PHILADELPHIA — Under intense pressure to improve its finances, cash-strapped Amtrak said it will lease a site next to the city’s main train station for a 32-story office building, a wire service reports.
The gleaming prism-like tower that could embellish the city skyline by late 2005 is the latest attempt by the national railroad to make a profit. Amtrak is facing possible restructuring by Congress.
The railroad earlier turned a former bowling alley near the 30th Street Station into a 100-space valet parking lot that sells out on weekdays at $35 a car. It also mortgaged parts of its most valuable asset, New York’s Penn Station, for $300 million to keep trains running through the end of its last fiscal year.
By last year, the national railway was getting 43 percent of its revenue from non-passenger business, carrying packages, periodicals, first-class mail, fruits and vegetables.
“Amtrak keeps wanting to do everything,” said Gil Carmichael, president of the congressionally appointed Amtrak Reform Council, which recommends breaking Amtrak into separate rail and real estate operations. “Amtrak needs to concentrate on its core business; its core business is moving passengers and moving trains.”
John Robert Smith, chairman of the Amtrak board, said the Philadelphia project was part of “using every opportunity to leverage all of our assets for a stronger Amtrak.”
“This office tower creates customers for us,” Smith said.
Under the plan Amtrak would lease land next to its 30th Street Station to Brandywine Realty Trust for 99 years. Neither Amtrak nor Brandywine disclosed lease terms.
Gerard H. Sweeney, president and chief executive officer of Brandywine Realty Trust, said the company is working to lease space in the building to large corporations.
Architect Cesar Pelli is designing the new building, called the Cira Centre. Pelli, a former dean of the Yale University School of Architecture, is best known for his design of the Petronas Towers of Kuala Lumpur, Malaysia, the world’s tallest buildings.
He said the new building would expand Philadelphia’s downtown across the Schuylkill River into a barren region occupied by the train station, the University of Pennsylvania and Drexel University, “to make one urban complex.”
“Given Amtrak’s financial shape and given the fact that Congress is examining their whole structure and funding, it might be premature to be considering long-term real estate transactions,” said Tom Till, executive director of the congressional council.