Category: Commercial Real Estate

Strawberry Mansion’s Cornerstone Baptist Church is slated for redevelopment as an affordable apartment building with 44 units.

The sprawling church, located at 2117 N. 33rd St. on the edge of Fairmount Park, was sold earlier this year to Philadelphia-based Select Redevelopment for $1.9 million.

Most of the units will be available to those making 75% of area median income, or less than $45,000 a year for a one-person household, with some available for even less to people earning lower incomes.

There will be 29 one-bedroom apartments, 14 two-bedrooms, and one studio. The project is estimated to cost $10 million to develop, with construction estimated to be complete in April 2028.

Travis Seal, a principal with Select Redevelopment, says Strawberry Mansion’s historic building stock, walkability, and park access have long been underappreciated by the real estate industry.

“Obviously [Strawberry Mansion] had some economic disinvestment over the second half of the 20th century, but a lot of people are waking up to the sense that neighborhoods like this are not being made every day anymore,” said Seal.

Seal says the roughly 100-year-old building — originally a synagogue called B’nai Jeshurun — is actually in robust condition, better than many historic religious buildings.

“We’re really trying to work within the existing structure because structurally, it’s [in] pretty good [shape],” said Seal. “It has some pretty fundamentally good bones, as opposed to churches that might be of a slightly older vintage, from the late 19th century.”

The church is not historically protected by local preservation regulations — earlier proposals from other developers would have razed the building for new construction — and Select Redevelopment’s project will also not require any zoning approvals to move forward.

The company has held some neighborhood meetings to gather community feedback, although it was not required to do so.

The church’s closure “was a really big loss to the neighborhood in terms of just us utilizing that space,” said Tonnetta Graham, the executive director of Strawberry Mansion Community Development Corporation.

Graham says that at its height Cornerstone Baptist was a huge presence in the neighborhood.

The congregation allowed its property to be used for a lot of neighborhood needs, including hosting a boxing ring, Boy Scout troops, summer camps, a community kitchen, and for high school graduation ceremonies.

But as the neighborhood and congregation shrank, they could not keep up with repairs, a common reason churches fall into disrepair.

Graham said there are some neighborhood concerns about the project — some would like to see even more affordability — and that residents would like the project to include efforts to honor Cornerstone’s history.

“We’re just happy that it’s not going to be demolished,” said Graham. “That’s the main thing. We won’t lose the actual edifice.”

Redevelopment backed by innovative affordability fund

Like many areas of North Philadelphia, Strawberry Mansion was hit hard by white flight and racist lending policies in the second half of the 20th century, which discouraged investment in the neighborhood and drove away residents.

In 1977, the federal government passed the Community Reinvestment Act (CRA), which compelled banks to make loans in neighborhoods that had experienced redlining and other discriminatory practices.

As part of TD Bank’s federal obligations to historically divested neighborhoods under the CRA, it has formed a $25 million partnership with CEI-Boulos Capital Management and together they are helping fund the redevelopment of Cornerstone Baptist Church.

The $25 million fund with CEI-Boulos is meant to allow TD Bank to invest in affordable projects without the long wait lists for competitive Low Income Housing Tax Credits (LIHTC). Many affordable projects suffer delays as they wait for that federal subsidy, and some are doomed if they don’t get a LIHTC award.

The CEI-Boulos partnership “helps us build a pipeline of CRA eligible deals outside of that pool,” said Scott Mularkey, CRA Investment Officer at TD Bank, which hopes to contribute to eight affordable projects in Philadelphia with the $25 million.

The TD Bank and CEI-Boulos fund will provide over a third of Cornerstone Baptist’s redevelopment costs.

They have previously backed a 49-unit project at 1348 S. 32nd St. in Grays Ferry and another 46-unit project at 2800 W. Diamond St., also in Strawberry Mansion.

Sam Spencer, CEO of CEI-Boulos, also argues that affordable rental housing is essential for Strawberry Mansion, where 57% of residents rent (compared to 45% of Philadelphia residents).

He also notes that 36% of residents in the census tract spend more than half their income on housing. He hopes the project will help people stay in their neighborhood.

“Strawberry Mansion has gentrification pressure,” said Spencer. “Our intent as a fund is to invest in projects that are going to serve current residents rather than drive current residents out.”

A New York-based developer that outbid real estate investor Dean Adler and Philadelphia’s PMC Property Group for control of the huge office complex at Centre Square has decided to walk away from the property.

Centre Square, one of Philadelphia’s largest office buildings, saw soaring vacancy after the COVID-19 pandemic and went into foreclosure in 2023.

In February, Adler announced that in partnership with PMC, he would buy the 1.76 million-square-foot office complex at 1500 Market St. for $70 million and transform it into a mixed-use mecca with hundreds of apartments and hotel space. The previous sale price in 2017 had been $328 million.

Then in May, the Philadelphia Business Journal reported that Manhattan-based CSC Coliving had bid $80 million for the project. CSC, too, planned a mix of residential, hotel, and office space.

“We were kicked out, and we didn’t fight it. We played by the rules,” Adler said. “We accepted when they were going to overbid us.”

On Thursday, the managing partner of CSC said his company had decided against the project.

“We backed out from 1500 Market,” said Salomon Smeke, managing partner and cofounder of CSC. “The tax abatement incentives in Philly were not enough to justify the conversion.”

Smeke said that “it would help” if a 20-year property tax abatement, like the one Mayor Cherelle L. Parker has been considering, were in place.

Asked for his reaction to CSC’s decision, Adler says that while he is still theoretically interested in the property, he will need to take another look to get a sense of why his competition backed out.

“Are we still interested? We are always interested,” Adler said. But he also said he would need to do more research.

“We are going to take our time,” Adler said. “I got to find out if there’s something we missed. Maybe they found something that we didn’t know, so we have to go back to do more homework.”

Adler has been on a roll of dramatic and ambitious adaptive reuse projects with his former company Lubert-Adler Real Estate Partners, transforming Philadelphia landmarks into mixed-use campuses, notably at the Bellevue Hotel on South Broad Street and the Battery on the Delaware River.

In these projects, Adler has championed a mix of residential, hotel, office, restaurant, and wellness.

Adler is also locked in a dispute with his former partner Keystone Property Group over the Bourse on Independence Mall, which he hoped to turn into another mixed-use hub.

The Centre Square project would have been CSC’s largest project in Philadelphia. The developer is known in Philadelphia for its purchase of the former International House in University City, rebranded as the Mason. CSC then toyed with the idea of turning the 3701 Chestnut St. tower into a drug and alcohol rehabilitation center.

The first public bathroom in the United States opened in 1869 in New York City. The controversies began not long after that.

Since then, the debate over the government’s role in providing public accommodations has reflected America’s political movements and controversies.

In the Progressive Era of the early 20th century, “comfort stations” were opened as an example of what good government could do. In the Jim Crow South, they were racially segregated. During the rise of the modern conservative movement in the 1980s, they were branded a typical failure of big government and closed.

More recently, opinions of public restrooms have ranged from fear of disease during the COVID-19 pandemic to a sanitary necessity for people living on the streets to targets of the backlash against trans rights.

Cities like Philadelphia are experimenting with bringing public toilets back in the form of the Philly Phlush: stainless steel contraptions that are easily cleaned but have limited privacy to keep people from sleeping or using drugs in them.

The Inquirer talked with Temple University history professor Bryant Simon about his new book For Customers Only: Public Bathrooms and the Making of American Inequality and the debate over government’s responsibility to provide accommodation.

This conversation has been edited and condensed for space.

When did public bathrooms first emerge?

What we understand as public bathrooms happened in the late 19th century, as privacy gets redefined and the scale of cities gets bigger. There’s a technology question here, too. You get the development of flush toilets and a really extensive sewer system.

The other important thing is there’s a shifting notion of government built around the Progressive Era. There were public-ish bathrooms before fully public bathrooms, but they were all maintained by private structures [mostly taverns]. They want to solve a problem that they think is both personal, scientific, and social, and they recognize that the private sector can’t handle it.

How long did it take for public bathrooms to become controversial?

That is the part of the story that surprised me the most. The answer is: almost immediately.

They offered privacy away from home. The public bathroom is seen by the middle and upper classes as an extension of the home. But privacy at home was exactly what working people, for the most part, didn’t have. Many working people lived in tenements with two or three brothers and sisters, their parents, and maybe their grandparents.

This is an opportunity. And they immediately seize it to drink, do drugs, sleep, do their hair. Most ominously, for those in control, they seize on it to have sex, particularly men.

As early as 1899, people in New York are complaining about men having sex in public bathrooms.

By 1905, Long Beach hires two out-of-work actors to entrap men in public bathrooms.

But [the authorities] can’t arrest their way out of it, and as early as the 1930s, public officials are beginning to advocate closing public bathrooms to scrub queer sex. The closing of public bathrooms becomes a way to edit people out of the public.

Later, when segregation breaks down, southern leaders close public bathrooms. When mass homelessness first appeared, almost every single city closed public bathrooms. That’s what’s happening in the current moment with trans people.

But that leads to our current problem, where now no one really has access to public facilities away from home.

Why do public bathrooms seem to reflect major pressure points of our society?

I would slightly reframe it and say they help to make these inequalities.

Segregation is the most clear example. [White policymakers] are using the bathroom to not just divide people up but to really make them feel unequal.

There was one other story I found that blew me away, where a Black janitor [in the Jim Crow era] is told to deliberately not clean Black bathrooms in the Atlanta bus station. It makes [Black Americans] feel the neglect of the state, but it also creates a smell that they know white segregationists will read as Black inferiority, which they are manufacturing.

More recently, with the homeless, taking away public bathrooms is essentially denying their entire existence, their bodily needs. There’s a part in the book where I talk about Washington Square 20 years ago [where the public restroom was deliberately kept in a state of bad repair].

We want them to feel their inequality in a profound sort of way. This is insulting; it’s humiliating; it’s uncomfortable; it’s cruel. There is an element of cruelty that runs through the book.

Are paid toilets a policy solution?

If I were building an ideal society, I wouldn’t want paid toilets, but we’re so far from an ideal that the question is would it be able to provide more people with more access? And would pay toilets also guarantee maintenance along the way?

In a political fight, you have to know what you ultimately want and then what you’re willing to accept. [In Europe often] they’re just putting paid toilets in places where there’s wealthier people, or they’re servicing travelers only. They’re not really in service of the larger community.

This is why what’s happening in Philly is interesting. Of the first Philly Phlush toilets, two of them are in neighborhoods. There are not a lot of parallels to that. It helps to build them in parks.

What the past has taught us, and I think we know this in Philly really well, given the Starbucks incident downtown [where two Black men were arrested while sitting in a Starbucks and not purchasing anything] is that leaving things up to the private sector guarantees you inequality.

In fact, if I were a progressive candidate, I would redefine sewer socialism to bathroom socialism. There was a Progressive Era reformer who said that these things show people in the most intimate way that government can work, and it actually could probably provide us leverage to do more.

It seems like a hard idea for politicians to champion because by its very nature, it evokes shame and disgust.

You’re right for another reason. Bathrooms are better at creating inequality than equality. The conundrum for politicians is the lack of public bathrooms is a place in which some really deep policy failures come into view. The housing problem, addiction, the collapse of the state, the fear of others.

And public bathrooms are pretty expensive now. So when politicians invest in them and they don’t immediately yield results, then it’s hard to argue for [bathroom] funding over a new roof for a public school or a new clinic in a neighborhood or extended library hours.

The really hard sell of the public bathroom is it’s the place that makes visible so many other problems that can’t be solved even with an investment of $300,000 for a public toilet.

But if you don’t solve them, you become San Diego [which had a major hepatitis an outbreak in 2017] or San Francisco, which is dealing with problems of open defecation and health problems for everyone.

It has the potential to affect all of us because of the health issues implied in not having enough public facilities.

More than a third of short-term rental properties like Airbnb and VRBO in Philadelphia have licensing issues, according to a new report from the City Controller’s office released Tuesday.

The controller found that of 3,734 analyzed licenses associated with short-term rentals, 1,327 were expired or noncompliant.

“Short-term rentals are an increasingly important part of Philadelphia’s lodging market, especially during major events that we’re experiencing right now,” City Controller Christy Brady said in a news release.

“The industry’s growth requires a clear, efficient regulatory framework with strong licensing and enforcement tools to identify noncompliance,” her statement read.

The city adopted licensing requirements in 2023, after coming under scrutiny for lack of regulation.

In one case highlighted by the report, the controller found a host operating 50 listings in the city without any of the correct licensing.

In other cases — including one property offering renters the chance to “Chill in Style Anime Themed Escape”— licenses were either absent or associated with unrelated uses like dumpsters or towing companies.

Philadelphia’s short-term rental market has been in the spotlight this summer, as the city hosts major tourism events including the 250th anniversary of the Declaration of Independence, the World Cup, and Major League Baseball’s All-Star Game.

The city has 121 registered hotels with 19,615 rooms and over 4,000 short-term rentals.

That’s a large reduction from before the licensing regulations took effect in 2023, according to the Department of Licenses and Inspections (L&I).

L&I says it has removed 10,452 unlicensed properties from rental sites since the beginning of 2024.

Under the regulations adopted in 2023, short-term rental hosts who live in the properties they are renting have to get a zoning permit and a “Limited Lodging Operators License.”

For those who do not live in the property, a zoning permit and a rental license with a hotel designation is needed. The licenses must be renewed annually.

No short-term rentals are allowed in the Far Northeast section of Philadelphia, where City Councilmember Brian J. O’Neill, a Republican, banned them.

The controller’s report recommends simplifying the “complicated compliance process for hosts” and switching to a more tech-oriented enforcement approach, which could monitor “noncompliant listing across multiple platforms.”

The result, the report suggests, would help the system move away from “complaint-driven enforcement managed by a small staff” of L&I workers.

Nashville and Mount Pleasant, S.C., have outsourced short-term rental regulation monitoring to third-party companies using automated tools to track listings across platforms.

As a result, they both saw over 90% of rentals complying with local laws, a huge increase from the previous status quo.

“The city can benefit from using technology-assisted monitoring tools that can support the identification of potentially noncompliant listings across multiple booking platforms,” Brady said in a statement. “Other cities are already utilizing this technology and significantly improving their enforcement measures.”

In the run up to the World Cup, short-term rental hosts in Philadelphia — as well as hotel leaders — have expressed concern that the anticipated level of consumer interest before this summer’s festivities has not fully materialized.

Just before the games began, the region’s short-term rental market had an occupancy of about 60%, according to AirDNA, which analyzes data from companies like Airbnb and VRBO.