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In January 1974, Philadelphia's Somerset Knitting Mills Company announced plans for a new factory in the Franklin-Callowhill East Urban Renewal Area. The project received assistance from the Philadelphia Model Cities Administration and the Philadelphia Industrial Development Corporation—on the condition that Somerset employ neighborhood residents, mostly African Americans and Puerto Ricans, in its new plant. Confounding processes of deindustrialization and urban disinvestment, Somerset remained in its new building until 1992. This article contextualizes the project (and a related "Garment Center" for the local apparel industry) within the ideological and policy history of urban renewal. It argues that with their focus on countering deindustrialization and establishing community partnerships, the Somerset and Garment Center projects offered models of how urban renewal should have proceeded from its inception. The two projects also demonstrated that the local state can reconfigure supposedly "natural" market forces and counter the purportedly inevitable process of urban economic decline. [ABSTRACT FROM AUTHOR]