Responding to a request from Mayor Kenney, the luxury
housing developer that reneged on a commitment to include affordable units at
One Water Street has agreed to a settlement that channels $3.75 million into
Philadelphia's Housing Trust Fund, according to Karen Guss, an administration
spokeswoman.
The deal, brokered late this week by what Guss called
"senior administration officials," means that the developer, PMC
Property Group, will be able to immediately start moving tenants into the
sleek, contemporary 16-story apartment house on the Delaware waterfront.
The city will use PMC's trust-fund payment to construct
affordable housing in another location.
The opening of One Water Street was put on hold in early
June after PMC asked to be relieved of its affordable-housing obligation.
The problem was that PMC had already been granted a
substantial zoning bonus - one that allowed the company to add five extra
stories and 30 full-priced units to the building - in exchange for setting
aside 25 apartments at subsidized rents. The building now has 250 units.
Initially, the city told PMC that it could legalize the
building's extra height by submitting a new zoning application. Under that
process, the developer could have substituted other amenities, such as retail
space and public art, for the 25 affordable units. But after an outcry from
affordable-housing advocates who complained the arrangement violated the spirit
of the law, the administration decided to change course, Guss said.
"No one in the administration was happy with the way
it was going," she said. "The mayor was [angry]. Folks in the
administration called the developer and said, 'We want you to do the affordable
housing. And if you're not going to do it, then we want you to pay into the
fund.' "
PMC's actions particularly disheartened housing advocates
because it was the first developer to take advantage of the new inclusionary
housing provision in the zoning code. Developers are allowed extra density in
exchange for setting aside a fixed number of subsidized units - or contributing
a sum of equal value to the housing trust fund.
Another developer that is building a luxury tower at
Second and Race Streets is also taking advantage of the affordable-housing
bonus.
In an email circulated late Friday, the city's director
of planning and development, Anne Fadullon, praised the $3.75 million
settlement, and said the payment would more than compensate for the loss of 25
subsidized units at One Water Street.
That figure, she wrote, was recommended by the Office of
Housing and Community Development. She said the agency arrived at the payment
after calculating the value of the 25 subsidized units and the cost to
replicate them in another location.
Members of the city's affordable housing community had
initially estimated that the 25 units were worth $5 million. Despite the
difference, the Philadelphia Association of Community Development Corporations,
an advocate for affordable housing, applauded the deal.
"This announcement is not only an example of the
Kenney administration holding a developer accountable to the zoning code, but
also to equitable development in the interest of low- and moderate-income
Philadelphians," the group wrote in a statement distributed about 45 minutes
after Fadullon's email went out.
Officials at PMC could not be reached for comment.
Since their substitution proposal became public, they
have declined to discuss the reasons for their change of heart.
PMC's decision to pay into the housing trust fund
represents an abrupt about-face in its strategy.
Just two weeks ago, it filed the paperwork to start a new
zoning process.
In its application, it said it would compensate for the
25 units by incorporating one retail space, a work of public art, and energy-saving
measures into One Water Street, at 250 N. Columbus Blvd. The developer even
paid a substantial sum to have its application fast-tracked.
Coincidentally, those substitutions were approved this
week by a plan examiner at the Department of Licenses and Inspections, Guss
said. That was only the beginning of a process, however, that would have
included public appearances before several city boards.
"We all knew that what they were doing was
lawful," she explained. "But we told them we didn't like it."
One Water Street is the first apartment building
constructed on the Delaware waterfront since the city completed a master plan
for the area.
PMC has been commanding substantial rents at One Water
Street, starting at $1,795 for a one-bedroom unit and going up to $5,525 for a
three-bedroom. The subsidized units would have rented for half that figure.
The Housing Trust Fund was created in 2005 as a way of
pooling funds to repair dilapidated houses and build new subsidized units.
Nearly 1,500 affordable units have been built over the last decade, Fadullon
wrote.
Source: Philly.com
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