HR&A advised the Metropolitan Transportation Authority on the retail vision for the Fulton Center, its solicitation process for a master retail operator, and a landmark revenue-sharing agreement with Westfield.

As the Metropolitan Transit Authority (MTA) planned to enhance its transportation infrastructure in Lower Manhattan, the agency sought to incorporate retail uses and public space into its development program for a $1.4 billion transit hub. HR&A helped the MTA develop a vision for a flexible retail and commercial environment that promotes a vibrant public realm while creating a dynamic commuting experience for one of New York’s busiest transportation corridors. The resulting development, Fulton Center, connects 300,000 daily commuters to nine subway lines, and provides 50,000 SF of signature, multistory retail and commercial space operated by Westfield, one of the world’s premier retail owners and operators.

HR&A created a strategy to optimize a retail space that would serve a diverse array of shoppers –residents, workers, and tourists – and ensure the retail is in harmony with existing and future retail in the station-area. By first establishing spatial boundaries that accounted for pedestrian circulation needs and transportation functions, we were able to create an exciting space-by-space tenanting strategy that reflected physical feasibility, market potential, and fulfilled gaps in the current retail landscape. We advised the MTA to dedicate the Center’s second-floor to a destination food environment, which would activate the less heavily trafficked space, and fulfill a missing niche in lower Manhattan. To translate this strategy into an operations concept, we partnered the station architect to ensure accommodations for an appropriately-sized back-of-house space, utility provisions, and signage needs.

As of January 2016, Shake Shack, Zaro’s Bakery, and Irving Farm coffee and roasters have all leased spaces in this new food destination. Additionally, co-working startup WeWork signed a 15-year lease for 38,000 square feet in the renovated Corbin Building

Equipped with a well-defined retail vision and strategy, the MTA asked HR&A to manage its solicitation process to identify a master lessee for the management the operations of the retail and public spaces. For this process, HR&A drafted the RFP, engaged developers, structured the pre-proposal conference and site tours, and answered respondent questions. The clearly articulated guidelines of the retail strategy provided confidence to RFP respondents that the space would be functional for tenants, but also ensured that the MTA would procure a retail operator that would adhere to world-class standards. HR&A actively supported the MTA through the proposal review and selection process, as well as negotiations with preferred bidders.

In 2013, after two years of planning and negotiation, the MTA selected the Westfield Group as master lessee, who is responsible for leasing, operating, maintaining, and dedicating private dollars to the upkeep of the retail and public space. In addition to the lessee agreement, HR&A structured an innovative public-private agreement as part of the transaction, in which Westfield and the MTA will share revenue from the retail space and the ad-revenues generated by over 50 digital screens installed throughout the station.

HR&A created development, investment, and phasing strategies to support the award-winning Master Plan for the Central Delaware, and advised on redevelopment scenarios for a revitalized Penn’s Landing.

CHALLENGE

Philadelphia’s waterfront once bustled with industrial activity, but as the City’s manufacturing and shipping sectors shifted to accommodate Center City’s growing knowledge-economy, the isolated waterfront deteriorated. Cut off from downtown by an interstate highway, the waterfront suffered from disinvestment, increased vacancy, and underutilization.

In 2010, the Delaware River Waterfront Corporation, seeking to revitalize a seven-mile length of the central waterfront, asked HR&A and a team of designers, engineers, urban planners, and architects to create a master plan that would create an accessible riverfront, provide community amenities, and increase the values of surrounding parcels to encourage redevelopment along the waterfront.

SOLUTION

The resulting plan extends Philadelphia’s vibrant urban environment to the water by incorporating neighborhood-scale development, transportation connections, public-realm improvements, entertainment and cultural offerings, and open space and recreation opportunities.
 
HR&A worked with the planning team to identify the initial steps needed to finance and implement these improvements, starting with an assessment of local demand for residential, retail, commercial office, flex, and hotel uses. This assessment helped shape the development program, and informed the planning team’s strategy to extend the low- and mid-rise character of nearby residential neighborhoods, which would create signature waterfront destinations without absorbing a disproportionate share of demand from Center City’s building inventory and businesses. Additionally, HR&A explored phasing, financing, and implementation alternatives that leveraged the site’s private development potential to support essential first-phase public improvements and amenities.
 
In 2014, HR&A joined a team of landscape architects and planners to advance the framework for open space and development at Penn’s Landing, Philadelphia’s premier waterfront event space. As one of the first-phase redevelopment sites identified in the master plan, the site included a range of activating uses including residential, retail, and an 11-acre signature park with neighborhood-scale public spaces that would provide key connections across the I-95 expressway towards Center City. HR&A assessed market demand for new development, and coordinated with the study team to evaluate multiple development scenarios, including associated phasing.
 

IMPACT

 
The Philadelphia City Planning Commission adopted the master plan in 2012, and the Delaware River Waterfront Corporation is now advancing implementation.
 
In 2015, DRWC selected a development partner to construct 550 units of rental housing, 30,000 square feet of retail, and significant public space at Spring Garden. This new development will complement a new entertainment center and nearly 500 additional units of housing now under way on private land surrounding the waterfront, spurred in part by Delaware River Waterfront Corporation advancement of five major infrastructure projects recommended under the master plan.

HR&A has supported the New Jersey Performing Arts Center since its inception. We helped craft the rationale for its funding and have provided development advisory services as it considers abutting residential development to achieve its founding mission of stewarding economic revitalization in Downtown Newark.

The opening of the half-billion dollar New Jersey Performing Arts Center (NJPAC) symbolized downtown resurgence and a redefining moment for Newark. Since its opening over a decade ago, NJPAC has drawn over 6 million visitors, and is considered a pioneering project in downtown Newark that has been followed by major investments such as the Prudential Center (the New Jersey Devils’ arena), increased office occupancy, the redeveloped 1180 Raymond, and One Theater Square.

HR&A developed an economic and fiscal impact study, and a long-term financial plan for NJPAC.

HR&A’s study of NJPAC’s effectiveness in revitalizing the Newark economy was integral in securing federal, State, City, and private funds including grants, bond and tax increment financing, and special assessments. At the project’s inception, HR&A projected NJPAC’s development, visitation and spending impacts.

HR&A provided real estate advisory services to NJPAC on the development of the first mixed-use project on an adjacent site, One Theater Square.

The original plan allowed NJPAC to acquire abutting parcels for private development in order to provide a long term source of revenue to fund the arts. In partnership with the City of Newark and State of New Jersey, HR&A assisted NJPAC in crafting a financial structure, then identified a highly qualified development partner. We consulted on the use of a variety of incentive programs for this development (Low Income Housing Credits, New Markets Tax Credits, and others). Although plans for the proposed redevelopment initially suffered due to the economic downturn, the adjacent mixed-use development plans were unveiled in 2010. One Theater Square has been approved for $38 million over ten years in funding from the New Jersey Economic Development Authority’s Urban Transit Hub Tax Credit Program and will also receive significant contributions from the State of New Jersey.