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City Council Initial Approval of Gallery Shopping Mall Remake Moves Forward

By Mike Dunn

PHILADELPHIA (CBS) -- After a week's delay, a City Council committee has approved plans by the owner of the Gallery shopping mall, in center city, to remake the facility from top to bottom.

The plan includes a huge city tax break for the owner.

Joseph Coradino, head of Pennsylvania Real Estate Investment Trust (PREIT), which owns the Gallery, emerged this morning from City Council chambers pleased with the approval he got.

"It's very exciting for us," he said.  "The Gallery becoming 'Fashion Outlets of Philadelphia' is one step closer to reality."

Included in the approval is a tax break for PREIT valued at $55 million.   PREIT had said without that public assistance the project was not financially viable, and approval of it did not seem to cause concern for councilmembers.

The project did, though, hit a roadblock in City Council last week over whether retailers will be required to pay workers higher wages.  PREIT and the Nutter administration said that is not the case, but some on Council -- most prominently Wilson Goode -- disagreed.

After today's committee vote, Coradino said the so-called "living wage" law will apply to PREIT employees and contractors at the new mall, but not to retailers who lease space.

"Obviously (the law) can't be imposed on the retailers selectively," he said.  "But what we are going to do is pay all our employees as well as security, maintenance, housekeeping, et cetera -- pay them the living wage."

Alan Greenberger, the mayor's commerce director, insists that the living wage law will not apply to the retailers.

"We believe not, because they are not intended -- and this is a word that's used in the law -- they are not 'intended' as recipients of the benefits.  In fact they are not the recipients of the benefits."

But Goode said retailers will benefit since the new mall is being designed with larger tenants in mind.

"The developer that is receiving the financial aid is obviously recruiting large stores to fill that space," Goode said.  "Therefore they are subject to the requirements."

In the end, City Council president Darrell Clarke opted not to delay the vote further over that issue, despite the differing interpretations of the living wage law.

Another issue, involving arrangements for kiosk vendors who were displaced by the renovation, appears resolved, with some of the vendors getting space in nearby Septa locations.

The Gallery makeover measures now go to the full City Council for a vote later this month.  Approval is expected, as is approval by the mayor.

Coradino says those final okays will allow the actual renovation to begin.

"The next step would be to pull permits and start construction," he said, adding, "Completion of the project will take 24 to 32 months."

The new mall will include a mix of 125 luxury and moderate brand retailers.

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