FOR ITS FIRST URBAN INFILL PROJECT IN Philadelphia, Toll Brothers picked one that most builders wouldn't have touched with a 10-foot pole: the redevelopment of historic Naval Square. More than 20 years after the purchase of the site—which for 144 years served as a naval academy, hospital, and retirement home for countless sailors and marines—the home builder finally is able to deliver on its promise to create a thriving urban community in its place. The community officially opened in July, with the first phase of housing expected to conclude in two years.

Paul Commito, director of acquisitions and development for Toll's urban division, says the project will result in approximately 1,200 luxury condominiums and townhomes. The initial phase includes the construction of 345 units, 78 of which will be rehabilitated units in the site's three historic buildings, with the remaining 267 units slated to be new townhomes.

Commito says the builder spent decades haggling over various plans for the 20-acre downtown site. The site's inherent historical value made striking a balance between preserving the character of the buildings and maximizing the amount of saleable space a major problem. Community and historic preservation groups feared development would mean the destruction of the Greek Revival-style buildings designed by American architect William Strickland and designated as National Historic Landmarks.

The tug of war tested the luxury home builder's commitment to the project's vision. But the builder persevered, even after a massive fire engulfed the site's main building, Biddle Hall, in 2000, sparking a lawsuit against the builder for demolition by neglect, despite evidence of arson.

“It's a developer's nightmare to have a tremendous amount of common space that you can't get revenue out of,” Commito says, adding that the 100,000-square-foot Biddle Hall is only about 50 percent space efficient. “[You have to] force yourself to find unique spaces and incorporate that into the plan.”

For Commito and designers, that meant spending countless hours walking the buildings looking for new ways to create space. The result? Phase 1 will offer 28 different unit types, ranging in price from $300,000 to over $1 million.

Learn more about markets featured in this article: Philadelphia, PA.