Note: This is the third article in a three part series on the future of South Kensington. For part one, click HERE, part two click HERE.

A lone delivery truck drives down North American Street on a snowy January morning, rolling past the few large, active warehousing businesses that have located here in the past 20 years. They are but hints of the dozens of freight depots, coal yards, dye mills, fiber mills, candy factories, lumber yards, sheet metal manufacturers, and box makers that 70 years ago competed for workers with legendary industrial complexes like Gretz Brewery and Stetson Hat, which alone employed 3,500 men and women. Nowadays, in this neighborhood that has become known as South Kensington, sections of railroad track, like parts of an old Lionel set, lie buried in blacktop, fossils of the behemoth lines that ran at grade for more than a hundred years.

American Street, which was given its massive width by the railroad itself, has been the target of several decades of tax policies, financing, and zoning meant to retain industrial firms, and then failing that, encourage others to move in. And no wonder City officials fought to keep it alive, if you look at the place from the perspective of 1940 or even 1960: it hummed with life. Why shouldn’t it once again?

But the dream of bringing industry at scale back to American Street, particularly in the blocks between Girard Avenue and Oxford Street, appears to be finally, fitfully, ending. Residential and retail development is coming north like a finger extended from the Northern Liberties, heightening the conflict between City officials and business owners on the one side who are unwilling to concede a future for heavy industry and warehousing and neighborhood activists and real estate developers who think a shift in land use policy toward residential, craft manufacturing, and retail is way overdue.

“High End, Sophisticated Company”

On the southernmost blocks of American Street here, just above Girard where it narrows to two lanes, the fight to preserve the last vestiges of industry has been taken up by two meat processing businesses, the European-American Sausage Company, owned by Ilya Babenko, and Emil’s Gourmet, which makes high end deli turkey and ham. Both businesses are literally in the path of coming residential development; Babenko and Emil’s president Ron Ramstad worry that they can’t operate with trucks and tractor trailers. Of course, their operations would produce food processing smells in a residential zone.

The European-American Sausage Company, just below Thompson Street, will be surrounded by a 191 unit residential complex with an internal courtyard modeled on the Northern Liberties’ Piazza, if a plan proposed by Blackstone Realty and approved last year by the Zoning Board of Adjustment comes to fruition. That plan also involves the demolition of the Philadelphia outlet of US Supply, a regional plumbing supplier. Blackstone, which owns the Wannamaker Building and the Courtyard by Marriott in the old City Hall Annex in Center City, among other significant properties, tried to buy Babenko’s building, which he acquired in 1993 for $46,000. But Babenko refused and then, according to reports, vociferously testified against the project when it came before the ZBA.

Emil’s Gourmet, a deli meat processor named after Philadelphia turkey breast pioneer Emil Gontowski, operates out of an anonymous-looking red brick building surrounded by empty lots (all once part of a Philadelphia and Reading Railroad freight yard).

“I’m the hidden secret that no one knows about,” Ramstad testified at a City Council hearing last year. “I actually have a pretty cool company right now.”

Ramstad was at City Hall to protest the rezoning from industrial to mixed-use residential of the vacant parcel across the street from his factory, where the Canus Corporation had planned to build a 320-unit apartment complex called Soko Lofts. The Blackstone and Soko Lofts projects, if built, will bring hundreds of residents into the heart of the long-protected American Street industrial corridor, literally to the two meat factories’ front doors.

At the City Council hearing, Ramstad said he was concerned that he would be pushed out from the spot he’s operated out of for nearly two decades. “My big issue is how to protect my asset from the neighbors complaining five years down the road that they don’t want a 24/7 operation,” he said, pointing to potential conflict between delivery trucks picking up turkey and pork and new residents driving and parking on the block.

Neighbors say that Ramstad, who did not respond to multiple attempts to contact him, has for years been the strongest voice opposing new residents coming to the neighborhood. Indeed, rather than surrendering to forces he says want him to leave, he has expanded operations since he arrived in 1996. The company purchased a vacant lot next door to its facilities in 2009 for $215,000, according to City records; the soil was capped and the lot turned into a parking lot (the deed for the property stipulates that it will remain for industrial use for 15 years and can only be developed for residential use if strict environmental criteria are met). Ramstad testified that he had 42 employees as of last year, has invested millions in state-of-the-art technology and could potentially triple or quadruple his business in its current facilities. “I’m not a chicken guy,” he said. “I’m a very high, sophisticated company.”

Ramstad has found support from within city government. Denis Murphy, of the Commerce Department, says that Ramstad’s business, which supplies Wegman’s Markets with gourmet turkey and ham, is one of the city’s most successful niche manufacturers. “In theory, it’s even healthy food,” said Murphy, who estimated it would take about $10 million to replicated the factory at another location.

Moreover, said Vince Dougherty, an assistant director in the Commerce Department who has been working to attract and retain industry on American Street for more than 20 years, “A property owner has the right to protect their own investment there. Any residential [development] coming in needs to respect the fact that this is an operating business that’s been there forever.”

Land Use, and People, in Conflict

And residential is on its way. Population pressure from Northern Liberties and Fishtown is already pushing into South Kensington, filling in lots left deserted by more than a half century of industrial decline and calling into question the longstanding policy of protecting industrial uses here.

American Street was awarded one of three Philadelphia Empowerment Zones in 1994; the federal program still disburses about half a million dollars annually to local businesses for job training and other investments. Yet vacancy is persistent on American Street, about 25 percent, according to a 2010 study by the Philadelphia Industrial Development Corporation, which works with the Commerce Department to encourage business growth.

However, until recently the city has resisted allowing any commercial uses like retail to diversify the corridor and try to attract new people. “It’s right in the path of some of the most interesting and exciting growth in Philadelphia and yet it’s still stuck in this antiquated industrial view,” said David Gleeson, a 15-year resident of the neighborhood and co-founder of Crane Arts, which renovated the monumental 1905 Crane plumbing warehouse an outlying buildings for studio and exhibition space in 2006 just north of Emil’s. “If there had been a lot of success at reindustrializing, go for it,” Gleeson said, “but they haven’t succeeded and it’s time for a different vision.”

Gleason experienced firsthand the forces preserving monolithic industrial use when the city opposed a variance to allow his building to put in a cafe nearly a decade ago. “There’s no reason why there couldn’t be a more mixed-use vision that knit American Street back into the neighborhood in a more effective way,” Gleeson said. “It’s not often that the city has this kind of potential interest in redeveloping a large part of its area. A little loosening of what’s allowed could unleash some really amazing energy.”

With the two proposed residential developments and others totaling almost 700 units, the tipping point may already have been reached.

“It’s always been a challenging neighborhood and always will be,” Dougherty said. “We have kind of agreed that the lower end is changing, becoming less industrial. We’re generally okay with that.”

The 2010 PIDC study recommended that American Street through the entire neighborhood to Berks Street be remapped as a transitioning area for more mixed use, but Dougherty prefers that the cut off be Master Street, just above Emil’s. It now appears that his vision will win out when the neighborhood is rezoned this spring following the completion of the Lower North District Plan, preserving far more industry-only land use than even the City’s own Philadelphia2035 visioning plan had recommended. The public comment period of the plan, now in draft form, end today (access it and the link to comment, HERE).

The City Planning Commission’s David Fecteau, project manager for the Lower North District Plan, acknowledged the tightrope of creating a new zoning map that accommodates the wishes of various competing factions. “We don’t want to stifle private development, but reserve the right to attract more businesses and growth too,” he said.

According to a draft of the plan, the blocks south of Master on American would be rezoned to residential and commercial, with the exception of the poultry plant’s parcel, which would become mixed industrial and commercial. Between Master and Jefferson streets would also be mixed commercial and industrial, while north of Jefferson would remain industrial only.

“It’s not realistic that the whole length can be industrial anymore,” Fecteau said, citing the residential buildings already approved for construction. “Sometimes the market leads and it’s okay for government to follow.”

But neighborhood activists are frustrated by insistence on keeping so much of American Street zoned industrial. “We have not been presented with any analysis addressing whether or not the land currently zoned for industrial uses in our neighborhood are truly appropriate or desirable locations for future industrial uses—and if so, what types of industrial uses,” said Leah Murphy a city planner and co-chair of South Kensington Neighborhood Partners’ Zoning Committee.

But if American Street is left largely industrial, it’s likely that real estate developers will seek variances and City Council ordinances supporting new uses on a parcel by parcel basis, as has been the case with the Brickstone and Soko developments. Planners and activists say that prospect defies the intent of the City’s new zoning code.

Warehouses and Distributors

The blocks immediately south of Berks have three large-scale distributors, in addition to numerous multi-acre vacant lots. Smaller industrial users and some dilapidated vacant buildings and single-lot vacant parcels fill the rest of the hodge podge landscape.

According to the Commerce Department, there are about 200 businesses supporting over 1,300 employees in the American Street Empowerment Zone as a whole, but the city doesn’t keep records on average pay or whether the employees are residents of the city, or neighborhood. Councilwoman Maria Quiñones-Sánchez, whose district contains all but a small portion of the zone, says that some of the companies do provide good paying local jobs to her constituents.

The Councilwoman said that she has opposed residential development up to Berks specifically because of the potential for truck conflict. “Ultimately it’s about jobs,” she said. “If I put residential that close to where I know there’s trucking at night, I’m going to be getting calls about it.”

However, Quiñones-Sánchez said she recognizes the opportunities to allow more mixed use on certain parts of the street to combat vacancy and underutilization. “Part of the problem is that the conversations have been at the extreme,” she said. “The city has to be more proactive in recognizing that their American Street Industrial Zone was not a full success.”

While both the Soko Lofts and the Blackstone projects have been compared to the Piazza, American Street is broader than Second Street and harsher than the Northern Liberties was even in the 1970s and 80s. There, industrial uses had always shared a more pedestrian scale with residences and stores, even amidst vast abandonment. The challenge of urban design here is even greater. Junkyards, truck traffic and loading docks ensure that however American gets zoned in the short term, it will take significant infrastructure intervention to make it broadly desirable.

At Emil’s, tractor trailers come and go, carrying the company’s gourmet deli turkey to Wegman’s and beyond. Some have suggested that the City make money available to move the company to somewhere like the Navy Yard, but Dougherty said the price tag would be prohibitive. Others imagine the market will take care of the problem. Rising land values will entice Ramstad to sell at a profit and move somewhere less expensive, even just a few blocks north on American, where the company might be able to maintain its Empowerment Zone tax benefits.

Neighbors insist they don’t want Emil’s to leave and that new residents can find a way to coexist with Ramstad’s business. “He’s been a little stubborn but I can understand his stubbornness in regard to what’s obviously coming,” said Charlie Abdo, a member of the South Kensington Community Partners.

“What could make the neighborhood great is the right mix,” Abdo said. “We want to make it all work and allow him to conduct his business. I think guys like Ron will eventually come around.”

Ramstad said he feels the pressure. “I realize development happens, but my issue was basically how do I protect my asset,” Ramstad testified at City Council. “Everybody wants me to leave now.”