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August 17, 2017

Fashion District Philadelphia forms new identity at old Gallery site

Developers tweak vision for shopping and entertainment district on East Market Street

Development Shopping
081717_FashionDistrictPhiladelphia Source/PREIT/Macerich

Aerial rendering of Fashion District Philadelphia.

The long-awaited renovation of The Gallery on East Market Street, spearheaded by developers PREIT and Macerich, will no longer be known as the Fashion Outlets of Philadelphia.

The partners announced this week they will reposition the project as Fashion District Philadelphia in response to the mix of tenants who have expressed interest in advance of a targeted opening in 2018.

"While the project will still offer outlet shopping, the response received from the retail community reaffirms that the scope of the project is a truly unique and robust one—encompassing a large number of full-priced, flagship-style stores and exciting entertainment concepts," the developers said in a statement. "The new name, Fashion District Philadelphia, reflects that sentiment and shift in tenant mix, along with a new fashion district this project will bring to this city."

The project to replace the Gallery at Market East, a relic of the 1970's whose retail currency faded over the last decade, first took shape in 2013 when PREIT purchased the property between Eighth and 11th Streets for $60 million. Fashion District Philadelphia is a $325 million, 50-50 venture between PREIT, which owns malls across Pennsylvania and New Jersey, and California-based Macerich.

The Fashion Outlets of Philadelphia concept, mirroring similar projects in Chicago and Las Vegas, was initially set to open earlier this year but ran into delays amid negotiations with the Philadelphia Redevelopment Authority. The city is providing $55 million in tax increment financing and $58 million in maintenance costs for surrounding public transportation projects over the next four decades.

Pennsylvania Gov. Tom Wolf kicked in another $10 million last fall to close a funding gap on the project, citing the economic and placemaking benefits of a revitalized shopping district. Philadelphia Mayor Jim Kenney anticipates the project will create an estimated 2,300 permanent jobs.

How the tenant mix changes as a result of the new identity is still to be determined. A report from The Philadelphia Inquirer confirmed plans for an H&M outlet, a relocated Burlington Coat Factory, the existing Century 21 and a "dine-and-recline movie theater" whose details have not been disclosed. Restaurants to-be-determined are also reportedly in the mix.

East Market Street was recently named the hottest retail corridor in the United States, fueled by excitement over the arrival of the East Market residential, retail and office development and the eventual completion of Fashion District Philadelphia.

Once completed, the developers said, Fashion District Philadelphia will be the largest cohesive retail project in downtown Philadelphia.