Philly Business Corridor Seeks Right Mix of Growth, Preservation – Next City

West Philadelphia's Lancaster Avenue

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Philly Business Corridor Seeks Right Mix of Growth, Preservation

Amid development pressures, neighborhood commerce advocates and entrepreneurs want to tap — and stay in control of — a thriving market.

Story by Jared BreyTwitter

Photography by Joshua Albert

Published on Nov 20, 2017

Along Lancaster Avenue in West Philadelphia, James Wright is a minor celebrity. Certainly the business owners know him: He was corridor manager for the nonprofit People’s Emergency Center for nine years before becoming director of community, economic and real estate development for PEC’s community development corporation arm. But the police officers and the passersby know him, too.

“Is this man bothering you?” joked an officer about Wright, pulling his squad car to the curb and addressing Brad Vassallo, PEC’s new commercial corridor manager, and me, on a recent Friday afternoon. “How’s the family? You been behaving yourself?” said another man a few blocks up the street, throwing his arm around Wright’s neck. “This here is my adopted son,” he said, turning to me and Vassallo. “Anytime he gets out of line … .” He trailed off, and buried Wright in a playful headlock.

Wright knows the commercial corridor’s buildings, too. The property on the corner of Hamilton Street was a gas station before a developer leveled it for student housing, he says. At one time, there were plans to convert the New Angle Lounge on 39th Street into a jazz club. The old West Philadelphia Title and Trust building at the very busy intersection around 40th used to be covered in billboards and illegal signs.

Times change. Commercial corridors persist.

Today, what’s officially called the Lower Lancaster Avenue Commercial Corridor sits at the nexus of a unique cocktail of otherwise familiar urban pressures. At its southeast end is Drexel University, a growing institution whose development ambitions are as imperial as those of its West Philly neighbor, the University of Pennsylvania, in years past. Housing demand is pressing in from the West Powelton neighborhood on the northwest side. The adjacent Mantua neighborhood was declared one of five economic “Promise Zones” in the U.S. by President Barack Obama in 2014, marked as a priority for antipoverty measures and federal funding.

The corridor’s buildings are historic, and developers want to tear some of them down. At the west end, there are industrial properties and auto body shops and huge urban parks. There are signs of gentrification everywhere, but businesses on Lancaster Avenue still serve a longstanding neighborhood clientele — mainly college students and black female-headed households, according to the surveys PEC has conducted, Wright says.

Wright wants to keep it that way. And make it better. Over the last few decades, the People’s Emergency Center has managed to take ownership of a handful of key properties on the corridor, trying to stay a step ahead of the market and keep the corridor from being completely lost to the whims of developers who, at the moment, are particularly keen on student housing.

“Some landlords, when they purchase a property, they don’t really see the incentive of making the ground floor commercial,” Wright says. “And so you could end up with three stories of residential, with ground-floor residential, which kind of kills the vibrancy or the future vibrancy of the corridor. The whole goal is to preserve ground-floor commercial.”

James Wright was corridor manager for the nonprofit People’s Emergency Center for nine years before becoming director of community, economic and real estate development for PEC’s community development corporation arm.

The pressures are bound to grow, in one form or another.

A few blocks off the Lancaster Avenue corridor sits one of the biggest vacant properties near the commercial heart of Philadelphia. Drexel University, a co-owner, has plans to build a billion-dollar mixed-use science center and office hub called uCity Square on 14 acres. In a 2014 community benefits agreement, the owners agreed to add retail that serves longtime residents (including a community bank) on the Lancaster Avenue edge of the site. Construction has already started — but the site was included in Philadelphia’s bid for Amazon’s second headquarters.

When the online retail company announced in September that it was inviting proposals for another facility that could employ up to 50,000 people, Philadelphia, like other cities, seemed to drop everything else it was working on to prepare its pitch. Philadelphia Mayor Jim Kenney has expressed his intention to make neighborhood commercial corridors like Lancaster Avenue the cornerstone of his economic development efforts, but what American mayor could pass up the opportunity to chase 50,000 new jobs?

Whatever the outcome of that ambitious reach, the People’s Emergency Center intends to keep plugging away at micro-improvements on Lancaster Avenue, Wright says, and so are dozens of other groups focused on neighborhood corridors throughout the city. Whether the development pressures they face carry an Amazon label or not, the local advocates have at least one ally at City Hall.

“If you look at Philadelphia and its very strong and vital Center City … that’s where all the jobs are. That’s where all the development is,” says Commerce Director Harold Epps, who has toured between 30 and 40 neighborhood corridors since joining the Commerce Department at the beginning of Kenney’s term in January 2016. “And as a person of color, I just wanted to make sure that we have as much visibility, opportunity, plans, strategy and initiatives to get our neighborhoods in less-household-income parts of the city as participating in the transformation of Philadelphia as possible. And in order to do that you have to have visibility, you’ve got to have engagement, and then you’ve got to have a plan and you’ve got to have strategy.”

Stitching Together a Disconnected Corridor

Last year, a nonprofit community “makerspace” called Tiny WPA opened a new storefront with PEC at 4017 Lancaster Avenue. Working out of the storefront and a studio in the basement, the group designs and builds small-scale public works for projects around the city, and runs a program called Building Hero to train neighborhood residents ages 16 and up in the fundamentals of design and fabrication. They’ve created “playable” street furniture to be placed around the avenue.

It’s the kind of organization — “I don’t know if you really want to call them a business or not,” Wright says — that Lancaster Avenue has seen more of lately. Mighty Writers, a free writing program for city kids, opened a location in the historic Hawthorne Hall building on the avenue in 2013. A 35-year-old film training project called Scribe Video Center is opening an outpost on Lancaster Avenue soon, according to Wright. EAT Cafe began experimenting with a pay-what-you-can restaurant model last year, hoping to serve low-income West Philly residents in the process. The performing arts-focused Community Education Center has anchored the east end of Lancaster Avenue since the 1970s.

PEC’s challenge is to help Lancaster Avenue double down on the qualities that make it unique while chipping away at the issues that make it like so many other struggling corridors. In some cases, that’s taken the form of vacant lot cleaning and streetscape interventions at key corners, like an Urban Thinkscape project that’s made a playground out of a vacant lot at 40th and Lancaster. There’s also a temporary installation that has artists digging in a triangular lot at 42nd.

Pearl Bailey-Anderson, who works as a trichologist, had already been operating a beauty salon on West Philadelphia’s Lancaster Avenue for eight years before she bought her current property, a slice of Hawthorne Hall, in 1996. PEC bought the then-vacant building in 2012 and is in the midst of efforts to fully restore the former performance hall and neighboring properties and make it a vital part of the commercial corridor.

When I stopped by La Pearl Beauty Emporium unannounced in October, a storm had just passed through, and Bailey-Anderson’s daughter, Knekeya, who works in the salon, was straightening a sidewalk sign out front. The shop draws both locals and those who don’t live in the neighborhood, Bailey-Anderson says, and sometimes people will come in and say they noticed the salon while passing by on the trolley. She says she’s always thinking about how to get pedestrians to notice the shop.

Sitting in a salon chair in the basement — there are two chairs on the ground level, and she lives on the second and third floors — Bailey-Anderson recounted to me the Parable of the Talents, from the Book of Matthew, in which a master leaves three servants with a portion of his wealth while going on a trip and, upon returning, rewards each for the investment he’s made. Two of the servants are rewarded for doubling their portion, but a third is punished for simply stashing the money away.

“I always wanted to grow,” Bailey-Anderson says. “When my Lord came back, I wanted to have something more to show him.”

La Pearl Beauty Emporium

At the time she purchased the building, Bailey-Anderson says, she had no idea that it was certified historic, and that she’d have to endure a tedious approval process if she wanted to make changes to the building. But it hasn’t stopped her. In the 20 years that she’s been operating at her current building, Bailey-Anderson has installed a new deck, restored the facade and made a host of improvements to the building’s interior. To do that work, she’s applied for and received multiple grants from the city and, she says, “PEC was shoulder to shoulder with me every step of the way.”

PEC is looking for stitches in what still feels like a disconnected corridor. Currently, various portions of Lower Lancaster Avenue serve different communities. According to Wright, the area east of 36th Street is primarily frequented by college kids, the strip from 36th to 38th serves a middle-class Powelton Village community, and 38th to 40th is home to some successful black entrepreneurs. There are higher-end salons, a gym and a consignment shop, for example. The area across 40th Street is “more convenience-based shopping, less destination,” Wright says, and the two blocks west of 43rd are “a little bit hodge-podgey.”

“Despite the perception being that the nicer of the businesses tend to be east of 40th Street, the foot traffic is west of 40th Street,” says Brad Vassallo, who only began as PEC’s commercial corridor manager in September. “So how are we bridging that gap?”

A product of a public input process led by the People’s Emergency Center and the Interface Studio, the Make Your Mark plan gathers a range of priorities for the future growth of the corridor and the surrounding neighborhoods, emphasizing things like cultivating civic leadership, creating safer streets, revitalizing the commercial strip and celebrating the area’s arts heritage. “We’re still working off of those goals,” Vassallo says, even if they aren’t branded “Make Your Mark” any longer.

Lately, PEC’s attention has been focused on a former bank property it owns at the corner of 38th and Lancaster. The property is adjacent to the uCity Square site, and PEC has been trying to convene residents to create a vision for what should be done with the building.

“We hope to attract a tenant to the building that will help steward the space, the outdoor space, by adding something cool to the inside,” Wright told me in September. “It could be some sort of food access. It could be a restaurant, a produce business, it could be a farmers market of some sort, it could be an art venue, something along the creative spectrum or the food spectrum that could look after the outdoor space.”

A few weeks later, Vassallo told me that he’d been approached by a real estate agent who works with Stephen Starr, one of the city’s most well-known restaurateurs, about the possibility of opening something on the bank site. An enticing offer, Vassallo said. But maybe not right for Lancaster Avenue.

“That would generate so much income for us,” Vassallo noted, somewhat wistfully. But a Stephen Starr restaurant is exactly the sort of establishment that would speed up the University City-fication of Lancaster Avenue — the very process that PEC is trying to temper.

Dedicating Resources to Neighborhood Businesses

Twenty-six percent of the commercial spaces on Lancaster Avenue between 38th and 44th streets are vacant, according to PEC’s Vassallo. Business owners complain a lot about trash. Problems with crime wax and wane, Wright says, and have gotten more complicated as opioid addiction has spiked in the last several years. Some tenants that the group wishes would set up shop on Lancaster Avenue are wary of taking a chance on a changing corridor. (PEC has been trying to attract small-scale food manufacturers that could use a portion of storefront space for retail, according to Wright, but the commercial rents are too high for many of them.) And growing development pressure threatens a legacy of black business and property ownership that PEC wants to preserve, Wright says.

Mayor Kenney, who campaigned behind the slogan that your ZIP code shouldn’t determine your destiny, has vowed to reinvest in neighborhood commercial corridors outside Center City. So far, Kenney’s big project has been a $500 million effort to renovate neighborhood parks, recreation centers and libraries. Commerce Director Epps’ corridor listening tour has brought some visibility to the issue, but in terms of the actual policies and programs aimed at supporting neighborhood commerce, not a whole lot has changed under the Kenney administration — at least not yet. What has changed is the customer service and the access, as there have been a number of efforts to make sure small neighborhood businesses, particularly in low-income areas, are able to access resources.

“There’s been sort of a new emphasis,” says Karen Fegely, the deputy commerce director for neighborhood business services, in her Center City office. “We’ve always been here. We’ve always been doing this work. But it was sort of a renewed commitment and emphasis.”

The Commerce Department administers a humble regimen of support programs for small businesses in neighborhoods that advocates say make a big difference in corridor management. Among the most visible is the Storefront Improvement Program (SIP), which reimburses business owners for half the cost of facade improvements up to $10,000, or $15,000 for properties with multiple addresses. Between 2011 and 2016, the Commerce Department gave out more than 500 SIP grants at an average cost of around $8,000, according to data provided by the department. When the program was imperiled a few years ago by a change in federal rules about community development block grant spending, advocates rallied to the cause and convinced the city, under then Mayor Michael Nutter, to pay for the program out of the general fund.

The department also runs a forgivable loan program called InStore, which helps retailers and food businesses upgrade equipment, improve their stores and open new locations. (Tiny WPA received an InStore grant when it signed a five-year lease, says Alex Gilliam, a co-founder.) It funds streetscape improvements and cleaning and beautification efforts on various commercial corridors. It partially reimburses businesses that install security cameras in public areas. It supports community development corporations — which can also get funding through a targeted business tax credit — and helps neighborhoods that want to create business improvement districts with planning and technical assistance.

One of Kenney’s key efforts, Fegely says, has been to expand the reach of all these programs. The department has created an immigrant business strategy and has hired bilingual staff members who speak Korean, Mandarin and Spanish.

“Our programs are trying to meet a business owner halfway, and with some business owners the halfway point is different,” she says.

Epps says that his tours have exposed him to unique issues in every neighborhood corridor. But what he hears consistently is a desire for a corridor that is clean, safe and well-lighted.

“And the other common denominator is that the neighborhood or corridor will be no stronger than the involvement of the shop owners on the corridor, and then their level of structure and organization,” Epps says. “To have somebody be focused on the strategy for the corridor. That can be in the form of a CDC or a business association, but the stronger neighborhoods and corridors are those that are organized and structured and that have dedicated resources.”

Weighing the Benefits of a Business Improvement District

Lancaster Avenue is fairly well-resourced, as far as neighborhood corridors go. According to the most recent tax form available, in 2014, PEC’s community development arm had $16.7 million in assets and had revenue of $1.1 million. In addition to the purchase of properties on the avenue, PEC has staff dedicated to helping business owners take advantage of government programs. It gets cleaning grants from the city. A smaller organization, the Lancaster Avenue 21st Century Business Owners Association (LA21), recently became a CDC as well.

But there’s not many neighborhood structures that can provide stable support and funding the way a business improvement district (BID) does. BIDs — and their cousins, neighborhood improvement districts — are quasi-public organizations that pay for streetscape improvements and other services through a special assessment on property owners in a defined area.

Philadelphia began creating BIDs in the early 1990s when the Center City District was formed. That organization is credited with reviving the downtown shopping district by focusing on cleaning, lighting, safety and marketing, but BIDs have helped transform other neighborhood corridors in the city as well, like East Passyunk in South Philly and Germantown Avenue in Chestnut Hill.

In 2012, the Commerce Department released a guide for neighborhoods that are considering establishing BIDs, and provides staff assistance in the process as well. But lately, new BIDs have had a tough go. Last fall, property owners on 9th Street in the Italian Market narrowly voted down a business improvement district that had been in the works for months. The Mayfair neighborhood in Northeast Philadelphia had the most recent success, with a new BID on a portion of the Frankford Avenue commercial corridor. Today, Philadelphia has a total of 15 BIDs.

Rachel Meltzer, an assistant professor of urban policy at the Milano School of International Affairs, Management and Urban Policy at The New School, says that BIDs tend to form in neighborhoods that are on some sort of “upward trajectory” — growing in population or experiencing an influx of more affluent residents — to supplement basic municipal services. They usually coalesce around a shared sense that the government is not keeping up with the needs of a commercial area, she says. They’re an easier sell on corridors with a lot of businesses that engage in similar activity and might demand similar services from the BID, and especially when there’s a strong anchor business or a small corps of owners who make it their mission to get a BID established.

“There’s definitely a threshold or a moment when BIDs tend to form, and I think it’s a moment when the benefits are perceived to outweigh the costs,” Meltzer says. “A lot of it is a political exercise.”

According to Wright, the LA21 business association is hoping to eventually create a BID for Lancaster Avenue. Wright says it would be a huge benefit in terms of managing the streetscape, but worries that an extra assessment could be a real challenge for some of the existing businesses. He says PEC has suggested that any potential BID be partially subsidized by a nonprofit foundation or another kind of entity, to keep it from displacing struggling business owners. (Representatives of LA21 did not respond to an interview request.) At any rate, establishing a business improvement district takes time and commitment, and planning for one on Lancaster Avenue is in the very earliest stages.

Protecting Longtime Businesses in Changing Neighborhoods

When the Philadelphia Association of Community Development Corporations released its Commercial Corridor Policy Agenda in May, it included a suggestion that the city “should investigate creating assistance programs for longtime businesses to help them manage changes and stay in their communities.” In some neighborhoods, commercial tax assessments have risen sharply from the prior year. It was a sign of economic health, but for some business owners, it was a cause for worry.

A few years prior, after Mayor Nutter had initiated a citywide overhaul of residential property tax assessments, City Council created a policy that freezes the tax bills of certain longtime owner-occupants whose assessments had tripled or more. PACDC suggests a similar program could be created for business owners, something to ease the pressures of commercial gentrification. Such an effort has already been launched in San Francisco, and the approach is being considered in Seattle.

PACDC would also like to see an increase in the funding for the corridor cleaning program, from $695,000 to $1 million a year, an expansion of the CDC tax credit, more street safety improvements on neighborhood corridors, a step-up in code enforcement on negligent property owners, improvement of the business permitting process, and more. It advocates for an increase of the Storefront Improvement Program’s reimbursement to up to 75 percent for businesses on “significantly distressed corridors.”

“When we developed this commercial corridor policy agenda, we did sit down with [city] commerce staff, and they generally agreed that these recommendations made sense,” says Rick Sauer, PACDC’s executive director. “They agree with sort of what we’re recommending here and proposing.”

Progress on the agenda has been modest so far. But Beth McConnell, PACDC’s policy director, says that’s at least partially because the group is devoting intense attention to an inclusionary housing proposal that was introduced in City Council last spring.

One other suggestion in PACDC’s policy agenda is for the Commerce Department to “build on” the Capital Consortium it has convened to help small businesses get access to loans.

This could make a difference for Lancaster Avenue where, Wright says, there’s a need for money that is patient and flexible — not the primary characteristics of the private market. Why would a property owner on Lancaster Avenue hold out for a retail tenant that contributes something vital to the corridor when she could just rent the space to students at $600 a head?

Most corridor organizations don’t own a significant number of properties or have funding to dish out to preferred tenants. But if they can help businesses find capital easily through a stable pool of lenders, they can have some sway over the commercial mix. Commerce’s Fegely says that helping businesses tap the Capital Consortium can create good outcomes for corridors even without any city money being spent.

“It gets down to the nitty-gritty [and] is really where you make a difference,” says Fegely. “That’s the nature of our work. We’re making really small market corrections, you know? How do we make money work in some neighborhoods? And we don’t need to do everything, we just need to do little things to move things along.”

It sounds a little like alchemy. But it’s completely in line with what corridor organizations across the U.S. are doing, and in fact with what Main Street America, a program of the National Main Street Center that focuses on revitalizing downtowns, recommends. It’s a mixture of design improvements, marketing, organizing stakeholders and planned economic investments.

Whatever the Kenney administration does explicitly for commercial corridors will be outmatched by its Rebuild parks and rec initiative. Officials — and corridor managers — say that investment will have spillover effects that benefit corridors. But advocates are hoping for a more focused mayoral effort as well.

“We haven’t yet seen that turn into any major new initiatives that are particularly relevant or related to corridors,” says McConnell. “What we’d hope to see is, in future budget years, a turn to a big initiative to see how we can boost corridors.”

Next City’s coverage of Philadelphia’s changing neighborhoods is made possible with the support of the William Penn Foundation.

Jared Brey is a freelance reporter based in Philadelphia. His work has been featured in Philadelphia magazine, PlanPhilly, Hidden City, The Philadelphia Inquirer, City & State, Grid magazine, and other publications.

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Joshua Scott Albert is a Philadelphia-based photographer and reporter. He's contributed to VICE, Buzzfeed, Philadelphia Magazine and several other outlets.