Editor’s Note: So-called “development pressure” is putting stress on a wide array of Philadelphia neighborhoods, from Gray’s Ferry to Germantown. Rents are rising, developers and residents are battling over turf, and as a result longstanding assumptions about the nature of Philadelphia’s neighborhoods are being challenged. Last year, the Hidden City Daily received a grant from the Ethics and Excellence in Journalism Foundation to explore some of the ramifications of this pressure. We start our reporting with this three-part series on South Kensington by Aaron Kase.

Longtime Northern Liberties builder and developer Charlie Abdo first started buying property above Girard Avenue a decade ago. “There really wasn’t much activity up in South Kensington at all then. Just torn down homes, factories, lots of bigger lots,” said Abdo. “That might have scared some people away just because it looked kind of barren.”

Not all that different from the Northern Liberties of the 1980s and 90s, large swaths of South Kensington, particularly along the American Street industrial corridor and west, are empty, a consequence of the long, slow collapse of the city’s industrial economy (the rectangular neighborhood’s boundaries are Front Street, Berks, Sixth Street, and Girard Avenue). Now, builders like Abdo, who lives in the neighborhood, and neighbor Paul Maiello, who restored the 1854 St. Luke’s Lutheran Church for Third Ward (now Impact Hub), and much larger real estate investors are eying parcels both large an small. “Lately at the zoning committee we’ve seen a handful of properties on really small lots,” said Abdo, now a member of the South Kensington Community Partners civic group. “Primo property is being bought up.”

Why are they coming? Value, proximity to transit, and diversity of people, said Leah Murphy, a city planner who moved to South Kensington in 2009. “I also knew it would be a good investment, seeing the market pressure building from the south and east. I think that is certainly a draw for many new residents. Unfortunately, it’s also a draw for those who are looking for a quicker return on that investment.”

Development has indeed intensified. Most notably, last year City Council approved the 320-unit Soko Lofts at Second and Master Streets, roughly modeled on Northern Liberties’ Piazza, on a lot left empty by the demise of a firm called Absco Steel (previously, like much of this part of American Street, the parcel was used as a freight depot by the Philadelphia and Reading Railroad).

While Soko’s developer, the Canus Corporation, has decided to sell the lot instead of build the planned residential project, before putting the lot up for sale it secured from Philadelphia’s City Council a significant zoning upgrade, to 600 allowable units. Whatever ultimately happens, the future of the Soko lot–about the same size as the still undeveloped parking lot adjacent to the Piazza–will be a critical measure of the neighborhood’s direction. Will South Kensington, like the Northern Liberties, become a dense playground for young professionals? Or will it hew more closely to the wishes of neighborhood leaders and residents, who value the racial and economic diversity and, in no small measure, the open space?

And furthermore, does it make any sense to protect American Street’s longstanding industrial zoning?

Zoning Matters

This question, which Hidden City raised in a report last year, is at the heart of a struggle for the future of American Street particularly, as the Lower North District Plan, which includes South Kensington, is finalized by the Planning Commission. In draft form now, with a public comment period that extends only until this Friday (click HERE for the link to comment), the plan falls short of advocating for transformative zoning changes on American Street, limiting the rezoning from industrial to a relatively unspecified mix of commercial and industrial to only the block between Master and Jefferson Streets and leaving the rest of the corridor as is. In that lower section, the Crane Arts building, adapted from industrial use in 2006, and the Soko Lofts parcel have already been rezoned.

According to the Lower North district planner, David Fecteau, administration and Commerce Department officials, as well as the Philadelphia Industrial Development Corporation, district Councilwoman Maria D. Quiñones-Sánchez, and some civic leaders “generally agree” that industrial zoning “with some liberalization to allow limited commercial, office, or entertainment uses, without residential development” should be preserved north of Master Street.

Murphy, who co-chairs the South Kensington Community Partners’ zoning committee, believes this is a mistake. “Preserving I-2 zoning in South Kensington condemns our neighborhood to continued suffering from the impacts of vacancy and neglect, with the slight and distant possibility that someday new industrial users will locate here, bringing with them their own particular negative impacts on the neighborhood,” she said. In fact, even in the American Street corridor, which has benefited from the federal Empowerment Zone program and other government initiatives, industrial and warehousing jobs are relatively scarce.

Moreover, said Murphy, neighbors are frustrated by the slow transition. “There are people who have been living in this neighborhood for decades, waiting for the opportunity of a zoning remapping process to come—to finally see land use policies on American Street change so that it can be released from its state of perpetual blight and desolation.”

“Urban design should be driven by what the community wants,” David Morley, a senior research associate for the American Planning Association, told Hidden City. But, he said, “part of the visioning process still needs to be connected to market reality. There are many times where the community would like to see new industrial jobs but that may not be a market reality.”

In this case, community members argue that it’s the City’s planners, unwilling to let go of industrial zoning, who are ignoring market forces. Already, blocks south and east of American Street above Girard have become a locus of residential development spilling over from the Northern Liberties. Around 800 new residential units have been approved–though not necessarily yet built–in just a few-block area (including the 320 for Soko Lofts).

Eugenie L. Birch, a professor of city planning at the University of Pennsylvania, said that the burgeoning real estate investment is an important sign. “Above all, Philadelphia should be pleased that there is market interest in an area whose land values were formerly depressed due to the city’s changed economic base and resulting obsolete land uses,” she said.

“For existing homeowners and for the city, this kind of development is a positive,” Birch said. “Homeowners will see their real estate values rise–this may be accompanied by a tax increase, but the ability to increase the value of an asset trumps this.”

The Planning Commission’s District Plan does attempt to accommodate trends away from heavy industry by supporting craft manufacturing and lifestyle amenities. Planners have targeted Fifth Street between Master and Berks Streets for residential development. American Street itself would become a “complete street,” with stormwater rain gardens, generous sidewalks, and bike lanes.

Planners are right to note the rise of craft manufacturing. In 2011, the firm Lightfast Build moved onto the corridor; this year, the Northern Liberties based metal fabricator Veyko is moving to a new facility and at American and Oxford Streets. And across the street from the proposed Soko Lofts, on another parcel once owned by the Absco Steel Company, the growing firm Emil’s Gourmet produces high end deli turkey for Wegmans and other stores. According to a City Commerce Department official, Emil’s, which employs about 40, is one of the city’s most successful niche manufacturers. The presently open, even wild feeling of American Street obliges Emil’s’ need for tractor trailer parking and machinery (the company parks its trucks in front of the Soko lot). But what happens if 400 people are living across the street?

The Burden and Opportunity of Vacant Land

While uses on American Street split roughly north and south of Master Street, the neighborhood itself splits east west at American Street. East and south to Front and Girard, South Kensington is relatively dense and residential, the home largely to Puerto Rican immigrants and their children. West of American Street, the fabric breaks down substantially; beyond clusters of traditional row houses around Fourth Street, about 30 percent of the land is vacant.

Murphy told Hidden City this isn’t all problematic. “Though some see vacant land only as a symbol of disinvestment, I know I’m not alone in actually having appreciation for the effect it has on ‘loosening’ the neighborhood fabric and providing some relief from otherwise dense urban streets. There is certainly a strong interest in the neighborhood in preserving some of this vacant land as open space, especially the many long-established and emerging community gardens in South Kensington. With market pressure continuing to build, South Kensington Community Partners is looking at models of protecting these community assets from being developed.”

But Abdo noted that density is still highly sought. “Even people who are adverse to change realize that the neighborhood can support a lot more density,” Abdo said. “It makes it more of a safer and vibrant community.”

As the neighborhood begins to fill in, one can’t help but be reminded of the Northern Liberties circa 1999. Almost fifteen years ago, it seemed that open land was so vast there urban density could never be achieved.

One cost of the eventual rigorous development in the Northern Liberties has certainly been its diversity. Residents of South Kensington have traditionally been lower-income, although more affluent neighbors have already been moving in. According to the U.S. Census American Community Survey, the 19122 area code, which includes South Kensington, had 16.9 percent unemployment and a median household income of $21,929 in 2012, well below the $37,016 figure for the city as a whole, and 31.9 percent of families live below the poverty level.

As with any gentrifying area tensions are likely to arise between newcomers and long-time residents, a mix of white, black, and Latino, worried they will get pushed out. “New people will move into this neighborhood who will have a different outlook than the current residents,” Birch said. “How this is handled will depend on the area’s evolving social capital. One would hope that everyone will find common interests (e.g. neighborhood safety and sanitation are pretty neutral) on which to work collaboratively. This will take leadership from either existing or new community organizations.”

Murphy said that social capital is one of the neighborhood’s strengths. “There’s no question that there are ‘tribes’ in this neighborhood, but by most accounts it’s an inclusive mentality,” she said.

One way to moderate the process is to be wary of forcing density before the conditions can support it. Stakeholders need to pay attention to more than just cramming in the maximum amount of people in an effort to bump up tax dollars, cautioned David Elesh, a professor of sociology at Temple who has studied the Kensington area for decades.

The area has to be an attractive place to live overall. “You want to think about balanced development,” he said. “Where are these people going to shop? What kind of transportation is available to get them to work? What kinds of leisure activities are there? How about parks? All of these things need some consideration.”

Perhaps even more critically, officials will have to assess the risk of developing contaminated land. “The question is, what is in the soils?” Elesh said. “What did they leave behind?”

There were 40 Superfund sites in the city as of 2009, including the Abcso Steel lot, the very site of the Soko loft development. Remediating the land can have great public benefit, and the Soko developers removed four feet of soil from the lot to make it habitable. However, such actions add greatly to the cost of development and could forestall it entirely if the land doesn’t hold significant potential. In this case the public shared part of the cost in the form of a $7.6 million low-interest loan from PennVest.

The cost of remediation of the Absco lot was high, in part, because of the impending residential use. When another Absco site across the street was prepared for the Emil’s Gourmet turkey factory in 2006 (to use as a parking lot), the developer only had to remove some of the contaminated soil and cap the ground.

But how widespread is the contamination? Denis Murphy, the manager of the Business Improvement District Programs at the Philadelphia Department of Commerce who worked for a decade with the American Street Empowerment Zone, said that about 60 percent of the neighborhood’s vacant parcels had once supported industrial uses. About half of them are contaminated, he estimated. “The problem may not be as bad a people’s perception of it might be,” he said.

Perceptions Changing

This perception hasn’t in fact deterred a rising, though certainly cautious, optimism in the neighborhood. Now even forgotten parcels have for sale signs; the development pressure is real. Leah Murphy believes much of the demand comes from residents. “It’s great to see people who are a part of this community investing in properties in the neighborhood and I really hope that trend continues,” she said.

And those people are initiating interesting projects. “People are taking on some pretty innovative adaptive reuse projects and there’s plenty more opportunity for that,” she said. But she also worries; a neighborhood in transition is a fragile thing. “Investing in real estate isn’t the same as investing in a community. You don’t often see developers or landlords from outside the neighborhood taking part in neighborhood clean ups and tree plantings, community meetings, and so on. Neighborhood stewardship can be a very hard thing to cultivate and maintain. Those who are engaged in that way, I think, want to take part in strengthening the neighborhood rather than simply watching it change and benefiting from that change.”

On American Street, through the Lower North District Plan, the City still has an opportunity to facilitate redevelopment that works in everyone’s best interest. “I’m really bullish on South Kensington,” said Charlie Abdo. “I’m looking forward to seeing the new and improved neighborhood.”

Nathaniel Popkin contributed reporting to this story.

Tomorrow: What’s the future for Soko Lofts property?