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The planned new apartment tower at 78 Olive St., now on hold.
Rising interest rates and construction costs have led a Philadelphia-based developer to push the pause button on a planned new 136-unit apartment tower — meaning that a Wooster Square surface parking lot will remain a surface parking lot for the time being.
The site of that now-delayed apartment project is 78 Olive St.
PMC Property Group, which owns the adjacent Strouse Adler “Smoothie” building apartments, won City Plan Commission approval in May to build a new 14-story, 136-unit apartment building on that site. The site plan approval came after the Board of Alders agreed to rezone the vacant 2.487-acre parcel of land to allow for a much denser residential development than would otherwise have been allowed.
That project now appears to be on hold.
Downtown/East Rock Alder Eli Sabin broke that news in an email newsletter he sent out on Wednesday.
“The developer of the proposed project at 78 Olive St recently informed the city that construction of the project is on hold because of rising interest rates and construction costs,” Sabin wrote. “If and when the project is ready to move forward in the future, we will be able to revisit conversations about the project’s site plan.”
Thomas Breen file photo
The 78 Olive St. parking lot, in April.
City Deputy Economic Development Administrator Steve Fontana confirmed PMC’s decision to put this project on hold for now, in a phone interview Thursday with the Independent.
“They told us that interest rates and construction costs were volatile and unpredictable, and could affect the timing of the project,” Fontana said.
He pointed out that PMC isn’t the only developer to cite the increased costs of borrowing and building as reasons for a local development’s delays. He also noted that PMC has several local residential development projects in the works, including recently completed new apartments behind and atop the old Chapel Square Mall at 900 Chapel St.
There are “lots of macroeconomic factors that we can’t control,” Fontana said. Those include interest rates, construction material costs, and worker shortages.
The city’s economic development agency can “work with [developers] on regulatory approvals and community outreach and to the extent that they want or need a tax assessment deferral.” But, he repeated, “there are things that we can’t control, and the larger macro-economic is part of that. We expect that the wheel will turn and things will loosen up again, and they’ll be back.”
PMC representatives did not respond to requests for comment by the publication time of this article.
The 78 Olive St. sits in the middle of a two-block stretch on the downtown edge of Wooster Square that has seen hundreds of new high-end apartments burst forth from surface parking lots and underused commercial sites in recent years. Before seeking and winning approvals for its 78 Olive St. development plan, PMC filed lawsuit after lawsuit against the city and an adjacent landlord in a bid to stymie development right next door to the site it’s now looking to build up.