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Tales From A Blighted Block
Congratulations, Philadelphia! You've just given birth to a brand new Redevelopment Zone!
In the waning days of the recent City Council session, three more square blocks of the city were given the official designation of blighted and thereby corralled within the bounds of the 9th and Ellsworth Redevelopment Area--WARNING! PDF file!. This was done over the near-unanimous opposition of the community. Everyone agrees that there is one building, taking up one quarter of a block, that truly is a blight on the neighborhood. But the rest of the 'blight' consists of a newly vibrant commercial strip and my own lovely block of owner/resident homes.
Join me for a tale of a stubborn city councilman, a group of angry homeowners, worried immigrant businessmen, and some curious real estate deals.
The 9th and Ellsworth redevelopment Area had its genesis back in 2000, when the City Planning Commission surveyed the two lower blocks of the 9th Street Italian Market (the blocks between Washington Avenue and Federal Street), and declared them to be blighted. As someone who has lived around there for a couple of decades, I can say that this was not an unreasonable assessment back then. As Frank Tartiglia says in this still-viewable video from the Vern Anastasio campaign, the Italian Market merchants north of Washington Avenue said these two blocks are where people go to die.
But that was then. Things have changed a lot since that original blight survey in 2000, and even since that video was made. These days, businesses are being opened by Mexican and Chinese immigrants all the time. Properties are being sold for astonishing prices. The air is filled with the sound of hammer and saw as property after property is undergoing renovation. And all with private money, not city funds.
Nonetheless, despite the very evident upswing in the area, Councilman Frank Dicicco was determined to push through this redevelopment zone, based on a survey now seven full years out of date. The primary target was the hulking abandoned property known as the “Ice House,” a dreary gauntlet of boarded-up storefronts beneath an imposing wall of crumbling brickwork that stretches two-thirds of the way down the block on the east side of 9th Street just below Washington Avenue. This former home of the American Ice and Coal Company has been abandoned for some 40 years.
The last time the Ice House property changed hands was back in 1993, when Carmel Real Estate bought it for $280,000. Carmel is the real estate entity of Jerald Goldfine, owner of the Valu-Plus discount chain. Story is, Goldfine had asked for and received Dicicco’s help in plans to turn the building into a Valu-Plus store, but that supposed deal fell through for unknown reasons.
And so, for 12 years Goldfine sat on the property, dutifully paying the measly 5300 bucks per year in property taxes to ward off condemnation as the building, and the block, continued to deteriorate. A bit of a dilemma, perhaps: the property would increase in value as the neighborhood developed, but it was the property itself that was the greatest impediment to development. Goldfine is familiar with such dilemmas: down in Baltimore, he has been entangled for years in a squabble involving property he owns subject to taking by eminent domain and property he sought to develop. Last year he was interviewed on the continuing real estate stalemate in Baltimore:
It was a paradox. The city wanted to make the West Side better by assembling properties, but in the process it drove away businesses already there. The merchants who held out were also stuck. Knowing their properties could be taken at any moment, they could not invest money to make their companies more viable.
The threat of eminent domain "doesn't allow you to properly operate a business or make improvements to your facility that are necessary," said Jerald Goldfine, whose West Side store, Valu-Plus, is also under the cloud of condemnation.
"Who would invest substantial amounts of money with the idea that a month later they could get a letter from the city saying, 'We're going to take your property with eminent domain'?" he said.
But that was Baltimore. Here in Philadelphia, things were coming to a head. The neighborhood was at last on the upswing, despite the black hole of the Ice House, thanks to a strong influx of Chinese and Mexican immigrants to the neighborhood in recent years. Last October, for example, an Asian investment firm paid $600,000 for a row of six one-story storefronts directly across the street from the Ice House, which they then renovated. New businesses opened up along 9th Street between Washington and Federal: restaurants, music stores, groceries, barbers, butchers, sporting goods, appliances, clothing. 28 properties within the proposed redevelopment zone sold within the past three years for an accumulated total of two million dollars more than the City's 2007 property assessments. When the American Planning Association national convention was in town in April, they held a tour of the area as an prime example of small-scale commercial revitalization in historic immigrant neighborhoods.
Meanwhile, a new deal was underway for the Ice House: senior citizen housing associated with the St. Maron's Catholic Church at 10th and Ellsworth. As a recent article in the South Philly Review described it:
For years, DiCicco had wanted to do something with the old icehouse, so he approached St. Marons and they loved the idea, he said.
St. Marons Monsignor Sharbel Lichaa referred the Review to church council member and parishioner Joseph Katter for comment, who said about a year ago, St. Marons and New Jersey-based private developer Community Investment Strategies Inc., which specializes in senior housing, entered into talks for the redevelopment....
The building has been up for sale for years, but with no interested parties, the councilman decided to move ahead with his bill to condemn it so St. Marons and Community Investment Strategies could bring senior housing to the area, DiCicco said.
It seemed that Mr. Goldfine was soon to find another of his properties subject to a city’s power of eminent domain, as Dicicco’s bill to create the 9th and ellsworth Redvelopment Area neared passage, with a final Rules Committee hearing scheduled for April 25th.
Ah, but now cue the angry hordes. It seems the proposed Zone encompassed not only the Ice House block, but also two adjacent blocks with no connection whatsoever to the Ice House, blocks containing many of these newly renovated properties and new businesses, as well as several rows of owner-occupied homes. Even more important, none of the affected business owners or property owners knew anything about the fact that they were on the verge of being subject to the city’s power of eminent domain!
At least they were unaware of it until an anonymous letter was slipped under everyone’s door two days before the Rules Committee meeting. The source of the letter is pure speculation. Perhaps someone with Vern Anastasio’s campaign, seeking to stir up a little trouble for Dicicco? Perhaps someone working for Goldfine, hoping to stall passage by whipping up some community opposition? Perhaps just some concerned citizen who stumbled across the information?
Whatever the source, the result was a stormy Rules Committee session. Dozens of affected neighbors and businesspeople showed up to demand that their buildings not be included in the Urban Renewal Zone. Representatives from JUNTOS and Asian Americans United decried what they saw as prejudicial action endangering an economically rising immigrant community.
Also present was a lawyer for Goldfine’s Carmel Real Estate, claiming that, lo and behold, a mysterious buyer identified only as the 9th Italian LLC, had suddenly turned up just a few days before, willing to pay $2.25 million for the property, and asking that City Council therefore defer passage of the bill, save the City the trouble and considerable expense of obtaining the property through eminent domain, and allow all to live happily ever after.
Council members, notably Councilman Kenney, were justifiably skeptical of the deal. From the minutes of the Rules Committee meeting:
COUNCILMAN KENNEY: So two days ago, we have an Agreement of Sale for 2.5 million, which would to me indicate that the owner is going to resist the condemnation. And could the Agreement of Sale act as an argument that the City should pay more than the $800,000 it's appraised for in order to condemn it….?
I want to ask a hypothetical scenario from your legal expertise. Is it illegal in the event that an Agreement of Sale is crafted or executed, signed, and that that Agreement of Sale results in a dispute between the Redevelopment Authority and the current owner, which potentially inflates the acquisition price from $800,000 to a million two, for argument's sake, and the owner agrees and the potential buyer agrees to dissolve their Agreement of Sale and the City settles with the current owner for a taking valued at a million two, would the owner of the property in any way be violating the law if they paid the proposed buyer some type of fee or payment?
Councilman Dicicco added his own skepticism:
COUNCILMAN DiCICCO: So you'll know, Mr. Pollock, your client knew enough to call me when he bought the property. He knew enough to call me and ask me to introduce a TIF. He knew enough to call me and ask me not to put the canopies on the face of that building, to hold off because he was going to renovate the building. He knew enough to ask me to get the stands, the vending stands, removed from the front of his building so that he could create a loading zone for the business that he intended to open as a result of the TIF, but he didn't know enough to call me to let me know he had a $2.5 million deal on the table to build housing?
Despite all the protest and the theoretical real estate deal, the Rules Committee sent the bill to the full council for final passage.
There was one last obstacle to overcome. Bowing to the vehement community opposition, stemming from the feeling they’d been kept utterly in the dark about a process that could have grave consequences for them, Dicicco agreed to attend a community meeting before final passage. The bill nevertheless was slipped onto the Council calendar before the meeting was scheduled, but the now-vigilant community squawked. The powwow was scheduled for May 30th, the day before the final vote.
The meeting did not go well. Dicicco faced a revved-up and skeptical crowd. At first he seemed bored as he listened to introductory remarks, some delivered in Spanish with English translation. But when the next speaker began citing detailed statistics about renovations, property sales and values, diminished tax delinquencies and other data which undermined the validity of the blight assessment, Dicicco jumped to his feet and angrily took over the meeting. As the Philadelphia Metro described it:
DiCicco took issue with several of the crowd’s questions and comments, interrupting several speakers loudly and repeatedly.
“That is not fair,” said an angry DiCicco in response to several comments he labeled “non-truths.”
“You can vote for me in November, you can not vote for me,” DiCicco later challenged the crowd.
“It’s a done deal. I’m moving this bill tomorrow,” he told them later.
As bad as that sound, in person it was much worse. It was almost an embarrassment to watch the councilman, flailing his arms and spluttering hostilities toward the crowd. He seemed flustered at times, at one point claiming he'd been mislead, that he thought the meeting was supposed to be about improving communication between the new immigrant businessmen of the lower Italian Market with the established merchants above Washington Avenue, and that he'd been sandbagged by this. That was, of course, an obvious lie. Indeed, Dicicco had brought along with him David Knapton, project supervisor for the Redevelopment Zone, and Troy Adams, another Redevelopment Authority project manager. Odd people to bring along if you believed the meeting was about improving communication between immigrant businessmen and the Ninth Street Merchants Association.
Still,it could have been worse. At one point his Constituent Services aide Nick Schmanek was urging him to storm out of the meeting. Dicicco to his credit had the political astuteness to put a cork in Mr. Schmanek's hissy fit and see the meeting through to the end. Indeed, the meeting wrapped up on a fairly civil note, with Dicicco friendlier and promising to work with the community. He reiterated his assurances that this bill was aimed solely at the Ice House, and that no other properties would be targeted by the city.
And so the bill passed. Homeowners and business owners alike take cold comfort in the Councilman's reassurances.
We are rankled at the tag 'blighted' being put over us, though we understand it is just a technical term and not meant as judgment on our restaurants or our renovated $200,000 homes and buildings.
We still are angry at being included within the boundaries of the Redevelopment Zone. Although there is a certain logic to the boundaries of the zone--include the entire 9th Street commercial corridor between Washington and Federal, along with properties abutting it from behind, as well as the under-utilized parking lots on Washington and Ellsworth (though I suspect the Ninth Street Merchants would be VERY unhappy at the prospect of losing that parking for their customers)--it is that very logic that disturbs us. Despite the umpteen swearing-on-the-bibles we've been given that the sole target of all this is the Ice House, the fact is the Redevelopment Authority plan postulates possible expanded development. A row of houses on Darien Street in included within the boundaries, but a row of houses on Ellsworth has the boundary zig-zag to exclude them (and one of those houses was festooned with Dicicco and Brady posters during the primary.)
And the fact is, in this City, Redevelopment Areas seem to last forever. Some date back to the Sixties. Some include what are now the finest parts of the city. Frank Dicicco may mean what he says today, but that doesn't mean that 20 years from now, some future councilperson and some deep-pocketed investor couldn't act against us. Our goal now is to get de-certified as a Redevelopment Zone, something which never has happened, but against which there is no legal obstacle.
And then there's the fact that funky real estate shenanigans continue to happen. Although the supposed last-minute purchase of the Ice House, as presented at the Rules Committee hearing, has yet to appear in finalized form, two adjacent properties did sell, on April 18th (again, just a week before the Committee meeting), for 3.5 million dollars:
Paul Giordano, Jr. sold two Philadelphia properties to ECU Stewart LLC for $3.5 million, or about $372 per square foot.
The transaction included a 6,578-square-foot industrial facility at 1132 S. Darien St., and a 2,830-square-foot retail building at 1101-07 S. 9th St.
The seller would not reveal if any brokers were involved in the transaction, citing a confidentiality agreement.
Hmmmm. Seems to be some parcel assemblage and price inflating going on. Where this will lead is still anyone’s guess. We hope some development does come to the Ice House property. But we also want the adjacent blocks to be removed from the Urban Renewal Zone.
Frank Dicicco has done a lot of good work on redevelopment in his district over the years, for which he deserves a lot of credit. But lately he seems to have lost his way a bit. He similarly bucked strong community opposition to another South Philly development proposal at Broad and Washington, according to the Daily News:
Developer Samir Benakmoume envisions a $500 million project on the site, with twin towers on Broad and related buildings behind it, including condominiums, a hotel, rental properties, retail and office space, and parking.
Score one for the developer's vision as City Council's Rules Committee yesterday gave initial approval on a rezoning that would allow the mega-development to proceed, assuming final passage in September.
But members of the Hawthorne Empowerment Coalition say the proposed 31-story towers "are too large, too high for South Philly, and nobody wants them," according to Albert Hicks, a coalition member.
Louise Hanible, a nearby resident, confronted the zoning bill's sponsor, Councilman Frank DiCicco, with a blunt reaction to the project.
"If you want a 31-story building, why don't you put it on 11th Street across from your own house, DiCicco," she bellowed in a gravelly voice.
An exasperated DiCicco stood up and walked away saying, "Let's just keep an empty lot for another 20 years - that'll make everybody happy."
Testy, testy. Is this the same Frank Dicicco who has this to say on his campaign website:
Every developer in the City recognizes that I will not support a project without a community’s support. Whether the project is a residential home, a condo tower or a big box store, I force the developer to meet with the community before lending my support.
One theory goes that the councilman has been replaced by an evil twin, and that the real Frank Dicicco is tied up in a basement somewhere. Another theory is that Dicicco has just fallen a tad more under the spell of the developers lately. Not to reopen the can of worms Dan U-A let loose with this post some days ago, but hey, when you’re spending $391,000 in a lousy councilmanic district primary race, it’s understandable you have to pay a lot of attention to fundraising.
Thing is, if he wasn’t making so many constituents feel angry and betrayed, maybe he wouldn’t have to campaign so hard and so expensively. Ah, the politician’s eternal dilemma….