40th Street revitalization raises local concerns

The area of 40th and Chestnut streets is scheduled for new development that entails the construction of medium-rise buildings on the block's northeast and northwest corners, along with the renovation of a handful of buildings that contain both commercial and residential units.

Like many previous developments in which Penn has been involved, this one has attracted its share of critics. These proposals are seen as yet another move that will eventually displace current businesses and residents.

"Under the guise of improving the neighborhood, there is also a very real danger of the neighborhood being gentrified -- they are pushing people out," community resident and Neighbors Against McPenntrification member Richard Rogers said.

At the core of debate lies what some see as a conundrum -- development improves the quality of life in the area, which in turn increases the cost of living and the rent. How can an area that has vacant properties be improved without pricing out existing tenants? The fear is that the commercial and residential upgrades will come at the expense of current residents.

But, unlike in the past, the developers are highly conscious of the questions and the challenges that new development brings to the neighborhood.

"We are trying to re-establish the residential community here," because many of the apartments on the street are currently vacant, said Mark Mills, president of the Metropolis Group, which is developing the four multi-use buildings along the block.

"It's clearly a diverse [commercial] market, and we don't want to just cater to the University of Pennsylvania students," he added. "It will clearly be a challenge to certain tenants. I don't want to dismiss that."

But some local residents, like Al Krigman, are highly skeptical of the whole project of development that started with public forums held last spring. "All of [the] sudden there are these forums, and they are going to talk about the development of 40th Street as though it has already been decided that it needed some sort of development," Krigman recounted.

"I just have this uncomfortable feeling about these self-anointed people that somehow think that they know what is best for everybody else," Krigman said. "I believe the whole idea is to get rid of these people and to change the look of those places and make it attractive to the kind of enterprises" the Penn community finds appealing.

According to Senior Vice President of Facilities and Real Estate Services Omar Blaik, Penn's role in the process is indirect. The University is leasing the buildings to selected developers for a 25-year term, but otherwise is taking a hands-off approach.

Even so, Blaik considered that the direct link between development and displacement might be too simplistic.

"When people think of market forces, they think there are going to be upscale stores, and [they are] going to be directed towards a higher-end market," Blaik said, noting, "That is not necessarily the case."

Blaik stressed that successful locally owned stores that rely on customers from lower socioeconomic strata will still have a place in new developments.

"If the community needs its specialty markets that target certain segments -- and there is a market for it -- [those] stores will continue to do business," he said.

But, according to Mills, the rates of rent have already increased in the area due to earlier developments around 40th and Walnut streets.

And if the rents continue to rise with new development, there is some uncertainty about whether local specialty shops will be able to survive in their current locations.

The open-member group Friends of 40th Street, which was created following last spring's forums about 40th Street development, is currently working with developers with the aim of upholding its founding principles. These principles include the retention of socioeconomic diversity in the area and the promotion of equitable development.

One solution could be to offer renovated units at below-market value to the current tenants. This is a viable option, because although the development as a whole must be profitable, not every unit must bring in a profit.

For the first six months of his project, which begins in January, Mills will focus on the renovation of the empty residential units. In fall 2005, he plans to focus on improving the businesses housed in the commercial units below the apartments.

"We are going to be placing additional demands on the [commercial] tenants, which they might find burdening initially, but eventually will find a benefit," Mills said. He added that some of the businesses, like S&M; Food Market, can be cheaply improved through better lighting, facade refurbishment and the removal of cigarette advertisements.

But, Mills agreed that as the neighborhood changes, not all business will be able to adjust. "At the end of the day, more than half of the [businesses] will end up relocating, because they won't be able to make the adjustment," Mills said, adding that those who do adjust will be more profitable businesses.

The moderate-rise buildings that are planned for the two north corners of 40th and Chestnut streets are considered to be "very well designed from an urban design point of view," and "will help to solidify the corner," according to Harris Steinberg, executive director of Penn Praxis -- the consulting practice of the School of Design. "I believe they are also phasing construction so there is not a complete disruption" for the businesses.

Still, the critics of the development are unsure if the renovations can be accomplished smoothly. "If you walk up from Chestnut to Market, what kind of stores are there? We aren't talking about upscale stores," Krigman said. "If you take one of these stores, and you shut the operations down in order to do this major renovation, what's going to happen to the person who owns it? He is out of business or he moves somewhere else."

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