Proposed Callowhill business district stokes old and new controversies

As the Callowhill neighborhood prepares to mark the one-year anniversary of the Rail Park’s opening, another significant date looms ahead: a June 25 public hearing that will help determine whether a business improvement district will come to the once mostly industrial neighborhood, now undergoing a rapid transformation.

As proposed, the Callowhill Business Improvement District (BID) would collect from all property owners within its borders an assessment — what some call a tax — to clean streets, fight illegal dumping, and add more lighting at night, a group brochure says.

But the BID — planned generally for an area from Vine Street to Spring Garden Street, and the Rail Park to Broad Street — has stoked old accusations (it’s simply a way to secure long-term funding for the Rail Park, it conflicts with a proposed Chinatown BID) while triggering a new one: Deception on the part of Arts & Crafts Holdings, a developer in the neighborhood that’s purchased more than 20 buildings in the last four years, and Center City District executive director Paul Levy.

The Callowhill Neighborhood Association failed to create a neighborhood improvement district in 2011-12. New businesses and investors, such as Arts & Crafts Holdings, have moved to the neighborhood, and new lines have been drawn for this plan.

“They are taxing us to subsidize their investment in the neighborhood,” said Philip Browndeis, who owns a condo on Buttonwood Street with his wife, which they rent out. He believes the BID — which would levy a 0.12 percent tax on commercial properties and a 0.06 percent tax on residential owners — will increase gentrification and decrease opportunities for affordable housing.

“It’s almost like a new feudalism. We now have to pay Arts & Crafts Holdings for the right to own property in the neighborhood.”

John Struble, a longtime resident and board member of the Callowhill Neighborhood Association, which is pushing for the BID, counters that “the subsidy is for anybody who lives here. The whole neighborhood is going to benefit.”

Property owners will have a 45-day period ending Aug. 9 to voice opposition; if more than one-third object in writing, the BID won’t go forward.

Browndeis and his wife, Lee Quillen, believe Levy and Arts & Crafts officials have worked to minimize the investment company’s role in organizing the BID as a way to gain support.

For instance, they say emails between Levy and Arts & Crafts that Quillen obtained under the state’s Right-to-Know law, and which she shared with The Inquirer, reveal discussions to leave out mentions of the BID in promotional postcards and survey material, as well as Arts & Crafts’ involvement in the BID. (Craig Grossman, Arts & Crafts general partner, is a member of the proposed BID board; Kelly C.G. Edwards, who works in community relations for the firm, serves on the steering committee.)

In a July 25, 2018, email, Levy wrote to Edwards: “You might not want to use the phrase Business Improvement District or BID on the postcard because that could provoke unnecessary opposition...."

In an Aug. 29, 2018, email, after a staffer in Levy’s office advised him that the survey sent people to Arts & Crafts’s website upon submission, Levy wrote to Edwards: “... Please advise. Do you want the web host remain anonymous?”

Edwards responded: “yes, please remove. everything should be Arts & Crafts agnostic and be more about ‘the neighborhood.’”

In an interview, Levy said he didn’t remember the email about leaving out references to the BID.

“If I wrote that, and I don’t recall writing that, I have no problem with that point of view,” Levy said. He said the business improvement districts in the city, including his own Center City District, “are technically ‘special-services districts.’ And I know that if you use the word business that that’s going to provoke opposition."

“Obviously, businesses are supporting this and residents are supporting it, so it was a piece of marketing and a communications device,” he said. “We were not trying to hide something.”

Struble said most Callowhill residents and business owners are not concerned with such wording. “At this point in time, everything is all on the table,” Struble said.

John Chin, executive director of the Philadelphia Chinatown Development Corp., which wants to create its own business improvement district — one with proposed boundaries overlapping the Callowhill area that would not impose an assessment on owner-occupied residential properties — worries the Callowhill BID could be “detrimental.”

“So far, what they are presenting in the language about the BID is a cleaning and greening budget,“ Chin said. But he said he worries that its stated mission could change, and eventually the BID — currently with municipal authority designation — could authorize issuing bonds for the Rail Park.

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He also criticized the voting process. Owners of individual condo units can’t voice opposition; rather, the condo association votes as a whole.

Added Chin, "If people in the neighborhood are going to be asked to pay into the BID, they should have an opportunity to voice their opinion on the BID.”

The Callowhill BID can issue bonds, Levy acknowledged, but can’t issue liens or seize property by eminent domain.

Sarah McEneaney, president of the Callowhill Neighborhood Association, said condo owners would likely pay about $120 a year, based on the average condo assessment.

Edwards said she originally sought advice from Levy three years ago in her role as the steering committee coordinator because of his experience creating the Center City District and helping to secure funding for the Rail Park.

"When I started to work for Arts & Crafts, the company was young and we had a few properties. But it was frustrating to get off the bus at 10th and Spring Garden, and there was just trash everywhere.... We’re not just talking about napkins rolling down the street. This is serious, heavy-duty dumping.

“A lot of property owners and residents started meeting,” she said. “It wasn’t masterminded by Arts & Crafts.”

Michael Pasquerello, owner of Cafe Lift and Prohibition Tap Room on North 13th Street in Callowhill, as well as three other restaurants in Philly and Narberth, said it has been hard keeping the sidewalks clean.

“We’re the ground-floor space in a condo building,” he said of Cafe Lift. “While I know I have a responsibility to maintain the sidewalks, there are also 70 people living in 35 to 40 apartments above. I think something like this [BID] is really good. It takes a little stress off.”

And if any of the money goes toward expanding the Rail Park, he’s OK with that.

“Some of the first meetings about what that could be took place inside Cafe Lift. They were Penn and Drexel students talking about what an elevated rail park could look like," Pasquerello said. “It’s all been a dream come true.”