A fortunate future at 40th and Ludlow Streets. One of Philadelphia’s few Frank Furness buildings left (and one of his earliest commissions) sheds its cladding after years of being concealed. | Photo: Michael Bixler

This spring, U3, a West Philadelphia-based real estate development company, purchased a child and adolescent mental health services building at 40th and Ludlow Streets run by an agency called The Consortium. U3’s principals, Tom Lussenhop and Omar Blaik, had been part of the team at the University of Pennsylvania in the 1990s that developed the university’s “West Philadelphia Strategies” to reverse West Philadelphia’s decline with investments in economic development, renovation, urban design, and education (Hidden City Daily co-editor Nathaniel Popkin, then the director of community planning at Penn’s Center for Community Partnerships, was also an early contributor to that effort). Lussenhop and Blaik had long-hoped that 40th Street could transform into a dynamic university-community edge, building on the cosmopolitan and not parasitic elements of Penn’s community and the wide-ranging diversity and high education level of the immediate neighborhoods to the west. Making 40th Street an attractive and lively commercial street, from the trolley portal at Baltimore Avenue to the Market-Frankford subway station at Market Street, was a priority of the early-1990s Spruce Hill Community Renewal Plan.

The three-story Consortium building has had a rich and surprising history masked by circa-1970s metal cladding and putty-colored paint that seemed to actively repel the pedestrian. Underneath is one of Frank Furness’s earliest commissions, completed in 1876 (the same year as his masterpiece Pennsylvania Academy of Fine Arts), while working with then-partner George Hewitt: the West Philadelphia Institute. One of a handful of privately run men’s institutes, this one offered a library (open to men and women “with no sectarian or partisan bias”), classrooms, and an auditorium. Philadelphia had more of these kinds of social clubs, libraries, societies, and improvement associations than any other city and the buildings they built and occupied lend particular character to the Philadelphia street. The West Philadelphia Institute gave way to a dancing school and then later, in the 1920s, was purchased by the Philadelphia Electric Company for offices and an appliance showroom, and expanded and substantially altered by the architect John Windrim.

Plenty of potential for the historic fabric that lines 40th Street between Market and Chestnut Streets. The small, two block corridor barely survived Penn’s campus expansion and urban renewal in the 1960s and 1970s. | Photo: Michael Bixler

Lussenhop and Blaik, who recently redeveloped the corner of 43rd Street and Baltimore Avenue into a restaurant, Clarkville, have hired the architecture firm ISA to restore the building to its Windrim form while also hoping to restore some original Furness-era details. Their $4.5 million restoration, to begin in mid-2018, will include a restaurant at street level, a club downstairs, and offices for small businesses and non-profits on the upper floors. “Small users have a hard time finding space near the institutions,” says Lussenhop. “This building will fill that niche.”

The developers have convinced the U.S. Department of the Interior to extend the West Philadelphia Streetcar Suburb Historic District to include the building, which is also on the Philadelphia Register of Historic Places. But they face some obstacles particular to this era and location, a real estate economy distorted by high-density zoning that incentivizes tearing down of old buildings. To make up the difference in the market they’ve applied for a $3 million redevelopment capital assistance grant from the state.

Hidden City took a tour of the building with Lussenhop and talked with him about U3’s plans, but also the underlying real estate economics in West Philadelphia that’s actively threatening the historic building stock. Very little is protected, as the Spruce Hill Historic District, formed on paper long ago, has never been approved by City Council.

Tom Lussenhop has had his eye on the former West Philadlephia Institute for some time. The co-principal of U3 Ventures and the former managing director of real estate at University of Pennsylvania hopes that his conversion of the building into a restaurant and office space for start ups will aid in reviving this little stretch of 40th Street. | Photo: Michael Bixler

Hidden City: Around the corner, on Chestnut Street west of 40th, preservationists and other neighborhood activists have tried unsuccessfully to fight real estate developers who are tearing down historic buildings and replacing them with high density apartment buildings. You agree with their position, but also argue that these new developments will limit the long-term economics of the neighborhood.

Tom Lussenhop: Land and building costs are inflated in this area since there is a frenzy of student housing projects that pay inflated values for property and tear buildings down to take advantage of the permissive CMX4 zoning.

While we, as property developers, certainly support zoning that supports highest and best use, the CMX4 zoning in areas where there is high quality, existing building stock has been a death sentence for preservation efforts. There are exceptions out there. Andrew Eisenstein, of Ironstone, for example, is doing smart preservation work, but the suburban, demolition-derby-developers have invaded and are ripping things down left and right.

This era is reminiscent of 1950s and 1960s urban America when cities were clear-cut in the name of “urban redevelopment” and the resulting development was shoddy, miserable crap. As the old saying goes, “plus ca change, plus c’est la meme chose.” I wish the younger, activist urbanists in our city were more involved in and aware of what is being lost.

4046-52 Chestnut Street was built by Thomas Powers in the 1870s. The identical buildings at 4042-44 were demolished for new construction shown on the left. 4046-48 and, further down the block, 4050-52 are being demolished for the same type of modern housing. | Photo: Starr Herr-Cardillo

HC: This is the reason you’ve applied for the redevelopment assistance grant?

TL: We have applied for a Redevelopment Assistance Capital Program (RACP) grant from the State of Pennsylvania to restore the building. While it’s common for developers to whine that they need subsidy, in this case, it’s actually true. The numbers really don’t work on this project without RACP since we had to outbid the search-and-destroy/demolition-derby developers who are driving prices up.

For the classically-trained geek economists out there, we see this situation as a pure case of market-failure. The search-and-destroy guys are attracting capital by vastly overstating the long-term value of what they they are building. Fifteen to twenty years from now, it will all be ripped down since it is of such low quality. Future investors and banks will lose their money…they just don’t know it yet. It would be better to invest more capital today (with some RACP help) and do the right thing by preserving the older, much more solidly built structures. That will prove the market, creating more enduring value and a more sustainable tax base for the city and its school system.

What’s happening on Chestnut Street is tragic…

Yesterday, Today, Tomorrow, 40th and Ludlow. | Image courtesy of ISA

HC: You’ve been thinking about the potential of 40th Street for some time. When did this building grab your attention?

TL: My business partner, Omar Blaik, and I both worked at Penn in the late 1990s and were heavily involved in the various initiatives Penn undertook to help stabilize the neighborhood which was struggling at the time with falling real estate values and general decline in quality of life. Nathaniel Popkin, who was also at Penn, encouraged us to see the potential of the 40th Street corridor and we were easily convinced. So, we have had an interest in 40th Street for a long time. Its collection of smaller, human-scale buildings is in great contrast to the super-blocks of Market Street.

There is a fabulous set of photographs of 40th Street taken by Denise Scott Brown in the early 1960s that were also inspiring to us. She stubbornly documented the strength and vitality of 40th Street at a time when clear cutting the older-building stock to make way for shiny new buildings was, somehow, deemed the only way to save American cities. It is astonishing what was lost but there is still a base to build on.

HC: You mentioned Penn and urban renewal basically decimating the blocks between Market and Chestnut between 38th and 40th and how this particular block is essentially the last intact vestige of that commercial corridor. With this project you said you hope to help both revitalize the block and, presumably, stave of demolition of the storefronts. What are your intentions/hope for the project and preserving the block?

TL: The history of the RDA and urban renewal is well documented in many books, but you also can read its long terms effects in the landscape around 40th and Market. RDA land acquisitions efforts drew the line at 40th and Market Streets. North and west of that intersection was deemed to be of no interest to the future of University City. That was both good and bad. On the one hand, the positive effects of a stronger real estate market and increasing quality of life (clean and safe streets, etc.) did not necessarily spill over the boundary. On the other hand, the 19th century commercial building stock is still intact and smaller owners predominate. It is also a truly diverse place in every respect. Our hope is that the restoration of the building will set an example to other immediate area owners that preservation and reinvestment in their older buildings is possible and economical.

Inside 26 South 40th Street pre-renovation. Photos by Michael Bixler.

HC: Plans are a restaurant on the ground floor and office space for non profits/innovative start ups–and possibly a basement bar?

TL: The ground floor has spectacular, 17-foot ceiling height and will make for a great restaurant and bar. The basement also has a catacombs-like feel and we hope it can be a club or social space of some kind. The upper floors are going to be marketed to smaller businesses and non-profits…small users have a hard time finding space near the institutions. This building will fill that niche.

HC: Our understanding is that you are going to strip away all of the panels and remove the paint on the brick. Anything else happening with the facade? Also, dropped ceilings will be removed to expose the tin ceiling. Are there any other interior elements or details from the original configuration that will be exposed and/or preserved?

TL: The 1920s era John T. Windrim-designed renovation will be our renovation standard. The seller will remain in the building through the end of 2017 so we have not been able to do much interior investigation. But we have been up above the dropped ceilings and the tin ceilings are still there. In a very real sense, the modern-era cladding, dropped ceilings and sheet rock saved this building. We have a hard time convincing the historic tax credits officials that there is a historic building in there…but we will get there!