PHILADELPHIA BUSINESS JOURNAL, February 10, 2006
It made perfect sense to Ken Goldenberg and the officers of his Blue Bell real estate development company.
The president and CEO known for building large retail centers in Pennsylvania and New Jersey was ready to take his company to the next level and try his hand in the residential market.
It was 2003 and Haverford Township was putting up for sale the site of the former state hospital. The Goldenberg Group made a pitch for 292 condominiums and carriage houses, and the Haverford Reserve project was born.
Now, the Goldenberg Group has two publicly disclosed residential projects: the Haverford Reserve and the redevelopment of the historic Ayer building into luxury condos.
Company officials declined to discuss costs for the projects. They acknowledged that joint-venture partners are involved with the residential undertakings: Pohlig Builders of Malvern is the partner on the Haverford Reserve project and Brown Hill Development of Huntingdon Valley is helping out on the Ayer.
Although the Goldenberg Group has moved into residential development, Robert Freedman, senior vice president of the company, stressed that the company is not relinquishing its bread-and-butter base of retail development.
“We were looking generally to diversify the firm, believing that this was a good business plan for us,” Freedman said.
He noted that the Goldenberg Group also has entertainment and mixed-use enterprises in the works, such as a seven-year effort to restore the Boyd Theater in Center City.
“It wasn’t a huge shift for us to say we now wanted to broaden our skill set,” Freedman said.
Freedman describes the company as a “fairly small privately held company” that doesn’t set clear lines of division. This flexibility gives the company an advantage, he said, when competing for projects against larger, more strictly drawn companies.
The number of employees at the Goldenberg Group has grown by about 10 percent over last year, according to Greg Reaves, chief operating officer of Goldenberg. But he said that is organizational growth, “not because we’ve expanded into residential.”
Goldenberg founded his company in 1984 after working with his father on a small retail development project in Philadelphia. That undertaking generated an annuity that Goldenberg used to build his business.
A Harvard Law School graduate and former environmental and civil rights attorney who went on to get his M.B.A. from The Wharton School at the University of Pennsylvania, Goldenberg combines a social conscience with business acumen. As a result, said Reaves, the Goldenberg Group considers the environmental and community impacts of its projects.
“We do it with the intent that we’re going to improve that property and make it better than before we came,” Reaves said.
Since its formation, the Goldenberg Group has completed 11 retail centers totaling more than 5 million square feet. Large anchor stores selling housewares, electronics and fashion merchandise provide regional draws for consumers. The company recently opened Whitman Square on Roosevelt Boulevard and Columbus Commons on Columbus Boulevard. And ground is about to break for the Park West Town Center in West Philadelphia, a large retail center in a Federal Empowerment Zone.
At the same time, construction is set to commence on the Ayer, and plans are under way for the Haverford Reserve.
Company officials don’t worry they may be spreading themselves too thin.
“We tend to gravitate to projects that are both of significant size and significant complexity,” Freedman said.
Renovations at the Ayer, located at 210 West Washington Square, will make way for 56 high-end condominiums with prices ranging from $700,000 to $2 million-plus. The facility is being touted as “luxury urban living” and will have 24-hour concierge service, a chauffeured town car, top-of-the-line appliances and interiors, valet parking for spaces beneath the building and balconies on the south side.
“Ken Goldenberg has always loved the building,” said David Mercuris, vice president of development for the company. “The Ayer is a unique and magnificent property, and it certainly is a pleasure for us to be associated with the conversion of this historic structure.”
Developers see their potential clientele as coming from among two primary groups: city dwellers looking to upgrade their lifestyle, and suburbanite “empty nesters” eager to move downtown for more entertainment and cultural options. The tentative move-in date for residents is summer 2007.
On the Main Line, the Haverford Reserve will be set on 38.2 acres next to164.9 acres of township lands and open space. The municipal tract may eventually be converted into a park and ball fields and could one day house a community center.
Plans for the residential development call for 192 condos (restricted to owners who are at least 55 years of age) and 100 carriage houses.
Units are being marketed to individuals and families who will not add large numbers of young children, in an effort to keep school taxes low while generating a “significant windfall” in real estate taxes, Reaves said.
The Haverford Reserve is expected to create $3.78 million annually in real estate taxes.
Reaves said the Goldenberg Group has faced no more obstacles in residential development than they did with other kinds of projects. On the Haverford Reserve, developers must raze 26 vacant buildings and meet a host of environmental requirements, and on the Ayer, the design of new parking spaces beneath the building is “certainly complex,” Reaves said.
But he added that “land development skills” – designing and engineering buildings for a particular piece of land and obtaining the appropriate permits – as well as understanding customers’ needs are “really where our skill sets are the strongest.”