Ken Allan's Commentary

User submitted October 2, 2012

The Gallery has undergone a number of recent changes, and with a potential redevelopment program proposed by it's current owner, PREIT (Pennsylvania Real Estate and Investment Trust), this is a good time to discuss The Gallery at Market East.

The Gallery at Market East was planned and constructed in the 1970's as a way to keep the middle market portion of Center City's retail district vibrant and competitive with the large suburban malls that had been opening all over the suburbs of Philly.

The complex runs along the north side of Market East and is connected to what was then the Headquarters and Flagship of Strawbridge and Clothier. The mall proper then was built around a new building that contained the new Flagship and Headquarters of Gimbel's Philadelphia division. The mall itself was built on 4 levels, and all levels had direct entrances to Strawbridge and Gimbel's. The ground level had entrancess to the cities rapid transit lines, and the PATCO line to New Jersey.

The Gallery opened in 1977 to great fanfare, and business was so strong that plans were soon announced for an expansion. The Gallery II opened in 1984 adding another block of mall space and a new JC Penney as it's western anchor. The ground level ran unbroken through the original Gallery, into Gallery II, and connected to a new commuter rail station. The complex boasted an array of stores ranging from national chains to more urban focused local stores. The absence of the later was an issue when Gallery I first opened, and was addressed early on.

All seemed well until 1986 when the parent of Gimbel's, BATUS industries put the chain up for sale, and then sold it off piece meal. Stern's took over the Gimbel's space, quickly alienated the Philly market, closed it's mall stores in 1988 and finally the Gallery store in 1989. Having the Gimbel's space empty affected the Gallery at once. On the street, 2nd and 3rd level who have to walk through Gimbel's to get from Gallery I to II. Vacancies on the 3rd level of both sections skyrocketed, and when Clover, a discount division of Strawbridge moved into the Gimbel's space it only used the 1st and 2nd floors, Leaving the 3rd floor of Gallery II cut off from Gallery I.

Fast forward to the 1990's, and K-Mart took over the Clover stores, and Burlington Coat Factory the JC Penney store. With these changes to the anchor line up the entire complex took on the look of a more discount mall. In 1995, The May Co bought the Strawbridge chain and while they moved the headquarters out of Philly, they did maintain the location as the Flagship of the chain. This remained The Gallery's main draw.

The 2000's brought on more changes. After Federated Dept Stores purchased the May Co., they closed the Strawbridge store. This left the Gallery without a better to middle market anchor, and no replacement store was found. The upper floors of the Strawbridge building were already redeveloped as office space, and PREIT purchased from Federated the area last used for the Strawbridge store (lower level to the 6th floor). Still not able to lure a new anchor tenant, PREIT started to redevelopment more of the retail space for office tenants. The most recent being new space on the 3rd floor of both the Strawbridge building and Gallery I for the staff of Philly's (2) daily newspapers, they moved in during the summer of 2012. The 3rd floor of Gallery II has been marketed towards professional services, although it does have the benefit of an entrance into Burlington Coat Factory.

Through it's history The Gallery complex has had a complicated patchwork of owners, and in 2012 PREIT obtained ownership of the Gimbel's building, giving PREIT ownership of all the buildings in the complex (but not the land). The Gimbel's building is made up of 2 below ground levels (one is presently mall space), 2 levels occupied by K-Mart, and 3 levels redeveloped as office space.

The Gallery has fared better than some “downtown” malls that have closed like Columbus Center, St. Louis Centre, and Mid-Town Plaza, but it is not the regional retail draw like Providence Place, Copley Place, and other prosperous downtown malls are.

As for the future, stay tuned.

Stephen Stofka's Commentary

Posted January 9, 2011 (user submitted)

The Gallery at Market East is one of many, many urban shopping malls that appeared in urban downtown areas during the late 1970s. What makes it relatively unique, however, is that it's located in Center City Philadelphia, along the traditional retail corridor of Market East--comparable with Minneapolis' Nicolette Mall or Toronto's Eaton Centre. What makes the Gallery different, however, is that unlike other downtown malls in similarly-sized cities, it has been slowly dying for over twenty years.

The mall was built in two phases--the east half (Gallery I) in 1977 and the west half (Gallery II) in the early '80s. The east half was grafted onto the Strawbridge & Clothier at 8th and Market and extended west for a block and a quarter, to 10th. The two main tenants were Strawbridge & Clothier, of course, and Gimbels, which moved into a new four-story building and vacated their previous Philadelphia flagship across the street from S&C, which was promptly torn down (that space remains a parking lot). When it opened, it also killed the Lit Bros. department store across the other street--8th Street--from S&C, due to its lack of mall access. But sandwiched between S&C and Gimbels, the mall did quite well, and the extension west to 11th (Gallery II) soon followed, with its lead tenant a J.C. Penney, in a purpose-built space at 11th and Market on the long-demolished former Frank & Seder site.

I'm not entirely sure when the Gallery started running down, since I remember the J.C. Penney being there from when I was a kid. However, I'll wager that the Gimbels bankruptcy in the mid-'80s was a contributing factor. Even when I was a kid, though, I remember that the topmost level was nearly dead, and my mother favored staying down in the lower levels, where, however, it was still busy.

Eventually a Kmart opened in the former Gimbels. Where Gimbels had four floors of selling space, though, the Kmart only has two. J.C. Penney moved out sometime in the '90s and was replaced by a Burlington Coat Factory. When May and Federated merged in 2005 or so, they decided to close the S&C (by that time known as Strawbridge's) flagship and convert the then-Lord & Taylor in the Wanamaker Building into a Macy's, a definite step down for Market East, since Strawbridge's catered to the Macy's clientele whereas Lord & Taylor catered to a clientele more appropriate for a Bloomingdale's. The S&C building has remained vacant since, and its vacancy is one of the dominant presences on the older part of the Gallery, which is now only 60% occupied, and even then mostly by urban-type stores like City Blue and mom-and-pops, some ubiquitous chains like Radio Shack, GameStop, and fye, and only a few more upscale stores, such as a Bath & Body Works and a Lane Bryant. The atrium near the former Strawbridge's mall anchor and the topmost floor in general are both nearly entirely vacant.

On a bright spot however, in 1989 the Lit Bros. building was renovated into the Mellon Independence Center, which has four floors of offices on top of a two-floor minimall, and very importantly, connected to the Gallery. State offices have moved into the former office levels of Strawbridge & Clothier, and the mall owners, PREIT, are apparently restoring the interior of the former flagship. The mall is directly connected to the 8th Street and 11th Street subway stations as well as Market East station, has connections with the Avenue of the Arts and Penn Center and Suburban Station via the network of underground concourses throughout Center City, is proximate to Independence Mall, and via its connection to the former Reading Terminal, is directly accessible via the Pennsylvania Convention Center and has an entrance across the street from the Reading Terminal Market (itself with a plan to expand), all of which means that although the current condition of the mall is quite poor, in the long run the offerings should come to be on par with what the excellent location seems to imply.

However, since both the interior and exterior of the mall are clearly dated '70s products, a major renovation of the mall itself would likely be needed for the transformation into the place the space is capable of to happen. Although rumors of a renovation have been floating around, the fact that PREIT is cash-strapped does not seem to bode well for it now; through most of 2009 a plan to convert the S&C space into a casino was entertained at length until the State told the proposers to go buzz off, so to speak. The only major plan PREIT can hope to have is thus to drag another regional or national department store (Boscov's? Bon-Ton? Sears? another go with Penney's?) into the vacant S&C space, and the perceived ugliness of the mall and east Market East in general--almost certainly its major detraction at this point--seems to be making the space a tough sell.

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