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Monday, May 20, 2024 | Back issues
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Developer’s Philadelphia WTC Plan Hits a Wall

PHILADELPHIA (CN) - A federal judge may have dealt the final blow to a decades-long plan to construct a high-rise World Trade Center complex near the banks of the Delaware River.

Waterfront Renaissance Associates, a private developer, said it spent nearly $20 million on a plan to build a 4-million-square-foot high-rise complex in Philadelphia that would serve as an international commerce hub for the Delaware Valley and southern New Jersey.

The plan, estimated to cost $700 million, was "actively encouraged, aided, and fostered" by city officials for nearly two decades, according to the February 2007 suit Waterfront Renaissance filed against Philadelphia, the city council and various neighborhood civic organizations.

But in March 2006, "despite their twenty years of support and aid," officials suddenly reversed course and imposed an unconstitutional 65-foot height restriction on the proposed construction site, according to the suit.

Even though the plan had "received the support and aid of virtually every city authority," the height restriction effectively destroyed the project, which called for a phalanx of high-rise buildings, including a 42-story residential tower, Waterfront Renaissance said.

The suit lodged a broad challenge to Philadelphia's general zoning protocol, saying it amounts to "ad hoc regulation of development by neighborhood associations" and the City Council.

Waterfront Renaissance said that approach produces "arbitrary decisions, favoritism and discrimination."

Zoning officials approve development proposals for the Delaware Riverfront based on the gauzy requirement that the proposal "provides for development appropriate in scale, density, character and use for the surrounding community," according to the suit.

But officials never objectively defined what that phrase means, according to Waterfront Renaissance.

U.S. District Judge Lawrence Stengel called the standard sufficiently specific on Friday, granting summary judgment for the city and closing the case.

"It would be impossible for a zoning ordinance to identify specifically each and every permitted use," the 24-page opinion states.

"A degree of discretion is necessary and is entirely consistent with the long history of land use law in Pennsylvania," Stengel wrote. "Such discretion does not render the zoning ordinance unconstitutionally vague."

Over a decade ago, then-Philadelphia Mayor John Street directed the city to combine 11.5 acres of city-owned property with Waterfront Renaissance's proposed World Trade Center site, according to the suit.

With the encouragement of Mayor Street and the Delaware River Port Authority, Waterfront Renaissance helped the city win state approval to make the site a Keystone Opportunity Zone, WRA says.

The city's property alone wasn't eligible for Keystone Opportunity Zone status, which is only granted to sites that are at least 15 acres, according to the suit.

The zone approval was a big boon for the city because it meant that the property's tenants would be afforded tax abatements to encourage development, making the city's portion of the property exponentially more valuable, according to Waterfront Renaissance.

The developer said the height restriction was suddenly imposed on the site by Councilman Frank DiCicco "solely for the purpose of giving unelected civic associations ... a measure of control over and input into the planning of high-rise re-development projects [in the riverfront area] ... so that the civic associations could use the height restriction to force developers to agree to ad hoc changes and concessions regarding high-rise projects as the price of support for variances from the height restriction."

The restriction "is manifestly irrational, as it eliminates the viability of the project, which the city defendants have strongly supported for almost twenty years during every critical aspect of planning the project, which the city defendants claim to support at the present time, and which has received extensive support from other governmental agencies in reliance upon the support of the city defendants," the suit states.

Stengel also disagreed that the height cap unconstitutionally targeted Waterfront Renaissance and allowed the city to unfairly obtain the boon of zoning status while depriving the developer of the fruits of its expensive lobbying efforts. Waterfront Renaissance had said the restriction didn't apply to other similarly situated sites nearby, including the city-owned portion of the proposed World Trade Center site.

The judge said he was not convinced by claims that the city obtained Keystone Opportunity Zone, or KOZ, status by combining its 11 1/2 acres with the Waterfront Renaissance site.

While it is true that Waterfront Renaissance spent money to lobby for zoning status, "plaintiff's pompous pronouncement that it conferred a benefit on the city by obtaining the KOZ status ignores the city's cooperative effort ... and the fact that WRA's portion of the property, which is substantial, is more valuable today than it was before it was designated for the KOZ," Stengel wrote.

Waterfront Renaissance Associates lamented the decision. "We are disappointed by the court's decision and are considering whether to appeal," President Martin Schiffman said in a statement

An appeal to the 3rd Circuit is the developer's last remaining legal avenue.

Philadelphia currently has a World Trade Center, but that complex has a comparatively lower profile than peer World Trade Centers around the world. The Philadelphia World Trade Center it is not housed in a signature office building and has not been able to benefit from the synergies achievable in a state of the art location where members of the global trading community can congregate.

World Trade Centers are licensed by the World Trade Centers Association, a membership group that promotes international business relationships through its branded facilities. There are 323 Centers in 96 countries, according to the association.

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