The Navy Yard Sees Residential Development In Its Future

The Navy Yard in southern Philadelphia has come a long way from the defunct shipbuilding center it was when it was decommissioned in 1996, but it still has quite of bit of growing to do yet, as you’ll hear at Bisnow’s Future of the Navy Yard event on Sept. 7 at 1200 Intrepid Ave.

Although PIDC bought the 1,200-acre Yard in 2000 and became master developer, the US Navy still has a significant footprint in the reborn industrial and office campus, which PIDC’s SVP of Navy Yard planning Prema Gupta calls “one of the early drivers of development in the Navy Yard.”

More than just one of the largest occupants, the Navy is also a draw for defense contractors, engineering firms and even life sciences and R&D operations, all of which benefit from proximity to the military for ease of business. But as the Yard matures as a business destination, it has also diversified.

“I would suggest that there is no bread-and-butter tenant down here,” says Liberty Property Trust VP Tony Ewing. “The uniqueness of this place is such that it provides a very customized value proposition to each of our tenants.”

Customized value comes from the fact that much of the Navy Yard is still a blank canvas. Prema estimates the number of employees who work there to be around 12,000, but she and Tony agree that at completion, the total could reach 30,000—but the future is far from set in stone.

“If we were to execute the master plan as it’s currently laid out, we will get to [30,000],” says Tony. “Are we going to execute the plan exactly as it’s laid out? Highly unlikely. Like many effective master plans, ours is a fluid document with the ability to react to market demand and can change accordingly.”

Liberty and PIDC can sign leases before construction begins, and build to suit their future tenants—changing the master plan, last officially updated in 2013, ever so slightly each time.

That customization allows for businesses that wish to expand but remain in Philadelphia, such as GSK and Tastykake, to find the space they need for larger plants in the Navy Yard.

“It’s been a compelling option for those organizations that have deep roots in Philadelphia but needed to either upgrade their facilities, improve their operations or create their own culture,” Tony says.

Beyond manufacturing, the Navy Yard is proving to be a surprisingly appealing option to life sciences companies and even tech startups.

“It makes a lot of sense to see companies established at [Philadelphia’s] hospitals and educational institutions, and they grow up and need space for, say, R&D next to office space,” Prema says.

With the luxury of space the Navy Yard provides, it’s not surprising that Liberty and PIDC have ambitions beyond a made-to-order business park. The defining characteristic of the next phase of development will be the addition of residential properties, with the goal of turning the Yard into a 24-hour, mixed-use community.

Prema estimates developing a series of multifamily buildings for about 2,000 residents, with what Tony calls “a mix of existing legacy Navy buildings renovated into loft-style apartments, combined with ground-up new developments.”

The biggest issue any residential development will face is the distance between the Yard and the residential heart of the city. Google Maps estimates the front gate is around a 20-minute walk to AT&T station at the end of the Broad Street line, a route that passes under I-95 with no dedicated bike lanes nearby. But developers are betting they can overcome those drawbacks.

“A lot of people will want to move to the Navy Yard‚ yes, because they work there, but also because of the riverfront property and the wide open spaces there,” Prema says.

There are also plans to increase the restaurant and retail options in the Yard, which are only growing.

“We’re at a great point where we introduce a couple of those amenities every year," Prema says, "and that will only accelerate when residential arrives.”

The real key to drawing residents will be establishing a better physical connection to the rest of the city. The ultimate goal is an extension of the Broad Street Line south to the complex proper, but that is years off, at best.

“We all recognize that the time, energy and will of the masses required to get [a BSL extension] done is great, and so the question is what to do in the interim,” Tony says.

The Navy Yard already has a private shuttle service that operates from both AT&T Station and Center City and is utilized by an estimated 15% of employees. That will expand service, thanks to a grant from the Delaware Valley Regional Planning Commission, and PIDC is working to establish bike lanes and improve the walk to the station.

Prema and Tony pointed to ride-sharing companies like Uber as a reasonable means of accessing the Yard right now, with Prema estimating it often takes “30 seconds” to get an Uber from a Yard workplace.

It may not be as economically or environmentally sustainable as public transit, but it’s an important use of technology to make a previously unimaginable scenario—appealing housing at a former Navy base—feasible.

Learn more next month at Bisnow's Future of the Navy Yard event. Sign up here.