Scrutinizing Street's neighborhoods legacy

HOW WILL John Street be remembered after he leaves the mayor's office?

Will it be for high rates of violent crime? Or the FBI bug found in his office? Perhaps Philadelphians will simply remember him grabbing a deferred pay-raise on his way out the door.

Here's another possibility: Perhaps John Street will be recalled as the first Philadelphia mayor to apply government's massive resources to fixing neighborhoods that had been in decline for decades.

And if Street becomes the "Neighborhood Mayor" to future generations, it will be because of his Neighborhood Transformation Initiative, a complex vision of how to renew city neighborhoods ravaged by generations of disinvestment with a quick jolt of $296 million in bond money plus other city tax dollars.

Street's vision was this: Knock down thousands of blighted buildings, clean up neighborhoods, condemn abandoned property and then package it for development, attract private developers and encourage homeowners to reinvest in their own properties.

NTI was "at the core of everything that we have been trying to do," Street said.

But did it succeed?

Street sees NTI as a galloping success.

"There are no throw-away neighborhoods any more," Street said. "All property is valuable in this city today and we have practically abandoned the use of the term 'abandoned property.' "

Street likes to tell the story of a homeowner who approached him recently, telling him he will always be her favorite mayor.

"She told me that her house in West Philadelphia used to be worth $5,000 and now people have offered her $150,000. She said it was like I wrote her a big fat check," he chuckled.

Street's goal, when he announced NTI in April 2001, was to see 16,000 new housing units develop in the following five years. He exceeded that goal with at least 24,000 units built, planned or under construction during his two terms in office.

But the administration's accounting includes every home built in the past eight years - whether or not it benefited directly from NTI.

Critics scoff at this generous way of judging the impact of a program that Philadelphians will be making annual $20 million bond payments on until 2031. By then, the city will have paid $552 million for the privilege of spending $296 million during the Street era.

Mark Alan Hughes, a Penn professor - and a frequent critic of NTI over the years who campaigned for Mayor-elect Michael Nutter - said that the program wasn't a "game changer" but rather a grab bag of programs that filled in the loss of federal housing money.

"It seems to me there had to be a really high return on investment and I don't see a lot of evidence of that," he said.

Today and tomorrow, the Daily News is examining how NTI did - or did not - meet its ambitious goals and change Philadelphia's neglected neighborhoods.

Street's anti-blight plan emerged in the 1999 mayoral campaign. It was the logical follow-up to the work he, as Council President, and Mayor Ed Rendell had done during the '90s to cure the city's grave fiscal problems and invest heavily in Center City.

During the campaign, Street pledged to "turn our attention to the neighborhoods without turning our back on Center City."

This idea was not new. On May 13, 1985, the day of the MOVE tragedy, then-Councilman Street had announced a proposal for a $550 million bond to finance loans for families to repair vacant homes. The plan, which also earmarked $40 million for massive demolition, died amid the political chaos of the MOVE era.

For an idea that had been around a while, NTI was a tough sell. Street needed more than two years to get the proposal through City Council.

What emerged was a program dedicated to demolition - though not as much as originally intended - plus redevelopment and home preservation. Over the years it added and dropped programs and shifted spending priorities.

"Look, I could have proposed a $10 million or $25 million program and gotten it approved in 60 days, but when you start talking close to $300 million, it made a lot of people nervous," Street said.

Unfortunately, it's difficult to tell what the city bought with that almost $300 million.

NTI's policies and money joined other programs designed to fight blight in Philadelphia, including a 10-year tax abatement for new and rehabbed homes.

At the same time, interest rates were falling to record lows and the real estate market was booming. Baby boomers began retiring and, if the real estate listings were any indication, many wanted nothing more than to settle in a city condo.

The city didn't keep track of which developments were the direct result of NTI money or land and which were simply the result of an improved real estate market.

When asked about the development that occurred on "NTI lands" - sites where the program helped with large-scale demolition or acquisition - Joyce Wilkerson, Street's chief of staff, said, "My guesstimate, knowing what the development time line is, is that it may not be a huge number."

The Street administration says that NTI helped create the environment for the city to prosper from the national trends - and without it, the city would have missed one of the greatest wealth-creating booms in decades.

"This housing boom rode on the wave of NTI investment and the overall investment and attention given to the city's neighborhoods," said Kevin Hanna, the mayor's secretary for housing and neighborhood preservation.

Street says developers told him a simple truth:

"They said they wouldn't be developing where they are without the original Neighborhood Transformation Initiative, the Safe Streets program, the lot cleaning and the abandoned-car removal. They were clear about that."

Said Wilkerson, "I don't buy this idea that if our dollars didn't actually fund the demolition, acquisition or subsidize the development that we can't take credit for it."

But others who have studied NTI say the administration is simply counting the market's successes as its own.

"It's tough to listen to that with a straight face," said Stephen McGovern, a Haverford College professor who's written about NTI. "It's amazing that they would still insist on that when no one agrees with them."

"The mayor is correct that the boom happened on his watch," said Kevin Gillen, a Wharton researcher and Econsult vice president, "but the idea that it is attributable to NTI is laughable."

Gillen credits Street for removing blight and stabilizing real estate values in some small markets. But he said, "The idea that you could drive an entire market that large just by concentrating your efforts in a few locales is stretching your faith in public policy."

An example of the two opinions of NTI's level of influence can be found at Naval Square, the tony development at the former Naval Home at 24th and Bainbridge streets.

Toll Brothers bought the property in the early 1980s and sat on it until market conditions warranted development. Then, Hanna helped Toll get various approvals from the city.

Hanna called the work he did "NTI-policy related." The administration adds 800 units from that development to its grand total of development.

But Zvi Barzilay, president and chief operating officer of Toll Brothers, said that although the Street administration helped "to some extent" with permit issues, state and federal authorities also played a role.

"I heard about it [NTI], but it had nothing to do with our project," he said.

To the Street administration, the criticism doesn't seem to matter much: They say that simply helping to arrest blight is a big enough success.

Said Street - who is soon to be an academic at Temple University: "Most of those academics never lived in a neighborhood that had thousands of abandoned cars. They never lived near an open-air drug market."

estate? A lot.

One of the most powerful forces reshaping Philly's real-estate market, said Gillen, McGovern and others, is changes wrought by the Philadelphia Housing Authority, which began tearing down high-rises and knitting new mixed-income communities back into the urban fabric.

NTI had little to do with that.

When PHA towers came down, Jeremy Nowak, president of The Reinvestment Fund and a key Street adviser on NTI, said, "the market took off. It said this is an OK place to be."

PHA is the city's biggest developer of affordable housing, which is subsidized by government and includes rental units and houses for sale. PHA built almost 4,000 units during the Street years.

Carl Greene, PHA executive director, said he made sure his strategy "fit into, complemented and supported" NTI.

But despite all the PHA work, only at the Mill Creek area in West Philadelphia (renamed the Lucien Blackwell Homes) did PHA get NTI funding for about 390 homes. Greene said it was about $3 million, though city records say $7.9 million went for demolition and acquisition of land.

Besides the PHA developments, another 6,600 affordable units have been built, are under construction or were planned during Street's entire term. By contrast, 4,884 affordable units were built during the Rendell years.

But, again, few of the Street administration's affordable-housing developments used NTI money or lands.

The city has spent $25.4 million in NTI money for 1,102 affordable housing units. On the drawing board are another 620 units, requiring almost $11 million in NTI acquisition costs.

The city also provided money for demolition and acquisition work for a small number of market-rate housing projects. According to an NTI list, $11.4 million was spent to develop 958 units.

Some projects used NTI money to mix less-expensive, city-subsidized housing with market-rate developments: Spring Arts Point at 11th and Wallace streets will be able to subsidize seven of its 72 units as affordable housing thanks to NTI.

NTI money also found its way into notable market-rate projects, including the Brewerytown development along 31st Street. The Westrum Company will eventually have 790 units there thanks to $1.2 million in demolition and acquisition funding.

On the factors explaining the boom in Philadelphia, Nowak said interest rates, market factors, demographic shifts and NTI all played a part.

"Are there places where cleaning up lots, assembling land, knocking down vacant buildings helped move the market? The answer is yes," he said of NTI. "Does that explain the broad-based market improvements that the Philadelphia market experienced for five years? That doesn't explain it. It contributed to it."

One of Mayor Street's many goals for NTI was to reverse the city's steady population decline, which has reduced Philadelphia from a city of 2 million to slightly more than 1.5 million in 2000.

Street hoped the city would gain about 75,000 residents over the first decade of NTI, about a 5 percent increase.

Because the bond-funded part of the program didn't begin until almost mid-2002, if Street's goal was to be met, the city should have grown some 37,500 residents by mid-2007.

But, in June, the latest federal census report had the city's population at about 1.45 million.

Still, the mayor sees a silver lining.

"I think the population has leveled off," he said. "I think we have been responsible for stabilizing our population loss and keeping a lot of people in the city. But if we are to grow in a serious way, you have to do something about the schools."

Nowak, Mayor Street's key NTI consultant, told the mayor in 2001 that the city didn't just have a blight problem. "We are a blight machine," he said.

If the then-current rate of creating vacant buildings were projected into the future, the city would be overwhelmed by it, Nowak recalled.

"It just seemed that it was getting worse and worse," he said.

What a difference six years can make.

In gross terms, there were more than 29,000 vacant buildings in early 2001. L&I now estimates there are fewer than 7,800 vacant buildings in the city, although Licenses & Inspections Commissioner Robert Solvibile warns that L&I is a complaint-driven system and his count may understate the actual problem.

Perhaps the most dramatic change has come for the "worst of the worst," as Solvibile calls those buildings that could collapse in the next 60 to 90 days.

Formerly known as "imminently dangerous" buildings, there were about 7,700 of them in 2001. There are now about 200 and they will be demolished soon, he said.

There are also about 3,200 buildings that are deemed structurally unsafe, though not likely to tumble any time soon. Solvibile said that some of the buildings formerly labeled "imminently dangerous" buildings may have been reclassified as structurally unsafe, but not many.

He also warned that the number of vacant but structurally sound buildings - 4,400 - is "what is known to our system. I'm not saying that's all of them. That's just what we know about."

Last August, when the Daily News asked how many vacant properties are in city inventory, Solvibile said there were 19,000, including 11,740 vacant, 7,180 unsafe and 220 imminently dangerous. He now says this count was actually the number of violations and not individual addresses.

So, is there less blight in the city? Kevin Hanna, the mayor's housing secretary, thinks so, and he has the eye of a newcomer whose first impressions of the city were gained in the fall of 2001 shortly before he decided to leave Atlanta and take the housing job here.

"I had never seen so much blight, however you define it, as I saw in Philadelphia six years ago," Hanna said. "Now, driving through those areas you still see a good bit of blight. I mean vacant buildings and properties, unkempt properties, but it's nowhere near the level it was."

Wilkerson, Street's chief of staff, says that as a result of NTI "a lot of little kids are not walking past buildings that are crumbling." *