Eli Kahn

Malvern Redevelopment Project — So close, and yet so far away (from Paoli)

Reading Aubrey Whelan’s article in today’s Philadelphia Inquirer, ‘Malvern apartment complex nears completion after 10 years in the works’ had me thinking about Paoli, and the long overdue  intermodal transportation center.  Malvern … so close, and yet so far away from Paoli.

The Eli Kahn development project in Malvern is transforming – with an estimated $45 million price tag there’s 25,000 square feet of new construction stretching 1,400 feet along King Street.  The mixed-use buildings plan has retail shops and restaurants on the first floor with 190 luxury apartments above.  Even a Kimberton Whole Foods is planned that may give Wegmans, down the road some competition.

We all understand that projects such as Malvern’s King Street development don’t come without their challenges … how to revitalize in the midst of quaint Victorian facades and street lights … how to move a town into the 21st century without losing the charm of its 18th century roots.  Change is never easy and not everyone has shared the vision for Malvern’s future.   Media, Phoenixville, Wayne, West Chester – I am sure that all these communities saw their share of resistance to change.  But today these towns are testaments to those who had the vision to believe in ‘what could be’ and the passion to ‘make it happen’.

I know that Eli Kahn’s project in Malvern is not the same kind of development as the Paoli Transportation Center. However, Malvern’s mixed-use commercial and residential buildings in the King Street business district (within walking distance of their train station) creates a model for Paoli’s redevelopment plans, beyond just a new train station.

I checked the Paoli on the Move website, www.paolionthemove.org  and there are no additional updates since the Paoli Transportation Visions Open House at the township building with SEPTA last October. Frustrated, I sent an email to Michelle Kichline, as chair of the Board of Supervisors, and to John DiBuonaventuro, as the western district supervisor, asking for an update on the project. I also sent an email to Lucille Songhaim, Septa’s Community Relations Coordinator asking the status on the Paoli Transportation Center.

I received a response from Michelle, thanking me for my inquiry and stating, We have been working on a joint update/ press release with SEPTA and Representative Kampf’s office. We expect SEPTA to release it soon. As soon as they do, I will have Bill Martin make sure you get a copy.”  I asked for a project update at the BOS meeting on February 11, and I am pleased to report that township manager Bill Martin emailed that he will add the update to the meeting.

A Penthouse View of Historic Market Street for Chester County Elected Officials . . . Rent $3.1Million per year

Based on Chester County’s recent lease negotiation with a private developer, no one would believe that we are facing the same economic challenges as the rest of the country.

The administrative offices of Chester County are moving from West Chester’s historic courthouse to a new privately owned 6-story office building on W. Market Street starting on March 18. Why the move . . . did they outgrow the courthouse office space . . . did they tire of their historic offices and long for the ‘new-car smell’ of new offices? 

The county’s elected officials including commissioners, county controller, county treasurer, county solicitor, Recorder of Deeds will be leaving their courthouse offices behind for this new location.  The lower 2 floors are parking for county employees and the upper four floors is office space in the new building. The Tax Assessment office will move to the third floor and the County commissioners and row officers will enjoy offices on the sixth floor, overlooking historic Market Street.

We do know the price tag for their new digs.  The county is paying $3.1 million in rent for the first year; increasing by $31K each year for the length of the 20-year lease. The lease option is $37 million for the first 10 years.  At that point, the county could purchase or extend the lease for the remaining 10 years.  I am not sure how this lease agreement would work . . . the county will not own the building but will pay rent.  I don’t see any economic or tax benefit to this arrangement.  If the county needed more office space, why not either renovate existing county-owned space in the courthouse or use bond money to build an office building.  At a minimum, the county would benefit from ‘owning’ rather than ‘renting’ their office space.

The county’s elected officials including commissioners, county controller, county treasurer, county solicitor, Recorder of Deeds will be leaving their courthouse offices behind for this new location.  The lower 2 floors are parking for county employees and the upper four floors are offices in the new building. The Tax Assessment office will move to the third floor and the County commissioners will enjoy offices on the sixth floor, overlooking historic Market Street.

As an aside, I did some research on the property owner of the new office building . . . J. Loew & Associates, a commercial real estate developer from Downingtown.  Based on the vast availability of office space listed on their website, J. Loew appears somewhat overextended with their available rental commercial real estate. In a quick analysis, I counted that the developer currently has over 30 office buildings, warehouse and retail complexes available for lease.  In addition, some of the available office space is very large corporate office buildings in the Great Valley. 

I guess a 20-year lease agreement with the county of $3.1+ million a year helped ease some of the pressure for J. Loew & Associates.  Think about it, the company finances and builds the Market Street office building in West Chester, rents it to the county at a profit and [if the county decides at the end of 10 years] turns around and sells it to the county for a profit.  Savvy business negotiating.  Also when researching J. Loew & Associates, I discovered another interesting fact.  The business partner of J. Loew & Associates, Eli Kahn, donated $25K to the Chester County Republican Committee over the last four years.  All so very interesting.

Many of our Chester County officials were elected on campaign pledges of no tax increases and many of those individuals seeking election or re-election continue similar austerity promises.  How will these same individuals now rationalize this lease agreement?  Are taxpayers going to pay for our elected official’s penthouse view of historic Market Street?

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