March 6-12, 2003
Taking a Gamble
Music mogul and mega-developer Kenny Gamble bets on the future of his South Philadelphia neighborhoods.
A row-house door opens slightly, and someone hidden in the shadows tosses a half-empty bag of garbage onto the sidewalk of the 1400 block of Federal Street. The icy wind carries the limp discard up the littered South Philadelphia block. Within moments, it comes to rest alongside other debris: empty bottles, flattened tires, splintered furniture, torn sneakers, soiled baby clothes. The refuse is partially obscured under blackened snow that was white and sparkling just days ago. Oddly, auto body and repair shops also litter this street, despite the scarcity of cars.
For more than 35 years, Edith Ortiz has lived nearby in the 1600 block of Federal Street. She remembers when this community was bustling -- when three-story row houses were filled with tenants, and neighborhood dwellers frequented the local dry cleaners, grocery stores and beauty salons. In recent years, however, Ortiz has witnessed her neighborhood's decline.
"When I moved here in '67," recalls Ortiz, a beautiful woman whose youthful energy belies her 72 years, "there was talk about redevelopment and renovation even then. Eventually, though, most of the renters moved out and these houses around here were vacant for years and years. Actually, it was a relief when they started taking the houses down. It's a great improvement over what it was."
Ortiz says that not long ago, of the 40 homes on her block, less than seven were occupied. Now, as a result of a neighborhood redevelopment project undertaken by South Philadelphia resident businessman Kenneth Gamble, the number of newly built and occupied homes on her block has tripled.
Some South Philadelphians, however, are not as pleased as Ortiz with the sweeping changes to the neighborhood. In fact, former property owners Bob and Barbara Lattimore and Pastor Jannie Wade believe that they were treated unfairly by both the city and Gamble. For them, progress has meant loss.
Folks are often leery of change -- especially when change upsets preconceived plans. The redevelopment of historically black South Philadelphia is no stranger to that truth. While the ultimate outcome of Gamble's project may be for the common good, the price of change has been high and the road to renovation, at times, heartbreaking.
Since 1960, nearly a half-million people have moved out of Philadelphia. For decades, the depressed streets of South Philadelphia have stood as a reminder of better days in this city of neighborhoods, where inhabitants live alongside one another in enclaves completely separate and distinct, secured like the stitching of a patchwork quilt. Longtime residents can recall when this part of South Philly was home to a thriving class of black professionals. Many say it was standard to have neighbors who were doctors, lawyers, engineers -- even an architect.
Over the past 50 years, however, this neighborhood has suffered. Theories abound about the demise of this territory abutting Center City. Among those speculations is that many residents, seeking the benefits promised through integration, moved to West Philadelphia as the predominantly white residents moved on to the newly developing Northeast and parts of the western suburbs. Still others, facing economic hardships, relinquished homeownership, moving into the newly erected Philadelphia Housing Authority high rises -- ill-fated from the start -- that began appearing on the city landscape in the late 1950s.
Today, the gentrification of this neighborhood that straddles the Avenue of the Arts has turned South Philadelphia into a real estate gold mine. Kenny Gamble is making sure he gets his piece.
In 1990, after a long, successful career as a multiplatinum-selling record producer and songwriter, Gamble, a South Philadelphia native, returned home with a plan. In particular, Gamble envisioned the revitalization of his old neighborhood: 15th and Christian streets -- once a hub, now blighted -- ideally situated on the fringes of Center City. In 1993, with partners Abdur-Rahim Islam and Shahied Dawan, Gamble formed Universal Community Homes, a nonprofit community development corporation. Six years later, Universal Community Homes had grown into the ubiquitous Universal Companies, a multimillion-dollar business with multiple undertakings. Signs declaring the company's involvement in construction projects currently under way are posted from 11th Street to Grays Ferry Avenue and South Street to Point Breeze Avenue. These days, Gamble has several business ventures: Universal Real Estate Development Co.; Universal Business Support Center; Universal Retail Cos.; Universal Construction Co.; Universal Education Management Co.; Universal Capital Investment Fund; and other limited partnerships, including Universal Point, LP (which focuses on the redevelopment of Point Breeze and Hawthorne) and Uni-Penn Housing Partners, a development alliance between Universal Companies and Pennrose Properties.
Gamble says the goal of Universal Cos. is to implement an all-inclusive, well-honed corporate paradigm to oversee and address the issues most pressing in the black community -- specifically the disintegration of the family and the lack of quality education. In addition to its involvement in assorted real estate projects, Universal Cos. offers job-training programs, owns a number of small neighborhood businesses and manages the Universal Institute Charter School, as well as three Philadelphia public schools, including the Edwin M. Stanton Elementary School, which Gamble attended.
"It boils down to economics," Gamble says. "So we're taking a business approach. This area of South Philadelphia is a largely African-American community and there's been no investment here in 40 to 50 years. At Universal Companies, we are a development corporation and a management corporation. We're making sure that people who never could participate in how their lives were being run now have a voice."
For the past four years, Gamble and his organization have been omnipresent in the contiguous communities of Point Breeze, Hawthorne, Central South Philadelphia and parts of Grays Ferry. Under the auspices of a government-sanctioned policy called "eminent domain," a blight-removal directive predating Mayor John Street's Neighborhood Transformation Initiative (NTI), Universal has acquired hundreds of abandoned and otherwise decaying properties at prices far lower than even the sweetest "sweetheart deal." In many cases, Universal was able to acquire land at infinitesimal fees because it was able to demonstrate the wherewithal to complete construction -- a practice not unusual in real estate projects, particularly when the developer is building low-income housing. For example, 31 parcels of land (92 properties) assessed at $147,284 were sold to Universal for $27, according to an October 1999 deed between the Philadelphia Redevelopment Authority (RDA) and Universal Point, LP. After real estate transfer taxes were calculated for those properties, Universal shelled out just under $20,000 to close the deal. With low-cost market opportunities like that available, the company is undertaking what is considered one of the largest, most comprehensive redevelopments of an urban residential neighborhood in the country.
"The Universal plan is a plan that we have put together in order to revitalize the community," Gamble says. "And this area in South Philly is a model to show how to end urban blight. We want to make sure that African-American people can stay in this area and we want to make sure there's affordable housing in this area. The most important thing to remember is that it's not magic but I'm doing it because something has moved me to do it -- and I can."
One of the things that makes Gamble's role remarkable -- at least to some who say they know him -- is that he's a member of the community he's overhauling. People in the neighborhood believe that despite Gamble's success as a music mogul, he remembers where he came from and wasn't afraid to return. With considerable wealth at his disposal, many would have understood if Gamble had opted for a genteel life in the suburbs, somewhere comfortable and pampered. But Gamble chose the opposite. These days, Gamble is not just a community developer; he's living in the midst of the community where his plans are taking shape.
"We're very happy with Kenny's development," says Barbara Grant, director of communications for Mayor Street's administration. "We're working pretty closely with Universal and we've been very supportive so that he's as successful as he can be. We'd like to see what he's doing duplicated in other areas of Philadelphia."
But not everyone is pleased with Universal's ambitious development plans. In order to initiate construction in the area, the city had to oversee the evacuation of the affected streets and make arrangements for whatever relocations arose as a result. Some longtime property owners found themselves caught in the dragnet of the eminent domain policy. While the city's NTI policy seeks to acquire blighted and abandoned public properties, the eminent domain policy affects properties that are both public and private. Along with a series of low-income housing tax credits designed to benefit developers, the eminent domain strategy has enabled Gamble to target a number of neighborhoods in South Philadelphia, the mother lode of his acquisitions.
Herb Wetzel, executive director of the Redevelopment Authority, says that under eminent domain, areas are declared "blighted," generally, when abandoned houses outnumber those that are occupied and property values plummet. Under these circumstances, houses that have met the RDA's blight criteria can legally be confiscated through an assortment of administrative procedures. A quasi-governmental authority, the RDA is directed and sanctioned -- ultimately -- by City Council and the mayor. After the RDA identifies an area, the elected district leader is responsible for alerting the community to the policy's goals through public forums and encourages community involvement in that transformation. After the eminent domain declaration is voted on in City Council, the mayor makes it law. Letters are distributed to affected properties, stating that the city and the RDA have determined the neighborhood blighted and intend to reclaim it. Another letter follows offering financial compensation for the acquisition; a period is available for property owners to respond, and demolition begins shortly thereafter.
"We had a few meetings at the [neighborhood] church, but only about five people showed up," says Edith Ortiz, describing the period preceding the demolition on her block in early 2000. "People made all kinds of excuses, I was busy, things like that. And they sat back as the process started unfolding. Condemnation notices [from the RDA] had been posted on their properties, but they didn't take them seriously. But when they came home and saw their houses had been mowed down, they were devastated."
To mitigate the discomfort of displacement, rules and guidelines are in place for owners to receive compensation for their properties, based on a fair market-value assessment. In nearly all cases the RDA also provides funds for relocation. Those owners who disagree with the city's assessment of their property and/or who expected more money from the exchange -- for either financial or aesthetic reasons -- are afforded a time period to challenge the decree. Many property owners are surprised at how low the RDA-assessed values of their properties are. Wetzel explains that fair market value reflects the overall condition of the neighborhood; privately hired assessors can be retained, but home improvements made by individuals are seldom taken into consideration.
And while the RDA and an appropriate planning commission can determine an area blighted, to acquire the properties -- whether public or private -- the RDA must have the approval of the city and a developer on hand, willing and able to undertake a redevelopment project, Wetzel says.
"We only have the power to take properties through a very detailed process," he explains. "But we have no authority to move forward without the mayor and a district Councilperson. What we do is enable development to take place."
One important criterion for the RDA definition of "blight" focuses on properties that are in tax arrears. Ortiz says that throughout the 36 years she has owned her three-story house, part of which is zoned as a rental property, she's never fallen behind in her taxes.
ON THE JOB: Universal Companies' numerous neighborhood businesses include this job training center.
"People lost control of their property through their own neglect," Ortiz says. "As long as I pay my taxes, they can't touch me."
Wetzel says that homeowners who were tax delinquent were offered the opportunity to make "arrangements" to pay the back taxes. A few took advantage of the arrangement, and were able to keep their properties. Many others moved on. But some found the offer unacceptable and the guidelines too rigorous.
Bob and Barbara Lattimore owned six properties in the Hawthorne area: a neighborhood grocery store, four buildings they planned to renovate and a vacant lot. In 1999, the housing project in the neighborhood, MLK Plaza, was imploded by the city to make way for new lower- to middle-income housing units. The Lattimores say they were pleased to learn that MLK Plaza, with its reputation for high crime, was coming down. But they say they had no idea that 231 other properties -- including their own -- would also be razed to make room for the new development being constructed by Universal.
"I'd been on the committee to decide what to do with these [housing] projects from the beginning," Bob Lattimore, 60, says. "But in the meetings they never discussed the taking of the extra properties."
During that period, Bob Lattimore was hit with a serious illness. Within months, their unmanned grocery store no longer provided income. Renters, living in a building the Lattimores described as termite-infested, had moved out years earlier. Already somewhat behind in their property taxes, the couple fell even further behind. A short time later, when the neighborhood was targeted by the eminent domain policy, the Lattimores received a letter from the RDA offering them $73,500 for their six properties. Bob Lattimore says that in his estimation, the offer didn't reflect the properties' true value (one building had been appraised at $70,000 a few years earlier). To complicate matters, the Lattimores initially received a letter of contemplation, a notice to owners expressing the RDA's interest in acquiring their property. This led them to believe they had more time to address the problems than they actually did. When Bob Lattimore's illness became the couple's priority, they didn't take advantage of the chance they had to contest the takeover. Eventually, they lost all of their property.
"I was working on my properties, but when I got sick, everything stopped," Bob Lattimore recalls, his body upright and staunch, his jaw firmly set. "I was recuperating from a heart operation and we weren't really given the opportunity to discuss it. Whenever we called the RDA, they passed us along to Kenny Gamble. I don't want to call out names or cast aspersions, but I asked the RDA, 'Why can't I build?' What I'm angry about is that they're taking [my property] from me and giving it to someone else and they're doing exactly what I wanted to do. When they took my properties from me, they left me penniless. The [$73,500] offer was just too low for the six properties. I didn't even make a counteroffer. If I could've completed work on my six properties, right now, they'd be worth $3 million. I don't want to sell; I want to build."
Lattimore says that four of his five buildings were unoccupied. With renovation being both costly and complicated, and taxes piling up every quarter, he says he tried to repair all the properties simultaneously, but nothing had been completed. When Universal submitted a proposal to the city, describing a redevelopment plan that would revitalize the entire area, the Lattimores' efforts were in vain.
"I'm not fighting against development," Bob Lattimore insists. "Actually, I think it's a great thing. The only bad thing about it is that when you upgrade a community, you end up downloading on a lot of poor people. I wanted to do something for my community. I had accumulated what I needed to accomplish what I was trying to do, but we were ignored. I don't think we should've been treated the way we were."
"We weren't trying to take people out," says Councilman Frank DiCicco, whose district was impacted by the massive relocation and demolition. "There was a lot of consideration given to everyone effected. I've talked to Bob Lattimore. I know he said this wasn't fair. I asked him, 'Why don't you sell part of [what you own], fix your property and pay your taxes? Why not consolidate?' Actually, his store was only open one or two days a week. But he was here, in Council, day and night. And finally, one day I said to him, 'Bob, it's over.'"
DiCicco says that he made sure there were ample announcements and meetings held to alert the community about the MLK Plaza demolition and the planned redevelopment for that area.
"With Universal, we had a developer that had a project," DiCicco says. "There was a lot of opposition to Gamble because proposed changes in any neighborhood are usually resisted. In my district, it was baptism by fire -- which is not unusual. But I see Kenny bringing in stability and homeownership -- not just rentals. He's recreated and rehabilitated the neighborhood."
Bob and Barbara Lattimore
Gamble says that nearly all the condemnations in that part of South Philly, west of Broad Street, were of abandoned buildings.
"The largest relocation for that project was MLK," Gamble says. "And once that was handled, it presented the opportunity to do [construction in] that whole area. We're concentrating on South Philly as our model. We want to be the first city in the country to end urban blight. But it's not going to be a quick fix."
Jannie Wade and her husband, Isaiah, moved from South Carolina to South Philadelphia in 1944. Not long after, Jannie Wade's calling to the ministry led to the couple's purchase of Mt. Carmel Holy Church, a small house of worship at 1629-31 Federal St. After years of sermons, and a swelling parish, Jannie Wade outgrew her undersized church. She says it was a sign from God when two abandoned buildings adjacent to the church came up for sale. Isaiah Wade purchased the double building, located at 1633-35 Federal St., for under $25,000 and the Wades began renovations. Construction was slow, but eventually Mt. Carmel moved completely out of 1629-31; 1633-35 became the church's new headquarters. The smaller building, now abandoned, was never sold or relinquished.
As the businessman of the team, Isaiah Wade was responsible for the family's financial affairs: overseeing construction, paying taxes, car notes, mortgages and the like. But, in 1987, Isaiah Wade died unexpectedly of heart failure. Soon after, a niece who lived next door began delivering the tax payments on the four Point Breeze buildings for Jannie Wade. Then her niece died. When Jannie Wade, at 85 years old, finally made her way to the municipal building to pay her delinquent taxes, she got some bad news.
"The girl who worked there said, Miss Wade, can I tell you the truth? Your houses have been sold,'" Jannie Wade recalls, sitting in her home, also in South Philly, but about a mile from the church. Shaking her head, she sorts through stacks of pictures, papers and remnants of the past. "I couldn't believe it."
Herb Wetzel says that, according to records kept at the RDA, Wade's properties had accumulated a long history of citations from the city's Department of Licenses and Inspections (L&I). Jannie Wade says she was totally unaware that her buildings were in violation of any property codes. She also says she has no recollection of receiving notification from L&I of those offenses. Records show, though, that from 1993 through 1998, all four of Wade's buildings were cited repeatedly.
One Tuesday in December 1998, Pastor Wade returned to her church to discover that sometime between the prior Sunday and that day, a city-hired wrecking ball, while toppling two of her buildings identified by L&I as "public nuisances," had also knocked an enormous hole in the rear of the church. That building, according to Wade, had not been scheduled for demolition. "[The construction workers] said they were tearing down 1629 and 31 [Federal Street] and everything else just started falling apart," says Pastor Wade, 90, her smooth, dark skin like a warrior's mask, but barely disguising her overwhelming disappointment. "All my stuff was stolen out of the church. During a sermon, we even heard somebody stealing the boiler -- right in the middle of the sermon. Can you believe that? I went to [the RDA on] Market Street and they told me to leave [the hole] alone so that they could assess the damage and give me some money. But they never did. Some of the people who lived on Federal Street told me to speak to Kenny Gamble. But I couldn't reach him, either. I couldn't make it to any of the meetings that had been organized and they just took my property. I never got a dime. My hand to God, I got nothing. Not even a good word."
When Wade finally received a letter of condemnation from the RDA, labeling all her properties blighted, she vigorously disagreed.
"I spent a lot of money trying to fix the place and keep the property up," she says. "I paid good money for a lot of repairs. I even resurfaced sections of the roof. Yes, I know there were some leaks in the kitchen, but nowhere else. My husband and I started early; we wanted a nest egg. Now, I don't even have a nest to put an egg in."
Wetzel says it's highly unusual for a property owner who has fallen under eminent domain to receive no compensation from the RDA. Financial offers, he says, are put into escrow accounts, remaining available to individuals who can prove ownership for sometimes as long as five years; any liens against the property are deducted from the amount of the original offering. But, Wetzel points out, by the time the RDA had targeted Jannie Wade's property, L&I had already demolished her four buildings. He says that the RDA was prepared to offer Wade almost $4,000 for just her land, but as owner, Wade became responsible for the demolition costs. Officials at L&I say that bill was in excess of $17,000. Wetzel says the $4,000 offering was applied to that debt; Wade still owes the city more than $13,000.
"If you own real estate and neglect it, the city just can't let it continue to deteriorate," Wetzel says. "Is that fair to the other people who live on that block?"
Gamble says every effort was made to accommodate those who were being displaced, but the responsibility for acquisitions and relocations because of his project rested squarely with the RDA. He admits, though, that the redevelopment has been a huge undertaking.
"What we tried to do was communicate with everyone in the neighborhood," he says. "But this is not just about Universal. The [Philadelphia Housing Authority] and the city Redevelopment Authority were involved, and now we're working with the mayor and NTI. The way we see it, here's a concrete plan to do something. Ten years ago, there was nobody down here. What we're doing is good for America; it's good for Philadelphia; everybody wins. The idea has grown into something that can actually work. We believe it's the right time to do this."
While nearly all of her neighbors have come and gone, Edith Ortiz has watched every step of the renewal.
"I read in the Inquirer that there's a property up for sale on the 1600 block of Ellsworth Street for $99,999," she says. "I was amazed that they could put a house on the market for that much money."
Gamble says the value of the entire redevelopment project is immeasurable.
"It's costing an awful lot," he says, "and Universal has already invested quite a bit in the area and the project. But the cost of building a community structure for a better quality of life, well, we haven't put an exact dollar amount to it."
Lois Fernandez loves South Philadelphia. Since 1967, she has lived in a beautifully furnished, three-story brick house in the 2100 block of Fitzwater Street. Twenty-eight years ago, Fernandez, 66, founded ODUNDE, an African-American cultural organization that sponsors a yearly festival on South Street. Citations celebrating her contributions to this neighborhood, from notables including former President Bill Clinton, are prominently displayed on her walls. Fernandez says rich memories of a vibrant and productive South Philly have kept her in that community and encourage her to take part in its revitalization.
"South Street was our Mecca; we used to call that neighborhood West of Broad," she reminisces. "There was a time when our people didn't live west of 22nd Street; that area was all white. But this was always a beautiful neighborhood; there's always been a brotherhood here. Even [author and scholar] W.E.B. DuBois, when he wrote The Philadelphia Negro , said he had never seen such organized Negroes as in this community. But then we got the big gift' of integration -- and black folks started moving to Cobbs Creek like it was Hollywood."
For six years, Fernandez has had her eye on three abandoned lots adjacent to her organization's headquarters at 2308 Grays Ferry Avenue. Fernandez says she envisions erecting low-income senior housing in that space. In October, Fernandez says she informed City Council President Anna Verna and members of the mayor's NTI office that she wanted to be considered for an NTI land deal, and bid on the property. City officials told her that to meet the competitive requirements to make a bid, she had to provide detailed plans for its redevelopment. Fernandez says she has enlisted the help of Gamble and Universal.
"Universal is our development partner," Fernandez says. "Universal will help us with everything, from design, to funding, to the money we'll need for construction. Kenny is proven. He has used his money and his contacts. He's made a commitment to save a neighborhood that was practically gone. There are some people who have some negative things to say about what Kenny is doing. There was even some criticism that Kenny was taking properties by eminent domain, and a sense that he was taking them illegally. But, you'll hear stories like that because you can't please everybody. In this case, though, the good outweighs the bad. Look at the people he's put into housing. I get so excited driving up Fitzwater these days. How wonderful that the neighborhood is coming back."
Gamble says he hopes that Universal Cos.' contributions to the area will be positive and long-lasting.
"We've made it an industry to help upgrade the lives of the African-American community," he says. "The future is like a piece of putty: You've gotta get your hands on it so you can mold it -- and that's what we're doing."
The future of Greater South Philadelphia (a term that's been coined by one of Universal's executive vice presidents, Rotan E. Lee, to describe the four-neighborhood tract) will depend on the continued efforts of the organization to devote time, money and manpower into the area. It also depends on the willingness of the residents who live there to want to be part of the metamorphosis.
"The city got tired of playing around and looking at the blighted houses throughout the community," Edith Ortiz says. "If you get something, you've got an obligation to hold on to it and maintain it. And those people [adversely affected by the development project] didn't do it. Kenny Gamble, being a black man, saw an opportunity to do something for the community. He allowed this to work for him. People say he's a millionaire. But he can't just put his own money into it -- it's also a city project. He, like all businessmen, is looking for a gain."