But a deal may be close to signing. While Greg West, executive director and lead broker for primary leasing agent Insignia/ESG, refused to disclose specific target tenants, he did some serious hinting. "Think service-based companies in Philadelphia and it shouldn't be too difficult," he teased. CitiBank, MBNA America, Merck & Co., MetLife, New York Life, PNC Financial, Prudential were all discussed in relation to the project. Among the area's major employers are the University and Hospital of Pennsylvania, First Union Bank Corp., Verizon Telecommunications, Aramark Corp. and Cigna Insurance Corp.
"I have told my compadres in Philadelphia not to expect a MetLife or New York Life or Citibank," Martin Schiffman, managing director of the New York-based investment firm Carl Marks & Co., and lead developer/licensee for the project, tells GlobeSt.com.
While Tower One gets close to an anchor, brokers are also looking for a 65% pre-lease on Towers Two and Three. "We are looking for a 400,000-sf signature tenancy," notes Schiffman. "We could very well get the back office, the district office or a security-related decentralization of a major investment bank. There's no question in my mind that we could get a division of a company that's based in New York."
In addition to Tower One, the first phase of the project will include Old City Harbor, a 42-story, 540,000-sf residential tower, expanded in the new plan from 358 units to 396 units, and from $73 million to $110 million. The entire four-tower complex will sit on a 232,000-sf, 5.3-acre footprint on Columbus Boulevard near the Delaware River in Downtown Philly, the site of a recent $20 million restoration by the Pennsylvania Dpt. of Transportation.
As West explains, the project lies within the Keystone Opportunity Zone: essentially a tax-free area for corporate tenants. "At the end of the day, it means that there are no Philadelphia or Pennsylvania corporate income taxes levied against companies who take space in the KOZ," he says. "The KOZ structure completely eliminates the usual objections for companies locating in downtown Philly, which are usually tax objections."
The Insignia/ESG marketing campaign has been in high gear since January, and offices working on the project now include Barcelona; Suwon, South Korea; France; Germany; Hong Kong Airport; Harrisburg, PA; and London. "I've actually got the Philadelphia, New York and London offices of Insignia working together for the first time ever," Schiffman tells GlobeSt.com. "It's not an easy thing to do."
According to a feasibility and impact study prepared by Legg Mason Real Estate Services, the estimated economic impacts of the Greater Philadelphia World Trade Center complex would include a minimum of 2,600 and a maximum of 10,500 new jobs, between $5.7 million and $23.4 million in annual wage tax revenues and about $2.3 million in annual sales revenues for the city.
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