Luxury hotel plans for former Family Court building

Three groups of developers have pitched plans for converting the 72-year-old Family Court building at 18th and Vine Streets into a luxury hotel, raising expectations for another big investment in an area undergoing major change.

In plans submitted to the city Wednesday, each group was aligned with a hotel operator. They are:

Fairmont Hotels & Resorts, teaming up with Logan Square Holdings, a limited partnership that counts the Goldenberg Group of Philadelphia among its five investors.

Starwood Hotels & Resorts, working with Philadelphia's Dranoff Properties and HRI Properties of New Orleans.

Kimpton Hotels, aligned with P&A Associates of Philadelphia and the Peebles Corp. of New York City.

The city owns the property and will appoint a committee of officials from its planning, commerce, public property, and historic preservation departments to select a development plan for the building.

John Grady, president of Philadelphia Industrial Development Corp., which is managing the sale, said the review process could extend into the fall, with an agreement by the end of the year.

Grady said the project would "extend the vitality" of the area around Logan Square and the Benjamin Franklin Parkway.

At 17th Street and Vine, construction has begun on the first Mormon temple in the Philadelphia region. Both sites also are near the popular new Sister Cities Park in Logan Square.

Farther down on the Parkway, the Barnes Foundation opened its doors last summer, while the Rodin Museum has undergone a top-to-bottom upgrade.

Residential construction, meanwhile, is taking off in Franklintown, just north of Logan Square. On a former empty lot on Callowhill Street, the 227-unit Granary apartment house is near completion.

"The Parkway is doing well as a destination," Grady said. "There is investment all around it."

Opened in 1941, the Family Court building was a New Deal project that included 37 interior murals by nine local artists. Both the exterior and much of the interior, including the murals, are now on the Philadelphia Register of Historic Places and must be preserved.

Currently, only Juvenile Court operates from the building. The domestic relations division of Family Court is at 34 S. 11th St. In June, however, both units will reunite in a new 15-story building at 15th and Arch Streets.

Originally, five groups were asked to submit detailed plans for the Family Court site, but two out-of-town developers - HRI and Peebles - decided to team with local partners.

According to information released by PIDC, each group is proposing a luxury venue, with varying numbers of rooms and amenities.

For Logan Square Holdings, this is the second time around on Family Court. In 2010, when the city made its first appeal for redevelopment ideas, the group was the only one to submit a plan. The process, however, was halted amid reports of a conflict-of-interest problem for a lawyer involved in the development of a new courthouse.

The lapse in time has helped the project, said Ken Goldenberg, president of the Goldenberg Group. "The economy has shifted," he said, "and the Parkway has become much more significant and inviting as an investment and development corridor."

The Logan Square partnership also includes Pyramid Hotel Group; Somerset Holdings; Fathom Partners; and Daroff Design Group.

The $180 million project would include 332 hotel rooms; 44,000 square feet of event and meeting facilities; restaurants and bar; shops; and a spa.

As an option for the project, the partners would add an additional floor of rooms, which they said would not be visible from street level.

"It lays out perfectly for a hotel," said Warren Fields, president of Pyramid Hotel, a Boston-based hotel developer.

He said Fairmont, which ran the Bellevue-Stratford Hotel from 1979 to 1980, is eager to return to Philadelphia. "Fairmont has a very grand feel in all of their hotels," Fields said.

The Family Court building mirrors the Central Library of the Free Library of Philadelphia. Both evoke the Hotel Crillon on the Place de la Concorde in Paris.

Carl Dranoff, president of Dranoff Properties, said the redevelopment of Family Court "is a tremendous opportunity to establish a compelling new hospitality anchor on the Parkway."

Dranoff, who said he "cut his teeth" on historic renovations in Philadelphia in the 1980s, is teaming with HRI, another experienced redeveloper of historic properties. A third partner is the Badger Group, a minority-owned Philadelphia developer.

PIDC said the Dranoff group was proposing 267 hotel rooms; a 4,000-square-foot ballroom; 10,000 square feet of meeting facilities; and a restaurant and bar.

Dranoff said the group had submitted as an option building another floor for "a very modest addition, not visible from the street." He did not disclose the value of the project.

He said the hotel would be part of the Starwood Luxury Collection.

The historic designation of the building presents challenges, he said, since the structure must accommodate a modern hotel. "It's like building a Swiss watch from inside the case," Dranoff said. "We want to have a 'wow' factor, but we also need to have a functional, well-oiled, well-working, successful business enterprise."

The group led by Peebles is the only one without an optional plan for adding a floor of rooms to the rooftop.

Don Peebles, the company's founder, said he felt the engineering challenges of another level were "insurmountable."

Peebles decided to team with P&A, a local company that built the St. James luxury rental-apartment house on Washington Square and the Murano condominiums at 21st and Market Streets. He said his company, which would be a majority partner, was a national development company but had not worked in Philadelphia.

"Partnering with a local developer," he said, "would offer us a more seamless execution of our plan. P&A is very successful."

Peebles is proposing an $85 million project with 199 hotel rooms; a 3,500-square-foot ballroom; meeting and board rooms; spa and fitness center; and restaurant and bar.

Kimpton, which would operate the hotel, is known for its boutique properties, including the new Hotel Monaco on Independence Mall and the Hotel Palomar near Rittenhouse Square.

"There is clearly a market at this time for a hotel," said Alan Casnoff, a general partner of P&A. "We went through the building and were just enthralled with what was there."