1706 Rittenhouse Square Street - Creating Extraordinary Value through Skillfully Maneuvering the Approval Process

Philadelphia, PA

Spaces:

68

Area:

7,500 sf

Constructed:

2006 – 2008

Cost:

$114M    /     $8.5M (Parking)

Sale Value:

$140M    /     $9.5M (Parking)

JV Developed by:

Parkway Corporation

 

Scanapieco Development Company

 

Partnership

1706 Rittenhouse Associates LP

About 1706 Rittenhouse Associates LP
1706 Rittenhouse Associates LP - a Parkway Corporation, and Scannapieco Development Corporation joint venture

Description
Parkway, through its high civic profile in the City and local reputation for quality development, successfully obtained zoning approval, and has subsequently developed a high end, 175,000 sf 31 story, 31 unit residential condo building that has more than 10 times the floor area than the site was originally zoned for.

The product has created a new high end standard for residential development, and a correspondingly high price point that has been welcomed by buyers, and who have been willing to pay prices previously unheard of in the Philadelphia market.

The building was completed for occupancy in the summer of 2010. In an uncertain market, where the news has been all about price reductions or failed new build projects, sales were completed on pace with our original projections.

The Parking Component
The 63’ by 110’ site was far too small to even think about placing conventional in and out ramping down to several basement levels. There would literally be only space for 6 or so self park spaces per level.

Parkway’s solution to this site dilemma was a fully robotic automated garage for this property, the first of its kind in Philadelphia and the third in the country. From a car forecourt drivers enter one of two entry cabins, parking on a full car sized flush floor pallet, exit their car, swipe a fob to identify who they are, and their car is automatically lowered by a storage and retrieval conveyance system into a 43 foot deep vault and placed in one of the 68 spaces on a storage rack. As a user is leaving their residence in the elevator, they swipe their identifying fob and their car is retrieved, rotated 180 degrees and placed in the entry cabin facing out for them to drive directly out of the facility. With only the equivalent of a traditional two car garage at grade, the remainder of the site at street level was able to be used for a dramatic lobby and adjacent garden.

Business Challenge
Parkway Corporation had owned and operated a small 5,700 square foot parking lot in the prestigious Rittenhouse Square residential neighborhood for over 50 years. The site was zoned for 3.5 story low rise residential use and grandfathered for its commercial public parking use.

Development of the scale contemplated by the zoning was worth far less than the parking use, and thus to squeeze more value from the asset required a more intense development which was not permitted.

In addition, the site was in a Historic District which required all development to be sympathetic with the surrounding low rise historic buildings, and was also under the watchful eyes of a very active Residents Association which as a matter of course opposes almost all new development.

The Solution
Parkway came up with a development concept for the site that had enough density to be a viable project, and more importantly, was aimed at a niche not served by other residential developments: 4,200 square foot full floor luxury condos, 31 stories in height.

In order to execute the concept, it was necessary to expand the site by buying the three historically certified town houses next to the site and seeking and obtaining permission to demolish one of them to expand the building footprint, and the other two to provide a “light and air” easement for the windows of the new tower on the common lot line.

The resulting project took a non conforming commercial use, parking, and returned the site to a conforming use, residential, while at the same time seeking a dimensional variance to allow the residential to exceed the 35 foot height limit and soar to a height of 395 feet.

Value and Benefits Delivered

Parkway created value.