State gives $2M for construction of 40th and Pine hotel

The state of Pennsylvania recently approved a $2 million loan to the Philadelphia Industrial Development Corporation for the construction of a proposed hotel complex on 40th and Pine streets.

Both the hotel developers, as well as state and local officials, hope the hotel - slated to be an extended-stay facility for families of patients in area hospitals - will serve as an economic catalyst in West Philadelphia.

The loan - which covers only 5 percent of the $40 million project - was approved by the Commonwealth Financing Authority through Building PA, a program that provides funding to jump start viable economic-development projects.

The loan was recommended by the Philadelphia Industrial Development Corporation - a nonprofit financing and real state service that served as a conduit between the state and the hotel developers.

The project will benefit the city by putting to use a vacant building and creating jobs, said Sam Rhoads, PIDC's senior vice-president.

Though residents of the neighborhood have voiced opposition to plans for the 10-story hotel, Steve Weitzman, a spokesman for the state Department of Community and Economic Development, said it is an investment for University City and West Philadelphia.

"If there is a hotel in the neighborhood, maybe it will attract a restaurant, theater or grocery store," he said. "We hope it will serve as a catalyst for neighborhood development."

Before construction can begin, the hotel must be reviewed by a long list of state, local and civic agencies, said Tom Lussenhop, one of the project's developers and a former Penn managing director of real estate.

While many of the city agencies have already approved the project, Lussenhop said he is still waiting on the Philadelphia Zoning Board of Adjustment, among other agencies.

Current plans call for a 10-story, 115-room complex as well as a 2,400 square-foot restaurant, Anne Papageorge, vice-president of Penn Facilities and Real Estate Services, wrote in an e-mail.

The hotel alone will have over 40 employees and create 250 construction jobs, according to Lussenhop.

The idea behind the extended-stay concept "is to have a comfortable, accommodating local option so that people don't have to combat the traffic in and out of the health system," Lussenhop said.

Pending approval, construction on the hotel will begin "as early in 2009 as possible," he added.

Some residents in the community surrounding 40th and Pine have been resistant to the hotel, complaining that it will generate traffic and take up curb-side parking spaces in an otherwise residential neighborhood.

But according to Papageorge, the University will address the parking needs of the project in Penn-owned garages at market rates.

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