Philadelphia Metropolis

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Development Done Right

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It is mandatory in America to worship the free market, but when it comes to cities, I wonder if an old European model might work better. Monarchy.

As it happens, we have the competing models on display in two neighborhoods just two miles apart from one another.Thumbnail image for Marras Passyunk.jpg

In one corner, there is South Street, the once-vibrant commercial strip known for its funky shops and eclectic crowds. It epitomizes the free-market approach.

In the other corner, there is East Passyunk Avenue, the newly prosperous, very hip collection of shops and restaurants in South Philadelphia. Passyunk is part of the principality once ruled by state Sen. Vince Fumo.

Fumo, now serving time in a federal prison in Kentucky (even princes can end up in jail), oversaw the redo of Passyunk Ave. from a slightly worn collection of old-time Italian-American shops into the locus of a reviving residential neighborhood that is attracting more and more young urbanites.

The Passyunk Ave. revival was the principal mission of Fumo's non-profit, Citizens Alliance for Better Neighborhoods, whose coffers were fed by millions given by PECO and the Delaware River Port Authority.

Fumo went to jail, in part, for using Citizen's Alliance money for personal baubles and services. But, the bulk of the money went for street cleaning projects in his South Philadelphia district and for the purchase and rehabilitation of mostly commercial properties in and around Passyunk Ave.

Last week, the latest act of the Passyunk story was played out.

Paul Levy, head of the Center City District and a court-appointed overseer of Citizens Alliance, announced the end of the old organization that ran business along the avenue, creation of a new entity called the Passyunk Avenue Revitalization Corp., and the hiring of a new executive director, local developer Sam Sherman Jr.

Sherman takes over an organization with nearly $3 million in the bank - due mostly to the sale of a few of the Fumo era properties -- plus an income of $400,000 a year derived mostly from rent paid by tenants in 15 commercial properties along the avenue.

Through the prince is gone, the goal of the new organization remain the same: to guide development along the avenue so that it keeps its healthy mix of restaurants and stores that draw outsiders and those that cater to local residents - florists, coffee shops, hardware stores, etc.

That's easier to do if you own a number of those properties and can manage them, in the same way the operator of a shopping mall works to assure a mix of tenants.

As Levy put it in his report to the courts: "One of the successes of the retail leasing program of the Alliance is the balance it achieved between (a) leases with several very high quality, regionally oriented restaurants... (b) neighborhood-oriented retailers...(c) start-up ventures, like vintage clothing shops and a scooter shops that provide both opportunities for young entrepreneurs and the one-of-a-kind shops that create unique and appealing local ambience."

Levy was talking about the Passyunk Avenue of today, but he could have just as easily been describing the South Street of 20 years ago, with its mix of funky shops (Zipperhead, the Eyes Gallery, Condom Nation; new and old restaurants (Tang's, Café Nola, Knave of Hearts, Jim's Steaks); and its neighborhood friendly stores (TLA Video, Cohen's Hardware, Blockbuster, Chef's Market, Book Trader, etc.)

Today, South Street - in addition to having a double-digit vacancy rate - is mostly a collection of cheesy retail stores. It's like the Wildwood boardwalk, without the redeeming quality of the ocean nearby. Local residents avoid the block like the plague, except for a local retail end between 11th and 8th Streets.

What happened to South Street? A free-market riot.

 

The growing rep of the street attracted retail chains, which in turn resulted in a dramatic rise in rents, which in turn drove out smaller shops and residential customers. When the corporate-owned chains failed or fled (Gap, Tower Records, Pearl, McDonald's, Gap kids, Blockbuster, Walgrens), the ecosystem deteriorated into the gap-toothed commercial strip it is today.

The result is a commercial block divorced from its own neighborhood. Queen Village the Society Hill, the two neighborhoods adjacent to South Street, are strong enough to withstand the impact of the deteriorating conditions along the block.  They just turn their backs to it.

But the revival of Passyunk Avenue fed off of - and fed - the residential boomlet going on around it, as young buyers pushed south of Washington Ave. in pursuit of affordable housing. The future of the avenue is inextricably linked to the future of the neighborhood, at least as this stage of development.

Fumo's enduring insight was to think like a smart developer: acquire a coagulant mass of commercial properties so development could be nurtured and directed. The success of this strategy has yielded a stream of capital the new revitalization group needs to maintain the area (through regular street cleaning, curbside improvements, etc) and still have a hand in managing commercial development of the area.

Lessons learned: best to manage development, assure a mix of tenants, and never lose focus on the fact that keeping the surrounding neighborhood connected with the commercial strip is crucial.

Even if it does take a prince to do it.

 

-- TF

 

 

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