"The truth will set you free. But first it will piss you off."

Gloria Steinem

Friday, November 29, 2013

Lessons from the Pennrose Affair, Part I

     Some years ago a mentor of mine, a veteran of many local government skirmishes, observed rather bitterly to me, “You know that old saying, ‘You can’t fight City Hall?’  Well, it’s wrong.  You can fight City Hall; you just can’t win.”  I’m sure he wasn’t the first to make that observation, nor the last, because it is, lamentably, very close to true.  But not always.
     News broke this past July that may herald a rare win for a group of organized local residents over a development project that gave every appearance of being “wired” and on its way to approval.  The project, referred to by the name of its developer—“Pennrose”—was to build a retail/apartment complex at the corner of DeKalb and Airy Streets in Norristown.  The news that Pennrose Inc. had failed to meet a deadline for a portion of the financing called the project’s future into serious question.  The residents who led the opposition appear to have won a victory in their effort to keep a subsidized housing complex out of Norristown’s core.  This deserves to be celebrated.  It also deserves to be studied.
     Now that some time has passed, we can examine the Pennrose affair within a larger context.  There are lessons to be learned here, lessons that urban community activists would do well to heed, regardless of the nature of their communities or where they happen to be located.  The specifics of this case apply to Norristown alone, but the rules of the game are the same everywhere.  You may ignore the specific facts, if you wish; but I would submit to you that the lessons that follow apply to YOU, and YOU, and YOU too.

(In the interests of full disclosure, let me declare that the following opinions are mine alone, and derive solely from my reading of the publications available to everyone.  I have not communicated in any way with any of the participants, as to motives, plans, tactics or anything else.)

A bit of background: 
The Pennrose project was to construct a 96-unit apartment building, with 5,000 square feet of retail space on its ground floor.  Twenty-two of the rental units would also be located on the ground floor.  This was a point of contention, and I will return to it in a future post.  A much bigger issue was that 60 of the 96 rental units would offer “affordable” rents subsidized by a tax credit program.  In other words, Pennrose was “subsidized housing.”
     Then there was the location.  Today the site is a sporadically used parking lot, owned by Montgomery County (this is important), that is useful mostly to churchgoers on Sundays.  Years ago, however, it was the site of Norristown Borough Hall (although always referred to as “City Hall,” for unknown reasons), and lies directly adjacent to the old, long closed, county prison.  In short, it’s in the core of old Norristown.  The two issues coalesced to offer both municipal officials and residents this basic question:  Is such a combined use, subsidized rent building a suitable occupant for this core location?
     The project’s progress through the approval thicket seemed to indicate that Norristown’s municipal government believed it was.  The project required a number of variances from zoning requirements, which it received, but which proved to be the source of its undoing.  A citizen’s group arose out of nowhere, christened itself “Norristown Nudge” and began to agitate against the project.  The project’s funding came undone back in July, and no word of its future has surfaced as of the date this was written.
     The best way I can pay tribute to “The Pennrose Affair” is to extract from it lessons I believe are applicable elsewhere.  There are three reasons, and each will be the subject of a separate post.

Lesson #1:  It’s Not Over; It Never Is.
     Everyone concerned should believe that reports of the project’s death are greatly exaggerated.  Assume instead that it is merely on hold, and keep your ear to the ground.
     Pennrose lost a portion of its financing, and the delay imposed by the lawsuit (more about this in my next post) may cause other components of that financial structure to exit, which they may have already done.  Or they may not.  More likely, another financial structure for the same or a similar project is being planned for the future.  Pennrose is in the business of constructing such government-supported housing structures; it’s what they do, and they are good at it, particularly the financing part.  The same news of their failure to qualify for funding for their Norristown project contained news of their success in another project in another location.  Funding cycles mean just that; they will come around again.  The July date was Cycle 2 of the finance agency’s calendar.  You should assume that the cycle process will continue.  Companies like Pennrose don’t take rejection personally; they are not going to get offended and walk away.  Exactly what they might do is not yet known, but you can be sure Pennrose is exploring all possibilities, with walking away from something that was so close to approval not very high on their priority list. 
     Keep in mind also that Pennrose has no financial “carrying costs” on the property while the legal issue is resolved.  They don’t own it, didn’t take an option on it, or (as far as we know) commit any money that would be due regardless.  On that score at least, Pennrose can essentially afford to wait.  Such costs are often critical in a fish-or-cut-bait decision on whether to advance a project, but not in this case.  Also, do not lose sight of the fact that if the property’s owner, Montgomery County, was willing to sell it for this project they would probably be amenable if approached again, by Pennrose or some other developer.
     A company that specializes in such projects should not be counted out after the first round; and that’s just what it was, not the end of the fight.  I might be wrong, but both research and personal experience tell me otherwise.

     Next week:  Lesson #2, wherein I focus on the efforts of groups opposing “wired” projects.