DAGspace: Planning for Industrial Growth in Philadelphia: PIDC Takes Aim

Planning for Industrial Growth in Philadelphia: PIDC Takes Aim by Janice Woodcock

This past summer, several citizens wrote to The Philadelphia Inquirer saying that Philadelphia 2035, the city’s new Comprehensive Plan, places too much emphasis on what it labeled “gentrification,” and not enough on the needs of Philadelphia’s current residents.  Such stinging criticism would be difficult for any urban planner to hear, but do the writers have a point?  Have planners overlooked the needs of the current population?

To answer this question we need to know whom we are trying to serve.  Who are Philadelphia’s residents and what do they need?  Like the population of many other rust belt cities, Philadelphia’s working age population is disproportionally disadvantaged. Only 32 percent of Philadelphia area residents over the age of 25 hold bachelor’s degrees, and only 21 percent of residents are educated beyond high school.1

Given this reality, Philadelphia needs jobs–particularly jobs that can provide a living wage to entry level workers and those who have little or no college education.  And here’s the rub:  policy makers believe that our days as an industrial nation have passed.  But this is not entirely true.

It would be more accurate to say that our industrial base is in a state of rapid and fundamental flux. Specifically, according to the Initiative for a Competitive Inner City (ICIC), “total industrial employment [in the US] has been stable for three decades and is expected to remain nearly constant at about 33 million jobs through 2016.” 2 Looking forward five years, employment in manufacturing is expected to decline by 16% while other industrial categories, namely construction, warehousing, transportation, and logistics will expand to make up the difference.3

Further, over the next ten years in the United States, approximately 1 billion square feet of industrial space will become vacant while newly expanding industries will require about the same amount of new industrial space – In other words, industry will not disappear, but it will move around. According to the ICIC, cities are well positioned to capture these industrial adjustments so long as a city’s strengths are leveraged in the process.

Thankfully, Philadelphia’s Industrial Development Corporation is well aware of this dynamic and is working to define strategically what to do. Last year the quasi-public agency, charged since 1958 with the development of industrial land, published an extensive analytic document, An Industrial Land and Market Strategy for Philadelphia.4 This report profiles Philadelphia’s industrial base, quantifying the fiscal impact of existing businesses and outlining the local factors affecting growth. As part of this treatise, the lower Schuylkill industrial lands are identified as a key location for future industry. The report finds that the area has the most vacant and underutilized industrial land when compared to other industrial areas in the city, yet is close to port and rail and occupies a strategic location near the airport, universities, and Center City.

In September, PIDC put forth a call to the planning community to develop the industrial strategy further, by creating a new Master Plan for the Lower Schuylkill. There are many exciting aspects to this effort. The process will tackle a very complex problem by identifying which industries might benefit from a strategic location. It will rightfully preserve space for industrial growth, and will place a stake in the ground for preventing inappropriate development on sites best retained for industry.

So what’s not to like?

It would be easy to say, “Let’s go!” and move on with this master plan, but this initiative is too important not to examine more closely.

To examine Philadelphia’s Industrial Strategy, a comparison with Seattle offers us several insights. Like Philadelphia, Seattle has a port, enjoys an industrial sector proportionally similar in size to Philadelphia’s (about 20% of all employment), and has sought to adjust its zoning code and mapping in response to encroachment of non-industrial development on industrial land.

However, in comparison to Philadelphia, Seattle’s leaders forecast robust growth in industrial jobs. Over the next five years Seattle is forecast to add 5,000 new manufacturing jobs per year, whereas Philadelphia is forecast to lose 480 per year.5 Why the difference? OK, it is true that Philadelphia does not have the same advantages as Seattle in ways beyond our control. For instance, Philadelphia does not enjoy relative proximity to China, nor do we have the presence of a Boeing in our neighborhood. Our river port is shallow compared with Puget Sound.6

However, Philadelphia has its own list of assets, such as a newly emerging, more favorable regulatory environment, central location between Washington and New York, the presence of higher education and research, and the ability to grow green jobs.

These are advantages that can differentiate us if we can draw lessons from our peers. Below are a few ideas that may help.

Creating a Positive Regulatory Environment for Industry

To be successful at attracting industry, the city will need to view the master plan for the lower Schuylkill as the basis for binding land use law. Without this status, zoning policy will undermine efforts to develop industrial sites. Existing property owners will have little incentive to either sell or develop their land. According to PIDC, [In Philadelphia] large tracts of [industrial] land have been rezoned and zoning variances have been granted in response to residential and commercial market pressure. With increased demand from non- industrial uses, building and land prices have increased, often pricing out industries that cannot afford to match the prices paid by residential or retail developers.7 Faced with similar pressures on industrial land, Seattle adjusted its zoning code to allow for an appropriate mix of manufacturing, office and residential in all land use districts including industrial and commercial districts. In certain targeted areas, projects were scuttled if they were inconsistent with the new industrial zoning. Can Philadelphia’s government exhibit similar discipline?

This cannot happen soon enough. Case in point: consider the 122 acre Port Richmond rail yard site located on the Delaware waterfront. This site is one of the few large tracts of available industrial land in the city, served by rail and separated from nearby residential uses by I-95. Due to its size and proximity to I-95, this site is targeted for “industrial intensification” by PIDC in its market strategy. The site plan below from PIDC shows 1.1M square feet of industrial space, with the potential of generating 2,349 industrial jobs, $899M in annual payroll and $10M in annual city taxes.

Instead of preserving the land for future industry, City Council in 2011 approved zoning for a non-industrial use, a new live music venue, to be developed by David Grasso at the foot of the I-95 freeway entrance. With an entertainment activity at the gateway to the site, future development of the remainder of the rail yards will be unattractive to industry because the associated dust, noise and traffic will be objectionable to the music venue.

In the public debate over rezoning, there was little mention of the loss of industrial land, impact on future job growth or loss of future city tax revenue. Rather, the debate revolved around traffic and nuisance to neighboring residents. This is evidence that current policymakers and designers, let alone unemployed workers, lack sufficient understanding of the economic impacts of allowing non-industrial activities in industrial areas.

Set Ambitious Economic Goals

The industrial future of Philadelphia rests not only on land use regulatory policy, but also on the economic development actions that the city takes to attract Industry. To forecast jobs, PIDC has prepared an estimate of future job growth to inform the master plan for the Lower Schuylkill. The forecast is based on “Cluster Analysis.” Cluster analysis, a method developed by economist Michael Porter9, evaluates the relative competitiveness of cities based on national growth trends, tailoring them for cities based on the presence of groupings or “clusters” of existing industry.  This analysis helps economic development professionals understand the strengths and weaknesses of an area.  For Philadelphia, cluster analysis indicates that 88% of future industrial growth will be in transportation and logistics.

While cluster analysis is widely accepted as an analytic tool, Ned Rauch Mannino, Temple Professor and advocate for industrial development, believes cities need to go beyond this method. He notes, that, “in identifying where Philadelphia’s industry can move, we need to examine where the world is moving. He believes that in addition to looking for new industries outside of our existing “clusters,” we should establish goals for growing neighborhood operations serving niche and emerging markets.

A Niche at the Navy Yard?

New York has done just that in the redevelopment of the Brooklyn Navy Yard. This year Mayor Michael Bloomberg announced a $10M fund to “activate, modernize and preserve” out-of-date industrial space across the five boroughs, including capital investment in the 300-acre Brooklyn Navy Yard supporting 275 businesses and 5,800 industrial jobs. The navy yard is in the midst of an expansion adding 1.5 million square feet of new industrial space and over 2,000 jobs in the next two years, with a focus on the manufacture of building products.

Architectural Record, in reporting this story, notes that there are “more designers in New York City than ever before, but that Bloomberg’s initiative may give hope to building product manufacturers who want to set up shop in the City.” By developing a large tract of land with a cluster of related fabricators in Brooklyn, business activity has reached a critical mass, with the 70 percent of the industrial employment that is centered around building products choosing to be located there in order to be closer to the design industry. 10

The Philadelphia Navy Yard

In a win that rivals New York, Philadelphia’s regional leaders have taken a giant leap forward in the past year by winning over $129 M in grant funding for the Greater Philadelphia Innovation Cluster for Energy Efficient Buildings, (GPIC) to be housed at a new complex at the Philadelphia Navy Yard. This new facility will strengthen the Navy Yard as an industrial anchor for Philadelphia.

As noted by Mayor Nutter in September 2010, “Philadelphia is positioned to grow good jobs for its citizens for a long time to come by inventing, manufacturing, and installing the latest energy efficiency technologies.” This think tank collaboration of industry leaders, educational institutions and institutional partners will be examining ways to promote energy efficiency in existing buildings and there will be great potential for spin- off industry if the types of facilities they need are well understood.

At the north end of the Study Area, another anchor will influence the plan for the Lower Schuylkill, the University of Pennsylvania. The expansion of University activities has yet to unfold at the DuPont Crescent site, where research and development firms will want to locate to be close to academic collaborators. The implications for industrial development are significant. With innovation and research nearby; industrial activity will soon follow –if we find a way to develop the Lower Schuylkill area to accept them.

These two anchors call for progressive thinking in urban planning, through the development of a green district infrastructure that saves energy, conserves water, and is cheaper and cleaner to operate. With large tracts of land under few owners, it will be possible to coordinate investment in energy, water, and transportation systems at a district scale, a scale now recognized by green thinkers as essential to achieve carbon neutral status in the built environment. In sum, the Lower Schuylkill industrial area can become a lab for a new type of innovative industrial development by coordinating investments in infrastructure and designing them according to the best, emerging environmental practices.

We began this article by asking if the planning community and civic leaders had forgotten how to serve the city’s inhabitants. Clearly the answer is an empathic NO. But for Philadelphia to compete, its industrial lands, and in particular the lands of the Lower Schuylkill must be developed with great care. Here is a guide:

Preserve industrial land through enforced zoning: Do not make the mistake of mixing commercial and industrial uses inappropriately as we are about to do along the North Delaware River. Instead, preserve large tracts of land so that, as the needs of our emerging green industries become clear, we can accommodate them.

Develop a new understanding of industrial location theory: Understand, as PIDC does, that firms make decisions to locate in a place for many complex reasons. Convenient access to markets, location near research, availability of land, and proximity of workforce are factors; but also important are relationships between industrial processes that can only be understood by looking closely at what each business does on site.

Develop an understanding of green job potential: GPIC will be looking at how to increase energy efficiency at the district level, using the Navy Yard as a lab. Can this idea be expanded to a new industrial campus nearby that takes advantage of emerging technology and nearby talent?

Develop energy and infrastructure models suited to Philadelphia at the district scale: Research into the ways that this region, with its unique conditions, can coordinate energy, water, and transportation investments to make competitive industrial centers, and start with the sites closest to the Navy Yard and Penn.

In summary, we need to applaud and support efforts such as the Master Plan for the Lower Schuylkill. Between now and the time it will take finish the plan, we need to protect existing industrial land, and explore more thoroughly the urban planning dynamics relevant to future industrial districts.

If it is true that 1 billion square feet of industrial space will be lost–and also gained in the United States over the next decade, the stakes are indeed high that our city and its planners succeed in positioning Philadelphia to compete successfully in the fray. If we put together an optimum industrial plan for the Lower Schuylkill, we will be well on our way.

 ————-

Janice Woodcock AIA, LEED-AP, is an architect and urban planner practicing in Philadelphia and previously served as Executive Director of the Philadelphia City Planning Commission. The author would like to thank contributors to this article: Laura Wolf Powers, Assistant Professor at Penn Design, University of Pennsylvania; Liz Gabor, Real Estate Manager at the Philadelphia Industrial Development Corporation, Ned Rauch Mannino, Professor at Temple and Philadelphia University; and Scott Page, Principal at Interface Studio.

DAGspace is a monthly opinion column written by members of the Design Advocacy Group (DAG), with the goal of promoting good design by encouraging thoughtful public discussion of design matters. The mission of the Design Advocacy Group is to provide an independent and informed public voice for design quality in the architecture and physical planning of the Philadelphia region. 

The next DAG meeting is this Thursdsay, October 6 at 8am, at the Center for Architecture, 1218 Arch Street. 

In addition to appearing on DAG’s website, you’ll be able to read DAGspace on Eyes on the Street every month. You can read previous DAGSpace articles here.

______________________

1 Judith Rodin and Brice Katz, “What America’s Cities Need,” Brookings Institution, June 11, 2010; (http://www. brookings.edu/opinions/2010/0604_philadelphia_katz_rodin.aspx) 2 http://www.icic.org/research-and-analysis/industrial-strategies 3 In Philadelphia, for example, there is a basis in food manufacturing and distribution, an industry that recently expanded with the opening of the new Food Distribution Center in South Philadelphia. The project has created an estimated 313 new jobs and maintained 1,250 others within the City limits. 4 Philadelphia Industrial Development Authority, in conjunction with the Philadelphia Planning Commission, and the Philadelphia Commerce Department, An Industrial Market and Land Use Strategy for the City of Philadelphia, September, 2010. 5 CB Richard Ellis, “Industrial Outlook for Seattle, Spring, 2011” and CB Richard Ellis, “Industrial Outlook for Philadelphia, Spring, 2011.” 6 PIDC points out that in comparison to Philadelphia, Seattle’s industrial base is smaller, less diverse, and just now growing into the size of Philadelphia’s base, tempering somewhat the contrast in growth rate. Even so, it seems that for Philadelphia to retain its base and increase the job growth potential, the city must adopt an entrepreneurial stance to attract new jobs. 7 Philadelphia Industrial Development Authority, in conjunction with the Philadelphia Planning Commission, and the Philadelphia Commerce Department, An Industrial Market and Land Use Strategy for the City of Philadelphia, September, 2010, p. iv. 8 In preparation for the plan for the lower Schuylkill, PIDC has developed a set of zoning policies to protect identified industrial areas. These policies have not yet been adopted. 9 See Michael Porter, The Competitive Advantage of Nations, Simon and Schuster, 1990. 10 Rita Catinella Orrell, “Native New Yorkers,” Architectural Record, September 2011,  p. 39.