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By Suzette Parmley, The Philadelphia
InquirerMcClatchy-Tribune Regional News October 30, 2008 - The owner and developer of
a half-acre site in Center City plans to
build a $420 million Waldorf-Astoria Hotel & Residences complex
there. Think
Four Seasons meets the Residences at Two Liberty, said Timothy J.
Mahoney III,
president and chief executive officer of Mariner Commercial Properties
Inc., of
Ardmore, which will codevelop the site at 1441 Chestnut St. with
Gatehouse
Capital Corp., a national real estate investment and development firm
based in
Dallas. Mahoney
is banking on the continuation of well-to-do empty nesters abandoning
big homes
in the suburbs for high-end apartments in the city. There will be 136
luxury
condos on the top floors of a five-star hotel. Retail, a
signature restaurant, seven floors of valet parking and a spa will take
up the
bottom 14 floors. The hotel will run from the 16th through the 27th
floors, and
condos will occupy the 28th through 58th floors. The hotel
is expected to open in the summer of 2012; at 670 feet, it would be the
sixth-tallest building in the city. "There's
nothing stopping the demographic trend, with the baby boomers coming to
the
city and wanting that urban lifestyle," Mahoney said. He also
could use a healthier economy. Donald J.
Trump, for one, is having a tough go making a similar project happen. A
Wall
Street Journal report yesterday said Trump was struggling to sell
high-end
condo units in his 92-story hotel tower in Chicago. The
credit crisis has forced other hotel projects planned for Center City,
including one at 12th and Arch Streets and another at 1601 Vine St., to
delay
construction. Occupancy
is down for several Center City hotels, industry watchers say, and the
luxury-condo
market has also cooled. The Waldorf would add to a crowded field of
top-tier
residences that includes Two Liberty and Symphony House. The
48-story Residences at the Ritz Carlton tower, with 270 units that
start at
$600,000 each, opens in early December. "Typically,
mixed-use projects such as this one require a certain level of
condominium
presales to finance the overall project," said Peter Tyson, vice
president
of PKF Consulting, who focuses on the region's hospitality industry.
"So
the ability to get the entire project under way will depend on the
project's
ability to presale the condominium units." Mahoney
acknowledged he was facing tough conditions. "The
market has some inventory issues right now," he said. "There's
certainly buyers sitting on the market more worried about what their
investment
portfolio looks like than buying a condo. "But
these buildings take three years to build . . . so whatever the market
looks
like right now is not what our buyer is looking at." Mahoney,
who was inspecting his group's condo sales office yesterday at 1518
Walnut St.,
the former Sharper Image building, said condos at the Waldorf would go
to
market in January. A
one-bedroom unit will start at just above $1 million, and penthouses
with a
private elevator and 14-foot-high ceilings will sell for $14 million to
$15
million. Groundbreaking
is planned for a year later, in January 2010. Mahoney
purchased the parcel, which sits directly behind one of his
competitors, the
Ritz Carlton and its condo tower, in 2000 with his partner, Brook
Lenfest. Lenfest
heads NetCarrier Inc., of Lansdale, a local-exchange carrier, and
Brooks
Capital Group L.L.C., a private-equity firm in Bala Cynwyd. Mahoney
described the Waldorf tower as "a mirror image of the new Ritz tower
going
up." He said the Ritz validated that there was a high-end condo market
at
15th and Chestnut Streets (more than 60 percent of the units at the
Ritz have
been sold, according to management). The
Waldorf tower will be designed with glass, granite and metals. Mahoney
originally
planned an all-concrete design, but he switched so the building would
have a
more contemporary facade. One floor
of the hotel will feature a spa and a 50-foot indoor swimming floor. Mahoney
said he and Lenfest had supplied all the equity so far. "This
is not investors' money," he said. "It's all our own equity. Until
credit markets improve late next year, it's all out-of-pocket." The
Waldorf enters a five-star hotel market that is not very big. There are
95
rooms at the Rittenhouse, 275 at the Ritz Carlton and 365 at the Four
Seasons.
The Waldorf will add 175 rooms. "There's
plenty of room for us," Mahoney said. Paul R.
Levy, president and chief executive officer of the Center City
District, said
the area the Ritz and Waldorf would occupy was undergoing a makeover. "The
Ritz is really transforming that area in a positive way," he said.
"The Packard Building has a new restaurant by David Grasso, there are
major improvement plans for Dilworth Plaza, and with the Convention
Center
expansion there will be a lot more foot traffic coming toward City
Hall." On the
Waldorf's chances for success, Levy said: "It really depends on how
they
position themselves in the market." For
Hilton Hotels Corp., planting the Waldorf flag in Center City
Philadelphia
thrusts it into the luxury marketplace for the first time. The
company owns other properties here - the Embassy Suites Center City on
the
Parkway, the DoubleTree Hotel on Broad Street, the Hilton Inn at Penn
in
University City, and the Hilton Airport Hotel. "The
city of Philadelphia and the Waldorf-Astoria both have arrived in the
21st
century with style and a sense of place and purpose," said Ross Klein,
global head of luxury and lifestyle brands for Hilton Hotels Corp.
Contact staff writer Suzette Parmley at 215-854-2594 or [email protected]. ----- To see more of The Philadelphia Inquirer, or to subscribe to the newspaper, go to http://www.philly.com. Copyright (c) 2008, The Philadelphia Inquirer Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |
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