Within Mayor Parker-76ers’ proposals for Market Street, a possibility to fill the Disney Hole

Mayor Cherelle L. Parker’s full-throated endorsement of the 76ers proposed arena on East Market Street came with a revelation of further, dramatic real estate development for the beleaguered shopping corridor.

In plans released Wednesday night, the Parker administration unveiled a proposal for a further 720 units of housing on the south side of Market Street, to be developed by Harris Blitzer Sports & Entertainment, the parent company of the 76ers.

This would be in addition to the 395 units that the Sixers earlier proposed, in a tower above the arena.

Parker also revealed a separate plan, from the Goldenberg Group, for a 400-to-600-bed hotel at Eighth and Market, atop a parking lot left over from a failed 1990s entertainment complex development involving the Disney Co. — and a series of other aborted real estate ventures.

But the uncertainty that accompanies all these new proposals around the arena was emphasized on Thursday by Councilmember Mark Squilla’s statement that he was committed to having the development team scrap the original 395-unit tower, which was to include affordable housing.

“My colleagues in Chinatown are really opposed to that housing development on top of the arena,” said Squilla. “They took that as a middle finger to Chinatown. … So I’ve been working with the development team to remove that piece from the project.”

Squilla said Chinatown neighborhood groups saw the tower as an insulting concession of little value offered by the 76ers to ease the passage of an arena they bitterly opposed to.

The 76ers did not immediately respond to a request for comment on their expanded housing proposal, but a team spokesperson said the organization looks forward to reviewing all of Squilla’s feedback.

The broad outlines of the development proposals outlined by Parker on Wednesday night were welcomed by business groups, who say that an injection of over 1,100 new residential units and a large hotel would add much-needed consumer interest and foot traffic to a thoroughfare that has struggled for decades, and whose issues have become acute since the COVID-19 pandemic.

“The fact that they’re considering putting residential on the south side adds more foot traffic to a street that has really lost foot traffic,” said Paul Levy, chair of the board of the Center City District. “So much of the development that can be stimulated by the arena can occur in the Market East corridor itself, where sites are available and where the need is greatest to reinforce connectivity between Independence Hall and City Hall.”

The 76ers proposed arena would replace a third of the Fashion District mall, on the north side of Market Street between 11th and 10th Streets. In addition to the arena itself, the main development site would also feature 395 residential units in a rear tower with a fifth of the units designated as affordable housing.

Harris Blitzer Sports & Entertainment has also assembled several existing commercial properties on the 900 and 1000 blocks of Market Street. Images provided by HBSE at the Wednesday newser detailed some 28,000 square feet of new retail slated for the 1000 block, as part of the initial arena development phase, and another 380 apartment units, set to launch in 2027.

A second phase of development outlined in the proposal, which could begin in 2030, would see another 340 residential units and 26,000 square feet of retail, and 114 parking spaces on the 900 block of Market.

Included in the proposal was a separate plan, from the Goldenberg Group, to transform their long underutilized property at Eighth and Market into a 420,000-square-foot hotel, featuring 400 to 600 beds and another 45,000 square feet of retail space.

But in an email to The Inquirer, the developer emphasized that their plans are very much in the early stages.

“We are in the preliminary stages of negotiations with multiple users, and while discussions are progressing, a development plan has not yet been finalized,” said Web Walker, the developer’s vice president of marketing.

The so-called Disney Hole was the unfortunate result of a failed 1990s economic development proposal involving the Walt Disney Co., Goldenberg, and former Mayor Ed Rendell.

That project aimed at revitalizing Market East. Historically the city’s retail mecca, the strip had suffered as major department stores shuttered or relocated in the late 20th century. The former Gimbel’s department store — once the largest of its kind in the world — had moved across the street to modern facilities inside the Gallery mall (now called the Fashion District) in 1977, leaving its hulking building on Market Street to later meet the wrecking ball.

The Goldenberg Group acquired the property in the 1990s, initially seeking to build a Sears department store and later a Westin hotel.

In the late ’90s, Disney was experimenting with smaller, urban theme parks, branded as DisneyQuest, in several U.S. cities. After a DisneyQuest opened in downtown Chicago, the Rendell administration backed a $150 million proposal from Disney and Goldenberg that would fill the vacancy left by Gimbel’s, redeveloping the Market Street site as a large multilevel facility featuring indoor rides, arcades, and other attractions.

Although the Disney site excavation progressed — leaving the eponymous hole on Market Street — Goldenberg struggled to find other tenants for the site. Disney soured on the DisneyQuest concept as other complexes posted disappointing revenues. The project was abandoned, the site filled in, and turned into the parking lot that exists today.

Over the following decades, the site was also eyed for a never-built casino, and other developments that never materialized.

Paul Steinke, of the Preservation Alliance, praised the new hotel proposal for potentially filling a long vacant gap on Market Street.

“Goldenberg’s proposal is evidence that the arena may spark the transformation of Market East into an entertainment and nightlife corridor, and maybe a regional draw the likes of which it hasn’t been for more than half a century,” he said.

Neighborhood groups had little response to Goldenberg’s plans and the Sixers’ expanded housing and retail proposals on the south side of Market Street, as they are almost uniformly against the arena.

In addition to Chinatown community groups’ long-standing opposition to the project, the Washington Square West neighborhood association and a Gayborhood community group have also denounced the project.

Councilmember Squilla, who represents all those neighborhoods, emphasized that negotiations were continuing with the 76ers about the project, the community benefits agreement, and the overall development project.

“There will be plenty of other places to develop additional housing in the Chinatown community and possibly on East Market that we could work with,” he said. “So that’s going to be part of our conversation also to hopefully remove that [tower] at least from the project.”