at Moorestown Mall, Plymouth Meeting Mall and The Gallery at Market East.

    In the first deal, PREIT executed a deal with Regal Entertainment Group to build the Regal Moorestown Mall Stadium 12 & Regal Premium Experience. The 56,000-sq.-ft. 12-screen theatre will open at Moorestown Mall, located in southern New Jersey, in time for the 2013 summer movie season.

    As the first RPX in the market, the custom-built theatre will replace the existing United Artist theatre, and more than doubles its size. It will feature digital projectors, surround sound, 2D and RealD 3D, stadium seating with high-back rocking recliner seats, and Regal Express kiosks for automated ticket purchasing.

    In a separate deal, PREIT is bringing Charming Charlie, to Plymouth Meeting Mall in suburban Philadelphia, Pennsylvania. The 12,000-sq.-ft. store is scheduled to open in spring 2012.

    Charming Charlie completes the center’s recently developed outdoor lifestyle retail wing, which is anchored by Whole Foods Market and Café and features LOFT, Orvis, Chico’s, Coldwater Creek, Jos A Bank, OLLY Shoes, and Message Envy. The store will also extend into the first floor of the two-level enclosed mall with additional accessibility from the mall’s common area.

    Lastly, has signed a lease with Philadelphia Media Network Inc., owner and publisher of The Philadelphia Inquirer, Daily News, and Philly.com, for occupancy of 125,000 sq. ft. of space in 801 Market Street, located in Philadelphia. The building anchors The Gallery at Market East, both owned by PREIT. The firm is expected to move in to its new headquarters in summer 2012.

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  69. Philadelphia’s Retail Resurgence Continues

    Philadelphia — Center City has seen a resurgence in retail activity in the last few years, making Philadelphia one of the brightest spots for retailers in the U.S.

    South and west of City Hall, to Rittenhouse Square, Center City has seen a boom in upscale retail and restaurants. Meanwhile, east of City Hall, every day retail is gathering steam. PREIT has plans to redevelop its Gallery at Market East in Center City, and this has piqued a lot of further interest from retailers. Marshall’s, a division of TJX Companies, announced in January that it will open a 26,000-square-foot location in a space currently occupied by Staples directly across from the Gallery at Market East (Donna Drew of Metro Commercial represented Marshall’s, while Michael Katz of Jenel Management Corp., represented the landlord; TJX’s Mark Hernon directed the deal).

    Meanwhile, Walnut Street — Center City’s high street shopping district — and its surrounding streets continue to pick up additional retailers who want to capture the city’s affluent residents (Philadelphia has the third largest CBD residential population following New York and Chicago). Center City District estimates that a business located on the 1400 block of Walnut Street can expect to see an average of greater than 2,000 people per hour. The Center City District estimates retail demand within one mile of City Hall is $710.9 million per year. Center City has a population of nearly 180,000, 73% of which have at least a bachelor’s degree.

    “(Center City) Philadelphia is one of just a few cities in the entire country that offer retailers extremely high pedestrian traffic, excellent demographics and very strong economic drivers,” says Jim Pearlstein, president of Pearl Properties, who owns a number of properties in Center City, and who has been a catalyst in Center City’s renaissance. “Coupled with a national sustainability movement/desire to live the urban lifestyle — thousands of additional residents/shoppers are moving into Center City each year — retailers are now experiencing similar results to New York, San Francisco, Washington and Boston. In the last year alone, we have seen new stores open from Apple, Le Pain Quotidien, Barbour, Brooklyn Industries, Free People and Jack Wills.”

    Philadelphia’s strong restaurant scene, which has spawned celebrity chefs Jose Garces and Stephen Starr, continues to grow in stature and notoriety, with many of the city’s restaurants branching out to New York, Chicago and other large urban markets.

    For its part, the city of Philadelphia and agencies like the Center City District and the Philadelphia Industrial Development Corporation, are constantly working on the city’s retail. In addition to promotion of Center City as a retail location, their efforts include fostering infrastructure improvements, like $6 million in streetscape improvements in and around Center City, and a commercial advertising district, which gives developers permission to install lighted and digital signs on their buildings in a certain area of Center City. Plans are also underway for a $55 million renovation of Dilworth Plaza at City Hall, a gateway to Market Street East that connects the east side of Market Street to the West side.

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  70. Let me first say I love old malls from the former Newtown Square Mall in Newark DE. To the Airport mall in Bangor ME.HOWEVER! This mall needs to be split in two distinct sections if not razed altogether. Nothing good happens here. People have been murdered here as well as robbed beaten up etc… This placde has had bad kharma from the start. In its early years it was rioted and looted by the lovely people of Philadelphia after a 76ers basketball win. It has been all downhill from there. It is horribly unaccesible on the upper floors as well. If you rebuilt the existing structure with three seperated sections each having there own designated anchor it would be much more viable.

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  71. What I always found interesting about this mall, when I worked near it, was that it really was woven into the fiber of the city. I would get off the train and use the mall to get from point a to point b in the summer to stay out of the heat. I shopped there a little, whenever I needed something in a pinch. But, generally, I would mostly use it as one would a city street.

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  72. The first time I visited The Gallery at Market East was in the summer of 2003, when the National Constitution Center opened. The last time I visted there was in November 2007. Pretty much the food court was the main draw, and I don’t remember there being anything of note as there was pretty much only an FYE and a Five Below, and a bunch of urban stores. It’ll be interesting to see if they can do something to make it actually worth visiting beyond the food court.

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  73. Kmart is closing

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  74. That’s pretty sad for KMart. They should try and put a Target there, but I’m not sure they’d be willing.

    I’m predicting it’ll all become office space eventually.

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  75. PREIT and The Macerich Company Form Joint Venture to Redevelop The Gallery in Philadelphia

    PHILADELPHIA, July 29, 2014 /PRNewswire/ — Pennsylvania Real Estate Investment Trust (PREIT/NYSE: PEI) and Macerich Company (Macerich/NYSE: MAC) today announced a joint venture partnership to redevelop The Gallery in downtown Philadelphia. Through this partnership, PREIT will capitalize on Macerich’s extensive expertise in developing and leasing vertical, multi-use projects in dense, urban environments and Macerich will benefit from PREIT’s Philadelphia-area relationships and retail dominance.

    Under the terms of the agreement, Macerich will acquire a 50% common ownership interest in The Gallery for $106.8 million. Macerich and PREIT will jointly handle the development, leasing and management of The Gallery. Costs related to the future development will be split 50/50 between the companies.

    The Gallery, approximately 1,400,000 square feet is located in the heart of Philadelphia, strategically positioned where mass transit, tourism, the residential population and employment base converge. The joint venture redevelopment is expected to build upon the offerings of the previously announced Century 21 anchor transaction and realize PREIT’s vision to create Philadelphia’s only transit-oriented, retail anchored multi-use property offering accessible luxury retailing and artisan food experiences.

    “We are thrilled to be partnering with Macerich, an established developer and operator, to bring a one-of-a-kind, premier center to Philadelphia,” said Joseph F. Coradino, CEO of PREIT. “Macerich has a proven track record of developing leading properties in attractive U.S. markets and we look forward to leveraging their deep experience and strong leasing relationships to unlock significant value in The Gallery. This joint venture allows PREIT to maintain a strong balance sheet and minimize execution risk as we continue to capitalize on strategic opportunities to enhance our portfolio, for the benefit of all PREIT shareholders.”

    Art Coppola, Chairman and CEO of Macerich commented, “This joint venture represents a great opportunity to participate in one of the top real estate markets in the United States with a high quality asset. The Gallery is aligned with the type of assets we look for; it has dominant positioning and strong long-term growth prospects. I look forward to working closely with the management team at PREIT as we combine our knowledge and skills to create an unparalleled shopping and dining environment for shoppers.”

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  76. PREIT and Macerich Announce Philadelphia City Council Approval of Legislation for Redevelopment of The Gallery

    PHILADELPHIA and SANTA MONICA, Calif., June 18, 2015 /PRNewswire/ — Pennsylvania Real Estate Investment Trust (NYSE: PEI) and The Macerich Company (NYSE: MAC) (the “Partnership”) announced today that Philadelphia City Council has approved the six ordinances and one resolution that allow for the long-awaited redevelopment of The Gallery in Philadelphia including $55.0 million in Tax Increment Financing.

    Construction on the project is scheduled to take approximately two years with a Grand Opening in 2017 as Fashion Outlets of Philadelphia at Market East. The property will offer a fusion of outlet retail taking the form of luxury and moderate brands, popular flagship retail, artisanal food experiences and entertainment offerings. The building will be completely reimagined into a bright, new contemporary space that welcomes residents, commuters and tourists and engages with Market Street with accessible storefronts, sidewalk cafés, a new streetscape, as well as digital signage and graphics.

    “Today is a defining day for PREIT and retail in Philadelphia, as the transformation of the Gallery, an effort 12 years in the making, has taken a major step forward,” said Joseph F. Coradino, CEO of PREIT. “We look forward to getting underway with building the next great urban marketplace and create a spectacular new shopping, dining and entertainment complex befitting a world-class city like Philadelphia.”

    “Redeveloping well-situated urban properties to add value is a signature strength of Macerich,” said Ed Coppola, President, Macerich. “We’re appreciative of the confidence the City of Philadelphia has in our partnership to redevelop The Gallery into an exceptionally high-performing shopping, dining and entertainment destination that will serve the region’s dynamic mix of visitors and locals. Fashion Outlets of Philadelphia at Market East will be a tremendous fit with Macerich’s irreplaceable portfolio of unique, trophy properties.”

    “We thank the Nutter Administration, Philadelphia City Council, the Philadelphia School Reform Commission and the Philadelphia Redevelopment Authority for their efforts and guidance in getting to this pivotal point,” Coradino added.

    CONTACTS:
    AT PREIT
    Heather Crowell
    VP, Corporate Communications and Investor Relations
    (215) 454-1241
    crowellh@preit.com

    AT MACERICH
    John Perry
    SVP, Investor Relations
    (424) 229-3345
    john.perry@macerich.com

    http://photos.prnewswire.com/prnh/20130905/MM75091

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