PHILADELPHIA-University of Pennsylvania and Houston-based Hanover Co. inked an agreement to develop a $100-million mixed-use apartment, retail and parking facility at 34th and Chestnut streets. Penn now operates surface parking at that location and is leasing the land to Hanover for 65 years. Hanover will develop and then manage the property, which is scheduled for completion in November 2007. Terms of the land lease are undisclosed.

Because the parcel is sloped, the building will be seven stories on one side and eight on the other. It will contain 295 residential rental units, approximately 26,000 sf of retail and commercial space, including a clubhouse and management office, and an attached five-story parking garage for 320 vehicles. There will also be two courtyards, one for residents only; the other, "semi-public," according to Brandt Bowden, Hanover's development partner who, with Hanover colleague John Garibaldi, is managing this development.

"The project went out for RFP a couple of years ago; a bidder was selected, and it didn't work out," Bowden tells GlobeSt.com. "We had been talking with the university, and they liked the quality and finishes of our plan, so we stepped in." This is Hanover's first development in Philadelphia and part of the university's East Campus Strategy for neighborhood growth and improvement, according to Omar H. Blaik, SVP of facilities and real estate services at Penn.

The building's footprint totals approximately 325,000 sf. Bowden says apartments will range in size from just over 700 sf for one-bedroom units to about 1,650 sf for three-bedroom units. "Rental rates," he says, "will be about $2 per sf a month, so rents for units will begin at about $1,400 a month. It is the university's intent to provide luxury, market-rate housing."

Blaik says, "University City continues to attract new development, new businesses and new residents." The East Campus Strategy, he adds, "is indicative of Penn's commitment to engage locally in building communities and investing in job creation and economic development."

This project is one of four residential development plans in that strategy. Its announcement came on the day University City District released its fifth annual "report card" for the area, documenting progress of the strategy initiated by Penn in 1995. UCD is a group advocating improvements for the 2.2-sm neighborhood that encompasses and surrounds the Penn and Drexel University campuses. Brandywine's Cira Centre office tower at 30th Street Station is a highlight of this year's report card, which also cites "significant progress" across a broad array of sectors.