Waterfront view

Philadelphia’s next frontier is at the old Navy Yard, Mayor John Street proclaimed earlier this month during his inaugural speech.

The mayor envisions "21st-century communities" at South Philly’s southernmost tip, consisting of existing industrial businesses, new high-tech companies and residential communities.

For more than six months, the Philadelphia Industrial Development Corp. has been working on a master plan for developing the eastern half of the shipyard, formally called the Philadelphia Naval Business Center.

The creation of new homes is one possibility, said John Grady, senior vice president for PIDC.

PIDC is considering two options for residential development, Grady said. One is to renovate existing buildings into apartment-style units, similar to what has been done in Center City. The second is construction of multi-family buildings and single-family homes, like those being built at the Capehart site, 20th Street and Pattison Avenue.

"What we’ve tried to do in the master plan is look at the potential for [residential use]," Grady said, "see what the positives are, see what the negatives are, determine if it is realistic."

PIDC expects to complete the master plan in March. Around the same time, the Street administration will make its budget proposal — one that will include plans to create an economic-development capital fund that will finance waterfront construction and other projects.

The fund will be comprised of state, local and private investments. Gov. Ed Rendell has begun lobbying for the state’s commitment in Harrisburg. Street wants to accumulate $500 million in the fund, which could be used to leverage billions into other public and private investments.

Not everyone is happy with the notion of using the city’s largest developable site — more than 1,000 acres — to build homes.

State Rep. Bill Keller believes there should be a mix of industrial, commercial and residential uses along the Delaware River, but wants the Navy Yard reserved for the ports. It is an ideal location to expand Philadelphia’s port system because of its access to railways and highways, Keller said.

"People in other major cities that have ports would die to have that land available," he said. "New York is choking … they don’t have any more land for their port."

The legislator also cited some industry predictions that estimate the volume of freight imported into the United States will increase 7 percent each year for the next 15 years.

Also, as cargo ships continue to be built larger, fewer vessels will be capable of passing below the Walt Whitman Bridge, Keller said, therefore limiting the number of ports vessels can reach further up the Delaware River.

"We can capitalize on all that new freight," he said. "That’s what we should be looking at, and then we can build houses all up and down the river."

One possible use being considered for the eastern half of the shipyard — one that Keller would like to see — is the relocation of the Philadelphia Regional Produce Terminal.

The terminal’s management has said it has outgrown its 44-year-old facility near the 3300 block of South Galloway Street and is actively looking for a new site on which to build a modern market. Keller, along with state Sen. Vince Fumo and representatives from the city, has participated in negotiations to keep the produce terminal from leaving Philadelphia for New Jersey.

One of the latest proposals is to relocate the fruit and vegetable vendors to a 70-acre site in the eastern portion of the Philadelphia Naval Business Center immediately south of Norfolk Southern’s intermodal property.

PIDC’s Grady said it is possible to fit both the new produce market and homes in the Navy Yard.

PIDC would need the approval of the U.S. Navy before any homes are built. When the Navy entrusted the nonprofit corporation with local military properties in 2000, it included a deed restriction that prohibited developing the land for residential use. PIDC and the Navy have had preliminary discussions about lifting this ban, Grady said.

There are also environmental questions. Grady said one is what can be done about the noise from the constant flow of planes approaching Philadelphia International Airport.

Another issue may be the cleanliness of the soil, he said, and whether it would be suitable for residential use.

PIDC typically does not work on residential developments, but Grady explained this could "add to the attractiveness of the site for commercial activity." Homes and the addition of amenities like restaurants, banks and other common retailers — and possibly extending the Broad Street Subway to serve the shipyard — would make the businesses there less isolated from the rest of the city, Grady said.

If this idea does move forward, he added, PIDC would partner with experienced residential developers.