Major changes in store for 40th, Chestnut

When developers' plans come to fruition by the end of 2006, the corner of 40th and Chestnut streets could be largely unrecognizable due to two seven-story buildings -- incorporating retail and residential space -- planned for the intersection.

The revitalization of the area will stretch north from the intersection to Ludlow Street. The effort will also include the renovation of five to six other properties along the block.

The first phase of construction -- focusing on the northeast corner currently home to Papa John's Pizza -- is scheduled to commence within the next 90 days and should be complete within the year. The northwest corner, which houses Atlantic Insurance and a number of businesses stretching along 40th Street, will make up the second half of the project, which will commence in this fall.

The buildings will be completed and ready for occupancy by early 2007.

"The retail space is really designed to interact in a very lively way with the street," said Bob Hoe of Teres Holdings, LLC, which is developing the corner. "There's a lot of glass, second floor retail ... [and] we are looking at a variety of different tenants that will not only appeal to the University but to the residential community and business community around campus."

The first-phase building will contain over 25,000 square feet of retail and 70 residential units. The retail area will seek to incorporate both large-scale, well-known tenants and smaller, local-area businesses.

"Part of the goal is to identify some real recognized name tenants to come into the property," Hoe said, adding that the company will balance those main tenants with "smaller, local, specialized tenants."

Hoe hopes that the diversity of tenants will coincide with the vision that Friends of 40th Street, an organization that has overseen the development, has been envisioning for the area.

The project was divided into two phases to give businesses currently located in the northwest building time to decide whether they want to stay in the area.

But desire may not be the only prerequisite for staying.

With the real estate prices inevitably growing, the new development has raised concerns over the ability of longtime local, small business to remain in the area after the construction is complete.

"We have been here for a long time, almost 20 years. I think the University should accommodate us and" other longtime tenants, said former owner of Fashionwear Emporium Sadequa Dadabhoy, explaining her own thoughts, as well as those of the current owner Mahmood Dawood. "I think it depends on if the University wants to keep us or kick us out. ... The University doesn't care about the small people. It does what it wants to do."

The University is playing an indirect role in the development, having leased the properties to the developers for 25 years. However, Penn's interest and involvement is apparent as the project was discussed at length during the recent winter meeting of the University Board of Trustees. Officials have said in the past that planning for the development of the area has been a collective effort between the University and local community members.

Dadabhoy doesn't think there has been enough communication, though.

"We are very concerned about it, but no one will talk to us about it," Dadabhoy said, adding that if no accommodation is made for the store, it will have to move because it will not be able to pay the increased rents.

Although it is unclear exactly which of the current businesses, including a nail salon and a Muslim specialty shop, will stay in the area, it is more than likely that they will have to adapt to a new market and rethink their business strategy to remain competitive in the newly developed locale.

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