Quote:
Originally Posted by Cro Burnham
BTW, i am surprised (obviously) that billionaires actually read SSP. That's kind of funny.
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Billionaires are people too. If it is actually him he definitely wins the award for best response to criticism ever. As for alternative that are more worthy of support I am not about to tell someone else how to spend their money especially someone who spends a considerable amount of money funding worthy charities in the region. I do really like this hotel project and think it will benefit the city.
Now if the question is how would I personally spend $280 million dollars to better improve Philadelphia by building real estate that is a question that I am willing to answer.
First, the criteria that I am setting for spending the $280 million is as follows:
1. Immediate short-term return in not important. I am taking this from the fact that PBJ stated the hotel will be worth $95.8 million on the day it is complete for an initial development return of roughly -56% on the $220 million the developer is putting up.
2. Job creation and tax revenue to the city is the top priority for the developments.
3. I am assuming $280 million is not enough to fund rail with a dedicated right of way that runs up 8th Street.
My spending philosophy is to put the money into areas that have current infrastructure in place to handle added density from workers and residents using the existing zoning that is already in place. Ideally we would not have to deal with zoning variances but I am going to assume minor variances would be approved as is typical under the current system. Zoning is taken from phila.gov
The first project that I would do is develop an office building between W Jefferson to W Oxford St along N Broad Street
http://goo.gl/maps/kBRxw
The land along N Broad totals 1.75 acres and is zoned CMX 2.5 meaning the building area is roughly 381,150 with a maximum height of 5 floor with street level retail. The block is currently owned by 4 different groups including Temple and two developers along with a non-profit. For arguments sake I am going to use $5,000,000 dollars to acquire the land or roughly $65.60 per sf of land. I will use $250 a sf for construction costs or a total of $95,250,000 to build the building. Ideal tenants would be Temple, venture capital investors, co-working location, education related services, plus roughly 76K square feet of potential retail. Break even rent is roughly $18.36 per sf on a triple net basis. Given all the student housing in the area I think the retail portion would be able to easily support that. The net positives would be the continued growth of the Temple area as the 4th largest jobs center in the city. Assuming 300k sf is office space and it is 95% occupied with the average worker taking 250 sf this would add roughly 1,200 office workers to the area daily. The added mix of office workers along this stretch of N Broad would greatly enliven the area and be great support for retail along this portion of N Broad leading into Temple.
I would spend the remaining $180 million buying and renovating dilapidated mixed-use building along Kensington Avenue, Point Breeze Avenue and N Broad Street and then offer free rent for the retail portion of the units. The idea behind this strategy is it would enable local businesses to open providing new jobs and tax revenue to the city along with eyes on the street and added density as vacant apartment units are brought back onto the market. Assuming $180,000 per renovated building that allows for 1,000 buildings to be renovated along major arterial roads in the city and would brings thousands of new jobs into the poorest sections of the city.