Durst Organization Halts Work Indefinitely At Multifamily Development On Philly Waterfront

New York developer The Durst Organization has big plans for Philadelphia, but its first step has not gone as expected.

Durst has halted work indefinitely on the construction of its planned 25-story apartment building at 300 North Christopher Columbus Blvd., a representative from the company confirmed to Bisnow in a statement. It had already completed excavation and foundation work.

A visit to the lot at the corner of Vine Street and North Christopher Columbus Boulevard showed that contractor Hunter Roberts has pulled its equipment from the site. Hunter Roberts declined to comment, citing a confidentiality agreement with Durst.

"The Durst Organization is pausing on construction of the mixed-use project at 300 N. Columbus Boulevard," Durst's statement read. "This decision is the result of unexpected rising construction costs and a challenging financing market. We are examining potential paths forward for the site and determining next steps. In the meantime, we are securing the site and making it safe for the surrounding community."

Durst has already spent $42M at the development site and made a nonrefundable $1.4M payment into the city's affordable housing trust fund.

Putting a project on indefinite pause just before it was set to commence vertical construction could be a sign that the financing environment Durst referenced in its statement affected its ability to secure a construction loan. The company's spokesperson would not comment on the project's financing beyond the statement provided.

Much of Durst's site work to date has focused on the presence of archaeological remains from a shipyard that dates back to Philadelphia's colonial history. Durst commissioned archaeologists to assess the site, and beginning in the spring, began exploratory digs. From the summer into the fall, some artifacts were extracted while Durst held two open houses with the public to discuss the plans for the historic site.

Several items have been extracted and will be donated to the State Museum of Pennsylvania in Harrisburg, but the majority of the historic site is best preserved by leaving it in the ground, rather than risking the destruction of a more intensive dig, a Durst spokesperson told Bisnow. The remaining archaeological work is waiting on a final report from archaeologists, which is due by the end of 2023. Once that is completed, the site will sit idle for an undetermined period of time.

More than half of the site is planned to include a public park, which would cover the remaining artifacts and preserve access to the Wood Street Stairs, one of the original stone staircases that led to Philly's Delaware River shipyards from colonial times through most of the 19th century. After a major fire, the site spent most of the 20th century as a parking lot.

The difficulty in obtaining construction loans has thrown a similar wrench in projects across the Philadelphia area and beyond, but two high-profile local developers have announced major financing deals in the past week.

Parkway Corp. obtained a loan from Prudential Financial to build a $430M, 18-story office building for Chubb at 20th and Arch streets, bolstered by over $10M in state grant financing and the security that comes from a single-tenant, build-to-suit development.

Gattuso Development Partners and Vigilant Holdings borrowed $290M from Corebridge Capital for a 532K SF lab building in University City, assisted by a new equity contribution from The Baupost Group. The building is 45% leased, but the deal still represents a bet that Philly's cell and gene therapy industries can continue to grow despite venture capital investment drying up.

Earlier in December, a cold storage development in the Port Richmond neighborhood secured financing through the Commercial Property Assessed Clean Energy program. 

All of the above projects are in different asset classes from Durst's project and benefited from specific advantages or financing tools that took their deals across the line. Still, Post Brothers managed to get a senior loan from Bank OZK and a mezzanine loan from Lionheart Strategic Management in November for a ground-up multifamily development less than 2 miles from Durst's site.

In addition to the money and work it already put into the site at Columbus and Vine, the Durst Organization has several reasons not to cut bait on its Philly investment.

In 2020, the company won the rights to develop a multiphase, mixed-use project surrounding the new park that is supposed to cover Columbus Boulevard and Interstate 95 between Chestnut and Walnut streets.

It brought local developer The Badger Group on as a development and equity partner, but is at the mercy of the park's construction, which is already years behind schedule.

The company also owns a swath of property along the Delaware River, including a handful of large-format restaurants across Christopher Columbus Boulevard from the 300 North Columbus site.

CORRECTION, DEC. 23, 7:18 A.M. ET: An earlier version of this story had the incorrect timeline for the archaeological report. It has been updated.