Those who wonder why Penn is devoting any of its resources to such non-academic matters would do well to look back about 15 years, a time when University City was in an unhealthy, downward spiral, and Penn was in real danger of losing potential students and faculty to more attractively located universities. It wasn’t just the aggravated assaults (or worse), or the decrepit appearance of too many blocks within walking distance of campus. It was also the absence of reasons to stay: a first-rate public school; an attractive, well stocked supermarket; and the kind of entertainment and retail options that make life not just tolerable but enjoyable. At this stage of American urban history, that very much includes restaurants.

Under the direction of President Judith Rodin CW’66 Hon’04, Penn launched a multipronged effort to bolster the neighborhood. Without belaboring points that have been made before, this effort took a great deal of work, creative thinking, and no small amount of money.

Before 1997, for example, there simply wasn’t a viable space available for a restaurateur who wanted to open a large, high-concept restaurant. The massive development of University Square (neé Sansom Common) included a choice, 8,100-square-foot space that attracted Stephen Starr’s futuristic pan-Asian fusion, Pod, which opened in 1998.

“Stephen Starr understood that if you create a destination—a full-service, multi-sensory experience—people will travel to a neighborhood,” says Anne Papageorge, Penn’s vice president for facilities and real-estate services. “Penn recognized that we might have to help support it, but we then got a participation rent on the back end, so if you were a success we wanted to recoup, as an investor, some of those profits. Once Stephen was successful there, people saw that. Jose Garces worked for Stephen; they knew each other.”

Starr also noticed that, all other things being equal, people from the Main Line and certain other suburbs actually preferred coming to University City, since they didn’t have to cope with Center City’s traffic and parking headaches.

“When Penn did its development and got Stephen Starr to open Pod, it was a signal to other restaurateurs that this was an acceptable, interesting place to do business,” says Barry Grossbach.  “Then smaller restaurateurs with a reputation for producing fine cuisine started to come out here—Nan being an example.” Nan, a low-key but top-drawer Thai-French restaurant at the corner of 40th and Chestnut streets, opened in 1997 under owner/chef Kamol Phutlek. “He brought his [French-Thai] fusion food with him,” Grossbach adds, “and things really began to pick up.”

Penn’s investments in early ventures like Pod, Penne (the restaurant at the Inn at Penn), and the revamped La Terrasse were sometimes substantial. But as University City became an increasingly viable market for restaurateurs, the nature of that investment changed, says Anne Papageorge. “In the beginning, it seemed that all we were doing was paying out, but now, five, 10, 15 years later, we’re reaping the rewards of these investments.”

“Typically we strike a participating ground lease, which means the rent we charge the developer is a function of their economic performance,” says Paul Sehnert, director of real-estate development, who oversees Penn’s off-campus real-estate strategies and its leasing and tenant mix. “We usually have a floor, which means they’re paying rent and they’re not in default—it’s not heroic. But if it does extremely well, we do well as well. We get an increment of performance. ”

Lori Brennan, director of marketing and communications for the UCD, suggests that the challenges facing Penn’s real-estate department have changed for the better in recent years. “Ten years ago they would have been out there trying to entice restaurants and retail options; now they’re having to turn people away. It’s a very interesting story now.”


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The Omnivore’s New Dilemma (Which exotic University City restaurant should we try tonight?) By Samuel Hughes
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