A groundbreaking ceremony is scheduled for Friday. The $62.5 million project, a collaboration between PHA and Alterra Property Group, will rise on the site of PHA's former headquarters, a short walk from Rittenhouse Square and the Schuylkill River Trail. PHA will own the building; Alterra is the design-builder and will manage the development.

The project is 60% affordable and 40% market-rate, with 28 studios, 68 one-bedroom units and 25 two-bedroom units, plus about 2,000 square feet of ground-floor commercial space. The affordable units will be subsidized for households earning up to 60% of the area median income — $51,540 a year for an individual.

"This development represents our opportunity to create and have a balanced community, and to have folks who want to live in Center City, live in Center City," PHA President Kelvin Jeremiah said. "Too often, our programs have been relegated to some of the least desirable locations."

The project has been reshaped several times. An initial concept called for a 200-unit building that was 80% market-rate and 20% affordable. A later version kept that affordability split but scaled to 162 units, with Alterra financing construction and holding a long-term ground lease with PHA. That structure collapsed after the pandemic, when hyperinflation, supply-chain disruptions and a more risk-averse lending climate upended the numbers, Jeremiah and Alterra principal Mark Cartella said. Securing approvals from the U.S. Department of Housing and Urban Development also took time, partly because of staffing cuts at the federal agency, Jeremiah has said.

Under the current deal, Alterra is building on PHA's behalf, and the housing authority is funding and operating the property entirely. Alterra expects vertical construction to begin in the coming months, with leasing starting in the second quarter of 2028.

Cartella called the development a "flagship" property and said he hopes it can be replicated elsewhere. "We do hope that this can be something that can hopefully be replicated, not only in Center City but in other parts of the city," he said.

PHA demolished its old headquarters around 2024, leaving a large vacant lot along a busy stretch of Chestnut Street. Nathaniel Margolies, president of the Center City Residents Association, whose boundaries include the site, said the new residents will be a welcome addition.

"There's nothing better for safety and the liveliness of a neighborhood than adding residents who care about their block and want to make it their own," Margolies said. "So we are enthusiastic for people to be living there, working there, playing there, in what was previously an empty space."

The project represents a significant shift for a housing authority whose developments have historically been concentrated in the city's least affluent neighborhoods. Placing subsidized homes in one of Philadelphia's most expensive districts — and setting aside a majority of units as affordable — is a test of whether mixed-income development can take root in Center City.