The Navy Yard's 'City Of The Future' Is Coming
At Bisnow’s Future of the Navy Yard event at 1200 Intrepid Ave in the Yard itself yesterday, developers and tenants of the massive business campus showed why it’s so special now, and why it can be even more so in the future.
The first panel was made up of notable tenants of the Navy Yard from various business sectors, all of whom spoke about how uniquely their respective spaces fit their businesses, all with one common theme—the space to grow and the license to define that growth.
David Price of motorcycle apparel company RevZilla—on the left above, next to FS Investments' Mia Fioravanti and Donna Bruno, GSK's Navy Yard site director—highlighted the rare ability to put its corporate headquarters, fulfillment and distribution centers all in one place, with additional “flex space.”
“For us, it was great because we needed inventory close to our customer service department so they could understand the product,” David said. “So we have a mini warehouse, a retail showroom…and our video production studio for our active YouTube channel.”
From a relatively new company like RevZilla to one that’s been around in some form or another for 150 years like Axalta Coating Systems, a move to the Navy Yard has coincided with a drive for reinvention.
Axalta R&D director Joanne Hardy (with the mic, next to moderator Matthew McClure of Ballard Spahr) described the company’s 2014 IPO and forthcoming move to the Yard as the start of “a new company.”
“We’re growing and we’re reinvesting, which is very different from a legacy company,” Joanne said. "Coming to the Navy Yard will be our Global Innovation Center, the main R&D lab worldwide for Axalta."
Athough manufacturing and R&D make up a large chunk of Navy Yard tenants, a financial company like FS Investments also found moving to the Yard a signal of a massive cultural change. Its new headquarters has a completely open office plan, on-site food service and fitness and wellness programs to promote healthy work environments and lifestyles for its employees.
“We found the need to bring our employees together, and we had all of these aspirations for what we wanted to do culturally as an organization,” Mia said. “And coming down here really allowed us to customize the space and create programming around that.”
Pharmaceutical giant GSK also built a completely open office at the Navy Yard, and made radical shifts in its infrastructure to suit the new digs, like the elimination of phones and dedicated meeting spaces in the office to inspire more spontaneous and natural collaboration, all in a LEED Double Platinum-certified building.
“In two years’ time, we moved 1,350 people from 800k SF to 207k SF, which really went towards GSK’s commitment to sustainability by reducing our carbon footprint,” Donna said. “And I’m not going to lie, we reduced our operating expenses quite a bit.”
All of these diverse improvements and changes to company infrastructure that a move to Navy Yard facilitated are important on their own merits, but in discussing what they mean for the future of each respective company, the focus was clear: attracting a Millennial workforce, especially coming out of Philadelphia’s universities.
“We’re looking for researchers and scientists, and many young graduates today are looking for a certain kind of lifestyle,” Joanne said. “Being here is really going to attract the kind of talent we’re looking for.”
“We wanted something that matched our young, vibrant corporate culture,” David agreed. “There’s a certain buzz in the Navy Yard that just can’t be matched in the suburbs.”
With all the talk of creating ideal corporate spaces in businesses’ own images, the discussion had a utopian feel at times. In the second panel, PIDC’s Prema Gupta (second from left, next to Turner Construction's Chris Beck) went so far as to say “we are literally building the city of the future here.”
And of course, it’s impossible to have a “city of the future” without people to live in it. Discussion on residential plans were vague, since there is a deed restriction in place preventing residential development from the time PIDC bought the property from the Navy. Asked why it exists at all, Prema spoke candidly.
“If you think back to when those negotiations were taking place and what the real estate market looked like at the time, [Philadelphia] is a completely different city,” Prema said. “There was no market for residential, and we didn’t push for it.”
When it does come to the Yard, the residential will be a mix of old Navy buildings, which have been historically preserved and maintained, and new construction. Everyone agreed that the Yard’s advantages are not in competing with established centers like Center City and University City, but in setting itself apart, and the residential phase will be no different.
“I will look forward to more engagement of the waterfront in the future, with respect to residential and commercial,” said Liberty Property Trust’s Tony Ewing (second from right, flanked by CohnReznick's Bernadette Daniel and Pennoni VP Mark Celoni). “We have a tremendous asset in the Delaware River, and I think a definitive part of our future is finding out a way to robustly interact with that.”
Despite all the high-minded ideas being tossed around, it still was easy to be reminded of the more pragmatic reasons why the Navy Yard will continue to be successful, and fulfill its lofty ambitions. City Councilman Kenyatta Johnson made a special appearance to provide that reminder.
Kenyatta spoke of ensuring that the two major tax incentives for businesses to move to the Navy Yard—its Keystone Opportunity Zone designation and the city’s 10-year tax abatement for new construction—would remain in place well into the future.
“[Liberty Property Trust and PIDC] have been consistently partnering with the City of Philadelphia to assure that the Navy Yard keeps moving forward,” Kenyatta said.
