400 S. 40th Street, designed by Samuel Sloan | Photo: Peter Woodall

The 4000 block of Pine Street in West Philadelphia was described by George E Thomas, in a nomination for inclusion on the National Historic Registry, as “one of the handsomest and best preserved mid-19th century suburban streetscapes of Philadelphia.” Many of the strikingly handsome antebellum houses on this block have also been included on the Philadelphia Historical Commission’s registry, including a corner property, 400 South 40th St. Though it has sat vacant for nearly a decade and was modified for use as a nursing home prior to its designation in the 1970s, traces of the Italianate mansion designed by the prolific 19th century architect Samuel Sloan still shine through.

While in theory local designation should prevent this building, damaged as it may be, from ever meeting the wrecking ball, today the Historical Commission will decide if 400 S. 40th’s owner, the University of Pennsylvania, and its developer, Equinox Properties, should be allowed to demolish it.

The story of this site and the protected building began in 2008, when developer Tom Lussenhop proposed to restore the mansion as part of the development of an extended-stay Homewood Suites hotel and cafe. Arguing that the site on 40th Street’s retail corridor and a block from the SEPTA trolley portal carrying four subway-surface routes would benefit from significant density, Lussenhop wanted a slender 11 story building to go along with the restored mansion. When neighbors opposed to the density blocked the project, Lussenhop and Penn tried to strip Sloan’s mansion of its historic protection so that a shorter hotel could be built on the entire site, but the Commission denied the request. Lussenhop and Penn then found another site for the hotel on the 4100 block of Walnut, where the knocked down a pair of significant, but unprotected buildings, including an exuberant turn-of-the-century house by the architect Charles Pearson to build the squat hotel. These buildings were left unprotected in part because the nomination of the Spruce Hill neighborhood as an historic district was never approved.

Now, four years later, Penn is back, asking for permission to also obliterate 400 S. 40th and–in a case that involves everything from Constitutional property rights to Philadelphia’s infamously powerful neighborhood associations–they’ll probably get it.

How is this possible? Penn officials are using one of only a few avenues to demolition for a building that has already been added to Philadelphia’s Historic Register: the claim of “financial hardship.”

400 S. 40th Street in 1963 | Photo: PhillyHistory.org, a project of the Philadelphia Department of Records

The Meaning of Hardship

The idea of a wealthy university seemingly crying poor in order to demolish a protected building has rankled local preservationists.

“You tell people outside of Philadelphia that the University of Pennsylvania is about to plead hardship on a historic house they bought, knowing it was historic, and it just sounds laughable,” said Aaron Wunsch, who is a lecturer on historic preservation at Penn’s own School of Design.

Wunsch describes financial hardship cases as the “Achilles’ heel” of the Historical Commission, saying “there seems to be no such thing as hardship plea too ridiculous to be thrown out right away.”

“You could look at this as a plea from a multi-billion dollar institution, you could look at this as a plea of ignorance from a buyer that surely knew what they were getting into when they bought this thing,” said Wunsch.

Wunsch believes the University always intended to demolish the building and has made little effort to repurpose the structure, which he sees as already viable for housing. “Common sense tells us that a well-built, reasonably well-maintained house fitted out for institutional use makes for a relatively easy apartment building conversion,” he said.

But, as is so often the case when common sense and the law collide, the issue is convoluted. The Historical Commission, whose financial hardship committee voted in April to recommend approval for the hardship claim, says it is just following its own rules.

“People were trying to make the argument that because [Penn] owns the building that they should be able to restore the mansion and let it sit there no matter how much money it loses. And I reject that argument. It’s clearly stated in our rules and regs that that line of reasoning is not to be considered,” said Sam Sherman, chairman of the Historical Commission’s board and head of its financial hardship committee. As the owner a property development company and former president of the Building Industry Association of Philadelphia, Sherman also fills the ordinance-mandated “developer” slot on the Commission.

Sherman is talking about Section 14-2007(7)(j) of the historic preservation ordinance, which states that demolition shall only be allowed if a building cannot “be reasonably adapted…sale of the property is impracticable [and] commercial rental cannot provide a reasonable rate of return and that other potential uses of the property are foreclosed.”

In essence, an entity does not necessarily have to be penniless to apply for a hardship claim, they simply have to show that they can’t make money off reusing the building.

“I want to be very clear, when we evaluate projects, the wealth of the owner is not considered. When we look at a financial hardship [case] we examine the project itself. It doesn’t matter if it’s somebody with $8 million in the bank or somebody on a shoestring,” said Sherman.

However, Magali Sarfatti-Larson, a professor who lives near the project site, in a brief she submitted to the Commission, alleges that the board does in fact have the ability the examine the “impact of the reuse of the existing building on the financial condition of the organization,” as stated in the ordinance.

Economics and Property Rights

Critics also allege that the university never seriously tried to sell the building; they question the credibility of a report by a 3rd party consultant retained by the city, the Paoli-based Real Estate Strategies, Inc, that only at least seven story tower would make the project economically feasible.

Jonathan Farnham, director of the Commission’s staff, maintains that the Commission must tread a fine line between preserving historic properties and infringing on 5th amendment property rights. Farnham says there is a strong legal precedent for excessive historic protection qualifying as the government essentially “taking” a property “when it regulates it without just compensation in such a way that the property loses any reasonable economic value.”

The ordinance does allow for historic buildings to be heavily modified in order to make reuse economically feasible, but what makes 400 S. 40th an even more unusual case is Penn’s reasoning for why demolition is now the only option: neighborhood opposition.

The Power of Community Organizations

“If [Penn] was going to satisfy the neighborhood in terms of the height of the building and how it relates to the street, they would have to demolish the building,” Sherman said, referring to the Spruce Hill Civic Association’s resistance to previous plans for a tower attached to the restored mansion.

Mark Wagenveld, vice president of the SHCA, said “height was the driver” in resisting the proposal. “In order to renovate that mansion, you had to have either someone who wanted to throw millions of dollars at it–which is not realistic–or a project attached to it that would generate a lot of income. The neighborhood does not want a tall building, so that leaves you with not many options.”

To its credit the university later submitted 10 and seven story iterations of this adaptive reuse concept relying on increased height and residential density to mitigate the cost of restoring the mansion, all of which the SHCA opposed.

Wagenveld also questioned the historical integrity of the building saying, “It was designated in 1973, but it had already been altered considerably–you have all these concrete additions to it now, I mean, is that still a historic property?” According to Wagenveld, John Farnham, director of the Historical Commission’s staff, said at a meeting that the original designation papers for 400 S. 40th could not be found. “No one can come up with a piece of paper that says why it’s historic,” said Wagenveld.

The SHCA supports the current proposal for demolishing the mansion and constructing a squat five story building for graduate housing. The community, says Wagenveld, is satisfied with a smaller building, even if that means losing a historic property. “Our board voted unanimously in February to say that we would not oppose demolition of the old nursing home,” he said.

Could other developers try to seek demolition permits by catalyzing neighborhood resistance and then claiming hardship?

The impact of the precedent set by the board’s ruling today will only be revealed as time passes and more of Philadelphia’s constructed history is jeopardized with demolition. What is certain is that while every party involved may be nominally following legal protocols, it is small consolation in light of the end result: a viable, historically designated building will likely be demolished by a wealthy university, in part because neighbors were upset about an extra two stories being added to the building. Still more tragic, is that what started as a planto potentially reuse a rotting historic mansion, adding even more energy to what could be one of the city’s most vital and transit-friendly retail streets, will likely end with three lost buildings, and more forgettable, low density student housing.