Navy Yard hits 10-year mark in stride

When computer engineer Jim Nasto started working at the Philadelphia Navy Yard about a decade ago, the 1,200-acre property was a virtual desert of vacant industrial buildings and abandoned parade grounds.

Many of those buildings now make up Urban Outfitters' headquarters, while the vast open spaces are being shaped into office parks inhabited by such corporations as GlaxoSmithKline.

"I love it," said Nasto, 29, a research contractor for the U.S. Navy, as he tossed a bocce ball in a landscaped park that opened last month. "Now we have all these buildings."

Ten years after the Navy Yard's first new offices opened, plans to transform the site from a symbol of the city's lapsed industrial might into a vibrant new neighborhood are hitting their stride.

The roughly 12,000 workers at the yard now outnumber the 10,000 or so ship workers and others employed there when it closed as a military base in 1996. The yard is estimated to have generated $77 million in local and state taxes in 2012, when its managers conducted their last economic study.

Liberty Property Trust, the yard's main developer, recently broke ground on its 14th new office building at the site, designed by the architect behind Two World Trade Center, and expects to start two or three more offices this year.

Crews also continue to renovate warehouses from the yard's heyday for Urban Outfitters, which, already the site's largest employer with 2,500 workers in eight buildings, plans to add 1,000 more over the next few years.

Joining the new park - landscaped by James Corner Field Operations, designer of New York's High Line - will be improved waterfront trails and a new canal fed by the Delaware River. Planners hope these amenities will attract workers and full-time residents.

"You begin to start to layer a series of textures on the Navy Yard that fulfill the vision," said John Gattuso, Liberty's regional director. "It is really about creating an environment that can compete on a world stage to attract the best-quality talent."

The Navy Yard joins other vast redevelopment projects nationwide, where abandoned or underused military or industrial sites are giving dense cities a blank slate for renewal.

In San Francisco, the former Mission Bay industrial enclave is now a growing district of corporate headquarters, biotech labs, and residential blocks, anchored by a new University of California campus.

At the former site of Denver's Stapleton International Airport, developer Forest City Enterprises is building walkable tracts of homes, shops, and offices that could one day be that city's biggest neighborhood.

And the Brooklyn Navy Yard, once the world's most expansive dry docks, now accommodates art studios and small factories, as well as the biggest movie studio outside Hollywood.

"It's a great opportunity for cities to rethink a piece of property that might not have been available to them for 100 years," said former Pittsburgh Mayor Tom Murphy, now a senior fellow at the Urban Land Institute.

For Philadelphia, the Navy Yard is also serving as a template for the city's efforts to bring blighted sites back to productive use, said John Grady, president of the Philadelphia Industrial Development Corp., which manages the yard for the city.

Planners are already applying its lessons to the 3,000-acre corridor of industrial land along the Lower Schuylkill River, from its confluence with the Delaware River to the University of Pennsylvania.

"We're starting a process of assembling land for private development and planning out infrastructure investments," Grady said. He says that the yard is at about the halfway point of its intended build-out.

The Philadelphia Navy Yard, which employed 40,000 at its peak, came under city ownership in 2000 after the U.S. Defense Department decommissioned the site as a military base. Some shipbuilding resumed that year at the newly opened Aker Philadelphia Shipyard.

Liberty finished its first building in the yard's main office park in 2005. A year later, Urban Outfitters began moving into its campus of renovated buildings.

Another watershed came in 2013 when GlaxoSmithKline left Center City for its glass-sheathed Navy Yard building. Other tenants include Tasty Baking Co., which operates a factory in the yard's industrial section, and WuXi AppTec Inc., a Shanghai-based pharmaceutical company.

The Navy Yard has enabled the city to retain and attract companies that may have left for suburbs with more space and building flexibility, Grady said.

About one third of the tenants at the yard also receive breaks on some city and state taxes for creating jobs or making large investments, thanks to its designation as a Keystone Opportunity Zone in need of development.

"We want to give people the maximum options" to work and expand in the city, Grady said. "Sometimes there are people who can't meet their real estate needs" in Center City.

When Franklin Square Capital outgrew its space at the 29-story Cira Centre near 30th Street Station, it considered University City and Delaware before settling on the Navy Yard, said executive vice president Michael Gerber.

The company liked the opportunity for outdoor sports along the waterfront and the ability to incorporate a fitness center into the design of its headquarters, he said. It was also drawn by the promise of the new park, which is dense with hammock groves, table-tennis tables, and exercise stations.

"The Navy Yard is perfectly suited for folks who are active and love the outdoors," Gerber said. "Those are opportunities you can't get anywhere else in an urban setting."

Still, some workers at the yard miss the shops and eateries found in more established centers.

Jade Nguyen, a computer engineer at General Dynamics Information Technology, said the site - where Marc Vetri's Lo Spiedo opened late last year - lacks inexpensive lunch spots and convenience stores. "If we had more amenities, it would be nice," said Nguyen, 34, munching on a food truck quesadilla. "The more stores you add, the better."

Planners hope to introduce homes to the site to attract shops with a round-the-clock clientele, pending a change to Navy rules barring housing.

The plan also includes an extension of the Broad Street Line, which now ends about a mile north of the Navy Yard's gates.

Up to 1,500 rental lofts and flats are planned in three of the site's historic buildings over five to seven years, PIDC's Grady said.

"It brings in morning and nighttime traffic, it brings in weekend traffic," Grady said. "It starts to drive a demand for amenities . . . that the office workers really can't support economically on their own."

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