Lawyer-investor Thomas A. Leonard and West Philly housing developer Scott Mazo say they've lined up financing and permits and are negotiating with tenants to build a new $25 million+, 94,000-square-foot office building in a vacant lot on the northwest corner of 41st and Market Streets.
"We won't break ground until we have about 60 percent of the building pre-leased or pre-committed," said Leonard. The partners "can make this work at $30 a square foot," comparable with Center City rents but lower than recent leases at Cira Center and other high-end University City locations. The site enjoys state and city tax breaks through the Keystone Opportunity Zone program and federal New Market Credits urban development tax breaks. Leonard hopes work can start this Spring.
"It's a Platinum-certified building, and that's big," said West Philadelphia city councilwoman Jannie Blackwell, citing the building's rare Leadership in Energy and Environmental Design "green design" status, with water recycling, trees on the roof and other conservation measures. The developers "went before the zoning board in June, and they approved it with community support. You know, it's been vacant a very long time. Scott Mazo has a good reputation for all the infill housing he's built in West Philadelphia, and everyone in Philly knows Tom Leonard," a former City Controller, Democratic fundraiser, chariman of union-funded Delaware Valley Real Estate Investment Fund LP, and partner at Obermayer Rebmann Maxwell and Hippel, LLP.
TRF, the Reinvestment Fund, "has agreed to finance this," and will raise funds from investors, said Leonard. Mazo said his firm, Neighborhood Restorations, "was TRF's largest borrower" when he was developing 900 units of market-rate, low- and moderate-income housing in West Philadelphia, and it's followed him from homes to offices.
Mazo and Leonard say they want to draw the kind of tenants that filled the University City Science Center's new "incubator" building on 38th St. when it opened in October. Too often, Mazo said, successful companies leave town because they can't find expansion space. "Centocor's technology was developed at Penn, but they ended up moving to Malvern. Our idea is to keep jobs in University City."
But Mazo said he's also angling for government or university offices. "We'd love to have the state or the city take a good part of the space," he said.