In the Nicetown-Tioga neighborhood of North Philadelphia, a Black-owned, social impact development company will soon break ground on an ambitious project.
Courtesy of Clinton Bush
TPP Capital Management Executive Vice President and Chief Strategy Officer Clinton Bush
TPP Capital Management, led by fund manager Anthony Miles and Executive Vice President and Chief Strategy Officer Clinton Bush, spent five years assembling parcels of largely vacant land in a five-block radius just to the west of Temple University Health System’s main campus. TPP intends to break ground there this quarter on the first phase of Tioga District, a mixed-use, wellness-focused development complex.
The first phase will include 84 rental units for ages 55 and up split across two buildings, one with 30 units and the other with 54, on the 1700 block of Tioga Street. Also breaking ground will be eight buildings of for-sale condos on the 3300 block of North 16th Street, with four units to a building and one in each building designated as affordable housing. The rest of the condos are priced to be “market rate, but market rate for Tioga, not for all of Philadelphia,” Bush told Bisnow.
That gap between what market rate means in Nicetown-Tioga relative to the rest of the city is more of a gulf. The neighborhood has a 35% poverty rate, with a median income of $21K, according to U.S. Census American Community Survey data, and $24K according to data from the city of Philadelphia. Even as neighborhoods like Point Breeze that had similar demographics at the start of the 21st century have gentrified, Tioga has remained stagnant or worse economically.
Tioga District is the first of what TPP hopes is many projects to be developed using capital from TPP Real Estate Development Fund, which Miles is operating as a qualified opportunity fund based on the opportunity zones program created by the Tax Cuts and Jobs Act of 2017. The fund has secured $30M in commitments out of its $100M target, and it is still looking for more investors into the fund and directly into Tioga District.
“We have the data to support why we’re doing what we’re doing, so we’re making a social impact, a community impact,” Bush said, noting that all of TPP’s assembled parcels sit within census tracts designated as opportunity zones. “Our model at TPP in terms of our social impact is built on food science, medical science and behavioral science. Our real estate is centered around a preventative health hub, which is really what the Tioga development is.”
An Unprecedented Project
Future phases of Tioga District call for an indoor produce farm run by Wyoming-based company Vertical Harvest, which is scheduled to break ground in the fourth quarter, and a 140K SF medical office building for primary care practices. At full build-out, Tioga District could contain around 20 separate projects, Bush said.
Courtesy of TPP Capital Management
A rendering of one of the senior housing buildings that will be part of the Tioga District development in North Philadelphia.
Part of the primary care building will be dedicated to nonprofit health care, managed by the Urban Affairs Coalition, a local organization dedicated to assisting other nonprofits with legal and financial management. At some point, Tioga District will include 58 more condos and health-focused commercial space, Bush said.
TPP, led by Director of Entitlements Doris Harris, secured zoning approval for the senior housing apartments and workforce housing condos in March, just before the coronavirus pandemic effectively shut down the city for over a month. In the time since, TPP has secured partnerships it believes will deliver an element never before seen in social impact development, and one that can immediately be rolled out on a grand scale.
TPP announced in December it brought on consulting firm Forefront, which assists developers in integrating wellness technology and principles into their projects, and partnered with Delos, an air purification technology provider and the company behind the International WELL Building Institute and its scoring system. Delos’ DARWIN technology, billed as an integrated, smart tech-based air purification system, will be built into every residential unit and commercial project in the Tioga District. As part of a later phase of construction, Delos will also have a research and development facility called the Well Living Labs, Bush said.
“This is a case study to take this model to other qualified opportunity zones,” Bush said. “We have a moral obligation as leaders to make these scalable solutions available to the city of Philadelphia, Mayor [Jim] Kenney, the [Philadelphia] School District, Gov. [Tom] Wolf and anyone who wants it because we are smack dab in the middle of a public health crisis. It’s our obligation, and the mayor’s obligation, to look at this opportunity.”
Bush said Tioga District will be the first impact-focused or mixed-income residential development in Philadelphia to have a technologically advanced air filtration system, a claim supported by Kevin Gillen, a Lindy Institute for Urban Innovation at Drexel University Senior Research Fellow.
“With COVID and the increased likelihood of adverse effects on the local population, I’m sure that increases the impetus for projects like this,” Gillen said.
Since the partnership with Delos and Forefront was announced nine months after the most recent meeting between TPP and community groups, multiple neighborhood residents who were present at that meeting were only informed of the planned air purification system when interviewed for this story. Former Tioga United President Pela McFee led her group, which was the registered community organization attached to the project, at that March meeting, and she expressed an initial reaction of hope mixed with suspicion that other community leaders echoed anonymously.
The empty lot at 1708-1710 West Tioga Ave., where TPP Capital Management plans to build rental apartments for seniors, in January 2021.
“My reaction would be, of course if you think on the surface level, that would be great,” said McFee, who resigned as Tioga United president shortly after the March meeting for what she called personal reasons unrelated to the project or the organization. “But it also could have a negative connotation that [the technology] isn’t what [TPP] says it is. Because in this community, things aren’t often what [developers] say they are.”
TPP plans to offer retrofit installations of the DARWIN system in some neighborhood homes and schools to help people get comfortable with the technology, Bush said.
Forefront, Delos and TPP are close to announcing the details of a partnership meant to extend beyond Tioga, Philadelphia and even Pennsylvania. Now that President-elect (and favorite son of Philly) Joe Biden is on the precipice of inauguration with a narrow Democratic majority in both houses of Congress behind him, the federal government could be looking for projects to champion as proof of a renewed commitment to supporting urban communities, and Bush expressed hope that Biden himself may take interest in the project.
“We’re actually in lockstep with the incoming administration’s philosophy of ‘Build Back Better,’” Bush said, referring to the catchphrase of Biden’s transition plan. “You have a lot of folks running with that philosophy, but with this relationship [with Delos and Forefront], TPP is demonstrating that that’s what we’re doing.”
History To Overcome
Though the project they have planned is a trailblazing one, Miles and Bush, brothers who were born and raised in the Francisville neighborhood to the south and east of Nicetown-Tioga and now live in Jacksonville, have followed a difficult path known well by those connected to low-income communities of color.
“Who’s going to make personal guarantees to bet on Tioga?” said Shift Capital CEO Brian Murray, whose own impact-focused development company is involved with the redevelopment of the nearby Beury Building. “Developers and communities of color often don’t have the balance sheets for that, so banks can put their hands up and say, ‘The comps don’t work,’ or that the owner doesn’t have the balance sheet and experience.
An empty lot on the 3300 block of North 16th Street in January 2021, before TPP Capital Management breaks ground on wellness-focused workforce housing condominiums.
“What we’ve been able to show in other parts of the city is that if you upgrade the housing, it’s not about the comps that are there today,” he said. “People are willing to and able to pay for better housing, but banks are always looking for historical comps, and they haven’t changed their risk analysis.”
In order to assemble the land for Tioga District, TPP’s principals reached into their own pockets for capital, just as they seeded the Real Estate Development Fund with their own capital.
“For five years, our team has been spending our own money and resources acquiring these parcels of land,” Bush said, his voice rising with emotion. “No one gave us nothing. And the investments we were able to get helped us, but the other funds get the money first; they don’t look at us first.”
As with so many neighborhoods with majority non-White populations in Philadelphia, the 20th-century impoverishment of Nicetown-Tioga coincided directly with redlining — the systemic, government-supported denial of real estate financing in specific geographical areas that led to decades without any new investment.
Redlining has long been outlawed, and some banks have made recent strides in crafting special programs to help some historically disadvantaged communities build wealth with home equity. Bank of America has partnered with TPP to offer down payment assistance and low-interest mortgages for the workforce housing condos in Tioga District to social service workers in fields like health care and law enforcement, Bush said. Bank of America didn’t respond to requests for comment.
But as long as banks use historical and geographical comparisons to calculate what loans to make, to whom and at what rates, the legacy of redlining lives on, tangibly as ever to neighborhood residents.
“I know that [the lack of neighborhood investment] is discrimination firsthand, because this community has been redlined going back to when my husband and I bought our first property in Tioga,” McFee said. “We never could get a loan, so I’m aware of the shenanigans that go on.”
Since assembling the land, TPP has inked partnerships with companies that seek to break the cycle. In addition to Delos, Forefront, Vertical Harvest and Bank of America, local civic-minded business association the Economy League has signed on as a partner to help foster regional connections. The Commonwealth of Pennsylvania has also awarded Tioga District a $10M infrastructure grant, Bush said.
Part of the Temple University Hospital complex looming over rowhouses on Tioga Street in the Nicetown-Tioga neighborhood of Philadelphia.
“If no one builds better and healthier [in Tioga], there still won’t be anything there,” Bush said. “So if we don’t tell this story and then get busy breaking ground, you can never break that cycle of poverty or people’s mindsets.”
Despite the near-total lack of new development, Nicetown-Tioga and its residents are haunted by the specter of gentrification and displacement. While Tioga District will only be adding housing to the neighborhood’s supply, residents expressed concern about the attainability of the condos that are not designated as affordable housing, as well as the senior housing rentals, which will start at $1,300 per month with some opportunities for rebates or other cost-mitigating deals.
“Only if they can get a subsidy,” McFee said when asked if Tioga seniors could afford $1,300 per month rents. “That was one of the things that raised the eyebrows of the RCO. We heard what [they’re] saying, that this is going to be used for seniors, but the owners might not be able to fill [their] buildings with seniors except people who can afford it. And that would contribute to gentrification.”
Since the proposed buildings are replacing what TPP and residents agree are blighted lots, gentrification concerns are more of a long-term worry than a deal breaker, tied to the prospect of rising property taxes. But if virtually no one who already lived in Tioga winds up living in Tioga District, then longtime residents may be less friendly to TPP during the next round of community zoning meetings. And without more grants or other low-cost financing, the gap may be too wide to close.
“We’ve got among the highest construction costs in the country, but one of the highest poverty rates as well,” Gillen said. “So the result of that is that all development skews to both ends of the economic spectrum. Market-rate developments are disproportionately built in Center City and for affluent communities. You just can’t make money on market-rate, workforce housing.”
Even if longtime residents don’t fill Tioga District, Bush sees TPP’s partnerships with Delos, Forefront and Vertical Harvest as ensuring that Nicetown-Tioga residents will benefit from the development overall, starting with receiving DARWIN systems in occupied homes.
“The neighborhood is at the bottom of the totem pole economically, and that’s what opportunity zones are supposed to be about,” Bush said. “You’re supposed to go in there to uplift the people living there, not push them out. So we want to bring resources to people already in their homes that want to keep their homes and can’t afford to move.”
Courtesy of TPP Capital Management
TPP Capital Management Fund Manager and Director of Investor Relations Anthony Miles
In multiple conversations with Bisnow, Bush continually returned to the Delos partnership as a foundational element of Tioga District’s social impact. As is the case in so many low-income communities in urban centers, residents of Nicetown-Tioga have demonstrably poorer health outcomes than residents in more affluent areas.
Partially due to the presence of SEPTA’s bus depot, the neighborhood is among the poorest in terms of air quality in the commonwealth. A 2019 survey of neighborhood health conducted by the city of Philadelphia found that only Kensington, the East Coast epicenter of the opioid epidemic, averages worse health outcomes, with a life expectancy for males of 64, 10 years below the citywide average.
If the primary care pavilion comes to fruition, residents Bisnow interviewed agree it would be an unmitigated boon to the neighborhood. As it stands now, the emergency room at Temple University Hospital serves as a de facto primary care facility for many living nearby, with a higher portion of uninsured residents than the city as a whole and fewer primary care physicians per resident, according to the city’s neighborhood health survey.
“If TPP says they’re going to build a community health center, it’ll be well-used, well-appreciated and much needed,” McFee said. “And that’s no exaggeration.”
Neighborhood representatives were made aware of the plans for the indoor farm years ago, but they remain skeptical it will happen even as they acknowledge the potential benefit.
“Anything that would help to enhance access to produce … it’s definitely a big deal, because we are a food desert right now,” McFee said. “Being a part of the community, we’d love anything to add to what we have, which is nothing right now.”
Faced with neighborhood skepticism and an unwelcome financing environment but joined by some crucial allies, Bush is anxious to get to the actual development work so TPP can start to back up its promises.
“No one wants to hear more talk; we’ve done enough talking,” Bush said. “Now, we’re ready to break ground.”