Photo / Donald Groff
By Kellie Patrick Gates
When Terry Gillen was named director of the Philadelphia Redevelopment Authority last June, Mayor Michael Nutter told her to make the agency more planning-driven and proactive.
“That’s easier said than done,” said Gillen, who recently sat down with PlanPhilly at her 1234 Market Street office to give her take on the progress and pitfalls of the past year. “It’s been hard, really, to get the plans done, to get them implemented, and to get everybody here the tools that they need to get us in the driver’s seat,” she said.
When Gillen arrived, her staff lacked basic tools that make good planning possible, she said. For example, “If people don’t have computers that can put maps together, you can’t do any planning.”
As the RDA’s name implies, encouraging development of underutilized parcels is high on the priority list. But when Gillen took the helm just over a year ago, the agency – which was created by the state in 1945, but run by mayoral appointees – did not even have an accurate list of the properties it owned. It had no easy way of letting would-be buyers and developers know what was available, either – the RDA didn’t have a website.
But part of the problem was also cultural. “I think what was the biggest surprise to me is the extent to which we were all pretty passive and sitting around and waiting for someone to bring us a deal, or somebody to come in with an idea,” she said. “The city wasn’t generating the deals or generating the ideas.”
The RDA now has computers and software that allows staff to plot all of the RDA-owned property and see how it fits together, she said. Employees are being trained to use it (this summer, a “mapping guru” from the University of Pennsylvania is doing an internship there).
RDA spent “days and days” combing through property records to clean up the RDA property list, Gillen said. That list of all 2,813 properties was recently posted on the new website, www.phila.gov/rda.
More on vacant property
About 75 percent of the vacant properties in the city is in private hands, Gillen said. But roughly 9,000 parcels are owned either by the city (about 6,000 parcels) or the RDA.
The RDA acquired most of the properties it owns through condemnation, which means that at some point in its 50-year history, the agency had a plan for the properties, but the plan never came to fruition.
At Nutter’s request, Gillen is coordinating efforts to get a better handle on all the publicly owned vacant property in Philadelphia – whether the parcels are owned by her agency or the City. She is working with Public Property Commissioner Joan Schlotterbeck and Office of Property and Community Development Director Deborah McColloch to streamline the system by which all vacant property in the city is moved. For starters, they want to create a single list of property that can be accessed on-line, and one process by which the property can be obtained.
“We need to figure out who owns what, and where (the parcels) are, and put them on a map,” Gillen said. “Then we’ll be sitting down with the Planning Commission to figure out, how do we handle them.”
Gillen said she doesn’t know enough yet to say what percentage of the property the City or RDA will want to keep for public purposes, including green space. But much of it needs to get back into the private sector, she said. “We do want to get them to people who are going to pay taxes on them. Taxes are the way that we pay for things like police and rec centers.”
Right now, instead of generating tax revenue or jobs, the vacant property is costing the city money for lawn mowing and other maintenance. Sometimes, the vacant properties become areas of neighborhood blight, Gillen said.
Some of this stagnation could be attributed to the bad economy, some to a decades-long trend of declining population and jobs. “But some of it, many people would argue, is that it was just too hard for the private sector to get their hands on property that the public owns,” Gillen said.”
The RDA has sold between 30 and 60 properties a year over the past few years, but, says Gillen, “we should be churning more properties per year – both buying and selling.”
City owned property has moved into private hands via the Vacant Property Review Committee. The RDA has not been in charge of the VPRC since the Street administration. But a year ago, Nutter asked Gillen to unlock a logjam of 1,000 properties that were somewhere in the process of moving from public to private hands.
Three hundred of these parcels are now back on the tax rolls. Most of these were single lots that had been sitting for five to 10 years, Gillen said. Most of the new owners paid little to nothing – it has been common for City and RDA owned property to be given away. Some paid fair market value – from many years ago. “These 300 had moved through the system legally,” Gillen said. “We felt we couldn’t say no” to the terms that were already laid out.
But next batch of 200 to 300 properties have not moved so far along, Gillen said, and so some of these buyers will pay current market value.
In the future, Gillen said, the RDA and City will be much more reluctant to give property away.
Reaching potential buyers
Gillen is confident that just listing the properties on a website will move them much more quickly, based on what was learned through a 22-property pilot program this spring. The test also showed Gillen that real estate agents can be helpful.
Through the program, 11 RDA properties were listed on their website and another 11 were assigned to real estate agents to sell. For the first time, the RDA was marketing its properties. “Just posting works,” Gillen said. “But the brokers were really good at predicting market value – better than even our appraisers.”
Of the 22 properties in the broker sale pilot, 10 sold – four through brokers and six through the RDA web site. Two additional buildings were under agreement, but then had to be demolished, Gillen said. The 10 properties sold for a total of $472,000.
This summer, a committee comprised of representatives from the RDA, City Council, other city agencies and some real estate brokers will examine the results of the pilot program and make recommendations to the RDA and Nutter about whether the City should continue to use realtors to market city-owned properties. City Council will hold public hearings on the matter in the fall, Gillen said.
While she’ll know more after the committee completes its work, Gillen said she believes brokers should be used to market some of the properties – ones where the zoning use is clear and no zoning problems are anticipated.
But cost is one of the factors that must be considered. Typically, real estate agents get a six percent commission on sales, but “we would have to negotiate that,” Gillen said. Some costs could be a wash. Since the real estate agents were better at determining market value than appraisers were, the city would contract with fewer appraisers, she said.
Streamlining the system
Gillen said she feels good about the progress toward marketing the RDA and city property, but just letting would-be buyers know what’s available isn’t enough; the process remains too cumbersome.
“We have made it so hard for people in the private sector to come here and know how to navigate the system,” she said.
A start: Anyone interested in buying RDA property can send a notice of interest directly from the website to get the process moving. Once the city property list is ready, the same procedure will be in place for that property, too.
It now takes three to four months to buy a piece of property from the RDA, so long as the buyer has financing lined up and City Council, which must pass a resolution for the property to be sold, is in session. Gillen is fine with that total length of time, but she’d like to get to the signing of the bill of sale sooner. “If you go to a broker and bid on a house, you sign a bid of sale within a week. We’d like to get as close to that as possible.”
An ongoing study will help determine where nips and tucks can be made, though. “We need to balance the public’s need to have its interests protected with the private sector’s need for speed,” she said. “The public wants transparency, openness, and their civil rights protected. There are lots of procedural requirements the government has to have so that can be ensured. But we have to move more quickly.”
Considering how much effort Gillen and other city officials are putting into selling these properties, it’s somewhat ironic that the RDA wants to take some of them back. But some properties have sat idle – for decades – despite going into public hands, Gillen said.
Whether the property was sold or given away, the RDA and buyer/recipient entered a redevelopment agreement. In this agreement, the redeveloper – the term used regardless of whether the new owner is a development firm or a property neighbor who wanted a bigger yard – has made promises to the city. This could entail building a new residential or commercial structure. But it could be as simple as keeping the lot clean and attractive, Gillen said. If the redeveloper fails to meet these terms, the RDA has the power to get the property back.
“When I came here, I asked how many properties have been taken back,” Gillen said. “The answer was zero.”
The RDA had never once enforced an agreement. But they’ve started now, Gillen said. About 30 redevelopers have been put on notice to “give us a good reason or give us the land back,” she said. These redevelopers have between three and six months to respond. If they fail to respond, or to prove their case, the RDA can get the land back.
Many more notices will be going out. RDA staff has finished investigating agreements going back to 2000, and is now working on the 1990s, Gillen said. They’ve got decades of history to cover. “It’s like an archaeological dig,” she said.
If a redeveloper was given the property, the RDA can simply take it. But if the redeveloper paid, they will be reimbursed. Gillen said it’s still being worked out whether the redeveloper would be given a check for whatever they paid, or if the RDA would have to pay more or less based on changes in value. How much the RDA would have to pay “will determine in some cases whether we want to take the property back.”
Also, the RDA can only take back the property if something could be done to make a better use of it, Gillen said. “We want to sell it,” she said. “This would create new revenue for redevelopment projects, and also show redevelopers that the RDA is serious about enforcement.”
Revenue can allow the RDA to take on projects that cost money without directly generating money, such as providing parks and green space, Gillen said. The RDA is writing many grants these days, too. And it’s using federal economic recovery money.
Buying foreclosures, building homes
Gillen is proud that hers is the first city agency to implement a new program using economic stimulus money, the Neighborhood Stabilization Program. With $18 million in federal money, the RDA is buying 180 foreclosed properties which will then be rehabbed, and sold over the next 18 months. The money will also subsidize costs so that some of the homes can be sold to low- or moderate-income residents, she said. Others will be sold at market rate.
The RDA has floated an RFP looking for a developer of market rate residential properties on several parcels it owns at 17th and Carpenter in South Philadelphia. The winning developer will buy the land from the RDA for more than $1 million, Gillen said. The developer will sign a redevelopment agreement to build and sell the homes.
Turning back to planning
Back in the 1950s, “the RDA basically built Society Hill,” Gillen said. But in more modern times, the agency has not been known for good planning, or targeting projects in places that could produce the most impact.
Gillen said she’s working to change this, and the RDA is working with the Planning Commission on plans for several neighborhoods.
RDA-owned land around Franklin Square would become home to high-rise residential buildings if the recently released master plan for Market East becomes a reality, with the RDA floating the RFP and hiring the builders.
The RDA and the Planning Commission have hired Interface Studio to develop a master plan for Point Breeze. And work will soon begin on a Master Plan for the Temple University area, west of Broad Street, Gillen said. This will dovetail with Temple’s new master plan.
The Planning Commission is now working to implement a neighborhood plan for the Wayne Junction/Nicetown area, Gillen said. “The RDA owns a lot of land up there,” she said. “We’re trying to get it developed for affordable housing.” The RDA will also coordinate with other city agencies, including the parks commission, which handles green space, and commerce, which assists with commercial corridors.
Gillen is eagerly awaiting a report that will help the RDA deal with a real problem spot – and she likes the price.
The RDA has been working with the Urban Land Institute, which is studying the site of the sinking homes in Logan, along The Roosevelt Boulevard. ULI will determine what can be done with the land based on both geological and market conditions, Gillen said. And ULI isn’t charging the RDA anything for the work, which Gillen hopes to receive this month. “We’re trying to do good planning for free,” Gillen said.
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