July 14, 2021
The companies working on the $2.6 billion Navy Yard redevelopment project have pledged a $1 billion investment in equity and inclusion efforts.
The Black-owned developer Mosaic Development Partners and Long Beach, Calif.-based Ensemble Real Estate Investments said Tuesday that inclusion initiatives would feature subsidized retail leases for minority-owned businesses, affordable housing and an internship program for underrepresented students.
The Environmental, Social & Governance program will serve as the "bedrock" of the firms' redevelopment of a 109-acre portion of the 1,200 acre South Philadelphia site.
"We are committing $1B to diversity, equity and inclusion (DEI) initiatives – again, likely the largest pledge ever in our industry," said Kam Babaoff, co-founder and chairman of Ensemble Real Estate Solutions & Investments. "Dedication to ESG, and specifically the DEI principals within it, will drive lasting positive change in this city because it will be built by Philadelphians for Philadelphians."
The full redevelopment project will take 15-20 years to complete and will have approximately 3 million square feet of office space, restaurants, a hotel and more. Both companies said 15% of its approximately 3,000 residential units will be set aside for "housing affordability" as well.
A quarter of the retail space would be set aside for subsidized leases for businesses owned by minorities, women, veterans or disabled people.
Gregory Reaves, founder and co-owner of Mosaic Development Partners, said the pledge could set a tone for future developments in the city.
"We are looking at all ways for people who have, frankly, been left on the sidelines to have an opportunity to participate here in a new way," Reaves told the Philadelphia Tribune.
The commitment to equity and inclusion will be applied not only to the building's future tenants, but also to the building and design of the project itself.
The companies said minorities, veterans and people with disabilities would make up at least 35% of the construction workforce, and at least 50% of the construction workers will be from the Philadelphia area.
The developers spent half of the project's total design costs, around $7.5 million, to hire 21 minority design and engineering firms, including Moody Nolan, the largest African American architectural firm in the U.S.
Minority-owned firms and minorities will make up 20% of the investment for the project. The companies said local low- and moderate-income residents could invest through crowdfunding for collectively up to 5% equity in the project.
There also will be an internship program through partnership with local universities for women and minority students in the Delaware Valley.
Mosaic and Ensemble were selected for the 109-acre redevelopment project in July 2020. It is estimated it will create 5 million square feet of housing, office, retail, hospitality and life science spaces.
Construction is set to start in the fourth quarter of this year, the developers said.
"This unparalleled commitment to [the environmental, social and governance program] sets the new standard for socially responsible, inclusive development in Philadelphia while providing countless benefits for Philadelphians for years to come," Mayor Jim Kenney said.