Mosaic Development Partners Hit The Big Time In Philly By Being The 'Voice Of Equity' For CRE

Mosaic Development Partners has attained the sort of prominence as a real estate developer that no Black-owned company ever has in Philadelphia.  

As co-master developer at the Philadelphia Navy Yard and part of the development team behind the Philadelphia 76ers’ new arena plan, Mosaic holds a new level of importance within the city’s business and civic communities.

Part of what made it the first to reach such rarefied air is its track record of delivering projects while keeping equity and community impact front of mind. And that could be what ensures Mosaic is the first and not the only one of its kind.

“We see the problems with not having equitable development opportunities in Philadelphia, and we’re unwilling to compromise on that,” Mosaic co-founder and CEO Greg Reaves told Bisnow. “So I feel very good about being that voice in the room because we know that it's not the voice of just Mosaic. It's the voice for equity.”

That voice has the backing of an equity investment from Josh Harris, principal of 76ers’ parent company Harris-Blitzer Sports Entertainment. From Mosaic’s relationship with Harris to its winning streak in development requests for proposals, Reaves and Mosaic co-founder and Chief Operating Officer Leslie Smallwood-Lewis have found themselves in rooms where Black business owners have rarely been.

They don’t just stay in the corner, either. 

“We have the ability to influence significant wealth, and most of that comes from our voice,” Reaves said. “We don't just want a seat at the table. We want to be able to influence that table and direct that table.”

Any equitable vision for the city’s future, including Mosaic’s, includes many more companies owned by women or people of color with the capacity to lead the city’s largest projects, and even to compete with Mosaic for the right to do so. 

Despite Philly’s Black population making up 44% of the city, virtually equal in size to its white population, only 2.5% of businesses in the city are Black-owned. As the poorest big city in the U.S., Philly concentrates its big business and flagship institutions in a relatively small portion of its geography, while wide swaths of neighborhoods have experienced little to no development for decades. 

“The fact that we speak about Mosaic in this way makes it obvious that things need to be improved,” said Tayyib Smith, principal of development firm Smith & Roller, co-founder of local, Black-owned investment group and advocacy organization The Collective, and a friend of Reaves and Smallwood-Lewis. “Anytime we talk about firsts like this, I get exhausted. It’s how we buy into myths of exceptionalism. There should be 10 Mosaics in the state of Pennsylvania, if not 50.”

Putting The Pieces Together

Reaves and Smallwood-Lewis got their start by bringing impact-focused development to some of the disadvantaged neighborhoods of color that make up so much of Philly. The pair continue to push forward such projects even as they sit in on planning meetings with the 76ers and ready a biomanufacturing facility and mixed-income housing development for 2023 groundbreakings at the Navy Yard. 

“There has been no appreciable drop-off at all,” said Michael Major, head of a North Philadelphia nonprofit working with Mosaic on a redevelopment of a multipurpose community center. “I don’t feel at all as if we’ve been kicked to the side or getting less of their expertise. They’ve been able to keep the balance; I’m not quite sure how.”

The co-founders met while they both worked at local commercial development firm The Goldenberg Group before leaving to found Mosaic together in 2008. Reaves and Smallwood-Lewis wanted their own company to focus on commercial real estate, which already made them an outlier among Black real estate entrepreneurs starting out. 

“For developers that don't have wealth, the hope is that they can start off flipping homes, build wealth and move to commercial development, but in reality, that transition rarely happens,” Reaves said. 

The pair kept Mosaic as lean as they could and worked hellish hours to get Mosaic off the ground. The company didn’t hire its first employee until 2018. The two performed every duty of a development company, and what they couldn’t do themselves, they contracted out to other firms — always with inclusion, opportunity and equity for marginalized groups front of mind.

“We adopted that model out of necessity early, but by the time we could hire people, we still wanted folks that know the entire cycle of development,” Smallwood-Lewis said. “That’s one reason why we keep things lean, the other being that we want to help grow outside, diverse companies.”

Without capital reserves, Mosaic needed to answer requests for proposals in order to gain development rights.

To this day, the 76ers’ arena proposal is the only major project Mosaic has gotten outside of the RFP process. The city of Philadelphia and the Philadelphia Industrial Development Corp. have both emphasized in recent years that responses to its RFPs include involvement from minority-owned and woman-owned businesses at not just the contractor level but the general partner level as well.  

Diversity requirements in RFPs cracked open a door that had been shut tightly to developers of color in Philadelphia, one Reaves and Smallwood-Lewis had worked for years readying to walk through.  

“Being that [Reaves and Smallwood-Lewis] have unusual and exceptional experience in commercial development, they were ahead of the curve in doing projects like in Sharswood and the northwest,” Smith said. “Those are areas where frankly, a lot of white developers don’t have interest unless there’s a lot of density or a big incentive. Mosaic was prepared for the moment that came when cities made an effort to add inclusion into their requirements.”

The door that Mosaic came through remains only ajar in Philly, while other cities like Atlanta have flung it wide open, Smith said.

“Without federal, state and municipal mandates, we’re never going to crack the nut,” he said. “And the reality is that only 7% of executives in CRE development are women or people of color. The traditional barriers of access to capital have made the industry lily-white.” 

For the 24 development companies Bisnow tracks in its reporting on diversity among commercial real estate executives, people of color hold 9.3% of C-suite positions, up from 7.5% in 2021.

Mosaic won its first RFP in 2012, four years after its founding. By the time it won the right to develop a multiphase, mixed-use development centered around a shopping center in the Sharswood neighborhood, Reaves and Smallwood-Lewis were able to press anchor tenant Grocery Outlet to bring on a local, Black entrepreneur as franchise owner.

The scale and success of that project got major players to take notice.

Harris toured the Sharswood site and came away so impressed with the project and his conversations with Reaves and Smallwood-Lewis that he brought on Mosaic as a partner on HBSE’s bid to develop the lots around the new park being built over Interstate 95 by Penn’s Landing (which eventually was awarded to The Durst Organization and its local, Black-owned partner The Badger Group).

Meanwhile, California-based Ensemble Real Estate Investments had been eyeing an upcoming RFP from PIDC to replace Liberty Property Trust as master developer of the Navy Yard. Mark Seltzer and Brian Cohen, two Liberty alumni who joined Ensemble for its Navy Yard push, reached out to Mosaic to be the diverse partner for its bid. 

“When we were thinking about a diversely owned company with deep experience in development and a certain level of capacity, it’s not a long list,” Seltzer told Bisnow. “When you’re responding to an RFP for the Navy Yard, that’s a really strategic effort … and you can’t be in Philadelphia and not know who Mosaic is.”

With Harris and with the Ensemble team, Mosaic led discussions by establishing that diversity, equity and inclusion would be the primary goal of any project or partnership it took on. Both Harris and Ensemble demonstrated values in line with Mosaic, and neither of them pigeonholed Mosaic as just a neighborhood-level developer.

“[Harris] got us focused on scale,” Reaves said. “He said, ‘You can do a lot of small things, and that’s great. But you can think bigger on how you drive impact.’ And that was a really healthy shift for us.” 

Harris eventually invested in the qualified opportunity fund Mosaic had set up for its Sharswood project, and early this year invested $10M in Mosaic itself. That he invested in the company and not an individual project was hugely significant, because it allowed Mosaic to be less concerned about how to survive until a project delivers and it starts generating income or development fees.

“We needed to have a blend of monies that could be invested into the company itself, to scale up a bit,” Smallwood-Lewis said. “But we also need to have capital available to fund all the pre-development work that allows us to do multiple projects at a time.”

Big-Time Developer, Neighborhood-Scale Projects

If all goes according to plan for Mosaic, by 2024, the company will be working on not two, but three different projects with major potential for civic impact on the city of Philadelphia: the Navy Yard, the 76ers’ arena and a redevelopment of the Family Court building overlooking Benjamin Franklin Parkway. 

Mosaic and Lubert-Adler Real Estate Funds’ partnered bid is one of four that made the shortlist bid for redevelopment from PIDC, which recently extended the final deadline for responses to February. All four respondents on the shortlist include at least one Black-owned developer at the partner level: Mosaic; The Badger Group; Smith & Roller and BKP Development Group; and Washington, D.C.-based Jair Lynch Real Estate Partners. 

All proposals must include an idea for the new home of the African American Museum in Philadelphia, which was central to Mosaic’s interest in bidding on the project.

If Mosaic wins, it may have to contend with criticism that it is crowding out competitors from reaching its level of scale, but Reaves called out that viewpoint as one only applied to developers from underrepresented groups. 

“We should be careful about saying it’s somebody else’s turn,” Reaves said. “That tells Black developers they’re all fighting over one piece of the pie, and that’s what we’ve been told our whole careers. Nobody has a problem when Brandywine [Realty Trust] wins all the projects, right?”

Mosaic has passed on bidding for some RFPs in the past when Reaves and/or Smallwood-Lewis knew another Black-owned developer involved in the process, the two told Bisnow. But that deference never wins out if they believe that Mosaic is the right company with the right proposal for a job. And the list of jobs that Mosaic goes after still includes the neighborhood-level, impact-focused developments on which the company made its name.

When Called to Serve, the nonprofit that Major leads as board president, sent out an RFP to redevelop the annex building for Zion Baptist Church in North Philadelphia into the Rev. Leon Sullivan Community Impact Center, he found Mosaic’s bid to be the most compelling before he even learned who was behind Mosaic and the personal connections that drew them to the project.

Sullivan was the longtime pastor at Zion Baptist and a titan for the cause of Black advancement in the 20th century.

By continuing its work on community-scale projects alongside its large-scale developments, Mosaic can do more with the former than it did years ago. The company’s name recognition has given Called to Serve a boost in raising funds among the city’s philanthropist class, Major said.

The William Penn Foundation, for instance, has pledged over $1M in grants for the $11M, 27K SF project, and a further $3M is coming from New Market Tax Credits from the U.S. Department of Housing and Urban Development, distributed by PIDC. In order for those credits to be used, the CIC must be fully funded; it needs slightly more than $3M to reach that goal by the spring.

“We’re a small nonprofit that has not done projects of this size, so a foundation could say, ‘They don’t have the experience to do this,’” Major said. “But for us to come to the table with Mosaic and what they’ve done, it gives us credibility.”

Credibility is also what Mosaic is giving to the 76ers’ arena project, on the other end of the spectrum in its portfolio. As part of the development team assembled by 76 Devcorp, Mosaic has been involved in every aspect of the project.

But with construction not expected to start on the arena for years, Mosaic’s track record in community development will be brought to bear first, 76 Devcorp CEO David Adelman told Bisnow.

“Their size and scale as one of the largest Black-owned developers in the city is great, but as for the arena, their experience with community development, building affordable housing, putting themselves in the shoes of community advocates — to me, that’s their superpower,” Adelman said.

If there is one message that Adelman has tried to hammer home in rallying support for the arena among residents of neighboring Chinatown, it is the benefit to the community that 76 Devcorp is promising.

The first stage of the process is negotiating a binding community benefits agreement that Adelman estimates could be worth $50M, but Adelman is open to finding ways for Chinatown-based businesses and financial institutions to have equity in the project. Community equity, more so than community engagement, is what Mosaic is most passionate about.

“This is why we started our company,” Reaves said. “Leslie spent an inordinate amount of time figuring out the financial strategy around this, which has been a hurdle beyond most people's belief.

"We want to add in community ownership, which we've done on two projects through a community crowdfunding [structure]. We have done some things to bring in the community in ways that had not been tried before, and we want to continue to be that place where you can experiment for the greater good.”