From a once down-and-out commercial corridor to one of the hottest dining destinations in Center City, South Street West's upswing has been dramatic. That said, the stretch's revitalization makes sense -- one of the golden rules of commercial real estate is "retail follows rooftops." Or, more generally, commercial investors track thriving residential markets, capitalizing on demand.
According to a recent assessment, property values in adjacent Graduate Hospital have increased 43 percent since 2005. In the past two years, restaurants, bars, and retailers have followed suit, filling up vacant parcels and woebegone storefronts on the neighborhood's northern edge, South Street.
But retail has yet to penetrate the neighborhood's core. A part of town once rich with corner stores and mixed-use buildings has become a homogenous bedroom community. If retail truly does follow rooftops, why haven't corner stores and other commercial uses returned to Graduate Hospital? And can efforts along 22nd Street provide this bustling community with the commercial corridor it deserves?
According to Laura Spina with the City Planning Commission
, the reasons are complex. "15 years ago, there were hundreds of vacant parcels in the neighborhood," she says. "Corner stores and retailers were long gone. When the neighborhood started to revitalize, developers had a clean slate."
Spina, a longtime Philly resident, remembers when the area began to change -- it happened fast. Developers snatched up vacant lots and began filling them with slick townhouses or renovating historic buildings into modern digs for urban dwellers.
Vacant corner stores and ground floor retail spaces were converted to residential use. This was so common that, by the time retail was poised to follow an immense residential boom, there was nowhere to go. The neighborhood's traditional mixed-use character was seriously endangered.
Local developer and Graduate Hospital resident Stephen Rodriguez
agrees with Spina's assertions, but goes one step further. He points a finger at Toll Brothers
, the national development firm behind the gated residential-only Naval Square
community in the neighborhood's western reaches. Toll Brothers' next mostly residential project is currently under construction on the 2400 block of South Street.
"Graduate Hospital has become the odd ball of urban neighborhoods in Philly," explains Rodriguez. "Peer neighborhoods like Bella Vista, Passyunk [Square] and Northern Liberties went through similar revitalizations, and all have strong commercial aspects in their cores. Graduate Hospital doesn't."
He blames the lack of retail on developers' priorities. In Northern Liberties, the big developer is Tower Investments
, a local firm that, according to Rodriguez, cares about the street-level vitality of the neighborhood. In their projects -- most notably the Piazza at Schmidt's
-- commercial space has been a central component.
"Graduate Hospital got stuck with the Toll Brothers," says Rodriguez, calling the company's developments in Graduate Hospital "shortsighted" and "missed opportunities" to fill commercial demand. "They're setting the example for future development and they won't do mixed-use."
This charge isn't new to the Toll Brothers, who completed Naval Square in 2005. In response to these criticisms, the company has admitted
to not being market pioneers, more often sticking with what they know will sell in the marketplace -- they are a publicly-traded company and must answer to investors. In Graduate Hospital, residential-only development has worked very well.
Rodriguez also places part of the blame on the South of South Neighborhood Association (SOSNA
), an influential community group serving Graduate Hospital.
"Had SOSNA set the tone for proper mixed-use years ago and not doled out variances for commercial to residential conversions, the Toll Brothers wouldn't have come to the neighborhood with single-use schemes in the first place," he explains.
Andrew Dalzell, programs coordinator at SOSNA, counters that the organization actively promotes small-scale local retail at corner properties, and believes their existence is a key component of a walkable environment.
"We've commissioned four recent studies that touch on storefront preservation and mixed-use neighborhoods," says Dalzell. "We've used their findings to appeal to the City Commission to get more corner properties zoned for commercial uses in the Central District Plan's rezoning process."
While variances have been given out for some commercial-to-residential conversions, Dalzell says the vast majority were converted "by right," meaning developers were permitted to renovate corner stores to apartments or condos without a variance request, leaving SOSNA out of the review process all together. "SOSNA hasn't had a seat at the table in a lot of these instances," he adds.
Despite these ongoing frustrations, mixed-use isn't entirely dead in the neighborhood. Rodriguez points to a number of specialty retailers in the neighborhood that are thriving. "Look at Magpie [Artisan Pies]
on South Street," he says. "They only sell slices of pie. Everyone thought that would be a risky venture but they're wildly successful. The Igloo
on Grays Ferry Avenue is another example. The neighborhood has a dozen of these stories."
With a heavily-trafficked bike lane and redesigned public spaces, 22nd Street between Washington Avenue and South Street has potential as a commercial corridor. "It's the spine of the neighborhood," says Dalzell. "It's one of our most exciting streets."
In the past year alone, neighborhood stalwart The Sidecar Bar Bar & Grille
has seen a number of new neighbors move in -- the modern bistro SoWe
opened at 22nd and Carpenter; Ultimo Coffee
opened their second location at 22nd and Catharine; and CVS
built a new store at 22nd and South. Coming soon are Kermit's Bake Shop at Washington Avenue (owned by Sidecar's Adam Ritter) and a specialty art shop at Fitzwater Street from local "knittivist" Leslie Sudock.
To build off this momentum, SOSNA recently sponsored "Super Saturday," bringing residents together to clean 22nd Street and commemorate the new Julian Abele Park
at 22nd and Carpenter Streets. The neighborhood group also planned the first ever Art Crawl along 22nd Street, featuring work from local artists in the corridor's numerous pocket parks and public spaces.
To push the street towards a more mixed-use future -- and to restore corner commercial properties throughout the neighborhood -- zoning restrictions need to change. With SOSNA's full support, the Central District Plan will recommend up-zoning all corner CMX-1 properties as well as existing commercial corner nodes not currently zoned commercial to CMX-2. CMX-1 accomodates neighborhood-serving retail as well as most residential uses, meaning the developer has the choice to dedicate ground floor space to either commercial or residential uses. CMX-2 primarily accomodates retail and service uses, essentially guaranteeing a building's first floor space is dedicated for commercial use.
According to Spina, this will guarantee a commercial component in these properties if and when they turn over. Even some of the lost commercial spaces can be converted back to retail when properties undergo an improvement or renovation in the coming years.
Rodriguez welcomes such changes to the base zoning code, but suggests that more needs to be done in the short term.
"A few years ago, commercial rents were $15 to $17 per square foot," he says. "Now, some are going for upwards of $40 per square foot. With no retail space to fill demand, rents have shot through the roof. All of a sudden, retailers can't afford to do business here. It's an unhealthy market."
Rodriguez believes it's up to local developers -- not a national firm like Toll Brothers -- to fix the commercial market. He points to projects such as Carpenter Square
at 17th and Carpenter Streets and the new construction building housing Ultimo Coffee at 22nd and Catharine Streets as positive examples -- they were both built by smaller, local developers who seem invested in improving the neighborhood's walkability and quality of life.
Rodriguez is also putting his money where his mouth is. Later this year, he'll break ground on Bloc 23
, a contemporary 22-unit condominium and retail project at 23rd and Bainbridge.
"For the past 10 years, all we've gotten is residential, residential, residential," he says. "We have to act now so we don't have any more missed opportunities. The neighborhood's long-term viability depends on it."
GREG MECKSTROTH is Flying Kite's development news editor.
Photographs by JOHANNA AUSTIN