Councilmember Mark Squilla proposes a plan to protect Chinatown from displacement by the new Sixers arena

When Councilmember Mark Squilla introduced legislation Thursday to allow the 76ers to move forward with a basketball arena on East Market Street, he included a bill to create special zoning rules for neighboring Chinatown.

His goal is to prevent small businesses and residents from being displaced as large projects like the arena or the “Chinatown stitch,” which will cap part of the Vine Street Expressway north of the neighborhood, move forward and could cause property values to spike.

“People are going to tie this to the arena, but we should be doing this anyway,” Squilla said in an interview Thursday. “[It’s about] the future of keeping Chinatown as a solid cultural hub for the city of Philadelphia, whether the arena gets the votes or not.”

The zoning overlay legislation Squilla proposed Thursday would cover the area between Vine and Filbert Streets from Ninth to 13th Streets.

It includes an inclusionary zoning ordinance to require affordable housing, restrictions on types of businesses, and limits on the size of new storefronts to discourage chain restaurants from crowding out traditional Chinatown retail.

Besides the geographic area, the bill is vague. The precise language mandating how any of this would work has yet to be added to the bill, as Squilla works with Chinatown organizations and the Planning Commission on the details. The exact language will be added to the bill by amendments in the coming weeks.

Squilla says that the inclusionary zoning aspect of the bill would be more flexible than current rules that cover swaths of Kensington and West Philadelphia. That law requires apartment buildings of 10 or more units to set aside a fifth of them for low-income residents.

But Squilla said he talked with one of the architects of that law, former Councilmember Maria Quiñones-Sánchez, and she warned him against setting affordability limits too low.

“I asked Maria, and she said they haven’t built anything yet,” Squilla said. “We don’t want to prohibit affordable housing [by accident], making it almost impossible for them to do any developments. So we are talking with Planning, how do we do a inclusionary zoning model that works?”

Other aspects of the bill include a ban of particular kinds of businesses from the neighborhood, chiefly the smoke shops that have been popping up all over the city and “personal service shops” to try to forestall more massage parlors opening. (Bars were considered as a restricted use as well but will not be included.)

Another provision of the bill would limit businesses to a maximum square footage unless they secure permission from the city’s Zoning Board of Adjustment.

The precise limit is still under discussion, and Squilla has asked the Planning Commission to study the size of businesses in Chinatown. The idea is to make it hard for a developer to buy multiple storefronts full of small businesses, close them, and open a large operation in their stead.

“You could buy three or four buildings together, and Chickie’s & Pete’s comes in … that’s not the Chinatown small-business feel,” Squilla said. “Somebody’s going to have to think about, if I go in there and buy these three properties, I’m going to have to get a variance to put a bigger place in.”

Squilla also plans a “Cultural Tax Increment Financing (TIF) District” that would cover the same area as his overlay bill to address the fear that if taxes go up as a result of increased property valuations, rents for small businesses will spike, too.

“The tax would be collected by the city and then remitted back … to offset the [rise] in rent,” Squilla said. “It’s almost like a rent rebate program to keep those small businesses there.”

Squilla says he has been consulting with experts in San Francisco, which created special zoning rules to protect its Chinatown. He’s also been consulting with groups in Chinatown.

“We’ve been talking to several different organizations … I don’t want to say [who] because they’ll get in trouble for talking to us,” Squilla said. “Just community stakeholders, I want to say.”

Critics of the 76ers’ plan argue efforts like these will not be enough to stem displacement. The impact studies paid for by the team, and sponsored by the city, projected that Chinatown would be negatively affected by the arena.

“Our city leaders are absolutely kidding themselves if they truly believe that the commercial core of Philadelphia’s Chinatown will be ‘saved’ by [this],” said Domenic Vitiello, professor of urban planning at the University of Pennsylvania. “No measures like this have preserved any American Chinatown … when such disruptive land uses as arenas are built in or next to them.”