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Fishtown, where small businesses bloom

Gone are the days in the 1940s and '50s when Clete Cunningham's father opened a welding supply company in what oldtimers call Fishtown, and "there was so much manufacturing in the city that there was plenty of business to go around."

Front Street Café in Fishtown. "It's an emerging area," said Anna Bailey, of the Philadelphia Federal Credit Union.
Front Street Café in Fishtown. "It's an emerging area," said Anna Bailey, of the Philadelphia Federal Credit Union.Read moreMICHAEL BRYANT / Staff Photographer

Gone are the days in the 1940s and '50s when Clete Cunningham's father opened a welding supply company in what oldtimers call Fishtown, and "there was so much manufacturing in the city that there was plenty of business to go around."

But these days, amid coffee shops and brew pubs, the area has been rebranded as East Kinsington and is becoming a business incubator, nurturing small arts- and tech-based companies.

"They are tiny little customers now, but we know from experience that some of them will grow into huge, multimillion dollar corporations," said Cunningham, who leads J.A. Cunningham Equipment Inc., founded in 1946 on Trenton Avenue.

"It's an emerging area," said Anna Bailey, a vice president at the Philadelphia Federal Credit Union, which opened its Fishtown branch on Dauphin Street in April 2013.

By Jan. 31, the branch had made $10.5 million in business loans.

"I don't think it has seen its full potential," she said.

By night, hipsters in flannel shirts crowd brew pubs, whiskey bars, restaurants, and nightclubs, with so many bicycling into Fishtown and parts of Kensington that finding room to lock a two-wheeler poses a challenge.

During the day, guitar makers and sellers, website designers, upholsterers, custom bicycle makers, and brewers are, bit by bit, adding jobs to these once tired river wards.

What's "nice about tech companies is that we bring people in here during the day," said Tracy Levesque, co-founder of Yikes Inc., a website design firm on East Girard Avenue that employs eight. "We need lunch. We need breakfast. We need coffee."

The newcomers include members of Philadelphia's fledgling "maker" community, small-scale manufacturers that hope to add capacity and revenue.

"We don't have the large businesses hiring 50 people that you'd expect to see in a former manufacturing area," said Kaelyn Anderson, commercial corridor manager for the New Kensington Community Development Corp. (NKCDC). "But if you have hundreds of small businesses planning to add one or two people, it adds up."

Whether those plans come to fruition is another matter. "A lot of our businesses are in their first five years," she said. "So they are not at the point of knowing whether their businesses are sustainable."

On the neighborhood's plus side is a cool and friendly vibe with the kind of post-industrial space with exposed girders and brick that millennial workers appreciate.

The Frankford El, with stops at Girard and Berks, serves this era's car-less commuters, who hop off the El and walk a few blocks to work, stopping for a latte en route.

"We're seeing the money flow into the neighborhood," said Mike Gadsby, 37, founder of the digital agency O3 World. Gadsby, who counts some neighbors among his customers, bought O3's handsome conference table from a nearby artisan.

Another plus is a spirit of cooperation - a staffer at the Soup Kitchen groused good-naturedly over which community clean-up day he should attend, trash bag in hand.

David Wilson and Simon and Victoria Firth, owners of Firth & Wilson Transport Cycles, buy their welding supplies from Cunningham and both Cunningham and the cycle shop support the local big draw gathering: the Kensington Kinetic Sculpture Derby and Festival on May 21.

(Welding and bicycles play major roles in the festival, which involves elaborate sculptures mounted on bicycle wheels and driven through a muddy obstacle course.)

The challenge? Land.

Low rents and prices attracted pioneers, who now worry about being priced out by rising rent or taxes.

"The advantage is that is a young neighborhood with a lot of people moving into it," Simon Firth said.

But, he said, the Firths and Wilson wish they owned the building, considering the tens of thousands of dollars they put into refurbishing it with the eventual goal of building custom bicycles.

How long is their lease? "Not long enough," he and his wife said in unison.

At the Philadelphia Sculpture Gym artists' cooperative on Frankford Avenue, Darla Jackson is partway through a five-year lease with an option to renew and has to fend off developers lusting after her space, once a roof-leaking wreck of a garage and auto-parts warehouse.

An equipment-sharing business for metal and ceramic artists, the Sculpture Gym is gaining traction, along with the area, but Jackson said she would never be able to afford the current market rent of $1.75 to $2.50 a square foot.

Business owners who bought their buildings don't have to worry about rising rents. Instead, higher taxes, fueled by rising property values, are a concern. "Some of the gains they've made have been offset by property tax increases," said Joanna Winchester, NKCDC's economic development director.

Longtime residents can apply for tax relief, she said, "but if you are a property owner of a small business, there's nothing to help you."

Some respond by converting upper floors to apartments, relying on that steady income to even ups and downs in business.

For Sandy Salzman, the NKCDC's director, the area's growth is nothing short of miraculous, although predictable, given the city's pattern of development.

Sitting in the living room of her Fishtown home, the one she bought 40 years ago for $7,500, she marveled that houses across the street now sell for $500,000.

Decade by decade, she described the local business history, including the immigrants who turned the region into a thriving textile center in the 1940s.

Veterans returning from World War II, she said, saw green spaces in Europe, and wanted a greener, suburban lifestyle. The G.I. Bill, which funded their education, meant they no longer needed to work in urban factories near the modest rowhouses where they grew up. "By the '60s, they had lost their connection to the neighborhood," she said. "Houses had no value."

The factories also left, some for cheaper labor elsewhere, some to build plants on farmland, and some because their products were no longer preferred by consumers. The machine shops that served those firms also folded.

Poverty settled in during the '70s, attracting some government money for unsuccessful economic development, Salzman said. By the 1990s, groups like hers could count 1,100 parcels of "dirty, filthy" lots in 1.5 square miles.

"We decided to call Frankford Avenue an arts corridor even though there wasn't one artist or one coffee shop," she said. Tax credits, facade improvement programs, and low-interest loans, combined with rising prices in Northern Liberties, attracted the artists and cafes.

Gentrification began in earnest in 2004 and 2005, she said. "Things were starting to get tense - the new people versus the old people."

Luckily, oddly, she said, the recession slowed growth and "gave everybody a cooling-off time" so old-timers could meet with the newcomers.

In 2003, Sophy and Chris DiPinto bought the East Girard Avenue building that houses their store, DiPinto Guitars.

"The day we got priced out of Northern Liberties, we decided to buy this building," Chris DiPinto said. Their business, in rental locations, had been on a northward migration, having already been priced out of Old City.

He said sales depend on the economy strengthening for the middle class.

"Give the middle class a way to get these bills off their backs, and we'll sell more guitars," he said. In the meantime, rents from apartments on the upper floors are helping to pay two employees.

For them, the Fishtown address is good, close enough to clubs so musicians between sound checks can stop in to buy, and big enough to feed a dream of custom-manufacturing guitars on site.

"We could move to a strip mall in New Jersey and save money," said DiPinto, who lives in Collingswood. "But this is where our customers are."