East Callowhill Is On The Verge Of A Massive Shift From Industrial To Residential

In an area a stone’s throw from Center City, but miles away in terms of commercial real estate, the combination of a recent zoning change and a portfolio sale has provided an opportunity for a unique type of revitalization — from industrial to residential and commercial, bridging a crucial gap for the growth of the city.

Between Spring Garden and Callowhill, Second and Ninth streets, what was once zoned for light industrial use dating back to the 1960s has been reclassified over the past two years to allow for any sort of mixed-use buildings to be built in the area up to six stories tall (13 with bonuses) on the north end of the zone, and nine stories (up to 31 with bonuses) in an overlay bordering Callowhill Street.

“We had plans going back a few years recommending this,” Center City planner Ian Litwin said, “and that’s where the overlay comes from.”

Mark Rubin wishes to see the area take advantage of the changes, so he is selling eight properties to be developed, hopefully as a package, to a developer with an overarching plan for the neighborhood some refer to as East Callowhill.

“We’re offering to give a developer an opportunity to build a neighborhood in the image they’d like to see, and the neighbors would like to see,” Rubin said.

The neighbors are perhaps the most crucial element to the possible development of residential and commercial density in what Colliers International, which is marketing the offering, has dubbed Callow East.

With only one previously existing mixed-use development, built with a variance at 444 North Fourth St., the first wave of buildings that would come from this purchase will rely on its proximity to the commercial corridors of Old City and Northern Liberties to produce the sort of neighborhood-based amenities renters now demand.

To the west, the embryonic Spring Arts area, itself a benefit of recent rezoning, will likely be built by the time any properties in Callow East deliver. Surrounded by activity just waiting for the last part to fill in, Callow East is the “hole in the doughnut,” Rubin and Colliers senior managing director Michael Barmash said.

“It was developed as government offices and industry years ago,” Rubin said. “It now represents almost a wall or a moat between Old City and Northern Liberties … so the city doesn’t flow from Center City out to Liberties and Girard Avenue and so on.”

Ask most residents what sits between Old City and Northern Liberties, and the answer most give is simply “the highway.” While Interstates 95 and 676 and their exits loom over Callowhill, they do not actually block any numbered streets. The early success of One Water Street, along Christopher Columbus Boulevard, and the Fillmore complex across the I-95 underpass from the rest of Fishtown, provide reasonable cause for optimism.

“I think [Callow East’s isolation] is all perception now, because there aren’t a lot of people there,” said Econsult Solutions president Stephen Mullin. “But the nature of the buildings in the area itself makes it seem like it’s more isolated than it really is.”

“There’s a lot of walking right now,” Rubin said. “My office is on Fourth Street between Callowhill and Spring Garden, and in the past five years, the foot traffic here has grown exponentially.”

Plenty of bike traffic already crosses Callowhill and the highways, as commuters from Northern Liberties and Fishtown make their way into Old City and west. Regarding the potential for a new, mini-neighborhood, Barmash said, “I think it’s a no-brainer, frankly.”

Whereas other improving areas of the city, such as Brewerytown and Olde Kensington are building with bigger scale or new construction in already residential areas, whatever gets built of the Callow East offering will be all but starting from scratch in bringing tenants and offering them amenities, and doing so at Class-A prices to offset the cost of construction.

Barmash said other, more affordable residential projects could be on the way as well, with adaptive reuse rather than new construction. But Callow East is using One Water Street as a model for introducing Class-A high-rises to an area surrounded by high levels of car traffic — and Barmash pointed out that One Water is 90% leased.

Litwin stressed that under the zoning change, any projects that get built in the area must include ground-floor retail to enliven the street. The height bonuses offered are tied directly to public improvements, such as pedestrian passageways, green space and stormwater removal (normally the province of the city). It is clear that part of the duty of any developer in the area will be to transform it from decades of industrial and manufacturing uses.

“Some of these properties are probably going to go through issues related to environmental cleanup,” Litwin said. “CMX-3 allows for a lot of flexibility, though, and it allows for a lot of amenities from these projects.”

Farther into the future, the city plans to help transform the area by potentially lowering the number of lanes on Callowhill Street to make traffic move slower and pedestrian crossing easier and adding a green bike lane down the median of Spring Garden to connect the Schuylkill and Delaware Rivers for cyclists. Those plans are not funded yet, but development activity would accelerate it. For now, the city is using its height bonuses to help guide developers toward what they see as the best way for a more pleasant neighborhood.

“I actually think this is an area where the demand will outstrip the government’s potential to intervene to fix up the sidewalks,” Mullin said.

Pedestrian passageways, for example, will be encouraged along what used to be Noble Street in the East Callowhill area, which no longer exists but remains a right of way, making the walking block between Spring Garden and Willow Streets unusually long.

“We see that space, though they can’t build on it now,” Litwin said, "as sort of an open space for developers to build pedestrian connections."

All of these grand designs are years away, however. Of all the properties on the market, only one is close to development, at Fourth and Callowhill, with a design by Cecil Baker & Partners already drawn up and passed through Civic Design Review. Whoever buys the property is not restricted to those plans, and still would need to obtain building permits for the site. But the proposal for two towers, at 24 and 27 stories, with a park open to the public and ground-floor retail provides an insight into one possible direction in which the area could go.

That project may be the only one to be built in this development cycle, as a relatively high number of multifamily projects are delivering around that time. If it goes up, it could be the kick-start the area needs to transition into what an increasing number of players are envisioning.

“I think that as soon as [Fourth and Callowhill] begins, the other projects will begin, especially if it’s purchased by the same developer,” Rubin said. “If not, whoever develops [the first project] will be incentive for others to move right along.”