City Hall to city mall? developers like idea

Transformation: But converting Philadelphia's landmark government center to a new use would be costly, they say.

January 15, 2001|By Nathan Gorenstein | Nathan Gorenstein,KNIGHT RIDDER/TRIBUNE

PHILADELPHIA - Turning Philadelphia's underused, worn-out City Hall into a retail, restaurant and business center makes sense architecturally, economically and commercially, say people who do such things for a living.

It won't be cheap to modernize the world's largest solid masonry building, but its status as an architectural gem in the center of town makes it a location tenants would pay premium dollars to occupy.

At least that's how it looks to a variety of real estate pros reacting to City Controller Jonathan A. Saidel's suggestion that leasing part of the 1.1 million-square-foot City Hall to private developers is one way to save it.

`A brilliant idea'

"It's a brilliant idea," said Philadelphia developer Carl Dranoff, who has made a career of overhauling old buildings. "It's thinking out of the box. It's bringing resources to the table that wouldn't ordinarily be there."

Whether any conversion ever takes place will depend on the outcome of detailed architectural and marketing studies.

Saidel's analysis concluded that a top-to-bottom restoration of City Hall would cost nearly $350 million.

Taxpayers cannot afford it, so Saidel's team outlined four scenarios to raise the money.

One involves leasing up to 65 percent of the structure to private developers. Other ideas involve using city funds or establishing a nonprofit agency for the renovations.

Unlike government, private developers could use a 20 percent federal historic tax credit to subsidize the necessary renovation.

The developer would recover his costs by leasing the space to tenants seeking a high-profile address.

"What does one pay for the premier space in Philadelphia? The answer is, generally a higher rate than the market rate nearby," said Hyman Myers, a preservation architect at the Vitetta Group, which in the early 1990s studied the cost of renovating City Hall.

`Great signature location'

"It would be one of the really great signature locations," said Don Meginley, director of operations for Goldman Properties Philadelphia, which is renovating old retail buildings along 13th Street.

Renting any part of City Hall to private tenants would require much preparatory work, including new elevators and centralized air-conditioning. Adding that equipment to a brick-and-stone building designed in the 19th century would be a formidable task.

"We have done that in buildings that are in tougher shape," Meginley said when asked whether such work is affordable.

A national historic landmark, City Hall is considered the best example of French Second Empire architecture in the country. But the roof has been leaking for years, and water has extensively damaged many of the building's upper rooms.

A $125 million exterior-restoration project, included in Saidel's price tag, has started. But that still leaves the inside, great stretches of which are virtually abandoned.

Only about 10 percent of the building, mostly on the northern side, is used by the mayor, City Council and their staffs.

Many of the court functions have been moved into surrounding office buildings.

And Mayor Street, who set up a committee to figure out how to study Saidel's recommendations, said it might make sense to move his offices across the street into the recently renovated Municipal Services Building.

Bringing pedestrian life to the sidewalks and plazas around City Hall that are now a vast expanse of empty space after 5 p.m. would beef up the city's attractiveness to tourists and suburbanites, Paul Levy, executive director of the Center City District, said.

`A dramatic effect'

"To put activity in that building, and to have people walking in and out and around it, I think, would have a dramatic effect," he said.

Developers say the first floor of City Hall could be turned into a retail and restaurant center - think of lunch or dinner on a scrubbed and landscaped City Hall plaza - and upper floors could be converted into office space.

Along with air-conditioning and elevators, the interior would have to be extensively redesigned. Extra-wide hallways now eat up too much space. "It would be hard but not impossible by any means," said Myers, whose firm is helping overhaul the state Capitol in Harrisburg. "It's done to lots of older buildings."

Dranoff agreed that such an overhaul could be done. His firm, Dranoff Properties, is turning an old General Electric factory at 31st and Chestnut Streets into 282 apartments and 100,000 square feet of office space.

But he cautioned: "Historic building do not lend themselves to cookie-cutter solutions. ... Multiple plans need to be put together."

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