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Concept Presentation for the Mosteller Corner

December 5, 2011

By Eli Kahn with Jack Loew

West Chester, PA -- E. Kahn Development Corp and J. Loew & Associates presented an Idea Exchange, a public meeting held at West Chester Borough Hall Council Chambers on December 5, 2011, at 6:00 pm, sponsored by the West Chester Business Improvement District.

Among the exhibits presented were:

  • Photos of existing buildings
  • Town Center zoning slide showing permitted uses
  • Map showing empty retail space
  • Massing study

After welcoming remarks from the BID, Eli Kahn made the following remarks taken from his notes and edited for clarity:

Existing Structure at Gay & ChurchWe are here to open a dialogue with the community members that are interested in the future of the Gay and Church street corner. Everyone is here tonight because West Chester is a special place and this is one of West Chester's most special corners.

We'd like to talk a little about what we purchased; tell you a little about ourselves; how we go about developing properties; discuss with you some of our thoughts and analysis; and then listen any and all comments.

We are sure of one thing! There is no way everyone in this room will agree on the future of this corner. But we think most in this room will agree that bringing this corner back to life will have an enormous positive impact on downtown West Chester.  

Aesthetics on this project, more so than any other we have been involved in, is critically important to us and it is what we intend to devote most of our time to moving forward.  

While on this issue we are also not going to hide from you that we find the existing buildings at this corner to be some of the ugliest buildings in the Borough. (Exhibit photos around the room were pointed out.)

The key issues for us will be successfully combining the following three things:  architectural aesthetics; a pedestrian/retail themed development; and economic feasibility.

We acknowledge the work done by the Borough on these properties over the last 10 years to include the HARB study in 2001 and the BID Symposium in 2009 and the West Chester Comprehensive Historic Preservation Plan of 2011.  

Overview of entire property we bought from County: exhibit photos including 10 N High St, and 24-42 W Gay St and 17-29 N Church St.

We have immediately started renovation of 10 N High St into the West Chester's premier corporate office address.  Our renovations will include a new entry lobby, interior finishes and new state of the art mechanical systems.

10 North High CourtyardThe Mosteller Corner is the main focus of tonight's forum. Now that these buildings are empty our immediate plans are to secure the buildings from vandals (a problem we have had with other vacant buildings). Effective upon the new electrical system to the historic Courthouse, all HVAC and electricity will be cut off to these buildings effectively moth-balling them. These buildings are functionally obsolete and unleaseable in their current condition.

Our hope is to present to the Borough a comprehensive development strategy for this corner as soon as possible as to limit the time the buildings lay dormant.

Who are we and what do we do
Jack Loew and I have been partners for almost 25 years and we have a combined 60 years of experience in commercial real estate development with many projects here in the Borough. Our offices are in Downingtown. Jack lives south of Town and I live in the borough of Malvern. Our business strategy is to develop for the long term and we keep almost everything we develop.

The keys to our success and longevity
We do intense market study on every project. All of our projects are "demand based". Within the results of our market study we identify the demand and develop a product to supply that demand.

For instance, we saw a trend a few years back that suburban office users were getting disenchanted with the suburban office parks, hence the success of 121 North Walnut Street, 313 West Market Street and 10 North High renovation.

We are constantly studying market trends and demand. This constant analysis points us in a specific direction where we focus our business.

Once we identify a project we provide tremendous due diligence on the location, market place, physical structure, utilities and the entitlements required to develop.  This includes a thorough analysis of the properties zoning which will provide us with the guidelines for what we can use a property for. From there we try to marry uses permitted by zoning with market demand.

Our findings for the Mosteller site
The existing Town Center zoning district allows the following uses: restaurants and taverns, retail, hotel, office space, banks, most residential uses including apartments and condos, student housing, government uses, library, educational uses, religious uses, museums, movie theater, day-care centers, funeral homes, and auto sales and service.

Based on our demand analysis of the above permitted uses our market research indicates the following uses are commercially viable:
Upscale retail, restaurants, a higher quality for-sale residential product and student housing. We see demand for all of these uses.
We see no demand for the following: low-end office, smaller low-end retail space, banks, any housing without parking with the exception of student housing. All of these uses are oversupplied.

Let me explain: we have proven the demand for Class "A" office space by the leasing activity we already have at 10 North High.

Because 10 North High has never before been available for private sector occupancy our renovation effectively adds 75,000 square feet of new speculative office space to the downtown West Chester market.  This is a huge amount of space for a market the size of West Chester to absorb.

The net effect of the 10 North High redevelopment will be to draw some existing borough tenants out of their lesser quality office space creating a surplus of older office space that will need to be reabsorbed into the market as either lower priced office space or some other adaptive use.

This is one of the reasons we are confident there is no demand for these buildings to be further used as office space.

Downtown West Chester has currently between 17 and 20 vacant retail store fronts totaling approximately 25,000 to 30,000 square footage of vacancy. The Mosteller buildings, if simply renovated, will introduce 15,000 to 20,000 square feet of speculative retail space creating a similar over supply effect on the retail space market. If all the retail space is of the same quality, it effectively increases the supply of existing vacant retail space to almost 50,000 square feet -- to much for a market the size of West Chester to absorb.

If we look back to our commercially viable uses of upscale retail, restaurants, a higher quality for-sale residential housing and student housing, there is clear demand for these uses. Jack Loew and I have made the decision, for reasons we will explain later, NOT to pursue any student/post student housing on this site. So let's remove that from the list of viable uses.

Based on our analysis, we now have a clear understanding of what uses can be successful. In short, it's where the demand is! This includes first floor upscale retail space with high ceilings, wide column bays, larger floorplates and handicapped accessibility with a higher quality residential condo product built above it with integrated parking, security, a building lobby, etc.

The uses which we have identified as having demand require onsite parking. The problem occurs when attempting to renovate the existing buildings. There is simply no way to create onsite parking.

Demand in the West Chester market place
We have talked for years about the need for a movie theater, a hotel, a department store, a bookstore, Anthropology, etc. Thanks to Brian McFadden we now have the Hotel Warner.

We have also witnessed in more recent years the transition in town from so many high quality restaurants and a few bars to fewer good restaurants and many more Bars.  Why is this?

The bars came largely because they are catering to West Chester's largest in-town residential demographic of patrons: the student and post student age group. If West Chester ever has a hope to try to attract the types of more upscale uses defined above, then West Chester will need to move the downtown residential demographic from a predominantly twenty-something to a 40- to 75-year-old demographic that will include urban professionals, empty nesters, and retiree's. This demographic has been slow to relocate into downtown from the immediate suburbs because the lack of suitable downtown residential offerings .

Why does Ardmore, Wayne, Bryn Mawr, and others, have many of the described uses we desire? It's because of better residential demographics within their walkable downtown area.

We have decided that we are not going to be part of a project that adds more student or post student housing supply in the heart of the downtown as this exacerbates the existing issue of not being able to attract the higher quality tenant or resident.
We feel this corner of Gay and Church Streets is the most significant pedestrian and retail corner in the entire Borough. It's more important than Gay and High or High and Market which we view as more vehicular intersections.  

F&M BuildingThis corner has been an absolute Dead corner for the last 40 years! We want to change that. We want to be part of a project that redefines this property into West Chester's premier retail and residential address. A project that will become an architectural treasure the way the F&M Building (located at High & Market) did 100 years ago. A project that can attract the best retail tenants and a project that can provide a housing option that can begin to shift the downtown demographic.

Our very preliminary massing study
The first image represents the current massing of this corner and street detailing the current 45-foot heights that exist today. (slide was shown)

The next image details what a full build out would look like based upon the existing by right zoning with a 90-foot tall structure on the entire site. (slide was shown)

And the last image details the thought that this corner can support a F&M-type building. One that details world-class architecture of a mixed use building on the corner. It will have upscale retail on the first floor and high quality residential above with the balance of the site keeping the rhythm and scale of the surrounding architecture. These blank images could be filled in with the help of a façade design fitting the significance of the corner so that 50 to 100 years from now they are talking about this project the way we currently talk about the F&M Building.

This development concept worked for the F&M Building and it worked for the Green Tree Building (located at High & Gay). Those two buildings anchor their respective corners.

These are our thoughts and we welcome the thoughts of the community.

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E-mail comments to Malcolm Johnstone.


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