Pennsylvania Real Estate Investment Trust of Philadelphia, which owns the property in a venture with Santa Monica-based mall operator Macerich, had been awaiting word on its request for up to $30 million in state aid for the $325 million-plus project.
Plans call for filling the 1.5 million square feet with outlet shops of upscale brands such as Gucci and Prada, along with typical mall tenants such as H&M. The developers also have said restaurants will play a big role in the project.
News of the RACP grant couldn't come too soon for PREIT, as it competes for tenants with other landlords in the rapidly revitalizing section of Center City known as Market East, said Larry Steinberg, a senior vice president in Philadelphia with commercial real estate company CBRE Group.
But delays kept work from starting until the beginning of this year, when the Gallery's east end closed for demolition efforts. The project is "on track for a planned 2018 opening," Coradino said in a July earnings call with analysts, although a Macerich executive said in February that completion could come as late as early 2019.
Five Below Inc. chief executive Joel Anderson said Tuesday that it would continue operating its store in the Gallery's west section until sometime next year, when the location will be permanently shuttered in preparation for a reopening in the nearby Lits Building in 2018.
The mall's only other remaining shops are Old Navy and Burlington Coat Factory. Burlington Stores Inc. spokeswoman Lauren Flanagan said in an email that the Burlington store would remain open during construction. A message left with Old Navy-parent Gap Inc. yielded no immediate response.
Conshohocken-based investment firm Boenning & Scattergood said in a June research note that no announcements about tenants at the revamped Gallery were likely until state officials revealed whether PREIT and Macerich would receive the $30 million in RACP funds.