Philadelphia Industrial Development Corporation (PIDC)

Essay

A black and white photograph of a construction crew outside of the glass and steel building, working on the sidewalk and road.
The Market East Shopping Center (known also as the Gallery) was part of PIDC’s efforts to attract shoppers back into the heart of Philadelphia. When the Gallery opened in 1977, it was one of the first urban shopping centers in the country. (Special Collections Research Center, Temple University Libraries)

The Philadelphia Industrial Development Corporation (PIDC), a nonprofit corporation controlled jointly by the city government and the Greater Philadelphia Chamber of Commerce, formed in 1958 to support existing businesses and attract new ones by offering land and low-cost financing for both for-profit and nonprofit enterprises.  To accomplish this mission, PIDC manages the oldest municipal land bank in the United States, pioneering a novel approach to assembling, upgrading, and marketing urban land to business owners.

During the 1950s the prevailing analysis of Philadelphia’s economic problem was that a lack of suitable land discouraged companies from expanding their plants and prevented new firms from moving into the city. Modern technology and production processes had made one-story factories more efficient than multistory industrial buildings. Investors favored one-story factories with convenient access to highways, off-street parking for employees, and easy loading and unloading of freight—all features more likely to be found in suburban locations than in the city’s congested industrial districts.

Elected in 1956, Mayor Richardson Dilworth (1898-1974) made industrial renewal a top policy priority. In 1958 Dilworth secured the cooperation of the city’s Chamber of Commerce to establish PIDC as a jointly-controlled nonprofit corporation. The city and chamber each furnished half of its initial operating budget. PIDC also received financial support from state industrial-development programs.

Moving quickly and at times controversially, PIDC acquired an inventory of abandoned industrial sites, as well as undeveloped parcels that might prove attractive to new firms or expanding companies whose owners wanted to stay in Philadelphia. Often PIDC improved the sites with water, sewer, and street installations before selling them to manufacturers.  PIDC then used the proceeds of those sales to create a revolving fund for further purchases. Most of this help went to small and medium-sized manufacturers and wholesalers in a wide variety of industries that reflected the historic diversity of the city’s economy: metal fabricators, publishers, machinists, food processors, makers of furniture, clothing, chemicals, and dozens of other products.

PIDC soon realized it would also have to help companies acquire financing in order to counteract the lure of suburban and Sunbelt locations, many of which offered financial incentives.   Older plants, especially small family-owned businesses, suffered from declining property values in older industrial sections of the city.  Their declining equity made it hard for them to borrow money for upgrades they needed in order to compete against suburban producers. PIDC found it could borrow money at below-market interest rates because the debt issued by municipalities is treated as tax-exempt by the federal government.  Borrowing at low interest rates, PIDC could then lend to companies at similarly low interest rates. As historian Guian McKee has observed, that arrangement has meant over time that the subsidy enjoyed by PIDC’s client companies came largely from the federal government, not from local taxpayers.

PIDC used its inventory of land parcels combined with financial incentives to lure companies to large industrial parks it began creating at the edges of Philadelphia during the 1960s.  Two prime examples are the Philadelphia Industrial Park created in the far northeast corner of the city and the Penrose Industrial District in the city’s southwest corner.  Each was constructed on land originally set aside for the city’s two airports, but not needed for that purpose.  These complexes provided the same modern buildings, landscaping, and ample parking as suburban industrial parks, with easier access to the city’s ports and airports.  Not surprisingly, they attracted dozens of companies, including both new arrivals and older established firms wanting to expand.

A black and white photograph of the a three story building with the words
The University City Science Center in West Philadelphia began with one building, at Thirty-Fourth and Market Streets. Today the Science Center exists as a fifteen-building complex spread across eight city blocks. (Special Collections Research Center, Temple University Libraries)

PIDC also played a role in creating the nation’s first urban research park in 1963.  As early as 1959 PIDC began pursuing that goal in partnership with the West Philadelphia Corporation (a nonprofit organization focused on drawing research and development activities to the area adjoining the universities in West Philadelphia).  Hoping that the city’s combination of medical schools, along with pharmaceutical and chemical companies, could attract new research and development firms, PIDC and WPC together created a nonprofit entity, the University City Science Center, with a dual mission: to promote scientific, medical, and engineering research that could be commercialized, and to develop real estate that would attract companies and individuals engaged in those pursuits.  Since the Science Center’s incorporation in 1963, PIDC has supported its growth with low-interest loans and other assistance for real estate development, in addition to funding early-stage companies bringing health care and life science technologies to market.

Starting in the 1970s, PIDC began devoting major efforts to reinforce downtown Philadelphia as the region’s commercial center.  By the early 1970s it was becoming clear that business services were overtaking manufacturing as the backbone of the Philadelphia economy. PIDC added hotels, offices, shopping, entertainment, and commercial properties to its redevelopment agenda. For example, PIDC bought the Bellevue Stratford Hotel on South Broad Street when it closed after a 1976 outbreak of Legionnaire’s Disease.  That transaction allowed a critical property in a strategic location to be returned to productive use. Other commercial projects included the Market East Shopping Center known as the Gallery, along with downtown parking garages, movie theaters, and restaurants.

The largest of all PIDC endeavors is its ongoing campaign to redevelop 1,200 acres of land at the Philadelphia Naval Shipyard, which the federal government decommissioned after it had served for 125 years as a shipyard and naval base.  When the Navy transferred ownership of the yard to the city in 2000, PIDC was assigned responsibility for transforming the enormous installation into a mixed-use campus with an emphasis on green technology.  Combining office suites, manufacturing spaces, and research-and-development buildings, the area has benefited from $130 million in public investments for utilities, landscaping, roadways, and other infrastructure.  PIDC has incorporated environmental values into its redevelopment, including LEED building design, advanced storm water management, preservation of open spaces, smart grid, and renewable power sources.  More workers are now employed there than were employed by the naval shipyard before it closed.

A map of the future construction of the Navy Yard, on top of a satellite image of the navy yard. The map portion shows colored sections of buildings, trees, and roads in various states of development. The satellite view is black and white, but shows more details of the buildings and roads.
Since 2000, the PIDC has brought together more than 143 partners to the old Philadelphia Naval Shipyard to develop a mixture of commercial businesses, office buildings, public recreation spaces, and residential units. This map from the 2013 Navy Yard Master Plan shows the progress that has been made, and where future development is planned. (Philadelphia Industrial Development Corporation)

Despite its record over more than fifty years of investment and job development, PIDC has its critics.  Some have faulted PIDC for shifting manufacturing to industrial parks at the far edges of the city.  In so doing, PIDC spurred job growth in locations only reachable by automobiles, and that requirement discouraged employment of low-income workers who did not own cars.  Good-government advocates, including the city controller, have periodically complained that PIDC conducts its business without regard to the checks and balances that normally constrain government.  As a separate nonprofit corporation, PIDC is able to circumvent debt-protection and bidding requirements and spend money outside of the usual appropriation process, without the transparency normally expected from government departments.   Balancing such criticism is PIDC’s record of completing over 5,000 transactions involving 2,000 acres in land sales and about $8 billion in financing—numbers that increase each year as PIDC continues to attract business investment.

Carolyn T. Adams is Professor of Geography and Urban Studies at Temple University and associate editor of the Encyclopedia of Greater Philadelphia.

Copyright 2014, Rutgers University

Gallery

Philadelphia Navy Yard Development

Philadelphia Industrial Development Corporation

On the southern edge of Philadelphia along the Delaware River, more than 1,200 acres of land was empty and available for development after the United States Navy left the location. The Navy operated the Philadelphia Naval Shipyard from 1871 to 1996, primarily to construct and repair naval vessels. When the shipyard closed, the Navy tested and removed harmful chemicals and other contaminants from the yard before shifting the land to the City of Philadelphia in 2000. The west side of the Navy Yard was sold to Kvaerner Shipping Company, later Aker-Kvaerner, and the remaining land was transitioned to the Philadelphia Industrial Development Corporation to diversify the property development. PIDC has partnered with over 143 companies to redevelop the former Navy Yard with a mixture of commercial businesses, office buildings, public recreation spaces, and residential units. The colored sections of this map of the Navy Yard highlight where development had taken place as of 2013 (tan, purple, blue) while also showing the expansive construction plans for the future (red). For a more in-depth look at the progression of the Navy Yard development, or to view a larger version of this map, visit The Navy Yard Master Plan 2013 Update.

University City Science Center

Special Collections Research Center, Temple University Libraries

The University City Science Center became one of America's first urban research development parks when it was incorporated as a nonprofit entity in 1963. Developed through a joint venture by the Philadelphia Industrial Development Corporation and the West Philadelphia Corporation, the Science Center has a dual mission to promote the scientific, medical, and engineering fields that could be commercialized, and to develop real estate that would attract others to Philadelphia to specialize in the sciences. This photograph from 1969 shows the first Science Center building, on the corner of Thirty-Fourth and Market Streets, as the plans for future construction were underway. The sign in this image advertised the $100 million Science Center project that would eventually consist of a fifteen-building complex surrounding Market Street (between Thirty-Fourth and Thirty-Eighth Streets). Construction of the additional buildings required the demolition of nearby residential areas, including more than 400 houses rented or belonging to working-class families. The Science Center has been directly responsible for helping more than three hundred science- and engineering-based companies develop in the Philadelphia region, while also bringing in new land development in the West Philadelphia area.

Gallery at Market East

Special Collections Research Center, Temple University Libraries

James Rouse, a well-regarded shopping-center designer, was hired by the Philadelphia Industrial Development Corporation and Philadelphia's Urban Redevelopment Authority to design the Market East Shopping Center (also known as The Gallery) in the 1970s. The Gallery was part of PIDC's larger efforts to attract shoppers back into the heart of Philadelphia by creating a shopping experience that rivaled shopping at suburban malls. Opened in 1977 and expanded in 1984, the Gallery has four floors of climate-controlled shopping space. In this view from 1977 when construction was still in progress, Gimbels department store is visible at the corner of Ninth and Market Streets. Over time, the anchor retailers have changed, and Gimbels was succeeded by Stern’s, then Clover, then Kmart, which closed in 2014 after a decade in that location.

In addition to providing commercial space for businesses, the Gallery acts as a transportation hub for the SEPTA and PATCO subway systems, and provides workspace for other Philadelphia organizations.

Bellevue Stratford

PhillyHistory.org

Starting in July 1976, 29 members of the American Legion died and 184 members suffered flulike symptoms because of a mysterious airborne illness they contracted during a convention at the Bellevue Stratford hotel. The malady became known as Legionnaires disease. Soon after the outbreak, the Bellevue Stratford closed as investigators determined where the deadly virus came from and city officials debated demolishing the building. The Philadelphia Industrial Development Corporation purchased the building in late 1976 as part of its larger initiative to redevelop commercial properties in Center City Philadelphia. PIDC sanitized the building and internationally advertised the property to real estate firms. In 1978, the local real estate company Richard R. Rubin & Co. purchased the hotel and renovated it to include space for offices, business, restaurants, and a hotel.

Today the property is known as the Hyatt at the Bellevue and among offices in the building is a suite used by the governor of Pennsylvania—making the stretch of Broad Street in front of the hotel a popular site for protesters who want to get the governor’s attention.

Related Topics

Themes

Time Periods

Locations

Essays

Related Reading

Eisinger, Peter. The Rise of the Entrepreneurial State: State and Local Economic Development Policy in the United States.  Madison: University of Wisconsin Press, 1988. Chapter 7: “Geographically Targeted Policies on the Supply Side.” pp. 173-199.

Graves, Richard. “Industrial Philadelphia: Its Greatest Need is More Land,” Philadelphia Evening Bulletin, December 14, 1958.

Knox, Andrea and Douglas Campbell. “PIDC: Fighting to Slow the Ebb of City’s Industry,” Philadelphia Inquirer, August 20, 1978.

McKee, Guian. The Problem of Jobs: Liberalism, Race, and Deindustrialization in Philadelphia.  Chicago: University of Chicago Press, 2008.

McKee, Guian. “Urban Deindustrialization and Local Public Policy: Industrial Renewal in Philadelphia, 1953-1976,” Journal of Policy History, Vol. 16, No. 1, 2004. pp. 66-98.

Oberman, Joseph. Planning and Managing the Economy of the City:  Policy Guidelines for the Metropolitan Mayor.  New York:  Praeger Publisher, 1972.

Petshek, Kirk.  The Challenge of Urban Reform: Policies and Programs in Philadelphia.  Philadelphia: Temple University Press, 1973.

Philadelphia Industrial Development Corporation.  An Industrial Land and Market Strategy for the City of Philadelphia.  Philadelphia, September 2010. (PDF)

Saidel, Jonathan.  Study of Activities Conducted on Behalf of the City of Philadelphia by the Philadelphia Industrial Development Corporation (PIDC) and the Philadelphia Authority for Industrial Development (PAID).  Philadelphia, Office the City Controller, April 3, 2000. (PDF)

Related Places

Gallery Market East, Ninth and Market Streets, Philadelphia.

Navy Yard, 4747 South Broad Street, Philadelphia.

Northeast Philadelphia Airport Industrial Park, Roosevelt Boulevard and Woodhaven Road, Philadelphia.

Philadelphia Wholesale Produce Market, 6700 Essington Avenue, Philadelphia.

University City Science Center, 3711 Market Street, Philadelphia.

Backgrounders

Links

Connecting the Past with the Present, Building Community, Creating a Legacy