Philly chooses developers for big Navy Yard expansion that includes housing

Ensemble Real Estate Investments of Long Beach, Calif., and Philadelphia-based Mosaic Development Partners have been selected to lead a major redevelopment push at the South Philadelphia Navy Yard that will include millions more square feet of labs and offices, and — for the first time — an around-the-clock residential population at the former military base.

The Philadelphia Industrial Development Corp., which manages the Navy Yard on the city’s behalf, said in a release Wednesday that Ensemble and Mosaic were chosen for the 109-acre redevelopment project because they “demonstrated an understanding of PIDC’s mission and shared a strategic vision for the Navy Yard to drive business growth and job creation for Philadelphia.”

The project is expected to draw $2.6 billion in new private investment, PIDC said.

Ensemble developed the Navy Yard’s Marriott hotel and later acquired several other buildings there from the tract’s previous main developer, Liberty Property Trust, making it the largest private property owner at the former base. Mosaic’s projects have included the Eastern Lofts apartments in Brewerytown.

The team was selected from a shortlist that included developers such as Houston-based Hines, Washington’s Hoffman & Associates, and Trammell Crow Co., a subsidiary of Dallas-based commercial real estate company CBRE. Gilbane Development Co., the Rhode Island-based developer that was recently picked by Amtrak to help revamp 30th Street Station, also had been under consideration.

“The Navy Yard has fulfilled its initial promise of becoming a thriving center for business, innovation, investment, talent, and jobs,” Mayor Jim Kenney said in the statement. “The exciting new partnership with Ensemble/Mosaic will not only build on this track record but will also bring new ideas and energy to the Navy Yard while ensuring that equity and inclusion are at the forefront.”

The 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.

Under PIDC’s watch, Liberty Property Trust turned a centrally located 80-acre section of the former barracks into what’s known as the Corporate Center, a collection of contemporary buildings — some by renowned architects — comprising 800,000 square feet of office and lab space.

When Liberty decided to cease work on office projects such as those at the Navy Yard in 2018, nearly all of the Corporate Center’s development parcels had been built on or spoken for, setting the stage for a next phase of work at the 1,200-acre property that now will be undertaken by Ensemble and Mosaic.

Part of that work is to transform 12 acres northeast of Urban Outfitters Inc.‘s headquarters campus into what’s being called the Historic Core District, which PIDC has said would become the Navy Yard’s “downtown.”

The section, largely bounded by 11th and 12th Streets, between Flagship Avenue and Normandy Place, is seen as accommodating 1,000 to 1,500 apartments in restored buildings, along with restaurants and shops to serve residents and nearby office workers and lab techs, PIDC officials have said.

The other site in PIDC’s new development push is being called the Mustin District, after the former Henry C. Mustin Naval Air Facility airfield that once occupied much of the tract. Its 97 acres extend east from League Island Boulevard.

Officials have said the district could support as much as three million square feet of new office, lab, and production space, emulating the Corporate Center’s atmosphere, and could also potentially accommodate residential buildings along its quarter-mile waterfront.

PIDC said it expects to finalize a development agreement with Ensemble and Mosaic shortly so the team can begin working on concrete plans for the sites in 2021.

Plans call for “substantial” participation of minority- and women-owned businesses in the project’s construction and operation and for a diverse ownership structure, aided by a crowdfunding component that allows many small investors to hold stakes in the development, the agency said.

A share of net income from the project will also be allocated toward a charitable foundation to create educational and work opportunities for young Philadelphians, PIDC said.

“The prior work at the Navy Yard has set an extremely high bar,” Mosaic co-owner Gregory Reaves said. “We are eager to apply our development model and expertise to bring unique perspective and solutions to the development team and create opportunities for disenfranchised businesses and communities.”