Kenney goes to bat for Florida developer after feds reject Family Court historic rehab

Mayor Kenney wants Washington to take another look at renovation plans for the old Family Court building after they were rejected by federal officials.

Kenney has written to Interior Secretary Sally Jewell, asking to meet with her after a subsidiary agency's decision not to qualify the project for tax breaks under a historic preservation program.

The request comes as the developer Peebles Corp. approaches its deadline to have permits and funding in place to convert the city-owned building at 1801 Vine St. into a hotel about two years after it was awarded the job.

"The mayor has reached out to the Secretary of the Interior," Kenney spokeswoman Ajeenah Amir said in an email Wednesday. "The request is under consideration."

Interior Department spokeswoman Leah Duran said that Kenney's letter had been received and that the department would respond directly to the mayor.

The Interior Department oversees the National Park Service, which ruled in May that Peebles' plan for the 75-year-old building would "severely downgrade" the structure's historic character. That decision disqualified the project from getting support through the Federal Historic Preservation Tax Incentives program.

City officials described the renovation as a vital step toward further enlivening the Benjamin Franklin Parkway when Peebles was awarded the project in 2014 after a competitive bidding process.

The Coral Gables, Fla.-based developer's $85 million plan for the vacant Beaux Arts court building envisioned 199 guest rooms, a 3,500-square-foot ballroom, meeting and board rooms, a spa and fitness center, and a restaurant and bar.

The bid originally called for the building to be developed as part of the Kimpton Hotel & Restaurant Group, which operates the Monaco and Palomar hotels here. But Kimpton spokeswoman Kristin Huxta Bradley said the company never formalized an agreement with Peebles for the property and has no connection to the proposal.

Peebles has until the end of November to secure its building permits and the tax credits under its deal with the city, said Philadelphia Industrial Development Corp. president John Grady.

The company is "actively pursuing all channels to secure the necessary approvals to move this project forward," Peebles spokeswoman Nicole D. Goldberg said in an email.

The tax credit would knock $14.6 million off the project's development costs, according to Howard M. Pollman, a spokesman for Pennsylvania's State Historic Preservation Office.

The Preservation Office administers the tax-credit program with the National Park Service, accepting applications and recommending to the federal agency whether to certify projects as eligible.

Preservation Office staff recommended certification for Peebles' plan in October 2015, but the Park Service rejected the developer's application on grounds that it would demolish or reconfigure too much of the building's interior.

Preservation Office executive director James M. Vaughan argued in a March letter appealing the Park Service decision that the second- and third-floor areas where Peebles planned major alterations were "secondary and utilitarian spaces" that need not be protected.

But the Park Service's chief appeals officer for cultural resources, John A. Burns, rejected that argument in a May response.

"The decision to rehabilitate this historic building as a hotel is likely an appropriate new use," he wrote. "However, the specific program outlined in this proposal is too aggressive for the structure."

Andrew Benioff, a hotel specialist at the Llenrock Group commercial real estate consultancy in Philadelphia, said the pushback from the Park Service put Peebles in a bind.

It will be difficult to adapt what was built as a courthouse into a hotel with sufficient guest rooms without big changes to its interior layout, but those changes are keeping it from getting the assistance it needs to make the project viable, he said.

"If you don't have tax credits to develop that into a hotel, I don't think it's ever becoming a hotel," Benioff said.

jadelman@phillynews.com

215-854-2615 @jacobadelman