On the Delaware River here is rising 16 stories of luxury living that symbolizes more than what kind of view money can buy. Called Dockside, it’s the first new multifamily construction in the city in a decade — and proof of the strength of Philadelphia’s reawakened real estate market.
Now, a city agency wants to further propel that market by lowering some fees that annoyed commercial developers and homeowners alike.
The Department of Licenses and Inspections has actually reduced some of its building permit and zoning fees.
L&I hopes to prolong a four-year building boom. In that time, city construction activity and property sales, which were dead in the water during the first half of the `90s, have climbed to levels last seen during the 1980s.
Since 1996, at least 17 outdated office buildings have been converted to apartments, with another 30 slated for the same process.
The same period saw 10 hotels, representing 4,000 rooms, either built from scratch or created by converting historic office towers, bank buildings and railroad sheds.
The residential real estate market also took off, with sales growing from 12,346 in 1997 to 19,008 in 1999, the last year for which complete figures were available.
L&I Commissioner Edward McLaughlin said the 11,922 construction permits issued in the fiscal year ended June 30, 2000, was 60 percent higher than the 7,467 issued in 1990. As a result, L&I collected $17.5 million in 2000, compared to $8.7 million 10 years earlier.
L&I’s unprecedented cut in permit fees won’t lower the cost of new buildings. But it will help fuel construction activity by correcting a growing disparity between the permit fees charged for new construction and the fees charged for renovation and remodeling of existing structures, McLaughlin said.
“In the past, permit fees to renovate a structure could cost twice, three times, or even more than the permit fees to demolish and reconstruct the same structure,” he added.
“Permit fees should not be a hindrance to the maintenance and rehabilitation of buildings and structures in the city.”
The city has seen several new-from-the-ground-up projects — like the $75 million Dockside being developed by the DePaul Group, of Blue Bell, Pa., — but much of the permit activity is generated by the renovation of existing buildings.
That conversion boom was also sparked by a cut in the costs involved: a 10-year property tax abatement on office-to-residential conversions approved by City Council in 1997.
The most recent of these so-called alteration projects is Carl Dranoff’s Left Bank, at 31st and Walnut streets, where 285 luxury apartments were carved out of a former food warehouse.
There’s an appetite for such projects. Leonard Poncia, director of development for DePaul, said there is still a strong demand for rental units in Center City — one of the few areas in Philadelphia that continues to grow in population.
The two-square-mile downtown area added 5,000 residents during the 1990s, according to the Center City District.
Although the number of building permits issued last year reflected a 21.06 percent drop from 1999, McLaughlin said the development picture remains strong because the total dollar value of the construction represented by those permits rose slightly, to $1,223,500 from $1,213,300 the previous year.
And Philadelphia Commerce Director Jim Cuorato said he sees “significant growth” in the residential, office and retail sectors, especially in the central business district.
