$250M Residences at the Ritz-Carlton To Rise on Meridian Fire Site

PHILADELPHIA-Residences at the Ritz-Carlton, a 44-story condominium, will rise on the site of the former Meridian Plaza office building across from City Hall, which was destroyed in a fire in 1991 and lay vacant ever since. The construction cost is $250 million.

The original plans called for a 57-story building. While acknowledging this is a "lower building," Craig Spencer, president and CEO of locally based developer Arden Group, tells GlobeSt.com, "we initially received zoning variances for the taller project, but they were appealed. At the same time, we were doing the economics and realized it could be as, if not more, financially viable at this height and would not require the time needed to fight the appeal." He also said the initial plan included a 40,000-sf health club and 25,000 sf of additional meeting space, both of which required additional parking. By eliminating those, "we eliminated eight levels of above-ground parking and retained the same residential framework."

Arden acquired the land about five years ago and declined to disclose the price. An adjacent parcel is owned by Ardmore-based Mariner Commercial Properties in a partnership of Tim Mahoney and Brook Linfest. At one time, Spencer acknowledges talking with those owners "about the possibility of a single project," which he says he and his partners rejected because of the limited number of prospects for financing such a large project as well as questions about delivering twice as many condo units at one time.

A rendering of 1441 Chestnut, a condo tower, is on the Mariner website. Spencer says, "We anticipate that something will be built on that land, and we designed our views not to be obstructed by a building there." Mariner could not be reached by deadline.

Arden's partners in Residences at the Ritz-Carlton are Miami-based Gencom Group and New York City-based Colgate Development LLC, which is headed by Brian Collins, former partner, COO and CFO of Millennium Partners, also based in New York. Arden, Gencom and Millennium also partnered in the conversion of the Girard Bank Building into the Ritz-Carlton Hotel, among several other JV developments that combine residential condos with high-end hotel brands, including Ritz-Carlton residences in several major cities.

Residences at the Ritz-Carlton here is aimed at the top of the condo market and residents will share in the hotel amenities. They include pet-walking, babysitting, housekeeping, concierge and in-room dining services along with concierge along with fitness, restaurant and lounge facilities.

The residential building is slated to contain 280 units. "We have a very flexible floor plan that allows for a variety of combination units," Spencer says, "thinking that buyers will combine them and it will end up with 10% to 15% fewer units." The smallest is 1,000 sf and the opening price point is $450,000. The largest is a 10,000-sf penthouse priced at $12 million. Spencer says he has a prospect and also reports that 60 units are already committed.

The architect is New York City-based Handel Architects, which is led by Gary Handel and is currently involved in the design of the World Trade Center Memorial at Ground Zero in Lower Manhattan. Residences at the Ritz-Carlton will be wrapped in glass and contain Girard Park, a gated private garden at street-level for residences. The lower portion of the park will be open to the public. Lehman Brothers arranged the financing. Groundbreaking is scheduled for this fall and completion is anticipated in spring 2008.