At the time, the Great Recession seemed like a great disaster to Greg Hill. A managing partner of Brown Hill Development, Hill had spent the last several years building and selling luxury condominiums, like Washington Square’s Ayer, where condos start at more than $800,000. He expected the city’s building boom to continue, and was already thinking about his next big project. Then the real estate market (and everything else) suddenly dropped, and Hill found himself struggling to sell his existing condos; developing more made no sense.
That turned out to be a boon for Hill—and for Philadelphia. In the wake of the recession, Hill and a colleague, Gabe Canuso, started D3, a commercial real estate development and management company with a big-hearted mission: To make communities better, through thoughtful and sustainable design, and projects that benefit a neighborhood or community organization. One of their first projects, Memphis Flats, helped to revive a moribund area of Fishtown by converting an old factory into sustainably-designed condos. Last year, D3 opened Oxford Mills, an apartment complex in South Kensington that offers discounts to teachers—who make up 60 percent of residents—and office space to education nonprofits. They worked with Fringe Festival organizers to open the Waterfront Arts Center on Delaware Avenue, and Children’s Crisis Treatment Center headquarters. Now, they are helping both Taller Puertorriqueño and Community Partnership School build new facilities.
The work is less lucrative—one of D3’s principals is to focus “a bit more on community and a little less on the bottom line”—but to Hill and Canuso, it is infinitely more profitable. “Sometimes things happen outside of your control and the result is it pushes you in a direction you needed to go in any way,” Hill says. “I like to think that the work we do has benefits that are beyond financial returns. We help individuals, help communities, help organizations.”
Oxford Mills is the ultimate realization of D3’s goals. A former lamp factory a few blocks from Frankford Avenue, the development helped to enliven a strip of South Kensington just as the area was starting to take off. But it is more than just an apartment/office building. It is a community. At lunchtime a week ago, representatives from about a dozen children’s nonprofits gathered in one of Oxford Mills’ three shared conference rooms, for a rare, intimate conversation with Schools Superintendent William Hite. Their free-ranging chat ranged from school security to navigating District bureaucracy to understanding trauma, and turned to ways they could work together to further everyone’s mission of helping children in Philadelphia. Already, several of the groups at Oxford Mills have come together on projects—the natural consequence of sharing space in the same office building. To Hite, who himself has held district events at Oxford Mills, it was the sort of brainstorming that he says is vital to his work. “I love this, having all these people around a table,” he says. “I learn as much from this kind of gathering as they learn from me.”
“You think these communities will roll out the red carpet, but there’s a certain level of skepticism,” Hill says. “There’s no doubt that with gentrification, the flavor of the neighborhood changes. With these projects, we have to build up some rapport with local constituents.”
The idea for Oxford Mills came from Baltimore, where Seawall Development turned an old factory in a once-moribund neighborhood into a similar complex for teachers and nonprofits. Donald Manekin, who founded Seawall with his son in 2007, was a longtime commercial developer who—after his family sold their 50 year-old business—became interim chief operating officer of the Baltimore School District and a Teach For America board member. The idea for a teacher’s housing complex came from his continual worry over how to keep teachers from leaving town when they finished their TFA term. “Ultimately, we want to keep teachers in town, have them fall in love with the city and buy houses and pay taxes,” Manekin says. “We kept thinking it would be great to help them. But we were surprised by how well it has worked.”
Seawall opened Union Mill, combining discounted housing for teachers with nonprofit space, in 2007; in 2011, it opened another similar complex in Baltimore, Miller’s Court. The next year, Seawall bought several rundown houses near Union Mill, revamping them and selling them at a discount—again as a way to keep teachers. “We had teachers asking us to sell houses in the neighborhood,” Manekin says. “They loved it there, and wanted to stay. We ended up selling 30 houses in a day.”
Manekin hooked up with D3 through their mutual law firm, BallardSpahr, which has offices here and in Baltimore. They settled on the old lamp factory because it was relatively cheap and in a fringe (but not too fringe) neighborhood. Still, pulling together the right combination of financing was a challenge. Hill says they were able to use New Market Tax Credits and some other public financing to make it work, and that having Teach For America commit to renting office space helped secure bank loans. They also spent months working with community organizations and neighbors to ensure their development felt like an enhancement to South Kensington, not an intrusion. It’s a process they first honed with Memphis Flats a few years earlier.
“You think these communities will roll out the red carpet, but there’s a certain level of skepticism,” Hill says. “There’s no doubt that with gentrification, the flavor of the neighborhood changes. With these projects, we have to build up some rapport with local constituents.”
One request, Canuso says, was to ensure Oxford Mills was not a gated community, walled off from the rest of the neighborhood. Instead, it has become in some ways a community center, where the local neighborhood association sometimes holds events, where nearby residents can do yoga in the studio housed in the basement, where they can gather at the attached coffee shop. Approximately 75 teachers live in the building, from all different types of schools around the city. In addition to discounts, they also get use of a common lounge area, with (more importantly) a photocopier. “It’s sad that teachers still have to do so much on their own,” says Canuso. “This way, at least they don’t have to run to Kinkos in the middle of the night to make their copies.”
Hill says the success of Oxford Mills has allowed him to imagine similar communities for other industries with young workers struggling to get by—like nursing. It’s hard—from the financing, to the community building, to the salvaging of decrepit buildings—but it is also deeply satisfying. “If you ever need evidence that money doesn’t make you happy, build homes for very wealthy people,” Hill says, noting that the joy of bringing a project to life was often dampened when a client showed up to closing with two attorneys ready to do battle. “First time homeowners show up and bring you a box of candy,” he says. “Now we work on projects we can feel good about. That makes up for a little less profit.”
Header photo: D3 Developers